A wave of anger and desperation from Britain's hospitality sector appears to have finally prompted a rethink in Downing Street over punishing business rate hikes announced in the Budget.
Following intense backlash, ministers indicated yesterday that potential changes to how the rates are calculated could be forthcoming. This theoretical lifeline arrives too late for many publicans already facing ruinous cost increases from April.
Celebrity Chef's Stark Warning Highlights Crisis
The severity of the situation was laid bare by celebrity restaurateur Tom Kerridge, who this week revealed the catastrophic impact of Chancellor Rachel Reeves's new business rates regime on his four gastropubs. For one of his establishments alone, the annual bill is set to rocket from £50,000 to £124,000 – an increase of 148 per cent.
His other venues face average rises exceeding 100 per cent, leading Kerridge to question the viability of staying open. The government's hinted U-turn may offer some reprieve, but for many, the damage is already done.
Writing for this publication, Patrick Dardis, former chief executive of Young's pubs, argues the industry's plight was predictable. He points to Kerridge's decision to endorse the Labour Party ahead of the 2024 general election, alongside other business figures, as profoundly misguided.
A "War of Attrition" on Pubs
Dardis describes an 18-month "cruel and unending war of attrition" waged against British pubs since the government took power. The sector, already battered by the pandemic and inflation, now contends with average utility bills up 57% in five years.
The business rates shock was compounded last Wednesday by another blow: government plans to lower the drink-drive limit in England to match Scotland's stricter 2014 rules. This would mean a single pint could put drivers over the limit.
While road safety is paramount, data from Scotland suggests the policy had "no impact on either traffic accident or fatality rates," according to a Strathclyde Business School study. The real impact was on pubs, with Scottish publicans reporting alcohol sales falling by up to 60%, averaging a 30% drop.
This move, Dardis warns, could sound the death knell for England's remaining rural pubs, which rely heavily on customers who drive.
Broken Promises and a Bleak Future
The article accuses the government of breaking key manifesto pledges, including promises of no National Insurance changes and no tax rises – the latter rendered false by frozen thresholds dragging millions into higher bands.
Despite hospitality contributing 7% of UK GDP and pubs alone generating £18 billion in taxes, Dardis believes the sector is being systematically undermined. He forecasts continued pub closures as the economy slides towards a recession marked by high inflation and unemployment.
The piece concludes with a stark warning: if Prime Minister Keir Starmer's tenure is short-lived, the industry could face an even harder line under a potential successor like Angela Rayner, architect of the Employment Rights Bill and successive national living wage rises that deter hiring.
For business leaders like Tom Kerridge who backed Labour, Dardis's message is blunt: their support has helped steer the very businesses they love towards a cliff edge.
