The Treasury has announced a support package worth over £80m a year for pubs and live music venues in England, with extra funding to be made available for Scotland and Wales to follow suit. The climbdown follows a fierce backlash against plans to overhaul business rates unveiled by Chancellor Rachel Reeves in her November Budget.
Trade bodies had warned that the changes would trigger widespread closures and job losses in the hospitality sector, particularly in pubs. On Tuesday, the government admitted it had not foreseen the total financial impact and unveiled new measures to mitigate the effects.
From 1 April, pubs in England will receive a 15% discount on their new business rates bill, saving them an average of £1,650 each. Bills will then be frozen in real terms for a further two years. The relief applies only to pubs where customers can buy drinks without eating, excluding hotels, whose rates will be reviewed separately.
The package received a mixed reaction. The British Beer and Pub Association said it would provide certainty for tens of thousands of pubs, but other trade bodies criticised the exclusion of other under-pressure businesses such as hotels and retailers. A group of publicans who have barred Labour MPs said the relief was not enough to lift their ban.
The hospitality sector remains under intense financial pressure from higher employer national insurance, minimum wage rises, energy costs and inflation. Analysis shows one pub a day closed for good in England and Wales last year, with the total number of pubs falling from 39,989 to 38,623.
The government will also review the methodology used to calculate pub rates, but it will not reduce VAT on beer, spirits and wine, a key demand of the sector. The relief package is worth at least £80m a year for England over three years.
