Backbone Of Our Communities Are At Risk; Fair Taxes Could Turn Pub Closures Into Job Growth’

Steve Alton, CEO of the British Institute of Innkeeping (BII), has today written to the Hon. Rt. Chancellor Rachel Reeves ahead of the upcoming Budget, calling for urgent action to support UK pubs and the vital role they play in communities and the economy.

Representing over 13,500 members across the UK with the majority operating single independent pubs, the BII has highlighted the stark reality facing the sector. Following substantial tax increases introduced in April and long-term inflationary pressures, only one-in-three pubs is now profitable. The BII is warning that 35% of the nations’ pubs risk closure without immediate intervention.

Despite strong trading throughout this year, the financial pressures have forced operators to make extremely difficult decisions. 74% of operators have significantly reduced staff hours, while 70% have reduced their number of employees with licensees now covering the shortfall by working unsustainably long hours themselves.

The BII is calling on Government to urgently act on the following priorities:

• VAT Reform: Permanently reduce VAT on pub sales to 10%, boosting resilience, creating jobs, enabling investment and minimising price rises for consumers.
• Business Rates: Deliver permanent, real-terms reductions in business rates bills from April 2026.
• Employment Incentives: Reverse recent NICs changes and introduce financial incentives for pubs hiring under-25s and those returning to work.

The BII’s member data shows that fair taxation would have immediate impact:

• 73% of pubs would increase investment
• 60% would increase staff hours
• 50% would increase their number of employees

Steve Alton commented: “Since the Covid pandemic, Government has recognised the huge value of our pubs, with the Prime Minister recently stating that ‘When our locals do well, our economy does too.’  This recognition must now be matched with urgent action at the budget to drive local economic growth by reducing the unfair tax burden. This will create skilled jobs and allow pubs to continue to serve their communities. Without it, many simply will not survive.”

The BII has urged the Chancellor to seize the opportunity to support and invest in the Great British Pub, stating that closures would result in lost jobs, lost tax revenue and immeasurable damage to communities in every town, village and high street across the UK.

Read the letter to the Chancellor here.