PM Faces Criticism Over Impact of Budget on Hospitality Sector

The hospitality sector’s concerns over rising business costs took centre stage in the final Prime Minister’s Questions before the Christmas recess, as Conservative leader Kemi Badenoch challenged Sir Keir Starmer on the impact of recent Budget measures on pubs and licensed premises.

Ms Badenoch criticised the government’s approach to supporting the on-trade, highlighting that licensed premises face a 15% rise in business rates following the autumn Budget. “The Prime Minister gave his word that he would help pubs, yet they face a 15% rise in business rates because of his Budget,” she told the Commons, calling on Sir Keir to acknowledge that his tax policies are forcing pub closures.

The Prime Minister defended the government’s position, pointing out that the temporary business rates relief introduced during the Covid pandemic was always scheduled to end. “That was the scheme they put in place. We supported it, but it was always a temporary scheme coming to an end,” Sir Keir said, referring to measures implemented by the previous Conservative government.

In response to concerns about the sector, the Prime Minister outlined several initiatives aimed at supporting hospitality businesses, including £4 billion in transitional relief for business rates. He also highlighted the creation of hospitality zones, greater licensing freedoms, and government efforts to tackle late payment issues affecting suppliers and businesses.

Sir Keir further emphasised broader cost-of-living measures designed to boost consumer spending in the hospitality sector, including frozen rail fares, frozen prescription charges, £150 reductions on energy bills, and increases to the National Living Wage.

The exchange reflects ongoing tensions between the government and the licensed trade over the financial pressures facing pubs, bars, and restaurants.

Industry representatives have expressed concern that the combination of business rates increases, rising National Insurance contributions for employers, and higher wage costs following National Living Wage increases could threaten the viability of many hospitality businesses.

The debate comes as the sector enters its crucial Christmas trading period, traditionally one of the most important times of the year for pubs and licensed premises.