Industry Reacts to Chancellors Rates Support

Relief Welcome-But Long-Term Concerns Remain

Chancellor Rachel Reeves’ eleventh-hour business rates package for pubs has been welcomed by industry leaders however operators and trade bodies warn that the 15% discount and two-year freeze falls well short of the comprehensive relief the sector desperately needs.

While the Government’s £100 million annual support measure—announced yesterday and representing around £1,650 for the average pub—has been cautiously welcomed as recognition of the crisis facing Britain’s locals, leading voices have branded the intervention “short-sighted” and insufficient to address the eye-watering cost pressures threatening widespread closures.

Most critically, the decision to limit relief exclusively to pubs whilst abandoning restaurants, hotels, and the wider hospitality sector to face business rates increases of up to 115% over three years has sparked warnings of a “two-tier” approach that ignores the acute challenges facing the entire licensed trade.

Kate Nicholls, Chair of UKHospitality, said:
“We welcome the recognition by the Prime Minister and the Chancellor of the scale of the challenges facing the hospitality sector. They have listened to us about the acute cost challenges facing businesses, all of which is impacting business viability, jobs and consumer prices.

“The rising cost of doing business and business rates increases is a hospitality-wide problem that needs a hospitality-wide solution. The Government’s immediate review of hospitality valuations going forward is clear recognition of this.

“The devil will be in the detail, but we need to see pace and urgency to deliver the reform desperately needed to reduce hospitality’s tax burden, drive demand, and protect jobs and growth. We will work with the Government over the next six months to hold their feet to the fire to deliver this.

“This emergency announcement to provide additional funding is helpful to address an acute challenge facing pubs.

“The reality remains that we still have restaurants and hotels facing severe challenges from successive Budgets. They need to see substantive solutions that genuinely reduce their costs.

Kevin Georgel, Chief Executive, St Austell Brewery:
“We welcome today’s intervention by the government which will mitigate the impact of business rates increases that were scheduled for April. We are pleased that the government has engaged with our trade bodies and heard the voice of the British public who so clearly recognise and value the enormous economic, social and cultural contribution of our pubs.

“It has been heartening to see the support of the public play out so clearly across the media in recent weeks and this public support has rightly influenced the government to reconsider their proposed changes to business rates that would have seen an acceleration in pub closures.

“We hope that this intervention is a recognition that we need a full review of the fiscal and regulatory landscape that has placed an unfair and unsustainable burden on the Great British pub. We now need to continue working with the government to permanently overhaul the outdated business rates system. Over time, we must create the conditions in which pubs can not only survive, but once again thrive at the heart of their communities – providing valuable employment, fostering social connection and cohesion, and acting as engines of economic growth across the length and breadth of the country.

“Without that clear action, they will face increasingly tough decisions on business viability, jobs and prices for consumers. Those are costs borne by us all, and I hope the Government delivers on its promise to support the whole hospitality sector.”

Nick Mackenzie, CEO of Greene King, said:
“The Government’s announcement today offers some much-needed relief to pubs, and recognises the important role they play at the heart of communities across the country. This package gives reassurance to publicans by easing some of the considerable cost increases due to come into effect in April.

“We look forward to continuing to work with the Government on its longer-term plan for fundamental reform of the business rates system, and reducing regulatory burden, which is desperately needed by pubs and the wider hospitality sector.”

John Webber, Head of Business Rates at Colliers,
“The Government’s backtracking is welcome on the immediate front, particularly for the smaller independent pub, but for the bigger chains the package will be limited, as it appears the subsidies will be limited by State Aid rules. Subsidy control limit at £315,000 over 3 years or £105,000 a year means for a chain with hundreds of pubs, support will be minimal.

Webber adds,” In addition, unless the government is serious about reforming the current system, the solution, “purely kicks the problem down the line.” We have long been saying the current rateable values for pubs, upon which business rates bills are calculated are just too high. The methods of valuation for pubs are overcomplicated comprising of rent and turnover but not taking into account increased costs. And some of the tactics used by the VOA when deciding values may need scrutiny. Kicking the issue down the road to 2029 without proper reform could still leave many pubs uncertain of their longer-term future.”

Webber added,  “And whilst the government acknowledges business rates are too high for the pub sector, what about all the other businesses in the RHL sector badly impacted by the revaluation – such as hotels seeing average RV rises of 76% across the country, and bills for some rising by over 150% in the three years of the list? The government has said it will examine the valuation methodology for hotels by 2029, but in the near term, this is a kick in the teeth for the hotel industry and rather suggests they will have to suck up these incorrect values for the next three years.”

The new announcement is really an admission that when the government claimed it was putting the whole RHL sector on a permanently affordable basis through its business rates “reforms”, it got it wrong. U turn number 13 has been lucky for a few, but unlucky for those limited by subsidy rules or those working in the hotel sector.”

Rather than bringing in fundamental reform, the government used its Budget to inflict a 10.2% increase on business rates bills on UK plc next April, increasing the tax take from £33.6 billion to £37.1 billion.

“Whilst the smaller independent pubs have been given a reprieve, this is unsustainable for everyone else given all the other costs UK businesses are facing.”

Lawson Mountstevens, managing director of Star Pubs said:
“Although we will need to fully digest the detail, this announcement is a huge boost for pubs and will ease the immediate concerns of publicans up and down the country. I am pleased that the Chancellor has clearly listened to the many Star Pubs licensees who expressed their objections to the plans published at the Budget. This support is a welcome acknowledgement of the pub as the cornerstone of British society, and we are committed to working with the Treasury in the coming weeks and months. This support means publicans and their staff are able to focus on the day job – running great pubs at the hearts of their communities.”

Steve Alton, BII CEO commented:
“We are relieved that the Treasury and the Chancellor have listened to the pleas from across the pub sector, from BII members and individual pubs across the UK, and as importantly, from loyal customers who have implored their local MPs to support their local pubs.

“The majority of our members, independently operating pubs in every community, will now see the business rates they pay today frozen or reduced from April, and held at that level over the next 3 years. For members with rateable values over £100k, this is not the case, however, they will also see any planned increases significantly reduced.

“This cannot be the end of the story, however. Today’s announcement will buy many in our sector time, but their situation is still untenable in the long term, with over 40p in the £1 still going to the Treasury. We are only back to where we were before the budget, with 2-in-3 pub businesses not making enough profit to reinvest in their teams and communities.

“This must be the beginning of true reform of the systems that have overtaxed our sector for so many years, and the recognition of their vital importance of our nations’ pubs for human connection, mental health support, and community value must now be shown in action, not just words.

“Levelling the playing field for pubs against the digital economy and businesses that do not have high energy, property and people costs is what is needed for the future, to permanently reduce the cumulative tax burden we unfairly face.”

Ash Corbett-Collins, CAMRA Chairman said:
“This short-term announcement is not the ‘permanently lower business rates’ that pubs were promised. While it is positive that the Chancellor has listened and announced extra discounts for pubs facing the threat of closure, it is short-sighted to think that today’s statement will give publicans the certainty they need.

“The plan to review the unfair way pubs are assessed for business rates is welcome, but this leaves pubs in the same situation as they have been for years – still facing a long wait for promised, and fundamental, reforms to make the system fairer.

“CAMRA will keep campaigning to get the Government to support great pubs and independent breweries so they can compete against online businesses and cheap supermarket booze.”

Michael Kill, CEO of the Night Time Industries Association, said: “While any recognition of the pressures facing pubs and music venues is welcome, this intervention amounts to little more than a drop in the ocean when set against the reality of the current tax system and the cumulative damage inflicted by the last two budgets.

“The sector has been savaged by rising business rates, VAT, alcohol duty, employment costs and licensing fees, and this limited, narrowly targeted relief raises a serious question: what will this actually do for the hospitality and night time economy as a whole? Not just for pubs and music venues, but for the vast proportion of the sector that will see no benefit whatsoever from this scheme.

“This policy position is frankly baffling. Pubs, bars, nightclubs, live music venues and cultural spaces are all part of the same fragile ecosystem, facing the same structural challenges and carrying the same disproportionate tax burdens. To support one part while ignoring the rest is not just short-sighted, it is fundamentally disconnected from how this industry actually operates.

“Once again, we are seeing sticking plasters applied to a much deeper problem that urgently needs to be addressed. There appears to be a worrying level of disengagement from the realities on the ground, and a lack of joined-up thinking across government.

“The Chancellor must urgently address this imbalance and recognise that piecemeal, sub-sector-specific interventions will not stabilise the industry. Without a meaningful, sector-wide approach to taxation and business rates reform, closures will continue, jobs will be lost, and vital cultural and social infrastructure will be permanently damaged. The current approach is simply not sustainable.”