Pub VAT cut to 13% 'reasonable ask' insists Kemi Badenoch amid Labour business rates U-turn
Pubs have been facing the prospect of much higher business rates after the Chancellor announced plans to end Covid-era discounts in her November budget
Labour only decided to U-turn on its planned tax raid on pubs because MPs realised they had all been banned from their locals, Kemi Badenoch told LBC as she called for VAT to be cut to 13 per cent.
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Speaking to LBC’s Tom Swarbrick, the Conservative leader suggested she would back pub landlords marching on Westminster to protest tax hikes as she branded Rachel Reeves’ autumn Budget a “catastrophe.”
Pubs have been facing the prospect of much higher business rates after the Chancellor announced plans to end Covid-era discounts in her budget in November.
Owners warned these changes could spell the end of the British pub, as rising taxes and bills pile pressure on landlords.
’They’ve come back after Christmas and realised how much everyone hates them…'
— LBC (@LBC) January 8, 2026
Tory leader Kemi Badenoch tells @TomSwarbrick1 that Labour will make a 'predictable' U-turn on business rates. pic.twitter.com/dOBu0kdDYJ
Today, LBC revealed Rachel Reeves is planning to provide further support to pubs on top of the £4.3billion already set aside.
Ms Badenoch, however, is unimpressed by the U-turn as she called for the Government to provide further support for the British institution.
“Labour MPs went away for Christmas and were banned from every single pub in the country,” she told Tom.
“What did I say at the budget? That Rachel Reeves was hurting businesses.
“Our policy is to scrap business rates for the high street if it's under £110,000. So that's pubs, restaurants and shops. That's what we really need.”
The Tory leader branded Labour’s tax rises a “catastrophe” for the hospitality industry and warned any changes made now will not be enough.
“Even if they U turn, it's not going to be enough,” she said.
“What about the restaurants? What about the hotels?
“It is all the small businesses, hospitality in particular, who have been hit by Rachel Reeves jobs tax and now she's taking their rates relief away. It's just terrible.
“These are the people who keep our high streets going. I don't want to see empty high streets and boarded-up shops, empty pubs.
“We want to see it thriving. Let's get Britain working again. That's why we have a policy to abolish those business rates for the high streets.”
Despite these comments, Ms Badenoch refused to commit to lowering interest rates for pubs and restaurants down to 13 per cent, from the current 20 per cent.
When pressed on whether she would support pub landlords marching on Westminster as farmers did over the last year, Ms Badenoch did not fully back the move but signalled her support.
“I was very supportive of farmers when they did that and they eventually got some of what they wanted with that partial U-turn.
“Now we're seeing another U-turn. As I said, I'm really sure it's because Labour MPs went to the pub at Christmas and couldn't get in.
“So the more the public let them know just how hated they are, I think the better the policies will be.”
An HM Treasury spokesperson told LBC: “We’re protecting pubs, restaurants and cafés with the Budget’s £4.3 billion support package.
"Without this support, pubs would face a 45% increase in the total bills they pay next year. Because of the support we’ve put in place, we’ve got that down to just 4%.
"This comes on top of our efforts to ease licensing to help more venues offer pavement drinks and put on one-off events, maintaining our cut to alcohol duty on draught pints, and capping Corporation Tax.”