Rachel Reeves 'poised to U-turn on business rates' for struggling pubs within days
The Chancellor commissioned research on extra support for pubs before Christmas, and is expected to come forward with more support specifically for struggling boozers, as early as next week.
The Chancellor is due to U-turn on her controversial business rates raid which has pushed pubs to the brink of collapse.
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Treasury officials say that that work on rates revealed a bigger impact of the changes to business rates than previously thought.
Dan Tomlinson, the Exchequer Secretary to the Treasury, has been working on the research, engaging with stakeholders and firms.
It's expected to include pubs-specific help - including on licensing, regulation, and crucially - on the way that the rates are calculated.
It comes after the Prime Minister told LBC earlier this week that they're looking at what "further support" might be possible to help firms.
He said: "We're talking to the sector, particularly hospitality and pubs, about what further support we can put in, whether that's licencing freedoms or other measures."We want to talk to the sector. I want to keep working with them to make sure we can work this through.”
The Chancellor announced in the Budget that Covid-style support would be tapered off further from April and there would be a re-evaluation of the calculation of business rates.
She also revealed a £4.5billion package of transitional help, to wean firms off the Covid relief.
The pub industry has been lobbying hard for changes - including a fresh look at the multiplier for how rates are worked out, or extra transitional relief help.
They reacted with relief at the news today.
Emma McClarkin, the Chief Executive of the British Beer & Pub Association, told LBC: “News that the government is going to look again at business rates increases is potentially a huge win for pubs across the country and shows Government have not only listened to our concerns but acted.
"This could save locals, jobs, and means publicans can breathe a huge sigh of relief.
"The BBPA has worked closely with ministers on a pub specific solution that would ensure that bills are reduced in line with the government’s previous promises to pubs.
"We now keenly await to see the detail of the upcoming announcement."
Tory leader Kemi Badenoch, who has said she will scrap business rates for struggling high street shops, including pubs said: "Yesterday Keir Starmer told us Labour had ‘turned a corner.’ Well, it looks like they’ve turned the corner straight into their first u-turn of 2026.
"Labour are killing Britain’s pubs. This rumoured u-turn is too little too late. It’s time to back our local pubs."
And Andrew Griffith MP, Shadow Business and Trade Secretary, added: “Just a month on and the Budget is already falling apart. Labour were wrong to attack pubs and now have been forced into another screeching u-turn as Kemi called for just this morning.
“But this humiliating about-face appears to do nothing for shops, restaurants, hotels and markets which all face a more than 50 per cent increase. With no detail provided, this is not the stability Rachel Reeves promised – it is a recipe for economic disaster.
“Only the Conservatives have a strong leader with a clear plan to stand up for business by cutting business rates for thousands of local high-street firms.”
Daisy Cooper MP, Treasury Spokesperson for the Liberal Democrats and Pub Parliamentarian of the Year 2024, told LBC: “This is literally the last chance saloon for our treasured pubs and high streets - so the government must u-turn, today.
“These businesses are worried sick, making decisions now, and can't wait a minute longer.
“Ministers must give them the clarity they so desperately need so businesses don’t go to the wall, hollowing our communities, in the coming days.”
But some MPs urged the Chancellor to go even further.
Carolyn Harris MP, Chair of the APPG for UK Spirits, said: “Pubs are more than pints.
“Landlords tell me that there is a much higher profit margin on spirits. Amongst the higher costs pubs are facing is yet another hike in excise duty.
“We cannot support pubs and hospitality if the spirits sector isn’t empowered to thrive.”
Yesterday LBC reported that pub bosses and staff are planning to march on Whitehall to demand the government reverses plans to hike business rates for landlords.
Andy Lennox, the landlord who spearheaded the campaign to ban Labour MPs from pubs across the country, told LBC there will be a day of coordinated action on January 30.
It is believed pubs are also considering shutting their doors to patrons for an hour on the day as part of the protest.
“We’re definitely pushing down the farmer route”, Mr Lennox said, citing the sustained pressure that led to the government’s u-turn on inheritance tax on agricultural properties, adding that pub owners would not back down until they see a similar concession on business rates.
Pubs are not planning on closing their doors for the day owing to cost pressures.
Speaking to LBC’s Nick Ferrari, Mr Lennox said: “All the trade bodies and a lot of the bigger organisations are now starting to organise for proper industrial action… There's a protest planned for the end of the month, and we're looking into some major kind of industrial action now.”
It comes after Celebrity chef Tom Kerridge told LBC’s Tom Swarbrick that the rates for his 'Coach' restaurant were set to rise from £50,500 to £106,000.
Mr Kerridge, who owns four separate gastropubs in England, said he was presented with a sheet of paper by Business Secretary Peter Kyle during a recent meeting which showed the new rateable tax amount on his 'Coach' restaurant had risen from £50,500 to £106,000.
Mr Kerridge said: “we as a hospitality industry are in a lot of trouble here. We are not in a good space.”
An HM Treasury spokesperson said: “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.”