Pubs are to get 15 per cent off business rates for the next three years as ministers scramble to defuse a Labour revolt.
The government has announced a package of reliefs amid fury that many hostelries face closing as a result of sky-rocketing bills.
However, Treasury minister Dan Tomlinson – sent to face MPs instead of Rachel Reeves – confirmed that the support will take effect in April and end in 2029. Although music venues will benefit, pleas from the wider hospitality sector and pharmacies have been snubbed.
Mr Tomlinson did not give any costing for the new policy, although it is expected to be around £100million a year. He suggested that figures will not be revealed until the Budget in the Autumn.
High street retailers have only been promised a ‘strategy’ for how they could be helped to deal with the shift to online shopping.
Shadow chancellor Mel Stride said the announcements were ‘far too little and far too late’.
In the Budget, the Chancellor boasted about cutting business rates by introducing a lower ‘multiplier’ – used to calculate the commercial property tax.
However, that tweak was more than offset by the removal of a Covid-era 40 per cent discount to business rates bills for hospitality, leisure and retail businesses, as well as new property valuations.
Treasury minister Dan Tomlinson confirmed that the support will end in 2029
The Treasury has announced extra support for pubs until 2029 after a major revolt by Labour MPs
Ms Reeves has also hammered the hospitality sector by ramping up national insurance for employers, making staffing more expensive.
Mr Tomlinson told the Commons he understood times had been hard for pubs, as he said the support would be worth more than £1,600 for the average pub. The valuation model used for pubs will also be reassessed.
Mr Tomlinson said pubs had not had the support they have needed ‘for too long’, and referenced 7,000 pubs shutting under Conservative led-governments between 2010 and 2024.
He said: ‘This Government does want to go further to support pubs. Pubs are the cornerstone of so many communities, they are essential to the social and cultural life of so many places across the country.’
He continued: ‘Today I can confirm that from April, every pub in England will get 15% off its new business rates bill on top of the support announced at Budget. Pubs’ bills will then be frozen in real terms for a further two years.
‘This support is worth £1,650 for the average pub, just next year, and will mean that around three-quarters of pubs will see their bills either fall or stay the same next year. Then bills will be frozen in real terms for the next two years.’
The Government will publish a High Streets Strategy later this year to help shops in towns and cities, Mr Tomlinson said.
‘We’ve already taken significant steps to acknowledge this and support businesses, including £4.3 billion of business rate support at the budget.
‘But over the last decade consumers have changed their habits, increasingly working from home and shopping online, and these trends continue to make it harder for high street businesses.’
Mr Tomlinson continued: ‘We will work with businesses and representative bodies to bring this strategy together.
‘It will be a cross-Government strategy, and we will be looking at what more Government can do to support our high streets.’
Responding in the Commons, Sir Mel said: ‘This partial U-turn is far too little and far too late. It is a sticking plaster which delays the pain for a few, while most businesses despair as they see their bills continue to skyrocket.
‘Our high streets need permanently lower business rates – not just for pubs, but for the shops and hospitality venues that give our high streets life.
‘These tax rises are a political choice, driven by higher welfare spending, and they are destroying businesses and jobs across the country. It doesn’t have to be this way.’
The Chancellor introduced transitional relief to manage increases to rates bills over the next three years after the removal of sector discounts.
However, industry bodies UKHospitality and the British Beer and Pub Association have been warning that pub business rates bills would still increase by an average of 15 per cent, or £1,400, in April.
They said this will be an average rise of 76 per cent, or £7,000, by the 2028-29 financial year – and some outlets face far higher increases.
The support package will not help hotels, where business rates bills are set to jump by an average of 115 per cent a year, or £111,300, over the next three years.
Pharmacies have also warned they are facing massive hikes in their costs.
Henry Gregg, Chief Executive of the National Pharmacy Association, said: ‘This increase will push some pharmacies to the brink of collapse.
‘Pharmacies are essential to their communities but the government have taken a decision today to prioritise pubs over the health needs of millions of people who use pharmacies every day.’It’s an insult to hard pressed pharmacists who are still struggling under the effects of historic NHS underfunding that simply isn’t sufficient to pay inflated business rates, medicine prices and their other bills.
‘Pharmacies are not like pubs, cafes or restaurants. They receive 90 per cent of their funding from the NHS and cannot simply increase their prices for the nations prescriptions to absorb this eye watering increase.’
Association of Convenience Stores chief executive James Lowman said: ‘Local shops will feel neglected and dismissed by this Government today as they are passed over for additional support. For those facing rates increases in April of thousands of pounds, difficult decisions will have to be made about investment, employment opportunities and the services that are provided to customers.
‘The Chancellor has a chance to make this right and extend business rates support in the Spring Statement to all retail, hospitality and leisure businesses. Without additional support, jobs will be lost, inflation will rise as retailers look to claw back margin, and investment will be put on hold.’
Earlier this week, Revolution bars group The Revel Collective said they were filing to appoint administrators in the face of weak consumer confidence and higher costs.
Ms Reeves has also hammered the hospitality sector by ramping up national insurance for employers, making staffing more expensive
A number of other hospitality groups, such as TGI Fridays UK and Leon, have also entered insolvency in recent months.
Chris Tulloch of Blind Tiger Inns – which operates 24 pubs – told the BBC he was braced for bills for Sky and TNT sports channels to rise in line with rates.
He said: ‘We’re very much in the dark about the ‘lifeline’ that we might be getting as pubs – which still seems like a very strange analogy given that they’re causing the problem in the first place…
‘The potential backtrack, if you will, is being called a ‘rescue deal’, ‘lifeline’ and a ‘bail out’, but to me that doesn’t really fit what’s happening.’
