Starmer poised for ANOTHER U-turn as ministers scramble for pubs rescue package amid fury from business and Labour MPs

Keir Starmer prepares for another U-turn amid growing business anger over interest rate hikes bars.

Ministers are trying to put together a rescue package to ease pressure on the hospitality industry and it is expected to be announced within days.

The impending collapse is the latest humiliation for Prime Minister and Chancellor Rachel Reeves, who is said to be resisting further concessions.

Pubs have been sounding the alarm about mass closures since Ms Reeves confirmed the Covid-era business rates relief would end in April. It had already been reduced from 75 percent to 40 percent.

The same month will see the introduction of new rateable values ​​for commercial properties, reflecting changes in the property market. Many pubs faced doubling of rates.

Demands for change are growing from Labor MPs after many local residents were banned as part of a campaign by angry landlords.

Pubs have been sounding the alarm since Ms Reeves confirmed the Covid-era business rates relief would end in April. Reduced from 75 percent to 40 percent

Industry body UK Hospitality has warned that any concessions should not be limited to pubs

Labor MPs also pressed the government to go further on pubs

Sir Keir had hinted that pubs could be allowed to stay open longer to help them cope with eye-watering extra costs.

But more importantly, it now looks like there will be concessions in the way rates are calculated.

The reforms are expected to be aimed specifically at pubs, despite warnings that other hospitality businesses such as hotels are in the firing line.

While the Treasury has not yet finalized the package, feverish work continues behind the scenes.

But industry bodies and Labor MPs are still pressing for wider aid to affected businesses.

Work and Pensions Minister Pat McFadden said this morning that the Government was ‘talking to the pub sector’ about its concerns.

He told BBC Radio 4’s Today programme: ‘Let me explain to listeners that there are three different things going on in pubs at the moment: the actual charges being charged, those levels have been reduced, but there’s also been a revaluation which has increased bills, and some of the Covid support that was put in place a few years ago has been withdrawn.

‘Without government action, the combined effect of all three of these things will be a huge increase in pubs’ bills.’

The senior minister said the Government ‘saw this coming’ and had introduced a £4.3 billion interim relief fund.

He continued: ‘Now that we have done this, the bars, the professional chambers and the tavern owners themselves said that this was not enough, you should understand our difficulties.

‘We appreciate how important the pub industry is to the UK economically and culturally, so we will continue to speak to the pub industry. We really value the pub’s role in British life. ‘We want to help the pubs.’

Asked if this meant the Government was planning a U-turn on withdrawing Covid-era tax cuts, Mr McFadden said: ‘I’m not going to predict anything, but I will say to your listeners: we appreciate the role of the pub in British life, it’s something we value.

‘Believe it or not, we are people as much as politicians, and we recognize the role pubs play.’

Kemi Badenoch said: ‘Yesterday Keir Starmer told us Labor had ‘turned the corner’.

‘It looks like they’ve turned the corner towards the first U-turn of 2026.

‘Workers are killing Britain’s pubs. According to this rumor, the U-turn is too little, too late. ‘It’s time to support our local pubs.’

Emma McClarkin, chief executive of the British Beer and Pub Association (BBPA), said: ‘The news that the Government will re-examine business rates rises is a potentially huge win for pubs across the country and shows the Government is not only listening to our concerns but taking action.

‘This could save local people and jobs and mean populists can breathe a big sigh of relief.

‘The BBPA has worked closely with ministers on a specific solution for pubs that will reduce bills in line with the Government’s previous promises for pubs.

‘We now look forward to seeing the details of the upcoming announcement.’

Shadow Business Secretary Andrew Griffith said: ‘The government may be about to reverse another of Rachel Reeves’ mistakes.

‘But that doesn’t fix his damage. More than 10,000 bars, hotels, restaurants and high street businesses are facing terminal costs. The Chancellor misunderstood this. ‘We need a complete U-turn now.’

The boss of supermarket giant Tesco today became the latest to condemn ‘unfair’ property taxes.

Chief executive Ken Murphy has called on the Government to completely overhaul the business rates system, which he described as ‘fundamentally unfair’.

He said the group would ‘absolutely advocate reforming the pay system for everyone, including pubs’, and was a strong supporter of campaigning ‘for a fairer pay system on behalf of the hospitality industry’.

He said pubs and hospitality firms had been hit particularly hard by the latest changes announced in the autumn budget, while retailers were paying a disproportionate amount of business fees.

Labor MPs are increasingly demanding change; many are being barred from locals by angry landlords

He said: ‘They are suffering from the relief they had at the end of the Covid period… and their interest bills are rising too.

‘I believe the government needs to overhaul the rates system.’

The supermarket sector narrowly avoided further business rates woes in the latest 26 November budget.

However, Mr Murphy noted that the retail sector owns around 5 per cent of taxable property in the UK but ‘pays 20 per cent of bill rates’.

Tesco is one of the biggest taxpayers in the UK, with bills of around £700 million a year.

He said the group’s interest rates were ‘not going up’ but ‘not coming down’ as a result of the latest changes approved in the budget.

John O’Connell, chief executive of the Taxpayers’ Alliance, said: ‘This is a pathetic plaster cast by a government that claims to support pubs and hospitality but is strangling the sector by punishing taxes and costs.

‘After hiking business rates and crushing employers with higher national insurance, ministers are now offering a token retreat and hoping hard-pressed public workers will be grateful, even if many are pushed to the brink.

‘If the government is serious about saving pubs, it should roll back business rates and scrap employers’ national insurance increases altogether, rather than adopting half-measures while the sector bleeds.’