Entire hospitality trade rounds on Labour to extend pubs support – as hotelier reveals £12m hike in business rates for single establishment

Labor faces scrapping a crippling business rates rise for the entire hospitality sector after proposing a plan to rescue struggling pubs.

Hotels, shops and other small businesses have pressured Chancellor Rachel Reeves to find a solution for them after a U-turn on pubs.

Rebel Labor MPs who fly the flag at pubs in their constituencies were told this week that Ms Reeves would unveil an emergency aid package ‘within a few days’ in a bid to stave off a developing rebellion.

But a number of other hospitality sectors are now pressing the Government to provide support for all areas of hospitality.

A hotel boss has revealed he is facing a £12.4m increase in his bill for a single property.

Chris Webb, Labor MP for Blackpool South, which has been hit hard by rises in coastal business rates, told a special meeting on Thursday night that Treasury secretary Dan Tomlinson was ‘receptive’ to cutting business rates for accommodation more broadly.

‘My discussions last night were that ‘the whole sector needs to be involved’ and the response I got was that all aspects of hospitality were being covered,’ he said last night.

He added: ‘Nothing is off the table and they continue to listen and engage with the industry while looking at possible changes.’

Pubs have been offered temporary exemptions from paying full business rates during Covid, but the Chancellor’s decision to scrap the relief in the Budget has left many landlords considering closing.

Amid a furious backlash and to head off a possible Commons revolt on Monday, the Treasury is said to have signaled a downturn but is still working on it.

Hotels, restaurants and small businesses in coastal towns such as Blackpool have been particularly affected by increases in business rates

Live music venues live ‘by word of mouth as it were’, says a Labor MP

Hotels have been particularly affected by business rates, with all commercial properties paying higher bills from April.

Pubs face a 76 per cent increase in the current average paid business rate in 2028, while hotels face a 115 per cent increase by then.

Surinder Arora, who runs several hotels in England, told BBC Radio 4’s Today program that the business rates bill for just one of his hotels rose by £12.4 million after discounts were reduced.

The CEO of Arora Group has described possible regulation of pubs as merely ‘not right or fair’.

Speaking to the BBC, Mr Arora said: “The new figures are eye-popping” and warned that “belt tightening” was inevitable and higher costs would be passed on to customers.

While he says he supports the Chancellor’s growth targets, higher taxes mean he could ‘go the other way’ rather than expand the business.

The live music industry, which does not fit neatly into the ‘pubs’ taxation category but relies on the sale of alcohol, could be the next sector to seek the Chancellor’s support.

‘One thing I’m particularly concerned about is the impact this will have on live music venues across the country; Patrick Hurley, the Labor MP for Southport, told the Daily Mail: “They’re just scraping by.

‘I’d love to see something done to support them. I know many of them have alcohol licences, and they could be included in this change to the tax interpretation of bars. But more generally I think the whole live music industry is in a difficult situation.’

More than 30 Labor MPs were set to vote in favor of an amendment to the finance bill that would cut rates for hospitality businesses on Monday, before the Government voiced support for pubs.

Another Labor MP said they were ‘keeping their powder dry’ to see how the Government could support the entire hospitality sector before making any changes.

Labor leader Anna Turley defended her party’s U-turn on tax increases on pubs as ‘a sign of a safe government’

But Labor leader Anna Turley yesterday defended her party’s U-turn on tax increases on pubs as a ‘sign of a safe government’.

Ms Turley said: ‘I do not believe this is a U-turn. It’s really about listening. I think that’s the sign of a Government that is actually in touch with people, listening to people and responding.’

The Conservatives have realized what constitutes another policy escalation for the Labor Government.

Conservative Leader Kemi Badenoch said: ‘This chaotic U-turn on pubs does nothing for the rest of the hospitality sector – cafes, restaurants, shops and gyms – which also faces a massive tax rise under this government.

‘Labour MPs returned from Christmas after being banned from local pubs, forcing Keir Starmer and Rachel Reeves into another embarrassing, last-minute policy change. ‘Will the rest of the retail, hospitality and leisure sector be forced to ban Labor MPs before this Government finally gets it right?’

A joint letter to Ms Reeves yesterday from shadow cabinet members Mel Stride, Andrew Griffith and James Cleverly called for urgent support for the wider high street ‘on a permanent basis’.