Labour to announce pub business rates U-turn after industry outcry | Hospitality industry
Ministers are preparing to U-turn changes to pub business rates following a wave of unrest in the hospitality industry, the Guardian reports.
In another government escalation into a contentious policy, details of revisions to business rates changes set to particularly impact the hospitality sector will be announced in the next few days.
A government source said the move would be an attempt to “identify issues with how business rates are collected”. This will be part of a wider Treasury package that also includes measures to help pubs in areas such as licensing, opening hours and wider efforts to reduce red tape.
The pub industry is pressing ministers to take action and Keir Starmer also faces concerns from a number of Labor MPs. Some pubs even put up signs banning Labor MPs in protest.
In November’s budget, chancellor Rachel Reeves pledged £4.3bn of financial support over three years to the retail and hospitality sectors, but also announced an end to the business rates reductions that have been in place since Covid.
This will further increase the impact of revaluing property valuations, which are the basis for business rates; This has caused the taxable value of pubs and restaurants to rise from its Covid-affected lows.
From April, prices will increase by 115% for the average hotel and 76% for a pub, while this rate will increase by 4% for large supermarkets and 7% for distribution warehouses. Whitbread, which owns pubs, restaurants and the Premier Inn hotel chain, says it will have to pay between £40 million and £50 million in tax as a result.
The change of plans follows discussions with pub and hospitality industry bodies about the impact of the revaluation. Before Christmas, Reeves launched work on a possible support package for pubs, led by Dan Tomlinson, the Treasury secretary.
While the change will be welcomed by both the pub trade and opposition parties, who have called for more help for pubs, it would be another U-turn following cuts to winter fuel payments for the elderly and changes to inheritance tax for farms, as announced two days before Christmas.
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 publicans can breathe a huge sigh of relief. The BBPA has worked closely with ministers on a specific solution for pubs that will see bills reduced in line with the government’s previous promises for pubs. We now look forward to seeing the details of the next announcement.”
