Pubs and live music venues to get support after business rates backlash, Treasury confirms | Hospitality industry
The Treasury has announced a support package worth tens of millions of pounds for pubs and live music venues in England and Wales following a furious backlash over plans to overhaul business rates.
Trade bodies had warned that business rates changes announced by Rachel Reeves in the Chancellor’s November budget would lead to widespread closures and job losses in the hospitality sector, particularly pubs.
On Tuesday the government announced fiscal support to cushion the impact of a change in interest rates after officials admitted they had not foreseen its total fiscal impact.
The package, whose final details are being worked out on Monday night, is expected to be worth around £100 million for pubs and concert venues.
Treasurer Dan Tomlinson said every pub in England and Wales will receive a 15% discount on the new business rates bill from April 1, worth an average of £1,650 each. The bills will then be frozen in real terms for another two years, taking inflation into account.
Tomlinson said: “This support is worth £1,650 for the average pub next year and will mean bills for around three-quarters of pubs will either fall or remain the same next year.”
Tomlinson said three-quarters of pubs would see utility bills fall or remain the same next year, and rates in the industry as a whole would be lower in 2028-29 than they are now.
Meanwhile, the government will review the methodology used to calculate how much pubs should pay in terms of rates, amid claims the industry is being unfairly penalized.
The government has also moved to reform broadcast licensing rules, including allowing longer working hours and making it easier to expand facilities. However, the government will not reduce the VAT rate on beer, spirits and wine, which is one of the biggest scourges of the industry.
Shadow chancellor Mel Stride said the measures were a “temporary plaster” and the Conservatives would lift business rates for thousands of hospitality businesses.
The wider hospitality industry has also lobbied for help but Reeves said last week the government was focusing solely on the pub sector. Live music venues will also be included Tuesday, Tomlinson said.
The government said it would also announce a review of the way hotels are valued.
Speaking at the World Economic Forum in Davos last week, Reeves said: “I recognize the particular challenge pubs are facing at the moment and that’s why I’ve been working with the sector over the last few weeks to make sure the right support is in place.” “I think the situation facing pubs is different to other parts of the hospitality industry.”
Pubs have come under intense financial pressure in recent years due to high employer national insurance contributions, increases in the minimum wage, energy costs and significant cost increases due to inflation.
Higher bills meant the total closure of one pub a day in England and Wales last year, according to an analysis of government statistics by tax expert Ryan. The overall number of pubs, including those vacant and those offered for lease, was seen falling to 38,623 in 2025, from 39,989 the previous year.
In the Budget, Reeves announced a £4.3bn support package, including providing aid to businesses, aimed at making up for the end of the Covid support scheme which cut bills by 40%.
But that wasn’t enough to offset the significant increase in property tax bills caused by the first revaluation of properties since the outbreak in April.
The shift in discharge caps was designed to be implemented over several years to slow the rise in bills, but the industry complained that the increase in the third year was unaffordable.
According to industry body UKHospitality, pubs in the UK are set to see their business rates bills rise by an average of 76% over the next three years, while hotels are set for an average rise of 115%.
But Waterstones boss James Daunt this week defended the government’s approach to the high street, arguing that business rates changes were “sensible” and benefited stores in struggling areas.
