Labour backlash as 50 MPs warn Reeves’s pubs business rates U-turn doesn’t go far enough
Rachel Reeves is facing a backlash from Labor MPs, pub landlords and business owners over a 15 per cent cut in business interest rates that is “wholly inadequate”.
The support, which the Treasury says is worth £1,650 for the average pub next year, comes after warnings in the Chancellor’s Budget that a decision to end rates relief introduced during the Covid pandemic would lead to mass closures and job losses.
The outrage triggered a national campaign led by TV presenter Jeremy Clarkson to ban pubs from allowing Labor MPs into their premises.
Independent He first announced the government would U-turn its plan to end benefits earlier this month, and the Treasury finally confirmed pubs and music venues will receive a 15 per cent cut on their business rates bills from April as part of a major support package.
But hotels, restaurants and cafes will not receive additional support despite concerns about rising tax bills.
Independent He saw a letter from 50 Labor MPs, edited by Labor Knowsley MP Anneliese Midgley, a member of the culture select committee, warning that change was not enough.
The letter, also signed by former minister Justin Madders and leading Labor MPs Stella Creasy, Dan Carden, Sharon Hodgson, Alex Sobel and Kerry McCarthy, warns that music venues are still under threat.
They said: “The UK Music industry is one of our most important cultural and economic assets, hosting world-famous artists, venues, festivals, studios and generating significant international soft power. It contributed £8bn to the economy by 2024.
“Many of us have been contacted by our constituents who use and operate these critical music venues in recent months to explain that they will be severely affected by the 2026 business rates revaluation, which is due to come into force on 1 April 2026.
“According to the Music Venue Trust, 84 community music venues in England face rate increases in value of between 45 per cent and 275 per cent from 2025-26 to 2026-27. These increases represent existential threats, not marginal adjustments.”
Announcing the support in the House of Commons on Tuesday, Treasury secretary Dan Tomlinson said property tax bills for pubs and music venues in England would be reduced by 15 per cent in 2026-27 and then “literally frozen” for the next two years.
But responding to the announcement, Ms Creasy urged ministers to rethink the exclusion of cafes, soft play centers and community centers from the plans, claiming it could lead to their closure.
He said: “I’m sure he wouldn’t want to be the minister responsible for sending young children to pubs because other places their parents could have taken them during the day have closed. That wouldn’t be in anyone’s interests.”
The Treasury’s intervention follows growing backlash from industry bosses and MPs over impending tax increases.
But industry bodies UKHospitality and the British Beer and Pub Association (BBPA) have warned business rates bills for pubs in England will still rise by an average of 15 per cent, or £1,400, in April without intervention.
They said this would lead to an average increase of 76 per cent, or £7,000, by the 2028-29 financial year.
And not all homeowners are convinced. Dom Jacobs, founder and managing director of Ardent Pub Group in London, said: “Rachel Reeves’ latest U-turn is welcome, but it is wholly inadequate. Hospitality continues to shoulder an excessive tax burden and this half-measure does nothing to change that.”
“Instead of supporting a sector that can deliver real growth and jobs, the government has once again missed the mark, a failure that will inevitably leave many brilliant public servants unemployed.”
Matthew Todd, landlord of The Wonston Arms, near Winchester, Hampshire, said: “I don’t see how it will save venues from closing; it’s actually such a small amount that’s being talked about. I’m afraid it’s not enough.”
Andy Lennox, manager of The Old Thatch in Wimborne, Dorset, said the cut in rates was a “cut on the bill increase” and did not go far enough.
“This is a bill we couldn’t afford to pay anyway. It’s been reduced but it’s still going up. And essentially, we’ve always advocated for meaningful tax reform that’s European, so VAT has been reduced to 13 percent.”
“Ultimately, while it’s welcome that the government is listening, we don’t think it goes far enough.”
