Pubs and live music venues to get support after business rates backlash
The Treasury has unveiled a support package worth tens of millions of pounds for pubs and live music venues in England and Wales, in a climbdown that follows a fierce backlash against plans to overhaul business rates.Trade bodies had warned that Rachel Reeves’s changes to business rates, announced at the chancellor’s November budget, would trigger widespread closures and job losses in the hospitality sector, particularly in pubs.On Tuesday, the government announced financial support to mitigate the effect of the rates shake-up, after officials admitted that they had not foreseen its total financial impact.The package, final details of which were still being hammered out on Monday night, is expected to be worth nearly £100m for pubs and gig venues.Dan Tomlinson, the exchequer secretary to the Treasury, said every pub in England and Wales would get 15% off its new business rates bill from 1 April, worth an average of £1,650 for each.
Bills will then be frozen in real terms, factoring in inflation, for a further two years,Tomlinson said: “This support is worth £1,650 for the average pub just next year, and will mean that around three-quarters of pubs will see their bills either fall or stay the same next year,”Tomlinson said three-quarters of pubs would see their rates bill fall or stay the same next year and rates across the sector as a whole would be lower in 2028-29 than they are now,In the meantime, the government will review the methodology used to calculate how much pubs should pay in rates, amid claims by the industry that it is unfairly penalised,The government has also moved to reform pub licensing rules, including allowing extended hours and making it easier to expand the premises.
However, the government will not reduce the rate of VAT on beers, spirits and wine, one of the sector’s biggest bugbears.Mel Stride, the shadow chancellor, said the measures were a “temporary sticking plaster” and the Conservatives would abolish business rates for thousands of hospitality businesses.The wider hospitality industry has also lobbied for relief, but last week Reeves said the government was focusing only on the pub sector.Tomlinson said live music venues would also be included on Tuesday.The government said it would also announce a review of the way hotels are valued.
“I do recognise the particular challenge that pubs face at the moment, and so have been working with the sector over the last few weeks to make sure that the right support is in place,” Reeves said at the World Economic Forum in Davos last week,“I think the situation the pubs face is different from other parts of the hospitality sector,”Pubs have come under intense financial pressure in recent years, with significant cost increases from higher employer national insurance contributions, rises in the minimum wage, energy costs, and inflation,Higher bills meant one pub a day closed for good in England and Wales last year, according to analysis of government statistics by the tax specialist company Ryan,It found the overall number of pubs, including those vacant and being offered to let, had fallen to 38,623 in 2025, down from 39,989 a year earlier.
In the budget Reeves announced a £4.3bn support package that included giving relief to businesses, intended to offset the end of a Covid support scheme that had reduced bills by 40%.However, this has not proved to be enough to offset a significant increase in property tax bills caused by the first revaluations of properties since the pandemic from April.The transition in relief caps was designed to be implemented over several years, to stagger the rise in bills, but the industry has complained that the increase in the third year is unaffordable.Pubs across the UK will face an average 76% increase in their business rates bills over the next three years, while hotels are braced for an average 115% rise, according to the industry body UKHospitality.
However, the boss of Waterstones, James Daunt, this week defended the government’s approach to the high street, arguing that changes to business rates were “sensible” and had benefited shops in struggling areas,
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