Rachel Reeves Faces Backlash Over Pubs Business Rates U-Turn

The recent announcement by Labour’s Chancellor, Rachel Reeves, aimed at addressing the rising business rates threatening pubs, has met with sharp criticism. Many have described the government’s move as “too little, too late,” with significant concerns about the future of the hospitality sector in the UK.

Kemi Badenoch, the leader of the Conservative Party, remarked that Labour is “killing” the nation’s pubs, amidst growing public dissatisfaction with the government’s handling of business rates. The Labour Party has reportedly banned its MPs from visiting over 1,000 pubs, a decision likely to influence public sentiment further. In an attempt to counteract Labour’s position, Badenoch has pledged to eliminate business rates for thousands of pubs if her party regains power.

The Chancellor is expected to announce measures designed to prevent the closure of beloved pubs due to a surge in business rates, which have skyrocketed in recent months. Campaigners have criticized these proposed measures as insufficient, describing them as a mere “pitiful sticking plaster.” They argue that comprehensive reforms are essential to save the hospitality sector from what they term a “tax bomb.”

Landlords are currently grappling with a crisis, as many premises have seen their rateable values increase dramatically. The government is anticipated to reveal a support package shortly, but the urgency of the situation is palpable. Badenoch emphasized, “Labour are killing Britain’s pubs. This rumoured u-turn is too little too late. It’s time to back our local pubs.”

The Shadow Business and Trade Secretary, Andrew Griffith, criticized the government’s budget, asserting that it is “falling apart” under pressure. He highlighted that while Labour is undergoing significant policy changes, the proposed solutions fail to address the broader issues affecting shops, restaurants, hotels, and markets, all of which face increases of over 50%.

John O’Connell, chief executive of the TaxPayers’ Alliance, has urged the Chancellor to take decisive action. He remarked, “This is a pitiful sticking plaster from a Government that claims to support pubs and hospitality while strangling the sector with punishing taxes and costs.” He called for the reversal of the business rates increase and the cancellation of the National Insurance hike that has burdened employers.

The Campaign for Real Ale, chaired by Ash Corbett-Collins, echoed these sentiments, insisting that the government must act swiftly to prevent pubs from closing. He stated, “Doing nothing and letting pubs go to the wall was never going to be tolerated by pub goers, publicans, or MPs.”

The impact of the proposed changes to business rates has been described as potentially devastating for pubs and breweries. Andy Slee, chief executive of the Society of Independent Brewers and Associates (SIBA), emphasized the necessity for a “meaningful long-term solution” to address the business rates issue.

Concerns have also been raised about the broader hospitality sector. Kate Nicholls, chair of UKHospitality, noted, “The entire hospitality sector is affected by these business rates hikes – from pubs and hotels to restaurants and cafes.” She advocates for a comprehensive hospitality-wide solution, suggesting the implementation of a maximum possible 20p discount to the multiplier for all hospitality properties.

As the government prepares to unveil further support measures, including potential reductions in energy costs for pubs, the specifics of how pubs will avoid the forthcoming business rates increases remain unclear.

The situation has heightened scrutiny over the government’s policy approach, especially following dissatisfaction with the removal of winter fuel support for pensioners and proposed increases in inheritance tax on agricultural land. Tim Bonner, chief executive of the Countryside Alliance, emphasized the importance of pubs in rural life, urging the government to consider the ramifications of their policies on rural communities.

As the pressure mounts, it is evident that the government must act decisively to address the growing concerns in the hospitality sector, balancing the needs of pubs with those of the broader community.