Rachel Reeves is facing a backlash for a cut to business rates for the likes of Selfridges and Harrods while many pubs and restaurants see a huge hike.
Analysis has found that a new shake-up of business rates will cause the tax bill of luxury stores to fall, while smaller venues face double-digit increases.
Harrods’ business rates bill for its flagship Knightsbridge store is expected to fall by £1.1m between 2025-26 and 2026-27 to £8.7m, according to The Times.
Selfridges is expected to pay £622,000 less for its Oxford Street shop, with the business rates bill for the landmark store falling to £8.7m for the 2026-27 year.
But the average pub in the UK is set to see a £1,400 rise in its bill next year, according to UK Hospitality.
In total, over three years, it’s a £318m increase to business rates bills for those small hospitality businesses.
‘Outrageous’
In a letter to all MPs this week, UKHospitality said “this outcome is totally contrary to the Government’s manifesto commitment” to level the playing field between the high street and online giants.
Kate Nicholls, the chairman of UKHospitality, called the reduction for Selfridges and Harrods “outrageous… while hard-pressed local pubs, neighbourhood restaurants and coastal hotels are seeing their bills significantly increase.”
“This is a damning example of how the business rates system has not been reformed in a way that delivers the Government’s intention to level the playing field to benefit hospitality businesses.
“The eye-watering increases to business rates that many hospitality businesses are seeing risk further closures and job losses, and need to be urgently addressed.”
Sir Tim Martin, the boss of Wetherspoon, told the The Times that there was “political indifference to the real threats to hospitality”.
“Most pub-goers won’t be consoled by princes and potentates paying less for caviar and champagne at Harrods, if that’s the main outcome of the Budget,” he added.
City AM has contacted Selfridges, Harrods and the Treasury for comment.