Panicked ministers are poised to water down the business rates bombshell faced by pubs, after an aggressive backlash from the industry saw over a thousand landlords ban Labour MPs from their premises.
The government is expected to announce an overhaul to the way it calculates business rates for pubs in days, which it says will help soften the sharp hikes that a majority the embattled sector faced in the aftermath of the Budget.
According to multiple reports, Treasury officials have conceded its overhaul to business rates – the commercial equivalent to council tax – left many local pubs facing a huge hike in their overall bill, despite the hospitality industry being offered 5p cut.
At November’s Budget, the Chancellor scaled back the business rate discounts that businesses have enjoyed since the pandemic. It also confirmed the results of a much-anticipated re-evaluation of so-called rateable values, an central government estimate for the amount of rent a site will pay in a year, which left pubs facing considerably larger bills.
The decision sparked uproar and weeks of dogged campaigning from the industry, which was already among the worst affected by consecutive rises to minimum wage and the ill-fated payroll tax grab announced in the government’s maiden Budget.
Thousands of landlords, including former Top Gear presenter Jeremy Clarkson, joined a grassroots campaign banning Labour politicians from their sites over Christmas. Other famous publicans like chef Tom Kerridge have urged government to step to prevent reems of locals hitting the wall.
Emma KcClarkin, chief executive of the British Beer and Pub Association, hailed government’s decision to reopen the business rates increases, branding a “huge win for pubs across the country”.
“This could save locals, jobs, and means publicans can breathe a huge sigh of relief. The BBPA has worked closely with ministers on a pub-specific solution that would ensure that bills are reduced in line with the government’s previous promise to pubs.”
Any package for pubs would constitute a major climbdown from ministers, less than two months after Chancellor Rachel Reeves delivered her second Budget. Only George Osborne’s famous ‘omnishambles’ Budget
But the government is likely to face further backlash from the wider hospitality industry – including hotels and restaurants – which under the leaked proposals will not be included in the package, which is ring-fenced for pubs.
The Treasury was approached for comment.