A U-turn by the Treasury will see pubs and music venues across England and Wales handed temporary relief from the worst of planned rises to business rates.
The government has been under pressure to act after changes made in the budget in November, alongside the end of support from the pandemic, meant businesses – and especially pubs – were set to face huge increases in their business rates in April.
This, coupled with a hike in the minimum wage and an increase in employer national insurance contributions, led businesses to warn that hundreds of pubs and venues could close without an intervention.
Now Treasury minister Dan Tomlinson has announced that there will be a temporary support package for pubs – but nothing for restaurants, soft play centres and cafes.
Announcing the changes, he said: “Pubs are the cornerstone of so many communities, they are essential to the social and cultural life of so many places across the country.”
Mr Tomlinson told the Commons that from April, every pub in England will get 15% off its new business rates bill. Bills will then be frozen in real terms for a further two years.
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Business rates are a tax based on an estimate of a commercial property’s rental value.
The changes will be worth £1,650 for the average pub over the next year, the minister added – before insisting that around three-quarters of pubs will see their bills fall or stay the same.
The support will also apply to music venues, but not recording studios and other hospitality venues.
He explained: “Many live music venues are valued as pubs and many pubs are grassroots live music venues. It would not be right to seek to draw the line so tightly so as to include some and not others.”
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Mr Tomlinson also told MPs that the government will launch a review into how pubs are valued, and will allow them to stay open until 1am or 2am for later stage home nation matches during the World Cup this summer, which is being played in North America.
The minister added that the government will consult on loosening planning rules for pubs, allowing them to extend their main room or add guest rooms without planning applications.
Recognising that “it’s a tough time for other businesses on the high street”, he pointed to an upcoming High Streets Strategy, along with previous financial support for companies.
Chancellor Rachel Reeves was not present in the Commons and did not lay out the changes, despite being in the chamber earlier on Tuesday.
‘Support must be permanent’
Responding to his statement, shadow chancellor Sir Mel Stride asked: “Is that it?”
Ms Reeves’s Conservative opposite number continued: “After all this time, after weeks of telling our local pubs that help was on the way, this is all they get – a temporary sticking plaster that will only delay the pain for a few, while thousands of businesses despair as their bills skyrocket.
“Support must be permanent. We have to cut business rates for our high streets to give certainty to local businesses, and it must be far wider than what the government has announced today, not just pubs, but the whole of the retail, hospitality and leisure sectors which bring life to our high streets and town centres.”
Meanwhile, the Liberal Democrats labelled it a “half-hearted U-turn” and called on ministers to “apologise to publicans for the months of uncertainty and worry they forced on them”.
Daisy Cooper, the party’s Treasury spokesperson, added: “The government must do the right thing and press ahead with the full 20p discount it promised to every retail, hospitality and leisure business, and back our call for an emergency VAT cut for hospitality until April 2027 to save the great British high street.”
‘Restaurants and hotels facing severe challenges’
UKHospitality said the minister’s announcement was “welcome” and showed the government has “listened to us about the acute cost challenges facing businesses”.
But Kate Nicholls, the group’s chair, added: “The rising cost of doing business and business rates increases is a hospitality-wide problem that needs a hospitality-wide solution.
“The reality remains that we still have restaurants and hotels facing severe challenges from successive budgets. They need to see substantive solutions that genuinely reduce their costs. Without that clear action, they will face increasingly tough decisions on business viability, jobs and prices for consumers.”
‘This is pure discrimination’
Tom Kiehl, the chief executive of UK Music, told Sky News that the government “must not forget recording studios”.
He explained: “Why should the studio used to film Hamnet be entitled to business rate relief, yet the studio used to record the soundtrack not be eligible? This is pure discrimination and recording studios must not be treated as poor cousins in the creative economy. The government must think again.”
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The British Chambers of Commerce responded that the announcement is “good news for pubs and music venues” but added that it “does not go far enough to protect many other businesses which are under huge pressure”.
Helen Dickinson, the chief executive of the British Retail Consortium said support should be ” targeted at all those on the high street whose bills will see the biggest rises, whether they are pubs, shops or cafes”.
