MPs have warned that recent and upcoming policies could be the final nail in the coffin for many pubs, as the Commons backed an increase in alcohol duty in line with inflation.
Pubs have faced a toxic cocktail in recent years, including an increase in employer’s national insurance, the minimum wage, energy costs, business rates, inflation, new worker’s rights legislation and now a rise in alcohol duty.
The alcohol duty rise will come into play from 1 February, after MPs backed the government’s Finance Bill that will enact policies announced in Rachel Reeves’s budget.
Analysis of government data by tax specialists at Ryan showed that one pub a day closed permanently in England and Wales in 2025.
Another 540 pubs are set to close this year, according to new modelling from UKHospitality.
That has raised alarm among many, including among Labour figures – and Ms Reeves is working on a package for pubs which could help them with business rates.
‘The rural pub is in danger’
Despite the alcohol duty rise being backed in the Commons on Tuesday, Labour MPs were among those who voiced concern about the pressures facing pubs.
Years of multiple challenges have “left many venues operating on very low margins, if any at all,” Jacob Collier, Labour MP for Burton and Uttoxeter said.
Gareth Snell, another Labour MP, said one brewer in his area faced a 450% business rate increase and called for a “realistic, workable solution” from the government.
Shadow treasury minister James Wild said the hospitality industry is being “punished” by the government, who are “layering costs upon costs”.
The UK’s longest serving and oldest MP, Sir Edward Leigh, also raised concerns about government plans to lower the legal limit for drink-driving and what it would mean for rural pubs.
He cautioned that “everybody who accesses these pubs in rural England has to go there by car”, adding: “The government has to understand that the rural pub is in real danger for these alcohol limits.”
Read more from Sky News:
Government U-turns on digital ID
Birmingham to Manchester rail line announced
Be the first to get Breaking News
Install the Sky News app for free
Also on Tuesday, mayor of Greater Manchester Andy Burnham, tipped as a future Labour leader, said he wanted a rebalancing of business rates and supported “relief for the high street and particularly pubs”.
Pubs will continue to be hit with rising prices in the meantime, with The Morning Advertiser reporting that the price of various drinks will rise from April.
Price hikes from Diageo will see Guinness jump by around 4p a pint – and there’s a 13p increase in the list price of a 70cl bottle of Smirnoff Vodka.
Price increases will add further pressure this year on a sector that has already seen more than 15,000 pubs close between 2000 and 2024, according to British Beer & Pub Association figures.
A new survey shows businesses turned their most pessimistic in three years at the end of 2025 and their mood worsened after Ms Reeves’s budget at the end of November.
The survey, published on Wednesday by The Institute of Chartered Accountants in England and Wales, revealed confidence dropped from September to December.
