In an open letter to Chancellor Rachel Reeves, the pubco boss said the measures announced in the 2025 Autumn Budget would do a “great deal of harm” to hospitality.
Spencer cautioned the sector faced reduced investment and job losses, undermining wider economic growth and diminishing confidence, without urgent action from the Government.
The letter said: “We entered this Budget process with the expectation your Government would recognise the significant challenges currently impacting Great British pubs, uphold your manifesto commitment to support the sector and ‘level the playing field between the high street and online giants’.
“Regrettably, this Budget introduces additional costs and challenges for an industry that is already experiencing material challenges, leaving publicans facing significant financial and mental strain.”
Addressing the House of Commons on Wednesday 26 November, Reeves claimed the lower business rates put in place for hospitality were the lowest since 1991, though experts have slammed the changes, calculating significant increases for pubs instead of reductions.
Harsh choices
Spencer further warned the revaluations from April 2026 would “wipe out any benefit” from the reduced multiplier announced as part of the Budget.
He pointed to figures from trade body UKHospitality (UKH), which showed by 2028/29 rates payable for pubs will have increased by 76%, compared to just 4% for large supermarkets and 16% for online distribution warehouses.
In his letter, Spencer gave an example for a Punch site with a current rateable value of £64,600. He detailed the rates payable in this instance would increase to £91,700, an uptick of £33,886 phased in over the next three years with the transitional relief.
He added transitional relief was welcome but would simply delay the impact of cost increases and implored the Government to increase the discount from 5p to 20p with immediate effect and delay revaluations for hospitality.
“This is not levelling the playing field; it is tilting it further against community pubs and our high streets”, the CEO wrote.
“We repeatedly warned the pandemic’s impact on previous valuations would uniquely disadvantage hospitality businesses.
Irreversible damage
“The decision not to implement the maximum permitted discount for hospitality properties, as allowed by law, means many publicans will face harsh financial choices, forcing them to pull back on investment, when they should be focusing on growing their businesses, creating meaningful employment opportunities and delivering sustainable tax receipts for the Treasury.”
The Chancellor also announced increases to the national living wage and national minimum wage alongside inflation-linked duty hikes. On top of this, rising operational costs, including energy, continue to put pressure on margins.
Spencer continued: “These additional pressures compound the challenge for operators already working on tight margins. Even prior to this latest hammer blow, increasing expenses and high taxes have meant only 12p from the typical £4.80 selling price of a pint goes to profit.
“Pubs are more than businesses; they are vital social hubs at the heart of communities. If your Government is serious about supporting growth, protecting jobs, and upholding your manifesto commitment to our sector, urgent action is needed to revisit the rates multiplier discount for pubs.
“We urge you to act swiftly to prevent irreversible damage to our industry and to ensure your Government’s commitment to fairness and community prosperity is upheld. The alternative is closures, with committed hospitality professionals and communities bearing the brunt.”
