During Prime Minister’s Questions on Wednesday 14 January, Conservative party leader Kemi Badenoch pressed Prime Minister Keir Starmer for clarity on changes to business rates for the hospitality sector.
“His budget doubled business rates for thousands of pubs. So can the Prime Minister tell us, is there going to be any change to his business rates policy?” she asked.
Starmer responded by saying the Government was working with the sector to ensure businesses received the support they needed, echoing Chancellor Rachel Reeves’ comments to the BBC.
The Prime Minister added that Labour’s economic policies had delivered lower inflation, reduced interest rates and higher wages, allowing working people to “go out and spend money in pubs”.
Beyond pubs
He also attacked Badenoch’s record in Government: “The leader of the opposition’s new-found concern for pubs will come as a surprise to anyone who remembers the 7,000 pubs that were closed under the Tories. As business secretary, she didn’t say a word about it.”
Meanwhile, Badenoch accused Starmer of failing to answer the question, describing him as “clueless”.
“It sounds like he doesn’t know what his policy is. This has been a farce from start to finish,” she said.
“This mess goes beyond pubs, it’s the whole of the hospitality industry; cafes, hotels, restaurants, they are all being clobbered by Labour’s tax hikes. There is a solution to this, Conservatives would abolish business rates for small business on the high street.”
The debate followed criticism from hospitality operators earlier this week, who accused the Government of being “ignorant" after business secretary Peter Kyle said ministers did not have the full picture on business rates ahead of the Autumn Budget.
Recent figures from trade body UKHospitality (UKH) also showed some 2,000 hospitality venues were at risk of closure this year without urgent reform.
Manifesto commitment
Concerns were also raised from Labour’s own benches. Labour MP for Burton and Uttoxeter Jacob Collier called for more targeted support for the sector during parliamentary proceedings yesterday.
“I recognise the permanently lower multiplier on business rates that the Government has put in place for retail, hospitality and leisure businesses. But any wins in this space have been wiped out in many cases by the new rateable values published by the VOA,” he said.
Collier highlighted two pubs in his constituency, the Devonshire Arms and the Roebuck, which are expected to see their rateable values rise by 60% and 70% respectively.
“At this rate, I’m not going to have much of a pub crawl”, he continued. “We must stay true to that manifesto commitment we made to level the playing field between online retailers and the high street.”
“An on average 76% increase for pubs for just 14% for online retailers means that we must think again on this. It is no good having transitional relief in place when a bill at the end of three years is simply unaffordable.”
