According to reports first carried in the Financial Times, the Treasury is expected to confirm new relief measures today (27 January), marking a significant shift in its position after officials acknowledged they had underestimated the impact of Budget changes on the sector.
Escalating pressure
It follows weeks of escalating pressure from operators, trade bodies and MPs, as well as a growing political fallout that has seen some landlords move to bar Labour MPs from their venues.
The news follows earlier reports that Chancellor Rachel Reeves was expected to opt for temporary, pub specific support rather than broader business rates reform.
The latest indication of a £100m package suggests a more substantial intervention, though it is reported to remain limited to pubs rather than the wider hospitality sector.
‘A different situation’
Reeves signalled last week that pubs were “in a different situation” to restaurants, cafes and hotels, disappointing operators who had hoped for sector wide relief. VAT cuts on beer, wine and spirits are also not expected, despite renewed calls from high profile industry figures.
The need for support has been sharpened by the first post pandemic property revaluations, due to take effect in April. Transitional relief caps mean bills for a typical £200,000 rateable value site will rise 15% next year, 25% plus inflation in 2027 to 2028 and 40% in 2028 to 2029.
UKHospitality forecasts the average pub will face a 76% increase in its business rates bill over the next three years. Hotels face even larger uplifts of around 115%.
A Treasury spokesperson said: “We recognise the significant value pubs bring to communities and the chancellor and prime minister have been clear that we are determined to support them.”
British Beer and Pub Association (BBPA) chief executive Emma McClarkin said: “We welcome the government looking at ways to support pubs, which have unique social value and are a vital employer. In the long term we want to work with government to help pubs thrive through permanent, meaningful business rates reform, a beer duty cut, a fundamental regulatory reset and mitigation of soaring employment costs.”
Further detail is expected later today, with operators awaiting clarity on whether the support will meaningfully offset the steepest rate hikes seen in decades.
