The vow to increase business rates relief by 20% will be for pubs, social clubs and live music venues is set top come into force in April 2027 and there will be a review of pub and hotel valuations too. Yet with businesses still battling rising labour costs, energy bills and taxes, many feel substantial intervention is still needed.
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As Chancellor John Healey prepares to deliver the Autumn Budget today (Wednesday 28 October), the industry will be watching to see whether Burnham’s pro-pub rhetoric is matched by meaningful action.
A new voice for pubs in Number 10
When Burnham entered Downing Street, many across the pub sector hoped his Government would take a different approach to hospitality.
Before becoming Prime Minister, Burnham backed calls for business rates reform, questioned increases to employer national insurance contributions (NICs) and signalled support for a lower rate of VAT for hospitality.
Those positions, coupled with a series of pro-pub interventions during his first months in office, raised expectations that the industry’s long-running concerns would receive greater attention in Westminster.
Three months on, operators have seen movement on business rates, but many of the sector’s biggest demands remain unresolved.
Business rates
The Government’s most significant intervention to date has been its decision to introduce a 20% reduction in business rates bills – via an increase in relief – for pubs, social clubs and live music venues from April 2027.
Ministers said the measure would support almost 32,000 venues, with a typical pub expected to save around £1,100 a year.
The announcement was broadly welcomed across the industry, although operators were quick to point out it falls short of the wholesale reform many have called for.
Several questioned whether the discount would materially alter trading conditions at a time when businesses continue to face rising labour costs, energy bills and taxation.
Others argued lasting change depended less on temporary relief and more on reform of the system used to value hospitality properties in the first place.
The Government’s commitment to review how pubs and hotels are assessed for business rates could therefore prove as significant as the discount itself. However, any conclusions from that review remain some way off.
VAT an outstanding issue
While business rates have dominated the Government’s early hospitality policy, VAT has remained the industry’s principal demand.
The sector-backed #VATsTheProblem campaign has continued to gather pace, calling for a reduction from 20% to 10% to support investment, recruitment and consumer spending.
Although Burnham previously voiced support for the concept, he has avoided making a firm commitment since entering office, instead focusing on business rates reform and wider economic measures.
That position has done little to reduce pressure for the sector, with trade bodies linking the issue directly to business viability.
Pressures beyond taxation
Operators have repeatedly warned rising employment costs have placed increasing pressure on margins, with recruitment, retention and wage inflation remaining major concerns.
Ahead of the Budget, business leaders called for measures to reduce the overall cost of employing staff, while others highlighted the importance of investment incentives and further support through the duty system.
Industry organisations have also continued to push for greater recognition of pubs and breweries within the Government’s wider economic and industrial strategy, arguing the sector’s contribution to jobs, tourism and local economies remains undervalued.
The verdict
Burnham’s first 100 days have provided operators with evidence pubs have a higher profile within Government than they have in recent years.
The business rates ‘discount’ represents a tangible intervention, while plans to review property valuations suggest ministers are at least considering more fundamental reform.
However, the measures announced so far have not addressed many of the issues operators cite as the biggest threats to profitability. VAT remains unresolved, employment costs continue to rise and the long-term shape of business rates reform is still unclear.
For pub companies, brewers and publicans, today’s Budget is therefore likely to be viewed less as an isolated fiscal event and more as an early indication of whether Burnham’s pro-hospitality messaging will be backed by policies capable of easing the cost of doing business.
