Chancellor Rachel Reeves is preparing to U-turn on her plans to axe business tax relief for parts of the hospitality industry in a much-needed win for Britain’s pubs.
This represents another significant policy reversal from the Labour Government after backing down from key elements of its cuts to welfare spending last year.
Labour MPs who are concerned about soaring business rate for pubs have told GB News they are hoping the Government will announce a package for pubs “very soon”.
One said that a proposal from Prime Minister Sir Keir Starmer to extend licensing hours to allow pubs to trade for longer would be “pathetic” compared with the hike in business rates which are set to increase by 75 per cent over the next three years.
Rachel Reeves
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GETTY / PA
The news came after 30 Labour MPs wrote to the Chancellor Rachel Reeves demanding action for pubs, many of which could close if the rates increase – driven by re-evaluation and the end of Covid support – goes ahead in a few months’ time.
Number 10 told reporters today: “We are engaging with the industry, listening to their concerns and finding out how best to help them” adding that £4.3billion in support has already been ear-marked for hospitality businesses.
The Chancellor and Prime Minister have faced scrutiny over its business tax agenda, with hospitality industry representatives claiming that one pub has closed every day since Mr Starmer took office in July 2024.
During her Budget, Ms Reeves confirmed plans to scale back business rate discounts that have been in effect since the Covid-19 pandemic from 75 per cent to 40 per cent.
Pubs have been forced to close in recent years
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PAFurthermore, the Chancellor previously announced that there would be no tax discount at all for businesses from April, pushing costs up for thousands of entrepreneurs.
However, ministers have informed The Independent that Ms Reeves is now expected to partially reverse her plans, with one claiming: “There’s going to be a U-turn on pubs.”
Speaking to GB News, Reform deputy leader Richard Tice said: “Another day, another U turn as Labour sees the huge damage of their anti-business, anti-growth, anti-jobs policies. They are unfit to govern in so many ways. Only Reform can be trusted to cut wasteful, inefficient spending & get growth flowing again.”
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