Business bodies have warned that the government has not gone far enough in the support measures being offered to the hospitality sector.
On Tuesday (27 January), Treasury Minister Dan Tomlinson announced that pubs and music venues in England will be given a 15% discount on their business rates bills from April and will not see increases for two years. The three-year package will be worth approximately £1,650 for the average pub in 2026/27.
Responding to the announcement, Kate Shoesmith (Director of Policy at the British Chambers of Commerce), noted that this is good news for pubs and music venues in England, but it does not go far enough to protect many other businesses which are under huge pressure.
“Our latest research shows that concern about business rates is its highest for at least eight years, with a third of all firms worried. In the hospitality sector that rises to 49%.
“Companies have proven remarkably resilient through years of turmoil, including Brexit, Covid, rising energy bills and geopolitical crises, but there are limits to how much they can endure.”
With new employment legislation coming down the tracks, a further inflation busting rise in the minimum wage and continuing global headwinds, the government must ease this burden, Shoesmith said.
“The Labour Manifesto, in 2024, correctly identified that business rates were a disincentive to investment, created uncertainty and placed an undue burden on High Streets. It pledged to reform them and it is now time the Government delivered on that promise.
“As a first step to fixing business rates it should move to annual revaluations, to give greater certainty around rateable value changes, and adopt a single flat rate 40p multiplier. These changes would provide greater transparency, simplicity and fairness ahead of a full review of the system.”
Not fit for purpose
Helen Dickinson, Chief Executive at the British Retail Consortium, noted that the government recognised that the government recognises the rates system is not fit for purpose and promised to replace it in their manifesto.
“The Treasury is right to introduce short-term relief for those hit hardest by the rates rises, but this should be targeted at all those on the high street whose bills will see the biggest rises, whether they are pubs, shops or cafes. If rates rises are left unchecked, it will lead to fewer shops and fewer jobs right at the heart of our communities.
“Today’s announcement shows there is more to be done on rates reform and government must honour the promise of root-and-branch reform they made to the electorate at the 2024 election.
“Business rates have been increasing every year and we are now at tipping point. At £27 billion in England alone, it is breaking the backs of businesses everywhere and must be brought down.
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