Closing summary
The Treasury has unveiled a support package worth more than £80m a year for pubs and live music venues in England and Wales, in a climbdown that follows a fierce backlash against plans to overhaul business rates.
Trade bodies had warned that Rachel Reeves’s changes to business rates, announced at the chancellor’s November budget, would trigger widespread closures and job losses in the hospitality sector, particularly in pubs.
On Tuesday, the government announced financial support to mitigate the effect of the rates shake-up, after officials admitted that they had not foreseen its total financial impact.
The package, final details of which were still being hammered out on Monday night, is expected to be worth more than £80m a year, over three years, for pubs and gig venues.
Dan Tomlinson, the exchequer secretary to the Treasury, said every pub in England and Wales would get 15% off its new business rates bill from 1 April, worth an average of £1,650 for each. Bills will then be frozen in real terms, factoring in inflation, for a further two years.
Tomlinson said:
This support is worth £1,650 for the average pub just next year, and will mean that around three-quarters of pubs will see their bills either fall or stay the same next year.
Tomlinson said three-quarters of pubs would see their rates bill fall or stay the same next year and rates across the sector as a whole would be lower in 2028-29 than they are now.
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Rachel Kelly, associate policy director of the British Property Federation, said:
We welcome any additional support for pubs but the fact that emergency measures are needed just weeks after Government introduced its new two-tier system for business rates shows the changes have not been properly considered.
The withdrawal of business rates relief for high street businesses has only been partially offset by the new split system, whereby smaller retail and hospitality premises pay a lower level of tax than larger, more valuable properties. This change hits all parts of the economy, with shops and restaurants as well as larger offices, warehouses and manufacturing buildings all potentially facing higher bills.
The changes have made a bad system worse and Government must ultimately lower and fix the multiplier tax rate and move to annual revaluations to avoid these sudden swings and emergency measures in the future.
