Chancellor Rachel Reeves is poised to perform a significant policy reversal by abandoning plans to scrap crucial business rate relief for the hospitality sector, delivering a major victory for pubs across the United Kingdom.
Pressure from MPs Forces Rethink
According to reports from The Telegraph, the Chancellor is finalising the details of the U-turn, with an official announcement expected in the coming days. This shift in policy comes after substantial pressure from within the Labour Party itself.
A group of 30 Labour MPs wrote directly to Rachel Reeves, demanding urgent action to support the nation's struggling pubs. This internal pressure appears to have been a critical factor in prompting the Treasury's reconsideration.
The Stakes for the Hospitality Industry
The potential consequences of the original plan were severe for the sector. Industry body UKHospitality had warned that the typical pub was facing a daunting 15 per cent increase in its business rates bill next year.
This projected increase would have had a cumulative devastating effect, equating to an extra £7,000 per year by the 2028-29 financial year for many establishments. The relief in question has been a lifeline since the Covid-19 pandemic.
During last year's Autumn Budget, Chancellor Reeves confirmed intentions to reduce the business rate discount for retail, hospitality, and leisure properties from 75 per cent to 40 per cent. The expected U-turn will see this planned reduction abandoned.
Government and Political Reaction
A spokesperson for Number 10 stated: "We are engaging with the industry, listening to their concerns and finding out how best to help them." They also highlighted that £4.3 billion in support has already been ear-marked for hospitality businesses.
However, the policy reversal has drawn criticism from political opponents. Speaking to GB News, Reform UK 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."
Ministers have privately informed The Independent that "there's going to be a U-turn on pubs," signalling the government's intention to avert a crisis in a beloved British industry.
