Prime Minister Sir Keir Starmer has pledged that the government will ensure pubs receive the necessary support, following a significant outcry over an impending increase in business rates.
Government Backtracks on Budget Decision
The climbdown comes after the hospitality sector raised serious concerns about the financial impact of the planned hike. Chancellor Rachel Reeves had earlier confirmed that pubs would receive "more temporary support", marking a shift from the original Budget decision announced in November.
The rise stems from a double whammy: a revaluation of properties and the withdrawal of Covid-era discounts. While ministers had established a £4.3 billion fund to help with the transition, Ms Reeves acknowledged that "for some pubs there is still a big increase." She stated an announcement on extra financial aid is due "in the next few days and weeks."
Resistance to Wider Hospitality Aid
However, both the Prime Minister and the Chancellor appear to be resisting calls to extend this specific financial assistance to other struggling hospitality businesses. During Prime Minister's Questions on Wednesday 14 January 2026, Tory leader Kemi Badenoch challenged Sir Keir on the U-turns, asking about business rates she claimed had been doubled "for thousands of pubs" in the Budget.
Sir Keir responded, "We're working with the sector to ensure that they get the support that they need," before attacking the Conservative record on pub closures. He avoided a later question on whether he would abolish business rates for the high street.
Ms Reeves defended the approach on BBC Breakfast, arguing that "it's not affordable to keep that temporary relief forever" as the government is still borrowing too much. She indicated that while pandemic support must end, the speed of withdrawal is key, and stated the "biggest concern right now is around pubs."
Sector Reaction and Future Fears
The pub industry welcomed the potential relief but stressed the urgent need for detail. Emma McClarkin, chief executive of the British Beer and Pub Association, highlighted the crisis, noting approximately 16,000 pubs have been lost since 2000, often due to high taxes and rates.
"It's never been more vital for pubs to get relief in the short term, and a proper plan to ensure our locals can flourish in the future," she said. "Pubs are part of the UK's DNA... and we keenly await the detail of any announcement."
This policy adjustment on business rates for pubs is one of several recent changes by Sir Keir's government, which also recently rowed back on its flagship mandatory digital ID policy.
