Labour Backbenchers Condemn 'Wholly Inadequate' Pub Rates Relief
Chancellor Rachel Reeves is facing a significant rebellion from within her own party, as more than fifty Labour MPs have written to the Treasury warning that a newly announced 15 per cent cut to business rates for pubs is "wholly inadequate". This government climbdown, first revealed by The Independent, follows intense pressure from the hospitality sector and comes against a backdrop of alarming closures, with figures showing over 200 pubs have shut their doors in the last six months alone.
A Sector Under Siege
The political firestorm erupted after the Chancellor's autumn budget decision to end the business rate relief introduced during the Covid-19 pandemic. This sparked a furious backlash, including a national campaign led by television presenter Jeremy Clarkson that saw pubs barring Labour MPs from their premises. In response, the Treasury announced a support package that will provide pubs with a 15 per cent reduction in their business rates bills from April 2026, alongside a freeze in real terms for the subsequent two years.
However, a letter organised by Labour MP for Knowsley, Anneliese Midgley, and signed by prominent figures including former minister Justin Madders, Stella Creasy, Dan Carden, and Sharon Hodgson, argues this intervention falls drastically short. The MPs warn that the planned 2026 business rates revaluation still poses an "existential threat" to many community venues, particularly grassroots music spaces.
Music Venues Face 'Existential' Rate Hikes
The parliamentary letter highlights a specific crisis within the cultural sector. Citing data from the Music Venue Trust, it reveals that 84 grassroots music venues in England are facing rateable value increases of between 45 per cent and a staggering 275 per cent from the 2025/26 to the 2026/27 financial years. The MPs emphasise that the UK music industry is a vital economic and cultural asset, contributing £8 billion to the economy in 2024.
"Many of us have been contacted by constituents in recent months who use and run these critical music spaces, explaining that they will be severely impacted," the letter states. "These increases do not represent marginal adjustments but existential threats."
Treasury Defends Limited Package
Treasury minister Dan Tomlinson defended the government's position, stating the support would be worth approximately £1,650 for the average pub next year. He confirmed the relief would also apply to music venues valued as pubs. "This decision will mean that the amount of business rates paid by the pub sector as a whole will be lower in 2028/29," Mr. Tomlinson said.
Despite this, industry bodies had issued stark warnings. UKHospitality and the British Beer and Pub Association (BBPA) cautioned that without intervention, pub rates bills would still rise by an average of 15 per cent, or £1,400, in April. They projected this could lead to an average cumulative increase of 76 per cent, or £7,000, by the 2028/29 financial year.
Mixed Reaction from Industry and Wider Concerns
The announcement has drawn a mixed response. Emma McClarkin, chief executive of the BBPA, welcomed the move, stating: "This pub-specific package will stave off the immediate financial threat... and will help keep the doors open for many." Conversely, publican Matthew Todd of The Wonston Arms in Hampshire labelled the relief "woefully not enough" to save venues on the brink.
The controversy extends beyond pubs. The Treasury's package offers no additional support for other hospitality businesses like hotels, restaurants, and cafes, despite their own concerns over soaring tax bills. Stella Creasy MP issued a stark warning about the knock-on effects, suggesting a lack of support for family-friendly venues could see parents forced to take toddlers to pubs during the day because alternative cafes and soft-play centres have closed.
"I'm sure he does not want to be the minister responsible for sending toddlers into pubs," Ms. Creasy told the minister, highlighting the interconnected crisis facing the broader high street. The issue of business rates remains devolved in Scotland, Wales, and Northern Ireland.
