Rachel Reeves is poised to U-turn on hikes to business rates for pubs following a furious backlash. The Government is expected to set out changes to the proposals in the coming days.
Pubs have been facing the prospect of much higher business rates after the Chancellor announced plans to end Covid-era discounts in her budget in November. Also coming in April are the new rateable values of business properties, which have been revaluated to reflect changes in the property market.
Tory leader Kemi Badenoch said the move was the Government’s “first U-turn of 2026”.
She wrote on X: “Yesterday Keir Starmer told us Labour had ‘turned a corner.’
“Well, it looks like they’ve turned the corner straight into their first U-turn of 2026.
“Labour are killing Britain’s pubs. This rumoured U-turn is too little too late. It’s time to back our local pubs.”
Shadow Business Secretary Andrew Griffith added: “Just a month on and the Budget is already falling apart. Labour were wrong to attack pubs and now have been forced into another screeching u-turn as Kemi called for just this morning.
“But this humiliating about-face does nothing for shops, restaurants, hotels and markets which all face a more than 50 per cent increase. This is not the stability Rachel Reeves promised – it is a recipe for economic disaster.
“Only the Conservatives have a strong leader with a clear plan to stand up for business by cutting business rates for thousands of local high-street firms.”
The Government had put in place a £4.3 billion fund to help pubs with the transition to higher rates, but it is understood more assistance will now be made available after an outcry from the industry.
Sources said Rachel Reeves would announce a package of support in the coming days, likely to include business rates relief and measures to cut licensing red tape.
It comes after a Cabinet minister hinted more support could be forthcoming as he insisted the Government values “the role of the pub in British life”.
Work and Pensions Secretary Pat McFadden told BBC Radio 4’s Today programme: “Let me just explain to listeners there are three different things happening with pubs right now: the actual rates that are charged, those levels have been reduced, but at the same time there’s been a revaluation which has pushed up bills, and some of the Covid support that was put in place a few years ago has been withdrawn.
“Left with no action from the Government, the combined effect of all of those three things would be a very steep increase in the bills for pubs.”
