The government has announced support for pubs (and live music venues) in the form of 15% business rates relief. Business rates bills will then be frozen in real terms in 2027-28 and 2028-29, meaning it will only go up by inflation in those years.
The measure has been described by publicans as no more than a sticking plaster that stops the huge hikes but doesn’t address the underlying issue that pubs already pay more than their fair share. And it does not deliver what Labour promised in their manifesto, says the Campaign for Pubs.
Even with the additional relief, it is still a far cry from Labour’s pre-election promise that the average pub would have their business rates bill reduced by £2,600 a year.
“The media has been reporting that pubs’ rates bills will be subject to a ‘15% discount’ from April,” said a campaign spokesperson. “However, this is misleading, as the 15% actually only applies to the unaffordable bills that were due to come into effect next April, not the bills currently in place. So this is not the discount that is being portrayed, it is simply a correction to looming future overcharging.
“The £100 million is also not ‘support’ — it is merely reducing the otherwise disastrous tax rise, but pubs are still overtaxed by the government, taking more than is reasonable or sustainable from mainly low margin but vitally important local businesses.”
In addition, says the campaign, the deeply flawed and unjustifiable revaluation of pubs’ rates has been left in place, meaning higher rateable values will continue to loom over pubs in coming years, despite the reality of the very tough trading conditions.
The campaign is still calling on the government to scrap the revaluation and maintain current valuations, in preparation for a full overhaul of the system from 2027.
It says there also needs to be an investigation into the contrived ‘Fair Maintainable Trade’ system for calculating pub rateable values. This uniquely penalises publicans, pushing up rateable values even at a time when actual trade and turnover has fallen as a result of the cost of living crisis, and that also pushes up rents and TV sports bills.
Ash Corbett-Collins, chairman of CAMRA, said it was short-sighted to think that the Treasury’s statement will give publicans the certainty they need. “The plan to review the unfair way pubs are assessed for business rates is welcome, but this leaves pubs in the same situation as they have been for years — still facing a long wait for promised, and fundamental, reforms to make the system fairer.
“CAMRA will keep campaigning to get the government to support great pubs and independent breweries so they can compete against online businesses and cheap supermarket booze.”
He added: “Letting pubs stay open for longer or extending their premises is not going to solve the fundamental problem where otherwise viable businesses face being taxed out of existence. Licensees are already limiting their opening hours and can’t afford to invest in their buildings.
“The government should fundamentally review the tax burden on pubs and independent breweries from things like VAT and alcohol duty to see if those systems can be made fairer, to give our locals a fighting chance against cheap supermarket alcohol.”
» Enjoying Beer Today? Become a Patreon supporter from £1.50 a month
John Webber, head of business rates at Colliers, said: “The government’s backtracking on its business rates policy announced in the Budget is certainly welcome on the immediate front. Pubs and live music venues have been given a reprieve, at least for the three years duration of the new list.
“However, the fact that the government has had to make such a big U-turn shows how a poorly thought-out its business rates policy is, and unless the government is serious about reforming the current system, looking at both methods of valuation and the multipliers, this volte face solution purely kicks the problem down the line.
“We have long been saying the current rateable values for pubs, upon which business rates bills are calculated, are just too high. The methods of valuation for pubs are over-complicated, comprising rent and turnover, but not considering increased costs. And some VOA )valuation office agency) valuation methods require closer examination. Kicking the issue down the road to 2029 without proper reform could still leave many pubs uncertain of their longer-term future.”
John Haw, chief executive of Fidelity Energy, points out that the relief does not address one of the most persistent and under-reported pressures facing the sector: volatile energy costs.
“For many pubs and live venues, energy is one of their largest overheads and one of the hardest to manage day to day,” he said. “What we see repeatedly is that energy risk is not driven purely by how much power a venue uses, but by how poorly pricing structures, contract terms, and peak demand are understood. In those cases, volatility becomes embedded into the business.
“When venues operate for longer hours and at higher intensity [such as during the forthcoming Six Nations season], with increased demand on lighting, refrigeration, heating, and audio-visual equipment, unmanaged energy exposure can do the most damage. Those are precisely the moments when businesses expect higher footfall to help them recover costs, not amplify them.”
St Austell Brewery chief executive, Kevin Georgel, welcomed the relief, but agreed that more negotiation was needed over a long-term solution forthe sector.
“We hope that this intervention is a recognition that we need a full review of the fiscal and regulatory landscape that has placed an unfair and unsustainable burden on the Great British pub. We now need to continue working with the government to permanently overhaul the outdated business rates system.
“Over time, we must create the conditions in which pubs can not only survive, but once again thrive at the heart of their communities — providing valuable employment, fostering social connection and cohesion, and acting as engines of economic growth across the length and breadth of the country.”
