Speaking to reporters at the World Economic Forum in Davos, Rachel Reeves said that “the situation the pubs face is different from other parts of the hospitality sector” and that she is working with them to ensure the government provides “the right support”.
The comments come as businesses across the wider hospitality sector face a significant rise in business rates following a revaluation of rateable values and the ending of the 40% Covid-era business rates relief for hospitality in April.
The average small business faces a 52% rise in business rates this year, according to the Federation of Small Businesses (FSB), which has warned the increases pose an “existential threat” to UK high streets.
Some operators, however, have been hit far harder. Chef and restaurateur Tom Kerridge has become a vocal critic of the changes, saying his four pubs face an average increase of 115%, with one venue’s rates potentially jumping from £50,000 to £124,000 a year.
He has argued that these “astronomical rises” make it increasingly difficult to keep venues open, invest in businesses or create jobs.
Responding to the chancellor’s comments, Allen Simpson, chief executive of UKHospitality, said: “The entire hospitality sector faces the same cost challenges – from eye-watering business rates hikes to the soaring cost of employment.
“These are not challenges unique to pubs. Our hotels, restaurants and cafés, to name a few, all face their business rates bills increasing by thousands, driven by the same large increases to rateable values affecting pubs. These businesses employ six in seven people working in hospitality.
“While it’s positive that there will be an announcement soon, this is a hospitality-wide problem that requires a hospitality-wide solution.
“The government has one chance to get this right. Without a package of support for the entire sector, I fear it will be too little, too late.”
Earlier this month, UKHospitality’s modelling suggested that six hospitality venues could close each day as a direct consequence of rising business rates.