Under the plan, pubs in England will receive a 15% cut to new business rates bills from April, followed by a two‑year real‑terms freeze.
Ministers have also pledged to review how pubs are valued for business rates purposes, a move designed to address widespread sector criticism of the current system.
The announcement comes after intense sector pressure over changes to business rates and the ending of pandemic‑related relief, which critics say have contributed to financial strain for hospitality businesses.
High-profile publican and restaurateur Tom Kerridge, for example, said that he is facing an average of a 115% rise in business rates across his four pubs.
The Government has acknowledged “significant pressure” on pubs, noting that nearly 7,000 have closed since 2010 amid rising costs.
It claims that, with the new support, 75% of pubs will see their bills fall or stay flat, and the sector as a whole will pay 8% less in business rates by 2029 than under previous plans.
“If we’re going to restore the pride in our communities, we need our pubs and our high streets to thrive,” says chancellor Rachel Reeves. “We’re backing British pubs with additional support, and our new High Streets Strategy will help tackle the long‑term challenges that our much‑loved retail, leisure and hospitality businesses have faced. Thriving local businesses, bustling high streets and pride restored in our communities — that’s what this government is delivering.”
Despite the rhetoric around “backing British pubs”, the package only applies to businesses in England, as business rates are devolved in Scotland, Wales and Northern Ireland. However, it will generate Barnett consequentials, giving the devolved administrations additional funding to allocate according to their priorities.
Dom Jacobs, the founder and managing director of London’s Ardent Pub Group, describes the package as “totally inadequate”.
“Hospitality continues to shoulder an excessive tax burden, and this half-measure does nothing to change that,” he continues. “Instead of backing a sector capable of delivering real growth and jobs, the government has once again missed the mark, a failure that will inevitably push many brilliant publicans out of business. That would be nothing short of a tragedy.”
Last week Reeves ruled out further help for other parts of the hospitality industry, saying that “the situation the pubs face is different from other parts of the hospitality sector”.
However, industry leaders disagree. UKHospitality chief executive Allen Simpson warned that rising business rates are affecting the entire hospitality sector - from pubs and hotels to restaurants and cafés - and called for wider support rather than relief targeted only at pubs.
Restaurateur Katya Milavic‑Davies, the entrepreneur behind Llewelyn’s in Herne Hill and Lulu’s wine bar and deli — as well as a small chain of hair salons — also criticised the government’s decision to single out pubs saying it was unfair to elevate pubs above other community businesses.
“I’m confident about our enduring, and important, impact on the local community. Last week at my restaurant we arranged a taxi for a local, who was unwell and became confused,”! she says.
“Every week in the salon one of our stylists washes a longstanding client’s hair for free because she’s found it difficult to do for herself since a stroke. Neither instance is unique, these are examples of the sort of care these personal businesses afford their communities, week in, week out. Why, then, does the Government’s U-turn on business rates apply to pubs alone?”
Business rates are based on a property’s rateable value (RV), which is meant to reflect its open‑market rental value. But restaurants and most other businesses are valued using a general method that considers local rental evidence.
In contrast, the RV for pubs is assessed on a system that estimates the annual trade a pub would generate if run efficiently — taking account of its location, type of services (including food and accommodation) and trading history. This difference in valuation methodology has been a focal point of industry concern during the most recent revaluation cycle.