Government to announce £100m support package for pubs following business rates revolt

UK pubs are to benefit from a government support package worth £100m that is due to be unveiled by the Chancellor today, it has been reported. 

It comes after the government admitted it had not anticipated the financial impact of the changes to business rates announced in last November’s Budget. This proposed that business rate discounts that have been in force since the pandemic would be cut from 75% to 40%, with no discount at all from April 2026.

The changes introduced at the Budget would mean pubs across the UK facing an average increase in business rates of 76% over the next three years, according to industry body UKHospitality.

It argued that small hospitality venues would see business rates bills rise by £318m over three years, while properties with a rateable value below £51,000 faced an increase of £38.6m in 2026 to 27, up 13%, £110.6m in 2027 to 28, up 38%, and £168.5m in 2028 to 29, up 58%. Even with a reduced multiplier, business rates would increase by 76% for the average pub and 115% for the average hotel over three years, compared with 16% for distribution warehouses and 4% for large supermarkets, it said.

In addition to the increase in business rates, the Autumn Budget also leaves the sector exposed to higher wage bills, frozen thresholds and further cost pressures, according to Access Hospitality managing director Champa Magesh, who told db venues would have to sell nearly 30 million more pints to cover the increases.

Sector demands rethink

In January, MPs and leading voices from across the hospitality industry called on the Prime Minister to rethink the planned changes to business rates to protect the industry when Covid-era business rate relief comes to an end in April.

Consumer Group the Campaign for Real Ale (CAMRA) said this needed to happen “now and not later”, saying pub-goers were demanding action from the government to avoid thousands of extra pub closures in 2026.

CAMRA chairman Ash Corbett-Collins said that the Prime Minister and Chancellor needed “to give in to pressure, accept the inevitable and announce a rethink now” as publicans would be facing higher bills from April, that “they simply can’t afford.”

The hospitality industry had warned that pressure on pubs had become “death by a thousand cuts”, as national insurance contributions, rises in the minimum wage, energy costs, and inflation bit. UK Hospitality chair Kate Nicholls told db that while there had been a cumulative tax burden “the big issues are rates and NICs.”

Speaking in Davos last week, Chancellor Rachel Reeves said that she recognised “the particular challenge that pubs face” and that she had been working with the sector “to make sure that the right support is in place.”

The support is likely to only benefit pubs, however.

“I think the situation the pubs face is different from other parts of the hospitality sector,” Reeves added.

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