4 days ago
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Rachel Reeves is poised to unveil a support package worth about £100m annually for pubs, after being warned of widespread closures and job losses after the announcement of controversial changes to business rates.
The chancellor is expected to announce the relief package on Tuesday, after officials admitted that they had not foreseen the total financial impact of the rates shake-up in England and Wales announced in the budget in late November.
Final details of the package were still being finalised on Monday night, but were expected to be worth about £100m a year for pubs, Politico reported.
The government has also moved to reform pub licensing rules, including allowing extended hours. However, it is not expected to reduce the rate of VAT on beers, spirits and wine.
The wider hospitality industry has also lobbied for relief, but last week Reeves said that the government was focusing only on the pub sector.
“I do recognise the particular challenge that pubs face at the moment, and so have been working with the sector over the last few weeks to make sure that the right support is in place,” she said at the World Economic Forum in Davos last week. “I think the situation the pubs face is different from other parts of the hospitality sector.”
Pubs have come under intense financial pressure in recent years, with significant cost increases from higher employer national insurance contributions, rises in the minimum wage, energy costs, and inflation.
Higher bills meant one pub a day closed for good in England and Wales last year, according to analysis of government statistics by the tax specialist company Ryan. It found the overall number of pubs, including those vacant and being offered to let, had fallen to 38,623 in 2025, down from 39,989 a year earlier.
In the budget Reeves announced a £4.3bn support package that included giving relief to businesses, intended to offset the end of a Covid support scheme that had reduced bills by 40%.
However, this has not proved to be enough to offset a significant increase in property tax bills caused by the first revaluations of properties since the pandemic from April.
The transition in relief caps was designed to be implemented over several years, to stagger the rise in bills, but the industry has complained that the increase in the third year is unaffordable.
Pubs across the UK will face an average 76% increase in their business rates bills over the next three years, while hotels are braced for an average 115% rise, according to the industry body UKHospitality.
However, the boss of Waterstones, James Daunt, this week defended the government’s approach to the high street, arguing that changes to business rates were “sensible” and had benefited shops in struggling areas.
