Pubs will get the support they need, vows Keir Starmer

Sir Keir Starmer has confirmed the Government is working with the pubs sector “to ensure that they get the support that they need” after an outcry over the impact of an upcoming hike in business rates.

Rachel Reeves earlier said pubs will receive “more temporary support” in a climbdown from a Budget decision.

But the Prime Minister and the Chancellor appear to be resisting calls for the financial aid to be extended to other ailing hospitality businesses, with Ms Reeves saying the “biggest concern” is around pubs.

The rise in rates is due to a combination of properties being revalued and the withdrawal of Covid-era discounts which was announced by Ms Reeves in November.

Ministers had put in place a £4.3 billion fund to help pubs with the transition to higher rates, but the Chancellor acknowledged “for some pubs there is still a big increase”, and she confirmed they will receive extra financial aid with an announcement due “in the next few days and weeks”.

It is one in a string of policy changes by Sir Keir’s Government, which most recently included a rowback on its flagship policy of mandatory digital IDs.

Challenging Sir Keir over the U-turns at Prime Minister’s Questions on Wednesday, Tory leader Kemi Badenoch asked whether there would be any change to business rates she said had been doubled “for thousands of pubs” in the Budget.

The Prime Minister replied: “We’re working with the sector to ensure that they get the support that they need.”

He then pivoted to attacking the Conservatives’ record, saying: “The leader of the Opposition’s newfound concern for pubs will come as a surprise to anyone who remembers the 7,000 pubs that were closed under the Tories – and as business secretary, she didn’t say a word about it.”

Sir Keir swerved Mrs Badenoch’s later question on whether he would abolish business rates for the high street, as she argued “the whole of the hospitality industry” is being “clobbered by Labour’s tax hikes”.

Ms Reeves told BBC Breakfast on Wednesday that while the Government has put in £4.3 billion of additional support to ease the withdrawal of pandemic-era support, “we do recognise that for some pubs there is still a big increase, and so we’re working pretty intensely at the moment”.

When it was put to Ms Reeves that many struggling publicans want information about business rates relief as soon as possible, she replied: “These changes are not due to come in for a few more months. So we’re going to get this right.

“But I think most people would accept that now the pandemic is over, some of that temporary support does need to come away, but it’s about the speed at which you do that.”

The Chancellor argued “it’s not affordable to keep that temporary relief forever” as “the Government is still borrowing too much”.

Regarding opposition and hospitality industry figures’ calls for financial aid to be offered to the wider hospitality sector, she said “the biggest concern right now is around pubs” which struggled more than other businesses during lockdowns.

Ms Reeves again hinted the rescue package would be restricted to pubs when she was asked during a visit to Leeds later on Wednesday whether she risked sacrificing cafes, independent restaurants and small hotels which are also asking for help.

She told journalists: “During the pandemic, quite rightly, a lot of temporary support was given to the hospitality sector, particularly to pubs, because they were closed.

“That’s not the same for the whole economy and not the same for the whole high street. Many shops were able to stay open during the pandemic, and so their valuations stayed pretty steady. But the valuations of pubs collapsed, and as a result their business rates payable fell. In our business rates review, we have permanently reduced the business rate tax for our high streets and for smaller businesses.

“But as that temporary relief comes to an end – although we are putting £4.3 billion of temporary support in – and as those valuations have risen, the tax paid on business rates for some pubs is going up.

“That’s why I’ve said, working with the industry, that we are working on additional support for those businesses.”

Emma McClarkin, chief executive of the British Beer and Pub Association, said: “We’ve lost approximately 16,000 pubs since 2000, many of whom were smothered by huge taxes and rates, which is why it’s never been more vital for pubs to get relief in the short term, and a proper plan to ensure our locals can flourish in the future.

“Pubs are part of the UK’s DNA and we welcome the news that Government is looking at measures to better support them, as they disproportionately pay higher rates compared to other sectors, and we keenly await the detail of any announcement.”