Rachel Reeves confirms pubs will get ‘more temporary support’

Rachel Reeves has confirmed pubs will receive “more temporary support” in a climbdown from a Budget decision after an outcry over the impact of an upcoming hike in business rates.

The Chancellor said temporary financial relief granted to the hospitality sector during the pandemic “does need to be unwound”, but added “it’s about the speed at which you do that”.

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 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 U-turns by Sir Keir Starmer’s Government, which most recently included a rowback on its flagship policy of mandatory digital IDs.

Ms Reeves told BBC Breakfast on Wednesday: “There’s a number of things happening with business rates. There’s been a revaluation of the value of properties. This is the first one since the pandemic. So rateable values were going to go up.

“And there’s a gradual withdrawal of some of the temporary support that went in during Covid.

“Now we’ve put in another £4.3 billion of additional support to phase that transition, but we do recognise that for some pubs there is still a big increase, and so we’re working pretty intensely at the moment. Again, I want to make sure that we get this right.”

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”.

She added: “You’ve got to find a balance.

“We’re trying to bring down that borrowing level. That’s what has meant that inflation and interest rates are starting to come down.

“But we want to support our pubs. We want to support our high streets, and we’re doing that.”

The Chancellor is facing pressure from opposition and hospitality industry figures to extend financial aid to other ailing businesses.

But Ms Reeves signalled she is resisting those calls, arguing the focus is on pubs that were forced to close during Covid and have seen a particularly steep rise in valuations.

“The biggest concern right now is around pubs,” she said, noting “some of the smallest businesses, particularly some cafes, don’t pay any business rates at all because they’re not big enough to do so”.

It emerged last week that the Treasury was rowing back on a Budget move by preparing a support package for the pub sector after it expressed worries about business rates changes.

In the latest in a series of U-turns, ministers on Tuesday signalled they were moving away from the compulsory element of Labour’s flagship digital IDs plan, allowing other digital documents to be used for right-to-work checks.

Ms Reeves played down the impact of racking up U-turns, saying “this story has been a bit overwritten” and “I don’t think most people mind whether it is one piece of digital ID or a form of digital ID that can be verified”.

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.”