Keir Starmer urged to rethink business rate reform to save pubs

Labour MPs are calling on Sir Keir Starmer to rethink planned changes to business rates to protect pubs and other hospitality businesses.

The pub industry is warning of widespread closures when Covid-era business rate relief comes to an end in April.

At Prime Minister’s Questions, Rachael Maskell, the Labour MP for York Central, called on Sir Keir to urgently review the proposals to help “avert a crisis” on the High Street.

The PM said the government was in talks with the industry to see what “what further support and action we can take”.

In her November Budget, Chancellor Rachel Reeves scaled back business rate discounts that have been in force since the pandemic from 75% to 40% – and announced that there would be no discount at all from April.

The government has offered some relief by reducing the “multiplier” used to calculate business rates.

But at the same time the Treasury has readjusted the rateable values of commercial property, meaning some businesses will be faced with bigger bills overall.

At PMQs, Maskell said: “Having met with many independent business owners, they fear the cumulative impact of the rateable value revision and relief reductions.

“In York, hospitality sees an average business rate rise of 41%, a music venue 44.4% and many independent shops increase around 27%.

“It will mean doors closing and trade ceasing, they just can’t do it.

“So could the prime minister urgently review the business rate proposals, and will he ensure a minister or official attends my business rate summit at the end of January, as I want to avert a crisis on York’s High Street.”

Sir Keir said talks were ongoing with the hospitality industry, without giving details about what measures were being discussed.

The PM’s spokesman also refused to give a “running commentary” and said the hospitality industry had been given a £4.3bn support package over three years in the Budget.

But some Labour MPs have told the BBC they are optimistic further relief will avoid the kind of protests seen over plans to tax inherited farm land, which eventually led to a partial U-turn.

They point to the willingness of Treasury ministers to meet the pub trade and critical Labour MPs.

Not all MPs are asking for the same thing from ministers, with some calling for a year-long delay to the reforms, while others expect the level of rates relief to be increased.

But there is a widespread view that changes of some kind will need to be made.

Ash Corbett-Collins, chairman of The Campaign for Real Ale (CAMRA) said: “Instead of months of uncertainty and the prospect of thousands of otherwise viable pubs having to close their doors for good, the prime minister and chancellor should give in to pressure, accept the inevitable and announce a rethink now.

“Whether through cock-up or conspiracy the government’s promise of permanently lower business rates for pubs hasn’t happened.

“Instead, publicans are facing higher bills from April, which they simply can’t afford.”

On Tuesday, Treasury minister Dan Tomlinson met representatives from the British Beer and Pub Association to discuss possible relief measures and further talks are expected.

In December, the association wrote to the government to ask for 30% “pub-specific business rates relief to prevent widespread closures and protect approximately 15,000 jobs”.

Conservative leader Kemi Badenoch has vowed in the Daily Telegraph to scrap business rates for thousands of British pubs if she wins the next election, accusing the government of treating them “like cash cows to milk”.

At their party conference in October, the Conservatives announced proposals to scrap business rates for High Street businesses, which would include pubs.

The policy would effectively expand an existing 40% discount on bills for hospitality firms, capped at £110,000 a year, to 100%.

The party estimates it would cost the Treasury around £4bn a year by 2029, which they say could be covered by cuts to the welfare bill and reducing the size of the civil service.

Badenoch also claims that Conservative plans to scrap green energy subsidies would save the average pub £1,000 a year in energy costs.