U-turn over business rates hike for pubs expected in coming days, Sky News understands | Politics News
A package for pubs which could help with business rates is coming in the next few days, Sky News understands.
It comes after House of Commons leader Sir Alan Campbell addressed backbench concerns over the hospitality sector, which is facing the end of COVID-era support and a hike in business rates following Rachel Reeves’ November budget.
He said: “The prime minister has been absolutely clear on this, [we are] listening and that he’s actively, we are actively looking at, further measures, to help pubs and the hospitality industry, whether these are in rural areas or in, urban areas.”
Sky’s deputy political editor Sam Coates has now heard that a rescue package that could help with this is coming in the next few days – but only for pubs.
The climbdown includes a change to the methodology of the business rates calculation, plus “regulatory measures”, it is understood.
This leaves others, like hotels, potentially exposed to the uplifts.
A source representing the wider hospitality industry said the climbdown “is not touching the sides” .
Conservative leader Kemi Badenoch, who has vowed to scrap business rates entirely, said the U-turn was “too little too late”.
She posted on X: “Yesterday Keir Starmer told us Labour had ‘turned a corner.’ Well, it looks like they’ve turned the corner straight into their first u-turn of 2026. Labour are killing Britain’s pubs. This rumoured u-turn is too little too late. It’s time to back our local pubs.”
Emma McClarkin, CEO of the British Beer & Pub Association, said news of a row back “is potentially a huge win for pubs across the country and shows government have not only listened to our concerns but acted”.
She added: “This could save locals, jobs, and means publicans can breathe a huge sigh of relief.”
A variety of factors mean hospitality venues could potentially see their bills rise by more than 100%, Sam told Anne in Thursday morning’s Politics at Sam and Anne’s.
Both pubs and hotels are also looking down the barrel of massive business rate hikes.
On the podcast this morning, Sam said only a few hours after Wednesday’s Prime Minister’s Questions – where the topic came up – he picked up rumours in the industry that some sort of announcement could be coming that would help pubs, but not hotels.
He said this could be because pubs are “more politically sensitive”.
Sam added: “But talking to a lot of people, if you do a one-off grant, then that’s expensive and doesn’t make the ultimate problem – which bites in three years’ time, go away.
“And hotels are amongst the worst affected and get the biggest increase in business rates in three years’ time – so there’s still big issues there.
“But the politics and the economics of rolling over the treasury on this are just so hard – and to my ear, a couple of days ago, they sounded like they pretty much wanted to stick and were being quite stubborn.”
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In November’s budget, Chancellor Rachel Reeves announced changes to how business rates are calculated, with a new band for retail, hospitality and leisure – bringing an end to the relief scheme first introduced in 2020 during the pandemic.
The sector argues that the new business rates, while lower than before COVID, do not go far enough.
They say that because the tax is based on rateable property values, which is an official estimate of a commercial property’s annual rental value, they are disproportionately affected because they have physical stores, restaurants and pubs – unlike online giants.
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Several pubs have already barred Labour MPs in protest at the changes.
As Sky News previously reported, a cabinet revolt is brewing over the matter.
However, Sky News understands the government has been warning businesses not to protest over the changes if they want to get any concessions.