Rachel Reeves has announced temporary support for struggling pubs after a damaging business rates row exposed conflicting claims about whether ministers knew tax hikes were coming. The Chancellor’s climbdown follows revelations that the Treasury was warned about soaring bills—despite government claims they were caught off guard.
Here’s what happened, why it matters, and what publicans can expect next.
The Business Rates Bombshell That Sparked the Row
UK pubs are facing a 94% average business rates increase over three years. Yes, you read that right, nearly double.
The spike comes from two forces colliding: property revaluations that pushed rateable values higher, and the end of pandemic-era relief schemes that cushioned the blow during Covid.
For context, pubs in London’s Square Mile will see their rateable value jump by £16,836 on average next year—a 16% hike. According to UK Hospitality, the typical pub bill will climb by £1,400 annually.
That’s a lot of pints to sell just to cover the tax man.
“We Didn’t Know” vs “We Told You So”
Here’s where it gets messy.
Business Secretary Peter Kyle initially told Times Radio the government “didn’t have access to that information” before making Budget decisions. He claimed ministers only learned about the impact after thousands of angry publicans protested.
But Jonathan Russell, head of the Valuation Office Agency, threw a spanner in that narrative. Speaking to the Treasury select committee, Russell said his team briefed the Treasury on sectoral-level impacts before the Budget—including data showing around 5,100 pubs would see bills roughly double.
“That data will include pretty much every classification of sectors in England,” Russell explained. “Some of them will have gone up in the region of doubling—about 13%.”
Translation: someone knew. The question is whether that information made it to the right desks.
Reeves Confirms “Temporary Support”—Details TBC
Facing mounting pressure, Reeves confirmed Wednesday that additional temporary support is coming for pubs hit hardest by the rates shock.
The Chancellor acknowledged pandemic support “does need to be unwound” but signalled the government will slow the pace of withdrawal. Details will be clarified “in the next few days and weeks.”
This follows the £4.3bn business rates support package announced in the Budget, which clearly wasn’t enough to stop the backlash.
“We do recognise that for some pubs there is still a big increase,” Reeves told the BBC. “We’re working pretty intensely at the moment. We want to support our pubs, we want to support our high streets, and we’re doing that.”
The British Beer and Pub Association called the move a “huge win” for landlords, saying it could “save locals, jobs, and means publicans can breathe a huge sigh of relief.”
What This Means for Publicans
Right now, pub owners are in limbo. The government’s promised more support, but hasn’t specified what that looks like—whether it’s extending existing relief, introducing new caps, or offering targeted grants.
What’s clear: the original Budget plan underestimated the impact on hospitality businesses already operating on thin margins post-Covid.
The rates revaluation reflects surging property values during the pandemic (when high streets were quiet but digital demand drove up commercial property prices in some sectors). Pubs got caught in the crossfire.
For publicans, the next few weeks matter. Any new support will need to arrive before April when the new rates kick in—otherwise, many could face impossible choices about staying open.
The Bottom Line
Reeves’ climbdown shows the government is listening, but the mixed messaging about who knew what when has damaged trust. If Russell’s agency warned the Treasury about doubling bills for thousands of pubs, why did ministers claim surprise?
For now, publicans wait. The “temporary support” promise offers hope, but without concrete details, it’s hard to plan. One thing’s certain: the business rates system needs more than temporary fixes—it needs fundamental reform.
Stay tuned for updates as the government clarifies its support package in the coming weeks. Your local might depend on it.
FAQ
Q1: Will all pubs get the new temporary support?
A: Not confirmed yet. The government hasn’t specified eligibility criteria, but the support appears targeted at pubs facing the largest business rates increases. Details should emerge within weeks.
Q2: Why did business rates jump so dramatically for pubs?
A: Two reasons: property revaluations reflecting higher commercial values, and the scheduled end of pandemic-era relief schemes. Combined, these pushed average hospitality bills up 94% over three years.
Q3: What was the £4.3bn Budget package supposed to do?
A: It was meant to cap business rates increases for retail and hospitality firms. However, property revaluations still left many pubs with significantly higher bills than expected.
Q4: Did the Treasury really not know about the impact?
A: Conflicting accounts suggest confusion. The Valuation Office Agency claims it provided sectoral-level data showing thousands of pubs would see bills double, but Business Secretary Peter Kyle said ministers lacked this information.
Q5: When will the new support take effect?
A: Unknown. The government promises clarification “in the next few days and weeks,” but timing is critical since new rates begin in April. Publicans need answers fast to plan accordingly.
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Effective Date: 15th July 2025
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