Chancellor Rachel Reeves is refusing to provide new financial support for pubs, even as Sir Keir Starmer acknowledges that many "will struggle" with the impending changes to business rates. In her November Budget, Reeves announced an end to the Covid-era business rates relief in April, following a previous reduction from 75 per cent to 40 per cent.
Compounding the issue, some village pubs are facing the prospect of paying business rates for the first time due to a revaluation of their rateable values announced after the Budget. The growing backlash has led to Labour MPs being barred from dozens of pubs and restaurants across Britain, with Ms Reeves herself banned from her local in Pudsey, West Yorkshire.
Speaking on Monday, Sir Keir appeared to open the door to extra support, telling LBC: "We're talking to the sector, particularly hospitality and pubs, about what further support we can put in, whether that's licencing freedoms or other measures." However, The Telegraph reports the Treasury is insisting it will not change the tax policy itself.
Tom Kerridge, the TV chef, said on Monday that Peter Kyle, the Business Secretary, was being "incredibly supportive" on the issue but had to convince the Treasury.
He told LBC he had asked Mr Kyle for support at a recent event and was told the Treasury needed to be convinced to sign off the money.
Mr Kerridge said of the prospect of a tax reduction: "[From] the conversation with Peter that isn't something that he has control over. That sits in Treasury. He has a meeting with the Treasury next week. He's presenting the case. He was incredibly supportive."
Sir Keir talked up the need to work with pubs to help with the challenges during his first public event of the New Year, which focused on Government support with the cost of living.
The Prime Minister told GB News: "We're working with the sector, particularly in hospitality. Obviously, there were reductions [in business rates] in place because of Covid, which were going to come to an end."
"There are then transitional provisions to help. The overall rating level is going down but I do acknowledge, for pubs and others, that the revaluation means that they will struggle in relation to the business rates applicable to them. That's why we're working with them."
The comments raised hopes that the Government could change the discount for 75,000 pubs, bars, restaurants and hotels in England in the new business rates approach. They come weeks after the Government folded after a year-long stand-off with farmers by substantially raising the point at which a new inheritance tax raid will kick in.
However, Treasury insiders hours later played down the prospect of a change in the tax rate itself, insisting new licencing freedoms would not impact the tax bill being faced by pub owners.
Before the Chancellor's Budget, the Government had indicated that a tax discount for pubs, restaurants and hotels of up to 20p was being considered.
However, a reduction of just 5p was announced, leading to frantic lobbying from the sector, including meetings with figures from No 10 and No 11 in recent weeks, and warnings about the impact of the changes.
The new approach has overlapped with what is in effect the first re-evaluation of the size of hospitality businesses for six years, which alone would also mean a jump in tax bills.
The Treasury is confident that so-called "transition" measures, such as capping bill increases next year at 15 per cent, are sufficient to help pubs ride out the reforms.
But industry figures are rejecting that position and the idea that changes to licences alone will be enough to protect pubs from the major business rate bill increases over the coming years.
