Hospitality businesses will “struggle” as a result of business rates changes announced in the Budget, prime minister Keir Starmer has acknowledged.
Chancellor Rachel Reeves said during her speech in November that firms in England would “enjoy the lowest rates since 1991”, but the ending of Covid-era business rates relief and a revaluation of properties will see the tax bills of many companies increase from April.
According to the Pubs Advisory Service, the average cost for a pub will rise by 37% from £30,375 to £41,560, and the Night Time Industries Association said a medium-sized restaurant with a rateable value of £60,000 will have to deal with a rates increase from £17,280 to £25,800, with major city centre nightclubs facing an average 76% hike from £187,200 to £330,200.
In protests, many pubs have joined a campaign to ban Labour MPs from their premises.
In an interview with GB News, Starmer admitted that the increases will hurt businesses.
He said: “Look, we’re working with the sector, particularly in hospitality. Obviously, there were reductions in place because of Covid, which were going to come to an end.
“There are then transitional provisions to help. The overall rating levels [sic] 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.”
In a separate interview with LBC, he suggested new support might be introduced.
He said: “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.
“We want to talk to the sector. I want to keep working with them to make sure we can work this through.”