Chancellor Rachel Reeves is set to announce a £300 million support package for pubs on Tuesday, providing around £100 million annually until 2029. The move comes after officials admitted they underestimated the financial impact of business rates changes announced in November's budget, which triggered warnings of widespread closures and job losses across the industry.
The intervention follows an intensifying backlash from pub owners and industry bosses over impending tax increases. One pub a day closed in England and Wales last year, with the total number falling to 38,623 in 2025 from 39,989 a year earlier.
Pubs face an average business rates bill increase of 76% - or £7,000 - by the 2028/29 financial year, according to industry bodies UKHospitality and the British Beer and Pub Association. The initial jump in April will be 15%, equivalent to around £1,400. Hotels will see even steeper rises, with business rates bills set to jump 115% on average over the next three years.
Chancellor Acknowledges Pub Pressures
Reeves recognized the scale of the challenge facing pubs last week at the World Economic Forum in Davos. «I do recognise the particular challenge that pubs face at the moment, and so have been working with the sector over the last few weeks to make sure that the right support is in place,» she said.
She drew a clear distinction between pubs and other parts of hospitality. «I think the situation the pubs face is different from other parts of the hospitality sector,» Reeves added.
Wider Hospitality Sector Excluded
Restaurants, cafes and hotels are expected to miss out on the support package despite also facing soaring bills. The decision is likely to draw criticism from these sectors.
The backlash over the budget changes has been severe, with some pub landlords barring Labour MPs, including the Chancellor herself. Several hospitality groups have recently entered insolvency, including Revolution bars group The Revel Collective earlier this week, and TGI Fridays UK and Leon in recent months.
Business Rates Shake-Up
The November budget introduced a lower multiplier for business rates but removed a Covid-era 40% discount for hospitality, leisure and retail businesses. The changes also included the first property revaluations since the pandemic, effective from April.
Pubs have faced mounting financial pressure from increased employer national insurance contributions, minimum wage rises, energy costs and inflation. The government has reformed pub licensing rules, including allowing extended hours, but is not expected to reduce VAT on beers, spirits and wine.
Note: This article was created with Artificial Intelligence (AI).
