Rachel Reeves refuses to bail out hospitality venues as 2,000 face closure after major U-turn on pubs

Rachel Reeves is resisting mounting Cabinet pressure to offer business rates support to the wider hospitality sector.

The Treasury signalled a major U-turn on pubs last week following warnings hundreds could be forced to close after a big hike in rates.

But industry chiefs say that other sectors such as cafes, restaurants and hotels will also be hit hard, along with music and theatre venues and independent shops.

They warned six such venues will close every day in the next year without support – a total of more than 2,000.

Kate Nicholls, chairman of UK Hospitality, said: ‘A whole hospitality problem needs a whole hospitality solution.’ 

The average hotel will see its business rates bill increase by £28,900 in the first year and by £205,200 in total over three years, the trade group said. 

The average pub faces paying £1,400 a year more initially and £12,900 over three years.

UK Hospitality is calling for ministers to quadruple the level of discount applied to business rates to the maximum possible for hospitality firms.

One Government source yesterday indicated that Downing Street is pushing for a wider package to avoid having to make further debilitating U-turns. 

‘There is a view that we want to do it once and get it right,’ the source said.

Business Secretary Peter Kyle, who will discuss the issue with the Chancellor this week, also hinted support should not be restricted to pubs. 

He told the BBC the Government had been ‘in listening mode for some time’ on the issue, and that talks were held with the hospitality industry in Birmingham last week.

Mr Kyle said conversations with the Treasury had been ‘vigorous’ but ‘collegiate’. But the Treasury insisted there are still no plans to extend help on business rates to other sectors. 

A source said hotels and restaurants may benefit from wider licensing reforms, but help on rates would be ‘pub specific’.

East Thanet MP Polly Billington, chairman of Labour’s group of coastal MPs, said ministers are having ‘genuine conversations with us’ about support for small hospitality and retail businesses.

It came as Labour was accused of a ‘wanton desire’ to destroy pubs.

A leading brewery boss said business rates reform piled further pressure on a sector already being battered by higher alcohol duty, minimum wages, National Insurance, VAT, corporation tax, green energy levies, packaging taxes and inheritance tax.

Richard Bailey, chairman of the Independent Family Brewers of Britain, said: ‘The measures taken by this government to increase tax and the burden of law on landlords and pubs will decimate this beloved and critical sector.

‘You can only assume from the Government’s recent actions and policy decisions that there is a wanton desire to wipe them out, destroy employment and vandalise our communities.’ 

He said that going to the pub is ‘becoming increasingly unaffordable’, adding: ‘Your local may not even be open every day due to ever-increasing taxes and legislation.

‘Pubs are being used as a whipping boy by His Majesty’s Revenue and Customs and the Treasury, who are deaf to the voices of industry that warn of hardship, closure and cultural obliteration.’

Some 1,500 pubs banned Labour MPs from their premises after the Budget. Mr Bailey, also chairman of Daniel Thwaites brewery, said: ‘This political leadership appear to have completely lost sight of the vital role that pubs play – or maybe they really don’t care.’

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