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Rachel Reeves was accused of doing 'far too little, far too late' for pubs today after she sent a junior minister to unveil a meagre bailout.
After an outcry by Labour MPs at the prospect of thousands of closures across Britain, pubs are to get 15 per cent off their business rates bill from April.
However, low-ranking Treasury minister Dan Tomlinson confirmed that the support will end in 2029. Although music venues will benefit, pleas from the wider hospitality sector and pharmacies have been snubbed.
Mr Tomlinson did not give any costing for the new policy, although it is expected to be around £100million a year. He told MPs that figures will not be revealed until the Budget in the Autumn.
High street retailers have only been promised a 'strategy' for how they could be helped to deal with the shift to online shopping.
Labour MPs lined up in the House to complain that the proposals did not go far enough. And Shadow chancellor Mel Stride said Labour was making a 'political choice' on tax, 'driven by higher welfare spending'.
In the Budget, the Chancellor boasted about cutting business rates by introducing a lower 'multiplier' - used to calculate the commercial property tax.
However, that tweak was more than offset by the removal of a Covid-era 40 per cent discount to business rates bills for hospitality, leisure and retail businesses, as well as new property valuations.
Treasury minister Dan Tomlinson confirmed that the support will end in 2029
The Treasury has announced extra support for pubs until 2029 after a major revolt by Labour MPs
Ms Reeves has also hammered the hospitality sector by ramping up national insurance for employers, making staffing more expensive.
Mr Tomlinson told the Commons he understood times had been hard for pubs, as he said the support would be worth more than £1,600 for the average pub. The valuation model used for pubs will also be reassessed.
He also said pubs had not had the support they have needed 'for too long', and referenced 7,000 pubs shutting under Conservative led-governments between 2010 and 2024.
Mr Tomlinson said: 'This Government does want to go further to support pubs. Pubs are the cornerstone of so many communities, they are essential to the social and cultural life of so many places across the country.'
He continued: 'Today I can confirm that from April, every pub in England will get 15 per cent off its new business rates bill on top of the support announced at Budget. Pubs' bills will then be frozen in real terms for a further two years.
'This support is worth £1,650 for the average pub, just next year, and will mean that around three-quarters of pubs will see their bills either fall or stay the same next year. Then bills will be frozen in real terms for the next two years.'
Mr Tomlinson said the Government will publish a High Streets Strategy later this year to help shops in towns and cities.
'We've already taken significant steps to acknowledge this and support businesses, including £4.3billion of business rate support at the budget,' he added.
'But over the last decade consumers have changed their habits, increasingly working from home and shopping online, and these trends continue to make it harder for high street businesses.'
Mr Tomlinson continued: 'We will work with businesses and representative bodies to bring this strategy together.
'It will be a cross-government strategy, and we will be looking at what more Government can do to support our high streets.'
Labour MP Rachael Maskell said the proposals 'do not meet the needs' of the independent traders in her constituency.
'York is a difficult place to trade... it is just not meeting the needs and those business will close,' she said.
Labour MP for Walthamstow Stella Creasy said there should be 'further support for the hospitality industry'.
She suggested ministers were sending 'toddlers into pubs' because they will be the only places to survive.
Labour MP Jonathan Brash said he had been contacted by a hotel whose business rates are set to 'basically double'.
'Hartlepool is a town of entrepreneurs and innovators but they can't afford this,' he said.
Responding in the Commons, Sir Mel said: 'This partial U-turn is far too little and far too late. It is a sticking plaster which delays the pain for a few, while most businesses despair as they see their bills continue to skyrocket.
'Our high streets need permanently lower business rates - not just for pubs, but for the shops and hospitality venues that give our high streets life.
'These tax rises are a political choice, driven by higher welfare spending, and they are destroying businesses and jobs across the country. It doesn't have to be this way.'
Ash Corbett-Collins, chair of the Campaign for Real Ale, said: 'This short-term announcement is not the "permanently lower business rates" that pubs were promised. While it is positive that the Chancellor has listened and announced extra discounts for pubs facing the threat of closure, it is short-sighted to think that today's statement will give publicans the certainty they need.
'The plan to review the unfair way pubs are assessed for business rates is welcome, but this leaves pubs in the same situation as they have been for years - still facing a long wait for promised, and fundamental, reforms to make the system fairer.'
Emma McClarkin, chief executive of the BBPA, said: 'We are pleased the Government has listened to our concerns, and those of publicans, consumers and MPs who rallied to defend our locals.
'This pub-specific package will stave off the immediate financial threat posed by accelerating business costs and will help keep the doors open for many.'
The Federation of Small Businesses (FSB) said the Government had 'passed up a critical chance to back struggling high street businesses'.
Policy Chair Tina McKenzie said: 'Although this news will bring a welcome, temporary reprieve for pub and music venue owners, small firms across the rest of the hospitality, leisure and retail sectors – from your local greengrocer, hairdresser and café to the nail bar or florist – will be incredibly disappointed to not have been thrown any type of lifeline. It's worrying that the Government repeatedly fails to recognise the difficulty that these businesses are in.
'Losing the previous 40 per cent discount, on top of April's revaluation of the rateable value of premises, and changes to the formula behind the bills, will take a heavy toll on small firms, threatening jobs and our high streets. A typical small bakers or dry cleaners will face a 52 per cent increase in its business rates bill over the next three years.
'The Government has the power to apply the full business rates relief already built into the system across the sectors, yet it has used this moment to exclude wider hospitality, retail and leisure. It also has the opportunity to raise significant extra revenue from the largest business premises, but has instead decided to impose the biggest increases on small high street bakers, gyms and restaurants.'
The Chancellor introduced transitional relief to manage increases to rates bills over the next three years after the removal of sector discounts.
However, industry bodies have been warning that pub business rates bills would still increase by an average of 15 per cent, or £1,400, in April.
They said this will be an average rise of 76 per cent, or £7,000, by the 2028-29 financial year - and some outlets face far higher increases.
The support package will not help hotels, where business rates bills are set to jump by an average of 115 per cent a year, or £111,300, over the next three years.
Pharmacies have also warned they are facing massive hikes in their costs.
Henry Gregg, Chief Executive of the National Pharmacy Association, said: 'This increase will push some pharmacies to the brink of collapse.
'Pharmacies are essential to their communities but the Government have taken a decision today to prioritise pubs over the health needs of millions of people who use pharmacies every day.
'It's an insult to hard pressed pharmacists who are still struggling under the effects of historic NHS underfunding that simply isn't sufficient to pay inflated business rates, medicine prices and their other bills.
'Pharmacies are not like pubs, cafes or restaurants. They receive 90 per cent of their funding from the NHS and cannot simply increase their prices for the nations prescriptions to absorb this eye watering increase.'
Association of Convenience Stores chief executive James Lowman said: 'Local shops will feel neglected and dismissed by this Government today as they are passed over for additional support. For those facing rates increases in April of thousands of pounds, difficult decisions will have to be made about investment, employment opportunities and the services that are provided to customers.
'The Chancellor has a chance to make this right and extend business rates support in the Spring Statement to all retail, hospitality and leisure businesses. Without additional support, jobs will be lost, inflation will rise as retailers look to claw back margin, and investment will be put on hold.'
Earlier this week, Revolution bars group The Revel Collective said they were filing to appoint administrators in the face of weak consumer confidence and higher costs.
Ms Reeves has also hammered the hospitality sector by ramping up national insurance for employers, making staffing more expensive
A number of other hospitality groups, such as TGI Fridays UK and Leon, have also entered insolvency in recent months.
Chris Tulloch of Blind Tiger Inns - which operates 24 pubs - told the BBC he was braced for bills for Sky and TNT sports channels to rise in line with rates.
He said: 'We're very much in the dark about the "lifeline" that we might be getting as pubs - which still seems like a very strange analogy given that they're causing the problem in the first place...
'The potential backtrack, if you will, is being called a "rescue deal", "lifeline" and a "bail out", but to me that doesn't really fit what's happening.'
Labour MP Carolyn Harris, Chair of the all-party Parliamentary group on UK Spirits, said: 'Pubs are more than pints.
'Pubs – and the distillers that supply them – are facing another hike in excise duty and it's hitting their bottom line.
'I welcome the announcement today on business rates, but if we are to truly support pubs and hospitality then we have to allow spirits to thrive.'
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