What Killed Britain's Pubs: Our Locals We'll Never Forget

Treasury to reverse 76% pub tax hike after 1,000 landlords ban Labour MPs

10 January 2026 · 18:11

https://www.upday.com/uk/politics/treasury-to-reverse-76-pub-tax-hike-after-1000-landlords-ban-labour-mps/vvpsnwp

 

The UK government is preparing a U-turn on plans to significantly increase business rates for pubs, with Chancellor Rachel Reeves expected to announce a financial support package within days. The reversal follows intense pressure from the hospitality industry and Labour MPs warning that thousands of pubs faced closure.

 

Treasury sources confirmed the climbdown comes after more than 1,000 pub landlords banned Labour politicians from their premises in protest over the tax hikes. Pubs were facing an average 76 per cent increase in business rates over the next three years, with some establishments seeing their bills double or even triple.

 

The crisis stemmed from the government's decision to end Covid-era business rate discounts, which had already been scaled back from 75 per cent to 40 per cent and were set to disappear entirely in April. Combined with a revaluation of business properties, many pubs faced rate increases running into tens of thousands of pounds annually.

 

Industry Relief and Political Fallout

Emma McClarkin, chief executive of the British Beer and Pub Association, welcomed the development: "News that the Government is going to look again at business rates increases is potentially a huge win for pubs across the country and shows Government have not only listened to our concerns but acted."

 

The government had previously established a £4.3 billion transitional relief fund, but the pub industry argued this was insufficient to address the scale of increases. Over 30 Labour MPs had been preparing to vote for an amendment to the Finance Bill on Monday to force a policy change.

 

Cabinet minister Pat McFadden acknowledged the sector's importance: "We appreciate how important the pub industry is economically and culturally to the UK, so we'll keep talking to the pub industry. We really value the role of the pub in British life. We want to help pubs."

 

Demands for Broader Support

The anticipated package is expected to include enhanced business rates relief and measures to cut licensing red tape. However, other sectors immediately demanded inclusion in any support scheme.

 

Kate Nicholls, chair of UKHospitality, called for wider action: "The entire sector is affected by these business rates hikes — from pubs and hotels to restaurants and cafes."

 

Henry Gregg, chief executive of the National Pharmacy Association, urged the government to exempt pharmacies from business rates altogether, citing a potential 140 per cent increase. Music venue operators facing rate rises of up to 400 per cent also pressed for inclusion.

 

Political Defense

Labour Party chairwoman Anna Turley defended the policy reversal against accusations of another government U-turn. She told Sky News: "I think it's a sign of a Government that is actually in touch with people, that is listening to people, and that is responding."

 

The development marks the latest policy shift for the Labour government, which has previously reversed course on inheritance tax for farms, winter fuel payments, and welfare reforms since taking office in 2024. Shadow Chancellor Mel Stride criticized the government's approach, stating the problem extends far beyond pubs to the entire retail and hospitality sector.

 

The Treasury is expected to make the formal announcement in the coming days, though details on the value and scope of the support package remain unclear.