Labour MPs are calling on Prime Minister Sir Keir Starmer to reconsider planned business rate reforms to protect pubs, hospitality venues, and small businesses. Industry groups warn that the end of Covid-era business rate relief in April could trigger widespread closures across the High Street.

MPs Raise Concerns During Prime Minister’s Questions

During Prime Minister’s Questions, Rachael Maskell, Labour MP for York Central, highlighted the financial pressures facing independent businesses. She urged Starmer to review proposals urgently to prevent what she described as a potential crisis:

“In York, hospitality sees an average business rate rise of 41%, a music venue 44.4%, and many independent shops increase around 27%. It will mean doors closing and trade ceasing; they just can’t do it.”

Maskell also called for ministers or officials to attend her business rate summit at the end of January to discuss solutions for High Street businesses.

Government Response

The Prime Minister confirmed that talks with the hospitality industry are ongoing but did not disclose specific measures under consideration. A government spokesperson emphasized that the sector has already received a £4.3 billion support package over three years as part of the November Budget.

Chancellor Rachel Reeves previously reduced pandemic-era business rate relief from 75% to 40%, with no relief planned from April. Although the multiplier used to calculate rates has been reduced, Treasury adjustments to rateable values mean some businesses will still face higher bills overall.

Industry and Political Reactions

CAMRA (The Campaign for Real Ale) chairman Ash Corbett-Collins criticized the government for creating uncertainty for pubs, calling for immediate relief measures:

“Publicans are facing higher bills from April, which they simply can’t afford. The prime minister and chancellor should give in to pressure and announce a rethink now.”

The British Beer and Pub Association requested a 30% pub-specific business rates relief to protect around 15,000 jobs, and Treasury minister Dan Tomlinson met industry representatives to discuss possible solutions. Further talks are expected.

Opposition Proposals

Conservative leader Kemi Badenoch has pledged to scrap business rates for thousands of pubs if elected, expanding the existing 40% hospitality discount to 100% for High Street businesses. The policy is estimated to cost around £4 billion annually by 2029, potentially funded by cuts to welfare and civil service spending.

Badenoch also highlighted that scrapping green energy subsidies could save the average pub £1,000 a year on energy costs.

Next Steps

While some MPs call for a year-long delay to the reforms, others want increased relief levels. There is widespread agreement that some form of adjustment is needed to protect pubs, hospitality venues, and independent businesses from financial collapse.