Chancellor Rachel Reeves has not ruled out extending support to hospitality businesses hard-hit by skyrocketing business rates. In a BBC Breakfast interview on Wednesday, she underscored her commitment to rescuing beleaguered spade-owners. With widespread Covid-era relief measures phasing out in April, many of these owners are starting to lose the financial battle.
Surging business rates are fast becoming the big concern. Pubs too are set to see a phenomenal 76% hike in their rates bills over the next three years. By comparison, the hotel sector is projected to experience even higher increases of 115% over the same time period. These steps to introduce caps on rate rises will provide some much-needed financial breathing space. This move will deliver £4.3 billion of savings over the next three years. These caps are intended to soften the blow of rising business rates, offering at least a little relief to businesses that are doing all they can to stay afloat.
Reeves acknowledged the pressing nature of the issue, stating, “I think that people can see that the biggest impact and the biggest concern right now is around pubs.” Her remarks make clear that it’s high time for more targeted help in the hospitality industry. Businesses need to be ready for the conclusion of temporary provisions that provided vital lifelines during the pandemic.
Kate Nicholls, Chief Executive of Hospitality UK, said that Reeves’ comments were “a big step in the right direction.” She stated, “It’s good to see recognition of wider hospitality and that she is talking about support beyond pubs.” Nicholls welcomed recognition of the devastating impact on all hospitality businesses of large-scale increases in their business rates.
Reeves was clear on her concerns. She suggested that she was reluctant to offer wider help beyond pubs and to other parts of the hospitality industry. She highlighted the need to strike a balance when delivering this assistance while making sure help is reaching pubs, particularly in this make-or-break period.
The Treasury is expected to announce further support for pubs tomorrow. This adoption would be an important first step in acknowledging the specific barriers that these businesses contend with in the new post-Covid landscape. As businesses brace for higher rates after years of relief, many are concerned about their ability to sustain operations under increased financial pressure.