'We're still in the dark': U-turn on pub business rates welcomed in Shropshire - but 'devil will be in the detail'
Pubs have been handed a boost after the Government appears to have carried out a U-turn on a planned hike in business rates due to come into force from April.
Chancellor Rachel Reeves announced in her November Budget that business rates relief for pubs, which has been in place since the Covid pandemic, would be scrapped from April 2026.
They had previously been scaled back from 75 per cent to 40 per cent and, at the same time, the Treasury has readjusted the rateable values of commercial property, leaving some businesses with higher bills overall.
The scrapping of business rate relief entirely would have left landlords facing potentially huge increases in monthly outgoings at a time when the pub industry is battling many challenges such as the squeeze on discretionary spending, climbing energy prices and cheaper drinks in supermarkets.
Industry figures suggested the average increase on business rates over the next three years was around 76 per cent for pubs and 115 per cent for hotels.
Although no concrete details have so far been announced, the Government is expected to make changes to how pubs' business rates are calculated, meaning smaller rises to bills.
Reports say any forthcoming changes will affect pubs only and not the wider hospitality sector such as hotels.
Ollie Parry has run The Salopian Bar in Shrewsbury town centre for 20 years and said he was facing incremental rises in his business rates which would have peaked in April 2029, leaving him with a £66,000 annual bill.
He currently pays £18,000 a year and warned last month that the pub's running costs could have increased by £185,000 over the past year once minimum wage and National Insurance increases were also factored in.
Mr Parry told the Shropshire Star: "I am very happy they have seen sense and are making a U-turn but, until it is actually announced, we are still as much in the dark about them increasing the rates in the first place.
"There has been no reasoning behind why the rateable value of every pub in Britain has gone up. We were in the dark about that and now we're in the dark about the U-turn.
"The Government was voted in power because they were going to completely change the whole system but they haven't done that, they have just put everyone's rates up."
Landlords and industry groups have been pressuring the Government while reports suggested 1,000 pubs had banned Labour MPs from their premises.
Meanwhile Whitbread, one of the UK's largest hospitality companies which owns household names such as Premier Inn and Beefeater, said it would have to pay between £40 million and £50 million more in tax.
Norrie Porter is the secretary and public affairs officer for the Shrewsbury and West Shropshire branch of The Campaign for Real Ale which works on behalf of the beer and pub industry.
He told the Star: "The talk of extra support from the Government to pubs is very welcome but, as always, the devil will be in the detail and we await that before making a full response.
"Business rates are a tax on pubs regardless of their profitability and the recent revaluation does not seem to take that into account.
"Full reinstatement of the small business relief to support smaller pubs would be a great help but the business rates system needs a full review and fundamental changes.
"CAMRA also supports clubs and licensed restaurants and we hope those will also be brought into the Government's support scheme.
"The most important change for pubs remains a reduction in the rate of VAT for hospitality businesses which would help viability, the cost of living and for them to compete fairly with supermarkets."
Ruth Ross, chief executive of Shropshire Chamber of Commerce, described pubs as "the heartbeat of many communities" and welcomed any help coming from the Government.
"The Chancellor recognised in her last Budget the current business rates system is broken and holding back growth but it is also incredibly unbalanced," Ms Ross told the Star.
"It's not just pubs which are finding themselves over-exposed, the same can be said for companies in other parts of the hospitality industry where some of the smaller companies are facing an existential threat.
"Taxation and business rates remain one of the greatest fear factors in our quarterly economic surveys and a third of firms questioned by the British Chambers of Commerce said they were worried about business rates. This is the highest level since the British Chamber started asking the question nearly a decade ago."
North Shropshire MP Helen Morgan said "urgent clarity" was needed from the Government on business rates changes, describing it as the "final chance" to help save hospitality and the high street.
Ms Morgan said pubs in her constituency were already "on their last legs" and that the Government needed to show its support.
The Liberal Democrat said: "This is the last-chance saloon for our hospitality sector.
"From the cruel jobs tax to high energy bills, so many small businesses in North Shropshire are on their last legs and need support.
"These businesses are naturally worried sick. The Government must respond by U-turning and announcing support for all hospitality businesses, including a VAT cut to boost our high streets.
"It is the final chance and a pivotal moment for ministers who urgently need to provide the clarity that these businesses are seeking."
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