Retail and hospitality trade bodies have called on Rachel Reeves to go further in reforming business rates, after she announced a new package today to help pubs.
The Chancellor granted pubs and music venues 15% rates relief for 2026/27, along with a two-year freeze in their bills.
The package will save the average pub £1,650 in 2026/27, according to the Treasury.
The government is also set to review how pubs are valued for business rates, with decisions to be implemented by 2029.
“If we’re going to restore the pride in our communities, we need our pubs and our high streets to thrive,” said Reeves.
“We’re backing British pubs with additional support, and our new High Streets Strategy will help tackle the long-term challenges that our much-loved retail, leisure and hospitality businesses have faced.
“Thriving local businesses, bustling high streets and pride restored in our communities – that’s what this government is delivering.”
The BRC said the measures showed the business rates system was “at tipping point” and needed comprehensive reform.
“The government recognises the rates system is not fit for purpose and promised to replace it in their manifesto,” said BRC CEO Helen Dickinson.
“The Treasury is right to introduce short-term relief for those hit hardest by the rates rises, but this should be targeted at all those on the high street whose bills will see the biggest rises, whether they are pubs, shops or cafés.
“If rates rises are left unchecked, it will lead to fewer shops and fewer jobs right at the heart of our communities.
“Today’s announcement shows there is more to be done on rates reform and government must honour the promise of root-and-branch reform they made to the electorate at the 2024 election,” Dickinson added.
“Business rates have been increasing every year and we are now at tipping point. At £27bn in England alone, it is breaking the backs of businesses everywhere and must be brought down.”
Local shops are ‘neglected’
The Association of Convenience Stores (ACS) said the reforms “neglected” convenience stores, thousands of which were facing significantly higher business rates bills from April thanks to Reeves providing limited support to smaller shops in the November budget.
“Local shops will feel neglected and dismissed by this government today as they are passed over for additional support,” said ACS CEO James Lowman.
“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.”
Lowman called on Reeves 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,” he said.
Read more: Budget 2025: how Rachel Reeves compromised on business rates
Meanwhile, UKHospitality welcomed the measures but called for a “hospitality-wide” solution to reduce the business rates burden.
“We welcome the recognition by the prime minister and the Chancellor of the scale of the challenges facing the hospitality sector,” said UKHospitality chair Kate Nicholls.
“They have listened to us about the acute cost challenges facing businesses, all of which is impacting business viability, jobs and consumer prices.
“The rising cost of doing business and business rates increases is a hospitality-wide problem that needs a hospitality-wide solution. The government’s immediate review of hospitality valuations going forward is clear recognition of this.”
Nicholls said the sector still needed “to see pace and urgency” from the government in delivering the “reform desperately needed to reduce hospitality’s tax burden, drive demand, and protect jobs and growth”.
“We will work with the government over the next six months to hold their feet to the fire.
“This emergency announcement to provide additional funding is helpful to address an acute challenge facing pubs.
“The reality remains that we still have restaurants and hotels facing severe challenges from successive budgets. They need to see substantive solutions that genuinely reduce their costs.
“Without that clear action, they will face increasingly tough decisions on business viability, jobs and prices for consumers. Those are costs borne by us all, and I hope the government delivers on its promise to support the whole hospitality sector.”
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