- Government backs British pubs with a major package of support on business rates and licensing reform, recognising the challenges they face and important role they play in local communities.
- Pubs will get a 15% cut to new business rates bills from April followed by a two-year real-terms freeze, as well as a review into the method used to value them for business rates. This is on top of support announced at Budget.
- Government also announces a new High Street Strategy to help ensure retail, leisure and hospitality businesses can thrive, as the bedrock of strong communities.
The Chancellor is backing British pubs with the announcement of a major support package, as the government recognises the challenges facing the industry and the vital role they play in building strong local communities.
Pubs have faced significant pressure as their numbers have fallen by nearly 7,000 since 2010, a roughly 15% reduction and amongst the highest across hospitality overall. The sector has also raised concerns around the way they are valued for business rates purposes.
Recognising the value they bring and the challenges they face, the government is introducing a support package to save the average pub an additional £1,650 in 2026/27. Around 75% of pubs will see their bills fall or stay flat over the same year with the pub sector as a whole paying 8% less in business rates in 2029 than they do currently.
Chancellor of the Exchequer Rachel Reeves said: “If we’re going to restore the pride in our communities, we need our pubs and our high streets to thrive.
“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.”
Other sectors continue to benefit from the £4.3 billion support package and from permanently lower tax rates for eligible retail, hospitality and leisure properties.
The government is also launching a review into how they are valued. The review will be carried out by the government alongside businesses and their representatives as well as valuation experts, ensuring that any decisions that follow will be implemented for the 2029 revaluation.
Over the last decade, changing consumer habits, increasingly working from home and shopping online, combined with the pandemic and the increase in energy costs following Russia’s invasion of Ukraine have had a significant impact on all high street business.
Recognising this, the government is also announcing a High Streets Strategy to reinvigorate Britain’s communities. Working alongside businesses and representatives, this cross-government strategy will be published later this year and will look at what more the government can do to support our high streets.
This government is committed to supporting pubs build sustainable business models over the long-term. In the spring, the government will consult on further loosening planning rules to benefit pubs, helping them add new guest rooms or expand their main room without local planning applications. We will continue to engage with the sector to ensure other retail, leisure, and hospitality premises also have sufficient planning flexibilities.
The Chancellor also announced £10 million of funding for the Hospitality Support Fund over three years – upped from £1.5 million for one year announced last April – to support pubs across the UK.
The additional funding aims to help over 1,000 pubs provide extra services for local communities, including creating community cafes, village stores and play areas to help pubs bring locals and families together and boost their footfall. It will also support people who are furthest from the labour market to move into jobs in hospitality.
As part of further licencing reforms, pubs and other licensed venues will be able to open after midnight for Home Nations’ games in the later stages of this summer’s Men’s FIFA World Cup, meaning more time for fans at the pub while boosting takings behind the bar and supporting jobs in hospitality. The government is also bringing forward a consultation to allow them to open late for other big events such as Eurovision.
The government will legislate later this year to increase the number of temporary events pubs and other hospitality venues can hold to help screen other World Cup games or host community and cultural events.
This support comes on top of the £4.3 billion package the Chancellor announced at Budget 2025. This includes capping business rate bill rises by 15% for most businesses from April, or £800 for the smallest, next year as pandemic-era reliefs end and new revaluations take effect.
This government is committed to reforming the business rates system and has already begun the work. At Budget 2025, the Chancellor announced a permanent 5p cut in the business rates multiplier for over 750,000 retail, hospitality and leisure properties, funded by a higher tax rate for the most expensive 1% of properties.
Stakeholders react to pubs support package:
Emma McClarkin, CEO of the British Beer and Pub Association, said: “We are pleased the government has listened to our concerns, and those of publicans, consumers and MPs who rallied to defend our locals.
“This pub specific package will stave off the immediate financial threat posed by accelerating business costs and will help keep the doors open for many.
“This additional support will provide certainty for tens of thousands of pubs, with many seeing their bills frozen or falling and there will be a sigh of relief from landlords across the country.
“We will now work closely with government to establish a transformative long-term plan that works for all pubs through permanent business rates reform to ensure they remain at the heart of communities.”
Heineken / star pubs: “Although we will need to fully digest the detail, this announcement is a huge boost for pubs and will ease the immediate concerns of publicans up and down the country.
“I am pleased that the Chancellor has clearly listened to the many Star Pubs licensees who expressed their objections to the plans published at the Budget. This support is a welcome acknowledgement of the pub as the cornerstone of British society, and we are committed to working with the Treasury in the coming weeks and months.
“This support means publicans and their staff are able to focus on the day job – running great pubs at the hearts of their communities.”
Anna Leach, Chief Economist at the Institute of Directors, said: “The Institute of Directors welcomes today’s decision by the government to provide targeted business rates relief for pubs, recognising the intense pressures facing this sector. This support will offer much-needed breathing space for businesses grappling with rising costs and tight margins.
“More broadly, the business rates system remains in urgent need of reform to address the disincentives to investment embedded in the current framework, and we welcome the government’s commitment to take action in this area.
“That said, stronger policy design at an earlier stage would deliver greater benefits for business confidence, planning and costs. We reiterate our call for more detailed, sector-by-sector analysis of the impacts of tax changes to be undertaken alongside each Budget. This would allow concerns to surface earlier in the process, enabling risks to be identified and addressed before they crystallise.”
Michelle Ovens CBE, CEO & Founder, Small Business Britain: “It is good to see the Government widen the business rates support available to pubs and music venues – many small, independent establishments will undoubtedly welcome this additional headroom.
“We also look forward to supporting the work of the newly announced High Street Strategy to ensure retail, leisure and hospitality businesses can thrive. Given the crucial role these sectors play at the heart of local communities it is vital small businesses are given as much support as possible and that we see swift action taken to address existing issues.
“The long-overdue work to reform the business rates system, which the government has already committed to and reaffirmed today, will be especially key.”
Kate Nicholls, Chair of UKHospitality, said: “We welcome the recognition by the Prime Minister and the Chancellor of the scale of the challenges facing the hospitality sector. 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.
“The devil will be in the detail, but we need to see pace and urgency to deliver 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 to deliver this.
“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.”
