The Government’s move to backtrack on a budget decision and provide new financial support for pubs is a sign of its strength and confidence, a senior Labour figure has said.
The Treasury is understood to be preparing a support package for the pub industry, due to be announced in the coming days, following an outcry over the impact of a major hike in business rates.
The move is the latest in a series of U-turns from the Government, which has also backed down on major welfare reforms due to pressure from backbenchers, and has partially scaled back inheritance tax on farms following lobbying by the sector.
Asked by Sky News why the Government kept making U-turns, Anna Turley, chairwoman of the Labour Party, said: “I don’t buy this is a U-turn. This is actually about listening.
“I think it’s a sign of a Government that is actually in touch with people, that is listening to people, and that is responding.”
She added: “I think listening to constituents isn’t being bullied or lobbied – that’s what we’re here to do.
“We’re here to represent the people that we live amongst and, if a policy isn’t right, I think it’s a sign of a confident Government that says, ‘do you know what? we’ll step in, we’ll sort it out, we’ll make sure it works’.”
Following briefing to the media that new support for pubs will be announced in the coming days, ministers are facing pressure to expand it to other businesses, with trade bodies saying “piecemeal responses” will not “save our high streets”.
Ms Turley could not say whether the support would be extended to other businesses.
She also told LBC: “The reality for now is that we want to support every small business, whatever sector they are in.”
Shadow business secretary Andrew Griffith said the U-turn should go “much wider” than just pubs.
He told the Press Association: “Businesses are bleeding out across our high streets. When you present yourself in A&E with blood gushing, you don’t want someone to throw you a pack of plasters.
“It’s got to be a substantial change to the Chancellor’s budget. This was a measure that she should never have introduced in this way. It just shows how they don’t understand business.”
Kate Nicholls, chairwoman of UKHospitality, called for “a hospitality-wide solution”, saying the entire industry is affected by business rate hikes, not just pubs.
Figures provided by UKHospitality suggest hotels in England face an average increase in business rates of 115% by 2030, compared with a 76% increase for pubs.
The National Pharmacy Association called for similar support for pharmacies, which chief executive Henry Gregg said face a 140% increase in rates.
He said: “We’re urging the Government to exempt pharmacy businesses from business rates altogether, in the same way as GPs are.”
The rise in rates is due to a combination of properties being revalued and the withdrawal of Covid-era discounts which was announced by Chancellor Rachel Reeves in November.
Ministers had put in place a £4.3 billion fund to help pubs with the transition to higher rates but sources said Ms Reeves would soon announce additional support including further business rates relief and measures to cut licensing red tape.
The Chancellor is understood to have commissioned work on providing more support for pubs before Christmas, after the budget’s impact on individual sectors began to become clear in Government analysis.
The pub industry tentatively welcomed reports of a U-turn, saying it was “potentially a huge win for pubs across the country”.
Emma McClarkin, chief executive of the British Beer and Pub Association, said publicans “can breathe a huge sigh of relief” and added her organisation would “keenly await” details of the relief on offer.
The Liberal Democrats called for ministers to come forward with proposals as soon as possible in order to provide “clarity” and prevent pubs going bust.
Reform UK welcomed the move, with deputy leader Richard Tice saying pub closures would be “a cultural catastrophe as much as an economic one”.
