Rachel Reeves is facing a backlash from Labour MPs, pub landlords and business owners over the “wholly inadequate” 15 per cent cut in business rates bills announced by the Treasury.
The move came after a furious backlash from pubs over the decision in the chancellor’s Budget to end the business rate relief brought in during the Covid pandemic.
The anger saw a national campaign of pubs led by TV presenter Jeremy Clarkson barring Labour MPs from their premises.
But after briefing that the government would U-turn on the plan, the Treasury finally announced 15 per cent off their business rates bills from April as part of a major support package.
The Independent though has seen a letter organised by Labour Knowsley MP Anneliese Midgley, a member of the select committee, warning that the change is not enough.
The letter also signed by former minister Justin Madders, and leading Labour MPs Stella Creasy, Dan Carden, Sharon Hodgson, Alex Sobel, Kerry McCarthy and others, warning that music venues are still under threat.
They said: “The UK Music industry is one of our most important cultural and economic assets, delivering world-renowned artists, venues, festival, studios and generating significant international soft power. In 2024, it contributed £8 billion to the economy.
“Many of us have been contacted by constituents in recent months who use and run these critical music spaces, explaining that they will be severely impacted by the 2026 business rates revaluation, scheduled to take effect on 1 April 2026.
“According to the Music Venue Trust, 84 grassroots music venues in England face rateable value increases of between 45 per cent and 275 per cent from 2025/26 to 2026/27. These increases do not represent marginal adjustments but existential threats.”
The announcement came after warnings from the sector that changes from November’s autumn budget would lead to mass closures and job losses.
However, other hospitality businesses such as hotels, restaurants and cafes will not receive additional support despite their own concerns over soaring tax bills.
The U-turn, first revealed by The Independent earlier this month, extends rate relief in an effort to help landlords with rising bills, instead of scrapping cash support from April.
Treasury minister Dan Tomlinson said the property tax bills for pubs and music venues in England will be reduced by 15 per cent in 2026/27 and then be “frozen in real terms” for the next two years.
He added that the support will be worth £1,650 for the average pub next year.
Mr Tomlinson said: “This decision will mean that the amount of business rates paid by the pub sector as a whole will be lower in 2028/29.
“It will also apply to music venues too. Many are valued as pubs and it would not be right to draw the line.”
The Treasury’s intervention comes after an intensifying backlash from industry bosses and MPs over impending tax increases.
However, industry bodies UKHospitality and the British Beer and Pub Association (BBPA) had warned that pub business rates bills would still increase by an average of 15 per cent, or £1,400, in April without an intervention.
They said this would have led to an average rise of 76 per cent, or £7,000, by the 2028/29 financial year.
Business rates are devolved in Scotland, Wales and Northern Ireland.
Emma McClarkin, chief executive of the BBPA, 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.”
Matthew Todd, landlord of The Wonston Arms near Winchester, Hampshire, said “I don’t see how it’s going to save the venues that are going to close – it’s actually a very small amount that’s being talked about. It’s woefully not enough, I’m afraid.”
Ms Creasy also warned that the lack of support for other businesses will see parents forced to take toddlers to pubs during the day.
She told the minister: “I’m sure he does not want to be the minister responsible for sending toddlers into pubs, because the other places that their parents might take them during the day have closed down. That would not be in anybody’s interest.”