Business Rates

Dan Tomlinson Excerpts

Tuesday 27th January 2026 Commons Chamber

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

This Government want the best for Britain’s high streets. We know how central they are to the strength and vibrancy of our villages, towns and cities. We know how hard small business owners work, and we know how badly they were let down by the previous Government; shops were shuttered, council funding was cut, and business rates were left totally unreformed. We will not let decline continue, and we are already taking steps to arrest it.

We are protecting high street businesses from upward-only rent review clauses, and we are introducing a strong new community right to buy to help communities safeguard valued community assets, such as pubs and shops on their high streets. We are pushing ahead with high street rental auctions, which are helping to bring long-term empty shops back into use. Where premises have been vacant for too long, councils can auction the right to rent them; they can offer one to five-year leases to new businesses and community groups, helping to create more vibrant high streets. We also launched the winter of action to combat retail crime, a nationwide crackdown on crime and antisocial behaviour to protect shoppers and retail workers.

As well as that, we are investing in local communities through the £5 billion Pride in Place programme announced last September, and we are investing to support growth, including through the new local growth fund. Around one in three businesses continue to benefit from small business rates relief and do not pay any business rates at all, and 85,000 benefit from reduced business rates as this relief tapers. At the Budget, we extended the small business rates relief second property grace period for another two years, which is a really important change; it means that businesses expanding into a second property will retain the support as they grow.

We know that there is more to do. Before I turn to today’s announcements, I want to run through the three main components of the changes to business rates that are taking place in April for all businesses, and to explain the steps that the Government took at the Budget last year on business rates. The first change is the underlying, significant reforms to the system that the Chancellor set out as part of our commitment to transform business rates in England over this Parliament. We have implemented permanently lower multipliers for eligible retail, hospitality and leisure properties; the multiplier will fall by around 12p or 25% on 1 April. Some of this is a result of the overall reduction in multipliers between revaluation periods, but the further 5p reduction announced by the Chancellor is, on its own, worth nearly £1 billion for the 750,000 retail, hospitality and leisure businesses that are the lifeblood of our high streets.

We are paying for this support for the high street through higher rates on the top 1% most expensive properties. That includes many large distribution warehouses, such as those used by online retail giants. Let us be crystal clear: before our reforms, a mid-sized high street business faced the same multiplier or tax rate as a warehouse used by an online giant—that was the system we were left with. Now, the mid-sized high street business will pay around 38p in the pound, and the large warehouse will pay around 51p in the pound. That is 33% more. This is a sizeable reform, and it is here for good.

The second component of business rates announced at the Budget was the revaluation. All non-domestic properties are revalued independently every three years for business rates purposes. New valuations will come into effect in April. I thank the independent valuers in the Valuation Office Agency who carry out the work. The Government did not take the easy approach of kicking the post-covid revaluation into the long grass. Instead, we introduced a significant transitional support package, because we knew that some sectors were seeing large increases in their rateable values after the pandemic. We are capping bill increases in each of the next three years for those with the largest rises, and we are spending a total of £4.3 billion on that and other interventions.

The Government recognise that the rateable value of hotels has increased significantly since the pandemic, so our caps on increases are particularly important for them, but it is right that we look at this further. We will therefore review the way that hotels are valued, to ensure that it accurately reflects the market for this sector.

The third important context is the tapering away of the temporary pandemic relief for high street businesses. The previous Government went into the election with plans to withdraw that relief overnight in 2025. That would have been a harsh and sharp removal of support, pushing up bills for independent high street businesses overnight by 300%. That is reckless and irresponsible. Instead, we have taken a different approach. We extended the retail, hospitality and leisure relief this year—it is set at 40%—and we are unwinding it over the coming years. The jumping-off point for any business currently receiving a 40% discount is their current bill, not their bill without relief.

The Budget decisions led to the following outcomes. First, for over half of ratepayers, bills will be flat or will fall next year. Secondly, of the properties whose bills will increase from 1 April, most will see their increases capped at 15% or less, or at £800 for the smallest. Thirdly, bills will adjust to new valuations, but because of our caps, this will happen gradually, and high street businesses will benefit from permanently reduced multipliers for the long term. That is a fair and reasonable approach. As set out at the Budget, in total we are spending over £4 billion in the next three years to limit the scale of bill increases for those who are either losing reliefs or seeing their rateable values increase.

In the coming financial year, because of our interventions, the business rates system will raise the same amount of revenue as it was forecast to raise in spring 2025, before the Budget—not billions and billions more, as Opposition Members seek to claim. The forecast is more or less the same. That is the shape of the policy that we set out in the Budget. I hope you will forgive me, Madam Deputy Speaker, but I wanted to set that out in full, because business rates are rather complicated.

This Government want to go further to support pubs. Pubs are the cornerstone of so many communities, and they are essential to the social and cultural life of so many places across the country. I have heard clearly from Government Members just how important pubs are. I thank colleagues who have engaged constructively and privately with me on this issue in recent weeks. Whether they represent constituencies in coastal or rural communities, towns or cities, their representations have been invaluable. Their constituents should know that most of the politics that they see in the papers is not what matters; it is the conversations and the advocacy of MPs in the corridors of this place that can make the difference. In particular, my hon. Friend the Member for Bournemouth East (Tom Hayes) has been a relentless advocate for businesses in his constituency, as have my hon. Friends the Members for Isle of Wight West (Mr Quigley), and for Redditch (Chris Bloore). I thank my hon. Friend the Member for Warrington North (Charlotte Nichols) for her engagement on this issue, in her role as chair of the all-party group on pubs.

For too long, under the Conservatives, pubs have not had the support they needed. Opposition Members claim to care about pubs, but where were they when the number of pubs fell by 7,000 between 2010 and 2024? They were in government, and they let the number of pubs in our communities fall by a fifth. The Conservatives also allowed the revaluation to go ahead with a business rates methodology for pubs that no longer has the support of the sector. Before the Budget, every pub sector body was broadly signed up to the methodology used for valuing pubs, and lent its support to the principles set out in the Valuation Office Agency’s guide. Since the Budget, the same sector bodies have withdrawn their support. The Government acknowledge their concerns and will therefore carry out a review of the pub valuation methodology. The review will report in time to be implemented at the next revaluation.

While that review is ongoing, and given the challenges that pubs faced over the long term under the previous Government, we are stepping in to provide support for pubs in the next three years. Today, I confirm that, from April, every pub in England will get 15% off its new business rates bill, on top of the support announced in the Budget. Pubs’ bills will then be frozen in real terms for a further two years. That support is worth £1,650 to the average pub next year. It will mean that around three quarters of pubs will see their bills either fall or stay the same next year. This decision—

[Madam Deputy Speaker (Caroline Nokes)]

Order. I say very gently to the Minister that it was always open to him to ask for extra time, but we cannot find any record of him having done so. He has already got to 10 minutes, and he seems to have three more pages, so I will allow the Opposition spokespersons more time as well. This is an important statement, and I think that the hon. Member wants to finish, but it is very unfair to exceed the time by what I reckon will be 50%.

[Sir Mel Stride (Central Devon) (Con)]

Last orders.

[Dan Tomlinson]

Let me apologise profusely for not letting you know in advance, Madam Deputy Speaker. This is the first time I have done one of these statements, and I will not make the same mistake again. I am glad that the same courtesy will be afforded to the shadow Chancellor, and I look forward to hearing a full 15 minutes of remarks from him. I am sure that they will be entertaining for us all. [Interruption.] I will make progress now, and we will hear more from the shadow Chancellor.

This decision will mean that the amount of business rates paid by the pub sector as a whole will be lower in 2028-29 than it is today. This is Independent Venue Week, so it is particularly appropriate that our package will apply also to music venues. Many live music venues are valued as pubs, and many pubs are grassroots live music venues. It would not be right to seek to draw the line in a way that includes some and not others, and I thank MPs who have made constructive representations on this issue in recent weeks. In the meantime, we are pressing ahead with wider regulatory reforms, building on the new licensing policy framework in the Budget, and we are working with the sector to ensure that local authorities are using that to ease licensing decisions on the ground. As part of our ongoing licensing reforms, for home nation games in the later stages of the men’s football world cup this summer, pubs and other licensed venues will be able to open until 1 am or 2 am, depending on when the game starts. We will legislate to increase the number of temporary events notices for pubs and other hospitality venues, whether to help them screen world cup games, or for other community and cultural events.

This Government are committed to helping pubs build sustainable business models over the long term. In the spring we will consult on further loosening planning rules to benefit pubs, helping them to add new guest rooms or expand their main room without planning applications. We will also continue to engage with the sector to ensure that other retail leisure and hospitality premises have planning flexibility—

[Mr Speaker]

Order. This is not acceptable. I have to be quite honest, because the other Front Benchers need time to respond. When a statement is meant to take 10 minutes, that is meant to be 10 minutes. If Ministers tell me otherwise in advance, I am willing to work with them, but they cannot just carry on speaking. Minister, I take it that you are now coming to the last page of the statement, not the middle pages—[Interruption.] No, I want you to bring it to an end, and quickly.

[Dan Tomlinson]

May I apologise, Mr Speaker, for not letting you know in advance that the statement would be running over 10 minutes?

[Mr Speaker]

Can I just ask, gently, have you not been advised that this is meant to be 10 minutes? Departments have people who are meant to advise Ministers on how long they have got. How on earth have you got a speech that is longer? It could be 20 minutes. It is unfair to the Members present, and there is other business. Please, this House should be shown the respect it deserves, and unfortunately we are not getting it. I am here to protect Members, not allow Ministers to take advantage.

[Dan Tomlinson]

Mr Speaker, I will wrap up very quickly, and I apologise again.

This Government also understand that things are not easy out there. Today’s announcement is about additional support for pubs, but we understand that this is a tough time for other businesses on the high street. We have already taken significant steps to acknowledge that and support businesses, including £4.3 billion of business rates support in the Budget. Over the past decade, consumers have changed their habits and are increasingly working from home and shopping online, and these trends continue to make it harder for high street businesses. I am therefore announcing today that later this year the Government will bring forward a high streets strategy to reinvigorate our communities. We will work with businesses and representative bodies to bring that strategy together. It will be a cross-Government strategy, and we will be looking at what more the Government can do to support our high streets.

To conclude, this Government have already started the work of reforming our business rates system, and any potential changes to business rates will be considered at the Budget in the usual way. Labour Members have the right economic plan for Britain and will back our high streets and our pubs every step of the way.

[Mr Speaker]

I call the shadow Chancellor of the Exchequer.

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[Sir Mel Stride]

That is much appreciated, Mr Speaker.

Mr Speaker, was that it? After all this time, and weeks of telling our local pubs that help was on the way, this is all they get—a temporary sticking plaster that will only delay the pain for a few, while thousands of businesses despair as their bills skyrocket. The Labour party manifesto promised to completely replace the business rates system. Labour Members said that they would create a system that levels the playing field for our high streets and supports entrepreneurship and investment. Well, we are waiting.

So far, what we have seen is the exact opposite of what our local businesses were promised, with business rates soaring across the board. Despite the temporary relief announced today, pubs will still end up, in time, with bills more than 70% higher than they are today. The Federation of Small Businesses has calculated that the business rates of a typical medium-sized shop or restaurant with a rateable value of around £50,000 will increase by 71% over the coming years. For hotels, it will be over 100%.

Ministers expect those businesses to be grateful for some temporary relief, tweaks to multipliers and changes to licensing, but the Conservatives have been clear: support must be permanent. We have to cut business rates for our high streets to give certainty to local businesses. Measures must be far wider than those that the Government have announced today, applying not just to pubs but to the whole of the retail, hospitality and leisure sectors, which bring life to our high streets and town centres. We would not just introduce temporary reductions in rates, but completely abolish business rates for thousands of pubs, shops and restaurants across our country.

These huge tax rises introduced by this Government are a choice, but it does not have to be this way. The Government have chosen to increase spending by vast amounts, including on the benefits bill, with a benefits giveaway of over £3 billion at the Budget to abolish the two-child cap. These choices are why bills are going up, businesses are going under, jobs are being lost and our high streets are being hollowed out.

Let us not forget that this is not an isolated issue. Businesses are having to shoulder not just business rates rises, but a long list of other burdens that are being piled on by a Government who simply do not understand how businesses work. Many of those facing the highest increases in their business rates were among the worst impacted by the Chancellor’s jobs tax. They have already seen their business rates go up by as much as 140% last year, and they face yet more costs and red tape from the Government’s employment rights legislation. Analysis by UKHospitality suggests that, on average, as many as six hospitality venues could close every single day this year. That is a tragedy for our high streets and our communities. It is also a tragedy for our young people, many of whom look for their first job in the local pub or coffee shop, and who will find those jobs simply do not exist any more.

I ask the Minister, where is the help for the wider retail, hospitality and leisure sectors? Does what has been announced today include gastropubs, pubs with hotel rooms, bars, nightclubs and private clubs? Why are the Government happy to stand by and watch while businesses close and jobs are lost? When will the guidance be published for businesses, so that they know whether they will be eligible for this further relief and what their bills will be over the coming year? Why did Ministers not come forward with this relief for pubs at the time of the Budget, when they knew the level of increases that many businesses were facing? No new information has been provided between the Budget being announced and this statement. Can the Minister confirm that because this relief was not accounted for at the Budget, today’s announcements will need to be paid for through yet more borrowing?

The Government have proved today that either they do not understand the damage that they are doing or they do not care. Today’s announcement is far too little, far too late.

[Dan Tomlinson]

Apologies again, Mr Speaker; it will not happen again.

[Mr Speaker]

I appreciate that, but when Madam Deputy Speaker is in the Chair, I expect her to be given the same respect, so that when she says that time is up, you do accept that ruling. She felt that you were not stopping in time. I do not want to get into it now, but I will be speaking to the Chief Whip later.

[Dan Tomlinson]

It is just not credible for the shadow Chancellor to say that he would scrap business rates. What did the Conservatives do over the 14 years that they were in power? They kept business rates in place, they did not reform the system and, year after year, they introduced temporary reliefs that did not work or last. Some 7,000 pubs closed under their watch, in communities up and down the country, and they expect this House to believe that they were just getting around to it. Well, we do not believe that and we will not stand for it. Instead, this Labour Government will get on with the work of ensuring that we can get our public finances in order, getting borrowing down and continuing to support businesses, as far as we reasonably can, with our £4.3 billion of support.

The right hon. Gentleman asked about the guidance. That guidance will be published today—I hope it has been published already, but if not it will come very soon. Bills will be landing in the inboxes and on the doormats of businesses across the country in the coming weeks, and will reflect the changes that have been announced today. Yes, this will be scored in the usual way at the Budget. He talks about borrowing, but his plans to scrap business rates entirely, funded by made-up savings in other parts of public spending, would mean an increase in borrowing of £30 billion or so, which we could not afford.

The Labour Government have set out significant plans today to support pubs and those businesses that are the heart of our high streets that have been affected by the particular way that they are valued. As I said in my statement, pub business rates valuations are not the same as those for the rest of hospitality: pubs are valued on their takings, whereas other hospitality businesses are valued on their bricks and mortar. Industry bodies have highlighted concerns about how the costs are accounted for in this methodology. The Government want to look at that more closely, which is why we are launching the review and have come forward with this significant package of support for pubs today.

[Mr Speaker]

I call the Chair of the Treasury Committee.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

I welcome the support for music venues as well as pubs in my constituency. I also welcome the Minister’s engagement and willingness to speak to the Select Committee and to be questioned by us. I am sure, Mr Speaker, you would agree that it would increase the Minister’s favour in your eyes were he to do that with dispatch and not leave it for too many weeks, so I thank the Minister for his engagement on that.

On the wider issues of business rates, changes have been announced, but will the Minister outline the timeframe within which we will see a significant change? It was a Labour manifesto commitment to change business rates, but it will take time because of the valuation procedure. Does he propose to change that wholesale, and in what timeframe? Businesses of all types, including pubs, need certainty most of all, so that they know the trajectory in good time and can plan.

[Dan Tomlinson]

The review of the methodology for pubs that we have announced today will be conducted as rapidly as possible, and I hope that it will conclude this year. We also want to look closely at the methodology used to value hotels, which is similar but not quite the same as that used for pubs. I am sure we will get into that in Committee in due course. We want to ensure that those reviews about the changes to the methodology conclude in good time for the next revaluation, which is set to come into operation in 2029. My hon. Friend asks about the Government’s ambition to rebalance the system. As I outlined, last year’s Budget introduced a significant rebalancing, with the largest businesses having a tax rate multiplier that is 33% higher than that of typical businesses on the high street. I look forward to continuing to engage with hon. Members and businesses on business rates in the run up to the Budget in the usual way.

--- Later in debate ---

[Daisy Cooper (St Albans) (LD)]

If the Government are serious about saving the high street, then these measures can only be the start. Since the Government’s first Budget, we Liberal Democrats have been warning that high streets were at risk if the Government did not make the various changes that they have made over the past 18 months.

A number of questions arise from today’s statement. There are 11 pubs in my constituency, not all of which could be described as large, that have a rateable value of more than £100,000 because of the ridiculous valuation system, and they will still see their rates bills go up. There will be such pubs across the country, but is it correct that they will get only half of the percentage relief? Pubs can already have 50 temporary event notices a year, so extending that is simply a soundbite solution without a problem.

I am glad that the Government are looking at hotels, but what is the timeframe? The Samuel Ryder hotel in my constituency tells me that its bill is going up by 157% in the first year alone, and it will not be the only such hotel. Will the new formula for hotels be in place in April, or will they be left in limbo?

The statement still offers nothing for the rest of the retail, hospitality and leisure sectors—the restaurants, soft play centres and high street shops that made business, investment and hiring decisions based on the expectation of the full 20p discount. I welcome the announcement of a high street strategy, which we Liberal Democrats will engage constructively with, but will the Minister start now by heeding our calls to direct the Competition and Markets Authority to look at the energy market, which is blocking hospitality businesses and other sectors from getting the best energy deals? Will he also look at our fully funded proposal to slash VAT until April 2027, to give our high streets a boost?

Over the past few weeks and months, getting answers and data from the Government has been like getting blood from a stone. Just 90 minutes ago, I asked the Minister if he would tell us what he knew and when; he said he would, but he has not.

Finally, on the methodology for pubs, the use of fair maintainable trade—turnover—has long had its day, but may I urge the Minister to allow for parliamentary scrutiny? None of the current legislation relating to pubs or business rates allows for any scrutiny in this House or the other place. I asked the Government about the valuation methodology back in July 2024; it was one of my first written questions after the general election, but it has taken 18 months for the Government to listen. Will they please allow this House to scrutinise their plans so that we can get a long-term fix to save our pubs?

[Dan Tomlinson]

The 15% reduction will apply to all pubs. As the hon. Member knows, there are different caps for pubs depending on their size, but if bills had been frozen, no bill would have fallen next year. Instead, because we have decided to apply the 15% reduction, around 75% of pubs will see their bills either stay the same or fall. I acknowledge what she says about the very largest pubs, but we will still significantly reduce the increase that they would have expected this year. Their bills will then be frozen in full in years two and three of the period before the revaluation review—I am glad that the hon. Member is able to welcome that review. Its results will be implemented for future revaluations.

The hon. Member mentioned temporary event notices. We are trying to implement the recommendations of the licensing review, which was carried out in conjunction with pubs and other businesses in the sector, so although she may think that changes such as these do not touch the sides or make a difference, pubs themselves told us that—in addition to ensuring that we could support them in the right way fiscally—such changes would be welcome. I hope that pubs that are able to make use of them will do so.

The hon. Member also asked about the 20p multiplier. She is right that we legislated for a reduction of up to 20p, but we have to see these things in the balance. The decision to reduce the multiplier by 5p came with a £900 million price tag; reducing it by the full 20p would cost significantly more. Taken in the round, our package of support has a lower tax rate within the system—a lower multiplier—but also steps in with caps to support businesses if they are experiencing increases in their values or having to adjust to the slow unwinding of the pandemic relief.

The hon. Member asked about VAT. All I will say—she will expect this—is that when the Liberal Democrats had the chance in government, they put VAT up; now, they seem to be calling for it to go down.

Finally, on the question of what I knew and when, as the VOA set out, Ministers were provided with details of the increases in the valuations. However, at that time, we did not foresee—I did not foresee—that after the changes in the rateable values that were published at the Budget, pubs and their representative bodies would want to withdraw their support for the independently and previously agreed methodology. Given that and the Government’s judgment that there are issues, to which the hon. Member has referred, we thought it was right to pause, review the methodology and ensure that it is fit for the future for pubs and hotels.

[Several hon. Members rose—]

[Jim Dickson (Dartford) (Lab)]

I thank the Minister for his statement. The pubs in my constituency, from the Growler Stop and Ivy Leaf in Dartford to the Bull in Stone and the Spring River in Ebbsfleet, are the heart of our community. Does the Minister agree that it is crucial that we find ways to protect them as places for people to come together and build communities, and that the package he has announced today—with its 15% reduction on the revalued bill and protection for the next three years—makes a big contribution to that goal?

[Dan Tomlinson]

I thank my hon. Friend for his question, and for his engagement on this matter on behalf of the businesses in his constituency. We are making a significant intervention for pubs because we understand the concerns that have been raised about the methodology. As we have heard from my hon. Friend, pubs play a central role in his community in Dartford, as they do elsewhere, and they are important to the health, life and vibrancy of high streets, towns and villages in constituencies across the country.

[Dame Harriett Baldwin (West Worcestershire) (Con)]

Putting up a sticker saying “No Labour MPs welcome here” is obviously a successful strategy if you want to get a change from the Treasury. However, what we have ended up with will lead to real complications on our high streets, because a pub that is helped by today’s announcement will be next door to a restaurant that serves alcohol and occasionally has music, which in turn will be next door to a music venue. Businesses on the high street will now be treated in a range of different ways, so why has the Minister chosen to single out pubs and music venues?

[Dan Tomlinson]

There is a significant overlap between the pub sector and live music venues. Many pubs serve as grassroots live music venues, with the result that they are often valued in a similar way for business rates purposes. We did not think it would be right to draw the line so tightly that some music venues, which happened to be valued as pubs, received the relief and others did not. We think this is a fair and reasonable way forward that reflects the reality on the ground.

[Florence Eshalomi (Vauxhall and Camberwell Green) (Lab/Co-op)]

I thank the Minister for this statement—it is welcome news, and many of the pubs in my constituency will welcome it. I received an email from the general manager of the Hampton by Hilton London Waterloo, who outlined that its business rates bill would increase by £296,000 next year and rise to £399,000 by year four. They want additional support, not just for the hospitality sector but for hotels. As the Minister knows, hotels contribute a lot to the local economy—they employ local people, their supply chain is local, and they house many of the people who come to visit our pubs, restaurants and other venues. Many of the hotels in my constituency house many MPs as well. Would the Minister be happy to visit one of those hotels along the south bank and have a discussion with its staff?

[Dan Tomlinson]

As a London MP, I do not get the joy of staying in a hotel in my hon. Friend’s constituency—instead, I get the joy of the Northern line on the route home. She asks an important question about hotels, which are valued in a different way from some other sectors. Their methodology is well established, but as with pubs, specific concerns have been raised, and the Government think it is right to review how hotels are valued for business rates purposes to ensure their valuations accurately reflect the market for those sectors. I intend to engage with hotel businesses and their representative groups on this important issue. Any future changes to business rates for hotels or other businesses will be considered in the usual way as part of the usual Budget processes.

[John Glen (Salisbury) (Con)]

Can I respectfully remind the Minister that when Jonathan Russell from the Valuation Office Agency came before the Select Committee, he was very clear that the impact of the rate rises was made known to the Treasury before the Budget? The VOA provided data drops over 12 months, which did not detail the rates for individual properties, but provided a clear overview at a central level and revealed that 5,000 pubs would see their rates double. It is just not credible for the Minister to say that the Treasury did not know what was going to happen, is it? It had a very clear view of the impact of the changes that it was imposing.

[Dan Tomlinson]

We were aware of the changes to rateable values that were going to be published at the Budget, which is why we came forward with a significant package of support to help businesses adjust to their new values. For example, yesterday, Waterstones came out to express its support for our changes to business rates, because the lower multipliers that we have put into the system will support its business. Businesses across the country are benefiting from those lower multipliers. As I have said, more than half are seeing their bills either flat or falling. We have also put in place significant transitional relief support, with caps this year, next year and the year after. That is because we were aware of the effect of the changes to valuation, although I was not aware of what would happen subsequently with the pubs and their views. I have engaged with them on the methodology, and because of that we are launching this review. We think it is right to look carefully at that methodology.

[Samantha Niblett (South Derbyshire) (Lab)]

Last Friday, I met Laura at the Malt in Aston-on-Trent. She started as a pot washer, went to university, worked the whole way through and is now a tenanted landlady. She shared the amount of hours she works, and she will welcome the review of the business rates methodology, not least because she feels that she works all the hours God sends and she was due to have to pay a lot more. Will the Treasury look at a couple of key bits of feedback that she gave me? One is about prices for alcohol in supermarkets. She could have longer licensing hours, but she cannot compete with people staying at home drinking. The other was about a cardboard tax. She has to pay for packaging for brewery deliveries, but she also has to pay local councils to pick up the packaging, so she would welcome something where the breweries reuse existing crates.

[Dan Tomlinson]

I thank my hon. Friend for her engagement on behalf of the businesses in her constituency. She raises some interesting issues on tax, regulation and licensing when it comes to pubs and hospitality. I do not want to pre-empt the work of the high street strategy, which will be a cross-Government effort with the Home Office, the Department for Business and Trade, the Ministry for Housing, Communities and Local Government and the Treasury working together, but we want to hear about these things from businesses on the ground. I look forward to engaging with Members of Parliament from all parties as we work on the strategy in the coming months.

[Mr Speaker]

I call Jennie’s dad, Steve Darling.

--- Later in debate ---

[Dan Tomlinson]

That is a very good question, and it allows us to reflect on the fact that back in 2009, Nick Clegg, the former leader of the Liberal Democrats, said that we did not need to invest in nuclear power, because it would not come online until the mid-2020s. We are in the mid-2020s now, and we would have benefited from long-term investments in clean and green power, driving down energy bills for consumers and for businesses across the country. We are now taking the long-term steps needed to invest in our energy security and bring bills down. That is incredibly important, and I hope that the steps we have taken on business rates and tax can be welcomed and that businesses in the hon. Member’s constituency and across the country can engage through the various sector bodies with the high street strategy that I have announced.

[Lizzi Collinge (Morecambe and Lunesdale) (Lab)]

I am sure that pubs and venues, such as the Alhambra in Morecambe, will welcome today’s announcement. The Minister might be aware of my letter to the Chancellor on the wider hospitality sector. On the high street, we know that consumer demand has changed, so businesses must change, too. Will the Minister tell me how the strategy will work with businesses and their representatives, such as the Morecambe business improvement district or Sedbergh economic partnership, to pivot businesses to meet the new market reality?

[Dan Tomlinson]

We are keen to hear from businesses, large and small, about what more the Government can do to support high streets. We want to engage on lots of issues affecting high streets, including planning, licensing and crime, and the direct investment that we can make in our communities. There is a lot to do, because we had 14 years under the Conservatives where our high streets were in decay and shops were shutting. We had 7,000 pubs closing and businesses struggling across the country. We know that there is work to do, and I look forward to working with my hon. Friend and other Members on it.

[Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)]

After all the briefing in the newspapers, we were all hopeful of something more significant, but we have a somewhat flaccid statement from the Minister. The statement not only totally ignores the fact that some pubs are having to deal with a threefold increase in business rates, but it does nothing to help high street retailers. Will the Minister be coming back to the House to make another U-turn to help our high street retailers?

[Dan Tomlinson]

No.

[Jim McMahon (Oldham West, Chadderton and Royton) (Lab/Co-op)]

The support package for pubs is welcome news. The Whitegate Inn in Chadderton saw its value increase from £194,000 to £330,000, and the Halfway House in Royton went from £20,000 to £57,000. The Minister knows that the pressures being felt by pubs are felt by the whole of hospitality. For instance, the Egyptian Room food hall in Oldham will jump from £142,000 to £175,000. It is all part of the same ecosystem. The Government could and should have included that wider package in the announcement today, but I urge the Treasury, even at the second attempt, to get it right and have a wider support package for the whole of hospitality.

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[Dan Tomlinson]

We have implemented a wider support package for businesses across the country as a result of the changes to valuations coming in from 1 April, which unwind the valuations that were last looked at during the pandemic. Some 56% of properties will see their bills fall or stay the same in April. The easy thing to do would have been to kick the revaluation into the long grass and bury our head in the sand, but we wanted to make sure that businesses, particularly those that have seen their valuations fall, got the benefit of having up-to-date values post pandemic. Then, because we were aware of the changes coming down the track, we stepped in with £4.3 billion of support. It means that our net revenue from business rates this year will be broadly the same as was forecast before the Budget.

[Sarah Olney (Richmond Park) (LD)]

My constituency has a diverse and varied hospitality sector that supports lots of different communities, including those who do not go to pubs, such as parents of young children, people who do not drink, faith groups and—dare I say—people who do not want to watch the football. They have different needs. They want to go to cafés and to soft play centres. Why are the Government focusing this relief just on pubs? Can they not come up with a package that provides better business rates relief for those businesses that will still be struggling with the rates hike?

[Dan Tomlinson]

The hon. Member may not wish to watch the football, and that is fine—that is her decision—but she will be interested to know that we are consulting on whether we can extend the power over longer licensing hours to other events. She will have to let me know if there are other events that she would like to go and watch in a pub, and that can be part of the consultation.

I have already answered the specific question that the hon. Member raises in a way, but I am happy to repeat myself. It is the case that pubs are valued differently than other sectors on the high street. It is also the case that they have suffered in the past 14 years, with 7,000 pubs closing and significant pressures. More broadly, we have put in a package of support, as I have outlined already.

[Ms Stella Creasy (Walthamstow) (Lab/Co-op)]

I know that many of the businesses in the Walthamstow beer mile that are also music venues, as well as our brilliant Rose and Crown pub and the Wood Street Bear, will welcome what the Minister has said today, and rightly so, because pubs are important. I must take issue, however, with his metric that pubs are somehow the only cornerstone of community life in this country. I join colleagues in asking for further support for the hospitality industry, in particular those small independent venues, such as cafés, community centres and soft play centres. I am 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 to during the day have closed down. That would not be in anybody’s interest. May I make a plea for him to revisit his exclusion of these smaller, independent chains from the hospitality relief that he is talking about?

[Dan Tomlinson]

I would not want to be the Minister who caused that to happen. My hon. Friend has made a very good point, and, as the parent of a young child, I can say how much I value soft play, even though it is rather exhausting at times.

I have set out the specific reasons why we have taken this approach to pubs and live music venues, and I am glad that my hon. Friend welcomes that for the businesses in her constituency. More broadly, the Government did come forward with £4.3 billion of support, most of which is coming this year, and we will of course continue to engage with businesses and with parliamentarians on this important issue in the run-up to future Budgets.

[Mark Pritchard (The Wrekin) (Con)]

I am not sure whether the Minister has volunteered yet for “Strictly Come Dancing”. Today, from the Government of U-turns, we have seen a half turn or a reverse turn or a pivot, as it is known in ballroom dancing circles.

The Minister will recall that I invited him to join me on a pub crawl in Shropshire. So far he has not responded, and perhaps he should not respond, because for many pubs in Shropshire his statement was too little, too late, and they have already decided to close their doors. The independent pub chains have to make investment decisions, and they have put those off. As for the wider business review, may I appeal to the Minister—on behalf of the leisure sector, the retail sector and the hospitality sector—for the timetable to be brought forward from 2029 so that people can plan for their business futures?

[Dan Tomlinson]

The hon. Gentleman has asked about timing. We have announced this decision today in time for new bills to be issued from 1 April that reflect the changes the Government have proposed, because we have listened and because we have carried out that engagement in recent weeks. I am not sure that I will take the hon. Gentleman up on his offer of a pub crawl just yet, but I hope he will be able to welcome the support we have provided for the pubs that he raised with me in questions earlier this year.

[Andy MacNae (Rossendale and Darwen) (Lab)]

I thank the Minister for his positive engagement and his willingness to listen. It has made a big difference. His announcement will be a big relief to pubs throughout my constituency, and it shows that the Government are on their side. However, he has rightly recognised the need for more fundamental reform, so I welcome the announcement of the pub and hotel valuation methodology reviews and the high street strategy. Does he agree that this is an opportunity to think further about how the business rates system, and indeed the tax system as a whole, could be used to actively incentivise entrepreneurs to start and grow businesses and create jobs in the places where our communities need them most?

[Dan Tomlinson]

I thank my hon. Friend for his persistent and powerful engagement on these matters. He is an expert on all things high street and business rates, as I have come to know. Let me point him to the transforming business rates work that the Government have been publishing and advancing. One possibility that we are considering carefully and talking to businesses about is changing the business rates system from a slab system to a slice system. At present, if a business goes over an individual threshold, the new tax rate will then apply to the whole value of its property. Reform is always tricky, but we want to investigate whether changing to a slice system, whereby the tax rate would not involve those big stepped increases, would support investment by businesses on high streets in Rossendale and Darwen and across the country.

[Lisa Smart (Hazel Grove) (LD)]

William Robinson is the managing director of Robinsons Brewery, on my patch. His is the sixth generation running a brewer, a bottler and more than 250 pubs, inns and hotels across the north-west and north Wales, as well as an important bottling plant in Bredbury. William has written to tell me that the present system is destroying confidence, businesses and future investment, and therefore jobs. Does the Minister accept that repeated changes such as moving from the removal of reliefs to this package, including frozen bills and a temporary 15% discount, have created huge uncertainty and anxiety for pubs as they are making important investment and staffing decisions?

[Dan Tomlinson]

There is a big picture that we need to move to with business rates: making sure that, permanently, we have differential treatment for retail, hospitality and leisure businesses and those with higher value, particularly the large online warehouses that are causing the economic rebalancing that we do not really want to see and that is harming our high streets. The Government set out the reforms in the Budget in respect of the 5p reduction in the multiplier. As I have explained to Members, that is a transfer of nearly £1 billion in tax away from the high street—less tax—towards the larger online giants. I want to continue to engage on all tax matters that affect the high street in the run-up to the next Budget, and decisions will, of course, be made in the usual way.

[Mr Clive Betts (Sheffield South East) (Lab)]

I welcome the changes that the Minister is introducing for pubs and music venues. Can he assure me that the changes for music venues will apply to Sheffield arena, which currently, under the proposal, is being treated like an Amazon warehouse? Will he also look at an issue I wrote to him about? Handsworth Junior Sporting Club, a small local voluntary sports club in my constituency, is faced with a 60% increase in business rates. Surely that cannot be right. It needs to be looked at again.

[Dan Tomlinson]

As I have said, some live music venues are valued in a similar way to pubs, and will therefore be included in the relief. We think it fairest to provide the same level of relief to all music venues. The detail will be set out for the business in his constituency and others to see in the guidance, which I hope, if it has not already been published, will be published at some point today.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

It does not say “English Business Rates” up there on the annunciator, so I assume the Minister can confirm that the budget—the departmental expenditure limit—for the Ministry of Housing, Communities and Local Government will increase with the new money, which will mean Barnett consequentials for the devolved nations. What will the quantum of that be, and when will it be delivered?

[Dan Tomlinson]

The Barnett consequentials of this decision will be set out in the usual way and through the usual process.

[Jenny Riddell-Carpenter (Suffolk Coastal) (Lab)]

I thank the Minister for his statement, and I give my personal thanks to the Members on both sides of the House who have been advocating very strongly with him, including my hon. Friends the Members for Redditch (Chris Bloore), for Gower (Tonia Antoniazzi) and for Isle of Wight West (Mr Quigley). I also thank the businesses and, in particular, the pubs in my constituency: the Anchor at Walberswick, the Froize Inn, Deben Inns, and many, many more. I welcome today’s announcement, but we can do more and go further, including in the strategy, to look at lowering VAT for hospitality and lowering the alcohol duty, which could perhaps be offset by a higher alcohol duty in supermarkets.

[Dan Tomlinson]

This year, we are three years on from the changes in alcohol duty that the last Government implemented. I am not sure whether they adopted the same policy position, but we made it clear that it would be reviewed after three years. As part of that usual process, we will be reviewing the reforms that were made in 2023. If my hon. Friend or other Members want to write to me about changes that they think should be made, I will, of course, be happy to receive that correspondence.

[Sarah Bool (South Northamptonshire) (Con)]

Labour’s response to high street struggles is a strategy later this year to look at

“what more the Government can do to support our high streets.”

Well, I will save them the trouble. They should adopt the Conservatives’ plan, and scrap business rates on those high streets.

[Dan Tomlinson]

I am not sure what the question was, but the Government have set out a plan that is fair and reasonable and does not engage with the fantasy economics that Opposition Members keep peddling. They still have Liz Truss in their party, and it shows, because instead of having a sensible business rates policy that is affordable and works for the long term, they have made-up spending cuts and pretend that they could afford to abolish a tax altogether. We know that that will not work. We know that they will not deliver it, not least because they had 14 years to make changes of that magnitude and never even bothered.

[Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)]

As co-chair of the all-party parliamentary group on music, in Independent Venue Week, I thank the Minister for extending the support to music venues. Will it include multi-use venues such as the City Varieties music hall in my constituency, where I attended the Holocaust memorial event on Sunday, and the Howard Assembly Room? Has the Minister considered the impact on music studios, which are also a core part of our creative industries?

[Dan Tomlinson]

I thank my hon. Friend for his support for the announcements made today. Because I do not know those specific independent venues, it would not be right for me to comment here, but he is welcome to check the guidance and to encourage the venues to check it online. We have made it clear that our policy intent is for pubs and music venues to be covered by these changes.

[Adam Dance (Yeovil) (LD)]

Many business representatives who met me after the Budget, including Shaun who runs Lanes hotel, will welcome the decision to review the way in which hotels are valued, but their biggest concern is about staying afloat today. A review will not make a difference to the bills that business owners such as Shaun are facing right now. What help will the Government offer rural hotels that are fighting to stay afloat, and does the Minister recognise the uncertainty that all this flip-flopping is creating for the hospitality sector?

[Dan Tomlinson]

We have set out a package of support for hotels and all other businesses. It is worth around £2 billion this year and £4 billion over the next three years. If there are hotels in the hon. Gentleman’s constituency that are facing significant increases in their rateable values this year, the increases in their bills will potentially be many multiples lower, because bill increases are capped at either £800 for small businesses or at 15% or 30% for the largest. It is really important that we distinguish—I am not saying that he is not doing so, because I am not sure of the detail—between the change in rateable values and the change in bills. That is important, and it sometimes gets lost in this discussion.

[Chris Curtis (Milton Keynes North) (Lab)]

I welcome the engagement from the Minister and today’s fantastic announcement, and invite him to come and have a pint at the Dolphin in my constituency, where I used to pull pints. Just down the road is William Cowley, a business that has been in my constituency since 1870. It produces the vellum on which much of the history of this nation has been written, including royal weddings, births and deaths; royal patents; freedoms of the city; and many Acts of Parliament. It is worried about its viability going forward, particularly after the revaluation of business rates. Will the Minister agree to meet me to have a discussion about how we can better support heritage businesses going forward?

[Dan Tomlinson]

One of my favourite things to do is to meet my hon. Friend to discuss a whole range of matters, so I will happily discuss this issue with him too. We have been in correspondence on this business already, so I hope that he passed on the messages from me about the need to check that there is a difference between the increase in the RV—the rateable value—and the increase in business rates bills. I hope to be in one of the fastest-growing cities in the country before long.

[Mike Wood (Kingswinford and South Staffordshire) (Con)]

This U-turn delivers some much-needed temporary relief for a lot of pubs, but it does not deliver the permanently lower bills that the Prime Minister promised. It also does nothing at all for the other hospitality firms in our constituencies—the cafés, restaurants, clubs and guest houses that are facing crippling rate rises because of this Government’s choices. Mr Speaker, is it not a sign of the incompetence of this Government that they cannot even get their U-turns right?

[Dan Tomlinson]

I do not think that was a question for me. It was a question for you, Mr Speaker.

[Alex McIntyre (Gloucester) (Lab)]

I note that Reform Members have already made it to the pub ahead of the statement, perhaps to celebrate the latest defection from the Conservative party, but I thank the Minister for today’s statement. Since I got elected last year, I have been running a campaign to open up our empty shops in Gloucester and show that we are open for business. May I ask him to expedite the high street strategy to make sure that we are capitalising on the fantastic opportunities in my city to turbocharge regional growth in my area and make sure that everyone can be proud of their high street?

[Dan Tomlinson]

I really look forward to working with my hon. Friend on important matters such as the high street strategy, and I hope that he has been in conversation with his local authority and businesses about some of the other measures that the Government are introducing and the issues that are important to him. High street rental auctions have real potential to be powerful in forcing shops that are being left vacant back into use. The introduction of the community right to buy should also be an effective change, and I hope that we will be able to see it implemented in his constituency and across the country.

[Layla Moran (Oxford West and Abingdon) (LD)]

Can the Minister understand, from the point of view of a small independent retailer, that the way that this announcement has been done—with the package coming forward late in the day—has led to a perception of unfairness? I was contacted by one owner, who pointed out that her bills have gone up by over £500 a month. She compares herself with Harrods and Selfridges, whose bills have gone down. Although she is pleased that local pubs and hospitality have got some help, her business sits alongside them and is part of the same community. What does the Minister have to say to that independent retailer, who is part of the backbone of our economy? When is the help coming for her business?

[Dan Tomlinson]

I do not know the details of that individual business owner and by how much her rateable value has increased, but we have implemented the permanently lower multipliers. They are now 33% lower than the tax rate that is paid by the online giants. That is a big change to the system that this Government have delivered, and which previous Governments ducked time and again. We have implemented our transitional relief caps this year, capping increases at £800 or at 15% or 30% for the largest businesses. We will continue to engage with businesses on what more we can do on a whole range of issues.

[Mr Jonathan Brash (Hartlepool) (Lab)]

Of course this package of support for pubs and music venues is most welcome, and I know it will be welcomed in Hartlepool, but I have been contacted by numerous businesses, including the Marine hotel in Seaton Carew, whose business rates will basically double this year. Hartlepool is a town of entrepreneurs and innovators, but they cannot afford that. Will the Minister look again at the wider support package that we could put in place for hospitality?

[Dan Tomlinson]

I would be happy to have a further conversation with my hon. Friend about this issue. It is really important that no hotel will see its business rates bill go up by 100% this year. It may be that the Marine hotel has seen a really significant increase in its rateable value, and we will review the methodology because of the large increases. We are aware of those, and we want to work on this issue with the hotel industry. It sounds like the business is probably one of the larger ones, so its increase will be capped at 30%. If it is a smaller business, the increase may be capped at 15%. That is the difference that this Government are making. If it is a business receiving RHL relief, it would have had that relief removed overnight under the previous Government, with a 300% increase in rateable values for businesses in 2025.

[Martin Vickers (Brigg and Immingham) (Con)]

If the Minister were to visit my constituency and come with me to the George Inn in Barton-upon-Humber, we would go inside and he would immediately recognise it as a typical English pub, yet it is also a hotel—the last hotel in the town. Could the Minister reassure the proprietor at the George? Will he receive early relief, or will he have to wait for yet another review?

[Dan Tomlinson]

The definition of “pubs” that is used for the changes that have been announced today is the same one that was used when the previous Government implemented a relief. I believe that that was in 2017, so it is a long-standing definition. I encourage the hon. Member to find that on the gov.uk website and send it to the relevant business. I do not know the precise details of the pub that he mentions, but we are sticking with the long-standing definition.

[Andrew Pakes (Peterborough) (Lab)]

We in Peterborough are fond of a pint, so I thank the Minister and his team for their engagement today and in the months leading up to this decision. We are also proud of our independent beer festival, and we are home to Oakham Ales. Can the Minister reassure us that as he looks at the strategy for the high street and the rules on business rates, he will have due regard to the needs of the community sector—both the pubs that are going into community ownership, and the small businesses and others that provide communities on our high streets?

[Dan Tomlinson]

That is a really important point. There are many independent pubs up and down the country, as well as bigger chain pubs, and it is right that the support that the Government are bringing forward will support both. Around 75%—definitely above 70%—of independents and chains will receive support this year, ensuring that their bills are either flat or falling. We want to make sure that we are protecting both the independents and the chains.

[Sammy Wilson (East Antrim) (DUP)]

I welcome the statement. It is a pity that it does not include hotels and restaurants, because the hospitality sector in Northern Ireland is under massive pressure due to taxes and the regulations that have been imposed. The Minister has confirmed that this will be new money and therefore there will be a Barnett consequential. Can he indicate how much that will be? More importantly, can he ensure that the Sinn Féin Finance Minister spends the money for the purpose that was intended, rather than spending it for other purposes, which he has done in the past?

--- Later in debate ---

[Dan Tomlinson]

It is not for me to tell the devolved Administrations how to spend their money, but if the right hon. Gentleman writes to me, I will be happy to write back to him with the details of the consequentials following the decision set out today.

[Chris Webb (Blackpool South) (Lab)]

As chair of the all-party parliamentary group on hospitality and tourism, I thank the Minister for his constant engagement with me since the Budget, because I have been able to raise concerns directly with him from the industry, UKHospitality and others. This statement will be welcome for many pubs in Blackpool, including our small music venues, such as the Bootleg. You may want to visit it sometime, Mr Speaker, and I hope you get well soon. We know that the hospitality sector has been struggling. It is on life support after a decade of neglect from the previous Government, and it needs more support. Will the Minister continue to engage with me, the APPG and UKHospitality on what the high street strategy can do, so that we get it right this time?

[Dan Tomlinson]

My hon. Friend is a powerful and strong advocate both for the businesses in his constituency and for the hospitality sector more broadly. I thank him for our conversations; I think we spoke before Christmas as well as in recent weeks. I will of course continue to engage with him and the hospitality sector on tax issues, as is typical for a Tax Minister in the run-up to a Budget, but I also want to talk more about the broader support the Government can provide, working across Departments, as part of the high street strategy we have announced today.

[Bradley Thomas (Bromsgrove) (Con)]

This is another U-turn that does not go far enough, because as a result of the choices made by Labour, energy bills are up, taxes are up and confidence is down. That is corrosive, and it is having a particularly corrosive effect on cafés, restaurants, hotels and small retail outlets. Will the Minister announce broader support for those businesses to alleviate the pressure of business rates or, better still, scrap them once and for all?

[Dan Tomlinson]

Over and over again, Conservative Members profess to be paragons of fiscal virtue, yet stand up in this place and say they want to cut taxation, which in effect means more and more borrowing. We have in the past seen the problems caused by Conservative Governments who let borrowing run out of control, cause interest rates to surge for families in our constituencies, send our economy to the dogs and harm living standards. We will not stand for that—we will not make the mistakes they made—and we will come forward with proportionate changes that support businesses, but that make sure we can continue to keep our public finances on a sustainable path.

[Rachael Maskell (York Central) (Lab/Co-op)]

York is a difficult place in which to trade, and with two thirds of businesses being independents, many will not get the relief the Minister has announced today. I sent through a paper with a spreadsheet of every business in the business improvement district showing that this just is not meeting their needs of those businesses, which will close. Will the Minister look at that detail, and ensure that resilience and support are built in, because York has a very strong retail reputation, but it is about to be challenged unless more help comes its way?

--- Later in debate ---

[Dan Tomlinson]

I am always happy to look at and respond to the correspondence I receive from hon. Members. I am aware of the issue my hon. Friend raises, which she has been consistently raising in this House. We came forward at the Budget with a significant package of support, and many small and independent businesses are small enough not to pay business rates because we have the small business rates relief in place, and we are extending that relief to support businesses that could extend to a second premises.

[Helen Morgan (North Shropshire) (LD)]

I declare an interest in that my husband works for an independent wine merchant.

Today’s news will be very welcome for the many pubs in North Shropshire that have been pushed to the brink over recent years by national insurance contributions increases, high energy bills and now business rates. However, this will not help shops or hotels such as the lovely Pen-y-Dyffryn in my constituency, the rateable value of which has nearly quadrupled. Will the Minister outline the timeline for his review of hotels in particular, and what other help can be given to retail and hospitality businesses?

[Dan Tomlinson]

We want to work with the hotel sector on the review I have announced today. We will make sure it reports in time to be implemented by the Valuation Office Agency by the date of the next revaluation. For hotels at the very far end of the distribution of changes in rateable value—with an increase that large, I believe the one the hon. Member mentioned is—that is precisely why we have implemented the support we have. If it is worth less than £100,000, its increase will be capped at 15% this year; if it is worth more, its increase will be capped at 30%. We are aware that that is still an increase, but it is significantly less than it would have been if we had not stepped in to provide that support.

[Catherine Atkinson (Derby North) (Lab)]

It is understandable that covid-era business rates support needs to come to an end, and the 15% cap on increases for most hospitality businesses is a really important protection. I particularly welcome the Government’s acknowledgment of the central role that pubs—such as the Paddock in Chaddesden, the White Swan in Littleover and so many more across Derby—play in our communities. Will the Government continue to listen to and work with pubs, so that we can ensure they have certainty for the long term?

[Dan Tomlinson]

Yes, we will continue to work with pubs, because we do value them. I want to be clear, however, that we value all of the businesses on the high street. We value our hospitality businesses, our retail businesses and those that work in leisure and soft play, which I believe was mentioned earlier. All the different businesses that provide life and vibrancy on our high streets are important. I have set out the particular challenges of the rateable value methodology for pubs and the big challenges they have faced over the last 14 years, with 7,000 closing, but we want to make sure we continue to do all we can to support high streets in my hon. Friend’s constituency and across the country.

[Ben Lake (Ceredigion Preseli) (PC)]

Dozens of small businesses across Ceredigion and north Pembrokeshire will have listened to the Minister’s statement with interest. Could he please reassure me that the consequential funding that he has confirmed will go to Welsh Government will be determined and communicated in time—by 1 April—to allow the Welsh Government to allocate additional support to those small businesses?

[Dan Tomlinson]

I am sure that the consequentials and their implications will be set out as soon as is practically possible.

[Steve Race (Exeter) (Lab)]

As I think you know, Mr Speaker, Exeter and Devon have some of the finest pubs, independent breweries and live music venues in the country. I thank Exeter Brewery and the Exeter Phoenix arts venue for their representations to me on these issues. I am pleased that, on top of the support in the Budget, pubs will get an additional 15% off, and that will apply to music venues as well, which is very welcome. Does the Minister agree with me that the £4.3 billion of support in the Budget, and the support today, stand in stark contrast to the record of 7,000 pubs closing under the previous Government?

[Dan Tomlinson]

I very much agree with my hon. Friend. What happened in the past is in stark contrast to the reform of our business rates system under our Government. We have set out long-term differences in the multipliers—also known as the tax rates—faced by high-street businesses and those faced by the online giants and the largest businesses. Typical businesses on his high street will have a significantly lower tax rate than that faced by the largest online warehouses. I understand that bills may still increase because of the winding down of pandemic relief and the increase in rateable values, but that underlying reform of the system is there, and it is there for good.

[Monica Harding (Esher and Walton) (LD)]

Tom Duxberry has run Marney’s village inn, a brilliant and much-loved local in Weston Green, for 17 years. Its rateable value is set to rise from £20,000 to £50,000—a 175% increase—and he is facing rent rises; inflation on beer, wine products and energy; and customers with less money in their pocket. Did the Government not see his plight right from the get-go, and what more help can they give him with all those pressures?

[Dan Tomlinson]

Because of the interventions announced today, the total business rates bill for pubs will fall over the coming years. As the hon. Member mentions, we are giving individual pubs a 15% reduction on their new bills, and then a real-terms freeze for the next two years. That is a significant intervention because of the significant challenges that pubs have faced—7,000 pubs have closed—and the issues with their RV methodology.

[Jack Abbott (Ipswich) (Lab/Co-op)]

I welcome this really significant additional support for pubs and music venues, on top of the £4.3 billion given to the wider sector at the Budget. I thank the Minister for all the conversations that he has had with me over the last few weeks, and I also thank Dan and Ness from the Greyhound, who have engaged so positively and constructively with me. It is fair to say that the business rates rebound inherited from the previous Government led to a mixed picture across Ipswich, but the Greyhound was particularly unfortunate. Could the Minister lay out his thinking behind the review of this process?

[Dan Tomlinson]

I thank my hon. Friend for his advocacy on behalf of the pubs and businesses in his constituency. Concerns have been raised about the methodology. We have looked into that in recent weeks, and we think it is right to review it. That review will take place in the coming months. It will definitely report in time for the new revaluation, so that we can have a long-term, sustainable methodology for pubs, making sure that they are valued in the right way for the long term, from 2029 onwards.

[Mr Adnan Hussain (Blackburn) (Ind)]

The Minister’s statement will certainly be welcomed by many pub owners who have written to me in recent weeks, anxious about rising costs, but what about the rest of the high street? Small businesses are the heartbeat of Blackburn and the engine of our country. Already battered by online shopping and rising costs, they are being squeezed from every direction. Why are the Government making it harder for Blackburn’s independent shops to survive, instead of delivering the permanent cuts that our town centres need to flourish?

[Dan Tomlinson]

Around one in three businesses will continue to benefit from small business rates relief, and so will pay nothing at all. As for independent shops that are above the threshold and in the business rates system, many just above the threshold will be on the taper, and others will benefit from the support that was set out at the Budget.

[Jacob Collier (Burton and Uttoxeter) (Lab)]

I welcome support for pubs in Britain’s beer capital of Burton and Uttoxeter. I thank the Minister for his continued engagement with me on this issue; I know that we will continue to speak about measures that could be included in the future, such as draught relief. The Minister will remember that I stressed the importance of hospitality more widely, and of breathing life into our high streets, so I welcome the high-street strategy announcement. How can businesses feed directly into it, so that we hear from those affected?

[Dan Tomlinson]

My hon. Friend is a proud and strong champion of the businesses in his constituency—the brewers, pubs and all those in the hospitality industry. I am sure that businesses in his patch would do well to feed in via him, as he is such a good representative.

[Dr Roz Savage (South Cotswolds) (LD)]

There are many fine pubs in the South Cotswolds, such as the Old George Inn in South Cerney and the Rattlebone Inn in Sherston. For many of our small rural communities, these are the only freely available spaces where people—faith leaders and football fans alike—can meet, yet many pubs are really struggling. Although I welcome today’s statement, £1,650 per pub is better than a poke in the eye, but not by much. Would the Minister be kind enough to meet me to discuss how his Department could further support the pubs of the South Cotswolds? Given today’s run-ins with the Chair, I suggest the Trouble House near Tetbury as a suitable venue.

--- Later in debate ---

[Dan Tomlinson]

I hope that I will be out of trouble before too long. We will double the hospitality support fund, providing £10 million of funding over the next three years. That fund aims to help more than 1,000 pubs diversify their business model, improve efficiency and productivity in the sector, and support people who are furthest from the labour market in moving into jobs in hospitality.

[Lewis Atkinson (Sunderland Central) (Lab)]

I welcome the 15% off business rates for pubs in Sunderland. As we are a music city—live music is core to our identity and regeneration—I particularly welcome the steps that the Minister has announced for live music venues, and his engagement with me and the Music Venue Trust. Could he say a little bit about the methodology for music venues? I know that he will look at the pub methodology, but would he consider discussing the future methodology for music venues? We could perhaps do that at a gig at Independent, or over a pint at the Ship Isis afterwards.

[Dan Tomlinson]

I thank my hon. Friend for his representations on behalf of businesses in his constituency. The Government are clear that we will look at the pub and hotel methodologies specifically. I would be happy to have a conversation with him about issues for other sectors, but the Government will focus on pubs and hotels. However, I would be happy to meet, to see if I can make it up to his constituency.

[Carla Lockhart (Upper Bann) (DUP)]

Unfortunately, the Sinn Féin Finance Minister in Northern Ireland has not got the memo on the need to support our hospitality sector, and is pressing on with a rates revaluation that will see a hotel in my constituency experience a 267% rate rise. Will the Minister commit to sharing this Government’s hard learning about rates, and will he go further and reduce the VAT rate for hospitality as well?

[Dan Tomlinson]

The hon. Member is right that each devolved Government have full control over the structure and level of business rates in their part of the country. They set a business rates policy, retain all the revenues generated, and determine how they are spent.

[Jonathan Davies (Mid Derbyshire) (Lab)]

When we had an urgent question on business rates last week, I raised the issue of grassroots music venues, so I am pleased that the Minister confirmed today that there will be 15% off business rates for pubs and grassroots music venues. As he seeks to build on the permanently lower multipliers and the excess of £4 billion of support in the Budget with his high street strategy, can I encourage him to keep music and cultural venues front and centre of his thinking? The UK music industry generates more than £8 billion for the UK economy, and these venues are a platform for future talent.

[Dan Tomlinson]

I will continue to keep those important cultural and social assets in mind as we work on our policy for supporting businesses across the country.

[Alison Bennett (Mid Sussex) (LD)]

The Minister talks about the definition of a pub. In the village of Hurstpierpoint in my constituency, Morley’s Bistro has a very similar product offering to food-led pubs on the same high street. They are competing for the same customers, and they are, ideally, all employing young people and giving them their first job. How does the Minister justify this?

[Dan Tomlinson]

We are, in the usual way, using long-standing definitions set out in business rates guidance to define pubs, and similar venues to which the relief will apply.

[Mr Luke Charters (York Outer) (Lab)]

I thank Gary at the Marcia Inn in Bishopthorpe and Adam at the Wenlock Arms in Wheldrake for meeting me to discuss support for pubs. The Tories created a ticking time bomb on business rates, then walked away, like someone who spilled a pint and left us to mop it up. Does the Minister agree that this Government are determined to back legendary landlords in Britain, like Gary and Adam?

[Dan Tomlinson]

Very much so. We want to support legendary landlords. I have my own in my constituency, and I look forward to having a pint with them this weekend to discuss the changes that the Government have made.

[Freddie van Mierlo (Henley and Thame) (LD)]

When it comes to business rates, the Government have delivered a masterclass in giving with one hand and taking with the other, leaving pubs and hospitality businesses worse off, but businesses cannot be fooled. They are on top of their numbers, even if the Government are not. Will the Government consider again the Liberal Democrat proposal for an emergency 5% cut in VAT for hospitality, and can he give an answer that does not resort to political point scoring?

[Dan Tomlinson]

We will not be considering the Liberal Democrats’ policy.

[Josh Newbury (Cannock Chase) (Lab)]

Yesterday, I visited the Beach Hut, a fantastic independent indoor play venue in my home village of Norton Canes. The owner, Joanne, told me how passionate she and her staff are, but they face particularly acute pressures; they have a relatively large footprint, and therefore higher business rates, but have to keep fees low for families. Indoor play faces a perfect storm of increasing costs, but it offers so much to children and their parents. As the Minister will be working on the high street strategy, will he meet me, people from Cannock Chase venues, and the Association of Indoor Play to discuss what support could be provided to the sector?

[Dan Tomlinson]

I would be happy to discuss that matter with my hon. Friend. Indoor play is a really valuable and growing part of our economy, but there are challenges. With more free childcare, it may be that fewer people are going in during the day, and I know that many indoor play centres have seen increases in their rateable values. We set out our proposals on business rates at the Budget to support these businesses with significant caps this year, next year and the year after.

[Claire Young (Thornbury and Yate) (LD)]

When I visited The Play Shed in Yate last year, the reduction in retail, hospitality and leisure relief was already costing it £12,000, even before the more recent changes. This package is welcome for pubs and music venues, but what will the Government do to help other leisure businesses in my constituency that are struggling with business rates?

[Dan Tomlinson]

We have changed the tax rates, the multipliers, within the system so that a typical high street business may now pay 38p in the pound and an online retail giant may pay 51p in the pound on their rateable values. That is a significant underlying reform to the tax system that is here for good.

[Tom Hayes (Bournemouth East) (Lab)]

Business rates are complicated, and this new methodology particularly so. Businesses were always going to be in touch with MPs, and in our democracy we were going to talk it through with the Government to get to a better place. Today’s announcement shows that our democracy works and that representation works. I thank the hospitality sector business owners in Bournemouth East who have constructively engaged with me to get to that better place. We also, in this House, need to put party politics aside and recognise that business owners put their hearts and souls, and their blood, sweat and tears, into building something better. We all need to commit to doing something better on their behalf. Will the Minister continue to engage with me, on behalf of all hospitality, so that we can get the very best deal for them, and not just now but for the future?

[Dan Tomlinson]

I thank my hon. Friend for his engagement, persistence and advocacy on behalf of the businesses in his constituency. I know that he has had many conversations with businesses in his constituency, and he has been able to feed them directly to me as the Minister with responsibility for tax. I am sure that we will continue to have such conversations in the months and years to come.

[Gideon Amos (Taunton and Wellington) (LD)]

The change in business rates for pubs will be welcomed by the Winchester Arms in Trull in my constituency, but a family hotel contacted me yesterday and the combined impact of Government changes in the Budget will, they expect, as they look to the year ahead, lead to a £250,000 loss next year. Will the Minister meet me, Somerset MPs and hoteliers to discuss how hotels can be helped through the reforms he is proposing?

[Dan Tomlinson]

Because of the concerns around the methodology to value hotels, today we have announced that we will review that methodology so that, in time for the next revaluation, hotels can have a methodology that more appropriately works for their sector. The hon. Gentleman is right to point out that hotels have seen some of the largest increases in their rateable values. Therefore, they will be some of the biggest beneficiaries from the caps we have put into the system this year.