Business Rates

Lindsay Hoyle Excerpts

Tuesday 27th January 2026 Commons Chamber

[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.

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

Mr Speaker, I think the mood of the House is that 10 minutes from the hon. Gentleman is more than enough, although I am grateful to him for having given me advance sight of his statement.

[Mr Speaker]

You can have some extra time, if you need it, and the same applies to the Liberal Democrat spokesperson.

[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.

--- Later in debate ---

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[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?

[Several hon. Members rose—]

[Mr Speaker]

Order. We will run this statement to about 3.15 pm, so we can all help each other. Jim Dickson is going to be a good example.

[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?

--- Later in debate ---

[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.

[Steve Darling (Torbay) (LD)]

This is a baby step in the right direction, but the hospitality, tourism and retail industry in Torbay continues to trade in a hostile environment. One leisure provider in Paignton shared with me that they have a £44,000 gas bill. Will the Minister share what the Government are doing to tackle these high energy prices that many suffer from?