Reeves’ pubs U-turn: how business rates sparked a revolt, and why ministers are now under fire

15 January 2026

Paul Francis

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Rachel Reeves is preparing a U-turn on business rates for pubs after an unusually public backlash from landlords, trade bodies, and even some Labour MPs. In recent days, pubs across the country have reportedly refused service to, or outright barred, Labour MPs in protest, turning a technical tax change into a political flashpoint about competence, consultation, and whether the government understood its own numbers.

Two pints of frothy beer on a wooden ledge, reflecting on a window. Warm, dim lighting creates a cozy atmosphere.

The row centres on business rates, the property-based tax paid on most non-domestic premises. For pubs, it is often one of the highest fixed costs after staffing and energy. And while the government has argued its reforms were meant to make the system fairer for high street businesses, many publicans say the real world impact is the opposite: higher bills arriving at the same time as wage costs and other overheads are already rising.

What changed and why pubs reacted so fiercely

The immediate trigger was the November Budget package, which set out changes tied to the 2026 business rates revaluation and the planned move away from pandemic era relief. As the details landed, hospitality groups warned that many pubs would be hit by sharp rises because their rateable values, the Valuation Office Agency’s estimate of a property’s annual rental value, had increased significantly at revaluation.

A Reuters report published on 8 January 2026 described the government preparing measures to “soften the impact” of the planned hike after industry warnings that closures would follow. It also noted trade body concerns about elevated rateable values and warned that thousands of smaller pubs could face a bill for the first time.

The anger quickly became visible. ITV News reported on pub owners in Dorset who began banning Labour MPs after the Budget, with the campaign spreading as other pubs joined in. LabourList also reported that more than 1,000 pubs had banned Labour MPs from their premises in protest. Sky News similarly reported that pubs had been banning Labour MPs over the rises due to begin in April.

How business rates are actually calculated, with pub-friendly examples

Business rates can sound opaque, but the calculation is straightforward in principle:

Business rates bill = Rateable value x Multiplier, minus any reliefs

Where it became combustible for pubs is that multiple moving parts changed at once: revaluation shifted rateable values, multipliers were adjusted for different sectors, and pandemic era relief was being reduced or removed.

The government’s own Budget factsheet includes worked examples that show why bills can jump even when headline multipliers look lower.

Example 1: a pub whose rateable value rises modestly: In 2025/26, a pub with a £30,000 rateable value used a multiplier of 49.9p and then deducted 40% retail, hospitality and leisure relief. The factsheet sets out the steps: £30,000 x 0.499 = £14,970, then 40% relief reduces that to a final bill of £8,982. After revaluation, the rateable value rises to £39,000. The pub qualifies for a lower small business multiplier of 38.2p, so before reliefs: £39,000 x 0.382 = £14,898. Transitional support caps the increase, resulting in a final bill of £10,329.

Even here, the bill rises. The cap stops it from rising as sharply as it otherwise would, but it still climbs.

Example 2: a pub whose rateable value more than doubles: In the most politically explosive scenario, the factsheet describes a pub whose rateable value rises from £50,000 to £110,000 at revaluation. In 2025/26, the bill is calculated as £50,000 x 0.499 = £24,950, then reduced by 40% relief to £14,970. In 2026/27, before any relief, the bill would be £110,000 x 0.43 = £47,300. Transitional support then caps the increase, producing a final bill of £19,461.

That is still a meaningful jump in a single year, even with protections. For pubs operating on thin margins, that scale of increase can mean the difference between staying open and closing.

This is why so many publicans argue that the political messaging did not match the lived reality. They were told reforms would support the high street, then saw calculations that delivered higher costs.

What Reeves is now doing to correct it

The government has not published the full final package yet, but multiple reports describe a targeted climbdown.

Reuters reported that a support package would be outlined in the coming days and that it would include measures addressing business rates, alongside licensing and deregulation. LabourList reported that Treasury officials were expected to reduce the percentage of a pub’s rateable value used to calculate business rates and introduce a transitional relief fund. The Independent reported ministers briefing that Reeves was expected to extend some form of relief rather than scrap support entirely from April, after pressure from Labour MPs and the sector.

In practical terms, “softening” the rise can be done in a few ways:

Increasing or extending pub-specific relief so bills do not jump as sharply in April 2026
Adjusting the multiplier applied to pubs within the retail, hospitality and leisure category
Strengthening transitional relief so the cap on year to year increases is tighter
Supplementary measures like licensing changes, to reduce other cost pressures

The direction of travel is clear: the Treasury is trying to stop the revaluation shock from landing all at once on pubs.

The critics’ argument: ministers did not do their homework

The most damaging strand of this story is not the U turn itself, but the allegation that ministers did not understand the impact at the point of announcement.

Sky News has reported internal disquiet about the business rates increase, reflecting wider unease about the political cost of the policy. ITV has also reported pub owners arguing that the “devil is in the detail,” a polite way of saying the announcement did not match the numbers that followed.

Most seriously, reporting summarised from The Times states that Business Secretary Peter Kyle acknowledged ministers did not have key details about the revaluation’s effects on hospitality at the time of the November Budget, and that the property specific revaluations created an unexpected burden for some pubs.

That admission fuels the criticism that this was not simply a policy misfire, but a failure of preparation. The core accusation from critics is straightforward: if the government is reshaping a tax system built on property values, then the people in charge should have had a clear grasp of what the valuation changes would do to real businesses. If they did not, they were not doing the job properly.

Even if ministers argue the valuation process is independent, the political reality is that pubs heard one message, then saw another outcome. The result has been a crisis of trust that a late rescue package may soften, but not erase.

What this episode tells us about tax policy and trust

Pubs are not just businesses. They are community anchors and cultural institutions, which is why this backlash travelled so quickly from accountancy jargon to front-page politics.

Reeves’ U turn may yet prevent the worst outcomes for some pubs. But the episode has exposed a deeper vulnerability: when the government announces complex reforms without convincing evidence, it understands the knock on effects, and the backlash is not only economic. It becomes personal, symbolic, and politically contagious.

If the Treasury wants to draw a line under this, it will need to do more than patch the numbers. It will need to convince the public and the businesses affected that decisions are being made with full visibility of the consequences, not discovered after the revolt begins.

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Cashless Society in the UK: Pros, Cons, and Controversies

Diane Hall
Sep 18, 2023
4 min read

The United Kingdom, like many other countries, has been steadily moving towards a cashless society in recent years. The rise of digital payment methods, contactless cards, and mobile wallets has made it easier than ever for people to conduct their financial transactions without the need for physical cash. Whilst there are clear advantages to embracing a cashless economy, there are also significant drawbacks and long-term implications that must be considered.

The pros of a cashless society

Convenience: One of the most significant advantages of a cashless society is the unparalleled convenience it offers. Digital payment methods allow people to make transactions quickly and securely, whether they’re shopping online, paying bills, or splitting a restaurant bill. Contactless payments have become especially popular in the UK, making it effortless to make purchases with a simple tap of a card or smartphone.

Example: Imagine a busy commuter in London who can easily use their contactless Oyster card for public transport, pay for a coffee at a café, and purchase groceries at a supermarket, all without needing to carry cash.

Reduced crime: A cashless society can help reduce various forms of financial crime, such as theft, counterfeiting, and money laundering. With digital transactions leaving a clear and traceable electronic trail, it becomes more challenging for criminals to engage in illicit activities.

Example: By relying on digital payment methods, the UK has seen a decline in bank robberies and physical cash thefts.

Financial inclusion: Digital payments can improve financial inclusion by providing access to banking services for those who are unbanked or underbanked. Mobile banking apps and digital wallets can help people manage their finances more effectively, regardless of their geographic location.

Example: Initiatives like mobile banking vans and digital wallets have brought financial services to remote areas in Scotland, helping residents access banking services more conveniently.

The cons of a cashless society

Exclusion of vulnerable people: Whilst digital payment methods offer convenience, they can also exclude the vulnerable in society who may not have access to smartphones or bank accounts. This digital divide can further marginalise those already facing financial difficulties.

Example: Elderly individuals who are not tech-savvy or homeless people who lack access to traditional banking services may struggle to adapt to a cashless society.

Privacy concerns: The move towards digital payments raises significant privacy concerns. Every digital transaction leaves a data trail that can be exploited by governments and corporations for surveillance or marketing purposes, potentially infringing on individuals' privacy rights.

Example: Concerns have arisen about the extent to which tech giants like Google and Facebook collect and utilise personal financial data for targeted advertising.

Security risks: Despite advancements in security measures, digital transactions are not immune to cyberattacks and fraud. Phishing scams, identity theft, and hacking incidents can lead to significant financial losses for individuals and businesses.

Example: In 2020, the UK's National Cyber Security Centre reported a surge in Covid-19 related phishing attacks, demonstrating the ongoing security risks associated with digital transactions.

Long-term implications of a completely digital currency system

Monetary policy challenges: A cashless society poses challenges for central banks in implementing monetary policy. Traditional tools like adjusting interest rates may become less effective, as digital currencies can be subject to volatility driven by global financial markets.

Example: In the event of a severe economic downturn, central banks may have limited options for stimulating the economy if interest rates are already near zero.

Financial dependency on tech companies: As cash disappears, individuals and businesses become increasingly dependent on technology companies for their financial services. This concentration of power raises concerns about monopolistic practices, accountability, and access to essential financial services.

Example: Tech giants like Amazon, Apple, and Google are expanding their financial services, potentially increasing their control over the financial sector.

Loss of anonymity: A cashless society erodes the anonymity that physical cash provides. Every digital transaction can be tracked, potentially inhibiting personal freedoms and leading to a society of surveillance.

Example: In China, the widespread adoption of digital payments has been accompanied by the government's ability to monitor and control citizens' financial activities, impacting personal freedoms.

Resilience to system failures: A completely digital currency system is vulnerable to system failures, whether due to technical glitches or cyberattacks. A lack of physical cash as a backup could leave individuals and businesses stranded in the event of a widespread disruption.

Example: In June 2018, Visa experienced a widespread technical failure in the UK, leaving many unable to make digital payments for several hours.

You may not think much of those pros nor be troubled by the cons of a cashless society; however, enough people are worried about the control and loss of freedoms that could be imposed by our government if cash no longer existed.

Say you were classed as obese. To the government, you’re a potential drain on the resources of our NHS. Conspiracy theorists proffer that the powers-that-be would restrict your spending on fatty foods and unhealthy meals if the UK solely operated a digital currency.

It seems there are plenty of people who believe that cash still has merit. Cash payments rose last year for the first time in a decade, increasing by 7% to 6.4bn. On a short break to a tourist town last week, I noticed two businesses clearly stating that ONLY cash could be used on their premises. I had to read their signs twice, as I’m that used to seeing businesses state that they’re card-only enterprises, certainly after the pandemic.

I’ve read of many small businesses in the current-cost-of-living crisis that claim the fees that card companies currently charge are severely eating into their profits. Maybe they’ll also turn back to cash?

What are your thoughts? Would you like to see cash phased out?