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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Is having a self-sufficient business an attractive thought right now?

Diane Hall
May 14, 2024
4 min read

There’s more than one meaning for self-sufficiency when it comes to business. Some may interpret the term as a company that can run quite happily without needing the founder/owner there on a day-to-day basis. However, in this article, I’m talking about self-sufficiency from the state and other bodies you may currently rely on to operate, i.e. being in full control of your enterprise.

What with all the upheaval in the energy sector and the escalating cost of gas, electricity and the fuel for your vehicles, the thought of self-sufficiency is an attractive one. No relying on the grid for power; no longer being held to ransom over escalating prices; knowing that you will always have a supply whatever happens.

A lot of farms have their own systems in place, such as wind turbines and solar technology, making biofuels with a processor, and growing their own food…but then, they have the land and skills to do such things. For the average business, however, this isn’t as easy.

That said, it’s definitely worth looking into what you can do, and what systems you could install. Some companies offer payment plans/finance on the initial outlay for green energy equipment, and the savings you’ll see will pay back this cost within a few years.

Back in the 1970s, there was such a shortage of electricity, many companies had to compound their operating hours into three days each week to conserve electricity and to ensure there was enough to go round; whilst we wouldn’t imagine this could happen again in 2022, this could be out of our control. Though the UK doesn’t import much of its energy from other countries, the companies harvesting the energy from our land and shores are not governed by us. We can already see the impact the Russian-Ukraine conflict is having on energy prices and the (what I see as immoral) profits the energy companies are making; if you’re not self-sufficient, you’re at their mercy.

The following suggestions all come at a cost, but the long-term returns and freedoms associated with them could be well worth the initial outlay.

Look at securing your premises

If you’re a business that rents its premises, you’re at the mercy of your landlord and what they may decide to do with the property at any given time. A lease and/or contract gives you some protection, but maybe there’s a good business case for you to purchase the building (or another building) yourself. This will create an asset for your business and help cement its longevity.

If this could be the case for you, think hard about the space you actually need; you may be renting an area that’s a little larger than what’s required because the location was important when you were establishing yourself. Now that you’ve built a reputation and a solid customer base, maybe you could look to buy premises in a cheaper area.

Think about green energy

Of course, green energy solutions help the environment. They also help you from being reliant on the National Grid and energy suppliers. Look at solar panels if this is an option for you, or a wind turbine. Weigh up the cost and supply of alternative fuels, such as red diesel/LPG, or even the equipment needed to make your own. The storage of unused energy has come on in recent years; it’s entirely possible for a business to go ‘off grid’.

Insulation

The better insulated your premises, the less energy you will need to heat it. There are grants available that can help you insulate your offices or workspace, which will offset some of your utility costs.

Look at conserving water

There are tricks you can apply to conserve the amount of water you use in your business. Of course, a business’s needs in this regard can fluctuate, depending on what it does; however, consider gadgets that reduce the water used in each toilet flush, or a water butt that could be useful for ground works and cleaning outdoors. Every little helps!

Consider your fuel bill

Does every meeting have to be in person; could some be delivered via Zoom? Could your delivery process be streamlined, i.e. can the route be better planned to reduce milage? Can you offer a discount for multiple orders, so that they can be compounded into one delivery? Can local/nearby deliveries be fulfilled by bike?

Turn things off properly

Leaving computers on standby overnight can still cost you approximately £35 per desk, per year, which can soon add up if you have a lot of them. Only leave your security lights on when you leave and ensure everything else is turned off at the end of the day.

Let there be light

Even a small change like switching your lightbulbs to LED will reduce your utility costs. Consider investing in a few battery-powered lights or even a generator; both would come in very useful if the country is plunged into darkness at some point in the future.

Alternative currencies

What would it take for the pound to collapse? There are a few crypto-currencies around and it’s worth the conversation with an expert to see if this is something you should incorporate within your business, to ensure its continuity if things went pear-shaped with the country’s currency. The phrase ‘don’t keep all your eggs in one basket’ comes to mind.

If this article sounds apocalyptic, it’s not meant to. It’s very empowering to know you could continue trading if the worst happened; we take so much for granted in this country. A self-sufficient business that has full control of its operations is extremely powerful.