A Cabinet revolt is brewing over upcoming business rate rises
As hospitality has been warned not to protest, Sky News can reveal.
Deputy political editor Sam Coates revealed on Politics at Sam & Anne’s podcast that there is “continued opposition at cabinet level” over the rise, and ministers are “not happy about it”.
politics latest updates
In the November budget the Chancellor… Rachel Reeves Changes to the way business rates are calculated, along with a new band for retail, hospitality and leisure, were announced – ending the relief scheme first introduced in 2020 during the pandemic.
The sector argues that the new business rates, although lower than pre-Covid rates, do not go far enough.
He says because the tax rate is based on qualified property values (an official estimate of the annual rental value of commercial property), they are disproportionately affected because they have physical stores, restaurants and pubs – unlike the online giants.
Sir Keir Starmer has acknowledged the industry will struggle with the new rates, telling LBC this week: “Obviously, what has happened is that there were cuts made during COVID, which were not always going to be OK.
“At some point, overall rates are going to go down. But I accept that because of revaluation, that means bills for some will go up.”
He said the government is providing transitional relief and they are looking at what else they can do, such as “licensing freedom”.
Chef Tom Kerridge, who owns four gastropubs, said his rateable value at The Coach in Marlow has increased by 100% from £50,000 to £106,000, which he described as “unsustainable”.
A number of pubs have already banned Labour MPs in protest at the changes.
However, Sky News understands that the government has been warning businesses not to object to the changes if they want to receive any concessions.
Read more:
Landlords say Reeves’ budget tax is ‘pub killer’
The rules-based system is ‘disintegrating before our eyes’
Why are pubs banning Labour MPs?
An industry insider said the government has been telling the business community that if they want help, they should take a lesson from farmers who were given relief just before Christmas when the government inheritance tax limit increased from £1m to £2.5m.
But the industry insider said the government were telling them that farmers were “good, fair negotiators, and they didn’t run a big campaign for it, which is why they got what they wanted.”
The message appears to have been confusing, as farmers protested for several months, with tractors blocking Whitehall becoming common.
Farmers lining up with tractors becomes common in Westminster in 2025. Photo: Reuters
Sam Coates said, “Anyone who has spent even a second watching those tractors being dropped in Whitehall and the mass campaign knows that this is absolute nonsense.
“What’s really happening here is that, despite the facts being completely false, this government is basically threatening the industry.
“The implication – I don’t know which Whitehall department it is, but clearly the implication is ‘if you want anything for your industry, then stop being so aggressive in your briefings.'”
“Now I don’t think it smacks of a government getting things on a firm footing.”
Michelin-starred chef Tom Kerridge said the rise is “unsustainable”
The Valuation Office Agency, which provides property valuations to the government, has stated that an increase in rateable value does not mean a corresponding increase in business rates, as there is transitional relief available, including:
• A £3.2 billion transitional relief plan to support the largest ratepayers, including airports and hospitality
• £500m to help small businesses
• A £1.3 billion extension of the Supportive Small Business Scheme for those who were eligible for retail, hospitality and leisure relief during the transition.
