PARLIAMENTARY DEBATE
Business Rates: Retail, Hospitality and Leisure - 19 January 2026 (Commons/Commons Chamber)

(Urgent Question): To ask the Chancellor of the Exchequer if she will make a statement on the planned changes to business rates for the retail, hospitality and leisure sectors.

Colleagues will have heard what the Prime Minister and the Chancellor have said on this matter in recent days. I will not add further comments on the specifics in responding to this urgent question. When there are further comments to be made, I am sure they will be made in the usual way.

At the Budget, the Government announced a comprehensive set of reforms to business rates. We have created a new, sustainable system with permanently lower multipliers for retail, hospitality and leisure businesses. Business rates are, in line with the usual timelines, revalued every three years, and new valuations that were set in train by the previous Government come into effect in April.

It was right to support businesses during covid, but the previous Government went into the election with plans to scrap the temporary support entirely in 2025. If they had won re-election, they would have removed that support overnight last April. If the Opposition had intended to extend the relief, why did they not say so and why was that not included in their forecast or projections?

We on this side of the House have chosen a different path: we extended the support at a lower rate in 2025-26 and are slowly unwinding it over the coming three years, with the help of £4.3 billion of transitional support. I think all Members can agree that it would not be sustainable for a £1.7 billion annual temporary covid tax relief to remain fully in place at the end of the decade. At the same time, our reforms—[Interruption.] I am glad someone is enjoying them. Our reforms to rebalance the underlying design of the business rates system towards high street businesses will be implemented in April.

The new, lower tax rates will be introduced for 750,000 RHL businesses, funded by a higher rate on the most valuable properties, including for the online giants. That is worth almost £1 billion and means that smaller high street businesses will have a tax rate that is 25% lower than businesses with the largest properties. That is being supported by a significant support package, as I said, worth £4.3 billion over the next three years. As a result, over half of ratepayers will see their bills flat or falling next year, and around a third of properties pay no business rates at all, as they receive 100% small business rate relief.

I look forward to supplementary questions from the shadow Chancellor, the right hon. Member for Central Devon (Sir Mel Stride), and other Members, and I look forward to seeing whether the shadow Chancellor can keep a straight face, given that he knows his Government never did enough for our high streets: 7,000 pubs closed over the 14 years the Conservatives were in power; shops were shuttered on high streets up and down the country; the council services that keep our high streets clean and vibrant were cut to the bone; investment was down; and the public suffered from the longest squeeze on living standards on record. That is the legacy for our communities—one that we are turning around.

That was a complete non-response. The Minister says he will make a statement in future in the usual way; we can only assume that that will be via the media, not this House.

Of all the excuses for a U-turn that we have heard from the Government, this one beggars belief. The Minister expects us to accept that the Government simply did not know what the impact of the changes would be when they announced them. That is astonishing. Why did they announce crippling rises in business rates without bothering to check who would be hit the hardest?

Worse still, we now know from the chief executive of the Valuation Office Agency, who appeared before the Treasury Committee last week, that Ministers were provided with the data on revaluations before the Budget. We are left with questions not only about whether the Government’s excuse is reasonable, but about whether it is indeed correct. Can the Minister clarify what specific information was given to Ministers on the level of increases that businesses would be facing, and when?

Businesses are now in a terrible limbo over what their bills will look like in the coming years. The Government have indicated that changes will be announced for pubs at least, but there has been no official statement, which is why we have had to drag the Minister to the House this afternoon, so will he answer the following additional questions?

Can the Minister at least make it clear which sectors will be in line for further support? Will it be just pubs? If so, why are the Government refusing to help businesses in the wider retail, hospitality and leisure sectors, some of which are seeing even higher rates increases? Will the new support be a temporary or permanent cut in bills, as we have called for? How much will it cost, and will it be funded by yet more Government borrowing? Will the Minister apologise now to the thousands of local businesses up and down our country that have been so sorely let down by this shambolic Labour Government?

The shadow Chancellor said that I was dragged to the House, but that is very much not the case; I am very happy to take questions from him and from Conservative and Government Members.

May I help the Minister a little bit? I did grant this urgent question. This discussion would not have happened if I had not done so. I am not quite sure that his statement and mine are compatible.

I fully respect your decision to grant an urgent question, Mr Speaker. It was—[Interruption.]

Order. I certainly do not need any help from Opposition Members.

It was the word “dragged” that I had some objection to. I did not mean to comment on your decision to grant the urgent question, Mr Speaker.

Let me answer some of the questions asked by the shadow Chancellor. The key thing is that we are implementing the revaluations that his Government set in train. Treasury Ministers holding a similar role to mine a good few years ago undertook the process for the revaluations that will be in place from April 2026. Those are set on property values from 2024.

Yes, there is an unwind from the pandemic, in terms of increases in businesses’ property values as a result of businesses recovering from the pandemic. We were aware of the impact of the valuation, and of the fact that the previous Government did not have any plans whatsoever to extend the temporary pandemic support. We extended it for one year, and over the course of the next three years we are phasing it out, with the support of Government decisions worth £4.3 billion, and our transitional relief scheme.

I will not comment on speculation, but the shadow Chancellor referred to borrowing. Over the course of this Parliament, we will see the fastest reduction in borrowing of any G7 economy. Borrowing is set to fall in every single year of the forecast because of the decisions that the Chancellor took at the Budget. We have doubled our headroom against our fiscal rules, and we are seeing a warm response from private sector investors and the markets as a result of the decisions that the Government have taken.

I call the Chair of the Treasury Committee.

Many pubs in my constituency are seeing eye-watering increases in business rates. We know from the Valuation Office Agency, which gave evidence to the Treasury Committee last week, that the formula used is the same formula that has been used for 20 years. This should have been no surprise, as the shadow Chancellor said, yet we learned in that meeting that more than 2,000 pubs have had their business rates doubled. This Government came in with a mission to transform business rates, and they came in part way through a valuation cycle. Aside from the question of what will happen to the hospitality sector, where are the plans for the reform of business rates in the medium to long term?

I thank my hon. Friend for her leadership of the Treasury Committee. At the Budget, we set out the first significant fundamental reform of the business rates system that we have ever seen. For the first time, there is a very significant divergence in the tax rate paid by businesses on our high streets and by the very largest businesses, including online giants. The tax rate is around 13p lower for high street businesses than it is for the largest businesses. That is a 25% reduction, which cost around £1 billion. It is a £1 billion reduction for businesses on the high street, paid for by higher taxes on those who can most afford it.

I call the Liberal Democrat spokesperson.

These business rates changes will hammer high streets, and with the jobs tax on top, many businesses have already decided to shut up shop. Getting data out of the Government has been like getting blood from a stone; every question I am about to ask, I have asked before, but let me try again. Why did the Government set the expectation that they would reduce the business rates multiplier by the full 20p discount for retail, hospitality and leisure, and then not use the maximum power that they gave themselves to do that? Do they accept that lots of small businesses have made investment and hiring decisions based on the expectations that this Government set, and will they apologise to those businesses for raising their expectations and then dashing them? Can the Government finally tell us how many business premises have been brought into paying business rates for the first time?

Last Tuesday, we learned that that the Valuation Office Agency had sent the Treasury data drops regularly over the past 12 months. What did Ministers know, and when? The VOA also confirmed that it had told the Treasury that more than 5,000 pubs would see their business rates double, so how is it possible that Ministers did not know that this would happen? Finally, whatever the Government are considering, can they confirm that it will apply to all hospitality businesses and not just pubs, and will they consider our fully costed Liberal Democrat plan for an emergency VAT cut for hospitality?

On the point about 20p versus 5p, we legislated for a reduction in the multiplier of up to 20p for retail, hospitality and leisure businesses, but that did not set an expectation that we would go that far; it set the bounds within which the Government could choose to operate. As the first step in our significant reform to the business rates system, we chose to reduce the multiplier by 5p, which reduces the total taxes paid by RHL businesses by almost £1 billion and increases the tax take from the largest businesses by an equivalent amount.

The answers to many of the questions that hon. Members ask are very easy to find in the data published by the VOA. Detailed breakdowns of the change in the value of properties between the different revaluation periods are published on the Government’s website. I will not take—I will not say “lectures”—suggestions from Liberal Democrat Members on VAT, given that when they were in power, they and the Conservatives chose to whack up VAT, a decision that pushed up inflation and added to the cost of living for people up and down the country.

The £4 billion package in the Budget is very welcome, but the manifesto commitment was to replace the business rates system, not tinker with it or subsidise it. Pubs alone will see bill increases of 4% this year. Alongside that, VAT thresholds are strangling hospitality businesses on the high street, and that is on top of a tax compliance bill of £25 billion for small business, not least because His Majesty’s Revenue and Customs does not answer 4 million phone calls a year. I repeat the question posed by my hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier), the Chair of the Treasury Committee: when will the Government table comprehensive, radical reform that meets the test of the manifesto commitment?

At the Budget, we published further updates on our broader work to transform the business rates system. There are things that we want to look at—for example, a switch from a slab system to a slice system, which should support and encourage investment. As was confirmed by the Chancellor at the Budget, we have already extended small business rate relief, so that businesses do not face a disincentive to expand from one premises to two premises, but there are more things that we want to look at that are in that consultation. Of course, we will continue to engage with businesses on our high streets up and down the country, and with businesses large and small, to see what more we can do to continue our work of reforming and improving the business rates system.

Some of my publicans are facing a threefold increase in rates. They have seen the speculation that the Treasury has briefed out to the newspapers, but they are still waiting. They do not have long to wait before they have to pay these increased bills, though, so can the Minister give some indication of when there will be clarity—not just for publicans, but for retailers?

It is important to be clear that no pub will see their business rates bill go up by three times this year. [Interruption.] No, it is simply not the case. It is true that some businesses have seen significant increases in their valuations, but this year the Government are capping the increase in business rates bills at either £800 or 5%, 15% or 30%, depending on the size of the property. Yes, bills may be higher, and it could be by a large percentage if the rate is moving up by £800, but for the vast majority of businesses, the increase in their bills this year will be limited, due to the Government having intervened and provided more than £2 billion of support this year.

I welcome noises from the Department about additional support for pubs, but this is not just about pubs; it is about all hospitality businesses, including music venues such as Claptrap the venue and Katie Fitzgerald’s in my constituency. They have been massively impacted by a perfect storm of new valuations by the Valuation Office Agency, the end of covid-related reliefs and rising energy costs. I also want to mention service-based industries, such as hair and beauty salons and indoor play centres. These businesses have limited opportunities to claim back VAT, as labour is their highest cost. When the Government consider additional support measures for hospitality, please can they ensure that all businesses are included?

Hospitality businesses are the cornerstone of our communities, providing life and vibrancy to high streets up and down the country. The Government are committed to continuing to support their growth and their success. We value the work that employees in that sector do—I believe that around 2 million people work in hospitality across the country—and the work of business owners who seek to grow and expand their hospitality businesses. Precisely because we value their work and the work of businesses on the high street, we fundamentally redesigned the transitional relief scheme, so that it takes the 40% reduction in bills as its jumping-off point. That reduction is a result of this Government’s decision to extend the pandemic-related relief. The previous Government had not costed or funded that, and they would have ended it overnight if they had won the general election in 2024.

The problem is that the November Red Book stated:

“The high street will benefit from permanently lower business rates for retail, hospitality and leisure”.

Businesses up and down the land think that was entirely misleading. We have had briefings to the newspapers that there will be a change, but the Minister is saying that that is not happening, and that change will be made through the normal processes, which I interpret to mean in the next spring statement. Those in businesses are lying awake at night, worried about these increases, so can the Minister tell them when relief will be on its way?

The changes at the Budget led to a reduction in the tax rate paid by businesses on the high street. That was a result of the reforms that this Government have brought in. We have been clear about the need to start the work to rebalance the business rates system to support our high streets. Because the pandemic relief is being unwound over the coming years—something that the previous Government would have done overnight in 2025, had they won the general election—and because of the increase in business rate values as we come out of the pandemic, some businesses are seeing increases in their bills. We have capped those increases significantly this year and over the coming three years, providing £4 billion of support. On the hon. Member’s point about updates being made in the usual way, it is of course possible for Ministers to make statements in the House.

My hon. Friend is absolutely right to say that the Opposition have no credibility on this issue. We know that had they won the election, either we would have seen these increases quicker, or the black hole would have been even bigger. None the less, it is true that many pubs are really concerned, and are under the impression that further help is coming. They are trying to make accounting decisions right now. Can he say any more about whether their bills will be exactly what they are expecting right now, or whether further help will come before April?

I am grateful to my hon. Friend for making the important point that the last Government had no plans to continue to extend the pandemic support. As for his other question, I will not comment today on the speculation. He and others can see the words that the Prime Minister and the Chancellor have said about this matter at the Dispatch Box and during various media interviews, and I have no more to say about it.

As has been mentioned, in its manifesto Labour committed itself to reforming the business rates system, and the Red Book for the Budget referred to

“permanently lower business rates for retail, hospitality and leisure”.

That will have given business owners the impression that their bills would be lower. The Government’s get-out about the rates being low, when they knew that transitional reliefs were being phased out and rateable values were rising substantially, is not cutting it with businesses that made plans accordingly. Last week, we on the Treasury Committee heard from the Valuation Office Agency that the Government had known for more than a year about the size of the increase in rateable values, so why has this backlash taken them by surprise?

As I have said, the Government were aware that a revaluation was taking place. That revaluation, which was initiated by the last Government, took account of property values in 2024, and will be in place from April this year. We were also aware—and Members in all parts of the House would probably agree on this—that by the end of the decade it would not be appropriate to retain the full pandemic relief almost 10 years after the height of the pandemic. In the round, as a result of those decisions, we came forward with a significant package of £4.3 billion of protection for businesses across the country—large and small, high street and non-high street—to help them adjust to the potential for higher bills that some are experiencing. Let me add that, as I said in my opening remarks, the business rates bills of about 50% of businesses are either flat or falling.

Pubs have a powerful lobby, unlike the independents on our high streets such as cafés and retail outlets. I have been poring over the spreadsheets showing the impacts that this will have on York. Some little retail outlets are seeing their business rates rise by 93%, and they simply do not have the resilience to deal with it. What will the Minister do for independents to ensure that they survive past March this year?

York high street, in my hon. Friend’s constituency, is a beautiful and wonderful place where there are many fantastic businesses. I worked there for a time. I know that Members in all parts of the House value the businesses that keep their high streets vibrant and thriving. We are taking steps, and we took steps in the Budget, to support high street businesses through our £4.3 billion of support, and we will continue to engage with Members and with businesses on the further steps that we can take to support them.

The Minister is talking in numbers, but out there on the doorsteps and in the streets and high streets, I have met a café owner and a publican whose businesses are busier than ever—they are selling more drinks and more food—but whose top line is shrinking because of the decisions being made by this Government. One landlady was in tears as she spoke to me about whether she should carry on, directly because of this Government’s policies. What advice would the Minister give her?

I hope that when the hon. Member was conversing with businesses in his constituency, he explained that this year, if a pub has a rateable value of less than £100,000, the policy as set out in the Budget will have capped those increases at 15%. I think it important for Members to do all that they can to help business owners pick through the complexities of the business rates system. It is a complicated system: there are many different reliefs, and there is a difference between the tax rates that are paid, the relief that is applied and the rateable value of the property. Of course some businesses are seeing their rateable values increase as we unwind from the pandemic, but that is precisely why the Government included that package of support in the Budget.

The hospitality and leisure sector in Liverpool is one of the largest employers and contributes significantly to the local economy. However, it is facing significant challenges at the moment, with the average hospitality business facing an increase of more than £48,000 in business rates over the next three years—double the national average, and a serious threat to sustainability. That is compounded by a 20% VAT rate, which is one of the highest in Europe. By comparison, Germany has reinstated a rate of 7% to support its sector. Can the Minister explain what targeted support will be provided to safeguard jobs, and to prevent closures and redundancies, in the hospitality and leisure sector in Liverpool? Will he please come to Liverpool to speak to business owners?

When I am up at the Labour party conference, I like to enjoy the pubs and hospitality available in Liverpool. It is a fantastic and vibrant city, and I know that the constituencies and areas in the middle of the city have some of the highest numbers of pubs and hospitality businesses in the country. Like me, my hon. Friend really values those businesses, the work that business owners do and, of course, the work that their employees do—they can be quite tough and demanding jobs.

We want to support hospitality, which is why the Government redesigned the transitional relief scheme at the Budget so that it applies a 40% reduction as the baseline, rather than unwinding the support in full, as the previous Government would have done overnight. We also said at the Budget that we will appoint a retail, hospitality and leisure envoy, and I look forward to that announcement in due course.

Order. We are going to run this session for an hour from the start, so it will end at 4.40 pm. If the Minister can help Members to get in, that will be really useful.

Perhaps the Prime Minister, on his much-heralded cost of living tour, might like to visit the pubs and cafés in my constituency of Esher and Walton, if they let him in. They are being squeezed to breaking point by this Government, while constituents watch their wallets because of tax rises. Hospitality venues are the lifeblood of my high street and create the jobs we need for young people. Will the Government act now by fully using business rates relief and introducing an emergency VAT cut for hospitality to protect jobs, pubs, restaurants and the lifeblood of my constituency?

One of the things that the Government are doing to support businesses up and down the country is bringing back economic stability. Under this Government, interest rates have been cut six times, which will reduce borrowing costs for businesses small and large, and we are doing all we can to boost living standards, so that people have more money in their pockets to spend in hospitality businesses. We have seen faster increases in wages in the first year of this Government than we did in the first 10 years under the Conservatives.

I find it a bit rich that the Conservatives are raising this issue, given that around 7,000 pubs and bars closed on their watch, which is felt in Blackpool and across the country. Will the Minister continue to engage with the hospitality sector, UKHospitality and small businesses to ensure that we get this right? Many are struggling after 14 years of Conservative government, and especially after covid. We need to support our high streets, which have been forgotten about for far too long.

I thank my hon. Friend for his engagement on this important issue, and for the work that he does on the all-party parliamentary group for hospitality and tourism. Yes, the Government will continue to engage with sector bodies such as UKHospitality on this and other matters that are important for the hospitality industry.

The Minister does not have to defect to Reform to get a pint, and I am very happy to show him round the pubs in Shropshire’s villages and market towns. I will show him that pubs are not just about having non-alcoholic and alcoholic drinks; they are often at the very heart of village communities. Local charities, the women’s institute, pensioner groups and others meet there because the post office or the shop has closed. May I genuinely invite the Minister to get out of London—out of the beltway and out of the bubble—and come to Shropshire? He will not be allowed inside pubs, of course, but I can bring him a pint outside when the warmer weather comes. I appeal to him to join me in Shropshire and hear at first hand what pub landlords and owners have to say.

We’re at last orders. Come on, Minister.

I do not know what the current Government position is on whether pubs are allowed to sell takeaway pints, but I hope that would be allowed in Shropshire if I were to visit. However, I have about 30 pubs in my north London constituency, and I have many conversations with publicans both locally and in my role as Exchequer Secretary.

I refer to my entry in the Register of Members’ Financial Interests and to my chairship of the all-party parliamentary beer group. Does the Minister accept that pubs are anchor employers on our high streets, and will he please ask the Chancellor to expedite a package of rates relief and duty reduction aimed specifically at sustaining these really important jobs in hospitality?

I strongly agree with my hon. Friend that pubs are important anchor institutions. I know that she cares deeply about the businesses in her constituency, and she is a strong representative for them. Under the previous Government, we saw more than one pub closing every single day—7,000 fewer pubs in our communities. This Government will do all we can to continue to support publicans and institutions that are the lifeblood of communities up and down the country.

There has been an absolutely shambolic, chaotic furore around these business rates since the Budget. When will the Minister do the right thing and confirm to the House exactly when we are going to get some clarity on these changes? Is he aware just how despairing businesses are in my constituency of Boston and Skegness and around the country because of the uncertainty and the increased costs? Is he also aware that pubs are reducing opening hours and employee hours? Will he do the decent thing and apologise?

I was not sure what the hon. Member was referring to when he said there was a “shambolic, chaotic furore”, but it was probably his own party, which would not be able to run anything in any brewery, let alone a whole country.

The Minister says that it is the job of MPs to help publicans and hospitality businesses understand the system. I gently say to him that they do understand it. Their frustration comes not from not understanding the help that is available, but from the system they are working in. Several things can be true at once. It is true that there is a permanently lower rate and that there is a £4 billion package to soften the blow for those with increased business rates, but it is also true that, when that goes away, breweries such as Titanic Brewery in Stoke-on-Trent will have an overall business rates increase of 130%, with some of its venues seeing a 400% increase. Can the Minister set out what specific support they can look forward to in the next three years, or can he give them clarity on what they need to budget for, because as a result of these changes some pubs around the country will close, and we need to avoid that?

I totally agree with my hon. Friend that we need to avoid the situation we saw for 14 years, when 7,000 pubs closed under the Conservatives, with about 4,000 closing in the first five years when the Lib Dems were in coalition with them. This Government will do all we can to support pubs, hospitality businesses and our high streets, which is why we set out a really strong set of proposals at the Budget, as he mentioned, including £4.3 billion of support.

When is a U-turn not a U-turn? I would suggest it is when the Government realise that they have made a terrible mistake, brief that they will change the policy and then send a Minister to this House to explain that nothing is changing at all. Does the Minister realise how much despair people are feeling? This is not a problem about a transition; this is a fundamental flaw in the whole concept of business rates that hits the smallest businesses the hardest. We need our policy, which is to leave the transitional rates relief permanently in place until there is a new system that exempts smaller businesses from this punitive tax.

The Conservatives had 14 years to implement significant reforms to the business rates system. They could have changed the system with significant underlying reforms, meaning that the tax rate paid by high street businesses was lower than the tax rate paid by the largest businesses, but they did not. I do not think we can trust a word they say when it comes to reform of the business rates system. They did not take the opportunity when they had their chance. It is easy to say things, but the Government are getting on with the job of reforming and improving our business rates system.

I thank my hon. Friend for his engagement so far on this issue. It will come as no surprise to him that we need a cut to VAT and the maximum 20p discount for business rates applied across hospitality, not just pubs, because nobody wants to drink in a pub surrounded by boarded-up cafés, restaurants and B&Bs. Can I urge the Government to act quickly and, as a gesture of their intent, withdraw the statutory instrument that enforces the much lower 5p business rate discount this April?

I thank my hon. Friend for her sustained and important engagement and advocacy on behalf of high street businesses in her constituency, from hospitality venues such as cafés and pubs to independent shops. She has explained to me really clearly the impact of various changes that previous Governments and this Government have announced on the businesses in her constituency. I will continue to engage with her and other strong advocates of the hospitality industry on this and other important issues that affect our high streets.

The Government have already imposed additional employment costs on our small businesses and those on our high streets. They are still struggling with sky-high energy costs that the Government have yet to alleviate, and now we have these massive increases in business rates. Is there anything at all that the Minister can say that will give hope to the small and medium businesses on our high streets that are wondering whether they can continue, or to our entrepreneurs who are wondering if they can get started?

The Government back small businesses and our high streets. We want to do all we can to continue to support businesses up and down the country. That is why we announced significant reforms to business rates at the Budget, making sure that we could have a permanently lower multiplier for high street businesses and providing significant support worth £4.3 billion over the coming three years.

Libraries and community centres are central to communities like mine in Lewisham East, and they make an excellent contribution to the local area. Can the Minister say whether there are any planned changes to their business rates and tell us how else they can be supported in our local community?

My hon. Friend is right to highlight the role that libraries and community centres in her constituency and across the country play in providing places for people to socialise, to learn new skills, and to grow and develop. I think of the libraries to which lots of parents in my constituency take their children in order to get their first books. The reforms to the business rates system that we set in place at the Budget will protect any businesses or premises that are seeing large increases in their rateable values, but I am always happy to have conversations with hon. Members on what other steps, more broadly, the Government could take to support important institutions such as those my hon. Friend raises.

We all look forward to whatever it is that the Government have decided to change here, but can I ask the Minister to look at two points? First, can he look at when appeals can be made to valuations? At the moment, businesses have to wait until 1 April, and that simply is not giving the sector any confidence. Secondly, can he look at wedding venues? They suffered enormously during covid and are likely, as things stand, not to benefit from any relief that he will announce in the next few weeks.

The process for businesses that are not satisfied with the valuation provided by the Valuation Office Agency is to go through the “check, challenge, appeal” process. In my role as the Minister with responsibility for His Majesty’s Revenue and Customs, I will of course be doing all I can to make sure that the performance of the VOA is as good as it can be to help businesses get through that process. That is very important, not least given that we are seeing a rebound in the values of many businesses across the country following the pandemic.

I hope the Minister will join me in congratulating Bristol East’s Lost and Grounded Brewers, which has just appeared on the list of the eight best breweries in Britain in The Times. He may recall that just before the Budget, I brought another Bristol East brewery, Left Handed Giant, to meet him and other Ministers at No. 11, where it made very clear the pressures facing the hospitality sector. Can he give me assurances that, as a first step, we need to sort out the revaluation shambles? Can he also ensure that the consideration of a differential rate of VAT, as we see in so many other countries on the continent, is also on the Treasury’s radar?

I join my hon. Friend in congratulating the brewery in her constituency. I know there is a vibrant small and independent brewery sector in Bristol, with lots of fantastic places where people can choose to have a drink if they so wish. Just the same as her, I want to make sure that this Government do what they can to continue to support businesses such as the one she mentions and those operating up and down the country. This Government are seeking to ensure that people have more money in their pockets so they can go out and spend it. That is why I am really glad that under the first year of this Labour Government, we saw faster increases in wages than we did in the whole first 10 years under the Conservatives.

As well as pubs, hotels and restaurants, is the Minister aware that many grassroots music venues, some of which have never been liable for rates, now face demands for thousands of pounds? The Music Venue Trust has said that these are not bills but “closure notices”. Will he ensure that grassroots music venues are included in any relief he provides, and are recognised as critical creative infrastructure?

We considered before the Budget the matter of businesses being brought into business rates for the first time. We set out at the Budget the supporting small business relief scheme, so that businesses that are paying no business rates at the moment but which are coming into business rates for the first time will have their increases capped at £800.

I refer to my entry in the Register of Members’ Financial Interests as the co-chair of the all-party parliamentary group on music. The vast majority of live performance venues have alcohol licences. Many are pubs, but the vast majority are not. Leeds Arena in my constituency is being dragged into the highest rate of business rates, alongside some large retailers. Without live performance venues, we will not have any future Ed Sheerans, Darcey Bussells, Idris Elbas or Simon Armitages bringing in the export income that the Treasury desperately needs. Is the Minister considering live performance venues, not just pubs, when he is thinking about the changes?

My hon. Friend is right to raise the importance of live performance venues. They not only support our economy directly, through people visiting the venues and enjoying a good night out and a good performance; they also support the local economy more broadly, with people travelling to and from, and choosing to go out for a meal before the event. He and I value the contribution they make to our national life and to our economy.

Business rates in Scotland are, of course, devolved, but businesses, particularly in the hospitality, leisure and retail sectors, are not immune to the impact of these measures as they spread across the United Kingdom and undermine the economy. Has there been any effort to sit down with Scottish Government Ministers to discuss a national strategy on how we can help businesses throughout the United Kingdom?

The hon. Member is right that business rates policy is devolved. I am in conversation with the Governments in Scotland and Wales about a number of changes to taxation policy that were announced in the Budget, and I will of course be happy to continue those conversations. We need to ensure that we continue to support these vital businesses up and down the country, which is why the Chancellor set out the package of support at the Budget.

Over 20,000 people, including the likes of James McAvoy and Benedict Cumberbatch, have rallied around to try to save the local cafés on Hampstead Heath. I recently spoke to one of the owners, Alfonso, who brought home to me the importance of having local cafés that are affordable and accessible. As a fellow north London MP, is the Minister going to join the campaign to save the local cafés on Hampstead Heath? Will he reassure my constituents that protecting small businesses is at the heart of Government policy?

If I get time and the parking permits in Camden allow it, I do like to drive down and have a walk in my hon. Friend’s constituency. I have not yet been made aware of that campaign, but I look forward to talking more with her about it. On a personal level, I will do all I can to get my tea and coffee from those establishments.

I am speaking to loads of business owners across South Shropshire in the retail, hospitality and leisure sectors, who are telling me the polar opposite of what the Minister is saying from the Dispatch Box, showing that the Government are completely detached from reality. There is a U-turn coming on this policy, but many business owners are lying awake at night worrying about how they are going to get through this. Can the Government make that U-turn quickly?

It is worth pausing to note that while some businesses will see increases in their bills, more than half of rate payers’ bills will either remain flat or will fall in the next year. That, in part, is because of the support the Government have provided to businesses, as set out at the Budget.

Hospitality and leisure businesses in the City of Durham are incredibly concerned about their future. Does the Minister agree that if we are truly to level the playing field between the high street and the online giants, it is time we show our much loved pubs, cafés, restaurants and hotels the same level of support that distribution warehouses, office blocks and supermarkets are receiving?

We are seeking to give even more support to those businesses than to the very largest ones. Under previous Governments, there would have been the same tax rate for those businesses, but, because of the changes we put forward at the Budget, the business rates multiplier for the smallest businesses on high streets in Durham and across the country is 25% lower than the tax rate paid by the largest businesses. This is the first significant, fundamental reform to the underlying tax rates in the business rates system in a very long time.

Whether it is retail, hospitality or pubs, businesses right across the United Kingdom, especially small businesses, are failing. That is due in no small part to action by the Government—increased taxes, increased energy prices and increased regulation. Rates play a big part in that, too. Can the Minister assure us that if there is to be further additional money for support, it will be ringfenced and not given to the devolved Administration in Northern Ireland, where the Sinn Féin Minister has taken the money but spent it on something else?

The right hon. Gentleman raised the issue of small businesses. It is worth nothing that a third of properties pay no business rates at all, as they receive 100% small business rate relief, and that a further 85,000 will benefit from reduced bills as this support tapers away.

Hospitality is the UK’s third largest employer; when the sector is hit, jobs are affected at scale. Pubs sit at the heart of the hospitality industry. In Montgomeryshire and Glyndŵr, we have 136 great pubs, employing more than 1,100 across the constituency, including the Eagles in Acrefair, where my wife used to work behind the bar, and the brilliant pub, the Hand, in Llanarmon Dyffryn Ceiriog. What steps is the Minister taking to support jobs in the hospitality sector?

I must say, I am very jealous that my hon. Friend has over 100 pubs in his constituency; I have only 27 in mine, and I have not made it round all of them yet. He is right to highlight the importance of the employment and job opportunities that can be provided by the hospitality sector, with around 2 million people working in it. Many people’s first job is in hospitality, helping them to get their foot on the career ladder and progress in their careers. That is why the Government provided significant support for hospitality businesses at the Budget, and it is why I will continue to engage with my hon. Friend and other Members on the issue of business rates and other matters where we can support our high streets.

Retail, hospitality and leisure businesses are at the heart of my constituency, yet family-run village pubs such as the Blue Boar in Walsham le Willows face significant increases in business rates from this April. If the Minister does recognise that the current system is failing businesses, when will he commit to meaningful reform and action, including giving local authorities greater powers to support socially and economically essential local businesses, which village pubs in rural areas undoubtedly are?

I will happily talk further with the hon. Member about any changes that we can make to give councils more powers in relation to the issue he raises. It is not a topic that has crossed my desk before, but I would be happy to receive some correspondence on it.

Two weeks ago, I held a roundtable for hospitality businesses in Tamworth to discuss the broken business rates system, and I then wrote to the Department about their preferences for support. The rates are crippling, and those businesses asked me to ask the Minister when reform is coming and how they will receive support in the interim, which is essential for my constituency and our businesses.

I thank my hon. Friend for her question and for the engagement that she has carried out with businesses in her constituency, as a strong representative of the businesses and people of Tamworth. The Government set out some significant reforms in the Budget. We lowered the tax rate that is paid by businesses on our high streets by 5p compared with what it would otherwise have been. That means that the tax rate paid by businesses on our high street is a quarter lower than that paid by the very largest businesses, which can afford higher taxes. That is why we rebalanced the system, transferring £1 billion of extra tax revenue from the largest businesses to high street businesses in my hon. Friend’s constituency and across the country.

The tables to which the Minister refers show that the median rateable value for pubs and wine bars is increasing by a third. He visited the Prince of Wales, a pub in his constituency, to help it reopen last spring. Its rateable value is going up from £49,200 to £62,500, which will push it into the higher band and higher bills. When we have the inevitable U-turn, will he ensure that it genuinely delivers lower business rates, and not just for the Prince of Wales in his constituency but for all hospitality venues across the country?

I thank the hon. Member for giving me a chance to talk about the Prince of Wales in my constituency, a fantastic pub that I am glad I and colleagues in Barnet council were able to save. I was there just a couple of weeks back, after a canvassing session out on the doorsteps. He is right to point out that some pubs are seeing increases in their rateable values as a result of the unwind from the pandemic. That is precisely why we have come forward with support, capping the increases in business rates bills this year and in subsequent years. In general, the point about pubs being at the heart of our communities is totally true. From the Prince of Wales in East Barnet to the Griffin in Whetstone—I could go on—there are some fantastic pubs in Chipping Barnet, as I am sure there are in his constituency too.

I am a bit surprised by the mock rage coming from the Opposition, given that, over the past decade and a half, thousands of pubs have closed. I thank the Minister on behalf of Stroud publicans for agreeing to review the system so that we can get a really practical solution for pubs. Can I confirm that all business rates, including those on the high streets, will be reviewed, so that we can have a proper level playing field with the out-of-town institutions?

It is really important that we level the playing field for business rates paid by high street businesses in Stroud—for which my hon. Friend is a strong and active representative—and those paid by the largest online retailers and those with warehouses and distribution centres. That is why we implemented the reforms in the Budget to rebalance the system through a lower tax rate on high street businesses and a higher one on those that can afford it. I thank him for raising the point that Opposition Members want to keep dodging, which is that on their watch 7,000 pubs closed across the country, hollowing out our communities and making our high streets and the places where we live less vibrant and less sociable.

I have heard from many struggling businesses across my constituency about the increasing pressures that they are facing. To give just one example, under the Government’s original plan, a small independent shop in Exmouth would have seen its rateable value rise by about 50%, wiping out the benefits of the lower small business multiplier, stripping it of eligibility for relief and leaving it facing extra costs of around £600 a month. Does the Minister understand how damaging that is for business confidence and viability, and will he please set out a timeline for when those types of small businesses can expect to receive support?

One of the challenges with the questions I am being asked by Opposition Members is that they seem to be suggesting that the Government should not have gone ahead with the post-pandemic revaluations. Those revaluations were set in train by the previous Government. I do not know about the hon. Member, but I think that, if businesses in his constituency or mine have seen a decrease in their rateable values since the pandemic, for whatever reason, it is right that the system is updated to reflect their post-pandemic values. That is what we have done. He cites a particular example. Of course there will be businesses that see increases in their rateable values, and that is precisely why we have stepped in, with the Chancellor announcing £4.3 billion of transitional support at the Budget last year.

I welcome the assurance that half of businesses will see their business rates flat or falling, and that is even after the end of the covid-era support and the post-pandemic review initiated by the previous Government. Research by the Music Venue Trust estimates that 600 grassroots music venues may see quite significant rises, probably because of the revaluation. Significant areas backstage are dedicated to production and performance and cannot be used for revenue raising. Will the Minister meet me and sector representatives so that we can understand the issue better together?

I thank my hon. Friend for raising this issue. Many grassroots music venues are valued as pubs. Intricacies and complexities in the business rates system mean that, when we think of pubs, it is important also to think of grassroots music venues up and down the country. We must provide support to them and to other businesses. That is why the Government stepped in with the £4.3 billion of transitional protection, over £2 billion of which will be in place this year.

Those who run pubs in my constituency are really worried about the Budget and its impact on their business rates bills. Last week the Business Secretary said that there was no way the Government could have known about the impact of their decisions, but the valuation office then confirmed that it had told Ministers about the impact of their decisions, which I think the Minister has confirmed. He also confirmed that that data was easily accessible, so why did that happen? Was it wilful ignorance, was it incompetence or did they just go ahead anyway?

I am glad that the hon. Member was able to ask the exact same question as the shadow Chancellor, the right hon. Member for Central Devon (Sir Mel Stride). I am not going to comment on the policymaking process in the run-up to the Budget.

I thank my hon. Friend for her question and for her continued representation for the small businesses in her Bournemouth constituency, where I know there is a vibrant and growing hospitality and leisure sector. We have implemented reforms to the system to rebalance business rates away from the high street and towards the online giants. I look forward to continuing to engage with her and other Members of Parliament on business rates, other issues and other steps that this Government can take to continue to support the high street and businesses in her constituency.

This morning I met Roly May, the landlord of the Russell Arms pub in Butlers Cross. Government Members might recognise it: it is the closest pub to Chequers, where they can drown their sorrows after an audience with the Prime Minister. The pub has seen as £17,500 business rate increase. I have heard similar horror stories from pubs such as the Cock and Rabbit in The Lee, the Dinton Hermit in Ford and many others. Will the Minister at least accept that there is no more money to squeeze out of pubs that are absolutely on the brink of financial catastrophe under this Government?

This Government understand the pressures that hospitality businesses, and pubs in particular, are facing. One of the pressures, which I have heard about very clearly, relates to the fact that the previous Government did not invest in our energy security, which would have ensured that businesses and families had lower energy bills and certainty about future bills, and as a result those businesses and families have seen their energy bills surge. In 2022, under the previous Government, we saw inflation hit 11%, and it is things like that that have made it difficult for small businesses up and down the country.

We all know that we are where we are precisely because of the disastrous legacy that we were left by the Conservatives, who made unfunded promise after unfunded promise. I welcome the Minister’s reassurance about transitional relief and the caps on the increases, but cafés and small hospitality businesses in Southampton are concerned not just about the future, but about the now, so what message would he give them to assure them that this Government are pro-business and have their back?

When it comes to support for businesses, we are making sure that we bring back economic stability to this country, with six interest rate cuts that will reduce the cost of borrowing for businesses and households. The economic stability that we have provided has meant that wages went up faster in the first year of this Government than they did in the whole first 10 years of the previous Government. We are supporting people up and down the country with the cost of living and providing stability for businesses in the corporation tax system, keeping it at the lowest rate in the G7 as part of our commitment to our corporate tax road map.

One of the worst things for business owners in my constituency is the unpredictability of running a business. They need to know, and it is simply killing them. They already have to deal with poor parking, a rise in antisocial behaviour and rises in national insurance contributions, wage costs and energy costs. Now, when they thought that they were going to have a reduction in business rates, they are possibly going to have a rise instead. Can the Minister alleviate their fears and put them out of their misery? What is it going to be? Is it going to rise or is it going to stay the same?

We want to provide stability in our taxation system, and one of the things that the Government are seeking to do in the coming years is to continue to have economic stability—something that was lacking for so long under the previous Government. That is why we are focusing on getting Government borrowing down in every year of the forecast, and it will fall faster in this country than in any other G7 economy. When it comes to business rates, the reforms that we set out in the Budget will rebalance the system to provide a permanently lower tax rate—the multiplier for those small businesses on the high street.