Treasury claims to be protecting pubs, but Labour’s policies will see thousands close

The government has been warned on Monday that more than 2,000 bars, pubs, hotels and restaurants will close this year due to Labour’s business rates.

UKHospitality, which is a trade body has warned that their modelling suggest 2,076 businesses will close in 2026 as they are struggling to pay business rates, the increase in employer’s national insurance and the minimum wage hike.

The modelling suggests 540 pubs, 574 hotels and 963 restaurants will close for good this year, should Labour press on with the planned increase with business rates in Spring.

Hotels business rates will soar by £28,900 in 2027 and by a staggering £205,200 over the next three years.

The average pub will see their rates rise by 15% next year and by 76% over the coming three years, this will be an increase of £12,900.

Kate Nicholls, Chair of UKHospitality, said, “Staggering increases to business rates will affect the entire hospitality sector and without a hospitality-wide solution, we will see significant business closures.

“Thousands of venues, particularly neighbourhood restaurants and local hotels, will be forced to close for good as a result of the significant rates rises they’re facing.

“This is yet another blow to a hospitality sector that bears the highest tax burden in the economy, and has already been disproportionately burdened by increases to NICs, wages, energy and other inputs.

“Hospitality is one of the nation’s biggest employers and has an incredible potential to grow and create jobs, but the money coming in the front door is simply not enough to offset the rocketing costs of doing business. All of this undermines the Government’s objectives to grow the economy and help more people back into work.

“We need a hospitality-wide solution that averts damaging business rates hikes in April. The Government needs to implement the maximum possible 20p discount to the multiplier for all hospitality properties.”

A Treasury spokesperson said, “We’re protecting pubs, restaurants and cafés with the Budget’s £4.3 billion support package – capping bill rises so a typical independent pub will pay around £4,800 less next year than they otherwise would have.

“This comes on top of cutting licensing costs to help more venues offer pavement drinks and al fresco dining, maintaining our cut to alcohol duty on draught pints, and capping Corporation Tax.”