The UK’s pub and hospitality companies have seen their share prices surge this morning, as the government readies a U-turn on planned increases to their business rates. This comes as a welcome relief for an industry that has been warning of the crippling impact these higher taxes would have.
Shares in Mitchell & Butlers, whose pub brands include All Bar One, Harvester, O’Neill’s, and Toby Carvery, have jumped 2.5%, making them one of the top risers in the FTSE 250 index today. Rival Marston’s, which operates over 1,300 pubs, bars and inns across the country, are up 2%, while JD Wetherspoon has gained 1.2%.
Pubs have been sounding the alarm for weeks, warning that they face much higher business rates after the Chancellor announced plans to end Covid-era discounts in her budget last November. From April, almost all commercial businesses will see their rateable value – the basis for calculating business rates – recalculated, with some pubs reporting that their rateable value has more than doubled.
In response to the industry’s pleas, the Treasury is now preparing to unveil a package of support in the coming days, likely to include business rates relief and measures to cut licensing red tape. This follows comments from Cabinet minister Pat McFadden, who acknowledged the government’s appreciation for “how important the pub industry is economically and culturally to the UK” and their desire to “help pubs”.
While the minister stopped short of confirming a U-turn, the market’s reaction suggests investors are confident that the government will provide the much-needed relief to an industry that has been “squeezed from every direction” by the prospect of soaring business rates.