Rachel Reeves slammed over 'ridiculous' £1.7bn tax raid as pub bosses warn it will lead to 'one closure a day'

Sir Tim Martin, founder and chairman of JD Wetherspoon, warned that planned changes to business rates would "inevitably" result in more pub closures at a time when the industry already faces a "ferocious tax disadvantage" compared to supermarkets.

The warnings come as publicans battle surging costs from the Chancellor's £25bn National Insurance raid and minimum wage increases, with industry forecasts suggesting one pub could close every single day this year across Britain.

Industry leaders have criticised Labour's failure to deliver on promised business rates reform whilst simultaneously imposing additional financial burdens on the sector.

Chris Jowsey, chief executive of Admiral Taverns, said that despite pubs appearing successful with high customer spending, "none of it is translating to the bottom line" due to mounting costs.

He warned that without rates reform, the Government risks making hospitality "extremely uninvestable" by "layering on cost after cost".

Simon Dodd, boss of Young's chain, noted that promised rates reform has "gone quite quiet", despite Labour coming to power with a five-point plan for growth.

"All we are asking for is a fair playing field," he said, adding that whilst his 230 pubs across London and the South East are "really, really busy", independent operators face particularly severe challenges.

Pub bosses have been particularly scathing about what they describe as the "ridiculously disproportionate" burden on their industry.

Simon Emeny, chief executive of Fuller's pub group, said the sector carries an unfair share of the £25bn raised from business rates, warning that continued government failure to deliver reform "really damages the viability of a sector that is absolutely critical to the UK economy".

He criticised the "archaic" business rates system as "not fit for purpose", noting it was created before the digital economy existed and that the Conservatives had put reform in the "too difficult box" for 14 years.

"If the Chancellor thinks this is 'job done', she is a long way off the mark," Emeny said, referring to Labour's limited changes at the last Budget.

The financial pressures facing pubs include a £500m increase in business rates in April, alongside the Chancellor's National Insurance hike and sharp minimum wage rises.

Before the Budget, small businesses had called for a Covid-era discount of 75 per cent to be extended, but Labour reduced this to 40 per cent, capped at £110,000 per pub.

The hospitality industry was hit by this "barrage of other costs imposed by Labour", according to industry sources, at a time when pubs already pay VAT on food sales whilst supermarkets do not.

Business rates are calculated using a multiplier system based on estimated annual rental values, with the standard rate for premises valued over £51,000 set at 54.6p in the pound.

The British Beer and Pub Association has warned that one pub will close every day this year across England, Wales and Scotland, leading to more than 5,600 direct job losses.

Beer sales by volume in pubs more than halved between 2000 and 2023, according to Morgan Stanley data.

The impact of Reeves's tax measures was evident in a KPMG and Recruitment and Employment Confederation survey showing redundancies caused job searches to rise at their fastest pace since November 2020.

Nick Mackenzie, chief executive of Greene King, highlighted that whilst pubs represent just 0.4 per cent of rateable property, they pay 2.1 per cent of business rates bills.

From next year, current relief will be scrapped and replaced with a lower multiplier rate for properties valued under £500,000, with costs shifted from the Treasury to businesses through surcharges on more valuable premises.