Sir Keir Starmer has been warned he risks a Cabinet revolt over Rachel Reeves’s decision to hike business rates in last November’s tax-raising Budget.
The Prime Minister, who is already facing a rebellion next week over rejoining the customs union, backed his Chancellor’s decision to taper business relief from 75 per cent to 40 per cent.
The trade body UK Hospitality warned the average pub now faces an increase of 76 per cent in costs following Ms Reeves’s changes.
Landlords have gone as far as to accuse the Chancellor of being "a pub destroyer".
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Following a mass campaign to ban Labour MPs from pubs, Sky News today revealed Cabinet Ministers have become increasingly disgruntled at the decision to axe the business relief discount.
The outlet reports that there is "ongoing cabinet-level opposition" to the hikes.
Speaking on Monday, the Prime Minister admitted many businesses may face hardship as a result.
"We're working with the sector, particularly in hospitality," Sir Keir told GB News.
Sir Keir Starmer has been warned he risks a Cabinet revolt over Rachel Reeves’s decision to hike business rates in last November’s tax-raising Budget
|REUTERS
He also admitted the upcoming revaluation will leave pubs and other businesses "struggling with the business rates applicable to them".
Despite this, Ms Reeves has refused to offer new financial support to pubs in particular.
Business Secretary Peter Kyle has been firmly against the plans, instead pushing the case with Treasury officials next week, following growing pressure from the hospitality industry.
And even TV chef Tom Kerridge said Mr Kyle had been "incredibly supportive" but did not have the power to grant tax, which sits with the Treasury.
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Rachel Reeves has refused to offer new financial support to pubs
|REUTERS
Sir Keir previously suggested the Government was looking at "licensing freedoms or other measures" to help the hospitality sector - but, for now, "some will have their bills going up".
Several pubs have already barred Labour MPs from entering their establishments, including former Top Gear presenter Jeremy Clarkson.
The Government is said to have warned businesses not to protest over the hike if they want to get any concessions.
According to Sky News, the Government has told businesses to take a leaf out of farmers' books, who saw the inheritance tax threshold rise from £1million to £2.5million before Christmas.
Thousands of farmers protested throughout 2025
| GETTYAccording to the source, farmers were "good, fair negotiators and didn't make a big campaign of it, which is why they got what they wanted".
This is despite farmers carrying out many protests over months, including tractor blockades on Whitehall.
A spokesman for the Treasury said: "We’re protecting pubs, restaurants and cafés with the Budget’s £4.3billion support package.
"Without this support, pubs would face a 45 per cent increase in the total bills they pay next year.
"Because of the support we’ve put in place, we’ve got that down to just 4 per cent.
"This comes on top of our efforts to ease licencing to help more venues offer pavement drinks and put on one-off events, maintaining our cut to alcohol duty on draught pints, and capping Corporation Tax."
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