Chancellor Signals Wider Hospitality Support As 2,000 Venues Face Closure

Chancellor Rachel Reeves says she is “working with the hospitality sector” to support pubs and hospitality operators as a new UKHospitality report predicts 2,076 venues will close this year unless the government finds a sector-wide solution to significant rises in business rates. 

A temporary support package for pubs is expected to be announced “in the coming days”, Treasury officials told the BBC, and the Chancellor has declined to rule out extending the relief for other hospitality businesses. 

Nonetheless, Reeves insists that pubs must pay their “fair share” of business rates over time, reports The Telegraph.

Speaking to the BBC, Rachel Reeves said: "As that transitional relief comes to an end, although we've put in £4.3bn over the next three years, we need to make sure that we do that in a balanced way that particularly supports our pubs and the hospitality sector”.

Reeves explained to BBC Breakfast on 14 January that she is “particularly concerned” about the impact of business rates on pubs, then later declined to rule out broader support across the hospitality sector. 

Kate Nicholls, Chair of UKHospitality, has welcomed the encouraging tone from the Chancellor, telling the BBC: “It's good to see recognition of wider hospitality and that she is talking about support beyond pubs”.

In recent weeks, calls have grown from both Labour and opposition MPs, as well as industry groups, for financial support to be extended across the pubs, hotels, and restaurants sectors.

Significant Business Closures 

Demonstrating the scale of the issue, new modelling from UKHospitality reveals that six hospitality venues could close every day in 2026, particularly neighbourhood restaurants and local hotels.

The analysis forecasts that 963 restaurants, 574 hotels, and 540 pubs would be set to close this year, if the government fails to introduce a hospitality-wide solution to avert significant business rates increases in April. 

“Staggering increases to business rates will affect the entire hospitality sector and without a hospitality-wide solution, we will see significant business closures,” warned Nicholls, UKHospitality’s Chair, in a press statement from the trade body.

“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,” Nicholls explained.

Currently, UKHospitality estimates that the average hotel will see their business rates increase by £28,900 next year and by £205,200 in total over the next three years – an increase of 115%. 

The average pub will see their rates increase 15% next year – an extra £1,400 – and by 76% over the next three years – an increase of £12,900. 

The rise follows the end of a Covid-era business rates relief scheme, coupled with increases in the rateable value of hospitality venues.

Last year pub closures hit one a day across England and Wales due to already mounting cost pressures.