Hospitality bosses warn Labour reforms could spark 'nightmare before Christmas' for business rates

Hospitality bosses warn they are at their wits’ end as Labour’s reform of business rates looms, warning the policy could unleash a 'nightmare before Christmas' on pubs, restaurants and hotels. Industry chiefs say the plan amounts to a rates shock for cash-strapped firms, with the British Beer & Pub Association warning that around 5,000 small pubs will begin paying business rates for the first time next year.

UKHospitality chief executive Kate Nicholls wrote in an online op-ed for the Daily Mail that 'Christmas should be a time of cheer, but last month’s Budget has instead left hospitality businesses at their wits’ end worrying about the looming business rates car crash.' She added that local pubs and neighbourhood restaurants will face rate increases running into the thousands in the coming months, and warned Labour’s pledge to level the playing field 'categorically' is not happening. 'This Budget has widened the gap between the High Street and big online businesses,' Nicholls wrote, and she warned of more closures, job losses and higher prices for consumers if the reforms go ahead without changes.

Several industry figures have pushed back publicly. Steve Perez, who founded drinks maker Global Brands, told reporters that Prime Minister Keir Starmer had 'lied to my face' about business rates, underscoring the deepening investor and operator anxiety ahead of any election.

A key fault line has been Labour’s framing of the reform. Ahead of the election, Labour pledged to reform business rates to 'level the playing field between the High Street and online giants' but industry groups say the reality of Reeves’ Budget changes leaves many firms facing higher bills. The Budget's announcement of 'permanently lower tax rates for over 750,000 retail, hospitality and leisure properties' was greeted with caution by business groups who say the net effect has been an increase in costs for many venues.

Industry groups say the impact will be uneven, with the 5,000 pubs expected to pay business rates for the first time next year, and small operators braced for thousands of pounds in extra costs. Blunt warnings from UKHospitality and other bodies have been echoed by landlords who say they will bar Labour MPs from their venues until the party engages with the industry's concerns.

Analysts say the debate should shift to how reforms are implemented and whether transitional relief and other measures are adequate to prevent widespread closures and job losses. The sector remains a pivotal employer and tourist draw, particularly pubs, neighbourhood restaurants and hotels that anchor town and city centers.

With elections on the horizon, the industry is pressing ministers to salvage High Street vitality by adjusting the rates reform and ensuring that tax reliefs translate into real relief for operators rather than higher bills.

Context: The clash underscores the broader policy fight over retail taxation and the balance between online dominance and traditional bricks-and-mortar venues, a debate that has intensified as consumer spending shifts and inflation pressures continue to affect hospitality margins.