The Chancellor has come under fire over plans that opponents say will be ‘devastating’
A campaign group established by the King has launched a scathing attack on Rachel Reeves, accusing her of accelerating pub closures with a harsh tax hike. Pub is the Hub, initiated by the then Prince of Wales in 2001 to rescue endangered pubs, is one of seven major organisations warning that “eye-watering increases” in taxes will devastate the hospitality sector.
In a strongly worded letter to Ms Reeves, the group expresses publicans’ “anger” and “shock” at changes to business rates announced in the autumn budget. Government officials maintain they are providing protection with a pledge of £4.3 billion in transitional relief, which will cap increases in business rates faced by pubs and other high street businesses. However, detractors argue that this relief will be phased out after three years, leaving thousands of pubs on the brink of financial collapse.
The charity’s involvement is particularly delicate given the King’s longstanding concern about the loss of rural pubs, often the last remaining community facility in villages across Britain. Pub is the Hub was founded as a non-profit organisation to offer struggling landlords expert advice on diversifying their businesses – including adding shops, cafés or Post Offices – to keep their establishments operational.
King Charles has regularly visited establishments supported by the scheme and contributed personally to its community services fund last year. Upon launching the initiative, he highlighted the “unprecedented challenges” confronting rural communities and emphasised that pubs possessed enormous potential to serve as “one-stop shops” for local areas.
The King takes no active part in managing the organisation or determining its political position. However, the charity states the circumstances have now reached a critical juncture. Approximately one establishment per day is expected to shut its doors next year, resulting in “thousands of vital job losses that will be devastating for communities across the country”.
The correspondence states that measures announced in the November budget triggered “real anger among publicans and pub businesses across England who, understandably, feel badly let down”.
The signatories caution that whilst warehouses utilised by online behemoths will encounter an average business rates rise of 7%, “the average community pub, the place where the social fabric of Britain is weaved, will be hammered with a damaging increase of 10 times the magnitude of this”.
The hospitality sector ranks as the UK’s third-largest employer and represents 7% of GDP, yet the correspondence alleges the industry overpays business rates relative to revenue by a factor of five compared with other sectors.
It notes that whilst the typical hospitality establishment surrenders 40% of its revenue to the taxman, Amazon recorded UK revenue of £29bn last year but paid £1bn in tax – merely 3.4% of revenue. Andrew Slee, chief executive of the Society of Independent Brewers and Associates, said: “Labour committed to levelling the playing field, but I have been trying to make sense of what happened in the Budget since the full horror of it emerged.
“It is such catastrophically bad policy that I can only think it was a mistake. No one could have looked at this and thought ‘this makes sense, so we’ll go with it’. It is madness.”
Mr Slee revealed the industry is demanding that the existing 40% discount on business rates for hospitality is maintained whilst a long-term solution is developed. The correspondence has also received backing from the British Beer and Pub Association, UK Hospitality, Independent Family Brewers of Britain, Hospitality Ulster and the British Institute of Innkeeping.
The pub and brewing sector contributes £18bn in taxation, meaning extensive closures would prove counterproductive for the Treasury, the organisations caution. Research indicates two-thirds of adults consider their local pub essential in tackling loneliness and isolation.
Whilst ministers have downplayed the consequences of next year’s tax increases, Mr Slee warned the proposal to scrap transitional relief after three years will render long-term planning impossible – and compel many pubs to close permanently.
The Chancellor has consistently presented the reform as delivering permanently reduced tax rates for pubs and high-street enterprises from April 2026, stating the Government aims to help small firms flourish and encourage growth, not suffocate them with obsolete regulations. Officials have stated that more than half of ratepayers will experience no increase at all, and the majority of increases will be capped at 15% or less next year – with the smallest pubs potentially seeing rises limited to approximately £800 in 2026/27.