Thank you for contacting me about tax on beer and pubs.
I appreciate the concerns you raise. Pubs make an enormous contribution to our economy and our society. They are an important part of our culture and heritage, and a crucial source of local employment. They bring vibrancy to communities and provide welcoming spaces for everybody. It is therefore worrying that they are still struggling to recover from the pandemic, as well as having been hit by the cost-of-living crisis. I am concerned that the last Government failed to protect businesses in the hospitality sector and allowed the running down of our high streets, with over 6,000 pubs and bars closing from 2010 to 2023.
I therefore welcome that the new Government took action in the Budget to support British pubs by cutting alcohol duty on draught products – which make up around 60% of the alcoholic drinks sold in pubs – reducing it by 1p per average strength pint from February 2025. This increases the relief available on draught products to 13.9% and will reduce businesses’ total duty bill by over £85 million a year.
I also recognise the concerns pubs have about business rates. Our business rates system disincentivises investment and creates uncertainty, and is particularly unfair on high street businesses such as pubs, which have shouldered too much of the burden for too long. I therefore welcome the Government’s plan that from 2026-27, it will introduce permanently lower tax rates for hospitality properties. This will enable them to benefit from much-needed certainty and support, and will be funded by introducing a higher multiplier on the most valuable properties, such as the warehouses used by large online companies.
In the meantime, as you will know, hospitality businesses were facing a cliff edge in April, with temporary business rates reliefs due to expire. I therefore also welcome that the Government has offered a 40% discount to retail, hospitality and leisure properties up to a cash cap of £110,000 per business in 20256-26, as well as freezing the small business multiplier. This is a support package worth over £1.6 billion in 2025-26 and will save the average pub over £3,300 in 2025.
Thank you once again for contacting me. I can assure you that I am committed to ensuring our pubs are able to thrive again.
Kind regards,
Barry Gardiner
MP for Brent West