Pubs and hotels could see business rates reformed after review
Source: BBC Business ↗
The Treasury has appointed business‑rates specialist Jerry Schurder to head a comprehensive review of how commercial property valuations are calculated in England and Wales, with a report due in March 2027. The review follows a recent policy move by Mayor Andy Burnham, who announced a 20 percent cut to business rates for English pubs, social clubs and live‑music venues that will take effect in April. Industry bodies such as the British Beer and Pub Association (BBPA) have highlighted the sector’s distress, noting that 161 pubs closed in the first quarter of the year across England, Scotland and Wales, costing roughly 2,400 jobs, and attributing part of the pressure to rising rates that are tied to turnover through the Fair Maintainable Trade (FMT) formula. The government has invited input from landlords, hoteliers and business owners, and the findings of Schurder’s review will feed into the next full revaluation scheduled for 2029.
The core issue driving calls for reform is the perceived inequity of the FMT‑based valuation method, which scales a pub’s rates bill with its revenue, effectively penalising successful establishments. Critics such as Jonathan Lawson, chief executive of the Butcombe Group, argue that this contrasts sharply with large online retailers whose rates are based on market rent and ignore sales volume, allowing expansive warehouse sites to pay comparatively low rates. The BBPA and other hospitality groups contend that pubs are assessed differently from retail venues, leading to disproportionately high bills that undermine profitability. Wider business voices, including the Federation of Small Businesses and the British Chambers of Commerce, have urged that any overhaul address the broader, “complex and outdated” system and consider raising the relief threshold for smaller firms, rather than delivering piecemeal adjustments.
Reactions to the review and the recent rate cut have been mixed across the political spectrum. While hospitality representatives such as Emma McClarkin of the BBPA welcomed the review as “sorely needed,” opposition figures like Shadow Chancellor Sir Mel Stride dismissed it as “far too late,” accusing the Labour government of exacerbating the sector’s woes through tax hikes and regulatory changes. Liberal Democrat Treasury spokesperson Daisy Cooper called for additional measures, including an emergency VAT reduction and reversal of recent jobs‑tax reforms. The outcome of Schurder’s review could reshape the valuation framework for both England and Wales, potentially influencing future rate relief thresholds, aligning Wales more closely with England, and setting the stage for a broader reform of the business‑rates system that affects all sectors.
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The U.S.'s central bank rate currently stands at 3.75%, so a global rates move like this could feed through to local borrowing costs. The U.S.'s economy is growing at 2.3% with inflation at 3.2%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track the U.S.'s own central bank rate closely. With the U.S.'s unemployment at 4.4%, personal-finance effects like this land on a labour market that is currently fairly stable. Health-system effects are harder to localise from economic indicators alone — the real impact in the U.S. depends more on local healthcare capacity than the figures above.
The UK's central bank rate currently stands at 3.75%, so a global rates move like this could feed through to local borrowing costs. The UK's economy is growing at 0.8% with inflation at 3.2%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track the UK's own central bank rate closely. With the UK's unemployment at 5.6%, personal-finance effects like this land on a labour market that is currently fairly stable. Health-system effects are harder to localise from economic indicators alone — the real impact in the UK depends more on local healthcare capacity than the figures above.
France's central bank rate currently stands at 2%, so a global rates move like this could feed through to local borrowing costs. France's economy is growing at 0.9% with inflation at 1.8%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track France's own central bank rate closely. With France's unemployment at 7.9%, personal-finance effects like this land on a labour market that is already under strain. Health-system effects are harder to localise from economic indicators alone — the real impact in France depends more on local healthcare capacity than the figures above.
Romania's central bank rate currently stands at 6.5%, so a global rates move like this could feed through to local borrowing costs. Romania's economy is growing at 0.7% with inflation at 7.8%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track Romania's own central bank rate closely. With Romania's unemployment at 6%, personal-finance effects like this land on a labour market that is currently fairly stable. Health-system effects are harder to localise from economic indicators alone — the real impact in Romania depends more on local healthcare capacity than the figures above.
The UAE's central bank rate currently stands at 3.65%, so a global rates move like this could feed through to local borrowing costs. The UAE's economy is growing at 3.1% with inflation at 2.5%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track the UAE's own central bank rate closely. Health-system effects are harder to localise from economic indicators alone — the real impact in the UAE depends more on local healthcare capacity than the figures above.