Rural Pubs: Fiscal Support

Debate between Adam Dance and Saqib Bhatti

Wednesday 17th June 2026 Westminster Hall

[Saqib Bhatti]

I could not agree more. That is exactly why we are here today. I am really concerned about the core of our communities being hollowed out by Government interventions. For elderly people in particular, a good pub lunch with great drinks and warm food can be a staple of the weekly routine. It is therefore no wonder that two thirds of adults believe that their local pub is vital to combating loneliness and social isolation. On the back of my hon. Friend’s intervention, I gently ask the Minister whether he recognises that losing a rural pub has a huge impact on our rural communities. Where are those people meant to go?

Dr Thomas Thurnell-Read from Loughborough University has conducted some fascinating research into the social value of pubs in local communities. The project looked at the impact of pub closures on communities and made it very clear that the loss of a pub, as my hon. Friend the Member for Kingswinford and South Staffordshire (Mike Wood) said, is so much more than just the loss of a business. Dr Thurnell-Read made it clear that the closure of a pub echoes throughout the entire community, impacting friendships, identities and vital local support networks in ways that cannot be captured by data alone.

As traditional community infrastructure such as banks, village halls and post offices also come under pressure, pubs are more important than ever as anchors in our rural communities. For rural areas, some pubs now act as more than just a place to meet and socialise. They have essential services such as micro post offices, prescription drop-offs, wi-fi hubs and barbers, as my hon. Friend mentioned. They even house part-time library shelves.

Research by the Rural Services Network has found that for every £1 invested in the provision of services and activities in the pub, an average of £8.28 of social value is created. It found that the diverse new services offered by pubs in local communities have lasting positive impacts on the overall wellbeing of individuals and their families, as well as on reducing loneliness, improving mental health and giving people greater independence.

Having spoken at great length about the value and importance of rural pubs, I am really concerned about the Government’s intervention and the lack of support for this vital industry. Some of our best pubs are in the Chancellor’s crosshairs. Labour has hit rural pubs with increased taxes and a litany of new burdensome legislation that is killing them off. The pub and brewing sector is among the most highly taxed of any business sector, with around £1 in every £3 spent in the pub going back to HMRC.

One of the most egregious taxes is the Government’s national insurance raid on our businesses. Having spoken with representatives of the UK’s beer and pub sector, there is no doubt that Labour’s rise in national insurance has had a huge impact on rural pubs. Just last week, Simon Emeny, the chairman of Fuller’s, said that pubs are facing “unprecedented” pressure from Labour’s tax rises. Given the nature of pub work, the lowering of the national insurance threshold has had a deep impact on publicans. Pubs are one of the major employers of young people. The sector employs 58% of its people on a part-time basis, which means that lowering the threshold has forced pubs to reconsider their hiring practices.

[Adam Dance (Yeovil) (LD)]

The concerns about taxes that the hon. Member is raising have really affected Jack, the owner of the Ye Olde Poppe Inn in Tatworth, and Buddy, the owner of the Flying Fish. Does the hon. Member agree that we need to lower VAT for pubs?

[Saqib Bhatti]

The hon. Member makes an interesting point. When publicans speak to me about taxes, they talk about their turnover either increasing or staying stable but the costs going up. The Government have to set out what they will do to improve the fiscal landscape for pubs, and for the hospitality industry more broadly.

A lot has been made of Lord Milburn’s report on NEETs—those not in education, employment or training—and the rise in the number of 16 to 24-year-olds in that category. Has the Minister considered the impact of these tax rises on pub-specific jobs? Some 51% of people working in pubs are under the age of 24, meaning that many are likely to be balancing working in the pub with other part-time commitments such as school or university. These new employment costs mean that publicans will think again about hiring staff on a part-time basis, driving many people into worklessness. The national insurance rise has had the single most damaging effect on the Saturday job.

In addition to the crippling jobs tax, pubs are also suffering because of stifling increases in business rates. These policies threaten to be a huge—maybe even the final—nail in the coffin of many pubs that are really struggling. Analysis from UKHospitality has found that, by 2027-28, the average pub’s business rates will be £4,500 higher than they are today, rising to an astonishing £12,900 within three years, even with the reduced multiplier and transitional relief. I asked one of my staff members how much they paid for a pint of beer in one of the pubs in my constituency, and they said a pint of lager came to £7.50. That pub would have to sell an extra 1,720 pints just to offset the cost of those shocking tax increases.

The Conservatives recognise the value of our pubs. We have pledged to scrap business rates for 250,000 retail, hospitality and leisure businesses because we recognise the importance of ensuring that businesses keep more of what they earn, allowing them to invest in the community rather than sending it back to central Government. I say to the Minister that Governments do not create growth or jobs; our businesses do. This announcement formed part of our larger campaign to get Britain working again, freeing up money for businesses to hire new people, often younger and always local. It would drive new jobs and economic growth across rural areas of the UK.

Building on that, The Telegraph revealed last month that landlords will be hit with a “nice pub tax” under new guidelines. It found that HMRC has ordered officials to levy higher business rates on pubs that are in attractive locations or based in character properties. That is a complete disaster, and could mean that many pubs are forced—