Rural Pubs: Fiscal Support

Calum Miller Excerpts

Wednesday 17th June 2026 Westminster Hall

[Calum Miller (Bicester and Woodstock) (LD)]

It is a pleasure to speak with you in the Chair, Mrs Hobhouse. I congratulate the hon. Member for Meriden and Solihull East (Saqib Bhatti) on securing this important debate.

I will begin by mentioning two people I represent. Becky runs the Red Lion in Eynsham. She met the Under-Secretary of State for Business and Trade, the hon. Member for Halifax (Kate Dearden), at my invitation earlier this year. That followed a question in the House, so some Members present, including the Minister, who is smiling, may already know Becky’s story. Her turnover is up, but her profits have vanished. She said that there is

“no living to be made any more”

from her rural pub. Think about what that means: the customers are still spending, yet she is squeezed to the point of asking herself whether to carry on at all.

Donna runs the Oxfordshire Yeoman in Freeland. She has faced the uncontrollable in the last few months: a washout summer, when summer trade is the very thing that a rural pub banks on to survive the winter. Stacked on top of that, she has faced the entirely controllable: a 50p minimum wage rise, soaring energy bills and rising water bills, all landing at once.

When landlords are counting every penny and customers are counting every penny on the same evening, that is not a market finding its level but a trade being hollowed out from underneath. Consider the scale of the loss: 161 pubs closed across England, Scotland and Wales in the first quarter of this year alone, which is more than two a day. Those closures took roughly 2,400 jobs with them. There is a huge difference between losing a pub in a city and losing one in a village. When an urban pub closes, a community loses an option, but when a rural pub closes, a community loses its social space, which almost never comes back. The rural pub sits alongside the church and the village hall as part of the fabric of some of our smaller communities. Such closures represent a loss of identity and cohesion in communities such as mine. We should ask, “Why is the rural pub more exposed?” They tend to have lower footfall, they tend to face higher energy and supply costs, and it is far harder for them to diversify their income. Running costs across hospitality are up around 43% since 2019, and one third of those businesses are operating at a loss.

I would like to turn to what might actually help. First, there is VAT and energy. Becky’s case is one of simple fairness. Why should British hospitality pay roughly double the VAT of comparable European countries? The Liberal Democrats would cut VAT on hospitality by 5% until April 2027 now—not after yet another review—and remove the main renewable levy from energy bills, taking more than £90 a year off the typical bill, funded by a windfall tax on the banks. Taken together, that is £270 back in the pockets of the average household over 18 months, allowing them more opportunity to buy a pint or a meal in their local pub.

Secondly, there is the issue of business rates. In January, the Government discounted 15% of the planned rate hikes for pubs, but Becky’s rateable value was hiked phenomenally before the freeze arrived, locking the damage in. The relief does nothing for shops, restaurants, cafés and the wider high street. Our ask is straightforward: the Government must deliver the full 20p discount promised to all retail, hospitality and leisure businesses. In the interim, they should keep the 75% relief and freeze the small business multiplier.

Before I end my remarks, I wish to refer briefly to the role of small breweries in our communities, such as Tap Social Movement in Kidlington, Little Ox in Freeland or Twisted Tree in Tusmore. Those small and medium-sized enterprises in the community combine a passion for independent brewing with a commitment to creating local jobs. However, in addition to the impact of pub company ties on landlords, the large brewers are locking small breweries out of our village pubs. Fewer than 40% of local pubs are open to small, independent breweries. Will the Minister encourage Ministers in the Department for Business and Trade to consider that barrier to market access? As part of the current pubs code review, will they consider a guest beer arrangement in England and Wales similar to that in Scotland?

--- Later in debate ---

[Dan Tomlinson]

I love an intervention like that one. We are looking at exactly that. Last year, in a call for evidence on how we can improve the business rate system to support investment, we set out that we would look at improvement relief. At the moment, it does give a relief if a business invests, but only for a short time. That is under active review as a result of the call for evidence, where we heard that businesses were interested in the extent to which changes to improvement relief could support them and their investment decisions. I would happily receive further representations on that from Members.

[Calum Miller]

Further to the comments from the hon. Member for Kingswinford and South Staffordshire (Mike Wood), the Minister will be aware of the way in which the pub industry is dominated by major pub companies, which often own tied pubs. That has a major bearing on the leasable value of many of these properties. Many publicans in my area tell me that that drives up their rates, even though they do not have full control over that, just as they do not have full control over their purchasing. Is the Minister working with the Department for Business and Trade to review that, and is he talking to the Competition and Markets Authority to review whether the pubco structure in our country is fit for purpose?

[Dan Tomlinson]

I thank the hon. Member for raising that issue; it is one that publicans in my constituency have raised with me as their MP. Of course, there are benefits to having a link with a major supplier, and I understand why many publicans choose that route, but it is clear that there are significant challenges, too. DBT has looked at this, and I am sure that conversations are ongoing with the Under-Secretary of State for Business and Trade, my hon. Friend the Member for Halifax (Kate Dearden), about what reforms could be made. This is not my policy brief, so I do not want to speak too far out of turn, but I totally understand the issue. I will raise it personally with my hon. Friend. I have done so in the past, after being asked to by my constituents.

On a related point, guest beers and access to the bar for guest beers in tied pubs was mentioned. DBT has met the parties involved in the beer market access review to hear their evidence directly, and it is giving due consideration to all the evidence, along with input from competition policy experts. This is under active review by the Government, and we are committed to making sure that we can have a diverse and competitive beer market. On a personal level, I hope that the Government can look really closely at this so that we can improve competition and choice, but it is being led by my hon. Friend the Member for Halifax.

As has been mentioned, in January this year we went further to support pubs, with a further 15% off their business rates bills and a real-terms freeze in business rates for pubs in the next two years of this revaluation period. That support is worth £1,650 for the average pub this year. It means that three quarters of pubs are seeing their bills either fall or stay flat this year and, as a sector, pubs will pay 8% less in business rates in 2029 than before the revaluation took effect.

Moving on from business rates, the Government recognise that pubs often serve as crucial community assets, particularly in rural communities, as the hon. Member for Meriden and Solihull East and many others have mentioned. They support local economies and communities, provide spaces for gatherings, support those in need and foster a great sense of local pride.