Business Rates: Retail, Hospitality and Leisure

Lindsay Hoyle Excerpts

Monday 19th January 2026 Commons Chamber

[Dan Tomlinson]

The shadow Chancellor said that I was dragged to the House, but that is very much not the case; I am very happy to take questions from him and from Conservative and Government Members.

[Mr Speaker]

May I help the Minister a little bit? I did grant this urgent question. This discussion would not have happened if I had not done so. I am not quite sure that his statement and mine are compatible.

[Dan Tomlinson]

I fully respect your decision to grant an urgent question, Mr Speaker. It was—[Interruption.]

[Mr Speaker]

Order. I certainly do not need any help from Opposition Members.

[Dan Tomlinson]

It was the word “dragged” that I had some objection to. I did not mean to comment on your decision to grant the urgent question, Mr Speaker.

Let me answer some of the questions asked by the shadow Chancellor. The key thing is that we are implementing the revaluations that his Government set in train. Treasury Ministers holding a similar role to mine a good few years ago undertook the process for the revaluations that will be in place from April 2026. Those are set on property values from 2024.

Yes, there is an unwind from the pandemic, in terms of increases in businesses’ property values as a result of businesses recovering from the pandemic. We were aware of the impact of the valuation, and of the fact that the previous Government did not have any plans whatsoever to extend the temporary pandemic support. We extended it for one year, and over the course of the next three years we are phasing it out, with the support of Government decisions worth £4.3 billion, and our transitional relief scheme.

I will not comment on speculation, but the shadow Chancellor referred to borrowing. Over the course of this Parliament, we will see the fastest reduction in borrowing of any G7 economy. Borrowing is set to fall in every single year of the forecast because of the decisions that the Chancellor took at the Budget. We have doubled our headroom against our fiscal rules, and we are seeing a warm response from private sector investors and the markets as a result of the decisions that the Government have taken.

[Mr Speaker]

I call the Chair of the Treasury Committee.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Many pubs in my constituency are seeing eye-watering increases in business rates. We know from the Valuation Office Agency, which gave evidence to the Treasury Committee last week, that the formula used is the same formula that has been used for 20 years. This should have been no surprise, as the shadow Chancellor said, yet we learned in that meeting that more than 2,000 pubs have had their business rates doubled. This Government came in with a mission to transform business rates, and they came in part way through a valuation cycle. Aside from the question of what will happen to the hospitality sector, where are the plans for the reform of business rates in the medium to long term?

[Dan Tomlinson]

I thank my hon. Friend for her leadership of the Treasury Committee. At the Budget, we set out the first significant fundamental reform of the business rates system that we have ever seen. For the first time, there is a very significant divergence in the tax rate paid by businesses on our high streets and by the very largest businesses, including online giants. The tax rate is around 13p lower for high street businesses than it is for the largest businesses. That is a 25% reduction, which cost around £1 billion. It is a £1 billion reduction for businesses on the high street, paid for by higher taxes on those who can most afford it.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Daisy Cooper (St Albans) (LD)]

These business rates changes will hammer high streets, and with the jobs tax on top, many businesses have already decided to shut up shop. Getting data out of the Government has been like getting blood from a stone; every question I am about to ask, I have asked before, but let me try again. Why did the Government set the expectation that they would reduce the business rates multiplier by the full 20p discount for retail, hospitality and leisure, and then not use the maximum power that they gave themselves to do that? Do they accept that lots of small businesses have made investment and hiring decisions based on the expectations that this Government set, and will they apologise to those businesses for raising their expectations and then dashing them? Can the Government finally tell us how many business premises have been brought into paying business rates for the first time?

Last Tuesday, we learned that that the Valuation Office Agency had sent the Treasury data drops regularly over the past 12 months. What did Ministers know, and when? The VOA also confirmed that it had told the Treasury that more than 5,000 pubs would see their business rates double, so how is it possible that Ministers did not know that this would happen? Finally, whatever the Government are considering, can they confirm that it will apply to all hospitality businesses and not just pubs, and will they consider our fully costed Liberal Democrat plan for an emergency VAT cut for hospitality?

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[Several hon. Members rose—]

[Mr Speaker]

Order. We are going to run this session for an hour from the start, so it will end at 4.40 pm. If the Minister can help Members to get in, that will be really useful.

[Monica Harding (Esher and Walton) (LD)]

Perhaps the Prime Minister, on his much-heralded cost of living tour, might like to visit the pubs and cafés in my constituency of Esher and Walton, if they let him in. They are being squeezed to breaking point by this Government, while constituents watch their wallets because of tax rises. Hospitality venues are the lifeblood of my high street and create the jobs we need for young people. Will the Government act now by fully using business rates relief and introducing an emergency VAT cut for hospitality to protect jobs, pubs, restaurants and the lifeblood of my constituency?

--- Later in debate ---

[Mark Pritchard (The Wrekin) (Con)]

The Minister does not have to defect to Reform to get a pint, and I am very happy to show him round the pubs in Shropshire’s villages and market towns. I will show him that pubs are not just about having non-alcoholic and alcoholic drinks; they are often at the very heart of village communities. Local charities, the women’s institute, pensioner groups and others meet there because the post office or the shop has closed. May I genuinely invite the Minister to get out of London—out of the beltway and out of the bubble—and come to Shropshire? He will not be allowed inside pubs, of course, but I can bring him a pint outside when the warmer weather comes. I appeal to him to join me in Shropshire and hear at first hand what pub landlords and owners have to say.

[Mr Speaker]

We’re at last orders. Come on, Minister.

[Dan Tomlinson]

I do not know what the current Government position is on whether pubs are allowed to sell takeaway pints, but I hope that would be allowed in Shropshire if I were to visit. However, I have about 30 pubs in my north London constituency, and I have many conversations with publicans both locally and in my role as Exchequer Secretary.