BII members disappointed as budget fails to deliver

BII members have been clear and consistent with Government on the realities for their local pub businesses, as they continue to face a huge tax burden, limiting their ability to invest in their teams and thrive instead of survive.

The Chancellor promised “breathing space on the cost of living and the cost of business” and “innovation and growth in every postcode”. But for many pubs, today’s budget delivers neither.

The British Institute of Innkeeping (BII) said its members running pubs across the UK will be disappointed that today’s budget did not acknowledge the huge additional burden that rising wages and duty on alcohol will place on their essential community businesses.

The Prime Minister’s action to acknowledge the huge social value of pubs by making a 20% cut to business rates bills for pubs in England from April 2027 for two years was very welcome. His “first step”, delivering approximately a £1,100 saving for the average pub will now be wiped out by the further increases announced in the budget to the National Living Wage and National Minimum Wage. This will cost pub employers £1,000 more to pay every full-time member of staff from April 2027. The 3.9% rise was lower than expected, particularly for 18 to 20-year-olds, but the extra cost will still be incredibly difficult for pub operators to absorb.

Today’s rise in the threshold at which pubs begin paying business rates, from £12,000 to £18,000 rateable value (RV), is also welcome. It means 3,500 further pubs will pay no business rates, but many of those were only brought into scope at the last revaluation, with the steep rises in RVs in April 2026.

Despite this action, many pubs feel they are just standing still, unable to invest and grow their teams and businesses, and the rise in wage and duty costs will inevitably mean higher prices at the bar, or a loss of further employment opportunities, particularly for young people.

Steve Alton, BII CEO, said:

“BII members running pubs across the UK will be hugely disappointed. This Government has recognised the vital contribution pubs make in every community, but this budget does little to reduce the cumulative tax burden holding them back.

“Even the smaller increase in the National Living Wage means an average of £1,000 more for every full-time member of staff from April 2027. With only 1-in-4 pubs making a profit in 2026, any rise in costs is a huge challenge. With over 40p in every £1 spent in pubs going to the Government in tax, many of our members are already at breaking point, understaffed, covering jobs themselves and working upwards of 80 hours a week to keep going.

“Even with a strong summer of trading, profitability is being impossibly squeezed. Our members have been consistent in what will make a real difference. They need a significant reduction in the overall tax burden they are facing, with VAT brought in line with other European countries the simplest and most impactful step. Pubs can quickly deliver investment, skilled jobs and growth in every postcode.

“The Prime Minister said pubs ‘need to know that the cavalry is coming’. Today, it simply didn’t arrive. This Budget was a missed opportunity to support growth, employment and tangible social value, and without further urgent support, many of our nation’s pubs in every postcode will simply not be able to survive and be lost to their communities.”

BII Ambassadors have also given their reactions to today’s Budget:

Miranda Richardson, The Squirrells, Duston said:

“Once again, I’m left asking what this Budget actually does for independent operators like me. I want to pay my staff well, reward my managers properly and continue investing in my pub, but every additional cost has a knock-on effect.

“We cannot keep expecting small businesses to absorb these pressures indefinitely. Pubs are employers, community hubs and contributors to the local economy, but we need more than warm words about their importance. We need a Government that makes it financially viable for us to thrive, not simply survive.”

Mark Wrigley, Atlas Bar, Manchester said:

“This budget was a missed opportunity by Andy Burnham to show some real intent to ease the burden that the Labour party have imposed on the Hospitality sector. He has failed to grasp the clear messages of what is required to unleash our sector’s ability to employ more young people.

“Instead, we are in a state of stasis, unable to move forward, invest and grow. We will continue to hold the line and look to contract to save cash, rather than be bold and seek to grow. Disappointing.”

Eamonn England and Arina Piskunova, The Windsor Castle, East Finchley said: 

“The VAT issue remains very much the same, employment costs continue to rise, and although we welcome the pledges on business rates and an option for some tied tenants to go free of tie on one beer, the bigger picture is unclear.”

Justine Bedford, The Royal Dyche, Burnley said:

“Really disappointed. I was genuinely excited when Andy Burnham took over from Keir Starmer. I felt he had a good understanding of what our industry needs and a genuine desire to support our businesses. Pubs are at the heart of our communities. They create places where people connect, where friendships are built and where local events can thrive. They bring people together and play such a vital role in keeping our communities alive.

“The government needs stop taking our industry for granted. It’s time to listen to the people on the frontline and deliver practical support that protects jobs, helps strengthen our local communities and gives our pubs a fair chance to survive. How many more pubs need to close before they listen?”

ENDS

Notes to the editor:

About the British Institute of Innkeeping:

The BII is the leading independent licensee support organisation for individuals working in hospitality, with over 13,500 individual members running premises across the UK - predominantly tenanted, leased, managed and freehold pubs. The organisation provides expert helplines, online business support, and guidance on key industry issues, and savings on a range of supply deals for its members, keeping pubs thriving in the heart of every community.

For further information please contact:

Molly Davis

Head of Communications

Mob: 07539 377752

Email: molly.davis@bii.org

Third-party news items are published as received for informational purposes. Publication does not imply endorsement by the Guild. Please use the contact details within the post for any enquiries.