Government budget undermines Britain's pubs, their teams, and local communities

The Chancellor’s budget has today dealt a devastating setback for BII member’s pubs, piling on financial pressure at the very moment the sector is striving to recover, grow, and continue serving at the heart of local communities.

Despite being promised real and meaningful reform to the business rates system by the Chancellor, as a key way to deliver permanently lower bills for pubs and reduce the financial pressure they are under, the current 40% relief has been removed from April 2026, and replaced with a new multiplier, which actually increases bills for the majority of pubs.

In addition, the vast rise in rateable values for many pubs, released just this afternoon, will compound this further with significant increases.

The BII estimates these additional pressures of higher business rates, rising staff costs, and the increases in alcohol duty, will make it even harder for pubs to operate profitably.

A budget that lets pubs down

Pubs are more than businesses—they are social hubs, safe spaces for connection, and community lifelines. The Chancellor’s decisions show a profound disregard for the pressures facing publicans running small businesses, who are already battling rising energy prices and sustained food and drink inflation. Instead of reducing the unfair tax burden they face, they have been subject to yet another wave of escalating taxes and employment costs.

A budget that lets working people down

Pub operators, 75% of whom have already had cut their workforce after last year’s budget, will now be forced to make more tough decisions about their brilliant teams, who work incredibly hard to serve their customers and communities.

Increased payroll costs from the 10% rise in employer NICs in April this year, have now been put under even more pressure with the 4.1% rise in National Living Wage from £12.21 to £12.71 and the 8.5% rise in National Minimum Wage from £10 to £10.85, making it harder for pub operators to protect hours, safeguard roles, and provide progression routes. This Budget lets down everyone who work so hard in our local pubs, from the publicans working unsustainable hours for little return, to the talent of the future, who will now have their opportunities limited.

A budget that lets communities down

When a pub closes, a community loses far more than a venue—it loses a gathering place, a source of local pride, a supporter of charities and events, and often, its last remaining space, open to all.

Steve Alton, BII CEO said:

“Words cannot express how devastating this budget is for so many of our members. We have been working closely with Government, sharing the realities for our members, running vital pub businesses in every community with them.

“Award winning operators, working tirelessly in their local businesses to deliver a brilliant and essential service to their communities, will now face thousands of pounds in increased taxes – and the hard truth is that many of them just will not be able to sustain their businesses come April next year.

“These measures will inevitably force many venues to reduce hours, cut investment, and, most worryingly, cut jobs, with young people set to be hit the hardest. Pubs are one of the UK’s biggest employers of 18–25-year-olds, offering vital first jobs, training, and career opportunities. Today’s Budget threatens these essential employment opportunities in every community.

“The detail behind the headlines of this budget, will put hundreds of community pubs at greater risk, threatening local economies and the social fabric of towns and high streets across the country.

“Government simply must reconsider their position on this or face the huge and dire consequences that we have warned of over the last year, with 35% of independent pubs under threat of closure. Without meaningful support, the consequences will be felt in lost jobs, failed businesses, and weakened communities.”

Contact: molly.davis@BII.ORG

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