Pub and hospitality operators have given a mixed verdict on Chancellor John Healey's first Budget, welcoming rates relief but warning it will not halt closures and job losses. Delivered on 28 October 2026, the Budget raises the small business rate relief threshold for retail, hospitality and leisure businesses in England from a rateable value of £12,000 to £18,000, which the government says will take 70,000 more businesses out of rates altogether. Larger eligible venues get a real-terms rates freeze, and small alcohol producers receive an extra £10 million a year in duty relief.

Why operators say the relief falls short

The sector's loudest complaint is what the Budget omitted: no hospitality VAT cut, despite a petition signed by more than 400,000 people seeking a fall from 20% to 10%. Queen of Cups chef-owner Ayesha Kalaji told The Morning Advertiser that the rates measures were "not what we asked for" and would not "turn the tide" of closures, while Michelin-starred chef Tommy Banks called the Budget "incredibly frustrating", saying many operators are busy yet still struggle to make their businesses pay. The Budget raises the National Living and Minimum Wages by 3.9% from April 2027 and alcohol duty in line with inflation from February, adding to cost pressures.

A first step, say the trade bodies

UKHospitality struck a more positive note, with chief executive Allen Simpson calling the relief "a first step towards fairness" and the first Budget in several years to deliver positive news for hospitality, while insisting the VAT campaign must go on. The Institute of Hospitality likewise described a mixed picture, noting that the effect will vary by business size and structure. Whether the relief steadies the sector will become clearer as the rates changes take effect from April.

Sources: The Morning Advertiser, The Staff Canteen, Institute of Hospitality.