Labour MPs are urging party leader Sir Keir Starmer to reconsider planned reforms to business rates, citing concerns about the potential for widespread pub closures and damage to the hospitality sector. The call to action comes as Covid-era business rate relief is set to expire in April, prompting warnings from the pub industry about the financial strain on businesses.

At Prime Minister's Questions, Rachael Maskell, Labour MP for York Central, pressed Starmer to urgently review the proposals, emphasizing the need to "avert a crisis" on the High Street. Maskell's concerns reflect anxieties within the Labour party regarding the impact of the reforms on local businesses and economies.

The government, according to Prime Minister Rishi Sunak, is engaged in discussions with the industry to explore potential support measures. However, the planned reduction in business rate discounts, initially scaled back by Chancellor Rachel Reeves in her November Budget from 75% to 40%, and the complete elimination of the discount from April, have fueled concerns.

While the government has offered some relief by reducing the "multiplier" used to calculate business rates, the Treasury's readjustment of the rateable values of commercial properties has created a situation where some businesses face higher overall bills. This revaluation process, intended to reflect current market conditions, has inadvertently increased the financial burden on certain sectors.

The current system of business rates, a property tax levied on commercial properties, has long been criticized for disproportionately affecting brick-and-mortar businesses compared to online retailers. The debate over business rate reform highlights the ongoing challenge of balancing the need for government revenue with the desire to support businesses and promote economic growth. The situation remains fluid, with industry stakeholders closely monitoring government policy and advocating for measures to mitigate the potential negative consequences of the upcoming changes.