The government is set to announce a softening of the forthcoming business rate increases for pubs in England within days, following pressure from landlords and industry groups. Treasury officials indicated they will alter the calculation method for pubs' business rates, resulting in smaller bill increases. This decision comes after the Treasury acknowledged the financial strain on many pubs due to significant increases in the rateable value of their premises.

The move is a direct response to lobbying efforts, including a protest where more than 1,000 pubs banned Labour MPs from their establishments. The BBC understands that the revised rates will apply exclusively to pubs, excluding the broader hospitality sector.

In addition to the business rate adjustments, the Treasury is reportedly considering relaxing licensing regulations to permit extended operating hours and expanded pavement drinking areas. These potential changes aim to provide further relief and revenue-generating opportunities for pubs.

Chancellor Rachel Reeves, in her November Budget, reduced the business rate discount, which had been in place since the pandemic, from 75% to 40%, and announced its complete removal starting in April. This reduction, coupled with substantial upward adjustments to the rateable values of pub properties, created significant financial challenges for landlords. The exact financial impact of the revised calculation method remains to be seen, but it is expected to alleviate some of the burden on pub owners.

Industry analysts suggest that the government's decision reflects concerns about the potential closure of pubs, which are considered vital community assets. The long-term effects on the pub industry and the broader economy will depend on the specifics of the announced changes and their implementation. Further details are expected to be released by the Treasury in the coming days.