King Charles Backed Pub Campaign Condemns Tax Increases on Hospitality Sector

Pub is the Hub, a charitable organisation established by King Charles III in 2001 to preserve rural pubs facing closure, has joined six other industry bodies in formally protesting against Chancellor Rachel Reeves’ decision to scrap business rates relief for the hospitality sector. The group’s letter to Ms Reeves expresses significant concern regarding what it characterises as “eye-watering increases” in taxation that threaten the viability of thousands of establishments across the United Kingdom.

The organisation, founded because the monarch recognised the critical role rural pubs play as community anchors in areas where few other amenities remain, has accused the government of breaking its manifesto commitment to reform the business rates system. The decision represents a substantial departure from Labour’s stated objectives regarding fairness in the tax regime affecting small businesses and independent operators.

According to the signatories of the letter, which include the British Beer and Pub Association, UK Hospitality, and the Society of Independent Brewers and Associates, the disparity in tax treatment across sectors has reached untenable levels. Whilst online retail warehouses will experience average business rates increases of seven per cent, community pubs face increases approximately ten times greater in magnitude. This asymmetry raises fundamental questions about economic policy coherence.

The hospitality sector represents the third-largest employer in the British economy and contributes seven per cent of gross domestic product. Despite this significance, industry representatives argue that hospitality businesses shoulder a disproportionate share of the tax burden; hospitality venues remit approximately forty per cent of turnover to taxation, whilst e-commerce operators such as Amazon contribute substantially less relative to their revenue base.

Andrew Slee, chief executive of the Society of Independent Brewers and Associates, characterised the government’s policy as “catastrophically bad” and questioned whether Treasury officials had fully considered the long-term implications. He noted that many publicans cannot make strategic business decisions with confidence given the three-year phase-out period for the current relief scheme, with the rates discount disappearing entirely by 2028.

Industry forecasts predict closure of at least one pub daily throughout 2026, resulting in substantial employment losses and the erosion of community infrastructure. The pub and brewing sector generates eighteen billion pounds in annual tax revenue; consequently, accelerated pub closures may ultimately prove counterproductive for government finances. Survey evidence indicates that two-thirds of the adult population regard their local pub as essential infrastructure for combating social isolation.

The Treasury has responded by asserting that the Budget provides a 4.3 billion pound support package for the hospitality sector, reducing what would otherwise represent a forty-five per cent increase in business bills to a four per cent increase in 2026. Government representatives maintain this represents adequate protection whilst funding other public priorities.