Conservatives announce 100% business rates relief for high street businesses

Today [Monday 6^th October 2025] the Conservative Party is announcing that it will introduce a permanent 100% business rates relief for the Retail, Hospitality and Leisure (RHL) Sector as part of a plan to build a stronger economy. 

250,000 businesses will benefit from the relief, delivering substantial savings that can then be reinvested in better premises, more staff and lower prices. 

The tax relief will cost £4 billion a year and is funded from the £47 billion savings package announced by Shadow Chancellor Sir Mel Stride today. 

These changes will bring businesses back to the high street, reinvigorating town centres and driving growth. 

The relief will allow businesses to pass savings onto consumers, meaning cheaper gym memberships, cheaper meals and cheaper pints for punters. 

It will also help protect and create jobs in the hospitality sector, reversing the decline seen under Labour. 89,000 hospitality workers have lost their jobs since the Budget – more than half of all UK job losses. 

This will particularly help young people, many of whom will be entering the workforce for the first time with jobs in the RHL sector.  

RHL businesses have been particularly hard hit by Rachel Reeves' £25 billion Jobs Tax, which has driven up the cost of staff significantly. 

These businesses are also facing growing energy bills under Labour, adding further pressure in line for even higher costs thanks to Labour's Unemployment Bill. 

Labour cut the 75% relief on business rates for non-domestic properties, such as RHL sector businesses, at the Autumn Budget 2024, seeing bills rise by 140% this year. This left the average shop facing rates jumping from £3,589 to £8,613 per year, whilst pubs will see a new average bill of a staggering £9,451 per year.  

That is why the Conservatives are announcing new action to safeguard the high street and deliver the right conditions for businesses and economic growth. 

Sir Mel Stride MP, Shadow Chancellor, said: 

“Our high streets and town centres have been battered by Labour. The increases in the Jobs Tax and energy bills have hit them hard, and pubs and shops have seen their business rates bills more than double. We want to see high streets thriving again. Pubs are vital centres of community life, but they are closing on a huge scale.   

“We will take decisive action to save small businesses and revive our high streets, lifting a quarter of a million shops and pubs out of business rates altogether.” 

“Rachel Reeves claims to care, but her actions speak louder than words, and businesses have been left reeling as the Chancellor cut the rates relief put in place by the Conservatives, and plans to abolish it altogether next year.” 

Andrew Griffith MP, Shadow Business and Trade Secretary, said: 

“Labour do not understand business. That much is obvious from their disastrous business tax grab. 

“No sector has been hit harder by Rachel Reeves than hospitality – and we all feel the knock-on effects in higher prices, pub and restaurant closures, and empty high streets. 

“Our 100% business rates relief will bring an enormous boost to struggling hospitality venues decimated by Labour and help to reinvigorate our town centres. 

“Unlike Labour, the Conservatives are on the side of small businesses, which are key to delivering a stronger economy.”  

ENDS 

Notes to Editors 

Our policy: 

·                We would introduce a permanent 100% business rates relief for the Retail, Leisure and Hospitality (RHL) Sector. 250,000 businesses will benefit from the relief, delivering substantial savings that can then be reinvested in better premises, more staff and lower prices (HMT, Press Release, 13 November 2024, link). 

·                The policy will cost £4 billion. In 2023-24 the 75 per cent relief for retail, hospitality and leisure (RHL) sectors cost £2.4 billion a year¹, and in 2024/25 the relief was expected to cost 2.65 billion². At a rate of 100 relief on the same basis and uprating it to 2029/30 based on OBR forecasts for total business rates receipts we expect this policy to cost £4 billion a year. 

The retail, hospitality and leisure sectors are important to our community and economy: 

·                Evidence shows that high street businesses have an important wider role in community life and social capital. Onward's report The State of Our Social Fabric said: ‘People notice the state of their high streets, the quality of their bus and train services, the investment in their roads or roundabouts, and equate physical disrepair with social decay' (Onward, The State of Our Social Fabric, 11 September 2020, link). 

·                The retail, hospitality and leisure sectors employ 5.8 million people.According to the Office for National Statistics, accommodation and food services employs 1.88 million people and 1.1 million people work in arts, entertainment and recreation. According to the British Retail Consortium (BRC), retail employs 2.8 million people (Nomis, Workforce jobs by industry, June 2025, link; BRC, Retail in numbers, accessed 6 October 2025, link; ONS, Employment by industry, 12 August 2025, link). 

Labour's choices have hit hospitality venues hard: 

·                Labour's first budget halved business rates relief for retail, hospitality and leisure businesses. Labour have cut Retail, Hospitality and Leisure relief from 75 per cent to 40 per cent, increasing rates for eligible businesses by 140 per cent (HMT, Autumn Budget 2024, 30 October 2024, link).  

o        This has caused the rates for the average pub to increase from £4,017 to £9,642 a year, according to independent valuers Colliers (Beer Today, 22 January 2025, link). 

·                Labour's first budget launched a £25 billion tax raid on British business. Labour increased employer National Insurance contributions by cutting the threshold from £9,100 to £5,000 and increasing the rate from 13.8 per cent to 15 per cent, breaking commitments made throughout their general election campaign and their manifesto which will increase the cost of employment by £900 for the average worker (IFS, Autumn Budget 2024, 31 October 2024, link). 

·                At the same time, Labour's Employment Rights Bill will burden businesses with over 70 radical 1970s-style regulations, imposing £5 billion of costs. Labour's Employment Rights Bill will put over 70 new 1970s regulations or requirements on businesses – at a cost to business of £5 billion a year (The Labour Party, Plan to Make Work Pay, 24 May 2024, link; The Daily Telegraph, 24 May 2024, link; DBT, Employment Rights Bill, October 2024, link; Electoral Commission, 11 November 2024, link). 

Over 1,100 pubs and restaurants have closed since the Autumn Budget with 89,000 hospitality workers losing their jobs. Analysis of ONS data by Hospitality shows the sector accounted for 53 per cent of all job losses in the UK. Furthermore, 1,122 hospitality venues have closed since the Budget, equivalent to two every single day (Conservative Post, 5 August 2025, link; UKHospitality, Workforce, accessed 2 September 2025, link; BBC News, 25 August 2025, link). 

As Labour's business rates reform looms, the hospitality sector is at breaking point: 

·                Rachel Reeves said that Labour will reform ‘crippling' business rates, but the dire fiscal situation means they will likely once again treat businesses as a cash cow. Rachel Reeves promised to ‘reform the system of business rates, to make a level playing field, to improve things for high street businesses and small businesses who face a crippling burdens and in many cases from business rates' However, fiscal constraints – including expected downgrades to growth and productivity forecasts in the autumn – mean that Rachel Reeves is likely considering substantial tax rises on business (BBC Radio Leeds, 17 May 2024, archived). 

·                More than 200 leading restaurant, pub and hotel companies, including Stonegate, Greene King and Wetherspoons wrote to the Chancellor warning the Budget will force companies to cut jobs and reconsider investment. The letter said: ‘Businesses would be reluctantly forced to raise prices by 6-8 per cent, fuelling inflation, yet could not realistically do so as our customers are at the end of their ability to pay more. Instead, many businesses would have to reconsider investment and drastically cut jobs and reduce the hours of team members' (UK Hospitality, Press Release, 10 November 2024, link). 

·                Kate Nicholls, CEO of UKHospitality, said that hospitality venues are already closing earlier because of the Jobs Tax. Kate Nicholls, CEO of UKHospitality said: ‘Pubs are being forced to tighten their belts to weather this tax storm and many are choosing to close on quieter days, or to operate on shorter hours to make ends meet. Not being able to trade at full capacity hits a pub's bottom line but it also makes it more difficult for communities to pop in for a drink or to eat out with friends and family. That is the custom that our pubs desperately need' (The Daily Telegraph, 14 April 2025, link).