A significant rebellion is developing within the UK cabinet over the impending increase to business rates, with ministers in open opposition to the Chancellor's plans. Simultaneously, the hospitality industry has reportedly been cautioned by the government against public protest if it hopes to secure any concessions.
Ministers Unhappy as New Rates Loom
Sky News can reveal there is "ongoing cabinet-level opposition" to the business rates hike announced by Chancellor Rachel Reeves. Deputy political editor Sam Coates disclosed on the Politics at Sam and Anne's podcast that ministers are "not happy about it." The changes, set to begin in April 2026, mark a major shake-up in how the tax is calculated.
In the November 2025 budget, Reeves confirmed the end of the pandemic-era relief scheme first introduced in 2020. A new band for retail, hospitality, and leisure businesses will be created. While the sector acknowledges the new rates are lower than pre-COVID levels, it argues they do not go far enough. The core issue is that the tax is based on rateable property values, which disproportionately impacts businesses with physical premises like pubs, restaurants, and shops, unlike online giants.
Pubs Ban MPs as Industry Voices Anger
The discontent has already spilled over into direct action. Several pubs have barred Labour MPs in protest at the changes. High-profile chef Tom Kerridge, who runs four gastropubs, highlighted the severe impact, stating the rateable value for his venue, The Coach in Marlow, had soared by 100% from £50,000 to £106,000. He labelled this rise "unsustainable."
Prime Minister Sir Keir Starmer has conceded the industry will struggle, telling LBC that while overall rates would eventually be lower, revaluation meant some bills would rise. He pointed to transitional relief and potential "licensing freedoms" as areas the government is examining.
Government's Warning to Business
Despite the visible protests from the hospitality sector, Sky News understands the government has been warning businesses against campaigning publicly. An industry insider said the message was that if they wanted help, they should emulate farmers, who were portrayed as "good, fair negotiators" who "didn't make a big campaign of it." This narrative was directly contradicted by Sam Coates, who noted the months of tractor protests that blocked Whitehall in 2025.
Coates interpreted the government's stance as a threat: "'Stop being so aggressive with your briefing if you want anything at all for your industry.'" He added this approach did not suggest a government operating from a position of strength.
The Valuation Office Agency has stated that an increase in rateable value does not automatically mean an equivalent rise in bills, citing available support schemes including:
- A £3.2bn transitional relief scheme for the largest ratepayers, including airports and hospitality.
- £500m to assist the smallest businesses.
- A £1.3bn expansion of the Supporting Small Business scheme for those transitioning from the old relief.
The standoff sets the stage for a tense period ahead of the April implementation, with internal government divisions adding to the political pressure.
