Small business groups have criticised the government’s decision to limit business rates relief in England largely to pubs and music venues, warning that thousands of firms across retail, hospitality and leisure are being left without meaningful support.
Reacting to the announcement, Tina McKenzie, policy chair at the Federation of Small Businesses, said ministers had missed a vital opportunity to ease mounting pressure on high street operators.
“The government has passed up a critical chance to back struggling high street businesses,” she said, adding that while pubs and venues would benefit from short-term relief, many other small firms were facing steep cost increases with little protection.
Under the new arrangements, businesses outside the targeted sectors will lose a previous 40 per cent discount at the same time as facing higher rateable values following April’s revaluation and changes to the billing formula. The FSB estimates that a typical small bakery or dry cleaner could see its business rates bill rise by more than 50 per cent over the next three years.
Ms McKenzie said the structure of the relief risked placing the greatest burden on smaller operators. “The government has the power to apply full rates relief across sectors, but has chosen to exclude much of hospitality, retail and leisure,” she said. “It has also missed the chance to raise more revenue from the largest premises, instead imposing the biggest increases on small high street businesses.”
The warning comes as many firms brace for further cost pressures in April, including higher employment expenses and rising energy standing charges. Business groups say the cumulative impact is forcing some companies to delay investment, scale back operations or reduce staffing levels.
According to the FSB, some members are already reconsidering expansion plans, while others are preparing for redundancies or closures if conditions do not improve.
Ms McKenzie urged the Treasury to revisit the issue in its Spring Forecast and provide broader support. “This situation is becoming unsustainable for many,” she said. “Without substantial help, we risk seeing more empty shops, fewer jobs and weaker local economies.”
The government has argued that targeted relief is necessary to balance support for vulnerable sectors with fiscal constraints. However, business representatives say a more comprehensive approach is needed to stabilise high streets and protect small firms during a period of continued economic uncertainty.
