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the budget, explained

What Do Andy Burnham and the Budget Mean for Pubs?

For pubs · By Keggo · 7 min read

By the numbers

Pub rates relief from April

35%

More pubs paying no rates

3,500

Expected beer duty rise

+3.9%

Living wage from April

£13.21

Andy Burnham spent the summer talking about pubs more than any Prime Minister in living memory. On 28 October his Chancellor, John Healey, delivered the first Budget of the Burnham government. So did the talk turn into anything you can actually bank?

Yes for business rates, especially if you run a smaller pub in England. Not so much for everything else. Here's what changed, what didn't, and what it means behind the bar.

How we got here

Burnham was Mayor of Greater Manchester from 2017 until June this year. He won the Makerfield by-election on 18 June, Keir Starmer announced his resignation a few days later, and Burnham was elected Labour leader unopposed on 17 July. He became Prime Minister on 20 July.

Pubs were a running theme from the start. During the leadership run he told LBC he wanted a 20% cut in business rates for pubs, paid for by raising rates on warehouses and out-of-town retail parks. The idea was to shift some of the tax burden away from the high street and onto the big sheds that compete with it. Commentators quickly nicknamed it "pub-o-nomics".

Three days after taking office, on 23 July, he confirmed it. Pubs, social clubs and live music venues in England would get an extra 20% off their business rates bills from April 2027. The Budget has now confirmed the detail and added a few more things alongside it.

The good news: business rates

This is the headline, and it's a real one.

Pub relief goes from 15% to 35%. Pubs already get 15% off their bills this year. From April 2027 that rises to 35%. The Treasury estimates pubs that still pay rates will save more than £3,000 on average next year.

Around 3,500 more pubs will pay nothing at all. Small Business Rates Relief is being widened from April 2027. Full relief now applies to properties with a rateable value up to £18,000 (up from £12,000), and tapered relief up to £21,000 (up from £15,000). That's around one in ten pubs in England out of business rates entirely.

Everyone else in hospitality gets a two-year cap. Other retail, hospitality and leisure properties won't see bills rise faster than inflation for the next two years.

Who's paying for it? Partly the gambling industry. Machine Games Duty on higher-stakes machines (stakes over £1 or prizes over £100) rises from 20% to 25% from April 2027. Most pub fruit machines sit at or below those limits, so that rise shouldn't land on you. Vape shops and adult gaming centres are also shut out of the new relief.

The catches. The relief is aimed squarely at single-site pubs. Bigger pubs and multi-site operators won't see anything like full exemption. And business rates are devolved, so none of this applies in Wales or Scotland. JW Lees, the Manchester brewer with pubs in North Wales, was quick to point out the rates help "won't help in Wales".

The less good news: duty, wages and VAT

Beer duty is going up. Alcohol duty rises in line with RPI inflation from 1 February 2027. Pre-Budget reporting put that at around 3.9%, which would take the duty on a pint from roughly 50p to 52p. A couple of pence a pint doesn't sound like much, but it lands on every pint you pour. The British Beer and Pub Association said it "will undoubtedly push up the price of a pint".

Small brewers do get a boost. A £10 million a year expansion of Small Producer Relief will benefit over 2,000 small brewers and cider makers from February 2027, with the most generous discounts on lower-strength drinks. That should help keep local and independent beer competitive on the bar.

Wages go up 3.9% in April. The National Living Wage rises from £12.71 to £13.21 an hour from April 2027, and the 18 to 20 rate goes from £10.85 to £11.27. Good news for bar staff. A real cost for pubs, where labour is already one of the biggest bills.

No VAT cut, no National Insurance relief. Despite a petition passing 400,000 signatures, VAT on hospitality stays at 20%. There was nothing on employer National Insurance either. For a lot of operators these were the two asks that mattered most, which is why UKHospitality called the Budget "a small step in the right direction" but not enough.

One to watch: guest beer for tied tenants

The government plans to add a Guest Beer provision to the Pubs Code for England and Wales. That would let tied tenants put a beer of their choice on the bar, outside their pubco's list. The Society of Independent Brewers says independents currently can't sell to around 62% of the pubs in their own communities, so this could matter a lot.

It isn't in force yet. It needs new legislation and there's no start date. It also only covers tenancies under the Pubs Code, so franchise and retail partner agreements aren't included. Worth keeping an eye on if you're tied.

So what does it actually mean?

If you run a small pub in England, this is the best rates news in years. There's a decent chance you'll pay nothing from April 2027. If you do still pay, your bill should drop noticeably.

If you run a bigger or multi-site pub, the rates help is smaller and the duty and wage rises probably cancel a good chunk of it out.

If you're in Wales or Scotland, you get the duty rise and the wage rise without the rates cut, unless your devolved government chooses to match it.

If you're a punter, your pint may creep up by a few pence from February. But more small locals staying open is the bigger prize. A pub with a lower rates bill is a pub with a bit more room to put on a quiz, book a band or keep the kitchen open.

What to do now

  1. Check your rateable value. Search "find a business rates valuation" on GOV.UK. If you're at or under £18,000, you could be paying nothing from April.
  2. Check your bill next spring. Relief is usually applied by your council, but bills go wrong. Make sure the 35% and any Small Business Rates Relief show up on your 2027/28 bill.
  3. Plan for February and April. Duty goes up on 1 February, wages on 1 April. If you're going to review prices, it's easier to do it once than twice.
  4. Talk to your accountant. This is a summary, not tax advice. The details of your own bill depend on your property and your setup.

Turning savings into full nights

Rates relief buys some breathing room. What keeps a pub going is people through the door. Quiz nights, live music, the big match, a proper Sunday roast. All of it only works if the people nearby know it's on.

That's what Keggo is for. Pubs post what's on in a few minutes, and people nearby find it on the app and at keggo.app. No algorithm to fight, and no need to post five times a week to stay seen. If you run a pub, list your events on Keggo. If you just like a good night out, see what's on near you.

Sources

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