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Labour MPs Call for Halt to Business Rate Rise for Music Venues

LONDON – Chancellor Rachel Reeves is facing a significant internal challenge as nearly 50 of her own Labour MPs have formally called for a halt to a forthcoming business rates increase, warning it poses an "existential threat" to the UK's grassroots music venues and recording studios. The move intensifies the pressure on the Treasury, which is already grappling with a wider backlash from the hospitality sector over rising costs.

In a letter coordinated by Culture, Media and Sport Committee member Anneliese Midgley and seen by the BBC, the backbench MPs urge the Chancellor to cancel the April rate hike. They argue that a recent revaluation of business rates could see bills for music venues skyrocket by between 45% and 275%, a surge many operators say they cannot survive.

The letter represents a direct appeal from within the party to protect a culturally and economically vital sector on the brink of financial crisis. It highlights a growing rift over the government's fiscal policy as it transitions away from pandemic-era support measures.

A Perfect Storm of Rising Costs

The impending financial crunch for music venues is the result of two simultaneous policy shifts: a revaluation of property-based taxes and the withdrawal of Covid-related financial aid.

Business rates are taxes charged on most non-domestic properties, calculated based on the property's "rateable value." A revaluation, effective from April, has reassessed these values for the first time since 2017, leading to sharp increases for many venues in areas with rising property prices.

Compounding this is the phasing out of pandemic support. In her November Budget, Chancellor Reeves scaled back the business rate discount from 75% to 40%. The MPs' letter highlights the critical next step: the complete elimination of any discount from April, creating a financial cliff-edge for businesses.

• The Revaluation Shock: The letter states, "Many of us have been contacted by constituents in recent months who use and run these critical music spaces, explaining that they will be severely impacted by the 2026 business rates revaluation." The dramatic increase in rateable values is the primary driver of the projected bill hikes.
• The Support Cliff-Edge: The move from a 75% discount to zero in just over a year has left businesses with little time to adapt. Operators argue that while the pandemic may be over, its economic aftershocks—including inflation, high energy bills, and changed consumer habits—are still being acutely felt.
• A Call for Reform: The MPs are not just asking for a temporary reprieve. The letter explicitly asks the Chancellor to cancel the April increase "until a new and less damaging method of valuing music venues can be devised," signaling a push for fundamental, long-term reform of the business rates system for the cultural sector.

Hospitality Sector in Revolt

The pressure from Labour's backbenches does not exist in a vacuum. It is part of a much broader campaign by the UK's beleaguered hospitality industry, which feels it is being unfairly burdened as the Treasury seeks to restore public finances.

In a dramatic sign of protest, an estimated 1,000 pubs have banned Labour politicians from their premises. This action was taken in response to the double impact of the business rates revaluation and the withdrawal of Covid-era support, which publicans argue will force many to close.

The Chancellor is understood to be working on a support package specifically for pubs, expected to be unveiled imminently. However, this has sparked concern among MPs and the wider industry that the support will be too narrowly focused.

• Fears of Exclusion: Many Labour MPs, as well as opposition politicians, are worried that any support package that singles out pubs will exclude other vital parts of the hospitality and night-time economy, such as hotels, restaurants, and the live music venues at the heart of the current appeal.
• Push for a Broader U-Turn: The letter from the Labour MPs is a clear signal that a pub-centric solution will not be enough to quell discontent. They are pressing for a wider U-turn that acknowledges the interconnected nature of the hospitality and cultural sectors.
• Recording Studios Also at Risk: The appeal extends beyond performance spaces. The letter also calls for more support for recording studios, a crucial part of the music industry's ecosystem. It claims that as many as half of these studios are under threat from the same rates revaluation, jeopardizing the UK's status as a global hub for music production.

What Happens Next?

All eyes are now on Chancellor Reeves and the Treasury. Her response will not only determine the fate of hundreds of small businesses but will also serve as a key test of her ability to manage internal party demands against her broader fiscal objectives.

The core of the Chancellor's dilemma is balancing the need for tax revenue to fund public services against the risk of triggering widespread business failures in a high-profile sector. Allowing a wave of closures in the music and pub industries would carry a significant political cost.

The coming weeks will be critical. The industry is awaiting the details of the promised support package for pubs, which will be scrutinized for its scope and generosity. The letter from her own MPs ensures that the plight of music venues will be a central part of that debate.

• The Treasury's Position: The Treasury, which has been approached for comment, typically defends business rates as a crucial source of funding for local councils and essential services. It is likely to argue that blanket support measures are no longer fiscally sustainable.
• Industry Lobbying: Sector bodies like the Music Venue Trust will undoubtedly use this high-profile political intervention to intensify their lobbying efforts, providing further evidence of the potential economic and cultural damage.
• The Path to Reform: The call for a "new and less damaging method" of valuation is the most significant long-term proposal. Observers suggest this could involve moving towards a model based on a venue's turnover rather than its property value—a system that would better reflect a business's ability to pay, but which would represent a complex and fundamental overhaul of commercial property taxation. The Chancellor's willingness to engage with this idea will be a key indicator of the government's long-term strategy for the sector.