Political U-turns come in various forms, and as news of the latest government reversal drifted out, this one connected to the plight of the pub trade, Labour MPs could take comfort in one thing: at least it happened quickly.
While last summer’s change of stance on benefit reforms was forced on Downing Street by open rebellion, and those for pensioners’ winter fuel payments and inheritance tax for farmers followed months of dissent, the decision to revisit decisions on business rates took a matter of weeks.
“It would have been better if we hadn’t done it at all, but at least it was reversed quickly,” said one MP about the promised new look at business rates valuations, which the hospitality trade say would have seen major increases for pubs and hotels.
“Maybe they are learning. And to give the government credit, they have been in proper listening mode over this. It was the right decision, and it’s not a sign of weakness to see there is a problem.”
That listening mode was most likely helped along by the fact that the message from the pub industry was relayed to the Treasury by a well-organised group of 30-plus Labour MPs, who had planned to table an amendment to the post-budget finance bill if nothing was done.
For all that the change of stance has restored harmony (subject to the specifics of the plan), many Labour backbenchers are nonetheless also asking: why all this again?
We are little more than a fortnight since the last U-turn, with changes to the revised thresholds for inheritance tax for farms announced quietly two days before Christmas. This followed months of pressure from campaigners, including a series of noisy, tractor-based protests outside parliament.
Many of the rural Labour MPs who had been on the receiving end of worries about inheritance tax had also faced lobbying over the plight of local pubs – and in some cases returned to their constituencies over Christmas to find themselves barred from them.
There is an extent to which the latest about-turn is slightly difficult from the others. The consequences of Rachel Reeves’ budget decision to scale back Covid-era business rate discounts, when combined with major increases in the rateable value of hospitality businesses, had seemingly not been fully appreciated in advance.
“The message of the budget was that the plan was to help pubs and smaller shops, and make people like supermarkets pay more,” one MP said. “So this caught them by surprise. But they should have been able to predict it.”
Some backbenchers see a common thread in all four major U-turns: a Treasury endeavouring to save money and not fully thinking through the consequences.
“It is now pretty obvious that most of our political mistakes have originated in the Treasury, and this is just the latest,” one MP said. “There appears to be no political nous or sense-checking in decisions there. Did anyone go through the effect of the business rates changes before they were announced?”
Another MP said this pattern of pushing through decisions which provoked an uproar was indicative of a government with the habit of making decisions without proper consultation.
“When the government thoroughly consults ahead of producing policy, it goes really well,” they said. “However, whenever it presses ahead with plans without the engagement of people with lived experience, or backbench MPs with their finger on the pulse, it ends up in the wrong place. I very much hope government is willing to listen and engage more, so it gets things right first time.”
