Prime Minister Sir Keir Starmer is facing growing internal resistance over the government’s planned increase in business rates, due to take effect on 1 April, Sky News understands. Senior figures within cabinet are said to be increasingly uneasy about the move, raising the prospect of a significant internal revolt.
According to Sky News deputy political editor Sam Coates, there is “ongoing cabinet-level opposition” to the hike, with several of Chancellor Rachel Reeves’s colleagues unhappy about the policy. The changes were announced in November’s budget and include a shake-up of how business rates are calculated, introducing a new band for retail, hospitality and leisure businesses.
The reforms will bring an end to the business rates relief scheme introduced during the COVID-19 pandemic in 2020. While the new rates are lower than pre-pandemic levels, industry groups argue they do not go far enough and unfairly target sectors with physical premises such as shops, restaurants and pubs, unlike online-based competitors.
Sky News also reports that the government has warned business leaders against mounting public protests if they want concessions. Sources claim ministers have urged businesses to pursue quiet negotiations, citing the example of farmers who recently secured changes to inheritance tax thresholds after months of demonstrations — a comparison some insiders have dismissed as misleading.
Sam Coates said the warnings amount to an implicit threat, suggesting that aggressive public campaigning could reduce the chances of securing support. He added that the situation does not reflect a government acting “from a position of strength”.
The row comes as Sir Keir prepares to travel to Paris later today for talks with European leaders as part of the Coalition of the Willing, amid wider international tensions. Domestically, however, the business rates dispute risks becoming an early test of Labour’s unity in government, just months before the reforms are due to come into force.