High streets under pressure: South Devon MP says tax rises are pushing businesses to breaking point

This year has picked up from where 2025 left off and continued to be incredibly difficult for business.

Within the first month of the year, a spate of closures happened across South Devon, from three beloved cafes and restaurants in Kingsbridge to Busters in Brixham – although I’m aware at least one was due to retirement and not entirely the dire conditions businesses are currently faced with.

Before I delve into how politics may have contributed to this situation, I want to begin by paying tribute to these businesses, their owners, and staff for all their hard work and contributions to the local community over the years. I know I speak for many when I say they will be sorely missed.  

These closures are, however, not isolated incidents. In 2025 an average of one pub shut every month, a devastating loss for local communities across the UK. Amid these closures, the headlines were relentless: ‘Reeves puts nail in coffin of high street’, read one. ‘A red box of broken promises’, another.  

READ NEXT: Devon pub owner says new government support is ‘not enough to save the sector’

These headlines come from the Daily Mail and Telegraph, respectively, outlets I rarely agree with. But on this point, they are absolutely correct and not alone in expressing it. Ever since the 2024 budget, the message I have heard from every business, no matter the sector, is the same: Labour’s tax policies are pushing us to the brink.  

This was reiterated again at a post-budget business networking event I held last month. Despite attendees stretching sectors from renewable energy to hospitality, all expressed consternation with the current tax environment, with rises in business rates a particular source of concern.  

Weeks before, at the budget, the Chancellor had proudly proclaimed that over 750,000 retail, hospitality, and leisure properties would have permanently lower business rates thanks to her policies. Eyebrows were immediately raised. Hours later, trade bodies like UKHospitality were rubbishing the claim. 

Thinking of this saga I’m reminded of Wes Streeting’s suggestion that the government’s new year’s resolution should be getting things right the first time – there is clearly still a long way to go on that! 

Fast forward to Tuesday 27th January and the government U-turned. With businesses facing huge tax rises, the government announced a support package for pubs and music venues.  

This is a good start if long overdue – but where, you might be asking, is the support for other businesses? Business rates impact most sectors – the clue is in the name, after all. So where is the support for cafes, restaurants, hotels, and all the other small businesses that make up the backbone of our communities?  

Those three industries alone represent six out of seven of the 3.5m jobs in the overall hospitality sector and they are still facing bankrupting business rates rises – 115% for a hotel in England, for example. This is clearly unsustainable, especially coming on the back of the rise in employer national insurance and wages. 

The Liberal Democrats believe the government must do the right thing here and press ahead with the full 20p discount it promised every retail, hospitality, and leisure business, and back our call for an emergency VAT cut for hospitality until April 2027 to save our high streets.  

In its own manifesto, Labour promised to do away with the whole business rates system, arguing it placed “an undue burden on our high streets”. In office, they have continued with the current structure that has seen many high streets enter a downward spiral. This incrementalism and managed decline offered by this government is a far cry from their election promise of change. What a wasted opportunity to create growth and positivity in our economy.

If you wish to contact me about this or another issue you are facing, please do so at: caroline.voaden.mp@parliament.uk   

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