Every Labour U-turn as Starmer set to row back on pubs rate relief

Sir Keir Starmer’s time in office has been characterised by a string of humiliating U-turns – from the watering down of the government’s flagship benefits bill to a major U-turn on the controversial winter fuel cut last year.

As the chancellor gears up for another U-turn on her plans to scrap business rate relief for pubs after a backlash from the hospitality sector and Labour MPs, hereThe Independent takes a look at all the times the government has gone back on its word or let voters down since winning the election in 2024.

Rachel Reeves is planning another humiliating U-turn on her plans to scrap business rate relief for pubs after a backlash from the hospitality sector and Labour MPs.

Ministers told The Independent that the chancellor is set to change the plans she announced in the Budget amid fears that it could see the doors close on many of Britain’s pubs and restaurants.

Ms Reeves had announced a cut in rates in her Budget, but her decision to end the temporary covid relief meant establishments would pay much higher bills.

The relief was worth up to 40 per cent of rates at a maximum of £110,000 a year and was going to come to an end in April under Ms Reeves’s original plans.

After months of pressure from farmers, Sir Keir watered down plans to tax inherited farmland.

Under the plans, announced by Ms Reeves last year, farmers were to be charged 20 per cent on agricultural assets above £1m from April 2026. This triggered a storm of fury, with fears that family-run farms would be worst affected.

But last month, Labour said it was raising the threshold from £1m to £2.5m, meaning that most farms would not have to pay it.

The climbdown came after crunch talks between National Farmers’ Union (NFU) president Tom Bradshaw and the prime minister in December, following a year of protests about the measures.

Ahead of the Budget, the chancellor decided against hiking income tax despite two weeks of clear signals in public speeches that she was poised to break the party’s manifesto pledge not to do so.

With markets spooked by the sudden U-turn, reported by the Financial Times two weeks before the Budget, the cost of borrowing for the government spiked, with 10-year gilts up 12 basis points at 4.56 per cent.

Treasury sources insisted the decision had been taken because of better-than-expected economic data, but others blamed interference from Downing Street in a bid to protect the prime minister from a potential leadership challenge.

Sir Keir suffered the biggest blow to his leadership since coming into power after he was forced to abandon a key plank of his controversial benefit cuts in order to get them through parliament in July.

Just 90 minutes before voting began, ministers announced that plans to restrict eligibility for personal independence payments (PIP) – which had been the central pillar of the government’s reforms – were being dropped.

Sir Keir had already been forced into a U-turn the week before when more than 130 Labour MPs signed an amendment that would have effectively killed the bill off. Among the concessions announced then was a plan to impose tougher eligibility rules only on future PIP claimants, leaving existing recipients unaffected.

In July 2024, the chancellor announced that pensioners not in receipt of pension credits or other means-tested benefits would no longer receive winter fuel payments – a £300 payment to help with energy costs in the colder months.

After spending months ruling out a U-turn, the prime minister in May told MPs he now wants to ensure more pensioners are eligible for the payment – something he claimed has come as a result of an improving economic picture.

After weeks of speculation over what the changes would look like, it was last summer confirmed that 9 million pensioners will be eligible for the payment – a huge uplift from the 1.5 million pensioners who received the payment in winter 2024-25.

Sir Keir spent months brushing off calls for a national inquiry with statutory powers into grooming gangs as unnecessary.

As Elon Musk launched himself headlong into the debate, calling for a fresh probe into the scandal, Labour’s refusal looked increasingly unlikely to hold. But Sir Keir stood firm, and even accused those calling for an inquiry, including Tory leader Kemi Badenoch, of “jumping on the bandwagon of the far-right”.

But in yet another screeching U-turn, after months of holding out, Sir Keir in June accepted the recommendation of Baroness Casey to hold an inquiry.

In a 2022 interview, Sir Keir said: “All your working life you’ve got in mind the date on which you can retire and get your pension, and just as you get towards it, the goalposts are moved and you don’t get it, and it’s a real injustice.

“We need to do something about it. That wasn’t the basis on which you paid in or the basis on which you were working.”

But, in a familiar change of tune since becoming prime minister, Sir Keir last year sent his work and pensions secretary out to tell Women Against State Pension Inequality, Waspi women, they would not be getting any compensation.

To complicate matters further, in November, the government announced it would revisit a decision to deny the Waspi women payouts.

Ministers claimed that evidence that was not shown to the then work and pensions secretary, Liz Kendall, when she made the decision had since come to light and needed to be considered.

Labour’s pre-election manifesto promised not to increase national insurance.

It stated: “Labour will not increase taxes on working people, which is why we will not increase national insurance, the basic, higher, or additional rates of income tax, or VAT.”

But, Sir Keir and chancellor Ms Reeves used the ambiguity around whether they meant employer or employee national insurance contributions to steamroll the pledge at Labour’s first Budget in power.

The pair argue that they only promised to keep employee contributions frozen and instead landed firms with a 2 per cent increase to employer national insurance contributions.