Chancellor John Healey's recent Budget has elicited a mixed response from businesses in Devon and Cornwall, with leaders pointing to both benefits and drawbacks.
Key announcements in the Budget included a £100 energy payment for eligible households, an extension of the VAT cut on electricity bills, and a freeze on fuel duty until July. The Budget also outlined plans for Devon to gain an elected mayor in 2028, while Cornwall is set to become a Foundation Strategic Authority.
Sue Jewell, chair of the South East Cornwall Tourism Association, described the Budget as giving "with one hand and taking with the other." While acknowledging the 3.9% rise in the legal minimum wage in April, she noted that many businesses already pay above this threshold to retain staff. However, she expressed concern that rising costs might lead to reduced staffing, impacting local employment opportunities.
Dr. Harry Pitts, a senior lecturer in Politics at the University of Exeter's Cornwall Campus, commented that the £100 energy payment was a small measure to ease immediate household financial burdens. This payment is designated for homes in council tax bands A to D in England and is funded by an additional tax on banks.
Business Rates and Support
The Budget proposed an increase in the threshold for business rates for high street shops in England, raising it from £12,000 to £18,000. This means businesses with properties valued below this new threshold will no longer pay business rates. Toby Parkins, interim CEO of the Cornwall Chamber of Commerce, predicted this change would benefit approximately 900 additional businesses in Cornwall, calling it a "big win" for small enterprises.
Helen Wylde-Archibald, from the Devon Chamber of Commerce, welcomed the "stability" offered by the Budget, noting that previous financial plans had been "scary for business." She appreciated the absence of broad business tax increases and the continued freeze on fuel duty until July. However, she felt the Budget lacked sufficient support for the farming and food sectors, which she believes has an impact on the rural economy.
Farming and Housing Concerns
James Kittow, representing Butcher & Grazier in Cornwall, expressed a feeling of being overlooked. He highlighted the absence of changes to inheritance tax for farmers, noting that inherited farming assets exceeding £2.5 million face a 20% inheritance tax. This, he stated, complicates succession planning for those wishing to continue farming and discourages new entrants to the trade.
Regarding the housing market, Andrea Drew, managing director at Lander Mortgage Services, pointed to a new scheme for first-time buyers, including a "First Time Buyer Isa." This account allows savers to build a deposit, with the government contributing a 25% bonus up to £4,000 annually. Drew expressed a reservation that the focus on new builds neglects the existing property market. She also raised concerns about an increase in tax for landlords, which she believes has led some to sell properties. This, in turn, reduces the available housing stock for tenants who may not be able to afford to purchase the properties themselves. Drew argued that the housing shortage cannot be resolved by decreasing the number of individuals providing rental housing.