Our Chair Professor Neal Juster provides his thoughts on this week's Budget announcement by the Chancellor of the Exchequer Rachel Reeves.

The Budget statement this week was the first of the new government, and the first ever to be made by a female Chancellor. It marked a change in approach and outlined a long-term framework to provide stability for the economy. There was an emphasis on giving local leaders more support to drive growth, together with new industrial and trade strategies. We expect more detail in the next spending review and in the forthcoming devolution white paper on what this means at a local level; however the emphasis within the Budget on mayoral areas underlined the importance of the Greater Lincolnshire devolution deal in ensuring our region is not left behind. 

The Budget included some welcome focus on boosting business investment and infrastructure, including a commitment to Growth Hubs and an extension to the Made Smarter Innovation Programme, which has been particularly successful in Greater Lincolnshire and across the East Midlands. Commitments to increasing road maintenance funding, accelerating the EV charger rollout and investment in gigabit broadband should bring a boost to rural areas. The confirmation of funding for Freeports, such as ours in the Humber, and the commitment to align Freeports with the national Industrial Strategy, are good news for our region.

There was mixed news for the business community. There were increases to the employer cost base, such as the hike in National Insurance Contributions and increase in National Living Wage. These changes are good news for our residents but could hamper the ability for some businesses to invest and recruit as their overheads are squeezed. There was some protection for smaller firms through increases to the employment allowance. The government also stated an intention to introduce permanently lower business rate multipliers for retail, hospitality and leisure properties, which would be welcome news for our high streets and visitor economy. Plans to support people who have ill health or disabilities into employment through the Connect to Work scheme, and help develop the careers of those who are far from the labour market through the Get Britain Working White Paper, are also welcome.  

Speculation around reform of Agriculture Property Relief was rife leading up to the Budget. The Chancellor’s speech indeed confirmed that reform is on the cards, albeit with protections for smaller farms which will affect investment levels in our county’s farms.  Government also committed to follow up on the previous administration’s promise to extend Inheritance Tax reliefs to environmental land uses which addresses an important barrier to change of land use to meet environmental outcomes. 

There were a number of references to setting the pathway to growth, and whilst the fiscal framework for economic growth and private sector investment were set at this Budget, businesses will feel that the detail of step change growth was lacking. Only the private sector can provide the scale of investment required to deliver the government’s growth agenda and it vital that the government develops this approach at the comprehensive spending review in March.

It is critical in this time of significant change that the business community work closely with local and national government to ensure that the businesses and residents of Greater Lincolnshire are heard. We will continue to work alongside local leaders to get the best possible outcomes for our businesses and residents.