Business leaders across Devon and Cornwall have offered mixed reactions to Chancellor John Healey's first Budget, unveiled on Wednesday, with some welcoming targeted support while others say their sectors have been overlooked. According to BBC News, the Budget included a £100 energy payment for millions of households, a VAT cut on electricity bills, and a freeze on fuel duty extended to July 2027. The announcements also confirmed that Devon would gain an elected mayor in 2028, while Cornwall was named as the only area on a pathway to become a Foundation Strategic Authority.
The response from the South West's business community revealed a pattern of winners and losers. Some sectors, particularly small retail, saw relief from changes to business rates thresholds, while hospitality and farming leaders expressed frustration at what they characterised as insufficient support for their industries.
What does the energy support mean for households?
The £100 Household Energy Payment will reach households in council tax bands A to D in England, funded through additional taxation on banks. According to government publications, the payment will be transferred directly into eligible households' bank accounts from January 2027, with the government estimating that up to 20 million households in England will receive it.
Dr Harry Pitts, senior lecturer in Politics at the University of Exeter's Cornwall Campus, characterised the energy payment as one of the
small things to make life a little easier for some households in the immediate period. The temporary zero VAT rate on domestic electricity will continue until 1 July 2027, providing ongoing relief on bills.
How will the minimum wage rise affect businesses?
The Budget announced that the legal minimum wage would increase by 3.9% in April. The National Living Wage for workers aged 21 and over will rise from £12.71 to £13.21 an hour from 1 April 2027, with the government estimating the wage increases will benefit around 2.3 million workers.
Sue Jewell, chair of South East Cornwall Tourism Association and a holiday accommodation provider, acknowledged the tension created by the wage rise. She said the Budget
gave with one hand and took with the other. Jewell explained that many businesses in her sector already pay above the minimum wage to retain staff, but the increased costs have forced some to reduce their workforce.
However because of the cost we've cut back on staff. Which is sad really because it's local people who could be having local jobs.
This mirrors concerns raised elsewhere in the South West. Business Live reported that small business owners across the region cited employment costs as a major concern, with some questioning whether they could sustain current staffing levels.
Which businesses benefit from the business rates changes?
The threshold at which high street shops begin paying business rates in England has been increased from £12,000 to £18,000, meaning businesses will pay no rates on properties with a rateable value below this level. These business-rates relief threshold changes apply from 1 April 2027, with the threshold for tapered relief also rising from £15,000 to £21,000.
Toby Parkins, interim chief executive at the Cornwall Chamber of Commerce, predicted this would benefit approximately 900 additional businesses in Cornwall.
For the small business that is a big win, he said.
Helen Wylde-Archibald, from the Devon Chamber of Commerce, expressed cautious approval. She said she
welcomed some stability, noting that
The last two have been a bit scary for business. However, she stressed that the Budget
doesn't necessarily give us all the conditions we want for full growth and strong growth, but the main thing was there was no broad base business tax rises and fuel duty remains frozen until July.
Wylde-Archibald highlighted a significant gap in the announcements, saying she did not believe there was sufficient support for farming and food production.
It has an impact on the rural economy, she added.
Why are farming leaders disappointed?
James Kittow, from Butcher & Grazier in Cornwall, expressed deep frustration at what he saw as the farming sector's continued neglect.
It just seems like we've been forgotten again. We're an industry that is ready, willing and able to help the country produce the food for the nation.
A key concern for farmers is the inheritance tax situation. Since April 2026, inherited farming assets worth more than £2.5 million have faced 20% inheritance tax, and the Budget made no change to this policy. Kittow explained the impact on succession planning:
I'm looking to plan for a succession... we want to keep farming, we want to keep doing what we love doing but if we're going to get hit on the other end of it then it does make you think twice about what is all this for, and it's just so sad for the future farmers that want to come into the trade.
What housing support is available to first-time buyers?
The Budget introduced a scheme for first-time buyers centred on a new savings vehicle. Andrea Drew, managing director at Lander Mortgage Services, explained that the key announcement was a
First Time Buyer Isa. This is an account in which savers can build up a deposit, with the government topping up contributions of up to £4,000 each year with a 25% bonus.
However, Drew highlighted a limitation in the housing support.
The only negative I would say... on new builds, the housing market isn't just all about new builds, it's about existing property... because not everybody wants to have a new build property, she said.
Drew also raised concerns about the impact on the rental market. The Budget increased tax for landlords by 4%, a move she said has prompted some landlords to sell their properties.
What tenants need is more homes to choose from, not fewer, and they can't solve the housing shortage by destroying people who are providing the housing, she argued.
What other regional investment was announced?
What happens next?
The changes to business rates thresholds and the National Living Wage will take effect from 1 April 2027. The temporary zero VAT rate on domestic electricity will continue until 1 July 2027, after which the government's position on electricity taxation remains unclear. The £100 Household Energy Payment will begin reaching eligible households from January 2027. Broader tax policy will remain largely frozen, with income tax and National Insurance rates unchanged and most tax thresholds frozen until 2030–31.
