£100 Energy Payment, Wage Rise and Rates Cut: South West Business Verdict on Budget

Chancellor John Healey's first Budget will hand millions of English households a one-off £100 energy payment while raising the legal minimum wage by 3.9% in April — a combination tourism and business leaders in the South West say gives with one hand and takes with the other.

The Budget, delivered on Wednesday, also cut VAT on electricity bills, froze fuel duty until July, and set Devon on course for an elected mayor in 2028. Cornwall was named as the only area on a pathway to become a Foundation Strategic Authority.

What did tourism operators say?

Sue Jewell, chair of South East Cornwall Tourism Association and a holiday accommodation provider, said the Budget "gave with one hand and took with the other".

The wage rise is the taking hand. Jewell said: "I think it's tricky because actually I would believe that quite a lot of people in our business anyway pay over the minimum wage just to retain staff."

She said rising costs had already forced her business to shed staff. "Which is sad really because it's local people who could be having local jobs," she said.

For tourism operators, the headline wage figure conceals a staffing squeeze already underway — roughly a four-percent pay floor rise lands on businesses that say they pay above it anyway.

Who gets the £100 energy payment?

Anyone living in a home in council tax bands A to D in England will receive the one-off £100 "Household Energy Payment". The government funds it through extra tax on banks.

Dr Harry Pitts, senior lecturer in politics at the University of Exeter's Cornwall Campus, called it one of the "small things to make life a little easier for some households in the immediate period".

That framing matters: a single £100 payment is modest against annual energy bills, and nothing in the Budget addresses costs beyond the immediate term.

How do the business rates changes work?

The threshold at which high street shops in England start paying business rates rises from £12,000 to £18,000. Businesses with a rateable value below that level pay no rates at all — a 50% increase in the exemption floor.

Toby Parkins, interim CEO at the Cornwall Chamber of Commerce, predicted the change would benefit about 900 extra businesses in Cornwall. "For the small business that is a big win," he said.

Helen Wylde-Archibald, from the Devon Chamber of Commerce, said she "welcomed some stability" after two turbulent fiscal years. "The last two have been a bit scary for business," she said, referring to previous Budgets.

She added: "It 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."

Her caveat: too little new support for farming and food, which she said has "an impact on the rural economy".

Why do farmers feel forgotten?

James Kittow, from Butcher & Grazier in Cornwall, said: "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."

The Budget left inheritance tax rules for farmers unchanged. Since April, inherited farming assets worth more than £2.5m face a 20% inheritance tax charge.

Kittow said the rule clouds his succession planning. "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," he said.

For a family farm above the £2.5m threshold, that means a fifth of the excess value owed to the taxman at handover — enough, in Kittow's telling, to make the next generation question the trade.

What changed for housing?

Andrea Drew, managing director at Lander Mortgage Services, pointed to a "First Time Buyer Isa" as the key housing announcement. Savers build a deposit in the account, and the government tops up contributions of up to £4,000 each year with a 25% bonus — up to £1,000 a year in free money toward a first home.

Her gripe: the scheme leans toward 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.

Landlords face a 4% tax increase. Drew said she had already seen landlords sell up because of the tax burden, while tenants could not afford to buy the homes coming onto the market.

"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 said.

The South West's verdict splits cleanly along sector lines: retailers and chambers claim a win on rates and stability, while farmers, tourism operators and landlords absorb costs the Budget never touched.