The Chancellor’s Budget is a tale of two Budgets. On the one hand, it includes big investments in infrastructure, healthcare, and public services, vital steps for building resilience in the UK economy.
Cornwall stands to gain in the long term from these social improvements, including the continuation of the Shared Prosperity Fund (SPF) providing a measure of stability for regional projects, albeit at a reduced funding level of £900 million for 2025-26. But for these benefits to actually reach us in the years ahead, businesses are being asked to shoulder a fair bit of the cost right now, with little in the way of targeted local support to help us manage that load.
The Budget has its upsides. Freezing fuel duty helps ease transport costs for those of us in rural areas, a small but valuable break for businesses and residents alike. And a cut to draught beer duty is a nice boost for our pubs and small brewers, recognising the cultural and economic weight they carry here.
On the social side, there’s a much needed increase in Carer’s Allowance, which is a lifeline for many people in Cornwall. Local councils will see an extra £1.3 billion for essential services, including provisions for tackling rough sleeping.
The Budget raises core funding for schools with an added boost for SEND (Special Educational Needs and Disabilities) programmes, which should support a stronger educational foundation for our young people. There’s also £300 million extra for further education, which is essential for developing the skills we need here in Cornwall for long-term growth.
Public Services, Digital Infrastructure, and Transport
I hope Cornwall’s healthcare system will benefit from the additional £22.6 billion earmarked for day-to-day NHS services and a further £3 billion in capital funding. These funds are critical for keeping our healthcare services afloat, and everyone has their fingers crossed that Treliske is allocated the funds necessary to complete its vital projects. However, the benefits will take time to impact communities here directly.
In housing, the £5 billion allocated nationally, plus the ability for councils to reinvest proceeds from Right to Buy sales, is a step toward addressing the local housing crunch and should help maintain and improve social housing stock.
Transport also received a focus, with new investments planned to enhance local transport infrastructure. Improved connectivity will help Cornwall’s businesses operate more efficiently and open up access to regional employment and services, strengthening our local economy.
Digital infrastructure has also been earmarked for over £500 million allocated to Project Gigabit and the Shared Rural Network to expand broadband coverage across underserved areas by 2030. This is particularly important for rural economies like Cornwall, where strong broadband connections are critical for growth, innovation, and equal access to opportunities.
Aerospace, Marine, and Offshore Sectors
The Budget presents key opportunities for Cornwall’s aerospace and marine sectors. With £975 million allocated over five years for research and development in aerospace, Cornwall’s Spaceport is well-positioned to benefit from this push toward advanced aerospace technologies.
In the marine industry, the £134 million earmarked for port infrastructure to support offshore wind projects aligns directly with Cornwall’s deep-water port capabilities. It’s imperative we lobby for those cables to land here.
Critical Minerals and Metals
The Budget’s support for critical minerals suppliers through UK Export Finance recognises the importance of securing the UK’s supply chains. Cornwall, with its capacity to supply essential tech metals, such as lithium for electric vehicles and energy storage, stands to benefit from this focus.
Tourism and Hospitality
Cornwall’s tourism and hospitality sectors, vital pillars of our local economy, have received some relief in the form of a 1.7% cut to draught beer duty and a 40% relief on business rates for retail, hospitality, and leisure properties, capped at £110,000 per business. These measures are important for a sector that sees seasonal fluctuations and has faced persistent challenges in recent years.
However, our tourism and hospitality businesses need continued and tailored support for long-term growth to keep Cornwall a leading destination and maintain sustainable employment in the region.
Agriculture
Agriculture remains a key sector in Cornwall, and the Budget’s reform on agricultural property has been met with considerable disappointment and anger from the farming community. With the reformed APR cap, relief will now only apply to the first £1 million of agricultural property value
The NFU expressed deep concern that the reforms could jeopardise the transfer of family farms to future generations.
Further Education (FE)
The Budget’s £300 million commitment to Further Education (FE) is a positive step towards building a skilled workforce ready to support Cornwall’s key industries. Our FE colleges are vital in preparing young people and adult learners with the practical skills needed in fields like renewable energy, manufacturing, tourism, and the creative industries. This investment will help Cornwall adapt to the demands of emerging sectors such as aerospace and critical minerals, ensuring we have the talent to support the region’s future growth.
However, the Budget offers little direct support for Higher Education (HE), which limits the development of advanced research and innovation in Cornwall. While FE funding is essential for foundational skills, HE institutions are equally important for driving innovation and creating high-skilled jobs.
Manufacturing
Cornwall’s manufacturing sector will see some benefit from the Budget’s expansion of the Made Smarter programme, which has doubled to £16 million. This increase aims to help manufacturers adopt advanced digital technologies, which is essential for keeping local businesses competitive and resilient in a challenging economic environment. However, with rising operational costs and tax pressures, Cornwall’s manufacturers will need continued support to fully capitalise on this digital shift and ensure they can invest in both innovation and workforce development.
Creative Industries
Cornwall’s creative industries, an essential and vibrant part of our economy, receive some acknowledgement in this Budget. The £15 billion in tax relief over five years, along with a £3 million investment in the Creative Careers Programme, is a positive gesture. This funding should help our creative sector build momentum and attract young talent, strengthening Cornwall’s cultural and economic landscape.
However, Cornwall’s creative businesses face many of the same financial pressures as other sectors. The rising costs of National Insurance and changes to Capital Gains Tax make it difficult for creative entrepreneurs to scale their businesses and reinvest profits. To truly thrive, our creative industries need more than one-off reliefs; they need sustained, dedicated support that matches the role they play in Cornwall’s economy and identity.
Financial Pressures on Businesses
The flip side here is the burden on businesses, especially small and medium-sized ones. Increased National Insurance contributions, with rates rising by 1.2 percentage points will put more pressure on employers across Cornwall. The rise in Capital Gains Tax (from 10% to 18% on the lower rate and from 20% to 24% on the higher) is another hurdle for entrepreneurs and asset owners trying to reinvest or plan for succession.
While Business Asset Disposal Relief (BADR) remains at the 10% rate for this year, changes are on the horizon. The rate will rise to 14% in April 2025 and then align with the main lower Capital Gains Tax rate of 18% by April 2026. This phased increase adds pressure on business owners planning asset disposals for succession, retirement, or reinvestment, making it more costly to leverage business assets in future planning.
Pensions and Welfare
There’s some recognition for Cornwall’s miners, with the Mineworkers Pension Scheme seeing funds returned to member pension pots—a well-deserved move for those who’ve contributed so much to our region. Changes to Universal Credit should also help ease the cost of living burden for some households.
Striking a Balance Between Social Gains and Business Pressures
Cornwall’s businesses are ready to support national growth goals, but there’s a balance to strike.
We’re footing a fair bit of the bill now for these longer-term social gains, and it’s vital we don’t tip the scales so far that SMEs are left struggling just to stay afloat.
The Cornwall Chamber of Commerce will keep pushing for the targeted investment Cornwall needs to bridge the gap and make sure our businesses can thrive until these long-term investments bear fruit. Cornwall has the potential to lead, but it’s time to make sure that potential is backed with the right support.
