Mixed reaction to first Labour Budget across Cornwall

Among the headlines from Chancellor Rachel Reeves’ first budget for Labour were £1.3 billion new grant funding for local authority services in 2025/26, including at least £600m in new grant funding for social care, £233m additional spending in 2025/26 to prevent homelessness and a 3.2 per cent increase in Core Spending Power for local authorities in 2025/26.

There was a sense of relief at Cornwall Council – which is on a financial precipice – at her pledge to continue the Shared Prosperity Fund at a reduced level for a transition year by providing £900 million for local authorities to invest in local growth in 2025/26, in advance of wider funding reforms.

There was also the promise of an additional £500m in capital funding for local roads maintenance and an extension of the 100 per cent business rates retention for Cornwall Council for 2025/26.

Here’s how people across Cornwall have reacted:

John Brown, CEO of Cornwall Chamber of Commerce

John Brown, the new CEO of Cornwall Chamber Of Commerce

“This is a tale of two budgets – one that brings vital investment into infrastructure and public services, but another that leaves businesses shouldering the immediate financial load. While infrastructure and social investments are essential for long-term growth, the path to those benefits is long and Cornish businesses are going to feel the impact of tax burdens faster than they realise the benefits of infrastructure investment.

“Cornwall’s economy is ready to thrive, and so it was disappointing that, other than a loose mention of Cornwall alongside fixing potholes, emphasis in the Chancellor’s speech was placed on anywhere other than Cornwall and the South West. More clearly needs to be done to fight for investment at the top table and make sure that Cornwall is not seen as somewhere that needs fixing, but with the potential to be thriving.

“We need inward investment and support to protect our local businesses while they stand strong and shoulder the burden of national investment as well as give them what they need to realise the regenerative economy we all want to usher in. For Cornwall, this budget offers potential but demands resilience. Our businesses need real, targeted support to carry them through to the other side of these ambitious national investments.”

Jayne Kirkham, Labour MP for Truro and Falmouth

“This is a budget that fixes the foundations of the country and sets us up for the change that this Labour government promised. On a national level it’s a budget that puts down the first few bricks as we set out to rebuild Britain. With these new measures we will be able to get the NHS back up on its feet with a 22bn boost, provide a shot in the arm for our schools with a renewed focus for SEND, and invest in our transport and energy infrastructure, while making sure that people don’t face higher taxes in their monthly payslips. In fact, we’re increasing the national living wage for everyone.

“On a local level the budget includes various pluses for Cornwall. The freeze in fuel duty is great for those of us who rely on a car with the guarantee of no rises at the pump next year. The one billion for the household support fund will provide the help needed to those struggling with the cost of living and the carers allowance recognises the hard-work that our carers do while protecting their income. It’s the biggest increase in allowance since its introduction, which is really monumental.

"We’re also getting some solutions for our housing crisis with a stamp duty rise up to five per cent for second home buyers, which should lead to more houses on the market for local people.

“Plus a continuation of the Shared Prosperity Fund that is investment into Cornwall now the EU funding has finished.”

Jayne Kirkham pictured at Labour\'s constituency office in Truro (Pic: Lee Trewhela / LDRS)

Cornwall’s other Labour MPs

In a joint statement the four Labour MPs for Cornwall – including Perran Moon, Anna Gelderd and Noah Law – commented: “We were able to speak directly to the Chief Secretary to the Treasury last week and express to him why Cornwall needs Shared Prosperity Funding. He listened carefully and the Treasury has acted to support Cornwall.

“We are delighted that so much anxiety from so many back home has been relieved. This is the right decision for Cornwall and shows the Labour government backs Cornwall. It’s a decision that also reflects the fact that the Government understands the importance of SPF to Cornish society.”

Cornwall Council’s Conservative leader Linda Taylor

Cllr Linda Taylor welcomed the news that the Government is taking action on several key issues she and MPs have raised since the General Election, saying it shows how Cornwall’s voice is being heard in Westminster.

Cllr Taylor said: “From the first hearing, I am pleased to see Cornwall’s voice has been heard in respect of our call for an extension to the Shared Prosperity Fund, likewise the announcement of more funding for local government, but we need to see the fine details to understand exactly what impact it may have in Cornwall.

“What has been pleasing though is to see some of the bigger issues that really matter to us being addressed in today’s budget. Since the election, I have written several letters to Westminster outlining areas where we wanted to see action taken. I wrote to the Department of Education regarding SEND pressures and the need to ease the financial pressures on the production of Education, Health and Care Plans (EHCPs), and was pleased to hear the announcement of significant extra funding in that area.

“I also wrote to the Ministry of Housing, Communities & Local Government requesting a continuation of the Government’s Rough Sleeping Initiative funding, so to see £233 million of additional spending in 2025-26 on tackling homelessness is pleasing. It will help to prevent increases in the number of families in temporary accommodation and help to prevent rough sleeping.

“Another letter, directly to the Chancellor, called for a fairer funding for Cornwall. So the Chancellor’s commitment to reforming the approach to funding allocations within the Local Government Finance Settlement by redistributing funding to ensure that it reflects an up-to-date assessment of need and local revenues, is particularly welcomed.

“These are issues that matter greatly to myself and my fellow councillors, and I believe to the people of Cornwall, so to see our voice being heard and action being taken is pleasing.”

Cornwall Council leader Linda Taylor (Pic: Linda Taylor / Facebook)

She added: “However, one thing is clear, the Autumn Statement doesn’t fully resolve all the challenges faced by local authorities across the country. Like many others, Cornwall Council will still have some very difficult decisions to make in order to balance the books for next year.”

Cornwall’s Liberal Democrat group

Cllr Colin Martin, leader of the Liberal Democrat Group on Cornwall Council said: “Tens of thousands of people across the Duchy elected Labour MPs who promised to deliver ‘change’ and to ‘get a fair share for Cornwall, but we have actually seen austerity get worse, especially for the cash-strapped council.”

He said before the Chancellor got to her feet, Cornwall Council like many others was already on the brink of financial collapse, with a predicted shortfall of over £100 million next year. Cllr Martin added: “Instead of providing the extra support we need, she has simply piled on extra costs. The increase in employer’s National Insurance contributions will cost Cornwall Council around £3m.”

Many low paid workers will welcome the minimum wage increasing to £12.21 from next April, but Cllr Martin says that the council’s policy of paying the Foundation Living Wage (£12.44) will no longer be enough to compete with other employers. “We need an extra £54 million to pay care workers £15 per hour and fill over 1,000 vacancies, but the Government hasn’t even given us enough social care funding to meet increasing demand, let alone cover a pay rise for care workers. Throwing money at the NHS without fixing social care is like pouring water into a leaky bucket.”

Cllr Martin, who previously worked as a Special Needs teacher says that extra funding announced for Special Educational Needs and Disabilities is a fraction of what is needed. “Cornwall is set to receive about £10m, but our annual SEND funding gap is £20m, with an accumulated deficit predicted to reach £40m by March 2025.”

Cllr Colin Martin, leader of the Liberal Democrat Group on Cornwall Council

Cllr Leigh Frost, deputy leader of the Liberal Democrat group, called out Labour’s “hypocrisy” over funding for the poorest region in the UK: “When the Conservatives introduced the Shared Prosperity Fund to replace Cornwall’s £100m per year EU funding, Labour rightly criticised the Conservatives for offering just £44m per year for three years. Today Labour said they would ‘continue the Shared Prosperity Fund at a reduced level for a transition year’. We will have to wait and see whether Cornwall gets its fair share of this ever-decreasing pie.”

Cornwall Voluntary Sector Forum

Emma Rowse, CEO of the Cornwall Voluntary Sector Forum, said: “The investment provided through Shared Prosperity Funding to date has resulted in excess of £12,000,000 of funding into the voluntary, community and social enterprise sector across Cornwall refurbishing community buildings, improving sustainable food production and reducing social isolation in some of our most disadvantaged communities. It is brilliant news to hear that this investment will continue.”

Business finance expert Deborah Edwards

A business finance expert has thrown support behind Cornwall’s pioneering entrepreneurs and business owners who have likely taken a hit in the budget announcement.

Deborah Edwards, practice director at Harland Accountants in Falmouth, Newquay and St Austell, has voiced her concerns that changes from April 2025 will have a deeper impact on the county’s business and not-for-profit community – through national insurance hikes, national minimum wage increases and employment reform.

She said: “Some people will be reflecting on the budget and thinking, it’s not as bad as we anticipated – but what we will see is an initial false sense of security that will be followed by a steep rise in the fundamental costs of running a business. It’s a budget that specifically targets employers and business owners. The chancellor promised not to raise taxes on ‘working people,’ but it’s a direct hit on the people who are creating the jobs that seems to conflict with Rachel Reeves’ stated intentions.

“Entrepreneurs are critical in keeping our local economy buoyant. These announcements could have business owners questioning their energy and appetite for investment in people, particularly when paired with an increase in business rates for bricks-and-mortar premises.

“From April 2025, it’s going to cost so much more to run a business. Our local business owners and entrepreneurs need support to innovate, expand and, ultimately, pay taxes from a position of strength rather than struggle.”

Tina McKenzie, of the Federation of Small Businesses

Responding to the Chancellor’s Budget statement, policy chair of the Federation of Small Businesses Tina McKenzie said: “Increasing the employment allowance for small businesses by a record amount is a very welcome move and we’re pleased the Chancellor has heard us loud and clear. More than doubling it, from £5,000 to £10,500, will shield the smallest employers from the jobs tax, therefore is a pro-jobs prioritisation in a tough budget.

“The decision to protect small businesses from an inflationary hike in business rates – by freezing the small business multiplier – will help small firms with premises across all sectors. Meanwhile, extending business rates relief, albeit at a lower level, for small firms in retail, hospitality and leisure will mitigate a potential cliff-edge tax hike for those in some of the toughest sectors.

“The true test of the budget will be whether small businesses can grow and end the economic stagnation the UK has been stuck in.”