Lincolnshire leaders react to Rachel Reeves’ budget — and raise concerns over the impact on the county

County leaders have given their reaction to Labour’s first budget in nearly 15 years - and raised concerns over the impact on our businesses.

Chancellor Rachel Reeves outlined the party's budget today (Wednesday, October 30) and her statement featured a £40 billion tax increase aimed at "fixing the foundations" of the economy and restoring public finances.

Reeves highlighted what she called a "black hole" left by the Conservatives, arguing there was a need for tens of billions in additional taxes to address it.

She later described the extensive number of potholes on the country’s roads - a matter of concern for Lincolnshire drivers in recent years - as a sign of “our failure to invest as a nation.” She promised an additional £500 million for road maintenance over the next year to repair an extra one million potholes annually.

The national living wage was also confirmed to increase by 6.7% to £12.21 an hour for workers over 21, equivalent to an additional £1,400 a year for an eligible full-time worker.

The Chancellor also outlined that employers’ National Insurance contributions will rise by 1.2 percentage points to 15% starting in April 2025. Furthermore, the government will lower the secondary threshold for contributions from £9,100 to £5,000. These measures are projected to generate £25 billion annually by the end of the forecast period, meaning the budget’s largest single tax-raising measure will come from businesses.

While Coun Martin Hill (Conservative), leader of Lincolnshire County Council, believed it was too early to fully assess the impact of the budget, he raised concerns about how these tax increases might affect businesses.

He said: "We will need to work through the effect of the rise in the national living wage and employers National Insurance contributions. We will also need to await further details on the 2% budget cut across all government departments and how this will translate to local government funding.

“We’re also concerned about the impact of these tax rises on local businesses, particularly alongside the planned changes to business rates and inheritance tax on agricultural and business assets. Again, we’ll need to look at how this might affect growth within the local economy and any knock-on effects this might have.

“To offset the announcement of a dramatic increase in taxes to record levels, the chancellor has promised extra money for public services, with additional funding for areas including pothole repairs, schools and special educational needs. Of course, this will only be good news if Lincolnshire receives its fair share of any new funding.

"For too long we’ve been short-changed by central government, with the challenges we face in delivering services in a rural county and the rising demand for support not fully reflected in our funding. So, it remains to be seen if this new money will make a real difference to our residents and relieve pressure on overstretched budgets or not.

“Finally, the special treatment given to mayoral areas has again underlined the importance of the Greater Lincolnshire devolution deal in ensuring our region is not left behind. So, we will continue to work with partners on the creation of a mayoral combined county authority to make sure things progress as planned.”

Meanwhile, Coun Colin Davie (Conservative), portfolio holder for economic development, environment and planning, strongly criticised the deal, describing it as “a disaster for the UK economy”.

He said: "At a time when we should be prioritising business innovation and nurturing talent for future prosperity, we have a budget with £40bn tax rise. We're now locked into a high tax, low growth ecnomy for years to come.

"Small businesses are the backbone of Lincolnshire's economy. Business wage bills will rise considerable as a result of the rise in employer contributions. The minimum wage increase means many small businesses will really struggle.

"The budget was also an attack on rural England and the farming community. The changes to the agricultural relief means family farms that have traditionally passed down through the generations will no longer be able to do so. This is at a time a lot of farmland is already being lost to solar power. I also fear for our leisure, hospitality and tourism sectors."

Additional reporting by Jamie Waller