Spring budget wish list: Lincolnshire “urgently” needs support in hospitality, tourism and flood prevention
In what is likely to be the final major economic statement before the General Election, Lincolnshire “urgently” needs support in its hospitality and tourism sectors to boost growth, as well as government support to prevent future flooding catastrophes.
Chancellor Jeremy Hunt will present his Spring Budget on March 6, as the government looks to bounce back after the UK fell into recession during the final months of 2023.
A recession happens when GDP falls for two successive quarters of a year, with the UK economy shrinking by 0.1% between July and September 2023, followed by a further 0.3% reduction between October and December.
Economic growth has been at the forefront of the agenda for some time now, as the country has scrambled to recover from the costly implications of the Covid-19 pandemic, as well as the war in Ukraine, which saw wholesale gas and oil prices soar in 2022.
As the cost of living continues its grip on the populace, the need for clear government action has arguably never been greater — but what does Lincolnshire need to get the ball rolling in the right direction?
Coun Colin Davie (Conservative), executive member for environment and economic development at Lincolnshire County Council, said the country was being “hamstrung” by VAT rates compared to our European competitors.
He urged the Chancellor to make cutting VAT rates for businesses a priority in his Spring Budget.
“We need to see VAT cut to around 5-7%,” he said. “It’s not right to be charging 20%, we have around 30-40,000 people employed in the tourism sector and the government need to think about how they can support that,” he said.
“Ultimately, though, this needs to have the feel of a proper Conservative budget. At the moment we are overburdened with tax and regulation, which is not conservatism at work.
“It feels wrong that we are taxing businesses the way we are, as well as ordinary working people, and we should be standing up for less taxation and a lot more freedom and flexibilities.”
As for the wider business sector, there is a clear need for “optimism” and a “glimpse of light on the horizon” from the Spring Budget.
That is the view of Katrina Pierce, Lincolnshire’s development manager at the Federation of Small Businesses (FSB), who said the county is in the midst of a “perfect storm” with a lack of footfall brought on by businesses not being open, and businesses not being open due to a lack of footfall.
She has called for “targeted support and investment” in the hospitality sector, as well as a raise of the VAT threshold to £100,000 from its current rate of £85,000.
“In a place like Lincolnshire with a dominant hospitality sector, that targeted support is urgently needed because optimism is low, and it takes confidence amongst the economy for businesses owners to feel comfortable in investing — this is arguably what we are lacking at the moment,” she said.
It is currently “far too low” according to the FSB, and Katrina Pierce warns that this threshold can stop businesses from pursuing growth due to an uncertain financial landscape.
“Lincolnshire businesses want a sense of optimism,” she said.
“It’s gloomy out there at the moment, with trading levels sluggish and slow. But business owners have known this for some time, they didn’t need official recession figures to note that down.
“That extra £15,000 on the VAT threshold creates breathing space for recruitment, investment or growth, and it creates a tipping point where some businesses deliberately sail below the threshold.
“We don’t want anything to hold businesses back, and alleviating that should bring about benefits.”
Coun Davie has made no secret of his desire to secure additional funding from the government when it comes to flood defence, particularly off the back of the impact left behind by Storms Babet and Henk.
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Lincolnshire County Council was appointed as the lead local flood authority by the government in 2012, granting it additional powers to investigate incidents of flooding across the county.
However, no budget or resources have been made available for this since then, meaning Lincolnshire County Council had to fund these investigations itself, primarily through local taxation, for over a decade.
The environment portfolio holder has confirmed that he wrote to both the Prime Minister and the Chancellor last month regarding issues around funding flood investigations and defences.
He said: “The events of Storm Babet and Storm Henk have meant the amount of investigation work required leaves us needing to find additional resources.
“We’d like to see money for lead local flood authorities, not just ourselves, to be properly funded in order to undertake the work that is required of them.
“It’s not right that people who had their homes flooded are left hanging on a limb by a lack of government support.”
Tied in with concerns around flood defence funding are the rates district councils are paying internal drainage boards, with Coun Davie saying some councils are paying up to 60 or 70% of their council tax precept to the drainage board.
For example, 22% of Boston Borough Council’s £11.098 million net budget for 2023/24 went to drainage levies, with 58% of the council tax requirement heading in that direction.
This, Coun Davie says, is an issue that needs to be resolved as quickly as possible, along with budget maintenance cuts to the Environment Agency, which only further weakens the capabilities of combatting incidents of flooding by way of a lack of resources.
Gainsborough MP Sir Edward Leigh (Conservative) took to the House of Commons on Tuesday morning, accusing “too many people in the Treasury” of thinking “the best way to grow the economy is to fill the country with more and more people.”
The Member of Parliament focused his arguments on economic growth around “mass legal migration” and there being “too many people on benefits.”
He asked the government to commit to a policy that would see overseas workers only become eligible to work in the UK if they are earning at least the national average of £33,000 per annum.
“No shortage schemes, no exemptions for care workers or the NHS,” Sir Edward said.
“In those sectors we should pay proper wages, we get people off benefits, because there are too many people on benefits dragging down our economy.”
This is a perspective backed by Coun Colin Davie, who said a lack of “productivity” was one of the biggest challenges the government faces in its quest for economic recovery.
“We need to address the fact that there are far too many people draining the system rather than contributing to it, and it’s a big challenge for this government, or indeed any government, to address.
“Once people get used to receiving support, they often don’t like to be told to work for it.”
Sir Edward also called for a severe cut to legal migration in a bid to “give something for our people to vote for” at the upcoming General Election.
Economic Secretary to the Treasury Bim Afolami MP responded to say that the country needs “higher earnings for British people” before citing the recent National Living Wage increase as evidence of the government’s plan to do precisely that.
