Tourism and business leaders across the South West have offered a **mixed and cautious reaction** to Chancellor John Healey’s inaugural Budget, with many welcoming immediate support measures but highlighting ongoing concerns about long-term stability and regional investment.
**For the Tourism and Hospitality Sector:**
* **Initial Relief for Energy Costs:** Many in the hospitality sector expressed relief at the announcement of continued or adjusted energy support measures. Operators of pubs, hotels, and visitor attractions, who have been grappling with unprecedented utility bills, see this as a vital lifeline.
* **A representative from the South West Tourism Alliance commented:** “The Chancellor’s commitment to easing energy burdens is a welcome acknowledgment of the severe pressures facing our hotels, pubs, and restaurants. For many, it will mean the difference between staying open and closing their doors this winter.”
* **Disappointment on VAT:** However, there was widespread disappointment that the Budget did not include a reduction in the VAT rate for hospitality and tourism. This has been a key demand from the sector, arguing it would stimulate demand, boost competitiveness, and help businesses rebuild.
* **The CEO of a prominent regional hotel group stated:** “While we appreciate the energy support, the opportunity to truly supercharge our recovery by reducing VAT was missed. A lower VAT rate would have allowed us to invest more, create jobs, and offer more competitive pricing to visitors, rather than just treading water.”
* **Workforce Challenges:** Concerns about staffing shortages and the cost of living impacting seasonal workers in an already tight labour market remain a significant issue, with many hoping for more targeted support in this area.
**For the Broader Business Community (SMEs, Manufacturing, Services):**
* **Cost of Doing Business:** Businesses across various sectors welcomed any measures designed to ease the burden of rising input costs, although many stressed that inflation remains the biggest threat.
* **The Director of the South West Chamber of Commerce remarked:** “Businesses are looking for stability and certainty. While some measures may provide a degree of immediate relief, the fundamental challenges of inflation, supply chain disruptions, and access to skilled labour persist. We need a clear, long-term economic strategy that goes beyond short-term fixes.”
* **Business Rates:** There was a strong call for fundamental reform of the business rates system, with many feeling the Budget did not go far enough to address this “crippling” tax, particularly for high street retailers and premises-based businesses.
* **Investment Incentives:** Some welcomed potential announcements around investment allowances or R&D tax credits, hoping these would encourage growth and innovation, particularly in the region’s burgeoning tech and aerospace sectors around Bristol and Exeter.
* **Infrastructure:** There was a call for greater clarity and commitment to key infrastructure projects in the South West, including improvements to road networks (e.g., the A303) and rail resilience, which are seen as vital for connectivity and attracting further investment.
* **A spokesperson for a rural business network added:** “While urban centres might see some benefits, businesses in our more remote areas are desperate for commitments on rural broadband and transport links to truly level up the playing field.”
**Overall Sentiment:**
The general consensus is that John Healey’s first Budget delivered some targeted relief in areas like energy costs, which will be welcomed by many struggling businesses. However, many leaders feel it lacked the bold, transformative policies needed to address the deep-seated challenges facing the South West economy, particularly in relation to long-term growth, investment in infrastructure, and significant reform for key sectors like tourism and retail. The focus now shifts to how these measures will translate into real-world impact and whether they provide a sufficient foundation for sustainable recovery.
