Steve Race backs Budget measures he says will help Exeter households and firms

Chancellor Rachel Reeves has delivered the Budget today, confirming a range of tax, welfare and economic measures that will have implications for households and businesses across Exeter. 

Key announcements include a one-year extension of the income tax threshold freeze to 2031, meaning more earners are expected to move into higher tax bands over time. 

The Chancellor also introduced a new annual surcharge that will apply to properties valued above £2 million charged in four bands from £2 million to £5 million plus, with the highest band paying £7,500 a year from 2028.  She also confirmed a mileage charge for electric vehicles starting from 2028, and announced a levy on pension contributions over £2,000. The two-child cap on means-tested benefits has also been removed.

According to the OBR’s (Office for Budget Responsibility) latest outlook, the planned tax and spending changes would drive the tax burden to a record 38 per cent of GDP by 2030–31, if they are fully implemented.

It also revised economic growth forecasts down after this year. Earlier today, the OBR apologised after Budget documents were published online around 40 minutes earlier than planned, describing the incident as a technical error.

Political reaction has varied across parties. National figures from the Conservative Party (Kemi Badenoch), Liberal Democrats (Sir Ed Davey) and Reform UK (Nigel Farage) criticised elements of the plans, citing concerns about taxation, economic growth and long-term fiscal strategy.

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Exeter’s Labour MP Steve Race welcomed several aspects of the Budget, saying that it will support local people and businesses. 

He said: “This is a budget that will help us to build a stronger, more sustainable economy, putting more money into people’s pockets and bringing down bills to help with the cost of living crisis, while bringing the national debt down.”

“We are beating the forecasts with growth this year upgraded to 1.5 per cent, from 1 per cent. For Exeter’s businesses there are several highlights including an announcement to support our high streets with permanently lower tax rates for 750,000 retail and hospitality properties.”

“We’re also doing more to provide support for start-up and scale-up businesses in Exeter – which will be our major employers of the near-future - backing entrepreneurs and fast-growing companies with tax breaks to hire and to list in the UK.”

Adding to this, Steve said: “People elected us to renew our economy and our communities, because they wanted change after years of decline. So, we continue to reject austerity or more borrowing, and instead we are making fair and necessary choices - to cut energy bills, cut NHS waiting lists, and cut government borrowing – all while raising over 500,000 children out of poverty.”

Economists in Exeter say the Budget reflects broader challenges. Professor Miguel Leon-Ledesma, from the University of Exeter Business School, said: “Today’s Budget shows the tortoise of productivity still trailing the hare of government debt, and that gap now shapes every fiscal choice.”

“Because productivity gains take years to materialise, the Chancellor has again turned to taxes and short-term levers to balance the books. Until the UK finds a way to speed up that tortoise, future Budgets will keep walking the same tightrope.”

Whereas, Conservative leader Kemi Badenoch reacted sharply, calling the Budget a “total humiliation” and arguing that it represents a heavy burden of taxes on working people.

Devon County Council raised concerns about the national high-needs education funding deficit, including Devon’s own £160m shortfall. 

Cabinet Member for Children’s Services, Cllr James Buczkowski, said the Budget did not provide clarity on long-term funding for SEND provision. 

He also commented on the introduction of the electric vehicle mileage charge, noting potential implications for the county’s climate and transport goals.

For Exeter households, the extension of the tax threshold freeze means gradual changes to take-home pay, depending on earnings growth and inflation over the coming years. 

The Government said typical energy bills are expected to fall by around £150 this year, but local charities in the city have warned that many residents continue to face financial pressures.

Businesses across Exeter are assessing how the Budget will affect staffing costs, investment and consumer spending. Retail and hospitality venues, in particular, will be examining the Government’s confirmation of lower business rates for the sector. 

The Budget also includes £820m for a Youth Guarantee and free apprenticeship training for under-25s in SMEs, which may support Exeter’s growing employment and skills sector. 

Further details on local authority funding are expected in December when the provisional settlement for councils is published.

For now, Exeter residents and businesses are reviewing the measures to understand how today’s national decisions may shape local finances, spending and economic activity over the coming year.