Labour’s recent budget announcement is a disappointing blow to hardworking families and small businesses across Lincolnshire. It’s full of broken promises, tax hikes, and huge increases in borrowing—directly impacting rural areas like ours in Grantham.
Let’s start with the £25 billion hike in National Insurance, which Labour previously promised wouldn’t happen. They’ve raised the employer National Insurance rate by 1.2% and lowered the earnings threshold to just £5,000 per year, which means more out-of-pocket for local employers. For Lincolnshire’s smaller businesses and farms already dealing with high running costs, this is an unfair hit that makes it more challenging to keep jobs secure and wages stable. The Institute for Fiscal Studies (IFS) estimates that three-quarters of this increase will affect lower-wage jobs, pushing costs onto those who can least afford it.
Beyond National Insurance, we’re seeing a historic rise in the overall tax burden, now set to reach 38.2% of GDP by 2028-29. This is the highest level in our country’s history, surpassing the post-war tax peaks. People here in Grantham and across Lincolnshire already work hard to make ends meet, pushing the tax burden higher risks and discouraging local entrepreneurship and innovation that are so vital to our rural economy.
Then there’s the £40 billion increase in borrowing for this year alone. The Office for Budget Responsibility (OBR) projects that this borrowing spree will increase inflation and interest rates. Mortgage rates, already a concern for families across Lincolnshire, will likely increase by an estimated 0.25% by 2025-26 due to this fiscal loosening. It’s estimated that inflation, which we’ve fought hard to control, will climb to 2.6% in 2025 and stay elevated compared to previous forecasts. This directly impacts household budgets, making everyday essentials—from groceries to energy bills—more expensive.
The lack of focus on rural communities is also troubling. This budget needs to be more aimed at helping Lincolnshire’s farmers or supporting rural businesses. Our council has been advocating for tailored policies that recognize the unique needs of rural areas. Yet, Labour’s budget appears to treat every region with a one-size-fits-all approach. Here in Lincolnshire, the council has worked hard to support farmers and rural enterprises with targeted initiatives in infrastructure and digital connectivity, but we could do so much more with the proper national backing.
Labour’s budget includes changing the bus fare cap, raising it from £2 to £3—a 50% increase that will hit rural communities particularly hard. For many residents in Lincolnshire, buses are the only reliable form of public transport, especially in areas where driving isn’t an option. While urban areas may have frequent services, rural routes like ours are already limited, and this fare increase places an added burden on those who depend on them most. Raising the fare cap doesn’t address the underlying issue of funding for rural transport; it simply makes bus travel more expensive without guaranteeing service improvements. Lincolnshire County Council has been working to subsidize essential routes to keep our communities connected. Still, with this fare hike, we need real investment in rural transport to maintain affordable, accessible options for everyone.
At Lincolnshire County Council, despite facing cuts to government grants and higher costs due to inflation, we’ve kept council tax among the lowest in the country. We prioritize essential services—roads, public safety, and social care—while being fiscally responsible. For example:
- We’ve boosted highways maintenance funding to £112 million for 2024/25, up from £102 million last year, to keep our roads safe and reliable.
- We’re investing in antisocial behaviour initiatives and spending an additional £1 million to improve community safety. We also work closely with local police and social landlords to keep our streets safe.
- Our specialist education program, which will provide 500 new special school places by 2024, is already making a difference for Lincolnshire’s young people with SEND, ensuring they receive quality education close to home.
In contrast, Labour’s tax-and-borrow approach needs to focus on sustainability. The OBR has forecasted a 0.7% reduction in growth over the next five years due to Labour’s policies, which leaves us fewer opportunities to improve local services and infrastructure. Rural councils like ours will bear the brunt of these misguided economic policies, with no guarantee of increased funding to offset these impacts.
Ultimately, Labour’s budget approach will make life harder for families and businesses in Grantham and Lincolnshire. The Conservatives remain committed to keeping taxes low, spending wisely, and standing up for rural communities. We’re working to keep Lincolnshire’s economy resilient, support job creation, and ensure that public services remain strong—without burdening residents with excessive taxes and debt.
Lincolnshire deserves leadership that understands our unique needs and delivers genuine support, not one-size-fits-all policies that fail to recognize the challenges of rural life.