The Budget did more for business than many had expected. The Chancellor cut red tape, eased business rates for small high-street premises and raised the allowances firms can claim when they invest in vans and equipment. But it also confirmed a higher minimum wage, new employment rules and continuing pressure on fuel costs, all arriving in 2027. We spoke to Gatwick Diamond Initiative Executive Director Brett North for his initial response to the Autumn Budget delivered by Chancellor John Healey on 28 October 2026.
For Brett, that combination is what matters most for the region. Brett said: “Much of what’s here is welcome. But I’m worried about the businesses that keep this region running: our logistics operators, mobile trades, service contractors and supply-chain firms. They go into next year with costs rising on several fronts at once, and there’s very little here to help them.”
The national picture is mixed. The economy has grown faster than forecast this year, driven largely by technology and AI. Inflation, however, rose to 3.5% in September, its highest in almost a year, mainly because of fuel. Diesel reached 192.5p a litre, its highest since July 2022, and motor fuel prices are up 30% on a year ago.
Asked whether stronger growth changes the outlook, Brett said it helped, but only up to a point. “Growth led by technology and AI plays to our strengths. But inflation is going the wrong way, and fuel is the reason. The Gatwick Diamond puts far more into the Exchequer than it gets back. Our businesses can deliver the growth the Chancellor wants, but only if day-to-day costs leave them room to invest.”
Red tape and the high street
Where the Budget does help, Brett thinks smaller firms will feel it. The government has announced an £800m package to reduce business costs. Just over £600m a year of that comes from cutting paperwork. Up to £155m comes from extending tariff suspensions on more than 250 imported products. Most significantly for small firms, ministers have dropped the plan to make micro-entities and small companies file full profit and loss accounts at Companies House.
“For us, the Companies House decision is the big one,” Brett said. “A lot of our members are owner-managed businesses competing on tight margins and confidential pricing. They would have been handing their figures to their competitors. Taking paperwork away from small firms is the cheapest growth policy a government has, and I’m glad the Chancellor listened.” He added that the tariff extension would help the region’s engineering and manufacturing supply chains.
The high street also does well. From April 2027, qualifying retail, hospitality and leisure premises will get full Small Business Rate Relief up to £18,000 rateable value, up from £12,000, tapering out at £21,000. The government says 70,000 businesses will stop paying business rates altogether. Pubs, clubs and live music venues get a further 20% off, on top of their existing 15% relief. Bill increases for qualifying properties will be capped at inflation for two years. The cost will be met by requiring online marketplaces to collect VAT on sales by UK sellers from October 2027.
“That’s real breathing space,” Brett said. “Town centres like Crawley, Horsham, East Grinstead, Redhill and Burgess Hill should feel the difference, and the extra help for pubs and music venues matters for the evening economy. Asking online marketplaces to do more is fairer to local shops competing with online sellers.”
Fuel, vans and the cost of moving around
The biggest gap, in Brett’s view, is transport. The 5p fuel duty cut has been extended to July 2027, keeping duty at 52.95p a litre. But businesses still pay full duty and 20% VAT on diesel, and there is no commercial diesel rebate.
“Extending the cut stops prices going up at the pump. It doesn’t bring them down,” he said. “Think of the plumbers, electricians, facilities teams, plant operators, hauliers and field engineers working up and down the M23 and A23. For them, diesel isn’t optional. It’s a tax on doing a day’s work, and there’s still no relief for commercial users.”
There is some help for vehicle operators. First-year capital allowances rise from 40% to 50%. The tax-free mileage rate for business miles above 10,000 a year goes up from 25p to 35p. The move to electric vans is getting less help. VAT on public charging stays at 20%, while VAT relief on household electricity has been extended. A new £100m fund will lower prices at local, lower-powered public chargers from spring 2027, but it is aimed at drivers who can’t charge at home.
Brett was pleased with the allowance changes but less hopeful about electric vans. “If you’re replacing a couple of vans next year, the higher allowance is genuinely useful, and anyone doing big miles in their own car will notice the extra 10p,” he said. “Electric is a different story. Most small fleet operators I speak to still can’t make the numbers work, and a fund aimed at people without a driveway doesn’t change that for a van business. Bring down the VAT on public charging and you’d see more of them make the switch.”
Employers, wages and young people
Employment costs are also rising. The National Living Wage goes up 3.9% in April 2027, from £12.71 to around £13.21 an hour, while employer National Insurance stays at 15%. The UK’s wage floor is already above Ireland’s (€14.15) and France’s (€12.31). From January, employees will also be able to claim unfair dismissal after six months’ service instead of two years.
“Nobody here is arguing against paying people properly,” Brett said. “But we’re already near the top of the European table, and it goes up again in April. Hospitality, logistics, care and retail will feel it first, and those are exactly the sectors Gatwick and its supply chain lean on. Then the dismissal rules change in January as well. If you run a business with 20 staff and no HR department, that’s a lot to take on in a few months, and people will need proper guidance well before the new rules arrive.”
He was also disappointed with the help on offer for hiring young people. The government rejected calls from the Work and Pensions Committee and the British Chambers of Commerce to remove employer National Insurance for all workers under 25. Instead, two narrower schemes remain. Non-levy employers can claim up to £2,000 for each new apprentice aged 16 to 24. Employers can also claim a £3,000 grant for hiring an 18- to 24-year-old who has been on Universal Credit for six months.
“The grants are worth using, and we’ll help our members access them,” Brett said. “But they’re narrow, and hiring is still cautious. A broad under-25 NI relief would have done far more to get young people into work.”
Owners and founders
Business owners also face a mixed picture. From April 2027, the lifetime limit on Business Asset Disposal Relief halves from £1m to £500,000. A proposed Founders’ Relief would offer a 10% Capital Gains Tax rate on lifetime gains of up to £10m for founders of trading companies, and is being consulted on until 30 November.
“We have a lot of owner-managed and family firms, and the cut to Business Asset Disposal Relief will hit many of them,” Brett said. “If you’re planning a sale or succession, take advice now. Founders’ Relief is a positive idea, but advisers expect the conditions to be tight. We’ll be pushing to make sure founders in our technology, aviation and professional services businesses can qualify.”
Devolution and the net-contributor problem
Several of the Budget’s biggest changes are about who controls public money. Business rates will become a fully locally retained tax by the end of the decade, with mayors receiving a 20% share from April 2027. Mayoral authorities are also expected to gain powers to introduce a visitor levy. Surrey, Sussex and Kent do not yet have elected mayors. Separately, the Budget includes £80m for the Local Renewal Fund, including for non-mayoral areas, and £125m for a Derelict Buildings Fund to bring empty shops, offices and pubs back into use.
Brett said that leaves the region exposed. “Keeping business rates locally gives our councils a direct reward for backing growth, and that’s good. But the most valuable new powers are going to mayors, and we don’t have one yet. We’re home to the UK’s second-busiest airport and a big hotel sector, so we have a direct interest in how any visitor levy is designed. Local businesses need to be part of that conversation from the start.”
He said Invest Gatwick Diamond would push for the region to get its share of the renewal and derelict buildings money, but that it was no substitute for long-term funding. “Funds you have to compete for are no substitute for the predictable funding mayoral areas will get. This region pays its way and more. It shouldn’t be left at the back of the queue for transport, power and housing investment. Growth here pays for services everywhere.”
Power and the AI opportunity
Brett sees the biggest opportunity in energy infrastructure. The new British Data Centre Covenant offers operators priority grid connections and permission to generate power on site while they wait. A new Ministerial Control Centre will work to shorten the time from being allocated a grid connection to having usable power. In return, operators must show benefits for local jobs, community investment, the environment and water supplies. The measure sits alongside more than £700m of AI-related funding.
“Grid capacity is one of the main things holding back commercial development in the South East,” Brett said. “Done well, the Covenant gives the Gatwick Diamond a real chance to win some of the investment behind the UK’s AI growth, and to make sure the communities that host it benefit.”
Asked for his message to the government, Brett came back to the businesses he started with. “This Budget makes sensible progress on red tape, gives small high-street businesses room to breathe and helps firms investing in vehicles and equipment. But the firms at the centre of our economy are carrying a heavy load into 2027, without a mayoral safety net behind them. We’ll keep making that case on behalf of the businesses that keep the Gatwick Diamond moving.”