North East business leaders have given a general welcome to yesterday’s Budget, in which Chancellor Rachel Reeves raised an extra £40bn, much of it from business, to pay for improved public services and investment in infrastructure.
Rachel Anderson, assistant director of policy at the North East Chamber of Commerce, said: “We welcome many aspects of the Budget and recognise the government has tough decisions to take for the long term.
“In a number of crucial areas for North East business and employers the government has listened to our collective calls for a stronger, fairer region, including on skills, infrastructure and the national framework for investment.
“The employers’ national insurance rise will be difficult for businesses, especially against the backdrop of increases in national minimum wage. We do however welcome the Chancellor’s increase in employment allowance, which will help many of our smaller businesses.
“There is positive news for investment in the electric vehicle and the automotive sector in our region, and for Crown Works Studios in Sunderland, which is expected to create over 8,000 jobs in the region.
“We were pleased to see the Chancellor’s commitment to multiyear local authority funding and the announcement that the North East Combined Authority will be eligible for integrated funding settlements from 2026/27. The commitment of £300mn for the further education sector is positive but does not go far enough. These are both measures we called for in our pre-Budget submission.
“It’s good that government is maintaining business rates relief for retail, hospitality and leisure to support our high streets, and we welcome the Chancellor’s freeze on fuel duty.
“We recognise the government has tough decisions to take for the long term and having pressed reset with this Budget, the government needs to use future fiscal events and policy initiatives to support business in the delivery of growth.”
Mayor welcomes transfer of powers to North East
North East Mayor Kim McGuinness said: “The Budget confirmed the biggest transfer of powers and resources from Westminster to the North East in a generation. The Chancellor has listened to my calls to back our region with a new integrated settlement, which means we as local leaders can invest in the priorities that matter to people in the North East.
“The government is backing our plans to create manufacturing jobs in the North East, with investment in our car industry and potential in electric vehicles.
“I’m pleased the Treasury has listened to my calls to save the £25m investment in the Crown Works Studios, so we can unlock 8,000 jobs and build a creative powerhouse on the banks of the River Wear. That means jobs for people in a range of industries, from hairdressers, electricians, make-up artists, to set designers and script writers.
“Taken with new powers to help people back into work, the Budget means new jobs, new training, new homes and new opportunities for people in the North East.
“The first Labour Budget in 14 years will unravel Tory decay, give us the tools to tackle child poverty and put us on course to make the North East the home of real opportunity.”
Child poverty
Beth Farhat – Chair of the North East Child Poverty Commission – said: “The Chancellor confirmed several welcome measures for families on low incomes across the North East. These include the increase in the statutory living wage, which is getting ever closer to a real living wage for all workers – as well as significant investment in free breakfast clubs.
‘The further extension of the Household Support Fund alongside action to reduce the impact of Universal Credit debt deductions will also provide important relief for families experiencing real hardship in the North East, not least because debt deductions impact children in our region more than any other part of the country.
‘However, it’s disappointing that the Budget did not address why quite so many North East families – both in and out of work – end up with debt deductions or have to turn to the Household Support Fund in the first place: because what should be a safety net for us all provides a wholly inadequate level of support.
‘All eyes are now on the desperately-needed national child poverty strategy the government will publish [in the spring]. This must also adopt the Chancellor’s approach of ‘invest, invest, invest’, but for babies, children and young people – and, as its first priority, must end the two-child limit policy as one of the single biggest drivers of poverty for children across our region.”
Supporting entrepreneurs
Charlotte Windebank, CEO of FIRST – a North East enterprise support organisation working with under-represented communities – commented on two key Budget measures, the £240mn back-to-work funding and employers’ national insurance increase. She said: “As someone dedicated to empowering entrepreneurship in the North East, these budget announcements present both opportunities and challenges for our region’s economic future, and I will be watching with interest as more details emerge.
“The £240mn pledge for work and health support services is particularly relevant for our region, where we see 44% of our working-age population currently economically inactive. At FIRST, we know that self-employment and business ownership can offer the flexibility and autonomy that many people need, and I hope that this funding will include support for those seeking self-employment as a way back into the workforce.
“The increase in employers’ national insurance contributions has the potential to slow hiring, especially for early stage or smaller businesses where margins are particularly tight. Looking at business creation in the first half of 2024, while 10,800 new businesses were launched in the North East, ONS (Office for National Statistics) data shows only 4,870 were registered for VAT/PAYE, suggesting a significant proportion are operating as sole traders or micro-businesses below these thresholds. These are precisely the businesses we should be encouraging to grow and create their first job opportunities, not burdening with additional employment costs.”
Levelling up Billingham
Chris McDonald, Labour MP for Stockton North, welcomed the announcement of £20mn of Levelling Up funding for Billingham. He said: “The inclusion of this project in the Budget is a huge win for Billingham and a testament to the Labour Government’s commitment to responsible, impactful investment. After years of delay, we’re finally seeing real action that will create jobs, enhance our town centre, and make Billingham a place [where] people are proud to live and work. I’m proud to have worked closely with Stockton Borough Council and the Treasury to make this vision a reality.”
The Billingham project, he said, is set to deliver substantial economic benefits, creating and safeguarding over 800 jobs, developing 10,000 square metres of new commercial and retail space and 45,000 square metres of enhanced public realm, and revitalising Billingham’s town centre for residents and visitors alike. It would also bring ten dilapidated buildings back to life, boosting the area’s aesthetic appeal and functionality.
Luke Myer, Labour MP for Middlesbrough South and East Cleveland, also welcomed the Budget. He said Teesside had seen the toll of years of cuts in schools, the NHS, and public services stretched to breaking point. “Small fixes will not cut it anymore; our communities need a full rebuild, and Labour’s Budget delivers on that promise.”
A1 dualling misses out again
But there was disappointment yet again for campaigners for dualling of 13 miles of the A1 between Morpeth and Ellingham in Northumberland. Hopes that the project would go ahead have been raised and dashed for decades, and there was optimism again before the Budget. But it was not fulfilled.
Councillor Richard Wearmouth, deputy leader of Northumberland County Council, told The Journal that £67mn had been spent by the last government on land acquisition, gaining planning permission and completing design works, and it was “incredibly disappointing that it was not going ahead.”
He added: ”Yet again Labour turned its back on the North East and took voters here for granted as they always do. The scheme is of vital importance to our local and regional economy; it would strengthen the Union with better links to Scotland and significantly improve safety for Northumberland residents.” He said the Conservative-run council would campaign tirelessly to get the project back up and running.
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