The North East Chamber of Commerce responds to the Chancellor’s budget

“The Chancellor has attempted a delicate balancing act today, using a series of measures to stabilise the public finances. While many of our members will welcome the decision not to introduce further taxes on business, the capping of salary sacrifice on pensions will increase costs for some employers. There will also be understandable caution about the significant tax burden now placed on households and consumers. This shift risks weakening confidence, dampening demand and slowing growth in the months ahead.

“The Chancellor is right to scrap the two-child benefit cap. Our members have long argued that this is one of the most powerful levers available to tackle the unacceptable rates of child poverty across our region and to support more parents into sustained and meaningful employment.

“Confirmation of the £13 billion of flexible funding devolved for skills, infrastructure and business support to seven Mayoral Strategic Authorities, including the North East Combined Authority, directly delivers our call for devolution to unlock North East growth and productivity. We welcome the announcement of £16 million for a new STEM Centre in Darlington, funded through the Growth Mission programme. Confirmation of the Creative Places Growth Fund, an AI Growth Zone, and access to a Revolving Growth Fund to improve finance for business within the North East Combined Authority area are all positive developments. Alongside the launch of Local Growth Funding for both Tees Valley and the North East Combined Authority, the government has clearly listened to our long-standing calls for deeper devolution to support locally-led growth.

“We also welcome further commitments on planning and development, including funding for the Forth Banks development in Newcastle.  The government’s recognition of capacity issues within the planning system, and the commitment of £48 million to address them, represents a significant win for the Chamber. We identified this issue in the Tees Valley Local Skills Improvement Plan in 2023, and today’s announcement shows that evidence-based, business-led insight can shape national policy.

“On education and skills, employers will welcome the full funding of apprenticeships for under-25s, which should help create more entry points into the labour market and support long-term workforce development across the region.

“Finally, the commitment to consolidate the fiscal rule assessment into a single annual event is a welcome move towards one of our most ambitious asks: for fiscal rules to be applied more flexibly and sensibly. Less speculation about fiscal headroom and more focus on delivery will begin to offer the policy certainty our members need to invest, create jobs and plan for the future with confidence.

“There is cause for guarded optimism, but what matters now is how today’s measures play out in practice. The Chamber will continue to champion the interests of North East businesses as the implications become clear.”