THE Chancellor's Autumn Statement has been met with mixed reaction from the North East today.

The UK faces a collapse in living standards, higher bills, tax hikes and increased unemployment as the economy slumps into recession.

Chancellor Jeremy Hunt told MPs today he was having to make difficult decisions to ensure a “shallower downturn”, but the economy was still expected to shrink 1.4 per cent in 2023.

A majority of households will be worse off as a result of Mr Hunt’s decisions, which will see the cap on energy bills increase and the tax burden rise to its highest sustained level since the Second World War.

The Chancellor blamed Russian president Vladimir Putin’s invasion of Ukraine for a “recession made in Russia”, with the spike in energy prices driving up inflation, but he was also being forced to manage the financial turmoil caused by his predecessor Kwasi Kwarteng’s mini-budget in September.

In an effort to get a grip on the public finances, Mr Hunt set out plans for almost £25 billion in tax increases and more than £30 billion in spending cuts by 2027-28.

The threshold at which the 45p top rate of income tax is paid will be reduced from £150,000 to £125,140.

An extra 92,000 people will be paying income tax and 130,000 will be paying the higher rate in 2027/28 after thresholds were frozen, meaning “fiscal drag” will see increased wages move them into higher tax brackets.

The windfall tax on oil and gas giants will increase from 25 per cent to 35 per cent and a 45 per cent levy on electricity generators will help raise an estimated £14 billion next year.

Household energy bills will also increase from April, although Government help will continue.

The energy price guarantee will rise from £2,500 to £3,000 for an average household’s annual energy bill – but Mr Hunt said that would still mean an average of £500 support for every household in the country.

State pensions, disability and working age benefits will increase by September’s 10.1 per cent inflation figure from next April.

He also announced a 9.7 per cent increase in the national living wage, which will rise to £10.42 an hour from April, meaning a £1,600 pay rise for a full-time worker.

An extra £2.3 billion per year will be invested in schools in England over the next two years, and the NHS budget in England will increase by an extra £3.3 billion in each of the next two years, Mr Hunt also said.

Hexham MP Guy Opperman said: "It is right that this Government has come forward with a plan to restore economic stability and tackle inflation.

"I welcome that even in these tough times the Government is investing an extra £11 billion into our schools and the NHS – delivering investment for our public services."

John McCabe, chief executive of the North East England Chamber of Commerce, said: "We know the Chancellor has had difficult decisions to make with this budget. He was right to focus on stability and protecting the most vulnerable households and businesses. This is what our members have called for and the government appears to have listened.

"There are some important commitments on public spending, infrastructure and benefits rising in-line with inflation. The government’s business rate proposals support both the hospitality and retail sector and local councils – this is a good first step. But energy costs continue to be a key concern for our members.

"Now that the details of the government’s energy bill relief scheme have been published we will make sure we engage to get vital support for businesses in our region. Taken together these interventions may help the North East weather some of the biggest economic headwinds in 2023.

"The government’s renewed commitment to an extended devolution deal for the north of the region is also welcome. This could play a pivotal role in levelling up the North East. The right deal will be an important win for our region and we hope this is confirmed very soon."

Responding to today’s Autumn Statement, Chair of the North East Child Poverty Commission, Anna Turley, said: "The Chancellor confirmed today that we are now in recession, and it’s clear that the months ahead are going to get even tougher for many families and children here in the North East.

"The extension to cost of living support and confirmation that benefits like Universal Credit will rise in line with inflation – as normally happens every year – will come as some relief, as families on the lowest incomes simply cannot sustain yet more real terms cuts to their budgets.

"But this increase should be made now, not next April. For some time, charities we work with across the North East have been reporting unsustainable levels of demand just to help families with the basics, more and more parents and carers falling into debt, and children missing out on essentials. Additional support is therefore required urgently, not in over four months’ time.

"The Chancellor also spoke about the need to tackle rising levels of economic inactivity, which is a significant challenge for our region. Yet he failed to make a single mention of childcare, the costs and availability of which are one of the single biggest barriers to employment or increasing hours at work. Rather than seeking to punish parents and carers on a low income, the Government has to understand that it’s simply not possible to improve living standards and opportunities for children and families without fundamentally addressing this issue."

North of Tyne Mayor Jamie Driscoll said: "Benefits and pensions are only being uprated in line with the Consumer Prices Index. But the poorest and most vulnerable spend most of their money on food, fuel, and rent, which are rising way faster than inflation. So in real terms, benefits are being cut."