North East reaction to UK 2025 Budget as two-child cap ends

Rachel Reeves speaks to nurses and members of the media during a visit to the University College London Hospital after she delivered her budget <i>(Image: Adrian Dennis/PA Wire)</i>
Rachel Reeves speaks to nurses and members of the media during a visit to the University College London Hospital after she delivered her budget (Image: Adrian Dennis/PA Wire)
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LEADERS across the North East have reacted to the UK's 2025 Autumn budget.

Around lunchtime yesterday (November 26), the Chancellor of the Exchequer, Rachel Reeves, revealed the UK's annual budget, unveiling tax rises, a scrap of the two-child benefit cap and a freeze of income tax thresholds until April 2031.

The decision to abolish the controversial two-child benefit limit from April has been highlighted as a victory by several community leaders.

The move, which will cost £3 billion by the end of this Parliament, is expected to lift around 450,000 children out of poverty by 2029/30, according to the watchdog, including 70,000 in the North East.

In a statement released by West Northumberland Foodbank, CEO Sam Gilchrist said: "We see every day how quickly circumstances can change for families, and how hard it can be to make ends meet. Any step that helps prevent people reaching crisis point is a positive one.

"As future welfare and support policies are developed, we hope decision-makers will continue to listen to local organisations and communities, so that changes respond to real needs on the ground and benefit those they are intended to help, whatever policy context people find themselves in.

"We’ll continue to play our part by supporting local people and working with our community to make sure support is there when it’s needed."

Hexham MP Joe Morris said: "The Budget marks a decisive reversal of a punitive policy imposed by the previous Conservative government.

"With child poverty in the North East being among the highest in the UK, lifting the two-child benefit cap will benefit children in communities not only across the Hexham constituency, but throughout the length and breadth of this country."

As well as calling the end of the two-child benefit cap a 'major victory', North East Mayor, Kim McGuinness, has highlighted the continuation of cheaper bus fares, the creation of a new tourist tax (visitor levy) and securing a £96 million Local Growth Fund to 'help small businesses', 'retail parks' and 'create more jobs', as major boosts for the region.

Rhiannon Bearne, deputy chief executive of the North East Chamber of Commerce, said the Chancellor had tried to strike a 'delicate balancing act', stabilising public finances without adding new business taxes.

She has cautioned that limiting pension salary sacrifice will 'push up costs' for some employers, while rising tax pressures on households could 'weaken confidence' and 'slow growth'.

The business specialist also backed the decision to end the two-child benefit cap, describing it as 'vital' for reducing child poverty and supporting parents into work.

"Devolved funding for skills, infrastructure and business support directly delivers our call for devolution to unlock North East growth and productivity," she said.

Rhiannon added that the announcements on STEM investment, creative and AI initiatives, and new growth funds show the government had 'listened' to 'long-standing' calls for deeper devolution.

“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," she said.

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