‘Must see more’ after Budget

The North East “must see more” investment from the Government in the months to come, the region’s mayor has warned ministers, writes Local Democracy Reporter, Daniel Holland.

Figures from across the region welcomed confirmation in Rachel Reeves’ Budget on Wednesday that the two-child benefit limit will be scrapped, while she also announced measures to cut the cost of energy bills by £150.

The Chancellor, whose announcements were mistakenly released early by the Office for Budget Responsibility, will also freeze national insurance and income tax thresholds for an extra three years beyond 2028 – meaning more people will be pulled into higher bands over time.

While the abolition of the two-child cap was high on many Northern leaders’ wishlists, there was no mention of a series of other projects – including major transport upgrades.

A Government decision on the future of the Northern Powerhouse Rail scheme, which includes the full restoration of the mothballed Leamside Line railway through County Durham, remains unclear. 

North East mayor Kim McGuinness had also called for investment to upgrade the A19 Moor Farm roundabout, more trains for the Northumberland Line, an extension of the Government’s newly-announced rail fare freeze to the Tyne and Wear Metro, and extra money to help revive Sunderland’s Crown Works film studios development after its main investor pulled out. 

None of those were mentioned by the Chancellor on Wednesday.

Ms McGuinness will get the power to impose a new ‘tourist tax’ to raise revenue from visitors to the region, while it is understood that her office is keen to use the North East’s £96 million of a Local Growth Fund to put into projects like the Crown Works and the Gateshead Quays regeneration.

The mayor said: “A visitor levy means we can enter a new era of regional events and festivals. This will create thousands of jobs, while attracting even more visitors to our unique world heritage sites at Hadrian’s Wall and Durham Cathedral, our stunning coastlines and the iconic Tyne bridges and quayside. 

“We’ve also secured £96m for a Local Growth Fund which we will use to help small businesses on our high streets and retail parks to grow and create new jobs for people right across our region.

“While I welcome these measures, we now must see more for the North East in the coming months. Including a commitment to re-opening a railway line connecting towns and villages in County Durham with our Metro at Washington, as well as upgrades to the East Coast Main Line.” 

The Government said that it would set out an “overarching plan” for northern growth in early 2026 and the announcements on transport upgrades “will be made shortly”.

The Chancellor also committed to a pensions boost for former mineworkers, by transferring the Investment Reserve Fund of the British Coal Staff Superannuation Scheme to its members, which she said would ensure “the women and men who worked in the coal industry’s offices and canteens get a fair deal in their retirement too”.

Conservative councillors in Cramlington accused Ms Reeves of having ignored the pleas to deliver the upgrade of the “accident blackspot” at Moor Farm. 

Wayne Daley, leader of Cramlington Town Council and also a county councillor for Cramlington North, said: “The budget was the last chance for the Chancellor to release funding to sort this out but instead we will face decades of delay and even more impact on job creation and road safety around Cramlington.”  

But local Labour MP Emma Foody insisted that a decision on Moor Farm was never expected this week and should come in the first quarter of next year as part of the Road Investment Strategy.

She said: “Once again, rather than working with me and local businesses and people to secure this vital investment, Northumberland Conservatives, who given the importance of the issues should know when the decision will be taken, seek to undermine the work to secure this vital investment – something that they never funded in fourteen years in government.”

Ms Reeves’s Budget also confirmed a new council tax surcharge on high value properties, aimed at raising £400 million. 

The added fee will start at £2,500 a year for homes worth more than £2 million, rising to £7,500 for properties worth more than £5 million. 

Karen Kilgour, the Labour leader of Newcastle City Council, said that was a “step in the right direction towards fairer funding” but that further reforms were needed to deal with a financial crisis facing local government.

She added: “I am also disappointed that Newcastle has not benefited more from new funding formulas for local authorities. Prudent financial management here in Newcastle means we don’t face the same financial crisis as some other big cities but that does not mean the current funding is sustainable long term.

“With the state our national finances were in, there was never going to be a silver bullet to solve all our problems. However, we still need more support from Government to address some of the significant challenges we face and I will continue to lobby ministers to get the best outcomes for our residents.”