Northern leaders react to Budget

The region’s business and political leaders have had a mixed reaction to measures announced in Chancellor Rachel Reeves’ Autumn 2025 Budget.

While voicing support for some measures, such as an end to the two-child benefit cap, many industries have spoken out against tax changes facing their sectors.

Greater Manchester Mayor, Andy Burnham, is among those with a more positive response to the Budget. He welcomed further support for the city-region in delivering on its growth plans, and the ability to raise revenue locally through a ‘tourist tax.‘ He said:

“This is a Budget that sets Greater Manchester up for the next decade of good growth, and we thank the Chancellor for listening to our calls. 

“The commitment to a new visitor levy will enable us to continue to support our thriving visitor economy and invest in the infrastructure to better support that growth, like later public transport, and making sure that everyone has a positive experience in Greater Manchester. 

“Ensuring public transport is affordable is a priority for us, and through the Bee Network we’ve been working hard to keep bus and tram fares as low as possible. It’s important that rail isn’t left behind, and we welcome the move to freeze rail fares for a year starting from March 2026. It’s a positive commitment ahead of major changes to simplify rail fares across Greater Manchester from Sunday 7 December. “

Accountants from Xeinadin (formerly Hallidays in Stockport), however, described the Budget as ‘a mixed bag’ for businesses, commenting:

“Against a backdrop of rising public sector costs and ongoing pressures on household budgets, the Chancellor walked a fine line, increasing taxes in some areas, but ultimately not as significantly as had been expected.

“For individuals, investors and business owners… measures introduce important changes that will influence financial planning for the year ahead.”

Greater Manchester Chamber of Commerce’s (GMCC) Deputy Director of Research, Subrahmaniam Krishnan-Harihara, meanwhile questioned the Chancellor’s arithmetic, arguing that announced tax rises were not sufficient to close the Budget deficit and could slow economic growth. He said:

“The announced measures raise approximately £26 billion. Simultaneously, spending is expected to increase significantly. For example, the Government have taken up direct funding of special needs education from 2028-29 costing up to £6.3 billion annually, while spending on sickness related benefits will be up by £20 billion annually by the end of the decade. Indeed, the OBR has warned that even the increased headroom that the Chancellor expects is still small compared with the uncertain economic forecasts and the smorgasbord approach to raising additional tax revenues. Therefore, there is concern that the gap the Chancellor needs to fill may not be filled. That means the Chancellor is counting on very optimistic levels of economic growth or, perhaps, holding back on larger measures for the coming years.”

He also warned freezes to income tax threshold undermined the increase in the Minimum Wage and could hurt consumer spending and the slow the economy further. Subrahmaniam continued:

“By extending income tax threshold freezes to 2030/31, the Chancellor will strip up to £800 annually from a full-time minimum wage worker’s spending power by the end of the decade. Moreover, the fiscal drag could pull an additional 400,000 people into paying income tax and push 600,000 more into higher tax bands.

“At the same time, the National Living Wage rises in April 2026 by 4.1% to £12.77 per hour, while workers between 18 and 20 will get an 8.5% rise to £10.85. In addition to the fact that workers will gain only 80% of that increase – fiscal drag claws back the rest – these rises also put pressure on businesses because the cost of employment goes up. This pro-cyclical tightening comes precisely when growth is weakening, and the OBR has downgraded productivity forecasts. These measures could actively suppress consumer spending and the business confidence needed for recovery. The behavioural response to these measures is going to be critical. If there is a reduction in the number of hours worked to offset tax increases or additional business costs, this measure will have an adverse impact on employment.”

Representing the region’s hospitality sector, UKHospitality CEO, Kate Nicholls, also warned of the impact on rising wage costs on businesses in the sector, arguing that a 5% cut to business rates for the industry did not go far enough:

“Wage rises, holiday taxes and monumental increases in rateable values have put even further pressure on hospitality businesses, as a result of this Budget.

“A 5p business rates discount is simply not enough to offset these costs and redress the damage it will do to business viability and job opportunities.”

The motor trade has also raised concerns on new pay-per-mile taxation for electric vehicles, warning it could impact demand and slow progress towards the government’s zero-emissions goals. Mike Hawes, SMMT Chief Executive, commented:

“Changes to the VED expensive car supplement are welcome, as is the additional £1.3 billion funding for the Electric Car Grant and support for charging infrastructure. These will help, but will not offset the impact of introducing a new electric-Vehicle Excise Duty – the wrong measure at the wrong time.

“Manufacturers have invested to bring more than 150 EV models to market. However, the pressure to deliver the world’s most ambitious zero emission vehicle sales targets – whilst maintaining industry viability – is intense. With even the OBR warning this new tax will undermine demand, government must work with industry to reduce the cost of compliance and protect the UK’s investment appeal.”