In the Spring Statement 2025, the government’s message was more about maintaining course than setting a new one. With no changes to tax rates announced and little fiscal content generally, the Statement was largely a confirmation of the government’s existing economic strategy, which the Chancellor sought to back up with updated statistics from the Office of Budget Responsibility (“OBR”). The focus was on sustaining stability, securing growth, and addressing long-term challenges through ongoing investments and reforms.
- Tax Rates Remain Unchanged: There were no announcements regarding changes to income tax, VAT, National Insurance, corporation tax. Businesses and individuals can perhaps breathe easy, knowing there is nothing else new imminent. Many will be preparing for the major changes announced in the Budget in Oct 2024 due to come into effect in April 2025.
- Increased Defence Spending: The government has committed to a substantial increase in defence spending, aiming to meet NATO’s 2.5% GDP target by 2027, with an additional £2.2 billion allocated for defence in 2025-26. This decision reflects a clear focus on national security in a volatile global environment.
- Investment in Infrastructure and Housing: The government is increasing its investment in infrastructure with an additional £13 billion over the next five years, alongside a £2 billion boost for social and affordable housing. These measures aim to stimulate growth and address what the government have identified as the UK’s housing shortage.
- Public Sector Reforms: The statement also outlined efforts to enhance public sector efficiency, including bringing NHS England back under the Department of Health and Social Care. A £3.25 billion Transformation Fund will support various government reforms, focusing on digital advancements and improved service delivery.
What This Means for Businesses
For businesses, the Spring Statement included no new tax measures. With no changes to tax rates or major fiscal policies, companies may be relieved that they can continue as planned; with major National Insurance changes coming in in April 2025, there may be a combination of relief that there is nothing new to consider but disappointment that pleas for the government to think again about some of the October 2024 changes have not been heard. In some sectors, the government’s investment in infrastructure and housing could also present opportunities in the coming years, particularly for industries tied to construction, technology, and housing.
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