Chancellor delivers Spring Statement focused on security and national renewal in a new era of global change
Chancellor delivers Spring Statement focused on security and national renewal in a new era of global change
The Chancellor, Rachel Reeves delivered her Spring Statement and in the light of the latest OBR forecast which increased its projections of the budget deficit for the current year by £9.8 billion which as the OBR notes, “remains a small margin against the risk of further shocks to interest rates, productivity, or global trade.” Growth is now likely to be 1.0% for 2025 which is half the previous projection, but thereafter growth is projected to be higher in every future year to 2030.The Chancellor emphasised that long‑term decisions made at the Budget last autumn and the choices made in the months since, mean that the UK is in a strong position to seize opportunity and to navigate the global challenges affecting security and economic stability. She outlined her core objectives as:
Go further and faster with defence: The government has chosen defence as one of the eight priority sectors under the Industrial Strategy. There will be a strong focus on UK Defence Innovation (UKDI), enabling innovative companies and start‑ups to have a pathway to scale and secure the necessary investment to grow, as well as opening public procurement opportunities. This will create a new important growth sector and provide a significant new pipeline of investment opportunities for the Angel and earlystage investment community across the UK.
Go further and faster on reform. This includes:
- Take stronger action against tax fraud and building many new measures through HMRC to clamp down on avoidance and transforming the experience for businesses to submit tax returns .
- Reforming welfare benefits to create further savings and increasing pathways to work
- Public sector reform – significantly reducing the size of the civil service and the creation of a £3.25 billion Transformation Fund to support the fundamental reform of public services, seize the opportunities of digital technology and Artificial Intelligence (AI), and transform frontline delivery to release savings for taxpayers over the long-term.
Kickstarting Growth and Investment
This remains the Chancellor’s core mission, Including the following:
- Building on the AI Opportunities plan announced in January
- Unlocking the potential of the Oxford‑Cambridge Growth Corridor, which could add up to £78 billion to the UK economy by 2035
- Strategic partnerships between the National Wealth Fund (NWF) and Greater Manchester, West Yorkshire, West Midlands, and Glasgow City Region to help regions develop and secure long‑term investment opportunities
- The Regulation Action Plan, published in March 2025, commits the government to cut the administrative costs of regulation on business designed to tackle complexity, reduce uncertainty and challenge excessive risk aversion in our regulatory system.
- Implement the Industrial Strategy alongside the results of the Spending Review in June. This will set out the government and industry’s 10‑year plan to meet our shared ambitions for unlocking investment and accelerating growth across the 8 growth‑driving sectors.
- Increase capital spending by a further £13 billion over the Parliament to support growth‑enhancing investments including infrastructure, housing, and defence innovation. This is in addition to the £100 billion increase in capital spending over the Parliament announced at the Budget last autumn.
- Make reforms to strengthen the role of the tax system including the Corporate Tax Roadmap to provide a stable and predictable tax environment to encourage investment, innovation, and growth over the long term and to explore different options for increasing the tax certainty available for businesses.
- Launching consultations on a revised system of advance clearances in the Research & Development tax relief system, and a new process to give major projects greater advance tax certainty.
- Publish an interim report that sets out a clear direction of travel for the Business rates system, with further policy detail to follow at the Budget this autumn.
- Remove the concept of domicile status from the tax system and implement a new Residence‑based regime from 6 April and continue to work with stakeholders to ensure the new regime is internationally competitive and continues to focus on attracting the best talent and investment to the UK.
- Reforming Individual Savings Accounts to get the balance right between cash and equities to earn better returns for savers, boost the culture of retail investment, and support the growth mission. Alongside this, the government is working closely with the Financial Conduct Authority to deliver a system of targeted support to give people the confidence to invest.
Ensure that the UK is the best place in the world to start and grow a business:
- The Government is committed to fostering a positive, dynamic environment for entrepreneurs and scale-ups as a central part of the growth mission and will continue to work with leading entrepreneurs and venture capital firms on how policy supports this mission.
- This will include reviewing the role of tax reliefs such as the Enterprise Management Incentives Scheme, the Enterprise Investment Scheme and the Venture Capital Trust Scheme. As part of this, the government will be holding a series of roundtables with key stakeholders during April.
It is good to see that Growth remain the key ambition of the Chancellor in this Spring Statement despite the economic and budgetary challenges and we are pleased to see that the role of these key tax reliefs to support investment and growth is recognised.
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