Welcome to the 2025 Spring Statement Newsletter from Beatons Group
No further tax increases in Spring Statement
Chancellor Rachel Reeves announced 'no further tax increases' in the 2025 Spring Statement.
The Chancellor's Autumn Budget contained a record £40 billion in tax increases. However, it did not raise personal taxes including, Income Tax, employee National Insurance contributions (NICs) or VAT.
Ms Reeves had pledged one fiscal event a year and confirmed that no taxes would be raised at the Spring Statement.
Instead, the Chancellor made a number of announcements on spending and economic forecasts.
The forecast from the Office for Budget Responsibility (OBR) halved the UK's growth in 2025 from 2% to 1%.
However, Ms Reeves pointed out that the Organisation for Economic Co-operation and Development (OECD) downgraded this year's growth forecast for every G7 economy.
The OBR forecasts show that inflation will average 3.2% this year before falling 'rapidly', meeting the Bank of England's 2% target from 2027 onwards.
Ms Reeves said that defence spending will increase to 2.5% of GDP, by reducing overseas aid. This means an extra £2.2 billion for the Ministry of Defence in the next financial year to address 'increasing global uncertainty'.
The government will spend a minimum of 10% of the MoD's equipment budget on innovative technology, boosting production in places such as Derby, Glasgow and Newport.
In addition, the Chancellor said that planning reforms will put the government 'within touching distance' of hitting its target of 1.5 million new homes over the course of this Parliament.
Ms Reeves said that this will increase the level of real GDP by 0.2% by 2029/30, adding £6.8 billion to the economy.
The Chancellor said: 'Our task is to secure Britain's future in a world that is changing before our eyes. The threat facing our continent was transformed when Putin invaded Ukraine. It has since escalated further and continues to evolve rapidly.
'At the same time, the global economy has become more uncertain, bringing insecurity at home as trading patterns become more unstable and borrowing costs rise for many major economies.'
For a detailed overview of the 2025 Spring Statement and what the measures mean for you and your business, visit our Spring Statement summary.
WHAT THEY SAID
'I can confirm to the House that day-to-day spending will increase in real terms above inflation in every year of the forecast, and in the spending review - apart from the reductions in overseas aid across the departments - day-to-day spending has been fully protected.'
Rachel Reeves, Chancellor of the Exchequer
'[The Chancellor] chose to be reckless with a sliver of headroom against her fiddled targets. She borrowed and spent and taxed like it was the 1970s.'
Mel Stride, Shadow Chancellor
'Weaker growth this year is a serious setback but not a surprise given the burden businesses are shouldering after the Budget.'
Rain Newton-Smith, Director General of the Confederation of British Industry
'The government must focus on reducing the cost pressures for businesses, boosting investment and exports.'
Shevaun Haviland, Director General of the British Chambers of Commerce
2025 Spring Statement - the political reaction
Addressing the House of Commons, Chancellor Rachel Reeves used the 2025 Spring Statement to announce an increase in defence spending and a move from a deficit of £36.1 billion in 2025/26 to a surplus of £9.9 billion by 2029/30.
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2025 Spring Statement - the business reaction
Business groups, including the Federation of Small Businesses (FSB), the British Chambers of Commerce (BCC) and the Confederation of British Industry (CBI) have reacted to Chancellor Rachel Reeves' 2025 Spring Statement speech.
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2025 Spring Statement - the economic picture
Within her Spring Statement speech, Chancellor Rachel Reeves revealed that the Office for Budget Responsibility (OBR) has halved UK economic growth from 2% in October 2024 to 1% in 2025.
Click here for the full story