27/03/2025
News
There were no tax increases in the Chancellor’s Spring Statement, which was a quick win for the Government before they moved on to more high-level topics that put them in the firing line of the official opposition.
Promises of an increase to universal credit from £92 per week to £106 per week by 2029/30 were also met positively. But what was said about business and the economy?
Economic growth
But growth comes first for this government. However, disappointingly, the Office for Budget Responsibility has slashed this year’s growth estimate from 2% to 1%. This sharp jolt, announced hours before Reeves presented their Statement, was explained in real terms by the OBR:
“Against a more challenging and uncertain outlook than in autumn, we have halved our forecast for economic growth this year from 2 to 1 per cent and lowered the forecast path for the level of productivity. Before accounting for policy, higher debt interest costs and other forecast changes left the current budget in deficit by £4 billion in 2029-30.”
However, the OBR has also altered its growth figures for the next five years. It believes that it will grow to 1.9% by 2026, by 1.8% in 2027, by 1.7% in 2028, and by 1.8% again in 2029 – a much better state than it had predicted in October.
Housing, planning, and education
One of the reasons for this revised increase is the huge planning reform that continues to gain speed. The government’s ambitious goal of creating 1.5 million homes in the UK is within “touching distance”, with Reeves announcing the country was still on target to deliver 305,000 homes per year.
Heckles of “how” were heard before Reeves explained that the government would be investing £600 million into education, training 60,000 construction workers. This is a possible solution to a few problems; 60,000 young professionals will improve the statistic that 1 in 8 young people are not in education, employment or training, and it will also ease the skills gap that the built environment is facing.
Public services reform
£3.25 billion is to be invested in public services, focusing on harnessing digital and intelligent technologies to save money and increase productivity.
Transforming departments, such as equipping the Ministry of Justice with drone and AI-enabled systems and advancing the HMRC by adopting new IT systems, will ensure agility and efficiency, two qualities lacking in NHS England, recently axed by the Secretary of State for Health and Social Care.
We hope to see our country's local authorities adopt this digital disruption, in order to save costs and improve practices.
In summary
As with every financial update, it's a game of two halves. When the Labour Party won the General Election in July 2024, Starmer said that citizens would need to hold their nerve and have faith for 10 years to see progress. To that end, this is par for the course; we were warned that it would get worse before it got better. But, if these targets are met, we will be able to breathe easy as taxpayers once again.
