Your Spring Statement 2025 reaction

Here’s how accountants and bookkeepers feel about the economy and public finances following Labour’s announcement.

Chanceller Rachel Reeves delivered her Spring Statement today (Wednesday) amid widespread speculation across business groups and the media who voiced concern around slow economic growth and potential tax rises.

Controversial plans to make huge benefit and welfare cuts also made headlines in the build up to the event.

Delivering her statement, Ms Reeves reiterated her commitment to not raising taxes and insisted her fiscal rules which would bring ‘economic stability’ and ‘security to working people’ were ‘non-negotiable’.

But pointing to an ‘uncertain economy’, ‘unstable trade’ and rising borrowing costs, Reeves revealed that the UK growth forecast has halved for 2025 from 2% to 1% according to modelling from the Office for Budget Responsibility (OBR). The OBR predicted that her 2024 budget would have led to a £4.1bn deficit in 2029-30, although it had previously forecast a £9.9bn surplus.

Steps – further savings – therefore needed to be taken to restore the £9.9bn surplus, she said, which include welfare and benefit cuts, further crackdowns on tax evasion, cuts to aid, civil service cuts and transforming public services. 

However, capital spending will increase by £2bn a year and an additional £2.2bn has been allocated for the Ministry of Defence.

And the economy could be ‘larger’ than previous OBR predictions by 2030, Reeves insisted, with households £500/a year ‘better off’ under the current government.

The OBR have also speculated that the UK’s tax share could be the highest levels since World War II. So what does all this mean for businesses? We asked AAT members for their views.

OBR figures give little reassurance or incentive for businesses to increase investment

Ellis Harris-Boulter MAAT, Founder and Director, FieCo Accountancy and Marketing and AAT Tutor

The most telling takeaways from today’s Spring Statement come from the OBR’s economic forecasts. Inflation is expected to rise to 3.2%, up 0.6%, while growth has been revised down from 2% to 1%. For businesses already treading cautiously after bearing the brunt of last October’s £40bn tax rise, these figures offer little reassurance. In this context, what incentive does a business owner have to invest in new technology, expand their workforce, or contribute to the pro-growth economy the UK urgently needs?

Nothing from the statement is particularly surprising – maybe this is because virtually the entire set of policies were already known to the media. Information was released in a way which made those claiming PIP and universal credit anxious for their livelihoods, with ministers offering little clarity or reassurance.

And this speaks to Labour’s biggest problem across the board – marketing. From the doom and gloom economic outlook last year that discouraged growth, to the uproar of the Family Farm Tax (which, even if it raises the estimated £115m, seems hardly worth the political cost), and the cut in overseas aid today, much of the pessimism surrounding the economy may stem not only from the extremely challenging economic environment itself, but also from how it’s being presented.

If the Government want more positive future forecasts, it needs to not only offer economic stability, but also communicate effectively, since confidence drives investment as much as policy.

Verdict: OBR figures give little reassurance or incentive for businesses to increase investment.

No big surprises but welfare cuts will have huge implications

Graham Hunt AATQB, AAT student

As a disabled man with cerebral palsy, I am slightly apprehensive about the further welfare cuts proposed and what the implications will be for the government’s ‘get-back-to-work’ plan.

I was also frustrated by the implication that it’s the fault of jobseekers themselves that unemployment is so high. They never seem to ask what the hiring managers are looking for in an employee.

Overall, there were no big surprises in the Spring Statement because everything was as expected due to media speculation in the lead up. So the focus on defence spending and further welfare cuts in order to balance the books were expected.

Verdict: No big surprises in the spring statements but welfare cuts to balance the books will have massive implications.

Not perfect, but a step in the right direction

Polina Dimitrova AATQB PM. Dip ACIPP Licensed Bookkeeper and Accounts Supervisor, Visual Synergy

The Spring Forecast announced today definitely had some interesting points. The standout for me was the extra £2.2 billion being allocated to defence. It’s a strong signal that the government is taking security seriously, especially with the aim of hitting 2.5% of GDP on defence spending by 2027. I also liked that they’re sticking to funding major infrastructure projects – it’s good to see they’re not cutting corners when it comes to long-term growth.

One thing that caught me off guard was the revised growth forecast for 2025. The OBR slashed it in half, which feels like a pretty big adjustment. And the welfare cuts—especially the 50% reduction in the Universal Credit health element for new claimants—were a bit of a surprise. I can see why these moves are being made, but they’re bound to stir some debates.

Overall, I feel quite positive about the forecast. It strikes a good balance between keeping the finances in check and making sure we’re investing in the right areas like defence and infrastructure. It’s not perfect, but it’s a step in the right direction.

Verdict: It strikes a good balance between keeping finances in check and investing in the right areas.

Would you like to contribute to future articles like this one? If so, please get in touch with Annie Makoff-Clark at [email protected].

Annie Makoff is a freelance journalist and editor.