The Spring Statement is always a grab bag of policies claiming to solve just about every economic woe. The Chancellor of the Exchequer, Rachel Reeves, shared her policy vision for the future today, and once again, the delivery promised fixes to an economy that continues to struggle under the weight of tepid growth and geopolitical concerns.
The Chancellor promised that the economy would be 0.2% larger in 2029-30 because of her designated reforms, which are said to be worth a boost of around £6.8 billion as measured today.
Planned reforms are expected to “unlock an extra 170,000 homes,” while 60,000 new construction workers are said to be in the works by 2029. The government plans to help build 1.5 million homes in England to solve the housing challenge.
The Chancellor announced an additional £13 billion of capital investment on top of the £100 billion amount announced at the Autumn Budget. This is predicted to deliver projects needed to catalyse private investment, supporting the UK’s “modern industrial strategy.”
In a dicey world, defence spending was high on the list. As fears grow about the potential for an American retreat in Europe, the UK looks to take up some of the slack. Defence spending is expected to reach 2.5% of GDP by 2027 and perhaps 3% after that. Additional defence spending is expected to be over £5 billion since the Autumn Budget.
Previously announced, reducing bureaucratic inefficiencies and wasteful government spending is predicted to help the government and industry become more productive. Efficiencies in government services, fueled by AI and technology, are anticipated to reform public services.
Scrutiny on taxes and scofflaws is expected to tighten, with more staff pursuing those who dodge their payments. Penalties for delays will be increased. Compensation will be paid to any tattle-tellers reporting serious non-compliance. HMRC will target wealthy offshore non-compliant individuals. The concept of domicile status will be removed from the tax system, and a new residence-based regime will be implemented from April 6, 2025.
Aided by technology, the government aims to tackle the tax gap, raising over £1 billion in additional gross tax revenue annually by 2029-30.
The government said it will work with entrepreneurs and VC firms on policies that support the innovation ecosystem. This includes tax relief schemes like Enterprise Management Incentives, Enterprise Investment (SEIS/EIS), and Venture Capital Trust (VCT) schemes. With little additional information provided, the government said it will schedule a series of roundtables with stakeholders in April.
The government forecasts the economy to grow by 1.0% in 2025, slower than expected, but growth is forecasted to accelerate to 1.9% in 2026.
CI received some feedback on the Spring Statement from financial industry types following the Chancellor’s speech in Parliament.
Silvija Krupena, Director of the Financial Intelligence Unit at RedCompass Labs, Jonathan Frost, Director of Global Advisory at BioCatch, and Marko Maras, CEO of Trustfull, were all disappointed that Reeves did not address the fraud epidemic in the UK.
“I’m disappointed that the UK’s fraud epidemic wasn’t a focus in the Chancellor’s statement. Fraud now accounts for nearly 40% of all crime, yet the response remains fragmented and reactive,” said Krupena.
Frost added:
“There were hopes that the Chancellor would build on the FCA’s commitment to tackle financial crime as a key priority in its newly unveiled five-year strategy, but disappointingly, it was left out of the Spring Statement.”
“It’s disappointing that Rachel Reeves’ Spring Statement didn’t touch on fraud prevention – especially when it’s one of the biggest threats to consumers and the economy,” said Maras.
Nigel Green, CEO of deVere and frequent commentator on UK policies, said the UK is facing a recession and the Spring Statement confirmed what many feared: conditions are worsening, and government policy is making it harder, not easier, to grow.
“The government talks a good game on growth, but it’s making life harder for the very businesses it needs to deliver it,” said Green, pointing to rising taxes and greater regulatory burdens, which are choking off business investment.
Laurent Descout, CEO and co-founder of Neo, said the lack of a commitment to university funding is a big concern as the UK Fintech sector depends on a steady flow of talented graduates.
“Without proper funding and incentives for research and spinouts, the UK’s leadership in Fintech and financial innovation is in jeopardy.”
Descout added that it is disappointing that the Chancellor failed to address the challenges facing SMEs.
“With company insolvencies at their highest level in a decade, businesses need real backing, not higher taxes and reduced incentives. The planned increase in capital gains tax on Business Asset Disposal Relief could deter investment in high-growth Fintechs, making it harder for startups to scale and compete globally. The government must reconsider their approach and do more to ensure the UK remains an attractive place for entrepreneurs and investors.”
Fintech and the digital asset sector did not garner any direct attention from the Chancellor. The CEO of Xapo Bank, Seamus Rocca, said the Chancellor rode a wave of confidence ahead of the Autumn Budget, but five months later, the UK faces inflation, tariffs, and a difficult geopolitical environment.
“Amid these stormy waters, digital assets have sunk further down the government’s agenda,” Rocca said. “While the government insists, ‘The world has changed’, the UK’s digital asset space has remained at a standstill. Bitcoin was built for uncertain times. At risk of trailing behind the US and Europe, we hope that Labour can work with firms in the digital asset space to shape policy and regulation to better serve the consumer and institutional investment markets.”
Scott Dawson, CEO of DECTA, echoed the concern that SMEs were overlooked by the Chancellor. He said Reeves provided rhetoric but little more.
“The lack of any specific measures to alleviate the rising costs, such as business rates, VAT, or the increase in National Insurance Contributions, is a missed opportunity. As we know from working closely with SMEs, they are already under significant strain, with limited access to funding. Our upcoming research on the matter echoes this concern, with a majority of consumers believing the UK is not a favourable environment for SMEs and expressing worries about inflation and fraud.”