• Swindon & Wiltshire Economy
• Thursday March 27 2025
• Author Name: Peter Davison

Spring Statement – business world reacts

Local businesses and business support organisations have been responding to the Government’s Spring Statement.

It might have been a Spring Statement, but green shoot metaphors were thin on the ground as Chancellor Rachel Reeves delivered her cost-cutting not-a-Budget yesterday (Wednesday).

The £14 billion of cuts were aimed at tackling Britain’s debt and boosting the nation’s economic resilience, but there was little to support economic growth.

When new – heavily trailed – spending was announced, it was aimed at one of the two major headwinds blowing in the UK’s direction – £2.2 billion to fend off a militarily aggressive Russia.

But along with the physical threat from the Best from the East comes a new risk – the Pest from the West, in the form of Donald Trump and his trade tariffs.

Cars are the UK’s biggest goods export to the US, and shares in both Aston Martin and Jaguar Land Rover tumbled in the wake of the US president’s 25 per cent levy on imported motors, announced overnight after the statement.

The Statement was accompanied by good news and bad. Inflation is slowing, but the UK’s growth forecast has been downgraded from two per cent to one – although the Office for Budget Responsibility is feeling more confident about every year following this one, as Labour’s house-building programme starts to reap rewards.

There were calls from the British Chambers of Commerce for more business-friendly policies.

“The government must focus on reducing the cost pressures for businesses, boosting investment and exports,” said director general Shevaun Haviland.

“Firms are realistic, but they are also hurting. Within days they will be faced with higher national insurance contributions and a rise in the national living wage.

Our research shows 82 per cent of businesses will be impacted by the NI hike – with firms forced to raise prices, postpone investment and cut back on recruitment.”

The Federation of Small Businesses was equally insistent that the Government needs to focus on jobs and growth.

“Today’s growth figures are a stark reminder of the urgent need to get the economy moving. The whole of Government must now step up and produce credible, pro-small business plans to achieve that,” said policy chair Tina McKenzie.

“FSB’s latest quarterly Small Business Index revealed confidence levels among small businesses at their lowest since the first year of the pandemic. That needs to be turned around, and fast.”

Meanwhile, there were calls to ‘unlock investment’ from the CBI. CEO Rain Newton-Smith said: “Firms are already braced for a difficult few months ahead with NICs, and National Living Wage increases next week.

“In its current form, the Employment Rights Bill risks imposing a significant regulatory burden onto companies with damaging consequences for growth, jobs and investment.”

Locally, Business West was pleased to hear Swindon name-checked. The business support organisation has been pivotal in drawing up the Heart of Swindon regeneration plans.

“The Chancellor outlined some improved long-term growth forecasts from next year, thanks in part to the Government’s planning reform and increased defence spending,” said managing director Phil Smith.

“These measures are positive for our regional economy, which has a pressing need for new housing, and has a strong defence and advanced manufacturing industry.

“We were encouraged to hear the Chancellor’s plans to tackle the construction skills gap which is hampering the ability to build the homes that we need.

“This is in line with the recommendations from the Local Skills Improvement Plan, which Business West leads for the West of England and North Somerset, Gloucestershire, Swindon and Wiltshire.

“We were also pleased that the Chancellor referenced Swindon in plans to support councils and housing associations bring bids forward for new developments. This upfront investment in housing delivery will help attract private investment. Business West has been working closely with Swindon Borough Council on bringing forward a new wave of housing in the heart of Swindon.

“It is vital that the focus on business and economic growth continues, and we welcome the Chancellor’s commitment to helping drive this.”

Meanwhile, Swindon-based accountancy firm PPS and financial advisor Dave Southby of Southby & Co Financial Planning both remained concerned about the effects of ‘Awful April’ on local businesses.

Sally Holland, a partner at Swindon-based accountancy firm PPS, said: “Rachel Reeves speaks of growth, however with the imminent changes to National Insurance and the National Living Wage this will prove difficult for some of the smaller businesses we deal with. Even with the increase in the employment allowance

“Tax thresholds frozen until 2028 create the highest tax burden in 70 years.

“The Government’s headroom is apparently being restored which gives the Chancellor leeway to cut taxes or increase spending in the future, but how many businesses will survive in the interim?

“Again inflation is expected to fall, but first forecasters think inflation for 2025 will average 3.2 per cent. Businesses are going to have to work hard to get through the next few years to be able to hopefully see some benefits in the future.

“Swindon was mentioned as one of the places that might bid for funds for building affordable/social housing so we will see if that happens and what the impact is.”

And Dave Southby added: “The Spring Statement offered very little for businesses, particularly the small business sector and absolutely on back-tracking on changes due to come into effect in a week or so.

“In some ways that’s good as we know what to expect, in others it’s a little disheartening for the Government not to recognise the impacts of rises in Employers’ National Insurance contributions on top of the annual rise in the National Minimum Wage.

“Now we will all be holding our breath ready for the Budget later in the year.”