Spring Statement 2025: what it means for UK businesses
The Chancellor’s Spring Statement has been delivered during an ongoing period of economic uncertainty, with businesses seeking clarity on the Government’s long-term plans for growth, investment, and taxation. While the Statement contained a lot of discussion about growth and investment, it was noticeably light on detail around expenditure savings – an area that continues to be important for sustainable economic progress.
Spring Statement Highlights the Need for Pro-Growth Investment
Roger Esler, Partner in the Leeds Corporate Finance team, commented:
“Government expenditure and tax rises evidently intertwine with economic growth and have complex and wide-ranging ramifications. To enhance the growth outlook, we must see expedient promised investment in areas such as defence, housing, (effective) energy, and infrastructure. The medium-term tax burden outlook also needs moderating with a more radical, long-term approach to public sector spending where it is evidently wasteful”.
Despite these challenges, businesses continue to demonstrate resilience. Roger adds:
“Businesses remain focused on what is in front of them – perhaps mid-sized businesses more so than giant multinationals – pursuing growth strategies or realisation routes whilst Capital Gains Tax rates still offer some encouragement to wealth creation. It’s a shame that so many other available levers to incentivise entrepreneurialism are not being deployed or are being pulled the wrong way”.
Tax Relief and Patent Box Under the Spotlight
The role of tax policy in supporting innovation also remains a key concern. The UK aspires to be a global leader in science and technology, yet tax changes in recent years have created uncertainty for businesses looking to invest in research and development.
Shenal Wijetunge, Partner in the Tax Advisory team, commented on the importance of tax policy in driving forward innovation in the UK:
“We need a tax system that actively supports innovation and attracts long-term investment. R&D tax relief plays a vital role in encouraging businesses to take risks to innovate, invest in cutting-edge research, and develop new products and processes. However, the recent changes to the regime have created complexity, uncertainty, and reduced benefits – precisely what innovative businesses don’t need”.
Patent Box relief, another tool designed to incentivise innovation in the UK, continues to be underutilised. Shenal continued:
“Patent Box has the potential to keep IP-rich businesses anchored in the UK. With the right adjustments, it could be a cornerstone of a broader innovation strategy, particularly for advanced manufacturing, engineering, and life sciences”.
Regional economies also have a crucial role to play in driving national innovation, with Shenal adding:
“Regions like the North West of England have thriving clusters in tech, pharmaceuticals, clean energy, and advanced engineering. Further targeted support here could unlock significant economic value and create the conditions for world-class innovation outside of London and the South East. Levelling up starts with backing regional R&D”.
A Clearer Path Forward for Growth and M&A
Given recent economic turbulence, many within the corporate finance sector hoped for a Spring Statement that prioritised stability and continuity, rather than causing further uncertainty.
Gregg Pendlington, Partner in Corporate Finance, said:
“We had hoped the statement would pass without too much economic drama, as this unsettles the markets. I was therefore pleased to hear the Chancellor confirming ahead of the Statement that she wouldn’t be making any tax changes, especially as businesses and taxpayers are still adjusting from the previous ones, and we’re beginning to regain some stability”.
Gregg also emphasised the need for a clear and structured approach to growth:
“The Government doesn’t seem to be afraid of making difficult decisions, which is good, but little and often is a better order of the day. It’s been a long time since M&A has been on a steady track, so hopefully, the Spring Statement will bring more stability and help to put us on that course”.
Political and Economic Weight of the 2025 Spring Statement
As businesses assess the effects of the Spring Statement, there is a growing sense that clarity and consistency are needed most. The Chancellor’s plans will have wide-ranging consequences across corporate finance, tax policy, and business investment, and the coming months will reveal whether the Government’s ambitions translate into meaningful action.
Koo Aseeley, Partner in the Wales and South West Corporate Finance team, added:
“Amidst domestic and international volatility, Rachel Reeves’ Spring Statement carries as much economic and political weight as any full Budget in recent years. It was very interesting and revealing to hear how the Chancellor plans to steer this Labour Government toward fostering the UK’s much-needed growth”.
Please note: Partner-authored articles represent individual perspectives and are not necessarily reflective of views shared by DSW Capital or the collection of businesses that comprise the Dow Schofield Watts group.
