Chancellor Rachel Reeves has made her Spring Statement announcement for 2025 – and it was pretty disappointing for small businesses.
Here’s what she said, how it impacts small firms and what the experts had to say.
Spring Statement 2025 live blog
13.12: Reeves ends her speech.
13.05: GDP growth – economy will be larger than forecast at time of Autumn Budget. Predicted growth of 1.9 per cent in 2026, 1.8 per cent in 2027, 1.7 per cent in 2028 and 1.8 per cent in 2029.
12.55: Promised new business opportunities as part of defence plan. Giving small businesses better access to Ministry of Defence contracts.
12.52: OBR says CPI will fall to 2 per cent by 2027. Have revised growth forecast from 2 per cent in autumn to one per cent now.
12.43: No further tax increases, as promised.
12.36: Turns to OBR forecast. Fiscal rules non-negotiable. Restored headroom against stability rule. Surplus £9.9 billion by 2029/30. ‘Broadly unchanged from autumn,’ according to Reeves.
12.34: Reeves mentions rise in National Living Wage, going up by 6.7 per cent next week.
Expert analysis of the Spring Statement 2025
Overall, it’s fair to say that the Spring Statement was lacking for small business owners. Here’s what the experts had to say.
Kevin Fitzgerald, UK MD of Employment Hero, thinks that support for SMEs helping people coming off of long-term benefits would be helpful:
“The government had an opportunity to support the small businesses that are the backbone of our economy, but today’s Spring Statement missed the mark.
“While we understand the fiscal challenges and see the case for benefit reform, the government hasn’t yet put these changes together in a way that works for businesses.”
“Providing targeted support to SMEs that hire people coming off long-term benefits would benefit both businesses and the economy. Without meaningful intervention, we risk further job losses, particularly among our youth where NEET numbers already approach one million.”
Vipul Sheth, MD of Advancetrack, worries about business owners leaving the UK:
“Inflation may be down slightly, but that’s little consolation to the thousands of businesses that are having their costs pushed up by the Labour government, at a time when they should be creating growth.
“My real worry now is business owners deciding to leave the UK. I fear many will see the iceberg and decide to abandon ship to other parts of the world, that offer lower taxes and more favourable conditions to allow their business to grow. Every single one that decides to leave represents job losses in the UK.”
Managing director of Aurora Capital, George Holmes, feels it’s time for new SME support:
“The Spring Statement delivered few surprises, but for small businesses, that’s part of the problem. With no new tax or spending support announced, and inflation now down to 2.8 per cent, many SMEs will feel this was a missed opportunity to help them weather the cost pressures they’re still facing. Despite clear warnings from business groups, there was no new support to ease the pressure on small employers; no targeted reliefs, no funding boosts, and no signal of short-term help with borrowing costs.”
Ronni Zehavi, CEO and co-founder at HiBob, was hoping to see some relief for small businesses:
“Every British business was watching the Spring Statement in hopes of seeing national insurance contribution relief. With less than two weeks until implementation, employers are now forced to continue making difficult budget decisions, with many reducing hiring, freezing or modifying wages and cutting back on staff investment.”
Policy chair of the Federation of Small Businesses (FSB), Tina McKenzie, says it’s time for pro-small business growth plans:
The whole of government must now step up and produce credible, pro-small business plans to achieve that.
“Every government department bears responsibility for growth and every cabinet minister must come forward at the upcoming spending review with proper plans to back small business growth and therefore growing the economy as a whole. From better programmes to support small business tech adoption, to introducing a Statutory Sick Pay rebate to help cover the extra costs being imposed on small employers, small firms want to see government money well spent and targeted to support growth.”
Samina Hussain-Letch, executive director at Square UK, think this will lead to more hiring outside the UK:
“With the increase in employer NIC from next month, we know from direct conversations with small business leaders they are looking to hire talent outside of the UK as a way to scale, despite the skills for their industry existing in-country. If the government truly wants to protect its working people, as promised in today’s Spring Statement, then it needs to start offering businesses tax relief so they have room to survive and grow.”
Sabby Gill, CEO of Dext, wonders what the rest of the year might hold:
“Business confidence has been smashed, and this could be the calm before the storm, with the big question now being whether Reeves is setting the scene for tax rises in this year’s Autumn Budget. As such, it’s critical that businesses are prepared; by leveraging automation and up-to-date financial data, businesses can mitigate risks and fuel long-term growth, even if we face a tougher landscape later this year.”
Read more
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