Summary of Spring Statement 2025

Anticipation for this latest fiscal event was played down by the government, suggesting we would see an update on public spending figures and fewer significant policy declarations than the Autumn Budget.

In line with these expectations the Chancellor used the Spring Statement today to present updated growth and inflation projections, with thematic updates focused on Defence spending, Planning and Housing, and Reform of Welfare, Tax Evasion tools, and the Civil Service.

Her message was one of navigating an uncertain world that is changing before our eyes, and securing Britain’s future through stepping up to be a strong partner to our allies and a global hub for innovation.

To that avail the government reaffirmed its commitment “to foster a positive, dynamic environment for entrepreneurs and scale-ups”. This includes continuing to work on supportive policies “including the role of tax reliefs such as the Enterprise Management Incentives Scheme (EMI) and the Entreprise Investment Scheme (EIS)”, and a consultation on “widening the use of R&D relief advance clearance” to provide greater certainty to businesses.

Insurtech UK has been consistently raising issues with the government concerning EMI, EIS and the R&D scheme - through both our Roadmap for UK Insurtech Growth and the recent insurtech CEOs roundtable held at HM Treasury - so it is encouraging to see these being acknowledged and addressed.

Summary of Spring Statement

Economic Outlook

Predicted growth

• downgraded for this year from 2% to 1%
• upgraded for the next four years: to 1.9% next year, 1.8% in 2027, then 1.7% in 2028, and 1.8% in 2029

Inflation

• forecast to average 3.2% this year (up from 2.6% previously forecast)
• falling back to 2.1% in 2026
• expected to hit 2% target from 2027

Thematic updates

Defence spending to rise to 2.5% of national income by 2027, in part funded by cuts to overseas aid.

Planning reform to streamline planning permissions and increase house building (a key manifesto commitment, but it is also the anticipated growth from these developments that has given the Chancellor a boost in today’s future economic projections)

Welfare spending reductions to include cuts to incapacity benefits and stricter tests for Personal Independence Payments

Tax Fraud and unpaid tax liabilities to be further tackled through measures on tax evasion and late payment penalties

Public Service reform to reduce the cost of running the government to include redundancy programmes followed by greater use of AI and technology improvements.