Business leaders react as Chancellor says UK Government has ‘the right economic plan’

Daniel Bevan - Editor

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Rachel Reeves has insisted the UK Government has “the right economic plan” for the country as she delivered her Spring Statement to Parliament.

The Office for Budget Responsibility (OBR), however, has reduced this year’s expected growth rate to 1.1%, but now estimates better growth in the coming years than previously thought.

Inflation is also expected to be lower than previous estimates (2.3%), but the OBR’s forecast were made before the most recent conflict in the Middle East began, which has resulted in a sharp rise in oil and gas prices in recent days.

Secretary of State for Wales Jo Stevens said: “The UK Government has the right economic plan to cut the cost of living, cut borrowing and grow the economy in every part of Wales.

“We are building a stronger, more secure economy which is increasingly vital in an uncertain world.

“The Chancellor confirmed an additional £555 million for the Welsh Government to invest in public services, like the NHS and education.

“This means the UK Government is providing the Welsh Government with nearly £6.5 billion in additional spending power over the spending review period.”

Shadow Chancellor of the Exchequer, Mel Stride, criticised the statement, accusing the government of not having substance.

He said: “This is not a Spring Statement, it is a surrender statement. She has nothing to say.

“She is claiming she is creating the conditions for renewed growth, she is rather like the dodgy estate agent standing in the crumbling building with the roof, windows, and floor gone saying: ‘just think of the potential’.”

The Welsh Government’s Cabinet Secretary for Finance, Mark Drakeford said: “What we’re seeing today is encouraging for Wales.

“The global economic picture remains difficult — nobody is pretending otherwise — but the UK Government’s plan is working. The economy is stabilising, it’s growing, and people in Wales will feel the benefit of that.

“We can be proud productivity in Wales has grown faster than the UK average, making a real contribution to the economy.

“The proof is in the investment coming Wales’s way. Two AI Growth Zones, a £14bn rail investment, a defence growth deal — Wales is open for business, and investors and businesses are taking notice.

“Today the Chancellor has added to what has already been a period of increased of funding for Wales. Half a billion pounds more, on top of what we have already secured — that is the difference it makes when two governments share the same values and actually work together. People in Wales will feel that in their NHS, in their schools, in their communities.

“After 14 years of cuts and difficult decisions, we are moving clearly in the right direction with the economy growing and interest rates coming down, all of which will have an impact on people’s lives.”

Reaction from business leaders:

Greg Tait – Wealth Manager, RBC Brewin Dolphin’s Cardiff

“Following November’s tax-raising Autumn Budget, today’s Spring Statement takes a markedly different approach. This was an economic update, not a fiscal event – in wealth planning terms, that is welcome news.

“However, there are several tax changes that people need to be aware of and plan for, and some are fast approaching.

“This includes changes just around the corner to Agricultural Property Relief (APR) and Business Relief (BR). From 6 April 2026, the much-contested £2.5 million cap will be introduced, extending to £5 million for married couples and civil partners.

“These changes could impact individuals with:

Farms or agricultural property: if the property is not actively farmed or rented for agricultural use, it may not qualify for APR.
Family businesses: businesses with investment-focused activities, such as property letting, may not be eligible for BR.
Diversified operations: farms or businesses with mixed activities (e.g. farming combined with tourism or renewable energy projects) may face reduced relief.

“If you are a business owner or a farmer, it is essential that you review your estate planning arrangements before this deadline, including an assessment of the value of your qualifying assets and how much currently benefits from APR or BR.

“This is a complex area of tax. In fact, nearly half (49%) of respondents to our gifting survey last year were unaware that business relief from qualifying investments cannot be passed to a spouse on death, so seeking financial advice is highly recommended.”

Lloyd Powell – Head of ACCA Cymru/Wales

“ACCA welcomes the Chancellor’s commitment to a single fiscal event in a year. We have reiterated the need for simplicity, certainty and stability in the tax system, and holding to a single fiscal event contributes to that much needed stability.

“Undoubtedly, heightened global uncertainty, combined with the UK’s weak economic growth and rising unemployment, continue to make it a challenging picture for the Chancellor.

“However the Chancellor remained steadfast and positive in her vision for the economy.

“ACCA remains concerned that changes coming in the new tax year, such as the increased dividend tax rates and higher Capital Gains tax on specific reliefs, as well as business rates revaluation, will place yet more negative pressure on small business owners, sole traders, and taxpayers.

“In particular, the significant changes coming to Making Tax Digital from April will be a huge shift and one that has the potential to cause headaches for many taxpayers – and for HMRC.

“Combined with the continued hangover from increases to National Insurance Contributions for employers, and the prospect of higher fuel costs, there appears to be little respite ahead for small firms.

“ACCA appreciates the Chancellor’s intention to bring stability and clarity, but the need to deliver economic growth continues to dominate concerns.

“With challenging headwinds, the economic picture globally looks unsettled, and developments in the Middle East are clearly an important risk on both the growth and inflation fronts.

“As the government lays the ground for its budget in the autumn, it’s becoming clearer that stronger action will be necessary to support tangible business growth.”

Shevaun Haviland – Director General of the British Chambers of Commerce

“Today’s Spring Statement confirmed that the UK economy is heading in the right direction, but a further acceleration is needed.

“With GDP expected to grow well below two per cent a year until 2030, unemployment set to rise in the near term and net trade remaining anaemic there is more to do.

“Crucially, the OBR’s inflation forecast does not take into account the widening conflict in the Middle East and increasing disruption to oil and gas supplies and shipping.

“That inevitably adds a fresh element of uncertainty on prices and government borrowing.

“Recent BCC research shows more firms want to expand, with nearly half intending to grow this year, compared to a third in 2025.

“To turn that optimism into a reality the government is right to focus on boosting exports, increasing regional investment and transforming productivity. 

“The immediate priorities must be accelerating long overdue business rates reform and making sure changes to employment rights don’t add unnecessary costs. 

“Alongside this, firms need policies that help them invest in skills and AI to increase productivity.

“Trade is also vitally important. Tariffs aren’t going away and the EU Reset needs to be properly handled to give British firms the best platform possible to grow exports.

“Finally, with growing geopolitical uncertainty, we need to get Defence right. The Government must unveil its Defence Investment Plan as soon as possible. It’s vital for the UK’s security and our economy.

“Clear spending decisions would unlock private investment, support SMEs, and boost jobs, skills and regional growth.

“But it is crucial that government procurement gives smaller firms the chance to compete.

“The Plan also strengthens the UK’s case for access to the EU’s defence finance facility.

“That could give British firms a chance to bid into major European defence projects and secure further export-led growth.”