The Big Question: May ’25

Jon Dudgeon

Co-founder and chief executive

Blu Sky Accounting

While the Chancellor’s Spring Statement demonstrates an intent to drive economic growth, the balance between cuts and investments raises questions about long-term sustainability.

For example, plans to raise £7.5 billion by combating tax evasion and avoidance signal progress towards a fair and transparent tax system.

However, adequate resourcing for HMRC is essential to ensure this increased enforcement does not cause undue frustration among compliant taxpayers.

In addition, reductions in welfare may negatively affect consumer spending, a critical driver of economic growth, and an area that directly impacts small and mid-sized businesses.

The statement also missed key opportunities to support SMEs, namely, by encouraging investment in research and development and early-stage businesses.

By enhancing research and development tax relief schemes, or increasing access to innovation grants, key growth drivers could have been boosted.

Plans to improve access to finance or support for working capital were also unaddressed, despite being vital for businesses to scale amid inflationary pressures.

There was no mention of direct investment in skills, apprenticeships or upskilling initiatives for the digital economy, which are crucial for SME competitiveness and long-term growth.

Ultimately, while the statement signals growth, it leaves businesses waiting for policies that directly support development, productivity and investment.

 

Stuart Miller

Director

Civil Engineering Contractors Association (North East)

As representatives of civil engineering contractors, we welcome the announcement of a further £13 billion over the course of this Parliament, though the benefits of this investment will only be felt once industry can get spades in the ground on projects.

We must do everything we can, at a local and regional level, to speed up decision making and planning while ensuring project budgets are realistic from the start.

I support the Government’s focus on infrastructure investment as a driver for growth as it creates well-paid, sustainable and secure jobs in our sector.

The further commitment to construction skills training is also welcomed.

There is an urgent need to recruit more apprentices, as well as experienced workers, and we will continue to champion that this sector offers ‘a job for everyone’, whether in a construction trade, a construction professional or a non- construction professional role.

Our sector can turbo boost economic growth if its potential is quickly unlocked.

To ensure this, though, project delivery must be expedited.

The North East has a track record of developing highly-skilled workers, who stand ready to deliver infrastructure schemes in the transport, energy, communications, waste and water sectors.

We keenly await the publication of the forthcoming Planning and Infrastructure Bill, which outlines commitments to speed up planning and remove other blockers to rapid project delivery.

 

Elaine Stroud (pictured)

Chief executive

Entrepreneurs’ Forum

Rachel Reeves likes to talk about growth, but I’m afraid her rhetoric is falling flat among the business leaders in our community.

Our latest survey revealed more than 80 per cent of Entrepreneurs’ Forum members lack confidence that the Government’s policies will lead to UK economic growth, which is concerning.

In fact, only two per cent of our members think Westminster has got it right.

Founders are angry their hard-earned profit is being swallowed up by tax increases, reducing resources to invest in growth plans.

Many entrepreneurs I speak to acknowledge the financial support they received during the COVID-19 years, and there is acceptance that business should bear some of the brunt of repaying this debt.

However, a tax on employment and family business succession is seen as a kick in the teeth.

While businesses are knuckling down and seeking to cut costs to compensate for the increased tax burden, they’ll also be keeping their eyes peeled for opportunities.

Investment in defence is likely to create gains in the North East manufacturing sector.

Business owners may also be more tempted to explore new markets such as the Middle East, given the stagnation of the UK economy and the unpredictability of the Trump administration in the US.

 

Ian Kinnery

Founder

Kinnery

The Autumn Budget will prove as damaging as the one that ended Liz Truss’ reign.

The key differences are that the target was different and the timing of the impact was delayed.

You have to take the two events together.

From the start of the new tax year, businesses will suffer a double whammy of increased costs of employing people and less flexibility in terminating that employment.

There is no upside.

Businesses will have felt the impact in their April accounts.

The more savvy businesses, who employ big numbers of low-paid workers, have already cut large numbers of staff.

The facts seem to be contrary to growth aspirations, and the mood among businesspeople is as bleak as I have ever seen it.

The Spring Statement is no less negative, but is directed more at reducing benefit costs and boosting defence spending.

The actions seem to be in direct conflict with aspirations of growth.

One brighter possibility may be the benefit of greater investment in housebuilding and defence spending, which may generate a multiplier effect.