Spring budget excitement
Peter McGahan
Monday 31st March, 2025.
I WAS to follow up on the potential impacts of people moving away from the dollar toward using other payment clearing systems and what impact that would have, but forgot the Spring statement was coming and so used this opportunity to get some popcorn out, ask a sommelier to wine pair with the popcorn and hey presto, you have my excitement below.
If ever there were a Budget which arrived with all the excitement of a dishwater lukewarm tea on a rainy Monday, Rachel Reeves’ Spring Statement was it. “Cardboard-licking flavours” - it just might go down in history as one of the most forgettable fiscal events in living memory. Popcorn aside, beneath the veneer of dullness lies a tale of two economies - one for everyday earners, and another for the global corporate giants quietly slipping out the back door with billions.
Let’s start with the headline-grabber that wasn’t - housebuilding. To her credit, the Chancellor did unveil reforms projected to increase housebuilding to the highest levels in 40 years. The Office for Budget Responsibility (OBR) estimates that by 2029-30, an additional 170,000 homes will be built, driven by planning reforms which aim to free up underused land like car parks and petrol stations. The result? A 0.2 per cent bump in GDP - a minor miracle for a policy with no direct cost.
This, surprisingly, was the statement’s most exciting feature. It tackles one of the UK’s great structural problems: housing availability. By boosting supply and improving labour mobility, it could support long-term economic growth (but not homelessness).
But beyond that? The rest was an exercise in accountancy footnotes - small savings here, cautious welfare cuts there. Government departments are being asked to slash admin budgets by 15 per cent. The welfare reforms, particularly to Personal Independence Payments and Universal Credit, may save £3.4bn, but they’ll also push an additional 250,000 people into relative poverty, (including 50,000 children). It’s austerity in slow motion.
And then there’s the tax crackdown. Reeves announced tougher penalties for late payments and expanded the reach of Making Tax Digital, now set to ensnare even more small traders. Tax consultants, accountants and even financial advisers could soon face tighter scrutiny. It’s pitched as clamping down on tax dodgers, but the reality is these policies disproportionately squeeze small business owners, gig workers, and the self-employed - those without the luxury of offshore loopholes or
clever corporate structures. If someone is struggling to pay tax, charging them more penalties won’t help a lot.
While these everyday earners are being chased for a few late payments and told to digitise their shoebox of receipts, large corporations continue to play a different game altogether. The UK still loses an estimated £35 billion a year in corporate tax avoidance. Tech giants like Amazon, Google, and Facebook generate billions in UK revenue yet pay a sliver in tax. Amazon, for instance, paid just £293 million on £13.7 billion in UK sales in 2019. Starbucks paid only £8.6 million over 14 years.
The hypocrisy is hard to ignore. On one side, a Chancellor squeezing £2.2 billion from admin cuts and another £3.4 billion from welfare, while on the other, tens of billions quietly vanish into the offshore mist. Reeves talks about fairness, but fairness doesn’t mean asking a delivery driver to do digital accounting while multinationals play financial hopscotch across tax jurisdictions.
And let’s not forget the ISAs. Tucked away in the small print was a potential reform dressed up as a boost for savers. But with the Treasury facing a £2.1bn hit from tax relief on cash ISAs, this may be more about plugging the hole than helping the public invest wisely. We’ll see.
So yes, the Spring Statement may have been boring on the surface, but it reflects a deeper truth: the economic burden continues to fall on those least able to shoulder it, while the giants remain largely untouched. That’s not just dull - it’s damaging.
If Reeves can deliver those homes, and truly unlock the productivity gains from land reform, she’ll deserve credit. But if she continues to focus on cardboard-licking measures for the little people, while ignoring the elephants in the room, it’s going to put me off popcorn.
If you have a financial query, please call 01872 222422 or email info@wwfp.net
Peter McGahan is the Chief Executive Officer of Independent Financial Adviser Worldwide Financial Planning. Worldwide Financial Planning is authorised and regulated by the Financial Conduct Authority.
