Rachel Reeves’ Spring Statement disappointed. What could have been a moment to boost confidence and show resolve instead landed as a deflating exercise in blame and bureaucratic retreat.
Faced with mounting evidence that Britain’s economy is stalling—not least the Bank of England cutting its 2025 growth forecast in half and the OBR slashing its projections too—the Chancellor offered neither bold thinking nor course correction.
She offered excuses.
Instead of decisive leadership, we got finger-pointing at international markets and a familiar refrain: “It’s not our fault.”
Yes, Donald Trump’s presidency has undeniably caused fresh volatility in global markets, and yes, the cost of government borrowing has spiked as a result. But the Chancellor’s response—doubling down on anti-growth tax hikes and burdensome regulations—only entrenches Britain’s economic malaise.
The UK is now forecast to grow by just 0.75% this year. That’s not stagnation; that’s decay. And while external turbulence plays a role, much of the damage is self-inflicted. Reeves had a clear choice: acknowledge the changed global backdrop and pivot policy accordingly—or bury her head in the sand. She chose the latter.
There’s no clearer example of this than her refusal to reconsider the slew of tax hikes she has imposed on business. These are not abstract fiscal tweaks. They hit employers in every corner of the economy, suppressing hiring, dampening investment, and ultimately costing jobs. At a time when we should be pulling every lever to support productivity, she’s pulling away the floorboards.
Worse still, Reeves leaned into tired ideological reflexes, granting union demands for heavy-handed labour regulations that employers warn will be job-destroying. Growth isn’t conjured by bureaucrats in Whitehall—it’s built by businesses willing to take risks. And they’re being punished for it.
The tragedy is that Reeves could change course. In fact, the path is laid out for her. The same justification she used to explain the revised growth forecasts—that “the world is changing”—is precisely the rationale she could use to announce an immediate suspension of these destructive tax measures. Not a U-turn. Not an embarrassment. A recalibration in response to global forces.
It would be a savvy political move and an economically sound one. Investors and business leaders alike understand that flexibility is strength. Rigidly sticking to a bad plan is recklessness. And Reeves has boxed herself into a corner with her promise to deliver faster growth while simultaneously putting up more barriers to achieving it.
Let’s be clear: the Chancellor is right to be worried about debt. She’s right that the public finances are under pressure. But growth is the most effective long-term remedy to that challenge—not short-term cash grabs that erode the base you’re trying to grow. You don’t shrink your way into prosperity. You create the conditions for expansion, and tax revenues follow.
Her Spring Statement instead foreshadowed a wave of spending restraint that will pinch hard, particularly as inflation lingers and public services buckle. Trimming public spending without first energizing the private sector is economic malpractice. And voters won’t buy into it. The public instinctively understands that a government taxing businesses into paralysis and then offering them less in return is not being straight with them.
Reeves is a highly capable operator. She knows the levers of power. But her statement revealed either a misreading of the moment or a stubborn refusal to adapt. Neither is forgivable when the stakes are this high.
If she’s serious about delivering growth, she must abandon the fiction that business can be the cash cow and the engine of the recovery at the same time. One or the other—not both. Britain’s economy needs oxygen. Instead, the Chancellor has placed a lid on the jar.
It’s not too late to reverse the damage. A bold move—like pausing the planned business tax increases and scrapping the worst of the red tape—would send a clear signal that Britain is open for business again. It would restore confidence in the Chancellor’s leadership, calm nervous investors, and reframe the national conversation around possibility rather than paralysis.
All she needs is the political will to do it. After all, “the world is changing”, as she said in her Spring Statement.
Leave a Comment