For more up-to-date analysis, see our recent piece on the Spring Forecast, which will take place on 26 March 2025. We delve into how this could differ from a Budget and what the chancellor could announce.
Chancellors have become chatty in recent years, often opting for two annual Budgets rather than just one. This isn’t the official pattern, though, and a Treasury spokesperson recently indicated to MoneyWeek that a Spring Budget looks unlikely in 2025.
“The chancellor has been clear that she will never play fast and loose with the public finances,” they said. “That is why she is committed to one major fiscal event every year.”
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The spokesperson added that this approach would “support economic growth and deliver certainty and stability for departments, families and businesses after over a decade of chaos and instability before”.
The comments follow Reeves’s first fiscal statement at the end of October, the Autumn Budget. This included £40 billion in tax hikes and £70 billion in spending plans.
The government said these measures were necessary to fix the “black hole” left behind by the Conservatives and to avoid a return to austerity – but it has run into criticism over several measures.
The hike to employer National Insurance (NI) contributions has been particularly controversial. Labour was determined not to raise taxes for working people, but critics say the NI hike will discourage employers from giving pay rises. It could even result in redundancies.
Seventy-nine UK retailers including Marks and Spencer and Tesco recently wrote to Reeves, warning of the £7 billion hit they will face as a result of changes announced in the Budget. As well as redundancies, they argue the changes will result in higher prices for consumers.
Businesses will be hoping that there are no more nasty surprises lurking around the corner – something Reeves acknowledged at a recent conference with the Confederation of British Industry (CBI).
Speaking at the event in November, Reeves told firms she was “not coming back with more borrowing or more taxes”, adding that public services now need to “live within their means”.
What about the spring spending review?
Every few years, the government carries out a spending review to set the budgets for each department. The last review took place in October 2021 when Rishi Sunak was chancellor, setting budgets until 2024/25.
Reeves is in the process of carrying out the next review, which will set budgets for at least the next three years. She gave an update in her recent Budget speech, confirming the first phase of the review has been conducted.
The next phase of the review was due to be delivered in the late spring, but the Financial Times reported last month that the schedule has since slipped. It is now expected to be delivered at some point in June, according to the paper’s sources.
With this in mind, you might be wondering whether the spring spending review is just a Budget by another name. But the answer is: not necessarily.
The House of Commons Library says that, unlike Budgets, parliament has “little formal role” in the spending review process. It adds: “There is no legislation governing spending reviews and they do not involve any formal role for Parliament, although select committees often scrutinise aspects of each review.”
Reeves has said the spending review will involve “difficult choices”, and has promised to take a “zero-based” approach where all expenses must be justified for each new period. “Just as we cannot tax and spend our way to prosperity, nor can we simply spend our way to better public services,” she added.
When is the next Budget?
If there is no Budget in the spring and Reeves shifts to one major fiscal event each year, the next Budget is likely to take place in the autumn of 2025.
The exact timing of the fiscal statement can vary. Although Reeves delivered the most recent Budget in October, former chancellor Jeremy Hunt opted for November when he delivered his statements in 2022 and 2023.
What is Rachel Reeves’s plan for growth?
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