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On 26 March 2025, Chancellor Rachel Reeves delivered the Spring Statement, setting out the government’s economic strategy amid a backdrop of global uncertainty and revised growth projections.
Economic forecast
- GDPR growth: The Office for Budget Responsibility (OBR) has revised the UK’s growth forecast for 2025 down from 2% to 1%.
- Inflation: Expected to fall to 3.2% in 2025, returning to the Bank of England’s 2% target by 2027.
Transport specific points
Fuel duty
The fuel duty freeze has been extended for another year, providing continued relief for hauliers and logistics firms facing fuel price volatility.
Road infrastructure investment
The government has pledged £10bn towards road infrastructure improvements, focusing on road upgrades, maintenance, and key connectivity projects, including the West Yorkshire Mass Transit initiative. As part of this investment:
- £4.8bn will be allocated to the Strategic Road Network for maintenance and upgrades.
- £1.3bn will go towards road renewals, improving road surfaces and reducing potholes.
- £1.6bn will be allocated to local road maintenance, marking one of the largest investments in local road repairs to date.
Vehicle Excise Duty (VED)
Despite industry concerns, the Chancellor did not provide clarity on the VED surcharge (commonly referred to as the luxury car tax). This omission raises concerns about confidence in the electric vehicle (EV) market, as businesses and individuals await clearer policies on taxation and incentives.
Business tax & investment
There were no new tax policy announcements in this budget, maintaining the current corporate tax framework.
Labour & HR
- A £625 million package has been introduced to boost skills in the construction sector, ensuring a steady pipeline of skilled workers for infrastructure projects.
- The government is pushing initiatives to bring younger workers into the labour market, aiming to address workforce shortages.
- Investment in defence will also support highly skilled jobs and apprenticeships across the UK, indirectly benefiting the logistics and transport sectors.
More details about the Spring Statement 2025 can be found here. For further information or to discuss how these changes might affect your business, contact Backhouse Jones today.
This article was written by Louise Brown.