The Spring Statement 2025: What can we expect?
Written by
Wednesday 19th March 2025
With the Chancellor committing to just one major fiscal event each year, the Spring Statement on March 26 is likely to be one of progress reports, updated fiscal outlooks, and refinements to policies previously announced, or heavily trailed.
One thing is clear, the challenging economic environment of the last few years isn’t getting any easier. Amidst concerns over a global trade war, the Organisation for Economic Co-operation & Development (OECD) recently cut its UK growth predictions from 1.7% to 1.4% in 2025 and from 1.3% to 1.2% in 2026. While this might sound like a minor tweak, it represents a near 18% cut in anticipated growth this year.
With the Chancellor under pressure to get growth back on track and facing criticism for measures implemented in the last Budget, Rachel Reeves recently told regulators that a key part of the problem is that the current level of bureaucracy makes it “too slow to get things done."
Reeves also said that "by cutting red tape and creating a more effective system, we will boost investment, create jobs, and put more money into working people's pockets."
This commitment to cut red tape is leading the government to abolish a number of quasi-autonomous non-governmental organisations — otherwise known as quangos — the most high-profile being NHS England, but there are also plans to merge the Payment Systems Regulator with the Financial Conduct Authority.
More tax rises?
In the aftermath of last year’s Autumn Budget, Rachel Reeves told the Confederation of British Industry (CBI) that she is “not coming back with more borrowing or more taxes", but with the government’s own self-imposed rules only allowing her to borrow to invest, balancing the books means cutting expenditure or raising taxes.
Recent news indicates they are certainly attempting to do the former, but the latter is not out of the question. That said, this is more likely to be as a result of a further freeze on income and other tax thresholds, relying on the subsequent fiscal drag to generate more revenue.
Employer NICs
Perhaps the most controversial announcement in the Autumn Budget was a 1.2 percentage point rise, from 13.8% to 15% for Employer National Insurance, with the earnings threshold before employers start to make National Insurance Contributions lowered from £9,100 to £5,000.
The new rules are set to come into effect from April 6 and, given the level of opposition, it is possible that we will see additional measures designed to offer some form of relief in the form of an increased Employment Allowance or higher threshold before employers’ NICs are paid.
The role of AI in fleet management
As with every other area of life and business, AI is set to change how fleet operators manage and maintain their vehicles, optimise routes, and improve the safety and efficiency of their drivers. In fact, 15% of UK fleet managers are already making use of AI, with more than a third actively planning to do so.
The government has unveiled an AI Action Plan which includes a commitment to invest in the foundations of AI, push hard on cross-economy AI adoption, and position the UK to be an AI maker, not an AI taker. This all sounds very good but the plan is currently short on detail and so the Chancellor may provide more information on the government’s future plans or at least give an indication of when we will know more.
Addressing the skills shortage
The Institute of the Motor Industry (IMI) is predicting a shortfall of 3,000 technicians qualified to work on electric vehicles by 2031, rising to 16,000 by 2035.
The government has already announced shorter and more flexible apprenticeships. However, the IMI has expressed concerns that ‘short-term flexibility cannot be at the expense of high-quality training and future-proof skills development’. There also seems to be a lack of focus on the automotive industry’s needs, specifically in relation to the transition to net zero and the growth of new digital technologies. This may be addressed, or at least some assurances given, in the upcoming statement.
Investing in Britain's roads
There has been growing speculation that, given the global macroeconomic climate, the statement may include revisions or additions to spending allocations. While transport and roads are unlikely to feature, it’s interesting that a recent survey commissioned by the Asphalt Industry Alliance (AIA) indicates that one third of local roads fail within just five years and that over 100,000 miles of roads across England and Wales have less than 15 years of structural life remaining.
As a result, David Giles, chair of the AIA, has called on the government to “set a minimum five-year funding horizon and a substantial, sustained increase in investment with budgets ring-fenced specifically for local roads maintenance.”
Phasing out ICE vehicles
The fleet industry has long been seeking clarity on the phase out date for cars and vans powered purely by petrol or diesel and the government’s most recent consultation closed on 18 February 2025.
The first part of the consultation focused on ending the sale of new cars with internal combustion engines from 2030, potential requirements for new non-zero emission vans to be sold from 2030 to 2035, and demand measures to support the uptake of zero emission vehicles.
The second element concerns the ZEV mandate which puts limits on the number of ICE only cars and vans sold each year. Although there are plenty of caveats and exceptions, the ZEV mandate is enforced through heavy penalties, and 28% of new cars and 16% of vans sold in 2025 must be zero emission. This rises each year until it reaches 80% for cars and 70% for vans in 2030.
The government has declined to comment on proposed changes to the ZEV Mandate ahead of an official announcement. This has led some commentators to speculate that we might see further news, or at least an indication of what is likely to happen, on March 26.
A final word
At this stage, speculation is all we really have, but whatever the Spring Statement includes, you can be sure that we will be ready to carefully analyse what is and isn’t included so that you have all the information needed to make fully informed fleet decisions. To find out more about how we can help, just get in touch.