Spring Statement 2026

The Spring Statement was deliberately light on fresh tax increases or cuts as Reeves focused on signalling stability and predictability ahead of the next comprehensive fiscal event in the Autumn Budget.

Additionally, all the forecasts today exclude any effect of the ongoing situation in the Middle East that could have profound effects on the economy.

Andrew Sanford, Partner, said:

One has to question, with such uncertainty, what value can be placed on the forecasts? Forecasted GDP increases are meagre before factoring in the current uncertainty in the Middle East. Inflation will increase, and GDP will fall if the dispute in the Middle East continues.

Youth Unemployment

Heather Powell, Partner and Property & Construction Lead, said:

£820m to support young people into employment has been announced again but is a drop in the ocean compared to those in this cohort out of work. It only promises 55,000 jobs. This initiative was first announced in December and promises training and coaching for young people.  In January 2026 unemployment of young people (16-24) reached almost 1,000,000.

The Chancellor needs to address the barriers to employment for young people, including the fall in the drop in the National Insurance thresholds which resulted in the loss of many jobs for young people in retail, the leisure and hospitality sectors.

The Chancellor’s own policies have increased the number of young people not in Employment, Education or Training (NEETs).

Robert Salter, Director, said:

The Chancellor, Rachel Reeves has suggested that the Conservatives are ‘at fault’ for the number of young people who are so-called NEETs. However, the reality is that Rachel Reeves’s decision to increase employer’s NIC and the National Minimum Wage – particularly for young people – has increased the numbers of young NEETs to over 16% of those between 16 and 24, since they came to power ca. 20 months ago.

It is interesting to note that Ms Reeves suggested that she would provide additional details about ‘closer cooperation’ with our European partners in the coming two weeks.  Whilst no further details were provided in this regard, if Ms Reeves were to be serious about helping the British economy, it would be appropriate for her to push for the ‘Norway model’, whereby there is genuine free trade and free movement with the European Union.  Whilst that model would allow the UK to continue seeking its own trade agreements with non-EU countries, it also helps ensure that interaction with key EU trading partners is easier, cheaper and smoother than it is presently.

Whilst Rachel Reeves spent a big part of today’s Spring Statement boasting about the recent fall in inflation to 3%, the reality is this was largely due to the drop in fuel costs over the past few weeks, something which the Government has nothing to do with and clearly, the recent developments in the Gulf will realistically push up fuel costs significantly in the coming weeks with an inevitable impact on official inflation rate too.

Downgraded growth forecasts and rising unemployment rates are not a good headline for the Government

Simon Gleeson, Partner, said:

Ultimately growth forecasts have been downgraded, and unemployment rates confirmed to continue to rise is not a good headline for any government. The Chancellor chose to instead double-down on how her plan was right instead acknowledging it and talking to opportunities for growth. Borrowing is double what was forecasted since the elections. The OBR’s independence continues to be an area of scrutiny and concern across all parties with many questions about integrity of the numbers presented.

The Spring Statement should have focused on the here and now, not swipes at previous Governments.

Sean Drury, Partner, said:

It was disappointing how much of the short speech was based on a repeated historical swipe about previous parliaments rather than focus on the here and now and the immediate future.

Clearly the statement couldn’t reflect the rapidly changing world environment and should have been grounded more in “actuals” rather than notoriously inaccurate multi-year forecasts. That said there are green shoots and we do have strengths, would have been good to hear more than snippets on how these could have been more of a focus than on more broad-based social justice initiatives – these still need funding outside of further tax rises which will be difficult to bear.

Three pillars of economic support

Gabby Donald, Partner, said:

While the Spring Statement contained nothing new in terms of fiscal policy, the Chancellor outlined three pillars of future economic strategy that will be developed in future speeches including the upcoming Mais lecture. Deepening trade alliances with EU, investment in innovation and AI and transforming economic geography.

The Government’s policy in each of these areas will gather plenty of attention and there is scope for tax policy to feed into the strategy in each area – whether it be through alignment or customs union with Europe or a partnership akin to EEA or EFTA; enhancing or adapting the tax reliefs and credits to support innovation; or through greater devolution of taxing powers in visitor levies and creation of more local enterprise zones, freeports and similar.

Revision of the planning rules will not deliver 1.5m new homes

Further revision of the planning rules will not deliver 1.5m new homes if we do not have the teams to build them.

Heather Powell, Partner and Property & Construction Lead, said:

There was no mention of the 1.5m new homes target in the Spring Statement. It is disappointing that the Chancellor did nothing more to address the urgent need to train brick layers, plumbers, carpenters, plasterers and all the other essential trades that are in such short supply on our building sites.

The shortage of workers in the construction sector has been identified as a key barrier to delivering against this target – and with youth unemployment now at c1,000,000 a major opportunity has been missed to address two key issues.

Spring Statement should have addressed the wider issues taxpayers are facing

Robert Salter, Director, said:

The Government has not specifically addressed some of the wider issues that significant groups of taxpayers are facing at the present time, such as the increasing pressure faced by new graduates, where increasing numbers of graduates are becoming liable to the ‘graduate tax’ even when they’re in minimum wage type jobs.

Similarly, she has made no mention about the impact of ‘high skilled individuals’ having increasingly looked to leave the UK over the past 5+ years.  Whilst some of this movement has been happening already – e.g. because of the increasing ease of working globally in the modern world – the reality is that some of Ms Reeves’s policy changes including the removal of the non-dom system of taxation, which can actually make it very beneficial for wealthier British nationals to leave the UK on a long-term basis to avoid IHT, have probably helped increase the numbers leaving the UK.

Global conflicts will impact UK pensions

Tomm Adams, Partner, said:

Pensions were not mentioned at the Spring Statement, but as we saw at the further invasion of Ukraine in 2022, regional and global conflicts can have a material impact on financial markets which may affect balances in pension members’ Defined Contribution plans. For those with many years left to retirement, this may not be of too much concern and may even allow for better long-term growth.

Those closer to retirement are hopefully in less volatile asset classes but I would encourage employers to review how their population is invested and consider whether they have sufficient de-risking factored into their default fund choices.

Individual pension members may want to look for financial advice as to their upcoming pensions strategy to minimise negative impact on their pension withdrawals.

Reeves reaffirmed her commitment to shave off £150 from the average household’s energy bills – but is this going to be sustainable in the face of spikes in oil prices which may increase further as today’s conflicts develop. We have to question where any subsidy is going to come from, given the understandable focus on defence spending as a direct result of the threat to national security from the wider world.

And if there is upward pressure on inflation, then this will again push the cost of the state pension up due to the triple lock – arguably creating a further ratcheting up of costs to the Exchequer which need to be recouped from somewhere. I wouldn’t rule out higher taxes coming in the next Budget as a result.

Unsurprisingly, no mention of the changes to the non-domiciled regime that has been in force for nearly a year. But as the press and tax advisers report on the millionaires’ exodus from the UK, there has been little to no acknowledgement of the net effect on the UK economy. I am confident we won’t see a U-turn on non-dom policy as such (and similar reform was originally proposed by the now Opposition in any case), but the Government should consider further developing the new Foreign Income and Gains regime to attract outside investment in the UK.

And whilst Middle East conflict continues, we may in fact see a number of individuals looking to repatriate to the UK, even temporarily, for security reasons – in which case, I would welcome the Government’s confirmation of relaxed tax rules for returnees to the UK in these circumstances – such as relaxations on time spent in the UK before triggering UK residence.

UK’s continued stability provides a dependable home base for US businesses

Michael Holland, Partner, said:

For US bound founders, the UK’s continued stability provides a dependable home base at a time when the US environment feels far less certain.

It is encouraging to hear global relationships and trade barriers are high up on the agenda, with potential upside for transatlantic businesses.

Would you like to know more?

If you have any questions about the Government’s Spring Statement and how it may impact you, please get in touch with your usual Blick Rothenberg contact, John Bull, Sean Drury or use the form below.

You can also visit our Spring Statement Hub, where you can find our commentary and a range of insights to help you better understand how the announcement may affect you.