{"id":2096272,"date":"2025-03-26T13:30:22","date_gmt":"2025-03-26T13:30:22","guid":{"rendered":"https:\/\/www.thebusinessdesk.com\/westmidlands\/news\/2096272-chancellor-relies-on-defence-as-obr-cuts-this-years-growth-forecast\/"},"modified":"2025-03-27T07:51:59","modified_gmt":"2025-03-27T07:51:59","slug":"chancellor-relies-on-defence-as-obr-cuts-this-years-growth-forecast","status":"publish","type":"post","link":"https:\/\/www.thebusinessdesk.com\/westmidlands\/news\/2096272-chancellor-relies-on-defence-as-obr-cuts-this-years-growth-forecast","title":{"rendered":"Chancellor relies on defence as OBR cuts this year’s growth forecast"},"content":{"rendered":"

Chancellor Rachel Reeves is backing the UK to become a \u201cdefence industrial superpower\u201d as she balances the need to drive economic growth in a changing world.<\/p>\n

The importance of defence was weaved through her Spring Statement, which gave no ground but rarely sought to expand on previous positions.<\/p>\n

\"\"<\/a><\/p>\n

However the Office for Budget Responsibility (OBR) has cut its forecast from 2% to 1% for the UK economy this year, before upgrades in the rate of growth in the following years.<\/p>\n

\u201cThe fiscal rules are non-negotiable\u201d, said Reeves today, adding that headroom has been \u201crestored\u201d by today\u2019s measures. The Chancellor blamed \u201cincreased global uncertainty\u201d for the OBR originally projecting a deficit.<\/p>\n

Well-trailled cuts of \u00a34.8bn to the welfare budget were used to keep Reeves within her self-imposed fiscal rules, which are expected to come under further pressure through this year and might need addressing in the autumn Budget.<\/p>\n

Many businesses have been critical of the additional costs from her first Budget last October that will come into effect next week. Reeves is also under pressure from some Labour MPs concerned that she is following a Treasury orthodoxy that mimics an austerity approach.<\/p>\n

Reeves highlighted how the Trump-inspired turbulence offers opportunities for the UK to become a \u201cdefence industrial superpower\u201d focused on innovation. Defence spending will be increased, with \u00a32.2bn will be provided to the Ministry of Defence, which is being offset by a reduction in international aid.<\/p>\n

Reeves has consistently set out that the Treasury would have one \u201cfiscal event\u201d in a year, and the Spring Statement was not designed to be a second Budget.<\/p>\n

The Government\u2019s spending review will be completed in June but Reeves brought forward \u00a33bn of investment for public services in a transformation fund, to \u201cmake public services more efficient, more productive and more focused on the user\u201d.<\/p>\n

Although there were no new tax-raising measures, \u00a31bn is aimed to be raised by further investment in HMRC\u2019s ability to tackle tax evasion.<\/p>\n

Suzy Harris-Milnes, tax partner at BHP said:\u00a0 \u201cThe Chancellor of the Exchequer kept her promise to make no major tax announcements during today\u2019s Spring Statement. In fact, there were enough bombshells for business owners in the Autumn Budget, including the increase in NI contributions for employers which comes into effect next week, that businesses need to ensure they\u2019re prepared for in the new tax year.<\/p>\n

\u201cHowever, that being said and linked to the Government\u2019s desire to get more people working, that all businesses should be aware that for apprentices under 25 who are basic tax payers and veterans there are no employer NI contributions.<\/p>\n

“With the new tax year starting next week it\u2019s crucial businesses get the right advice to ensure that they are able to not just survive but thrive in what the Chancellor noted as uncertain times.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Rachel Reeves stressed the ‘increased global uncertainty’ in her Spring Statement, but fiscal rules remain ‘non-negotiable’<\/p>\n","protected":false},"author":18,"featured_media":2096274,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"coauthors":[81],"class_list":["post-2096272","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-news","tag-top-story"],"yoast_head":"\nChancellor relies on defence as OBR cuts this year's growth forecast | TheBusinessDesk.com<\/title>\n<meta name=\"description\" content=\"Rachel Reeves stressed the 'increased global uncertainty' in her Spring Statement, but fiscal rules remain 'non-negotiable'\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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