The announcement comes against the backdrop of economic turbulence and fiscal tightening with the Office for Budget Responsibility (OBR) having recently halved its GDP growth forecast for the year from 2% to approximately 1%.

Whilst the Statement highlighted the OBR’s forecast of faster than expected growth, today’s announcements will still be a huge disappointment to the UK’s small and medium enterprises who are eager to invest in their companies.

Theo Chatha, CFO at Bibby Financial Services, said: “The Chancellor’s Spring Statement will be a huge disappointment to the UK’s small and medium sized enterprises. We know 87% of SME business leaders are eager to invest and nearly half were deferring major investment decisions until after today’s Statement.

“Will SMEs feel more confident after today’s announcements? Likely not, and we could see a worrying continuation of this ‘wait and see’ approach as businesses further delay decisions on areas of investment such as machinery, technology and recruitment – resulting in an economic lag for the UK.

“Off the back of an unpopular Autumn Budget and with increased employer National Insurance contributions and business rates set to rise, today’s statement was a missed opportunity to support the UK’s SMEs.”

Dr Charles Nimoh, macroeconomic expert at the University of Salford, commented: “The Chancellor’s Spring Statement was an opportunity to present a bold economic vision, not just figures on paper. Instead, we were met with political soundbites and no real solutions. Her statement on “not taxing to spend” may sound appealing, but without investment, how does the government plan to drive growth, create jobs or support struggling households?

“This morning’s inflation figures show a drop to 2.8%, edging closer to the Bank of England’s 2% target, but still above it. With inflation cooling, now is the time for a clear plan to stimulate growth - yet today’s statement offered none.”

The UK is also committed to becoming a defence industrial superpower by allocating a minimum of 10% of the defence budget to new technologies, including drones and AI-enabled systems. This investment will drive demand for highly skilled engineers and scientists while opening new business opportunities for UK tech firms and startups.

By accelerating the delivery of innovative technology to the front line, the government aims to strengthen national security while ensuring that small businesses across the UK have better access to Ministry of Defence contracts.

Tobias Stone, Co-Founder of Resilience Media and Resilience Conference, noted: “The Chancellor’s choice to put defence spending at the heart of her speech today, and in particular to commit at least 10% of the equipment budget to novel technologies, reflects the urgent need for technology and innovation to play a bigger role in both our economy and our national security.

“The UK’s startup and venture capital sector has the skills and the commitment to take a lead globally in developing tech that strengthens our resilience and supports our defence.

“We need to ensure this money is spent wisely, and that the defence and national security community are supported to work more effectively with the tech sector, and that the tech sector realises now is the time to step up and support resilience, defence, and national security.”

Volodymyr Levykin, CEO and Founder, Skyrora said: “The Government’s newly announced defence innovation fund and commitment to the biggest defence spending increase since the end of the Cold War demonstrate where defence sits on the political agenda. However, now is the time for the UK to tap into the strength of its space sector to develop sovereign defence capabilities, if it is to truly become a defence industrial superpower. Any investment into space catalyses tech development, so investing more in defence (read space) speeds up innovation and the production process.

“Space is the great enabler between industries and the first battlefield for effective defence strategies. If the UK invests more in sovereign launch capabilities, we would not depend on third parties for satellite-based activities such as intelligence, reconnaissance and communications. Ultimately, more investment in defence should automatically mean more investment in space. In turn, we will foster greater innovation, boost the economy, and keep the nation safe.”

Nigel Holmes, Director of Research and Development at Ryan, comments: “The £400 million defence innovation fund is a strong signal that defence R&D is being prioritised, particularly in AI and emerging technology. This creates a significant opportunity for UK tech companies, especially those working in automation, cybersecurity and data analytics, to align with the Ministry of Defence’s innovation goals.

“Military contracts have been hard to access for smaller firms in the past. But this funding, if paired with procurement reform, could open the door to startups and scale-ups to play a greater role. R&D tax credits, if properly claimed, can give them the runway to innovate with confidence, especially in these high-complexity areas.

“Small businesses should track how this funding is deployed, and ensure they’re audit-ready for R&D claims tied to high-complexity workstreams like AI, robotics, or materials engineering.”

The upcoming changes to National Insurance Contributions (NIC) and the reduction in Business Relief Rates set to take effect this April will also significantly impact many small business owners and was something many business owners would’ve appreciated an update on.

Andy Fishburn, Managing Director at Virgin StartUp, said: “The rise in National Insurance Contributions has been a significant blow to small businesses and new startups across the UK. Even though the changes won’t come into effect until 6th April, many founders in our Virgin StartUp community have told us they have already had to make changes to account for these plans, with many either cutting staff or slowing recruitment hires. Interestingly, more founders are turning to freelance support as an alternative, cost-effective way to access the skills and support they require.  

“Rachel Reeves has pledged to make Britain the best place to be an entrepreneur, and we are urging the Chancellor to consider the pressure that startups and small business founders are currently under and create conditions where startups can thrive and grow. One solution would be to leverage the existing infrastructure and capability at the British Business Bank and Start Up Loans programme to provide more founders with financial support.

“Extending the eligibility time for businesses to access StartUp Loan funding would make a huge difference, as would allowing founders who have successfully repaid their first loan to obtain a second Start Up Loan if they’re launching a new business. For a longer-term view, the Chancellor should also consider how the Start Up Loan programme could evolve to incentivise founders to start and build the sustainable businesses that the UK needs to transition to a modern green economy.”

Ronni Zehavi, CEO and Co-Founder at HiBob comments: “Every British business was watching the Spring Statement in hopes of seeing national insurance contribution relief. With less than two weeks until implementation, employers are now forced to continue making difficult budget decisions, with many reducing hiring, freezing or modifying wages and cutting back on staff investment.   

“The cost of employing people remains the most significant burden on businesses. With new employment obligations set to be rolled out in April to support working Brits, it is crucial government doesn’t overlook the vital need for assistance to those employing them. Today’s lack of support is another blow, but businesses must remember the value in investing in talent in the long run.”

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