Just five months after Chancellor Rachel Reeves unveiled the first Labour budget for 14 years, the eyes of UK business once again turned to the dispatch box to see what she would say in her spring statement. Designed as a mid-year update on government spending and tax plans, this spring statement was met with a lukewarm reception by UK businesses, partly due to the continued commitment to increasing National Insurance Contributions as well as a drop in the threshold from when NICs become payable. Despite lingering caution, there was some measured optimism from the Office for Budget Responsibility (OBR) about long-term growth.
At Shire, we have spent the last three decades supporting businesses across numerous sectors with flexible leasing solutions that allow them to scale their business with confidence. Let’s explore what it means for your business - and how leasing could fuel your growth without the burden of large capital outlays.
So, what happened? Broadly, there were four main pillars to the spring statement.
1. OBR forecasting remains cautiously optimistic
The OBR cut its growth forecast for 2025 in half - from 2% to 1% - but it has leaned more optimistic in its forecast for the near future. The OBR has forecasted growth for the following years:
2. Welfare set to be cut
There is set to be approximately £5 billion cut from welfare, which has been achieved by changing the way Personal Independence Payments are assessed. There was a promise from the Chancellor to invest £1 billion in employment support to help get people back to work.
3. Tax collection to be tightened
Labour intends to spend a lot more on tax collection and invest in HMRC’s ability to crack down on tax avoidance. These measures aim to generate around £1 billion in revenue.
4. Flooding Britain with affordable housing
Reeves announced that the government will be investing £2 billion towards affordable housing in 2026, to deliver 1.3 million homes over five years. In addition to this, there was no reversal of certain tax and living wage increases, nor was there any change to corporation tax.
Inflation is predicted to average 3.2% this year before reducing to 2.1% in 2026 and then 2% in 2027. Reeves closed her speech by saying that the OBR had predicted that the UK economy would be larger when compared to what they were predicting at the time of the October budget.
While there were some green shoots of optimism, the overwhelming sentiment is a cautious one among businesses. Whilst many are eager to invest, businesses continue to wait to see what effect announcements such as the spring statement, as well as wider global issues, will have on their growth plans. For UK businesses, it appears that there is a shift from survival mode to a more strategic, selective approach to growth.
There is a need to be cleverer about what to invest in, when, and, crucially, how to invest in it. Industry data shows that businesses that use external finance are far more likely to plan for growth when compared to those relying on internal capital. Additionally, those who use financial solutions experience a reduced loss in revenue from unpaid invoices or bad debt.
In times such as this, where there is a desire for optimism, leasing can offer more than just access to assets - it can help businesses make decisions which promote growth without putting pressure on internal cash reserves.
For many industries, the need to modernise is no longer a choice. It's a necessity. However, the prospect of tying up capital into new equipment and infrastructure outright is daunting, especially when so much money is already going to increases in National Insurance and other employee-focused areas. Leasing gives businesses fast access to the equipment they need, without tying up capital or taking on risks like depreciation and outdated assets.
In a post-spring statement world, many industries could benefit from exploring leasing options.
Construction firms and those in infrastructure will need to access the latest machinery and vehicles to meet demand to build homes. By leasing essential machinery and vehicles, construction firms can stay ready to respond to demand, scaling operations confidently, knowing their equipment is ready to meet the demands of upcoming projects.
In manufacturing, companies may well look to update outdated machinery that no longer meets tightening regulations or evolving customer expectations. Leasing can help to modernise production lines and keep operations compliant now and into the future, without overstretching capital.
Fleet renewal remains a priority for transport and logistics companies, especially as they look to get in line with government net-zero emission targets and reduce operational costs. Upgrading vehicles and having access to the latest fleets can be done through leasing, allowing firms to stay environmentally responsible and efficient.
Away from legacy industries, professional services and technology firms are grappling with the acceleration of AI and ever-advancing tech. Opting for leasing can ensure those businesses can keep up with changing virtual infrastructure and preferences in working arrangements by always having access to the latest equipment that doesn’t require upfront capital.
If you find yourself in these sectors, or any that require new assets and technology, speak to our team today to see how they can help.
With the spring statement now in the rear-view mirror, we asked our leasing experts here at Shire what businesses should do next.
Review your asset and operational needs for the next 12-24 months
Regardless of industry, examine your current assets and compare them against your needs. This will allow for proper allocation of funds for new equipment and give you a better idea of where you need to invest.
Understand that leasing could give more agility
Ownership may feel like the default option, but leasing often suits businesses in industries where change is the only constant. Tying capital to depreciating assets that are soon replaced by more advanced technology in just a few years can hamper future investment.
Engage with a leasing provider early to explore your options
Consulting with a leasing provider as soon as possible will give you insights into what options are out there. From payment models to the assets and equipment available, speaking to an expert can unlock the full potential of leasing.
Here at Shire, we work closely with businesses to deliver tailored leasing solutions that give them the benefits of new infrastructure and equipment without the weight of upfront costs. In other words, we support growth without compromising on control.
The spring statement signalled that better times could lie ahead, with revised near-term OBR forecasts indicating that growth is on the horizon. Businesses that act strategically can put themselves in a strong position, and leasing offers a way for them to do that without immediate financial overreach.
Shire is ready to support those forward-thinking businesses in 2025 and beyond. To learn more, speak to our team to explore leasing solutions tailored to your business goals.