‘IT’S WATCH THIS SPACE FOR NI BUT TRUSS SHADOW LOOMS LARGE AS CHANCELLOR PLAYS BLAME GAME’
26th Mar 2025
In response to the Chancellor’s 2025 Spring Statement, Andrew Webb, Chief Economist at leading business advisory firm Grant Thornton Northern Ireland, said:
“While the Chancellor’s 2025 Spring Statement did not directly reference Northern Ireland, the increased spending on defence that was declared could deliver an economic boost for businesses in the region that service that industry.
“However, it is important to remember that more defence spending does not translate to a Barnett consequential for Northern Ireland as the Stormont Executive does not have devolved defence powers.
“This government’s first multi-year spending review, due to be published in June, will be a more telling announcement for Northern Ireland. By that stage we will have a comprehensive sight of how departmental spending will look in the coming years, so it is a case of ‘watch this space’.
“Analysing the Spring Statement more widely, it is interesting to note that, while the Truss premiership was one of the shortest in history, it may have cast the longest shadow. Governments now seem to live in perma-fear of how the markets react to anything they do.
“No matter how much the Chancellor might want to play the ‘blame game’ – the previous government, geo-political uncertainty, higher interest rates, and trade wars all got a touch – there were choices here and the Chancellor chose to punch down on some of the poorest and most vulnerable.
“Having boxed herself in on no further tax increases after the Autumn Budget, and having decided that her self-imposed fiscal rules are unbendable, a £4.8 billion cut to the benefits system was the choice she made. That said, spending more on chasing down tax evaders is a welcome move in this statement.
“The OBR has run the numbers and concluded that this statement restores the Chancellor’s fiscal headroom by the end of parliament. However, it also halved the forecast for economic growth this year, to 1%. More concerning, for all the talk of unleashing economic growth and using AI to become more efficient, the OBR expects productivity to decline.”
