Spring Statement: 6 Takeaways for Small Businesses

The Spring Statement 2025, prioritising ‘stability and security’ was delivered by The Chancellor of the Exchequer, Rachel Reeves, on Wednesday 26th March.

While not intended to be an official fiscal event or Spring Budget, the Statement reaffirmed key points of the Autumn Budget, such as sticking to fiscal rules, prioritising investment into public services and growing the economy.

However, the speech did not address the growing concerns from businesses owners and entrepreneurs on the impending tax rises and the significant increases to employment costs they will face next month, which were announced in the Autumn Budget. Instead, the Statement primarily focused on changes to welfare and reducing government spending.

We’ve summarised the 6 key takeaways that impact small businesses.

1. Get Britain Building Again

A 40-year high target, named ‘Get Britain Building Again’ aims to create 1.3 million new homes by 2029/30, supported by 60,000 additional workers – which will act as a welcome boost for the construction industry. A £600 million fund has been set aside to create 10 new technical excellence colleges across the UK to deliver the training for construction apprentices.

The sector has suffered an estimated shortage of roughly 225,000 workers in the field, set against the backdrop of delays and disruptions which are due to cost the UK up to £10 billion annually.

Rebecca Leversidge, Marketing Manager at Premierline, comments:

“While addressing the skills shortage is crucial, it’s accompanied by significant risks that businesses will need to prepare for. Employers taking on new workers, particularly in high-risk roles like scaffolding, need to ensure they have the right employers’ liability insurance in place, in addition to robust health and safety measures.

If training is rushed to meet demand, there’s a risk that workplace incidents could rise, leading to costly claims and operational disruptions. This means it’s vital that businesses don’t just focus on expansion but additionally consider the safety and protection of their workforce for compliance and long-term sustainability.

At a time when 58% of small businesses in the UK do not have adequate insurance cover to cover unexpected workplace accidents, full cover is essential to avoid any financial risk.”

2. Employers’ National Insurance Contributions to increase from 6th April 2025

Previously announced in the Autumn Budget, the planned increase to employers’ National Insurance Contributions (NICs) will go-ahead.

From April 6, 2025, employers’ NICs will increase from 13.8% to 15%, and the threshold at which employers start paying NICs will decrease from £9,100 to £5,000.

Many small businesses are already operating on thin margins, and higher NICs could make workforce planning even tougher. Cutting costs by reducing staff or turning to contractors without understanding the insurance implications may also create greater risks down the line. As an insurance broker, we advise that SMEs reassess their employers’ liability and business interruption insurance to avoid unexpected legal or financial consequences, particularly if your workforce structure is likely to change.

3. Minimum Wage Increase to go ahead 1st April 2025

The Government previously announced National Minimum Wage rates for 2025, including the National Living Wage which rises from £11.44 to £12.21 per hour. The new rates which will come into force from 1 April 2025.

The minimum wage increase is necessary for workers, but for small businesses, it will mean finding new ways to stay profitable. Many will need to rethink pricing, efficiency, or staffing levels. If businesses are adjusting their operations—such as relying more on automation—it’s critical for them to review their insurance policies to cover potential new risks, like cyber liability or equipment breakdown.

We recommend that if businesses are introducing new technologies to adopt automated processes, they should review their cyber liability and equipment breakdown insurance to cover emerging risks.

4. Reduction in Government Spending

With the aim of reducing the cost of running the government by 15%, by 2030, government spending cuts could be a major challenge for businesses that rely on public contracts. If revenue streams become unstable, SMEs must ensure they have the right business interruption and credit risk insurance in place to protect against delayed or lost payments. Staying proactive about cash flow management will be crucial, especially for construction, healthcare and professional services.

5. Increased Defence Spending

Government defence spending is to be increased by an additional £2.2 billion next year, achieved by cutting overseas aid to 0.3% of gross national income. A minimum of 10% of the Ministry of Defence’s equipment budget will be spent on new technologies including drones and AI-enabled technology. There will also be a protected budget of £400 million within the Ministry of Defence for UK Defence Innovation, rising over time, with a clear mandate to bring innovative technology to the front line at speed.

Changes to defence procurement aim to streamline the process which will give more small businesses opportunities to access Ministry of Defence contracts and supply their products and services.

Further new business opportunities arise as the demand for advanced manufacturing production increases in areas like Glasgow, Derby and Newport. These areas will benefit from increased employment for skilled workers and local development.

A commitment for £200 million will create thousands of jobs to support nuclear submarines in Barrow, and fund military homes and naval ports in Portsmouth and Plymouth.

6. Stamp Duty Land Tax Increase for Landlords and Property Owners

From 1st April, Stamp Duty will be payable on properties purchased over £125,000; the current threshold is £250,000. The change will mean property owners who buy more properties will be facing higher stamp duty charges. Property owners looking to increase their property portfolios should consider the rental value of the property to ensure they cover the increased costs of purchase. Protecting this investment with the right property owner insurance will help safeguard it whether it is unoccupied or let.

For tailored business insurance solutions that match your evolving risks, get in touch with Premierline today and safeguard your business for the future.