📊 UK Spending Review 2025: Cautious Progress, but a Missed Opportunity for Business Confidence
11th June 2025
The recent spending review by Chancellor Rachel Reeves marks a significant moment in the evolution of the UK’s fiscal and investment strategy. Framed as a pivot toward long-term resilience and sustainable growth, the review sets out day-to-day and capital spending plans that seek to stabilise public services, unlock infrastructure development, and distinguish Labour’s economic stance from that of previous governments.
From the vantage point of a business such as Gapuma, working across international trade, sustainable fuels, and alternative energy solutions, the review presents both encouraging signals and persistent concerns. While there is much to welcome in the renewed attention to capital investment and decarbonised infrastructure, several underlying issues—most notably the continuing burden of elevated employer National Insurance—remain unresolved.
Strategic Infrastructure: Welcome Commitments, Uneven Benefits
The headline figure of £113bn in additional capital investment over the next four years is perhaps the most striking element of the review. It includes support for flagship infrastructure projects, such as £14.2bn for the Sizewell C nuclear development, and £15bn for improvements to public transport outside London.
For a company like Gapuma, whose activities touch on low-emission logistics, biofuel trading, and cross-border sustainable energy supply, such investment is welcome. Modernising regional infrastructure and transport networks could catalyse demand for cleaner fuels, more transparent supply chains, and decarbonisation services aligned with Net Zero targets.
However, it’s important to note that this capital boost is front-loaded—meaning much of the new spending is concentrated in the early years of this parliament. With borrowing costs rising and fiscal headroom narrowing, there is reasonable uncertainty about how much of this investment pipeline will be sustained, particularly for emerging sectors that do not yet have the institutional weight of legacy industries.
A Balanced Approach, but Policy Volatility Remains a Risk
The Chancellor was careful to frame this review as a departure from austerity without crossing into fiscal recklessness. Real-terms departmental spending will rise by 1.2% annually, and capital spending by 1.3%, modest increases that reflect a constrained environment shaped by weak economic growth and elevated public debt.
That said, businesses are still contending with the effects of frequent and abrupt policy reversals in recent years. From energy pricing frameworks to regulatory treatment of alternative fuels, the policy landscape has often shifted faster than business planning cycles can accommodate.
For companies operating across borders and across sectors, stability and predictability are as valuable as funding. A clearer, more dependable framework for industrial decarbonisation, cross-border energy trade, and green investment remains a high priority—particularly in the absence of significant new policy instruments in this review.
National Insurance: The Missing Reversal
Perhaps the most conspicuous omission in this otherwise comprehensive review is any move to reverse the unprecedented hike in employer National Insurance contributions. For many businesses, this remains a major obstacle to growth, workforce expansion, and strategic investment in skills.
In a post-pandemic, low-growth economy, where talent acquisition and labour market participation are key to resilience, the continuation of this higher rate undermines confidence. It directly disincentivises hiring at the very moment when investment in people should complement investment in infrastructure.
Jack Bardakjian, CEO of Gapuma Group, commented:
“Gapuma remains committed to the shared enterprise of making the British economy prosperous and forward-thinking—but it needs government to share in the heavy lifting, instead of always seeing business as a backstop and fiscal fail safe. This cycle of raiding corporate coffers has to end, or else confidence will ebb still further and mitigate against the growth Reeves’s plans require.”
Conclusion: Strategic Direction Set, Delivery Now Critical
Reeves’s spending review does not lack ambition. It provides a roadmap for critical investment in infrastructure, seeks to safeguard key public services, and attempts to restore economic credibility through consistent messaging. But for the private sector to fully engage and invest alongside government, a stronger emphasis on long-term policy coherence, hiring incentives, and stable taxation will be essential.
Gapuma remains committed to working at the forefront of sustainable trade, alternative fuels, and the energy transition. We will continue to advocate for the policy clarity and investment conditions required to drive meaningful, market-led progress in these areas.