Spring Statement 2025 updates: What does it mean for farming?

Chancellor Rachel Reeves delivered her Spring Statement On March 26.

The Chancellor outlined the overall state of the economy to MPs in Westminster during the speech, along with new taxation and spending cuts.   

Last year's Autumn Budget was met with frustration from farming communities after she announced a 20% taxation on inherited agricultural assets over £1 million in April 2026.

Along with changes to Agricultural Property Relief (APR) and Business Property Relief (BPR), rural businesses have claimed they may need to sell land and their businesses in order to pay Inheritance Tax.

The agricultural sector said the changes could 'devastate' rural communities. 

Nearly five months have passed since the Budget, and farmers have been protesting across the country to fight for their futures.

They have sent a clear message that the sector will 'not back down' until the Government makes changes to Inheritance Tax which safeguard the future of family farming.  

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Chancellor Rachel Reeves' Spring Statement

She said: "This Labour Government was elected to bring change to our country. To provide security for working people and to provide a decade of national renewal.

"I am proud of what we have delivered in just nine months. Restoring stability to our public finances.

"Giving the Bank of England confidence to cut interest rates three times since the General Election.

"Rebuilding our public services with record investment in our NHS bringing waiting lists down for five months in a row.

"Increasing the national minimum wage to give three million people a pay rise from next week."

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Chancellor's announcements

• Fiscal rules non-negotiable with Office for Budget Responsibility (OBR) forecasting they will be met by 2027/28
• No further tax increases
• Increased crackdown on tax avoidance
• Welfare savings recently announced will amount to £4.8bn
• Universal Credit standard allowance will increase from £92 per week in the financial year 2025/26 to £106 per week by 2029/30
• Universal Credit health element will be cut by 50% and then frozen for new claimants
• Defence spending to increase to 2.5% of GDP
• Overseas aid to be cut to 0.3% of GDP
• NHS England abolished as previously announced
• Civil services cuts of 15% – including voluntary exits, AI use
• Day-to-day Government spending will increase in real terms each year
• Capital spending announced £2bn per year extra
• Inflation forecast as 3.2% this year, 2.1% in 2026 and under 2% from 2027
• Growth forecast from OBR reduced from 2% to 1% for 2025
• OBR Increased growth forecast to 1.9% in 2026, 1.8% in 2027,  1.7% in 2028 and 1.8% in 2029
• 10% of new defence spending to be spent on new innovative technology
• Small business access to defence contracts
• £2bn of UK export finance to be made available for defence

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Steve Barclay

Former Defra Secretary Steve Barclay said the Chancellor is already under pressure after claiming her Autumn Budget has led to increased unemployment, reduced business confidence and stagnant growth.

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Defra Secretary Steve Reed took part in a cabinet meeting earlier this morning, that had been rescheduled from yesterday to today, ahead of the Chancellor's Spring Statement. It has been rumoured that the Chancellor could announce further department cuts, with Defra's Budget vulnerable to being 'chopped'. 

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NFU

NFU President Tom Bradshaw said: "I agree with the Chancellor, our world is changing, and we are facing an increasingly insecure global stage.

"Safeguarding our food security is an essential part of the nation's ability to remain resilient to international shocks.

"The Government's own manifesto said food security is national security.

"But the policies announced since the election have only delivered blow after blow to farmers and growers' confidence which is now at an all-time low, with investment plummeting.

"We want to work with Government to deliver the foundations for food security, economic growth and environmental delivery and we have the blueprints to support this.

"We will continue to make the case for investment ahead of the comprehensive spending review."

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CLA

CLA president Victoria Vyvyan said: "More housing is desperately needed, but the Government's plans to remove all market value from compulsory purchases is tantamount to asking farmers to bear the cost of fixing a housing crisis they didn't cause.

"Many CLA members would willingly put forward land for affordable housing development were it not for the expensive, slow and bureaucratic planning system.

"Overhauling the system must be an urgent priority for the government to unlock economic growth.

"We back the building of a small number of homes in a large number of villages to support sustainable and thriving rural communities, and this must not be overlooked in the drive to build 1.5m homes in this Parliament."

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Tim Farron

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James Wright

Exmoor farmer James Wright has questioned whether Labour will announce a u-turn on Inheritance Tax changes for farmers ahead of the Spring Statement. 

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Conservative Rural Forum

Ahead of the Spring Statement, the rural advisory group said Labour's farming policies could lead to a loss of jobs and investment in rural communities across the UK.

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Stuart Anderson

South Shropshire MP Stuart Anderson said the Chancellor should 'axe' Inheritance Tax changes ahead of the Spring Statement. 

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Sir Keir Starmer

Speaking at Prime Minster's Questions, Prime Minister Sir Keir Starmer said: "I have full confidence in the Chancellor."

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Shadow Defra Secretary Victoria Atkins

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Harriet Cross

Scottish Conservative MP for Gordon and Buchan, Harriet Cross, said: "Businesses have once again been left battered and bruised by Labour's Spring Statement.

"They have been betrayed by the Chancellor who time and time again, before the election, promised not to raise taxes on workers or increase national insurance.

"The hikes imposed by Rachel Reeves since becoming Chancellor will have disastrous implications on businesses, third sector organisations, and public services across Scotland.

"To make matters worse, no indication has been given of when these costs will be lowered.

"All we heard today was bad news. Businesses need the confidence to invest, recruit and export which the Chancellor is not giving them."

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Joshua Reynolds

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Wedlake Bell

Simon Blackburn, head of Agriculture, rural and landed estates at Wedlake Bell, a legal firm, said: "This Spring Statement has been all about spending cuts. 

"Many issues raised [in the Autumn Budget] are very important to people across the UK (not just the rural sector) remain unaddressed.

"Despite this, there was a promise of a drive to increase housebuilding, which will likely be welcome news to housebuilders and land owners alike.

"For example, no changes were made to the £1m cap which was proposed in the Autumn Budget 2024 in respect of inheritance tax BPR and APR.  

"While farmers and rural landowners can breathe a sigh of relief that the news on taxation did not get any worse, many will regret that the Government has yet to grant any concessions to reflect the significant impact these changes will have on them.

"Earlier this month, Defra pulled up the drawbridge on the Sustainable Farming Incentive, leaving many farmers and landowners not only wondering how many acres they would have to sell to pay the next slug of Inheritance Tax, but whether their income now will exceed their costs of sales at all. 

"Ms Reeves has spoken frequently of the Government's desire to encourage growth in the UK: many landowners, farmers and rural property owners are keen to diversify, develop and invest in their land, from rewilding to housing development or creating jobs through investment in hospitality and retail.

"The much-mooted average saving of £300,000 per estate from APR is exactly the type of capital that could be invested into these projects."

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Caroline Lucas

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David Jordan

Beef farmer David Jordan, from Choppington in Northumberland, said: "Agriculture is on its knees.

"I am disappointed the Chancellor has not helped us [farmers] out with Inheritance Tax.

"I have spent 50 years farming and this is the worst period of my farming life.

"Since the Autumn Budget, I have woken up in the morning and thought what is the point of farming.

"I have worked many hours calving and cutting corn through the night. 

"What this Government is doing is a total disaster for agriculture."

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Centre for Policy Studies

Robert Colvile, director at the Centre for Policy Studies, said: "Given where Rachel Reeves found herself, the Chancellor should be congratulated for not making things worse – in particular, by raising taxes again.

"It was also welcome to see the Government focusing on reducing the Welfare Bill, cutting the size of the Civil Service and making Whitehall work more efficiently – though the proof will be in the delivery.

"And it was particularly welcome to see planning reform, which the CPS has championed for so long, being judged to make a strong contribution to growth.

"But the Chancellor's Spring Statement was fatally undermined by a failure to acknowledge that her own actions have contributed to Britain's economic woes, and continue to do.

"It was not global uncertainty that imposed a multi-billion-pound jobs tax, or introduced an Employment Rights Bill loathed by every business in the country.

"Those measures will make it harder to create the jobs and growth that will deliver the welfare savings the Government is promising.

"Looking ahead, we face a future of lower productivity, higher borrowing and growth coming in at under 2% every single year – a dismal scenario.

"Even if the Government's plans all come off, and the forecasts are accurate, and there are no further fiscal shocks, we will still only end up with the same paper-thin level of fiscal headroom as after the Budget.

"In other words, for all the Chancellor's claims to have stabilised the public finances, the odds are extremely high that she, and we, will soon be back in the same place all over again."

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Caroline Voaden

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Kevin Hollinrake

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New Economics Foundation

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Wines of Great Britain

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Institute for Fiscal Studies

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Greg Smith

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Richard Tice

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British Retail Consortium

Helen Dickinson, chief executive at the British Retail Consortium, said: "The Chancellor has committed to tearing down regulatory barriers and implementing policies to grow our economy and create jobs.

"And yet retailers are facing tough choices as they try to find ways to address the £7bn in new costs this year as a result of increased employer NICs, higher NLW, and the new packaging tax.

"The impact of this will be higher prices, fewer shops and less investment in jobs.

"We welcome the Chancellor's commitment to 'drive growth in the economy 'and the retail industry is keen to play its part in this mission.

"As the Chancellor aims to drive down the number of those who are ‘economically inactive', there is a need for better routes back into work for those that want or need it after a period of inactivity.

"But the costs from the Budget, and uncertainty about how the Employment Rights Bill and new business rates policy will be implemented, mean it will be much harder for retailers to keep creating these kinds of jobs.

"So the Government should avoid unintended consequences and provide clarity about the implementation of these policies as soon as possible.

"A serious plan for retail growth would support the industry to invest in new jobs and keep prices down for customers."

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British Independent Retailers Association

Andrew Goodacre, chief executive at the British Independent Retailers Association, said: "While we welcome the Chancellor's focus on economic growth, we are deeply concerned that the Spring Statement has overlooked the immediate crisis facing independent retailers.

"Our members are confronting a perfect storm of rising costs – from the 140% increase in business rates to the National Living Wage rise and National Insurance changes – all while consumer spending remains subdued. 

"The Chancellor's forecasts of improved household income may offer some long-term optimism, but they do nothing to address the immediate cash flow challenges our members face.

"Many independent retailers are making difficult decisions right now about whether they can continue trading under these conditions.

"The Chancellor spoke about being 'impatient for change' and the British people being 'impatient for change' – our members are certainly impatient for meaningful support that recognises their vital contribution to local economies and communities.

"Independent retailers are naturally resilient and optimistic, but even the most positive business owners are finding it difficult to maintain that outlook in the current climate."

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David Mundell

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Robin Swann

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More updates to follow

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• What can farming expect from the Chancellor's Spring Statement and beyond?
• "We'll kickstart rural growth" - What did Labour Party leader Sir Keir Starmer promise for farming?
• FREE WEBINAR: Unpacking the Chancellor's Spring Statement and Inheritance Tax planning