Business groups giving Spending Review mixed report card

Chancellor of the Exchequer Rachel Reeves announced the 2025 Spending Review to the House of Commons on 11 June 2025. It was the first Spending Review in four years and saw billions of investments across the UK. Ms Reeves announced funding for technology, energy, transport and housebuilding. The UK’s business groups have given a mixed response. Here we take a look at what they saw in the Spending Review.

Signs they get it

The British Chambers of Commerce (BCC) said that it has been waiting for government to show it understands the deep-rooted problems holding back our economy and how they can be solved.

Alex Veitch, Director of Policy at the BCC, said: ‘We have seen signs they get it, with action to address some of the key issues that can help firms.

‘The Chancellor’s pledges on £15 billion of regional infrastructure investment, a £14 billion commitment to Sizewell C and an £86 billion package for research and development funding can make a real difference.

‘But the government must not give with one hand and take with the other. While plans for investment are welcome, we are clear that, if we are to sustain meaningful growth, there can be no further taxes on business in the Autumn Budget.’

Downpayment on growth

The Chancellor’s Spending Review was ‘a downpayment on hardwiring the growth mission into government priorities’, according to the Confederation of British Industry (CBI).

Rain Newton-Smith, Chief Executive of the CBI, said: ‘Against a challenging backdrop, the choice to prioritise investment in clean energy, R&D, as well as delivering a much-needed boost to housing, transport, and infrastructure is the smart play that will raise the long-term ceiling of the economy.

‘The litmus test now will be following through on delivery in partnership with industry at pace. That must be underpinned by a comprehensive strategy for driving investment in adult skills and addressing high energy costs, which were missing from today’s announcement.’

Private sector responsibility

Infrastructure investment was rightly prioritised, said the Institute of Directors (IoD), although more needs to be done to help businesses, it added.

Anna Leach, Chief Economist at the IoD, said: ‘Infrastructure investment has been rightly prioritised. The allocations to regional transport, nuclear energy and R&D from the capital spending budget are sensible and largely aligned with the priorities of business leaders. But public sector net capital investment is set to fall by 0.6% per year in real terms over the Spending Review period.

‘If the private sector is to be ultimately responsible for delivering the renewal of the UK economy, a strong and coherent plan to drive business investment is needed. Increasing the capacity of the British Business Bank to lend is an important step. And the forthcoming Infrastructure and Industrial strategies will enhance policy stability and enable businesses to plan.

‘However, the broader business environment needs addressing: the tax and regulatory system, employment regulations, energy cost competitiveness, and our connections with global markets are all fundamental to creating the conditions for investment.’

Small business left wondering

Small businesses were left wondering when they will feel the benefits of the Spending Review, according to the Federation of Small Businesses (FSB).

Tina McKenzie, Policy Chair of the FSB, says: ‘It was not the business-focused day they had hoped for. As spending allocations were announced, decisions over how that money would support small businesses were not included.

‘Increased Statutory Sick Pay came without help for small businesses to afford it; extra money for housing and defence came without a commitment to include small firms in the supply chain; new energy efficiency funding for households came without equivalent help for small business premises.

‘The one major bright spot for small firms today was the significant increase in resources to the British Business Bank, which FSB campaigned for in advance of today's statement and which we welcome. This should see far more finance flowing to local businesses up and down the country.’