The Chancellor of the Exchequer, Rachel Reeves MP, made her Spring Statement 2025 to Parliament on 26 March 2025. AIRTO has welcomed HMG’s continuing prioritisation of growth previously announced in the Autumn Budget 2024. In particular, we welcome specific commitments to:

• boost Research and Development (R&D) and innovation via MoD including through the upcoming Strategic Defence Review and Defence Industrial Strategy.
• establish UK Defence Innovation (UKDI), simplifying current MOD structures and approach for innovation to improve engagement for innovative companies and start-ups to secure investment through public procurement to grow, thereby unlocking more potential for the nation’s defence capabilities.
• the Regulation Action Plan, published in March 2025, committing to cut the administrative costs of regulation on business by 25% by the end of the Parliament and shape a regulatory system that encourages new investment, innovation, and growth by to tackling complexity, reduce uncertainty and challenging excessive risk aversion.
• consult on a revised system of advance clearances in the R&D tax relief system. Appropriate simplification and clarification of such tax relief to achieve more certainty for businesses would be welcome.

These commitments reflect the government’s previously stated recognition of the critical role that innovation has to play in driving economic growth and addressing societal challenges.

AIRTO recently put forward representation to His Majesty’s Treasury for the second phase of the government’s Spending Review (which built upon input to the government in September 2024 ahead of the Autumn Budget 2024), calling for growth to be enabled by applied research, development and innovation, highlighting the key policy interventions needed for a clear, consistent strategy to address immediate economic and societal challenges, and build a strong, energy-secure Net Zero economy.  We also called for improvements to the UK’s regulatory system and better utilisation of public procurement in the government’s role as ‘first customer’ to drive growth and scale-up by optimisation of processes to enable fledgling businesses to win contracts.  Business organisations such as CBI have also called for some of these improvements, and we welcome the Spring Statement as a positive step in this direction.

In addition, to welcoming the Chancellor’s initiatives highlighted above, AIRTO looks forward to the launch of the new Industrial Strategy (Invest 2035: the UK’s modern industrial strategy), having responded to HMG on its Green Paper for the Industrial Strategy in November 2024. Confidence from industry in the UK economy remains fragile so the manner of implementation of the new Industrial Strategy will be critical in stimulating industrial partnership for UK growth.