Chancellor Rachel Reeves delivered her Spring Statement to the House of Commons on Wednesday (26th March).
There was a focus on security and growth, with a significant increase in defence spending. This involved shifting some of the overseas aid budget to pump more money into defence. Alongside this, there was a push for economic growth, with investments in infrastructure and skills.
The government’s committed to increasing defence spending to 2.5% of the UK’s GDP by 2027. This is a pretty hefty investment, reflecting concerns about the current global situation.
There was a drive to make public services more efficient, looking at how welfare spending is managed, and making sure everyone pays their fair share of tax. The aim is to make public services more productive, as well as agile.
The statement included plans to invest more in infrastructure, such as roads, railways, and housing. There’s also a focus on training, particularly in the construction sector, to get more skilled workers.
In this spring statement, there were no major changes to the main tax rates. However, there were discussions regarding future potential reforms to ISAs. Additionally, there was continued discussion regarding future pension taxation changes, that had been previously discussed in the Autumn budget.
The government is pushing forward with reforms to the welfare system, with the aim of getting more people into work, and there is also a focus on making sure that welfare spending is sustainable.
In essence, the Chancellor’s trying to balance the books, strengthen national security, and give the economy a bit of a boost.
MDU urges government to reform clinical negligence law following the Spring Statement.
Responding to the Chancellor of the Exchequer’s statement, Tom Reynolds, Director of Policy & Communications at the Medical Defence Union (MDU), said: “The Spring Statement lays bare the significant financial challenges facing the public purse. While the government’s focus is on efficiency, there is an urgent need to invest in frontline NHS health and social care services. That is why the government must not shy away from bold reforms which could allow for the most efficient use of existing budgets.
“The MDU is acutely aware of the strains on the NHS’s finances and have long campaigned for reform of the law surrounding clinical negligence costs which could free up hundreds of millions of pounds every year to be spent on recruiting staff, improving working conditions and patient care and tackling waiting lists. We are calling for urgent action by the government to reform the disproportionate legal costs awarded in lower value clinical negligence claims as we regularly see legal costs eclipse the amount of compensation awarded to a patient. There needs to be a prompt introduction of fixed recoverable costs in clinical negligence claims of up to £25,000, followed by a commitment to extend that regime to claims valued up to £250,000.
“There is a vital need to repeal S2(4) of the Law Reform (Personal Injuries) Act 1948, requiring the courts to disregard the existence of the NHS when making a compensation award, and instead doing so on the basis of the cost of private care.
“These are just some of many reforms the system is crying out for. By addressing these unsustainable costs, the government will be able to redirect much needed funds to frontline NHS services. It is time to get on and do it.”
Wesleyan Financial Services cites lack of good news for dentists
Iain Stevenson, Head of Dental at Wesleyan Financial Services, said: “Today’s Spring Statement was short on good news for dentists. Many practices will still be absorbing the measures announced in the Autumn Budget, including hikes to employers’ National Insurance and the National Living Wage. These measures begin next month and will heap extra pressure on practices’ finances. While there will have been some relief that no new employer taxes were announced, nothing was introduced to ease the burden either.
“From a personal finance perspective, we heard nothing further on Inheritance Tax (IHT) – an issue already worrying dental professionals, given plans to bring pensions into its scope from 2027.
“We don’t yet know if it will affect NHS Pension Scheme funds, but it will certainly include private pension savings, which many dentists have. As we await more information, it’s important to start considering what this might mean for both your retirement and estate plans, and to seek expert advice if needed. IHT rules are complex, and a professional adviser can help create a sound plan that delivers the best outcomes for you.”
