Mixed Reaction to UK Government Spending Review
Business leaders have given a mixed reaction to the UK Government Spending Review, which included Welsh rail investment worth at least £445 million .
The Federation of Small Businesses (FSB) said it was 'not the business-focused day' small businesses had hoped for, whilst calling on the Welsh Government to use local growth funding announced in the Spending Review to boost the business support system.
The CBI described the Spending Review as a 'downpayment on hardwiring the growth mission into government priorities', adding that the 'litmus test now will be following through on delivery in partnership with industry at pace'.
The UK Government said the rail investment announced by Chancellor Rachel Reeves would invest in both North and South Wales, adding that it would fix level crossings, build new stations, and upgrade existing lines. It said the rail upgrades would specifically link centres of advanced manufacturing excellence in North Wales and improve connections between Cardiff and Bristol.
Monmouthshire County Council said it was 'delighted' with the rail announcement, adding that its communities 'have continued to live with the impacts of congestion on the M4 with no viable public transport alternatives'.
It said the upgrades to the South Wales Mainline will increase train service frequency and the provision of five new railway stations – including Magor Walkway, which it said was a testament to the tireless work of the MAGOR group (Magor Action Group on Rail).
Mary Ann Brocklesby, leader of Monmouthshire County Council, said:
'This is a hugely welcome investment that recognises the urgent need to upgrade our transport network here in Wales. Magor Walkway Station is a project with strong community backing from local councillors, residents, and campaign groups. I'll continue working with all partners to make sure Monmouthshire sees the benefit of this long-overdue rail project.'
The Welsh Government will receive the largest settlement in real terms since devolution in 1999, the UK Government said, with an average settlement of £22.4 billion per year.
Secretary of State for Wales Jo Stevens said:
'This UK Government is investing in Wales' future and driving economic growth across the country.
'We promised we would deal with the historical under-investment in Wales' rail network and the funding announced today in this Spending Review shows we are delivering on that pledge.
'Along with a record financial settlement for Welsh Government to improve public services, £118 million more to help keep coal tips safe and investment in growing industries like aerospace, we are backing Wales' potential and delivering for working people.'
The Chancellor also announced that the British Business Bank's total financial capacity will be increased to £25.6 billion, which will enable a two-thirds increase in investments to around £2.5 billion each year.
The British Business Bank said this investment is expected to crowd in tens of billions of pounds of private capital.
Louis Taylor, CEO, British Business Bank, said:
'We welcome today's announcement by the Government, which is a strong endorsement of the British Business Bank's 10-year track record, market access and capabilities, including our position as the largest investor in UK venture and venture growth capital funds and the most active late-stage investor in UK life sciences and deeptech.
'To deliver the Government's growth mission it is critical that our most promising entrepreneurs can access the finance they need to grow their businesses, no matter what their background or where they are located.'
Tina McKenzie, Policy Chair of the FSB, said:
'Small businesses will be wondering when they will feel the benefits of today's Spending Review. 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.
'With headline departmental funding allocated, the challenge now passes to each and every government department to be strategic with their spending over the next three years – using every taxpayer pound to get the most value, stimulate the economy, and spread jobs and growth. SMEs should get a far greater share of public contracts, and big businesses which treat their smaller suppliers poorly should be banned from winning them.
'Small business confidence is already languishing at levels comparable to the energy bills crisis, while job numbers in small businesses are falling fast, so bold, concerted action is needed. You can't grow the economy and tax revenues without growing small businesses.
'Small firms were not the focus today, but the second half of 2025 now becomes a crunch period for SME-focused growth reforms. Ministers must buckle down on this over the summer and through to the autumn, putting small businesses at the heart of the Industrial, Trade and Small Business Strategies. This includes addressing business rates, Employment Allowance expansion and Statutory Sick Pay in the autumn Budget, and proper legislative reform in the King's Speech.
'The benefits will only come if the Government takes these challenges seriously through to the autumn.'
John Hurst, FSB Wales Chair, said:
'Small businesses in Wales continue to face relentless pressure from rising employment costs, ongoing changes to employment legislation, and sustained high energy bills.
'The Welsh Government must now actively back our small businesses by using the local growth funding announced in the Spending Review to boost our business support system, fostering a dynamic ecosystem that encourages entrepreneurship and empowers Welsh business owners to innovate, invest, and grow.'
Russell Greenslade, Director, CBI, Wales, said:
'Today's Spending Review signals a downpayment on hardwiring the growth mission into government priorities. Against a challenging backdrop, the choice to prioritise investment in clean energy, R&D, as well as delivering a much-needed boost to transport in Wales, 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.
'The Chancellor's announcement made clear that Wales has the industries of tomorrow. From solar power to battery technology, net zero and renewables to semiconductors helping to power AI. The additional budget increase was modest, but this is understandable given the difficult economic context.
'R&D investments by the government will hopefully see projects from our key sectors make the impossible possible. We would have liked to have seen a more adaptive growth and skills fund geared to minimise apprentices leaving early due to high living costs. Overall, there were positive announcements in the Spending Review. It is now up to local firms and government to enter the bidding processes they are so good at and win that funding for Wales.
'CBI Wales looks forward to working closely with the Welsh Government on the welcomed allocation of additional funding from the UK Government. Our goal is to help reduce the high burden of costs currently facing our businesses in Wales. By doing so, we aim to unlock growth and create more jobs across the country – ensuring the Welsh economy remains resilient and competitive for the future.'
Ann Watson, CEO of Skills Charity Enginuity, which promotes skills in the engineering and manufacturing sectors, broadly welcomed the Spending Review.
She said:
'Today's Spending Review sends a welcome signal of government support for the UK's priority industrial sectors, with significant investment announced for clean energy, defence and transport. This increase in capital investment will help create demand across the UK's industrial supply chains, providing SMEs with a confidence boost to realise the Government's ambitious economic and decarbonisation goals. With fiscal parameters now in place, the crucial next step is a comprehensive Industrial Strategy that provides clarity, detail and meaningful policies to set a concrete vision for the future of UK industry.
'Enginuity is also pleased to see the Chancellor acknowledge that achieving growth requires investment in skills, with an injection of £1.2 billion of additional investment per year by 2028-29 into the skills system. Its impact will depend on allocation and execution and will no doubt hinge on further details due to be announced in the forthcoming post-16 strategy.'
The Tidal Range Alliance (TRA) warned of a 'glaring blindspot' in the UK Government's high-level energy ambitions. It said that while the focus on future energy investment was welcome, it believes there is a 'major lack of risk evaluation, mitigation, and no credible contingency planning'.
Robin Peters, Tidal Range Development Lead for the TRA, said:
'The strategy is bold but is dangerously exposed. The focus and future investment in low carbon technologies is to be applauded, but hydrogen fired generation, carbon capture and new nuclear are all high-risk in terms of technology readiness, supply chains, and delivery timelines.
'That risk is being pushed into the market, without the Government retaining control or providing a credible Plan B.
'Tidal Range technology is the Plan B and should be in the mix now. It is a civil infrastructure technology with predictable output, low-risk delivery, and decades of successful generation from existing schemes in France and South Korea.
'Why it has been omitted from the Government's strategic investment plans is not only baffling but a major energy cause for concern.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
24 minutes ago
- The Independent
Findlay: Tories will save £650m – and use the cash to cut taxes for Scots
Scottish Conservative leader Russell Findlay will promise voters his party can bring down taxes by stopping 'wasteful spending' and making £650 million of savings. He will insist there is a need to 'urgently streamline bloated government' at Holyrood. The party leader will outline plans for a Taxpayer Savings Act, promising this will save £650 million by 'cutting red tape, getting a grip on spending, and harnessing business expertise'. Mr Findlay will also tell the Scottish Conservative Party conference in Edinburgh about plans to establish a Scottish Agency of Value and Efficiency. This would be run by business leaders, he will tell the conference, who would then be 'tasked with wielding a claymore on waste'. The Scottish Tory leader has already accused First Minister John Swinney and his Government of wasting money 'on an industrial scale'. In his keynote speech to the conference – his first since becoming leader north of the border last year – he will say that 'putting a stop to wasteful spending is top of our agenda'. Mr Findlay will tell party supporters: 'We need to urgently streamline bloated government. 'Improving services means treating people's money with respect.' He will say £650 million that could be saved as a result of a Taxpayer Savings Act would be used 'to bring down people's taxes', adding: 'By doing that, we would start to restore trust.' Mr Findlay will also promise the Tories would 'shut down quangos that don't deliver value' and 'tackle the SNP's culture of cronyism through strict new rules on public appointments'. He will pledge a future Conservative government at Holyrood would seek to reduce both the number of ministers and special advisers. He is then expected to say: 'We would introduce a Scottish Agency of Value and Efficiency, run by business leaders. People in the real world who know how to get things done. 'They would be tasked with wielding a claymore on waste.' Another proposal will be for an Accountability and Transparency Index, with Mr Findlay saying this would 'shine a light on every organisation that receives public money, and would begin to dismantle the SNP's toxic era of secrecy'. Scottish public finance minister Ivan McKee said: 'The Scottish Government is making real progress in reforming the public sector: the number of Scottish public bodies under Government control has shrunk from 199 in 2007 to 131. 'However, we know there is more to do, which is why I will soon unveil our public service reform strategy. 'Unfortunately, this work has been made more difficult by the UK Government's decision to pursue Brexit, which in 2023 alone led to an estimated cut in public revenues of about £2.3 billion. 'Most Scottish taxpayers already pay less income tax than they would elsewhere in the UK.'
South Wales Argus
an hour ago
- South Wales Argus
Natasha Asghar MS visits Newport Principality branch
The visit was part of celebrations marking the society's 165th anniversary. The Principality Building Society, with its largest branch presence across Wales, declared in April its commitment to maintaining high street and community presence until 2030. This decision stems from consistent member feedback and research that indicates more than 70 per cent of people consider branch presence crucial when choosing a financial provider. Kelly Young, head of savings customer services, said: "Cash remains a vital part of daily life for many—not just as a payment method, but as a pillar of financial stability, especially for small businesses, residents, and rural communities." She added that the society is committed to investing in its network and ensuring access to cash for the communities it serves. Natasha Asghar, member of the Senedd for South Wales East, commended the society's dedication to maintaining its local branches and services across Welsh communities. She said: "With over 160 years of service, the Principality remains a cornerstone of Welsh town centres and has the strongest high street presence of any financial services provider in the country." The society was first established in Cardiff in 1860.
South Wales Argus
an hour ago
- South Wales Argus
Cardiff University cuts ‘could be repeated,' Senedd hears
Wendy Larner, president and vice-chancellor of Cardiff University, appeared before the Senedd's education committee on June 12 as part of an inquiry on higher education. She told Senedd members universities face an existential moment and the financial headwinds 'continue to blow strongly'. Prof Larner said it is an enormously challenging time for the higher education sector – 'not just here in Wales but in the UK and, indeed, globally'. Patrick Younge, chair of council, warned universities do not have a viable business model, with a tuition-fee freeze costing Cardiff £24m more than its competitors from 2017 to 2024. He said: 'If you don't address the fundamentals, all of the Welsh universities will be going through this year on year on year because income is not rising and expense inevitably rises.' Prof Larner said January's 'academic futures' document – which initially included a target to cut 400 jobs – was the beginning of a genuine consultation. The vice-chancellor confirmed the final plan includes retaining nursing, music and modern languages albeit with smaller cohorts and new models. She told the committee the initial target was scaled back to 220, with 151 academic staff leaving voluntarily: 'This leaves a final reduction of 69 full-time equivalents… by 2029/30. Compulsory redundancies are always a last resort.' Cefin Campbell, Plaid Cymru's shadow education secretary, questioned the wisdom in proposing changes only to backtrack, 'with resulting damage to staff morale'. Natasha Asghar, the Tory shadow education secretary, pressed the witnesses about the university's plans to open a new campus in Kazakhstan while making cuts at home. Prof Larner replied: 'Transnational education is part of the future for UK universities.' On staff welfare, Prof Larner said: 'We have seen… a little change in stress-related data. As is always the case, the majority of that… refers to personal, not workplace stress. 'But I absolutely understand the challenge here…. I take the well-being of our staff very seriously: this is not easy, change is really difficult.' She criticised the University and College Union for 'blindsiding' the university by going to the press with concerns about a 'total health and safety crisis'.
