Budget Reaction by Annette Spencer, Chief Executive, Association of Corporate Treasurers:
“In last year’s Budget, business confidence was shaken by the stark disconnect between the Government’s positive prior rhetoric and the actuality of the Chancellor’s decision to increase Employer National Insurance Contributions. As we work through the details of today’s (26 November 2025) Budget Statement, we cautiously welcome that businesses were not hit again to the same extent. We support the aspirations for economic growth, but today’s announcements do not give us confidence that the Government has a cohesive strategy to deliver that growth and to avoid the Chancellor potentially needing to come back for more tax increases next year.
The recent trend of waiting uncertainly for the next annual Budget cycle is having a dampening impact on economic activity at multiple levels. To break out from this ‘wait and see’ economy, what treasurers and their businesses need from government is greater clarity, certainty, and consistency – to provide more predictability over fiscal policy, regulation and access to capital. These preconditions are essential for longer-term investment, effective risk management and confident participation in UK financial markets. In the shorter term, policy uncertainty is also potentially contributing to financial market volatility, which can make it more difficult - for example - for corporate treasurers to price and issue debt to finance their businesses.
Whilst some measures will add directly to costs for some businesses, such as reducing the writing down allowance main rate in corporation tax (to raise £1.5bn), the majority of measures in this year’s budget focus principally on changes affecting individuals. The OBR says that the personal tax burden will hit a record high of 38% of GDP in 2030-31, e.g. through further freezing of income tax thresholds. Businesses will fear that in the medium term this may suppress consumer spending and thus economic activity. The changes to salary sacrifice schemes, affecting some pension contributions from 2029, could raise the tax burden significantly on some employers and may lead to workers saving less.
Nevertheless, we welcome the Chancellor’s decision not to increase current corporate tax rates (which she claimed are the lowest in the G7) and the forecast that the inflation rate should come down next year. We also welcome the commitments to investing in infrastructure and engineering projects around the country, as well as to growing the AI industry in Britain. We would encourage the Government to extend to existing companies the new 3-year stamp duty exemption on shares of companies that choose to list in the UK. In principle, we welcome the funding support for apprenticeships in SMEs, building on the "youth guarantee" announced last November which promised every 18 to 21-year-old in England access to an apprenticeship, training, education opportunities or help to find a job.
Overall, there appears a lack of understanding of the impact of being on the one hand rhetorically pro-growth whilst on the other hand suppressing growth by imposing higher costs on businesses and individuals. We fear the “cheese-paring” approach to economic policy will not deliver the growth necessary to reduce the national debt and enable reforms.”
For context, corporate treasurers are the financial risk managers of the real economy. They are responsible for ensuring that businesses have the funding, liquidity, and risk management tools to operate, invest, and grow. Treasurers manage billions of pounds in value in cash, debt, and financial instruments across sectors, and their decisions directly affect the resilience and competitiveness of UK plc. Corporate treasurers can help deliver the Government’s economic growth mission for the UK but only if enabled by Government policy.
Image credit: “The Chancellor of the Exchequer leaves Downing Street to deliver the Budget” by HM Treasury, CC BY-NC-ND 4.0