Public Opinion on the 2025 Spending Review: Implications for UK Fiscal Policy and Retail Investors

As accountants at Cutts and Co, it is crucial to stay abreast of the latest developments in fiscal policy and public opinion, especially in light of significant economic announcements such as the 2025 Spending Review.

Recently, Chancellor Rachel Reeves unveiled the government’s fiscal priorities and funding allocations, which have sparked a mix of reactions from the British public.

Public Skepticism and Fiscal Concerns

A key takeaway from the YouGov survey following the Spending Review is the widespread skepticism among Britons regarding the affordability of the proposed spending commitments.

A staggering 67 percent of the public believe that the government will likely need to increase taxes or borrowing to fund these pledges, including 64 percent of Labour voters.

This skepticism underscores a deep-seated concern about the government’s ability to adhere to its fiscal rules and manifesto promises, particularly those related to income tax, National Insurance and VAT.

Priorities in Public Spending

Despite the overall skepticism, certain spending priorities have garnered significant public support.

For instance, increased funding for the NHS is overwhelmingly endorsed by 83 percent of respondents, reflecting the high value placed on healthcare by the British public.

Other popular measures include funding for repairing and refurbishing school buildings at 76 percent, building more affordable homes and homes for social rent at 68 percent and increasing the number of prison places at 56 percent.

Divisive Issues: Science, Technology and Infrastructure

Not all spending proposals have been met with uniform approval.

The investment in science and technology, particularly AI development, is a divisive issue, with 42 percent supporting it as a right priority and 39 percent opposing it. This division highlights the ongoing debate about the role of technology in public spending and the need for clearer communication about its benefits.

Infrastructure projects, such as the proposed railway expansion between Milton Keynes, Oxford and Cambridge, as well as TransPennine rail links, have also received mixed reactions.

Only 35 percent of Britons see these as appropriate priorities, while 44 percent believe they are the wrong priority.

This disparity suggests that the government may need to better articulate the long-term benefits of such investments to gain broader public support.

Implications for Retail Investors

For retail investors, the public’s skepticism about the government’s fiscal management and the potential need for increased taxes or borrowing is a significant concern.

It suggests that economic stability and predictability, which are crucial for investment decisions, may be at risk.

Retail investors should be cautious and closely monitor any changes in fiscal policy that could impact their investments.

Moreover, the public’s preferences for certain types of spending can provide insights into sectors that may see increased government support.

For example, the strong backing for NHS funding and school repairs indicates potential opportunities in the healthcare and education sectors.

Conversely, the lukewarm response to infrastructure projects might signal a more cautious approach to investments in these areas.

Conclusion

The 2025 Spending Review has laid out ambitious spending commitments, but it is clear that the British public remains skeptical about their feasibility.

As accountants, it is essential to advise clients to be vigilant about potential changes in tax policies and borrowing rates, which could have direct implications for their financial planning and investment strategies.

By understanding the public’s priorities and concerns, retail investors can make more informed decisions and align their investments with sectors that are likely to receive sustained government support.

At Cutts and Co, we are committed to providing our clients with the most up-to-date and relevant advice to help them navigate the complexities of the current fiscal landscape.