Spring Statement 2025: Rachel Reeves should be courageous and favour economics over ideology, says Interactive Investor boss
Chancellor Rachel Reeves needs to be “quite courageous” and not “allow ideology to get in the way of economics” when she delivers her Spring Statement on 26 March, the chief executive of Interactive Investor has said.
Richard Wilson, speaking on an up-coming episode of Morning Wire‘s Boardroom Uncovered podcast, added that the government’s growth agenda “isn’t matched with growth policies”.
The chief executive, who also holds the position of chief operating officer at parent company Abrdn, also said the UK doesn’t “appear to have a very strong political class” and called for changes to how the country values and rewards politicians.
The Spring Statement will be the Chancellor’s second major fiscal event after she delivered her first Budget in October 2024.
Chancellor should be ‘quite courageous’ in Spring Statement
Speaking on Boardroom Uncovered, Wilson said: “The fiscal headroom is clearly a problem given the growth rates tracking down towards zero, inflation being somewhat resilient and therefore interest rates being a bit higher which then affects the cost of funding government debt.
“I think she needs to be quite courageous and solve [problems] for the long run.
“The bond market obviously puts a speed limit on what you can do but things like transaction tax you have to resolve that. You either solve it now or the market will solve it for you.”
The CEO of Manchester-headquartered Interactive Investor added that increasing tax on employers through National Insurance contributions announced in the Autumn Budget reduced firm’s appetite to hire and increased the cost of employment.
He argued that raising income tax would have been “a much more sensible thing to do”.
Wilson also hit out at Rachel Reeves’ Inheritance Tax reforms in the Autumn Budget which have “caused all sorts of angst” and led to protests from farmers in the months since.
The chief executive said: “To grow you have to support that growth agenda with tax structure that makes sense.”
‘The growth agenda isn’t matched with growth policies’
He also pointed to long notice periods of gardening leave as a drag on the UK’s growth.
Wilson said: “You’ve also got to attract talent and retain talent in the country. We have in financial services certainly the regime of deferrals and long notice periods which slow down the process of people moving.
“You have this strange environment – you don’t see it in the US, in New York at all – where you might be sitting on garden leave for six months or a year.
“For your most valuable talent you could, if you change jobs four or five times over 30 years, take a big chunk of your best people out of the market.
“The growth agenda isn’t matched with growth policies. The imposition of employer taxes as an example, is a net negative and I’m not seeing – in terms of industrial policy – that translating into growth factors.”
Also during the up-coming Boardroom Uncovered episode, the boss of Interactive Investor said that while the Chancellor is facing “fiscal challenges”, she should not allow “ideology to get in the way of economics”.
He added that the UK needs to be “wealthy enough as a nation to be generous” but that can’t be achieved by “undermining growth”.
‘We don’t appear to have a very strong political class’
Wilson also pointed to what he sees as a lack of value in the job MPs do in contributing to a deficiency in political leadership in the UK.
He argued that it’s “very easy to criticise people and lambast them in the newspapers for going to a football match” – a reference to the media storm last year around Keir Starmer accepting free Arsenal tickets.
Wilson said: “We also don’t reward them very well. An MP’s salary is just about a smidge above a junior supervisor in the City in London.
“So we’ve got a number of reasons why it’s not a very appealing vocation. I think the Western world is a bit short of stronger leaders today which is a risk for all of us.”
He concluded that the UK doesn’t “appear to have a very strong political class” and “the depth of leadership that we have in politics is short”.
The boss of Interactive Investor added that the country has “got some significant challenges to face and we need our institutions to stand up and be strong”.
He said: “We need to have simple rules that we can work by so we’re clear if we’re investing you don’t find yourself where someone is changing the rules later. That just discourages everybody from investing.
“But we have a wonderful environment in the UK. We’ve got wonderful talent, we’ve got some great strengths and we just need to be consistent and keep it simple.”