2025’s Autumn Budget landed with heavy rhetoric on productivity, fairness, and private investment, all cast against the bleak backdrop of a weary industry.
Across construction, manufacturing, food, logistics, and energy, the response is mixed at best and melancholic at worst: higher costs, thinner margins, and no clear route to the step-change in industrial competitiveness that has been promised.
In construction, the headline message is one of strained credibility. “There’s little in this Budget for the construction sector,” said Dr David Crosthwaite, chief economist at BCIS. He points to fragile output and housebuilding data, a “shrinking workforce,” and a Chancellor celebrating planning reforms while simultaneously freezing employer National Insurance thresholds and charging NICs on salary-sacrificed pensions — measures he warns will increase the cost of doing business and put “further upward pressure on tender prices” while reducing firms’ ability to hire.
Robbie Blackhurst, built environment expert and founder of Black Capital Group, is even less diplomatic. “This is not a pro-business Budget – far from it,” he said. “Freezing employer NIC thresholds is a stealth tax on jobs. Taxing salary-sacrifice pensions punishes retention. Higher dividend taxation actively discourages entrepreneurship. Cutting capital allowances will stall investment across construction and other capital-intensive sectors.”
Meanwhile, Howden’s view underlines how those decisions land in day-to-day planning. Warren Dickson, CEO, Corporate & Commercial, Howden UK & Ireland, notes that the freezing of fuel duty for five months “creates short-term reprieve but uncertainty for long-term planning,” and that changes to minimum wage and salary sacrifice “means increased cost pressures at a time when businesses are factoring in more cost raises than ever before.”
SME cost base and pensions under pressure
If the Budget was intended to reassure SMEs, many of these comments suggest the opposite. Blackhurst’s description of a “£26bn tax raid that will raise operating costs, suppress investment and directly hit the very entrepreneurs driving the UK economy” is echoed in different language by others.
Food and drink manufacturers link the same mix of tax and regulatory uncertainty directly to inflation, skills, and long-term saving. “We would have liked to see more in this Budget on growth,” said Karen Betts, chief executive of the Food and Drink Federation. “Investment in productivity and growth in our sector is the best medium-term protection against the UK’s persistently high rates of food inflation.”
She argues that the UK’s largest manufacturing sector needs “an adequate share of government R&D funding,” stable regulation, and meaningful consultation when rules change, pointing to the Soft Drinks Industry Levy as a more mature model than current proposals around the Nutrient Profile Model.
On pensions, Betts warns that changes to salary sacrifice risk storing up further problems. “We’re concerned that the changes to salary sacrifice for pension contributions will discourage people from adequately saving for their retirement, creating further costs for the State down the line.”
Howden’s own benefits research adds another wrinkle. Dickson notes that 68% of SMEs are not currently offering salary sacrifice at all, meaning many are missing out on potential NIC savings which could be reinvested in their people. Even after the Budget changes, he argues, “salary sacrifice remains an effective lever that businesses can use during more challenging economic periods.”
Apprenticeships welcomed, but skills reform still unfinished
On skills, the tone is more balanced, albeit still cautious. Industry bodies acknowledge positive steps on apprenticeships while making it clear that high employment costs and thin retraining pathways remain a serious constraint.
“We welcome the Chancellor’s recommitment to strengthening the skills sector,” said Ann Watson, CEO of Enginuity. “Funding to make training for under-25 apprentices free for SMEs will unlock valuable opportunities for young people to build their careers in our sectors.”
The caveats, however, follow quickly. Watson describes the Budget as “a missed opportunity to tackle fully the increasing cost base facing SMEs,” warning that consecutive minimum wage rises and a “lack of fundamental skills reform will continue to stifle growth in the Government’s key growth sectors.” She points to Enginuity’s latest SME Snapshot survey, which finds that “high employment costs are now the largest factor driving inflationary pressures and undermining the UK’s labour market.”
Mark Gray, UK&I country manager at Universal Robots, strikes a similar note from an automation perspective. “The Budget from Reeves acknowledges the cost pressures on small and medium sized businesses,” he said. Offering free training for under-25s and plans to cut energy prices “will provide much-needed relief,” particularly for manufacturers facing rising resource costs and widening skills gaps. But he also notes that National Insurance increases earlier in the year “squeezed SME budgets and made it more challenging to recruit the apprentices much needed to drive growth.”
As automation accelerates, Gray argues, it is “more important than ever that the next generation is equipped with technical skills and the confidence to drive future growth in the industry” and deliver on the UK’s industrial strategy.
From the warehouse floor, Dexory’s co-founder and chief commercial and product officer, Oana Jinga, makes the link between skills and adoption of robotics and AI even more explicit. “Talent is still the biggest handbrake,” she says. “Mid-career technicians should be able to retrain into robotics and AI roles in a matter of months. There was little in the Budget to accelerate technical retraining, which remains critical to adoption. Fast pathways mean stronger teams, quicker adoption and less reliance on overseas hiring.”
Investment, automation, and sector competitiveness
While skills and wages dominate the immediate reaction, many of the sharpest comments focus on capital investment and the coherence of the UK’s industrial incentives.
“UK innovators don’t need more short-term tweaks, they need rules they can actually plan around,” Jinga said. “Give companies a multi-year guarantee on R&D reliefs and you’d see robotics and AI projects move from pilot to production overnight.” She argues that, despite productivity being a central theme, the Budget “stopped short of giving businesses the certainty they need”.
Her criticism of full expensing is equally pointed. “Right now, full expensing ignores the equipment that actually powers modern industry. Warehouses run on robotics, sensors, heavy compute and certified second-hand equipment, yet none of this was addressed or expanded in today’s announcements.”
In life sciences, the verdict is that recent plans have not yet translated into serious fiscal backing. Gail Vallis, partner in Gardner Leader’s corporate and life sciences teams, noted that “despite promising change in the sector plan published in July, and the exodus of big pharma since then, there are no game changers.” A £16m research centre in Darlington and other regional funds are “very welcome, but bigger change is still needed to put the UK back where it belongs in life sciences.”
From a manufacturing and net-zero angle, Epson’s Duncan Ferguson wants more targeted support for those investing in cleaner kit. “Strengthening the UK’s industrial competitiveness requires more than short-term stimulus; it calls for long-term incentives that reward businesses investing in cleaner, smarter, and more efficient technologies and supply chains,” he said.
He points to enhanced capital allowances for low-carbon manufacturing and energy-efficient systems as a missed opportunity, particularly for the UK textiles sector where reshoring and nearshoring could be underpinned by digital, resource-efficient production methods.
Energy, EVs, and the search for a long-term model
On energy and transport, reaction is less about individual line items and more about the absence of a coherent long-term framework.
For Dassault Systèmes, scrapping environmental levies to pare back bills is the wrong instinct. “The idea that we could get rid of the environmental levy charged to energy customers to reduce energy bills is a short-sighted approach,” said Aneela Nasim, infrastructure, energy and materials industry director, EuroNorth.
“Instead, we need more commitment for clean, homegrown energy sources, which will enable the UK to become a competitive player in the energy sector.” She notes that, according to the government’s own figures, 21.7% of the UK’s primary energy now comes from low-carbon sources, up from 20.8% in 2023, and argues that the UK has the know-how to do much more.
On EVs and road funding, the new per-mile charge for electric vehicles is accepted by some as inevitable, but not as a strategy in itself. “A pay-per-mile charge for EVs is a logical step as fuel duty revenues decrease, but it is not a strategy on its own,” said Daniel Parker-Klein, director of policy and communications for the Chartered Institute of Logistics and Transport (CILT) UK. “The UK needs a clear, integrated plan for how we fund roads, rail, and wider mobility – one that is fair, future-proof and aligned with decarbonisation goals.”
CILT points out that fuel duty currently raises around £28bn a year, some of which goes on roads, and that the proposed 3p-per-mile EV charge, with a lower rate for hybrids, is intended to plug that gap as more drivers switch away from petrol and diesel. The Institute stresses that logistics, public transport operators, and motorists need long-term certainty, and that fairness for rural communities must be built in from the outset.
Dickson’s perspective from Howden brings this back to fleet operators’ balance sheets. For companies already moving to electric and plug-in hybrid fleets, he warns, the additional 3p per mile for battery electric vehicles and 1.5p per mile for plug-in hybrids sits on top of existing road taxes and the looming 2030 ban on new petrol and diesel sales. “Multiply that time and time again for anyone involved in transportation of products or people, and that’s a big squeeze on outgoings,” he said.
A Budget that talks growth, but prices in friction
The responses vary in emphasis by sector, but the pattern is consistent. Industry is not dismissing the Autumn Budget as irrelevant; apprenticeships, some energy support, and elements of transport reform are recognised. Yet almost every spokesperson highlights friction at the precise points where the Chancellor claims to be backing growth — higher wage and tax costs for SMEs, uncertain paths for mid-career retraining, and a patchwork of incentives that does not yet add up to a long-term industrial strategy.
Watson notes that Enginuity has now launched a Policy Centre for Supply Chain and SMEs to “unify and amplify SME voices at the highest levels of policymaking,” an implicit acknowledgement that current consultation mechanisms are not delivering what smaller manufacturers need.
Whether subsequent consultations on EV road pricing, the detailed rules for free SME apprenticeships, or any future reforms to R&D reliefs and capital allowances close that gap will determine whether UK industry can plan around this Budget, or simply absorb it as another round of costly, short-term adjustment.
