Clean energy, skills and transport dominate in UK’s most industry-focused budget in a decade
The UK’s 2025 Budget Review has signalled a profound shift in economic policy, with over £100 billion in public capital investment aimed at revitalising infrastructure, accelerating the energy transition, and addressing industrial skills shortages. From heavy manufacturing to logistics, business leaders have broadly welcomed the direction — but cautioned that ambition must be matched with implementation.
Major announcements include £14.2 billion to fund Sizewell C, £2.5 billion for a Small Modular Reactor (SMR) pilot programme, and a further £2.5 billion allocated to nuclear fusion. Transport infrastructure also received a substantial uplift, with £15.6 billion earmarked for mass transit projects and a fourfold increase in local transport grants. On the innovation front, the government committed £22 billion annually to public R&D, alongside a £2 billion AI Opportunities Action Plan and £1.2 billion per year for training and apprenticeships.
These pledges were described by Kelly Becker, President for UK & Ireland, Belgium & Netherlands at Schneider Electric, as “a major boost for regional growth, transport and much needed STEM education and skills.” However, she warned that “the devil is in the detail” — and that to be truly effective, the funding must align with a coherent industrial policy. “We particularly welcome the commitment to transport decarbonisation, including the infrastructure underpinning electric vehicles, and significant funding commitments to the energy transition and the AI Opportunities Action Plan. But with high energy costs stalling growth, industry needs support now,” she said. Accelerating decarbonisation and digitalisation, she argued, must be central to strengthening the UK’s industrial backbone and boosting competitiveness.
The need for immediate impact was echoed across sectors. For the logistics and transport community, the long-term infrastructure commitments are a step forward — but not, in isolation, a complete solution. Daniel Parker-Klein, Director of Policy and Communications at the Chartered Institute of Logistics and Transport UK (CILT UK), said the review “recognises the essential role transport, logistics and supply chains play in underpinning Britain’s renewal, with long-term infrastructure investment a crucial foundation.” Yet he stressed that government must also focus on smaller, high-impact projects to enhance supply chain resilience and global competitiveness.
CILT offered a pointed example: electrifying just three miles of rail near London Gateway — the UK’s fastest-growing container port — would allow electric locomotives to haul freight as far as Glasgow, at a cost of less than £10 million. With housebuilding also receiving a boost in the review, Sue Terpilowski, Chair of CILT’s Public Policy Committee, noted that this would place new demands on freight infrastructure. “To achieve this and the building of new homes means having the infrastructure in place to ensure construction materials can be supplied to such large-scale projects up and down the country,” she said. “Fundamentally we need a freight plan which will help tackle supply chain efficiency and productivity challenges.”
The review’s emphasis on skills investment also drew cautious optimism from training providers and tech firms. Ash Gawthorp, Co-founder and Chief Academy Officer at Ten10, called it “a welcome shift towards an economy that invests in innovation, skills, and enterprise.” He highlighted the scale of support for R&D and AI as “clear signals that government intends to back world-leading science and homegrown technology,” adding that this could help generate high-quality jobs and global investment in areas like green tech.
Gawthorp also praised the expansion of the British Business Bank’s capacity, describing it as a way to “enable small businesses and startups to access the capital they need to innovate and scale.” However, he argued that the most critical component was the £1.2 billion investment in apprenticeships, which could “unlock new pathways for young people and strengthen the talent pipeline across industries” — provided the funding is delivered effectively. “It recognises the need to align innovation, skills, and enterprise development,” he said. “However, follow-through will be essential. That means getting funds where they’re needed, making training accessible, and ensuring industry has a voice in shaping the delivery of these programs.”
With both an Infrastructure Strategy and a full Industrial Strategy due later this month, businesses will now look for clarity on delivery timelines, procurement models and co-investment terms. As Becker put it, “In a competitive international environment, the forthcoming Industrial Strategy must provide UK businesses with a clear roadmap for public-private cooperation, targeted incentives and solutions to industry-wide challenges, especially energy costs and skills.”
For now, the review offers a promising blueprint. But for UK industry, the next stage will matter more: turning bold pledges into actionable, shovel-ready progress.
