Autumn Budget 2025: Make UK Reaction
26.11.2025
The Chancellor has unveiled her Autumn Budget at a crucial moment for manufacturers. What it means for the sector will become clearer in the coming days, but among the announcements were a range of measures affecting skills, apprenticeships, energy costs and business taxation.
Make UK will be analysing the detail and outlining what it means for manufacturers as further information emerges. Here's our initial reaction to what has been announced.
On the Autumn Budget statement:
Given the difficult economic circumstances the Chancellor faced, as well as the intense speculation, this was a case of two steps forward one step back for manufacturers.
"On the upside, companies will welcome the decision to expand capital allowances for leased equipment and greater investment in Apprenticeships for SMEs. Funding for skills, business support and infrastructure, targeted at the Regional Mayors, will also help support growth. The Chancellor should also be commended for her personal intervention to kick start the consultation on the business energy support scheme which is vital if we are to address the UK’s eye watering and uncompetitive industrial energy prices.
"On the downside, however, restricting tax relief on salary sacrifice and, a further increase in the National Living Wage mean that manufacturers are again facing greater barriers to successful recruitment and retention of skilled staff. The electric vehicle road tax will also potentially hinder their adoption and damage an automotive sector already facing a challenge to meet its EV targets.
"The Government came to power promising that growth was going to be its number one mission and, while it was dealt poor cards, we have yet to see any significant upswing in our economic performance and productivity. It is the private sector that will provide this growth and create high value, high skill jobs and, while the industrial strategy was a major signal of intent, we need to see a much stronger focus on delivery.
On skills and changes to the Apprenticeship Levy:
There’s good news on skills - with extra investment for SMEs hiring apprentices helping to cut training costs for those under 25s. At first sight, the multi-billion-pound package for funding adult skills for the devolved authorities will be good for local employers. Moreover, targeted packages on engineering skills in the Industrial Strategy will be a boost to manufacturers. However, cutting the expiry window to 12 months under the Growth and Skills Levy - which limits how long unspent levy funds can be used - will make it harder for larger employers to hire apprentices.
On the changes to Salary Sacrifice and increase in the National Living Wage, Verity Davidge, Policy Director at Make UK, said:
“The double whammy of restricting tax relief on salary-sacrificed pension contributions and a further increase in the National Living Wage mean that once again, the UK’s manufacturers are facing greater barriers to successful recruitment and retention of skilled staff.
“Make UK had called for the Government to consider how to use the tax system more effectively to support employers to invest more in the health and wellbeing of their workforce. Charging both employers and employees NICs on pension contributions simply increases employment costs further and makes it harder still to recruit successfully, instead of investing in productivity.
"A further NICs rise for employers as a result of this change following last year’s increase will be difficult to stomach for businesses who want to support the Government’s efforts to improve recruitment and employment.”
On the decision to extend full expensing to leased equipment, Fhaheen Khan, Senior Economist, said:
“This is a welcome move which shows Government is letting businesses choose how they invest in modern technologies whilst rewarding productive activities. It is important we continue to monitor how capital allowances are being used to support growth and ensure they remain competitive on the global scale which can be done with further expansions to how full expensing is used in the tax system.”
On the Electric Vehicle Road Tax, Patrick Matthewson, Senior Policy Manager, Energy & Environment, said:
“The Government’s approach to EVs is creating more push than pull factors for mass adoption of EVs which is preventing consumers from making the much-needed transition to cleaner vehicles. The measures introduced today will dissuade consumers, just as manufacturers are facing increased pressure to make EVs 80 per cent of total sales in 2030.
“Furthermore, the continued inclusion of employee car ownership schemes (ECOS) within the scope of Benefit in Kind rules will hamper companies’ ability to encourage employee use of EVs and, restrict stimulation of a healthy, second-hand market. Taken alongside the introduction of the Electric Vehicle Excise Duty (eVED), this will put a massive block on consumers adopting EVs.
"This new charge is likely to reduce demand for EVs as it increases their lifetime cost and so manufacturers will need to respond through either lowering prices or, by reducing sales of non-EV vehicles.”