Manufacturing: What the industry needs from the Autumn Budget 2025
Chris Barlow · Posted on: November 18th 2025 · read
As the UK gears up for the Autumn Budget on 26 November, manufacturers across the country are watching closely.
The industry, long considered the backbone of the British economy, finds itself at a critical juncture, from rising costs, global competition, to policy uncertainty. The upcoming Budget presents a vital opportunity for the government to demonstrate its commitment to revitalising UK manufacturing.
Tax burden and investment freeze
One of the most pressing concerns for manufacturers is the cumulative impact of recent tax increases.
The rise in Corporation Tax to 25%, coupled with higher employer National Insurance contributions and an uplift in the National Minimum Wage, has squeezed margins and led to a freeze on recruitment and investment.
MHA’s summer report revealed that over two-thirds of manufacturers expect these tax burdens to negatively affect their spending on technology, AI, and R&D, areas critical for global competitiveness. Many industry leaders are calling for a cut in Corporation Tax as a way of boosting the growth of the economy, stimulating investment, and helping the UK regain its competitive edge.
Cybersecurity and operational resilience
With 33% of firms citing cyber-attacks as a major threat, investment in digital infrastructure is no longer optional. Manufacturers are calling for targeted incentives to support cybersecurity upgrades and digital transformation, ensuring operational resilience in an increasingly volatile environment. The recent cyber-attack on Jaguar Land Rover, estimated to have cost the UK economy around £1.9 billion, serves as a stark reminder of the scale of the threat. The broader impact on the supply chain stands as a warning to all manufacturers of the potential ripple effects of such incidents.
Industrial Strategy
The launch of a new Industrial Strategy earlier this year was welcomed, but manufacturers now want more than rhetoric. They are urging the government to back the strategy with real funding, clear timelines, and measurable outcomes. A multi-year public investment programme, broken down by department and priority sector, is seen as essential to reversing the UK’s decline in global manufacturing rankings.
Skills shortages and workforce development
The skills gap remains a persistent challenge. While recent Budget announcements have included commitments to skills development, manufacturers are looking for more targeted support, particularly for SMEs and regional hubs. Apprenticeship reform, vocational training, and partnerships with local education providers could help plug the gap and future-proof the workforce.
Under the Apprenticeship Levy, the government has recently announced new “V Levels”, backed by £800 million of investment focused on key industries. It’s still early days, and a consultation has been launched, time will tell what impact this initiative will have on addressing the skills shortage.
Missed opportunities and policy gaps
Despite some positive steps, manufacturers feel let down by the lack of movement on R&D tax relief and Capital Allowances. The current R&D regime is seen as overly complex, especially for smaller entities, and there is frustration that no changes were made to Corporation Tax or post-Brexit trade facilitation. These omissions risk undermining the industry’s ability to innovate and expand. In addition, the industry remains concerned about the impact of rising tariffs and electricity prices, which are expected to increase further as the cost of investment and green transition measures are passed back to consumers. These omissions risk undermining the industry’s ability to innovate and expand.
A Budget that must deliver
Manufacturers are not asking for handouts, they are asking for clarity, consistency, and commitment.
"The Autumn Budget 2025 must deliver a framework that enables long-term planning, supports innovation, and restores confidence in the UK as a manufacturing powerhouse. Anything less risks leaving the industry further adrift at a time when global competitors are surging ahead."
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