Opening her statement to the House of Commons, Reeves set the wider context for the policies, citing progress on trade and investment: “We are rebuilding our economy, forging new trade deals with the US, India and European Union. We have reformed visa systems and raised public investment to its highest level in over four decades,” she said.
"Growth is the engine that carries every one of our ambitions forward. Through stability, investment and reform – the platform from which British ambition can finally get moving again.”
The Chancellor confirmed a significant reduction in electricity prices for manufacturing businesses to improve competitiveness, while a flagship tax measure will allow firms to write off 40 per cent of qualifying investment in the first year, aimed at reversing historically low investment levels and making the UK a more attractive destination for industrial growth.
The Budget also commits to strategic sector support under a “buy, make and sell more” philosophy, Reeves said.
Defence spending is set to rise further, reinforcing earlier interventions to safeguard British steel and prioritise domestic supply chains for national security. Investment into next-generation technologies will also increase, including semiconductor development, advanced manufacturing in Northern Ireland and two new AI growth zones planned in Wales, expected to create 8,000 jobs.
Scotland will receive £14 million for low-carbon projects in Grangemouth, while clean energy manufacturing will benefit from backing for Rolls-Royce’s small modular nuclear reactors.
To underpin these ambitions, £13 million has been allocated for skills and infrastructure across seven mayoral regions, and apprenticeships for under-25s in SMEs will remain fully funded.
Reeves confirmed income tax and National Insurance thresholds will be frozen for three years from 2028, signalling a balance between fiscal discipline and growth-driven investment.
Mixed Industry Reactions
Mark Gray, UK&I Country Manager, Universal Robots
"Today's Budget from Reeves acknowledges the cost pressures on small and medium sized businesses. As the backbone of our UK economy, offering free training for under-25s will provide much-needed relief, while plans to slash energy prices give manufacturers, in particular, a welcome boost.
"As UK manufacturers continue to face immense challenges with the rising costs of resources and widening skills gaps, these reforms are a lifeline for many. National Insurance increases earlier this year squeezed SME budgets and made it more challenging to recruit the apprentices much needed to drive growth.
"We're encouraged by these reforms and hope it gives the industry confidence to lean into skill development and meet the high demand for technical prowess and automation skills in SMEs."
Raj Mittal, Restructuring Advisory Partner, FRP
“This is a missed opportunity to deliver the comprehensive support that manufacturers need as they navigate cost pressures, supply chain disruption and geopolitical uncertainty.
"However, firms have been given clarity. After months of speculation, manufacturers, and their customers, finally have certainty over near-term government policy that they can factor into their strategic planning. This could support fresh investment, and new orders, over the months ahead. Critically, it also provides the stable environment businesses need to review their funding options and engage with lenders with greater confidence.
"The National Living Wage increase will add further pressure to manufacturers' cost bases. With margins already squeezed by energy costs, raw materials and supply chain pressures, boards should be promptly reviewing how this affects them, and what their options are if they need to adapt.”
Oana Jinga, Chief Commercial & Product Officer & Co-Founder, Dexory
“UK innovators don’t need more short-term tweaks, they need rules they can actually plan around. Give companies a multi-year guarantee on R&D reliefs and you’d see robotics and AI projects move from pilot to production overnight. The Budget made productivity a central theme, but it stopped short of giving businesses the certainty they need to make that productivity a reality.
“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. That’s a missed opportunity to support the technologies most likely to accelerate productivity. Instead, clear, usable rules for workplace autonomy would have an immediate impact. A single, joined-up sandbox for approvals would cut through months of uncertainty and let firms deploy autonomous mobile robots at scale.
“Government procurement could be a far bigger catalyst. If public services, from NHS logistics to postal networks, committed to multi-year automation goals, it would create the reference deployments that help UK robotics scale at home and compete globally. That kind of long-term signal was missing today, but would align closely with the government’s ambition to raise productivity.”
John Pearce, CEO, Made in Britain
“Much of this budget has been around taxation and increasing headroom for the British economy as a whole, with a focus on areas such as pensions, property and fuel duty proving the key headlines of this 2025 Budget set out by the Chancellor.
“Lower underlying productivity growth has been cited as a reason behind real GDP figures falling short of forecasts, and this is something that British manufacturers have been sounding the alarm over for quite some time. A productive economy can only be achieved when the right support is in place for businesses and manufacturers to excel in their industries, and it is already so difficult for our members to create a profitable business when so much is being thrown at them due to a struggling UK economy.
“It has therefore been welcoming to see the Chancellor prioritise homegrown suppliers for future government procurement contracts, which should place British manufacturers and businesses in a good position to grow and work on large-scale projects. We would also like to see this go further moving forward, incentivising British businesses that seek these procurement opportunities.”
“Manufacturers desperately need the Treasury and all government departments to do all they can to ensure that profitability is tangible and feasible. Many of our members at Made in Britain are small and medium sized businesses who will need to find additional funds in their cashflow to account for minimum wage increases, dividend tax hikes and the costs of complying with additional rules and regulations."
Pinaki Banerjee, CEO, PP Control & Automation
"Overall, today’s Budget delivers welcome signals for UK manufacturing through long-term investment, sector-specific backing and commitments on energy and specifically, apprenticeships.
“However, let’s not get carried away. There are still significant concerns around productivity, with very little in there to encourage investment in automation and technology and, apart from the encouraging news on funding for under 25 apprentices, a skills crisis that hasn’t really been fully addressed.
“In fact, the deeper you investigate the announcements, many of the key policies give a little bit with one hand but then take away with another. For example, a strong commitment to nuclear is welcome, yet there was little additional clarity on timelines for grid reform, hydrogen rollout, CCS clusters or renewable supply-chain commitments.
“Devolution and more regional funding can boost ecosystems and local supply chains, yet more details on the much vaunted Industrial Strategy and its implementation was glaringly missing from the speech.”
