It was no surprise, therefore, to see industrial organisations make a string of suggestions, requests and warnings as chancellor John Healey prepared to deliver his first budget in parliament. Covering everything from electricity prices to R&D, some of those priorities were supported in today’s (28 October) autumn statement – and some received less attention. Here are the key reactions from professional and industrial organisations.
IMechE welcomes investments
“We welcome measures in the budget to support business investment and industrial competitiveness, including improved access to finance and investment in key sectors such as aerospace and defence, alongside various measures to reduce the cost of energy for the engineering sector. These are important steps towards strengthening the UK’s industrial base and supporting growth,” said IMechE director of policy and impact James Partington.
Increased investment in AI – including an additional £140m for the Sovereign AI Unit, which aims to help promising UK AI companies increase and maintain their presence in the country – will be welcomed by industry, he added.
“Engineering is central to growth across the UK, with 6.4 million people in highly skilled roles driving productivity and innovation. The government must now match this contribution with the ambition and investment needed to unlock engineering’s full potential,” Partington said.
Concerns remain on industrial energy
With the high costs of industrial energy under the spotlight, Healey highlighted the previously announced British Industrial Competitiveness Scheme in his statement, claiming it will cut electricity bills for energy-intensive businesses by up to 25% from April 2027.
The scheme will provide welcome support for more than 10,000 companies, Partington said. But, he continued, “with growing energy costs piling ever more pressure on industry, we need this to go further and for support to be extended to a wider range of companies, or we risk losing investment and high value jobs to countries offering more competitive conditions.”
Manufacturers’ organisation Make UK criticised the announcement, saying the government had “failed to address” high energy costs. “Our industrial electricity costs are the highest in the world,” said chief executive Stephen Phipson CBE. “As I told the chancellor last week, this is having a ruinous effect on investment and requires urgent action. It is hugely disappointing that he didn’t listen to a sector that supports 2.6 million jobs and accounts for 42% of UK exports.”
He added: “This budget has failed to address any of the fundamental costs holding back investment and growth in manufacturing. We will continue to push the government to make reindustrialisation an economic reality, rather than an empty political slogan.”
Red tape relief
Describing aerospace as “one of the UK’s greatest manufacturing success stories”, the budget announced plans for a new 10-year, £2.5 billion programme with Rolls-Royce to develop next-generation gas turbine technology for civil and defence aerospace. The programme will support 3,300 jobs at the manufacturer by the end of 2029, and the government hopes it could attract billions of pounds in further investments across the supply chain.
The document also included plans for a new Ministry of Defence-led drone regulation unit, which will “take a targeted approach to cutting red tape and create clearer routes for testing uncrewed and autonomous systems”.
The removal of regulations was welcomed by Alan Fisher, CEO of Farnborough Aerospace Consortium, who said that red tape “strangles businesses and prevents investment”. The organisation said conditions will nonetheless remain “tough” for members, which include hundreds of businesses in the aerospace, aviation, defence, space sectors and their supply chains.
“There are two main areas of concern; energy costs remain high and levels of defence spending remain uncertain. The chancellor said he will aim to spend 3% of GDP on defence by 2030. That is not a commitment and means uncertainty,” Fisher said. “He said more detail will emerge in next year's spending review, but our members will see that as kicking the can down the road.”
‘Continuity and certainty’ needed for rail
Rail projects covered in the budget included confirmation of over £300m for the Leeds Existing Station Programme, set to increase capacity and improve accessibility at Yorkshire’s busiest railway station, and exploratory work with the Greater London Authority to aim to enable international rail at Stratford International.
Before responding to the budget, the Railway Industry Association expressed “sincere condolences and sympathies” to everyone affected by the train crash in Spain today.
Reacting to the statement, chief executive Darren Caplan said: “Recent commitments, including the publication of the Rolling Stock & Infrastructure Strategy, progression of the Railways Bill through parliament, and investment in new UK-built rolling stock, have provided greater direction for the sector, and so – whilst our members tell us they would still like to see more progress on accelerating private, third party and local funding, and smoothing out of boom-and bust investment – we of course welcome measures that continue this momentum overall.
“RIA and our members remain committed to working with political decision makers and influencers, stakeholders and railway clients across the rail industry to deliver a safe, reliable and efficient railway that supports economic growth, improves connectivity and creates high-quality jobs across the UK.
“The priority now is ensuring continuity and certainty in investment. A stable, long-term programme of work will give businesses across the rail supply chain the confidence to invest in people, skills, innovation and manufacturing capability.
“We look forward to continuing our engagement with government in the months ahead to support the delivery of rail reform and to ensure the railway continues to play its full part in driving growth and opportunity across the UK.”
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