Autumn Budget 2024: the CBI impact

Alongside the Autumn Budget, the Office for Budget Responsibility (OBR) released its economic and fiscal outlook. 

The OBR forecast for the UK economy remains broadly in line with the March forecast. Budget policies deliver a temporary boost to GDP in the near term and some crowding out of private activity in the medium term. The OBR estimates that the policy package boosts real GDP by 0.6% at its peak in 2025-26 as the fiscal loosening temporarily raises output above its potential level. This temporary stimulus fades to zero over the remainder of the forecast as monetary policy acts to rein in any excess demand. Real GDP growth is therefore forecast to pick up from close to zero last year, to 1.1% this year, 2.0% in 2025, and 1.8% in 2026. 

While inflation has come down to around the 2% target in mid-2024, the OBR expects CPI inflation to 2.6% in 2025, slowly returning to the 2% target by the forecast horizon. Compared to the March forecast, inflation is 1.1 percentage points higher in 2025 and 0.6 percentage points higher in 2026, driven mainly by greater-than-expected persistence in wage growth and the impact of the near-term fiscal loosening in this Budget. The OBR estimated that Budget policy measures increase inflation by 0.4 percentage points at their peak effect in 2026. 

The tax-to-GDP ratio is forecast to increase to the highest level on record at 38.3% of GDP in 2027-28, compared to 36.4% in 2024-25. Part of this increase is driven by the policies announced at this Budget. 

Public sector net borrowing is forecast to rise from £121.9nb (4.5% of GDP) last year to £127.5bn this year, before falling steadily back to £70.6bn (2.1%) by 2029-30. 

Public sector net debt falls from a peak of 98.4% of GDP this year to 97.1% in 2029-30. The peak is now lower than in the March forecast, but the OBR expected a steeper drop to 94.3% by 2028-29 after the Spring Budget. 

The government has announced three new fiscal targets: a fiscal mandate for the current budget – revenues minus day-to-day spending – to be in surplus by 2029-30; a supplementary target for public sector net financial liabilities to fall as a share of GDP by 2029-30; and a revised welfare cap, with the target year updated to 2029-30. In the central forecast, the current budget target is met two years early. In the pre-measures forecast, the rule is met by a margin of £22.7bn (0.7% of GDP), but the direct and indirect effects of Budget policies reduce this headroom to £9.9bn (0.3% of GDP) in the target year, which is the third lowest since 2010. 

The exchange rate showed a relatively muted reaction to the Chancellor’s Budget. As of 15:00, the pound stood at $1.30 against the US dollar and €1.20 against the euro. Even after accounting for a fall in morning trading, the pound sterling was broadly unchanged from when markets opened this morning. 

Gilt yields had been rising in the weeks leading up to the Budget, reflecting market unease at the possibility of increased government expenditure and uncertainty over a change in the fiscal rules. Yields fell slightly as the Chancellor began delivering her budget. However, by 15:00 yields had started rising again as traders digested the news from the OBR forecast that the Chancellor has very little fiscal headroom to meet her new fiscal rules. By 15:00, the 2-, 10- and 30-year gilt stood at 4.35% (+0.08pp since 8am), 4.39% (+0.07pp) and 4.89% (+0.09pp), respectively. 

Equity markets had a mixed reaction to the Budget. The FTSE 100 fell steadily since markets opened this morning and had lost 0.6% of its value by 15:00, although this may reflect news of stronger–than-expected US GDP growth, meaning room for higher-for-longer US interest rates, rather than the Budget itself, especially given that the index is dominated by internationally oriented firms. The FTSE 250 (more reflective of domestic companies) rose strongly and had gained 0.7% by 15:00. Similarly, the FTSE AIM 100 (an index of smaller listed companies) jumped nearly 4% since markets opened, driven by a better-than expected outcome for the inheritance tax relief for AIM shares (which was only halved, compared to expectations that it would be scrapped entirely). 

Funding for critical decarbonisation technologies  

Building on the momentum of recent net zero announcements, it was positive to see continued commitment to support investment in key technologies critical to decarbonising the economy. In particular, funding of £3.9bn for Carbon capture, utilization, and storage (CCUS), support for the first round of electrolytic hydrogen production contracts and £2.7bn for Sizewell C’s development, which will provide signals to investors on the role the government intends to play in the commercialisation of net zero technologies.  

Clarity on commitments for the Warm Homes Plan 

Details of the Warm Homes Plan, with the allocation of £3.4bn towards heat decarbonisation and household energy efficiency over the next three years, provide some of the policy certainty long sought after. Likewise, it's positive to see the government’s recognition of the success of the Boiler Upgrade Scheme with a commitment to increase its funding. Well documented access to capital, particularly with the continued pressures on the cost of living, are a challenge for many homeowners when considering energy efficiency upgrades, which in turn dampens the market for heating and insultation upgrades. However, it is notable that some decisions will need to be made on the levels of continued funding beyond the three-year period in the upcoming Spending Review. With energy efficiency policies historically having failed due to lack of long-term policy certainty, it will be critical that these mistakes are not repeated.

Confirmation of changes to the Energy Profits Levy  

The first-year allowance under the Energy Profits Levy (EPL) has been retained at 100% to continue incentivising North Sea investments. The Labour Government initially proposed removing all investment allowances under the EPL, a move that the CBI warned would render many North Sea investments unviable, risking jobs, investment and UK energy security during the transition to net zero. This announcement will help to alleviate concern within the sector, ensuring continued investment in the North Sea. However, the decarbonisation allowance will be cut from 80% to 66% from 1 November 2024 which sends the wrong signal for investment in transition technology. The impact of this policy change should be carefully monitored. 

Building on recent announcements on the Clean Power Mission and the launch of the Invest 2035 industrial strategy, this could have been an opportune moment for the government to set out a commitment to develop a net zero investment plan. In the context of the tight fiscal position, establishing such a tool would ensure that public and private investment flows at the speed and scale required to meet the Climate Change Committee’s balanced pathway to net zero by 2050. Likewise, today’s budget gave little in the way of utilising green tax incentives to promote high-growth green technologies. With competition fierce for attracting new growth industries, outsmarting rather than outspending our competitors means making better use of our tax system.   

As the UK industry decarbonises, effective carbon pricing mechanisms play a crucial role to support investment and create new markets in green technologies. Although industry will welcome the government’s response to the consultation on the implementation of a UK Carbon Border Adjustment Mechanism (CBAM), including confirmation of the 1 January, 2027, significant concerns remain that this does not align with the EU’s CBAM implementation. Linkage between the UK and EU carbon pricing systems to limit carbon leakage continues to be a high priority for industry, this additional lack of alignment will add to increased costs of compliance and risk competitiveness of UK businesses. 

The CBI will continue to work with Mission Control and DESNZ in the delivery of the government’s ambitions on the Clean Power 2030 Mission. This will include ensuring businesses are able to share their decarbonisation challenges and experiences of interacting with the energy system to date, alongside developing relationships with the National Energy Systems Operator.   

The CBI will engage with the government to understand how it intends to use tax policy to support green investment, and continue to make the case for strategic use of the tax system to decarbonise the UK economy. The CBI will collect feedback from members on the impact of changes to the decarbonisation allowance under the Energy Profits Levy and provide insights to the government to ensure that any unintended consequences are addressed. 

As the government develops an Industrial Strategy, the CBI will continue to work across HMT, DBT and DESNZ to make the case for a Net Zero Investment Plan to leverage private investment in net zero and drive growth across the economy. In addition, the CBI will continue to campaign on the importance of UK-EU linkage on carbon pricing policy to prevent carbon leakage and support UK competitiveness. This will include hosting roundtable sessions with government to highlight the opportunities and challenges faced in industrial decarbonisation.  

Government-funded childcare 

Responding to ongoing challenges with labour market inactivity, the Budget confirms £1.8bn to continue the expansion of government-funded childcare. The CBI has long argued that to ensure the successful expansion of childcare, further funding would be needed. 

Driving labour market participation 

There was the promise of further measures to support people into work that will be brought forward shortly in a Get Britain Working white paper. This includes £240m to trial new ways of getting people back into work and £115m in 2025-26 to deliver Connect to Work, a new supported employment programme matching people with disabilities or health conditions into vacancies. 

Delivering quality training 

In the skills space, the Chancellor committed to investing £40m to begin much-needed reform of the apprenticeship levy into a more flexible Growth & Skills Levy. This will be welcomed from businesses across the economy who have expressed frustration with how the levy has impacted their ability to invest in a broader range of training solutions. 

Following representations from the CBI on the value of, and challenges, confronting training providers, the government also announced £950m for skills capital, including new funding to support colleges to maintain, improve and ensure suitability of their estate. An 'additional' £300m will be handed to the further education sector next year. Details on exactly what this extra cash is earmarked for have, however, not been released, with the Department for Education expected to decide what this can be spent on.  

There was also a commitment to delivering the Lifelong Learning Entitlement (LLE), with a revised launch date of January 2027. The LLE will expand access to high-quality, flexible education and training for adults throughout their working lives. 

The Chancellor announced that the government has accepted the Low Pay Commission’s recommendation to increase the NLW by 6.7% to £12.21 from April 2025. This will be a cause for concern for many businesses who will need to accommodate this increase against a challenging economic backdrop. With productivity growth stagnant, this will require difficult choices, with some likely to squeeze investment or raise prices to finance it.

In line with previous budgets, there was again an underwhelming focus on the future of work and skills. With fiscal headroom tight, today’s Budget was a key and missed opportunity to improve productivity and workforce participation by unlocking business investment in people and training. Additional funding was identified for Further Education, but skills development does not stop at college. Adult education and adult skills training appears to have been overlooked.

Moreover, it is disappointing that there was no action to return the idle capital sat in overfunded Defined Benefit (DB) pension schemes to employers. The latest PPF 7800 data shows that £475bn is held in aggregate surplus on a ‘s179 basis’. Yet, there is no capacity for trustees to invest it productively. Requiring that DB trustees return surpluses above buy-out level to the employer, upon their request, could enable significant capital to be reoriented back to growth. Similarly, it was disappointing that action to enable the Pension Protection Fund to charge a 0% employer levy and begin redistributing back contributions to employers was missing.  

The CBI will continue to campaign for the need for levy flexibility to include non-apprenticeship training, moving beyond the commitment in the budget to flex out the levy to shorter and foundation apprenticeships in key sectors. We will also continue to push for immediate flexibility to use levy funds for a broader range of accredited courses, and greater transparency around how levy take is allocated by Treasury. Publishing data on the allocation of new and expired levy funds will be key to understanding the scope to offer levy flexibility and building business confidence that the levy is being used for its intended purpose: unlocking business investment in skills. 

Investment in technology adoption to drive growth and productivity 

The Chancellor introduced measures to support business to adopt technology, with more to come in the spring. This included new funding for tech adoption pilot programmes, confirmation of Made Smarter rolling out regionally, and £37m funding for Made Smarter Innovation. As a first step towards a tech adoption strategy as called for by the CBI, the announcement of a review on barriers to the adoption of transformative technologies is welcome. As is £500m for digital infrastructure rollout. These measures pave the way for more businesses to effectively adopt technologies that will enhance productivity and provide headroom for growth. 

Protection of R&D investment and tax reliefs 

Public R&D investment has seen a slight increase to a record £20.4bn, including an uplift of 4.5% for DSIT’s R&D budget to £13.9bn. This was coupled with maintenance of R&D tax relief. This protection of the baseline levels for R&D provides a steady foundation to build on in the multi-year spending review in the spring. 

Targeted R&D investments to unlock growth 

The Chancellor championed the importance of R&D for growth as part of the Industrial Strategy. This includes the first year of funding for a new multi-year R&D Missions Programme (£25m) to solve targeted problems jointly with private and third sector investment, a new Life Sciences Innovative Manufacturing Fund (£70m in 24/25 and up to £520m over five years), £975m in R&D funding for the aerospace sector over five years, and over £2bn in R&D and capital funding over five years to support the automotive sector. These initial commitments set a strong foundation for long-term, supportive investment in R&D, aimed at catalysing private investment and growth.

Scale of ambition for the long term 

The protection of R&D investment and tax reliefs in a difficult context is very welcome. However, if the UK is to really turn a corner on growth and crowd in private investment, government needs to clearly set out the level of ambition for investment long term. R&D investment decisions are often made in an international or global context and there was an opportunity to signal intent and set out the direction of travel in the longer term to give businesses confidence to invest.  

Coordinating government action on technology adoption 

Following on from an October member roundtable on tech adoption with National Technology Advisor, Dave Smith, the CBI is planning a follow-up, and will input member views into the review of the barriers to adoption of transformative technologies. Effective strategy to drive technology adoption will be crucial to spur innovation and boost productivity across key sectors of the economy, and this review presents a strong first step. 

Engaging on proposals for technology adoption pilots 

The CBI will actively work with the Department for Business and Trade (DBT) to develop its tech adoption trial pilots, for which the Chancellor announced a £4m package, and will seek input from members on proposals. The CBI has called for further expansion of the successful Made Smarter programme to other sectors of the economy, and will share member views with DBT as the pilots are developed to help with understanding around how government can best provide businesses with practical, hands-on experience in implementing advanced technologies.   

Ensuring tech and innovation play their full part in the Industrial Strategy 

The CBI will respond to the Industrial Strategy Green paper consultation and engage with officials across DSIT and DBT. The CBI’s AI and Data, and R&D working groups will convene to input to our submission and will bring members together with DSIT leads on the Regulatory Innovation Office this month. More broadly, we'll actively follow up on a number of issues including the R&D Missions programme, procurement of innovation, the Data Bill, and measures to support scaling of innovation to understand more. We'll be reaching out to members for input. 

Members: for more information on how to get involved, please contact Kapila Perera.

UK businesses have no shortage of strategy, ambition or talent, but the operating environment often fails to support growth. Members tell us they can now see some bright spots emerging in the UK economy. But the challenges are persistent: sluggish productivity growth and underperforming business investment compared to international competitors. 

Supporting mayors and mayoral combined authorities to unlock regional growth

As a long-standing supporter of devolution and elected mayors, the CBI welcomes the introduction of the first integrated settlements for both Greater Manchester and West Midlands Combined Authorities from 2025-26.  The aim here is to give mayors meaningful local control over funding in a single flexible pot, enabling them to better plan for the future and deliver growth. 

The government has established the Council of the Nations and Regions and Council of the Mayors; is working with local areas in England on the upcoming English Devolution White Paper and as they develop Local Growth Plans; and is putting ‘place’ at the heart of Invest 2035: A Modern Industrial Strategy.  

Planning reform needed to support infrastructure delivery critical to unlocking business investment and boosting growth 

While we welcome the announcement of 300 additional planners, this will not be enough to meet the scale of the challenge and should be accompanied by other reforms such as ringfenced planning fees and piloting of Local Planning Hubs. 

Driving regional growth  

Innovation accelerators show a commitment to place-based policy and utilising regional assets to support growth across the UK.  

The announcement of several key infrastructure projects and an increase in capital expenditure to support regional growth and boost connectivity across the UK is welcome, including confirmed funding to tunnel from Old Oak Common to Euston and progressing with HS2 Phase One to improve connectivity between London and Birmingham. 

Public-Private Partnerships as a catalyst to drive private sector investment 

We welcome the Government’s commitment to work in partnership with the private sector through the creation of a National Wealth Fund. This will help provide the catalyst to drive private sector investment.  

More detail will be needed to ensure local growth plans align to new Industrial Strategy 

With regards to public private partnerships, more detail will be needed on the process and vehicles required to get private investment moving. 

Announcements on planning reform do not go far enough to meet the scale of challenge. Therefore, more will be needed from government with regards to meaningful planning reform.  

The CBI will host a mayoral roundtable with England’s metro mayors next month to discuss how we can work in partnership to drive inward investment. Also on the agenda is how Local Growth Plans align with the new government's Industrial Strategy. 

The CBI will continue to engage with government to ensure there’s meaningful planning reform to build the infrastructure and housing needed to unlock growth.  

Reform on the horizon for business rates

The government has detailed its next steps for business rates reform in England. As campaigned for by the CBI, the government’s Discussion Paper has been published to consult with businesses and co-design long-term reforms. For 2025/26, the small business multiplier will be frozen, shielding these businesses from inflationary increases, with additional relief for high-street retail, hospitality and leisure (RHL) businesses. However, the approach to permanently lower multipliers from 2026/27 for RHL properties adds complexity to the system and means rebalancing the burden to higher value properties (those with a rateable value greater than £500,000 such as warehouses used by online giants). 

Corporate Tax Roadmap paves the way for a more stable tax system  

Long called for by the CBI, the Corporate Tax Roadmap sets out a more predictable tax regime by capping the headline Corporation Tax rate at 25% for the rest of Parliament and maintaining the generosity of key investment reliefs such as permanent full expensing, Annual Investment Allowance, R&D tax credits and the Patent Box. Smaller companies will welcome confirmation that the Small Profits Rate of 19% will not increase. This certainty, plus the shift to a single annual Autumn Budget, will boost business confidence to invest in the longer term after years of fluctuating tax rates and allowances.  

Increase in employers’ National Insurance will impact business investment plans

From 6 April 2025, Employers’ National Insurance will rise by 1.2% to 15% and the earnings threshold will be reduced from £9,100 to £5,000. The CBI has warned the government that this could impact business growth, leading to reduced investment, hiring freezes, lower pay, price increases and jobs moving overseas. Smaller employers will be shielded from some of the impact with the Employment Allowance increasing from £5,000 to £10,500, and this will now apply to all eligible employers. This tax hike will be tough for many firms, as it's due regardless of profitability. 

No outcome on health tax incentives  

The absence of reform on health tax incentives is a missed opportunity to let business play its part in preventing people from leaving the labour market. Businesses have been waiting for the outcome of the occupational health tax incentives consultation for over a year and the lack of any announcement will come as a disappointment for employers who are keen to play a proactive role in stemming the flow of economic inactivity but are discouraged by the tax system. A recent CBI survey found that 49% of businesses would reinvest any tax savings into the health of their workforce. 

Making Tax Digital timetable remains uncertain for corporates and extended for unincorporated businesses  

As large multinationals in the UK are in the midst of implementing the OECD’s Global Minimum Tax rules, they will now have some time before they need to consider updating their systems to comply with Making Tax Digital (MTD) for Corporation Tax, originally planned to come in no earlier than April 2026. This is because HMRC needs to update its old systems first and this will take time. 

 Last year, the previous government set out a fixed schedule for phasing in MTD for Income Tax Self-Assessment, with unincorporated business owners with income over £50,000 having to maintain digital records and submit quarterly tax reports from April 2026, extending to those with income over £30,000 from April 2027. This will now be rolled out further with the income threshold dropping to £20,000 by the end of this Parliament. The CBI had previously asked to exempt small business owners from unnecessary quarterly reporting to help them save on administration costs in the early stages of their businesses. 

Extending Full Expensing to leased and rented assets remains static 

The draft legislation on extending Full Expensing to leased and rented assets remains unpublished and the government’s position is still the same in that this will be explored further when fiscal conditions allow. This will come as a disappointment to businesses in the leasing sectors. 

We'll work with our members to respond to the Government’s Discussion Paper and shape the transformation of the business rates system. We already have a strong cross-sectoral member mandate on most aspects, including moving to a progressive slice-based system of taxation, making business rates investment-friendly, streamlining reliefs and exemptions, and prioritising Valuation Office Agency (VOA) transparency and performance. 

The CBI will continue to advocate for the government to implement an ambitious expansion of tax-free employee health support. Recent CBI analysis shows these measures would prevent 34,000 people from permanently leaving the labour market each year and add £8.57bn to the economy by 2030. 

Our Employment Taxes Working Group will engage with HMRC’s policy team on mandating the reporting of benefits-in-kind via payroll, which is confirmed to still go ahead from April 2026, although some of the initial consultation feedback seems to have been taken on board as the approach will now be phased.   

We will stay plugged into the government’s plans to publish the draft legislation for extending Full Expensing to leased and rented assets. 

As featured in the Corporate Tax Roadmap, the CBI will work with the government and members early next year to input into the design of a new advance ruling service that will give greater certainty on the tax treatment for large business investment projects. We will also push for digitalisation of manual HMRC processes and simplification opportunities across the tax system. 

In the budget, it was announced that the Northern Ireland Executive is receiving £18.2bn in 2025-26, including an additional £1.5bn through the operation of the Barnett formula, with £1.2bn resource and £270m capital and  £760m targeted funding, with £670m resource and £90m capital, including for the 2024 restoration financial package, historic funding packages and additional security funding. 

 Other announcements that will benefit Northern Ireland include:  

• The commitment that the UK government will work closely with the Northern Ireland Executive on the Industrial Strategy, 10-year infrastructure strategy and the National Wealth Fund to ensure the benefits of these are felt UK-wide 
• The commitment to work closely with the Northern Ireland Executive to develop proposals around an Enhanced Investment Zone in Northern Ireland 
• Confirmation that the funding pause on the Causeway Coast and Glens and Mid South West City Deals has been lifted; these deliver a combined investment of £162m over 15 years to these areas 
• The rollout of digital infrastructure enabled by over £500m of UK-wide investment in Project Gigabit and the Shared Rural Network   

It is not clear from the details currently provided how Northern Ireland will benefit from the investment in decarbonisation and the funding allocated to schemes, including support for hydrogen production (none of the named projects are in Northern Ireland), support for EV adaptation and the warm homes programme.  

We also await further details on how Northern Ireland will benefit from the long-term support for growth-driving sectors including the funding for the aerospace, life sciences and creative industries outlined in the budget. 

The CBI will engage with the Northern Ireland Executive, local officials and stakeholders as further details are published on how the money made available through the Barnett Consequential will be allocated to ensure that investment is made in key areas to support inclusive economic growth in Northern Ireland. 

We are also finalising our response to the consultation on the draft Programme for Government and will continue to feed members’ views into future Northern Ireland consultations including those around the Northern Ireland budget.  

The Chancellor announced a record £47.7bn for the Scottish Government in 2025/26. This includes a £3.4bn top-up through Barnett in 2025-26, with £2.8bn for day-to-day spending and £610m for capital investment.  

Other announcements that will benefit Scotland include: 

• Commitment for the UK government to work closely with the Scottish Government on the Industrial Strategy, 10-year infrastructure strategy and the National Wealth Fund; in response to the publication of the government’s Invest 2035 Green Paper, CBI Scotland has been calling for a strong partnership with devolved governments to ensure the Industrial Strategy is a UK-wide effort 

• The publication of a Corporate Tax Roadmap – a key CBI ask – which will help to provide certainty to businesses and investors 

• Confirmation of revenue support for two electrolytic hydrogen projects through the first Hydrogen Allocation Round: Cromarty Green Hydrogen Project and Whitelee Green Hydrogen; both projects are expected to bring in significant international investment and create jobs 

• The rollout of digital infrastructure enabled by over £500m of UK-wide investment in Project Gigabit and the Shared Rural Network, which will support under-served parts of Scotland, including the Highlands and Islands. CBI Scotland had previously called for the Scottish and UK governments to work together on the roll out of gigabit-capable broadband, including on cost-benefit analysis on site selection.  

The first-year allowance under the Energy Profits Levy (EPL) has been retained at 100% to continue incentivising North Sea investments. The Labour Government initially proposed removing all investment allowances under the EPL, a move that the CBI warned would render many North Sea investments unviable, risking jobs, investment and UK energy security during the transition to net zero. This announcement will help to alleviate concern within the sector, ensuring continued investment in the North Sea. However, the decarbonisation allowance will be cut from 80% to 66% from 1 November 2024 which sends the wrong signal for investment in transition technology. The impact of this policy change should be carefully monitored. 

CBI Scotland will send a letter to the Scottish Finance Secretary, Shona Robison, outlining business' priorities for the upcoming Scottish Budget, expected in December.   

The letter sets out four key areas for prioritisation to help create a policy environment that encourages business investment, fosters sustainable growth and positions on the global stage: 

• Building a competitive business environment  
• Seizing green growth opportunities  
• Futureproofing the labour market  
• Evolving infrastructure and connectivity  

If you would like to know more about our work ahead of the Scottish Budget, please get in touch with Katie Miller.  

In Wales, the government is providing the Welsh Government with £1.7bn Barnett consequential in 2025-2026. The Welsh Government can spend on its own priorities.  

Celtic Freeport can now offer tax benefits  

Designating tax sites in Celtic Freeport in South Wales, meaning businesses will be able to start to benefit from tax reliefs on new investment and employment in those sites in November, supporting the Freeport to create good, highly skilled jobs in an area that needs them 

Green hydrogen - HyBont will generate 443 tonnes of green hydrogen per year 

Confirming £125m for Great British Energy, which will be headquartered in Aberdeen. The government has also confirmed support for two electrolytic hydrogen projects: two in Wales, in Milford Haven and Bridgend, and in Scotland, in Cromarthy and Whitellee, to support low carbon hydrogen production and directly create good quality, local jobs. 

UK-wide increase to Industrial Energy Transformation Fund  

To support existing firms to decarbonise and grow, the government has also confirmed £163m to continue the Industrial Energy Transformation Fund over 2025-26 to 2027-28. 

Additional apprenticeships funding 

The Budget awarded an additional £40m to the Skills and Growth Levy with the intent to deliver shorter and foundation apprenticeships in key sectors. This is a priority for firms in Wales too and we would welcome Welsh Government using the funding it will receive from this announcement to implement similar reforms. 

No mention of financial flexibility for Welsh Government 

The Welsh Government should have more flexibility in the ways it manages its own finances.  Restrictions on virement, carry over and the use of clawbacks sound technical but are impacting how millions of pounds are spent and making long-term planning more challenging. Any government fiscal review should consider these factors. 

Achieving net zero by enhancing the grid 

Wales has one of the largest offshore renewable energy markets in the UK and more information on grid investment would have been welcomed. Many businesses want to progress offshore energy projects as well as on-site investments in renewable energy in manufacturing plants right across the M4 and A5. To unleash this wave of investment, the government needs to urgently increase grid capacity. To achieve that, significant planning reform is needed and the workforce must be equipped with the skills needed for a net zero economy. 

The CBI will engage with ministers and officials in both governments to discuss member priorities in more detail and begin planning for the Chancellor’s Spring Statement. Engagement will include: 

• Rebecca Evans MS, Cabinet Secretary for Economy, Energy and Planning
• Jo Stevens MP, Secretary of State for Wales 
• Paul Davies MS, the Economy, Trade, and Rural Affairs Committee Chair  
• Stephen Crabb MP, Welsh Affairs Committee Chair 
• Luke Fletcher MS Plaid Cymru spokesperson on the Welsh economy 
• Andrew Slade, Director General for Economy, Skills, and Natural Resources 
• Glynne Jones, Director, Office of the Secretary of State for Wales 

Members: to get involved in shaping Welsh policy, contact Leighton Jenkins.