Autumn Budget 2025

With international and domestic pressures continuing since the Spring Statement, the Chancellor was once again under pressure to meet her non-negotiable fiscal rules. The OBR's latest economic and fiscal update, published alongside the Autumn Budget, confirmed the Chancellor was left with a headroom of £4.2bn in FY29/30. The lower-than-expected drop in the pre-measures forecast was largely due to the OBR initiating a process of reviewing fiscal forecast models and judgements as part of a fiscal baseline review. This process, along with the supply side review, was designed to reduce the volatility of their forecast between rounds to support a smoother policy development process within government.

The news on short-term growth was positive for the Chancellor, with the OBR increasing its growth forecast for 2025 from 1.0% to 1.5%. This is because output growth was revised up in the second half of 2024 and growth was stronger than expected in the first quarter of 2025, at 0.7%. The latter was partly due to the temporary frontloading of property transactions and exports, as households sought to avoid stamp duty threshold changes and businesses tried to get ahead of tariff increases, both of which came in from April. Longer term, the news was less positive, with real GDP growth downgraded from 1.9% to 1.4% in 2026, from 1.8% to 1.5% in 2027, from 1.7% to 1.5% in 2028 and from 1.8% to 1.5% in 2029. The OBR's central forecast for the underlying rate of productivity growth in the medium term was cut to 1.0% - 0.3 percentage points slower than in the March forecast.

Greater domestically generated inflation, alongside higher food prices, means that inflation stays higher for longer than expected in March. In this forecast, higher food and services prices push CPI inflation up to 3.5% in 2025 and 2.5% in 2026, respectively 0.2 and 0.4 percentage points higher than the March forecast. These upward pressures on prices are only partly offset by a 0.3 percentage point reduction in inflation in 2026 from Budget policy measures, primarily those that reduce household energy bills. CPI inflation is expected to return to the Bank's 2% target in 2027, a year later than in the March forecast.

After some initial volatility in response to the unprecedented leaking of the OBR's economic and fiscal outlook prior to the Budget speech, financial markets have reacted positively to the Chancellor's measures. Gilts have rallied in response to news that the Chancellor's fiscal headroom had more than doubled to £21.7bn (from £9.9bn in the Spring Statement), with additional upward pressure coming from the Debt Management Office (DMO) announcing that its issuance of gilts for 2025-26 will be lower than first expected. As a result, yields (which move inversely to prices), fell across short- and long-dated gilts. By 3.30pm, 2-year gilts stood at 3.71% (-0.06pp since today's open), 10-year gilts at 4.43 (-0.06pp) and the 30-year gilt at 5.23% (-0.09pp), respectively.

The pound has also gained strength, accelerating after the Chancellor began speaking. The pound stood at $1.32 against the US dollar (appreciating by 0.9%) and €1.14 against the euro (appreciating by 0.2%).

UK equity markets have, in the end, also responded positively. After an initial fall in the FTSE 100 and 250 - in response to the OBR's weaker growth outlook, targeted levies on gambling companies and the lack of action on the windfall tax on oil and gas - equity markets rose. The FTSE 100 - which is dominated by internationally oriented firms - rose 0.7% in value by 4.00pm. The more domestically-oriented FTSE 250 also posted a gain of 0.9%. Similarly, the FTSE AIM 100 (an index of smaller listed companies) has risen since markets opened.

Introducing a 40% first year allowance available for leased assets and unincorporated assets

While the government has not committed to a full extension of full expensing to leased and rented assets, they have introduced a 40% first year allowance which will be available for leased assets and unincorporated businesses. This will support some additional investment in equipment small businesses need - including in key sectors like construction and farming. Businesses need affordable access to greener kit and this initial allowance will go some way to providing it. The CBI looks forward to working with government on a full implementation of the policy when fiscal headroom allows.

Removing tax barriers to unlock employer investment in preventative workplace healthcare

HMRC has confirmed tax-free treatment for employer reimbursements of eye tests and introduced a new tax relief for employee flu jabs. These changes follow member engagement with HMRC and the CBI's campaign to remove tax costs for employers investing in workforce health. While further progress is needed to secure a more ambitious expansion of relief, these steps reduce reporting burdens-saving large employers from processing thousands of data lines and allowing finance teams to focus on higher-value work.

We will continue working with HMRC and HM Treasury to secure tax-free status for Employee Assistance Programmes and ease rules on occupational health referrals, targeting the leading workforce health risks: mental health and musculoskeletal conditions. Together, these reforms could add £1.97bn to the economy over this Parliament.

Removing VAT charges on goods donated by businesses to people in need

The government will remove VAT charges on goods donated by businesses to people in need from April 2026, fixing a long-standing anomaly where giving incurred tax but wasting did not. This breakthrough follows sustained CBI engagement, including a high-level roundtable with The Rt. Hon. Gordon Brown CH, and the Exchequer Secretary. HMRC will adopt a light-touch approach, using existing business systems to keep compliance simple. For businesses, this means donating surplus goods up to £100 in value per item will be tax free, unlocking tens of millions of pounds worth of products for charities and advancing both anti-poverty and anti-waste goals. A higher £200 per-item value limit will apply to other household essentials such as white goods.

We will work closely with HMRC and HM Treasury to ensure draft legislation and guidance on the new VAT relief are practical for businesses and charities, keeping compliance simple and red tape to a minimum.

Progressing business rates reform

Consulting on moving business rates from a slab tax to a slice tax is a welcome step in the right direction. If implemented, it will remove a clear distortion in the system and reduce unfair cliff-edges for growing firms. This reflects a recommendation first made by the CBI, and will move us towards a more modern and competitive rates regime.

Moving away from proposals that risked access to tax advice

The CBI had raised concerns about proposals in the Finance Bill 2025-26 that would have introduced a regulatory model for tax advisers that legitimate firms would have struggled to navigate, while doing little to curb bad actors. The decision to step back from these plans is a positive development, creating space for more constructive discussions with professional services firms on how best to ensure high-quality tax advice.

Publishing two major HMRC consultations

HMRC has published outcomes from two major consultations: a new advance tax certainty process for investment projects over £1bn, launching in July 2026, and a targeted R&D advance assurance pilot for SMEs from April 2026. Both align with the principles set out in the CBI's 2023 Business Tax Roadmap - delivering greater certainty to give firms the confidence to invest for the long term.

We worked through the CBI Tax Committee and Innovation Taxes Working Group to press HMRC and HM Treasury for accessible, commercially responsive services that enable companies to confirm the tax treatment of their investments. For business, these reforms reduce tax risk, speed up clarity on eligibility for reliefs, and cut administrative friction - helping unlock investment and innovation.

We will continue working with HMRC and HM Treasury to ensure the new Advance Tax Certainty Service and SME R&D advance assurance pilot are practical, timely, and proportionate, and to make the case for wider accessibility to R&D clearances over time.

Applying employee and employer NICs to pension contributions made through salary sacrifice schemes

The proposal to apply employee and employer NICs to pension contributions made through salary sacrifice schemes from 2029 will be a further cost on wage bills, at a time when government is well aware of the negative impacts of last year's NICs changes. It will also hit pension saving when the Pension Investment Review published in May showed 4 in 10 people are not saving enough for retirement. The NICs benefit for salary sacrifice boosts pension saving - both by increasing the amount employees can contribute and allowing businesses to share their NICs saving with staff in the form of higher discretionary pension contributions. CBI survey data shows that 3 in 4 employers will have to decrease pension contributions in response to the extra cost - that is why businesses have called it "a tax on doing the right thing". The CBI called out these contradictions before the Budget and will continue to campaign against this change, recognising the damage it will do to growth, investment and pension saving rates.

Overnight stay levy proposals will add to administrative burdens and cost pressures

The CBI has warned that the levy would increase burdens on tourism and hospitality firms, as well as businesses with travelling staff. If introduced, revenues must be legally hypothecated to support the sectors most affected - not spread thinly across local government budgets. Central and local government should also limit administrative burdens, including by coordinating rates and collection systems.

Failure to undertake EPL reform risks further stalling investment

Not moving from the energy profits levy to a genuine windfall profits charge is a missed opportunity, with North Sea investment already slowing - potentially threatening energy security, future costs, and the skilled workforce needed for the UK's energy transition.

Expanding R&D tax credits to include capital spending

The government has stuck to its commitment in the Corporate Tax Roadmap not to change the scope of R&D allowances. While it would have been positive to see an extension to capital spending, given the fiscal position this is not surprising.

Delivering a more workable IR35 regime, streamlining capital allowance and updating outdated travel and subsistence allowances

The Autumn Budget missed a critical opportunity for meaningful tax reform. Instead of piecemeal measures, businesses need clarity and simplicity in the tax system. The CBI will keep pushing for reforms that make would make a real difference including fixing the complex IR35 regime with practical solutions such as a HMRC Green Card clearance for contractors clearly outside of scope, streamlining capital allowance category types to make it easier for businesses to understand the tax treatment of their capex spend, and modernising outdated employee expense and benefit rules so they reflect today's costs and working patterns. These changes aren't about giveaways - they're about removing friction, improving compliance, and creating a tax system fit for a modern economy.

The CBI will continue to campaign against NICs on salary sacrifice pension schemes, recognising its inherent contradictions and the damage it will do to growth - as we did before the Budget. If you would like to contribute to CBI efforts to challenge the changes to taxation of pensions, please contact Tax Policy Manager, Alice Jeffries and Pensions Policy Manager, Laurence Raeburn-Smith for how to get involved.

The CBI will consider whether to respond to the government's consultation on an overnight stay levy, to determine how the proposal will work. If you would like to be involved in preparing the CBI's response to these consultations please contact Tax Policy Manager, Alice Jeffries and Domestic Policy Manager, Mark Goldstone.

We will continue to work with government to ensure full expensing for leased and rented assets is implemented as soon as possible, given the Treasury now has increased fiscal headroom. To discuss this area further, please get in touch with Tax Policy Manager, Alice Jeffries.

We will work closely with HMRC and HM Treasury on the new VAT on donated goods relief's draft legislation and guidance, ensuring they are practical for businesses and charities, and keep compliance simple and red tape to a minimum. If your business wishes to donate more goods to charity in light of the change, discuss with your advisers how this will work. If you would like to contribute to this activity, please contact our Tax Policy Adviser, Andy Scott.

We'll work with HMRC and HM Treasury on the new Advance Tax Certainty Service and targeted SME R&D advance assurance pilots, to ensure they are practical, timely, and proportionate, and push for HMRC to roll out accessibility to R&D clearances more broadly to more companies in due course. If you would like to contribute to this activity, please contact our Tax Policy Manager, Alice Jeffries.

We will continue working with HMRC and HM Treasury to make the case for tax-free treatment for Employee Assistance Programmes (EAPs) and for relaxing rules on occupational health treatment referrals, with a focus on mental health and musculoskeletal conditions. Our analysis shows these measures alone could add £1.97bn to the economy over this Parliament. If you would like to contribute to this work, please contact our Tax Policy Adviser, Andy Scott.

Providing support for young people not in employment, education and training (NEETs)

Over the spending review period, the government is allocating £820m for the Youth Guarantee. It will offer a six-month paid work placement to every eligible 18-21-year-old who has been on Universal Credit and seeking work for 18 months. It will also cover 100% of employment costs for 25 hours a week at the relevant minimum wage, and additional wraparound support. This could strengthen businesses' ability to help more young people enter the labour market.

Mitigating the impacts of the International Student Income Levy's introduction

The government is introducing a new levy on Higher Education providers' income from international students, of £925 per student per year of study, starting in August 2028 academic year 2028-29. All providers will be given an allowance for the first 220 international students per year, for whom they will not pay the charge. The income raised by the Levy will be fully reinvested into higher education and skills, including to fund maintenance grants for disadvantaged students studying priority courses. We will keep the rate under review, with future decisions on deployment of the proceeds set out at the next spending review.

Although the decision to push ahead with Levy is disappointing, the 220-student allowance before universities are charged, plus the commitment to reinvest money into higher education and skills, should offset some - but not all - of the problems that the Levy poses to businesses.

Allocating an additional £725 million to the Growth and Skills Levy

The government has confirmed they will be allocating an additional £725m to the Growth and Skills Levy over the spending review period to help support apprenticeships for young people, including a change to fully fund SME apprenticeships for eligible people under 25. This builds on long-standing calls for the government to increase the budget for growth and skills.

However, publicly available data suggests that some of the funding raised through the levy may still not be put towards skills. Further defunding has also not been ruled out.

The government did not commit to directing the full amount raised through the Immigration Skills Charge (ISC) toward skills and training - a missed opportunity to increase training participation and drive productivity-led growth.

The government has accepted the Low Pay Commission's recommendation to raise the National Living Wage (NLW) by 4.1%, from £12.21 to £12.71 in April 2026. The National Minimum Wage (for 18-20-year-olds) will increase by 8.5% to £10.85. These rises will concern many businesses already struggling with rising employment costs. With productivity growth still weak, firms will face difficult choices about how to absorb the increase. Young people are already among those most affected by a lack of vacancies, and such a large uplift in the NMW risks making it even harder for them to enter work.

The importance of adult skills was also overlooked. It is vital that the government does not seek to expand training opportunities for young people by restricting funding for adult learners; both groups are essential to driving productivity and unlocking growth. It was also notable that no consideration was given to the impact of the international student levy on universities' ability to deliver training, nor to the financial pressures facing post-16 training providers.

Looking ahead, we will continue to press for a post-16 Education and Skills roadmap that sets out which short courses will be eligible for Levy funding and when, giving employers and training providers the clarity they need to plan effectively. We will also keep calling for more ambitious Growth and Skills Levy reform, including ensuring that all revenue raised is directed towards skills. This will be essential to reducing the risk of further defunding and securing the training needed to drive the economy forward.

On the Youth Guarantee, we will continue working with the government to shape its design and delivery, including collaborating with employers to ensure the funding is used where it will have the greatest impact. We will also keep highlighting the unintended consequences of the levy on universities' international student income.

Expanding technology adoption support

The government will extend AI adoption support to the Industrial Strategy's high-growth sectors through the BridgeAI programme. This demonstrates a firm commitment to helping businesses deploy new technologies to drive productivity and wider economic growth - an approach the CBI and its members have long advocated.

Committing to use public procurement to drive innovation

This is a big win for the CBI and a significant step towards using the state's purchasing power to pull ideas through to value at scale. Government has committed to appoint Procurement Innovation Champions in each department, launch an Innovation Marketplace, and run a task-and-finish group to address the barriers to procurement of innovation. These initiatives will significantly improve innovative businesses' ability to engage with public procurement processes, while allowing government to deliver better public services.

Clearly allocating public R&D budgets, with increased funding for business innovation

Earlier in the week government announced more strategic allocation of the uplifted R&D budget across three buckets - curiosity-driven research, innovation to tackle national priorities, and support for business innovation. This includes increased funding for business innovation, as called for by the CBI, including £4.5 billion directly for innovative UK companies in the IS-8 sectors. At the same time, core university research and innovation funding will grow in line with inflation, supporting the UK's underpinning research strengths. These changes should give businesses clarity on the opportunities from public R&D funding, increased funding for business innovation, and support government deliver fewer programmes at scale.

Delivering e-invoicing in partnership with the private sector

The CBI and its members have urged a strategic approach to public sector digitisation that engages the private sector, including clear guidance and adoption support for businesses. We therefore welcome the decision to mandate e-invoicing from 2029, along with the long lead-in period, which gives firms the certainty and time they need to prepare, upgrade systems, and manage implementation costs effectively, supported by government-backed technology adoption.

Raising limits on innovation incentives

Scaling, innovative businesses are central to the UK's growth story. Raising the limits on innovation incentives will help these firms scale domestically by improving access to finance and talent. The CBI has advocated for this change through our Scale-Ups Playbook and Innovation Taxes Working Group, and we welcome the government's response. We look forward to engaging with the call for evidence to further strengthen tax support for scaling businesses.

Advanced Markets Commitment to support UK innovation

CBI members will welcome the Advanced Markets Commitment as a clear signal of the government's support for UK innovation and its intent to create early markets for domestic compute.

Creation of AI Growth Zones in Wales

The announcement of AI Growth Zones in South and North Wales is a welcome step in delivering the AI Opportunities Action Plan. CBI members have long called for measures that bring together infrastructure, skills, and planning reform to unlock growth. This is a positive start, but delivery will be critical - particularly in accelerating planning processes, improving grid connectivity, and ensuring local businesses can access the opportunities created.

While announcements on AI skills measures were absent, strengthening workforce capability remains essential. From our engagement with the government, we understand that the skills package has been rescheduled and is now expected early in the new year. The expansion of the BridgeAI programme is also welcome, but its scope is limited to AI and the Industrial Strategy's growth sectors. The government can go further by widening digital and non-digital technology adoption support to all sectors of the economy.

We look forward to working with government on its consultation and calls for evidence on how to go further to support businesses to scale and stay in the UK, including via improvements to tax support. To find out how you can contribute, please get in touch with Technology and Innovation Policy Manager, Nicola Eckersley-Waites.

The CBI and its members will continue working closely with the Commercial Innovation Hub to help deliver its commitments to drive innovation through public procurement, including at our upcoming December roundtable with the Hub and the Department for Business and Trade's Growth Policy Unit. To get involved, please contact our Technology and Innovation Policy Manager, Nicola Eckersley-Waites. We will also continue engaging with the National Technology Advisor and his team to broaden support for technology adoption across the economy - advocating for a National Technology Adoption Plan - and will feed insights from our AI skills project into the development of the government's AI skills agenda.

350 additional planners announced to deliver necessary planning reforms

Business welcomes the attention given to bolstering planning capacity. The CBI has welcomed the Government's planning reforms through the National Planning Policy Framework and the Planning and Infrastructure Bill, but skilled capacity at a local level is key to ensure projects are not stuck in long planning queues. An additional 350 planners are a good start, and news of a Planning Careers Hub is welcome to retain and retrain more planners in the profession.

Introducing three year tax relief on Stamp Duty and Stamp Duty Reserve Tax for newly listed companies

The CBI welcomes a reduction in stamp tax on shares for new listings as a boost to the UK as a listing destination. Ultimately, this should be the first step towards removing this tax altogether and bringing the UK back in line with competitors in jurisdictions with France and the US.

Avoiding the introduction of a banking levy

The CBI is relieved that the government did not increase the banking levy. At a time when we should be encouraging lending to support business investment, these changes would have undermined the competitiveness of a sector already taxed at a higher rate than our peers.

Maintaining capital investment in major infrastructure projects

Such as Lower Thames Crossing, Midlands Rail Hub and Northern Powerhouse Rail is a welcome decision to ensure we build the economic infrastructure that will power productivity improvements for businesses.

Agreeing a more pragmatic and proportionate approach to Landfill Tax reform rate

Maintaining alignment between lower and higher rates and stepping away from the proposed significant increase in the standard demonstrates government has listened to industry concerns about unintended consequences for vital infrastructure projects and legitimate recovery and reuse activities.

Funding to empower mayoral authorities

We welcome the announcement on flexible funding for seven of the Strategic Mayoral Authorities, empowering mayors with local control over a single flexible funding pot. We encourage the government to go further, by rolling out Integrated Settlements to all Combined Authorities who want one.

Introducing new UK Listings Relief to boost UK competitiveness

We've been calling on the government to undertake bold action to improve the competitiveness and liquidity of UK public equity markets, both through our budget submission and recent report. The introduction of the new UK Listing Relief is a welcome change to boost the competitiveness of the UK as a listing destination. Ultimately, this should be the first step towards removing stamp taxes on shares altogether and bringing the UK in line with competitors in jurisdictions like France and the US.

Presenting a clear roadmap for the development and adoption of a suite of public-private partnerships (PPP)

The Budget makes a welcome reference to a future PPP model as part of the NHS Rebuild Programme.

However, overall the Budget doesn't outline a clear roadmap or timelines for the development and adoption of a suite of PPP models to accelerate private financing of UK infrastructure projects.

Reducing the Cash ISA limit alone will not support investment

The CBI backs efforts to boost retail participation, encourage domestic savers to take greater risks, and welcome reforms that improve access to investment products. However, cutting the Cash ISA limit is a stick without a carrot. Cash ISAs are still an important source of investment capital for major financial institutions, and because the government scores the measure as raising revenue, it's clear that it won't, by itself, move savers into stocks and shares ISAs. A more comprehensive package which includes removing stamp duty on investments made through stocks and shares ISAs and enabling financial institutions to take greater risks would truly support investment in UK businesses.

Nothing new on major infrastructure delivery

While new planners are welcome, the CBI wanted to see Government use primary legislation to progress major infrastructure projects, reducing the delays from judicial review attempts.

The CBI will continue to push reforms for infrastructure delivery, public-private partnership and planning reform with teams across HMT, MHCLG and NISTA. If you would like to find out more about this work, please contact Domestic Policy Manager, Mark Goldstone.

We will continue to campaign on the importance of healthy public markets to the UK economy, with emphasis on improving the liquidity and competitiveness of London markets and strengthening the IPO pipeline. To get involved with our work on listings, please get in touch with Financial Services Senior Manager, Tom Maitland.

Household savings on electricity to ease affordability risks

The chancellor focused her firepower on reducing household energy costs, a key manifesto commitment. This will have positive inflationary effects and reduce the price homes pay for electricity compared to gas - a structural change required to accelerate the energy transition. It will be delivered by ending an energy efficiency scheme (ECO) and moving some policy costs (Renewables Obligation) on domestic bills to general taxation. It is expected to save the average household £150 and will take effect across Great Britain from 1 April 2026, alongside Ofgem's price cap decision.

Additional £1.5bn funding for the Warm Homes Plan

Funding for the Warm Homes Plan has increased, contrary to rumours ahead of the budget. An additional £1.5bn brings the total package to £15bn to be spent on low-carbon heating and insulation for low-income households over the next five years. The Warm Homes Discount (£150 relief for fuel-poor homes) will also be extended to an additional 3 million households. Ending ECO means that the Warm Homes Plan is the only vehicle, with less total funding, for household energy efficiency. It must be delivered in full to support the UK's low-carbon heating market, with details forthcoming.

Mixed bag for automotive decarbonisation

The chancellor also announced a package which is a mixed bag for transportation decarbonisation. A new pay-per-mile tax will be introduced for EVs of 3p per mile and 1.5p per mile for plug in hybrids in April 2028, around half the current road-charging rate for petrol and diesel cars. Vans and lorries are exempt, so this is unlikely to impact commercial fleet electrification, but household consumer sales are likely to be impacted at a time when the automotive sector is already under pressure to meet ambitious zero emission vehicle sales targets. EV charging infrastructure received a £100m boost, and EV-only forecourts will be exempt from business rates. The first-year 100% capital allowance on qualifying expenditure on zero emission cars and EV chargepoints which had been due to expire will continue for another year.

Tackling the high cost of electricity for business is the most glaring omission of this budget. This continues to hold back business investment and disincentivises their transition to electrification. A targeted electricity discount scheme had been expected to reward industrial electricity users that switched to more efficient electrical heating sources, and was a key ask of the CBI. Instead, the budget reaffirmed two previous announcements: consultation on the British Industrial Competitiveness Scheme (BICS), intended to reduce industrial electricity prices for around 7,000 businesses from 2027, and an uplift of the Network Charging Compensation Scheme for around 550 of the UK's most energy intensive businesses.

The government responded to consultations on the future of the North Sea without easing the Energy Profits Levy (EPL), a key industry ask. Instead, the EPL will be replaced by a permanent Oil and Gas Price Mechanism at a rate of 35%, which will come into effect in 2030 or if triggered by the EPL price floor. This will make investment in the UK supply chain, and the skilled workforce that supports the transition into low carbon projects, harder. Announcements confirmed that drilling at existing licensed sites will be permitted, a pragmatic approach to the transition.

Maintaining investor confidence in the projects which are upgrading, expanding and transitioning the UK's energy system is ultimately the route to secure and affordable energy. The CBI will continue to defend legislation foundational to stable and robust policy and regulatory frameworks that do so.

The CBI will especially prioritise continuing to make the growth case for lowering the cost of industrial electricity. New energy infrastructure is critical to delivering the transition. How we pay for it must reflect the value it delivers over time to maintain affordability. Welcome steps have been taken today to ease the burden on households, but energy remains one of the primary costs of doing business. The CBI will inform the design of the British Industrial Competitiveness Scheme (BICS) to support foundational and energy-intensive high-growth sectors. Consultation ends on 19 January - to have your say, reach out to Jonathan Oxley, Senior Manager, Net Zero.

The Budget offered a handful of wins for Scottish business, but nothing close to what is needed to see Scotland reach its full growth potential.

£820m boost via the Barnett formula

The £820m uplift for the Scottish Government gives Holyrood some room to shore up squeezed budgets, though firms will want that money deployed into areas that can boost productivity and growth: planning capacity, skills and infrastructure rather than absorbed by rising costs.

Forth Green Freeport set to unlock £7.9b in investment and 16,000 jobs

Approval of the full business case for the Forth Green Freeport marks a significant step toward unlocking large-scale private investment. With ambitions to leverage nearly £7.9b over the next decade and create up to 16,000 jobs, this is a genuinely strategic intervention. For firms in logistics, advanced manufacturing and clean energy, it signals momentum, provided delivery moves at pace and key enablers like planning and grid capacity keep up.

£20m commitment to Inchgreen Dry Dock to boost marine engineering and shipbuilding

The £20m commitment to upgrade Inchgreen Dry Dock is a meaningful boost for Scotland's marine engineering and shipbuilding ecosystem. Inchgreen is one of the largest dry docks in the UK, and modernisation could attract new offshore wind manufacturing, vessel repair and fabrication work. If executed well, it strengthens Scotland's position in maritime supply chains where global demand is growing sharply.

Up to £14.5m for industrial projects at Grangemouth

This commitment shows welcome recognition of the site's national economic importance. As Scotland's primary industrial cluster and a critical part of the UK's chemicals and fuels infrastructure, Grangemouth needs investment to transition while safeguarding jobs and supply chain capability. Targeted support here is the right signal to industry, though business will expect a clearer long-term plan for decarbonisation and competitiveness.

The government has set out its long-term approach to North Sea taxation but stopped short of reforming the Energy Profits Levy (EPL), a key ask from industry. Instead, the EPL will be replaced by a permanent Oil and Gas Price Mechanism set at 35 percent, coming into force in 2030 or sooner if the EPL's price floor is triggered.

For Scotland, this matters. The North Sea supports tens of thousands of high-skill jobs and an extensive domestic supply chain, and the lack of near-term relief will make investment decisions-particularly around transition and low-carbon projects-more difficult. The confirmation that drilling and activity at existing licensed sites will continue is a pragmatic move, but firms operating in Scotland will still be looking for a clearer, more stable investment environment to plan confidently for the next decade.

Both governments now need to pivot from announcements to execution. Business is clear that neither Westminster nor Holyrood can grow the economy alone; the two governments must start pulling in the same direction if we are to see Scotland reach its full economic potential.

• The Scottish Budget on 13 January 2026 is now a critical test. With fresh Barnett consequentials on the table, Holyrood must use them to unblock the basics: a planning system that moves at the speed of investment, workforce programmes that finally close persistent skills gaps, and joint UK-Scottish co-investment in the sectors where Scotland can genuinely lead: clean energy, advanced manufacturing, life sciences and tech.
• Scottish elections on 7 May 2026 are on the horizon and the business community will be watching closely for bold but credible plans from all parties. Firms need a pro-growth agenda that survives the campaign trail and carries through the next Parliament.

£505m boost to funding via the Barnett formula

Positive headlines from the Budget for Wales were an additional £505m of funding via the Barnett formula, the funding of two cutting edge AI zones, one in South Wales where the semiconductor cluster gets extra funding and another AI Zone alongside the Small Modular Reactor (SMR) in North Wales. These are long-term projects aiming to deliver sustainable growth, and point to a coordinated devolution dividend. The CBI has long called for targeted investments of scale, uniting the powers of both governments. The additional £505m will be welcomed by the Welsh Government. We now await their decisions on where else that funding is invested.

£2.5bn flagship nuclear project in North Wales

North Wales will host the UK's first Small Modular Reactor (SMR) at Wylfa, Anglesey. This flagship nuclear project represents an initial £2.5bn investment and is expected to support thousands of skilled jobs across the region. The SMR programme forms part of the UK's wider energy security and net-zero strategy and re-establishes Wales as a key player in the nuclear sector, increasing chances of earlier GRID updates.

More planning officers to unlock infrastructure delivery

The recent CBI Wales report Planning for Growth said government must first invest in its planning departments if larger reforms were to be successful. To address critical shortages in planning departments, £24m was allocated UK-wide to hire and train 300 new planning officers. Wales will receive a population-based share of this funding, enabling local authorities to improve planning approvals and unlock housing and infrastructure delivery. The issue now rests with the Welsh Government on whether it will follow through.

While overall UK government revenue is raised, there is no explicit ring-fenced fund to support large firms in Wales transitioning to low-carbon production, retrofitting equipment, or investing in green R&D. Given Wales's industrial legacy (e.g. steel, energy, heavy manufacturing), this will increase the transition time for major employers to adapt and invest sustainably.

Election 2026: The CBI will outline its comprehensive case for reforms to drive the economy forward in its manifesto, due to launch in January 2026 for the Welsh Parliamentary election.

Get involved: If you would like to find out more about our work in Wales, including getting involved in working groups to actively shape key CBI policies, please contact Leighton Jenkins.

£370m boost to funding through the Barnett formula

In the budget, it was announced that the Northern Ireland Executive will receive an additional £240m resource spending and £130m capital spending through the operation of the Barnett formula.

£18.85m package to boost NI trade

£16.6m of new funding over the next three years for an Internal Market Package to boost trade between Northern Ireland and Great Britain, including the creation of a 'one stop shop' support service that will help businesses unlock the full opportunities of trading across the UK internal market and enable businesses based in Northern Ireland to take advantage of their access to the UK and EU markets.

£2.25m of new funding for Intertrade UK to forge and strengthen trade and business links between Great Britain and Northern Ireland.

We welcome both these funding packages and will continue to work with the government to find practical solutions that minimise the burdens of the Windsor Framework and maximise the opportunities of dual market access.

Enhanced investment zone for advanced manufacturing

The Enhanced Investment Zone will focus on advanced manufacturing (photonics and biotechnology) and is expected to leverage over £230m in private investment and support creation of more than 1,000 jobs over 10 years.

Tackling childhood poverty that threatens Northern Ireland's economic future

The removal of the two-child benefit cap is an important and correct step for Northern Ireland where families tend to be larger. Locally, the proportion of children living in relative poverty is far too high and serves as a long-term threat to the region's economic future - so any moves to improve this should be welcomed by both households and business.

The measures around cost reductions in energy bills will not apply in Northern Ireland as energy policy is devolved; but CBI Northern Ireland will continue to work with the Department of Economy to ensure that local firms get parity when it comes to energy support and subsidies with their GB counterparts. We would encourage the Northern Ireland Executive to avail of the UK government's offer to put in place similar measures in Northern Ireland.

The CBI recognises that economic growth is an important aspect of creating a stable fiscal future and providing the revenues needed for public spending. We will continue to work with the Executive to boost local investment and create a conducive economic environment in which businesses can thrive.

We will work with Intertrade UK to ensure that the new funding to support trade across and between UK regions is fully realised and meets the needs of CBI members.

We will also engage with the Northern Ireland Executive and local officials 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 drive economic growth in Northern Ireland.

Get involved: If you would like to find out more about our work in Northern Ireland, including getting involved in working groups to actively shape key CBI policies, please contact Claire Sullivan.