The Chancellor didn’t disappoint. In the opening minutes of her hour-and-thirty-minute-long statement (yes, you read that right) to the House, she promised to raise £40 billion in new taxes, an eye watering sum. 

A sizeable portion of that (c. £25 billion) looks set to be raised through increased employer National Insurance Contribution – which will rise in April 2025 from 13.8% to 15%. The threshold at which businesses start paying National Insurance on a workers' earnings will also be lowered from £9,100 to £5,000. 

There’s not much getting around it: for businesses, that is going to take some adjustment. As will rises to the minimum wage and the National Living Wage – from £8.60 to £10.00 an hour and from £11.44 to £12.21 from April 2025, respectively. 

But Rachel Reeves went on to reveal more than £70 billion in long-term investment to “get Britain building again”, emphasising targeted investments across regions and sectors. That includes some punchy figures put to the UK’s heavily trailed Industrial Strategy.

Will this borrow-and-tax-to-invest get businesses to invest? We take a closer look at some of the key measures announced and take stock of the impact on the wider economy.

The government plans to boost investment in the National Health Service (NHS), including £1.5 billion to create more capacity for procedures and £1 billion will be allocated for critical maintenance, repairs, and upgrades across England. 

It also committed £460 million towards strengthening pandemic preparedness and health protection, and £26 million for new mental health crisis centres.

The government also committed to releasing a new 10-year NHS strategy in April next year.

The government is allocating £1.4 billion towards rebuilding schools and increasing the core school budget by £2.3 billion to support the recruitment of 6,500 new teachers.

Significant investment is planned for various rail route upgrades and connections across England including:

• The Transpennine Route Upgrade, connecting York and Manchester via Leeds and Huddersfield
• The East West Rail to link Oxford, Milton Keynes, and Cambridge

The Budget also confirmed HS2 investment to complete the tunnel connecting Old Oak Common and Euston, ensuring HS2 trains reach central London.

An additional £500 million has been allocated to the Affordable Homes Programme to promote social and affordable housing construction, part of a plan the government says aims to speed up the delivery of 1.5 million new homes.

The Budget includes an additional £3 billion in support for SMEs and the Build to Rent sector through housing guarantee schemes, aiming to encourage the development of tens of thousands of new homes. It also includes £46 million to support recruitment and training for local planning authorities to increase local planning capacity.

“The Autumn Budget brings key opportunities for the construction sector, with notable support for affordable housing and retrofitting through a £5 billion housing fund and £3.4 billion in energy efficiency upgrades, demonstrating a commitment to sustainability and accessibility,” says Laura Capper, Head of Manufacturing & Construction.

“The freeze on fuel duty provides some cost relief for firms, and the 100% retention of Right to Buy receipts empowers local councils to drive housing projects. While challenges like NIC increases remain, continued support for full expensing and apprenticeships aligns with industry goals to meet the 1.5 million homes target, invest in skills, and strengthen construction’s long-term growth and resilience.”

Funding was announced to launch Great British Energy, a governmental body to be based in Aberdeen and tasked with investing in renewable energy as well as own, manage and operate clean power projects.

The government also confirmed its support for two electrolytic hydrogen projects each in Scotland (Cromarty and Whitelee) and Wales (Milford Haven and Bridgend) to promote low-carbon hydrogen production and create jobs

The Budget allocates £8 billion of private investment for Carbon Capture, Usage and Storage (CCUS) infrastructure, as well as £3.9 billion in 2025-26 for the first CCUS clusters in the UK.

The RHL sector will see a 40% reduction in their business rates liability (replacing the 75% discount expiring in April 2025), capped at £110,000 per business. From 2026-27 onwards, the government said it plans to lower business rates multipliers (which determine the rate at which business rates are calculated) for RHL properties.

A wide range of other industries look likely to benefit from a range of targeted relief measures and investment linked with the government’s widely trailed Industrial Strategy, including:

Aerospace: £975 million over 5 years to support research and development for advanced aerospace technologies.

Automotive: more than £2 billion is committed over 5 years to support the automotive sector, including the zero-emissions vehicle manufacturing sector and supply chain.

Telecoms: £500 million in 2025-26 for Project Gigabit and Shared Rural Network to enhance digital infrastructure in underserved areas of the UK.

SME Manufacturers: funding for the Made Smarter Adoption Programme, which supports small manufacturing businesses in integrating advanced digital technologies, will double to £16 million.

Life Sciences: up to £520 million for a new Life Sciences Innovative Manufacturing Fund to stimulate growth and build resilience for future health emergencies. 

Mining: UK Export Finance (UKEF) will provide financial support to UK companies supplying critical minerals to UK exporters in high-growth sectors like EV battery production, clean energy, aerospace, and defence.

“The 2024 Autumn Budget adopts a balanced strategy for manufacturers, ensuring stable R&D tax relief and the continuation of full capital expensing. While increased National Insurance Contributions may add pressure, extended capital allowances and targeted energy support create opportunities for improved productivity and decarbonization,” Laura says.

“Significant investments of £1 billion in aerospace, £2 billion in automotive, £500m for life sciences, and £6.1 billion in core research funding strengthen the UK's status as a leader in advanced manufacturing. These initiatives provide a solid foundation for developing a dynamic and ambitious new industrial strategy.”

For businesses, this Budget offers a combination of relief measures, particularly in areas like business rates and employment costs, and initiatives to promote digitisation and growth.

But higher wages and the rise in employer National Insurance Contributions could pose a challenge for some, requiring careful financial planning and adaptation. Changes to taxes on capital from CGT on shares, reliefs on disposal of businesses and treatment of agricultural assets for inheritance tax all point to the importance of planning ahead.

“Businesses must comprehensively re-evaluate strategies, including cost structures, process optimisation, and leveraging the National Minimum Wage for talent retention, to ensure sustained growth amidst these changes,” says David Scott, Head of Consumer Industries.

The million-pound question is: will this high-tax, high-spend model achieve faster productivity and GDP growth? 

It doesn’t appear so – at least over the 5-year forecast period. The Office for Budget Responsibility (OBR) reckons the economy will now grow more quickly this year (1.1%) and next (2.0%), but not as quickly as predicted in 2026, 2027, and 2028 when the Tory government revealed its projections in the spring. 

The OBR’s forecast for productivity is also little changed from previous projections – and follow the same path as GDP: a little higher in the near term compared with March 2024 estimates, and a little lower in the long-term.

Economic growth and productivity (%): a little lower, a little higher 

It’s not all gloomy. The Chancellor underlined how her growth ambitions will be rooted in the regional economies that make up the UK. From announcing a new growth deal in Argyll, Scotland to promising to work with local government and devolved administrations on local growth plans. Customers tell us that these collaborations between the public and private sectors are crucial to boosting growth on the ground.

For more insight into the big forces shaping the outlook for businesses and the UK economy, follow us on social media.