Chancellor accused of short-termism in tepid Autumn Budget response

Chancellor will rue missed opportunity – Autumn Budget Reaction from Neil Evans, Managing Director, Veka plc

 The Autumn Budget missed a crucial chance to recalibrate the burden on business and set out a credible pathway to higher productivity, investment and growth. For companies like Veka that face wage-bill inflation, employer tax increases, constrained capex and flat markets, the headlines remain hard to face. Despite some measures aimed at supporting investment, the Budget still compounds the squeeze for labour-intensive manufacturers.

Like many manufacturers, we have already absorbed significant employment cost increases. Every 1% rise in employment costs adds around £200,000 to our annual bill. Last year alone, nearly half a million pounds of additional cost came from higher employer contributions and minimum wage shifts.

Five years on from the pandemic, our wage bill is up by around 30 per cent. Much of that is genuine post-Covid cost pressure, but the structural employment burden is very real – and the Budget offers no meaningful relief on that front.

Employer National Insurance costs have already risen from April 2025, rather than being delayed until later years, meaning 2025 has not been the ‘cheap year’ previously assumed. The full cost impact is already embedded in the system, with fiscal drag set to bring more of the workforce into higher tax and NI bands over time.

Our capital expenditure tells a similar story – but with one important nuance. Once those non-negotiable costs absorb the budget, growth capex is the first casualty.

However, the new 40% First-Year Allowance does offer a genuine, if partial, counterweight to the tax and labour cost pressures we face. For asset-intensive companies, including those investing in plant, machinery and automation, this could be a meaningful lever. But it does not change the fact that we enter the new financial year with less headroom and greater caution.

In the housing and home-improvement space, the signals remain weak. Other countries have backed homeowner subsidies and retrofit programmes; here, there was still no meaningful demand-side support. With UK energy costs among the highest in Europe and no strong stimulus to drive consumer confidence, businesses in that part of the market face both cost-push and demand-drag pressures.

It can’t be right that the private sector is expected to carry ever-rising burdens while the headline narrative remains about driving growth. If we are to invest in automation and modernise our operations, there needs to be greater consumer confidence in the market.

One of the many benefits of being part of a multinational, family-owned business is the exposure to what works in other countries. Germany’s fully integrated, automated factories have redesigned workflow through automation – enabled in part by a recovering market supported by homeowner incentives. The opportunity is there, but only if investment and demand move together.

What we need from Government is a real partnership: forward-looking clarity on employment tax burdens, targeted capital investment incentives, demand-side stimulus for sectors dependent on household spending and a scheduling of policy changes that aligns with business pricing and planning cycles. Without those, any aspiration to have ‘jobs in every corner of the economy’ will be undermined by the very burdens placed on those creating the jobs.

In short: even with some investment measures included, the Budget reinforces the headwinds our business is already facing. It spotlights the need for proactive planning, strategic capex discipline and early engagement with Government policy. If none of this changes, then nothing changes.