Paula Ireland, commercial & operations director at Felcon Limited, non-executive director at Sussex Chamber of Commerce and chair of Apprenticeships East Sussex, reacts to the Budget.
“Banks have already labelled the Autumn Budget 2025 as targeted and tax-heavy. The Chancellor has doubled her fiscal buffer from roughly £10bn to £22bn – but only by raising around £26bn a year in extra taxes by the end of the decade, pushing the tax burden to a post-war high.
“Markets reacted calmly: gilt yields fell, sterling strengthened and the FTSE ticked higher. Not exuberance, but acceptance that the plan is stable and credible.
“As a commercial & operations director in the specialist cleanroom manufacturing sector, what matters to me is simple; Budgets change the economics of investment, labour and profitability. And this one sends a very clear signal.
“From January 2026, manufacturers will benefit from a new 40% First Year Allowance on most plant and machinery. That’s highly welcome, it allows us to write off a significant portion of new equipment up front. But from April 2026, the writing-down allowance drops from 18% to 14%, meaning slower relief thereafter.
“Coupled with the decision to freeze corporation tax and maintain R&D relief unchanged (after years of instability), the message is unmistakable. Don’t sit on profits, reinvest them.
“For a manufacturer like us, this makes genuine strategic sense. We’re now in a position to justify upgrades such as advanced CNC equipment, improved fabrication lines, automated handling and in-house testing capability.
“But the financial reality is blunt, if we don’t invest, the after-tax cost of doing nothing increases. That’s why we are now building a 3-5-year capex roadmap, prioritising assets that improve throughput, reduce rework and cut energy intensity. The stability around R&D relief also allows us to plan for new products with confidence rather than hesitation.
“Funding is available if you have a credible plan. Lenders are signalling that they expect to be net providers of credit in 2026, supported by guarantee schemes and British Business Bank channels. 12 months ago, the tone was cautious. Today it is clearer.
“If you bring a productivity-led investment plan, there is capital to support it. For companies with strong technical capability, clear demand and disciplined financial management, this is a window worth using.
The biggest operational pressure is the rise in National Living Wage and Minimum Wage: 4.1% for 21+, 8.5% for 18-20 or 6% for 16-17 and apprentices. We already pay above the minimum, but the issue is the compression of pay bands.
“As NLW rises and tax thresholds remain frozen, the gap between non-skilled, semi-skilled and skilled workers narrows unless we adjust the whole structure. That can quickly erode motivation and retention. Without intervention, those differentials collapse.
“Skilled staff rightly ask: “Why carry the responsibility for pennies more than a new starter?”. Our response must be deliberate, rebuild pay bands for 2026 onwards. Set clear percentage premiums for semi-skilled and skilled roles. Link progression to competence, not tenure. Communicate a 2–3-year transition path so the workforce sees structure and fairness. Operationally, this is one of the most important actions manufacturers must take.
“Business rates multipliers will fall from April 2026, but revaluations mean many industrial occupiers, especially in the South East, could still face significant increases. Although retail and hospitality see the largest reliefs, manufacturers do not.
“We are planning on the basis of a 10-15% increase and will challenge valuations early. As with most of this Budget, stability does not mean saving; it means planning ahead.
“As a specialist manufacturer serving the NHS, pharmaceutical and semiconductor sectors, for us the takeaway is clear. The tax environment now favours reinvestment. Wage pressures will tighten margins unless addressed structurally. Rates and overheads will likely drift up, not down. Funding for well-planned innovation and capex is available.
“This Budget won’t transform the sector overnight, but it does provide something we haven’t had for a while: a stable framework to invest against.
“As I see it, manufacturers who upgrade capability, skills and clean, efficient technology will come out stronger. Those who delay will find rising wages and taxes steadily eroding their margin. The direction is set. The question now is whether we act early or react too late?”
