Chancellor Rachel Reeves’ Autumn Budget outlines major reforms in infrastructure, industrial strategy, and wages, impacting logistics resilience and operational costs.
The Labour government’s Autumn Budget introduces measures to enhance UK infrastructure, tackle regional development, and increase wages. While the budget makes strides in infrastructure investment, logistics industry leaders express concerns about limited direct support and rising costs in critical areas like wages and tax policies.
Infrastructure: A New Authority and Investment Zones
A centerpiece of the Autumn Budget is the establishment of the National Infrastructure and Service Transformation Authority (NISTA), which will oversee the delivery of key infrastructure projects. Set to be operational by spring 2025, NISTA merges existing bodies to streamline project approval and execution processes, working with industry to validate business cases before funding.
The government has also committed to a 10-year infrastructure strategy and regional investment, including new Investment Zones and Freeports to boost advanced manufacturing and green industries. Matt Gregory, managing director for Körber Supply Chain Software, acknowledged the potential benefits but emphasized the need for more targeted logistics support to foster innovation and address the sector’s complex workforce needs.
Industrial Strategy and Trade: Funding for Key Sectors, But Cybersecurity Lacks Attention
The budget reinforces the Industrial Strategy’s focus on high-growth sectors, with £2 billion over five years earmarked for the automotive industry to support electric vehicle (EV) production, and £975 million to advance aerospace technology. Industry leaders have praised the focus on these sectors but note that without support for logistics workforce development and digital transformation, achieving sustained growth may be challenging.
The budget further commits to a Trade Strategy in 2025 aimed at bolstering trade relations and resilience in the face of regulatory shifts. However, cybersecurity investment—vital for safeguarding supply chain data and infrastructure—was notably absent, sparking criticism from cybersecurity firms that warn this oversight could compromise both public trust and national resilience.
Wages and Fuel Duty: Mixed Responses in Logistics
The logistics sector welcomes a freeze on fuel duty and the extension of the 5p cut, seeing it as a necessary relief amid rising operational costs. With fuel constituting a significant part of weekly expenses, industry leaders view this as essential to maintaining delivery reliability and controlling costs.
However, the increase in the National Minimum Wage to £12.21 per hour from April 2025 presents a financial strain for logistics businesses that operate on narrow profit margins. Additionally, the rise in employer National Insurance contributions and the lowered contribution threshold to £5,000 adds further costs. Many SMEs fear these changes could hinder growth and limit investment in new technologies. Tony Cheetham of Shipster and Andrei Danescu of Dexory cautioned that such policies may curb innovation in sectors reliant on reinvestment in talent and technology.
Technology and Clean Energy: Funding Digital Adoption and Green Infrastructure
The government’s Made Smarter Innovation program, receiving an additional £37 million in funding, aims to accelerate digital adoption among small manufacturers. The program’s expansion to all English regions supports technology integration in supply chains, enhancing efficiency and resilience.
To further green energy goals, the budget dedicates £3.9 billion to carbon capture projects, alongside a commitment to advancing hydrogen production. Although this funding supports net-zero ambitions, supply chain executives stress the importance of aligning clean energy infrastructure with practical logistics needs for effective emissions reduction.
Outlook: Balancing Fiscal and Sectoral Growth Goals
While the Autumn Budget’s commitments to infrastructure, trade, and clean energy lay groundwork for long-term economic growth, the lack of logistics-specific support and rising employer costs pose immediate challenges. Industry leaders call for balanced policies that foster both fiscal responsibility and sectoral resilience, ensuring the UK supply chain remains competitive on a global scale.
