Britain’s manufacturers are calling on the Government to use the forthcoming Budget to prioritise measures that drive growth, warning that further business tax increases and a continued failure to tackle high industrial energy costs risk pushing the UK towards deindustrialisation.

The call follows new data from Make UK, which shows that manufacturing business costs have already risen sharply this year following increases in National Insurance Contributions (NICs). Firms are also bracing for additional financial strain from proposed changes to Inheritance Tax and the introduction of the Employment Rights Bill.

Make UK said the UK’s persistently high industrial electricity prices remain an “existential threat” to many firms and criticised the Government for delays in launching the promised British Industrial Competitiveness Scheme (BICS). The organisation noted that four months have passed since the scheme was announced, with no sign of a consultation.

In its Budget submission, Make UK is calling for six key measures to support manufacturers:

• Expand the British Industrial Competitiveness Scheme to all manufacturers and backdate it to June 2025.

• Ringfence the £1.1 billion raised through the Growth and Skills Levy for reinvestment in the skills system.

• Introduce a targeted business rates exemption for investment in green technologies.

• Commit to no further increases in National Insurance Contributions.

• Provide a targeted electrification discount for firms switching from gas or oil to electricity.

• Extend Full Expensing to include leased assets.

Stephen Phipson, CEO of Make UK, said:
“Business is facing a potent combination of weak demand at home and abroad, alongside escalating costs across the board. If we are to get growth off the floor, it’s going to be business that delivers it — and this Budget must make growth the number one priority.

“In particular, energy costs are now an existential threat to the UK’s industrial base. Government needs to stop sitting on its hands on the energy support scheme and bring it forward urgently, backdated to when it was first announced.”

Make UK’s data shows that almost seven in ten manufacturers (70%) expect further tax increases, while 68% say their costs have already risen more than anticipated in the past six months. As a result, 58% have raised prices, and a further 53% plan to do so within the next six months.

The survey also found that over 90% of companies have been affected by the NICs rise, leading to pay freezes (29%), reduced pay increases (54%), and recruitment freezes (51%).

Looking ahead, 95% of firms expressed concern about the forthcoming Employment Rights Bill, with 67% saying it will negatively affect their business. Make UK also warned that apprenticeship opportunities in engineering and manufacturing have fallen 41% since 2017, despite recent progress toward a more flexible Growth and Skills Levy.

The organisation is urging the Government to take immediate, practical steps to stabilise costs and stimulate investment, warning that failure to act risks long-term damage to the UK’s manufacturing base and industrial competitiveness.