Industry voices have welcomed the Autumn Budget‘s investment in AI safety and sovereign AI capability but warn that high industrial energy costs and a lack of support for putting AI to work leave manufacturers and SMEs exposed.
The Autumn Budget has drawn a mixed response from the manufacturing and technology sectors. Commitments on AI security, sovereign compute, and support for entrepreneurs were broadly welcomed. But the UK’s manufacturing body said the Chancellor had sidestepped the issue that matters most for reindustrialisation: the cost of energy.
Across the comments, three themes stand out. Energy remains the biggest unresolved cost for industry. AI security funding is welcome, but its value depends on how it is directed. And businesses want help adopting AI, not just protecting it.
Energy: the missing piece
Make UK had billed the Budget as the first real test of the Government’s pledge to reindustrialise Britain. Chief Executive Stephen Phipson CBE said it had failed that test.
“Today they failed to address the one issue that would enable this – high industrial energy costs,” he said. “Our industrial electricity costs are the highest in the world. As I told the Chancellor last week, this is having a ruinous effect on investment and requires urgent action.”
Phipson pointed to the scale of what is at stake, noting that manufacturing supports 2.6 million jobs and accounts for 42% of UK exports. “It is hugely disappointing that he didn’t listen,” he added.
He welcomed the slowing of minimum wage increases but said employing people remains more expensive and riskier because of the Employment Rights Act and higher employer National Insurance contributions. “This Budget has failed to address any of the fundamental costs holding back investment and growth in manufacturing,” he said. “We will continue to push the government to make reindustrialisation an economic reality rather than an empty political slogan.”
The energy concern extends to smaller firms. Dr Anand Verma, Founder and CEO of ExpectAI, welcomed higher small business rate relief, a tripled trading allowance, and a new young entrepreneurs allowance. But he warned that ongoing costs and inadequate energy infrastructure still weigh on SME survival rates, including for firms that sit within larger supply chains. “It opens doors but doesn’t ensure they remain open,” he said.
AI security: welcome, but the detail matters
The Budget’s half a billion pounds for AI safety and security, alongside support for sovereign AI capability, was the most widely welcomed measure.
Rob Robinson, CEO at C86, called it “a welcome step towards encouraging business investment and supporting UK economic growth”, adding that support for homegrown innovation and critical technology infrastructure could give businesses more confidence to invest.
But he cautioned that funding alone will not be enough. “AI is not a plug-and-play solution, particularly for businesses supporting the UK’s critical national infrastructure, where new technologies must be carefully integrated without compromising the security and reliability of existing systems,” he said. Robinson called for closer collaboration between government, technology companies, and entrepreneurs to help businesses move beyond initial trials and embed AI securely across their operations.
Nik Kairinos, CEO & Co founder, RAIDS AI linked the investment to a run of high-profile AI breaches over the summer. “The key will be in how and where that funding is directed,” he said, warning that AI roll-out has moved so fast that governance has not kept pace.
He argued that organisations need clear audit trails of what their AI is doing, continuous monitoring against baseline behaviours, and human oversight, particularly over autonomous agents. “The risks from rogue AI to businesses and citizens are significant, but simply not using AI is not an option.”
The same applies to sovereign infrastructure. Investment in data centres supports technological independence, he said, “but developing domestic infrastructure does not automatically guarantee AI safety”. Without the ability to independently monitor and audit AI systems, “the investment made in the UK’s sovereign AI capabilities risks being wasted.”
Protecting AI, but not putting it to work
For some, the Budget’s AI focus leaned too heavily towards security at the expense of adoption. ExpectAI’s Dr Anand Verma said nothing in the package rewarded small businesses for using AI to run their operations.
“A nation that leads on AI security should also lead on putting AI to work,” he said. “AI can give a 10-person team the reach of a firm ten times its size. That’s how SMEs compete, grow, and create jobs. The Budget protects the technology not its use.”
Ritam Gandhi, Director of Studio Graphene, took a more positive view, saying the Budget recognised the need both to embrace the opportunities AI creates and to back the entrepreneurs who will turn them into businesses. He welcomed measures for founders and scaleups, but said the UK must keep investing in AI capability and “creating the conditions for businesses to develop and adopt AI in ways that deliver lasting value”.
Devolution and the infrastructure pipeline
Milda Manomaityte, Chief Executive of ACE, welcomed the Chancellor’s commitment to fiscal devolution and cheaper, cleaner energy. She said it showed the government understands “that energy is the foundation of growth in every part of the country”.
“The ambition is right,” she said. But the infrastructure sector needs a stable, fully funded pipeline, clarity on the private investment models it will be expected to rely on, and certainty that commitments will survive the next fiscal event. Devolution, she added, only works if mayors and local authorities have the capacity and long-term settlements to plan and design schemes properly. “Getting design right at the start is the best way to save money later.”
The reaction suggests industry sees the Budget as a step in the right direction on AI, but not yet a plan for reindustrialisation. Security and sovereign compute have been funded. Energy costs, employment costs, and practical support for AI adoption remain the open questions manufacturers and SMEs will be watching at the next announcement.
