Unsurprisingly given recent events, today’s Spring Statement from Chancellor Rachel Reeves focused on economic stability and reaffirming fiscal discipline amid global uncertainty. Of course, developments in the Middle East over the weekend have raised a number of concerns for businesses, in particular the potential for rising fuel costs and potential supply chain disruption.
However, the Chancellor didn’t introduce any new tax breaks, subsidies or industry-targeted stimulus aimed directly at manufacturing and the statement focused overwhelmingly on updated forecasts rather than new incentives.
My plan is the right one. I am in no doubt about how great the rewards we can be if we stay the course. The forecast today confirms that the choices this Government have made are the right ones.
Rachel Reeves, Chancellor of the Exchequer
The Chancellor was keen to project economic stability to reassure business leaders and markets stating that her economic plan has become, “even more important in a world that in the last few days has become yet uncertain.
“With the unfolding conflict in Iran and the Middle East, it is incumbent on me and on this government to chart a course through that uncertainty, to secure our economy against shocks and protect families from the turbulence that we see beyond our borders.”
Revealing details of the OBR forecast, the Chancellor stated that it had adjusted its projections so that GDP “grows slightly slower in 2026 and then faster in both 2027 and 2028”.
She said that GDP is forecast to grow by 1.1 per cent in 2026, 1.6 per cent in both 2027 and 2028, and 1.5 per cent in both 2029 and 2030. “I have always said that growth is for a purpose – to make working people better off, and I can confirm that GDP per person is set to grow more than was expected in the autumn,” she continued.
Reeves also alluded to the “prize” on offer, promising that the UK would have £15bn more a year “to make working people better off” if the government’s economic plan succeeds. “That is the prize on offer. That is the prize within our grasp. This is the right plan, a plan that is more necessary than ever before in the world of uncertainty, a stronger and more secure economy, inflation and interest rates falling, resilient public finances and in every part of Britain, working people are better off.”
Reaction to the Spring Statement below.
Our sector is deeply place-based, provides long-term employment and underpins wider supply chains.
With the right policy framework, it is exactly the kind of industry the government wants to see thrive.
Ceramics UK’s three key asks of government are.
Energy costs and Supercharger access – industrial competitiveness
Our most urgent ask is access to the Supercharger scheme for all UK ceramic manufacturers and suppliers.
Ceramics is energy-intensive by design, not by inefficiency. High-temperature kilns and continuous processes are unavoidable, and many of our members face energy costs that undermine productivity and investment — despite being excluded from existing support.
Extending Supercharger access would be a textbook example of active industrial strategy:
- protecting skilled, well-paid manufacturing jobs
- anchoring industry in regions like the Midlands and North
- and giving businesses the headroom to invest in decarbonisation rather than manage crisis.
This isn’t about propping up the past — it’s about securing the future competitiveness of a strategic sector.
UK ETS – a fair, credible path to net zero
On decarbonisation, ceramics is committed to Net Zero and already investing in innovation — hydrogen readiness, electrification, and new kiln technologies.
But ceramics has a high proportion of process emissions that can’t be eliminated quickly. If the UK Emissions Trading Scheme doesn’t reflect that reality, it risks driving carbon leakage rather than emissions reduction.
What we’re asking for is sector-specific flexibility within UK ETS — a fair transition that recognises industrial realities while keeping us on a credible decarbonisation pathway. That aligns with Labour’s commitment to a just and achievable Net Zero.
Trade enforcement – fair competition and resilience
The third issue is trade. UK ceramic manufacturers are competing against imports produced with ultra-low-cost energy, including Russian gas used indirectly in countries such as India, Turkey, and China.
At the moment, the burden of bringing trade cases sits with individual companies, many of them SMEs. That’s neither fair nor effective.
We’re asking for government leadership on trade enforcement — using trade defence tools to ensure fair competition, protect domestic capability, and strengthen UK manufacturing resilience.
“The £1bn helicopter deal with Leonardo is a significant commitment and, given the events of the past few days, a timely one. The world has changed dramatically and defence capability has to change with it.
“What is particularly significant about the Leonardo deal is the investment in Proteus, the UK’s first autonomous uncrewed air system.
“The development of unmanned platforms like this is one of the areas where additive manufacturing has the most immediate and compelling role to play. 3D printing allows complex components to be produced rapidly, iterated quickly and manufactured on demand — exactly the qualities you need when you are developing and deploying autonomous systems at pace.
“What conflicts in Ukraine and now the Middle East are demonstrating is that modern warfare demands manufacturing that is agile and continuously supplied. Traditional supply chains were not built for that. Additive manufacturing is.
“UK companies are already delivering production-scale components to defence programmes — not prototypes, but mission-ready parts produced on demand to the same rigorous standards as conventionally manufactured equivalents. The capability exists right now.
“The scale of defence investment announced is genuinely welcome. But its full value will only be realised if innovative British SMEs are embedded in the supply chain rather than locked out of it by procurement processes that have not kept pace with what advanced manufacturing can deliver.
“For AMUK members, today’s statement — while relatively light on new measures for business more broadly — reinforces the direction of travel on defence. The opportunity for the additive manufacturing sector is real and growing. What we need now is procurement reform to match the ambition of the investment.”
UK businesses continue to face cost and operational pressures. Our research shows that energy prices are a top concern for ~45% of UK companies, while only 27% of retail & hospitality, 33% of healthcare, and 64% of industrial organisations are prioritising efficiency or resilience measures this year. Businesses can make progress by using consumption data to spot inefficiencies, aligning supply arrangements with operational needs and introducing efficiency improvements in phases; helping manage costs and strengthen resilience regardless of short-term policy developments.
Rachel Reeves’ Spring Statement has landed exactly as billed: deliberately low-key on new policy, but high-impact for SMEs because the updated forecasts will set the tone for costs, confidence and investment decisions over the next six to twelve months. “Stability is the headline Reeves is promoting, but there is little acknowledgement of the fragility small businesses are facing, given the renewed energy-price shock rippling through markets.
For Britain’s small businesses, the message is decidedly mixed. On the plus side, avoiding sudden policy pivots helps planning, particularly for firms already juggling tight cashflow, higher borrowing costs and lower demand. However, the OBR’s more downbeat growth picture and the explicit warnings around geopolitical volatility and inflation risk will be another jarring reminder that 2026 is not going ‘back to normal’ when it comes to operating costs.
What SMEs needed from today was a clear path to lowering the cost of doing business. Instead, they’ve effectively been told to wait for Autumn. Key pressures SMEs face today are not abstract: business rates remain a day-to-day drag on high streets, light industrial operators and local services, and the wider business community has been consistently asking for faster relief on energy costs and meaningful tax simplification. In this environment, the practical impact is that SMEs will be forced to keep prioritising flexibility over long-term commitments.
The renewed uncertainty surrounding conflict in the Middle East creates an added layer of volatility that British SMEs can ill afford. The most immediate risk is to energy markets, as sustained disruption to oil or gas supply routes typically pushes up wholesale prices. This quickly filters through to higher fuel, logistics and utilities costs for small businesses already operating on tight margins.
There is also the wider confidence effect. Heightened geopolitical tension tends to unsettle financial markets, which can lead to currency fluctuations and upward pressure on borrowing costs. For SMEs reliant on lending to manage cashflow or fund growth, even small shifts in interest rate expectations can materially affect decision-making.
Uncertainty also impacts demand. When households and larger corporations feel cautious, spending and investment are delayed. For many SMEs (particularly those in retail, hospitality and supply chains), that hesitation translates into softer revenues. Geopolitical instability doesn’t sit on the sidelines of the UK economy; it feeds directly into our costs, confidence and cashflow.
Small businesses are seeking predictability, and global uncertainty reinforces the need for domestic policy that reduces, rather than compounds, financial pressure: this is nowhere to be found in today’s statement.
The Chancellor’s emphasis on credibility with markets is understandable with investors already spooked by global events, but the fact is, SMEs are the engine room of local growth, jobs and innovation. If the Autumn Budget is going to do the heavy lifting here, it must be unambiguous on SME priorities: a credible plan for business rates, support to ease energy intensity for smaller firms, and incentives that unlock investment, rather than asking businesses to continually absorb more risk.
British SMEs have already waited too long for meaningful support from the government in these extremely difficult times. When small businesses are under pressure, growth falters; when growth falters, the whole economy pays the price.
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