Budget changes have ignited discussions within the industry regarding funding, skills, and the resilience of supply chains.
On 30 October 2024, Chancellor Rachel Reeves announced the Labour government’s Autumn Budget, generating discussions across industries, including packaging.
This year’s budget aims to shape economic growth, strengthen infrastructure, and drive innovation.
Here, we explore how this budget may influence the packaging industry, especially in areas related to logistics, trade, and technology.
Infrastructure’s role in packaging
The establishment of the National Infrastructure and Service Transformation Authority (NISTA) marks a pivotal shift, with its mission to ensure “effective delivery of infrastructure across the country” and collaborate closely with the packaging and logistics industries to drive efficiencies.
However, some industry leaders are sceptical of the government’s level of commitment to supporting logistics, a critical backbone of packaging.
Matt Gregory, Managing Director for Northern Europe at Körber Supply Chain Software, expressed disappointment: “The lack of specific measures of support for the logistics sector in today’s Autumn Statement is disappointing, given the crucial role that it plays in supporting the UK economy.”
He highlighted that the supply chain sector needs support to face modern challenges, stating, “To meet complex supply chain challenges, more needs to be done to improve resilience and agility.”
Gregory also pointed to the need for targeted education programmes to boost skills in emerging areas, such as AI, which he believes are essential for sustaining the UK’s global standing in supply chain innovation.
In response to infrastructure project announcements, Gregory suggested that packaging firms will also be affected: “Announcements regarding key infrastructure projects require significant investment in the supply chain. Technology and data analytics are key to ensuring the real-time coordination of materials, equipment, and personnel across complex networks.”
For the packaging industry, clear guidance from the government on building essential supply chain processes is vital to meeting project budgets and deadlines effectively.
Trade strategy and the industrial push for growth
The Autumn Budget includes a new Industrial Strategy to boost sectors such as advanced manufacturing and clean energy, both of which intersect with the packaging industry’s sustainability ambitions.
This focus on growth-driving sectors aligns with the government’s commitment to invest £2 billion over five years in the automotive industry and £520 million in life sciences to foster resilience.
By supporting clean energy and circular economy goals, the budget opens opportunities for packaging companies involved in recyclable and sustainable packaging solutions.
The budget also pledged to release a Trade Strategy in 2025 to “renew the UK’s commitment to free and open trade” and strengthen relationships with the European Union.
Such strategies hold potential benefits for packaging exporters, particularly those who rely on streamlined cross-border trade with Europe. However, the packaging sector will need to wait for more details on how these trade policies will directly impact packaging exports and imports.
While promising, this strategy will require coordinated government and industry support to take full effect.
Reflecting on these initiatives, Gregory noted, “Further clarity is needed on how the government intends on building the supply chain processes, technologies, and talent needed to deliver these projects within budget and on time.”
Technology and sustainability in packaging
A significant portion of the budget is directed toward sustainability and technology, with promises of £37 million in funding for the Made Smarter Innovation programme and an extension of the SME Digital Adoption Taskforce.
This investment encourages packaging firms to adopt advanced digital technologies, supporting the industry’s shift toward automation and data-driven operations.
By doubling the funding for the Made Smarter programme to £16 million, the government aims to enable smaller packaging businesses to digitise and expand operations across the UK.
Clean energy initiatives, a cornerstone of the Autumn Budget, include a £3.9 billion allocation for carbon capture and green hydrogen projects, which support the packaging industry’s push for eco-friendly materials and processes.
The government’s commitment to clean energy, with a focus on carbon capture and low-emission technologies, offers potential benefits for packaging manufacturers working toward decarbonisation.
Yet, some in the sector worry that the broader challenges of sustainability and innovation require a more balanced approach. Tony Cheetham, Managing Director of Manchester-based Shipster, highlighted concerns around tax policies that may hinder innovation in tech-dependent industries like packaging:
“The increase in employers’ National Insurance contributions will be a hard pill to swallow for us. As a growing tech company, wages are nearly 75% of our entire budget.”
In the packaging industry, such increased costs could limit investment in sustainable innovations and green packaging technologies.
The Autumn Budget 2024 presents opportunities for the packaging sector to advance in areas of logistics, trade, and sustainability. However, leaders in the industry urge the government for more targeted measures and clearer guidance to ensure that these initiatives are both supportive and actionable.
The future of packaging in the UK may depend on how effectively the industry can leverage these new policies for growth and sustainability while navigating the associated economic pressures.
Source from Packaging Gateway
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