The Chancellor of Exchequer has announced the Autumn Budget, with tax rises and a scrap of the two-child benefit cap some of the major changes affecting the UK.

UK Chancellor Rachel Reeves has announced targeted investment in industrial strategy sectors across the UK with the introduction of two AI growth zones in Wales, creating more than 8,000 jobs and £17 million in Northern Ireland to strengthen UK external markets.

Reeves emphasised the importance of strategic public investment, stating that government procurement rules have been changed to allow the UK to “buy British” when national security is at stake, particularly in areas such as artificial intelligence.

Rachel Reeves, Chancellor of Exchequer, said: “We have changed government procurement, so we can buy British when it’s crucial to our national security including … today for AI, driving innovation and building that great industry here in Britain.”

The Chancellor reiterated the government’s commitment to devolved growth, announcing £13 billion in flexible funding for local and regional leaders to bolster skills development, business support and infrastructure.

Reeves added: “These budget measures are the right choices for a fairer, a stronger, and a more secure Britain.”

The announcement follows revised projections from the Office for Budget Responsibility, which earlier this year halved the UK’s GDP growth forecast from 2% to around 1%. Since then, growth has already risen to 1.5%, indicating improving economic momentum.

Additional measures include an extension of business rates retention for West England, the Liverpool City Region and Cornwall until 2029. Defence spending will increase, with targeted investment in Portsmouth, Barrow and Plymouth, as well as further support for Team Derby and for growing defence industry hubs across the UK.

Reeves also reaffirmed major transport and rail commitments, maintaining the additional £120 billion in investment set out at the previous spending review. Key projects include the Lower Thames Crossing, continued development of city region transport networks, the Midlands Rail Hub and the TransPennine Route Upgrade.

The Chancellor further highlighted ongoing support for the Northern Growth Corridor, including Northern Powerhouse Rail, stressing that improved connectivity is vital for linking towns and cities and driving long-term regional growth.

UK tech leaders react

Karen Meechan, ScotlandIS chief executive
“Today’s Budget presents a mixed picture for Scotland’s tech sector. The allocation of an additional £820 million for Scotland signals stronger fiscal foundations for public services and with that, the potential for renewed investment in infrastructure, skills and innovation. It’s also encouraging to see continued support for several industrial, decarbonisation and defence projects across Scotland.

“However, the extension of the UK-wide income-tax threshold freeze is still a concern for our sector. Over time, this ‘fiscal drag’ will create a significant tax burden on businesses and undermine Scotland’s ability to compete for talent. For start-ups and scale-ups already under pressure, this risks slowing growth.

“We welcome the widening of the eligibility margin for schemes like Enterprise Management Incentives (EMI) that could help SMEs and scale-ups compete more effectively on a global stage. Similarly, the new procurement frameworks – particularly for AI – could be an incredibly promising change for Scotland if translated effectively. However, the real value of today’s announcements for Scotland will only become clear when the Scottish Budget is published in January and we see how the additional resources are allocated.

“Until then, we urge both UK and Scottish governments to work together to ensure policy and investment choices genuinely unlock growth, innovation and competitiveness for Scotland’s digital economy.”

John Lucey, VP EMEA at Cellebrite
“The tidal wave of AI isn’t slowing down and for public sector organisations, particularly police forces, there is a growing pressure to reduce time to evidence,” John Lucey, VP EMEA at Cellebrite said.

“To achieve this, AI and automation are essential to streamline time-consuming tasks such as reporting and data analysis to save hours and millions in efficiency.

“Especially when connected to public safety, AI always needs human verification and oversight. People must be the ones to govern AI’s use cases, using it as an assistant to speed up otherwise menial and manual tasks.

“For policing, this means digital forensics teams can leverage AI to shorten case times through content classification, evidence prioritisation and automated device extraction to expedite verdicts.”

Stuart Harvey, CEO of Datactics
“AI is revolutionising public services to drive greater efficiency, innovation and economic growth, but to fully harness these advancements, the UK must prioritise strategic investment in data infrastructure and the responsible deployment of AI.

“Without robust systems to manage, analyse, and secure data, businesses and government departments risk falling behind in an increasingly competitive global market.”

“A strategic investment in data governance will help boost productivity and ensure the UK remains at the forefront of the AI boom while ensuring economic stability and long-term prosperity.”

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Blake Richmond, CEO at Resonate Group
“Our cities and regions are essential for growth, and freezing rail fares keeps train travel affordable, which not only eases the cost of commuting for workers but also supports the wider economy by encouraging spending, connecting people to jobs, and strengthening leisure market.”

“We welcome further investment in data technologies and AI, which are key to modernising rail industry processes. By adopting smarter, data-driven systems, creates more opportunities to develop AI to optimise these flows across an increasingly connected transport system, supporting long-term economic growth and regional development.”

Sheila Flavell, CBE, COO of FDM Group
“Scrapping the two-child benefit cap will be hugely beneficial for parents who want to return to work but have been held back by financial pressures. The cap had made it difficult for parents to get back into work and rebuild their careers after a break.”

“This new lift will ease the burden on families and open doors for parents who simply need the right support and flexibility to re-enter the tech sector.”