Autumn Budget 2026: Impact on the UK Lighting Industry
The Government’s Autumn Budget includes a number of measures with implications for businesses across the UK lighting industry, bringing a mixture of opportunities and ongoing challenges for the sector.
While there are positive developments around business investment, public procurement and export support, significant pressures remain for businesses across the lighting value chain, from manufacturers and suppliers to designers, distributors and service providers.
For The LIA, the central question is whether the UK is creating the right environment for lighting businesses to invest, innovate, employ, develop skills and grow. While the Budget includes some welcome measures, we believe there is more to do to ensure the UK remains a competitive place to do business.
Energy costs and UK competitiveness
Energy costs continue to be a significant concern for UK industry, particularly for businesses involved in manufacturing.
The introduction of the British Industrial Competitiveness Scheme from April 2027 will provide targeted support to eligible energy-intensive manufacturers. Meanwhile, the cancellation of the planned Gas Shipper Obligation avoids an additional policy cost for businesses.
However, support remains targeted rather than offering wider industrial energy relief.
For lighting manufacturers operating in the UK, internationally competitive energy costs are essential. More broadly, energy and operating costs influence investment decisions, supply-chain resilience and the ability of businesses across our sector to compete internationally.
The LIA wants to see the UK remain an attractive place to manufacture, invest, innovate and do business, supported by an internationally competitive energy and business environment.
Encouraging business investment and growth
The Budget presents a mixed picture for business investment.
From 1 January 2027, the main rate of First Year Allowance will increase from 40% to 50%, allowing businesses to claim a greater proportion of qualifying investment earlier where it does not already qualify for full expensing.
However, from April 2027, the main rate of Writing Down Allowance will reduce from 14% to 12%, slowing the rate at which tax relief is received on some investments.
For lighting businesses considering investment in UK operations, manufacturing capability, automation, innovation and energy efficiency, a consistent and supportive tax environment remains important.
Investment decisions are influenced by more than individual tax measures. The combined impact of energy and operating costs, taxation, employment costs, skills availability and the wider economic environment all play a role in determining where businesses choose to invest.
The LIA would like to see a consistently supportive environment that gives lighting businesses the confidence to invest in their future and strengthen UK capability.
Employment, skills and technical competency
People and skills remain fundamental to the future success of the lighting industry.
From April 2027, the National Living Wage will increase by 3.9% to £13.21 per hour. While supporting wages is important, rising employment costs add to the pressures businesses face when recruiting, retaining and developing their workforce.
At the same time, investment in skills and professional development is essential to maintaining the industry's competitiveness.
As lighting technology, regulation and expectations around product and professional competency continue to evolve, access to the right technical knowledge and expertise is increasingly important.
The LIA believes that access to the skills and technical competence required across the lighting value chain is fundamental to our industry's future.
We will continue to make the case for an environment that enables businesses to invest in their people, apprenticeships, technical skills and professional development.
Public procurement: recognising the value of UK businesses
One area of the Budget that could have particular significance for the lighting industry is public procurement.
The Government intends to introduce a new definition of a 'UK supplier' by January 2027, alongside changes designed to give greater recognition to factors including skills and social value in procurement decisions.
This presents a potentially important opportunity for businesses across the lighting supply chain.
The LIA would welcome procurement policies that properly recognise the contribution businesses make to the UK economy through employment, skills, innovation, design, manufacturing, technical expertise, product quality and responsible supply chains.
That contribution takes many forms across our industry and should not simply be determined by where a company is registered.
How 'UK supplier' is ultimately defined, and how quality, skills, economic contribution and social value are reflected in procurement decisions, could have important implications for businesses across the lighting sector.
This is an area The LIA will be following particularly closely as further details emerge.
Supporting UK businesses to export
There are also positive developments for businesses looking to expand into international markets.
Changes to UK Export Finance support are intended to widen access to finance for SMEs that currently export or are looking to begin exporting, alongside broader eligibility for export finance products.
The UK lighting industry has significant technical expertise, innovation and international potential. Supporting businesses to access overseas markets and compete globally is important for the sector's continued growth.
Measures that help UK lighting businesses trade, compete and grow internationally are welcome, and The LIA will be interested to see how accessible this support proves to be for SMEs across our sector.
Business rates and the wider cost of doing business
The Budget also includes further business rates support, particularly targeted at the retail, hospitality and leisure sectors.
For businesses across the lighting industry, including those operating manufacturing facilities, offices, warehouses and distribution centres, property costs remain an important part of the wider operating environment.
While individual measures may provide relief to specific sectors, the cumulative cost of operating, employing people and investing in the UK continues to influence business confidence and competitiveness.
Ensuring businesses across the wider industrial and manufacturing landscape can operate sustainably and competitively remains an important consideration.
The LIA's view: creating the right conditions for growth
Overall, the Autumn Budget contains measures that could provide useful support to parts of the lighting industry, particularly around investment, procurement and exporting.
However, the bigger question is whether the UK's overall business environment is sufficiently competitive to encourage lighting businesses to invest, innovate, employ, develop skills and grow here, while supporting a strong and resilient domestic supply chain.
For UK manufacturers, internationally competitive industrial energy costs remain a key priority. Across the wider industry, operating costs, access to skills, incentives for investment and procurement policies that recognise genuine economic contribution all matter.
As the trade association representing businesses across the lighting value chain, The LIA will continue to advocate for the conditions our industry needs to strengthen UK capability, competitiveness and technical expertise.
We will also continue to highlight the important role of energy-efficient lighting, controls and smart technologies in reducing energy consumption across the UK's built environment, improving building performance and supporting the transition to net zero.
The lighting industry has an important contribution to make to the UK's growth, energy and industrial ambitions. Ensuring that contribution is recognised and supported will remain central to The LIA's engagement with Government and our wider policy and advocacy work.
Have your say
We want to hear from our members.
What does the Autumn Budget mean for your business? Where do you see opportunities, what pressures remain, and are there particular issues you believe The LIA should be raising on behalf of the industry?
Your feedback helps inform our ongoing engagement with Government and ensures that the experiences and priorities of businesses across the lighting sector are represented.
Share your thoughts with The LIA and help shape the conversation around the future of the UK lighting industry.
