What does the Autumn Budget mean for Northern Ireland?
The 2025 Autumn Budget announced by Rachel Reeves MP yesterday will have a profound effect on both citizens and businesses in Northern Ireland, especially if the Executive choose to mirror changes that are devolved matters. Most notably, Reeves announced more than £16m to support businesses in Northern Ireland dealing with post-Brexit trade rules and £350 million for the NI Executive.
The Spending Review 2025 provided devolved governments with their largest spending review settlements in real terms since devolution began with an extra £1.7 billion being granted through the Barnett Formula. Through this, the NI Executive will receive an additional £240 million in resource funding and £130 million in capital funding. Despite the extra funding and the fact that the Executive receives at least 24% more per person than the rest of the UK, this will still not be enough to cover the Executive’s current projected overspend, which currently stands at £400 million. In response to this shortfall, Secretary of State for Northern Ireland Hilary Benn MP has told Executive ministers to consider revenue raising measures.
Northern Ireland’s businesses will benefit from Labour’s new ‘UK Internal Markets Package’ which will see £16.6 million being used to improve trade between Northern Ireland and the rest of the United Kingdom under the Windsor Framework. This package will provide a “single point of contact” to solve trading disputes and assist businesses who are coming to terms with the Framework. Located within this package is also £2.25 million for Intertrade UK with will help the promotion of business links and the removal of trade barriers.
The Budget also has confirmed that advanced manufacturing will be the sector focus for the Enhanced Investment Zone in Northern Ireland, targeting clusters in photonics and biotechnology. The Department for the Economy expects this zone to create over £230 million in private investment and support the creation of more than 1,000 jobs over the next 10 years. The Executive and the UK Government are actively looking to boost interventions in this sector through the likes of local development and support for green initiatives. This investment comes off the back of over £310 million over four years for Northern Ireland’s four City and Growth Deals; £100 million for QUB’s APIC center; £25.2 million for Studio Ulster; £30 million for the Belfast-Derry/Londonderry Corridor and the new Defense Growth Deal.
One of the key measures announced that will affect Northern Ireland is the increase to the National Living Wage (NLW) and the National Minimum Wage (NMW) with the NLW rising by 4.1% and the NMW by 8.5% in April 2026. The Government estimates that this will help “around 170,000 workers” in Northern Ireland. This will have a greater effect here as there are proportionally more low earners in Northern Ireland than Scotland, Wales and some parts of England but will also put some businesses at risk due to rising operational costs. This measure combined with the continued freeze on income-tax thresholds will increase the tax burden on businesses as wages continue to rise.
The 2025 Autumn Budget will have a significant effect on Northern Ireland’s businesses and people. The allocation of £370 million will ease cost pressures in the midst of higher costs but does not solve the Executive’s funding shortfall. How effectively the Executive uses these funds and how they respond to the continued shortfall will determine whether this budget delivers real change in Northern Ireland.