With cyber-attacks surging and energy costs biting, the Institution of Engineering and Technology (IET) is urging the Government to deliver a Budget that secures Britain’s digital defences, powers clean tech growth, and restores long-term competitiveness.
It’s calling for:
- Prioritising national cyber resilience through support for SMEs and investment in skills.
- Strengthening the UK’s competitiveness by backing engineering, innovation, and supply chain capacity.
- Providing long-term clarity in energy policy, taxation and transition planning.
- Ensuring consumers and businesses can benefit from clean technologies through fair pricing, improved infrastructure and predictable regulation
The IET stands ready to work with Government, industry and the engineering community to help deliver a more resilient, productive and competitive UK.
SMEs need urgent support in cyber resilience
This year has seen a spate of high-profile cyber-attacks, reinforcing the vulnerability of essential services and supply chains at a time when digital systems underpin every sector of the UK economy. The IET broadly welcomed the Cyber Security and Resilience Bill announcement earlier this month (12th Nov), but says Budget action is needed to ensure organisations, especially SMEs, have the capability and resources required to keep pace with a rapidly evolving threat landscape.
Jayne Black, Digital Futures Policy Manager at the IET, said: “We’re calling on the Government to introduce greater support for SMEs to bolster their cyber security measures through targeted tax incentives, investment in skills training and accessible guidance.
“Our recent Skills Survey found that cyber security skills are ranked as both the skill engineering employers view as most important for business growth over the next five years and the most difficult to find in recruitment – particularly amongst SMEs. That is why skills initiatives must support both training future practitioners and experts and upskilling current users.
“Smaller companies make up the backbone of the UK economy, but many lack the financial headroom and internal expertise to implement robust, modern cyber security practices. Current support is fragmented, short-term or difficult to access, leaving many SMEs under-prepared. Tax incentives to reinvest in cyber skills and resilience planning would help close this capability gap.
“Digital capability is about resilience. Cyber security is two-pronged; prevention is essential, but every organisation must prepare for the inevitability that an attack will occur. With hackers constantly reinventing their tactics, best practice is a moving target.
“This is why it’s critical that cyber strategies are led by professionals who are suitably qualified and able to adapt to change, and why resilience planning must be grounded in real-world scenarios. Cyber security is a cost of the modern world. Investment now will limit damage and reduce costs in the long term.”
Keeping the UK competitive amid rising costs
The IET warns that growing financial pressures across industry combined with the high cost of scaling technology businesses in the UK are eroding the country’s competitiveness at a time when global markets are moving quickly.
Stephanie Baxter, Head of Policy at the IET, said: “In an environment of budget restrictions, we must ensure wider policy decisions do not undermine the UK’s competitiveness.
“The UK has an abundance of world-leading engineering and digital talent and a strong intellectual capability base providing the ideal conditions for nurturing startups and scale ups. However, escalating operating costs are making it increasingly unattractive for businesses and investors to stay and grow here.
“When investing in technologies such as AI or quantum, we must look at the whole ecosystem: manufacturing, infrastructure, energy and skills. Without strengthening the entire supply chain, the UK risks falling behind.”
Energy affordability and long-term certainty must underpin the energy transition
Reforms to energy pricing including potential cuts to VAT on energy bills, green levies, and the structure of social support schemes must be considered as part of an integrated approach that focuses on the overall affordability and stability of the energy transition.
The IET highlights that:
- Adjusting VAT alone may have limited benefit unless paired with broader reforms to address the underlying costs of energy
- Transitioning certain levies or support schemes into general taxation could make costs fairer and more transparent for consumers
- Allowing some schemes – such as the Renewable Obligation – to phase out naturally could help reduce market distortions
- Long-term certainty in taxation is essential to securing investment, particularly in energy infrastructure where projects span 25-40 years
The IET also stresses that the UK must avoid creating conditions that disproportionately favour low-cost imported technologies at the expense of domestic capability potentially impacting both long term resilience and industrial growth.
James Bamborough, Sustainability and Net Zero Policy Manager at the IET, said: “Adjusting VAT on energy bills may be eye-catching, but it doesn’t address the core issue: the underlying cost of energy remains too high. Moving some levies into general taxation could be a fairer and more effective way to support households and the transition. Above all, the energy sector needs long-term stability. Major projects can span decades and rely on predictable policy and taxation. Without it, the UK risks losing vital investment.”
EV transition: support consumers, expand infrastructure, and reform taxation fairly
With EV sales rising and fuel duty revenues declining, the Government’s announcement that it will introduce a pence-per-mile (PPM) road-user charging model has been expected.
The IET highlights that:
- A PPM system could provide long-term fiscal stability and is widely used internationally (typically 5-7p per mile).
- Maintaining incentives to switch from internal combustion engine vehicles must remain a priority as EVs are one of the easiest sectors to decarbonise
- Infrastructure remains a major barrier: consumers without home charging face higher costs and fewer options. Expanding reliable street-charging infrastructure is essential to maintaining momentum
- Over time, incentives and taxation must balance affordability with fairness, ensuring early adopters and those unable to charge at home are supported
Bamborough said: “EVs are one of the simplest decarbonisation wins, but only if incentives and infrastructure keep pace. A move to a pence-per-mile charge is sensible, provided we maintain a clear cost advantage over petrol and diesel vehicles.
“The main barrier now is infrastructure. People who can’t charge at home face higher costs and fewer options, so expanding reliable street charging must be a priority.
“EVs remain expensive upfront, so some incentives will still be needed. But over time, it’s reasonable that EV drivers contribute to road funding. We need a balanced system that keeps EVs attractive while ensuring tax revenue remains sustainable.”
