UK Budget 2026: The packaging and processing industry reacts

Were the predictions of a ‘boring Budget’ correct? As Chancellor John Healey seeks to provide stability to homes and businesses in the midst of continuing economic volatility, experts from across the packaging and processing industry weigh in with their snap verdict on what 2026’s Budget brings.

Between material costs, energy prices, supply chain disruption, and evolving regulations, the print and packaging industry is in the middle of a challenging time. And, while media briefings promised a so-called ‘boring Budget’, there were some concerns that even a relatively uneventful fiscal statement could create disruption for businesses already pulled in too many directions.

The promise of a dull budget was largely delivered, with the Chancellor’s red briefcase containing a large number of relatively minor measures. However, dull doesn’t mean unimportant – the 2026 Budget still contained a lot to mull over for print and packaging businesses.

There is no better place for industry professionals to find solutions to the challenges raised by the Budget than Packaging Innovations & Empack. The UK’s largest packaging and processing event represents an opportunity for the industry to gather under one roof, share their perspectives, and spark inspiration across the entire packaging supply chain. And, with 2027’s event on the horizon, these conversations have already started.

What does the 2026 Budget mean for print and packaging?

The Autumn 2026 Budget is the busiest Budget ever, containing the largest number of headline measures in history. However, the combined value of all of these measures adds up to the smallest value in history, making it a complex story to unpack. It’s a Budget that has done a lot or not enough, depending on who you ask.

Here are the headline measures that print and packaging businesses should be aware of:

Plastic Packaging Tax rises and changes: The PPT rises by £7.74 per taxable tonne, from £228.82 to £236.56, on 1 April 2027. This adds cost pressures for applications that rely heavily on virgin plastic, such as those with food contact requirements. At the same time, the Government confirmed that pre-consumer waste will stop counting as recycled content for PPT purposes as previously announced, reducing viable feedstock. However, this was mitigated a little by the confirmation that mass balance accounting will be introduced in April 2027.

Mandatory certification for mechanically recycled plastic confirmed: Following a consultation period, the Government confirmed the introduction of previously announced certification requirements for recycled plastic beginning on 1 April 2030.

Energy support: Funding for the British Industrial Competitiveness Scheme (BICS) offers eligible manufacturers savings of up to 25% on their electricity costs, starting in April 2027. While most print and packaging businesses will not fall into eligible categories, British glass and metal producers do, alongside non-hazardous waste disposal businesses, reducing cost pressures elsewhere in the packaging supply chain.

Mixed news for machinery investment: The main-rate first-year allowance increases from 40% to 50% for qualifying expenditure from 1 January 2027. However, the main writing-down allowance falls from 14% to 12% from April 2027. This could affect investment decisions, especially for SMEs.

Minimum wage increase drives operating cost pressure: The National Living Wage rises 3.9% to £13.21 an hour from 1 April 2027, with other minimum wage rates also increasing. This must be accounted for in day-to-day operational costs.

e-invoicing changes specialist printing operations: Printers of business forms, invoice pads, and other specialist applications should take note of the introduction of e-invoicing. This requires VAT invoices to be generated as structured data rather than printed, customised forms.

What the industry thinks

Miles Beale, Chief Executive, Wine and Spirit Trade Association (WSTA)

"It’s a breathtaking hike. No one will be toasting this record-breaking 4.55% RPI increase on top of rising inflation – most of all British consumers who will be paying for this. Instead of providing breathing space in a cost of living crisis, the Chancellor’s alcohol tax hikes will further suffocate British business and serve up nothing for consumers.

“The only way to give families and businesses some support in an economic crisis is to stop the hikes, look at the numbers, and listen to those being impacted. The old tactics are not working for anyone. Increasing alcohol duty is not boosting Treasury funds, but it is closing down businesses and pricing consumers out of a bit of joy in their shopping basket.

“If Government is serious about providing growth in every postcode, it has to stop piling on the pain for businesses and consumers across the country and show its support to the UK drinks sector."

Karen Betts, Chief Executive, The Food and Drink Federation (FDF)

“Food and drink manufacturing should be central to the Government’s growth and reindustrialisation agenda. But time and again, we are treated as an afterthought. The Treasury in particular has persistently failed to recognise the importance of food and drink manufacturing to jobs and prosperity across the length and breadth of the UK.

“This Budget offers nothing to ease the pressures food and drink manufacturers are under. Instead, one of the Chancellor’s flagship announcements, removing tariffs from some food and drink products, will have no meaningful impact on consumer prices. But it will undermine British factories and their workers, grappling with much higher costs, producing the same products.

“The Government has chosen not to extend energy support, available to other manufacturing sectors, to food and drink businesses, which would have helped to strengthen our sector in the face of overwhelming pressures. Our energy costs are double the European average, and this is hitting investment, jobs and growth. If government is serious about tackling the cost of living, there is plenty they can do. But today they have made a clear choice to do nothing.”

Foodservice Packaging Association

“There are some welcome measures in this Budget, particularly the support for energy-intensive manufacturers, investment and the hospitality sector, which remains an important customer for many foodservice packaging businesses. However, these measures need to be viewed against the considerable regulatory and commercial pressures already facing the packaging supply chain.

“The confirmation that mandatory certification of mechanically recycled plastic will be introduced for Plastic Packaging Tax purposes from April 2030 is a further significant development. The FPA supports measures that strengthen confidence in recycled-content claims and prevent businesses from gaining an unfair advantage through inadequate verification. However, certification must be practical, proportionate and consistent across domestic and imported packaging, recognising existing assurance arrangements wherever possible.

“Beyond the specific measures announced in the Autumn Budget, there remains an urgent ned to address the cumulative impact of Plastic Packaging Tax, packaging extended producer responsibility and the PRN/PERN system. Each has its own objectives, but businesses experience their combined effect on costs, administration, material choices and investment decisions. The introduction of the Deposit Return Scheme in October 2027 will add further obligations for businesses producing, distributing or selling in-scope drinks containers.

“The FPA supports the principle that producers should contribute to the costs of managing packaging waste. However, our own research into the growth of businesses operating within the packaging supply chain has raised important questions about whether all those with obligations under pEPR are being identified and held accountable. This work has helped secure greater engagement with government departments, including the establishment of monthly meetings with PackUK, where we continue to raise concerns about compliance gaps, transparency and the risk of costs being disproportionately borne by responsible businesses.

“We also need clearer evidence that the substantial sums being collected from producers are delivering measurable improvements in UK recycling infrastructure and performance. Producers should be able to see what their contributions are achieving.

“Within this budget government has signalled its commitment to improving industrial competitiveness and reducing unnecessary regulation. We would like to see those ambitions translated into a coordinated, evidence-led assessment of packaging policy, alongside immediate action to address compliance gaps and ensure that responsible UK businesses are not placed at a competitive disadvantage.

“Packaging manufacturers and distributors need confidence to invest in innovation, domestic production and more sustainable materials. That requires a regulatory framework which is credible and effective, but also fair, proportionate and predictable”.

Nick Mockett, Corporate Finance, Moorgate Capital

“From a packaging mergers and acquisitions point of view, the most important consideration is the budget’s impact on cost of capital. The OBR is forecasting that government borrowing will go up (an extra £65bn on £420bn to FY2030/32). Usually, the more you borrow, the more you have to pay to borrow. Currently, UK 10-year gilts are ~5.4% (versus ~4.4% in the Truss mini-budget era), compared with Switzerland ~0.5%, Germany ~3.35%, Spain ~4%, Greece ~4.3%, Italy ~4.5%, and France ~4.9%.

“If debt providers are getting a higher interest rate from lending ‘risk-free’ to the government, why would they not charge higher interest rates to businesses? This suggests that the cost of capital raised to run a business increases – not just the cost of debt, but also the cost of equity, as the risk-free interest rate forms the basis of the calculation financiers tend to use. It also suggests that when a business owner seeks to sell a business, it will be worth less. This is because acquirers discount the future cash flows of the target. Ceteris paribus, the higher the cost of capital, the greater the discount, and the less the business is worth.

“Prima facie, Founders Relief (Capital Gains Tax at 10% on £10m over lifetime) may be good news for entrepreneurs but early comments from tax experts suggest it will be difficult to meet the conditions to benefit. Company distributions reform in April 2028 should tighten rules on capital reductions, share buybacks, and demergers. This could constrain M&A activity and restructuring of businesses. It could also mean lower returns for business owners who exit.

“So, if you are contemplating selling a business, you may discover that finding common ground on enterprise value is more challenging and that when you have sold it, more of the return on investment goes to the government rather than the investors. The good news is that if you sell the business quickly, you may beat new rules. The other good news is that if you are acquisitive, the consideration paid for the target may be lower.”

Emma Verkaik, CEO, BCMPA

“The Government talks about delivering growth in every postcode, but this Budget overlooks many of the businesses already making that happen. This is by no means an easy option as business owners care deeply about the people they employ and the communities they support. Yet they are being pushed into increasingly difficult decisions, with pressures mounting and little hope of meaningful relief on the horizon.

“Manufacturing SMEs create local jobs, support UK supply chains and provide stability in communities throughout the country. They need the confidence to recruit, invest in new technology and compete internationally, yet many continue to face intense pressure from rising costs and regulation.”

Gillian Garside-Wright, Director of Consulting, Aura Global

“There’s a lot to welcome in today’s Budget, particularly the focus on easing some of the pressure on households and businesses, alongside encouraging investment and productivity. For the packaging industry, that investment piece is really important because businesses are being asked to manage significant regulatory change at the same time as investing in better packaging, technology, manufacturing and skills.

“However, if we want businesses to invest, innovate, and become more productive, we need to recognise that investment isn’t just new machinery. It’s also better data, digital capability, automation, packaging optimisation and the infrastructure needed to make circularity work commercially.

“There’s also a really important consumer point here. If businesses are simply faced with additional costs and limited opportunity to reduce them, inevitably there is pressure for some of that cost to move through the supply chain. At a time when Government is focused on easing cost-of-living pressures, we should be equally focused on making sure environmental policy incentivises change rather than simply adding cost to everyday products.”

Jo Stephenson, Managing Director, Think B2B Marketing

“It’s a decidedly mixed Budget for the industry, both in terms of what it does and does not do. There is some selective cost relief, and the general commitment to reducing red tape and admin should be applauded. However, other measures – notably the minimum wage increase and Plastic Packaging Tax rise – make existing cost pressures more acute. Other measures that many businesses advocated for, like the alignment of Capital Gains Tax and Income Tax, did not materialise – but neither did potentially challenging ones, like the new levy on gas bills.

“Whether the Budget is positive or negative really depends on where you sit in the supply chain. Many packaging converters and printers might find themselves ineligible for the most significant support measures, whereas material manufacturers, machinery producers, and waste management operators may qualify for help with electricity costs under the British Industrial Competitiveness Scheme.

“It was a Budget filled with tweaks and tinkering, but little to either boost or hinder growth.”

Martin Kersh, CEO, The Packaging Federation

The Packaging Federation welcomes the Government's recognition of the essential need to reduce unnecessary regulation, lower industrial energy costs and improve the competitiveness of British manufacturing.

The Chancellor's announcement of further measures to reduce administrative burdens on business, together with the establishment of a new Better Regulation Executive, represents an important opportunity to ensure that regulation supports economic growth while delivering its intended objectives. As things stand, EPR and other packaging regulations are imposing costs and complexity that, in our view, are discouraging business investment and diverting resources away from growing businesses and generating the profits the country needs.

Packaging is an essential enabling industry, supporting virtually every sector of the UK economy. Yet businesses throughout the packaging supply chain face significant and growing costs arising from Extended Producer Responsibility, Packaging Recycling Notes and an increasingly complex regulatory framework.

We particularly welcome the establishment of the Better Regulation Executive, bringing together HM Treasury and the Office of the Prime Minister and Cabinet, working closely with the Department for Business, Innovation, Science and Trade.

Given the scale and complexity of packaging regulation, we believe the packaging industry should have a direct voice in the Executive's work. The Packaging Federation therefore calls for a representative of the packaging community to be included in its industry engagement arrangements, helping to ensure that the practical and cumulative consequences of regulation are fully understood.

The Government's ambition to reduce the administrative cost of regulation by 25% is welcome, but achieving meaningful reductions in the burden on packaging businesses will require an urgent review of the EPR system. This is why the All-Party Parliamentary Group for Packaging in the Circular Economy is calling for an urgent review of the operation of EPR.

The Packaging Federation looks forward to working with the Better Regulation Executive and the Department for Business, Innovation, Science and Trade, and very much hopes that Defra officials will seek to ensure that the Budget's commitments translate into practical improvements for British business.

Neil Farmer, Founder and Owner, Neil Farmer Associates

"This was a budget of many small measures. A comprehensive department-by-department allocation of funding will be deferred to the 2027 Spending Review, so much is still to be revealed. This is clearly a holding, low-key budget.

“One of the most important features of the Statement was the announcement of £20.4 billion for the National Wealth Fund and Business Bank. The bank is wholly owned by the Department for Business, Innovation, Science and Trade, but operates independently. It is there to help UK small businesses survive, grow and prosper, and is good news for small packaging businesses looking for the finance they need to start or scale up.

“I am a supporter of AI and the benefits it can bring to the packaging industry, so I applaud the £140 million investment announced for AI firms. There is also a new deal for datacentres and a new datacentre covenant. Growth in AI is important to our country and investment of this sort must be welcomed.

“Regarding wealth creation, a Founders Relief on Capital Gains Tax is good news. As I know from my own experience when setting up and running Neil Farmer Associates over the last 25 years, any tax saving is important at the start of a new business. The Tax-Free Threshold for new ventures is being raised to £3,000, which is beneficial to start-ups and entrepreneurs.

“The new Growth Fund for Regional Mayors encourages more monies to be locally retained. The Chancellor plans for 100% business rates to be devolved and locally retained by the end of the decade. The business rate burden for small businesses, particularly in the retail sector and high streets, including foodservice and foodservice packaging companies, has been a major barrier to growth, so I hope this measure regarding the rates will be delivered over the next three years – too many companies have struggled and been forced to close down because of the business rate burden."

Andy Bagnall, Director General, British Soft Drinks Association (BSDA)

“With our members already facing significant economic headwinds, we welcome the Budget measures that provide breathing space for businesses and consumers, particularly business rates relief for hospitality and the high street. Soft drinks are integral to UK high streets, accounting for one in five convenience store purchases.

“We had hoped to see movement on the decision to apply VAT to unredeemed deposits under the UK’s Deposit Return Scheme, which launches in 11 months’ time. Applying VAT could divert funding away from recycling infrastructure and increase costs for consumers. The BSDA has pressed ministers on this issue for several years and will continue to push for progress in the coming weeks.

“It's positive that the Budget made no unexpected changes to the Plastic Packaging Tax, but its effectiveness should now be reassessed as part of a wider review of packaging policy, ensuring that it works alongside the Deposit Return Scheme, that the Packaging Recovery Notes system is overhauled, and that hospitality businesses are not paying twice for packaging waste management.”

Adam Herriott, Senior Specialist, WRAP

“We welcome the Budget’s increase in Plastic Packaging Tax in line with inflation, maintaining the incentive to use recycled plastic in packaging. Though we know that alone is not necessarily enough to bring about change.

“HMRC’s analysis, published alongside the budget, shows that UK Plastics Pact members and associates consistently outperformed non-members in meeting the 30% recycled-content threshold. This reinforces the value of voluntary agreements in helping businesses move faster and further than policy alone, progress we will build on through the UK Packaging Pact.”

Mohamed Elkhalifa, Industrial & Public Affairs Manager, British Plastics Federation (BPF)

“Many of our members will see little change in the costs that are holding back investment. Chemicals and ceramics now have dedicated support funds; plastics, the UK’s third largest manufacturing sector by employment, has none. It is imperative that government recognises plastics as a foundation industry.

“Admittedly, all the ills of the country cannot be addressed in one fell swoop, and much more remains to be done. There was some advance on reducing energy costs, but we need to go further to make real inroads into the extremely high energy bills faced by industrial companies. At long last, it was good to see mandatory certification of mechanically recycled plastic in packaging confirmed. This is something we have been calling for since the tax was introduced.

“Nevertheless, government needs to continue an in-depth dialogue with industrial sectors. The BPF will continue to press ministers for the genuine partnership between government and industry that this moment demands.”

Paul Barber, Managing Director, James Cropper Paper & Packaging

“The Budget is a timely reminder of the pressures facing manufacturers in Britain. Businesses like ours continue to balance rising costs with the need to invest, improve productivity and compete successfully in international markets.

“At James Cropper, our focus is firmly on the areas where British manufacturing can create real value. That means investing in our people and assets, developing specialist products, and building on the expertise, innovation and provenance that have been developed here in Cumbria over generations.

“Initiatives such as Made in Britain help shine a light on that wider story and encourage conversations about the value of making things here in the UK. Measures that help create a more competitive environment for manufacturing are welcome, particularly where they support investment, skills and long-term resilience.

“Ultimately, our priority is to keep investing in the people, knowledge and capabilities that allow businesses like James Cropper to manufacture successfully in Britain. If we want British manufacturing to thrive for generations to come, creating the conditions that enable businesses to invest with confidence will be essential.”

Martin Taylor, Managing Director, VPK Packaging UK & Ireland

“The Budget is a mixed one for manufacturers. There are positives in the increased first-year allowance for qualifying investment and the additional focus on apprenticeships and skills, but those measures sit alongside higher employment costs and continued pressure from energy and waste.

“The headline support on industrial electricity is also less straightforward than it first appears, with eligibility determining whether many manufacturers will benefit at all.

“For packaging businesses and their customers, the overall picture is therefore one of selective support rather than a broad reduction in operating costs. The key question will be whether the measures are enough to give manufacturers the confidence to keep investing in productivity, equipment and skills.”

Josh Brooks, Divisional Director Packaging, Easyfairs

“The Budget affects every link in the supply chain differently. Our perspective as event organisers is that those links are closely connected. A material supplier’s ability to invest, a converter’s production costs, and a brand’s packaging requirements all influence what the wider industry can achieve.

“That makes cross-industry collaboration particularly important when investment budgets are stretched. A decision to change a material, increase recycled content, or introduce new technology should be looked at holistically, which is why we have ensured Packaging Innovations & Empack covers every step of the packaging journey.

“Government has an important role in creating the conditions for investment. Our role is to help businesses build the relationships that turn these conditions into practical action. Across our packaging events, that means creating opportunities to compare experiences, challenge assumptions, and find partners with complementary expertise. Budgets change every year, but it’s these connections that build true resilience and ensure businesses can adapt in the long term.”

Three takeaways from the print and packaging industry

Support is welcome, but does it reach where it’s needed?

Some in the industry welcome the relief and investment measures announced. Others question how much help will actually reach businesses under the most intense pressure. The nuances of eligibility and practical delivery will determine whether headline commitments translate into meaningful support.

Investment needs to extend across the business

Equipment is just one part of the productivity picture. Many industry responses also highlight the importance of skills, people, digital systems, and recycling infrastructure as a single unified ecosystem. Businesses need the financial room and confidence to invest across all of these areas while still remaining competitive.

Tax and regulation need to work together

The snap reaction largely calls for a more coordinated approach to packaging policy, energy costs, and business administration. A recurring concern is that while new compliance requirements are often manageable in isolation, their cumulative costs and complexity can absorb resources needed for innovation and increase pressure on customers and consumers.

What does the future hold?

For a Budget so widely described as boring and inconsequential, it asks some very complex questions of print and packaging businesses. Where will investments make the greatest difference? How can you prove the value of sustainability decisions? How should costs and investment be shared across the supply chain? Which parts of the business will customers even need in five years?

The answers to these questions will be different depending on where a business sits in the supply chain, but they do need to be answered. And there’s no better place to find those answers than Packaging Innovations & Empack.

As the effects of the Budget ripple into 2027 and far beyond, join thousands of visitors and hundreds of experts exhibitors and speakers across two days at the NEC Birmingham to find solutions to problems across the entire packaging journey.

Register for a free ticket today to attend the biggest Packaging Innovations & Empack event yet on 24 & 25 February 2027.