The Chancellor has laid out her vision for growth after a turbulent start to her tenure marked by controversy and almost no growth.
In a wide ranging speech she mapped out a future and said “low growth is not our destiny but growth will not come without a fight.”
Well that’s for sure as she gave her backing to the controversial third runway at Heathrow, something which will get her into a fight with environmentalists and London’s Mayor. However Ms Reeves said it was vital for growth and would be built with net zero commitments in mind.
She said: “I can confirm today that this government supports a third runway at Heathrow and is inviting proposals to be be brought forward by the summer. We will then take forward a full assessment through the airport national policy statement.
“This will ensure that the project is value for money and our clear expectation is that any associated service transport costs will be financed through private funding.
It will ensure that a third runway is delivered in line with our legal, environmental and climate objectives.”
Rachel Reeves
Silicon valley in the south
The Chancellor also pledged to transform the area between Oxford and Cambridge into “Europe’s Silicon Valley,” unveiling funding for transport, housing, a university innovation hub and a new hospital to drive growth in the region.
Green energy, EVs and water
Green energy projects are also receiving backing through the National Wealth Fund. The government will invest £65m into expanding an electric vehicle charging network and £28m into Cornish Metals to secure key raw materials for solar panels, wind turbines and electric vehicles.
The water sector also got a boost with the government approving £7.9bn in funding for nine new reservoirs, allowing water companies to push forward long-delayed projects. New guidance on major infrastructure will also be introduced to ensure fair investment across all regions.
With funding spanning technology, infrastructure and energy, the government is positioning itself to drive innovation and economic growth—but questions remain over delivery and long-term impact.
Reaction to her vision of the future has been as mixed, as expected.
About time…
Sam Richards, CEO of pro-growth campaign group Britain Remade, backed the plan: “For too long, Britain has failed to build the new homes, clean energy infrastructure, and transport links we desperately need. Today’s speech contained concrete steps towards changing that.
“The Chancellor is absolutely right to argue that by making it easier to build we can both get richer and reach net zero carbon emissions.”
Rico Wojtulewicz, Head of Policy and Market Insight at the National Federation of Builders also backed the pledge from the Chancellor to cut planning barriers.
He said: “An unwillingness to build reservoirs, treatment plants, pylons and power stations has led to poor water quality and rising energy costs. Delays to road, rail, and airport projects have scaled back ambitions, increased transport emissions and stifled clean energy innovation.
“Opposition to commercial premises, especially in regional plans, has deterred business from investing, expanding, and forming partnerships.
We must accept that there is no growth without business and innovation, and no business without a connected world, workforce, and investment. The Chancellor is correct to return her focus to fixing the primary barrier to UK growth: the broken planning system.”
Cautionary welcome…
The money people also seemed positive, with the UK Sustainable Investment and Finance Association’s CEO James Alexander saying: “The Chancellor’s recognition of net zero as a major economic opportunity is encouraging. She is right to identify planning regulation as stifling investment into the UK. The UK’s prohibitively slow and opaque planning system has discouraged the flow of billions in private capital into key UK growth areas like renewable energy, electric vehicles, and nascent green technologies.
“But not all regulation is anti-growth. The UK stands to gain more from maintaining and furthering our leadership posture in sustainability, especially at a moment where other major economies risk alienating green investment by signalling regressions on climate ambitions.”
The Aldersgate Group – an alliance of business, academia and civil society leaders for a sustain economy – gave the plans approval if it continued net zero focus.
Executive Director Rachel Solomon Williams stated: “The Chancellor rightly said that net zero will be at the heart of future growth and that the UK is uniquely placed to lead.
“It’s now crucial that the government follows through with real change, enabled by policy. This includes working to ensure that the modern industrial strategy maximises the potential of low-carbon industry to drive growth.
“This can build on welcome new investments in electric vehicle infrastructure and solar supply chains, alongside measures to support further offshore wind development. “
Growth paid for with emissions?
Environmental Audit Committee Chair, Toby Perkins MP, cautioned against building without concern for the emissions impacts of these projects.
He said: “I welcome the Chancellor’s commitment that any proposal must meet strict rules on noise, air quality and carbon emissions but more detail is desperately needed on how this will be achieved.
“Aviation could be the largest emitting sector in the UK by 2050 and noise and air pollution from Heathrow already has a significant effect on the urban environment of west London.”
Wrong in all ways…
But the CPRE said Ms Reeves had made the wrong decisions and backed the wrong levers for growth.
CEO Roger Mortlock said:
The single biggest threat to the countryside is climate change. If the government expands Heathrow, Luton, City and Gatwick airports, the increase in carbon emissions will make a mockery of its commitment to reaching net zero by 2030. Airport expansion will do nothing to boost UK growth.
“There has been no net increase in air travel for business purposes or in jobs in air transport since 2007.
“CPRE local groups in Bedfordshire, Hertfordshire, London and Sussex have been at the forefront of campaigns to prevent further airport expansion. If implemented, these proposals would have a devastating impact on some of the UK’s most valuable agricultural land, vital wildlife habitats and green spaces close to millions of people’s homes.
“Building more homes close to transport hubs must not be allowed to undermine the Green Belt, one of this country’s most successful spatial protections with huge potential to help address the climate and nature emergencies.”
The Chancellor has made a speech, now it is over to the markets and business to see if they believe these levers will make growth – without compromising net zero.
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