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1 week ago
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Rachel Reeves has confirmed that the government will throw its weight behind a third runway at Heathrow, claiming it will make the UK “the world’s best-connected place to do business”.
In a speech in Oxfordshire on her plans for national growth, the chancellor said: “We cannot duck the decision any longer.” She said the London hub “connects to emerging markets all over the world, opening up new opportunities for growth”.
Reeves claimed the case for expansion at Europe’s busiest airport was “stronger than ever”. She insisted expansion would be achieved within the government’s carbon emissions targets, claiming: “We are already making great strides towards cleaner and greener aviation.”
Confirmation of the government’s plans for Heathrow is likely to spark fury among environmental campaigners, who argue it will make it impossible for the UK to meet its carbon emissions targets.
The speech set out a range of “supply-side” policies Reeves said would kickstart growth, from sweeping away environmental regulation to bankrolling transport projects.
The chancellor also underlined the importance of establishing a smoother trading relationship with the EU, which she said would be in the “national interest”. She said the business secretary, Jonathan Reynolds, present at Wednesday’s speech, would soon travel to India in pursuit of a new trade and investment deal.
Reeves is under pressure to deliver on Labour’s promise of a stronger economy: the latest official figures suggest that growth ground to a halt in the second half of 2024.
The chancellor defended her controversial decision to impose a £25bn increase in employer national insurance contributions in her October budget.
There had been knock-on effects for British businesses, she conceded – but her critics had not put forward an alternative. “I accept that there are costs to responsibility. But the costs of irresponsibility would have been far higher: those who opposed my budget know that, too.”
The chancellor’s speech was given to an audience of business leaders at a vast factory in Oxfordshire operated by the German company Siemens, which makes the magnets for use in medical scanners.
As well as Reynolds, several other cabinet ministers were in the audience, including the environment secretary, Steve Reed, the work and pensions secretary, Liz Kendall, and the transport secretary, Heidi Alexander.
Reeves was keen to highlight the possibilities of creating a “growth corridor” between the research hubs of Oxford and Cambridge – including reopening a rail line between the two university cities, via Bedford.
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“At the moment, it takes two and a half hours to travel from Oxford to Cambridge by train,” she said, adding that there was also a lack of affordable housing across the region. “We are going to fix that.”
Reeves also listed a barrage of other projects the government is supporting across the UK, from Trans Pennine rail to efforts to regenerate and reopen Doncaster Sheffield airport and create a new mass transport system for West Yorkshire.
The chancellor said she had been “genuinely shocked” about the slow pace of decision-making on planning. She highlighted a solar farm in Cambridgeshire that was first raised with government in 2021, adding: “It’s ridiculous.”
She promised a planning and infrastructure bill to be laid in parliament this spring, which would “fundamentally reform our approach to environmental regulation”, making it harder to object to new developments.
