Heathrow, 'Europe's Silicon Valley' and Old Trafford: Reeves' key plans to boost the UK's economy
The plans for a new runway received parliamentary approval in June 2018 but faced legal challenges, ITV News' Business and Economics Editor Joel Hills reports
Rachel Reeves has confirmed the government is backing the controversial expansion of Heathrow Airport during a major speech on the government's strategy to grow the UK's economy.
The chancellor announced the widely-expected plans along with a raft of other big infrastructure projects in a bid to boost Britain's flagging economy.
Insisting she is willing to "fight" to boost growth, she also outlined plans for new transport links, a super corridor between Oxford and Cambridge which she said could become 'Europe's Silicon Valley', and major redevelopment of the area surrounding Old Trafford.
Reeves said economic growth "isn’t simply about lines on a graph" and is the government's number one mission, insisting it is needed to cut hospital waiting lists, get more police on the streets and meet climate targets.
“It is about the pounds in people’s pockets, the vibrancy of our high streets and the thriving businesses that create wealth, jobs and new opportunities for us, for our children, and grandchildren," she told the audience.
“We will have succeeded in our mission when working people are better-off.”
However, critics have already raised concerns that most projects are based in London and the south east, with few options to boost other areas further north of England.
Heathrow, Gatwick and Luton airports expansion
Reeves said the case for a third Heathrow runway was “stronger than ever” but insisted the plans would be delivered in line with the UK's climate commitments in a bid to quell criticism from opponents who believe otherwise.
"I have always been clear that a third runway at Heathrow would unlock further growth, boost investments, increase exports and make the UK more open and more connected," she told the audience.
"And now the case is stronger than ever because our reforms to the economy, like speeding up the planning system and our plans to modernise UK airspace, means the delivery of this project is now set up for success."
The government has asked for proposals on the third runway to be brought forward by the summer, after which the plan will face further hurdles before work can begin.
The plans received parliamentary approval in June 2018 but faced legal challenges. The airport would need to apply for a Development Consent Order to go ahead with the project.
This means there is no timeline for when a third runway could open, but it is likely to be well into the 2030s.
The scheme would have a major impact on the local area, with hundreds of homes demolished and villages such as Harmondsworth and Longford likely to be partly or wholly demolished.
Green campaigners will be unhappy about the announcement, while Mayor of London Sadiq Khan said he doesn't support a new runway and Labour donor Dale Vince argued it would undermine the UK’s climate change commitments while providing “the illusion of growth”.
Reeves also backed expansion plans for Luton and Gatwick Airports.
Gatwick Airport wants to bring its second, emergency runway into routine use for take-offs by smaller aircraft, providing a major boost in capacity and resilience.
The airport says construction could start this year - if signed off by the transport secretary - and be completed by the end of the decade.
Luton Airport wants the limit on its annual number of passengers to be raised from 18 million to 32 million. This would involve expanding its existing terminal and building a second terminal.
Redevelopment of Manchester United's Old Trafford
The government reiterated its backing of Mayor of Greater Manchester Andy Burnham's plans to redevelop the area around Manchester United’s football stadium Old Trafford. It will include residential, transport and entertainment developments.
Manchester United is eager to create a new venue by either redeveloping its current stadium to increase capacity to 87,000, or build a new ground which could hold 100,000 fans. It will decide on its preferred option “ahead of the summer”.
Burnham said a redeveloped Old Trafford will be “the global capital of football” for the 21st century and the benefits "will be felt far and wide" across the country.
Oxford-Cambridge corridor: 'Europe's Silicon Valley'
Among other measures announced was a 70-mile growth corridor between Oxford and Cambridge, which the chancellor hailed as having “the potential to be Europe’s Silicon Valley” with a boost for railway links between the two cities.
The chancellor said backing for housing, transport and other investment in the Oxford-Cambridge corridor would add £78 billion to the UK’s economy by 2035.
Oxford will also get a new growth commission aimed at helping boost the city’s economy, following a similar initiative in Cambridge.
As part of the troubled new hospitals programme which was started by the Tories in power, the government will also now prioritise a new Cambridge cancer research hospital.
The hospital will bring together Cambridge University, Addenbrookes Hospital and Cancer Research UK.
East West Rail
The East West Rail scheme involves boosting railway links between Oxford and Cambridge with new and upgraded lines.
The scheme has three stages, with initial services from Oxford to Bletchley and Milton Keynes scheduled to begin this year. The other two stages are reliant on government funding and approval.
These involve services being extended from Oxford to Bedford, and then from Oxford to Cambridge via Bedford and Bletchley.
A new railway station at Tempsford, Bedfordshire, would provide connections between the East Coast Main Line and East West Rail.
Homegrown clean power
Reeves said the government is removing barriers to deliver 16 gigawatts of "offshore wind by designating new marine protected areas to enable the development of this technology in areas like East Anglia and Yorkshire, crowding in up to £30 billion of investment in homegrown clean power."
She also announced two new investments from the National Wealth fund. They are £65 million to expand Connected Kerb's electric vehicle charging network across the UK and £28 million for Cornish Metals to help provide raw materials for solar panels, wind turbines and electric vehicles.
The chancellor said this will support "growth and jobs in the south-west of England," adding: "There is no trade-off between economic growth and Net Zero - quite the opposite."
South Yorkshire airport city
Reeves said the government will work with regional leaders to “recreate South Yorkshire airport city”.
“The last government stood by as Doncaster Sheffield airport was closed by its owner despite the overwhelming support for it to stay open," she said.
“It now sits idle, despite the potential to drive jobs and growth across the north.
“So, I can announce today that we will work with Doncaster Council and the Mayor of South Yorkshire Oliver Coppard to support their efforts to recreate South Yorkshire airport city as a thriving regional airport.”
Nine new reservoirs
New reservoirs will be built near Abingdon in Oxfordshire and in the Fens near Cambridge to quash fears of a water shortage as new homes are built.
They will be among nine new reservoirs built as the Government has agreed for water companies to invest £7.9 billion to improve infrastructure.
Lower Thames Crossing
The government will also work with the private sector to build the Lower Thames Crossing, Reeves announced, which will be a new £9 billion road crossing between Kent and Essex.
It would connect the A2 and M2 in Kent to the A13 and M25 in Essex via a 2.6-mile long tunnel under the Thames, which would be the UK’s longest road tunnel. This is aimed at reducing congestion on the Dartford Crossing.
Watch Rachel Reeves' key speech in full:
Reeves said she is willing to "fight" for economic growth and that the UK has for too long "accepted low expectations and accepted decline".
“The productive capacity of the UK economy has become far too weak," she continued.
“Productivity, the driver of living standards, has grown more slowly here than in countries like Germany or the US. The supply side of our economy has suffered due to chronic under-investment and stifling and unpredictable regulation, not helped by the shocks that we have faced in recent years.
“For too long, politicians have lacked the courage or the strength to confront these challenges.
“When presented with a choice, they have not prioritised growth. Instead, they have accepted the status quo and they have been the barrier, not the enablers of change.”
Business Secretary Jonathan Reynolds warned this morning that the UK risks being “left behind” if it does not go for growth.
“We simply cannot afford to say we don’t build reservoirs any more, we don’t build railways, we don’t build runways. That’s not good enough, we will be left behind,” he told BBC Breakfast.
Ahead of the speech, Sir Keir Starmer vowed to “clear out the regulatory weeds” to encourage growth in a Times newspaper opinion piece.
The prime minister added: “In the 1980s, the Thatcher government deregulated finance capital. In the New Labour era, globalisation increased the opportunities for trade. This is our equivalent.”
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