29.01.2025

Today, Chancellor Rachel Reeves outlined her plans to kick-start growth in the UK economy, making a number of infrastructure-focused pledges, including backing proposals for a third runway at Heathrow Airport.

Announcements were also made on relaxing some environmental planning rules to allow developers to build more freely, something which manufacturers and other businesses looking to expand their operations will welcome. While Government guidance on building major projects is set to be reviewed in order to support investment opportunities across the country.

Improving infrastructure and connectivity in the north of England and city regions was another key priority outlined by the Chancellor, alongside the Government's aims to establish "Europe's Silicon Valley" between Oxford and Cambridge which, if successful, could add £78bn to the UK economy in the next 10 years.

The Chancellor also reiterated the importance of the industrial strategy, set to be released in the spring, and recognised Make UK's key role in keeping it on the agenda, despite varying levels of government support in recent years.

Commenting on the speech by the Chancellor today, Stephen Phipson, Chief Executive of Make UK, said:

“Industry will welcome this upbeat, forceful and positive statement from the Chancellor which helps inject a much-needed reset into the debate. In particular, companies have become very frustrated at the UK’s longstanding, sclerotic approach to planning reform, energy and infrastructure investment and broadband connectivity. The Chancellor’s commitment to tackling these issues and removing the barriers facing companies who want to invest will be central to enabling growth and economic success. 

“However, there is little doubt that the next twelve months are set to be immensely challenging in a difficult and, ever changing, international environment. In this context, shifting the dial on boosting growth becomes far more complex. Furthermore, there is a clear contradiction between implementing laudable measures such as planning reform and infrastructure investment whilst, at the same time, applying a handbrake through measures which will inevitably reduce investment and freeze recruitment. This is a clear dichotomy that Government needs to resolve internally about boosting growth and, the trade-offs this will mean if it is to deliver these welcome but, ambitious, commitments. 

“As a first step, however, Government must now set out as a matter of urgency the immediate and significant priorities to boost advanced manufacturing as part of its industrial strategy given the very clear benefits to the economy overall this will bring. Make UK looks forward to helping deliver on this critical objective.” 

Commenting on the planned third runway expansion at Heathrow Airport, Stephen Phipson added:

“Heathrow is the UK’s only hub airport, with over 92% of the global economy within reach of a direct flight from Heathrow and it is the country’s largest port by value. Last year, over £200 billion of British trade passed through Heathrow - more than double all other UK airports put together. Its unique mix of passenger and freight routes make it a vital infrastructure asset and one which is essential to power economic growth.

“However, Heathrow is almost at capacity and without increasing that capacity, other European hubs will overtake it. Today’s announcement is vital if we are to drive economic growth - more connectivity with the rest of the world provides British exporters with more markets to sell their goods and drives inward investment to every part of the country.”