The Plan for Change and Oxford-Cambridge Growth Corridor is intended to kickstart economic growth
The plans for the Oxford-Cambridge Growth Corridor are expected to add £78bn to the economy as Reeves vows to go “further and faster” than ever before.
The corridor will see projects to connect the two cities further, bringing growth to the regions and settlements in between, as well as financial support for industry, science, and technology in the area as work is undertaken to create a “European Silicon Valley”.
Reeves emphasised the need for economic stability to avoid “a repeat of the Liz Truss mini-budget” and to drive economic growth in the UK. She also said that development in the relationship between the US and UK, and a “reset in our relationship with the EU” will be vital to British growth and prosperity.
She also re-emphasised the importance of the National Jobs and Career Service and Skills England.
Several investments have been announced
Reeves announced several new investments in her speech, including £65m to upgrade the country’s electric vehicle (EV) charging network, and £28m in raw materials and metals for solar panels, wind turbines, and EVs.
She also promised a £30bn investment into bringing an extra 16 gigawatts of clean power in offshore wind power through designating new marine protected areas in areas such as Yorkshire and East Anglia.
An updated investment rule was also announced, raising the average invested GDP from 1.9% to 2.6%.
Old Trafford is still set to receive renovations as part of the Plan for Change.
Reeves announced that the Environment Agency would lift any objections to development around Cambridge, allowing up to 4,500 new homes and community spaces, including schools and leisure facilities, as well as new laboratory space will also be opened in Cambridge City Centre.
Water companies will also unlock £7.9bn in infrastructure investment over the next half-decade, including nine new reservoirs.
Transport in the Oxford-Cambridge area is also set for an upgrade with investment into East-West Rail, and new services between Oxford and Milton Keynes, and upgrades to the A428 between Milton Keynes and Cambridge. A new East Coast Mainline station in Tempsford was also announced.
A new Cambridge Cancer Research Hospital was mentioned as part of the New Hospitals Programme.
East Midlands airport was also announced to see construction of a £1bn advanced manufacturing and logistics park.
Culham is planned to have an AI growth zone for the construction of data centres as part of the growth corridor.
Heathrow Airport was also confirmed to have government support for a third runway, which has been a controversial subject for a long time. A £63m investment into clean aviation fuel development was also announced.
Sir Patrick Vallance has been appointed as the senior leadership of the revived plans for the Oxford-Cambridge Growth Corridor.
Construction industry reacts to Oxford-Cambridge Growth Corridor
Reeves said: “Oxford and Cambridge offer huge potential for our nation’s growth prospects. Only 66 miles apart, these cities are home to two of the best universities in the world, and the area is a hub for globally renowned science and technology firms. This area has the potential to be Europe’s Silicon Valley.
“To make that a reality, we need a systematic approach to attract businesses to come here and grow here. At the moment, it takes two-and-a-half hours to travel between Oxford and Cambridge by train. There is no way to commute directly by rail from places like Bedford and Milton Keynes to Cambridge, and there is a lack of affordable housing right across the region. In other words, the demand is there, but there are far too many supply-side constraints on economic growth here.
“The Ox-Cam Arc was originally launched in 2003, over twenty years ago, but the project was then dropped by the previous government in 2021. We are not prepared to miss out on the opportunities any longer.”
Justin Sullivan, president of RICS, said: “Rachel Reeves is correcting the course of Labour’s growth journey. The tough decisions have been made; now it’s time to press ahead with much-needed reforms.
“Since the Budget confidence amongst companies in the built environment has tailed off spelling bad news for housing and infrastructure delivery – particularly among SMEs, the backbone of construction supply chains, whose ability to borrow, grow and deliver disproportionately relies on sentiment across the economy. These have combined to undermine the positive impact of changes to the National Planning Policy Framework, announced in December. But Rachel Reeves’ speech today will help reset the mood.
“By streamlining decisions on critical infrastructure projects and slashing red tape, policymakers should achieve their ultimate aim of economic growth by capturing the potential of high-growth, knowledge-intensive ecosystems like the Oxford-Cambridge Arc.
“While Reeves is focusing on the biggest, most newsworthy projects – like the East-West Rail link – her department must work with MHCLG and local councils to realise the strategic benefit of improving more local, smaller scale infrastructure projects – like local road networks, water utilities, and public transport links. Part of this focus must be on addressing the skills crisis that affects every corner of the built environment.”
Melanie Leech, chief executive of the British Property Federation, said: “We fully support the Chancellor’s focus on removing the barriers to growth and welcome today’s speech as a necessary re-affirmation of the Government’s commitment to action.
“Investors need certainty and a reason to put their money into the UK – the planning system has been an investment deterrent for too long. The Government is absolutely right to remove barriers to the delivery of new homes and essential infrastructure by streamlining decision-making, encouraging development by transport hubs, simplifying the planning regime through a greater use of Local Development Orders and re-focusing the role of statutory consultees.
“The property sector strongly supports the introduction of more strategic planning. Such ‘larger than local’ planning will enable both housing and employment uses to be holistically planned across local boundaries, which will be hugely beneficial to local and national economies. However, while these intentions are good, without adequate resourcing of planning departments, these ambitions will falter. The Government needs to plan for more than 300 planners and allow planning departments to fully recover their costs while ring-fencing the income to protect the service.
“We welcome the new mandate for the National Wealth Fund and Office for Investment to work with local leaders to develop tailored investment strategies and deliver a pipeline of incoming projects linked to regional growth priorities.
“The BPF has long argued for pension reform that would enable pension schemes to more easily invest in real estate. Increased flexibility on how defined benefit pension funds can invest is welcome and will enable this huge pool of capital to be more readily deployed into renewing the UK’s built environment.”
Lord Hutton, chair of the Association of Infrastructure Investors in Public Private Partnerships, said: “The Chancellor is right, but it’s impossible to plug the maintenance hole or build new infrastructure without bringing in the private sector.
“Every other western country uses a similar approach to public private partnerships , which the UK pioneered, but then cancelled in 2018.
“We’re now a low investment nation: since 2000 investment has averaged 2.5% of GDP, less than two-thirds of the OECD average. If we are to go for growth, we need a new vision for private investment in our social infrastructure.”
Robert Colvile, director of the Centre for Policy Studies, said: “The vast bulk of the Chancellor’s speech was hugely welcome – and indeed echoed arguments the Centre for Policy Studies has been making forcefully for years. She is right that growth needs to be the absolute priority, that excessive and often conflicting regulation has held back business, that we need to redeploy pension capital, and that we need to build houses, factories, roads, railways and reservoirs. The Chancellor has even adopted proposals by the CPS’ Samuel Hughes – in partnership with UK Day One – to build a major new town at Tempsford, alongside a renewed commitment to the Oxford-Cambridge Arc, which we have long championed.
“In short, those who want Britain to be a more prosperous and more dynamic country should cheer on every word. But there are two major caveats.
“First, Labour’s rhetorical support for growth needs to be matched by action – whether that is on getting shovels in the ground for the Lower Thames Crossing or actually delivering the planning reforms we need to unlock housing. Because we have heard much of this before.
“Second, the Chancellor’s support for growth comes off the back of a Budget that has done a huge amount to damage it. The Chancellor said she wanted to make Britain the best place in the world to be an entrepreneur – yet her own tax decisions have made that impossible. And in terms of damaging regulation, the Government’s own impact assessment confirms that its new union-friendly rules on workplace regulation will hit businesses with billions in further costs.”
Roger Mortlock, CPRE chief executive, 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. Recent research from the New Economic Foundation indicates that airport expansion will drive significant tourism revenue abroad, not bring it to the UK. To create the jobs of the future we need investment in low-carbon industries and transport, not more unsustainable expansion of the UK’s airports.
“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.
“The proposed Lower Thames Crossing would also drive-up levels of unsustainable travel at a time when funding should be directed into sustainable public transport instead. CPRE Kent has highlighted how the crossing’s environmental and economic impacts on the local area would far outweigh any supposed benefits.
“We welcome the government’s plan to support the construction of more homes close to existing transport hubs, particularly in our towns and cities. Provided that they are genuinely affordable and built on brownfield land, these homes could help unlock growth by providing sustainable places to live close to where people already live, work and go to school.
“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.
“It’s clear we’ve got to build a clean energy grid fit for the future but the best way to achieve this is with local communities involved from the start.
To speed up the planning system, the government should deliver on its commitment to fund hundreds of new planning officers.
“The UK could learn from countries such as Ireland and Australia, which involve communities in decision making from the beginning, reducing the need for lengthy and expensive legal processes without eroding democracy. For everyone’s sake, we should be building consensus, not dismissing people with real ideas and solutions as “blockers.”
Dave Seed, managing director of Qube Residential, said: “Rachel Reeves was met with chants of ‘growth, growth, growth’ as she delivered her much anticipated speech on economic growth. While I was eager – if somewhat also apprehensive – to hear her plans for growing the economy, one notable point was her focus on increased investment in infrastructure. Improved transport links and infrastructure could boost property values, potentially making some areas more attractive to renters and investors alike, but there are no guarantees. This promise of economic stability is reassuring in theory, yet whether it materialises remains to be seen. Developers and landlords may find some comfort in this pro-growth stance, but many will likely remain hesitant to make any major moves just yet.”
