Rachel Reeves, Britain’s chancellor, with an uphill task when she arrived at the Swiss alpine town to court investors at the annual meeting of the World Economic Forum. She met a raft of Wall Street bosses, asset managers, and pension funds to convince them that Britain is open for business and that she is single-mindedly focused on growth.
New reservoirs
The government has approved £7.9bn in investment for water companies to build nine new reservoirs, including a new Fens Reservoir to serve Cambridge. There will also be a new Abingdon Reservoir near Oxford. Officials agreed on water resources management plans with water firms in December, with the first reservoirs due to open in 2028, and 2050 as the completion date for all projects.
Silicon Valley
Reeves vowed to build “Europe’s Silicon Valley” between Oxford and Cambridge, with policies aimed at boosting the region’s growth, saying they would add £78bn to the UK economy in the next 10 years.
Funding has been confirmed for transport projects, including new services on an East-West Rail line beginning this year – reviving plans shelved by Boris Johnson in 2022. She also promised an upgrade on the A428 between Milton Keynes and Cambridge. The University of Cambridge will open an innovation hub in the city center, which will be built alongside 4,500 new homes and schools after the Environment Agency dropped its opposition.
Heathrow expansion
Reeves confirmed the government is backing plans to build a third runway at Heathrow Airport, arguing it could create 100,000 jobs.
The plans received parliamentary approval in June 2018 but have been stuck in limbo after legal challenges ever since. She invited Heathrow to submit plans to expand the airport by the end of the summer, but promised the government would only sign them off if they were “in line with legal environmental and climate objectives”.
The government has already backed the expansion of City Airport and Stansted Airport around London. A decision to expand Luton Airport and build an emergency runway at Gatwick Airport will be delivered soon, she promised. The government will work with local authorities to reopen the Doncaster Sheffield Airport, aiming to turn it into a thriving regional hub.
There will also be a new partnership between Prologis and Manchester Airport Group that will build a new advanced manufacturing and logistics park, resulting in £1bn of investment and 2,000 jobs, Reeves said. Reeves later said a third runway could be built by 2035, however, others believe it will be closer to 2050.
Approvals for new towns are expected soon as the government has already received proposals along the rail with 18 submissions for sizeable new developments. A new Cambridge Cancer Research Hospital will also be prioritized.
Lord Patrick Vallance, the ex-chief scientific adviser to the government and now a Labour Minister, will be in charge of overseeing the project. Governments of all stripes have been looking at creating large-scale housing projects in the so-called Oxford-Cambridge Arc since at least 2003. Various projects gained support under Johnson, Theresa May, and Rishi Sunak – but were killed off by funding concerns and local opposition.
The original plans had promised the new rail line would be completed by 2030 and one million new homes and jobs delivered in the area by 2050.
Changing infrastructure rules
Government guidance on building major projects will be reviewed in order to support investments outside of the wealthy and productive south-east of England, Reeves said.
“This means that investment in all regions is given a fair hearing by the Treasury that I lead,” she said.
This will work alongside other major changes set out in the government’s upcoming Planning and Infrastructure Bill.
Redevelopment of Old Trafford
One of the projects to benefit is plans to redevelop Manchester United‘s Old Trafford football stadium.
Manchester United are set to make a decision by the end of the season on whether to redevelop the existing stadium into an 87,000-capacity venue or build a brand-new 100,000-capacity ground. The club said it would make the final decision by the summer. The Old Trafford scheme is expected to use public money to move three rail freight terminals blocking the redevelopment.
Mayor of Greater Manchester Andy Burnham has promised the scheme will build 5,000 homes and create a second “major football campus” in the city.
Trade trips
Reeves announced the government will be hosting a range of trade trips. Business Secretary Jonathan Reynolds is going to India next month for trade talks while the UK resets “the relationship” with the EU.
Building on “our special relationship with the United States under President Trump” is in the national interest, Reeves said.
National Wealth Fund investments
The government will invest in two green energy projects through the National Wealth Fund set up under Labour. Reeves said £65m will be given to electric vehicle charging company Connected Kerb project to extend their network.
Meanwhile, £28m will be invested in Cornish Metals, which provides the raw material for solar panels, wind turbines, and electric vehicles. The funding is expected to be released shortly.
Lower Thames Crossing
Reeves mentioned the new Lower Thames Crossing, the UK’s largest road tunnel, which will link Tilbury in Essex and Gravesend in Kent.
The £9bn tunnel under the Thames River will be one of the most expensive infrastructure projects in British history. The government is exploring how to finance it privately.
Around the UK
Most of the announcements were focused on England, where the government has greater control over planning and infrastructure. But Reeves said the government was “working with the devolved governments to ensure the benefits of growth can be felt across Scotland, Wales, and Northern Ireland”.
Reeves claimed government backing for the Wrexham and Flintshire Investment Zone in Wales, announced last year, would attract £1bn to the area. Backed by the likes of Airbus and JCB, Reeves said the investment would create up to 6,000 jobs.
Glasgow will be one of the first city regions to benefit from “provide deeper more focused” investment from the National Wealth Fund.
The problem, says one executive at an asset-management firm, is that the chancellor lacks a narrative: a bumper sticker that shows why Britain is a place to do business. One striking contrast is with the flurry of activity since Donald Trump began his second term. Next to that, Labour’s method in office looks sluggish, even though a British government—especially one with a big majority in Parliament—has a freer hand to act than an American president. There is plenty of scope to ease restrictions, both at home and in overseas trade, including with Europe. But time is ticking, and the competition for investment is heating up.
