Rachel Reeves Backs Heathrow Expansion In Major Economic Growth Speech
3 min read
Chancellor Rachel Reeves confirmed the government’s commitment to building a third runway at Heathrow airport, after she claimed the project would increase growth, investment and exports.
In a speech on Wednesday in Oxfordshire, the Chancellor reiterated the government’s core aim and message to deliver economic growth and make Britain the world’s “best connected place to do business”. Major proposals announced included:
- Resetting the UK’s relationship with the EU
- Mass transport system in Yorkshire
- Re-development of Old Trafford
- Restarting trade negotiations with India
- Backing the Lower Thames crossing
- Nine new reservoirs
- A “growth corridor” between Oxford and Cambridge
- New planning approach around train stations
The speech set out the government’s key aims for the rest of the Parliament and tried to convey a sense of optimism and enthusiasm for business. Reeves spoke about bringing back stability in Britain, before pivoting to focusing on delivering economic growth.
Reeves said Heathrow was at the “heart of the country’s openness” and connected the UK to emerging markets including Argentina, Brazil, Indonesia and South Korea. More than 60 per cent of air freight comes through Heathrow where 15 million travellers used Heathrow in 2023. The Chancellor claimed a third runway could boost the UK’s GDP by three per cent by 2050.
The Chancellor attempted to allay environmental fears from back bench MPs after she said the construction of the third runway would be in-line with the UK’s net zero commitments. Transport Committee chair Ruth Cadbury told PoliticsHome on Tuesday it would not be “legal” to build Heathrow airport in 2025.
“Heathrow themselves are clear that their proposal for expansion will meet strict rules on noise, air quality and carbon emissions, and we are already making great strides in transitioning to cleaner and greener aviation,” Reeves said.
The Chancellor told the audience the UK’s productive capacity was too “weak” and lagged behind its competitors. Experts have suggested the UK’s planning system has harmed productivity and suppressed growth within the last few decades.
“Productivity, the driver of living standards, has grown more slowly here than in countries like Germany or the US,” Reeves said.
“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.”
The Chancellor said the government had delivered the most “significant planning reforms” to the UK.
“I have been genuinely shocked about how slow our planning system is by how long it takes things to get things done.
“Take the decision to build a solar farm in Cambridgeshire, a decision that the energy secretary took only a few weeks into the job in July, but in which had first come to government's attention in 2021 it's ridiculous.”
Reeves announced two further investments by the National Wealth Fund which included a £65m investment to expand the UK’s electric vehicle charging network and a £28m equity investment in Cornish metals.
The Chancellor claimed there was “no trade-off” between economic growth and net zero. “Quite the opposite. Net zero is the industrial opportunity of the 21st century, and Britain must lead the way.”
Reeves also said the government was looking at visa routes for well-skilled migrants to attract more talent to settle in the UK and set-up businesses. However, she told reporters that the UK would reduce migration from its current levels of almost 750,000.
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