The Chancellor, Rachel Reeves, has ‘rebooted’ the Government’s growth plan with her speech in Oxfordshire, vowing to go “further and faster” to kickstart economic growth. The speech signals a change in tone, ending the doom mongering that has dogged the Government’s first six months in office, with a more positive and upbeat message about the strengths of the UK economy.
Despite the economy growing by just 0.1% in November, and the Bank of England stating that it has not grown at all in the second half of 2024, the Chancellor outlined the reasons for optimism, referencing that the IMF have upgraded the UK status for faster rates of growth than other G7 nations, and PWC’s findings that the UK is now the second most attractive place for global investment.
The Oxford-Cambridge Arc was a central feature of the speech, with the Chancellor announcing plans to make this innovation corridor the ‘Silicon Valley’ of Europe. We have, of course, heard this before: The Ox-Cam Arc was first proposed in 2003, under the previous Labour Government, and Cambridge has long been referred to as Silicon Fen.
This renewed push to improve transport links and housing along the Oxford-Cambridge Arc is a welcome step toward unlocking economic potential. By enhancing connectivity and addressing housing shortages, the initiative seeks to capitalise on the area’s world-class research and technology sector, which has the potential to open-up further economic clusters. It is encouraging to see a focus on long-term investment in high-growth areas, but success will hinge on balancing economic ambitions with local concerns around sustainability and infrastructure capacity.
The original Silicon Valley thrived because of a strong spatial policy across the wider San Francisco Bay area. The Arc can leverage its unique strengths by extending opportunities further into the East of England. It will enlarge Cambridge’s relatively small travel to work area, albeit westward. The issue for the East of England is how East West Rail can be extended beyond Cambridge, and how the benefits of growth through tech and science can be spread to opportunities across the region, including the potential for manufacturing.
The East also gained notable mentions for a new Cambridge cancer research hospital to be prioritised as part of the Government’s new hospitals programme, the removal of barriers to deliver offshore wind in areas like East Anglia, the announcement that the Environment Agency has lifted objections to Cambridge expansion, and agreement of water resources management plans for investment in the new nine new reservoirs, including the Fens.
The Chancellor warned “growth won’t come without a fight” and to this end, the Government is determined to take on the NIMBYs to build housing and infrastructure, by driving-through planning reforms and deregulation. An action plan to reduce the environmental burden and to stop the excessive use of judicial reviews to contest development is expected in March. The commitment to develop land around railway stations is also welcome; something that the Eastern Powerhouse has been calling for since its inception.
If there is a criticism of the Chancellor’s speech it is that the raft of proposals – new housing, reservoirs, data centres, clean energy, and transport infrastructure - will all take many years, if not decades, to be realised. One project that could have more immediate returns is the unfunded Ely (and Haughley) Junction upgrade. This is a major priority not just for the East, but for the rest of the country as well. It is essential for improving trade routes, enabling goods to be moved more quickly between Felixstowe and the Midlands and the North of England. It will remove nearly 100,000 lorries from our roads; cut congestion by 5.6 million hours and emissions by 1.7 million tonnes over 60 years; improve rail passenger services; unlock opportunities for East West Rail east of Cambridge to Norwich; free up rail capacity around London; and directly support DfT's rail freight growth targets.
It's hard to think of a more obvious and cost-effective project to deliver fast growth across England. The Eastern Powerhouse is calling for all partners across the East of England to make the strongest possible case for Ely (and Haughley) ahead of the next Spending Review.