Growing the UK Economy

Lindsay Hoyle Excerpts

Wednesday 29th January 2025 Commons Chamber

[The Chief Secretary to the Treasury (Darren Jones)]

With your permission, Mr Speaker, I would like to update the House on the Government’s work to unlock investment and secure economic growth. That is the No. 1 mission of this Government. Without growth, we cannot deliver on the priorities of the British people, cut NHS waiting lists, rebuild our schools or put more police on our streets. That is why the pursuit of growth is our first mission, putting our country on a new path towards a brighter future after 14 years of failure from the Conservatives. By helping businesses to invest and create wealth, we ensure they can provide jobs and opportunities that change lives, putting more pounds in people’s pockets and rejuvenating communities across the country.

We have seen progress on that already, with huge private sector investments into our country since this Government came into service, but now we must go faster and further. We must help businesses and places to achieve their potential. We do that by being an active and strategic state—one that works in true partnership with businesses, investors and local leaders to deliver for the British people in every corner of the country. That principle was at the heart of the Chancellor’s speech earlier today in Oxfordshire, where she announced the latest steps that the Government are taking to drive growth across the country. I am pleased to update the House on those announcements now.

The economic growth we are pursuing must reach into every town, city and community across the United Kingdom—inclusive growth for everyone, not just those at the top—because there is untapped talent and unrealised opportunity throughout the country and we cannot let that go to waste any longer. If we can raise the productivity of major cities like Manchester, Birmingham and Leeds just to the national average, we will deliver an extra £33 billion in economic output. So I can confirm that our plans for regional growth will be hardwired into the spending review, the infrastructure strategy, the industrial strategy and our approach to trade and investment.

We are already providing £200 million of funding to support the development of a new mass transit system in West Yorkshire, and at the autumn Budget we secured improved connections between towns and cities from Manchester through to York. We are also developing our plans to further improve connectivity in the north and across the country through our 10-year infrastructure strategy, which will set out our long-term vision for social and economic infrastructure across the country.

Today we are progressing with the Wrexham and Flintshire investment zone, focusing on the area’s incredible strength in advanced manufacturing to leverage in £1 billion of private investment and create up to 6,000 new jobs. As the Chancellor announced at Davos last week, the Office for Investment will work hand in hand with local areas to develop opportunities for international inward investment, starting with the Liverpool city region and the North East combined authority, while the national wealth fund will build on its strength and combined authority engagement to build a pipeline of investable propositions with mayors, starting with strategic partnerships in the Glasgow city region, West Yorkshire, the west midlands and Greater Manchester. Sticking with Manchester, we are giving our support to the Mayor of Greater Manchester’s plan for the redevelopment of Old Trafford, creating new housing, new commercial developments and a new stadium—but, I am advised to inform the House, not necessarily Government-wide support for the team that play there.

I am pleased to update the House on our new approach to the Oxford-Cambridge growth corridor, a hugely exciting opportunity for the UK and the British economy. For centuries these two cities have been synonymous with inspiration, invention and innovation. Economic analysis suggests that with the right support the region could bring a GDP boost of £78 billion by 2035, yet time and again Governments have failed to capitalise on this remarkable area, most recently in 2021 when the last Government dropped their commitment to what they called the Ox-Cam arc project.

Through under-investment, poor transport connections and a lack of affordable housing, the incredible growth potential of the area has been squandered as people and businesses have been forced to move and invest elsewhere. No longer: Lord Vallance will act as our champion for the growth corridor, utilising his impressive experience in life sciences, academia and Government to unlock growth opportunities across the region and promote its potential to investors across the world. We will establish a new growth commission for Oxford, to recognise and capitalise on the growth potential of this historic city.

We already know, of course, that transportation is a huge factor in the success of the country. Heathrow is the UK’s only hub airport and our largest air freight hub by volume, connecting us to emerging markets around the world, opening up new opportunities for trade and investment. But its growth has been constrained for decades. Today we are announcing that the Government support and are inviting proposals for a third runway at Heathrow airport, to be brought forward by the summer. This is an important infrastructure project expected to have positive growth impacts across the United Kingdom, and it has the backing of businesses and business groups including the CBI, the Federation of Small Businesses and British Chambers of Commerce as well as trade unions such as the GMB and Unite.

According to a recent study from Frontier Economics, a third runway could increase GDP by 0.43% over the next 25 years, with over half—60%—of that boost going to areas outside London and the south-east. It could create over 100,000 jobs in the local area and maintain Heathrow’s status both as a global passenger hub and as the UK’s largest air freight hub by volume.

Reforms this Government have introduced to speed up the planning system will ensure the delivery of the project and set it up for success. Once proposals have been received the Government will take forward a full assessment through the airport national policy statement to ensure that any scheme is delivered in line with our legal, environmental and climate obligations. We want the scheme to be value for money, and our clear expectation is that any surface transport costs associated with the project will be financed by private capital and should be sustainable and low-carbon. The Secretary of State for Transport will also set out planning decisions for further airport expansion at Gatwick and Luton shortly.

Crucially, I am pleased to announce that we are taking further steps in our transition to greener, cleaner aviation. At the start of the month, the sustainable aviation fuel mandate became law. Sustainable aviation fuel reduces carbon dioxide emissions compared with fossil jet fuel by around 70%. Today we are announcing an additional £63 million for the advanced fuels fund over the next year, and we have set out the details of how we will deliver a revenue certainty mechanism. Those measures will support investment and high-skill green jobs in plants across the United Kingdom, delivering sustainable aviation fuel here in the UK for UK consumption.

Transportation is equally important on a local level, and that is as true for the Oxford-Cambridge growth corridor as it is for anywhere else. This Government have confirmed that they will provide crucial funding for transport links, including upgrades to the A428 to reduce journey times between Milton Keynes, Bedford and Cambridge, as well as for East West Rail with new services between Oxford and Milton Keynes starting this year. We have already received submissions to the new towns taskforce to build new developments along the new railway. At Tempsford, we will accelerate delivery of a mainline station on the east coast main line so that travellers can get to London in under an hour and to Cambridge in under 30 minutes once East West Rail has been delivered.

We will ensure that the pioneering work that has long been a hallmark of the area will continue. We are today committing to a new AI growth zone in Culham. We welcome the University of Cambridge’s plan for a new flagship innovation hub in the centre of Cambridge, and a new Cambridge cancer research hospital will be delivered as part of wave one of the new hospital programme. Just yesterday, Moderna completed the build for its new vaccine production and research and development site in Harwell, while committing to invest £1 billion in the United Kingdom—proof that when we create the conditions for success, businesses can lead the way.

I am pleased to confirm for the House that the Environment Agency is lifting its objections to specific developments in Cambridge, so we will press on with plans to develop 4,500 additional homes, new schools and office, retail and lab spaces in and around Cambridge. In a further boost to the area, we have now agreed water resource management plans with water companies, unlocking £7.9 billion of investment in water resources over the next five years, including the new Fens reservoir serving Cambridge and the south-east strategic reservoir near Oxford.

This Government have come in with a purpose: to bring growth, and with it opportunity, to the country. In just six months, we have taken the tough decisions to make that possible. We are taking on the responsibility of a Government who deliver real change for people—no longer the hollow promises of the Conservative party, but change delivered under this Labour Government, working with business and local leaders to drive the growth that will lift up this country. Now we must go further and faster so that the next generation and the generation after will have the opportunities they deserve, to ensure that Britain is strong and successful once again in a fast-changing world and so that everybody in this country can have the chance to succeed. Today’s announcements will help make that a reality and show how our plan for change will build a better Britain. I commend the statement to the House.

[Mr Speaker]

I call the shadow Chancellor of the Exchequer.

--- Later in debate ---

[Darren Jones]

The House is indebted to the shadow Chancellor—Mr Melmentum himself—for his lecture on the need for speed from this Government. Let me tell him that we have done more in the last six or seven months than that lot did in the last 14 years.

The shadow Chancellor asked me about our plans to work with business. The comments today from business leaders and investors speak for themselves: our plans are welcomed by businesses, and we will be working in partnership with them to deliver for this country. He also asked me about work. Those of us in the Labour party make no secret of the fact that we like to support people into work—strong, secure work with workplace rights and secure incomes to help make people’s family finances add up. That is why our party was created in the first place. The real truth from the data is that under the last Government, too many people were waiting at home sick, unable to get NHS appointments or access to mental health services so that they could be helped back into work. Too many people were waiting at home, waiting for training and unable to seize the opportunities advertised in front of them. This Labour Government will not treat those things as a luxury, but will work at speed to give people the work they deserve.

At the heart of the shadow Chancellor’s statement was a truth for the country to consider. Under the last Administration, it was promises cancelled; under this Administration, it is promises being delivered.

[Mr Speaker]

I call the Chair of the Treasury Committee.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

I welcome this Government’s commitment to infrastructure investment and to telling the world that Britain is open for business, but to achieve all of this, we will need a really skilled workforce to deliver on those major construction projects. May I ask my right hon. Friend to set out how the Government will ensure that we have the skills to deliver what he has promised?

[Darren Jones]

I thank the Chair of the Treasury Committee for her question. This is an important test of turning policy into real-world delivery. Through our infrastructure and industrial strategies, we are engaging right now with businesses and investors across the country so that as we bring forward our plans, we have a skills and training system that creates opportunities for people to take up the jobs that we need them to do in order to help get Britain building. That will be a crucial part of our approach to infrastructure, so that every person across the country can seize the benefits of this Government’s plans.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Daisy Cooper (St Albans) (LD)]

The Government are absolutely right to focus on economic growth, but their blinkered approach on Europe is holding back British businesses and stifling the very growth that we need to fund our public services. By ruling out negotiations with the EU on a bespoke customs union and a youth mobility scheme, the Chancellor’s dash for growth will be more like a slow crawl in a car with the handbrake on. In order to turbocharge economic growth, will the Government start negotiating those initiatives now?

To unleash growth through our small businesses, the Chancellor should scrap her national insurance contributions rise, and instead seek to raise the same amount of money through the measures that we Liberal Democrats have suggested: reversing the tax cuts on the big banks, increasing taxes on the big tech and gaming companies, and reforming capital gains tax in a way that would be fairer and raise more money. Will the Government look again at those alternative revenue raisers and lift the burden that the Government have placed on small business?

On airports, the Chancellor has voiced her support for Heathrow expansion and has suggested that expansion will be forthcoming for other airports. We Liberal Democrats oppose this, because it will deliver minimal growth at a huge cost to the climate. Can the Government confirm whether they intend to abide by the advice of their own climate change advisers that no airport expansion should proceed until a UK-wide capacity management framework is in place? In the midst of a climate emergency, can the Government give a cast-iron guarantee that the so-called refreshed carbon budget that the Chancellor referred to will not water down climate targets, and what do they have to say to those experts who say that sustainable aviation fuel is not realistic or scalable?

Turning to the Oxford-Cambridge growth corridor, we really welcome plans that further boost the UK’s position as a European and global science leader. Can the Government confirm that there will be enough money for the whole of the route to be constructed on the East West Rail route, and that they will work hand in glove with local authorities to minimise the environmental impacts, introduce infrastructure before or alongside housing, and maximise local community benefits?