The Chancellor’s Speech on Economic Growth - January 2025

Yesterday, Chancellor Rachel Reeves delivered a speech in Oxfordshire outlining the Government’s plans for economic growth, with significant implications for the technology sector. You can find the Government release here, and the full speech here.

 

Below, we have summarised all the key points to look out for. If you have any questions about specific issues or our work in this area, please don’t hesitate to contact the team.
 

Headline Announcements for Tech:

  • Planning & Infrastructure: The upcoming Planning and Infrastructure Bill will streamline development, including for data centres and tech hubs. The government plans to cut regulations, particularly environmental ones, to ease the process for developers.
     
  • Oxford-Cambridge Growth Corridor and AI Growth Zones: The Government is backing major transport projects, including East-West Rail and is taking the next step to create an ‘AI Growth Zone (AIGZs) in Culham, Oxfordshire. This is a key part of the UK Government’s plan to build out critical AI infrastructure. The Chancellor has invited regional and industry input the help shape the next stage of its programme for AIGZs.
     
  • Investment & Growth: The National Wealth Fund will support tech-related projects, including EV charging networks and critical minerals for renewable energy. Investments made by the National Wealth Fund will focus provide more support for city regions like Glasgow and Manchester.

Further information on the announcements

Regulation & Planning

  • A new Planning and Infrastructure Bill will be introduced this spring to streamline the planning process.
  • She indicates the government’s determination through 13 planning decisions and approved 9 nationally significant infrastructure projects spanning airports, data centres, energy farms, and major housing developments.
  • The Government will reduce environmental regulations placed on developers which force them to pay into the nature restoration fund, to allow things to focus on getting things built.
  • Judicial review reform will also be considered to prevent delays to major infrastructure projects.
  • The Government will publish an action plan on UK regulation in March to reduce complexity and unlock business investment.
  • The Chancellor emphasises the Government’s commitment to growth by highlighting the plans to introduce growth-focused remits and appoint a new Chair for the Competition and Markets Authority (CMA).

Investment & Infrastructure

  • The National Wealth Fund will invest in EV charging (through ConnectedKerb and Cornish Metals).
  • The Government is removing barriers around marine protected areas to unlock offshore energy opportunities.
  • Private finance will be explored to deliver the Lower Thames Crossing between Gravesend and Tilbury.
  • New investment rules will ensure both cost and benefits are considered when making decisions on infrastructure projects.

Oxford-Cambridge Growth Corridor and AI Growth Zones:

  • The Government will champion the Oxford-Cambridge arc, supporting investment in infrastructure and research hubs.
  • The Government is backing East-West Rail and is taking the next step for critical AI-focused developments in the vicinity of the rail project, including to leverage existing areas with energy capacity, including the Culham Space Centre), where the UK Government will create the first ‘AI Growth Zone’ (AIGZs) to attract private investment, accelerate the build-out of critical AI infrastructure and drive the economic rejuve nation of the area. The Chancellor announced a call for expressions of interest from regional and local authorities and industry, to help inform the next stage of its programme for AIGZs.
  • The aim is to make this region “Europe’s Silicon Valley”. The Government has alreayd received 18 submissions for “sizeable new developments” for new towns along the East-West Rail corridor.
  • Minister Lord Vallance would act as the champion for the Oxford-Cambridge corridor, working alongside Peter Freeman, hair of Homes England.
  • The Chancellor stated that this Growth Corridor could add up to £78 billion by 2035.

Trade & International Relations

  • The UK will deepen economic ties with the US and EU, as well as fast-growing economies across the world. techUK’s latest trade report discusses the complexity of navigating the increasingly complex geopolitical environment, with potentially conflicting goals.
  • The Jonathan Reynolds, Business Secretary will visit India soon to restart free trade agreement negotiations. Negotiations for a UK-India FTA were launched in 2022, under the previous Government, however an agreement failed to come to fruition before elections in both countries in 2024.
  • The Government is looking at reforming visa regulations to attract highly skilled international workers, in “growth sectors”. This will be done whilst the government attempts to maintain its aim to reduce net migration numbers overall.

Heathrow Expansion

  • The Government supports a third runway at Heathrow and wants to see proposals come forward before the summer.
  • The Government will invest £63 million in the UK’s sustainable aviation fund, in an effort to make a third runway compliant with national climate goals.
  • The Chancellor stated that data shows that a third runway could boost GDP by 0.43% by 2050.

 


If you have any questions, please get in contact with the team:

Oliver Alderson

Oliver Alderson

Junior Policy Manager, techUK

Edward Emerson

Edward Emerson

Head of Digital Economy, techUK

Mia Haffety

Mia Haffety

Policy Manager - Digital Economy, techUK

Usman Ikhlaq

Usman Ikhlaq

Programme Manager - Artificial Intelligence, techUK

Luisa C. Cardani

Luisa C. Cardani

Head of Data Centres Programme, techUK


 

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Antony Walker

Antony Walker

Deputy CEO, techUK

Alice Campbell

Alice Campbell

Head of Public Affairs, techUK

Edward Emerson

Edward Emerson

Head of Digital Economy, techUK

Samiah Anderson

Samiah Anderson

Head of Digital Regulation, techUK

Audre Verseckaite

Audre Verseckaite

Senior Policy Manager, Data & AI, techUK

Mia Haffety

Mia Haffety

Policy Manager - Digital Economy, techUK

Archie Breare

Archie Breare

Public Affairs Manager, techUK

Oliver Alderson

Oliver Alderson

Junior Policy Manager, techUK