29 January 2025 , 13:21
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Rachel Reeves has announced the government is backing a third runway at Heathrow Airport, in a bid to give the UK economy a much-needed boost.
The Chancellor’s decision comes despite criticism from environmental campaigners – and several Labour MPs who stood up to oppose the plans in the House of Commons yesterday.
Work on a third runway at the UK’s busiest airport, located in west London, is unlikely to start for many years but would significantly boost capacity.
However, London’s Labour mayor Sadiq Khan has publicly positioned himself against the move, citing ‘a climate crisis and a climate emergency’.
Following the announcement from Reeves, he reiterated his opposition in a series of social media posts, saying: ‘I’m simply not convinced that you can have hundreds of thousands of additional flights at Heathrow every year without a hugely damaging impact on our environment.’
The government has argued it will be possible to offset the huge increase in carbon emissions that would inevitably result to make the expansion ‘compatible with the UK’s legally binding climate change commitments’.
And Reeves believes the expected prize of a growing economy is worth the price.
Another runway would increase British GDP by 0.43% by 2050, she said, with over half of the benefits going outside London and the south-east of England.
The Chancellor told the audience of businesspeople and journalists: ‘By backing a third runway at Heathrow, we can make Britain the world’s best-connected place to do business.’
Theresa May’s government previously announced support for an additional runway at the airport in October 2016, but no firm progress was ultimately made.
Reeves said Heathrow would be asked to provide plans for the expansion by this summer with a Development Consent Order by the end of this parliament, currently set for 2029.
Growth has been the clear focus of the Chancellor’s speech at a Siemens facility in Oxfordshire this morning, one of the her most important since she took up the role last July.
Beyond the airport expansion, she also announced plans for a ‘growth corridor’ between the university cities of Oxford and Cambridge – or the ‘OxCam Arc’.
The government will provide support for new communities in the 66-mile stretch, with better transport links from the two cities to Milton Keynes in the middle.
A new East Coast mainline station in the Bedfordshire village of Tempsford – population around 600 – will serve to underline the plans for the area.
The corridor between Oxford and Cambridge has the ‘potential to be Europe’s Silicon Valley’, the Chancellor said.
She cited industry experts who said up to £78 billion could be added to the UK economy by developing the area.
In addition, she gave the government’s backing to the redevelopment of Manchester United’s home ground of Old Trafford – creating a 100,000-seater mega-stadium.
To achieve growth, which she described as the ‘number one mission of this government’, she said it would be necessary to cut ‘stifling’ red tape and regulations that are blocking infrastructure development around the country.
‘But growth will not come without a fight. Without a government that is on the side of working people. Willing to take the right decisions now to change our country’s course for the better.’
Responding to the speech, Shadow Chancellor Mel Stride described Reeves, Prime Minister Sir Keir Starmer and ‘their job-destroying budget’ as the ‘biggest barriers to growth in this country’.
He added: ‘This is a Labour government run by politicians who do not understand business, or where wealth comes from.’