Rachel Reeves has confirmed Labour government support for a third runway at Heathrow, claiming it will “make Britain the world’s best connected place to do business”.
Speaking in Oxfordshire, the chancellor provided her backing to the expansion of UK’s busiest airport despite environmental concerns, including from inside her own Cabinet.
Ms Reeves said the government would invite proposals for the third runway in the summer. She said the controversial project would be delivered in line with our legal, environmental and climate objectives.
Other projects backed in her landmark speech included the redevelopment of Old Trafford in Manchester and the building of the Lower Thames Crossing.
She said: “Low growth is not our destiny, but growth will not come without a fight, without a government willing to take the right decisions now to change our country’s future for the better.”
Today was Ms Reeves’ opportunity to outline how Labour will deliver economic growth following a rocky start since Labour’s victory. Some of her policies - such changes to inheritance tax for farmers and a rise in tax paid by employers - have faced a barrage of criticism.
Latest gross domestic product figures showed the UK economy grew only slightly in November.
Key points
- Reeves confirms government support for third runway at Heathrow
- Heathrow Airport expansion 'badly needed' says Rachel Reeves
- Reeves says builders shouldn't have to worry about bats and newts
- Plans for Old Trafford redevelopment get Rachel Reeves's backing
- Action plan on kick-starting growth to be unveiled in March
- What are the plans for Heathrow airport
Nothing changes - Tory shadow chancellor says after Rachel Reeves' speech
11:38
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Alex Ross
Following Rachel Reeves’ speech, in which she gave her backing to a series of major projects including the expansion of Heathrow, the Tories reiterated their attack on the Autumn Budget.
Shadow chancellor Mel Stride said: “The biggest barriers to growth in this country are Rachel Reeves, Keir Starmer and their job-destroying budget – and nothing in the chancellor’s speech proved otherwise.
“What’s worse, the anti-growth Chancellor could not rule out coming back with yet more tax rises in March.
“This is a Labour Government run by politicians who do not understand business, or where wealth comes from. Under new leadership, the Conservatives will continue to back businesses and hold this Government to account.”
Rival protest camp parks up across the road
11:35
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Archie Mitchell in Oxfordshire
Meanwhile, a rival camp of climate protesters from Green New Deal Rising have parked up across the road from the convoy of farmers.
They are warning the chancellor against Heathrow’s expansion, with a banner reading: “There is no growth on a dead planet.”
Family farm tax protest outside Rachel Reeves' speech
11:31
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Archie Mitchell in Oxfordshire
The anti-family farm tax outside the chancellor’s speech has multiplied, with more than 20 furious farmers and a long line of tractors now stood outside protesting Labour’s inheritance tax changes.
It is impossible to hear anything above the sound of tractor horns blaring, and the chancellor will have to drive through the demonstration to leave the venue.
Reeves' 'blinkered approach' on Europe is holding back businesses - Lib Dems
11:24
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Alex Ross
Responding to Rachel Reeves’ speech on economic growth today, Liberal Democrat Treasury spokesperson Daisy Cooper MP said the chancellor should have focused on a new UK-EU trade deal.
She said: “The Chancellor’s blinkered approach on Europe is holding back British businesses and stifling growth.
“If this government was serious about boosting growth, it would start negotiating a new UK-EU trade deal with a bespoke customs union at its heart.
“This is the single biggest lever ministers could pull to turbocharge our economy. The refusal of the Chancellor to even consider it shows a worrying lack of ambition.
“After years of economic vandalism under the Conservatives, families and businesses deserve better.”
Mayor of London remains opposed to Heathrow expansion
11:21
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Archie Mitchell in Oxfordshire
Just responding to Rachel Reeves’ backing of a third runway at Heathrow, the Mayor of London quickly gave his response on social media.
He said: “I remain opposed to a new runway at Heathrow airport because of the severe impact it will have on noise, air pollution and meeting our climate change targets.
“I will scrutinise carefully any new proposals that now come forward from Heathrow, including the impact it will have on people living in the area and the huge knock-on effects for our transport infrastructure.
“Despite the progress that's been made in the aviation sector to make it more sustainable, 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.”
Environment group quick to attack government's support of Heathrow expansion plan
11:04
,
Simon Calder
The “No 3rd Runway Coalition” has responded furiously to Rachel Reeves pledging support for expansion at Heathrow airport.
Paul McGuinness, chair of the environmental campaign group, said: “We assume Heathrow expansion was chosen because it has become the totemic mission impossible.
“Yet, the plan is not only eye-wateringly expensive. It entails flattening villages and tunnelling over the M25’s busiest junction to increase Heathrow’s size by an area that is larger than Birmingham airport, to fly as many extra planes as Gatwick currently flies – effectively to build the UK’s second-largest airport next to the first. And all in the most overflown and densely packed residential region in the UK.
“And with the slew of other expected expansions in the South East now increasing aviation capacity by 60 million passengers each year – which is more than Heathrow expansion ever offered – Heathrow expansion is now less investable and less possible than ever".
There were protesters outside Siemens Healthiness in Eynsham, Oxfordshire, where Rachel Reeves was giving her speech.
Analysis: Rachel Reeves has put Ed Miliband in his place
10:56
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David Maddox
Even as late as Monday afternoon energy secretary Ed Miliband was hinting that a third runway at Heathrow could be blocked if it did not meet carbon emission targets.
But chancellor Rachel Reeves has pulled rank and made a decisive move to end the long running debate over Heathrow expansion.
She wants the UK to be “the world’s best connected place to do business”.
Other countries are expanding their airports. Ms Reeves does not want the UK to be left behind.
Heathrow Airport expansion 'badly needed' says Rachel Reeves
10:53
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Alex Ross
In setting the government’s support for the third runway at Heathrow Airport, she said it showed ministers’ ambition for the future.
She says: “I can confirm today that this Government supports a third runway at Heathrow and is inviting proposals to be be brought forward by the summer.
“We will then take forward a full assessment through the airport national policy statement. This will ensure that the project is value for money and our clear expectation is that any associated service transport costs will be financed through private funding.
“It will ensure that a third runway is delivered in line with our legal, environmental and climate objectives.”
Ms Reeves earlier said a third runway at the hub airport was “badly needed”, that the previous government had taken no action on it and claimed no full-length runway has been built in Britain since the 1940s.
'We cannot duck the decision any longer' - Reeves supports Heathrow airport expansion
10:48
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Alex Ross
Rachel Reeves says the case to expand Heathrow Airport with a third runway is stronger than ever.
She says she can now confirm that the government supports the plan and invites the proposal to be brought forward in the summer.
She adds that the plan would be delivered in line with the government’s environment objectives.
“We cannot duck the decision any longer,” she says.
Plans for Old Trafford redevelopment gets Rachel Reeves's backing
10:45
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Alex Ross
As we were expecting, Rachel Reeves has told the audience that she will back plans for the redevelopment of Old Trafford.
The government has ambitions for the wider housing and residential and leisure offer that could be put in that place around the stadium.
The chancellor says it will "drive regeneration and growth in the area”.
Tories spotted an omission in Reeves’ speech
10:39
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David Maddox
As Rachel Reeves celebrated the power of devolution and the “brilliant mayors” around the country the chancellor listed figures like Manchester’s Andy Burnham, Liverpool’s Steve Rotherham and others.
But one name was left off that list - London's Sir Sadiq Khan.
Khan has annoyed Downing Street recently by suggesting Donald Trump is a fascist. He appears to be in the bad books.
Rachel Reeves pledges support for Lower Thames Crossing
10:37
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Alex Ross
A proposed new road linking Kent and Essex through a tunnel beneath the River Thames will be backed by the government, says Rachel Reeves.
The chancellor says the government would work with the private sector to deliver the Lower Thames Crossing “that our country desperately needs”.
She added: “This includes the Lower Thames Crossing, which will improve connectivity at Dover, Felixstowe and Harwich, alleviating severe congestion as goods destined to export come from the North and the Midlands, and across the country, to markets overseas.
“To drive growth and deliver value for money for taxpayers, we are exploring options to privately finance this important project.”
Reeves speech drowned out by factory sounds
10:35
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Archie Mitchell in Oxfordshire
Rachel Reeves has a great backdrop for her growth speech, with some of the UK’s most advanced machinery stacked up behind her.
But the scenery is not without its downfalls.
For those in the audience, it is tricky not to get distracted from the chancellor’s words by the loud whirring of the shop floor in the background.
Action plan on kick-starting growth to be unveiled in March
10:33
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Alex Ross
An action plan intended to make regulation “work much better for our economy” will be published in March, Rachel Reeves says.
The Chancellor says businesses are held back by a complex and unpredictable regulatory system, and that is a drag on investment and innovation.
She says: “We have already provided a new growth-focused remit to our financial service regulators, we have announced a new interim chair of the Competition and Markets Authority, and we have established the regulatory innovation office with an initial focus on synthetic biology, space, AI and connected and autonomous vehicles.
“But we need to go further, and we need to go faster, so earlier this month I met the heads of some of our largest regulators.
“They have already provided a range of options to drive growth in their sectors and proposals for how they can be more agile and responsive to businesses, and we will publish that final action plan in March to make the regulation work much better for our economy.”
Reeves says builders shouldn't have to worry about bats and newts
10:31
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Archie Mitchell
Rachel Reeves has taken her fight for growth to two tiny targets: bats and newts.
The chancellor is taking an axe to planning regulations that block major infrastructure projects or add years of delays and millions of pounds of cost.
She cited a £100m pound “bat tunnel” designed to protect the creatures from the HS2 rail project.
And she said: “We are reducing the environmental requirements placed on developers when they pay into a nature restoration fund that we have created, so they can focus on getting things built and stop worrying about bats and newts.”
Analysis: Reeves tries to explain why she has been right all along
10:30
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David Maddox
This is very much a “why I did what I did” speech by Rachel Reeves as she spends some time justifying what she has done so far as chancellor.
A robust defence was needed given the brickbats from business which have come her way over workers rights and tax rises.
She highlights the reforms to the planning system which will make Labour unpopular in individual constituencies but is the biggest hope for achieving economic growth.
Given the scale of the infrastructure needed in this country for issues like the AI revolution then the reforms were desperately needed.
She reminds the audience of the infamous £100 million bat tunnel for HS2.But will the reduction in infrastructure burdens be enough to persuade major corporations to invest in Britain?
Critics will say that the high tax regime will continue to be a problem.
'Focus on getting things done instead of worrying on bats and newts' - Rachel Reeves
10:29
,
Alex Ross
Rachel Reeves is now outlining what will be in the planning and infrastructure bill.
She says it will streamline processes and make the consultation process far less burdensome.
She gives an example on how projects are held up with the story reported last year that HS2 was spending more than £100m to build a bat shed.
She says the bill will reduce environmental requirements, adding: “So they [builders] can focus on getting things done instead of worrying about bats and newts.
She also says the bill will stop the excessive use of judicial reviews, with the bill to come in the spring.
'Politicians have lacked the courage' on the economy - says Rachel Reeves
10:22
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Alex Ross
Rachel Reeves says politicians in recent years have “lacked” strength to confront challenges in the economy.
The Chancellor says: “The productive capacity of the UK economy has become far too weak.
“Productivity, the driver of living standards, has grown more slowly here than in countries like Germany or the US. 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.
“When presented with a choice, they have not prioritised growth. Instead, they have accepted the status quo and they have been the barrier, not the enablers of change.”
Analysis: Trump love-in
10:21
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David Maddox
It feels like a long time ago that Labour NMPs were agitating to prevent Trump from speaking to a joint sitting of the Houses of Parliament, Rachel Reeves is on message for the new special relationship.
She claimed to be looking forward to working with the Trump administration which has a very different growth plan of slashing regulations and taxes.
It will be interesting to see if this shapes into some sort of trade deal which would boost growth but may come at a price.
Rachel Reeves says country can 'do so much better'
10:19
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Alex Ross
Low growth is not Britain’s destiny, Chancellor Rachel Reeves says, as she signals she is willing to “fight” for economic growth.
She says: “We have fundamental strengths in our history, in our language and in our legal system to compete in a global economy, but for too long that potential has been held back. For too long we have accepted low expectations and accepted decline.
“We no longer have to do that. We can do so much better. Low growth is not our destiny, but growth will not come without a fight, without a Government willing to take the right decisions now to change our country’s future for the better.
“That’s what our plan for change is all about. That is what drives me as Chancellor.”
Analysis: Smiling Reeves back on message
10:16
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David Maddox
After seven months of doom and gloom, Rachel Reeves has returned to the “optimism” she was talking about during the election.
It’s all about growth she is telling the country today after seven months of misery, tax rises and measures which have actually harmed that mission.
This is the first time for a while we have seen Reeves smile and it may well be that she has realised the “we were faced with a terrible legacy” message was not working.
Ms Reeves is now hoping that second time round businesses will forget about the start of this government and accept she really wants to grow the economy.
Reeves says she is prepared to fight for growth
10:15
,
Archie Mitchell
Rachel Reeves is surrounded by MRI scanners in production, telling gathered business leaders, journalists and members of Sir Keir Starmer’s government how she plans to “fight for growth”.
With a convoy of protesting farmers on tractors outside, the chancellor has said growth is about more than lines on a graph, it is about “the pounds in people’s pockets”.
Ms Reeves is setting out how stability, reform and investment are the three key pillars of Labour’s mission to drive growth.
Growth is about more than lines on a graph, Rachel Reeves says
10:13
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Alex Ross
Growth is about more than lines on a graph, Rachel Reeves has said as she began a major economic speech.
In her first major speech since the Autumn Budget, she said: “Growth isn’t simply about lines on a graph, it is about the pounds in people’s pockets, the vibrancy of our high streets and the thriving businesses that create wealth, jobs and new opportunities for us, for our children, and grandchildren.
“We will have succeeded in our mission when working people are better-off.”
Among the senior Government figures in the audience are Environment Secretary Steve Reed, Transport Secretary Heidi Alexander and science minister Lord Vallance.
Chancellor starts her speech
10:10
,
Alex Ross
Rachel Reeves takes to the podium which displays a banner saying “kickstart economic growth”.
She starts by saying economic growth is the number one mission of the Labour government.
She says it is needed to meet climate goals, give the next generation the opportunity to thrive and improve living standards for ordinary working people.
She said: “We will have succeeded in our mission when working people are better of.”
Infrastructure projects expected to be backed by Rachel Reeves
10:07
Chancellor Rachel Reeves is due to support a number of major infrastructure schemes in a speech on growth this morning.
Here is a summary of some of the schemes that could be mentioned:
Heathrow airport
Heathrow airport in west London wants to build a third runway to raise capacity and boost resilience.
The scheme would have a major impact on the local area, with hundreds of homes demolished and villages such as Harmondsworth and Longford likely to be partly or wholly demolished.
The plans received parliamentary approval in June 2018, but the airport would need to apply for a Development Consent Order to go ahead with the project.
There is no timeline for when a third runway could open, but it is likely to be well into the 2030s.
Gatwick airport
Gatwick airport in West Sussex wants to bring its second, emergency runway into routine use for take-offs by smaller aircraft, providing a major boost in capacity and resilience.
The project would involve widening the runway by 12 metres.
The airport says construction could start this year and be completed by the end of the decade.
Transport Secretary Heidi Alexander is expected to make a final decision on whether to approve the scheme by February 27.
Luton airport
Luton airport in Bedfordshire wants the limit on its annual number of passengers to be raised from 18 million to 32 million.
This would involve expanding its existing terminal and building a second terminal.
The scheme would not require a new runway or flight paths.
Transport Secretary Heidi Alexander is expected to make a final decision on whether to approve the scheme by April 3.
East West Rail
East West Rail involves boosting railway links between Oxford and Cambridge with new and upgraded lines.
The scheme has three stages, with initial services from Oxford to Bletchley and Milton Keynes scheduled to begin this year.
The other two stages are reliant on Government funding and approval.
These involve services being extended from Oxford to Bedford, and then from Oxford to Cambridge via Bedford and Bletchley.
Old Trafford
Manchester United is eager to create a new venue by either redeveloping its current stadium to increase capacity to 87,000, or build a new ground which could hold 100,000 fans.
The club has said it will decide on its preferred option “ahead of the summer”.
The project would also involve a major regeneration of the area around Old Trafford, with residential, transport and entertainment developments.
Lower Thames Crossing
This is a new £9 billion road crossing between Kent and Essex.
It would connect the A2 and M2 in Kent to the A13 and M25 in Essex via a 2.6-mile long tunnel under the Thames, which would be the UK’s longest road tunnel.
This is aimed at reducing congestion on the Dartford Crossing.
Transport Secretary Heidi Alexander is expected to make a final decision on whether to approve the scheme by May 23.
Old Trafford can cement Manchester's place as 'global capital of football'
09:56
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Alex Ross
A new or redeveloped Old Trafford can cement Manchester’s place as “the global capital of football”, the city’s mayor Andy Burnham has said.
Manchester United are set to make a decision by the end of the season on whether to redevelop the existing stadium into an 87,000-capacity venue or build a brand-new 100,000-capacity ground.
Rachel Reeves is expected this morning to reiterate the Government’s backing for the redevelopment of the area around Manchester United’s football stadium Old Trafford.
Burnham said the project, which also involves relocating freight terminals, will benefit other parts of the north-west, as well as his city.
He told BBC Breakfast: “This truly… it’s one of those rare projects that’s a win-win, the benefits will be felt far and wide.
“On the east of Manchester, if you look at what’s happened there – and the Commonwealth Games helped that with public money at the time – Manchester City have taken that and poured so much investment in themselves to improve the east of Manchester.
“Imagine that being balanced on the west of Manchester with another major football campus.”
Heathrow Airport proposed expansion
09:51
,
Alex Ross
Here’s what it’d look like with the new third runway to the north west of the existing two.
The current maximum annual number of flights is around 475,000. A third runway could enable the airport to reach around 740,000 flights a year.
How to increase Heathrow capacity by 15% – instantly
09:49
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Alex Ross
Travel correspondent Simon Calder is at London Heathrow airport Terminal 5 ahead of the Chancellor’s announcement.
He has been writing about “mixed mode” arrivals and departures, which could increase capacity by 15% immediately – just by allowing planes to land and take off from both runways simultaneously.“
At present, Heathrow dedicates one strip of asphalt to landings and the other to take-offs.
Intuitively, you might imagine that the most efficient way to operate a two-runway airport like Heathrow is to separate arrivals and departures. In fact, the opposite is true: you can extract more capacity if there is a plane coming into land a few seconds after an aircraft ahead has taken off.
“Heathrow at its peak has a landing every 80 seconds and a take-off every 80 seconds. But across at Gatwick, air-traffic controllers can manage an arrival and a departure in as little as 65 seconds. Mixed mode adds capacity without the need for another runway.”
But it is, he adds, extremely controversial as it would end respite from aircraft noise.
What are the plans for Heathrow airport
09:44
,
Alex Ross
Chancellor Rachel Reeves is expected to give her support on Wednesday for the expansion of Heathrow Airport.
The plans, which would see the building of a third runway, would create extra capacity which could be used to increase flight numbers and boost resilience during disruption.
The current maximum annual number of flights is around 475,000. A third runway could enable it to reach around 740,000 flights a year.
Heathrow said in 2018 that it could complete the project for £14 billion.
But there are environmental concerns.
Campaigners say airport expansion would lead to a severe increase in aircraft noise experienced by local communities.
Planes emit CO2 when they burn jet fuel, which would also contribute to global warming.
What are we expecting in Rachel Reeves' landmark speech
09:22
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Alex Ross
This is Chancellor Rachel Reeves’ biggest speech since delivering her Autumn Budget last year, and there is understandably much interest as she looks to outline how she’ll deliver economic growth.
Among the major projects she will unveil will be plans to deliver the Oxford-Cambridge Growth Corridor that will boost the UK economy by up to £78bn by 2035, according to industry experts.
An announcement on the expansion of Heathrow is also expected despite the threat of a backlash by Labour MPs, while the chancellor will also back a major plan to redevelop the iconic Old Trafford home of Manchester United.
She will tell regional and business leaders in Oxford that economic growth is the number one mission of this government and its Plan for Change.
Ms Reeves will say: “Low growth is not our destiny, but that economic 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.”
Third runway at Heathrow would be 'an illusion of growth'
09:10
,
Alex Ross
We heard this morning from energy boss and Labour donor Dale Vince who told BBC Radio 4 it would be a mistake for Rachel Reeves to back a third runway at Heathrow.
Mr Vince, who donated £5m to Labour in the run-up, to the election said it would lead to exporting tourism money aboard and would “come at the expense of our carbon-cutting effort”.
He said: “We’ve got to decarbonise energy, transport and food, and at the moment we’re on course to do energy, and we won’t do that with this Heathrow expansion, which is a big mistake.”
Labour MP who threatened to smash reporter’s face with bat made trade envoy by Starmer
08:54
,
Jabed Ahmed
Full report | Reeves warned ‘it’s crunch time’ as chancellor relaunches her economic growth agenda
08:37
,
Jabed Ahmed
Our Political Editor David Maddox reports:
Labour doesn’t have a ‘doom message’, business secretary says
08:29
,
Jabed Ahmed
Jonathan Reynolds has denied that Labour has a “doom message”, instead saying he has “always been optimistic”.
It comes as critics accuse the government of talking down the economy, after the government repeatedly set out the problems facing Britain and pointed to a “£22bn black hole” they claimed to have inherited from the Conservatives.
The business secretary – asked if the party realised they had gone too far with negative messaging – said: “I don't believe we had a doom message. I believe we face a difficult fiscal inheritance. We have to address that.”
Pressed on whether he regrets how much the government mentioned the “black hole” facing the public finances, Mr Reynolds said: “I regret there was a black hole.”
He added: “There are times where you face this kind of situation and you've got to address it.”
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