Reeves confirms backing for Heathrow expansion but refuses to rule out new business taxes
Rachel Reeves has confirmed the government’s backing for a third runway at Heathrow in a major speech on economic growth.
The Chancellor addressed journalists, business leaders and cabinet ministers at Siemens Healthineers in Oxfordshire on Wednesday morning.
She said: “Heathrow is at the heart of the UK’s openness as a country, it connects us to emerging markets all over the world, opening up new opportunities for growth.
“As our only hub airport Heathrow is in a unique position, and we cannot duck the decision any longer.
“So I can confirm today that this government supports a third runway, and is inviting proposals to be brought forward by the summer.”
Any Heathrow third runway could cost tens of billions of pounds, and would take upwards of a decade to complete.
The process has run on for decades, Reeves stressed, and the plans have faced opposition throughout that time from environmental campaigners who argue against aviation due to its carbon emissions.
But the Chancellor insisted “our clear expectation is that any associated service transport costs will be financed through private funding” and that the new runway would be “delivered in line with our legal environmental and climate objectives”.
Shadow business secretary Andrew Griffiths was unimpressed, saying “no one should be fooled” by Reeve’s speech, adding “Future investment is welcome but businesses need action today on reversing Labour’s jobs tax, their red tape Employment Bill, high energy costs and the family business death tax.”
Facing questions from journalists, the Chancellor refused to rule out further tax rises on businesses over the course of this parliament.
What else has Reeves announced?
Determined to talk up the UK’s economy, she pointed to the International Monetary Fund (IMF’s) 2025 upgrade, which found the UK would have the fastest growth among major European countries.
The government, she said, would also work closely with the private sector, including to deliver the Lower Thames Crossing and rail projects across the north of England.
Over the next five years, Reeves added, Britain would invest 2.6 per cent of GDP on average, “compared to 1.9 per cent planned by the previous government”.
She announced a refreshed carbon budget delivery plan, and investment by the National Wealth Fund into electric vehicle charging and £28m into Cornish metals, “providing the raw materials to be used in solar panels, wind turbines and electric vehicles”.
Reeves vowed: “There is no trade off between economic growth and net zero.
“Quite the opposite. Net zero is the industrial opportunity of the 21st century, and Britain must lead the way.”
The Chancellor argued that Britain needed to “stop worrying about the bats and the newts” when it came to planning and major infrastructure schemes, with new homes set to get automatic approval around railway stations in fresh zoning plans.
The problems in our economy, the lack of bold reform that we have seen over decades, can be summed up by £100m backed up build for HS2
While she insisted the government would work “tirelessly” to deliver the Planning and Infrastructure Bill in a bid to streamline the system, also this spring.
And after meeting with regulators to drive forward her pro-growth approach, Reeves confirmed a final action plan would be unveiled this spring.
In her speech, she insisted her “consistently set out strategy” was to “grow the supply side of our economy”.
Reeves, who has faced backlash from business over her October tax hiking Budget, said: “First and foremost, it is businesses, investors and entrepreneurs who drive economic growth.”
The Chancellor focused on three key elements, which she said were stability, reform, and investment.
She also stressed the importance of working in the national interest, and argued: “That means building on our special relationship with the United States and President Trump.”
Reeves added: “I look forward to working with the new Treasury Secretary, Scott Besant, to deepen our economic relationship in the months and years ahead.”
But she also highlighted the government’s planned EU reset, and her recent visit to China.
Elsewhere, Reeves said she was “pleased to confirm” that business secretary Jonathan Reynolds would shortly visit India to restart talks on a free trade agreement (FTA).
And she said the government would “look at the visa routes for very highly skilled people so the best people in the world choose the UK to live, work and create wealth”.
It comes after Reeves was forced to water down her non-dom tax plans after a flight of the super wealthy overseas.