Rachel Reeves is set to announce an ambitious package of measures aimed at jump-starting Britain’s flagging economy, as she positions her government’s growth drive alongside Margaret Thatcher’s 1980s approach to deregulation.
In her speech on Wednesday, the Chancellor will throw her weight behind a series of high-profile infrastructure and development projects, including an expansion of Heathrow Airport, the creation of a “European Silicon Valley” between Oxford and Cambridge, and regeneration around Manchester United’s Old Trafford.
Critics, however, have voiced scepticism about the government’s sudden shift towards pro-growth policies, claiming that a raft of tax hikes and regulatory changes has already undermined business confidence. They highlight the Chancellor’s extensive Budget tax plans and the new workers’ rights framework, as well as strict environmental regulations. Some industry leaders accuse ministers of taking seven months to respond to deteriorating economic conditions—by contrast, they point to how Donald Trump launched a significant economic stimulus package within days of assuming office in the US.
Reeves’s new plan includes an East-West Rail link between Oxford and Milton Keynes, improvements to the road linking that route to Cambridge, and the development of new towns along the Oxford-Cambridge corridor—an area she says could generate as much as £78 billion for the economy by 2035. This shift underscores a departure from the previous government’s “levelling up” agenda, which targeted investment in left-behind regions across the North and Midlands. Instead, Reeves places the focus on delivering faster travel connections and more affordable housing in one of the country’s most innovation-driven regions.
Alongside infrastructure upgrades, Reeves is expected to endorse a third runway at Heathrow and expansion at other key airports such as Gatwick and Luton. While any buildout would take years to complete, it marks a notable change in tone, with Labour leader Keir Starmer citing Thatcher’s deregulation of the City as a model for the “morass of regulation” that his government plans to overhaul. He frames this drive as crucial to unlocking billions of pounds of private investment, dismissing suggestions that growth and green policies are incompatible.
Yet the new pro-growth rhetoric arrives as ministers proceed with measures that many firms argue are stifling expansion. Despite the introduction of a ‘growth test’ to filter out policies deemed detrimental to the economy, some planned initiatives—such as a £25 billion National Insurance increase and a ban on new oil and gas exploration—remain in place. Critics have seized on these apparent contradictions, questioning how the government can claim to support expansion while imposing higher costs on employers.
Entrepreneurs in the private sector also complain of mixed signals. Sportswear founder Tom Behan, for instance, describes the business climate as “incredibly challenging,” saying the current administration has been slow to offer clarity and leadership. He points out that, while the US unveiled a vast funding package for AI within days of a new presidency, it has taken the UK government over half a year to propose fresh growth measures.
Despite these criticisms, Reeves is pressing ahead with her reforms, emphasising that forging a stable and dynamic economy requires decisive action, including “tough trade-offs” between growth, environmental commitments and workers’ rights. Business groups remain eager for concrete follow-through and a swift timeline, warning that Britain’s competitive edge could erode if momentum stalls yet again.
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Rachel Reeves to unveil ‘Thatcher-style’ growth agenda as businesses demand swift action