UK Chancellor backs third Heathrow runway among other infrastructure projects

In a speech UK Chancellor Rachel Reeves outlined several projects aimed at boosting the UK economy.

Britain鈥檚 Chancellor of the Exchequer Rachel Reeves speaks about her plans for Britain鈥檚 economy in Eynsham, Britain, January 29, 2025 (Photo: REUTERS/Peter Cziborra/Pool)

The Chancellor welcomed the expansion of Heathrow Airport as she unveiled Labour鈥檚 plans for promoting economic growth. Supporting, in principle, a planning application for a third runway at Heathrow marks the first step in the process.

Reeves invited proposals to be brought forward by the summer to 鈥渆nsure that a third runway is delivered in line with [the] legal, environmental and climate objectives.鈥�

The Chancellor also emphasised plans to invest in connecting 鈥渢he Oxford-Cambridge growth corridor鈥�, with the aim of creating 鈥淓urope鈥檚 Silicon Valley,鈥� which is expected to add billions to the UK economy. 

Additionally, Reeves announced an agreement with water companies to unlock 鈥溌�7.9 billion of investments in the next five years鈥� to improve water infrastructure, including the construction of nine new reservoirs. 

The government will also back the redevelopment of the Old Trafford football stadium in Manchester. Furthermore, plans to review the 鈥淕reen Book,鈥� a guideline used to evaluate significant investment projects, will be announced. The review aims to support public investment decisions across the country, including areas outside London and the southeast. 鈥淭his means investment in all regions is given a fair hearing by the Treasury,鈥� she said.

A 拢100 million bat tunnel installed on the HS2 rail project has prompted the government to assess why delivering major infrastructure is becoming 鈥渇ar too expensive and far too slow鈥�. Reeves says that the government will be reducing the environmental requirements placed on developers so that they can focus on building and completing projects.

The government states that the Planning and Infrastructure Bill is a priority and will be introduced in the spring, emphasising their commitment to the 鈥渟mooth, speedy, and rapid delivery鈥� of this bill.

Starmer vows to change UK law to speed up major infrastructure builds UK Prime Minister Kier has announced proposals to change planning law to make it harder for major infrastructure projects to be delayed

Commenting on the speech, director of operations for the Civil Engineering Contractors Association (CECA) Marie-Claude Hemming, said, 鈥淭he Government should be applauded in its commitment to airport expansion, which is an issue that has been kicked into the long grass by successive administrations, but which is vital to the UK鈥檚 future as a global trading nation.

鈥淚ndustry is keenly awaiting the publication of this Spring鈥檚 Planning and Infrastructure Bill, but the Chancellor鈥檚 commitment to speeding up planning and removing blockers to growth, such as excessive use of judicial review, are positive signs that the UK Government has listened to industry, and will act accordingly.鈥�

Justin Sullivan, president of RICS, added, 鈥淩achel Reeves is correcting the course of Labour鈥檚 growth journey. The tough decisions have been made; now it鈥檚 time to press ahead with much-needed reforms.

鈥淪ince the Budget confidence amongst companies in the built environment has tailed off spelling bad news for housing and infrastructure delivery 鈥� particularly among SMEs, the backbone of construction supply chains, whose ability to borrow, grow and deliver disproportionately relies on sentiment across the economy. These have combined to undermine the positive impact of changes to the National Planning Policy Framework, announced in December. But Rachel Reeves鈥� speech today will help reset the mood.

鈥淲hile Reeves is focusing on the biggest, most newsworthy projects 鈥� like the East-West Rail link 鈥� her department must work with MHCLG and local councils to realise the strategic benefit of improving more local, smaller scale infrastructure projects 鈥� like local road networks, water utilities, and public transport links. Part of this focus must be on addressing the skills crisis that affects every corner of the built environment.鈥�

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