‘Europe’s Silicon Valley’ at heart of government’s growth plans, Rachel Reeves to announce
Rachel Reeves will unveil Labour’s plans to grow the UK economy on Wednesday, warning it “will not come without a fight”.
The chancellor is expected to announce a raft of measures including developing Oxford and Cambridge – which she says has the “potential to be Europe’s Silicon Valley” – building nine new reservoirs and the redevelopment of Old Trafford.
The speech is considered a key moment for a chancellor who has struggled with sluggish economic headwinds since her first budget last autumn.
Politics latest: Follow the chancellor’s speech on Wednesday morning
Despite intense speculation, the government has not yet announced whether they will back a third runway at Heathrow, or further developments at other airports.
The chancellor has struggled with sluggish economic headwinds since her first budget last autumn. Pic: PA
In a speech on Wednesday, Ms Reeves will confirm:
• Support for the Oxford-Cambridge Growth Corridor – also known as the Oxbridge Arc – that was scrapped by the Conservatives in 2022. The government points to a report claiming the development, including transport, business growth, and housing, could add £78bn to the UK economy by 2035;
• An agreement that allows water companies to spend £7.9bn to build nine new reservoirs, with two planned for Somerset and then one each in Lincolnshire, Hampshire, Cambridgeshire, Oxfordshire, Suffolk, Kent and West Midlands. A new reservoir hasn’t been opened in the UK since 1992;
• The government will back the redevelopment of Manchester United’s Old Trafford stadium and its surrounding area, alongside plans to change the way projects are appraised and evaluated, in order to “support decisions on public investment across the country, including outside London and the southeast”;
• Confirmation of a new approach to the National Wealth Fund and Office for Investment to get regional development happening faster.
Very little of this is new… or growth-friendly
Don’t, whatever you do, call it a “relaunch”.
When the chancellor stands up and delivers her much-anticipated speech on Wednesday – with all sorts of exciting schemes for new infrastructure and growth-friendly reforms – she will cast it as part of the new government’s long-standing economic strategy.
Regardless of whether you believe that this is all business-as-usual, it’s hard to escape the fact that the backdrop to the chancellor’s growth speech is, to say the least, challenging. The economy has flatlined at best (possibly even shrunk) since Labour took power. Business and consumer confidence have dipped. Not all of this is down to the miserable messaging emanating from Downing Street since July, but some of it is.
Still, whether or not this constitutes a change, most businesses would welcome the chancellor’s enthusiasm for business-friendly reforms.
But it’s not everything. What about the fact that the UK has the highest energy costs in the developed world? What about the fact that these costs are likely to be pushed higher by net zero policies (even if they eventually come down)? What about the fact that tax levels are about to hit the highest level in history, or that government debt levels are now rising even faster than previously expected.
A commitment to growth
Ms Reeves will use these plans as demonstrations of the government’s commitment to “growth”.
The chancellor is set to say in her speech: “Low growth is not our destiny. 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.
“That’s what our Plan for Change is about. That is what drives me as chancellor. And it is what I’m determined to deliver.”
In its election campaign last year, Labour pledged to increase building in the UK – both housing and infrastructure.
These pledges are essential to the government’s plans to grow the economy, which has continued to struggle since Ms Reeves’ budget.
A key date for the chancellor is 26 March, when the Office for Budget Responsibility will provide its latest forecast, an indicator of whether they think the government’s plans will work.
A lack of growth could lead to Ms Reeves having to cut budgets further or raise taxes.
As part of the government’s plans to grow the economy and build, Sir Keir Starmer has vowed to “take on” people who oppose building near where they live, who are known as Nimbys – which stands for Not In My Backyard.
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PM: ‘Growth number one priority’
The Oxbridge arc
The chancellor will also announce that the Environment Agency has dropped its opposition to 4,500 houses around Cambridge after working with the regulator and local authorities.
The prime minister was clear last week that he also wants to see fewer legal challenges to planning applications.
Other developments in that region that are getting government backing include more funding for East-West Rail, with new services between Oxford and Milton Keynes, and upgrades to the roads linking Milton Keynes and Cambridge.
Ms Reeves will also say a new East Coast Mainline Station at Tempsford – between Cambridge and Milton Keynes – will be supported.
Starmer and Reeves will ‘take on’ people who oppose building near where they live. Pic: AP
Read more on growth:
Reeves to seek billions from pension schemes
Analysis: Will chancellor’s plans finally boost growth?
Sir Patrick Vallance, a science minister who came to prominence during COVID as the government’s chief scientific adviser, will be made the Oxford-Cambridge growth corridor champion.
Ms Reeves is set to say: “Just 66 miles apart, these cities are home to two of the best universities in the world, two of the most intensive innovation clusters in the world, and the area is a hub for globally renowned science and technology firms in life sciences, manufacturing, and AI.
“It has the potential to be Europe’s Silicon Valley. The home of British innovation.”
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She will point out there is no direct commuter link between the two sites and a lack of affordable housing in the area.
The chancellor will say the industrial strategy will look to “take advantage” of the area’s “unique strengths and potential”.
Mel Stride, the shadow chancellor, claimed the “biggest barriers to growth” in the UK are Ms Reeves and Sir Keir, and their “job-destroying budget”.
He branded the ideas “hastily cobbled together”, saying they will not help businesses.
Politics
UK-US trade deal ‘isn’t worth the paper it’s written on’, says Nobel Prize-winning economist
A Nobel Prize-winning economist has told Sky News the recently announced UK-US trade deal “isn’t worth the paper it’s written on”.
Sir Keir Starmer and Donald Trump announced the “first-of-a-kind” agreement with a live, televised phone call earlier this week – and the British prime minister hailed the deal as one that will save thousands of jobs in the UK.
Politics latest: Tories criticise proposals to tackle immigration
But leading economist Joseph Stiglitz has told Sunday Morning with Trevor Phillips he “wouldn’t view [the deal] as a great achievement”.
“Any agreement with Trump isn’t worth the paper it’s written on,” he said, pointing out the president signed deals with Canada and Mexico during his first term – only to slap them with hiked tariffs within days of returning to the White House this year.
“I would view it as playing into Trump’s strategy,” he said.
“His strategy is divide and conquer, go after the weakest countries, and sort of put the stronger countries in the back.”
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How good is the UK-US deal?
The scramble to secure a UK-US trade deal was sparked by Mr Trump’s ‘Liberation Day’ announcement last month, which saw the president hike import tariffs for multiple countries and subsequently send global markets crashing.
China initially faced tariffs of 34% and when Beijing hit the US with retaliatory rates, a trade war quickly ensued.
The US and China now impose tariffs of above 100% on each other, but representatives from the two countries have this weekend met for high-stakes negotiations.
Read more:
Key details in the UK-US deal
Analysis – the challenge Starmer faces
Donald Trump, with US vice president JD Vance and Britain’s ambassador to the US Peter Mandelson, announcing the deal. Pic: AP
Sir Keir Starmer dialled in for the deal announcement. Pic: AP
With its response to Mr Trump, Beijing “made it very clear that the US is very dependent on China in so many ways,” Mr Stiglitz said.
“So they’re beginning now to negotiate, but from a position of strength.”
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Asked if he thinks the UK should have focused on its relationship with the EU instead of the US, Mr Stiglitz said: “Very much so.
“My view is that if you had worked with the EU to get a good deal, you could have done better than what you’ve done.
“If it turns out, in the end, when you work it all out, Trump is unhappy, he’ll run. If he’s unhappy, I pray for you.”
Among the terms in the UK-US trade deal are reduced tariffs on British car and steel exports to the US, while the UK has agreed to remove a tariff on ethanol, used to produce beer.
The agreement also opens a new agricultural exchange, with US farmers being given access to the UK for the first time – though UK food standards on imports have not been weakened.
UFC fighter turned Irish political candidate Conor McGregor has endorsed the idea of building a Bitcoin reserve in his country to give more “power back to the people.”
“Crypto in it’s origin was founded to give power back to the people. An Irish Bitcoin strategic reserve will give power to the people’s money,” McGregor wrote to X on May 9.
The former UFC champion said he would discuss his plans in more detail in an upcoming X spaces, prompting responses from some of the Bitcoin industry’s most prominent leaders.
“We need the greatest minds for this BTC Reserve. Message me and lets chat on my space,” McGregor said in response to Bitcoiner and host of The Pomp Podcast, Anthony Pompliano.
One of US President Donald Trump’s crypto advisors, David Bailey, also reached out, to which McGregor responded: “David message me, let’s discuss your ideas!”
McGregor announced his independent candidacy for the Irish presidency in late March 2025, centering his campaign on anti-immigration policies and combating crime.
Ireland’s next presidential election must take place by Nov. 11, 2025, as the term of the current President, Michael D. Higgins, is set to end the day after.
Establishing a Bitcoin reserve — let alone one coming from a minor, independent party — would be no easy feat.
Despite recent regulatory progress, the US, El Salvador and Bhutan are among the few countries that have established a Bitcoin reserve to date.
Related: US has ‘countless’ ways to bolster Bitcoin reserve: Bo Hines
McGregor’s political visibility was recently boosted by a trip to the White House, where he met Trump and received his support.
However, McGregor is facing intense scrutiny in Ireland, having recently been found guilty of sexual assault in a civil case — a conviction which he has since appealed — while also previously being investigated for hate speech crimes.
McGregor’s last crypto endeavor failed
McGregor’s push for a Bitcoin reserve comes a little over a month after the McGregor-backed REAL project failed to attract sufficient funding in its token launch pre-sale, prompting a full refund to all token bidders.
The team behind the project, Real World Gaming, only raised $392,315 over a 28-hour presale on April 5 and 6, less than half of the $1 million minimum requirement that it initially set.
Magazine: Adam Back says Bitcoin price cycle ’10x bigger’ but will still decisively break above $100K
Sir Keir Starmer has joined other European leaders in Kyiv to press Russia to agree an unconditional 30-day ceasefire.
The prime minister is attending the summit alongside French President Emmanuel Macron, recently-elected German Chancellor Friedrich Merz and Polish Prime Minister Donald Tusk.
It is the first time the leaders of the four countries have travelled to Ukraine at the same time – arriving in the capital by train – with their meeting hosted by President Volodymyr Zelenskyy.
Sir Keir Starmer, Emmanuel Macron and Friedrich Merz travelling in the saloon car of a special train to Kyiv. Pic: Reuters
Leaders arrive in Kyiv by train. Pic: PA
It comes after Donald Trump called for “ideally” a 30-day ceasefire between Kyiv and Moscow, and warned that if any pause in the fighting is not respected “the US and its partners will impose further sanctions”.
Security and defence analyst Michael Clarke told Sky News presenter Samantha Washington the European leaders are “rowing in behind” the US president, who referred to his “European allies” for the first time in this context in a post on his Truth Social platform.
“So this meeting is all about heaping pressure on the Russians to go along with the American proposal,” he said.
“It’s the closest the Europeans and the US have been for about three months on this issue.”
Sir Keir Starmer, Volodymyr Zelenskyy and Emmanuel Macron among world leaders in Kyiv. Pic: AP
Trump calls for ceasefire. Pic: Truth Social
Ukraine’s foreign minister Andrii Sybiha said Ukraine and its allies are ready for a “full, unconditional ceasefire” for at least 30 days starting on Monday.
Ahead of the meeting on Saturday, Sir Keir, Mr Macron, Mr Tusk and Mr Merz released a joint statement.
European leaders show solidarity – but await Trump’s backing
The hope is Russia’s unilateral ceasefire, such as it’s worth, can be extended for a month to give peace a chance.
But ahead of the meeting, Ukrainian sources told Sky News they are still waiting for President Donald Trump to put his full weight behind the idea.
The US leader has said a 30-day ceasefire would be ideal, but has shown no willingness yet for putting pressure on Russian president Vladimir Putin to agree.
The Russians say a ceasefire can only come after a peace deal can be reached.
European allies are still putting their hopes in a negotiated end to the war despite Moscow’s intransigence and President Trump’s apparent one-sided approach favouring Russia.
Ukrainians would prefer to be given enough economic and military support to secure victory.
But in over three years, despite its massive economic superiority to Russia and its access to more advanced military technology, Europe has not found the political will to give Kyiv the means to win.
Until they do, Vladimir Putin may decide it is still worth pursuing this war despite its massive cost in men and materiel on both sides.
“We reiterate our backing for President Trump’s calls for a peace deal and call on Russia to stop obstructing efforts to secure an enduring peace,” they said.
“Alongside the US, we call on Russia to agree a full and unconditional 30-day ceasefire to create the space for talks on a just and lasting peace.”
Sir Keir and Volodymyr Zelenskyy during a meeting in March. Pic: AP
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Putin’s Victory Day parade explained
The leaders said they were “ready to support peace talks as soon as possible”.
But they warned that they would continue to “ratchet up pressure on Russia’s war machine” until Moscow agrees to a lasting ceasefire.
“We are clear the bloodshed must end, Russia must stop its illegal invasion, and Ukraine must be able to prosper as a safe, secure and sovereign nation within its internationally recognised borders for generations to come,” their statement added.
“We will continue to increase our support for Ukraine.”
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Read more:
Russia’s VE Day parade felt like celebration of war
Michael Clarke Q&A on Ukraine war
Ukraine and Russia accuse each other of breaching ceasefire
The European leaders are set to visit the Maidan, a central square in Ukraine’s capital where flags represent those who died in the war.
They are also expected to host a virtual meeting for other leaders in the “coalition of the willing” to update them on progress towards a peacekeeping force.
Military officers from around 30 countries have been involved in drawing up plans for a coalition, which would provide a peacekeeping force in the event of a ceasefire being agreed between Russia and Ukraine.
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This force “would help regenerate Ukraine’s armed forces after any peace deal and strengthen confidence in any future peace”, according to Number 10.
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