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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.

Rachel Reeves poses for photographs with her Treasury team as she leaves 11 Downing Street.
Pic: PA
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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



Ed Conway

Economics and data editor

@EdConwaySky

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.

Read the analysis in full here

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.

Sir Keir Starmer and Chancellor Rachel Reeves. Pic: AP
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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.

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Trump says Musk ‘off the rails’ for forming political party to rival GOP

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Trump says Musk ‘off the rails’ for forming political party to rival GOP

Trump says Musk ‘off the rails’ for forming political party to rival GOP

US President Donald Trump has blasted Elon Musk’s plan to start a new political party that could splinter the Republican vote in the 2026 midterm elections.

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MP recalls childhood abuse as he calls for law change to make domestic abuse a specific criminal offence

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MP recalls childhood abuse as he calls for law change to make domestic abuse a specific criminal offence

An MP who decided until recently to “never speak” about the abuse he suffered as a child has shared his harrowing story so that “no kid has to go through” what he did.

Josh Babarinde describes being physically abused by his mother’s former partner from the age of four, and remembers crying himself to sleep under the covers “hearing shouts, hearing screams and things smash”.

He says he became hypervigilant growing up and felt safe at school but “like he was treading on eggshells” in his own home.

The Eastbourne MP, who is also the Liberal Democrats’ justice spokesperson, says his experience has driven his politics. He is calling on the government to stop abusers “slipping through the net” and being released from prison early.

Opening up about his story in his twenties was “difficult” but looking back, Mr Babarinde says, he is “so proud of the resilience of that kid”.

The MP recently found his childhood diary containing Star Wars drawings alongside an entry he wrote from the bathroom. The diary, he recalls, wrote: “I’m really going to try to go (to the toilet) but I can’t. Oh my goodness, I’m gonna be in so much trouble, I’m going to get smacked so hard.”

Then an entry five minutes later: “I still haven’t done anything, I’m going to be in so much trouble.”

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He says reading the entry reminded him of how “helpless” he felt.

“It was mortifying,” he says. “An abuser takes away your sense of self-worth.”

Josh Babarinde speaking to Sky's Ali Fortescue.
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Mr Babarinde says he wants the government to ‘properly recognise domestic abuse crimes in the law’

The 32-year-old is calling on the government to change the law to make domestic abuse a specific criminal offence. The change would mean, he argues, abusers can no longer effectively disguise their history under other offences like assault.

He says the Ministry of Justice’s early release scheme, which has seen thousands of prisoners released early to ease overcrowding, has failed to exclude domestic abusers despite government promises because there is no formal categorisation for offenders.

It is impossible, he argues, to know exactly how many domestic abusers are in prison currently so perpetrators are “slipping through the net” on early release.

Read more from Sky News:
Remembering the bravery of 7/7 victims and responders 20 years on
Met Police chief calls for ‘mega’ forces in push for shake-up

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January: Rising violence against women and girls

Mr Babarinde says the uncertainty means victims and survivors are not able to prepare for their abuser’s release.

He said: “They might need to move house or move their kids to a new school, shop in different places. All of these kind of things are so important, and so that’s why that commitment the government made was so important.”

A spokesperson for the Ministry of Justice said: “Our thoughts are with all victims of domestic abuse – it takes immense courage to speak out.

“We are building a justice system that puts victims first – strengthening support, increasing transparency, and giving people the confidence to come forward and be heard.”

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Another tantrum from the Labour backbenches is inevitable

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Rachel Reeves hints at tax rises in autumn budget after welfare bill U-turn

In common with many parents across the country, here’s a conversation that I have with my young daughter on a semi-regular basis (bear with me, this will take on some political relevance eventually).

Me: “So it’s 15 minutes until your bedtime, you can either have a little bit of TV or do a jigsaw, not both.”

Daughter: “Ummmm, I want to watch TV.”

Me: “That’s fine, but it’s bed after that, you can’t do a jigsaw as well.”

Fast-forward 15 minutes.

Me: “Right, TV off now please, bedtime.”

(Pause)

Daughter: “I want to do a jigsaw.”

Now replace me with the government, the TV and jigsaw options with axing welfare cuts and scrapping the two-child cap, and my daughter with rebellious backbenchers.

Politics latest: Former Labour leader calls for wealth tax on assets above £10m

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Rachel Reeves’s fiscal dilemma

That is the tension currently present between Downing Street and Labour MPs. And my initial ultimatum is the messaging being pumped out from the government this weekend.

In essence: you’ve had your welfare U-turn, so there’s no money left for the two-child cap to go as well.

As an aside – and before my inbox fills with angry emails lambasting me for using such a crude metaphor for policies that fundamentally alter the lives of some of the most vulnerable in society – yes, I hear you, and that’s part of my point.

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Welfare U-turn ‘has come at cost’

For many in Labour, this approach feels like the lives of their constituents are being used in a childish game of horse-trading.

So what can be done?

Well, the government could change the rules.

Altering the fiscal rules is – and will likely remain – an extremely unlikely solution. But as it happens, one of Labour’s proverbial grandparents has just popped round with a different suggestion.

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Welfare: ‘Didn’t get process right’ – PM

A wealth tax, Lord Neil Kinnock says, is the necessary outcome of the economic restrictions the party has placed on itself.

Ever the Labour storyteller, Lord Kinnock believes this would allow the government to craft a more compelling narrative about whose side this administration is on.

That could be valuable, given one of the big gripes from many backbench critics is that they still don’t really understand what this prime minister stands for – and by extension, what all these “difficult decisions” are in aid of.

The downside is whether it will actually raise much money.

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Is Corbyn an existential risk to Labour?

The super-rich may have lots of assets to take a slice from, but they also have expensive lawyers ready to find novel ways to keep their client’s cash away from the prying eyes of the state.

Or, of course, they could just leave – as many are doing already.

In the short term, the future is a bit easier to predict.

If Downing Street is indeed now saying there is no money to scrap the two-child cap (after heavy briefing in the opposite direction just weeks ago), an almighty tantrum from the backbenches is inevitable.

And as every parent knows, the more you give in, the harder it becomes to hold the line.

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