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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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Royal College of Psychiatrists pulls support for assisted dying bill

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Royal College of Psychiatrists pulls support for assisted dying bill

The Royal College of Psychiatrists (RCP) has pulled its support for the assisted dying bill.

The announcement is a blow to supporters of the bill ahead of its return to the House of Commons on Friday.

It comes as plans to legalise assisted dying in Scotland passed the first stage this week.

Dr Lade Smith, president of the RCP, said: “The RCP has reached the conclusion that we are not confident in the Terminally Ill Adults Bill in its current form, and we therefore cannot support the Bill as it stands.”

The move is significant because, under the bill’s current stipulations, a panel including a psychiatrist would oversee assisted dying cases.

The RCP outlined a number of issues it had with the current bill, including: the bill not making provision for unmet needs, whether assisted suicide is classed as a treatment or not, what the psychiatrists’ specific role on the panel would be, and the increased demand the bill puts on psychiatrists.

If the college support remains withdrawn, and the bill passes, it isn’t clear what effects it may have.

More on Assisted Dying

Kim Leadbeater, the MP behind the bill, has confirmed it will include a clause that means anyone who does not want to be involved in the process will not have to do so.

Supporters of the bill argue it would ease the suffering of dying people, while opponents argue it would fail to safeguard some of the most vulnerable people in society.

Kim Leadbeater MP defends changes to Assisted Dying Bill
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MP Kim Leadbeater talking to Sky News

Questions over the bill

The more prominent role of a psychiatrist in the bill came about after a previous amendment.

Initially, the bill said that after two independent doctors approved an assisted dying case, it would then need to be further approved by a High Court judge.

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But MPs on the parliamentary committee scrutinising the bill voted to remove that clause in March.

Instead, Ms Leadbeater proposed a voluntary assisted dying commissioner that included an expert panel with a psychiatrist.

She said this was a “strength, not a weakness,” but opponents of the bill disagreed, saying removing the High Court judge “fundamentally weakens protections for the vulnerable”.

However, amid changes and amendments to the original bill, there has been growing concern about safeguarding and timeframes, Sky News political correspondent Ali Fortescue reported.

Friday’s debate was already delayed from 25 April, to give MPs more time to consider amendments.

If the bill passes on Friday, it will move to the House of Lords, where it will undergo similar legislative stages, and if it passes that too, it won’t come into effect until at least 2029, after its implementation was delayed.

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Civil service relocation and AI officials at heart of government cost cutting measures

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Civil service relocation and AI officials at heart of government cost cutting measures

AI civil servants and sending human workers out of London are at the heart of the government’s plans to cut costs and reduce the size of the state bureaucracy.

Shrinking the civil service has been a target of both the current Labour and recent Conservative governments – especially following the growth in the organisation during the pandemic.

From a low in 2016 of 384,000 full time workers, in 2024 there were 513,000 civil servants.

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The Department for Science, Innovation and Technology is claiming a new swathe of tools to help sift information submitted to public consultations could save “75,000 days of manual analysis every year” – roughly the work of 333 civil servants.

However, the time saved is expected to free up existing civil servants to do other work.

The suite of AI tools are known as “Humphrey”, after Humphrey Appleby, the fictional civil servant in the TV comedy Yes, Prime Minister.

The government has previously said the introduction of AI would help reduce the civil service headcount – with hopes it could save as much as £45bn.

Speaking today, Technology Secretary Peter Kyle appeared to take aim at expensive outsourcing contracts, saying: “No one should be wasting time on something AI can do quicker and better, let alone wasting millions of taxpayer pounds on outsourcing such work to contractors.”

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March: 10,000 officials could go

Move outside of London

Other money-saving plans announced today include moving 12,000 civil servants out of London and into regional hubs – with the government hoping it can save almost £100m by 2032 by not having to pay for expensive leases of prime office space in the capital.

Currently, 95,000 full time civil servants work in London.

Tens of millions of pounds a year are expected to be saved by the closure of 102 Petty France, which overlooks St James’s Park, and 39 Victoria Street, which is near the previous location of New Scotland Yard.

In total, 11 London offices are slated for closure, with workers being relocated to the likes of Aberdeen, Belfast, Darlington, Bristol, Manchester and Cardiff.

Read more:
More than 1,000 officials to be cut
Payouts for departing civil servants capped

Reeves hints at 10,000 cuts
‘Almost certain’ AI will lead to cuts

The reforms of the civil service are being led by Chancellor of the Duchy of Lancaster Pat McFadden – one of Sir Keir Starmer’s most influential ministers.

Mr McFadden said: “To deliver our plan for change, we are taking more decision-making out of Whitehall and moving it closer to communities all across the UK.

“By relocating thousands of civil service roles we will not only save taxpayers money, we will make this government one that better reflects the country it serves. We will also be making sure that government jobs support economic growth throughout the country.

“As we radically reform the state, we are going to make it much easier for talented people everywhere to join the civil service and help us rebuild Britain.”

The government says it wants senior civil servants out of the capital too – with the aim being that half of UK-based senior officials work in regional offices by the end of the decade.

The government claims the relocations and growth of regional hubs could add as much as £729m to local economies by 2030.

Pat McFadden delivers a keynote speech to the CyberUK conference.
Pic: PA
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Pat McFadden is leading the changes to the Civil Service. Pic: PA

Union welcome – cautiously

Unions appear to cautiously welcome the changes being proposed.

All of Prospect, the PCS and the FDA say it is positive to see better opportunities outside of the capital.

However, they have asked for clarity around whether roles may be lost and what will be offered to people transferring.

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Fran Heathcote, the general secretary of the PCS union, said: “If these government proposals are to be successful however, it’s important they do the right thing by workers currently based in London.

“That must include guarantees of no compulsory redundancies, no compulsory relocations and access to more flexible working arrangements to enable them to continue their careers should they wish to do so.”

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US lawmakers call for change in corporate digital asset taxes

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US lawmakers call for change in corporate digital asset taxes

US lawmakers call for change in corporate digital asset taxes

Two US senators are calling on Treasury Secretary Scott Bessent to “exercise [the department’s] authority” and change a provision affecting taxes on corporate holdings of digital assets.

In a May 12 letter, Senators Cynthia Lummis and Bernie Moreno suggested Bessent had the authority to change the definition of “adjusted financial statement income” under existing US law in a way that could reduce what digital asset companies pay in taxes. The proposed adjustment was suggested as a way to modify a provision of the Inflation Reduction Act, signed into law in 2022.

“Our edge in digital finance is at risk if US companies are taxed more than foreign competitors,” said Lummis in a May 13 X post.

Cryptocurrencies, Law, Taxes, Senate
May 12 letter to Treasury Secretary Scott Bessent. Source: Cynthia Lummis

According to the two senators, the proposed modification would provide “relief to corporations that invest in digital assets.” Lummis has been one of the most outspoken digital asset advocates in Congress, while Moreno took office in January after crypto-backed political action committees spent roughly $40 million to support his 2024 Senate race.

Related: Arizona governor kills two crypto bills, cracks down on Bitcoin ATMs

The Inflation Reduction Act, which went into effect in 2023, imposes a 15% minimum tax on companies that report more than $1 billion in profits for three consecutive years. The measure would seemingly include unrealized crypto gains and losses, leading to Lummis’ and Moreno’s calls for the Treasury Department to “act swiftly.”

Senate awaiting second vote on stablecoin bill

The call from the two senators came as lawmakers in the Senate are expected to consider another vote on the Guiding and Establishing National Innovation for US Stablecoins, or GENIUS Act — legislation to regulate payment stablecoins in the US. A motion for consideration failed to move forward in the Senate on May 8 due to Democratic lawmakers pushing back on Donald Trump’s ties to the crypto industry.

Lummis, one of the bill’s co-sponsors, suggested that she would continue to support digital asset regulation. The Senate could take up another vote in a matter of days.

Magazine: Best and worst countries for crypto taxes — plus crypto tax tips

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