Greater Manchester business leaders react to Chancellor Rachel Reeves’ speech on growth

Chancellor Rachel Reeves declared she would go ‘further and faster’ to deliver on the government’s growth ambitions during a speech at Siemens’ Healthineers in Oxfordshire on 29th January.

In her speech, she outlined plans to review the government’s Green Book guidance on appraising public investment, which has historically disproportionately favoured decisions benefiting London and the South East. She also gave backing to plans in Greater Manchester for the redevelopment of Old Trafford, although stopped short of announcing additional funding from Westminster.

Rachel Reeves also set out ambitions to deliver an Oxford-Cambridge Growth Corridor, with the potential to add £78 billion to the UK economy. Proposals include support for developing around 4,500 homes in Cambridge, investment in transport links including a direct rail connection between the two cities, and nine new reservoirs in the area. Highlighting the area’s technology and life sciences businesses, the Chancellor described the region as having the potential to become Europe’s equivalent to California’s Silicon Valley.

With the Chancellor’s focus on one of the UK’s most economically productive areas, business leaders in the North West have responded cautiously to the speech.

Chris Fletcher, Policy Director at Greater Manchester Chamber of Commerce, praised action on updating public investment rules and support for Old Trafford’s regeneration, but highlighted omissions from the Chancellor’s speech on subjects such as rising wage costs. He said:

“There are many things to welcome in the Chancellor’s speech today with a clear ambition to kickstart growth by tackling the barriers that have played a part in holding back critical parts of the economy.

“Confirmation of the recently announced plans for Old Trafford, reference to the great work being done in Stockport and outlining a pilot programme with the Office of Investment and the National Wealth Fund in GM are to be welcomed. There were other announcements around changes to planning procedures and other areas where the pace of infrastructure development will be speeded up and restrictions removed.

“However for many business owners listening to this they will not be comforted at all by the Chancellor’s confirmation of the NIC rise announced in the Budget and set to hit them from April onwards. We are hearing from businesses stating this will cost tens of thousands of pounds and for them the promise of faster developments will seem pretty meaningless.

“The announcement of a review of the Treasury’s ‘Green Book’ – the mechanism they use to assess the ‘value’ of infrastructure schemes and which naturally favours development in high value areas such as the South East, and therefore a major blocker of growth in the North, is long overdue and should help rebalance critical developments across the country.

“The ambitious plans for Oxford and Cambridge and expansion of Heathrow were other critical parts of the speech and we will be looking closely at how these will help local economies here in the North.“

Ryan Etchells, Chief Commercial Officer at Cheadle-based property lender Together, was more critical. He argued that investment in an already wealthy region of the UK would have limited impact on challenges holding back growth in the North of England:

“The Chancellor’s promise of our very own Silicon Valley linking Oxford and Cambridge is certainly headline grabbing but is insufficient to unlock growth for the majority of UK SMEs. 

“The Government’s Levelling Up Agenda was meant to stretch right across the country. Singling out two of the wealthiest regions in the UK will in no way fully answer the larger growth and housing puzzle. Building homes in the Oxford-Cambridge corridor is one element, but without policy support those who don’t fit the ‘perfect mortgage model’ will still face challenges. And, overlooking regions which are in most in need to focus on the home counties and Capital is troubling.

“For example, while we’d agree that the football club should foot the bill for the re-development of the Old Trafford stadium itself, as a Manchester-based property lender what we need to see is how the Government plans to support this project in terms of wider regeneration of the area, which would provide fantastic opportunities for residential and commercial investors and developers.”

“All eyes are on Labour to renew housing plans for The North and ensure plans for driving economic growth are carried out fairly – before tax hikes start to bite in April.” 

The life sciences sector, however, has welcomed the plans outlined in the Chancellor’s speech. Steve Bates, CEO of the UK Bioindustry Association said:

“The UK is a global leader in biotech innovation and attracts the most venture capital in Europe. New figures we’ve published this week show that biotech is a vibrant growth sector of the UK economy with an exceptional ability to attract global investment. Delivering the infrastructure needed to support the growth at pace – especially in the Oxford Cambridge growth corridor- is key to the success of our sector.“

The Chancellor also gave her backing to expansion of the UK’s largest airport, Heathrow, and the construction of a third runway. Responding to this announcement, a statement from Manchester Airports Group has welcomed the move:

“MAG welcomes the Chancellor’s recognition of the pivotal role airports have to play in kick-starting the economy and raising living standards across the UK. Her positive approach to planning is good news and reflects the urgency of her growth mission.  

“As an island trading nation, we need ever better connections with the world and thriving airports in all parts of the country. That means backing our aviation sector while helping it achieve its net zero targets. 

“We can start by maximising the potential of existing runways across the UK.  At MAG, we plan to invest £2.5bn in Manchester, London Stansted and East Midlands over the next five years – the largest private investment in transport infrastructure outside the M25. That will create jobs, drive trade and attract immediate inward investment in the North, South and Midlands. 

“A prime example is our partnership with Prologis at East Midlands Airport. It will unlock £1bn of further investment and attract global advanced manufacturing and logistics businesses to the region, creating up to 2,000 jobs.

“We need a policy environment that encourages private investment in airports and will work with Government to ensure we all maximise the contribution aviation makes to its economic vision for everyone in the UK.”