Chancellor Rachel Reeves (pictured) has called net zero the “industrial opportunity of the 21st century” in a major speech to business leaders on economic growth plans.
The chancellor said there is “no trade off between economic growth and net zero”, while announcing two national wealth fund investments in companies that aid the energy transition.
Connected Curb will receive £65m backing to extend its electric charging network, while a £28m equity investment was made in Cornish Metals, which provides raw material for solar panels, wind turbines and electric vehicles.
The government will also release an updated carbon plan later in 2025. while Reeves added the government is removing barriers to delivering more offshore wind by designating areas to provide green power.
A £7.9bn investment over the next five years into the UK’s water resource management was also announced.
The speech also included backing for a third Heathrow runway and calls to reform planning processes in order to unlock growth.
James Alexander, CEO of UKSIF, said Reeves’s recognition of net zero as a major economic opportunity is “encouraging”.
“She is right to identify planning regulation as stifling investment into the UK. The UK’s prohibitively slow and opaque planning system has discouraged the flow of billions in private capital into key UK growth areas like renewable energy, electric vehicles, and nascent green technologies. But not all regulation is anti-growth.
“The UK stands to gain more from maintaining and furthering our leadership posture in sustainability, especially at a moment where other major economies risk alienating green investment by signalling regressions on climate ambitions.”
Reacting to the speech, Institute of Economic Affairs executive director Tom Clougherty said the chancellor is “saying all the right things on growth” and “should be applauded” for many of the announcements made.
“Restoring Britain’s economic dynamism simply has to be the government’s overriding objective – without that, no other meaningful agenda is possible. The challenge now is to make sure that rhetoric becomes reality,” Clougherty said.
“Can the government face down opposition to the developments that it now wants to proceed? Heathrow’s third runway will be the acid test of how heartfelt the government’s growth commitment is. After all, we have been here – and been disappointed – before.
“The government also needs to ensure that pro-growth action on specific projects is following by fundamental, systemic reforms – which mean that in future, market-led development does not depend on intervention from Downing Street for its viability. We need genuine regulatory liberalisation if this pro-growth pivot is going to be sustainable.
“Crucially, how will prioritising growth sit alongside the government’s plans on employment law and net zero? As things stand, policy commitments in those areas clearly militate against stronger economic growth. If the government is willing to rethink its approach there, we will know that they are serious about putting growth first.”
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The chancellor also set out plans to create the “Silicon Valley of Europe” between Oxford and Cambridge, through investments in a series of infrastructure projects in the region.
“Low growth is not our destiny, but growth will not come without a fight, without a government willing to take the right decisions now to change our country’s future for the better,” Reeves said.
Lindsay James, investment strategist at Quilter Investors, called the plans ambitious.
“Cambridge University’s proposal for a new large-scale innovation hub in the city centre, which Reeves declared as the world’s leading science and tech cluster by intensity, marks a significant step forward. Additionally, the new growth commission for Oxford, the planned reservoirs near Oxford and Cambridge, and the improved rail links in the area are all positive developments.
“However, it is questionable whether there is the necessary scale, funding and skills to truly become Europe’s Silicon Valley. Silicon Valley offers tech companies unparalleled growth opportunities due to access to vast venture capital funding, a cluster of skills, and the sheer scale of the US market. Replicating this in the UK will be extremely challenging, so there is a very long and winding road ahead.”
This story was written by our sister title, Portfolio Adviser
