Rachel Reeves is to announce a new city merger (Image: Getty)
Chancellor Rachel Reeves is to announce the creation of a high-tech mega-city linking Cambridge and Oxford in a desperate bid to “kickstart” the faltering economy.
She will vow to grow the economy in a long-awaited economic growth speech following a wave of criticism from industry and warnings that her tax-raising Budget is destroying jobs.
In a sign of growing concern within Number 10, it emerged that Prime Minister Sir has ordered every member of his Cabinet to explain how all new policy proposals will help the economy grow before they can receive approval.
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The is expected to announce that will receive the green-light to build a third runway, with Gatwick and Luton airports also allowed to expand.
But it was confirmed that she will announce government support for a planned Oxford-Cambridge Growth Corridor, also taking in Milton Keynes, with new housing, rail links and road upgrades designed to turn the region into the UK’s own Silicon Valley.
The project will be led by Patrick Vallance, who was Chief Scientific Adviser during the pandemic. An initial 4,500 new homes will be built around Cambridge but there will also be “new and expanded communities”. An earlier Government study suggested the area’s population could grow by 1.9 million by 2050.
In addition, the Chancellor will confirm that water companies will build nine new reservoirs.
She is expected to say: “We are at the forefront of some of the most exciting developments in the world like artificial intelligence and life sciences. We have great companies based here delivering jobs and investment in Britain.
“And we have fundamental strengths – in our history, our language, and our legal system – to compete in a global economy.”
Ms Reeves will say: “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.”
The speech follows a succession of dire economic figures with world-leading financial analysts S&P Global warning the UK economy “largely stalled at the start of 2025” as firms cut employment in January thanks partly to “widespread concerns over higher staff costs associated with the Budget changes”.
Shadow Chancellor Mel Stride said: “The biggest barriers to growth in this country are Rachel Reeves, , and their job destroying budget.
“Hastily cobbled together announcements of growth in the 2030s will do nothing to help the businesses cutting jobs right now because of Labour’s punishing jobs tax, the companies being crushed under their barrage of new regulations, or the farmers facing bankruptcy over the cruel family farm tax.”
Sir has told his Cabinet that growth must be “hard-wired” into everything the government did, with the effect on growth assessed for every new policy.
However the Government’s own assessment of the Employment Rights Bill championed by Deputy Prime Minister , currently making its way through Parliament, has warned that it will “impose a direct cost on business of low billion pounds per year (ie, less than £5billion annually).’
The impact assessment said that 17 per cent of employers would respond by cutting jobs.