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The Chancellor has today (8 July) promised to take immediate action to fix the foundations of the economy, rebuild Britain and make every part of the country? better off.
In her first speech as Chancellor, Rachel Reeves pledged to leaders of some of the UKs pioneering industries to build growth on strong and secure foundations built on stability, investment and reform, and forged through a new partnership with the private sector.
Addressing the difficult economic inheritance this government faces, she committed to taking immediate action to drive sustained economic growth, the only route to improving the prosperity of our country and the living standards of working people.
Setting out her first steps to deliver on the governments commitments in its manifesto that every action it takes will be based on sound money and economy stability, the Chancellor promised a new economic model that will grow the economy and keep taxes, inflation and mortgages as low as possible.
The Chancellor said had the UK economy grown at the average rate of OECD economies over the fourteen years from 2010, it would be 143.3 billion larger worth 5,053 for every household in the country. This could have brought in an additional 58 billion in tax revenues in the last year alone to sustain our public services.
Taking decisive action, the government is today announcing a series of measures to lay the foundations for a dynamic, modern and growing economy, including taking urgent steps to build 1.5 million homes over the next five years and the immediate removal of the de facto ban on onshore wind in England, as part of its clean energy mission.
Chancellor of the Exchequer Rachel Reeves said:
Today I am taking immediate action to fix Britains economic foundations.
By growing our economy we can rebuild Britain and make every part of the country better off.
Deputy Prime Minister Angela Rayner said:
Our country is under new management and a new era for economic growth will be built on secure foundations.
The Chancellor and I will work in lockstep to kickstart the economy, unleashing housebuilding and powering local growth.
Change starts now. We will unblock the bottlenecks and drive forward a transformational package to build the homes people need.
Energy Security and Net Zero Secretary Ed Miliband said:
Every family has paid the price of the ban on onshore wind farms in higher energy bills. This ban has undermined our energy security, put costs on peoples bills especially those on lower incomes and held us back in our fight against climate change.
This Government is wasting no time in delivering the bold plan we need to take back control of our energy; boosting our energy independence and cutting bills for families as we tackle the climate crisis.
Getting rid of this ban and giving priority for planning permission for much needed infrastructure sends an immediate signal to investors here and around the world that the UK is back in business, an immediate step in our mission to make Britain a clean energy superpower.
The government is taking swift action on its central growth mission by announcing the following:
Planning
The government is taking swift action to identify and unblock key stalled sites to get large housing schemes moving forward, starting with four sites across England to unlock over 14,000 homes: Liverpool Central Docks, Northstowe, Worcester Parkway and Langley Sutton Coldfield.
The Chancellor has also welcomed the Deputy Prime Ministers commitment to make the economic benefit of development a central consideration when intervening in the planning system. This starts today by recovering two appealed planning applications for data centres in Buckinghamshire and Hertfordshire.
To facilitate this new approach, the Deputy Prime Minister will also write to local mayors and the Office for Investment to ensure that any investment opportunity with important planning considerations that comes across their desks is brought to her attention and to the Chancellors. This will help to ensure the planning system can unlock major schemes from clean energy projects and transport infrastructure to film studios and art-entertainment venues.
The Chancellor has also confirmed that the government will support local authorities with 300 additional planning officers across the country.
Further announcements will be made in the coming weeks to accelerate the development of housing and infrastructure, including launching a landmark consultation on an updated, growth-focused National Planning Policy Framework to include mandatory housing targets and a requirement to review greenbelt boundarieswhere necessary to meet them.
These will prioritise Brownfield and grey belt land for development to meet housing targets where needed, partnered with new golden rules that will make sure the development this frees up will also deliver thousands of affordable homes, including more for social rent.
Critical major infrastructure
The current planning regime acts as a major brake on economic growth which is why the government will make the changes the country needs to forge ahead with new roads, railways, reservoirs, and other nationally significant infrastructure.
The government will set out new policy intentions for critical infrastructure in the coming months, ahead of updating relevant National Policy Statements within the next 12 months to provide certainty to industry. We will legislate to ensure they are updated at least every 5 years.
The government will also build on the Strategic Spatial Energy Plan which is being developed by the National Energy System Operator to speed up the roll out of clean power, and will seek to expand the use of spatial planning to other infrastructure sectors.
The Chancellor has asked the Secretaries of State for Transport and Energy Security and Net Zero to prioritise taking decisions on critical infrastructure projects which are with them now.
To go further, to help speed up delivery on infrastructure such as transport and energy, the government will review how it can unlock critical infrastructure, without weakening environment protections.
Alongside this, the government will make sure energy projects are prioritised in the planning system and consult on including onshore wind power developments in the Nationally Significant Infrastructure Projects (NSIP) planning regime.
Further details on ending the de facto ban on onshore wind will be set out later by the Department for Energy Security and Net Zero, and the Department for Levelling up, Housing and Communities.
Martha Lane Fox, President of the British Chambers of Commerce, said:
Fixing the foundations of the economy can provide businesses with the stability and certainty they need to unleash a wave of investment to create growth and new jobs.
Labours pledges to create an industrial strategy, improve trade relations with the EU, and boost skills training all have capacity to make a huge difference.
Todays commitment to deliver large scale infrastructure at greater pace, especially green energy projects and more housing where people want to live, is very welcome.
But policy must be backed up with better skilled and resourced planning departments to deliver this step change. Thats why the pledge to fund an extra 300 planning officers is so important.
Its also why the BCCs Planning Skills Fund has been set up in partnership with Government. It will develop an additional pipeline of new and upskilled planning talent to boost growth in our local economies.
Additional information
For more information, read the Chancellors speech text
- Due to previous restrictions, only two onshore wind turbines have been built in England in almost a decade, with projects in the pipeline shrinking by 90%.
- The Chancellor used some facts based on Treasury analysis in her speech to industry leaders today. In the interests of transparency we are publishing more information on this analysis, including some facts not specifically referenced in her speech. We have also set out details of the methodology and sources used for this analysis.
GDP
The UK economy would be 143.3bn (6.3%) larger on an annualised basis in 2024Q1 if it had grown at the OECD average from 2010Q2 to 2024Q1:
This is 2081 per person, or 5053 per household.
Tax receipts would have been 58bn higher in 2023-24 (holding the tax burden constant).
The UK economy would be 159bn (6.9%) larger on an annualised basis in 2024Q1, if it had continued to grow at the average rate seen between 1997Q2 and 2010Q2:
This is 2303 per person, or 5593 per household.
Tax receipts would have been 64bn higher in 2023-24 (holding the tax burden constant).
International forecasts
UK GDP would be 1.4% (32bn) larger by the