Rachel Reeves, the Chancellor, has signalled that economic growth must take precedence over net zero goals, creating a likely rift with Energy Secretary Ed Miliband and senior Labour figures who remain opposed to expanding the UK’s biggest airports.
Speaking at the World Economic Forum in Davos, Reeves insisted that “the answer can’t always be no” to major infrastructure projects, as she outlined Treasury support for controversial plans to build a third runway at Heathrow and extend facilities at Gatwick and Luton. She argued that, after years of sluggish growth, “when we say growth is the number one mission of this Government, we mean it. That means it trumps other things.”
Her stance risks alienating party heavyweights such as Sir Sadiq Khan, Mayor of London, and Andy Burnham, Mayor of Greater Manchester, who are firmly against airport expansion. Miliband, who has long championed climate initiatives and previously opposed a new runway at Heathrow, has indicated that net zero is “unstoppable” but is moving “not fast enough.”
Reeves acknowledged the potential tension but criticised the approach of past administrations, which she said often allowed important economic opportunities to be derailed by local resistance and policy hesitancy. “Of course there are other things that matter,” she said, “but growth has to trump other considerations.”
Having already imposed £42 billion in tax rises last October to bring the public finances “under control,” Reeves sought to reassure businesses that she would not come back “for more” at the next fiscal statement. Emphasising her instinct “to have lower taxes, less regulation,” she was careful not to make firm promises on future tax cuts but stressed: “We’re never going to have to come back again and do a budget like that.”
Reeves also highlighted the departure of Marcus Bokkerink, chairman of the Competition and Markets Authority, as evidence of the Government’s determination to align regulators with a “pro-growth” agenda. Bokkerink’s successor, Douglas Gurr, the former UK boss of Amazon, is expected to reflect this priority.
To bolster innovation and attract talent in artificial intelligence, biotechnology and other high-growth sectors, Reeves revealed that ministers are “looking again” at the UK’s immigration rules. “Britain is open for business. We are open for talent,” she said, underlining the goal of making it easier for skilled workers to secure visas.
The Chancellor’s robust endorsement of growth over net zero arrives amid heightened pressure on the Government following a surge in gilt yields and renewed concerns about Britain’s economic outlook. Reeves is holding a series of meetings with business leaders and investors in Davos to rally support and promote the UK as a competitive global destination.
While her comments could energise the business community by promising a less onerous regulatory environment and fewer tax surprises, they may also deepen divisions within Labour and prompt environmental groups to mount fresh opposition to large-scale developments such as an expanded Heathrow.
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Reeves puts growth first in clash over net zero and Heathrow expansion