Chancellor Rachel Reeves has announced a new plan to unlock the potential of the Oxford-Cambridge Growth Corridor, that she says has the potential to become “Europe’s Silicon Valley” and boost the UK economy by £78 billion by 2035.
It’s part of a government pledge to support infrastructure improvements, including new transport links, housing developments, and investment in water and AI sectors, clearing the way for 4,500 new homes
The plans aim to strengthen the UK’s leadership in key industries such as life sciences, AI and advanced manufacturing, through new funding and new growth commission and follows last week’s announcement of a National Wealth Fund and Office for Investment charged with finding will new ways to spur regional growth.
She told and audience in Oxford that she will go “further and faster” to kick start the economy, adding: “Britain has huge potential, but for too long that potential has been held back. The Oxford-Cambridge Growth Corridor is a critical part of our Plan for Change, and together we will create the right conditions for economic growth, innovation, and prosperity across the UK.”
Jones: what are the tangible benefits?
Tina McKenzie, Policy Chair of the Federation of Small Businesses said it was a rallying cry that “sends a strong, confident message that from now on growth comes first, and any barriers to that will be erased.
“Today’s announcements must herald the start of an unyielding focus on growth, and more action to help small firms. Pro-growth choices, whether through the Spending Review, the next King’s Speech with a new Small Business Bill, action on regulators, improving the Employment Rights Bill and revolutionising HMRC’s customer service, are an absolute must. The whole country needs to prove the UK is a great place to do business, and that entrepreneurs can be given the confidence necessary to make growth a reality.”
Lisa Miles-Heal, CEO of accounting software firm, Silverfin described the ambition to create the Silicon Valley of Europe as bold and risks being undermined by the government’s previous taxation stance.
“Attracting home-grown investment is going to be tough. The recent rise in capital gains tax has chipped away at investor incentives, making it less appealing to take risks with their own capital. Without a tax environment that encourages investment, the flow of vital investment to a new Silicon Valley is likely to be dampened,” she said.
“Many businesses face a new tax reality that will limit their ability to invest in new innovations. Operating in these conditions means they are more likely to save profits for a rainy day, than proactive take a risk on R&D and growth.”
Miles-Heal: plans are bold but risky
Moderna has invested £1bn in Harwell, Oxfordshire, to strengthen the UK’s position as a global leader in biopharmaceutical innovation. And new funding for a cancer research hospital as part of the NHS’s New Hospital Programme further bolsters the regions life sciences capacity.
Richard Eardley, CEO of Investigo, part of The IN Group, said: “The development of AI and advanced manufacturing will require a workforce capable of meeting the demands of cutting-edge technologies.
“We need to ensure that regional tech hubs are supported by strong educational foundations and accessible skills programs that can nurture local talent, retain graduates, and reduce the reliance on talent from outside the region.”
Arjun Mahajan, Chief for Client Partnerships at AND Digital said: “The UK has the potential to be a global leader in AI and Technology but investment alone won’t achieve this, we need talent, infrastructure and bold action. The focus on AI Growth Zones and innovation hubs is a strong start but the real challenge comes from building a highly skilled workforce to drive this change.”
“Businesses must take a people AND innovation approach to drive skills training, from early careers to mid-career switchers in order to attract and develop talent. The UK must move fast to create a system where AI Accelerator Programs enable companies of all sizes to thrive, because in the race for AI leadership, standing still means falling behind.”
Eardley: tech hubs will need support
She said: “The UK’s six million small businesses and start-ups will welcome the return of a positive drum beat for 2025 – but they will be keen to understand how the Chancellor’s plans like the Oxford-Cambridge Growth Corridor talked about today, translate into tangible benefits for local enterprises.
“The success of initiatives like this will ultimately depend on whether they create an inclusive economic environment that supports businesses of all sizes. We hope this represents the start of a more upbeat outlook and approach to the economy.”
And Hal Cook, senior investment analyst at Hargreaves Lansdown pointed out: “Recent data from the Investment Association has shown that there has been a steady and continued growth in retail investment since 2020, with the share of assets managed on behalf of retail investors now stands just over a quarter of AUM, at 26%. While the National Wealth Fund has lofty ambitions to attract inward investment from the big beasts of global finance, opportunities need to be created for armies of smaller retail investors, who together would be a significant force to boost UK growth.
“Opportunities to invest in UK growth companies are few and far between with retail investors left out of most the stock market flotations, so providing them an ‘in’ to the National Wealth Fund would be a hugely welcome move.”
