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.”
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.”
Aman Parmar, Head of Marketing at Bizspace stressed that despite the optimism, her “reluctance to discuss taxes and her refusal to rule out further tax rises on businesses over the course of this parliament may well be leaving small business owners and startups nervous for the months ahead, and that they were somewhat ignored in todays speech.
“Ms Reeves, who has previously been criticised by UK business owners for her October 2024 tax-hiking budget, dedicated her speech to the long-term plans of focusing on stability, reform, and investment. She repeatedly took opportunities within her speech to clamp down on the message that she has not heard any reasonable alternatives to her changes to business taxes from the Conservative party, and that her ‘difficult decisions’ have been made in the best interest of the public.”
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.”
Emma Jones, CEO of small business support platform Enterprise Nation, described the speech as “action-orientated, pro-active tone delivering some much-needed optimism”.
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.”
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