The UK chancellor Rachel Reeves says the Labour government will go \u201cfurther and faster\u201d to kick-start the British economy. Economic growth \u2013 to raise living standards and fund public services \u2013 is apparently a core mission<\/a> of this government.<\/p>\n Yet since the general election last July, this growth has proved elusive<\/a>.<\/p>\n In fairness, the UK economy been pretty stagnant for a long time. And as Reeves sometimes mentions<\/a>, she arguably inherited the worst set of economic circumstances<\/a> since 1974.<\/p>\n Nevertheless, the government has been guilty of some major own goals. The means-testing of winter fuel payments<\/a> drew derision, while the public framing of a \u201cpainful\u201d budget in October 2024 dented business and consumer confidence<\/a>.<\/p>\n So after a difficult first six months in office, the chancellor\u2019s big speech on January 29 was an opportunity for a major economic reset. And there were some signs of encouragement.<\/p>\n She reaffirmed, for example, a commitment to reforming the UK\u2019s antiquated planning laws for residential and commercial building. And there was a big emphasis on public investment, which is to rise to 2.6% of GDP<\/a> over this parliament, compared to the previous government\u2019s plans of 1.9%.<\/p>\n Airport expansion at Heathrow<\/a> (and to a lesser extent, Luton and Gatwick) aims to enhance global connectivity and increase trade and investment, especially with emerging economies.<\/p>\n But those plans, which run counter to the government\u2019s net zero goals<\/a>, unsurprisingly sparked the ire of environmental campaigners<\/a>, as well as some senior Labour MPs and party donors.<\/p>\n They may also widen the UK\u2019s regional inequalities<\/a>, drawing more investment and economic activity to the south-east. The same goes for the notion of building Europe\u2019s \u201cSilicon Valley\u201d between Oxford and Cambridge<\/a>.<\/p>\n That said, some other regions may benefit from announcements<\/a> which included a \u00a328 million investment in Cornish Metals (for materials for solar panels and wind turbines), and \u00a363 million for advanced fuels which should bring more high-skilled jobs to areas like Teesside. There were also plans for housing and commercial redevelopment around Old Trafford in Manchester<\/a>.<\/p>\n Some of these projects will form part of the government\u2019s new industrial strategy<\/a>, which is expected in the spring.<\/p>\n One word to look out for when that strategy is unveiled is \u201cBrexit\u201d, which continues to act as a drag on the UK\u2019s growth. Yet in her speech, while Reeves used the \u201cgrowth\u201d word more than 50 times, she mentioned Brexit just once.<\/p>\n It deserves much more attention. For investment in the UK has been lacklustre<\/a> since the 2016 referendum, and research shows that post-Brexit red tape has hampered exports<\/a>, especially for smaller firms. Overall, the UK\u2019s exports of goods are down by 9%<\/a> since 2020, while similar economies have seen their exports rise by 1%.<\/p>\n The chancellor has previously suggested<\/a> a Brexit \u201creset\u201d, and there may be a future a deal<\/a> to ease some Brexit agri-food trade barriers. Reeves has also floated the possibility of the UK joining a \u201cPan-Euro\u201d customs zone<\/a>.<\/p>\n Other moves which might help UK manufacturing include a bill<\/a> that would allow the government to keep pace with new EU product safety regulations, and anything else which avoids new administrative costs<\/a> for businesses.<\/p>\n Yet despite the government perhaps adopting a more conciliatory tone with the EU, there are frustrations with the UK\u2019s \u201cred lines\u201d<\/a>, such as a refusal to agree to a scheme<\/a> which would make it easier for young EU citizens to travel, work and study in the UK, and for young UK nationals to do the same in EU member states.<\/p>\n And while the chancellor\u2019s speech highlighted the government\u2019s long-term ambitions for growth, there was little to address current weaknesses quickly.<\/p>\nRed tape restrictions<\/h2>\n
Execution<\/h2>\n
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<\/a><\/p>\nThe UK chancellor, Rachel Reeves, aims to accelerate economic growth but faces challenges. Her recent speech emphasized planning reforms, public investment, and airport expansion, sparking environmental concerns. Brexit-related trade barriers remain a key issue, yet were barely mentioned. Labour\u2019s pro-growth stance is promising, but execution, private investment, and regulatory reforms will determine its success.<\/em><\/p>\n Phil Tomlinson<\/a> is Professor of Industrial Strategy and Co-Director Centre for Governance, Regulation and Industrial Strategy (CGR&IS) at the University of Bath<\/a> and David Bailey<\/a> is Professor of Business Economics at University of Birmingham<\/a>. This article is republished from The Conversation<\/a> under a Creative Commons license. Read the <\/em>original article here.<\/em><\/a><\/p>\n