Chancellor to announce investments along Oxford-Cambridge Growth Corridor to 'kick start' economy

Rachel Reeves, Chancellor of the Exchequer, will pledge to go "further and faster" to deliver her government's Plan for Change, aimed at stimulating economic growth across the UK.

In a speech today, Reeves will unveil a package of measures designed to unlock the full economic potential of the Oxford-Cambridge Growth Corridor, which could contribute up to £78 billion to the UK economy by 2035.

Reeves will highlight the region’s importance, citing the universities of Oxford and Cambridge as global leaders in innovation, with sectors such as artificial intelligence, life sciences, and advanced manufacturing driving future growth. She will stress the need for better transport links and affordable housing to unlock further development.

Investments in housing and infrastructure

Among the most significant announcements will be the Environment Agency lifting its objections to a new development around Cambridge. This will enable the delivery of 4,500 new homes, as well as schools, leisure facilities, and office space. The development aims to ease the housing shortage in the city, which has been struggling with affordability.

Reeves will also confirm a £7.9 billion investment over the next five years to improve water infrastructure across the region. This includes the creation of nine new reservoirs, such as the Fens Reservoir in Cambridge and the Abingdon Reservoir near Oxford, ensuring that the growing population has access to a reliable water supply.

Transport upgrades

Funding for transport improvements will be another key focus of the Chancellor's speech. She will confirm that East-West Rail services between Oxford and Milton Keynes will begin this year, while the A428 road will undergo significant upgrades, improving journey times between Milton Keynes and Cambridge. A new East Coast Mainline station in Tempsford will also be accelerated, allowing faster access to London and boosting economic opportunities in the region.

Cambridge Cancer Research Hospital

Reeves will also welcome the prioritisation of the Cambridge Cancer Research Hospital as part of the New Hospitals Programme. The facility, which will bring together the expertise of Cambridge University, Addenbrookes Hospital, and Cancer Research UK, aims to improve cancer survival rates and foster collaboration between researchers and clinicians.

Innovation hubs and growth commissions

The Chancellor will endorse plans for a new innovation hub in Cambridge, designed to accelerate the city’s growth as a global science and technology cluster. The government is also establishing a Growth Commission for Oxford, inspired by the Cambridge Growth Company, to tackle barriers to development and help the city achieve its economic potential.

In recognition of the importance of the Oxford-Cambridge Corridor, Reeves will appoint Sir Patrick Vallance as its Growth Corridor Champion. Vallance, who has extensive experience in science and technology, will provide leadership to ensure the region’s ambitions are realised.

The challenges of growth

In her speech, the Chancellor will also acknowledge the challenges facing the region. "Oxford and Cambridge offer huge economic potential for our nation’s growth prospects," Reeves will say. "But there is no way to commute directly from towns like Bedford and Milton Keynes to Cambridge by rail. And there is a lack of affordable housing across the region."

She will add, "Oxford and Cambridge are two of the least affordable cities in the UK. In other words, the demand is there, but there are far too many supply-side constraints on economic growth in the region."

Reeves will outline that the government’s strategy is designed to overcome these barriers by focusing on infrastructure and investment. "For the first time, a government is providing real leadership to deliver this project with a clear strategy for the entire region," she will say.

Strengthening the region’s global position

The Chancellor will stress that Oxford and Cambridge are well positioned to become Europe’s "Silicon Valley" and the "home of British innovation." She will point to the region’s concentration of world-class talent and its potential to lead in sectors like life sciences, AI, and manufacturing.

"To grow, these world-class companies need world-class talent who should be able to get to work quickly and find somewhere to live in the local area," Reeves will say. "The region’s infrastructure is crucial to achieving this."

Continued government support for growth

Reeves’s speech will also follow recent announcements about the National Wealth Fund (NWF) and the Office for Investment (OfI), which will work with local leaders to develop tailored strategies for regional growth. These reforms aim to connect central government with local expertise, ensuring that investment matches the needs of each area.

Science Minister Lord Patrick Vallance will praise the government's approach, stating, "The UK has all the ingredients to replicate the success of Silicon Valley or the Boston Cluster but has been constrained by short-termism and a lack of direction." He will express optimism that the government’s Plan for Change will unlock the region’s full potential.

Transport Secretary Heidi Alexander will add, "Well-connected communities are a cornerstone for growth," highlighting the transformative potential of East West Rail and the new station at Tempsford.

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