EYNSHAM, England, Jan 29 (Reuters) - British Finance Minister Rachel Reeves endorsed the long-awaited new runway at London's Heathrow Airport on Wednesday, positioning it as a key component of her strategy to stimulate the country's sluggish economy.
Under pressure to address growth concerns following a recent bond market selloff, Reeves also detailed plans for new wind farms and reservoirs, along with a "growth corridor" linking the university cities of Oxford and Cambridge.
In a speech at a Siemens Healthineers medical equipment plant near Oxford, Reeves voiced support for the third runway at Heathrow, Europe's busiest airport, stressing the necessity of opening new export markets to attract investor confidence.
We cannot delay this decision any longer, Reeves stated.
While assuring that increased flights would not compromise Britain's net zero commitments, critics including campaigners and London Mayor Sadiq Khan raised climate concerns opposing the move.
With an aim to accelerate economic growth to alleviate the public debt burden, Reeves acknowledged that the implementation of many projects on her agenda would require years, while the business tax hikes announced earlier had swiftly impacted corporate hiring and confidence.
Outside the Siemens plant, farmers protested against Reeves' decision to end an inheritance tax exemption for farming families.
Reeves unveiled plans to facilitate 16 gigawatts of offshore wind power generation, with investments of 65 million pounds ($80.7 million) in an electric vehicle-charging network and 28 million pounds in a mining operation in southwest England. She also highlighted intentions to strengthen trade relations with the European Union post-Brexit, and the upcoming discussions on a trade deal with India.
Reeves and Prime Minister Keir Starmer had pledged to elevate Britain to the fastest-growing G7 economy but have faced challenges, including criticism over tax hikes impacting growth.
The recent surge in global government borrowing costs heightened pressure on Reeves to revitalize the economy.
Reeves outlined plans for home-building and improved transport connections to foster a European equivalent of Silicon Valley along the Oxford to Cambridge corridor. Additionally, she underscored 8 billion pounds ($9.95 billion) worth of investments over five years by water companies, including the construction of nine reservoirs.
Low growth is not inevitable. But growth will require determination, she emphasized.
Further, Reeves and Starmer emphasized their commitment to overcoming opposition to infrastructure projects and streamlining the planning process.
Heathrow Chief Executive Thomas Woldbye mentioned that a third runway could be operational by 2035, emphasizing the government's focus on economic growth.
Critics like Greenpeace UK’s policy director Doug Parr urged the government to prioritize renewable energy and innovation in sustainable sectors such as green steel, electric vehicles, and batteries.
The Bank of England's forecast indicated no growth in Britain's economy during the latter half of 2024, with a projected 1.5% growth in 2025 mainly driven by increased government spending.
While major financial institutions anticipate growth below 1% this year, the International Monetary Fund predicted that Britain would outperform its European counterparts.
Gilles Moec, chief economist at AXA, emphasized the importance of solutions that do not heavily rely on increased public spending to boost confidence and economic growth.