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Peninsula Team, Peninsula Team
(Last updated )
Peninsula Team, Peninsula Team
(Last updated )
In a bid to revive the lacklustre economy, the chancellor delivered a punchy speech announcing plans to develop Oxford Cambridge Growth Corridor and approve Heathrow third runway.
The move came as growth stagnates and business confidence has been dampened by worries about the upcoming £25bn bill for additional employer’s national insurance due in April and general mood of negativity.
Determined to shake off business concerns and attract investment, chancellor Rachel Reeves went to Oxford to give her latest speech on the government’s growth strategy, at the Siemens Healthineers factory.
‘Growth is our national mission, to get more money in people’s pockets,’ Reeves said. ‘We’re going further and faster to get Britain building, unlocking critical national infrastructure projects and stopping the blockers who have stifled growth for too long.
‘For too long, Britain’s potential has been held back. We’ve had years of stagnation and decline. I’m putting an end to that. I will go further and faster to kickstart economic growth and put more money in your pocket.’
A major part of the plan is focused on the Oxford-Cambridge Growth Corridor – known as the OxCam – with the chancellor confirming ‘funding towards better transport links in the region’, while easier planning rules mean new houses and industrial parks will be built more quickly.
Reeves said: ‘Oxford and Cambridge offer huge economic potential for our nation’s growth prospects. Just 66 miles apart these cities are home to two of the best universities in the world, two of the most intensive innovation clusters in the world and the area is a hub for globally renowned science and technology firms in life sciences, manufacturing, and AI.
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‘It has the potential to be Europe’s Silicon Valley. The home of British innovation.
‘To grow, these world class companies need world class talent who should be able to get to work quickly. 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. Demand is there but there are far too many supply side constraints on economic growth in the region.’
The anchorstone for the OxCam development will be East-West Rail, linking Oxford and Cambridge, and work will start on a new service between Oxford and Milton Keynes this year, resurrecting plans dropped by the last government. There will also be a new East Coast Mainline station at Tempsford near Bedford, and the A428 Milton Keynes Cambridge road will be upgraded.
There will also be a new Cambridge Cancer Research Hospital as part of the New Hospitals Programme bringing together Cambridge University, Addenbrookes Hospital and Cancer Research UK.
Reeves also said the government would support plans for expansion of Heathrow airport and the third runway, although this is likely to meet significant opposition. She hinted that the use of judicial review would also be curbed, presumably to loosen up development and reduce the time between initial plan to completion and final opening of projects.
Looking beyond the southeast, Reeves said there will be support for the building of a new stadium for Manchester United to replace Old Trafford, and a new approach for the National Wealth Fund (NWF) and the Office for Investment (OfI) to work with local leaders to build pipelines of incoming investment and projects linked to regional growth priorities.
There was a mixed reaction to the speech, with the high tax environment for businesses continuing to dent confidence. The upcoming employer national insurance hike is a major concern with the £23bn additional tax burden, while concerns about the new employment rights bill, set to add £5bn a year to employer costs, and rise in national minimum wage, is stifling jobs growth.
Majid Hussain, head of private client, HaysMac said: ‘These announcements are welcome, and could help to shift the gloomy, clouded narrative around the UK. However, we already know that individuals are leaving the UK, and business investment has stalled, so further and decisive action is urgently needed.
‘The country needs immediate reform of the tax system to make the UK a more competitive destination for wealthy investors – at present they are leaving in droves as a result of the Autumn Budget measures. There is a window of opportunity to stem the bleed, but it is quickly closing.’
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