Sir Keir Starmer has vowed to “clear out the regulatory weeds” to encourage growth, as Rachel Reeves will say that Britain has been “held back” and “accepted stagnation” in a major economic speech.
The Prime Minister invoked his New Labour predecessors and Margaret Thatcher, and said that for “too long regulation has stopped Britain building its future”.
It comes as the Chancellor is due to set out policies on Wednesday to encourage economic growth, and hail the region around Oxford and Cambridge as having “the potential to be Europe’s Silicon Valley”.
He said ministers will “kick down the barriers to building, clear out the regulatory weeds and allow a new era of British growth to bloom”.
The Prime Minister later added: “A change in the economic weather can only ever come from a supply-side expansion of the nation’s productive power.
“In the 1980s, the Thatcher government deregulated finance capital. In the New Labour era, globalisation increased the opportunities for trade. This is our equivalent.”
Ms Reeves’ speech in Oxfordshire on Wednesday is expected to lay out plans for projects around the Oxford and Cambridge region, as well as confirm support for the expansion of Heathrow Airport and reiterate the Government’s backing for the redevelopment of Old Trafford.
During her speech, the Chancellor is expected to describe Britain as a country of “huge potential” but also to say that “for too long, that potential has been held back”.
“For too long, we have accepted low expectations, accepted stagnation and accepted the risk of decline. We can do so much better,” she will say.
It comes as Ms Reeves and Sir Keir suggested to business leaders that Cabinet colleagues have been ordered to ditch policies which could stand in the way of their efforts to grow the economy.
New reservoirs and a new train station are among the measures set to be announced by the Chancellor during the speech, which will include plans to boost connectivity in the region around the two university cities.
As part of the delivery of what Ms Reeves will call the “Oxford-Cambridge growth corridor”, she will also touch on funding for East-West rail, a long-proposed railway line that would connect the cities, as well as a new railway station in Tempsford.
Ms Reeves will say the cities are “two of the least affordable in the UK” and existing transport options mean that to travel between them “by train takes two-and-a-half hours” while “there is no way to commute directly from towns like Bedford and Milton Keynes to Cambridge by rail”.
“Oxford and Cambridge offer huge economic potential for our nation’s growth prospects,” she is expected to say.
“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.
The Chancellor will later add: “In other words, the demand is there but there are far too many supply side constraints on economic growth in the region.”
Sir Keir told business chiefs at a meeting in the City of London that he was “hard-wiring growth into all the decisions of the Cabinet” and that “what Rachel and I have done is to make it clear to each of our Cabinet colleagues that in each of their briefs, growth is the number one mission”.
Ministers will be expected to set out the growth credentials of new policies in order to get approval from their Cabinet colleagues, in a shake-up to the usual system to get “collective agreement” on substantive changes.
Shadow chancellor Mel Stride claimed that the “biggest barriers to growth” are Sir Keir, Ms Reeves and their financial plans.
Ahead of the speech on Wednesday, Mr Stride said: “Hastily cobbled together announcements of growth in the 2030s will do nothing to help the businesses cutting jobs right now because of Labour’s punishing jobs tax, the companies being crushed under their barrage of new regulations, or the farmers facing bankruptcy over the cruel family farm tax.”
