In her first speech as chancellor, Rachel Reeves, sounding a little like former Tory prime minister Theresa May, has pledged to build growth on strong and secure foundations, built on stability, investment and reform, forged through a partnership with the private sector.
Setting out her first steps to deliver on the government’s commitments in its manifesto that its approach will be based on sound money and economy stability, the chancellor promised a new economic model to grow the economy.
Reeves announced steps to build 1.5 million homes over the next five years and the immediate removal of the de facto ban on onshore wind in England, as part of its clean energy mission.
“With the Labour government’s ambitious manifesto commitment to double onshore wind, triple solar power and quadruple offshore wind by 2030, the UK is set to become a global leader in clean energy,” said Tara Irwin, an ESG analyst at Hargreaves Lansdown.
“This initiative promises fruitful returns for investors investing in renewable energy companies and funds as the market expands,” Irwin added.
Reeves has said she has given priority to planning permission for much needed infrastructure to send a signal to investors here, and around the world, that the “UK is back in business”, and to make Britain “a clean energy superpower”.
For investors, the detail of what such statements mean will matter more.
Chris Cummings, CEO of the Investment Association, said: “We strongly support the new government’s ambition to drive economic growth.”
Cummings then added: “Investment is the key to unlocking growth. We must act to channel more capital into thriving British businesses and infrastructure projects and to create a nation of confident investors that understand the value of investing their money safely, and for the long-term.”
Cummings said the Investment Association has written to the chancellor to outline how the sector can support the new government in its ambition to kickstart growth in the UK.
Reeves noted announcements will be made in the coming weeks to accelerate the development of housing and infrastructure, including launching a landmark consultation on an updated, growth-focused National Planning Policy Framework to include mandatory housing targets and a requirement to review greenbelt boundaries where necessary to meet them.
The existing planning regime has often been cited as a brake on economic growth, which is why Reeves stressed the government will make the changes needed to forge ahead with new roads, railways, reservoirs and other infrastructure.
Zoisa North-Bond, CEO of Octopus Energy Generation, said: “Streamlining planning reform and fast-tracking shovel-ready renewables are key to boosting UK-wide investments in homegrown green power.”
And North-Bond added: “As a next step, the government should enable zonal pricing for energy. This would slash bills immediately across the country and unlock investment in new renewables where demand is high.”
Patrick Heath-Lay, chief executive of People’s Partnership, said it was important for the government to work with the pensions industry. “It’s crucial that government and the pensions sector can work constructively to enable greater pension fund investment in priority sectors, while ensuring the interests of pensions savers are at the heart of decisions,” he said.
The government said it will set out new policy intentions for critical infrastructure in the coming months, ahead of updating relevant national policy statements within the next 12 months to provide certainty to industry and investors.
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