What Does Rachel Reeves Speech Mean for Supply Chain?

Chancellor Rachel Reeves has unveiled her bold growth plans for the UK by announcing a series of major infrastructure projects.

The government has also backed the long-mooted expansion of Heathrow Airport through the addition of a third runway which has, until now, been hampered by numerous legal challenges. 

Inevitably, all the projects outlined by Reeves are set to have a major impact on the supply chain. 

Here, Supply Chain Digital takes a look at the some of them in more detail.

Heathrow third runway

Plans to build a third runway at Heathrow, the UK's largest airport and Europe's busiest, have been rumbling on for years. 

Despite receiving parliamentary approval back in 2018, legal roadblocks have prevented initial proposals from progressing much further. 

The government has argued the expansion could create more than 100,000 jobs, both in the local area and indirectly further along the supply chain. 

"I've always been clear that a third runway at Heathrow would unlock further growth, boost investment, increase exports and make the UK more open and more connected as part of our Plan for Change," said Reeves, who gave her speech from Siemens' factory in Oxfordshire. 

"Now, the case is stronger than ever because our reforms to the economy – like speeding up our planning system and our strengthened plans to modernise UK airspace – mean the delivery of this project is set up for success.

"So I can confirm that this government supports a third runway at Heathrow and is inviting proposals to be brought forward by the summer."

Evidently, the addition of a third runway could bring with it a host of benefits from a logistics and trade perspective, better connecting the UK to the rest of the world. 

"Heathrow is the UK’s biggest port by value and a critical hub which provides access to the rest of the UK and the world for British business," commented David Wells, CEO at Logistics UK. "The opening of a third runway will expand the reach of industry to new global markets both for imports and exports."

Alun Cornish, Manager Director for Ramp and Gateways at FedEx Europe, added: "Expansion at Heathrow is a step in the right direction for UK growth. To fully realise its potential, it’s crucial that expansion plans include provisions for cargo growth alongside passenger flights.

"The ability to efficiently import and export goods is essential for UK economic growth, so it's vital that cargo forms part of the UK’s future airport strategy."

Lower Thames Crossing

Elsewhere, the government has confirmed it is "assessing options" for private financing the Lower Thames Crossing, which has the potential to vastly improve connectivity between vital ports and reduce congestion at the Dartford Crossing. 

The proposed crossing, set to be the UK's largest road tunnel, would run beneath the Thames, connecting Tilbury in Essex with Gravesend in Kent.

With an estimated cost of around £8.3bn (US$10.3bn), it is expected to rank among the most expensive infrastructure ventures in British history.

"We will work with the private sector to deliver the infrastructure that our country desperately needs," Reeves continued.

"This includes the Lower Thames Crossing, which will improve connectivity at Dover, Felixstowe and Harwich – alleviating severe congestion as goods destined to export come from the north and the Midlands and across the country to markets overseas.

"To drive growth and deliver value for money for taxpayers we are exploring options to privately finance this important project."

David adds: "If nationally important projects like the Lower Thames Crossing and third runway at Heathrow become a reality, we can deliver goods more efficiently across the country, benefitting everyone nationwide."

Old Trafford development

Reeves confirmed in her speech that the government would back of the Mayor of Greater Manchester’s plans for the regeneration of the area around the Old Trafford football stadium, home of Manchester United. 

This is set to include new housing and commercial development. 

It's anticipated the scheme will use public money to move three rail freight terminals which are currently blocking the planned redevelopment.

United are expected to decide by the end of the 2024/25 season whether to expand the current stadium to accommodate 87,000 supporters or build a brand-new ground with a capacity of 100,000. 

Wrexham and Flintshire Investment Zone

Reeves also revealed further details on Investment Zones, with the Wrexham and Flintshire Investment Zone set to focus on the area’s strengths in advanced manufacturing.

Backed by the likes of Airbus and JCB, the hub is anticipated to attract £1bn (US$1.24bn) in private investment over the course of a decade, creating up to 6,000 jobs in the process.

"JCB has been a prominent feature of the industrial and economic landscape in Wrexham and Flintshire for over 45 years," says Mark Turner, COO at JCB. "Innovation is the lifeblood of our business and we welcome the creation of an Investment Zone in North Wales and hope that it will attract many other businesses to the area.

"As an advanced manufacturer of precision engineering components, JCB Transmissions looks forward to other advanced manufacturing businesses coming to the area. This could go a long way towards building the supply chain resilience of existing manufacturing businesses in the area, such as JCB."

Explore the latest edition of Supply Chain Digital and be part of the conversation at our global conference series, Procurement & Supply Chain LIVE.

Discover all our upcoming events and secure your tickets today. 

Supply Chain Digital is a BizClik brand.