Chancellor Rachel Reeves' growth speech: What small businesses need to know

Chancellor Rachel Reeves has delivered a major speech on the government's plans to boost economic growth. Here's a summary for small business owners and Enterprise Nation's reaction to the speech.

The UK as a place to run a business

The chancellor make several references to businesses and entrepreneurs. They included:

"Without economic growth, we cannot improve the living standards of ordinary working people, because growth isn't simply about lines on a graph. It's about the pounds in people's pockets, the vibrancy of our high streets and the thriving businesses that create wealth, jobs and new opportunities for us, for our children and grandchildren."

"I am determined to deliver the strategy to grow the supply side of our economy, recognising that first and foremost, it is businesses, investors and entrepreneurs who drive economic growth, and a government that systematically removes barriers that they face one by one and has their back."

"Britain should be the best place in the world to be an entrepreneur. That is why we protected funding for research and development, and it is why one of the first decisions that I made as chancellor was to extend the Enterprise Investment Scheme and the Venture Capital Trust schemes for a further 10 years to get more investment into new companies driving their innovation and growth. I am determined to make Britain the best place in the world to invest."

International trade

On international trade, Rachel Reeves referred to Brexit and a "reset" of the UK's relationship with the European Union to make it easier for businesses to import and export. She said:

"We will prioritise proposals that are consistent with our manifesto commitments and which contribute to British growth and British prosperity, because that is what the national interest demands."

Last week, the EU's new trade chief, Maros Sefcovic, said he was open to Britain joining the Pan-Euro-Mediterranean Convention, a trade agreement which allows manufacturing parts and ingredients to be sourced tariff-free in several countries in Europe and Africa. In an interview with Sky News, the chancellor said was "happy to look" at joining.

In her growth speech, Reeves also referenced the US, following the election of president Trump. In his campaigning, Trump said he would impose tariffs on overseas businesses exporting to the US.

Reeves said:

"We stand at a moment of global change. In that context, we should be guided by one clear principle, above all, to act in the national interest, for our economy, for our businesses and for the British people.

"That means building on our special relationship with the United States under president Trump. The prime minister discussed the vital importance of growth with the president last weekend, and I look forward to working with the new treasury secretary, Scott Besant, to deepen our economic relationship in the months and years ahead."

In other international trade announcements, Reeves said business and trade secretary Jonathan Reynolds will visit India to restart talks on a free trade agreement with the UK.

'Europe's Silicon Valley' in Oxford and Cambridge

The chancellor announced the government's ambition to make Oxford and Cambridge "Europe's Silicon Valley". She said development of the "Oxford-Cambridge Growth Corridor" will contribute £78bn to the UK economy.

Measures include:

• Better transport links in the region including funding for East-West Rail, with new services between Oxford and Milton Keynes this year and upgrading the A428 to reduce journey times between Milton Keynes and Cambridge.

• The Environment Agency has lifted its objections to a new development around Cambridge that the government says could create 4,500 new homes and community spaces such as schools, leisure facilities, office and laboratory space.

• Support for the development of "new and expanded communities in the Oxford-Cambridge Growth Corridor" and a new East Coast Mainline station in Tempsford.

• A new Growth Commission for Oxford to review to unlock growth for the city and surrounding area.

• Appointment of Sir Patrick Vallance as Oxford-Cambridge Growth Corridor Champion.

Skills and employees

On helping businesses with skills and growing their workforces, Reeves repeated previous announcements around creating a national jobs and careers service with Skills England.

She pledged to deliver "fundamental reform of our welfare system" including looking at areas such as "the rising cost of health and disability benefits". Earlier this week, the government announced a review by former John Lewis boss Sir Charlie Mayfield will explore how to urgently support people with long-term illnesses or disabilities back into work.

The chancellor said the government will also look at the visa routes for "very highly skilled people so the best people in the world choose the UK to live, work and create wealth".

Planning

Reeves said she was "genuinely shocked about how slow our planning system is" when it comes to infrastructure projects.

She outlined how the government's Planning and Infrastructure Bill intends to "rapidly streamline" the process for determining applications, to "make the consultation process far less burdensome, and to fundamentally reform our approach to environmental regulation".

She said the environmental requirements placed on developers will be reduced so they can "stop worrying about the bats and the newts".

Airport expansions

On the contentious issue of a third runway at Heathrow Airport in west London, Reeves said the government backs the move:

"I have 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.

"And 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 today that this government supports a third runway at Heathrow and is inviting proposals to be brought forward by the summer."

Reeves said transport secretary Heidi Alexander will take decisions on expansion plans at Gatwick and Luton "shortly", and that the government will work with Doncaster Council and the South Yorkshire mayor to reopen Doncaster Sheffield Airport.

A partnership between Prologis and Manchester Airport Group will create a new advanced manufacturing and logistics park at East Midlands Airport.

Other investments

The chancellor said the government is supporting Greater Manchester mayor Andy Burnham's plans for the redevelopment of Old Trafford, with new housing and commercial properties around a new stadium.

The government is also moving forward with the Wrexham and Flintshire investment zone, with a focus on advanced manufacturing.

Regulation

Reeves said "businesses are held back by a complex and unpredictable regulatory system, and that is a drag on investment and innovation".

Measures taken, she added, include announcing former Amazon boss Doug Gurr as the new interim chair of the Competition and Markets Authority, and establishing the Regulatory Innovation Office, with an initial focus on cutting red tape for synthetic biology, space, AI, and connected and autonomous vehicle businesses.

In addition, following the chancellor meeting the heads of regulatory bodies, the government will publish its full plan in March for cutting red tape and reducing regulatory burdens on businesses.

Energy and net zero

On energy policy, Reeves said:

"There is no trade off between economic growth and net zero, quite the opposite. Net zero is the industrial opportunity of the 21st century, and Britain must lead the way. That is why we will publish a refreshed carbon budget delivery plan later this year."

Through the National Wealth Fund, Connected Kerb will receive £65m to expand their electric vehicle charging network across the UK, and Cornish Metals will get a £28m equity investment to provide the raw materials to be used in solar panels, wind turbines and electric vehicles.

Employer's National Insurance increase

The chancellor referred to the controversial increase to employer's National Insurance announced in her Autumn 2024 Budget. She said:

"Taking the right decisions and the responsible decisions does not always mean taking the easy decisions. The increase in employer's National Insurance contributions has consequences on business and beyond. I said that up front in my Budget speech.

"I accept that there are costs to responsibility, but the costs of irresponsibility would have been far higher. Those who oppose my Budget know that too."

National Wealth Fund

The chancellor referenced to the previous announced National Wealth Fund (NWF) and the Office for Investment (OfI) that will "work with local leaders to build pipelines of incoming investment and projects linked to regional growth priorities".

It will trial strategic partnerships in Greater Manchester, West Yorkshire, West Midlands, and Glasgow City Region and the OfI piloting an "approach in the Liverpool City Region and the North East Combined Authority to connect their regions to central government and industry expertise in order to unlock private investment".

Enterprise Nation's reaction to Rachel Reeves' growth speech

Emma Jones, founder of Enterprise Nation, said:

"Today the chancellor has taken an action-orientated, pro-active tone delivering some much-needed optimism.

"The UK's six million small businesses and start-ups will welcome the return of a positive drum beat for 2025, but they will be keen to understand how the chancellor's plans, like the Oxford-Cambridge Growth Corridor talked about today, translate into tangible benefits for local enterprises.

"The success of initiatives like this will ultimately depend on whether they create an inclusive economic environment that supports businesses of all sizes.

"We hope this represents the start of a more upbeat outlook and approach to the economy."