Getting Britain’s future back: does the Chancellor have a plan for the long term?
29 January 2025
UCL Policy Lab provides the latest analysis of the Chancellor's speech on removing the blockers to growth.

It always used to be said that the first job of any political leader is to “own the future.”
In the last few years, though, it has seemed that owning the past that has mattered more. Donald Trump won the presidency promising to “make America great again.” Dominic Cummings led the Brexiteers to victory by pledging to “take back control.” A million alt-right activists on X talk daily about taking pride in the Empire and stopping people from pulling down statues.
Rachel Reeves’ speech yesterday bucked this trend. She tried to bring the future back into fashion.
Her speech was an attempt to show that, for all the troubles of the present, better days lie ahead. It was also an effort to rid the government in which she serves of its reputation for gloom and to demonstrate that, even if it doesn’t possess communicators with the talent of Tony Blair or Harold Wilson, it cares about the sunny uplands, just as they once did. We are probably all grateful for that.
Turning what the Business Secretary, Jonathan Reynolds, called the nation’s “animal spirits” around is no easy task, however.
We have heard endlessly about the government’s “inheritance,” and no one who follows current affairs can be ignorant of the challenges facing developed economies more broadly right now. The Chancellor’s task, therefore, was to set out an economic vision—no less—one that could quieten her critics, and even excite some new supporters.
Despite noise to the contrary in some of the early press briefings, that vision clearly still starts with the energy transition and the economic potential of green growth.
The Chancellor’s task, therefore, was to set out an economic vision—no less—one that could quieten her critics, and even excite some new supporters.
Despite noise to the contrary in some of the early press briefings, that vision clearly still starts with the energy transition and the economic potential of green growth.
As UCL economist, Professor Wendy Carlin states, for the UK to have a prosperous future, it “needs to embrace the best of the new hardware for the green energy transition—wind and solar, along with the necessary permissions for electricity infrastructure.”
The UK is already a leader in this area and can work with its partners in Northern Europe to expand capacity, collaborating with both EU nations and others, including Norway. This requires a long-term commitment—not just to wind farms and solar power but also to interconnectors and cables that enable the UK to connect to other renewable energy markets.
Next, it moves to science and technology, particularly life sciences and artificial intelligence.
The Prime Minister visited UCL just a couple of weeks ago to make a long-term commitment to the UK’s capacity for innovation in artificial intelligence. The UK must remain agile and a hub for the best innovations. This requires a strong working relationship between government, research, and business, hence the emphasis on the Oxford-Cambridge arc.
Planning reform and infrastructure development are clearly crucial for the Chancellor too. A long-stated core element of the government’s mission is to end “sticking plaster politics.” This includes a commitment to removing the barriers that have hindered infrastructure projects in transport, housing, and energy. There is growing consensus that building in the UK has been excessively difficult, with costs significantly higher than in comparable nations such as France and Spain.
One example is light rail or trams. Leeds remains the largest city in Europe without a major metro or tram system—a failure attributed to planning challenges and a lack of investment. As the government has pointed out, lowering costs by removing regulatory barriers would help deliver these projects, improving lives, boosting productivity, and fostering economic activity. So too would a continued commitment to devolution, building on the work of both Labour mayors and the previous Conservative government.
This underscores the economic potential of agglomeration too. The geographic concentration of economic activity in core parts of the country, and not just in London, remains crucial to revitalizing the UK’s growth prospects. It was no surprise to see the Chancellor talk as much about airports beyond the South East, as to emphasise the importance of a third runway for Heathrow.
So much, so good.
But as the press questions that followed the Chancellor’s speech demonstrated, the difficulty with bringing the future back into fashion is that it can lead some to think the government is neglecting the present.
As the UCL Policy Lab’s Co-Director for Economics, Lukasz Rachel, puts it, “thinking long-term is not something we see in politics every day, and so it is welcome, but the government must be worried both “how long is the long-term” and “whether short-term difficulties will get in the way.”
Rachel goes on to explain that the Chancellor’s response to those challenge come in two parts: “First, investment plans are coupled with reforms, such as reforms to the planning system, which should speed up implementation. Second, the Chancellor was quite explicit in the aim of raising the subdued expectations about Britain’s economic destiny.”
Carlin also emphasises that if the Chancellor gets the tone right, then politics and economics could come to reinforce each other. “The UK has the chance to avoid the growth-dampening partisanship of the US”, she explains. “The UK can avoid the partisan divide which will damage growth there with the right hindering the development and deployment of renewable technologies and the left slowing down the potential gains from AI.”
At heart, then, this is was a speech where, as Carlin and Rachel explains, positive sentiments and expectations are key. The Chancellor wants the country to believe that a better future is coming. And whether they believe it or not could well determine the outcome, not just for her but for all of us.