Which part of the UK will be 'the Silicon Valley of Europe'?

The government has revealed plans to create a tech hub in the Oxford-Cambridge corridor to boost growth and the economy across the UK.

Chancellor Rachel Reeves gives a speech on economic growth at Siemens Healthineers, in Eynsham, Oxford. Picture date: Wednesday January 29, 2025.
Chancellor Rachel Reeves outlined plans for a 'Silicon Valley' for the UK. (PA)

Chancellor Rachel Reeves has unveiled plans for Oxford-Cambridge corridor to create the Europe's own Silicon Valley in a major speech on growth.

The initiative aims to fuel innovation and economic growth as prime minister Sir Keir Starmer promised to clear regulatory obstacles to ensure the project's success. Writing in The Times ahead of her speech, Starmer criticised “thickets of red tape” that have “spread through the British economy like Japanese knotweed” and hindered investment.

Speaking in Oxfordshire on Wednesday, Reeves said that Britain has been “held back” and “accepted stagnation” in a major economic speech hailing the project, which will span an area between Oxford and Cambridge and bring £78bn to the UK’s economy by 2035.

LONDON, ENGLAND - JANUARY 28: Britain's Chancellor of the Exchequer Rachel Reeves arrives for the weekly Cabinet meeting at 10 Downing Street on January 28, 2025 in London, England. (Photo by Leon Neal/Getty Images)
Rachel Reeves hopes to boost the economy with her growth plans. (Getty)

While the government’s plan promises significant economic benefits and infrastructure improvements, shadow chancellor Mel Stride claimed that the “biggest barriers to growth” are Starmer, Reeves and their financial plans.

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But the government are banking on the project to turn the UK into a leading tech hub, with Reeves expecting to say: “For too long, we have accepted low expectations, accepted stagnation and accepted the risk of decline. We can do so much better.”

The project will span the corridor between Oxford and Cambridge, often referred to as the ‘Oxford-Cambridge Arc’. The region, spans approximately 66 miles and has been chosen for its strategic location housing two of the world's top universities, Oxford and Cambridge, which are renowned for their contributions to science, technology, and innovation.

The area is also home to established tech companies like Microsoft, Amazon, and AstraZeneca. Chancellor Reeves has articulated that the region's potential to become Europe's Silicon Valley lies in its capacity to attract world-class talent, given its proximity to these educational powerhouses.

Proposed Oxford-Cambridge rail link. (PA)
Proposed Oxford-Cambridge rail link. (PA)
Oxford (pictured) is a key area for the government’s plans for a UK Silicon Valley. (Getty)
Oxford (pictured) is a key area for the government’s plans for a UK Silicon Valley. (Getty)

Reeves was due to say: “Oxford and Cambridge offer huge economic potential for our nation’s growth prospects.

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“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.

“It has the potential to be Europe’s Silicon Valley. The home of British innovation.”

New reservoirs and a new train station are among the measures set to be announced by the chancellor during her speech.

As part of the delivery of what 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.

The project is set to connect Oxford, Milton Keynes, and Cambridge, alongside a new East Coast Mainline station at Tempsford. Road upgrades will further enhance connectivity, making travel within the region more efficient.

unmanned level crossing on a main railway line at tempsford cambs
Tempsford in Cambridgeshire would get a new station under the plans.

In addition to transport, there will be significant urban development. About 4,500 new homes are slated for Cambridge to help provide housing for the expected influx of workers and researchers. Water companies are also set to invest £7.9bn over five years on water infrastructure, including reservoirs in the Fens and Oxfordshire.

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The government is hoping to attract businesses in sectors like life sciences, artificial intelligence and advanced manufacturing, constructing new laboratory and office spaces to accommodate them.

Speaking after the chancellor's speech, Dr Mairi Gibbs, boss of Oxford University Innovation, which is owned by the university, praised the plans for the Oxford and Cambridge region.

She said the chancellor “rightly highlights the critical role of innovation and scale-ups in driving Britain’s economic growth”.

Councillor Liz Leffman, the leader of Oxfordshire County Council, welcomed the investment in East-West Rail, but warned of the need to fix existing infrastructure. She told Yahoo News UK: “We also need urgent action to fix our crumbling water and sewage system, and improve the electricity grid, if the region is to flourish.”

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Leffman also stressed that there was local ”concern” for plans for a new reservoir near Steventon. She added: “We know that this is opposed by the majority of local people and has been questioned and scrutinised at many levels over a long period of time.”

CAMBRIDGE, UNITED KINGDOM - 2025/01/23: (EDITORS NOTE: Image taken with drone) 
An aerial view of a new development in Cambridge. The UK government said that it will reduce the number of legal challenges that opposition groups can bring to new infrastructure projects. (Photo by David Tramontan/SOPA Images/LightRocket via Getty Images)
More homes would be built in Cambridge (pictured) and Oxford to accommodate an influx of workers and businesses. (Getty)

Wendy Blythe, chair of the Federation of Cambridge Residents’ Associations, also warned of depleted resources in the area that a new reservoir won’t fix.

She told Yahoo News UK: “Until the water shortage in the Cambridge area is resolved it is futile to rely on Cambridge to drive the UK’s plans for growth and investment.

Currently, 99% of Cambridge Water’s supply comes from chalk aquifers and other groundwater sources. Already the aquifers are being depleted, and local rivers and streams are drying up.

“There are plans for a new Fenland Reservoir but this cannot be delivered before 2035 and would be vulnerable to flooding because of rising sea levels. And, as Cambridge Water have highlighted, this new reservoir will not be sufficient to supply all the growth planned.“

Yahoo News UK has contacted Cambridge County Council for a comment.

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