Chancellor Rachel Reeves announced plans to build “Europe’s Silicon Valley” between Oxford and Cambridge on Wednesday (29/01).

Her remarks are the latest sign that Labour will make scientific research hubs central to its efforts to boost growth.

The plan includes a slate of housing and infrastructure investments that the government says would double the area’s economic output. These include the revival of the long-defunct “Varsity” train line connecting Oxford and Cambridge, and support for the University of Cambridge’s plans to build an innovation hub in the City Centre.

Peter Kyle, the Secretary of State for Science, Innovation and Technology, said: “The Oxford-Cambridge Arc is already an engine of prosperity, but we can go even further. We are determined to unleash research and development as a driving force in our mission to grow the economy in every corner of the country.”

Labour’s announcements come three years after former Conservative Prime Minister Boris Johnson shelved the original version of the initiative, choosing to focus on “levelling up” poorer regions instead.

Reeves’ plan – which also includes a project to build a third runway at Heathrow airport – signals that the new government will push ahead with investments in the UK’s already-prosperous southeast, despite concerns that they could exacerbate regional economic disparities.

A research report commissioned by the Oxford-Cambridge Supercluster Board, a consortium of industry and university leaders, recently found that the Oxford-Cambridge Arc scheme would add £78bn of GDP to the UK economy by 2035.

Minister of State for Science, Lord Patrick Vallance, who has been appointed Oxford-Cambridge Growth Corridor Champion, cited innovation centres built around leading American universities as inspiration for the scheme: “The UK has all the ingredients to replicate the success of Silicon Valley or the Boston Cluster, but for too long has been constrained by short termism and a lack of direction.”

Cambridge’s vice-chancellor Deborah Prentice joined executives from pharmaceutical company AstraZeneca and semiconductor design firm Arm in endorsing the plan, saying that she was “excited and very encouraged by this shared commitment to supercharging growth in the Oxford-Cambridge corridor.”

A version of the Oxbridge Arc revived in 2023 under previous Prime Minister Rishi Sunak’s government promised the construction of one million homes and 700,000 new jobs in the area, but it soon met fierce resistance from local groups.

Water shortages have also been a persistent stumbling block for plans to build new housing and transportation in Cambridge in recent years. Last week, a project to build 5,600 homes on the northeast end of the city was put on hold while developers awaited government permission to transfer neighborhood sewage works to a new location.

Labour leader of Cambridge City Council Mike Davey said he supported the plans, but called for caution. “The government should learn from the mistakes the Tories made on the Arc – we need to bring local communities with us and they need to see the benefits,” he said.

Reeves’ plan now includes £7.9bn in new investments for water companies to build reservoirs in the region. It will also prioritise the construction of the Cambridge Cancer Research Hospital, which gained government approval last year.

Daniel Zeichner, who attended King’s College and now represents the City of Cambridge in Parliament, echoed Davey’s sentiment, saying: “It is crucial that we get the balance right – development must be sustainable, and infrastructure must keep pace with demand. I will continue to push for further investment in public transport, water security and affordable housing to ensure Cambridge remains a great place to live and work.”