Teaching activity

In the News Teaching Activity – why are the government planning to create a ‘Silicon Valley’ in the UK? (Feb 2025)

Elizabeth Veal

3rd February 2025

Rachel Reeves is likely to unveil plans to create “Europe’s Silicon Valley” between Oxford and Cambridge.

The government plan aims to boost infrastructure and innovation, with potential to add £78bn to the UK economy within a decade. It hinges on supply-side reforms, including streamlined planning regulations, infrastructure investment, and airport expansion, to accelerate economic growth. By improving transport links and easing development barriers, the plan seeks to enhance productivity and private sector confidence. However, critics warn that focusing growth in the South risks regional imbalances, while environmental groups argue that deregulation and airport expansion could jeopardise climate targets.

Reeves plans to create ‘Silicon Valley’ between Oxford and Cambridge | Infrastructure | The Guardian

1. What are supply-side policies, and how might the government's proposed infrastructure investment between Oxford and Cambridge improve the UK’s long-run aggregate supply?

2. Assess the potential benefits of the UK developing a ‘Silicon Valley’ between Oxford and Cambridge.

3. Should governments prioritise economic growth over environmental sustainability, or is it possible to achieve both simultaneously?

Download our suggested answers for this resource here

Elizabeth Veal

Liz has taught Economics for over 25 years, including several years as Head of Economics at leading schools.

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