Matthew Lynn

Rachel Reeves can easily make life difficult for Rishi Sunak

Rachel Reeves can easily make life difficult for Rishi Sunak
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There is one thing to be said for Anneliese Dodds: as shadow chancellor, she set the bar very low. Virtually invisible, with few ideas, and a manner designed to send even political obsessives to sleep, her successor Rachel Reeves won’t have to do much to look like an immediate improvement. A wet tea towel would have more impact.

And yet if Reeves wants to make a real impression, there is one move she should make, even though it would require some courage. She should focus on attacking the government from the liberal, pro-consumer right rather than the left – because that's where the space is.

After a disastrous set of local elections, it is difficult to see why the hapless Dodds should be the most high-profile casualty on the Labour front bench. True, she didn't set the world alight. Even so, voters in the Red Wall will hardly have abandoned Labour because they didn’t agree with her plan for a ‘bright future for our High Streets ( a ‘fightback fund’, in case it slipped your mind) or her occasional calls for a ‘responsible fiscal framework’. It would seem something deeper was happening. But Sir Keir Starmer realises someone has to carry the can – and he has courageously decided it isn’t going to be him. 

Reeves may well prove an upgrade. She is smart, articulate, and doesn’t have too much baggage. Yet if she wants to make a real impact, then she needs to take Labour in a completely different direction. On most economic matters, the Boris Johnson-Rishi Sunak double act are already well to the left of centre. The space is on the free market, consumer friendly liberal right.

What would that look like? First, Reeves could make the case for fiscal prudence. The government is spending money like crazy, but if it blows up it will look a lot better if there are clips of the shadow chancellor warning about it. 

Next, the party could embrace change. In the United States, for example, vast sums of money have been spent on stimulus cheques rather than a furlough scheme. Unemployment went up, but has fallen rapidly again as the economy re-opens. That could well be better than simply preserving lots of old jobs that might never come back.

Thirdly, Labour could champion small businesses and entrepreneurs, and take on monopolies. The party could stop condemning the gig economy, for example, and work out ways to regulate it so that it worked for employees as well as the app companies (that’s where the jobs are going to be). 

Finally, it could reform the state, drawing on the lessons of vaccine success. Instead of condemning business people getting involved in government, they should bring in some more of that energy to improve delivery.

In truth, the Conservatives have moved a long way to the left on economics. They have turned into the Big State party, hooked on industrial strategy and intervention. It is very hard to see how Labour can muscle them out of that territory. Whatever they promise to spend, Johnson will simply double it. 

But that has left a lot of space on the consumer-friendly, pro-competition right. It might be unfamiliar territory, and not all the activists will like it. A lot of voters might, however – and if Reeves wants to be really bold she should seize it.