As expected, Rachel Reeves used her big – and long – growth speech this morning to back the expansion of Heathrow and argue that Britain was taking too long to make decisions on building infrastructure, let alone getting it done. The Chancellor did devote large passages of her speech to criticising the ‘structural problems in our economy’, and to blaming the Conservatives, but she was clearly trying not to make the whole thing about what her predecessors had got wrong. This speech had to be about how Labour was going to grow the economy, after months of criticism that Reeves and Keir Starmer are taking the wrong approach. Reeves said there was ‘no alternative to restoring economic stability’ but the path she was on, and that ‘the costs of irresponsibility would have been far higher’.
Reeves spent much of the first 20 minutes listing what she and other ministers were busy doing, just in case anyone had missed that. She pointed to the US-UK special relationship, as well as resetting the relationship with the EU, her trade trip to China and Business Secretary Jonathan Reynolds heading to India for trade talks next month.
She also made a point of saying that Liz Kendall will be setting out plans for the reform of ‘the rising cost of health and disability benefits’ before the spring statement. This was presumably in response to some press briefings recently that Downing Street and the Treasury are frustrated by the lack of progress from the Work and Pensions Secretary in coming up with changes and cuts to the benefits bill. Newts and bats were kicked to the kerb, too, with the Chancellor bringing up the now infamous £100 million bat tunnel, as she said the government’s new nature restoration fund would allow developers to ‘focus on getting things built and stop worrying about the bats and the newts’.
In the questions after the speech, Reeves had to face the contradiction between her desire to cut back on the regulation that is stifling business, and the tax rises that the same businesses say are stifling their ability to hire more workers. She would not rule out further tax rises, saying she wasn’t going to write five years’ worth of budgets now, while repeating her line that the autumn Budget was a ‘once in a generation’ event. She also continued to argue that the Tories had not presented a ‘serious alternative’ to her plans, backing the investment she had announced but not the tax rises needed to fund it.
Reeves was asked if she regretted her gloomy tone after the election, and answered that she had faced a very difficult situation. But the very fact that she had to give a speech listing all the ways the government is going to get growth suggests that she accepts her tone did have consequences, even if there was no alternative.
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