Amidst a Labour frontbench characterised by either tedium, forgettability, or incompetence, Rachel Reeves is an anomaly. She may be Keir Starmer’s second female Shadow Chancellor, but she has every chance of being Britain’s first female occupant of Number 11 Downing Street.
Since a young Margaret Thatcher once thought that that might be as far as a woman could get in politics, what Reeves thinks is naturally of interest to not only discern what a Labour government led by Keir Starmer might do but also in speculating what an alternative administration might look like if the ball comes loose from the socialist scrum. So it helps that her thinking is more interesting than most.
Two months ago, Reeves took to the stage in Washington D.C to declare Labour’s economic policy to be “securonomics”. Inspired by Joe Biden’s Inflation Reduction Act, she argued Labour would “rebuild the industrial foundations that we have lost” and which have left Britain “exposed to global shocks”.
Labour had long-since announced its “green prosperity plan”: an effort to spend £28 billion a year investing in the “industries of the future”, boost domestic energy security, and presumably purchase a very large amount of insulation. Her Washington speech was an opportunity to step beyond this to embrace an “emergent global consensus” involving a more active state and industrial policy.
I have previously written about Rishi Sunak and Jeremy Hunt’s lack of interest in an industrial strategy and hostility to the Biden-Reeves approach. As a fiscal conservative myself, the idea that a government might be able to pick winners – however eco-friendly – sits uneasily.
But I am also enough of a pragmatist to see which way the global wind is turning and to see that the Prime Minister and Chancellor may be left fighting for an outdated neoliberal dream just at the point when protectionism, ‘decoupling’, and a return for the strategic state were on the rise. In that sense, Reeves has read the mood music better than Number 10.
And yet, less than two months on, the Shadow Chancellor appears to have changed her tune. The Blairite playbook that Starmer and co have been singing from has meant Reeves has often made clear that the public finances are a priority. But now it seems the cost of that is for her to junk her own rather interesting agenda.
Yesterday, Reeves told Laura Kuenssburg a Labour government would not “play fast and loose with the public finances”. This “means paying for day-to-day spending through tax receipts and getting debt down”. As such, she cautiously pushed the “green prosperity plan” back towards the end of the next parliament.
In a sense, this was both good economics and good politics. The Mini-Budget farrago showed what can happen to a government’s programme if the markets won’t wear it at a time of persistent inflation, rising interest rates, and spiralling government debt payments.
It would also do Labour little good to be waffling on about “green prosperity” at a time when many voters are worried about paying their bills. But dropping the pledge – or punting it into the unforeseeable future – does open Labour to the charge as to what exactly they are offering that is different to the Tories, asides from personnel.
Starmer has long since u-turned on all those elements of the Jeremy Corbyn agenda – like bringing public services back into “common ownership”, abolishing tuition fees, or re-introducing freedom of movement – he tactically praised during the leadership election. Economic radicalism – even in its “securonomic” form – seems to have gone out of the window.
Shorn of a distinct economic agenda, Starmer’s Labour seems like little more than a New Labour tribute act. As our Deputy Editor has highlighted, he promises little more than some more constitutional tinkering here, another Equality Act there, and a bit of grumbling about non-doms inbetween. Under a Sue Gray emergent from behind the curtain, the Blob will happily triumph.
Yet in her interview yesterday, Reeves did at least gesture to one of the few areas where Labour can happily outflank the Tories: housebuilding. The Shadow Chancellor attacked the Tory record, and that housebuilders want “housing targets back” and “the planning system unblocked”, not government money. Surely this is the stuff of YIMBY dreams?
Tory backbenchers have done a very good job at killing off both the only major supply-side reform Boris Johnson aimed to pass and one of their party’s few great successes in office by first undermining the Housing Bill two years ago and then by forcing the Government surrender on housing targets in December.
As ever, those MPs who babble the most about “growth” are those least interested in delivering it. Nick Boles – one of the authors of the system of housing targets that got housebuilding levels up to their highest in thirty years – has switched to Labour partially because, he argued, Labour is far more likely to get serious housing reform delivered than a Tory party in hoc to NIMBY backbenchers.
One wonders if this would remain the case if Starmer finds himself backed up by a few dozen MPs from the commuter belts or Home Counties after the next election – and it was Labour who saddled us with the Town and Country Planning Act, after all.
But the rhetoric of Starmer and Reeves is at least much more positive than that of Sunak and the Conservatives. Reforming our planning system and delivering more homes will be essential to improving our anaemic growth rates and ensuring that my generation has some form of prosperity to look forward to. Fortunately for Labour, it also sets them apart from the Tories.