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The year... is 2009 (modesty forbids me naming the Sunday Telegraph journalist who first identified the bust up in Gordon Brown’s cabinet at the time). It just goes to show that some things never change. If a week is a long time in politics, 16 years is an eternity.
Rachel Reeves went all-in on Heathrow expansion in her big speech today. The Government backs it, she said, inviting proposals to come in ‘by the summer’. It could create 100,000 jobs.
Major concerns remain – including among some of the Chancellor’s cabinet colleagues. Many of them were present at Siemens’s Oxfordshire facility, the venue for Reeves’s address, but these did not include Miliband (the Energy Secretary’s team said he was detained by ‘meetings’ elsewhere).
Reeves announced a slew of pro-growth measures today including backing Manchester United’s plans for a new stadium, turning the ‘Oxcam’ corridor between the two university cities into a UK silicon valley, more investment for electric vehicle charging, new towns and stations, planning law relaxations, rail upgrades and talks on a new free trade agreement with India.
Like Heathrow, all these projects will take time, energy and political will to blast through a thicket of regulations and objections. But the Chancellor badly needed to inject a sense of energy into the plans in a bid to reset the government’s entire approach to the economy after the Budget, which attracted opposition from business, particularly the decision to hike national insurance for employers. One of her cabinet allies, Business Secretary Jonathan Reynolds, promised today that people would feel the effect of the government’s new growth proposals in their pockets this year. No pressure then…
From Gloom To Boom
Change of tone was everything. Gone was last year’s doom-laden narrative, designed to put the entire blame for economic ills on the Conservatives and their £22billion black hole, but which in itself contributed to an overall sense of gloom depressing all sectors.
The speech followed a media blitz by the Chancellor designed to put her on the front foot, making the political weather than crouching in a Treasury bunker facing attacks from all sides. In briefings, Reeves’s team have stressed her willingness to have political fights – not least with her own side – in a bid to get things done and engender a sense of momentum. They promise more to come.
The Government’s Industrial Strategy will play a vital role. The main sectors which will be the focus of the drive for growth have long been announced, with No10 wanting the crucial ‘sub-sectors’ identified this week and published over the next few weeks.
This process could lead to fresh tension between the Treasury and other departments.
There is frustration among some ministers and MPs about HMT’s narrow approach to Industrial Strategy and its reluctance to support sectors like manufacturing which have a presence in politically important regions for Labour.
Some Labour insiders also note the gap between the Industrial Strategy Green Paper that emerged from Whitehall at the end of last year and the strategy the party issued in Opposition, which is said to be closer to some ministers’ real view of the policy agenda. The debate over Heathrow’s third runway is also evidence that the defining internal struggle facing Labour is how far growth is impacted by its net zero pledges. Expect to see this play out more publicly in Labour’s pro-growth caucus of new MPs as the months go by and as Reeves pulls more and more contentious policy levers as she steps up her bid to juice the economy.
The Chancellor bet the farm on growth today. Her positive tone will be welcomed by many – but she knows more than ever she must now deliver.
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