May 29, 2024
Economy

Labour has no ‘grand plan’ to kickstart economic growth if it wins the election according to experts who accuse Rachel Reeves of having little more than ‘slogans and buzzwords’



By David Wilcock, Deputy Political Editor For Mailonline

09:41 22 Apr 2024, updated 10:24 22 Apr 2024



Labour has no ‘grand’ plan to kick-start economic growth if it wins the next election, experts warned today.  

The Social Market Foundation said that Sir Keir’s Starmer’s party ‘must have an underlying economic worldview that will shape its approach to growth’ after 14 years in opposition.

But the cross-party thinktank said that ‘it isn’t yet clear … exactly what they believe will drive growth and how they will achieve it’, despite being runaway favourites to form the next government. 

Introducing a collection of reports on the opposition, the SMF’s director Aveek Bhattacharya said that a Labour government would face greater economic challenges than the last time it took power, in 1997, but ‘it is less clear how they will address them’. 

The shadow chancellor, Rachel Reeves, has ‘a number of slogans and buzzwords floating around’ her, including ”securonomics”, ”the everyday economy”, ‘productivism”, ”modern supply side economics”, he added. 

But he continued: ‘There are important texts where Rachel Reeves has tried to set out her economic thinking … yet these ideas remain underdeveloped or at least in need of elaboration.

‘Overall, we find no ‘grand theory’ of growth but a series of pragmatic, often technocratic, interventions which might drive growth.

‘Labour came to power in 1997 with a clear vision of how to grow an already strong economy, drawing on confident macroeconomic theory. The situation now is very different. 

The economy is weaker, and the need for growth is more urgent. However … there is little evidence that Labour has a grand theory underpinning their plans for growth. Instead, there is a focus on pragmatism, a hint of a supply-side approach, and a hope that a return to competence will be enough to stimulate growth. If Labour does make it to power, we had all better hope this will suffice.’

In a speech last month Ms Reeves said Britain must rebuild its economic ‘resilience’ in the face of international turmoil.

The shadow chancellor’s key speech drew parallels with 1979 when Margaret Thatcher defeated Labour, saying Britain is at an ‘inflection point’.

Ms Reeves claimed the UK must not rely on ‘states whose interests conflict with our own’ as she called for a beefed-up industrial strategy and hit out at a ‘reckless’ pursuit of globalisation.

The remarks reflect the growing view among many politicians in the West that, after the turbulence caused by the pandemic and amid growing tensions over Taiwan, they must move away from over-reliance on China.

Despite the allusion to the transformation of the country in the 1980s, the shadow chancellor made plain that she was not aligning the party to Thatcherite thinking and committed Labour to scrapping trade union reforms brought in under the Conservatives.

Ms Reeves came under fire both from the Labour left – as Corbynites attacked her over the parallels drawn with Mrs Thatcher – as well as Jeremy Hunt.

The Chancellor told MPs that Labour’s economic policy was a ‘black hole filled with platitudes’ and questioned how the party would find ‘literally billions of pounds to fund unfunded spending pledges’.

And there was push-back from the unions too, with Unite general secretary Sharon Graham accusing Ms Reeves of lacking a plan for the ‘real economy’ and focusing on ‘abstract economic concepts’.

She added: ‘If you stick to phoney fiscal rules, rule out taxing the wealthy and pander to the profiteers, you end up in a straitjacket.’

Martin Abrams, a spokesman for the Left-wing campaign group Momentum, told The Telegraph: ‘Once again, the Labour leadership is proving itself out of touch with the Labour movement and Labour values.

‘Thatcher’s government did not bring about “national renewal” but instead misery for millions of working-class people and ballooning inequality.’

He said: ‘Labour should be offering a true break with Thatcherism with a popular programme based on public ownership, state investment and wealth taxes.’



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