April 22, 2024
Economy

Rachel Reeves must build her way to a growth plan


With Labour 20 points ahead in most polls, and particularly after this double by-election drubbing, the Tories look set to be turfed out of office. The party’s strategy, to the extent they have one, is to delay the general election until the autumn, in the hope the economic outlook improves.

By then, the Bank of England should have made several interest rate cuts. Together with a few tax reductions – including in next month’s Budget – that could generate an economic “feelgood factor”.

But even if the economy does perk up, an outgoing Tory government will bequeath Labour an economic can of worms. The incoming Treasury team will face low growth and high taxes, politically untouchable spending and huge government debt, unsustainably high immigration and crumbling infrastructure.

I get Reeves’ reluctance to reveal her party’s preferred economic measures at this stage. If the Opposition announces strong policies months before an election, ministers can steal them, spiking their rivals’ guns.

Over recent weeks, though, Labour has all-but abandoned its flagship “green prosperity” pledge to spend £28bn a year on green investment. Yet that was the centrepiece of the party’s growth strategy.

Reeves also talks a lot about “securonomics”, the strategy she describes as “putting economic security first, for family finances, for our national economy, rebuilding our ability to do, make and sell here in Britain so we’re less exposed to global shocks”.

Securonomics is about “an active, strategic state working in harmony with vibrant and open markets”, she says. To me, that’s just faux-scientific verbiage.

The Tories brought us “levelling-up”, which has delivered next to nothing. Is “securonomics” Labour’s version, a campaigning slogan rather than a set of thought-out and costed policies?

One area where Labour’s rhetoric has been bold is planning reform. In late 2022, Rishi Sunak dropped compulsory householding targets for local authorities – targets Sir Keir Starmer immediately promised to reinstate.

The Labour leader has pledged to oversee a “major boost” in affordable and social housing delivery. He has proposed a fast-tracked planning process and an undisclosed number of “post-war new towns”.



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