Voices: Reeves’s Scrooge-like epiphany on British growth is unconvincing
There hasn’t been a change of tone like it since the freezing bookkeepers in The Muppet Christmas Carol asked Michael Caine’s Ebenezer Scrooge if they could have some more coal for their fire. When he asks, “How would they like to be suddenly unemployed?” they start singing “Heatwave!” in hastily donned beach gear.
In such a similar fashion, Rachel Reeves switched from the gloom of painful choices needed to fill the £22bn black hole to the sunny optimism of a chancellor announcing that good times are just around the corner.
In an interview today, preparing the way for a speech on growth on Wednesday, she said: “We are absolutely fantastic as a country.” She said that Britain could learn from Donald Trump’s unrelentingly pro-USA attitude: “Yes, I think we do need more positivity.”
Reeves has gone from being accused of talking the country down to sounding as if gripped by starry-eyed fantasy. She said she had been “in sales mode” this week in Davos and that we “shouldn’t apologise” for Britain’s strengths in artificial intelligence, tech and clean energy: “We shouldn’t be all polite about it. We should be shouting from the rooftops.”
Who can say whether this is a planned change to the next phase of her programme for government or a panicked response to business leaders who have told her that she has overdone the talk about the “worst fiscal inheritance since the war”? It is probably a bit of both. She had to drive home the message that the Tories had left the public finances in a mess, forcing her to make decisions that she hadn’t wanted. But her sternness put a dampener on the “animal spirits” that she now says she wants to see unleashed.
Hence the Scrooge-like transformation from taking away pensioners’ winter fuel payments to spreading joy, generosity and good cheer about the future.
Reeves has long been an advocate of growth, with Labour’s first mission being to achieve the fastest rate of growth in the G7, but that has been obscured in recent months by official statistics showing GDP flat, and by business leaders complaining about anti-growth tax rises.
On Wednesday, Reeves wants to emphasise her determination to make growth happen and her belief that it will by the next election. She is said to be chafing at the pace of change and to have told officials that she doesn’t want any more reviews or consultations.
Her message at Davos was that growth “trumps other things” – implying that the need to build houses and airports would take precedence over environmental concerns.
There is a danger, though, in the “impatient for growth” message, of sounding like Liz Truss, at least according to supporters of the short-lived prime minister. Anne-Marie Trevelyan, the Conservative former MP who was in Truss’s cabinet, said: “I don’t know if it is ‘Liz Reeves’ or ‘Rachel Truss’, but it is fascinating to see Labour acknowledge that the kind of reforms to planning and the judicial review system that Liz Truss began are both right and necessary.”
This is rubbish. Truss’s mistake was not to go for growth but to announce unfunded tax cuts as the route to it. That wasn’t going to work, and it didn’t.
But the comparison with Truss does serve a useful purpose, which is to expose the vacuity of “growth” as a slogan. It is no use simply saying that growth is important, or that you will take on the “anti-growth coalition”, as Truss did, or that you will “bulldoze the blockers” – a variation of which is expected to feature in Reeves’s speech.
It is just not true that growth “trumps other things”. Reeves may be right that badly designed climate-change policies are a threat to prosperity, although that probably applies more to plans to make electricity more expensive than it does to a third runway at Heathrow.
But if higher GDP were all that mattered, we would rejoin the EU single market and build over the green belt. In practice, some “other things” do matter more than money, and Reeves could be a lot clearer about what trumps what.
She also needs to be careful about her mood swinging too far the other way. She and Keir Starmer seem to zigzag between realism about the long time needed for policy changes to have an effect and daft overclaiming about speedy transformation. At the Labour conference before the election, Starmer said growth would come “very quickly”, and that the legislation to promote it would happen “within months”, which sounded as if he was promising growth within months.
Reeves is now in a similar position, knowing full well that changes to planning law, for example, will make a marginal difference that won’t be measurable for several years, and yet feeling forced to promise jam tomorrow if not sooner.
Thus the zealous optimism of her interview in The Times ended up trying to have it both ways. “We can’t turn things round overnight,” she said. “This is a whole-of-parliament project, but real wages are increasing, inflation has come down and we’ve had two cuts to interest rates.”
Instead of swinging wildly from “woe is me” to “happy days”, sometimes in the same sentence, it might have been a good idea to have set out, preferably in opposition, a plan for growth that went beyond platitudes and planning law.
