It’s the economy, stupid. That was the message from Rachel Reeves, the shadow chancellor, to her Conservative opponents in her speech to Labour’s party conference. Ms Reeves is not a showy politician. Her style is to be all substance, and her message was that she is capable and decent. This is smart politics. The Conservative party has proved to be incompetent in its stewardship of the economy just when the issue topped the political agenda.
Ms Reeves set out her party’s stall by promising to boost business investment, build homes and ease planning rules – especially around green industries – to spur growth. Often seen as a hard-headed pragmatist, the shadow chancellor played on her party’s heartstrings with a call for a Labour government to rebuild public services and create jobs. She also hit home by creating dividing lines with the Tories by contrasting her plans for stable growth with the Conservatives’ record of wasteful, corrupt and inept administration. The biggest cheer was for her proposed anti-corruption commissioner to recover money lost to fraud during the pandemic.
Labour’s restrictive fiscal rules are unlikely to survive contact with reality. It would be better if Ms Reeves could be bolder and less in thrall to economic orthodoxy. But she does see the government as having a key role in a green transition. Labour is right that Britain will need an activist state to reach net zero. Earlier this year the energy regulator said that it was “unacceptable” that there were decade-long waits to connect low-carbon projects to the electricity grid. Housing developers are also facing delays in getting power to new homes. Working with Ed Miliband, the shadow climate secretary, Ms Reeves appears determined to get a grip on the situation.
This will be a key electoral battleground as the Conservatives under Rishi Sunak pivot to weaponise voters’ fears that net zero will impose costs today, even if in the long term they reduce household bills. The rash of headlines in the Tory-supporting papers about “Labour’s plans to rewire Britain with electricity pylons across countryside” aims to energise not-in-my-backyard sentiment in swathes of rural England. Labour has chosen to fight back by using what were once Tory arguments – that wind and solar are competitive sources of energy, they help to reduce electricity costs and will make Britain independent of petrocrats in Russia and the Middle East. This is a winnable argument for Labour. Mr Miliband says that by 2030, his party’s plans will take up to £1,400 off the annual household bill. Internal party polling suggests Labour’s idea of a publicly owned national champion in clean power generation, known as GB Energy, is a vote-winner.
The Labour conference has felt giddy at times, with delegates openly discussing a big Labour win – even a landslide – at the next general election. This feels premature. There is a long way to go. Ms Reeves knows that, unlike in 1997, the nation is stuck in an economic rut. She has to break with a failed model of economic governance. She cannot fix the country’s problems by sticking to Tory plans and cutting deeper into the budgets of “non-protected” departments. Taxes will have to go up, though it would be injudicious for Ms Reeves to admit that now. Labour has been largely engaged in party management since 2019 rather than ideological development. Ms Reeves’ speech is a welcome recognition of how that is changing.