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Rachel Reeves, the UK’s shadow chancellor, will on Tuesday present an unusual new recipe for economic growth in Britain if the Labor Party wins the next general election: stability.
Reeves will argue at the Corn’s annual conference that Britain has been through enough upheaval in recent years, from Brexit to the Covid-19 pandemic and war in Ukraine to former prime minister Liz Truss’s “mini-Budget”, which triggered turbulence in the financial markets. .
While it insists that Labor will change the way the economy is run, including through reform of the planning system and employment laws, there will be an underlying assumption against rocking the boat.
“Growth achieved through stability – built on the strength of our institutions,” he will tell a City of London audience at the 2024 Mais conference, an annual speech by a leading figure in economics or finance. He will also promise to rebuild growth on “strong and secure foundations”.
Reeves will contrast his approach with that of Truss, who wanted to radically reshape Britain’s economic institutions. One of his first acts was to sack the permanent secretary to the Treasury, Sir Tom Scholar.
In recent months, Reeves has overshadowed the approach taken by Chancellor Jeremy Hunt, in a little-noticed sign that Labor has no intention of moving in a different direction if it wins an election due this year. “Stability is change,” said one Labor official.
The shadow chancellor has endorsed most of Hunt’s “Edinburgh reforms” of financial services, while the Labor Party did not oppose any measures contained in either November’s autumn statement or this month’s budget.
Reeves would strengthen two of the institutions that Truss blamed for some of Britain’s economic woes: the fiscal watchdog, the Office for Budget Responsibility and the Treasury itself.
Reeves has already promised to ensure by law that any government making significant and permanent changes to taxation and spending will be subject to an independent forecast of its impact by the OBR.
In his Corn speech, Reeves will reject occasional suggestions that the Treasury should be broken up, but will propose giving a greater role to its Economic and Growth Unit, created by the Labor government in 1997 to provide an internal focus on growth. reforms.
Reeves will argue that the unit should be “integrated into budget and spending review processes alongside the Treasury’s tax and spending departments”, to give a new emphasis on growth.
The Treasury said the unit had grown to 250 people over the past 10 years and that recent fiscal events had demonstrated its commitment to growth, both by cutting taxes on employment and increasing tax breaks for business investment.
A spokesperson said: “The Treasury’s role as an economics secretary is at the forefront of what it does and is particularly evident in recent fiscal events, with measures taken to increase labor supply and stimulate business investment.”
Reeves will argue that he wants to create a stable foundation on which reforms to planning, public services and the labor market could be added to create a more dynamic economy.