It’s Boost Britain season – a clarion call to get Britain off the sofa, stop moaning and do something (anything!) to get the UK economy into trimmer form.
Previously reserved in her communications style, Chancellor Rachel Reeves has begun rousing people who prefer protecting bats to HS2, and declared herself to be “shouting from the rooftops” about the pent-up wonders of the UK economy.
That will continue with a speech on Wednesday which will see the Government state that “growth comes before any other priority”. This bracing message is also the beginning of a different era for a Chancellor who is embarking on a headlong clash with many of her own colleagues over support for airport expansion and a general “outta my way” vibe.
A lot of the rhetoric in pre-released comments in the run-up to this speech could have come from her Conservative predecessors. From George Osborne, admiration for the Chinese way of ramming through infrastructure projects, while the UK gets caught up on “lunatic” project blocking. And from Jeremy Hunt, the newfound caution on hitting wealthy non-doms on their past earnings or inheritance planning, as she rows back on those plans.
Watching the Chancellor on her interview rounds at Davos and in a flurry of TV interviews over the weekend felt like being subjected to a fitness instructor selling us a package of high-intensity training to cure those flabby bits of the economy. “I’ve been in sales mode this week in Davos,” Reeves told an audience of business executives. Tellingly, she did not disavow a comparison when asked about the “boosterism” of Donald Trump – replying that the UK, too, needed some Make Britain Great Again “positivity”.
All of this marks a goodbye to “old Rachel”, with those forgettable, cautious, mechanistic speeches about “fixing the foundations of the economy” and a ritual dissing of Liz Truss to make Labour feel better about itself.
The early growth stasis under the Government was a warning signal and so was a bad landing with the very entrepreneurs and bankers Reeves had courted. As one FTSE chairman puts it: “Not everything wrong with the Government since last July can be blamed on Angela Rayner being close to the unions or Ed Miliband being too green.” The ultimate voice shaping the direction of the economy is the Chancellor.
This message has landed and “New Rachel” is fierier, more instinctive than her previous presentation as a senior chess player who could plot out sequential moves and anticipate what would follow. That did not prevent her imposing a tax on non-doms, based on the assumption that they are so attached to living in Britain that they would swallow paying levies on income and capital gains earnings overseas and a wallop on inheritance tax on their assets in trust.
Now Reeves is unpicking her own policy: we do not hear much of the projected gains trotted out of £2.7bn a year by 2029, mainly because when an estimated 10,000 multimillionaires leave the UK, they are not around to pay the taxes at all.
The real reason for the volte-face is the clash between her desire for high spenders with dual (at least) residences, to stay in London, list companies on the London stock exchange or get venture capital into the AI and green tech companies she is boasting about, rather than head off to favourable tax regimes in competitor countries.
Still, it is an odd clash to talk about unleashing the spirits of growth, when National Insurance rises for those taking on new staff are costing thousands of jobs at Sainsbury’s. Employers are anxious about the Labour pledge to deliver worker rights from day one as a bumper-sticker policy.
The UK is about to see the benefits of Brexit
Read MoreThe prospect of dealing with legal repercussions when new staff leave a job shortly after hiring worries a lot of owners, and a more phased approach might have caused less avoidable angst. When Rupert Soames, the CBI boss, tells me that “the Government has lost the trust of business”, the clash between that judgement and call for boosterism can rebound. The fundamentals need to be sorted before the cheerleading can be convincing.
To Reeves’s credit, she has acknowledged that the tendency of many of her own colleagues to think that a growth boost comes easily and without painful trade-offs for a centre-left party is likely to see Britain sink further into a mix of anxiety and smugness. In the new era in the US, when companies and investors can choose between riding the giddy but lucrative “Trump bump” in share valuations, it is not enough to simply declare that we are open for business. Global capital flows are not that into us right now. Shouting alone will not convince them – Reeves has to sound like she wants to win and take the hits to get there.
It is also, as she privately conceded last week, not enough to blame Brexit for bigger problems the country needs to address – and to which shadowing tattered European industrial policies won’t much help. Ideally there would be a reconnection of the UK to Europe for trade purposes, as Europe faces chilly trading headwinds with the US. But Reeves can only engage when there is appetite in Europe to do so and that will not be fast.
The quickest way to her goals then is by rebooting UK Plc and being prepared to risk unpopularity to do so – in Labour and often beyond it. To that end, 2025 looks like the year where we say goodbye to stolid “Rachel from accounts” and hello to a more radical, even ruthless, Chancellor.
It won’t happen without some blood being spilt on the No 11 carpet – and some of it, I confidently predict, will be ministerial.
Anne McElvoy is host of the Power Play podcast for POLITICO
Read More Details
Finally We wish PressBee provided you with enough information of ( Goodbye, Rachel from accounts – and hello to a radical, ruthless Chancellor )
Also on site :
- 'The Young and the Restless' Heartthrob, 48, Makes Rare Appearance with Daughter
- NYT Connections Sports Edition Today: Hints and Answers for June 19
- Pakistanis flee Iran amid Israel-Iran war border closure