Chancellor of the Exchequer, Rachel Reeves, delivered a speech emphasizing a more optimistic outlook for the UK economy, despite ongoing challenges. The speech, which focused on long-term investments and supply-side reforms, aimed to boost business confidence and counter the perception of economic gloom. However, critics argue that the measures announced are unlikely to yield immediate results and may even hinder growth in the short term.
This speech felt like the feel-good bits of a Budget without the green benches and baying MPs (Photo: Chris Ratcliffe/Bloomberg via Getty Images)was a key moment for Reeves, who is under pressure to spell out a more optimistic picture of the UK’s prospects after being criticised for the Government’s gloomy messaging in the first six months in office. With the economy stagnating and business and consumer confidence flagging, she needed to plaster on a grin.
, including a £25bn national insurance raid on employers, are forecast to lead to lower growth over the next five years. The measures she announced today – which include backing a third runway at Heathrow, relaxing planning constraints, building the UK’s own Silicon Valley between Oxford and Cambridge and unlocking money from pension schemes – will take years to be felt. Taken alongside greater rights for workers and ending new licences for North Sea oil and gas exploration, growth could be stymied instead. A tax clampdown on wealthy foreigners has sparked an exodus of millionaires. TheSome in the Labour movement believe if the Government can show six quarters of continuous economic growth, voters will feel better off and reward Starmer and Reeves at the ballot box. Sooner would obviously be better. Cash-strapped Reeves needs money now and is about to be walloped again on 26 March, when the Office for Budget Responsibility is expected to significantly downgrade economic forecasts. Wednesday’s speech felt like the feel-good bits of a Budget without the green benches and baying MPs, and Reeves’s Tiggerishness marks a shift in strategy. While they’re sticking to the plan to pursue supply side regulatory reform as the key driver of growth; they are doing it by talking up Britain. Businesses will be thrilled. Don’t call it a reset, but this speech should probably have been made last year. Reeves made a renewed push for net zero a key part of her speech, saying she wants Britain to “lead the way” in what she calls the “industrial opportunity of the 21st century”.With the go-ahead for a third runway at Heathrow, Reeves made a clear attempt to balance this with detailed measures to invest in cleaner energy and industry – including expanding electric vehicle charging network across the country, and £28m for Cornish Metals, who provide raw materials to be used in solar panels, wind turbines and electric vehicles. Just call it political offsetting. Will no one speak up for the bats? Reeves put on her shocked voice that they should be protected: “The problems in our economy, the lack of bold reform we have seen over decades, can be summed up by, the type of decision that has made building major infrastructure in our economy far too expensive and far too slow.” Reeves is picking a deliberate fight to signal to the public that are not going to be Nimbys, but in going after the bats Reeves is making herself the Ozzy Osbourne of the Labour Party. Confidence among manufacturers fell at the fastest pace in two years in January, with private sector activity scarcely growing and hiring slowing down at the fastest pace since the financial crisis. But she can’t wish growth into existence. Just because Reeves and Prime Minister Sir Keir Starmer announce it is happening, it doesn’t make it so. It’s too soon to talk of green shoots of economic recovery. Reeves can smile all she likes, but Britain is playing catch-up
ECONOMY LABOUR PARTY RACHEL REEVES UK ECONOMY INVESTMENTS GROWTH BUDGET NET ZERO
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