Reeves to go ‘further and faster’ for growth after recent turmoil

A flurry of dismal UK economic data this month gave Chancellor Rachel Reeves “permission” to pursue a more aggressive growth agenda, according to senior government officials, undermining Labor’s sensibilities and putting her on a war footing with regulators.

The chancellor will deliver a ‘growth’ speech next week amid a stagnant economy, recent turmoil in bond markets and a survey on Friday which showed: UK businesses are cutting jobs at the fastest pace since the financial crash, barring a pandemic.

Reeves, who is looking to accelerate a number of flagship investment projects, has decided to go “faster and further” in pursuit of growth after a recent tussle from markets and political opponents, partners said.

“There’s a view in the Treasury that this is all good,” one minister said. “It’s seen as a license for them to go harder on growth measures.”

The chancellor’s ally said: “He’s frustrated with the speed of things. He wants to use the power of the Treasury to show where we want to go next. This is politically contentious stuff.”

For example, Reeves, who drew criticism from the Conservatives for visiting Beijing this month, is pushing for fast-fashion company Shein to list in London despite concerns about the standards of its factories in China.He also supports the expansion of Heathrow Airport.

The market turmoil earlier in the year led to claims that Reeves’ work wasn’t right, but his supporters said he used the episode to respond with “strength and determination.” He said this month he would be happy to be recognized as “Iron Chancellor”.

The Conservatives, however, say this is ridiculous. “Labour is clearly out of its depth and ideas to grow the economy,” said Andrew Griffith, the shadow business secretary. “Working people are paying against Labour the price of war.”

Griffith points out that for all Reeves’ deregulatory talk, he is going to impose a set of new labor laws on companies that the government is evaluating; the business is worth £5 billion.

But Reeves, who was speaking about the British economy at the World Economic Forum this week, has shown in recent days a willingness to use the power of his office to take decisive action in Whitehall, some of which are being privately applauded by Tories.

Ministers this week kicked out Markus Bokerink as chairman of the Competition and Markets Authority, the monopoly regulator that has come under fire for allegedly slowing growth.

His departure was a signal to other regulators that they need to push growth harder, Treasury officials said. “Sometimes you have to send a message,” one said.

Reeves’ focus on boosting regulators has been privately admired by the opposition. “We should have done it ourselves,” said one former Tory Treasury minister.

Yet while some Tories are privately approving, Reeves’ actions have baffled some in the aisle, with former shadow chancellor John McDonnell accusing him of leaving the door open to critics, saying Labor was “protecting corporate abuses and profiteers”. Labor MP said. “It’s desperate.” He, however, seems comfortable finding such enemies.

So did the chancellor sided with the banks this week in a High Court case that will decide whether they have to pay potentially tens of billions of pounds in damages in a car finance mis-selling case The new tax regime has been eased;

Reeves is also expected to signal his support for the South East next week, including for the expansion of Heathrow Airport, despite fierce criticism from the green lobby and London Mayor Sir Sadiq Khan.

Whitehall insiders believe Reeves published the move to jump-start his cabinet colleagues.Starmer himself previously voted against a third runway at Heathrow, while Ed Miliband, who threatened to resign from Gordon Brown’s government over the issue, this week. rejected any offer of his resignation, while judicial reviews of controversial infrastructure projects will be limited.

Given the threat to his unsustainable fiscal plan from sluggish growth, Reeves has told the Treasury to stop focusing on budgets and focus instead on boosting investment.

Officials are working on a number of projects, some with fruit-related codenames, to invest in Britain.

One is about massive new Universal theme park A site near Bedford is proposed, with officials close to talks between the company and the Treasury saying they are “progressing well”.

Backers of the project claim it could generate up to £50bn of economic value in its first 20 years.The Treasury has been asked to provide financial support, including the upgrade of the M1 motorway junction and the construction of a new station.

One official briefed on the talks, dubbed Project Mandarin, said they were almost complete. Another person added about the negotiations. “So close. Almost there, but not there yet.”

Officials said the aid package is mainly focused on ensuring infrastructure investment and improvements, which will be important to the thousands of people who travel to visit the 500-acre site.

Bosses at Comcast, whose Universal Destinations & Experiences is behind the scheme, previously told the FT they wanted to build “one of the biggest theme parks in the world”.

Universal Destinations & Experiences said: “We continue to have productive discussions with the UK government.”

As well as the theme park, Reeves is also trying to finalize talks with AstraZeneca to restore the vaccine production stand in Speke, Merseyside.

The project was halted after the Treasury sought to reduce the amount of government support it gives to the UK pharmaceutical company’s vaccine hub, cutting the pledge made by the last Conservative administration from around £90m to £40m.

Meanwhile, Reeves is also expected to signal his support for a £9 billion motorway and tunnel across the River Thames in east London, which will use private finance to pay the cost to taxpayers.

There are also signs that the government is hoping to avoid any criticism that it is concentrating all its firepower in the south-east of England.

The Treasury has announced plans to review the “green book” it uses to assess the value of proposed investment decisions, which has long been at the center of the ire of critics who believe it favors London and the surrounding region.

It has also promised to build a pipeline of investment projects out of the South East with the help of the Investment Office.