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Rachel Reeves, UK shadow chancellor, will on Tuesday set out an unfamiliar new prescription for economic growth in Britain if Labour wins the next general election: stability.
Reeves will argue in the annual Mais lecture that Britain has been through enough upheaval in the past few years, from Brexit through the Covid-19 pandemic and Ukraine war to former prime minister Liz Truss’s “mini-Budget”, which sparked turmoil in financial markets.
Although she will insist that Labour will change the way the economy is run, including through reform of the planning system and employment laws, there will be an underlying presumption against rocking the boat.
“Growth achieved through stability — built on the strength of our institutions,” she will tell a City of London audience in the 2024 Mais lecture — an annual address by a prominent figure in economics or finance. She will also promise to rebuild growth on “strong and secure foundations”.
Reeves will contrast her approach to that of Truss, who wanted to dramatically reshape Britain’s economic institutions. One of her first acts was to sack the Treasury’s permanent secretary Sir Tom Scholar.
In recent months, Reeves has shadowed the approach taken by the chancellor Jeremy Hunt, in a little-noticed sign that Labour does not intend to lurch in a different direction if it wins the election expected this year. “Stability is change,” said one Labour official.
The shadow chancellor endorsed most of Hunt’s “Edinburgh Reforms” of financial services and Labour has not opposed 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 ills: the fiscal watchdog, the Office for Budget Responsibility, and the Treasury itself.
Reeves has already promised to guarantee in law that any government making significant, permanent tax and spending changes will be subject to an independent forecast of its impact from the OBR.
In her Mais lecture, Reeves will reject occasional suggestions that the Treasury should be broken up, but will propose giving an enhanced role to its Economic and Growth Unit, created by the Labour government in 1997 to provide an in-house focus on pro-growth reforms.
Reeves will argue that the unit should be “integrated into the budget and spending review processes alongside the fiscal and spending departments of the Treasury”, 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 shown its commitment to growth, whether cutting taxes on work or boosting tax breaks for business investment.
A spokesperson said: “The Treasury’s role as an economics ministry is at the fore of what it does and particularly seen in recent fiscal events, with measures taken to increase labour supply and boost business investment.”
Reeves will argue that she wants to create a stable base upon which reforms to planning, public services and the labour market could be added to create a more dynamic economy.
