Rachel Reeves says the Treasury's enterprise and growth department will play a bigger role in policy-making. Photo: Holly Adams/Bloomberg
Britain is having a 1979 moment, Rachel Reeves will say on Tuesday, promising a Labor government will work with business to create a decade of «national renewal».
After delivering the annual Mais lecture in Labour's Shadow Chancellor of the City of London will compare the economic challenges facing the next government with those faced by Margaret Thatcher.
She will pledge to «hard-wire» economic growth in future budgets, giving the Treasury's Enterprise and Growth Department expanded role in policy development.
Labor, which is 20 points ahead in the polls, will now be under intense pressure to clarify its economic policies in more detail.
The party recently abandoned a key pledge to invest £28 billion in green investment, but its tax and spending plans are largely shrouded in secrecy.
Ms Reeves will also make clear that she and Sir Keir Starmer, the leader of the Labor Party, have rejected the economic approach of former leader Jeremy Corbyn and will emphasize the importance of making profits for the economy.
She will say: “I remain optimistic about our ability to meet the challenges we face if we can bring the public and private sectors together under a national mission aims to restore strong economic growth across the UK.
“When we talk about a decade of national renewal, this is what we mean. As in the late 1970s, we are at an inflection point.
“And, as in previous decades, the solution lies in sweeping supply-side reform to stimulate investment, removing the blockages that are holding back our productive potential and create a new economic settlement based on the evolution of economic thought.
“A new chapter in the economic history of Great Britain. And unlike in the 1980s, growth in the coming years must be broad, inclusive and sustainable.”
The speech, which outlines the overall picture of the Labor Party's economic strategy, is intended to be deliberate about the private sector and how he can work with the government.
The initial optimistic response came from the Labor Confederation. British Industry (CBI), which stated that “the surest route to sustainable growth is to attract business investment.”
Rishi Sunak addressed business leaders on Monday and said he could personally give the country a «bright future» as he continues to fight speculation that some Tory MPs want to remove him.
The Telegraph reported last week But Mr Sunak said on Monday: “I'm not interested in Westminster-wide politics. It does not matter. The future of our country is important, and that's what I'm focused on.»
Ben Wallace, the former defense secretary and ally of Boris Johnson, said it was “too late” to change the leader, with a general election due no later than January next year.< /p>
He told Times Radio: «There comes a point in the election cycle when you actually put on your best suit, stand up, march to the sound of gunfire and get on with it.»
Ms Mordaunt made no public comment, but allies rejected claims she was involved in any plot against the Prime Minister as «nonsense».
Previous speakers at the Mays lecture, which gave politicians the opportunity to set out their economic thinking, included Sir Tony Blair, Gordon Brown, George Osborne and Mr Sunak.
While Ms Reeves's speech will compare the economic difficulties and the need for fundamental reform to the situation faced by Baroness Thatcher, it will also criticize the way Nigel Lawson, the then chancellor, engineered the boom that led to recession.
These remarks suggest that Labour's shadow chancellor believes that economic reform, similar to that seen after 1979 and after Sir Tony's New Labor came to power in 1997, is necessary if Labor is to win the next election.
The comments also indicate that she rejects Labour's big government economic policy of the 1970s, involving large-scale public ownership, which has so far attracted Corbyn and John McDonnell, his shadow chancellor.
Economic revolution Thatcher led to the massive privatization of industry, a decrease in the influence of trade unions, and later, during her premiership, to a noticeable reduction in the tax burden.
Sir Keir faced a Labor backlash in December when he used an article in The Telegraph to argue Thatcher was one of the few prime ministers to bring about «meaningful change» in Britain.
Ms Reeves said she would be an “iron” chancellor, remembering the former prime minister in her speech at the Labor Party conference last year.
Her speech in the City of London will echo criticism leveled at the Treasury's approach to policy-making by members of the Conservative Party's right, including Liz Truss during her brief premiership.
Ms Reeves will press her case. that the Labor government must «turn away from managed recession» and focus on economic growth, saying it would «tightly link economic growth to budget and spending processes through a reformed and strengthened Enterprise and Growth Department».
She will add: “Growth comes from stability based on the strength of our institutions. Invest through partnerships between proactive government and entrepreneurial businesses. And reform of our planning system, our public services, our labor market and our democracy.
“In the face of a more uncertain world, the challenge is not only to recognize acute risks, but also to identify opportunities. Reject managed decline and pursue the long-overdue task of renewing our shared purpose, rethinking outdated assumptions and restoring growth to a strong and secure foundation.”
The reference to civil service reform echoes the position of other shadow Labour. Cabinet ministers, for example, that the National Health Service needs an overhaul if the party comes to power.
Ms Reeves remains under pressure to explain how she will fund some £2bn a year of extra spending, including on the NHS, which was covered by a promise to scrap non-resident tax status. Jeremy Hunt adopted the policy in his Budget earlier this month, leaving Labor with a black hole in its proposed finances.
Under the leadership of Ms Reeves and Sir Keir, the party has decided to largely match the Tories' spending and tax plans , refuting Conservative claims that they plan to raise taxes in office.
Laura Trott, Conservative MP and chief secretary to the Treasury, said of the speech: “Rachel Reeves may be promising a new chapter, but it will be the same old Labor Party. No plan, just more borrowing and more taxes — that's how the last Labor government destroyed our economy.»
Louise Hellem, chief economist at the CBI, said: «The Shadow Chancellor is right that the surest path to sustainable development is through Growth. business investments.
“The key to this is a long-term, sustainable vision of what the UK economy can be in 2030 and a plan to deliver it, delivered through collaboration between business and government. Britain achieves its best results when politicians and businesses work together.»
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