Rachel Reeves is on a mission to invigorate the UK's economy with a sense of urgency and optimism. The Shadow Chancellor is set to unveil sweeping changes, aiming to streamline planning regulations and announce a new runway at London's Heathrow Airport in a major speech next Wednesday. This ambitious plan was conceived shortly after the Budget, as Reeves faced mounting pressure to respond to the growing concerns from the business sector.
Reeves' push for economic growth includes advocating for significant infrastructure developments, like the Heathrow expansion. Sources indicate that this strategy has strengthened Reeves' position among her colleagues, enabling her to argue more forcefully for such initiatives. Intriguingly, her recent rhetoric has drawn comparisons to that of a Conservative chancellor—a comparison she might not relish, but one that underscores her proactive approach.
Ministers point to planned changes in planning rules and efforts to attract big AI companies as part of their strategy to stimulate growth. However, industry veterans like Sir Paul McCartney caution that achieving such growth is no simple feat. Reeves’ sense of urgency is palpable, with one union leader describing this moment as a "cross your fingers behind your back moment."
Transitioning to this accelerated pace poses challenges. A senior Labour MP acknowledged that "shifting gears isn't easy," highlighting the complexities involved in adapting to new roles and responsibilities. Others in the political arena suggest that Reeves' recent initiatives reflect a Cabinet that has matured beyond its early days in office, although initial evidence suggests that the anticipated masterplan was not as robust as once believed.
"This is a correction," noted a senior source, describing it as a response to the clamor from businesses and the political shifts symbolized by "the orange man in the White House."
The metrics evaluating the government's success in its top priority—enhancing UK prosperity—remain inconsistent, with some indicators appearing bleak. Treasury insiders reveal that Reeves has been actively pushing for new economic growth strategies since shortly after the Budget, often described as "banging the table" for more ideas.
"Move at speed is much clearer," said a senior source, emphasizing the urgency of Reeves' approach.
The economic landscape faced additional turbulence following a market wobble, bringing frustrations about growth into sharper focus.
"The market wobble brought that frustration to the fore – we talked about growth for a long time… I think it's begun to put rocket boosters under that," remarked a senior source.
However, this rapid shift in strategy doesn't come without its critiques. A Whitehall source described the preparation for government as lacking, saying:
"They lost time because the preparing for government team wasn't really preparing for government—they had the opportunity to come in and show what they were made of, and they fluffed it," contributing to what was deemed a "meandering approach."
Some within the Labour ranks express skepticism about the effectiveness of simply pulling economic levers.
"The levers you pull don't just connect to something—the dead hand of the Treasury can't simply control economic growth," stated a senior Labour MP.
City sources have also expressed doubts about Labour's pro-business stance post-Budget.
"Labour did a great job of pretending to be pro-business up until [the Budget]. No one would say they are now," observed one City source.
Adding to the concern is the sentiment from key executives who have noted a decline in market confidence.
"There's been nervousness about this year; sentiment has definitely got worse, with a lack of a positive drum beat," commented an FTSE chief executive.
A union leader summed up the situation succinctly:
"The bottom line is that growth is anaemic—they need to massively invest."