Labour Shadow Chancellor Rachel Reeves' economic plans are more radical than you might think – Joyce McMillan

Labour’s plans represent a definite ideological break with the form of neoliberalism embraced by Conservative Chancellor Nigel Lawson 40 years ago, but Keir Starmer’s party is failing to move the national conversation away from right-wing economy orthodoxies

There is no more basic error in politics than underestimating an opponent; and no temptation harder to resist, particularly in the heated climate of 21st-century online politics. On Tuesday of this week, the Shadow Chancellor of the Exchequer, Rachel Reeves, delivered this year’s City of London Mais Lecture, to an audience largely composed of financiers and business people; and given the right-wing mood-music which surrounded the event, it’s perhaps not surprising that many, particularly on the political left, have already rushed to judgment, and concluded that Labour under Keir Starmer offers no real change from the tired neoliberal orthodoxies that have gradually undermined Britain’s economy and society, over the last 40 years.

Within 24 hours of the speech, for example, the well-known left commentator Owen Jones was already declaring that he had torn up his Labour party card after a lifetime of membership, citing the promise of more austerity, and Labour’s failure to denounce obvious breaches of international law in Gaza, among the factors that drove him out. Yet here is the paradox that serious commentators must note: the actual text of Reeves’s one-hour speech, as opposed to the spin placed upon it, signalled a definite ideological break with the form of neoliberalism embraced by Tory Chancellor Nigel Lawson in his Mais Lecture of 1984, and towards what one commentator shrewdly called “Bidenomics without the money”.

‘Securonomics’

Shadow Chancellor Rachel Reeves, Labour leader Keir Starmer and Scottish Labour leader Anas Sarwar, pictured on a visit to a Siemens factory in Glasgow, need to win people over to their way of thinking about economics (Picture: Jeff J Mitchell/Getty Images)

The speech began with a devastating analysis both of the UK’s long-term decline, relative to comparable economies, and of the disastrous policy decisions of the last 14 years which have exacerbated those problems, including both sustained austerity in public spending, and Boris Johnson’s deeply damaging Brexit deal. In the face of this bleak situation, Reeves denounced Lawson’s brand of neoliberalism as “wrong not only in application but in theory”. She embraced what she called “securonomics”, categorically rejecting the key neoliberal idea that national prosperity can be achieved by making ordinary workers less secure, driving down pay, and removing employment protections. And she began, in the second half of the speech, to list measures which a Labour government would take to promote stability, investment and reform in the UK, the three factors which she sees as essential conditions for healthy growth.

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Now some of those measures, it’s clear, should be welcomed by all those who hold progressive views. The removal of some anti-trade union laws, the outlawing of zero-hours contracts, the extension of employment rights, the reversal of recent government decisions to de-prioritise green measures, and new systems – for example, via the Office for Budget Responsibility – for taking account of the long-term value of public investment, are all examples of positive change.

Yet when it comes to the full implementation of what Reeves calls a “fundamental course correction” for the UK, there are still huge and troubling questions to be answered. The first concerns her absolute conviction that sustained economic growth is the answer to the UK’s economic problems. It is clear that Reeves remains well aware of the pressure to ensure that future growth is in some sense “green”. She does not, though, demonstrate any interest in establishing new and less destructive measures of economic success, or appear to have given much thought to the huge conceptual shifts involved in trying to achieve a sustainable economy, on a finite planet.

The question of money

Secondly, for all Reeves’s decision to include “reform” as one of her priorities – and her clear understanding of how growing regional inequalities have hampered UK development, over the last 40 years – she seems to have few specific thoughts about how to address that issue, in today’s United Kingdom. In the whole 8,000-word speech, for example, there is not a single reference to England’s city mayors, or to the devolved governments of Scotland, Wales and Northern Ireland, and their role in the new economy she envisages.

Thirdly, and perhaps most crucially, there is the question of money, and whether the paradigm shift Reeves suggests can possibly be kick-started without a massive programme of public investment, at least on the scale of the £28 billion-a-year green investment scheme on which Labour recently cut in half. In truth, if Reeves and Starmer are as serious as they claim about obeying conventional fiscal rules, and as averse to higher taxes, then it’s hard to see how they can even keep their pledge to provide immediate emergency support for the NHS, far less promote a serious change of economic direction within any viable time-frame; “Bidenomics without the money”, indeed.

Political change about more than policy

And then finally, in a headline-driven political world where few will read Reeves’ speech in full, there is the political question not only of why Labour’s spinmeisters still think it clever to portray the leadership as admirers of Margaret Thatcher (red wall electoral arithmetic, no doubt), but also of the likely political consequences of their reluctance to signal the extent of the change that Reeves suggested. To put it bluntly, unless they are willing, before the election, to change the predominantly right-wing mood music that now surrounds the Labour leadership, and shift their tone to something more proudly assertive about the change in economic attitudes that her speech envisages, they run the risk that they may indeed win a famous election victory, but without having built any real grassroots support for the change they want to see.

In that case, they may find – like Tony Blair and Gordon Brown 25 years ago – that real political change is not only about policy, but about changing the terms of our national conversation, in ways that enable progressive policies to be understood, embraced and defended, at every level. And that if Labour politicians run scared of mounting that clear challenge to the right-wing orthodoxies that currently dominate UK public debate, they may find that real change eludes them; and that any good they do is easily dismissed, and even more easily reversed, come the next change of UK Government.