Rachel Reeves will use a speech at Harvard on Monday to set out her views on Brexit, devolution and investment, in her first public intervention on her own record and on Britain's future since leaving government. The address comes after John Healey's first budget as chancellor.
On Europe, Reeves will say that no one in government could "be in any doubt" about her position on the damage done by Brexit, and about her belief that the UK should one day return to the EU fold. "Economic interests, common values and basic geographical reality all point towards Europe," she is expected to say. The argument is not entirely new for her: six months ago, in a lecture, she said that "Brexit did deep damage" and that the aim was "not to turn back the clock but to look toward a new and stable, future relationship". Until her intervention, Andy Burnham had been the torchbearer for rethinking the Brexit settlement since becoming prime minister.
The speech will examine how governments can meet the public's appetite for radicalism while retaining credibility with financial markets, and will argue that pursuing a closer relationship with the EU, including eventual rejoining, can be credible as well as radical. "Economically, it is the credible choice. Britain's values, and a serious assessment of the geopolitical scene today, tell us it is the radical choice too," Reeves will say, giving Burnham credit for his willingness to face reality head on. Her stance places her closer to Burnham, who removed her from government, than to Healey, her successor at the Treasury, who has joked about his own age when asked whether the UK would rejoin the EU "in his lifetime" and has said his job is to "try and make the most of Britain's position now".
On devolution, Reeves — the MP for Leeds West and Pudsey — argued in her earlier lecture that what most distinguishes Britain from its closest peers is the relative underperformance of major cities outside London compared with their European counterparts. She said the north of England had "waited for far too long, for a government that matches warm words with concerted ambition", and called for the regions to be liberated from "stifling Whitehall orthodoxies". The main policy announced in that speech, a plan to begin giving regional leaders a share of national taxes that have long been allocated by central government, now forms the centrepiece of Healey's budget.
Reeves's central theory of growth was investment. She raised employers' national insurance, an unpopular move that nonetheless signalled a government willing to take hard choices while borrowing for public investment, and the fiscal rules were changed to permit a multi-year commitment to an eventual £100bn in new capital spending. That money is now beginning to flow into NHS infrastructure, roads, housing, rail upgrades, and energy and industrial investment. In the Harvard speech she will argue that the shift to an investment-led growth model "required sacrifices" that a government led by Keir Starmer failed to persuade the public to back. "The challenge is to make the politics and economics, those dual tests of credibility and radicalism, line up," she will say.
Within Westminster, some MPs now argue that Reeves's legacy and influence have been judged too harshly. At Healey's first outing at the International Monetary Fund in Bangkok, its economists praised his predecessor, saying the UK's deficit reduction plan "stands out" among G7 peers. Her arguments have also been awkward for a government that has adopted Brexit rethinking and devolution as its own theory of growth while removing one of their key backers under Starmer. Burnham, if he avoids an early election, may begin to see the investment bear fruit in public services and in market confidence, though international turmoil could derail progress — and if his government counts public services, Europe, devolution and growth among its successes, Reeves will be able to claim some of the credit.
Sources: The Guardian Business.