'Permission' from bleak UK economic data this month has given the Chancellor 'permission' to pursue a more aggressive growth agenda, according to senior government officials, trampling on business sensibilities and putting her on an equal footing with regulators.
Next week the Chancellor will deliver a “growth” speech against the backdrop of a sluggish economy, recent turmoil in bond markets, and Friday's survey shows… UK Business to Cut Jobs At the fastest pace since the financial collapse, barring the pandemic.
Reeves, who wants to accelerate a number of pioneering investment projects, was said to have been decided by colleagues after taking a recent beating at the hands of markets and political opponents to “faster and more” to pursue growth.
“There is a view in the Treasury that this is all good,” a minister said. “It is seen as permission for them to go more seriously on growth measures.”
The Chancellor's ally said: “I'm frustrated with the speed at which things are happening. She wants to use the power of the Treasury to show where we want to go next. This is politically controversial stuff.”
For example, Reeves, who attracted conservative criticism for a visit to Beijing this month, is listing London express company Shein, despite concerns about standards at its factories in China. It also supports the expansion of Heathrow Airport.
Market turmoil at the start of the year led to claims that Reeves' job was on the line, but her supporters say she used the episode to respond with “strength and decisiveness”. She said this month that she would be happy to be known “Iron Chancellor”.
Conservatives, however, say this is laughable. Andrew Griffiths, the shadow business secretary, said: “Business is clearly out of their depth and out of ideas to fuel the economy.” “Workers pay the price for the labor-on-business war.”
Griffiths notes that for all Reeves' talk, she's about to force companies to impose new employment laws, which the government will appreciate. The cost of the business is £5 billion.
But Reeves – who was speaking this week about the British economy at the World Economic Forum – has shown in recent days a willingness to use the power of her office to take decisive action across Whitehall, some of which the Conservatives are privately applauding.
Ministers this week Overwhelmed Markus Bockkrink as head of the Competition and Markets Authority, a regulator of monopolies who has been criticized for alleged growth.
His departure was a signal to other regulators that they should push harder on growth, according to Treasury officials. “Sometimes you have to send a message,” said one.
Reeves' focus on motivating regulators received particular admiration from the opposition. “We should have done this ourselves,” said one former Tory treasurer.
However, while some conservatives agree in private, Reeves' actions have rallied some on her side of the aisle. She has been accused by former shadow chancellor John McDonnell of leaving the door open for critics to say Labor was “defending the abuse of corporations and profiteers”. “He is desperate,” said a senior Labor left-wing member. She seems comfortable making such enemies.
Counselor too Aside with banks This week a High Court case will determine whether they have to pay out tens of billions of pounds in a car finance sales case. A new non-DOM tax regime has been relaxed.
Next week, Reeves is also expected to signal her support for airport expansion in the south-east, including Heathrow, despite intense criticism from the green lobby and London Mayor Sir Sadiq Khan.
Whitehall Insiders believe Reeves leaked the move to bounce back her Cabinet colleagues. Starmer himself has previously voted against a third runway at Heathrow, while Ed Miliband – who has threatened to resign from Gordon Brown's government over the issue – this week played down any suggestion he would quit. At the same time, judicial reviews of controversial infrastructure projects will be scaled back.
Given the threat posed to her risky financial plan by slow growth, Reeves asked the Treasury to stop focusing on budgets and focus on boosting investment instead.
Officials are working on a range of projects – some with code names related to the fruit – to attract investment in Britain.
One has to do with the huge new self Universal Entertainment Park It is being proposed for a site near Bedford, with officials close to talks between the company and the Treasury saying they are “progressing well”.
Supporters of the project claim it could generate up to £50 billion in economic value in the first 20 years. The Treasury was asked to provide financial support, including upgrading the M1 motorway interchange and building a new station.
One official briefed on the talks, dubbed Project Mandarin, said they were almost complete: “It's one of those negotiations where you can conclude if you want to.” Another person briefed on the talks added: “It's very close. It's almost there, but it's not there yet.”
Officials said the support package focused primarily on ensuring infrastructure investments and improvements, which will be necessary to carry the thousands of people traveling to visit the 500-acre site.
Comcast executives — whose global destinations and expertise are behind the scheme — have in the past told the FT that they want to build “one of the greatest theme parks in the world.”
“We continue to have fruitful discussions with the UK government,” Global Destinations and Experiences said.
Alongside the theme park, Reeves is also trying to finalize negotiations with Astrazeneca to revive a stalled vaccine manufacturing site in Speke, Merseyside.
The project was halted after the Treasury sought to reduce the amount of state support provided to the British drugmaker's vaccine centre, cutting the pledge made by the last Conservative administration from around £90m to £40m.
Meanwhile, Reeves is also expected to signal her support for a £9bn motorway and tunnel across the River Thames in east London, which will use private funding to defray the cost to taxpayers.
There are also signs that the government is hoping to avoid any criticism that it is concentrating all its firepower in south-east England.
The Treasury has announced plans to review the “Green Book” it uses to assess the value of proposed investment decisions, and is focusing on upset from critics who believe it favors London and the surrounding region.
It also promised to build a pipeline of investable projects outside the Southeast, with the help of the Investment Office. Reeves is closely watched by northern mayors, who was groomed by the Labor government when he first took office.
