Rachel Reeves's first big speech as chancellor was long list of changes to nuts and bolts of UK economy

Rachel Reeves’s first big speech as chancellor was long list of changes to nuts and bolts of UK economy

Posted by Admin July 8, 2024 Bussiness

The first big announcement of Gordon Brown’s chancellorship was, arguably, the single biggest decision and the single biggest moment of his entire time in office.

In a wood-panelled room on Whitehall a few days after being elected, Mr Brown announced that he was making the Bank of England independent – to the shock of many of those present.

Money latest: Pubs want ‘disgraceful’ Co-op TV advert taken off air

Rachel Reeves‘s first big speech as chancellor happened in the same room today, but lacked the drama or the big-bang surprise of that moment. Rather than announcing a big, unexpected change of British institutions, she instead unveiled a long list of changes to some of the nuts and bolts of the British economy.

But perhaps that was the point. Reforming the planning system is not something one can announce in a single press conference. This country’s inability to build the homes it needs and the roads, railways and power grids it’ll need in future is not something one can solve by making a bit of the Treasury independent. It is a hard job that will take grit, effort and time – if it can succeed at all.

It will involve challenging vested interests across the country, not to mention disappointing millions of voters who rather like the fact that it’s so difficult at present to get planning permission for new flats and buildings.

Calling for traditionally right-leaning reforms

Yet the fact that the chancellor chose this issue – and the broader topic of economic growth – to focus on in her first press conference is telling. Traditionally it’s liberal and right-leaning MPs who have called for planning reform – arguing that regulations and local resistance are holding back economic growth.

That the new Labour government see this as their territory underlines that they intend to occupy some of the topics and issues long abandoned by their opponents.

The Labour reforms are designed to make it easier for developers to build, including on some parts of the green belt. There will be new housing targets. The chancellor also announced an end to the ban on the construction of new onshore wind turbines.

None of these decisions were exactly unexpected – none had the Big Bang effect of that Gordon Brown moment. But as one of the business leaders who came along to the event told me afterwards, the key thing with reforming planning isn’t making a single “big bang” decision but about delivery.

A host of cabinet big guns

If something needs to be built in the national interest, but is facing local resistance, how well can you corral the machinery of government to make the right choice on behalf of the country? In that sense, among the most significant things about the event wasn’t merely the policies announced by Ms Reeves but the fact that she did so with a host of other cabinet “big guns” there in the front row of the audience: deputy PM and housing and communities secretary Angela Rayner, energy secretary Ed Miliband, business secretary Jonathan Reynolds. After years in which the cabinet often seemed to be acting at cross purposes with each other, Labour are determined to give the impression of unity.

But will it work?

The real question is whether it works. And the reality is that it’ll take years (and quite a few years) to see any windfall from changes in planning rules on the wider economy. Even so, if this government can genuinely boost housing growth to anywhere near its targets, while also encouraging a large amount of business investment, it will unlock a source of growth this country has struggled with.

Still, this is just day one. Many other questions loom: about the state of the public finances, about the squeeze on family incomes and about whether the government will have to raise taxes to finance its departments. But they are for another day.