In an age of attention-grabbing algorithms and amplified outrage on social media, politicians have few incentives to make arguments at any length. That makes Rachel Reeves’s Mais lecture earlier this week refreshing as a detailed exposition of the chancellor’s thinking.
Ms Reeves returned to an argument she first made in opposition, about the growing need for government intervention to mitigate public anxiety and destabilising volatility in a dangerous world. She calls this “securonomics” and it is intended as a rebuttal to the laissez-faire, small-state theories that, as applied by Conservative governments, starved Britain of investment, amplified regional inequalities and created the fallacious case for Brexit.
To boost growth, the chancellor calls for an activist government, not necessarily a bigger one; partnering with the private sector, but also cutting regulation and devolving economic power to regional leaders. In a welcome break from Treasury orthodoxy, Ms Reeves is considering giving devolved institutions control over major tax revenues that have traditionally been hoarded in Whitehall. She also made a forthright case for Britain’s realignment with the European single market. While much of the speech restated existing government policy, the pro-EU tilt was discernibly new. It was made more prominent by the unusual absence of any passages celebrating relations with the US.
Both the chancellor and the prime minister have been nudging the rhetorical dial in this direction for many months, referring now quite regularly to the demonstrable harm that Brexit has inflicted on the economy and sounding more ambitious about the scope of future partnership with continental neighbours. Ms Reeves took that a step further this week, noting the “strategic imperative for deeper integration between the UK and EU” and observing that “no trade deal with any individual nation can outweigh our relationship with a bloc with which we share a land border … and that accounts for almost half our trade”.
These are elementary truths that should have been spelled out before the last election. A campaign that acknowledged the folly of Brexit might have won a mandate for a more accelerated reconciliation with Europe. But the Labour leadership, fearful of provoking a backlash in leave-voting areas, pretended that the benefits of an improved relationship with Brussels could be achieved from behind red lines that preclude substantial integration with the single market. As long as those red lines are in place it will be difficult for the chancellor to generate much economic dividend from her pro-European rhetoric.
The ambition to combine alignment with EU standards in some sectors, while retaining the right to competitive divergence in others, sounds to many continental ears like the “cherrypicking” agenda that was rejected every time the Conservatives tried to negotiate along those lines. Sectoral participation in the single market is not impossible and some EU leaders are open to innovative models of “third country” partnership with the UK. But it will take a more vigorous pace of negotiation, driven by a higher level of political commitment – making the case to a domestic audience and outlining clearer objectives in Brussels – than Sir Keir Starmer has so far provided.
It is reassuring that Ms Reeves understands that Britain’s interests are best served in strategic intimacy with Europe. But there is a gap still to be bridged between recognising the facts and acting on them with the requisite urgency.
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