4th February 2025
Reeves on economic growth – kickstart or cold start?
British Prime Minister, Keir Starmer, and Chancellor, Rachel Reeves, are in danger of having to eat humble pie when it comes to their ability to deliver on the promise of economic growth. The mission of the present government has been made clear, economic growth, but simply repeating the mantra does not deliver the desired outcome.
The keynote speech on the subject by Reeves last week has only succeeded in re-opening the 20 year long debate about a third runway at Heathrow Airport; whether or not this will actually deliver growth anyway; how it will help Britain meet its net zero carbon targets; and why so much emphasis on investment in the South East when the rest of the country is crying out for economic support. The aspiration to turn the corridor between Oxford and Cambridge into Britain’s Silicon Valley just reinforced this point.
Reeves claims that 60% of the benefits of a third runway at Heathrow will be felt in areas other than London and the South East, though without giving details as to precisely how. The geographic distribution of investment may in any case be an academic point as the accumulation of wealth in the hands of a small minority, rather than ownership and production being in the hands of the people, will ensure the maintenance of Britain’s class system. The working class are not going to be the ultimate beneficiaries, whether in John O’Groats, Land’s End or anywhere in between.
Socialism, or any aspiration towards it, is not on the agenda of this government, in common with all previous Labour governments, so tweaks to how capitalism functions is the best that they hope to deliver. Even in those terms however, Reeves does not seem to have won any allies.
What used to be regarded as the environmental lobby but is actually articulating the interests of many in saving the planet, has been up in arms about the third runway proposal, as well as the possibility of the government consenting to the Rosebank development, Britain’s biggest untapped oilfield.
The project is being led by Norwegian company, Equinor, and having had a consent application rejected in Scotland recently they are expected to return with a further proposal later in the year, claiming that “Rosebank is critical for the UK’s economic growth”, a euphemism for Rosebank being critical for Equinor’s profits and its shareholder’s dividends.
There are potential routes to economic growth, even in the short term, within the straitjacket of capitalist economics. Investment in renewable energy technology would be an option that would both promote growth and contribute to net zero carbon targets. Diverting spending away from the cost of weapons of mass destruction and nuclear submarines would free up resources, which could begin to address the crumbling schools and hospital infrastructure. Investment in renewing the health and education systems would in itself help promote economic growth.
A renewal of the national rail network, charging point infrastructure to encourage the take up of electric vehicles, more resources for the creative industries, proper financing of local government, all of these things would contribute to economic growth, as well as providing the platform for arguing that public, and ultimately the people’s, ownership and control is the key to lasting economic change.
Sadly Starmer, Reeves and the Labour Cabinet have no such vision and remain trapped within the confines thinking that reform within capitalism is a sufficient goal. Clearly it is no such thing, as working class families continue to grapple with rising water and energy costs, rising food costs, rising housing costs and deteriorating local services. That was never going to be reversed in six months but a roadmap towards it could have been outlined and a vision fought for.
As it stands the demagogues of the far right are making up ground in Britain and across Europe; Zelensky in Ukraine, Meloni in Italy, Le Pen in France, Alternative fur Deutschland in Germany, to name a few.
It is not impossible to see Reform UK taking seats off both Labour and the Tories at the next General Election and shifting the political landscape in Britain even further to the right. A YouGov poll published in The Times today (4th February) puts Reform on 25%, Labour on 24% and the Tories further behind on 21%. While Britain is still a long way from a General Election if this trend continues Labour’s dream of a second term could easily be wiped out.
A response to such polling figures should be to mount a robust challenge to the politics of Reform and the Tories. However, too many in the Labour Movement are afraid of being accused of being “woke”, a term that has become a pejorative in the hands of the right wing media to demonise anyone with progressive ideas or left wing politics. The fact is that anyone not woke is, by definition, asleep and that will usually come with being bigoted, xenophobic, homophobic and in denial of the climate emergency.
Capitalism as a system, designed to serve the interests of the rich and powerful, cannot be modified in the interests of the working class, it must be overthrown. The more the Left pussyfoots around this reality the more emboldened the right wing will be to push their simple answers to complex solutions. This is the message the Labour and peace movements in Britain need to grasp and campaign upon, before the world is reshaped entirely in the image of Donald Trump or Elon Musk. These are the people who must be stopped. Theirs are the ideas that must be quashed.
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