Chancellor confirms new industrial strategy to be published next month, as she reiterates government's commitment to meeting clean energy targets
Rachel Reeves used her keynote speech to the Labour Party Conference this afternoon to insist there will be no return to austerity, as she declared "the era of trickle down, trickle out, economics is over" and promised to boost investment in emerging green industries.
Addressing a packed hall in Liverpool, the Chancellor reiterated Labour's plans to reform the planning system to take on the "blockers" and insisted that despite the tough fiscal environment the new government would boost investment in key infrastructure and industries.
"'Growth is the challenge and investment is the solution... It is time that the Treasury moved on from just counting the costs of investment to recognising the benefits too," she said. "So we are calling time on the ideas of the past, calling time on the days when governments stood back, left crucial sectors to fend for themselves, and turned a blind eye to where things are made and who makes them. The era of trickle down, trickle out, economics is over."
The comments are likely to fuel speculation the Treasury could tweak its fiscal rules to provide more freedom to allow it to borrow to invest in strategically important infrastructure.
The speech - which was disrupted by several hecklers from the campaign group Climate Resistance protesting at Labour's stance on arms' exports to Israel - also saw Reeves confirm she would next month publish a new Industrial Strategy, alongside Business Secretary Jonathan Reynolds, setting out how Labour intended to catalyse investment in key industries and ensure the UK "speeds ahead" towards its net zero and clean energy goals.
And she promised the government's upcoming Investment Summit next month would send the message that "after years of instability and uncertainty Britain is open for business once again".
Reeves also argued Labour had done more within 72 hours of taking office to remove planning barriers than the Conservative government had achieved in 14 years, including through the lifting of the "senseless Tory ban on onshore wind".
"I have promised this hall before, but what you will see in your town, in your city, is a sight that we have not seen often enough in our country - shovels in the ground, cranes in the sky, the sounds and the sights of the future arriving," she said. "We will make that a reality.
"Jobs in the automotive sector of the future in the industrial heartland of the West Midlands, jobs in life sciences across the north-west, clean technology across South Yorkshire, a thriving gaming industry in Dundee, and jobs in carbon capture and storage on Teesside, Humberside and right here on Merseyside too."
The speech raises the prospects the government will imminently finalise the long-awaited policy and subsidy framework that developers have argued is necessary to ensure the UK's pipeline of carbon capture and storage projects can reach a final investment decision.
Reeves defended the government's controversial decision to axe the Winter Fuel Allowance for most pensioners and slammed the previous government for leaving a £22bn budget black hole. But she also sought to sketch out a more positive vision of how the economic stability Labour is seeking to provide should unlock much needed investment and productivity improvements across the economy.
Reeves followed a speech yesterday from Foreign Secretary David Lammy in which he underscored the centrality of climate action to Labour's economic and diplomatic strategy.
"In a world filled with conflict it is easy to take our eyes off the most fundamental threat that our world faces - the climate emergency - [which was] treated by the last government with a cynical disdain that we cannot afford," he said. "With Keir Starmer and [Energy Security Secretary] Ed Miliband, I will help restore Britain's climate leadership, for British jobs, opportunity and growth. Because climate matters."
He highlighted how Labour would lead a new Global Clean Power Alliance, deliver the new Great British Energy investment vehicle, accelerate onshore wind development, appoint new climate and new nature envoys, and honour its pledge to "end new oil and gas licences while guaranteeing a fair transition in the North Sea".
The speeches were welcomed by David Walsh, head of public affairs at WWF, who urged the Chancellor to now ensure the upcoming Budget delivers on her promise to be ‘Britain's first green chancellor'.
"Whether it's investing in clean, cheap British energy or supporting our farmers so they are fairly rewarded for transitioning to regenerative practices, nature and a safe climate underpin the health and wealth of our nation," he said. "At the Budget we urge the government to provide certainty and enable investment by putting the climate and nature crisis at the heart of its plans."
Rain Newton Smith, director general at the CBI, also gave Reeves' address a warm welcome, praising the Chancellor for "hitting the right notes in a speech that balanced the need for fiscal responsibility with an optimistic pitch to investors about the strengths of the UK economy".
"Businesses will be further reassured to hear that while the government won't duck difficult decisions, they will be taken in the context of a return to long-term sustainable growth," she said. "Building capacity back into the economy, publishing a new industrial strategy, and reforming business rates will all give investors confidence that the UK is open for business. While stability in terms of the government's tax plans - particularly around headline corporation tax - will help to deliver a dose of the certainty that businesses crave."
Later this afternoon, Environment Secretary Steve Reed and Energy Security and Net Zero Secretary Ed Miliband are due to address the conference.
Reed is expected to provide further details on Labour's plans to boost investment in water infrastructure to tackle the sewage crisis, while Miliband is reportedly planning to confirm Labour will introduce new energy efficiency rules for rented properties, after the Conservatives last year scrapped similar proposals.
The Times reported Labour is to launch a consultation on plans that would require all rented properties to reach an Energy Performance Certificate rating of C or above by 2030. Miliband is to confirm the rules will be extended to cover social housing, as well as private rented properties.
The Conservatives dropped plans for new minimum energy efficiency standards for rented properties last year, arguing they would impose excessive costs on landlords that would then feed through to tenants.
However, Labour is set to revive a plan it believes will result in significant energy bill and emissions savings for tenants. The proposed rules are expected to include a cap on the amount landlords have to pay to try and meet the standards and would be accompanied by Labour's plans to provide more funding for domestic energy efficiency upgrades.
The proposals were welcomed by Simon Francis, coordinator of the End Fuel Poverty Coalition, who highlighted how "people in rented accommodation are almost twice as likely to live in cold damp homes compared with people who own their own properties".
"The Energy Secretary is to be congratulated for recognising the importance of the need for better energy efficiency standards in rented homes, but the government shouldn't drag their heels with more consultations," he said. "This issue has been consulted on widely in the past and Ministers must move to take action. There is no time to waste as improvements will take months or years to be felt by tenants and the longer it takes, the more support households will need to stay warm in the winter."
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