When the chancellor, Rachel Reeves, gives her growth speech next week, she has told officials she does not want to announce any more reviews or consultations. It has to be “doing, doing, doing” as one aide put it. “She is very impatient at the pace of change.”
In both the Treasury and No 10, there is a new restlessness after the past few weeks of economic turmoil and media onslaught – now the early months of getting their feet under the desk are over and the system should be made to work as they want it to.
The mountains to climb are not just the economy – where the government has taken a battering – but on energy, infrastructure and significant failures of the state that led to tragedies such as the Southport murders and scandals over grooming and rape gangs.
Strategists in No 10 believe there is a clear theme here – hollowed-out system failure. “The last six months has been a lot of frustration with how slowly things happen,” one said. “The pressure of the last weeks has sped things up – particularly on growth. But it was always there. You can apply it to planning but you can also apply it to grooming gangs – this frustration that the system isn’t working.
“We’re in a phase where we’ve had enough of being told no – let’s put the foot to the pedal. You’ve got to go much harder, much faster, you’ve got to force the issue.”
Reeves and the business secretary, Jonathan Reynolds, arrived at the World Economic Forum in Davos with one aim: to drive home the message that the UK government will bulldoze through any barrier that stands in the way of growth.
Nothing was more symbolic of that than the forcing out of the chair of the Competition and Markets Authority, a kind of Trumpian move that Reeves might once have criticised, but is now emblematic of the frustration she feels with the inertia of the status quo.
In the past, Reeves might have felt she had to be deferential to the major regulators, one aide said. “That’s not how we feel any more.”
Other regulators are in her sights, as well as environmentalists wanting to block infrastructure projects. Next week the chancellor is expected to give the go-ahead for large-scale airport expansion, to the dismay of green campaigners.
To anyone who has met Reeves, her backing for a third runway at Heathrow will not come as a surprise. But there has been some alarm in Labour about the bluntness with which she was prepared to say that net zero came second to economic growth. The energy secretary, Ed Miliband, has had to repeatedly remind colleagues about Britain’s legally binding carbon budget.
The forcefulness with which airport expansion has been pushed by the Treasury struck some ministers as something close to panic. “This is not the magic bullet that they think it is,” one cabinet source said.
Cabinet members have also been told to get in line. Every minister proposing a policy will have to show it would bolster growth. Anything that is shown to negatively impact growth will be rejected, the Treasury has made clear.
The desperate search for announcements that can be heralded as good for growth has become somewhat of a running joke. “It’s like the first episode in The Thick of It when they try and make up policy that is both universally popular and completely free – but in our case you have to also add ‘good for growth’,” one special adviser said, referring to the Armando Iannucci comedy about Westminster.
In the coming months, a number of policies from welfare changes to potholes to the future of waste management will be tied to the overarching mission of growth. In one press release, “the need for people to queue at the local council to register the death of a loved one” was described as “getting in the way of growth” as the government promised to digitise the requirement.
Some senior Labour MPs – particularly veterans of the Blair and Brown governments – believe that what is needed politically is “more sweeties” for the core vote and swing voters, rather than a focus on hammering a message about growth that does not mean much to ordinary people.
“My constituents don’t care about growth and GDP per se. They care about tangible things that either improve their lives financially or are cost-free social changes that signal the country is going in a better direction. We need more positive announcements but ones about stripping away regulation ain’t going to cut it,” one former minister said.
Contrary to some newspaper front-pages, there is no threat to Reeves’s position. She remains Keir Starmer’s closest political ally and confidante – though Labour MPs have begun to grumble more loudly about the chancellor. Starmer himself is also keen to show his government is shaking up the state, using stark language to announce plans to overhaul judicial review – promising to take on the “nimbys” and stop “toads and newts” from stopping homes and infrastructure being built.
Reeves and her advisers began to plan a speech focused on growth in the aftermath of the autumn budget, faced with a stark forecast from the Office for Budget Responsibility (OBR) that showed the mostly anaemic growth over the next parliament. The speech will target four areas for growth – planning, deregulation, energy and trade – and is designed to focus minds in Whitehall. “Frankly, whatever the OBR is going to show in March, it’s not going to be enough,” one official said.
“We need to be able to show in March that no matter what it says, we are pulling every lever available. The speech won’t just be setting out a vision, there has to be very specific measures not just in the speech but over the weeks after that.”
