A radical agenda is needed to deal with the crises of economic stagnation, political polarisation and the climate emergency. Rachel Reeves did not offer one
On Tuesday night, Rachel Reeves gave an important speech in the City of London, in which she offered an insight into Labour’s economic thinking. In her Mais lecture, the shadow chancellor cast Britain in a “moment of flux”, comparable to the end of the 1970s when one economic paradigm replaced another. It was, in many respects, an admirably fluent analysis that highlighted the economic damage wreaked by austerity and the price paid by political instability.
A radical agenda is needed to deal with the compounding crises of economic stagnation, political polarisation and the climate emergency. However, Ms Reeves’ response shrank from the scale of the challenge. This raised the question of whether Labour had learned anything from the last decade and a half. The extreme urgency of global heating means Britain can’t risk throttling green investment because of the demands of financial stability. Yet that is where Labour finds itself. Ms Reeves cited approvingly the US treasury secretary Janet Yellen’s “modern supply side economics”. But she refused to back Ms Yellen’s intellectual argument that there are social benefits in running the economy “hot” by maximising the use of all available resources.
