Rachel Reeves – 2024 Speech to Business Leaders at Rolls Royce

The speech made by Rachel Reeves, the Shadow Chancellor of the Exchequer, on 28 May 2024.

Good morning.

In five weeks’ time, the British people will go to the polls.

To make a profound choice about the future of our country.

And where better to think about the future than here at Rolls Royce, in Derby.

Away from the short-termism of politics, the pessimism of our present moment, here you have the very model of a great British business…

… a global brand synonymous with excellence…

… that continues to this day to pioneer in new technologies critical to the challenges of a changing world…

… from submarine technologies crucial to defence, to the development of carbon neutral aviation at the frontier of the climate transition.

And a business partnering with homegrown small and medium enterprises throughout its supply chain…

… which has nurtured deep roots in this city going back more than a century.

A business built on the foundations of a past in which we can take pride, with a vision of a future that we can invest our hope in.

**

As Shadow Chancellor, one of the great privileges of this role has been to travel the country and meet entrepreneurs, innovators and business leaders all across the UK.

In the most challenging of economic times, they give me immense optimism.

Today I want to put forward a simple proposition:

That this changed Labour Party is today the natural party of British business.

And I want to set out the central economic fault line in this election, the choice before the British people on the fourth of July:

Five more years of chaos with the Conservative Party, leaving working people worse off;

Or stability with a changed Labour Party.

TORY INSTABILITY

I can tell you exactly what Rishi Sunak wants you to think on polling day.

He’s already saying it.

That the plan is working – don’t change course now.

That the chaos and instability wrought by Liz Truss was just a blip.

That the deep problems we face are down to global events – they’re not his fault at all.

‘Don’t judge 14 years on 49 days’, he will say.

**

I want to take that head on.

Because while it is true that the crises we have faced are global in origin, our unique exposure to those crises…

… the reasons we have been hit harder than many comparable countries…

… by the economic impact of covid and then by inflation and rising energy prices…

… can only be explained by choices made by Conservative governments here at home.

And because while the Prime Minister want this election to be about whether inflation is coming down this month…

… he omits to mention when it started to rise:

On his watch as Chancellor;

Even before the Conservatives, in their clamour to cut taxes for those at the very top, sent interest rates and mortgage costs spiralling.

He omits to mention when it peaked too…

… on his watch as Prime Minister.

And he omits to mention the families and businesses dealing with the consequences of Conservative economic mismanagement today.

**

Like the family I met in Redcar:

The dad doing an apprenticeship, the mum working in a supermarket…

… who spend every evening talking about money, because there’s just not enough to pay the bills.

The small business owner in Milton Keynes…

… desperate to expand, but faced with a system of business rates that are stacked against her.

Or just down the road from here, the workers at Alstom, some of whom I met just a few months ago…

… who are facing the uncertainty that results…

… when a government is unwilling to take a long-term, strategic approach, in partnership with business and trade unions…

… the only responsible approach to economic policy.

The Conservatives are insulting the intelligence of millions of people like these, forced to deal with the consequences of their failure.

**

But we won’t let them get away with it.

Because the Conservatives do deserve to be judged on the record of those fourteen years.

The general election, in five weeks’ time, is a chance for the British people to pass judgement on fourteen years of economic chaos and decline under the Conservatives.

Fourteen years that have seen taxes reach a seventy year high.

National debt more than double.

And the typical homeowner re-mortgaging this year paying £240 more every single month, after the disastrous mini-budget.

Wages flat.

Public services on their knees – taxpayers asked to put more and more in, but getting less and less in return.

And economic growth on the floor.

Five Prime Ministers.

Seven Chancellors.

Twelve plans for growth, each yielding less than the last.

To put this into perspective:

If the UK economy had grown at the average rate of OECD economies under the Tories, it would now be £150 billion larger;

An additional £5,000 for every household;

Providing an additional £55 billion more investment in our public services.

**

That is their record – and they deserve to be judged on it.

The Conservatives have failed on the economy.

The plan isn’t working.

And Rishi Sunak’s decision to call an early election is the clearest sign of that.

If he doesn’t believe his plan is working, why should you?

TAX

And no matter how much they tell us that Liz Truss was nothing to do with them, their every action tells us otherwise.

They haven’t learnt their lesson.

They’re singing from the same songbook.

With the Prime Minister’s priorities dissolving into thin air, what is his last, desperate throw of the dice?

Not to deliver on the promises he has made over the last two years.

But instead, to offer up £64 billion worth of unfunded tax cuts.

They offered up another one just last night.

The Conservative cannot say how they’re going to pay for them.

What cuts will they make to public services?

What other taxes will they raise?

Or will they be paid for by yet more borrowing?

And why should anyone believe them, after – I’ll say it again – the tax burden has reached it’s highest in seventy years?

Be in no doubt, the single biggest risk to Britain’s economy is five more years of the Conservative Party.

CHANGED LABOUR

My ambitions for Britain are so much greater than that.

I don’t think we need fantasy economics to look and hope for a better future – just look around us.

But we do need change.

Under Keir’s leadership, we have changed the Labour Party so that we may have the chance to change our country for the better.

To offer a government that is pro-worker and pro-business, in the knowledge that each depends upon the success of the other.

A party that understands business.

That works with business.

I’m not one of those politicians who thinks the private sector is a dirty word, or a necessary evil.

I’ve worked in the private sector.

Before politics, I worked in financial services in West Yorkshire.

I know what a successful business can do for places like those.

And I know that economic growth comes from the success of businesses, large, medium and small – there is no other way.

I’m not talking about the old trickle down, free market dogmas of the past…

… but instead, a new spirit of partnership between government and business.

An approach fit for a more uncertain world.

I know there is no policy that I can announce…

… no plan that can be drawn up in Whitehall…

… that will not be improved from engagement with business.

And our manifesto will bear the imprint of that engagement.

I want to lead the most pro-growth, pro-business Treasury in our country has ever seen…

… with a laser focus on making working people better off.

Today, more than 120 senior business leaders have signed a letter, expressing their support for a Labour government.

Across the world of business, Labour is being recognised as the natural partner of business;

The party of growth and of enterprise.

**

A few years ago, you might not have expected to hear those things from the Labour Party.

Think how far we have come under Keir’s leadership, in four short years.

If we can change this party, to bring it back to the service of working people;

If we can return it to the centre ground of politics;

If we can bring business back to Labour;

Then I know we can bring business back to Britain.

To bring investment back to Britain.

To bring growth back to Britain.

To bring hope back to Britain.

Because by bringing business back to Britain, we can deliver a better future for working people.

Whatever ideologues on left and right say, it’s not either-or:

This Labour Party understands that business success is crucial to good jobs, and good work is crucial to successful businesses.

It is by bringing business back to Britain that we can create good jobs that pay a decent wage;

Bring in investment to build strong communities with thriving high streets;

Put more money in people’s pockets;

And take pride in goods and services made here in Britain, but exported around the world.

LABOUR’S PLAN

Our plans for growth are built on partnership with business;

A mission-led government, prepared to take on the big challenges that we face and ready to seize the opportunities of the future.

And a government that will build all its plans for the future on the bedrock of economic stability.

It is clearer than ever that at this election, there is a choice between Tory chaos or Labour stability. And stability is change.

Stability, so that we never again see a repeat of the mini budget and the damage it did to family finances.

Stability, so that families and business can plan for the future.

Stability of direction…

… so we can bring together government, business and working people in common purpose…

… to meet the great challenges of our time.

**

That will be underpinned by robust fiscal rules, that get debt falling by the end of the parliament.

I will never play fast and loose with the public finances – because when you do so, you put family finances at risk.

We have started as we mean to go on:

I have been very clear that every policy we announce, and every line in our manifesto, will be fully costed and fully funded.

No ifs, no ands, no buts.

That is the attitude I will take into the Treasury.

Because taxpayers’ money should be spent with the same care with which we spend our own money.

**

I remember how, when I was growing up, my mum used to sit at the kitchen table, combing over, line by line, her bank statements and her receipts.

We weren’t badly off, but we didn’t have money to spare.

To my mum, every penny mattered.

Believe me, I understand – the basic test for whoever is Chancellor is to bring that attitude to the public finances.

**

And stability will rest – as it always has done when Britain has enjoyed economic success – on strong institutions.

I started my career as an economist at the Bank of England.

I know why the stability it brings and its independence from short term politics matter to economic success and the battle against inflation.

So Labour will not play – I will not play – the Tory game of undermining the Treasury or the Bank of England;

And I will introduce a new fiscal lock;

So that any government making significant and permanent changes to tax and spending…

… will be subject to a forecast from the independent Office for Budget Responsibility.

So that there is never a repeat of the mini budget.

Stability must mean something else too – and I have heard time and time again from business how important this is:

Certainty in our tax system;

Which is why we have committed to the publication of a business tax roadmap…

… covering the duration of the parliament, within the first six months of a Labour government;

And it is why corporation tax will be capped at its current rate for the duration of the next Parliament.

That is the lowest rate among G7 economies.

And  should our competitiveness be under threat, we will act.

STABILITY

Stability will be the bedrock of everything we do.

But stability alone is not enough.

It is one, central part of what I call securonomics;

A new approach, which recognises that our age of insecurity requires new answers to new economic challenges.

So stability must stand alongside a plan to fix our weak levels of investment.

Britain today is the only G7 country with investment below 20 percent of GDP.

I am not under the illusion that government can fix this alone – the lifeblood of economic growth is business investment.

So investment will be delivered through a new partnership between government and business;

Embodied in a modern industrial strategy;

And in a new National Wealth Fund…

… with government investing to crowd in tens of billions of pounds of private investment…

… to create the jobs of the future, drive down bills, and achieve energy independence.

**

And we will need reform too.

No more ducking the difficult decisions.

No more shrinking from vested interests.

No more accepting that this is as good as it gets.

So we will reform our politics…

… pushing power out of Westminster so our local and regional leaders can deliver for their areas.

We will reform our skills system…

… to give working people the chance to succeed in a changing world of work…

… replacing the Apprenticeship Levy with a new Growth and Skills Levy.

We will reform our planning system…

… taking head on the single biggest obstacle to growth and investment we face, to get Britain building again.

We will deliver reform for security in work, with a New Deal for Working People.

And we will forge a closer relationship with our nearest neighbours in the European Union, to ease the burden of bureaucracy and red tape on British businesses;

Including a new veterinary agreement, an agreement on touring visas, and the mutual recognition of professional qualifications.

**

Stability, investment, reform.

You’re going to hear those three words a lot from me.

Because they are the ingredients of a genuine plan for the future.

An alternative to managed decline.

The reason that I can say today, with confidence, that this Labour Party is the natural party of British business.

CHANGE

The choice at the next election is simple:

Five more years of the vicious cycle of chaos and decline which the Conservatives have set in motion;

Or a changed Labour Party;

Putting stability first, in the service of working people.

**

We will fight this election on the economy.

Every day we will expose the damage the Conservatives have done…

… the further damage they threaten to do.

And we will set out Labour’s alternative.

Five missions for a decade of national renewal.

And six first steps to point the way to a better Britain.

Cutting NHS waiting times, with 40,000 new appointments every single week;

Launching a new Border Security Command to smash criminal gangs and strengthen our borders;

Setting up Great British Energy, a new, publicly owned clean power company;

Cracking down on antisocial behaviour;

Recruiting 6,500 new teachers;

All fully costed, all fully funded;

All those ambitions built on the bedrock of economic stability.

The foundation stones for a decade of national renewal.

**

To serve as Chancellor of the Exchequer would be the privilege of my life.

Not to luxuriate in status;

Not as a staging post in a career;

But to serve.

I know the responsibility that will come with that.

I embrace it.

I know that it will not be easy.

It will take hard work.

And it will require harder choices.

I am ready for it.

**

As I travel around the country, I see great potential everywhere I go.

In dynamic, great British businesses like this one.

In labs and classrooms in our world-leading universities.

And in the talent and effort of working people.

It is time to unlock that potential.

Turn the page on chaos and decline.

And start a new chapter for Britain.

Labour is ready.

Thank you.