Rachel Reeves has said that a future Labour government will tilt even more towards business interests than the Tony Blair era as she plans to raise £22 billion of private sector investment in green energy projects.
Reeves, the shadow chancellor, talked about the importance of involving business groups in key government decisions to boost the UK economy’s growth, during an interview with The Times.
She said business groups and financial institutions would be “in the room” with ministers making key decisions as part of Labour’s “mission” to make the UK the fastest-growing economy in the G7.
“If I become chancellor, the next Labour government is going to be the most pro-business government this country has ever seen,” she said.
Reeves spoke with the newspaper before the inaugural meeting of the party’s national wealth fund task force. This initiative aims to attract private sector investment into green technologies such as hydrogen and carbon capture and storage. Labour plans to allocate £7.3 billion of public funds to the scheme, with the goal of enticing an additional £22 billion from private sources.
The task force, including figures like Mark Carney, the former Bank of England governor, and CS Venkatakrishnan, the Barclays chief executive, will design the scheme before the next election.
Reeves stressed the government’s commitment to providing state support to bolster investor confidence in costly and risky technologies like green hydrogen. “The role of the government in that sector might be to say, ‘You produce it and we will guarantee that it will be purchased’. We will be the backstop to that.”
“Our No 1 mission is to grow the economy,” she said. “We’re going to grow the economy by understanding business.”
Reeves said that with countries competing for investment, and limited scope for public sector funding, it was critical to support business. But this was also a philosophical decision.
“I recognise that is different from the Labour parties that went into the last few general elections. But this is the best way to grow the economy and lift living standards,” she said.
Regarding Labour’s plans to enhance workers’ rights, Reeves hinted at possible revisions to accommodate business concerns. The measures, which include offering employees rights from their first day in work and an end to all zero-hour contracts, have been criticised by some business groups for being inflexible and potentially counterproductive, The Times reported.
“We’ve been out of power for 14 years, we want to make a difference. But we want all of our policies to work and that means they’ve got to work for businesses and working people as well.
“Of course, we’ll consult. We’re doing that in opposition and you can see that with the amount of time we put into the business engagement,” she said.
