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Reeves clears the runway for landing

 


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London Playbook

Reeves clears the runway for landing

By Stefan Boscia

January 28, 2025 8:00 am CET

https://www.politico.eu/newsletter/london-playbook/reeves-clears-the-runway-for-landing/

 

London Playbook

By STEFAN BOSCIA

 

Good Tuesday morning. This is Stefan Boscia.

 

DRIVING THE DAY

THE FINAL BOSSES: Rachel Reeves will lay the final groundwork this morning for her big growth pitch that would (if successful) change the whole course of this government. On Wednesday the chancellor will unveil her plans to slash red tape, shed some of her recent economic gloomsterism and, in her own words, get Britain building. But first, Reeves and Prime Minister Keir Starmer will finish off days of meticulous pitch-rolling by pre-selling her speech to a room full of business leaders. Reeves will then take her plans to Cabinet for final sign-off in what will be a jam-packed morning for the chancellor.

 

Talking to the Square Mile: Reeves and Starmer will meet the CEOs of some of Britain’s biggest businesses this morning as they wave around proof the government is serious about boosting Britain’s anemic economic growth. In attendance will be chief execs from companies including Lloyds Bank, Nationwide, Taylor Wimpey, BAE Systems, Tesco and BT. The chancellor and PM will brief the roundtable on their plans to slash red tape (especially on planning and environmental regulations) and stoke infrastructure activity. This is expected to include government support for the expansion of Heathrow, Gatwick and Luton airports.

 

Free the surplus: The pair also come to the meeting armed with a fresh policy ahead of Wednesday’s big speech. The government confirmed last night it would lift restrictions on defined benefit pension funds, which will allow them to invest locked-away “surplus funds” into the British economy. No. 10 reckons there is £160 billion of funds in surplus and that “restrictions have meant that businesses have struggled to invest them.”

 

**A message from Goldman Sachs: Despite challenges to the region ranging from trade uncertainty to high energy prices and emerging competitors, the Euro area is forecast to avoid recession in 2025, according to Goldman Sachs Research. The economy will be buoyed by increases in income and spending, especially in the south. Read the Europe Macro Outlook.**

 

Tick of approval: The initial reaction from business groups was roundly positive, with the BVCA private equity lobby calling it “a further step to unlock investment from pension funds into productive assets and fire up the U.K.’s growth trajectory.”  A City figure told Playbook that Reeves’ November pension reforms were more significant, but that today’s announcement would be “important as a signal they are being ambitious and keeping up momentum.” The FT has full details of the new pensions policy here.

 

Tear down this wall: Reeves said she was “fighting every day to tear down the biggest barriers to growth, taking on regulators, planning processes and opposition to this urgent mission.” Starmer said he wants to oversee “nothing short of rewiring the economy,” which will include “creative reform, the removal of hurdles, and unrelenting focus.” The PM is due to do a pool clip after the roundtable, which will drop on our TV screens at some point this morning.

 

Doing the rounds: New City Minister Emma Reynolds will be on the morning broadcast round to talk up the government’s growth agenda, which will include Sky at 7.15 a.m. (full timings below). Reynolds is also speaking to the Treasury committee at 10 a.m., which will be the first chance for MPs to properly grill her since she was promoted. Maybe she’ll get asked at some point about her previous lobbying efforts for China.

 

BACK TO THE RANCH: Starmer and Reeves will then travel back home to Downing Street to brief the Cabinet on Wednesday’s big speech. The 9.30 a.m. Cabinet meeting will give Reeves a chance to unveil the details of her growth push and to rally her colleagues around her vision. Reeves tried to fire up Labour MPs at a mostly pliant meeting of the Parliamentary Labour Party on Monday by saying “the prize” (presumably both economic and political) “could be immense” if the government gets its growth mission right.  

 

She said: “Wealth created, and wealth shared, in every part of Britain. Now is the chance for us to shout about that potential and the brighter future ahead. Because no one else is going to do it.” The Mirror’s Ashley Cowburn and Lizzy Buchan have a full write-up of Reeves’ Monday night speech. POLITICO’s Dan Bloom texts in to say Reeves was challenged by only one MP at the PLP meeting— anti-Heathrow third runway campaigner Ruth Cadbury.

 

Speak now or forever hold your peace: Today’s Cabinet meeting is also the final chance for anyone in attendance — *cough* Ed Miliband *cough*— to speak up against Reeves’ dash for growth. Miliband is the highest profile member of the government opposed to a third runway at Heathrow on environmental grounds.

 

What to make of this? The energy secretary got Lobby journos excited on Monday when he told a Westminster committee that “any aviation expansion must be justified within carbon budgets and if it cannot be justified then it will not take place.” (Via MailOnline.) However, POLITICO’s energy policy team pointed out that Miliband also went on to say there were “mechanisms” to get around breaching carbon budgets.

 

Though technically … While Reeves can offer airports political support, any final decisions on whether they can expand are quasi-judicial ones for Transport Secretary Heidi Alexander.

 

All sewn up: In any case, the chance of Cabinet table dissent this morning appears to be very small, according to senior government figures. One Cabinet minister told Playbook there was “zero” chance anyone would speak out against Reeves’ plan. “Support for the chancellor is rock solid,” they said. “She’s come out swinging and she’s making the weather.”

 

But but but: Reeves’ growth plan may still run into internal trouble in one area. The chancellor announced in Davos last week that she wanted to change the U.K.’s visa rules to make it easier to attract overseas workers in AI and life sciences. Officials also say this proposal will come up in her speech on Wednesday. But the i’s Arj Singh reports the Home Office is dead against fee reductions for workers in these areas.

 

Coming attraction: This may well set up the classic Home Office versus Treasury battle over immigration that happens in nearly every government. While Home Secretary Yvette Cooper has been tasked with bringing down immigration numbers, Reeves will probably be keen on any help she can get in boosting GDP growth figures.

 

Might be worth a look: And speaking of immigration, the ONS is today releasing new estimates of how much Britain’s population is set to grow over the next 15 years. Those will be out at 9.30 a.m. here.

 

Coming attraction: Once Wednesday’s speech is out the way, attention will start turning to another tricky pitch for growth — Keir Starmer’s EU “reset,” and his meeting with 27 EU leaders next Monday. The FT’s George Parker, Peter Foster and Andy Bounds report that the PM is looking to re-link the U.K. and EU emission trading schemes as part of a fuller summit with the bloc later this year.

 

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AN EXTREME LEAK

WATCH OUT JOE ROGAN: A leak of the government’s extremism review has forced ministers to fight off suggestions they want to expand the definition of extremism to conspiracy theorists or people involved in the “manosphere.” Center-right think tank Policy Exchange obtained a copy of the Yvette Cooper-commissioned report (link here), revealing it recommended that extremism should not be viewed through the lens of fringe ideologies (like Jihadism or neo-Nazism).

 

Casting a wide net: The review instead said extremism should be based “on behaviors and activity of concern,” because of the “dizzying range of beliefs and ideologies we see.” It called for the definition of extremism to be extended to people who spread conspiracy theories, are involved in “online subcultures called the manosphere” or engage in extreme misogyny. Environmental protesters and anarchists are also singled out for inclusion.

 

Backing away: Security Minister Dan Jarvis was quick to disown the results of the review, commissioned by Cooper after the Southport riots, saying the recommendations are not government policy. “There are not, and have never been any plans to extend the definition of extremism,” Jarvis said. He added: “But as the horrific Southport attack shows, alongside that we also need more action on those drawn towards mixed ideologies and violent obsessed young people.”

 

Tiers for fears: The story got picked up widely in this morning’s papers, with the Times and Telegraph splashing on it. The Times’ Matt Dathan goes in on the review’s claim that accusations of “two-tier policing” (which have rained down on Starmer since Southport) are part of an extremist right-wing narrative. People who have accused the PM of overseeing “two-tier” justice include Nigel Farage, Robert Jenrick, Suella Braverman and, of course, Elon Musk.

 

Bobbies on the (social media) beat: The Tel, meanwhile, highlights the review’s call for police to spend more time going after people for non-crime hate incidents — like what happened to the paper’s columnist Allison Pearson. The Home Office defines non-crime hate incidents as an action that is “perceived by a person other than the subject to be motivated — wholly or partly — by hostility or prejudice towards persons with a particular characteristic.” The category is often used by police in relation to social media posts.

 

Piling in: Shadow Home Secretary Chris Philp jumps on all this to accuse the government of planning “a backward step in the interests of the political correctness we know Keir Starmer loves.”

 

THE KIDS AREN’T ALRIGHT: The leak comes just as a report today claims the nearly 150 children arrested during last summer’s riots were there for “fun” and not for any ideological reason. The Children’s Commissioner said the children joined for “the thrill of the moment” and that their involvement raises “some really serious questions about childhood in England and why our children feel so disaffected and disempowered.” The BBC has a write-up of the report here.

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