Rachel Reeves Ditches Labour’s ‘Don’t Mention The War’ Approach To Brexit

New shadow chancellor dares to step across the third rail of British politics.

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Ok, so she didn’t use the word Brexit. But when Rachel Reeves made her debut as shadow chancellor in the Queen’s Speech debate, she did something few Labour politicians have dared attempt in the Starmer era: point out the downsides of the way Boris Johnson “got Brexit done”.

Reeves risked the third rail of British politics as she sketched out how the pandemic had exposed structural weaknesses in both the British economy and in Tory policy over the past 11 years.

Attacking Boris Johnson’s lack of vision for UK manufacturing outside the EU, she said our factories, as well as our cultural industries, farmers and our fishermen, “are suffering because of the huge gaps in this government’s deal with our European neighbours”. Yes, she mentioned the war!

And Reeves went further with, wait for it, actual facts. “In the last quarter, exports to the EU were down 18.1%, and exports to countries outside the EU were up by only 0.4%.” In other words, it wasn’t the Covid third wave that hit our exports, it was new Brexit trade barriers. Ministers were “in denial about what businesses need to thrive in this new environment”.

What went unsaid, as the OBR has pointed out, was that the impact of Covid on our long term output pales into insignificance compared with the permanent scarring caused by Brexit. Not even Reeves will go that far, as it risks lecturing former Labour voters that they got it wrong in 2016. But her decision to highlight Johnson’s failures was telling nevertheless.

For obvious reasons, Starmer’s team don’t want to go down the rabbit hole of promising to renegotiate the PM’s skinny trade deal. A new customs union, even if on offer, looks politically impossible as it would let Brussels write our rules without any British vote at the EU table. The party’s next manifesto also cannot afford to be painted by Tory Blue Wall MPs as a “despite Brexit” blueprint.

Yet Reeves pointed to other answers, such as a joint state-private sector investment in three new electric battery factories to boost our green car industry, that seemed designed to appeal to all kinds of voters. Declaring that “‘Made in Britain’ is a sign of quality, a stamp that marks British manufacturing as among the very best in the world”, her other charge was that the government had not done enough to protect steelworkers or shipbuilders.

Reeves’ punchy performance showed that for all the focus on Angela Rayner’s status, the bigger story of Starmer’s reshuffle was him trying afresh to convince the voters that Labour was on their side on the economy. And without credibility on that, there is no path back to power for the Opposition.

As a former Bank of England economist, it’s plausible to see Reeves as Chancellor running a Labour Treasury. However, she made plain right at the start of her speech that she and her party had to “be trusted by the public with their money” and that was “a test that I intend to meet”. It was a reminder that her previous months of work on Tory Covid “cronyism” (like shadow health minister Justin Madders’ relentless work on Test and Trace) was always as much about waste as it was about sleaze.

Starmer’s aim is that under Reeves, Labour can slowly recover the prudence that Gordon Brown made his own. Handled correctly, it could even use the weight of that famous Margaret Thatcher line about the economy – that national budgets are like household budgets – in a judo throw against the Johnson administration.

Shadow chief secretary Bridget Phillipson told me recently that it was precisely because she had grown up in a poorer household that she understood better than most the need to spend every penny wisely. That kind of framing is one way to reconnect with lost voters in all parts of Britain.

Match that with growing business frustration at new trade barriers with Europe (which has the simple consumer impact of long delays ordering anything on Amazon from the EU), plus calls for an industrial strategy and investment in jobs of the future, and Labour may be feeling its way back into the conversation.

There’s a long way to go, not least as Rishi Sunak underlined again his message that the government had done more than any Western government to directly subsidise jobs through the crisis. But Reeves’ ‘Made in Britain’ moment, plus a reality check on the PM’s exit deal, was at least a start.

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