An avalanche of dark economic data in the United Kingdom this month gave Chancellor Rachel Reeves the “permission” to continue a more aggressive growth program, according to senior government officials, trampling on work sensitivities and putting it on the War foot with regulators.
The Chancellor will deliver a discourse on “growth” next week in the context of a stagnant economy, recent bond markets and an investigation on Friday showing that British companies suppress jobs at the fastest rhythm since The financial crash, except pandemic.
Reeves, who wishes to accelerate a certain number of flagship investment projects, would have decided, according to his colleagues, after his recent attacks against markets and political opponents, to go “faster and further” to continue growth.
“The Treasury believes that all is well,” said a minister. “This is considered an authorization for them to go further in growth measures.”
An ally of the Chancellor said: “She was frustrated by the speed with which things are happening. She wants to use the power of the treasure to show where we want to go afterwards. It is a politically controversial question.
For example, Reeves, who sparked conservative criticism for his visit to Beijing this month, put pressure on the fast-fashioned fashion company shein to be listed in London, despite the concerns about the standards of its factories in China. It also supports the enlargement of Heathrow airport.
The market turbulence at the start of the year led to asserting that Reeves’ work was at stake, but her supporters said she took advantage of the episode to react with “strength and determination”. She said this month that she would be happy to be known as “The Iron Chancellor”.
The conservatives, however, find this laughable. “It is clear that Labor is overwhelmed and short of ideas to grow the economy,” said Andrew Griffith, a ghost secretary for business. “Workers pay the price of war waged by Labor against companies. »»
Griffith notes that despite all the discourse of deregulation of Reeves, she is about to impose on companies a series of new labor laws, which, according to government estimates, will cost companies 5 billion pounds sterling.
But Reeves – which spoke this week of the British economy to the World Economic Forum – has shown its desire to use the power of its office in recent days to take decisive measures in Whitehall, some of which are applauded in private by the Conservatives.
The ministers oust this week Marcus Bokkerek this week from his post as president of the Competition and Markets Authority, the monopolies’ regulatory body that has been criticized for alleging growth.
His departure was a signal addressed to other regulators so that they must intensify their efforts in terms of growth, according to the Treasury officials. “Sometimes you have to send a message,” says one of them.
The emphasis on the stimulation of regulators has aroused the personal admiration of the opposition. “We should have done it ourselves,” said a former conservative Minister of the Treasury.
However, even if some conservatives approve in private, the actions of Reeves have shaken some on its side of the aisle. She was accused by former ghost chancellor John McDonnell of having left the door open to criticism saying that the Labor Party “defended the abuses of companies and profiteers”. Another left -wing Labor MP said: “It’s desperate. However, she seems to feel comfortable making such enemies.
The Chancellor has also taken the side of the banks this week in a case in front of the Supreme Court which will determine whether they should potentially pay tens of billions of pounds in repair in a case of abusive sales of automotive financing. A new non-Dom tax regime has been relaxed.
Next week, Reeves should also report its support for the expansion of airports in the Southeast, including in Heathrow, despite the strong criticism of the green lobby and the mayor of London, Sir Sadiq Khan.
The initiates of Whitehall think that Reeves disclosed the decision to return his colleagues from the cabinet; Starmer himself has already voted against a third track in Heathrow, while Ed Miliband-who threatened to resign from the government of Gordon Brown because of this question-this week minimized any suggestion that he resigned. At the same time, judicial controls of disputed infrastructure projects will be reduced.
Given the threat posed by sluggish growth for its precarious budgetary plan, Reeves asked the Treasury to stop focusing on budgets and rather focusing on investment stimulation.
The authorities work on a series of projects-some bearing code names related to fruit-to attract investments in Great Britain.
One concerns a new massive universal theme park offered for a site near Bedford, with officials close to the talks between the company and the Treasury claiming that they are “progressing well”.
Supporters of the project claim that it could generate up to 50 billion pounds of economic value in its first 20 years. The treasure was asked to provide financial support, especially for the modernization of a crossroads of the M1 motorway and the construction of a new station.
An informed official of negotiations, baptized project Mandarin, said that they were almost finished: “It is one of these negotiations that you can conclude if you wish. Another informed person of discussions added: “It’s very tight. We are almost there, but not yet. »»
Officials said the support program was mainly to guarantee investments and improvements in infrastructure, which will be essential to transport the thousands of people traveling to visit the 500 acres site.
The leaders of Comcast – of which Universal Destinations & Experiences are at the origin of the project – declared in the past at the FT that they wanted to build “one of the largest theme parks in the world”.
Universal Destinations & Experiences said: “We continue to have productive discussions with the British government. »»
In addition to the theme park, Reeves also tries to finalize negotiations with Astrazeneca to restart a vaccine manufacturing site blocked in Speke, in Merseyside.
The project was suspended after the Treasury sought to reduce the amount of state support provided to the British pharmaceutical company vaccination center, reducing the commitment made by the last conservative administration of around 90 million pounds Sterling at 40 million pounds sterling.
Meanwhile, Reeves should also report its support for a highway and a 9 billion sterling tunnel crossing the Thames East London, which would use private funding to cover the cost for taxpayers.
Some signs also show that the government hopes to avoid any criticism that it concentrates all its firepower in the south-east of England.
The Treasury has announced its intention to review the “green paper” which it uses to assess the value of the investment decisions proposed, for a long time at the center of the anger of the criticisms which believe that it promotes London and its surrounding region.
He also promised to build up a reserve of investable projects outside the Southeast, with the help of the office for investment. Reeves is closely watched by the mayors of the North, who had been courted by the Labor government when it was entered into office.
