Rachel Reeves insisted Brexit risks leaving the UK ‘stranded’ today as she urged closer ties.
The Chancellor talked up the need to get closer to Brussels again in a major speech – suggesting that, exploiting AI, and growth outside London were her main goals.
But she denied that her own massive tax raids on Brits had been wrong for the economy, arguing the country was in a ‘stronger’ place as a result.
The comments came as Ms Reeves delivered the Mais lecture at the Bayes Business School in London, billed as spelling out her strategy for boosting growth.
Keir Starmer has vowed a ‘reset’ in relations with the EU which critics have branded an attempt to unwind Brexit – although the PM insists the UK will not rejoin the customs union or single market.
However, talks have been stumbling over Brussels demands, such as for concessions on student fees and a youth ‘free movement’ scheme.
Nodding to the new US approach under Donald Trump, the Chancellor said it had become clear that ‘globalisation as we once knew it is dead’.
And she swiped at the decision to leave the EU – which Labour fiercely opposed in 2016. ‘Brexit created profound uncertainty, raised new barriers to trade and leaves Britain facing an additional danger today: the risk that we find ourselves stranded between powerful trading blocs as globalisation retreats,’ she said.
Chancellor Rachel Reeves delivers the Mais lecture at Bayes Business School in London today
Prime Minister Sir Keir Starmer stands next to Ursula Von Der Leyen, President of the European Commission, at a bilateral meeting at the Munich Security Conference on February 14
Ms Reeves said: ‘In this changing world, Britain is not powerless. We can shape our own future. Our method is stability, investment and reform – through an active and strategic state.
‘Today, I am making three big choices on the greatest growth opportunities for Britain in the decade to come: growth in every part of Britain, AI and innovation, and a deeper relationship with the EU.
‘Our plan is clear. To build for growth, to champion innovation, and to make Britain the place where the industries of the future are created.’
The intervention comes after Ms Reeves revealed in an interview that she preferred European Commission President Ursula von der Leyen to Mr Trump.
‘I believe that our future is closely intertwined with that of Europe,’ she said.
Defending her tax raids despite signs the economy is slowing down, Ms Reeves said: ‘I don’t believe that we would be in a stronger place today, if we have entered with higher inflation, higher interest rates and higher borrowing or with collapsing public services.’
However, she acknowledged the stormy start to Labour’s time in power.
‘I won’t pretend that the last 18 months haven’t been without their challenges. There have been arguments that we have won in principle before the election about responsibility, growth and careful prioritisation, which I have found must be fought and won over and over again persuade people in practice,’ she said.
Acknowledging scepticism after failed attempts in the past to achieve regional growth, she said: ‘Each part of Britain can carve out its own niche in industries crucial to the UK’s prosperity and security, drawing on the skills of their workforce, their existing industrial strengths and the natural assets on which they are built.
‘That’s why we stepped in to assure a future for shipbuilding in Belfast, car manufacturing in the West Midlands and steel at Port Talbot and in Scunthorpe. And the Business Secretary will publish the Government’s steel strategy on Thursday to secure a long term future for British-made steel.’
Regional leaders will gain ‘control of a share of some national taxes’, including income tax.
Ms Reeves said she will set out a ‘roadmap for future fiscal devolution’ at the next Budget.
