Sunday 12 June 2022 / 9:00 AM Economy / Rachel Reeves

Labour’s Plan for a Stronger, More Secure Economy

Britain has so much potential. In our people, our businesses, and our universities we have the energy and talent to lead the world in the industries of the future, meet the challenges of the climate transition, and bring prosperity and security to all parts of the country.

But the Covid pandemic and the cost of living crisis have shown how the foundations of our economy have been weakened. Over the past decade we’ve seen slow growth and stagnating wages, which has led to higher taxes and weakened public services. We’ve seen a failure to secure our energy supply, which has left us uniquely exposed to higher global gas prices.

And we’ve seen the inability of this government to get a grip on the cost of living crisis, which has undermined business and consumer confidence – the engines of our economy.

Labour has a plan for a stronger, more secure economy. We will get the cost of living under control and make Britain more resilient, laying the foundations we need for a thriving, dynamic economy in the future.

There are three parts to our plan to get Britain’s economy back on track and give families, pensioners and businesses the confidence they need for the future.

Labour’s plan will:

1. Stabilise the foundations of our economy by providing emergency support for business, reducing their costs and limiting the price rises they pass on to consumers. This includes:

○  A £600m contingency fund to support struggling firms and energy intensive industries, paid for by the one-off windfall tax on oil and gas producers announced by Labour in January.

○  A cut in business rates for small and medium-sized businesses, paid for by a temporary increase in the Digital Services Tax.

2. Provide security for the winter and beyond by acting immediately on insulation and nuclear and renewable energy with Labour’s Green Energy Sprint. This includes:

○  A plan to cut energy bills by up to £400 a year by insulating 19 million homes over the next 10 years. Labour first called for this in September 2021, and if the government had taken action then more than 2 million homes could be insulated by this winter.

○  Turbocharging the drive for home-grown renewable and nuclear energy capacity, so that we are less exposed to global energy prices. Labour will double onshore wind by 2030, double offshore wind by 2035, triple solar power by 2030, and invest in tidal, nuclear, hydrogen.

○ Investment in the grid and reforms to planning to accelerate the roll-out of cheap, clean, home-grown energy that communities want to see.

3. Put in place a longer-term approach to economic growth and security. Labour will strengthen the foundations of the economy, ensure that we buy, make and sell more in Britain, and partner with business to make Britain a world-leader in the industries of the future. This will create jobs and growth in all parts of the country, and help secure the economy against future shocks. This includes:

○  Strengthening supply chains:

  • Making Brexit work by sorting out problems at British ports and cutting red tape on importers, ensuring that Brexit doesn’t weaken our European supply chains.
    Buy, make, and sell more in Britain, to shorten supply chains and make our economy more resilient to global events. That means investing in reshoring, ensuring more public contracts go to British companies, and standing up for domestic industries.
  • Develop a robust competition and takeover regime to strategically protect the productive capacity of British firms, including from hostile takeovers and asset strippers, and to reduce hasty lay-offs in recession. We will also scrap the private equity carried interest loophole to reduce some of the tax incentives that have led to asset stripping.

○  Developing an industrial strategy, working hand-in-hand with trade unions and businesses, that will:

  • Help British businesses lead the world in growing high-tech industries like life sciences, the digital sector, electric cars and renewable energy
  • Improve jobs and wages in the industries that make up our everyday economy in sectors like retail, hospitality and care.

○  Introducing Labour’s climate investment pledge, which will catalyse private sector investment and bring good, sustainable jobs to all parts of the country. For example, we will:

  • Build the factories that will allow our world-class electric vehicle industry to thrive
  • End the offshoring of offshore jobs and bringing industry back to the UK
  • Secure the future of our steel industry by winning the global race for green steel production.

○  Supporting start-ups and growing businesses, including:

  • Making the business tax system fit for the 21st century by scrapping business rates and replacing them with a system that will incentivise investment and level the playing field between high street businesses and global giants.

That is Labour’s plan for a stronger, more secure economy – one that addresses the immediate challenges we face, while creating the conditions we need for growth and prosperity in the future so that Britain can once again fulfil its potential.