Rachel Reeves speech at Fabian Society New Year Conference

Friends, what a pleasure it is to be with you all again.

This might come as a surprise, but I can’t help but feel it’s been a slow start to the political year.

After the procession in and out of No.11 last year, it’s already the 21^st January and I’ve still only faced one Chancellor.

Last year I faced four in six months.

If Jeremy Hunt lasts until the budget, he’ll be the longest serving Chancellor since the current Prime Minister.

Now I have been a Fabian almost as long as I have been a member of the Labour Party.

As Secretary of the Young Fabians, I remember meeting in the old offices on Dartmouth Street, and feeling a real connection to our history; every time Labour has won power and achieved meaningful change.

Take one of my heroes: Beatrice Webb.

As a social investigator, reforming campaigner, and an economist too, Webb spent a lifetime fighting to build an economy that worked for ordinary people, in the knowledge that this was not just a moral cause, but a route to a stronger, more prosperous country.

As our economy, our society and our politics have changed, so our solutions must change too.

This morning I want to tell you about how the next Labour government will bring that Fabian spirit to bear on the challenges ahead.

As we look ahead to the next General Election, the questions the British public will be asking are simple:

Are me and my family better off than thirteen years ago?

Do our hospitals, our schools and our police work better than they did thirteen years ago?

Frankly, does anything work better than when the Conservatives came into office?

And if the answers to these questions are no – then you know it is time for a change.

The Conservatives have brought our public services to breaking point.

Three years ago they clapped our nurses; but with our NHS on the brink, their solution is to sack them for taking industrial action.

They crashed the economy, landed homeowners across the country with eye-watering increases to their mortgages, and now they want to tell us all that last year was just a bad dream.

And they have presided over more than a decade of stagnant living standards.

Thirteen wasted years.

Never again let the Conservatives claim to be the party of sound economic management.

Never again let them claim to be the party of aspiration.

And never trust the Tories with our public services.

And to add insult to injury, this week they showed us the depth of their commitment to their own levelling-up rhetoric.

The Prime Minister gave the game away last year, when he bragged about fiddling funding formulas to divert cash from the North to Tunbridge Wells.

And then what did we get this week, when the results of this round of the Levelling Up Fund were announced?

Money funnelled into Tory-held seats.

£19 million for the Prime Minister’s own constituency.

But nothing for the entire city of Leeds.

Ministers have broken promises and they have wasted councils’ time.

It’s not that the Tories have failed in their efforts to level up the country.

They haven’t even bothered.

And worst of all it is clear that they never intended to either.

Friends, it is time for change.

It is time for a Labour government.

While the causes of the cost of living crisis are largely global.

But our unique exposure to global events – to pandemic, war and economic crisis –  has been the result of the choices of Conservative governments.

Our present crisis is just one chapter in a longer story: more than a decade of weak growth, productivity and pay, and of the eroding of Britain’s economic resilience.

The effects of Putin’s war have reverberated around the world, and we will not waver in our support for Ukraine.

But it wasn’t Russia’s invasion of Ukraine that caused home insulation rates to collapse.

It wasn’t Russia’s invasion of Ukraine that caused a decade of inaction on nuclear and renewable energy.

And it wasn’t Russia’s invasion of Ukraine that closed our gas storage facilities here in Britain.

Those are the consequences of a thirteen-year Tory experiment, in unilateral energy disarmament.

And we are all paying the price.

We desperately need a plan to repair Britain’s economic and energy security, and bring energy bills down; a plan to end our reliance on fossil fuels.

But we also need a plan, for the weeks and months ahead.

Because while the Prime Minister buries his head in the sand, for ordinary people the cost of living crisis hasn’t gone away.

That is why we have called on the government to rule out any rise in fuel duty in the upcoming budget.

Because it cannot be right, in the midst of a cost of living crisis, that nurses driving from shift to shift, supermarket workers doing the night shift and the millions of people around the country without access to decent public transport should be left to face the biggest ever hike in petrol prices.

And today I can tell you more about the immediate action we would take to address the consequences of this crisis.

Millions of households are still looking to a 40 percent increase in their energy bills, in April.

On a week when temperatures fell below zero, I know many families and pensioners will be feeling the pressure particularly acutely.

At the same time, energy companies continue to enjoy record profits.

Over the last year, North Sea oil and gas profits have tripled.

That cannot be right.

So today, I can announce what a Labour government would do.

We would hold to that most basic of principles: that those who have profited from the windfalls of war should shoulder their share of the cost, so ordinary people do not have to bear the brunt of a crisis that they did not cause.

We will extend the windfall tax, closing the fossil fuel investment loophole and taxing oil and gas profits at the same rate as Norway.

By backdating this from the start of 2022, when oil and gas giants were already making historically large profits, we can raise more than £13bn.

A Labour government would pass those savings onto families immediately, to keep energy bills down this year.

Our plan will save a typical household up to £500 on their energy bills from April, compared to the government’s plan,  by keeping the energy price guarantee at its current level of £2,500, rather than letting it rise to £3,000.

But let me be clear: this is a maximum.

If wholesale prices fall further, the cap must come down too.

And it is a scandal that those with the least are often forced to pay the most for their energy.

So we would eliminate the premium paid by households on prepayment meters.

And the forced installation of prepayment meters all too often lead to the most vulnerable households going without heating entirely.

So Labour are calling on government to bring in a moratorium on that practice.

Let me say to those companies that are doing this:

It is wrong.

It punishes the most vulnerable households.

And under Labour, it will not happen.

That is what a Labour government would do.

That is a plan for today’s crisis.

But as Keir said earlier this month:

Sticking plaster politics is not enough.

We cannot persist with walking into a crisis unprepared, and at the last minute producing hugely expensive fixes to get us through, while the underlying problems – those weakened foundations – remain untouched.

We will take urgent action to help millions of households through the ongoing energy crisis – because we must.

And Labour will act to keep energy prices down for good.

That is why Labour has a plan to reach one hundred percent clean power by 2030, and retrofit millions of homes.

These policies could save a typical household up to £1,400, generating savings not just for one year, but for every year to come.

A response to today’s crisis and a plan to prevent tomorrow’s crisis.

That is what a Labour government will do.

Climate transition is a moral responsibility – we all know that.

It is an economic necessity.

Because the costs of action today are far less than the costs of action tomorrow.

And it is an opportunity.

Because whatever ideologues on left and right might tell you, we do not have to choose between going green and going for growth.

In the 2020s and 2030s, the two go hand-in-hand.

To some on the right, climate change is nothing more than a cost or even a con.

Some on the left meanwhile will claim that the only way to tackle the climate crisis is nothing short of a command economy, or the overthrowing of capitalism itself.

And then there are those on the fringes of the green movement who shudder at the very prospect of economic growth.

I reject all those assessments, and their ideological cul-de-sacs.

More innovation, more investment and more enterprise will be crucial to our green transition.

And there is a global race on for the jobs and industries that will power that transition.

We do not to have choose between letting the planet burn, or accepting a future of diminishing living standards in a poorer country.

If these were the extent of our ambitions, we might as well give up now.

Climate transition isn’t about putting a lick of green paint on a stagnant and insecure economy;

It’s about new jobs and new industries, lower bills and higher living standards, and economic growth.

Pro-worker; pro-business; and pro-climate.

We know some country is going to lead in offshore wind, in green hydrogen, in carbon capture and storage, and in so much more.

Why not Britain?

From Rolls Royce, developing carbon neutral aviation in Derby, to Tred in Leeds, which has launched the UK’s first green debit card, to Fife Renewables Innovation Centre, housing businesses at the frontier of the clean energy revolution – the potential is there.

But in too many places and too many industries, it is going unrealised.

Meanwhile the Biden administration’s Inflation Reduction Act has galvanized green energy in the United States.

And at the World Economic Forum this week, Ursula von der Leyen announced plans for an EU Net-Zero Industry Act to allow European nations to compete.

But our government is sat carping from the sidelines.

Grant Shapps, the Business Secretary, says these measures are ‘dangerous’.

But I’ll tell him what’s dangerous: doing nothing.

The choice is simple: we can sit by while our peers steam ahead in the global race for the jobs and industries of the future; or we can use all the powers at our disposal to let British businesses and working people compete in that race.

That is why our Green Prosperity Plan forms the very centrepiece of Labour’s economic policy.

That is the choice Labour will make.

That is what a Labour government will do.

This morning I can tell you more about a core part of our Green Prosperity Plan:

Our world-leading pledge,  to be the first major economy to have 100% zero-carbon power by 2030.

We don’t make that pledge lightly.

It will take choices; hard choices, that a Labour Government will make in the national interest.

Take just one example: our planning system.

A system now defined by delay.

It currently takes up to 13 years to develop a new offshore wind farm.

Up to 4 of those years are spent fighting through the planning system.

The Hornsey 1 wind farm off the Yorkshire coast was commissioned under the last Labour Government, but didn’t come online until 2019.

Its cheap, clean power that now supplies a million homes couldn’t be provided until years of bird data and other planning requirements had been collected and assessed.

​​Since 2017, not a single offshore wind farm has been recommended for approval by the Planning Inspectorate; in every case they have had to be overruled by the Secretary of State.

But it adds further delay when that same Secretary of State lets that approval decision sit on their desk for almost 2 years, as they did with Hornsey 3, which will be the world’s biggest wind farm when it’s finally completed later this decade.

Those delays are depriving a further 3.2 million homes from that cheap, clean power.

And that’s before you consider the years offshore wind farms have to wait for a connection from the National Grid, so that that power can get from the North Sea to people’s homes and businesses.

This backlog has now got so bad that projects from the latest leasing round last year have been told they will not get a grid connection until 2033 – over a decade later.

Meanwhile, what are the Tories doing?

Reforming the planning system?

Sorting out the grid backlogs?

Not a bit of it.

They’re using these critical months and years to argue about whether they should continue to ban onshore wind completely, or simply set up a special, uniquely-restrictive planning regime for it instead.

With Labour, that won’t stand.

If we’re going to double onshore wind capacity, triple solar, and quadruple offshore wind, all within the next 7 years, we will need to reform that planning system.

We’d ensure net zero is embedded through it and our whole energy system; bring planning restrictions for onshore wind in line with other infrastructure; impose tough new targets to get planning decisions on renewables down from years to just months; reform the grid system to cut the delays and get on with delivering more clean power capacity to turbocharge the transition; and ensure these decisions are prioritised so that agencies can meet them.

We’ll look at how to ensure that communities that host infrastructure in the national interest feel its benefits; end the farce of planning decisions languishing on Ministers desks and crack down on Whitehall blocking developments; and require Local Authorities to proactively identify land for renewable energy opportunities and improve access to data.

That’s just one example.

But we will remove those barriers, wherever they are.

That is what a Labour government will do.

That work is ongoing, led by Ed Miliband, and there will be much more for us to announce ahead of the next election.

Now, the Prime Minister made clear the depth of his own commitment to net zero this week, when he chose to fly by RAF jet from Teesside to Blackpool.

I understand the air stewards had to do the seatbelt demonstration a few times before it really sank in.

When you look back on the next Labour government, I ask you to judge us on this:

Are energy bills down – for good?

Is Britain more secure from the effects of global fluctuations in the energy market?

Are we on course for net zero?

Have we created hundreds of thousands of jobs in Britain, in new and growing industries, in our ports, our steel towns and across our industrial heartlands?

I will campaign with everything I’ve got to see that Labour government elected.

I will give all I’ve got to be your next Chancellor.

And I make this pledge to you:

That I will be Britain’s first green Chancellor.

Our Green Prosperity Plan forms one part of a wider approach.

The Tories may bury their heads in the sand, but around the world, economic common sense has moved on.

Inequality does harm economic growth.

Markets alone cannot deliver the strategic investment we need.

And as well as the success of industries at the frontier, the state of our everyday economy – of care, retail, and more – is crucial to sustainable growth.

To fail to learn these lessons, is to follow the path of managed decline.

The alternative is what the US Treasury Secretary, Janet Yellen, calls ‘modern supply side economics’.

It is based on the knowledge that strong and inclusive economic growth cannot be achieved without active government creating the foundations for a dynamic private sector to build on.

It is time for a British ‘modern supply side’ approach.

Let me explain what I mean.

It starts with the acceptance that neither of the big ideas which defined British economic policy over much of the last eighty years are adequate for today’s challenges.

Because although we would be in a far better place today had the Tories 10 years ago paid more heed to Keynes’ insights, Keynesian pump-priming on the demand side does not hold the answers to stagflation, and supply-side problems require supply-side solutions.

That was true in the 1970s, and it remains so today.

But the old supply side economics was based on a misplaced faith, that deregulation and tax cuts for the wealthiest would stimulate economic growth and their benefits would ‘trickle down’ to everybody else.

Not only did that approach widen inequality between places and people.

It had diminishing returns for growth and productivity.

The Truss experiment was the last gasp of a failed economic philosophy.

A modern supply side approach means government taking on a more strategic role, to expand the productive capacity and the resilience of our economy:

First, by providing catalytic investment and strategic partnership with business, through our Green Prosperity Plan, through our modern industrial strategy, and through the work of our start-up review.

Second, by boosting our labour supply – by supporting strong public services and helping people back into work.

And third, by repairing our economic resilience, extending economic security with a real Living Wage and our New Deal for Working People – led by the work of Angela Rayner – and reducing our dependence on fragile international supply chains with our plans to buy, make and sell more in Britain.

Together these plans comprise a modern supply-side economics; a new approach, for economic growth felt in every part of Britain.

That is what a Labour government will do.

The success of this approach will require honesty about the limits of what national government can achieve alone.

First, because we cannot achieve our ambitions with the pull of a lever in Whitehall, and so we will give local, regional and national leaders the powers they need to support thriving local economies.

And second, because any government serious about growth and improving the supply-side capacity of our economy needs to fix the mess that is this government’s Brexit deal and forge a closer trading relationship with the European Union.

Our agriculture and our food industries rely on trade right across Europe, but we have a deal which doesn’t even include a veterinary agreement.

We are pioneers in creative industries, but we have a deal which ties them in knots over visas.

We are the second largest exporter of services in the world, but we have a deal that doesn’t include the mutual recognition of professional qualifications.

And we have the best universities in Europe, but we have a deal which cuts us out of the Horizon research initiative.

So we will fix the holes in the government’s patchwork Brexit deal.

And instead of picking needless fights with our largest trading partner, we will work together with our neighbours and allies, to get a deal that works for the British economy.

That is what it means to stand up for the national interest.

And one final thing:

Modern supply side economics recognises that a strong economy rests on strong public services.

So be in no doubt: there can be no return to austerity.

It has left our country poorer, our public services at breaking point, and our public finances in tatters.

Labour will make sure public services have the investment they need;

And reform, too – to meet the challenges of an ageing society; to equip young people with the skills for a new economy; and seize opportunities presented by advances in artificial intelligence and robotics.

Good public services must be paid for.

Labour will not waver in our commitment to fiscal responsibility.

I have been clear about the absolute importance of ensuring every line of our next manifesto is fully costed.

So let me tell you what a Labour government will do.

We will end the tax break which exempts private schools from paying VAT and business rates.

Because friends, private schools are many things, but they are not charities.

We will put that money where it belongs, into all our children’s futures: into our state schools.

And we will end the non-dom tax status.

Because if you make Britain your home, you should pay your taxes here too.

And under Labour you will.

We will put that money into one of the largest workforce expansions in the history of our NHS.

More doctors; more nurses; more midwives; more health workers.

That is what a Labour government will do.

I know that, in the months to come, many of you will play your part in making our shared ambitions a reality.

Together, we will change Britain again – in that Fabian spirit.

We will rescue our public services from Tory neglect.

Restore economic security to working people.

Support British businesses to lead in the global race.

And build that fairer, greener Britain.

That is what a Labour government will do.

And friends, be in no doubt:

That government is coming soon.

Thank you.