As she stood beside two union flags in a wood-panelled room, it looked as if Rachel Reeves had stepped into Rishi Sunak’s own press conference room in Downing Street – a deliberate move. The shadow chancellor had been preparing for this moment for months, warning of the heightened risk of recession ever since the last quarter’s GDP figures showed negative growth. Accusing Sunak of putting the economy “into reverse” and leaving his promise of economic growth “in tatters”, Reeves was keen to imprint one phrase on voters’ minds: “Rishi’s recession.” One Labour source said it was “an economic and political moment – for a government to have fallen into recession in an election year, when Rishi Sunak has made his whole argument about growing the economy”. Labour sources say Reeves had wanted to speak directly to the country at such a crucial time, rather than popping up briefly on television screens for a short clip. “The picture we want the country to see is a competent alternative to what you’ve gone through, doubling down on Rachel’s core strength of people looking at her and trusting her,” one source said. They say Reeves is now gearing up to make the election all about economic competence, having put to bed the argument over Labour’s £28bn green investment promise once and for all.
Prior to the decision to ditch the pledge, Labour figures had been getting tangled up in questions about how it would be paid for and were fearing Conservative attacks on their spending plans. But having abandoned the £28bn figure after weeks of uncertainty, Reeves and her team now feel they “can prosecute the economic case much more effectively”, one source said. Reeves’s speech showed Labour trying to get back on the front foot after a difficult few days for the party in which its poll lead has slipped slightly, and Keir Starmer has been mired in accusations that he did not act quickly enough to suspend a Labour candidate accused of spreading a conspiracy theory about Israel. The shadow chancellor appeared sure-footed in the face of questions about the Rochdale candidate furore, saying the comments had been made in a private meeting and that Labour could not know everything about what was said behind closed doors. She also batted away queries about what she would do if standing in Jeremy Hunt’s shoes for the budget next month, apart from saying Labour would go for growth with planning reforms and a modern industrial strategy. The question remains about how Labour’s economic offering differs from the Tories’ now that the party has got rid of the £28bn green investment pledge, which, while the subject of political attacks, had polled well with the public. Reeves made noises about matching Tory tax cuts, saying she had “made no secret of the fact that [she] wants taxes on working people to be lower” as long as the money was there to make that possible. But with Sunak and Hunt believed to be pencilling in public spending cuts to fund tax cuts, that could put Labour in a difficult position over whether to follow suit. The shadow chancellor referred to “hard choices ahead”, but went no further in indicating how Labour would deal with a scenario where the Tories go to the polls promising tax cuts on the back of fresh austerity.