“Never let anyone tell you that there’s no difference between a Labour government and a Conservative government.” Rachel Reeves used her speech in Liverpool to draw a sharp dividing line with her Tory predecessors – and with Nigel Farage’s Reform UK.
In a restatement of Labour’s early achievements in government, received as a tonic by the party faithful in the hall, the chancellor pointed to a slew of spending promises.
Presented with a choice between “invest or decline”, Reeves said, “we chose investment”.
From £29bn for the NHS to school breakfast clubs, a slew of new transport links and 2,000 extra GPs, she was keen to underline the payoff from raising taxes and loosening her fiscal rules at last year’s budget – amid calls from some in her party to loosen the purse strings much further.
Introduced before her speech by Matt, a welder from the Sizewell C nuclear facility, who thanked the chancellor for securing the industry’s future, Reeves drew another contrast with the Tories by highlighting Labour’s willingness to intervene in industry.
Citing this weekend’s backing for Jaguar Land Rover after it was hit by a cyber-attack, as well as recent support for steelmaking and shipbuilding, Reeves said: “I have never believed the Tory mantra that the best thing a government can do is stay out of the way.”
Having set out a shopping list of investments to warm the hearts of Labour supporters, Reeves went on to make an unapologetic defence of her fiscal rules – which are expected to force her to announce tax increases at a crunch budget in November.
The chancellor insisted the gains she highlighted had been possible “only because we remained steadfast in that commitment to economic stability”.
“That is not a trade-off with our Labour values, it is essential to our Labour values,” she said.
Without mentioning by name the Manchester mayor, Andy Burnham, who suggested last week that Labour should be less “in hock” to global bond markets, Reeves hit out at “critics” who might want her to ditch her fiscal rules.
“They are wrong: dangerously so,” she said, pointing to the rocketing mortgage rates that followed Liz Truss’s mini-budget as an indication of how badly wrong things could go when the government got on the wrong side of financial markets. “That was a warning, and the British people will not forgive any party that forgets it,” she said.
Reeves’s team were gleeful last week when Burnham’s comments appeared to have rattled the bond markets, briefly pushing up the government’s borrowing costs.
While it was the Tories who featured most heavily – with the phrase “don’t let anyone tell you that there’s no difference between a Labour government and a Conservative government” recurring throughout – the chancellor also took aim at Reform.
She urged Labour members and MPs to go back to their constituencies with the message that theirs is the party standing up for working people, citing workers’ rights, the increase in the minimum wage, and action to tackle youth unemployment and fix public services.
“There is only one party that was founded by working people and one party that is committed absolutely to defending their interests,” she said, to applause. “The clue is in the name, conference: the party of working people is the Labour party.”
There was little new news in Reeves’s speech, with promises on school libraries and long-term youth unemployment briefed in advance.
But it set the contours of what is likely to be Labour’s economic argument at the next general election – investment v decline – as well as the leadership’s more urgent pitch to the party, with critics circling.
As Reeves put it: “Have faith, because our party and our country have overcome greater challenges than this.”
