Rachel Reeves says ‘no alliance’ more important than with the EU in likely last major speech as chancellor
There is “no alliance” more important than the UK’s relationship with the EU, Rachel Reeves said in what is expected to be her last major speech as Chancellor.
Reflecting on her two years at the Treasury, Ms Reeves called on Britain to be “much bolder” and go “much further” in building closer ties with the bloc.
Ms. Reeves’ comments come later IndependentCampaign to rebuild Britain’s relations with Europe.
Ms Reeves also defended her record, saying that under her management the economy had “overcome all challenges” and that Labor had proven its reliability “on every decision” since her election.
He concluded by calling on new prime minister Andy Burnham to balance economic credibility with the “radical change” that he said defined the Labor government, adding: “I know that will remain the next mission.”
Speaking at Mansion House, Ms Reeves said: “This government has shown that change, indeed radical change, is possible and the record of the last two years makes clear that governments can only achieve this change when they combine radicalism with credibility.
“I had to gain that credibility in the opposition and I proved that in every action I took as Chancellor in government.”
Ms Reeves, who has long been a keen advocate of deepening post-Brexit ties with Brussels, also said the reward of a stronger relationship with the trading bloc would be “enormous”.
He called for the UK-EU summit, planned for this month but thrown into doubt after Sir Keir Starmer announced his resignation, to be rescheduled “as soon as possible” to finalize plans for the youth mobility scheme and other agreements on agricultural products and emissions.
Ms Reeves said: “In our age of insecurity, our country’s economic strength depends on strategic alliances and no alliance is more important to us than our relationship with the European Union.
“I think we need to be much bolder and go much further towards a credible economic and security partnership, where the default is to include the UK rather than exclude it, recognizing that in many cases this will be the approach that will be of the greatest benefit to Britain.”
It comes after a period of strained UK-US relations, which deteriorated after Sir Keir Starmer rejected Britain’s involvement in the Iran war.
Britain’s economy is expected to remain sluggish for another month as some sectors remain under pressure as conflict in the Middle East continues to hamper growth, but Ms Reeves maintained the country’s finances were still “strong”.
The Office for National Statistics (ONS) will publish gross domestic product (GDP) figures for May on Thursday.
But the Chancellor said he had “always been optimistic about the future of our economy and our country, and I remain optimistic about the future.”
“This government has made great progress in delivering on the promise of change,” he said.
Ms Reeves appears to have accepted that she will not remain Mr Burnham’s chancellor, but the new prime minister has yet to confirm any cabinet appointments.
The Makerfield MP is the only candidate in Labour’s leadership pipeline and will officially take over from Sir Keir on Monday, July 20, after the Prime Minister announced his resignation last month.
The chancellor signaled that the new administration must maintain the support of markets if it is to be successful, and said he believed Mr Burnham’s government would prioritize credibility as well as radicalism.
“Radical change cannot endure without credibility, and credibility cannot be sustained without delivering change that meets the moment,” he said.
“Radical change is only possible with credibility. That is my mission as chancellor. That is the mission of this government and I know it will remain the mission of the next government.”
Mr Burnham has committed himself to Labour’s fiscal rules, but suggested there was leeway on tax within limits in the party’s manifesto, which ruled out increasing VAT, income tax and national insurance.
The Confederation of British Industry (CBI) said Ms Reeves “strikes the right tone” in reassuring markets, global investors and firms about the UK’s commitment to growth.
Chief Executive Rain Newton-Smith said: “The priority now is to continue translating these reforms into practical changes that will strengthen the financial services sector and support the firms that rely on it across the wider economy.
“The recently announced SME support package is welcome and will help more businesses in the UK to scale, export and adopt new technologies. This investment should pay off by increasing productivity, strengthening local economies and supporting long-term growth.
“The next step is the implementation of key reform programmes, including reform of the Financial Ombudsman Service, pension reform and regulation of the Senior Managers and Certification Regime. The key measure of success will be whether these changes can unlock more domestic investment, help ambitious firms scale and grow, deepen the UK capital markets and make regulation clearer, faster and more predictable.”
