Labour will take inspiration from Joe Biden to create jobs and reduce inflation with an approach branded by the shadow chancellor as “secureonomics”.
In a speech at the Peterson Institute in Washington DC, Rachel Reeves outlined a mission to ensure economic security across the UK by rebuilding Britain’s “industrial foundation”.
This will mean “investing in the sectors and technologies that will determine our future economic success”, she said.
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Ms Reeves also suggested the current Brexit deal would be “reviewed” under a Labour government by 2025 if it wins power at the next election.
She dubbed her strategy “securonomics”, which she said would mean a bigger role for the government in running the free-market economy and fostering new partnerships with international allies.
Aligning the policy with the Biden Administration, Ms Reeves said the US President was “rebuilding America’s economic security” with a more active state and modern industrial strategy – as she heaped praise on his Inflation Reduction Act.
The landmark package of tax breaks and subsidies seeks to curb the deficit and invest in green technology and clean energy in an approach dubbed “Bidenomics”.
Labour has previously said an £8bn national wealth fund would result in a zero-carbon economy “made in Britain” and has committed to invest £28bn a year in the “green economy” – two policies Ms Reeves promoted in her speech.
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She said “errors in economic policymaking allowed Britain’s economy to weaken” – citing the “long, hard years of austerity and the chaos of our recent governments”.
Ms Reeves said: “Securonomics can right these wrongs.
“By drawing on the talent and effort of millions of working people in every part of the country.
“By forging a new partnership between an active state and dynamic open markets, and by fostering a new era of global partnerships between nations with shared values and interests.”
Tory chairman Greg Hands dismissed the plans as “the same old Labour ideas”, and declared that his party “will take no lectures from Labour” on the economy.
Ms Reeves stressed her approach “won’t mean trying to become a British version of America”.
But she suggested Labour would hope to deepen and redefine UK-US ties as a “green special relationship”, with a focus on renewable energy such as offshore wind and carbon capture and storage.
On Brussels, Ms Reeves expanded on Sir Keir Starmer’s suggestion that Britain needs a “better deal” with the EU, saying a review of the current legislation would begin by 2025 under Labour.
“Britain with Labour will be a trading nation, exporting across the world and open to business and investment at home,” she said.
“Britain cannot, should not and – with Labour in power – would not try to go it alone.
“In 2025, the UK’s deal with the European Union will be reviewed.
“While there’s no going back into the single market or the customs union, with Labour we would make trade easier with Europe, and rebuild ties with our closest neighbours.”