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Shadow Chancellor Rachel Reeves Won Over Sceptics With Green Spending And Tax Reforms

4 min read

Shadow chancellor Rachel Reeves' multi-billion pound green spending promise and commitment to reforming the tax system won over sceptical Labour party members in what is being billed as a “refreshing” first conference speech.

Speaking at the Brighton Centre, Reeves was given standing ovations for promising a Labour government would invest £28 billion a year in green capital investment until 2030 and that she would be the first “green chancellor”.

She also won applause for pledging to scrap the £1.75 billion business rate and VAT relief for private schools claiming charitable status and re-channelling that into the state sector.  

One delegate leaving the hall from the Mole Valley constituency Labour Party in Surrey, said he knew little about Reeves but she had impressed him.

“Green issues are the most important that we face and she responded to that with a serious commitment," he told PoliticsHome. "The £28 billion a year in a Labour government comes close to meeting the test.” 

Many members were initially feeling sceptical going into conference, he suggested, over the Labour leadership’s commitment to the Green New Deal after a motion on the subject was thrown out by the conference’s arrangements committee, and then reinstated after an appeal.

He said if Starmer watered down his “10 pledges” to members, one of those being climate justice and the green new deal policy, he would quit the party.

“I have also been concerned by the expulsions of members and so there was a lot riding on this, and Rachel Reeves made it much more likely that I will stay because I have some faith that a Labour government would address climate change," the member continued.

"It was refreshing, I didn’t know much about her but I feel like I know her better. I was anxious coming into conference with the row about the rule changes too but now it’s just ‘policy, policy, policy’.” 

Another member from Sudbury in Suffolk, attending her first Labour conference said Reeves' performance was “out there” and “more like Angela”, referring to more passionate speaker deputy leader Angela Rayner.

She said the shadow chancellor's focus on scrapping business rates was welcome as so many town high streets are seeing their businesses going bust, and the economic policies outlined today could be good for Starmer’s popularity.

“I’m more to the left of the party but I do believe everyone deserves a chance, and [Starmer] just hasn’t had that chance himself because of the pandemic. I thought Rachel was good and lots of policy ideas.”

A first time constituency Labour party delegate, who joined the party in 2017 when Jeremy Corbyn was leader, was also impressed. 

“I thought it was fantastic and it’s taking us in the right direction. It was pragmatic," they said.

“Scrapping business rates is a strong signal that Labour is the party that defends business.”

Professional bodies have also welcomed Reeves' economic direction for the party and some of the proposals she made. 

The Federation of Small Businesses (FSB) welcomed Labour’s proposal to scrap business rates and said it would support 200,000 smaller firms.

FSB National Chair Mike Cherry: “A lot of small firms will cheer the pro-business policies set out in this speech as they fear a hike in the anti-growth jobs tax in April.

“Removing another 200,000 small businesses from business rates altogether would mark the first major step towards fundamental reform of a pernicious tax.”

He said key English regions would benefit from the policy, including Labour-Tory battlegrounds in the North of England.

Shevaun Haviland, Director General at the British Chambers of Commerce, also welcomed Labour’s proposed reform to business rates if they were in power, describing the current system as a “drag anchor” for firms in the recovery from the pandemic.

He said: "The shadow chancellor is right to highlight that reforming business rates must also be placed within a wider context of how businesses are taxed and the need to build a tax system fit for the future, including how online-only businesses are taxed.”

However he warned that any scrutiny of tax reliefs needed to be done carefully so as not to put firms off investment.

Reeves said in her speech the party would review “every single tax break” as too many provide loopholes for those who can afford the best advice.  

She said: “If it doesn’t deliver for the taxpayer or for the economy then we will scrap it.”  

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