Rachel Reeves: “I would like Labour to be clear that if there was a referendum, we would campaign to Remain”
As chair of the Business Select Committee, Rachel Reeves has been inundated with dire warnings about the consequences of a no deal Brexit. But with the Prime Minister’s deal looking unlikely to win the support of MPs at next week’s crunch vote, is there any way forward that works for British business? Sebastian Whale reports
Rachel Reeves is working her way through a pile of Christmas cards when I knock on the door of her fifth-floor parliamentary office. The Labour MP is using a rare period of political respite to tackle a mountain of correspondence. As an economist with a penchant for detail, she’s clearly calculated it’s worth getting ahead of the game.
Keeping her calendar free as we head into December is certainly a wise endeavour. The government has set aside five days for debate on the Prime Minister’s Brexit deal, with the vote pencilled in for 11 December. Theresa May is staring down the barrel of defeat and politicians on both sides of the EU debate are seeking to steer the good ship Brexit in their direction.
We meet on a dour day in the capital that somehow manages to render unimpressive the view of Westminster Bridge from Reeves’ prime piece of parliamentary real estate. The MP for Leeds West (a constituency that voted Leave) is a supporter of a so-called People’s Vote. But she was a late convert to the movement, and someone who reluctantly concluded that a second crack of the whip was needed. In layman’s terms, she was one potential waverer that the PM might have hoped (but failed) to win over in support of her deal.
“I look at my post bag now – I’m not saying it’s representative – but I’ve had hundreds of letters saying People’s Vote, Remain and two or three saying why haven’t we left it. I’m not saying that’s how my constituency would vote in another referendum. But there is a lot of unease in my constituency that voted Leave about what’s happening and where we’re going now,” she says.
“After the referendum, I felt that it was the responsibility of the government and parliamentarians to negotiate a good deal, to try and preserve some of those positives about our membership of the European Union; the single market, free and frictionless trade. But, to be honest, I do want to see restrictions on free movement of labour. I don’t want to go back to the European Union and then carry on with business as usual. I still want to reform the European Union. But I think that as a country we would be poorer with fewer jobs [outside the EU], and I can’t vote for that deal. And that’s the deal we’ve got on the table.”
As chair of the BEIS Select Committee, Reeves has taken evidence with dire warnings about the consequences of a no deal Brexit. Airbus told MPs it would cost the company €1bn a week in turnover; ADS, the aerospace, defence, security and space trade body, said it could lead to “flight chaos”. The Food and Drink Federation this weeks revealed that Britain is running out of warehousing facilities required to stockpile goods. And just hours before we convene, the Treasury sets out its forecasts for each Brexit scenario, and the Chancellor says that the UK will be worse off outside the EU in each of them.
But the CBI publicly came out in support of the Withdrawal Agreement and future partnership (despite private emails seen by ITV News in which the group’s head of EU negotiations said it was “not a good deal”). Other businesses too have lent support to the Brexit deal. Reeves says this is because they deem the alternative to be far worse.
“The businesses we had in front of us yesterday – Diageo, Nestle, Airbus today – I totally understand why they’re saying that. They are incredibly worried about what happens in case of a no deal,” Reeves says.
“At the session we had today, they all said that Remain is better than what we have now or what is being proposed. So, they haven’t given up that belief and they want to be as close as possible to what we’ve got.”
With the concerns from her evidence sessions whirring round her ears, Reeves is determined that a no deal Brexit be prevented. And she rejects the options on the table for MPs as set out by Theresa May.
“I have a lot of respect for the Prime Minister. I believe that she is a reasonable and responsible person who cares passionately about our country. I don’t think that she would allow the country to crash out of the European Union. This idea that the choice is between her deal and no deal – I don’t really think that is the case,” she says.
“I don’t think she would allow no deal and I don’t think that Parliament will allow her deal. In which case, you’ve got to find another way forward. Changing the Tory leader isn’t going to change the arithmetic in the House of Commons – a general election would, but I’m not sure it would resolve the question of our future relationship with the European Union. The way to resolve that is through a People’s Vote.”
Referring to May’s tour of Britain, Reeves adds: “She is going around the country now making the case almost as if it was the country who were going to be making the decision, but it’s not – it’s 650 MPs in here. If she wants to go the country and make the case for her deal she should be able to do that, but then the country should be able to have a say and form its own judgment.”
With scores of Tory MPs seemingly wedded to voting against her deal, does Reeves believe the PM is warming up for a second referendum? “Possibly. The options available if she loses this vote, there’s likely to be a no confidence motion in her. I don’t see at the moment Tory MPs wanting to trigger a general election. But something has to give, because if she can’t get her deal through and if, as you say, potentially 100 Conservative MPs don’t back the Prime Minister’s deal that she’s staked so much on then we need to find another way forward,” Reeves says.
“We’re not going to be able between now and March 29th go back and start again. The European Commission has said that, it’s just not practical. We haven’t managed to get very far in two years and I don’t think we’re going to go back and say ‘oh, actually we’ve changed our mind and we want to do a Norway for now model’.”
I ask Reeves if this impasse, as she puts it, was inevitable. She is unsure but cites May’s “hubristic” approach when she first entered No10 and her “demonising of the 48%”.
“I do think she has done her best to try and get a deal that preserves some of the benefits and free and frictionless trade. But the red lines that she set out early on – leaving the single market and customs union – did tie her hands and that has been part of the reason why we’re in some of the problems we’re in now,” she says. “I don’t think that she needed to have constrained herself so early on, and by doing so she’s prejudged the negotiation by setting those red lines which made it harder to bring with her MPs like me.”
How about her own party? Labour’s policy of constructive ambiguity has served them well in the past two and a half years, but Reeves believes the leadership must now confront the questions before them.
“I do think that time is running out now and we need more clarity – from all the Labour party – but including from the top about where we want to go. I would like to see the Labour party be clear that if there was a referendum on the final deal, we would want Remain to be in it and that we would campaign to remain in the European Union,” she says.
With more gusto than the party did in 2016? “With greater enthusiasm this time. Absolutely. And also, if there is a vote in Parliament on a People’s Vote, to be clear that Labour would vote in favour of that. That’s not clear at the moment.”
Reeves grew up in Lewisham, south east London and showed an early proficiency for problem solving by winning an under 14 chess championship. She read PPE at New College, Oxford and received an MSc in Economics from the London School of Economics. There followed stints as an economist in the Bank of England and the British Embassy in Washington. She moved to Leeds to work for HBOS in the mid noughties.
She was elected to Parliament in 2010 and quickly joined the Labour frontbench. Reeves was appointed Shadow Chief Secretary to the Treasury under Ed Miliband in 2011 and was Shadow DWP Secretary until the 2015 election. In 2017, she was elected chair of the BEIS Select Committee, where she has led high-profile inquiries into the collapse of Carillion and areas like executive pay.
The founder and boss of getting firm Bet365, Denise Coates, paid herself £265m in 2017 – breaking a record she set the previous year for a chief executive of a British company. Though Reeves is unfamiliar with the case, she says that her committee has been unimpressed by the “staggering” salaries execs are taking home.
“I use the example of Persimmon, because that’s something we have looked at as a committee. The chief executive got a £75m bonus and yet that employer was not a living wage employer. So, some people are having to rely on tax credits and universal credit to be able to put food on the table and pay their rent, while someone at the top earns more money than most of us can expect to earn in several lifetimes. It’s now the case that a FTSE100 chief executive in this country earns more in one year than it would take somebody on average earnings to earn in 167 years. That ratio has increased hugely over the last 40 years,” she says.
Does she support limiting the pay ratio between the highest and lowest paid in a company?
“I would like to see remuneration committees and shareholders being much more active and crackdown on this excessive pay. I would like to see higher levels of taxation so that if you are earning that sort of money, some of it could be clawed back and put into public services,” she replies.
“And also, I think it would be worth looking at things like corporation tax rates. If a business has a pay ratio above a certain amount, maybe they should pay a bit more in corporation tax than businesses that share that prosperity amongst all of its workforce. I do think there are public policy responses that could be used to address the issues of pay inequality.”
Protecting the voiceless or the vulnerable is central to what drives Reeves’ politics. It seems to underpin why she feels comfortable voicing her support for a second referendum despite her constituents being in favour of Leave. She fears that voters in Labour’s heartlands stand to lose the most from a mishandled Brexit or from leaving the EU with nothing to show for it.
“When the economy turns sour, whether it’s through financial crisis or a house price crash or whatever it is, it’s always the poorer parts of the country that pay the highest price.”