Rachel Reeves and Labour's shadow Treasury team: "We behave like we’re in government"

Rachel Reeves is eager to make history. A former Bank of England economist with a lengthy stint in industry, her long-held ambition is to become the United Kingdom’s first female chancellor.

Speaking a day before the Treasury U-turn over the energy windfall tax, a bullish Reeves could have used our interview to press home her credentials as a shrewd operator who has her opponents on the ropes. Instead, she insists on focusing on the team of shadow ministers she has pulled together in the 12 months since taking on her role, including the group in our discussion.

It’s an unusual pitch for a shadow chancellor to invite scrutiny of her entire team, and, by extension, her leadership, during a period when economic competency sits at the forefront of voters’ concerns.

Perhaps that decision is strategic, an attempt to demonstrate harmony among Labour’s top team while reports swirl of discord in Downing Street. Or, possibly, the shadow chancellor wants to demonstrate that Corbynism has been definitively routed from the party’s economic approach.

Either way, Reeves, who stepped back from the frontbench under the previous regime, has been resolute – to the dismay of some within the party – that she is indeed charting a different course on the economy, but admits this has not come without significant effort.

“Obviously damage has been done to that relationship [with business and industry] but I think I’m in a really good position to rebuild it because of my background.

“I know this world, I’ve worked with a lot of these people. This is a world which I feel very comfortable in, very at home, already have good relations, and people are certainly open to hearing from us.”

“It’s a two way thing,” she adds. “It’s an opportunity for me to show the change in Labour under Keir [Starmer] and [my] leadership, but it’s also a chance for me to get an idea from business about their big concerns.”

Restoring that economic credibility with business and industry is clearly a major focus for the entire team, and each member is keen to namedrop the influential individuals they have met in recent months as they attempt to mend bridges.

As Reeves highlights, Boris Johnson’s notorious “f*** business” comment opened a gap her party is eager to fill, but Tulip Siddiq, the shadow city minister, also hints at a sense of frustration, of being hamstrung by the previous leadership, saying it’s a “bit sad” that the relationship had broken down.

“They definitely want to engage and it does occasionally come up that maybe that wasn’t the reputation we had under the previous leadership,” says Siddiq. “That’s really changed now.”

A government that has to borrow their best ideas from the opposition is a government that has run out of ideas

What has also clearly changed is the way in which Labour engages with their political opponents. It takes little effort to imagine the deluge of press releases and pre-scripted attack lines which would have poured from former shadow chancellor John McDonnell’s team following the announcement that during a cost of living crisis, the Chancellor had secured a place on The Sunday Times’ Rich List. Perhaps more concerning for her opposite number, Reeves barely rises to the question – opting to play the ball, not the man.

“Obviously he doesn’t understand the day-to-day struggles, and I don’t think many of the Tory top team do, but I don’t really think that is the issue,” she insists. “You can empathise even if you haven’t had those experiences, but I’m more interested in judging people by their policies.

“They’ve been struggling around for five or six months now [on the windfall tax], trying to undermine what is a common sense policy, and they are going to U-turn because none of their arguments stack up. And the truth is we’ve forced them into this. 

“I’m pleased about that because it will make a big difference to people who are struggling with their bills, but a government that has to borrow their best ideas from the opposition is a government that has run out of ideas and run out of time.”

While Labour, and the shadow Treasury team, can claim some credit for pushing the government into a U-turn, it is questionable whether the party’s role will be recognised by the wider public, and seems certain to be long-forgotten by the next general election. Having pressured the government to bring forward an emergency budget to tackle the cost of living crisis, there is little sense of what new ideas they would introduce were they in power.

Each member of the team stays firmly on message when pressed on the point – recycling their commitment to introduce a new business rates regime (without providing substantial detail), closing tax loopholes and opposing the National Insurance rise. By focusing less on announcing a raft of fresh policies, and instead shoring up a reputation for economic responsibility, Labour is taking a gamble, as household budgets are squeezed and voters clamour for fresh ideas.

“We are starting to form the basis of an economic policy,” Siddiq says in response. “We haven’t set up every single policy because we’ll do that closer to an election – but we certainly have an idea of what we want to do.”

Reeves is equally clear on that point. She doesn’t want her team to be producing policy on the fly, closing off any criticism that the party’s sums do not add up. To assist she chose to bring on Pat McFadden, a highly experienced former business minister who also served as an adviser to Tony Blair, as her shadow chief secretary.

“Hell will freeze over before Pat will allow a shadow colleague to spend money without explaining where it will come from,” she jokes.

It is a sense of discipline that has patently filtered down through the team, and both James Murray and Abena Oppong-Asare, despite only joining the Commons in 2019, appear thoroughly on board with the strict approach.

“There is definitely an emphasis in what we all do, following Rachel’s lead on this, making sure all the numbers add up,” Murray says. As a former deputy mayor for housing under Sadiq Khan, he insists it’s a style which is already “hard-wired” into him.

“Everything is solidly backed by data and evidence,” he adds. “If we’re going out with a policy, we need to be absolutely certain it’s fully costed, it’s going to be effective, it’s value for money. It feels very rigorous.”

Siddiq, who has previously served in other shadow ministerial roles, adds: “We are very focused on data and evidence, which is not always the case in every team. If you can show Rachel and Pat some evidence of how the sector’s thinking... this is what the latest survey said, then they’re more likely to come around to your point of view. 

“But if you mentioned something on a whim, they’d probably dismiss it. I’d think it’s fair to say they listen, but they don’t suffer fools gladly.”

While there might be consensus on the approach among Reeves’ team, there are rumours of rumblings of tension among some other shadow departments, who may feel implementing such financial constraint so far out from a general election is inhibiting their ability to shape policy out in the open.

“We do have to collaborate with other teams... they may have some policy ideas, but we also need to look at how it could be implemented in terms of costing,” Oppong-Asare says. 

“I do feel we’re very open, and colleagues can come to us and have those conversations. So I don’t think you see us having battles with colleagues externally, because of the fact we’re very open in having dialogues with them.”

McFadden insists that far from being tight-fisted, his decision to keep a firm control on ensuring the sums add up chimes with the mood at the top of the leadership. “I’ve been around politics for a long time, through years in government and latterly years in opposition. And I’m really enthused by Rachel as shadow chancellor,” he says. “She brings a combination of qualities that adds an enormous amount to Labour’s top team.

“We’ve got in this position now an experienced former Bank of England economist who understands the issues really deeply, but also... and I’ve seen how different politicians operate, Rachel is a great team leader who has... injected the whole thing with a really collegiate, positive, energetic spirit.”

There is a clear sense that, by bringing together a team with more diverse backgrounds, Reeves hopes to untangle the dilemma which faces parties of all stripes: namely, how do you formulate policy on macro topics like growth, inflation and interest rates, while relating that to the everyday lives of ordinary families?

For Oppong-Asare, the challenge is resolved by ensuring voices from across the country are heard by those making economic decisions. Pointing to the government’s lockdown rules, she says her experience in her constituency during the pandemic showed that a lack of diverse voices in government resulted in many Black, Asian, minority ethnic and women-led businesses falling through the cracks.

And despite the diversity that exists within the current Cabinet, Oppong-Asare suggests that without a conscious effort to maintain a constant dialogue with those communities, their concerns are still being lost as policy moves through the machinery of government.

“I feel very strongly that if the government had better representation of individuals who understood those sectors, we wouldn’t have had the unequal policy coming out,” she says. “You see that if you don’t have people from diverse backgrounds bringing things to the table, certain groups are going to be left behind when it comes to the government making decisions.”

Whether it is the impact of the current economic pressures, the change in strategy among Labour’s top team, or a mixture of both, the party is now edging ahead of the Conservatives in some polls on who would offer better stewardship of the country’s finances.

It is uncharted territory for the party, at least in recent years, but the team is resolute that its approach is the right one, even if it does attract accusations of being too cautious.

“We behave like we’re in government. The team is run like we are a government department making policies, even though we’re not actually legislating,” Siddiq says.

“I’ve been in other teams where you’re very clearly in opposition so you behave like that. This feels like we are government ministers in a way, because of what is expected of us. If you did the analysis of other shadow cabinet teams, without sounding too critical, I don’t think that would be the case in every single team.”

While team members clearly view themselves as a government-in-waiting, they still face many unknown hurdles before they get to test their approach at the ballot box, and it’s easy to forget that a global pandemic, a war in Europe and a cost of living crisis, have already rocked the UK in the few short years since the last election. Even Starmer’s own political future looks shakier than it did a few weeks ago.

But if Reeves has her eyes on higher office, she does well to disguise it. Instead, she insists the pair share a joint political vision that can lead them out of opposition and that, unlike so many political pairings before, it is strong enough to withstand the friction that comes from occupying Downing Street.

“We know the next election is going to be about the economy. And that’s why we’ve been doing this sort of double act these last few months in calling for the government to tackle the cost of living crisis but also, after more than a decade of faltering growth, to actually develop a plan,” Reeves says.

“Keir and I have a very good relationship and he says to me that our teams work so closely together he can’t remember sometimes who is supposed to be in my team, and who is in his, because it’s a real shared endeavor, a partnership approach.

“We need that partnership, both to win, but also to be successful in government.”

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