Reeves’s growth plans ‘exactly what economy needs’ say UK business groups – as it happened

Chancellor Rachel Reeves. Photograph: WPA/Getty Images

5.01pm GMT

Afternoon summary

• Rachel Reeves has confirmed the government will throw its weight behind a third runway at Heathrow, in an upbeat speech setting out her plans for kickstarting the stalling UK economy. In an analysis, Heather Stewart, the Guardian’s economics editor, assesses whether or not Reeves’ plan will work.

• Rachel Reeves has been accused by environmental experts of putting the climate at risk with high carbon projects including the expansion of Heathrow airport.

• Peter Mandelson has said his past remarks that Donald Trump was “a danger to the world” were “ill-judged and wrong” before his expected confirmation as ambassador to the US.

• Keir Starmer has claimed the Conservatives are the “coalition of blockers” as he defended his government’s growth proposals and employment law reforms. (See 2.16pm.)

• The head of the NHS in England is under fresh fire after a second influential group of MPs in barely 12 hours accused her of lacking the “drive and dynamism” to radically reform the service.

• Two major Conservative donors, Bassim Haidar and Mohamed Amersi, paid £25,000 each to attend a Reform fundraising dinner on Tuesday night, and sources say the party brought in pledges of more than £1m beforehand from businesspeople.

4.52pm GMT

What thinktanks are saying about Rachel Reeves' speech

And here are comments on the Rachel Reeves speech from thinktanks.

From an analysis by Theo Bertram, a former Labour adviser who now runs the Social Market Foundation (centrist)

Today marks a decisive shift in the politics and policy of this government. Both the strategy and substance are changing, and Labour are taking risks with both.

Labour has always talked about growth as a key mission but until now the emphasis was squarely on laying the blame on the previous administration. It went too far in that regard, giving the impression not just of being slowed but trapped by the Conservative economic legacy. Today, with just one brief reference to ‘the nightmarish inheritance’ in Keir Starmer’s article in The Times, the Prime Minister is instead bullish …

Both Starmer and Reeves talked about their strategy in the terms of economic theory (something that Starmer rarely does). He describes ‘a supply-side expansion of the nation’s productive power’. Removing regulatory barriers, cutting red tape, and supply-side expansion: the remarkable thing about these goals is that they are the same goals of recent Conservative governments, under both Rishi Sunak and Liz Truss. The big difference this time is that Labour is not promising tax cuts.

This may be viewed as a weakness – what is supply side reform if businesses are hit by a growing fiscal burden? But Labour sees this as a strength. In its view, tax cuts only offer a short term “sugar high”. Starmer and Reeves have chosen the harder path, grinding away at regulatory barriers to growth. But having staked everything on that approach, including the economy and their political careers, there is reason for optimism that they might actually make progress this time.

From an analysis by Greg Thwaites at the Resolution Foundation (centrist/left-leaning)

The chancellor’s speech today provided some more detail on how the government plans to boost growth. One can begin to discern the outlines of a growth strategy taking shape, and it is increasingly clear what this government wants to be known for: building things.

Life is never really this simple, but if Margaret Thatcher’s defining economic legacy was to privatise, Tony Blair’s was to invest in human capital, and David Cameron’s was to rein in public spending, then Reeves’ evolving approach is about construction—of roads, railways, reservoirs, homes, and thereby, she hopes, a stronger economy. Her growth strategy is becoming more concrete in both senses of the word.

From Eleanor Shearer, senior research fellow at Common Wealth (leftwing, greenish)

Labour still lacks a convincing account of what is wrong with our economy. Nothing that the chancellor said today on the need for “sound public finances” or “cutting red tape” would have been out of place in a speech from any politician of the last 15 years.

Rather than getting to the heart of the matter — that we have an economy structured to put profit over people and planet — the Government has instead borrowed their big ideas from private developers, asset managers and industry lobbyists and announced a smattering of projects mainly across the South East, with the hope that benefits will trickle down to everyone else.

From an analysis by Alex Chapman, senior economist at the New Economics Foundation (leftwing)

Rachel Reeves’ commitment to Heathrow expansion relies on flawed economics. By the government’s own metrics, airport expansion won’t deliver serious economic growth. Business air travel peaked two decades ago and a new runway won’t change that.

​The primary impact will be to encourage UK households to spend their cash overseas, depriving high streets and domestic destinations of spending. The UK’s domestic tourism industry is already suffering. Growth in incoming tourists has been outnumbered 3:1 by Brits leaving for trips abroad. More outbound flights will deprive British regions of vital spending and is an ​‘anti-levelling up’ move.

There are some comments from more rightwing thinktanks at 2.47pm.