Rachel Reeves unveils Labour's Joe Biden-inspired economic strategy
- Published
Rachel Reeves tours the New York Stock Exchange on a three day visit to the US
Labour is seeking inspiration from Joe Biden's plan to tackle inflation and create jobs, shadow Chancellor Rachel Reeves has said.
The US president's vast package of subsidies and tax breaks for industry has been dubbed "Bidenomics".
Unveiling her version in a speech during a US trip, Ms Reeves pledged to rebuild Britain's "industrial foundations" if Labour wins power.
She claimed this will insulate the country against "global shocks".
Ms Reeves has dubbed her strategy "securonomics", which she said would mean a bigger role for government in running the free market economy and greater cooperation with like-minded international allies.
As chancellor, she said she would aim to create high quality jobs in British businesses, and reduce the country's dependence on foreign workers and goods.
"Globalisation as we know it is dead," she told an audience of economists in Washington DC.
"We must care about where things are made and who owns them. We must foster new partnerships between the free market and an active state and between countries across the world who share values and interests."
Ms Reeves spoke of her admiration for Joe Biden's $430bn (£350bn) Inflation Reduction Act (IRA), which seeks to tame rising prices by cutting the deficit and investing in domestic energy production while promoting clean energy.
'Special relationship'
She stressed that she did not want to make Britain "a version of America, Australia, Germany or France" as that "would not work".
But she did propose a "new special relationship" with the US, focusing "on the clean energy economy, where both Britain and America have signature strengths".
Labour says this would involve regular dialogue with the Biden administration and US trade unions, to learn how to create more high quality jobs and tackle geographical inequality.
The party's flagship economic policy is a £28bn a year "green prosperity plan", which aims to create jobs in new green industries and set up a publicly-owned renewable energy company.
The shadow chancellor has promised to cut Britain's debt burden by binding a future Labour government to strict borrowing limits, leading some to suggest it will have to scale back its green prosperity plans.
In her speech, Ms Reeves said her "securonomics" strategy would be "built on the rock of financial stability and economic security".
'Dangerous'
In a Q&A afterwards, she conceded that Labour would not be able to do everything it wanted to do because money would be tight, but she insisted the party's manifesto policies were all fully-costed.
She also insisted that Britain would not be turning its back on global trade under Labour, as some critics of Mr Biden have accused him of doing.
"It is not a retreat from trade. It is about doing things differently in the interests of economic security and also security for working people," she said.
Ms Reeves, who also met US Treasury Secretary Janet Yellen on her trip, sets out her strategy in detail in a pamphlet, A New Business Model for Britain, external.
In January, Energy Secretary Grant Shapps warned that Mr Biden's policies could herald a "dangerous" slide into protectionism.
And Business Secretary Kemi Badenoch has written to her US counterpart complaining the IRA package would "harm multiple economies across the world".
The EU, Canada and South Korea have all argued it breaches world trade rules.