Rachel Reeves has told MPs the government needs to go “further and faster” to increase economic growth, as Downing Street sought to reassure people concerned about the environment that net zero and increasing output go “hand in hand”.
The chancellor has unnerved some Labour MPs and green campaigners with her increasingly punchy rhetoric about economic growth being a priority over preventing climate change, as she strives to improve the UK’s anaemic forecasts and drive up living standards.
In a speech on Wednesday, she is expected to outline her plans to radically alter planning rules and accelerate building and infrastructure projects, as well as backing airport expansion despite fears it may put the UK in breach of its legally binding carbon budget.
At a meeting of the Parliamentary Labour Party on Thursday, Reeves made a direct pitch to MPs, telling them there would be “no easy routes out” to growing the economy and the government must “start saying yes” to changes that could create wealth across the country.
“Have we done enough? No. We must go further and faster because the cost of living pressures are still very real for working people across Britain and the only way we can turn this around is through economic growth,” she told them.
“Will that growth come easy? No. There are no easy routes out. There are always reasons for government to say no. Over the past six months as chancellor, my experience is that government has become used to saying no. That must change. We must start saying yes.”
She added: “Now is the chance for us to shout about that potential and the brighter future ahead. Because no one else is going to do it.”
However, No 10 sought to reassure those who may be concerned about the environmental implications of the relentless drive for growth, insisting that it went “hand in hand” with the net zero agenda and the green investment behind it.
“We’ve talked previously about the jobs that green industries of the future will bring, the fact that, by backing GB energy and the National Wealth Fund, we’ll be crowding in billions of pounds of private sector investment. These agendas absolutely go hand in hand,” Keir Starmer’s spokesperson said.
Ed Miliband, the climate change secretary who was forced to deny that he was resigning over the decision to back a third runway at Heathrow, told peers that the government saw “no contradiction” between net zero and growth.
“We believe they go absolutely hand in hand, because net zero is a major contributor to growth, can be, and the climate crisis is the biggest long-term economic threat our country faces,” he added.
However, backbench Labour MPs have criticised the emphasis Reeves has placed on the economy, potentially at the expense of the environment.
Barry Gardiner, the shadow climate secretary under Jeremy Corbyn, told the BBC: “Rachel is wrong to pit decarbonising the economy against economic growth. Decarbonisation is the growth of the future. The world is transitioning to net zero and I want our businesses to be leading the way”