Shadow Chancellor Rachel Reeves said she would encourage the private sector to contribute to bringing supply chains back to the UK instead
Labour has abandoned plans to nationalise key industries if it wins the next election, the shadow Chancellor has confirmed.
Rachel Reeves suggested that the railways were the only sector in line to be taken over by the state even as she pushes for action to bring industrial supply chains back to the UK.
Nationalising other businesses such as energy firms, water companies and the Royal Mail is no longer on the agenda, by contrast.
Before the last general election Labour had proposed nationalising all those industries, and Sir Keir Starmer said during his own leadership campaign that they should be taken into “common ownership”.
Speaking at a manufacturing conference hosted by industry group Make UK, Ms Reeves said Labour’s goal was “to prize economic resilience alongside openness” by encouraging firms to set up British supply chains rather than using suppliers from overseas which may prove unreliable in a crisis.
Asked by i whether she would press ahead with nationalisation to further this promise, the shadow Chancellor replied: “It’s not about nationalising industries. I’ve been very clear that every pound of taxpayers’ money spent, we will explain where that money will come from.
“I think with trains it’s a different point, because as those contracts come up for renewal I think the Government have got every right to bring those into national control given the mess that some of our train operators have made of our transport infrastructure. But we would not be looking to nationalise a whole swathe of industries.”
Ms Reeves urged Jeremy Hunt not to listen to Conservative backbenchers who are urging him to cut corporation tax, insisting that a better approach would be to introduce targeted tax breaks for companies which agree to reinvest their profits.
She said: “I would prioritise incentives to support investment, because if businesses make profits – I want business to make profits – it’s up to them what to with those profits, to use those profits for share buybacks or dividends, or to use that money to invest. It’s the investment that I want to encourage and incentivise, because it’s investment that results in productivity gains and economic growth, and that is what we desperately need in Britain.
“I would resist, if I were the chancellor, the siren calls of some in his party to cut corporation tax, but instead if there is money available to use that to have support and incentives for investment.” She also called for a review of the business rates regime to lower taxes on “bricks and mortar businesses” and shift the burden towards firms which operate online.
And the shadow Chancellor insisted that it would be possible to make improvements to the UK’s trade deal with the EU, saying: “We would work with our neighbours and our allies to make practical changes, not going back into the single market or the customs union, but changes we can make at pace to improve exports and get investment back into Britain.”