The Observer view: In her pursuit of growth, Rachel Reeves must go green and go local | Observer editorial

IT had a rough start to the year Rachel Reeves. The Chancellor found herself in the spotlight with debt interest costs, while consumer and business confidence fell. Manufacturers, hampered by high energy costs and Britain’s consequences from the EU, are struggling, while Donald Trump’s threats against those who dare to trade with the US are worrying.

It’s not a completely new situation. Since the Budget, Reeves has been criticized for the combination of tax rises and higher borrowing needed for what represents only a modest rise in government spending over the next two years. Businesses are angry because so much of the tax burden has fallen on them. Consumers, unsure of the country’s prospects, hunkered down. If they are a big spender, it is on a foreign vacation to escape the gloomy atmosphere at home.

In response, Reeves has delivered an almost daily round of initiatives. Many of them seem designed to please business leaders and convince them that higher taxes are a small price to pay for higher growth. Central to the discussion is where the growth will come from and what kind of growth it will be.

Reeves was right to focus her budget on building a green growth platform by encouraging investment in digital technology and electricity generation and storage. Conservatives were confused about the speed of electric vehicle adoption and what should be done to insulate homes. In both cases, the situation began to become clearer and government support became more consistent and progressive.

However, Reeves undermined the seriousness with which the government was pursuing zero by canceling rail upgrade projects, saying last week at the World Economic Forum in Davos Airport expansion In the Southeast it was high on the agenda. On Wednesday, there should be some clarity about how these moving parts fit together when the Chancellor talks about what she means by growth in her first speech of the year. Let’s hope six months inside the Treasury shows that pulling the tired old levers won’t spark the economy back to life.

There should be some progress once Reeves and Keir Starmer implement their plan to force Whitehall departments – and New Labor institutions like National Wealth Fund -Engage locally rather than issue top-down errors on how to target investment. This type of local participation is new in England and should be imposed, at least initially. Civilian employees generally resist cooperation and need more than gentle encouragement to participate meaningfully.

Boards also need direction. They have tended to follow a three-pronged program extending back decades. First, activate the high street to attract shoppers. Then give the university, if there is one, the freedom to build student accommodation and academic facilities where it likes. On the side, sign up to real estate developers whenever possible to build homes and commercial buildings that are not known for requirements for additional amenities or green spaces.

Andy Burnham, Mayor of Manchester Combined Authority, He said last week He could add million pounds a year to its economy With the redevelopment of six “Nomu” sites. One of these is the area around Old Trafford, if Manchester United’s board rebuilds or renovates the football ground. If it can avoid turning it into a professional ghetto, which is what developers always want, it will make Manchester a more attractive place for people to live and businesses to thrive.

If brighter, more attractive “livable” cities are at the heart of good growth, based on greener infrastructure – renewable energy, electric transport, well-insulated homes and green spaces – coupled with low levels of crime and good schools, the North can, the North can Who, as he put it Mark E. Smithrises again.

The UK needs the north, west and Midlands to start enjoying the benefits of growth – not just London and the south-east. Only then can Reeves begin to put the bad news behind her.

Do you have an opinion on the issues raised in this article? If you would like to submit a letter of up to 250 words for publication, email it to us observer.letters@observer.co.uk