Rachel Reeves used her speech at the Labor Party conference to refine the dividing lines for the upcoming election set by Kwasi Kwarteng on Friday.
On the government side, there is the chancellor’s vision of tax cuts, downsizing and deregulation, where the state gets out of the way of business.
The shadow chancellor alternative, presented on Monday, featured a greater role for the state, albeit falling short of the large-scale nationalization favored by some of her predecessors.
Part of this wider role is investing in public services, so the government’s abolition of the top rate of income tax has been scrapped and a £1.6bn investment has been invested in a huge expansion of NHS staff to help people with long-term illness recover and get back to work.
But Ms Reeves’ speech was not focused on public services but on business, laying out plans to work alongside private businesses and create a stable environment to spur investment and growth.
This included plans for a national wealth fund to invest in new industries and a national economic council to put industry and labor leaders “at the heart of economic decision-making”.
In doing so, Ms Reeves bet on the fact that businesses would be more concerned with stability and the economic mood music chosen by the government than with sweeping tax cuts and promises of deregulation.
Combined with the release of Labour’s industrial strategy on Monday, the shadow chancellor’s pitch is that her party is not business-unfriendly and that she is herself a pair of safe hands who can be trusted to help economy and public finance.
Ms Reeves has continued this theme since her appointment as shadow chancellor in May 2021, mimicking the 1990s ‘prawn cocktail offensive’ which saw Labor successfully wooing prominent business figures.
In the meantime, she made clear how Labor would seek to attack the government’s economic policy.
She sought to portray Friday’s mini budget as only benefiting the wealthy, focusing on the scrapping of the 45p income tax rate and the decision to lift the cap on bankers’ bonuses paid by the loan.
Repeating a line of attack already deployed by Labor frontbenchers at fringe events around the conference centre, she said: ‘Why should my constituents in Leeds West pay for tax cuts for those who are already the richer?”
Ms Reeves and Mr Kwarteng have claimed to be pro-growth and pro-business, but the choice offered to the public is between the small Chancellor state and the medium-sized Shadow Chancellor state.