![\"Rachel](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2026\/03\/6806459.jpg\" "\\"Rachel")
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Rachel Reeves attacked the legacy of Brexit in her Mais lecture (Image: PA)<\/p>\n
The desperation which has gripped Sir Keir Starmer\u2019s Government can no longer be disguised. Rachel Reeves<\/a> delivered a speech to the City of London intended to reassure her party, our country and world markets that she has a plan to rescue Britain from no-growth quagmire. Her solution is to put the country into reverse.<\/p>\n In the absence of new ideas, the Government is on a full throttle mission to re-align with the European Union<\/a>. It blames Britain\u2019s woes not on its brutal tax raids but on Brexit<\/a>. Ms Reeves loathes Britons\u2019 decision to quit the bloc, declaring in her landmark Mais lecture: \u201cBrexit did deep damage. Recent independent studies indicate its GDP impact could be as much as 8%.\u201d<\/p>\n Labour lacks the popular mandate and political courage to reverse Brexit. It knows disaster would await if Sir Keir and Ms Reeves squared off against Nigel Farage <\/a>and Kemi Badenoch in a new Brexit referendum, so instead the strategy is accept EU rules in return for greater access to markets in a frantic attempt to ignite growth.<\/p>\n Read more:<\/strong> Rachel Reeves ‘in denial’ as she fights to save her job with landmark speech <\/a><\/p>\n Rather than accepting a common rulebook in a few isolated areas, she believes there is sweeping potential in agreeing wholeheartedly to Brussels red tape.<\/p>\n \u201cNow,\u201d she told her audience at Bayes Business School, \u201cthere are areas in which regulatory autonomy may be necessary for sectors with unique characteristics or strategic importance for the UK. But that should be the exception, not the norm.\u201d<\/p>\n This will horrify Brexiteers, for whom restoring the freedom of the nation to write its own rules is both an historic opportunity to gain a competitive edge over rivals, and a core tenet of national sovereignty to be guarded for future generations. Just in case anyone in the auditorium was in any doubt about the significance of her announcement, the Chancellor made it clear she was ready for a fight.<\/p>\n \u201cThis will require us to make and win the political arguments,\u201d she said. \u201cBelieve me, I\u2019m up for it. Because I believe absolutely that closer alignment is the right course for our country; a course chosen as a sovereign nation, a course chosen in our national interest.\u201d<\/p>\n Rather than try to steal a march on the EU in the face of ferocious competition from emerging economic powerhouses, she let the world known that Britain on her watch is throwing in its lot with the bloc.<\/p>\n \u201cIf we are to enhance the competitiveness of European industry in the face of global competition, we must work together \u2013 remove trade barriers between us, and avoid collateral harm between trusted partners,\u201d she said.<\/p>\n She insists she is not turning \u201cback the clock\u201d but looking \u201cforward to a new and stable future relationship\u201d. But her speech will have left everyone who is disappointed that Britain has not made greater use of Brexit opportunities with a sinking feeling. Her vision for Britain is certainly not making the UK Europe\u2019s answer to Singapore.<\/p>\n The other big idea is to double the funding for Oxford and Cambridge\u2019s development corporations in an attempt to create Europe\u2019s answer to Silicon Valley.<\/p>\n No one would disagree that Britain should make the most of its world-class university cities. But throwing cash at wealthy regions of the United Kingdom is hardly levelling-up. And she announced her plan while also attacking the \u201cfiction\u201d that prosperity can be based on the success of just a few places – an apparent contradiction.<\/p>\n One element of the Chancellor’s proposals could have major consequences. She wants regional leaders to have \u201ccontrol over a share of some national taxes”, with the \u201cproceeds of growth benefiting the places that generated that growth\u201d.<\/p>\n Ms Reeves, MP for Leeds West and Pudsey, knows that Britain is hideously reliant on the wealth of London and the southeast. And she wants the country to \u201cback Manchester and Liverpool and Leeds to match and overtake Stuttgart, Turin, and Lyon\u201d \u2013 but right now her Treasury is straining to balance the books.<\/p>\n America\u2019s prosperity has been powered by opening up new home-grown energy sources and the remarkable economic growth of cities such as Austin, Texas. For all her good intentions, Ms Reeves\u2019s speech did not read like a recipe<\/a> for a similar renaissance in Britain.<\/p>\n For months, financial commentators have fretted about the risk of an Artificial Intelligence \u201cbubble\u201d bursting, but Ms Reeves\u2019s Treasury plans to invest \u00a3500million backing British AI companies. Those with long memories will shudder at the thought of Whitehall \u201cpicking winners\u201d, as it used to be called.<\/p>\n But Ms Reeves loves the idea of an interventionist Government and is a rebel against the \u201cdoctrine of the passive state\u201d. If her big bets deliver big wins the whole country will prosper. If the gamble fails, however, then the Government will have another fiasco on its hands.<\/p>\n The war in Iran compounds Reeves’s difficulties after the economy failed to grow in January (Image: Getty)<\/p>\n She won warm applause from the academics and business figures in a warm room in central London, but on the frontline of the economy many businesses are in a battle for sheer survival.<\/p>\n The reality is that one of the greatest threats to multitudes of companies in the UK \u2013 regardless of whether it is a steelworks, a fish and chip shop or an AI data centre \u2013 is Britain\u2019s punishingly high energy costs, and these have the potential to get much worse if the crisis in Iran escalates.<\/p>\n Ms Reeves admitted this is among factors likely to put \u201cupward pressure on inflation in the months to come\u201d. A surge in household bills will have profound consequences for local shops and services, unless the Government takes radical action to shield Britons from a new cost of living<\/a> crisis.<\/p>\n![\"UK](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2026\/03\/london-england-british-chancellor-of-the-exchequer-rachel-reeves-participates-in-a-g7-finance-680605.jpeg\" "\\"UK")
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