(Photo by Phil Noble – WPA Pool/Getty Images)
The past few days must have been bewildering for Rachel Reeves. Only two years ago at the Labour Party conference she played a video, on the screen above the stage, of a suave Canadian endorsing her for chancellor. She seemed excited – almost giddy – at the idea that this man, who she clearly revered, would support her move to take control and revive the British economy. Back then, Mark Carney was seen as the charismatic former governor of Britain and Canada’s central banks who was close to George Osborne. He was the technocrats’ technocrat.
The pride with which Reeves announced the endorsement was a sign that she thought signalling to Britain’s financial cl…
(Photo by Phil Noble – WPA Pool/Getty Images)
The past few days must have been bewildering for Rachel Reeves. Only two years ago at the Labour Party conference she played a video, on the screen above the stage, of a suave Canadian endorsing her for chancellor. She seemed excited – almost giddy – at the idea that this man, who she clearly revered, would support her move to take control and revive the British economy. Back then, Mark Carney was seen as the charismatic former governor of Britain and Canada’s central banks who was close to George Osborne. He was the technocrats’ technocrat.
The pride with which Reeves announced the endorsement was a sign that she thought signalling to Britain’s financial class that she would maintain the status quo was more important than proposing a radical departure from the Osbornite consensus. Carney’s support was the perfect way to illustrate that Labour did not pose a threat to the economic establishment. And it seemed sincere. Reeves was formed in institutions: the British Embassy in Washington, the Bank of England, banks such as HBOS. She believes in the credibility that these institutions bestow on certain ideas and leaders. And there is no more “institution man” than Mark Carney.
It must have been hard, then, to hear the man she so respected declare that this institutional order no longer exists. In his speech at Davos this week, Mark Carney quoted a story from Vaclav Havel about how Soviet power was partly upheld by the individual shopkeepers who kept signs in their window which read “Workers of the World Unite!” – even though they didn’t believe it themselves. Carney declared the rules-based order over. He recognised that middle powers such as Canada can no longer rest on the assumption they won’t be pushed around by the big powers. He told everyone to take down their signs.
Sat beside Trump’s trade chief, Howard Lutnick, for a Davos panel on 20 January, Reeves watched on as he put forth the case that “globalisation has failed” the West and the United States. The Chancellor herself has said something very similar in the past. And she was quick to recognise that Britain’s and America’s national interests will not always be the same. But her tone could not have been more different from Carney’s. She was anxious for Lutnick to reaffirm that Britain was the US’s closest friend. “I hope and believe as your strongest ally,” she said at one point, that Lutnick would remember he needs the Europeans to secure things such as critical mineral.
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Reeves later said that Britain will not be “buffeted around”. Unfortunately, that is not up to her, for the reasons Carney set out. Her old idol has hung a closure sign on a list of institutions that Reeves has long revered. You would imagine that he included the special relationship on that list. But Reeves doesn’t want to take down the sign from the window.
[Further reading: Mark Carney’s lessons for Keir Starmer]
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