Rachel Reeves’s Liverpool conference speech was slick, confident and deeply revealing. Her government, she told us, had chosen “investment” and “renewal” over “decline”. No more drift. No more excuses. The chancellor cast herself as the hard-headed realist, taking unpopular decisions now to rebuild Britain’s economic strength tomorrow.

Yet strip away the lofty rhetoric and consider her evidence. The policies Reeves celebrates reflect instincts almost any Labour chancellor would follow. Far from a novel, full-spectrum growth agenda, she’s really selling old Labour statism — albeit with a touch more fiscal restraint and slightly less regulation than her backbenchers want.

Of course, no conference speech will ever be economically rigorous. Still, listening to Reeves you’d think bailing out flailing firms, shuffling transport funds around and subsidising uneconomic energy production were obvious routes to prosperity.

Yes, Britain’s chronic underinvestment — public and private — has restrained growth. But it doesn’t logically follow that all government capital spending boosts growth, regardless of cost or sector. Yet that is precisely what Reeves and the prime minister imply: that any government “investment” is inherently beneficial.

A truly pro-growth agenda expands markets, cuts costs and greases the wheels of efficiency by enhancing mobility. Reeves instead reminded us that she is “the chancellor that’s increased the minimum wage” as her government has delivered “the biggest upgrade of workers’ rights in decades”. These help some workers at others’ expense, sure, but don’t boost growth.

Increasing hiring costs and employment risks chokes small‑firm expansion and wipes out entry‑level jobs. The prime minister’s idea that this will drive a productivity boom by forcing firms to invest more is flatly contradicted by Britain’s weak productivity growth as the minimum wage soared.

No, what we see here is motivated reasoning: that what’s good for beneficiary workers must also be pro-growth. Such thinking runs through Labour’s industrial interventions too. When Harland & Wolff teetered “we chose to step in,” Reeves said, protecting British shipbuilding. She also trumpeted a £1.5 billion loan guarantee to Jaguar Land Rover and pledged support for “British-forged steel”. All examples, apparently, of the “strategic state” supporting “jobs and growth”.

But what serious economist believes rescuing struggling firms guarantees growth? Bailouts reward lobbying, not innovation. They soften budget constraints and embed inefficiency. Perhaps preserving shipbuilding has national security value. Fine. But let’s be honest: that’s a trade-off with growth, not a complement to it.

Labour, though, denies any such tension. Sir Keir Starmer claimed that higher defence spending is “undeniably good for growth”. Economists might allow that it has the occasional spillover benefit. But few would argue that shifting more resources through government into defence emboldens prosperity.

Even in policy areas that can genuinely support growth — like infrastructure — Labour confuses tools with outcomes. Yes, better transport improves connectivity and agglomeration. Yet the highest-return projects typically work with market trends to ease urban congestion, rather than being prestige schemes promising regional regeneration.

Likewise, subsidising expensive nuclear and renewables may improve energy security or decarbonisation. But investing in otherwise uneconomic projects is likely to raise energy costs and drag on users’ productive potential for the foreseeable future.

I don’t want to bash Reeves too much for implying otherwise. She is at least trying to pull Labour away from the fantasy that borrowing more still is the path to growth. For a party whose “prince across the water” still decries being “in hock to the bond markets”, that’s no small fight.

But pro-growth policy is hard. It requires taking on vested interests to grind out higher efficiency or innovation through contentious tax reform, controversial planning changes, regulatory overhauls and public service reform. Labour is doing bits along these lines. Yet after her speech, I think Reeves genuinely believes public sector pay rises, new libraries and capped bus fares produce growth too.

The more she talked, the clearer it seemed that Labour can’t distinguish between policy it finds morally satisfying and what might actually help growth.