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(Bloomberg) — Soon after her UK budget on Oct. 30, as economic sentiment plummeted and businesses protested higher taxes, an under-pressure Rachel Reeves had one key message for Treasury officials: “We need to go further and faster on growth.”

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The chancellor of the exchequer will put meat to the bones of that ambition when she unveils her plan to breathe life into Britain’s stagnant economy, with a speech on Wednesday that’s set to outline a major push on infrastructure including controversial airport expansion projects. It marks a fightback moment aimed at restoring Reeves’ reputation among those doubting her decisions six months into power.

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After market turbulence this month exposed the fragility of her spending plans, the chancellor is gambling on an all-out drive to stimulate the economy, even if it pushes the governing Labour Party’s reputation for environmental stewardship into the background.

“Reeves will take growth over reducing carbon emissions,” David Oxley, chief climate and commodities economist at Capital Economics, said in an interview. “That’s a clear message she’s been wanting to send.”

For many investors and firms, the announcement of construction projects, a deregulation drive and a crackdown on legal challenges to major infrastructure plans comes half a year too late. 

While allies of Reeves and Prime Minister Keir Starmer privately accept they could’ve sent stronger signals in recent months, they insist they had no choice but to raise taxes to secure the public finances. They requested anonymity while speaking to Bloomberg about internal government discussions.

Amid stagflation fears and a flood of bad economic data, Britain’s finance minister has told the Treasury it needs to shift its mindset from a focus on tax and spend to helping the economy grow. From now on the message from Downing Street will be “growth, growth, growth,” one official said. There is no more time to waste, another added. 

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Aides say this is not a panicked response to economic warning signs flashing red, instead arguing the recent market turmoil — which at one point raised questions about Reeves’ future — had bolstered her argument with Labour colleagues that the government has to go all-out for growth or it will end in failure.

Labour’s internal debates spilled out into the public realm this week, after Bloomberg revealed the chancellor is poised to back expansion at three London airports, including a controversial third runway at Heathrow. At least four cabinet members are opposed to the plan on environmental grounds, according to people familiar with their thinking. One said they would want to see an updated environmental impact assessment before considering changing their mind.

Downing Street is frustrated by that opposition, which is centered on doubts aired previously by Energy Secretary Ed Miliband and London mayor Sadiq Khan over whether the UK can meet its climate commitments while boosting aviation. The last time Parliament voted on Heathrow expansion, in 2018, eight members of the current cabinet opposed it, including Starmer and Miliband. Transport Secretary Heidi Alexander was transport adviser at the time to Khan, who contested the plans in the courts. 

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Growth is and always has been the core objective and the main policy in Labour’s manifesto, one aide said, expressing surprise some in their party didn’t seem to get that. A second added that while Starmer and Reeves would ensure they delivered on their green agenda, growth is the top priority. They said Miliband would be a big beneficiary of planning reforms enabling the building of more wind farms and nuclear plants.

Reeves hit back at her opponents in an interview in Davos on Wednesday, warning “the answer can’t always be no” on infrastructure works. Starmer told Bloomberg on Thursday that he wanted to give a “clear signal for anyone looking to do business in the UK. We are on your side, creating the conditions for you to invest.”

In theory, there’s no reason why economic activity can’t continue to grow while the UK also cuts carbon emissions, according to Oxley at Capital Economics. But he cautioned that aviation is a sector that is emissions-intensive and difficult to decarbonize. 

Some of the chancellor’s more bullish supporters argued that upsetting climate campaigners may be necessary in the pursuit of a stronger economy and a second Labour term. One said that with Donald Trump in the White House and the populist right on the rise in Europe, Downing Street is alive to the fact the world is heading in a different direction. They warned that voters will not reward Labour for being first on the green transition if it hurts Britain’s economic competitiveness, and advocated rolling back some green targets, as former Conservative premier Rishi Sunak had done. They also suggested reconsidering a ban on new UK oil and gas licenses, while conceding that may be a step too far.

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Miliband on Thursday dismissed the idea he could resign over Heathrow, though some Labour lawmakers sympathetic to his position warned this is not the first time he’s been at odds with Reeves, who in opposition jettisoned his flagship commitment to spend £28 billion a year on the green transition. They also questioned whether Starmer was being bounced by Reeves, a suggestion dismissed by an ally of the premier, who said he was in complete alignment with her.

Reeves has taken confidence that the recent flurry of policy announcements and her punchy appearance at Davos have worked in her favor after a slew of negative headlines. An ally said a key aim in the weeks ahead was to create more of a buzz about what Britain will do to unlock growth, sending signals to investors that the government is serious about reform. 

Wednesday’s speech will recap previously trailed policies, make a series of new announcements backing infrastructure projects and potentially new freeports and investment zones, and end with a message that there is more to come.

Speaking to Bloomberg in Davos last week, Barclays CEO C.S. Venkatakrishnan said he was “very confident in the UK,” praising Starmer and Reeves for showing “the right signs about supporting business.” They had a plan, he said, but it was one “they need to implement and they need to implement quickly.” 

Next week, Reeves will try to show she is moving fast enough.

—With assistance from Joe Mayes and William Mathis.

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