Steve Reed: “Reform is a symptom of broken trust”

Steve Reed came to parliament later than planned. In 2008, as the leader of Lambeth Council, he was the favourite to win the Labour nomination in Streatham but was defeated by one Chuka Umunna (who ran as a Compass-backed “soft left” candidate). Their paths since illustrate the vagaries of political life. Umunna, who left Labour to form the Independent Group and later joined the Liberal Democrats, is no longer in politics at all (he now leads JP Morgan’s sustainable finance arm). Reed, who stayed loyal to his party throughout the wilderness years, is Environment Secretary.

The portraits outside his departmental office at Marsham Street are a reminder of Labour’s long exile from power. Ten Conservative secretaries of state, including Michael Gove and Liz Truss, preceded Reed; it was Hilary Benn, now Northern Ireland Secretary, who last held the post under Labour.

Reed’s ambition is to turn the Department for Environment, Food and Rural Affairs (Defra) – often regarded as a Whitehall backwater – into a “department for growth”. He commissioned a review of environmental regulation by Dan Corry, former leader of Gordon Brown’s No 10 Policy Unit, which found 3,000 examples of “green tape” entangling construction projects.

“Having Defra as a blocker of growth is no longer feasible,” Reed said when we met, citing “the scandal of the bat tunnel” – a £100m shield to protect bats in ancient woodland in Buckinghamshire. This model, he argues, has served neither growth nor nature.

Rather than taking a “bat-by-bat” approach, Reed will require developers to pay into a new Nature Restoration Fund. “That is a better way to protect nature, because it’s when you join up restoration that you have the biggest impact on restoring species and restoring nature… That is a completely different approach from the Tories who were frozen on both the economy and on nature.” Reed also pointed to the planned £104bn private investment in water and sewage infrastructure from 2025 to 2030. This, he promised, will end “the scandal of record levels of sewage going into our rivers, lakes and seas” and boost growth by removing obstacles to housebuilding.

England, remarkably, is the only country in the world with a fully privatised water and sewage system. The revival of public ownership under Labour – the railways, GB Energy, steel (almost) – has prompted new demands to “take back water”, as one campaign sticker near the Defra offices put it. But Reed insists that this is neither feasible nor desirable. “The franchises for rail are seven years long and then they come to an end, so [renationalisation] is possible without having to buy them back. If you wanted to buy back the water companies, it would cost in excess of £100bn – and that’s money that would have to be taken away from schools and the health service.”

The real issue, he maintains, is not ownership but regulation. “Scotland has a nationalised water company and they’ve got the same problems with sewage.” The new Water (Special Measures) Act 2025 gives regulators the power to bring criminal charges against water executives and to ban the payment of bonuses if environmental standards are not met.

But for now it is billpayers who are being squeezed. In April, bills increased by the highest amount since privatisation in 1989 (they are due to rise by an average of 36 per cent over the next five years). Does that concern Reed? “It concerns me and I’m furious about it, of course I am. At a time like this – at any time – this shouldn’t have happened. But the reason those bills are going up is that the Conservatives failed to ensure there was adequate maintenance of the sewage system during the 14 years that they were governing our country.”

The consolation, Reed said, is that “the money from billpayers is now ring-fenced so it can only be spent on upgrading water infrastructure, never again diverted for multimillion-pound bonuses and dividends to failing water companies. That is a huge reassurance to customers and it’s something the Conservatives could have done but refused to.”

A youthful 61, Reed is an affable but steely presence, the kind of politician who makes a good friend and a bad enemy. His commitment to Labour was forged through personal experience – the social cost of anti-gay legislation (Reed married his partner in July 2022) and the economic cost of deindustrialisation. During the 1980s Reed’s family was “shattered” by Robert Maxwell’s closure of Odhams printing factory in Watford where his father, aunt, uncle and grandparents worked. “It was like a little southern echo of the destruction of industrial communities much more common in the north of England,” he told a recent Parliamentary Press Gallery lunch.

Then, in Lambeth, Reed saw “how the hard left could be just as effective as the right in wrecking communities”. As opposition leader from 2002, he fought to dispel memories of “Red” Ted Knight, the council’s former head, who presided over a children’s care home abuse scandal. It was during this time that Reed recruited a “feisty young campaigner” named Morgan McSweeney. No 10’s chief of staff held the same role in Lambeth after defying Labour’s national unpopularity to help the party win control of the council in 2006. Reed brokered the fateful meeting between McSweeney and Keir Starmer in the summer of 2019 as Starmer planned his shadow leadership campaign. “Loyalty and gratitude are the hallmarks of politicians. And that’s the only way I can account for being rewarded with the department for sewage and angry farmers,” Reed has quipped.

A few months before the 2024 general election, Reed told the New Statesman that “farmers feel completely shafted by this government”; Labour duly won 114 rural seats. Do they not feel the same way now? “I can understand why people don’t want to pay taxes,” Reed said when I pressed him on the new £1m cap on inheritance tax relief for agricultural property (which he learned of just 24 hours before last year’s Budget). “But the real issue is that the sector is not profitable” – something Reed hopes to change.

“Farms that are liable for inheritance tax – and most will not be – would only have to pay half the rates of anyone else in other parts of the economy, and instead of making the payment immediately they get ten years, so they’ve got a much better deal [than others].”

For farmers, speculation of an imminent trade agreement with the US raises the spectre of chlorinated chicken and hormone-injected beef. But Reed insisted they have nothing to fear. “Our manifesto was clear: we’re not going to allow farmers or food producers to be undercut in future trade deals.”

It’s not just farmers who are aggrieved by Labour. Nigel Farage’s Reform has led several opinion polls and may win the Runcorn and Helsby by-election on 1 May (“I’m not going to write that one off even at this stage,” Reed told me). But rather than denouncing Farage as a Thatcherite or a Putin sympathiser – as Labour often does – Reed offered a more reflective perspective. “Reform have been doing better as people’s trust in politics has been broken; they are a symptom of that… This government has to rebuild that broken trust and until there are visible proof points of change, I don’t think people will be prepared to give that trust back.”

As our conversation ended, Reed recalled his recent visit to Windermere where he vowed to end the sewage discharges that have turned the lake green. “This beautiful, iconic lake will once again be pristine and full of fish… It’s by focusing on the politics of place that we can start to rebuild trust and address the challenge from the extremes.”