Rachel Reeves has been appointed by Keir Starmer as the UK’s new Chancellor of the Exchequer, or finance minister, becoming the first woman to hold the role.
The daughter of teachers, Reeves studied politics, philosophy and economics at Oxford University before taking a graduate job at the Bank of England, initially tasked with analyzing how Japan attempted to emerge from its period of stagnation in the 1990s.
Britain’s economy today faces a similar challenge. Since the financial crisis of 2008, Britain’s economic growth has mostly flatlined. The last time the average Briton went so long without a real-terms pay rise, Queen Victoria had not been born.
Labour made kickstarting economic growth a key mission. In a recent lecture, Reeves diagnosed the root of Britain’s economic ills.
Reeves said the years of political instability that followed was a product of the economic harm wrought by austerity. She called the failure to invest when the government could borrow cheaply “an act of historic negligence.”
Although Labour has been criticized for not making bolder tax-and-spend commitments – leading some to argue there is little difference between their plans for the economy and the Tories’ – Starmer’s government will face far more constraints than the Conservative government in 2010. After the surge in borrowing costs, Britain is much more fiscally constrained now than it was then.
Still, within these limits, Reeves has made a series of quietly radical promises. She calls her agenda “securonomics” – a homage to “Bidenomics” – an attempt to build secure supply chains to avoid future inflationary shocks.
To this end, Labour has also pledged to create two new economic institutions: a National Wealth Fund, aiming to rebuild Britain’s industrial strength and encourage private investment, and Great British Energy, a mission to create a publicly-owned clean energy company by 2030.
What is clear is that Labour is not promising overnight fixes to Britain’s malaise. Starmer and Reeves say they hope to embark on “a decade of national renewal.
