Rachel Reeves fires up investment agenda in first week as Chancellor

Regarded as the political 'star of her generation', the Labour MP is pushing ahead with reforms on green energy and house building while making 'hard choices' to fix the economy

Britain's Chancellor Rachel Reeves on a visit to a building site in Oval, south London. Photo: Kirsty O'Connor / Treasury

William Church was impressed when he met Rachel Reeves, the UK's new Chancellor, when she visited his shoe factory, Joseph Cheaney & Sons, in Northamptonshire last year.

"We had a chat with her and took her round the factory," the joint managing director told The National.

"She's clearly a very capable lady and she means business for business. She comes suitably qualified in that she worked at the Bank of England and has a background that significantly underpins her current brief."

Star of generation

That chimes with what Ms Reeves' friends have told The National, that she was regarded as a woman who was “already marked out as a star of her generation” from her undergraduate days at the University of Oxford.

The peer John Woodcock, who has known Ms Reeves since they were students in the Labour Party, described her as “warm in person, a really acute sense of humour and a great to be around”.

“But Rachel’s also been able to build up a sense of loyalty, friendship and respect within the Labour family and beyond it,” said Mr Woodcock, who is the government’s independent adviser on political violence.

“The Treasury is buzzing with a new leadership now, with Rachel wanting to roll up her sleeves for the structural changes that can that can deliver growth, which the country is crying out for.”

It was “no accident” that the transformation of Labour's economic fortunes and credibility “was mapped out during her time” as shadow chancellor.

Andrew Harrop, secretary general of the Fabian Society, the Labour think tank, described her as a “very serious-minded, hard-working, diligent person”.

“She’s in politics because of the issues she cares about rather than the political game and she's got that studious, academic economist style that means that she's very well equipped to be Chancellor.”

A senior Labour insider also described her as “rigorous” and surrounded by good advisers who are not sycophantic and challenge her decisions.

“She has a good team of people around her who are very thoughtful, very engaged across the Labour Party, not aloof or remote,” he added.

“Rachel does the work, whereas politics tends to be filled with a lot of show ponies, but she's definitely not one of them. What you see is really what you get.”

Safe investment

Ms Reeves has been in her current brief for a matter of days, following Labour's landslide election victory last week.

"To investors and businesses who spent 14 years doubting whether Britain is a safe place to invest, then let me tell you, after 14 years, Britain has a stable government," she told a gathering of business leaders in her first major speech as Chancellor on Monday.

Ms Reeves added that the government will make the "tough" and "hard choices" to fix the UK's economy, which still suffers from low growth, relatively high interest rates and the worst public debt figures for 60 years.

"The question is not whether we want growth, but how strong is our resolve?" she said.

Business groups have been largely enthusiastic about the arrival of Ms Reeves and her team at the Treasury and most feel they should be given a degree of latitude to spark the "change" the Labour Party outlined in its election manifesto.

Growth the key

As Chancellor her key aim will be to stimulate Britain away from its anaemic growth of 1 per cent GDP which will entail significant reforms, already signalled in her speech on Monday.

Key will be reforming building regulations to stimulate the housing market – Labour has promised to build 1.5 million new homes in its five-year term – but also bringing wind farms onshore.

“Seeing her announcements shows that she is making big changes from the first week because there has to be big reforms,” said Mr Harrop. “Getting the British economy growing is massively important.”

Ms Reeves views economics not merely from the national perspective but from people being “better off in their own lives”, he added, with better pay and job security.

Unlocking private-sector investment was key, said Mr Woodcock. “I know how frustrated investors have been in recent years, those like the UAE who want to bring investment into the UK economy but have felt blocked by the entrenched barriers to economic progress embedded within the system," he said.

“That absolutely means deepening our country's friendship with our allies and partners in the Middle East, with the United Arab Emirates, with Saudi Arabia and Israel.”

Mr Harrop added that as the Gulf was “important both geopolitically and economically”, Ms Reeves “won't want to be reducing our economic ties, particularly in areas where they should be growing”.

'Huge green growth opportunity'

Removing the ban on onshore wind farms would enable Britain to "green our energy supply and help the UK take advantage of a huge green growth opportunity, so it’s welcome to see that being delivered so swiftly", said Rain Newton-Smith, chief executive of the Confederation of British Industry.

Stella Smith, founder of the tech company Pirkx, which delivers well-being services, said Ms Reeves' first budget should definitely include "funding for growth companies to support job creation and supporting institutional investment for companies after the start-up phase".

Having met Ms Reeves, Ms Smith said the new Chancellor "came across as likeable, diligent, cool, calm and well-intended".

"She really listened and took action," Ms Smith told The National.

For Mr Church, the reintroduction of duty-free shopping for international visitors to Britain, better known to retailers as the "tourist tax", would be an easy win for the new Chancellor in her budget later in the year.

"If we wanted to stimulate an influx of foreign money into our goods and services in London, then to reconsider that tax would definitely create an immediate wave of optimism throughout our sector," he told The National.

He added that "with change always comes optimism", and while Britain's business leaders are prepared to give Ms Reeves a chance to bring about that change, their patience is limited.

Good neighbours

Key to successful government in Britain is the relationship between prime minister and chancellor.

Ms Reeves’ relationship with Keir Starmer was “very close”, said the Labour insider.

“You're not going to see much drama or tensions between the two and that will be the cornerstone of their whole political project,” he added. “They're not on that performative side of politics which leaves them a bit cold, so I would expect quite a tight operation centre.”

Mr Harrop added that, after 14 years of sometimes chaotic Conservative rule, “we basically have two competent grown-ups in the room”.