Rachel Reeves was sworn in on Friday as Britain’s first female Chancellor of the Exchequer, one of the UK’s four biggest public offices responsible for managing the UK budget.
After 15 years of economic stagnation, Reeves, a Labour MP with a reputation as a no-nonsense, no-nonsense businessman, faces the daunting task of boosting Britain’s productivity growth, a key indicator of prosperity, while reviving struggling public services.
“I know the scale of the task I will be inheriting,” Reeves told the BBC early on Friday. “There’s not a lot of money,” he said, adding that the party needed to unlock private investment.
Reeves is expected to approach his new role with caution.
“Labour has come a long way to restore public trust in its economic performance and the chancellor does not want to put that at risk,” said Carice Roberts, director of the Public Policy Institute.
For example, the Labour Party has moved towards more centrist policies in recent years, following former leader Jeremy Corbyn’s left-wing policies of increased spending and widespread nationalisation of industry.
Mr Reeves, 45, was elected MP for the northern city of Leeds in 2010. To prove his credibility, he has often said he was traditionally trained as an economist, having worked for six years at the Bank of England after university.
She has stressed her goal of creating stability after a period of domestic and international economic shocks, including soaring energy prices and proposed tax cuts that roiled financial markets during Chancellor Liz Truss’s term in office, which lasted just 49 days.
Reeves calls her economic policy “securonomics,” a boring-sounding coinage that reflects her already serious reputation: She once told the Guardian that if you want a “cartwheel,” just ask someone else.
She describes “Securonomics” as ensuring Britain’s economic security in an increasingly fragmented world, while also ensuring workers’ financial security – inspired by the policies of US Treasury Secretary Janet Yellen.
But the calls for stability also signal that Britons should not expect rapid and dramatic changes in the way the economy is run.
With high debt levels and relatively high taxes, Reeves has vowed not to raise corporate, personal or VAT taxes and to adhere to strict debt rules. Given these constraints, he hopes stability will spark much-needed economic growth.
In practice, this is expected to mean giving more powers to financial watchdog agencies such as the Office for Budget Responsibility and working more closely with businesses to encourage greater private investment.
“Labour is very much dependent on expectations of economic growth and they rely on growth to increase spending on services,” Mr Roberts said.