How Rachel Reeves, Britain’s probable next chancellor, wants to change the country

AS A STUDENT at Oxford University in the late 1990s, Rachel Reeves’s friends gave her a framed photograph of Gordon Brown, then the Labour chancellor, to hang in her college room. “They knew how much I loved the Treasury,” she later recalled. Unless the polls are very wrong, Labour will sweep to power on July 4th after 14 years out of office. Credit will belong, in large part, to Ms Reeves’s work in changing perceptions of a party once seen as fiscally reckless and hostile to business. Her reward will be the fulfilment of a long-held dream: becoming Britain’s first female chancellor.

Ms Reeves was born in south-east London in 1979, the daughter of two primary-school teachers. Her younger sister Ellie is also a Labour member of parliament; she is now the party’s deputy campaigns co-ordinator. After Oxford (where she read politics, philosophy and economics) and the London School of Economics (where she got an MSc in economics) Rachel Reeves joined the Bank of England as an economist; her time there included a stint at the British embassy in Washington, DC. She became an MP in 2010 for the constituency of Leeds West in Yorkshire.

Ms Reeves has pointed to several moments in her life as clues to the sort of chancellor she will make. The first is a childhood memory of her mother at the kitchen table, ticking off receipts against her bank statements. When Sir Keir Starmer, the Labour leader, appointed Ms Reeves shadow chancellor in 2021 he gave her one task: to convince the British public that they could trust Labour with their money. This was part of a broader detoxification of the Labour Party, which had lost four successive general elections in part because voters felt it was less able than the Conservatives to manage the economy. That was partly an accident of history: Labour was in power when the global financial crisis struck. Yet it was also an injury that Labour inflicted on itself by electing the far-left Jeremy Corbyn as leader in 2015. But in recent years the Conservatives have been the champions of self-inflicted injuries, making Ms Reeves’s job much easier. She seized on a spree of government waste during the covid-19 pandemic. Liz Truss’s calamitous mini-budget, meanwhile, offered her an unparalleled opportunity. Ms Reeves embraced an approach to fiscal orthodoxy that Ms Truss had dismissed as “abacus economics”.

Ms Reeves’s caution has left Labour with a remarkably slim manifesto, which envisages a nugatory £7.3bn of tax increases, ($9.2bn, 0.3% GDP), to meet £4.8bn in giveaways. Growth, she says, will have to pay for a more generous state; there is a conspiracy of silence with the Tories as to how to avoid cuts to public services that have already been pencilled in. But her approach is apparently persuasive to many: Ms Reeves is more trusted than Jeremy Hunt, the incumbent chancellor, on the economy by a margin of 39 points to 31, according to Survation, a pollster. Those who think Britain would benefit from a less-dominant Treasury are likely to be disappointed by her tenure: the reassurance exercise has meant flaunting her veto power over her colleagues’ spending plans.

Move on a few years for a second moment. As teenagers, Ms Reeves and her sister raged against educational injustice. Their state school had too few books. The sixth form consisted of prefabricated classrooms in a yard. Inspired by Sir Tony Blair’s talk of the importance of education, the Reeves sisters joined Labour, leafleting for their local branch. “We are both children of that Thatcherite revolution and we rebelled against it,” Ms Reeves has said. Her belief in the principle of comprehensive education is one of her strongest. Old slights linger; she often talks about being patronised by privately educated boys at chess competitions. As an MP, she wrote a biography of Alice Bacon, who as a minister in Harold Wilson’s government helped introduce comprehensive schools, which would largely end the selection of pupils by ability in the state sector. (Bacon, Ms Reeves wrote, was of the same mindset as her colleague, the Labour intellectual Anthony Crosland, who promised to “destroy every fucking grammar school in England”.) She was outraged by the discovery, in 2023, that more than 200 ageing concrete schools were unsafe. Little wonder then that Ms Reeves has indicated that the schools budget would be her first priority for additional government spending should the economy allow. Labour will raise taxes on independent schools; to headteachers who complain that this will force them to cut bursaries she responds with barely a shrug.

A third moment comes a couple of decades later. A few days before the Brexit referendum of 2016, Ms Reeves visited a large employer in her constituency. She knew then that the vote was lost: the workers blamed migration from the EU for low wages, and the pro-Remain campaign had no answers for them. It was an experience that has made her reluctant to reopen the question of Britain’s relationship with Europe: her constituents would vote the same way again given the chance, she says. Her scepticism of the benefits of the market liberalisation that New Labour had extolled culminated in a speech in Washington, DC in 2023 in which she declared that: “Globalisation, as we once knew it, is dead.” As chancellor she will seek to create manufacturing jobs, increase energy independence and reduce supply-chain risks from hostile states. She promises to lure global investors with modest government subsidies and the promise of planning reforms. It is an agenda cast in the language of “resilience” and “home-grown” industries, in which the state takes a greater interest in “where things are made and who owns them”. The competition for state funds will be intense: whether schools or industrial subsidies get priority is a coming tension.

Unlike Sir Keir, Ms Reeves chose not to serve in Mr Corbyn’s shadow cabinet. But she shares with her boss a ruthless clarity: the Labour Party’s chief purpose is to better the lot of working people and that means doing what it takes to win. The Che Guevara radicalism that powered the far left was, as she saw it, a luxury that people like her could not afford. As with Sir Keir, that focus encourages a strong work ethic; it is telling that she admires Theresa May, the former Conservative prime minister who was also known for burning the midnight oil. (“She’ll burn through civil servants,” predicts one former Treasury official.)

As with Sir Keir, Ms Reeves’s fear of a slip that could spell defeat means that her public appearances are clipped. (The mortifying revelation, in October 2023, that chunks of a hastily-written book about female economists had been taken from Wikipedia seems to have done no lasting damage.) She sticks to the script; there is none of the breeziness that has characterised Conservative chancellors. Nothing has been left to fate. But, a few days into the campaign, there was a flash of confidence. “For the first time since I’ve been an MP, I believe we’re in touching distance of doing this,” she said.■

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