New United Kingdom Finance Minister Rachel Reeves, who was appointed as the UK’s first female Chancellor of the Exchequer under Prime Minister Keir Starmer, made a bold commitment on Monday to “fix the foundations” of Britain’s economy.
Her pledge comes on the heels of the Labour Party’s recent electoral victory, which marked a significant shift in the UK’s political landscape.
Reeves, 45, took office at a time when the British economy has just begun to recover from a recession, with inflation rates normalizing and the Bank of England on the verge of reducing interest rates. The Labour Party, which had emphasized economic growth and stability in its campaign, won a substantial majority in last Thursday’s general election, enabling it to pursue a transformative agenda.
In her inaugural address since her appointment, Reeves criticized the Conservative government’s track record, describing it as a period marked by “fourteen years of chaos and economic irresponsibility.” She stressed the need for urgent reforms to reverse the economic damage inflicted by the previous administration.
“New Treasury analysis I requested over the weekend exposed the opportunities lost” under the Conservative administration, Reeves revealed during a speech to business leaders in London, according to AFP. She elaborated on how weak economic growth under the Conservatives had led to a £58 billion ($74 billion) shortfall in tax revenues last year, which she argued had negatively impacted public services.
Despite these challenges, Reeves assured that her government would pursue economic growth through “robust fiscal rules,” acknowledging that Britain’s current debt levels had risen due to extensive state spending during the Covid pandemic and rising energy costs.
Central to Labour’s economic strategy is a plan to double onshore wind energy capacity by 2030 as part of a broader effort to achieve net-zero carbon emissions. “That means immediately removing the de facto ban on onshore wind in England, in place since 2015,” the government stated in a separate announcement on Monday.
Additionally, Reeves outlined ambitious plans to reform planning regulations to speed up infrastructure development. This includes a major initiative to build 1.5 million “affordable” homes in partnership with the private sector, aimed at addressing the housing shortage and boosting the economy.