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20 under 40: Rachel Reeves

We tipped the new shadow chief secretary to the Treasury from the start.

Age: 32
Labour, Leeds West

At the Labour party conference in Manchester last year, I was talking to Sunder Katwala, who was then general secretary of the Fabian Society, when he paused and gestured towards a young, dark-haired woman. "She will be the first woman to lead the Labour Party," he said, and then nonchalantly continued our conversation. The woman was Rachel Reeves, and I had heard other Labour insiders speak of her in the same way.

Reeves won the safe Labour seat of Leeds West at the last general election. I first met her several months before that when she visited the offices of the New Statesman. I was impressed by her forthright confidence and, because she is a former Bank of England economist, the expertise with which she spoke about our economic woes.

Reeves, the daughter of two teachers, grew up in Lewisham, south-east London - and has the accent to prove it. She went to inner-city state schools and then up to Oxford, only the third person from her school to go to either Oxford or Cambridge. She did postgraduate work at the London School of Economics and then joined the Bank of England as a graduate economist. "It was really important to me that I went and worked outside politics after university," she told me. "I wanted to acquire skills and expertise." All good.

Her school years politicised her. "The Eighties and Nineties were a very tough time for schools like mine. There were large cutbacks in sport, music and other extracurricular activities. My mother is a special needs teacher and special needs were cut back as well. My sixth form was two prefab huts in the playground. We didn't have enough textbooks. The library was closed and turned into a classroom. There was nowhere for children to do their homework. I was struck by the unfairness of it all."

Reeves joined the Labour Party as a sixth-former and was active in the Labour Club at university, but avoided the Oxford Union. "I wasn't interested in debating with no purpose."

Even before she became an MP, she was one of a group of young intellectuals gathering around Ed Miliband, whom she supported for the leadership. "I wanted a leader who could set out a positive agenda and communicate well with ordinary people - and Ed can do that."

Reeves is just what Labour needs: a young, state-school-educated woman from the south of England who has a safe seat; a social democrat who is articulate in the language of economics and has experience of the world beyond Westminster, the media and think tanks. She is tough and direct, too, as I discovered when I was slow to reply to an email from her offering an article to the New Statesman.

In October 2010 she was appointed shadow minister for pensions. I expect this impressive and determined MP to be promoted to the shadow cabinet before long. From there, she has the potential to become a first-rate chief secretary to the Treasury, and more besides, in the next Labour government.

Next: Rory Stewart

Previous: Dominic Raab

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Jason Cowley is editor of the New Statesman. He has been the editor of Granta, a senior editor at the Observer and a staff writer at the Times.

This article first appeared in the 19 September 2011 issue of the New Statesman, Meet the next Prime Minister

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How can Britain become a nation of homeowners?

David Cameron must unlock the spirit of his postwar predecessors to get the housing market back on track. 

In the 1955 election, Anthony Eden described turning Britain into a “property-owning democracy” as his – and by extension, the Conservative Party’s – overarching mission.

60 years later, what’s changed? Then, as now, an Old Etonian sits in Downing Street. Then, as now, Labour are badly riven between left and right, with their last stay in government widely believed – by their activists at least – to have been a disappointment. Then as now, few commentators seriously believe the Tories will be out of power any time soon.

But as for a property-owning democracy? That’s going less well.

When Eden won in 1955, around a third of people owned their own homes. By the time the Conservative government gave way to Harold Wilson in 1964, 42 per cent of households were owner-occupiers.

That kicked off a long period – from the mid-50s right until the fall of the Berlin Wall – in which home ownership increased, before staying roughly flat at 70 per cent of the population from 1991 to 2001.

But over the course of the next decade, for the first time in over a hundred years, the proportion of owner-occupiers went to into reverse. Just 64 percent of households were owner-occupier in 2011. No-one seriously believes that number will have gone anywhere other than down by the time of the next census in 2021. Most troublingly, in London – which, for the most part, gives us a fairly accurate idea of what the demographics of Britain as a whole will be in 30 years’ time – more than half of households are now renters.

What’s gone wrong?

In short, property prices have shot out of reach of increasing numbers of people. The British housing market increasingly gets a failing grade at “Social Contract 101”: could someone, without a backstop of parental or family capital, entering the workforce today, working full-time, seriously hope to retire in 50 years in their own home with their mortgage paid off?

It’s useful to compare and contrast the policy levers of those two Old Etonians, Eden and Cameron. Cameron, so far, has favoured demand-side solutions: Help to Buy and the new Help to Buy ISA.

To take the second, newer of those two policy innovations first: the Help to Buy ISA. Does it work?

Well, if you are a pre-existing saver – you can’t use the Help to Buy ISA for another tax year. And you have to stop putting money into any existing ISAs. So anyone putting a little aside at the moment – not going to feel the benefit of a Help to Buy ISA.

And anyone solely reliant on a Help to Buy ISA – the most you can benefit from, if you are single, it is an extra three grand from the government. This is not going to shift any houses any time soon.

What it is is a bung for the only working-age demographic to have done well out of the Coalition: dual-earner couples with no children earning above average income.

What about Help to Buy itself? At the margins, Help to Buy is helping some people achieve completions – while driving up the big disincentive to home ownership in the shape of prices – and creating sub-prime style risks for the taxpayer in future.

Eden, in contrast, preferred supply-side policies: his government, like every peacetime government from Baldwin until Thatcher’s it was a housebuilding government.

Why are house prices so high? Because there aren’t enough of them. The sector is over-regulated, underprovided, there isn’t enough housing either for social lets or for buyers. And until today’s Conservatives rediscover the spirit of Eden, that is unlikely to change.

I was at a Conservative party fringe (I was on the far left, both in terms of seating and politics).This is what I said, minus the ums, the ahs, and the moment my screensaver kicked in.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.