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7 March 2016

Rachel Reeves is emerging as Labour’s shadow chancellor in exile

The former Bank of England economist is using her time on the backbenches wisely. 

By George Eaton

No party in recent history has had more its of most talented figures on the backbenches than Labour today. Among them is Rachel Reeves. Like 12 other former shadow cabinet members, the Leeds West MP chose not to join Jeremy Corbyn’s frontbench. Freed from the burden of collective responsibility, she is intent on establishing herself as Labour’s pre-eminent economic voice.

Since returning from maternity leave last month, the 37-year-old Reeves (a Treasury select committee member and former Bank of England economist), has impressed MPs with her interventions on savings, welfare and finance. Today, she delivered a major speech at the Social Market Foundation and published an alternative Budget.

In her think-tank address, Reeves called for a flat rate of pension tax relief (as recently rejected by Osborne), progress towards universal childcare (paid for by scrapping inheritance tax cuts) and increased investment in infrastructure. The latter, she rightly argued, should be classified separately from other public spending, as is common elsewhere in Europe.

In her alternative Budget (published nine days ahead of Osborne’s), Reeves also advocated improved access to finance for small and growing businesses, a smart industrial strategy to boost productivity and exports, increased focus on adult skills and vocational education, and greater devolution of power and resources to cities, counties and regions.

John McDonnell recently sought to bring Reeves into the tent by asking her to join Labour’s economic review – an invitation she politely declined. The title she is laying claim to is that of shadow chancellor in exile (one that Chris Leslie, who held the post before McDonnell, is also competing for). As an ally of Dan Jarvis, Reeves is well-placed should he win the leadership. By using her time on the backbenches to establish her economic primacy, she can help ensure that is the case under any non-Corbynite figurehead.

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