New Chancellor pledges to ‘fix foundations’ of the British economy

Rachel Reeves, the new Chancellor of the Exchequer, has pledged a number of measures, including mandatory housebuilding targets and the repeal of the onshore windfarm ban, as she aims to ‘fix the foundations’ of the British economy.

History maker

Ms Reeves has made history as the first woman to be appointed as Chancellor of the Exchequer since the role was created in the 16th century.

In her first speech since being appointed to the role, the Chancellor said: ‘Our manifesto was clear: sustained economic growth is the only route to improving the prosperity of our country and the living standards of working people.

‘Where governments have been unwilling to take the difficult decisions to deliver growth – or have waited too long to act – I will deliver.

‘It is now a national mission. There is no time to waste.

‘I want to outline the first steps this new government has taken to fix the foundations of our economy, so we can rebuild Britain and make every part of our country better off.’

Grasping the nettle

In the speech at the Treasury, Ms Reeves promised a new approach to growth which would rest on three pillars – ‘stability, investment and reform’.

The Chancellor made a series of announcements including:

• Councils will be given mandatory targets in the drive to build 1.5 million homes.
• ‘Grasping the nettle’ of planning reform, including on green belt land.
• Ending the ‘absurd’ ban on new onshore windfarms.
• Giving priority to energy projects.
• 300 additional planning officers.

Political pain

Ms Reeves said that she had repeatedly warned about the dire state of the public finances during the General Election and added that ‘what I have seen in the past 72 hours has only confirmed that’.

New Treasury analysis shows the economy would be £140 billion bigger had it grown at the OECD average since 2010. The Chancellor said she is prepared for ‘short-term political pain’ to fix Britain’s finances and she will not ‘shrink’ from difficult choices.

Ms Reeves also confirmed that she will deliver a full Budget later this year.

Businesses encouraged

The Confederation of British Industry (CBI) said that businesses would be encouraged to hear that growth was the ‘defining priority of government’. The business group said that a ‘step change’ in growth could bring improvements to public services and living standards.

Rain Newton-Smith, CBI Chief Executive, added: ‘Firms will welcome the Chancellor wasting no time in committing to tackle the burdensome and time-consuming planning processes that are holding back critical investments in infrastructure and housebuilding.

‘While government can lay the foundations for growth, it’s business that will bring the innovation, ideas, and investment to make them a reality. That’s why we welcome Labour’s openness to working with business to really go for growth and bring much needed momentum back to our economy.’

The 109th Chancellor

Ms Reeves is the 109th person to hold the position of Chancellor of the Exchequer.

She studied philosophy, politics, and economics (PPE) at the University of Oxford before joining the Bank of England as an economist. She has also worked in the British Embassy in Washington DC.

Ms Reeves was elected to Parliament as MP for Leeds West in 2010 and appointed shadow Chancellor in 2021.

After being appointed as Chancellor, she said in a statement on X (formerly Twitter): 'It is the honour of my life to have been appointed Chancellor of the Exchequer.

'I know what responsibility it brings, and I am ready to deliver the change our economy needs to make working people in all parts of the country better off.

'It comes with a historic responsibility as the first woman to be appointed Chancellor.

'To every young girl and woman reading this, let today show that there should be no limits to your ambitions.'