Can UK business and Rachel truly be Friends?

She may share a first name with Jennifer Aniston’s character in US smash series Friends but new UK Chancellor Rachel Reeves, arrives at 11 Downing Street with a degree of uncertainty hanging over her approach to business.

As expected the Labour party have won an election which was really much about the size of the majority rather than who would win, and Reeves will need to hit the ground running.

She has spent the past six weeks making all the right noises though.

This week she sought to soothe concerns from the City of London that tax rises are on the cards. Speaking to The Standard, she said: “Obviously, I worked in the City both at the Bank of England and then in the private sector in financial services, I see our financial services in the UK as a huge asset where there is huge potential to bring more jobs, to export more, to grow that part of the economy.”

It may go to ease some concerns that financial services such as banking and insurance will be viewed as a ready source of income, via new windfall taxes and an increase in Insurance Premium Tax.

They look to be off the table but Reeves has yet to get a good look at the books and the fact that promising investment on the campaign trail and delivering them are two very different matters.

However, Reeves has made it clear that the new Labour is a pro-business labour.

She said Labour would be a government that is pro-worker and pro-business, in the knowledge that each depends upon the success of the other.

“A party that understands business. That works with business,” she continued. “I’m not one of those politicians who thinks the private sector is a dirty word, or a necessary evil. I’ve worked in the private sector.”

Reeves said that there needed to be a new spirit of partnership between government and business. One that adopted an approach fit for a more uncertain world.

“I know there is no policy that I can announce, no plan that can be drawn up in Whitehall that will not be improved from engagement with business,” she stated.

The old adage is “be careful what you wish for”. Rachel Reeves  has long wished to be the Chancellor of the exchequer and the wish has been granted. Businesses will hope that this is a Rachel which truly wants to be friends.

Jon Guy, Editor,

Emerging Risks