Rachel Reeves, Chancellor of the Exchequer for Britain, speaks during an interview at the British Consulate in Toronto on Aug 7.
“I wanted to send a message that Britain is open for business,” Ms. Reeves said in an interview with The Globe and Mail at the British consulate in Toronto. “Our number one mission is to grow the economy. And to grow the economy, we need to unlock private investment, and we’re looking both domestically and around the world for the sources of that finance.”
The first Labour government since 2010 has inherited an economic mess. Britain’s gross domestic product growth is sluggish, government debt levels are high, and public services are ailing and underfunded, despite the country being saddled with a relatively high tax burden. With public finances already stretched, the new government is leaning on private investment and reforms to the country’s planning and pension systems to drive economic growth.
The new government is pursuing at least one traditionally left-wing project: re-nationalizing the country’s passenger rail system, which was privatized in the 1990s. Ms. Reeves balked at the term “re-nationalization,” saying that the government is not taking over businesses, it is simply not retendering private-sector contracts when they come to an end. But the result will be the same: Britain’s passenger train network will come back under public ownership and operation over the next five years.
She’s also looking at reforms that would encourage British pension funds to invest in a broader range of domestic assets, including private and public equities as well as infrastructure.