Britain finally has a female chancellor. It only took 800 years.

LONDON — England’s first top finance minister was a man: “Henry the Treasurer,” a wealthy landowner from Hampshire who served King William the Conqueror after his invasion of 1066.

Every subsequent chancellor of the exchequer — the archaic name for the nation’s finance ministry established in the 12th century — has also been a man. Until now.

From humble beginnings, Rachel Reeves, a former chess prodigy, Oxbridge graduate and Bank of England economist, now hopes to turn the U.K.’s finances around as the first woman ever to take on the role.

It’s a historic landmark that’s not lost on her.

“It is … a huge privilege to be the first ever female chancellor of the exchequer,” she told Treasury staff on her first day in the role last Friday. “To every young woman and girl watching this: let today show that there should be no ceilings on your ambitions, your hopes or your dreams.”

Reeves’ appointment by Prime Minister Keir Starmer, following the Labour Party’s landslide win at the July 4 general election, was unsurprising. She and Starmer are famously close, and she had shadowed the role in opposition since 2021.

But her beginnings are unusual compared to many of her predecessors as chancellor.

Reeves, 45, has been the MP for Leeds West in the north of England since 2010. But she was born 200 miles south, in Lewisham, south east London — an area which has suffered crime and poverty for decades, and is in the top 20 percent of the most deprived local authorities in England.

She was educated a comprehensive school in nearby Bromley. Her parents were both teachers, while her grandparents worked at a shoe factory in Kettering, Northamptonshire, where she recalls spending school holidays with her sister, Ellie Reeves, now also a Labour MP and minister of state in Starmer’s Cabinet Office.

A former national under-14 girls’ chess champion, Reeves reveled in her ability to “quietly thrash” any boys who thought they could take on the young prodigy.

That approach stayed with her through her journey to the peak of British politics, and has brought plaudits from around the world, including from U.S. Treasury Secretary Janet Yellen who congratulated Reeves on her “historic appointment as the first female chancellor of the exchequer.”

Constant presence

Politics, and more specifically the Labour Party, has been a constant throughout Reeves’ life. She grew up under Margaret Thatcher’s Conservative government, with Tony Blair’s New Labour elected as she reached university. (She and her sister joined the party just before the 1997 landslide victory).

Her husband, Nicholas Joicey, is a high-flying civil servant who has worked in multiple government departments, including a long stint at the Treasury. Sister Ellie is married to Jon Cryer, an influential former Labour MP who stepped down at this month’s election.

Rachel Reeves and Keir Starmer are famously close, and she had shadowed the role in opposition since 2021. | Justin Tallis/AFP via Getty Images

Financial prudence was a strong theme in Reeves’ upbringing. In interviews, she recalls her mother showing her how to balance the books, telling the BBC last year: “We weren’t poor, but we didn’t have money to waste.”

Unlike many new occupants of No. 11 Downing St., the traditional residence of Britain’s chancellors, Reeves has real-world economic experience — including a career in finance.

She took a degree in philosophy, politics and economics from Oxford, the degree of choice for future top politicos. A stint at the Bank of England as an economist was followed by several years working in Britain’s private banking sector.

Securonomics

Reeves has described the economic strategy used by Conservative chancellors after the global financial crisis in 2008 as broken.

Recalling her upbringing in a speech at last year’s Labour Party conference, where to her mum “every penny mattered,” Reeves has pledged to improve the lives of working people in Britain through what she describes as “securonomics.”

The idea is to usher in a new age of wealth creation via sustained growth, reversing what she sees as the errors of the last 14 years of Tory rule, which she characterizes as overly laissez-faire.

But Reeves faces a huge challenge to achieve what she termed in her first major speech as chancellor as a “national mission” — to grow the U.K. economy after years of stagnation. She has received a tricky inheritance from a string of Conservative governments which struggled in the face of a pandemic, wars and spikes in inflation.

“A key factor underpinning the government’s ultimate success at stabilizing public finances will likely be the U.K.’s growth outcomes,” said ratings agency S&P in a note this week. “In our view, the new government will face difficult policy trade-offs, as did the previous Conservative administration, given the U.K.’s constrained fiscal position.”

Getting the economy growing again will present Reeves with a challenge. If at heart she is a chess prodigy who calculates every move on the board, a prudent financier and a saver from a young age, she may need to learn to loosen the purse string a little.

“Rachel Reeves knows full well that while aiming to curb excessive spending and lower public indebtedness sounds like the prudent thing to do, it also acts as a binding constraint on an economy that is in bad need of higher investment,” said Konstantinos Venetis of research provider TS Lombard.

The newly-elected government doesn’t have to look far back in history to find a prime minister intent on delivering growth who managed to achieve the opposite. Liz Truss, the U.K.’s shortest-serving PM, pledged the same outcome in 2022 by cutting taxes — and ended up crashing the economy.

“With memories of the autumn 2022 mini-budget debacle still fresh, the incoming Labour government will take pains not to upset the markets,” Venetis said.

The National Wealth Fund is a public-private fund announced Tuesday which aims to get £20 billion of investment back for taxpayer input of £7.3 billion. | Pool photo by Justin Tallis via Getty Images

Keeping the City of London on side will be a priority for Reeves. The Labour Party pledged in its January financial services manifesto to “champion” the square mile, and has strived to re-position itself as the party of business after shattering City confidence under the previous left-wing leadership of Jeremy Corbyn. Reeves sat out Corbyn’s leadership on the Labour backbenches and has been quick to distance herself from his approach.

But Reeves will want something in return from the City: investment. One way she hopes that will be achieved is the National Wealth Fund, a public-private fund announced Tuesday which aims to get £20 billion of investment back for taxpayer input of £7.3 billion.

Another hopeful fix is via increasing stockmarket listings in London, which have slumped in recent years. The last Conservative government had enjoyed some success with the announcements that companies Raspberry Pi and Shein would list in London. Reeves hopes to go further by getting more capital flowing in the U.K.

Time is not on her side. The British public, facing an ongoing cost-of-living crisis and inflation which has only just come down to the desired level after three years, are unlikely to give the new government much breathing room.

Reeves has already warned the Labour Party has inherited the worst public finances since the second world war.