After a bruising few weeks, Reeves used her speech at the City’s annual Mansion House jamboree to rip up red tape in a bid to attract international investors to the UK.
The way one Government source puts it, summarising the Chancellor’s view, is: “We need a bit more risk in the system, because without risk there is no reward.”
If the Chancellor’s gamble pays off, and economic growth starts perking up significantly, then everyone in the UK will benefit.
A healthier economy would boost living standards, but also go some way to ending the grim cycle which sees new tax rises introduced at each Budget to plug holes in the public finances.
She told Mansion House that “we have a duty to maximise the potential of people’s pension savings” – which clearly implies investing in assets which provide a higher return over time, but on the flip side tend to be more dangerous.
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Another idea, on hold for now but still on the statute book, would see pension funds forced by law to put more money into specific UK markets – risking the worst of both worlds, as savers see their pots invested into assets which are still relatively risky but less lucrative than their equivalents abroad (since if they were equally profitable there would be no need to make the investments mandatory).
In an interview with the Yorkshire Post, she summed one aspect of the national malaise well: “A couple of generations ago, my mum and dad were primary school teachers. They owned their own home in their 20s. How many primary school teachers today can get on the housing ladder?”
Again, there are risks here. Offering mortgages to less well-off borrowers risks a wave of defaults in a market downturn; building more homes can upset those who find their local green fields concreted over.
In truth, perhaps she has no choice – better growth is the only way to avoid never-ending questions about which taxes she will raise next, and even how long she will be in her job.
The gung-ho attitude expressed in the Mansion House speech is one of the last cards Reeves has left to play.
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