An economic advisory shake-up is underway in the Treasury as Chancellor Rachel Reeves races to replace two key advisers before her crucial autumn budget. John Van Reenen, her chief economic adviser, will soon reduce his role, while Anna Valero departs entirely leaving gaps in Labour’s economic brain trust.
Van Reenen, a leading productivity expert from the London School of Economics (LSE), has been Reeves’ right-hand economist since Labour took power. Though officially part-time, he worked “seven days a week” during a turbulent first year. Now, he will cut back to just one day weekly as he returns to academia.
Valero, another LSE economist and industrial strategy specialist, will also leave. Treasury sources say her exit was expected but warn her departure could weaken Labour’s industrial policy push.
Reeves faces a daunting autumn budget amid slowing growth and strained public finances. She recently U-turned on cutting winter fuel payments and faced backlash over disability benefit cuts. Now, she must decide whether to hike taxes a move that could spark fresh political battles.
At a Lords committee, Reeves stressed Van Reenen’s core argument: boosting productivity through investment. “Investment in skills, infrastructure, and tech is the answer,” she said. She also hinted at wealth taxes, telling ex-Tory chancellor Lord Lamont: “Tax decisions come at budget time.”
The economic advisory shake-up leaves Reeves without two key thinkers just as tough choices loom. Some Labour insiders say she lacks a strong enforcer like Ed Balls under Gordon Brown to push Treasury policies across government.
Meanwhile, No. 10 wants its own economic adviser to balance Treasury influence. Starmer’s team has long sought an independent voice on growth and fiscal policy.
The Treasury insists Van Reenen and Valero will stay in touch, but their reduced roles leave gaps. With the budget approaching, Reeves must quickly recruit heavyweight replacements. The economic advisory shake-up could define her next moves will she find the expertise needed to steer the UK through turbulent times?
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