Keir Starmer Reshapes Economic Team as Downing Street Aims for Delivery Overhaul

Sir Keir Starmer began the new parliamentary term with a dramatic reset of his Downing Street operation, appointing a trio of heavyweight economic experts to oversee the Chancellor in advance of the critical autumn Budget. The move, widely seen as a significant shift of authority, has cast doubt over Rachel Reeves’s standing as Chancellor, with senior Labour figures and market watchers alike noting her increasingly tenuous position at the heart of government economic policy.

Leading the new team is Darren Jones, formerly Reeves’s deputy at the Treasury, who now steps into the newly minted role of Chief Secretary to the Prime Minister. Joining him is Baroness Shafik, the distinguished former deputy governor of the Bank of England, and Dan York-Smith, a Treasury veteran with two decades of experience. All three will play a pivotal role in crafting the government’s taxation and spending decisions as Labour confronts an acute fiscal challenge.

The reshuffle triggered an immediate market reaction, with a spike in UK borrowing costs as traders anticipated a stronger tilt towards taxation and public expenditure. The financial community’s sensitivity reflects growing concern about how Labour will address a looming £50bn deficit and whether additional tax hikes are now on the horizon.

While Starmer has framed the overhaul as an acceleration towards tangible delivery—placing emphasis on “delivery, delivery, delivery”—the realignment has signalled a new phase in Labour’s governance, shifting from post-Tory consolidation to active intervention and policy implementation. Government insiders suggest the move is crucial to countering both internal division and public impatience over stagnant growth, NHS waiting lists and channel crossings. Starmer himself has voiced voters’ frustrations, noting a need to move “further and faster” in setting out Labour’s alternatives.

Supporters of Reeves have downplayed any suggestion of a power struggle, insisting she agreed the personnel changes following a summer of discussions. However, opinion within the party is less decisive. One MP described the appointments as a sign that Reeves’s authority is “weak and deteriorating”, while Opposition figures have been quick to pounce, casting the reshuffle as evidence of governmental confusion amid rising inflation, debt and fiscal uncertainty.

Baroness Shafik’s arrival as chief economic adviser follows a lengthy search for respected economic thinkers inside No 10. Her international experience—spanning the IMF, UK civil service and major academic institutions—brings additional expertise as Labour seeks to define its economic legacy. Dan York-Smith, now principal private secretary to Starmer, complements this with his detailed knowledge of UK tax and welfare.

Alongside economic shifts, Downing Street’s communications and policy units have undergone a refresh. Tim Allan, a Blair-era press secretary, takes over as executive director of communications, where his background in shaping public narratives will be critical in building support for difficult fiscal choices in the next Budget. Meanwhile, the policy operation has seen Vidhya Alakeson step up, reinforcing Labour’s commitment to policy delivery.

Rachel Reeves has simultaneously appointed John van Reenen, a prominent economist and advocate for wealth taxation, as a new adviser on economic growth. His part-time, unpaid role is illustrative of Labour’s determination to draw on diverse expertise as it prepares to redefine the government’s approach to taxation and inheritance.

While the Prime Minister has sought to position this shake-up as the start of phase two of his premiership, critics remain sceptical. With the public’s appetite for change undampened and the challenges intensifying, Starmer’s revamped team faces an immediate and steep test in the drive to deliver.