Sir Keir Starmer’s new economics guru has ‘no experience of business’, carries ‘little clout in the markets’ and is a big fan of wealth taxes, it was claimed today.
Baroness Minouche Shafik is set to be hired as the Prime Minister’s chief economic adviser in the latest revamp of No 10’s top team as growth stalls and Chancellor Rachel Reeves lines up swingeing tax hikes in her autumn Budget.
In her new role Lady Shafik, a former deputy governor of the Bank of England, will act as a bridge between Starmer and Reeves, who is lining up a tax hikes to fill a hole in the public finances of up to £50 billion.
Lady Shafik has previously worked with Torsten Bell, the pensions minister and former boss of the Resolution Foundation think-tank, who was last week promoted to play a key role in Budget preparations.
In 2023 Lady Shafik co-chaired a Resolution Foundation inquiry which called for the abolition of inheritance tax relief on farms and bringing pension pots within a dead person’s estate.
Both measures were enacted by Reeves in her maiden Budget to the fury of farmers and savers.
Born in Egypt, Lady Shafik has spent much of her career in academia, the civil service and at the International Monetary Fund, where she oversaw its response to the Eurozone debt crisis in 2009.
Shadow Business Secretary Andrew Griffith said Sir Keir had hired ‘an establishment academic with no experience of business’, adding: ‘Any one of thousands of British businessmen and women could have educated him on the harsh realities of trying to tax your way to growth.’
Last year Lady Shafik quit as head of Columbia University in the US amid criticism of her handling of student protests in response to the Israel-Hamas war.
‘Her recent failures in leadership in academia suggests she has difficulty engaging with the challenges of the real world,’ said Julian Jessop, a former Treasury economist.
Lady Shafik seemed ‘even keener on wealth taxes and income redistribution’ than Reeves and Bell, he added. ‘She has no business experience and little clout in the financial markets.’
No 10 declined to comment.