Rachel Reeves: 'I look at the life choices Ed Miliband's made and do not envy that'

Labour has a rising star in Rachel Reeves. Could she go all the way to the top? Oliver Wright meets her

Rachel Reeves was made shadow Chief Secretary to the Treasury after serving only 18 months in Parliament (PA)

It is a perilous combination: a politician and a group of small children, with a journalist watching. So it is not surprising that Rachel Reeves, the newest and youngest member of Ed Miliband's Shadow Cabinet, looks a little trepidacious as she stands in front of 160 primary school children for a question and answer session in her Leeds constituency.

"So do you know what I do?" she asks. "You're a shadow," a young boy replies – perhaps slightly mangling the teachers' briefings.

"Can you name any politicians you've heard of?" she tries again.

"David Cameron, Nick Clegg, Margaret Thatcher, the Queen," they variously reply.

Reeves is wise enough not to ask if they had heard of Mr Miliband.

But one thing is sure: we are all going to be hearing much more of Reeves. Last month, after a parliamentary career of only 18 months, she was appointed at the age of 32 to shadow Danny Alexander as Chief Secretary to the Treasury.

In the Westminster parlour game of "spot the next party leader", she is tipped to be Labour's first female leader – if she can beat fellow 2010 new entrant Chukka Umunna, now the shadow Business Secretary.

But before then, she has the unenviable task of trying to persuade the public that Labour can be trusted with the economy again.

In this she has the advantage of being a trained economist and not having been in government or ever having worked with Gordon Brown.

Born in Lewisham (she still has a husky south London accent) she went to a state school in Bromley, studying maths, further maths, economics and politics at A-level. She got four As, and went on to study politics, philosophy and economics at New College, Oxford.

But although she had been a Labour Party member since she was 16 – "that's who we vote for", her dad is said to have told her when a picture of Neil Kinnock came on television – she did not take the usual path into New Labour politics.

Instead of becoming a Westminster researcher or ministerial adviser, she joined the Bank of England as an analyst. One of her first tasks was to report on the Japanese government's use of quantitative easing. She did a year's secondment at the British embassy in Washington, analysing the US economy, before going to work for HBOS at its headquarters in Halifax (luckily in the retail arm), where she was during the 2008 crash.

That experience clearly still affects her. "There was one woman I worked with who'd been with the company all of her life – and remember most people there were only earning an average of £18,000. Every year she put money into the share save scheme and almost overnight she saw the value of all her savings just wiped out.

"That was to help in her retirement. She was doing the right thing. People at the top of that organisation played fast and loose not just with customers, not just with taxpayers, but also people who worked there. That was one of the saddest things from a personal perspective. People lost all faith in the organisation they worked for, as well as losing their savings and, in some cases, their jobs as well."

In fashioning Labour's response to the economic crisis, Reeves and the shadow Chancellor, Ed Balls, have two distinct disadvantages. The first is that in the public mind Labour is responsible, if not for the crash itself then for being asleep at the wheel and not paying sufficient attention to regulating the banking sector. The other is more forward-looking: how, as an opposition, can you fashion an economic policy when the sands are shifting from one week to the next?

On the first point Reeves admits that when in government they did not do enough. But she believes that is nothing compared with the decisions made by the Coalition since June 2010. "A year ago, the British economy stopped growing. In a year we have had 0.5 per cent growth. In the G7, only Japan has grown more slowly than us and they had an earthquake. In the European Union, only Greece, Portugal and Cyprus have grown less than us.

"So the decisions made by Osborne and Cameron a year ago have resulted in growth flat-lining, unemployment rising and inflation increasing – only Estonia in the EU has a higher rate of inflation than us. Coupled with that, we have had the euro crisis and we warned a year ago that when you have a hurricane blowing around you don't rip out the foundations of your house. That is effectively what this government has done.

"It is blindlingly obvious that if you've got more people out of work and more people claiming benefits, more businesses failing, fewer businesses taking on workers, it's going to be harder to reduce the deficit and harder to pay back the debt – and that's exactly what we're seeing. We're seeing an economic tragedy unfold."

Reeves got the call telling her she had made the Shadow Cabinet while she was at Ben Gurion airport waiting for a flight home after a parliamentary tour of Israel and the Palestinian territories. "Obviously I said yes, and then had five hours on the plane to think about what I'd just done," she laughs.

It has also had an unusual effect on her home life. Reeves married her husband, whom she met in Washington, last year. He now works as a civil servant in the Treasury and her new job means work and home cannot mix. "It means we have to make sure we keep a separation between what we do at work and what we talk about at home." She laughs: "We have to talk about novels and films and what to have for dinner..."

And for the future? Does she want to be Labour leader or Britain's second female Prime Minister? Reeves may be inexperienced – but not so inexperienced as to answer that.

"I love my job. I love being a constituency MP. A year and a half ago I was delighted to be elected as an MP." She adds: "I look at the life choices that someone like Ed Miliband must have to make to be leader of a political party and I don't really envy a lot of that. He's got two young children and I think it's an extremely tough job to do." One almost believes her.

She is not coy about her desire to get back into government. Referring back to the little boy in the primary school assembly, she says: "When he said that, I thought, 'He's right – I'm just a shadow'. I can do an awful lot in my constituency and I can try and hold the Government to account, but there is so much more that I could do if I was not a shadow – if I was out in the light."

A LIFE IN BRIEF

Born Rachel Jane Reeves in Lewisham on 13 February 1979

Education State school in Bromley. Studied PPE at Oxford. Took a Master's degree at LSE

Career Joined Bank of England as a graduate, spent time as an adviser in Washington. Joined HBOS in 2006. Lost twice for Labour in Bromley & Chislehurst before being elected MP for Leeds West in May 2010. Appointed to Shadow Cabinet in October 2011