Mohamed A. El-Eraian

CAMBRIDGE – Pity Rachel Reeves, the United Kingdom’s Chancellor of the Exchequer. Before she had even gotten through her highly anticipated “growth speech” on January 29, criticism flooded social media and the airwaves. Her approach is too scattered, some said, and too reliant on measures whose impact will be felt only over the long term. Some programs run counter to the government’s environmental commitments, others said, and they are not evenly distributed across the U.K. It is all too expensive. Ryanair CEO Michael O’Leary even went so far as to declare publicly that Reeves “hasn’t a clue.”

Don’t get me wrong: the speech was not perfect. But perfection is not possible under the U.K’s current economic and financial conditions, and to pursue an elusive optimum would be to make the perfect the enemy of the good. Moreover, Reeves’ speech did succeed in five areas.

First, it reinforced the message that the government will go “further and faster” to boost growth – its “number one mission.” Second, it laid out several specific efforts – including planning (zoning) reforms, reducing over-regulation, and improving the use of pension-fund surpluses to increase domestic investment – to ease constraints on existing growth engines.

Reeves also focused on the need to promote new drivers of growth, such as by creating a European “Silicon Valley” in the corridor linking Oxford and........

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