When Nemat Shafik resigned as president of Columbia University in August 2024 to take on an assignment for the British foreign secretary, it seemed as if Britain was giving her a refuge: She had struggled to handle pro-Palestinian protests that were threatening to tear apart the Ivy League campus.
Now, the British government has recruited Dr. Shafik for a permanent post — as the chief economic adviser to Prime Minister Keir Starmer — and it promises to thrust her back into a political vortex, though of a very different kind.
Dr. Shafik, an Oxford-trained economist who goes by the name Minouche, will be charged with helping devise policies to reignite Britain’s economic growth and dig the government out of a deep fiscal hole. Her immediate task is to aid in drafting the next government budget, which is widely seen as a litmus test for Mr. Starmer, after a trouble-prone first year that has left him deeply unpopular.
“She’s moving into a very complex environment, with a U.K. political environment that is changing very rapidly,” said Tony Travers, a professor of politics at the London School of Economics, where Dr. Shafik served as president and vice chancellor before Columbia recruited her in 2023.
Professor Travers, who knew Dr. Shafik at the L.S.E. and praised her tenure there, predicted she would face a pressure-cooker atmosphere in 10 Downing Street, as well as the challenge of dealing with the Treasury, a powerful ministry that is jealous of its authority and resistant to outside influence.
The “capacity to deliver policy in Downing Street is very limited,” Professor Travers said. “To try to come up with policies to restore economic growth, which has been so elusive, would be a challenge for absolutely anybody.”
As demanding as Dr. Shafik’s job may be, it is hard to imagine it will be any tougher than her 13 months at Columbia, where she was in the eye of a storm over Israel’s war in Gaza. After pro-Palestinian encampments became entrenched on campus, she faced accusations from the right that she had allowed antisemitism to take root.
Dr. Shafik then enraged many on the university’s faculty with a conciliatory appearance before a congressional committee, during which she discussed internal disciplinary procedures. She twice called the police on to Columbia’s campus to break up demonstrations, further eroding faith in her leadership.
When Britain’s foreign secretary, David Lammy, offered her a temporary, unpaid assignment chairing an external review of Britain’s development policy, Dr. Shafik grabbed it. In her resignation letter, she lamented having presided over a “period of turmoil where it has been difficult to overcome divergent views across our community.”
Dr. Shafik also returned to the House of Lords, the unelected upper house of Britain’s Parliament, where she has a lifetime appointment. The Foreign Office said that the review on development policy had been submitted last February. In keeping with other internal reviews, its results have not been made public.
Downing Street did not comment on Dr. Shafik’s new role or make her available for an interview. Her appointment is part of a broader shake-up by Mr. Starmer, who is desperate to turn around his political fortunes. His Labour Party consistently trails Reform U.K., an insurgent anti-immigrant party led by Nigel Farage, in the polls.
Among the government’s multiple challenges is how to close a ballooning budget deficit without raising basic taxes, as Labour promised it would not to do in the run-up to the election in 2024.
The government was stung by a decision last year by the chancellor of the Exchequer, Rachel Reeves, to cut a subsidy that helps older people pay their heating bills in winter. It later backtracked on the plan. Mr. Starmer faced a rebellion of Labour lawmakers against his plan to tighten the rules for people to receive disability and sickness benefits (he was forced to water that down as well).
Mr. Starmer’s shake-up, analysts said, suggests that he wants to take a more hands-on role on economic policy. In addition to Dr. Shafik, he brought in Tim Allan, a onetime communications adviser to Tony Blair, the former Labour prime minister, and Darren Jones, a top adviser to Ms. Reeves, to be his chief secretary.
Ms. Reeves has also summoned reinforcements: She recruited Torsten Bell, a Labour lawmaker who previously ran a center-left economic research institute, the Resolution Foundation, to help draft the budget.
In the past, Dr. Shafik has proposed increasing the tax burden on wealthy people as a way to address deepening income inequality.
“Because wealth has grown even more unequal than income, we should explore taxing wealth such as inheritance, land, and real estate,” Dr. Shafik wrote in an article in 2018 for the International Monetary Fund, where she had earlier served as deputy managing director. She described it as a way to secure “intergenerational fairness and social mobility.”
Right-leaning newspapers like The Daily Telegraph have seized on Dr. Shafik’s comments as evidence that the government will raise taxes on the rich when it announces the budget.
Clarity of any kind would be helpful, analysts said. Dr. Shafik also once served as deputy governor of the Bank of England, which analysts said would give her credibility in explaining economic policy to foreign investors. Britain’s stubborn inflation and the government’s policy swings have raised pressure in the financial markets. On Tuesday, yields on 30-year government bonds hit their highest level in 27 years.
“It’s good that the government is appointing people like Torsten and Minouche,” said Jonathan Portes, a professor of economics at King’s College London, who once worked with Dr. Shafik in a previous Labour government. “Whether that means we’ll get those policies, who knows?”
Professor Portes said Dr. Shafik’s appointment indicated that Mr. Starmer was no longer willing to subcontract economic policy to his chancellor.
“Part of the reason for Minouche is so that he can get involved in what’s in the budget,” he said. “Ultimately, it is the responsibility of the prime minister to take control of the policy of his government.”
Mark Landler is the London bureau chief of The Times, covering the United Kingdom, as well as American foreign policy in Europe, Asia and the Middle East. He has been a journalist for more than three decades.
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