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Prime Minister Keir Starmer is tightening oversight over the administration’s financial strategy by reinforcing a cross-government Budget Board responsible for shaping the Autumn Statement on 26 November.
The board, which is set to convene weekly, aims to guarantee enhanced collaboration between No 10 and the Treasury following critiques of Chancellor Rachel Reeves’s initial Budget, which faced backlash from business organizations due to significant tax increases.
The restructured committee will be co-chaired by Torsten Bell, pensions minister and former head of the Resolution Foundation, and Minouche Shafik, Starmer’s newly appointed chief economic adviser.
The committee will also feature Katie Martin, Reeves’s chief of staff, charged with overseeing relations with businesses; Varun Chandra, No 10’s business envoy; Darren Jones, the newly appointed Chief Secretary to the Treasury; and Starmer’s chief of staff Morgan McSweeney.
Both communication heads from No 10 and No 11 will participate in the board, alongside Tim Allan, Starmer’s recently appointed communications director and an experienced figure from Tony Blair’s administration.
Government insiders stated that the widened ensemble was intended to synchronize economic and political messaging while infusing a stronger business viewpoint into budget deliberations.
Increased pressure on Reeves as fiscal restrictions tighten
Chancellor Rachel Reeves is encountering mounting pressure in anticipation of November’s Budget, with the Office for Budget Responsibility (OBR) expected to reduce forecasts. To adhere to her self-imposed fiscal guidelines, she might need to uncover £25bn–£50bn in extra tax increases, as per independent assessments.
Reeves faced criticism after her previous Budget due to boosting employer national insurance contributions by £25bn, a decision business leaders claimed raised hiring expenses and exacerbated inflationary pressures.
Rain Newton-Smith, director-general of the CBI, has encouraged the administration to pursue “radical tax reform” instead of further tax increases, highlighting stamp duty and VAT thresholds as sectors needing revision.
The Institute of Directors (IoD) applauded the establishment of the Budget Board but urged for enhanced business representation.
Anna Leach, IoD chief economist, remarked: “It is encouraging that the government is reinvigorating its focus on the growth agenda, especially regarding business. However, for success, the Budget Board must produce a statement that benefits enterprises, with prompt measures to eliminate growth obstacles from the tax and regulatory framework.”
She also indicated that including independent business perspectives in the board would assist in “constructively challenging” governmental thinking and introduce specialized expertise into budget planning.
The fortified Budget Board emphasizes Starmer’s commitment to centralize economic decision-making and avert the political blunders of recent times. Yet with sluggish growth, declining business confidence, and challenging fiscal choices on the horizon, the real challenge will be whether this new platform can balance Labour’s fiscal responsibility with a growth-oriented agenda that reassures enterprises.
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