Sir Keir Starmer has created a “budget board” of ministers and officials in a bid to mend broken relations with businesses and the City – and tighten his grip on economic policy.
The group will meet weekly to co-ordinate ‘pro growth policies’ ahead of the looming Autumn Budget on 26 November.
It is also expected to keep businesses and City leaders on side, officials told the Financial Times.
The new board will be jointly chaired by Baroness Minouche Shafik, Starmer’s economic adviser, and Torsten Bell, a Treasury minister.
Varun Chandra, Starmer’s business adviser, is also on the panel, along with Tim Allen, the new Number 10 communications chief.
Other members of the board include Morgan McSweeney and Katie Martin, chiefs of staff to Starmer and Reeves respectively, as well as Ben Nunn, the chancellor’s press chief.
Darren Jones, a former Treasury minister who has assumed the new role of “chief secretary” to the prime minister is also a key figure on the panel
The “budget board” panel also includes key business voices, in recognition that the next few months could strain relations with the corporate sector.
Fixing damaged relations
Chancellor Rachel Reeves badly damaged relations with UK business in her maiden Budget last October, where she increased employers’ national insurance by £25bn. She also motioned a significant increase in the national minimum wage.
A Labour official said: “This is about putting more weight behind a pro-business budget.”
“We have to reassure business that we are not just going to keep taxing to spend.”
Another said: “The budget board will funnel into the decisions that the prime minister and chancellor take. We don’t want to find ourselves in a difficult position with business again.”
Allies of Starmer have said the board was agreed jointly with the chancellor, and will focus on stimulating growth while maintaining a channel of communication with the business community ahead of the Budget.
Businesses and the City are braced for higher taxes as Reeves and the Treasury scramble to fill a fiscal hole of least £20bn, threatening a bigger split with corporate Britain and risking further economic growth.
While Reeves’ allies insisted she welcomed the creation of a stronger economic team, she is under heavy scrutiny after her failed attempts to cut winter fuel payments for pensioners and the abandoned plan to cut £5bn in welfare benefits.
Reassure business
The Treasury said the government would “focus on building an economy that works for working people” in the next Budget.
Meanwhile, Starmer told ministers they must reassure business over the coming weeks that they have a strategy to boost national output, with a focus on issues including planning and new infrastructure projects.
He stressed that “growth and delivery” were core priorities for the upcoming budget, and that ministers had to cut the number of regulators and civil servants, as he continues to feel pressure over his handling of the economy.