Sir Keir Starmer has strengthened his control over economic policy by establishing a new ‘Budget board’, bringing together senior ministers, advisers, and business voices. The group will meet weekly between now and the Budget on 26 November to coordinate pro-growth policies and maintain smoother relations with business and the City.
The move follows tensions sparked by Chancellor Rachel Reeves’s first Budget last October, when she imposed a £25 billion rise in employers’ national insurance contributions and approved a significant increase in the minimum wage. Business leaders felt blindsided, and relations between the government and corporate Britain were severely strained.
According to officials, the new board’s remit is to keep business leaders engaged, prevent another political clash, and support measures to drive growth. One Labour figure 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.”
Who sits on the new board
The board will be co-chaired by Baroness Minouche Shafik, a former deputy governor of the Bank of England and Starmer’s new economic adviser, and Torsten Bell, now a Treasury minister. Other members include senior advisers, political strategists, and communications chiefs, with a deliberate mix of policy expertise and business engagement.
Key figures include Varun Chandra, Starmer’s business adviser, and Tim Allan, the new Number 10 communications chief and a former press aide to Tony Blair.
Morgan McSweeney and Katie Martin, chiefs of staff to Starmer and Reeves, respectively, are also on the panel, alongside Darren Jones, a former Treasury minister who has taken up the new role of ‘chief secretary’ to the prime minister. The panel includes senior communications figures such as Allan and Ben Nunn, Reeves’s press chief, reflecting concerns over how poorly last year’s Budget was handled in the media. A shake-up of Treasury communications is also underway.
Reeves’s allies insist she supports creating a stronger economic team in Number 10, despite growing scrutiny over her recent policy missteps, including failed plans to cut winter fuel payments for pensioners and an abandoned £5bn cut to welfare.
Balancing growth with fiscal pressure
The board will ultimately feed into the decisions made by Starmer and Reeves as they prepare for what is likely to be another tax-raising budget. The Government faces a fiscal gap of at least £20bn, putting pressure on Reeves to find revenue while attempting not to undermine growth.
Business and City leaders are bracing for further tax rises, which could cause another rift between Labour and corporate Britain. At the same time, Starmer’s allies argue that the new system will ensure clear lines of communication and a stronger political strategy around the Budget.
The Treasury has said it will focus on “building an economy that works for working people”. In a statement, it added: “For too long the British economy has felt stuck due to under-investment, meaning no matter how hard you work, you’re not seeing the rewards you deserve in your pay packet. Our priority is to build an economy that works for working people using investment and reform as our tools for renewal.”
In September, Starmer convened a cabinet focused on growth, telling ministers they must reassure business leaders that the Government has a strategy to lift national output. Priorities include planning reform and significant infrastructure projects like a new rail line linking northern cities. He also pressed ministers to reduce the number of regulators and civil servants, stressing that “growth and delivery” must be central to the November Budget.
Political tensions rising
The creation of the Budget Board comes amid mounting political pressure over the state of the economy. Kemi Badenoch, Conservative leader, warned on BBC’s Newsnight that Britain risked going “cap in hand” to the International Monetary Fund for a bailout, drawing comparisons with the 1970s Labour Government under James Callaghan.
Reeves dismissed the claim as “irresponsible” when addressing MPs, retorting: “The only thing that needs a bailout is the Tory party from its failed leadership.”
With growth faltering and fiscal pressures intensifying, the Budget on 26 November is set to be a defining moment for Starmer’s premiership. By creating the Budget board, he hopes to deliver a more coherent economic message, and avoid another damaging fallout with business.
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