The State of this: The Prime Minister answers questions after delivering his speech on reducing state bureaucracy on Thursday. © PA Images / Alamy Stock Photo
Away with the flabby state was the Prime Minister’s main message this week, as he delivered a speech in Yorkshire on Thursday, pledging transformative reform to the way the state is run. During his speech, which would not have felt out of place in a Blair (or, whisper it, Tory) administration, Starmer argued that the state is now bigger but weaker than ever, although insisted he was not questioning the efforts and work of the civil service, and suggested that there is “too much regulation and too many regulators.” Announcing a series of policies, Starmer referenced his ambitions to revamp planning regulation to simplify the process without compromising on standards, and announced that he is issuing a new target for Government to cut compliance costs for businesses by a quarter. In keeping with his push towards AI, he also highlighted that tech could save £45bn across the public sector, noting he will “send teams into every government department” to make them more innovative and efficient, arguing that no civil servant should be spending time on a job that AI can complete just as well. Finally, revealing the white rabbit of the announcements, and in his mission to cut down government quangos to reduce bureaucracy, Starmer announced the Government will re-centralise the control of the NHS and abolish NHS England, with the money saved going straight towards healthcare services.
Chancellor Rachel Reeves will deliver her first Spring Statement on 26 March, alongside the publication of the OBR’s latest economic and fiscal forecast. The Government previously committed to one major fiscal event a year to provide stability and certainty on tax and spending changes. However, with the economy seen to be underperforming and global uncertainty increasing Government borrowing costs, there’s growing speculation that it’s going to be a more eventful affair than initially anticipated. Economists have suggested that Reeves could break her fiscal rules amid reports that the £9.9bn financial buffer projected by the OBR in October has been wiped out, requiring either tax hikes or spending cuts. Here’s a headline roundup of what could be announced:
Welfare cuts: Reeves is expected to announce several billion pounds of departmental spending cuts, with the welfare budget a key target, including £5bn in savings by making it harder to qualify for Personal Independence Payments, which help people with the additional costs of their disability. These payments will reportedly be frozen in the next financial year, so they do not rise with inflation. The Government is also expected to raise the basic rate for Universal Credit paid to those searching for work, or in work, while cutting the rate for those who are judged as unfit for work.
Income tax: An extension to the freeze on income tax thresholds is said to be on the cards, meaning taxpayers on an estimated median income of £39k would see an extra £810 added to their income tax bills if the freeze was extended by a year. According to the IFS, extending the freeze in income tax thresholds and NI by two years would raise £5bn in 2028-29 and a further £10.1bn in 2029-30.
Cash ISAs: Reports have indicated that the Government will reduce the £20,000 tax-free annual limit in cash ISAs to £4k, to encourage more people to invest their savings in stocks and shares. However, it is said to be a longer-term aim and so is not expected to be announced in the Statement.
International aid: Details of how international aid funding will be reallocated to defence could be confirmed, following the Prime Minister’s announcement that UK defence spending will rise to 2.5% of GDP by 2027. The PM has also committed to publishing a single new national security strategy after the Statement and ahead of the NATO Summit in June.
Defence: A new UK defence innovation organisation which will ‘work with innovative firms to rapidly get cutting-edge military technology into the hands of British troops, and harness the ingenuity of the UK’s leading tech and manufacturing sectors’ will be launched at the Statement.
£250 – annual reduction in bills that people who live within 500m of new or upgraded pylons will receive (paid for by an increase of 80p for everyone else)
200% – rate of Trump’s threatened tariff on imports of EU alcohol
5,408,707 – total number of UK businesses at the end of 2024, down nearly 20,000 from the previous quarter.
£5-6bn – amount Government hopes to save through welfare and benefit reforms, which are expected to be unveiled next week
0.1% – rate the UK economy contracted by in January, despite growth of 0.4% in December 2024
Over 7,000 – approximate number of jobs expected to be lost at NHS England when it is scrapped
$24bn – amount China owes the state of Missouri in damages due to COVID, following a court ruling this week
The much-hyped Planning and Infrastructure Bill was published on Tuesday, with the aim of introducing measures to speed up planning decisions to boost housebuilding and remove unnecessary blockers and challenges to the delivery of infrastructure such as roads, railway lines and windfarms. Amongst the myriad of measures in the Bill, it will introduce a national scheme of delegation to set out which types of planning applications should be determined by officers versus committees, establish the Nature Restoration Fund, streamline consultations for Nationally Significant Infrastructure projects, propose energy bill discounts for those living close to new pylons, streamline the process to install EV charging infrastructure, and create a new scheme to 'unlock billions of pounds of investment in long duration electricity storage to store renewable power'. Spare a thought for the political consultants who have spent their week combing through the 167-page, catch-all, super Bill…
The Government will “supercharge innovation” through a series of new measures, strategies, funding and research, Peter Kyle – the Science, Innovation and Tech Secretary – announced in his speech at the techUK conference this week. Whilst confirming funding in areas such as quantum and 5G, he also announced former Science Minister Lord Willetts, will serve as the first chair of the Regulatory Innovation Office.
The Deputy Prime Minister may not have quite got the memo on reviews and consultations ahead of the Prime Minister’s speech on Thursday, as her department ironically began the week by launching a review and a consultation on limiting the scope of statutory consultees and removing a limited number of them from planning decisions... To be fair to MHCLG, the review is on freeing up the planning system, and the scope will be narrowed to focus on heritage, safety and environmental protection.
The Government held back from issuing reciprocal tariffs on the USA, after President Trump issued an executive order imposing global tariffs on steel and aluminium from Wednesday. The Business Secretary called it "disappointing" but stated that the UK was "focused on a pragmatic approach and are rapidly negotiating a wider economic agreement with the US to eliminate additional tariffs and to benefit UK businesses and our economy”. He added however that whilst they were not following Canada and the EU in issuing retaliatory tariffs, “all options were on the table”.
A new Board of Trade will be launched to help SMEs in particular 'boost their exports and help super-charge growth for the economy.' The Board will be made up of a range of CEOs and business leaders, chosen due to their expertise and knowledge of respective fields, including the CEO of BT, the founder of Small Business Britain, as well as Mike Soutar – the entrepreneur who you may recognise as Lord Sugar’s terrifying interview expert on The Apprentice.
The Payment Systems Regulator will be abolished and its responsibilities consolidated into the Financial Conduct Authority, as part of the Prime Minister’s bonfire of the quangos, Downing Street announced ahead of the PM’s speech this week. The Government stated the decision follows complaints from businesses that the regulatory environment was too complex – with payment system firms having to engage with three different regulators, costing them time, money and resource.
300,000 people will no longer need to file a Self-Assessment tax return, according to new plans announced by the Exchequer Secretary James Murray this week. Those newly exempt include people trading clothes online, dog-walking or gardening on the side, driving a taxi, or creating online content. Of the 300,000 benefiting, an estimated 90,000 will have no tax to pay and no reason to report their trading income to HMRC in the future at all, whilst others will be able to pay any tax they owe through a new online service.
Dame Antonia Romeo was appointed as the Home Office's new Permanent Secretary, replacing Sir Matthew Rycroft who is leaving the Civil Service at the end of March 2025. Romeo is currently Permanent Secretary at the Ministry of Justice.
Mike Amesbury will stand down as an MP, after he was given a suspended sentence for assaulting a constituent. A by-election will now take place in his Runcorn and Helsby constituency. Karen Shore, a local teacher and councillor has been selected to fight the seat, in which Labour won a 14,696 vote majority over the Reform UK candidates at the 2024 General Election.
Defence chiefs from more than 30 nations met in Paris this week to further consider proposals for a European peacekeeping force in Ukraine. Military chiefs from countries including the UK, France, Canada, Australia, Japan and New Zealand held a rare meeting without representatives from the USA following President Trump’s words and actions on Ukraine. The meeting of military minds was followed up by a meeting of the E5 nations – UK, France, Germany, Italy and Poland – on Thursday, at which Defence Secretary John Healey and his European counterparts agreed to ‘step up European support for peace in Ukraine’, and ‘consolidate our common approach to European defence within NATO and EU frameworks'.
Former Bank of England Governor Mark Carney has been sworn in as Prime Minister of Canada after he was elected the new leader of the Liberal Party of Canada. He has replaced Justin Trudeau, who announced his resignation in January. Carney, who served as Governor of the Bank of England between 2013 and 2020, has pledged a “renewed, relaunched” economic and security partnership with the US. He is also due to head back to the UK and France next week as part of his first official foreign visit as Prime Minister.
The Employment Rights Bill completed its passage through the House of Commons this week, passing its third reading by 333 votes to 100. The legislation, which Deputy PM Angela Rayner has consistently referred to as being “pro-growth, pro-business and pro-worker”, includes a right to guaranteed hours, cracking down on zero-hour contracts without the offer of work, making paternity leave a day one right and new restrictions on exploitative fire and rehire processes. Measures will be enforced through a new Fair Work Agency, which will bring together existing authorities. The Bill now head to the Lords for scrutiny.
Farming Minister Daniel Zeichner issued another blow for farmers, as he delivered a Ministerial Statement following the Government’s announcement it had stopped accepting new applications for the Sustainable Farming Incentive 2024, with no notice. Zeichner explained that the high uptake of the scheme – with 37,000 live SFI agreements – meant that it was now “fully subscribed”, although he assured that all existing SFI agreements would be honoured. He confirmed that a revised SFI offer will be forthcoming, with details to follow the Spending Review including when it will open for applications.
Two Private Members’ Bills had their second readings on Friday – the Rare Cancers Bill and the Free School Meals (Automatic Registration of Eligible Children) Bill. Labour MP Scott Arthur’s Rare Cancer Bill, which proposes to create a database to improve access to clinical trials, received backing from the Government and passed its second reading. Meanwhile, debate on the Free School Meals Bill was adjourned, with the second reading set to continue on 11 July, although this means the Bill is unlikely to progress any further.
It’s not been the best week for Nigel Farage, after he suspended 20% of his MPs (one – Rupert Lowe) and a new poll out from YouGov has revealed that a third of 2024 Reform UK voters believe the party would be performing better under a different leader. Whilst the outspoken former UKIP, Brexit and now Reform UK leader is still the most popular of Reform’s five MPs, he has seen his favourability rating drop from over 90% in February to 73% this week.
With the Government preparing to take an axe to benefits, a new poll from Ipsos has shown that more than half of Brits believe the welfare system does not provide good value for taxpayers’ money. In terms of priorities, 38% of Brit stated ensuring older people have security in retirement should be the top priority for the benefits system, followed by a reliable safety net and supporting people to get back to work – both at 29%.
In handy timing for the Government’s planned changes to the welfare system, the Institute for Fiscal Studies has a report out this week detailing the significant rise in the number of people receiving health-related benefits. In England and Wales, 4 million 16 to 64 year olds (1 in 10) now claim either disability or incapacity benefits, up from 2.8 million in 2019 (1 in 13). One factor is mental health, with the report finding that 13–15% of the working-age population reported a long-term mental or behavioural health condition in the latest data, up from 8–10% in the mid 2010s. Similarly, in bad news for businesses, the report found that sickness absence days per worker were 37% higher in 2022 than in 2019.
The annual tradition of bosses thanking women in the workplace for being women took place again this week in honour of International Women’s Day. Parliament also marked the occasion, posting a group photo of all the women in the House of Commons. The organiser ensured everyone was included – including Steve Darling’s guide dog, Jennie, who made an unexpected but welcome appearance in the front row, surrounded by ministers. You go, girl.
Meanwhile, Lord Finkelstein had enough of the back-and-forth over the Holocaust Memorial Bill. Speaking during the Bill’s committee stage, he summarised the contradictory arguments peers made about the project: “No one will come; everyone will come; the garden is too tranquil; the garden is too full…no children will ever go safely by this memorial, and that we do not need to worry about all the people going there because anyone who goes to the learning centre will end up drowning, as the waters will rise and we will have to flee for our lives.” For context, this was hour three of the debate.
