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Sir Keir Starmer has promised to “hard wire growth into all decisions in the cabinet”, as he set out what he called a new approach to policymaking at a meeting with senior executives in the City of London.
Downing Street said that in future all cabinet ministers would have to “set out the growth credentials of new policies in order to get approval from their cabinet colleagues”.
The “growth impact of proposals will be subject to the same rigorous assessment that already applies to new public spending”, No 10 added.
Starmer’s change to the Whitehall “write round” process for cabinet decisions — in which cabinet ministers are consulted on new policies — is intended to focus attention on the growth potential of new policies.
“Everything has to be seen through the question of whether it is pro-growth,” Starmer told business executives on Tuesday morning.
The message came as chancellor Rachel Reeves prepares to give a speech on growth on Wednesday in which she will signal support for a third runway at Heathrow airport, a policy previously opposed by senior cabinet members, as well as the prime minister himself.
Starmer and Reeves on Tuesday met executives in the City of London, where both adopted a notably bullish tone on the prospects for the British economy, in stark contrast to their gloomy rhetoric last year.
Business leaders have warned that Reeves’ insistence that she had been handed by the Conservatives “the worst economic inheritance” of any UK government since the second world war had sucked confidence out of the economy.
They have also criticised the Labour government for introducing measures which executives say will hit growth, including a £25bn national insurance hike on employers and new labour laws.
At a round-table breakfast, Reeves adopted a markedly more bullish tone than last year. “It’s the role of government to shout about all the amazing things we are doing as a country,” she said.
“We want to partner with you in business to showcase all the great things we have going for us,” she added.
Reeves will use her speech on Wednesday to promise to go “further and faster” on growth, including greenlighting airport expansion in the south-east, a move which has caused unrest in Labour circles.
In the last House of Commons vote on a third runway at Heathrow in 2018, seven members of the current cabinet voted against it, including Starmer. The others were Ed Miliband, Steve Reed, Lisa Nandy, Darren Jones, Anneliese Dodds and Hilary Benn.
Miliband, climate change secretary, has previously strongly opposed Heathrow’s expansion, but has indicated he will not resign from the cabinet over the new policy.
Reeves told Labour MPs on Monday evening to back the government’s growth agenda, in spite of nervousness on the left of the party that she is neglecting consumer interests and getting too close to big business.
Meanwhile, Reeves will also promise on Wednesday to simplify the planning system and confirm plans to relax rules over the release of some of the £160bn surplus in defined benefit pension schemes.
Corporate leaders at the City meeting included Charlie Nunn of Lloyds Banking Group, Marco Amitrano of PwC, Jennie Daly of Taylor Wimpey and Paul Golding of Pinewood.
Last week, a PwC survey of chief executives conducted in October and early November — mostly before Labour’s tax-hiking October 30 Budget — found that Britain was the second most attractive country for investment behind the US.
Golding told reporters that his film production company would be able to ride out recent government increases in national insurance contributions and new employment laws, but urged Reeves not to increase business rates.
“Don’t tinker — steady as she goes,” he said. “The last thing we want is to see business rates deter investment into the industry.”
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