The Treasury has ordered government departments to be “ruthless” in identifying public spending cuts as Labour faces mounting questions over its economic plans.
An internal letter from Chief Secretary Darren Jones, sent to cabinet colleagues on 12 December, revealed that “difficult” budget decisions will be required in the upcoming spending review in June.
The letter, seen by The Telegraph, read: “Growth is the only way that we can deliver better outcomes in public services, without raising taxes on working people and is our primary mission for this Parliament.
“Spending Review 2025 cannot be a business-as-usual spending review. Building on our missions, the Plan for Change set out ambitious milestones that must be delivered within the challenging fiscal context we inherited. Success will require ruthless prioritisation.”
It comes as the pound was under further pressure on Monday as Government borrowing costs continued to push to multi-decade highs.
Chancellor Rachel Reeves is also under further pressure from businesses, with the chairman of the Confederation of British Industry (CBI) telling the BBC the Chancellor has “bruised” the confidence and trust of business by expecting it to fill the hole in Government finances.
Former Gordon Brown spokesman to drive UK’s post-Brexit efforts to reset EU relations
A former aide to Gordon Brown has been appointed to help steer Sir Keir Starmer’s efforts to “reset” relations with the European Union.
Michael Ellam, who was Mr Brown’s official spokesman in No 10, has returned to Whitehall in a newly created role responsible for the European Union and international economic affairs in the Cabinet Office.
Nick Thomas-Symonds, the Cabinet Office minister responsible for the reset with Brussels, said Mr Ellam would be a “huge asset”.
Mr Ellam will lead official-level discussions for the UK with the EU and international groupings such the G7 and G20.
He will manage the EU relations secretariat in the Cabinet Office, the unit set up to deliver closer relations with Brussels.
Mr Ellam has returned to the Civil Service after leaving in 2013 to join HSBC, where he became chairman of public sector banking.
The PM wants closer economic and security ties with Europe as part of his effort to repair relations with the bloc following Brexit.
Jabed Ahmed13 January 2025 10:46
Flyer for Labour minister in corruption probe ‘found in palace of deposed Bangladesh leader’
Our Political Correspondent Millie Cooke reports:
Jabed Ahmed13 January 2025 10:34
Cabinet minister acknowledges risk of AI as government outlines tech plans
The UK cannot “press a pause button” on artificial intelligence (AI), Pat McFadden has warned.
Speaking to LBC radio, the Cabinet Office minister acknowledged there were risks with the adoption of the new technology, as the Government sets out its AI plan.
He added: “There are going to be mistakes made, there are going to be things that go wrong, but we must not allow all of that to encourage us to press a pause button on one of the most exciting technological innovations to happen for many years.
“Of course, you’ve got to build safety into it, you’ve got to be aware of the risks.
“But the point of the action plan being published by the Government today is to make sure that the United Kingdom is a welcome home for the investment so it doesn’t just go elsewhere, and that we are relentlessly curious and enthusiastic about the applications to increase productivity in both the public and the private sectors. That is the prize that awaits us.”
Mr McFadden compared AI to the advent of electricity in people’s homes, adding: “There was scepticism sometimes because people said ‘what would we use it for?’
“Imagine that question today when you look around your own home, and that is the way that we’ve got to think about this.”
Jabed Ahmed13 January 2025 10:16
Written ministerial statements to the House of Commons today:
- Secretary of State for Business and Trade: Putting fans first: consultation on the resale of live events tickets and call for evidence on pricing practices.
- Chancellor of the Exchequer: 2025 UK-China economic and financial dialogue.
- Secretary of State for Environment, Food and Rural Affairs: Cambridge Waste Water Treatment Plant Relocation DCO Extension.
- Secretary of State for Science, Innovation and Technology: Publication of the AI Opportunities Action Plan and the Government Response.
Jabed Ahmed13 January 2025 10:01
Business leader believes companies will let employees go due to Employment Rights Bill
Speaking about the impact of the Employment Rights Bill on businesses, CBI chairman Rupert Soames said: “I think not only will they not employ, I think they will let people go.
“I think there could be quite an ugly rush before some of these things come into force.
“Nobody wants this, but the things like the probation periods in the Employment Rights Bill, we don’t want that to become an adventure playground for employment rights lawyers.”
Jabed Ahmed13 January 2025 09:46
Full report | Treasury using AI to reply to taxpayers’ emails as Starmer vows to ‘mainline technology into veins’ of UK
My colleague Andy Gregory reports:
Jabed Ahmed13 January 2025 09:31
CBI chairman says Reeves has ‘bruised’ business confidence
The Chancellor has “bruised” the confidence and trust of business by expecting it to fill the hole in Government finances, the chairman of the Confederation of British Industry (CBI) has said.
Rupert Soames said business leaders were less likely to employ in the current climate.
He told BBC Radio 4’s Today programme: “The Chancellor told us at the time of the budget that there was an unexpected hole of about £22 billion pounds in the Government finances, and business was going to have to fill it.
“In filling in one hole, it’s created another, and that hole is a hole in the confidence and trust that business has in the Government.
“I think sometimes it’s not understood, the extent of the impact, particularly on companies that employ lots of people.
“We think the national insurance increases are going to feed through into inflation, we’re going to have a lower growth rate, but also, because of things like the Employment Rights Bill coming along, you’re going to find people laying people off and less likely to employ.”
Jabed Ahmed13 January 2025 09:13
Tories say Starmer must show leadership over Sadiq
The Prime Minister must show leadership following the allegations around his anti-corruption minister Tulip Siddiq, the Tories said.
Asked about reports that Ms Siddiq lived at properties in London linked to allies of her aunt, the former Bangladeshi prime minister, shadow business secretary Andrew Griffith said he was more interested in the “tone at the top” of Government.
He told LBC News: “It is not about any individual minister, it is about the tone that the Prime Minister… remember he called himself ‘Mr Rules’, ‘Mr Integrity’, and it immediately transpired he had been having other people, donors, pay for his wife’s clothes and accepting hospitality to Taylor Swift concerts?
“It is not about any one individual to me. It is about the tone at the top, what sort of Prime Minister leadership we are going to see in this space.”
Jabed Ahmed13 January 2025 09:11
McFadden insists he has full confidence in under-pressure minister Siddiq
A senior Government figure said he has full confidence in Tulip Siddiq, the anti-corruption minister under investigation over allegations about properties linked to her aunt’s political movement in Bangladesh.
Pat McFadden, a Cabinet Office minister, was asked by Times Radio if he had full confidence in his colleague.
Mr McFadden, the Chancellor of the Duchy of Lancaster, replied: “Yes.”
He added: “She (Ms Siddiq) has done the right thing. All these allegations have been made, and she has referred all of them to the independent adviser on ministerial interests.
“When we won the election six months ago, we boosted the powers of the independent adviser in the new ministerial code that was issued, to make sure that he had the power to initiate and carry out investigations into allegations like this.
“That is what he is doing, and that is the right way to deal with this.”
Jabed Ahmed13 January 2025 09:09
Coming up in Parliament today
1430 Home Office questions
1530 A statement on the Defence Committee report titled “Developing AI capacity and expertise in UK Defence”
Backbench business debates on (i) Hospice and palliative care (ii) Impact of food and diet on obesity
An adjournment debate on the impact of sixth form college strikes in Sussex on students
1630 E-petition 661407 relating to children’s social media accounts
1430 Oral questions1520 Great British Energy Bill – committee stage (day three)
Jabed Ahmed13 January 2025 09:08