Cabinet ministers face economic growth test for new policies

Sir Keir Starmer and Rachel Reeves have ordered Cabinet colleagues to ditch policies which could stand in the way of efforts to grow the economy.

The Prime Minister said the Government’s “growth mission” was now the driving force behind policy decisions.

He told business chiefs in the City of London that had been made clear to “each of our Cabinet colleagues”.

The Chancellor will deliver a major speech on Wednesday setting out plans for growth, expected to include support for expansion of Heathrow Airport – an issue which Cabinet ministers including Energy Secretary Ed Miliband have opposed in the past.

Sir Keir told business leaders: “When you’re answering the question, ‘should we do X, or should we do Y’, that is guided by the mission.

“Should we do X? If it’s good for growth, good for wealth creation, the answer is ‘yes’, if it’s not then the answer is ‘no’.

“It prioritises and gives a sense of direction to Government.”

He added he was “hard-wiring growth into all the decisions of the Cabinet”.

He said: “What Rachel and I have done is to make it clear to each of our Cabinet colleagues that in each of their briefs, growth is the number one mission.”

Ministers will be expected to set out the growth credentials of new policies in order to get approval from their Cabinet colleagues, in a shake-up to the usual system to get “collective agreement” on substantive changes.

The Prime Minister has asked Cabinet Secretary Sir Chris Wormald to implement the changes.

The rules mean the economic impacts of proposals will be subjected to the same rigorous assessment that already applies to new public spending.

But Downing Street acknowledged the new requirement would not necessarily block all policies that harmed growth.

The Prime Minister’s official spokesman said: “The decision-making will continue to be for the Cabinet; we are not going to pre-empt Government decision-making.

“The point is the growth impact, the growth credentials, must be presented – much like public spending implications must be presented – such that in reaching collective agreement it is very clear what the impact of those decisions will be on growth.”

Speaking at the same meeting of business chiefs in London, the Chancellor said her duty was to promote the UK as a destination for business investment.

In a sign of a change of rhetoric following months of highlighting the difficult legacy left by the Conservatives, Ms Reeves said: “It’s the role of government to shout about all the amazing things that we are doing as a country, all the huge opportunities that we have.”

Speaking to broadcasters following the meeting with business leaders at Bloomberg’s HQ in the City of London, Sir Keir declined to confirm the expected announcement on airport capacity.

Asked if he was choosing growth over net zero commitments, he said: “I’m not going to speculate about Heathrow and any decision there.

“What I will say is that growth is the number one priority, wealth creation, making sure that people are better off.

“Of course, we also have climate commitments, but growth is really important too.”

The meeting saw the Prime Minister and Chancellor seek to persuade bosses from businesses including Tesco, BT, Unilever and Lloyds Bank that they are committed to helping the private sector thrive as they attempt to attract more investment to the UK.

Nationwide’s chief executive Debbie Crosbie, who was among the business leaders at the meeting, said: “The Government’s focus on economic growth is vital to improve living standards, support public services, and increase UK competitiveness.

“The drive to remove the regulatory barriers that limit growth are very welcome, particularly when they increase access to the housing market.

“Today’s meeting was another good example of the positive engagement between government and industry.”

The Government announced a major change to the rules governing pension funds in a bid to free up more money for investment in British businesses and infrastructure projects.

Under the plans, defined benefit pension schemes in surplus will have more flexibility to invest some of that money in their sponsoring employers.

Around 75% of defined benefit schemes are currently in surplus, with the Government saying up to £160 billion could be made available for investment.