Article by Chris Smyth, courtesy of The Times
08.09.2025
The British Prime Minister has appointed reformers on the right wing of the Labour Party to key roles in a cabinet reshuffle to push through welfare changes and ease net-zero rules in an effort to boost economic growth.
Keir Starmer handed the main economic departments to ministers on Labour’s right flank as he sought to use the resignation of Angela Rayner as deputy prime minister to revive his faltering fortunes by stripping back barriers to growth.
The new-look cabinet will meet for the first time on Tuesday, and Sir Keir will tell them to “step up a gear” in the focus on the economy.
Steve Reed, who replaced Ms Rayner as Housing Secretary, told public servants over the weekend that his mantra was “build, baby, build” as he acknowledged that further a further easing of planning rules would be needed to kick-start growth.
He will meet developers this week as he promises to “move on to the next stage in unleashing one of the biggest eras of building in our country’s history”, and will tell homebuilders: “I will leave no stone unturned to build the homes Britain desperately needs.”
Peter Kyle, appointed Business Secretary, is expected to focus on overhauling burdensome regulation, as Labour aims to cut costs on business by 25 per cent as part of its industrial strategy.
Government insiders said net-zero regulation had emerged as a particular bugbear for many firms, pointing to the appointment of Michael Shanks as a joint business and energy minister as a sign that Sir Keir was ready to ease environmental red tape.
“There’s a tension between net zero and driving growth, so you’re drawing them under one portfolio and saying business comes first,” a government source said.
Mr Kyle was due to fly to Washington on Monday to meet White House officials and US business leaders before heading on to China. “My mission is to drive forward economic growth and to give businesses across the country the opportunities they need to thrive,” he said.
Pat McFadden, the new Work and Pensions Secretary, has been handed a revamped “department of welfare and skills” and tasked with making another attempt to reform welfare benefits after a chaotic retreat over the summer on an attempt at £5bn ($10.2bn) of cuts.
Sir Keir’s allies acknowledge that it was a mistake to start with a savings target, but insist further welfare reform will be essential to get people off benefits and into work.
Liz Kendall, who carried the can for the reversal on welfare reform, remains in the government as Science Secretary. Sources said that, as a “big public services reformer”, she had been appointed to push ahead with attempts to digitise government, as Sir Keir considers introducing digital IDs for all.
