At times today I admit I was hit by confusion: was Alexander Isak leaving Newcastle to take up a key policy role at No10 – and was Liz Lloyd's loan deal to Bayern Munich on or off?
Although Keir Starmer’s shake-up of No10 roles was immediately dismissed by critics as moving the deck chairs on the Titanic amid sinking poll ratings, it was in fact further-reaching, deeper and more significant than anticipated.
James Lyons’s departure as strategic communications director saw him replaced by Blairite veteran Tim Allan. The three Downing Street policy heads – Lloyd, Stuart Ingham and Olaf Henricson-Bell – are all moving to new senior government roles. The PM finally has an in-house economic advisor: Minouche Shafik, a former deputy governor of the Bank of England, and a replacement principal private secretary, Treasury official Dan York-Smith.
Most eye-catching was the move by Darren Jones, Rachel Reeves’s number two as Treasury chief secretary, into No10 to perform a similar role for the Prime Minister, a post which has never before existed. Jones was replaced by the able James Murray who, in turn, was succeeded as exchequer secretary by rising star Dan Tomlinson.
The move by No10 to increase its economic heft sparked warnings from some commentators that Starmer was taking back control and that consequently Reeves’s days could be numbered ahead of a tricky Budget in which she is universally expected to raise taxes.
I take a different view however: it is further evidence that the Prime Minister and his Chancellor are both lashed to the mast in stormy economic seas and will sink or swim together. While Starmer has indeed drawn down HMT talent in Jones and York-Smith, the Budget is still expected to be written by Torsten Bell, a Treasury minister who was a special adviser to Alastair Darling as Chancellor.
The shake-up, at least in part, is designed to ensure that the same economic messaging comes out of No 10 and No 11 – much closer, in relationship terms, to Cameron/Osborne than to Blair/Brown. With today’s changes focusing on Downing Street, a ministerial reshuffle, largely if not wholly confined to middle-ranking and junior posts, appears to have been pushed back to later in the month.
Growth you can feel
One of the government’s new themes was road-tested this afternoon – ministers aim to deliver ‘growth people can feel in their pockets’. This slightly clunky phrase is the result of analysis inside No10 of last year’s US election result – Joe Biden was booted out, according to this theory, partly because, although the US economy was growing on his watch, all voters ‘felt’ was rising inflation. With its accent on individuals feeling the benefit, how does this square with the government accepting it needs to rebuild bridges with business.
The same issue is true with the issue that has dominated all others this summer. Overall immigration numbers are falling, but all most voters see is small boats and asylum seeker hotels. Last month saw the number of small boats arriving on UK shores drop to the lowest August total since 2019 – but this will be swept aside while Reform owns the media narrative.
Starmer’s new-look No10 team must reclaim the agenda urgently through effective policy and messaging. President Trump’s state visit later this month presents another opportunity/challenge for the government’s relations with businesses, particularly US-based tech companies, as does the planned trip by Jonny Reynolds, the business secretary, to China later this year.
Not only does the Budget set the sternest of tests, but next May’s local and national elections, featuring contests in Wales, Scotland, London and other big cities, will see an unpopular Labour government faced by an unparalleled series of threats from all sides of the political spectrum.
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