Reshuffle gymnastics prepare Starmer to walk tricky budget tightrope | Economics

Reshuffle gymnastics prepare Starmer to walk tricky budget tightrope | Economics

Dan York-Smith, recently appointed by Labour leader Keir Starmer as his principal private secretary, has a background as a qualified international gymnastics judge. This unique skill may prove useful as Labour approaches the challenges associated with Shadow Chancellor Rachel Reeves’s upcoming autumn budget.

As the government prepares to increase taxes amidst rising inflation and ongoing cost of living concerns, fiscal strategies are undergoing scrutiny. York-Smith, who formerly coordinated fiscal events at the Treasury and is regarded positively among Whitehall colleagues, is joining other key appointments. Starmer has also brought in Darren Jones as “chief secretary,” a newly created role, and appointed Minouche Shafik, a former deputy governor of the Bank of England, as his chief economic adviser.

Reactions to this reshuffle have been generally supportive, with some former government advisers commenting on the necessity for greater political engagement in economic policy. Jonathan Portes, a former senior government economist, noted the importance of No 10 being involved in tax and spending decisions to avoid wise but politically unsound choices from the Treasury.

Tim Leunig, chief economist at Nesta, highlighted that appointments alone may not suffice without clarity regarding the Prime Minister’s objectives. He emphasized the need for Labour to identify specific groups for potential tax increase burdens, particularly in light of the anticipated downgrades in growth forecasts from the Office for Budget Responsibility.

Labour’s difficulties in navigating economic policy have been evident in their first year, especially as they balance manifesto commitments with the political realities of funding requirements and public discontent over tax adjustments. Meanwhile, business responses to proposed national insurance contributions have been largely negative, impacting hiring and contributing to inflationary pressures.

Reeves is also seeking a new chief economic adviser following the reduced role of John Van Reenen. James Murray will succeed Jones, while Dan Tomlinson is set to take over Murray’s former position. Shafik’s reputation as an expert in the international economy is anticipated to guide Labour’s strategies, but concerns remain regarding the complexities of implementing a budget that addresses both revenue needs and public expectations.

Source: https://www.theguardian.com/business/2025/sep/01/reshuffle-gymnastics-prepare-starmer-to-walk-tricky-budget-tightrope

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