Finance & Leasing AssociationSimon Goldie, Director of Advocacy
HM Treasury (HMT) has always been a key power centre in Whitehall. Sometimes it has been more obvious than not – for instance when Gordon Brown was Chancellor, he made clear that in his view he was the Chief Executive of the Government while the Prime Minister, Tony Blair, was Chairman. Other Chancellors were more subtle but however they approached the role, they knew that being in charge of the Treasury meant making the political and economic weather.
It's understandable: HMT hold the purse strings.
And now we have seen how that power can even be wielded by a potential Chancellor.
Sir Keir Starmer's announcement that Labour was dropping its commitment to deploy £28 billion to support net zero was not taken lightly. Internally, the Labour Shadow Cabinet had been discussing this for months. Reeves was for dropping it, Starmer and Ed Miliband were keen to retain it.
There is context to all this. The public finances are tight and whoever comes into government after the next election will need to prioritise spending plans. As well as that, we are seeing a recalibration on net zero policies across Europe as well as a change in investor ESG sentiment. Reeves and Starmer know all of this.
That’s why it's critical to maintain our strong engagement with HM Treasury. For example, our work on full expensing highlights why it’s important to make the case for our members and how this can deliver tangible results.
If Labour win, expect the power of the Treasury to continue. Reeves will face hard decisions and has already shown how she will approach them.
Published 15 Feb 2024
