Chancellor Rachel Reeves has returned from the World Economic Forum in Davos with renewed zeal for driving economic growth, encapsulating the government’s continued overriding priority.
In a tough fiscal climate with rising borrowing costs and geopolitical uncertainties, boosting economic growth has become even more central to the government’s agenda and political fortunes. Speaking over the weekend, Reeves highlighted the UK’s prospects and even suggested learning from Donald Trump’s ‘boosterism'.
In a major growth-focused speech this week, Reeves is expected to signal support for a third runway at Heathrow Airport alongside broader planning reforms and investments in infrastructure and housing. While delivering on growth is vital, this pro-deregulation stance poses its own risks, with Heathrow’s expansion particularly controversial with some key figures within Labour.
This is just one element of the government's attempts to go all-out for growth. Last week's softening of its non-dom tax proposals, the dismissal of Marcus Bokkerink (Chair of the Competition and Markets Authority), and a commitment to restrict repeated legal challenges to planning decisions for major infrastructure projects are all signs of the government’s intent.
However, these plans for growth will only bear fruit in the medium and longer-term, and with March’s Spring Forecast and tough spending decisions looming, the challenging economic fundamentals and associated political difficulties will continue to persist for now.
Economic issues are clearly a concern for all political parties. Last week, Leader of the Opposition Kemi Badenoch reportedly urged former Prime Minister Liz Truss to “shut up for a while” following unhelpful interventions, such as a recent letter threatening legal action against Keir Starmer for accusing her of crashing the economy. The attempts to distance the Conservative Party from Truss’ economic legacy highlights Badenoch’s challenge of standing out in a crowded political field, an issue compounded by her lack of specific and detailed policy proposals so far.
Last week also saw the sentencing of killer Axel Rudakubana to a minimum of 52 years for the Southport killings last summer. Despite warning signs and various referrals to Prevent, his actions were not classified as terrorism due to the absence of an ideological motive. This has reignited debates over UK counterterrorism policies, including whether the definition of terrorism should be expanded, as well as calls – including from the Labour MP for Southport – for a harsher sentence for Rudakubana.
Prime Minister Starmer announced a public inquiry into the failures surrounding the case and attention has once again shifted to tech platforms, with Home Secretary Yvette Cooper urging them to remove content viewed by Rudakubana to prevent similar attacks in future.
Across the Atlantic, Donald Trump’s return as the 47th President of the United States was anything but quiet. A flurry of executive orders sought to rollback much of President Biden’s legacy, addressing hot button issues such as immigration and climate change. In a taste of things to come, President Trump’s threat of emergency tariffs on all goods from Colombia, led the country to back down and accept deported migrants from the United States.
However, presidents are constrained by what they can achieve through executive action alone - with Trump's attempt to end birthright citizenship in the US already temporarily blocked by the courts - and all eyes will look to Congress as Trump tries to advance his agenda in the months ahead.
Back home, Trump’s second term creates new complexities for the UK, but the start has been positive with Trump praising Starmer for doing a "very good job thus far" after their phone call on Sunday. Starmer will hope his government can leverage this relationship to secure Trump’s approval for Lord Mandelson as ambassador and avoid the economic damage from Trump’s tariffs amongst other issues.
However, with reports that Starmer is expected to resist pressure to increase defence spending to 2.5 per cent of GDP by 2030, this initial rapprochement between the two world leaders may not endure for long.
Meanwhile, debates around Europe continue to persist in British politics. Polling to mark the 5-year anniversary of Brexit found every constituency in Britain thinks the government should prioritise trade with the EU over the United States. The government has not ruled out joining the Pan-Euro-Mediterranean Convention, a Europe-wide customs scheme, and this follows recent calls from the Liberal Democrat leader Sir Ed Davey for the UK to join a new customs deal with the EU.
While closer ties with Europe could boost the economy and counterbalance Trump’s unpredictability and the impact of potential tariffs, with Reform hot on Labour’s heels in recent polls, any such moves run the risk of alienating some key voters at a time when the government needs support more than ever.
With mounting economic challenges at home and abroad, expect many more weeks like this one – with difficult decisions and a relentless focus on delivery from the government – across the year to come.
What’s on in Parliament
Monday 27th January
House of Commons
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Oral questions: Education
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General debate: Creative Industries
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Westminster Hall debate: e-petition 657935 relating to speech and language therapy
House of Lords
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Oral questions: Service provided by Avanti West Coast between Manchester and London
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Oral questions: Role children’s rights will play in plans to improve children’s wellbeing and opportunities
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Legislation: Mental Health Bill – Committee stage (day 4)
Tuesday 28th January
House of Commons
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Oral questions: Justice
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Ten Minute Rule Motion: Women’s State Pension Age (Ombudsman Report and Compensation Scheme)
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Westminster Hall debate: Road safety for young drivers
House of Lords
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Oral questions: Preventing community pharmacy closures
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Oral questions: Status of retained EU law
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Legislation: Data (Use and Access) Bill – Report stage (day 2)
Wednesday 29th January
House of Commons
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Oral questions: Wales
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Prime Minister’s Question Time
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Westminster Hall debate: Housing targets in rural areas
House of Lords
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Oral questions: Outstanding asylum applications of Syrians in the UK
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Legislation: Royal Albert Hall Bill – Third reading
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Legislation: National Insurance Contributions (Secondary Class 1 Contributions) Bill - Committee stage (day 2)
Thursday 30th January
House of Commons
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Oral questions: Business and Trade
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Backbench Business: General debate on proportional representation for General Elections
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Westminster Hall debate: Medicinal cannabis
House of Lords
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Oral questions: Discussions with international partners on Taliban restrictions against women in Afghanistan, including medical school attendance bans
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Debate: Tax implications of corporations shifting profits to low and no-tax jurisdictions
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Debate: New youth mobility scheme with European countries
Friday 31st January
House of Commons
The House of Commons is not sitting. The House will next sit on 3rd February 2025.
House of Lords
The House of Lords is not sitting. The House will next sit on 3rd February 2025.
Consultations
- NHS Pension Scheme: proposed amendments for April 2025 - Closes 4th February
- Consultation on the implementation of the new subscription contracts regime - Closes 10th February
- SMS investigations into Apple and Google’s mobile ecosystems - Closes 12th February
Statistics
- National population projections: 2022-based - Published 28th January
- Sexual Orientation - Published 29th January
- Appointments in General Practice, December 2024 - Published 30th January