Global insecurity means the Government must go ‘further and faster to reform the state, to deliver a strong, agile and active state that delivers for working people’, Starmer tells his Cabinet
Sir Keir Starmer is to abolish outside regulators and bring more decision-making inside government under a “bonfire of the quangos”.
In the first cut of red tape, the Payment Systems Regulator – which oversees systems like Faster Payments and Mastercard – will be axed and brought under the Financial Conduct Authority.
The move is part of a major reform of the state to be outlined by the Prime Minister in a speech on Thursday which he will claim will drive economic growth and make a difference to the lives of working people under Labour’s “Plan for Change”.
But the Conservatives claim Labour has overseen an expansion of regulators.
Pat McFadden, the Chancellor of the Duchy of Lancaster, has already warned the civil service that “radical” cuts to Whitehall are being planned to make the government more “agile”, while Health Secretary Wes Streeting is overseeing a major reform of NHS England, bringing it closer to the Department of Health, with thousands of posts set to go.
Starmer said: “For too long, the previous Government hid behind regulators – deferring decisions and allowing regulations to bloat and block meaningful growth in this country.
“And it has been working people who pay the price of this stagnation.
“This is the latest step in our efforts to kickstart economic growth, which is the only way we can fundamentally drive-up living standards and get more money in people’s pockets.
“That’s why it is the priority in the Plan for Change, and it’s why I’m not letting anything get in its way.”
Chancellor Rachel Reeves said: “The regulatory system has become burdensome to the point of choking off innovation, investment and growth. We will free businesses from that stranglehold, delivering on our Plan for Change to kickstart economic growth and put more money into working people’s pockets.”
Starmer told his Cabinet on Tuesday that Whitehall departments should take responsibility for decisions “rather than outsourcing them to regulators and bodies as had become the trend under the previous government”, Downing Street said.
Current global insecurity meant the Government must go “further and faster to reform the state, to deliver a strong, agile and active state that delivers for working people”, Starmer told Cabinet ministers.
“This included Cabinet assessing processes and regulations that play no part in delivering the Plan for Change,” he added “and the Government taking responsibility for decisions rather than outsourcing them to regulators and bodies as had become the trend under the previous government.”
Asked whether Starmer’s speech amounted to a “bonfire of the quangos”, the PM’s official spokesman said: “When it comes to the state, this week, the Prime Minister, Cabinet and the Cabinet Secretary will set out the next steps that this Government will take to fundamentally reshape the British state to deliver for working people and their families with a single minded focus to drive through the plan for change.
“But we also need to see the state more agile, more mission-focused. We need to see the Civil Service that is more productive and empowered to deliver on and that’s what you’ll hear more from the Chancellor or the Prime Minister on later in the week.”
The Government said bringing the Payment Systems Regulator under the FCA would make it “easier for firms to deal with one port of call” when querying transactions.
Downing Street said “unnecessary regulation” would be cut to boost growth and put “more money in working people’s pockets”.
Further steps to cut red tape will be announced by ministers over the coming days.
It comes after the Justice Secretary became embroiled in a row with the Sentencing Council last week over guidance asking judges to consider ethnicity when deciding whether to ask the Probation Service for a pre-sentence report on an offender.
Shabana Mahmood has asked the Sentencing Council to reconsider its guidance, while ministers have insisted it is for them and Parliament to determine policy.
Responding to this Tory leader Kemi Badenoch said: “If the Justice Secretary, Shabana Mahmood, doesn’t want a two-tier criminal justice system she should change the law and the Conservatives will back her.
“Ministers should decide, not quangos. Labour need to grip this.”
A Tory source said: “Since it assumed power, this government of bureaucrats and lawyers has created a new quango once every nine days. Like his disastrous Budget and snatching away winter fuel payments, Keir Starmer is constantly having to undo his own terrible decisions.”
The Government said that axeing of the Payment Systems Regulator would not immediately affect its remit or ongoing programme of work, and the quango would continue to have access to its statutory powers until legislation is passed by Parliament to enact the changes.