Jeremy Hunt announces freeze on Whitehall expansion

Jeremy Hunt vows to slash ‘the blob’ by 66,000 and freeze Whitehall expansion as Chancellor uses Tory conference speech to pledge to toughen benefit rules and tighten the law to stop people being ‘debanked’

Jeremy Hunt today announced a freeze on Whitehall expansion as he set out plans to cut 66,000 civil servant jobs.

In his address to the Tory conference in Manchester, the Chancellor pledged to save taxpayers £1billion next year by halting the growth of the civil service.

Mr Hunt pledged to cap the Whitehall headcount at its current level of around 490,000 and set out an ambition to reduce this number to pre-Covid levels.

The Chancellor also used his conference speech to pledge to toughen benefit rules, confirm plans to increase the National Living Wage to at least £11 an hour, and vow to tighten banking rules in the wake of the ‘debanking’ scandal.

But today saw Mr Hunt come under fresh pressure to slash taxes, as former PM Liz Truss led a string of ex-Cabinet ministers in demanding a cut to levies at a rally of Tory activists.

Elsewhere at the Tory conference in Manchester today:

• There were fresh reports that the PM is poised to scrap the northern leg of HS2 to Manchester
• Former PM Liz Truss demanded cuts to corporation tax as she delivered a dramatic speech to Tory activists
• Nigel Farage refused to rule out a return to politics as the ex-Ukip leader was mobbed in his first Tory conference appearance in a decade
• Kemi Badenoch wooed Tory members with conference speech railing against Net Zero and Remainer defeatism
• The Tories continued to move closer to Labour as a new Redfield & Wilton Strategies poll put them 14 per cent behind Sir Keir Starmer’s party

Jeremy Hunt announced a freeze on Whitehall expansion as he set out plans to cut 66,000 civil servant jobs

The Chancellor pledged to cap the Whitehall headcount at its current level of around 490,000 

Mr Hunt also used his Tory conference speech today to confirm plans to increase the National Living Wage for over-23s to at least £11 an hour and impose tougher conditions on benefits

What did the Chancellor say in his Tory conference speech? 

Freeze on Whitehall expansion

The Chancellor said: ‘I’m freezing the expansion of the civil service and putting in place a plan to reduce its numbers to pre-pandemic levels.

‘This will save £1 billion next year.’

Toughened benefit rules

‘Around 100,000 people are leaving the labour market every year for a life on benefits.

‘Mel Stride gets this 100 per cent which is why he’s replacing the Work Capability Assessment.

‘And we’re going to look at the way the sanctions regime works.

‘It isn’t fair that someone who refuses to look seriously for a job gets the same as someone trying their best.’

Boost to National Living Wage

‘We promised in our manifesto to raise the National Living Wage to two thirds of median income – ending low pay in this country.

‘At the moment it is £10.42 an hour and we’re waiting for the Low Pay Commission to tell us next year’s recommendation.

‘But I confirm today, whatever that recommendation, we will increase the National Living Wage to at least £11 an hour next year.

‘That’s a pay rise for two million workers.’

Tightened laws on ‘debanking’

‘Nobody should have their bank account closed because someone else decides they’re not politically correct.

‘We’ll tighten the law to stop people being debanked for the wrong political views.’

Taxes

‘Conservatives will always protect public services, but we’re also honest about the taxes that pay for them.

‘After a once in a century pandemic and the biggest energy crisis in a generation, the level of tax is too high.’

Announcing his plans to halt Whitehall expansion, the Chancellor said in his speech: ‘We have the best civil servants in the world and they saved many lives in the pandemic by working night and day.

‘But even after that pandemic is over, we still have 66,000 more civil servants than before. New policies should not always mean new people.

‘So, today I’m freezing the expansion of the civil service and putting in place a plan to reduce its numbers to pre-pandemic levels. This will save £1billion next year.’

Mr Hunt vowed not to lift the freeze on Whitehall expansion until the development of a ‘proper plan not just for the civil service but for all public sector productivity improvements’.

In June 2016, when the EU referendum took place, there were 384,000 civil servants – the smallest number since the Second World War.

But the number of Whitehall staff has since grown as the civil service expanded to deal with Britain’s exit from the EU, and then respond to the Covid pandemic.

The Treasury stressed Mr Hunt’s announcement did not amount to a recruitment freeze, and that current recruitment campaigns would remain ongoing. 

Mr Hunt also announced a wide-ranging ‘equality and diversity audit’ designed to drive out ‘waste and inefficiency’ caused by woke initiatives. Government sources said the job squeeze could last for five years, with departments encouraged to cut ‘non-core’ functions like diversity to focus on essential tasks.

He said: ‘Improving opportunity and stopping discrimination should be every manager’s job and not a box you tick by hiring a person, so driving out inefficiency and waste on diversity spending is critical.’

A Tory source said the initiative was designed to ‘cut the Blob down to size’ and ‘tackle some of this woke nonsense that is getting in the way of delivering what the public want’.

The cost-cutting drive came as the Chancellor insisted that independent forecasters such as the Institute for Fiscal Studies were ‘wrong’ to claim that Britain had moved permanently to a high-tax, high-spend economy.

He said spending control and a public sector productivity drive could eventually free up cash for tax cuts. But to the dismay of some Tory MPs, he ruled out slashing taxes in next month’s Autumn Statement.

He said introducing tax cuts now would ‘compromise’ the battle against inflation, adding: ‘I don’t think it’s going to be possible to do any big tax cuts, on the basis first of all of the public finances as we see them.’

He told GB News: ‘The way you win elections is by making promises people believe. We’re being honest with people, there is no short cut to tax cuts.

‘If I gave a big tax cut this year, it would be inflationary, because we’d be putting money in people’s pockets, which would boost up demand, which would ultimately mean prices would go up as well. So this is not the right time.’

The Chancellor left the door open to pre-election tax cuts in next year’s Budget, but said it was not yet clear if they would be possible. And he hinted he will keep the pensions triple lock in place in the Autumn Statement, saying ‘we’ve always prioritised’ pensioners.

Mr Hunt’s renewed focus on civil service waste reflects the need to improve public sector efficiency and free up cash for any tax cuts.

Treasury sources said rising interest rates meant the cost of servicing the UK’s debt mountain was now £20 billion a year higher than at the March Budget, squeezing the Chancellor’s room for manoeuvre. Boris Johnson announced plans last year to cut 91,000 civil service jobs over three years, in order to reduce Whitehall to its pre-2016 level. But the idea was dropped by Liz Truss amid warnings that redundancy payments could cost £7 billion.

The new plan revives the aim of squeezing the size of the Whitehall machine, but will take longer, will reduce it only to its pre-2019 level and will not involve compulsory redundancies.

Mr Hunt also used his Tory conference speech today to confirm plans to increase the National Living Wage for over-23s to at least £11 an hour and impose tougher conditions on benefits.

He confirmed he and Work and Pensions Secretary Mel Stride intend to rework the benefits sanctions regime to make it harder for people to claim benefits while refusing to take ‘active steps’ to move into work. 

The Chancellor also pledged to tighten banking rules in the wake of the ‘debanking’ scandal to make sure customers could not have their accounts closed due to their political views.

‘Nobody should have their bank account closed because somebody else decides they’re not politically correct,’ Mr Hunt said.

‘We will tighten the law to stop people being debanked for the wrong political views.’

The debanking scandal erupted when ex-Ukip leader Nigel Farage revealed he was being ditched as a Coutts customer.

A dossier emerged showing a bank committee had said the politician’s views did not align with the lender’s own.

Mr Hunt delivered his Tory conference speech just hours after Ms Truss teamed up with fellow ex-Cabinet ministers Jacob Rees-Mogg, Ranil Jayawardena and Priti Patel at a ‘Make Britain Grow Again’ rally.

The quartet all demanded lower taxes and a greater focus on reviving the UK economy. 

Mr Hunt admitted the ‘the level of tax is too high’. But the Chancellor defended his and Rishi Sunak’s focus on cutting inflation from its 11 per cent peak, as they attempt to fend off Tory calls for immediate tax cuts. 

‘Nothing hurts families more when it comes to the weekly shop, heating bills or pump prices, which is why the Prime Minister has pledged to halve it,’ Mr Hunt said.

‘We’re getting there – it was 11 per cent , it’s now down by 40 per cent – the plan is working and now we must see it through, just as Margaret Thatcher did many years ago.

‘When we halve inflation, that’s not a 1 per cent income tax cut, that’s a 5 per cent boost to incomes compared to if it stayed the same.’

Mr Hunt delivered his Tory conference speech just hours after former PM Liz Truss teamed up with fellow ex-Cabinet ministers Jacob Rees-Mogg, Ranil Jayawardena and Priti Patel at a ‘Make Britain Grow Again’ rally

The Tories have continued to move closer to Labour as a new Redfield & Wilton Strategies poll put them 14 per cent behind Sir Keir Starmer’s party

 As Mr Sunak watched on in the audience, Mr Hunt also pushed back at concerns about the health of the UK economy.

‘Our friends at the Office for National Statistics have recently changed their mind about the size of the British economy,’ he said.

‘They had been saying we were the worst performing large European economy since the pandemic.

‘But we weren’t the worst, we were one of the best. Since the pandemic, we have recovered better than France or Germany. We’ve grown faster than both of them since we left the single market.’

The Chancellor added: ‘So, to all the pessimists and decliners who have been talking us down, we say this: don’t bet against Britain. It’s been tried before and it never works.’

Mr Hunt appeared to take a swipe at those in the Tory party, such as former PM Liz Truss, who are demanding tax cuts and a greater focus on economic growth.

‘It’s easy to support higher growth, better public services and lower taxes. Harder to make it happen,’ he said.

‘It’s time to roll up our sleeves, take on the declinists and watch the British economy prove the doubters wrong.’

Labour’s Darren Jones, the shadow chief secretary to the Treasury, said in response to the Chancellor’s speech: ‘Outside the hall, Liz Truss was back to tell the Tory Party and the country that she was right all along – despite crashing the British economy and costing UK householders billions.

‘Jeremy Hunt had no big idea at all. Neither of them has a plan to take Britain forward or to help people with housing and the cost of living crisis.

‘What we need to do is turn the page on 13 years of Tory failure, grow the economy and make sure the benefits are felt in every part of the country. That’s the plan Labour will be setting out at conference next week.’

The Prospect union said Mr Hunt’s announcement on Whitehall expansion amounted to a U-turn after the Prime Minister had said he did not believe in ‘top-down targets for civil service headcount reductions’.

Mike Clancy, the union’s general secretary, said: ‘This latest U-turn shreds any remaining doubts about the Prime Minister’s lack of personal commitment to civil servants and will further undermine vital public services which are already struggling.

‘We now have Government ministers rushing out policies at Tory conference in a desperate attempt to shore up their own support from the hard-Right of their party.

‘This says more about the electoral problems facing the Conservative Party than it does about effectively running the country.

‘As a union, we have demanded a meeting with ministers to convey the real sense of alarm among their own staff that ministers have unleashed with this dangerous announcement.’

Dave Penman, general secretary of the FDA union which represents senior civil servants, said: ‘With so many public services still on their knees post-Covid, it’s fantasy politics to suggest you can just get the same with significantly less resources.’

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