Rishi Sunak’s baby steps on cabinet changes are a reminder he still struggles to take his party with him

Published

2 years ago

August 31, 2023

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Rishi Sunak today sought to put his own stamp on the cabinet, in a way not possible a year ago when he took over.

Yet this reshuffle – which was already in the works in May – took only baby steps towards creating a cabinet truly in Mr Sunak’s image.

Even this level of change immediately provoked rumblings which suggest some of the Conservative Party are not yet ready for a top team that bears his imprint too heavily.

Today has been a stark reminder that, 10 months into the job, sometimes Mr Sunak still struggles to take part of his party with him.

And as a result, he is now likely to have a second reshuffle before the end of the year.

The logic behind the three decisions today tells us much about Mr Sunak.

There is a perfectly sensible reason to replace Ben Wallace with Grant Shapps.

Mr Wallace had qualities that endeared him to many – his affinity with the military, his high standing with Tory members, his willingness to confront the Treasury and other ministers, and his pivotal role over Ukraine.

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But not all of these went down so well in Number 10, who felt this amounted to grandstanding on the world stage and endless demands for cash.

It was no secret in Westminster that the personal relationship between Mr Wallace and Mr Sunak was not the strongest.

So the Shapps appointment represents a different approach.

A fast learner – as any cabinet minister who has had five jobs in the last year can expect to be – he will use this more high-profile approach to project the government’s message more widely.

Senior Tories know they don’t have many top-rank media performers (“it’s a bit eighth series Big Brother”, sighed one) – so an upside of the defence post is that it comes without the burdens of the energy job – where the incumbent risks being dragged into tricksy arguments about climate change and net zero.

Mr Shapps is not known for getting bogged down in fights with cabinet colleagues or arguments with the Treasury.

In general, he is well-liked – and last year was sufficiently confident to launch his own, albeit brief, leadership bid.

Such is the grumpiness of the Tory Party that this closeness is toxic for some, with one member of the government labelling Grant Shapps “an encyclopaedia salesman” – he was a businessman before entering government – and claiming this was a reward for helping to oust Liz Truss.

Yet Mr Sunak will see this as putting the demands of an upcoming election ahead of the need for depth of military or foreign affairs experience – a trade-off he will be comfortable with.

Replacing Mr Shapps in the energy brief is Claire Coutinho, one of the most loyal MPs to Mr Sunak in parliament.

A special adviser when he was chief secretary to the Treasury, a parliamentary aide when he was chancellor, and a senior figure on his campaign team, this former investment banker speaks the prime minister’s language.

As a reward, she becomes the first 2019 intake MP to be catapulted into cabinet.

But she is a relatively unknown figure to many, and there will be an awful lot of Tory MPs who feel there are others (perhaps themselves) with greater qualifications.

She – along with Laura Trott, Victoria Atkins, Laura Farris and the highly tipped David Johnston, who was promoted to Ms Coutinho’s old job – form a new generation of loyalists for the new prime minister.

But many others, bruised by the Truss era, are hostile and suspicious of his decision to promote allies rather than reach across the party to find talent.

Back in May, there were suggestions this reshuffle might spell the end of Therese Coffey, the environment secretary, Steve Barclay, the health secretary, or even Suella Braverman, the home secretary.

What is not clear is whether things will be easier in November than they are now, the last days of August.

Politics

Civil service relocation and AI officials at heart of government cost cutting measures

Published

1 hour ago

May 14, 2025

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Civil service relocation and AI officials at heart of government cost cutting measures

AI civil servants and sending human workers out of London are at the heart of the government’s plans to cut costs and reduce the size of the state bureaucracy.

Shrinking the civil service has been a target of both the current Labour and recent Conservative governments – especially following the growth in the organisation during the pandemic.

From a low in 2016 of 384,000 full time workers, in 2024 there were 513,000 civil servants.

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The Department for Science, Innovation and Technology is claiming a new swathe of tools to help sift information submitted to public consultations could save “75,000 days of manual analysis every year” – roughly the work of 333 civil servants.

However, the time saved is expected to free up existing civil servants to do other work.

The suite of AI tools are known as “Humphrey”, after Humphrey Appleby, the fictional civil servant in the TV comedy Yes, Prime Minister.

The government has previously said the introduction of AI would help reduce the civil service headcount – with hopes it could save as much as £45bn.

Speaking today, Technology Secretary Peter Kyle appeared to take aim at expensive outsourcing contracts, saying: “No one should be wasting time on something AI can do quicker and better, let alone wasting millions of taxpayer pounds on outsourcing such work to contractors.”

Move outside of London

Other money-saving plans announced today include moving 12,000 civil servants out of London and into regional hubs – with the government hoping it can save almost £100m by 2032 by not having to pay for expensive leases of prime office space in the capital.

Currently, 95,000 full time civil servants work in London.

Tens of millions of pounds a year are expected to be saved by the closure of 102 Petty France, which overlooks St James’s Park, and 39 Victoria Street, which is near the previous location of New Scotland Yard.

In total, 11 London offices are slated for closure, with workers being relocated to the likes of Aberdeen, Belfast, Darlington, Bristol, Manchester and Cardiff.

The reforms of the civil service are being led by Chancellor of the Duchy of Lancaster Pat McFadden – one of Sir Keir Starmer’s most influential ministers.

Mr McFadden said: “To deliver our plan for change, we are taking more decision-making out of Whitehall and moving it closer to communities all across the UK.

“By relocating thousands of civil service roles we will not only save taxpayers money, we will make this government one that better reflects the country it serves. We will also be making sure that government jobs support economic growth throughout the country.

“As we radically reform the state, we are going to make it much easier for talented people everywhere to join the civil service and help us rebuild Britain.”

The government says it wants senior civil servants out of the capital too – with the aim being that half of UK-based senior officials work in regional offices by the end of the decade.

The government claims the relocations and growth of regional hubs could add as much as £729m to local economies by 2030.

Union welcome – cautiously

Unions appear to cautiously welcome the changes being proposed.

All of Prospect, the PCS and the FDA say it is positive to see better opportunities outside of the capital.

However, they have asked for clarity around whether roles may be lost and what will be offered to people transferring.

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Fran Heathcote, the general secretary of the PCS union, said: “If these government proposals are to be successful however, it’s important they do the right thing by workers currently based in London.

“That must include guarantees of no compulsory redundancies, no compulsory relocations and access to more flexible working arrangements to enable them to continue their careers should they wish to do so.”

Politics

US lawmakers call for change in corporate digital asset taxes

Published

3 hours ago

May 13, 2025

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US lawmakers call for change in corporate digital asset taxes

Two US senators are calling on Treasury Secretary Scott Bessent to “exercise [the department’s] authority” and change a provision affecting taxes on corporate holdings of digital assets.

In a May 12 letter, Senators Cynthia Lummis and Bernie Moreno suggested Bessent had the authority to change the definition of “adjusted financial statement income” under existing US law in a way that could reduce what digital asset companies pay in taxes. The proposed adjustment was suggested as a way to modify a provision of the Inflation Reduction Act, signed into law in 2022.

“Our edge in digital finance is at risk if US companies are taxed more than foreign competitors,” said Lummis in a May 13 X post.

Cryptocurrencies, Law, Taxes, Senate — *May 12 letter to Treasury Secretary Scott Bessent. Source:* *Cynthia Lummis*

According to the two senators, the proposed modification would provide “relief to corporations that invest in digital assets.” Lummis has been one of the most outspoken digital asset advocates in Congress, while Moreno took office in January after crypto-backed political action committees spent roughly $40 million to support his 2024 Senate race.

The Inflation Reduction Act, which went into effect in 2023, imposes a 15% minimum tax on companies that report more than $1 billion in profits for three consecutive years. The measure would seemingly include unrealized crypto gains and losses, leading to Lummis’ and Moreno’s calls for the Treasury Department to “act swiftly.”

Senate awaiting second vote on stablecoin bill

The call from the two senators came as lawmakers in the Senate are expected to consider another vote on the Guiding and Establishing National Innovation for US Stablecoins, or GENIUS Act — legislation to regulate payment stablecoins in the US. A motion for consideration failed to move forward in the Senate on May 8 due to Democratic lawmakers pushing back on Donald Trump’s ties to the crypto industry.

Lummis, one of the bill’s co-sponsors, suggested that she would continue to support digital asset regulation. The Senate could take up another vote in a matter of days.

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Politics

What are the next steps for the US stablecoin bill?

Published

5 hours ago

May 13, 2025

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What are the next steps for the US stablecoin bill?

Proponents of a bill to regulate stablecoins in the US Congress will likely take up another vote on the legislation in a matter of days without responding to concerns about President Donald Trump’s financial ties to the cryptocurrency industry.

The Guiding and Establishing National Innovation for US Stablecoins, or GENIUS Act, failed to get enough votes to pass in the US Senate on May 8 amid calls from some Democratic lawmakers to halt any legislation related to digital assets until Republicans could address Trump’s potential conflicts of interest.

Immediately following the vote, some lawmakers from both parties suggested they could reconsider the bill as early as this week, but without agreeing on a bipartisan path forward.

After the GENIUS Act failed to proceed in a 48 to 49 vote in the Senate, Majority Leader John Thune made a motion to reconsider, setting up a possible vote on the matter within days. A source familiar with the matter told Cointelegraph Republicans who backed the bill were unlikely to modify it to block Trump or any member of his administration from investing in digital assets, claiming it was beyond Congress’s authority under the Constitution.

“[…] this delay is not inherently detrimental,“ said Liat Shetret, vice president of global policy and regulation at blockchain analytics firm Elliptic. “We can expect the bill to return to the floor, with this pause giving both parties time to clarify provisions and address lawmakers’ concerns.”

The Cedar Innovation Foundation, an organization tied to the political action committee (PAC) Fairshake, issued a warning to Senate leadership to “avoid political games” and pass a stablecoin bill “in the coming days.” Fairshake spent more than $131 million to support candidates in the 2024 US elections, some of whom are currently serving in the House and Senate. There are still more than 500 days until the 2026 midterms, when many members of Congress are up for reelection.

On May 12, the Senate resumed consideration of the motion to proceed to consideration of the GENIUS Act, suggesting another vote soon.

Changes to stablecoin or market structure bills?

Should Republicans in the Senate reintroduce the bill without any changes, it’s unclear whether they would have enough support to clear a 60-vote majority to avoid a Democratic filibuster — a process to delay or sometimes block a vote on a bill.

The Trump family’s ties to the crypto platform World Liberty Financial and its stablecoin, USD1, have raised potential corruption concerns, as has offering the top holders of his TRUMP memecoin the chance to pay for access to the president through an exclusive dinner and reception.

“[…] the Republicans’ bill did nothing to address Trump’s conflict, and instead voted to hand Trump the authority to write the rules over his and his competitors’ stablecoins,” said Democratic Representative Maxine Waters in a May 6 statement. She blocked a hearing to discuss a possible digital asset market structure bill, citing concerns about Trump’s “ownership of crypto.”

Democratic lawmakers have already introduced possible solutions to what they called the “biggest corruption scandal in the history of the White House” — with legislation in the House and Senate to bar members of Congress, the president, the vice president, and their families from profiting off memecoins. Senators Elizabeth Warren and Chris Van Hollen also reportedly called on the president to fully divest from USD1 before making any possible deals with foreign governments.

The nonpartisan organization State Democracy Defenders Action reported in April that Trump’s crypto holdings were worth roughly $2.9 billion, which accounted for 40% of his wealth. This report came before the launch of World Liberty Financial’s stablecoin, which an Abu Dhabi-based investment firm said it would use to settle a $2 billion investment in Binance. Trump’s sons, Eric, Donald Trump Jr., and Barron, were all listed as “Web3 ambassadors” for the platform.

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