As a new year starts with the government focused on cost of living domestically, driven by a commitment to demonstrate a “year of proof”, but facing massive global headwinds, I wanted to share five takeaways from a recent high-level economic and political discussion at FGF’s Business Panel.
The FGF Business Panel brings corporate leaders, policymakers and experts together to explore solutions to challenges facing our country, and last month hosted Dan Tomlinson MP, Exchequer Secretary to the Treasury and Chris Curtis MP, Chair of the Labour Growth Group.
Here are five takeaways from the Business Panel’s conversation:
1. A balanced Budget that is fair and necessary. The Budget delivered a series of business-focused policy changes, from Electric Vehicle Excise Duty reforms to new tax reliefs aimed at spurring innovation. While businesses recognise that some measures will deliver benefits and others will introduce new costs, the consensus was that the package is fair and necessary, and underpinned by a welcome sense of stability. Maintaining the lowest corporation tax rate in the G7 continues to provide certainty to competitive international business. The Spring Statement on 3 March will not attract the same level of expectation and anticipation as November’s Budget, and won’t have an OBR assessment of performance against fiscal rules, thus the Chancellor will feel in the driving seat despite having fewer levers at her disposal. In 2026 we should see inflation return to the 2% target by April, and a further three interest rate cuts would see the base rate down to 3% by the end of the year; the minimum wage rising by 4.1%; state pensions up by 4.8% and benefits up 3.8%.
2. Urgency must now drive delivery in the “year of proof”. The end of 2026 will mark the halfway point of this parliament. The Plan for Change was launched; major strategies in Defence, Health, Infrastructure, Child Poverty, Industrial Strategy, and Homelessness have been published; flagship legislation has received Royal Assent; and trade deals have been signed. The next phase must be defined by urgent, meaningful, and transformative delivery. The Prime Minister expressed his frustration at pulling levers only to find regulations, consultations, and bureaucracy standing in the way of change. Others have blamed the stakeholder state. Ministers in departments, Mayors and local government, and the Prime Minister’s Delivery Unit will need to redouble efforts if 2026 is indeed to be the year of proof.
3. Parliamentary caucuses are becoming engines of practical change. Groups such as the Red Wall Group, the Living Standards Coalition, the Coastal Communities Group, the Labour Rural Research Group, and most prominently, the Labour Growth Group, have evolved from advocacy forums into practical problem-solvers. They are increasingly putting forward actionable proposals for Government. Chris Curtis MP highlighted the need for a Growth Omnibus Bill to consolidate further measures that enable investment and growth, an instrument that could significantly support delivery capacity and improve stakeholder engagement. These caucuses are set to grow in influence in 2026.
4. There is momentum for regulatory reform, but culture lags. Across sectors, from energy and retail to manufacturing and planning, there is clear scope for better regulation to unlock growth. Ministers have instructed regulators to operate with a sharper pro-growth mandate, but entrenched cultures mean progress is slow. Leadership changes at several regulators indicate a desire from Ministers to accelerate reform, yet industry voices are not always heard or understood. Structures are needed to ensure stakeholder insight consistently informs policy and regulatory decisions.
5. The centre of government has long been under-powered and structures and culture are a persistent challenge. As an example, industry is eager to engage directly with the Exchequer Secretary, and individual businesses continue to seek meetings. The Minister’s remit spans major agencies including HMRC, the Valuation Office Agency, and the Government Actuary’s Department: a broad and politically sensitive portfolio. Yet the sense is that capacity, culture, and co-ordination are persistent challenges at the centre of government. This is something FGF’s In Power 01 report identified and proposed recommendations to fix and was addressed this week by the Chief Secretary to the Prime Minister’s ’move fast and fix things’ speech.
These five takeaways are a flavour of the scope of the Business Panel’s discussions which will continue in 2026, bringing the experience and insight of business to Government, and focusing on growth, investment, devolution, deregulation, tax, procurement, skills and more.
It is clear that despite facing global and domestic challenges, the Government has achieved meaningful progress toward its mission of national renewal. But urgency remains the watchword; delivery the priority; and genuine engagement is essential. The FGF Business Panel stands ready to play its part.
For further information on the FGF Business Panel, please contact John Lehal, Convenor of the Business Panel on [email protected] or Adam Terry, FGF Deputy Director on [email protected]
