PARLIAMENTARY DEBATE
Rewiring the State - 2 September 2026 (Commons/Commons Chamber)
Debate Detail
On the steps of Downing Street six weeks ago, the Prime Minister set out the priorities that will guide this Government. He was clear that 40 years of overly centralised decision making and over-privatisation have stripped power and resources away from communities in every nation and region of this country; that public control over the things that matter so much to people’s lives has been systematically eroded and become a barrier to businesses wanting to start and grow; and that a broken economic and political model has cost good jobs and opportunities in many parts of the country, while delivering sky-high prices in exchange for poorer customer services.
The Prime Minister was clear that this Government will be the circuit breaker that our country needs: a Government who will take power from Westminster and Whitehall, and put it in the hands of the communities who are best placed to use it; who will rewire Britain, so that our politics and our economy work for every person and every place. On a bedrock of fiscal discipline, we will build a pro-business culture and an innovation-led economy that delivers good growth in every postcode.
We have wasted no time in delivering on that commitment. In the newly formed Office of the Prime Minister and Cabinet, we are rewiring the machinery of government so that the Prime Minister has the resources and levers he needs to deliver on his priorities. By stripping out many of the bureaucratic functions of the office, we have created a stronger, more focused Department that is capable of driving forward the Prime Minister’s agenda. This Government recognise that for far too long there has been a disconnect between the Cabinet Office and No. 10, and it is that lack of joined-up thinking that has hampered the ability of successive Prime Ministers to drive forward their own agendas across Government.
We have had a dichotomy at the heart of Government: the most centralised state in the G20, with one of the most underpowered centres. In the newly established OPMC, we are ensuring that the Prime Minister has the support and resources he needs to deliver the change that the public are impatient to see. From that office, we will drive forward work across Government to put the essentials, such as water, transport, energy and housing, under greater public control, in order to regenerate our communities, breathe new life into our high streets and give people more room to breathe through action on the cost of living.
That work of change has begun. Working closely with the Prime Minister and the Cabinet Secretary, we have begun the work of shifting power and resources away from Whitehall. Through our devolution blueprint and the establishment of No. 10 North, we have created a new engine of regional economic growth that will empower places that have been overlooked by Westminster for too long. We are granting new powers to strategic authorities to take more control over the future of their regions: a greater share of locally generated revenues, beginning with business rates; and more control over housing, public transport and infrastructure. For the first time, local leaders will have the power and resources they need to invest in the things that matter most to their communities.
This Government are filling in the map to bring an end to the system of two-tier devolution, so that by the end of 2028 we are able to extend to all parts of England the same offer that the rest have enjoyed for many years. This is how we can empower communities, drive local economic growth, create new jobs and deliver maximum benefit to the people who live there. This is devolution by design and devolution by default, and by working across Government we will build a new economic model that begins to put life’s essentials back under stronger public control and make them affordable for people again.
Working with my right hon. Friend the Secretary of State for Housing, Communities and Local Government and the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Doncaster Central (Sally Jameson)—and building on the strong foundations laid down by my predecessor, my right hon. Friend the Member for Bristol North West (Darren Jones), whom I thank for his work—we are delivering a once-in-a-generation rebalancing of power in this country. This is what a rewired state looks like: one that is relentlessly focused on delivering for the people of this country, with empowered communities and good growth in every postcode. These are the tests against which our decisions will be measured and the metrics by which our actions will be judged.
Last month, the Chancellor and I announced reforms to public procurement that will cut red tape and unleash a new wave of British job creation. Too often, small and medium-sized businesses have struggled to navigate complicated procurement processes that seem to prioritise everything. When we prioritise everything, we prioritise nothing, so we are making the process simpler and doing things differently. From next year, businesses seeking to win a share of £90 billion in central Government contracts will be left in no doubt about what we want from them: creating good jobs and giving young people the skills they need for the future. These new rules will ensure that the £90 billion spent each year through Government contracts supports British jobs, skills and people in every postcode.
We are going further in our reforms to public procurement to ensure that taxpayers’ money is delivering more for our communities. For the first time since 2020, we are removing the defence exemption from social value. That means billions of pounds of defence contracts will soon give weighting to jobs and skills for young people across Britain. This is how we back businesses in every part of the country. In my ministerial colleagues, Parliamentary Secretaries to the Cabinet Office my hon. Friends the Members for Gateshead Central and Whickham (Mark Ferguson) and for Chipping Barnet (Dan Tomlinson), businesses looking to build and grow here in Britain—creating those good jobs and driving that good growth—will have strong advocates in this Government.
The work of my Department in strengthening our national resilience and co-ordinating the Government’s response to emergencies remains central. Over the summer, we saw communities across the country impacted by unprecedented wildfires precipitated by one of the hottest and driest summers on record—a reminder of the very real and present threats to the UK posed by climate change. During the third week of August, four major incidents were declared across south Wales, Hampshire, Cambridgeshire and the west midlands. By 13 August, fire and rescue services were tackling 47 wildfire incidents, and 79 separate requests for additional equipment and resources were made by fire and rescue services. In south Wales alone, more than 200 military personnel were deployed to tackle 14 separate incidents.
Such was the extent of support provided across the country that almost every service was impacted or involved in the response, and some of the most stretched services faced the prospect of having to deprioritise certain call-outs due to the pressures on the system. The day before the national alert was issued, close to 12,000 999 calls were recorded in a single day, which is six times the average call volume. Many services were stretched to breaking point, but continued to work around the clock to protect lives, communities and properties. I am sure everyone in the House will join me in thanking our emergency services and military personnel, who put themselves in harm’s way to keep us safe.
On 14 August, when the Government received direct requests from fire and rescue services for urgent Government intervention, we took decisive action. A national emergency alert was issued to provide the public with clear guidance on the steps they should take to avoid inadvertently contributing to an already dangerous situation. It should come as no surprise that the British public did their bit. Within 48 hours, there was a 42% decrease in the number of 999 calls, falling from 12,000 to 5,200, and by Monday morning the number of live wildfire incidents had fallen from 47 to 27. This gave our fire and rescue services the breathing space they needed to tackle existing fires and keep us all safe.
Over the coming weeks, I will continue to work closely with Cabinet colleagues to ensure the Government’s response meets the scale of the challenges we face. I will also be working closely with my right hon. Friend the Minister for Security in ensuring that this Government take a long-term and strategic approach to the country’s preparedness. The Government will continue to work closely with our frontline services and local resilience forums to mitigate the risks posed by extreme weather and drought, including a £100 million increase in funding for the fire services and a £65 million boost in support of our farmers.
In the interests of brevity, I will touch briefly on the work that is happening elsewhere in my Department. I have been delighted to welcome my right hon. Friend the Member for Vale of Glamorgan (Kanishka Narayan) not only to his role as the Minister for Artificial Intelligence, but to join us around the Cabinet table. The Prime Minister has been clear that he sees harnessing the potential of artificial intelligence as a central part of our country’s future, and the elevation of this role reflects the ambition this Government have to make Britain a world leader in these advanced technologies.
I am also pleased to welcome the Minister for Intergovernmental Relations and European Relations to his role. My right hon. Friend the Member for Lincoln (Mr Falconer) has wasted no time in the vital work of building stronger ties with our closest neighbours and allies. I was very grateful to him for interrupting his honeymoon to come home and be appointed to the post.
My Department is also bringing forward a programme to modernise the operation of the state. We are taking public control of the way Government work—cutting out the unnecessary processes and needless reviews that slow decision making and stifle innovation. At the heart of this agenda will be the restoration of Ministers’ responsibility and agency to deliver the change they promise, with increased accountability to Parliament and the public for the direction they set and the decisions they take. We will bring forward new methods of public deliberation in policy development and do away with box-ticking consultation with the usual suspects. Fewer decisions will be delegated to unelected bodies, and the way decisions are made will be scrutinised in Parliament, not in the courts, ending the warm bath of constructive ambiguity that politics has been too happy to soak in for far too long.
I am aware—I am deeply honoured—that I am the first woman to hold the role of First Secretary of State since the late, great Barbara Castle. I am confident that if I can channel even a fraction of the energy and determination that she brought to this role, collectively we can change our country for the better. For too long, too many places have been written out of our national story; their contribution ignored and their potential overlooked. People feel like the system just does not work for them. That is why in 2024 they voted for change. This Government are on a mission to ensure we can deliver on the Prime Minister’s and the public’s priorities. This is a collective endeavour, and together we will deliver the lasting change that people deserve. I commend this statement to the House.
I also congratulate the right hon. Lady on the wording of her statement. The phrase “rewiring the state” was first coined by the Leader of the Opposition in her leadership contest in the summer of 2024, and for a very good reason. The state does need rewiring; we agree on that. It is in urgent need of rewiring. It needs rewiring so that politicians can make decisions, it needs rewiring so that elected Governments can fulfil their mandates speedily, and it needs rewiring so that the state does not continue to grow ad infinitum.
I know that the new Administration delight in nothing more than criticising the Blair Government. There were many reasons to criticise the Blair Government, but I wish to talk about just three: the first is quangos, the second is the nature of the Treasury and the third is the issue of legal constraint. Some of the worst of these problems are those of entrenched institutional inertia. We have seen over time how quangos have led to Ministers having less agency over important decisions that affect our constituents’ lives, so it is unfortunate that the deputy Prime Minister has today announced the creation of a massive new quango in the OneGov Delivery Agency. It will be in charge of Government recruitment, the civil service, pensions, shared services, security vetting, and so on. It will oversee the spending of considerable public money. It is a step in the wrong direction, because Ministers will retain responsibility for those services, but they will lose power over them.
One of the reasons we have seen a proliferation of arm’s length bodies is that they have become a way of dodging excessive bureaucracy put on by the centre. In this instance, by the centre I really mean the Treasury. In its modern form, the Treasury is the behemoth created by Gordon Brown and designed to control Whitehall and to reduce departmental Ministers’ authority over their spend and their decisions. I was therefore genuinely interested to hear the right hon. Lady say over the summer that the Treasury was an “imperial finance department”. I had rather hoped that she was going to lead the charge to smash the barricades and destroy this terrible imperial power, but instead it appears that the empire has struck back. The briefing we were given initially was that No. 10 North was going to take control of growth. That seems to have been watered down. It is now rumoured that the Chancellor will give the speech on growth next week, and that the real power remains within No. 11 south. Will the right hon. Lady tell the House what powers, levers and budget she will have, as head of No. 10 North, to increase growth across the UK?
Legal constraint is obviously a massive problem. Over the Blair years, laws such as the Human Rights Act 1998 and environmental legislation created endless sources of judicial review, which made it increasingly difficult for Government to do things—to build infrastructure and so on. That is a colossal drag on the capabilities of the state. If the right hon. Lady wishes to work on that, the Conservatives would be happy to work with her.
In the statement, we heard a further exposition on devolution and the merits of No. 10 North. For that to be credible, the Government need to be able to give three basic guarantees. The first is that this will lead to an overall reduction in the size of the civil service. Despite promises made after the election, the opposite has happened under Labour; since the general election, the headcount of the civil service has risen by over 11,000. Will that be reduced, and by when? The second guarantee is on the nature of devolution—whether it is driven by the interests of local people, or just by those of one party. Over the summer, Labour councillors were allowed to redraw the boundaries of the authorities that they hope to represent, and to do so before any independent review by the Local Government Boundary Commission. Labour set about the biggest reorganisation of local government in 50 years with no mandate to do so, and announced it on the day before recess, with no scrutiny. One wonders how it can be localism if it is imposed—and imposed with constraints.
Also over the summer, after the Prime Minister had made his interesting announcement about assigned income tax and retained business rates, the Mayor of the Tees Valley, Lord Houchen, said that he would create
“a new rebate scheme to put money back into people’s pockets and let families keep more of the money they earn.”
It is an excellent idea—an excellent Conservative idea—so excellent that it was immediately shot down by the deputy Prime Minister. Will she tell us whether combined authority mayors will be able to cut taxes or give rebates, so that working people can keep more of their money—or will this just lead to higher taxes? Otherwise, it appears that local mayors will not have the freedom to cut taxes; they will only have the freedom to increase them. They will only have the freedom to increase the size of the state, not reduce it. It appears that this Government are rewiring the state—but just to grow it.
The last point is simply about cost. How much is this reorganisation costing? How much is being spent on No. 10 North? How much will need to be spent in order to power the localisation agenda that this Administration have put forward? Where is that money coming from? Is it coming from other Departments, in which case, from where, or is it coming from tax, and if so, which taxes? If it is coming from borrowing—well, I think the bond markets will have something to say about that. Until the Government can show that they are able to cut taxes and spending, so that we can get real growth across the country, I am afraid that all of this will just be another northern pipe-dream.
I am glad that we can find common ground. I will start with the cost of No. 10 North, which I imagine the hon. Gentleman knows already, given the sheer quantity of parliamentary questions and freedom of information requests that have come in over the summer. No. 10 North has been fully funded from existing Cabinet Office budgets, with no additional spending pressure. We are grateful to colleagues in Manchester for hosting us in Heron House so graciously; that is working exceptionally well.
I absolutely agree—I hope we can work together on this—with the hon. Gentleman on looking at where we can streamline the state and ensuring that elected Governments of any stripe can make the decisions that they have been elected to take. There is an awful lot of common ground and frustration that people from across this House share about unelected regulators and quangos standing in the way of democratically elected politicians. There is a serious commitment from this Government to tearing away that red tape and ensuring that we can deliver the change that we were elected to deliver. I therefore gently point out the irony in his asking me to ensure that a quango, the Local Government Boundary Commission, takes decisions on local government reorganisation, rather than the democratically elected Communities Secretary.
We have already been clear that the central civil service is expected to shrink, that we want it to be more streamlined and efficient, and that our commitment to devolution and rewiring the state absolutely means fewer civil servants at the centre and building the capacity and capability of regional and local government. Local government was a huge victim of the decade of austerity, which held back growth in our local economies.
We are moving policy functions out of the Cabinet Office in order to streamline things and ensure that we can be ruthlessly committed to delivering the Prime Minister’s priorities; I make no apologies for that. We have transferred a number of strategic functions into No. 10 North, including local economic growth and devolution strategy, which we have moved from the Ministry of Housing, Communities and Local Government, and local economic growth policy, which we have moved from the Treasury; that is a little bit of a chip at its empire.
One area that has not been covered so far is education. The First Secretary is probably aware that in five wards in my constituency with high levels of deprivation, there is not a single sixth form. Responsibility for that rests totally with academy trusts, and the local council has no power or influence over it whatsoever. When she looks again at devolution to bodies with democratic control, could she look at the education system? That will be key to tackling the problem of those not in education, employment or training.
The First Secretary mentioned national resilience. That is about whether the lights stay on, whether the shelves stay stocked, and whether a family in Hazel Grove can get through a week or more of serious destruction without losing their livelihood. The covid inquiry was blunt: it found that we were ill prepared for an emergency, never mind a pandemic. Those failures cost lives, and people deserve to know that lessons have been acted on, rather than filed away.
There is certainly progress to welcome. We have the resilience action plan, the UK Resilience Academy, and Exercise Pegasus, which was the largest pandemic exercise this country has ever run. Those are steps that my party has long called for, but announcements are not preparedness. I would welcome hearing from the First Secretary what plans she has to improve public awareness and understanding of what the whole of society needs to do to be ready. We are in an increasingly uncertain world, so will the Government think again on digital sovereignty, so that the critical systems that our constituents rely on are not dependent on suppliers that this country cannot control?
I strongly agree with the First Secretary that this country has a broken political system. Later this afternoon, we will debate the Representation of the People Bill, which is meant to fix that. It takes some steps in the right direction, but fails to rise to the moment. Does she agree that there is still so much more to do, starting with halting the scourge of big money that is poisoning our democracy by capping political donations and bringing in a fairer voting system? We need to fix our politics so that we can get on with fixing the country. I have heard her talk previously in this House about moving fast and fixing things. I urge her to crack on.
On digital sovereignty, my right hon. Friend the Minister for Artificial Intelligence is looking at that, through his taskforce. It is one of the important workstreams that he is considering with colleagues across Government. I am sure that he will update the House in due course.
As the hon. Lady says, we will debate the elections Bill this afternoon. She and I absolutely share a commitment to stopping big money, and foreign money in particular, interfering in our politics. I will work with colleagues across Government through the defending democracy taskforce, chaired by my right hon. Friend the Security Minister, to look at what further steps we can take beyond the Bill.
Finally, on preparedness, my predecessor announced in July that we will deliver a campaign to raise awareness of the simple steps that households can take to keep themselves safe during everyday emergencies, like extreme weather. We will announce more information and begin that campaign later this year.
I hope that the First Secretary will agree that rewiring has to be a process, not an event. The Public Administration and Constitutional Affairs Committee will remember the great fanfare with which mission-led government was talked about a couple of years ago, before it died a rather slow, lamentable death. Can she assure us that she has both the personal energy and commitment to see this through to the end, as well as the support and resources around her in order to achieve it?
I echo the call from my hon. Friend the shadow Minister about the importance of looking at quangos and arm’s length bodies, particularly within the devolution and decision-making space, because too many of them have got out of control. I also echo the point about outsourcing, because outsourcing takes away a lot of agency from local communities and individuals, and that needs to be looked at with some urgency.
Does my right hon. Friend have any plans to bring forward the new national adaptation plan? The national adaptation plan 3 under the previous Government was widely derided, but there is currently no plan for a new one until 2028, and it is clear that the pressures we are facing in summer are worse than ever before. Can she tell us whether there will be a new national adaptation plan or, if not, what she is going to do to ensure that we are better prepared next summer than we were this summer?
There are actions required of the UK Government, the devolved Governments and numerous public agencies and landowners, and I am pressing all of them on these issues. With the risk growing, my ask of the First Secretary is that the lack of military aerial firefighting capability within the UK be urgently reviewed, so that aerial assistance can be provided in these extreme and often prolonged incidents. What work is being done with our European neighbours in respect of mutual aid in tackling wildfires? We must recognise that exceptional local effort cannot be a substitute for national and international preparedness.
“overly centralised decision making and over-privatisation”.
Development thus far has simply concentrated power in the hands of the big corporates and left communities feeling left behind and disempowered. In Shetland, we host one of the largest onshore wind farms in the country, but we have the highest levels of fuel poverty, and last year the developer SSE was paid £9 million in constraint payments not to generate electricity—that is regulatory madness. In this rewired state, will the communities that host renewable energy developments have control and get direct financial benefit from them?
One thing that the First Secretary of State did not mention and which I would like to draw her attention to is civil service pensions. I have a huge number of constituents who are waiting. I know that that issue comes under her Department, and I would really like her support on it.
Will the First Secretary of State ensure that the voice of firefighters is at the heart of preparing for the changing climate and that they get what they need to protect our communities? I make particular reference to retained firefighters. I am aware of retained firefighters in Staffs who did an eight or 10-hour shift fighting wildfires, went home, got in the shower and went to their day job. They are absolute heroes and deserve all our respect. If we can make sure that their voices are at the heart of the response, that would be a very good thing.
Will the First Secretary of State explain how the £100 million that she referred to will be allocated? Is it a one-off payment, or is it an uplift to the current funding formula, which needs to be updated for fire and rescue? Will she give a little more detail on the asset refresh programme and whether the assets that firefighters are crucially in need of will be allocated quickly?
I seek some clarity on business rates. She mentioned that devolution might lead to business rates retention, but it is the structure of business rates that is causing the decline of our high streets and the decimation of our hospitality sector. Giving local authorities such as Bournemouth, Christchurch and Poole council and Dorset council the right to cut them will simply move the problem from the business to the statutory services of the councils. Could she clarify this and expand a little on her intentions?
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