Chancellor John Healey has appointed Ravinder Athwal, the economist who drafted Labour’s 2024 manifesto, as his senior special adviser. The move, which sees Athwal move from the consultancy Flint Global, has intensified rumors regarding a potential early general election, despite Prime Minister Andy Burnham explicitly rejecting such speculation. However, people with knowledge of Athwal’s thinking suggest he has learned from the travails of Labour’s early months in office. One left-of-centre economist said: “I’d say he was at the more interesting and curious end of the Starmerite project.”.
Athwal, a Cambridge-educated economist and former Treasury civil servant, previously served in Keir Starmer’s Downing Street team. During that tenure, he played a pivotal role in formulating the five core missions that defined Labour’s government agenda. A source familiar with the appointment described his arrival as invaluable, noting his experience as a heavyweight economist who can offer both technical guidance and political insight to the Chancellor ahead of the upcoming budget. National insurance or VAT was seen by Starmer’s team as key to Labour’s landslide victory two years ago, the pledge at the heart of the manifesto not to increase income tax. One former colleague described him as “nice and clever – a good combination”.
Addressing claims of an impending election on Friday, Prime Minister Burnham told ITV Calendar, “well, yes, that’s when the next election will be. All of this speculation on an early election, I can knock that dead.” Nevertheless, observers within the party suggest that Athwal’s recruitment could signal readiness should a new manifesto ever be required, while others remain wary that it reinforces a cautious, continuity-focused economic strategy. He said, “well, yes, that’s when the next election will be, asked by ITV Calendar whether the next general election would be in 2029. But it is widely agreed that it has restricted the party’s room for manoeuvre once in power.
The appointment comes as Healey prepares for a crucial budget on 28 October, faced with a challenging economic landscape marked by rising government borrowing costs and high global oil prices. Officials are currently working rapidly to develop options for consumer support, though any intervention is expected to be far less expansive than the universal schemes implemented in 2022. Government sources emphasize that the Chancellor prefers a focused budget, as opposed to the tax-heavy approach seen in previous fiscal updates.
Healey is navigating significant fiscal constraints, with inflation and interest rates having diminished the financial headroom previously anticipated. While the Chancellor has promised a buffer against economic uncertainty, it is projected to be substantially lower than the £24 billion forecast in the spring. Significant decisions concerning long-term tax and spending policy are likely to be deferred until next year’s spending review, following the introduction of the Prime Minister’s 10-year development plan.
Internal changes at the Treasury continue as Athwal prepares to start next week. Former adviser Neil Amin-Smith has transferred to Downing Street, while Will Straw remains in his role as Healey’s chief of staff. Among the pending policy hurdles, Healey has notably omitted setting a specific timeline for reaching the 3% GDP defence spending target by 2030, a goal he strongly advocated for when resigning from Starmer’s government earlier this year. After taking over at the Treasury in July, Healey hired Will Straw, who played a leading role in the remain campaign during the Brexit referendum, to be his chief of staff; some of Rachel Reeves’s economic advisers, including Spencer Thompson, stayed on. The former Clean Bandit violinist Neil Amin-Smith, who was closely involved in her plans to devolve more tax revenue to local leaders, has moved across to Burnham’s No 10, reeves’s chief economic adviser.
