This is an audio transcript of the Political Fix podcast episode: ‘Labour confronts £20bn black hole’
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George Parker
Hello and welcome to Political Fix from the Financial Times with me, George Parker, in the hot seat while Lucy Fisher is off sunning herself in warmer climes. On the menu today: brace for tax rises. Chancellor Rachel Reeves is to set up what she claims is the full extent of the mess the Tories have left behind. So is she just looking for excuses to put up taxes? And where will the pain fall? Plus, taking the train between Birmingham and Manchester, we’ll hear why the government is telling people not to bother. To discuss it all, we have in the studio my FT colleagues Robert Shrimsley.
Robert Shrimsley
Hi, George.
George Parker
And Stephen Bush.
Stephen Bush
Hi, George.
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George Parker
So the UK’s new chancellor of the exchequer, Rachel Reeves, will address the House of Commons on Monday, and she’s expected to lay out the full scale of the financial pressures and their predictions. This could translate into extra tax rises worth, according to one analyst, between £10bn and £25bn come the Budget. Robert, the government comes into office, it finds things are even worse than they thought, decides to put up taxes. You’ve just seen that coming?
Robert Shrimsley
Yeah. It’s like that famous scene in Casablanca, isn’t it, where the chief of police declares himself shocked to discover there’s gambling going on as he’s handed his winnings. No. I think we all pretty much saw this coming. Well, we’re going to get this statement from Rachel Reeves where she’s gonna explain all the problems are even worse than she could possibly have imagined and they really are kitchen-sinking it. That would obviously immediately raise the question, what are you gonna do about it? And what they’re gonna do about it is have to spend more. So the question is not whether they will spend some more, I think, but how they will get the money and the balance that they will adopt between finding extra taxation and pushing their borrowing a little bit. But there’s no question that about what they’re up to.
George Parker
No, indeed. And what do you think, Stephen? Disingenuous, to put it mildly? After all, Paul Johnson, the director of the Institute for Fiscal Studies, says the books were already wide open thanks to the public scrutiny given to them by the Office for Budget Responsibility.
Stephen Bush
So I don’t quite agree with Paul Johnson in that he’s right that in terms of the nuts and bolts of the public finances, most of that stuff is in the public domain. But if he takes say, prisons, the government has disclosed things — that’s the Prison Governors’ Association — themselves were saying, we couldn’t get the government to tell us this.
So in terms of the sort of underlying fiscal position and, you know, it was obvious to everyone that, for example, the fully costed NHS workforce plan was not fully costed, right? And so they were going to have to do some form of, my, you’ve had some right cowboys in here theatre anyway.
However, I think it is clearly true in some parts of the public realm that there are genuine long-run and in-year financial pressures that are actually new. And in some ways that’s kind of what allows them to get away with being disingenuous, right, and it gives them, you know, the kind of the grain of truth is, it is a little bit worse than said. But we did all know that one of the reasons why this election campaign was pretty dishonest was it was two parties who were definitely going to raise taxes pretending they wouldn’t have to, which means that instead of having a clear idea of what exactly those taxes are, we will all find out, some of us to our horror if we turn out to be the people who’ve lost out on, you know, who’s actually getting the taxes levied on us in November, October.
Robert Shrimsley
And I think the key decision, George, in my going over the last year, was Labour’s decision to go along with the national insurance cuts that Jeremy Hunt unveiled in two stages ahead of the election. These were meant to be an electoral trap or an electoral promise. And Labour saw this trap and decided not to walk into it. But that was a short-term win because there’s no way they would have reduced national insurance had they been in power and it was at a higher level. So now they’re stuck because they’ve made these deep promises not to tamper with VAT, income tax and national insurance, which is something like 60-plus per cent.
George Parker
Seventy-five per cent if we include corporations.
Robert Shrimsley
Include corporations, exactly. So they’re really stuck on those things and in looking back at the election year, we don’t know whether it was the right move, whether they could have got away with not agreeing to the second national insurance reduction. They were scared not to and we understand the politics of it, but it’s put them in a hell of a bind and they’re going to have to find other tax measures, which A, probably don’t raise as much as they would like and B, often have, you know, curious side effects that aren’t appreciated straight away but can do some damage.
Stephen Bush
I think that is the really big problem with the election campaign is that, broadly speaking, we know that having national insurance at the level it was last year was not economically harmful, whereas all of the other stuff that the Labour party’s promises are pushing them towards on asset taxes, on taxes on the rich, on taxes on non-doms do come with risks.
I mean, for example, if you change the inheritance tax status of farms, most farms, you know, they borrow against the physical asset, which is the farm. So suddenly if you go, you know, so that loophole, for example, is not just to help wealthy farmers. That is a key part of how agriculture as a business functions in this country.
I was quite struck, though, that I think it was Sunday, or maybe it was Monday, but a reactive crow landed in my inbox from Darren Jones, the chief secretary to the Treasury, which was really quite vituperative. Right, you know, it said that Jeremy Hunt admitted that the tax cuts were based on a lie. And I just remember looking at it and thinking, OK, that’s an interesting level of rhetorical heat towards last fiscal event, not least, as Robert says, we did all know that was a problem at the time. And part of me wondered, are they hoping that they can pull off an even bigger sort of U-turn on their tax policies than that by using words like lie? Because it’s not the kind of word you often see in your inbox from (inaudible).
Robert Shrimsley
You don’t mean literally going back on the national insurance commitments they’ve given to you? That would be extraordinary at this stage.
Stephen Bush
It would be extraordinary. But, you know, sorry to be, you know, the voice of unrestrained capital, but asset taxes are really bad. And you can see, you can imagine how if they, you know, they’re sitting there looking at all of the options they’ve ruled out, looking at the risks of the options that they’ve ruled in, that you might feel that the risk of going, we’ve abolished national insurance and (inaudible) it together, or the last Budget was a complete fiction and we’ve actually had to completely unpick it.
You’re maybe better off styling that out than going, oh, we’ve pulled a lever and all of the, you know, the better feeling internationally, the sense of looking at the UK again as an investment destination. I mean, obviously, all of these options are bad and I think that the scale of the election victory suggests that they probably shouldn’t have gone along with those final two fiscal events.
George Parker
All the briefings certainly are. And you’d expect them to say this, of course, that this is gonna be really big and really bad, the statements on Monday. And you speak to ministers who say genuinely, they’ve gone into departments where they claim that previous Conservative ministers have basically given up governing in the last few months going to the election, that difficult decisions on things like prisons, the asylum system were just being parked because they knew election was coming up and it was quite likely somebody else would be coming in. Now, that’s the kind of thing you’d expect them to say. But it does sound like it.
As Robert said, it’s gonna be a kitchen-sink operation on Monday, and it does open up the questions of what are the taxes? You went through some of the options there, but pension tax relief, capital gains tax reform, they’re another big lever if you cut out all the other ones we discussed that they’ve already excluded, which, you know, will have their own distorting effects, won’t they?
Robert Shrimsley
They will, and if they all come with a cost there’s always losers in any tax measure. But, you know, what you have to look at clearly are the ones that Rachel Reeves chose not to rule out or chose to fudge. And she has consistently fudged the issue of capital gains tax. There was a fairness argument around capital gains tax that says, you know, people who use it to get some of their income at a lower rate should pay the same rate as they would if they were paying interest income tax. On the other hand, it’s questionable whether it raises as much money as they think it might raise.
You certainly could alter the tax relief on pensions so that people got their tax relief at a set figure rather than whatever rate they pay income tax at. That would bring quite a lot of money. They could have a look at inheritance tax, although she sort of implied they weren’t gonna do very much with that. But again, perhaps you could tamper with the rate.
But these things will all come at a cost. And one of the things that’s changed with the Labour party is it’s begun to appeal. And its victory was built, in part at least, on pulling in a lot of quite successful people, graduate-class people, people who’ve got their own home, people who might hope to leave things to their children, all those kind of things. And they’re bringing in a group of people who are now their supporters. And if you start hitting them with those kind of taxes, it suddenly becomes a little bit more complicated. So I think they’re in a real mess.
I must admit, I’m interested to see if they don’t start tampering with some of the debt and deficit formulas to see if they can just squeeze out a bit more borrowing instead.
George Parker
Yeah. In other words, keep to the fiscal rules in terms of having debt falling in the fifth year, but changing how you define debt.
Robert Shrimsley
Well, exactly. And also, I mean, there’s been talk about bringing in Bank of England debt as part of this definition as well. And if you think, like I guess they do, that you might get some real momentum on growth within a year, then maybe you just hope to sort of push it for another year and see where you are.
George Parker
So Stephen, what you think the actual politics are? Plainly, what Rachel Reeves will seek to do on Monday is to present the Conservative party as a party which completely messed everything up. There’s a crisis everywhere, as Keir Starmer put it. That will be the message they’ll try to pin on the Conservatives, and they’ll keep hammering it for the next four years, five years into the next election, in the way that George Osborne did in 2010 — you know, how there was no money left.
Set against that, the politics are that it’s quite likely they’ll have to put up taxes, having given the quite strong impression that they weren’t going to do it in the election campaign. How do you think the balance works out there?
Stephen Bush
Well, I think it’s pretty clear from the polls and indeed just travelling the country during the election that people, I think, always believe that the Labour party will tax more than it says and spend more than it says. And in some ways, I think the Labour party only ever wins elections A, when it convinces people enough of its rectitude and they go, OK, you’re probably gonna suppress your instincts a little bit, and also when they feel the public realm is in a sufficiently bad state and they go, OK, yeah, we probably do need to get those spendthrifts in for a little bit to kind of, you know, fix the underlying state of the public realm.
And I think it’s pretty, it seems, feels to me obvious that’s where the average voter is right now. Of course, it’s one thing to believe and indeed to know that taxes need to go up in the abstract. It’s quite another to then welcome them when you see them in your own payslip. So I suspect that the second those taxes start to come in, there will be some slippage in the Labour lead, some political disruption.
I think in some ways the big bet they are making, similarly to Cameron and Osborne in 2010-15 is actually, from 2010-15 there were some quite chunky real-terms tax cuts. The global fuel price fell, so for David Cameron’s target voters, that period worked quite well for you. And yes, there were problems with the cuts and you read about it in the papers, but you were both sold on the message of it’s hurting but it’s worth it, but it also felt like it was worth it.
I think the challenge for Labour politically is that they are really betting the farm, then, that their departmental ministers can actually deliver tangible improvements in the public services in those four years, and they can deliver the public service equivalent of a grand and a half of tax cuts, which is what the average household got under Cameron-Osborne.
Now, we always see in new governments that some people who are quite good at opposition turn out to be not so good at governing. They might get lucky and those people will be in jobs that aren’t the stuff that voters really care about. But let’s say, you know, Wes Streeting, really impressive communicator, someone who’s wowed all of the key stakeholders in healthcare when he sits down to meet them. But let’s say for a moment, purely hypothetically, that it turns out Wes Streeting is not a good departmental minister and the NHS gets worse before it gets better. Then I think these tax rises become very hard to sell.
Robert Shrimsley
I think the important point that you touched on this, I mean, obviously we should remember that George Osborne, although your point about the tax burden is right. George Osborne comes in and he whacks up VAT by 2.5 per cent, almost the first thing he does to get the public finances straight. But there was a fundamentally different point. The Conservatives came in and their remit was sort out the public finances. They argued for that quite clearly. The public bought the argument and that’s what they came into.
Labour sort of have come in on a remit to sort out public services rather than the public finances. And so the question I think they’ve got to juggle all the way through is this fundamental (inaudible) . . . Will we be judged more harshly if public services are no better, or if we pushed it a bit on tax? And I think they will be judged more harshly on the public service side of that ledger, but only up to a point. They can’t overdo this. But I think they have . . . I think there is a tolerance for some taxation extra. They may need that tolerance is always if it’s falls on other people.
George Parker
Let’s see. Well, we’ll come back to Rachel Reeves’s big statement next week on the pod.
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Now, linked to the question about the so-called mess in the public services, we had a host of reports out this week from the public spending watchdog, the National Audit Office, about a dozen of them, setting out some of the problems that the Labour government’s inherited, the most interesting, which I think, and it made our paper splash in the FT, was the debacle which is HS2, the high speed rail line. Now, the FT reports this week on the news that the NAO thought that releasing its decision to axe the northern leg of HS2 between Birmingham and Manchester could mean the government might have to incentivise people to avoid using trains. Now, the FT’s Gill Plimmer has been covering the story and joins me now. What exactly did the NAO say?
Gill Plimmer
Well, essentially it said that the UK’s biggest infrastructure project, which is costing £67bn, is now going to have slower and less capacity on the line north of Birmingham that goes up to Manchester. And this is because it’s got new custom-built HS2 trains that will run on those tracks. And because the new trains running on old tracks, they’ll run a bit slower and there also just won’t be enough room for passengers. So that’s why it said that, you know, the government really must look at other ways for people to travel.
George Parker
What? So in other words, encourage people to drive down the M6 rather than get on the train?
Gill Plimmer
Exactly. I mean, it seems preposterous, and it really is preposterous, to be honest. The other thing they said was that there was still no plan for the Euston station, which is the central London terminus and has been a demolition site for a good 10 years that, you know, moved people out of their homes, knocked down office buildings. And they’re saying it’s going to take a few more years to come up with a plan and actually start building a new station at Euston.
George Parker
So we could end up with a high-speed line running between Birmingham and a station at Old Oak Common, which is out in the western suburbs.
Gill Plimmer
Yes. And which no one has really heard of. And then people from there will have to change trains, reducing the impact of a high-speed line.
George Parker
And I think they also said scrapping the northern leg of the flagship line would take three years and cost up to £100mn?
Gill Plimmer
Yes, that’s absolutely right. They have to restore the land to what it was. And then there’s also a lot of land that they have to sell that they no longer need. And that will also cost time and money.
George Parker
And can you also just explain this for people that don’t quite understand railway engineering: why is it that high-speed trains that will run from London or Old Oak Common up to Birmingham, and then will carry on up to Manchester and Birmingham? Why is it that they won’t be able to carry as many passengers?
Gill Plimmer
I think that just the design is that they’re smaller trains and they’re running on old tracks, which aren’t designed for high-speed rail.
George Parker
And does it also involve taking out the business class carriages as well?
Gill Plimmer
That’s one idea to try and increase capacity. And of course, we still don’t know how much fares will be anyway on these new high-speed trains. And fares are already astronomical, so that will be an interesting angle too.
George Parker
Well, exactly. I mean, what do we think? Do you think they’re gonna be considerably higher than the current trains running between London, Euston and Manchester?
Gill Plimmer
Well, the original plan was that HS2 would be targeted at business passengers and that’s why it should be built, because it would, you know, increase economic activity in Birmingham and the north. So since then we really haven’t had an update on the fare structure or how it will work with existing trains.
George Parker
Is there any prospect at all, do you think, that a Labour government could restore that HS2 high-speed line between Birmingham and the north?
Gill Plimmer
I kind of doubt it. I mean, the government has enough trouble on its plate. It’s got Thames Water, the biggest water company, that may collapse, and hospitals and numerous other problems to deal with. And the reason it was scrapped was the plans were at such an early stage. That was one of the findings of an Oakervee report a couple of years ago that they actually, you know, a bit like Euston, although they were spending billions of pounds of money on it, they actually hadn’t worked out how the whole thing would work.
George Parker
Yeah. And one of the things I remember when Rishi Sunak announced to the Tory conference last year he was scrapping the northern leg of HS2, he said some of the money would be released to fill in potholes. How does that go?
Gill Plimmer
Yes. (Laughter) Well, still potholes on my street.
George Parker
Yeah. And also, I think the NAO had a report out this week saying that the Department of Transport had literally no idea what the state was of local roads and that the whole programme’s bit of a debacle.
Stephen Bush
Well, the interesting thing is that, you know, Louise Haigh, the new transport secretary’s statement in our story on it, is quite intriguingly equivocal. She says, oh yeah, Conservatives are at it; we’ll set out our plans in due course.
Now, given that High Speed 2 is such an important boost to rail capacity, right, that is the big other thing it does. It allows you to free up more space for freight, which then allows you to free up more space so, you know, when people go like, oh, well, we should actually make it easier to travel within cities. Well, you can’t do that without taking the big city-to-city trains off the existing lines.
I suspect that George is exactly right, that there are so many other things that people vote for in the short term than the Labour party needs to spend money on first if it wants to get re-elected. The thing is, really all they need to do in this parliamentary term is not sell land. And also there is a broader British disease that it takes longer to build things in the United Kingdom than our peer countries.
This is one of the things that the Boris government was looking at through I think it’s called Project Speed. This is one of the things that the Labour party hopes to fix with its planning reforms.
So I think you can see how what they might do is go, well, we’re not gonna sell the land. We’re going to build the bits that haven’t been cancelled. And then they will hope two things. One, the image, which, I think for me really sticks out in the NAO report is that Birmingham Curzon Street will still have to have seven platforms, but because it will at that point then switch from high-speed rail to regular rails, most of these platforms will have no trains on.
And to be honest, from a cynical power politics perspective, if I were an incoming government, I would want to mention the fact that thanks to Conservative mismanagement, it is cheaper to build a train station in which more of the platforms are used than are not. I would like to keep that image in the public mind for quite a while, and then you hope that if your planning reforms work, you can go, well, because it is now cheaper and quicker to build things, we actually can build that and that can be your thing in the next parliament, assuming that you get your growth and your planning stuff right.
But it’s very hard to see how you can have a functioning railway system if you don’t fix our British disease of building things so slowly and you don’t have the extra capacity that only High Speed 2 can unlock.
George Parker
So there’s plenty of space at Curzon Street in Birmingham for Costa Coffees and a few sandwich shops as well, so, you know, upsides to everything.
Gill, one final thing before you go. You also, as you alluded to, write about Thames Water, whose credit rating has been slashed to junk. Do you think the government will have to intervene at some point and bail out Thames Water?
Gill Plimmer
I think most of the guesses are on that, but we just don’t know at this stage. I mean, I guess that slashing of the credit rating to junk status didn’t mean anything in itself, but it raises the chance that Thames may default on more of its debt, that it will find it harder to raise debt and equity, which it’s going to plan to do in the autumn. And it just pushes it one step closer.
George Parker
Thank you very much.
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So on to the Conservative party leadership contest. And the race is on. More candidates have put themselves forward this week, and at the time of recording, James Cleverly and Tom Tugendhat have thrown their hats into the ring, with Kemi Badenoch, Suella Braverman, Mel Stride, Robert Jenrick and Priti Patel waiting in the wings. Stephen, is this going to grab the public’s attention or is this gonna turn out to be Britain’s dullest and longest-running reality TV show?
Stephen Bush
A bit of both, I think, in that at some point, the new government is going to have to send people on holiday, because if they don’t, then ministers will start, you know, folding up in the House of Commons and, you know, news, like an ideal gas, has to fill the available space. There will be a period in August where there will be no political news and for large chunks of the UK media, they’ll reach for the Conservative leadership for want of anything better.
George Parker
I’ve got an interview with Mel Stride coming up for sure. Yeah, lots of news desks getting bombarded with that kind of message.
Stephen Bush
Yeah. And so therefore there will be a period when it will be hard to escape as a story because it will be the only game in town. And the structure of the contest this time basically incentivises them to spend the whole summer sniping at each other.
But when people get back from recess, when ministers have recharged over the holiday, the fact that it’s a party that’s suffered a very big defeat, that many people believe — rightly or wrongly, given how volatile politics is — but many people believe they’re out for at least a decade. They’ll switch off it. And then there’s this problem that they’ve scheduled the end date a couple of days before the presidential election.
George Parker
Well, yeah, November the 2nd. Robert, do you mind reminding listeners how this slightly convoluted contest is going to play out and who gets to make the final decision when a win is announced on November the 2nd?
Robert Shrimsley
So what happens is this is a joint exercise between MPs and Conservative party members. So what happens is the MPs, I think you have to get 10 nominees to stand in this contest. So they have to get, each of them, the seven of them are gonna have to get 10 each from the 121 MPs.
George Parker
I’m sorry to just say that it actually . . . the whips calculate by the time you take out people that aren’t going, aren’t gonna vote, including the party whips, you’re probably fishing in a pool of about 90 names.
Robert Shrimsley
They’re gonna get that . . . Let’s assume all seven managed to get their 10. There’ll then be a series of votes of MPs. This will all happen very quickly, which whittles the seven down to four. The four will then spend the summer, as Stephen said, arguing.
Stephen Bush
Oh, no. So the seven will spend the summer because all that happens before recess is getting 10.
Robert Shrimsley
But we’re not going to get the . . . (overlapping talk)
Stephen Bush
Then there are no more votes. So yeah . . .
George Parker
Once again, once it gets whittled . . .
Stephen Bush
It’s whittled down in the first week back.
Robert Shrimsley
OK.
George Parker
All right.
Robert Shrimsley
All right. Let’s start again. So basically, anyway, look — eventually, at a date to be confirmed, the seven is whittled down to four. The four then go and present themselves to the Conservative party conference, effectively turning that into a beauty contest. And the MPs then come back, whittle the four down to two, and the two are then presented to the entire Tory party membership for a victor to emerge.
I slightly disagree with Stephen on the point about both of those, but the point about the boredom around this, because this is essentially an internal exercise that the country’s not really meant to watch that much. And it’s a bit like . . . I think political parties worry too much about process and mess. The truth is, no one really cares how sausages are made most of the time. And no one really cares about the Conservative party for at least a year.
So the point is, they have the time to take the time and attempt to construct a strategy for themselves, and more importantly, and a critique and analysis about why they lost and what they need to do, which ought to inform their choices for the next leader. Of course, the great worry is that they’re not going to do that. They’ve already decided what they want to think, and they will pick the leader who is closest to their own views. But essentially, what ought to be happening is this time ought to be spent creating the analysis of why they lost and where they are.
George Parker
Do you think it’s enough time? There was a big debate inside the party, wasn’t there, about how long this contest had run to? Do you think November, the beginning of November is about the right amount of time for the party to sit there with a wet towel over its head and reflect?
Robert Shrimsley
If I thought the real work was going to go into analysis of the reasons they lost and what they do, then I would certainly advocate giving it the time. But since I don’t believe that, since I think pretty much all the candidates and most people likely to be voting have already got their basic thumbnail sketch of what happened, I don’t think you need to spend much more time.
The country does need an official opposition, albeit an enfeebled one. So I think going to November is not bad. It’s not as if you’re giving . . . The example of going long that’s often cited is Michael Howard, when he stood down as Tory leader in 2005, went a long time because he saw the emergent figures of David Cameron and George Osborne and wanted to give them time to arrive and be serious contenders. It’s not as if in this case that’s happening. There aren’t these brilliant young people just below the strata of leadership contenders who will emerge. So in the end, they might as well get on with it. I think November’s plenty of time.
George Parker
Stephen, do you think it’s all gonna be rather dispiriting? I was thinking the interview that Tom Tugendhatgave to the Daily Telegraph, which led the paper with the headline saying that he was considering leaving the ECHR, I thought, oh my gosh, we’re going around the same old track again. They’re talking about the ECHR, an issue which voters did not talk about at all, as far as I can recall in the election campaign. Is this contest gonna be stuck in the same loop, amplified by media outlets like GB News and the Daily Telegraph?
Robert Shrimsley
Absolutely.
Stephen Bush
Yes, I mean, it will be . . . One of the reasons why I completely agree with Robert that, you know, in some ideal world, where they were going to have a serious conversation about the voters they lost, come to serious terms with this. You know, it’s easy to come to terms with the successes of your time in government, but have a serious account of the failures of their time in government. And a long contest would be a good idea. But no. Instead, it will be this kind of unconvincing red meet-off. I mean, no one believes that in the last six months, Tom Tugendhat suddenly discovered that he doesn’t like the ECHR. They, you know . . .
George Parker
Which I should say, by the way, for listeners who have tuned this out for a while, it’s the European Convention on Human Rights.
Stephen Bush
Yeah, no one believes that he’s changed his mind about the challenges of getting out of that framework. But he thinks, I think, correctly, that his only winning card in this leadership election is basically to go, we need to win. And all the polls suggest he is their best option to win. I know that you think, you know, I’m a bit of a Remainer and I’m a bit of a wet, but don’t worry, I’m actually like you.
And you know, I mean in different ways, almost all of the candidates in this race are going to be quite disingenuous. I mean, Robert Jenrick, who went from being a sort of cookie-cutter minister to suddenly discovering that he agreed with the right on everything at exactly the point he realised he’d been passed over for Cabinet Office. I mean, you know, it’s like a competition to make the 2015 Labour leadership election look like it was full of people who weren’t disingenuous frauds.
It’s gonna be a grim election in which it will also further the . . . because you’re right that voters don’t care about it. But I think that precisely means if you do want the government to be restrained — and I quite like judicial restraint on the executive — then the drift of the Tory party towards being opposed to any form of restraint on what government can do the human rights framework is basically unstoppable.
Robert Shrimsley
I mean, I do think Stephen was touching on a problematic point for the Conservatives, which is they’re all going to converge around roughly the same point, because their analysis is that’s where the Conservative party is. I thought Tom Tugendhat’s first forays were very disappointing for this reason because actually, look, there’s no point in trying to be look, I’m quite rightwing, because if the party wants to go rightwing, they’ve got real rightwingers to vote for. You know, and being, I really hate . . . it’s like that scene in (inaudible). I really hate the ECHR. How much do you hate it? Oh, I really hate it! That’s not gonna work because you’ve got people who genuinely do. And I sort of thought, frankly, first of all, we don’t know this will be the only leadership contest for the Conservatives in the next, in this coming parliament. I actually thought the only option for someone like Tom Tugendhat is to lean into his reputation with . . .
George Parker
Michael Portillo-style.
Robert Shrimsley
No. Well, leave that and we should say, look, what we’ve actually got to do is stop pretending that the only reason we lost is because we weren’t sufficiently rightwing and start looking at all the seats and votes we lost to the Labour party and to the Liberal Democrats as importantly. And all the ways we look like we hate our own country — the fact that we don’t like London, we don’t like graduates, don’t have a plan to deliver housing for people — actually, I’m gonna be the candidate says, we’ve got to lean into those problems and that’s how we get back in. Maybe, just maybe, it’s not enough, but maybe it isn’t enough anyway.
George Parker
Is your assumption the party is gonna go down the rightwing rabbit hole?
Robert Shrimsley
I think it will certainly pick a rightwing candidate, whether it goes full rightwing or semi-rightwing, that’s open to debate, because I think one of the other factors in this is that none of the candidates that we’re seeing are tremendously inspiring. You don’t look at them and go, well, that’s a future prime minister. So I think there is an element to which someone could emerge by force of personality. That’s one of the reasons people talk about Kemi Badenoch so much, because, you know, she has got a visible and strong personality.
George Parker
Now, in the unlikely event you had a vote and if you were casting a vote, a likely hypothesis on another that your vote was being cast to choose the leader most likely to deliver a Conservative victory at the next general election, rather than tickle the tummy of party activists. Who would you go for, Stephen?
Stephen Bush
I would go for James Cleverly. So, I can already feel some of my contacts on the left of the party sending angry texts, but one of the things they would say is, how can you pick someone who was in Boris Johnson’s bunker right to the end, who then backed Liz Truss? Well, actually, the fact that one problem the Conservatives have is that they are sort of like an organisation which has a lot of bad managers and doesn’t want to listen to instructions any more, and the fact that he actually does have a measure of legitimacy when he says, I have been loyal and constructive throughout and we need to go back to being loyal and constructive throughout, helps. He has held a major office of state. He actually has therefore developed some views about domestic policy, which Tom Tugendhat, for all his undoubted strengths as a performer, is a foreign policy guy whose acquaintance with domestic policy is not great.
Robert Jenrick, I’m sorry, I have to agree with a Labour person who said to me, I hope that they pick Robert Jenrick because if we lost Robert Jenrick I would at least spend the next four years laughing about it. I mean, you know, as I say, he is obviously selling the Conservative party a false bill of goods, which works in leadership elections but I don’t think would work in a general election. I think that would be a disaster for them.
Suella Braverman is not gonna get the numbers, so she’s irrelevant. Priti Patel has the experience to turn around what is obviously a tattered party. And in some ways, if you’d asked me who’s the fix-the-Tory-party candidate, I think there’s a very good argument for Priti Patel as the turn around and fix this broken machine. But she’s really not popular with the public and people do actually know her. And so I think she’s unlikely to turn it around. So yeah, James Cleverly, I think it would be my vote.
George Parker
Robert, I know you’ve got to get off and watch The Boss, Bruce Springsteen at Wembley shortly. Who would you go for?
Robert Shrimsley
There are three to me who are plausible. One is James Cleverly. One would be Tom Tugendhat if you’re prepared to tell the party some home truths and push it outside its comfort zone. And the other possibly is Kemi Badenoch, because I think that she’s positionally in about the right place for the party as it is, but also ready to say we can do this and we can’t do that.
But the honest answer to your question George is, I’d actually like to see somebody who is prepared to confront the Conservative party with some of the home truths they need to hear because . . . And say to them, perhaps, you know, it would be nice if we didn’t spend three elections before we got back into power. Let’s see if we can short-circuit that a bit.
Stephen Bush
I think the thing I would say, having overlooked Kemi Badenoch in my own summary, is that she is the candidate who has shown real courage in both the 2022 leadership elections and a willingness to say things that the party didn’t want to hear. You know, her endorsem*nt of Rishi Sunak and her repudiation of Boris Johnson in that second leadership election was a vital moment, I think, in the unspooling of his leadership contenders. That did take real courage. That did involve telling the party things it didn’t want.
Robert Shrimsley
And she defied her MPs over the retained European law.
Stephen Bush
And she defied her MPs over the retained European law. She has, and I do think an underrated, prerequisite of being a good leader of the opposition is that willingness to walk through fire and take your party to where it needs to go. So that’s why, yeah, she’s the other . . .
Robert Shrimsley
I mean, the danger is the culture wars rabbit hole, which she also likes. But she’s got personality, which I think just would shine through a little bit.
George Parker
Robert, it’s time for our political stock picks. Who are you buying or selling this week?
Robert Shrimsley
Because we spent so long talking about the Conservative party, I don’t know, do you know what? I’m just gonna buy Ed Davey because he . . . We’re gonna see a tonne more of him as we saw at question time this week.
George Parker
He was quite good, wasn’t he?
Robert Shrimsley
He was quite good. He’s focusing on social care, which I think is gonna become more and more of an issue for people over the course of this parliament. The Liberal Democrats are back with a big number of MPs. He’s back in question time with . . . getting much more limelight. So we’re just gonna see a lot more of him. So it’s a cheap pick, but it’s the pick I’m picking.
George Parker
Stephen.
Stephen Bush
I just wanna gloat as a long-term Davey believer who was laughed at in this very studio.
Robert Shrimsley
Wasn’t that a Monkees song? (Laughter)
Stephen Bush
No, I’m gonna sell Suella Braverman. I think Robert Jenrick has done a, to say something more positive about him, has done a brilliant job of carving out her natural supporters. You know, he’s got John Hayes on board. He’s got Danny Kruger on board. And I think given that it’s a very small pool, I find it very hard to see how she can even get on to the ballot, given he will take more of her supporters and will have a more natural reach to parts of the party than Suella Braverman cannot reach.
Robert Shrimsley
What are you doing, George?
George Parker
Well, I’m gonna go for someone called Torsten Bell. Some of our listeners will know him as the former head of the Resolution Foundation charity think-tank. He’s just got a book out called Great Britain?, which I’m sure Stephen’s already read. And, you know, I’m planning to take it on holiday with me, I promise. But he’s just been made a parliamentary private secretary (PPS) to Pat McFadden, which puts him into the Cabinet Office, the engine room of this new government close to Pat McFadden, who’s gonna be a really important figure in this government. I think Torsten Bell will be a likely cabinet minister by the end of this parliament.
Robert Shrimsley
It’s a really good call. And of course, he’s really hot on the issue of child poverty, which is a signal that the leadership will want to send to its own MPs.
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George Parker
And that’s it for this episode of the FT’s Political Fix. I’ve put links to subjects discussed in this episode in the show notes. Do check them out. There are articles we’ve made free for Political Fix listeners. There’s also a link there to Stephen’s award-winning Inside Politics newsletter. You’ll get 30 days free. And don’t forget to subscribe to the show. Please do leave a review or a star rating. It really does help spread the word.
Political Fix was presented by me, George Parker, and produced by Audrey Tinline. Manuela Saragosa is the executive producer. Original music and sound engineering by Breen Turner. Cheryl Brumley is the FT’s global head of audio. Lucy will be back with you next Friday.
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