This is an audio transcript of the Political Fix podcast episode: ‘Starmer’s ‘Project Chainsaw’: the NHS, Whitehall, welfare’
Lucy Fisher
Hello and welcome to Political Fix from the Financial Times with me, Lucy Fisher. Coming up: the world’s largest quango is scrapped. That’s how the government framed the abolition of NHS England’s management body this week as Starmer swings an axe at what he calls the flabby British state. Plus, a major Labour rebellion is brewing over the PM’s welfare overhaul. And is the Reform party imploding?
To discuss it all, I’m joined in the studio today by Political Fix regulars Stephen Bush. Hi, Stephen.
Stephen Bush
Hi, Lucy.
Lucy Fisher
Robert Shrimsley. Hi, Robert.
Robert Shrimsley
Hello, Lucy.
Lucy Fisher
And Anna Gross. Hi, Anna.
Anna Gross
Hi, Lucy.
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Lucy Fisher
So let’s kick off with Keir Starmer’s big speech on Thursday about Whitehall reform. He’s called for a total rewiring of the state to achieve his programme for government. And we’ve got a few more details about what this means this week. A bonfire of the quangos, fewer civil servants, wholesale digitisation of the public sector and more. But Robert, obviously the big announcement was that he is getting rid of NHS England. So first off, can you just explain for our listeners what this means and why it’s a big deal?
Robert Shrimsley
OK. Well, as you were saying before we came in, what it doesn’t mean is he’s not getting rid of the NHS, which is an easy mistake to make. OK, how far back to go on this? In 2012, the Conservative reforms created an arm’s-length body to run the NHS for the government so that it was taken away from political decision making. And it was called NHS England, which obviously is different in other parts of the UK but called NHS England. And it was to take oversight of the NHS, decide what was done, send out instructions and orders to the rest of the NHS as to how it would work.
This reform has generally been considered to be an absolute disaster. It’s been considered disaster almost even before it was legislated, and it has no wider support in the country and in Parliament. And lots of people talked about reversing it, and what’s happened today is that Keir Starmer, Wes Streeting have announced that they’re going to, and they’re going to take a lot of the functions that were in NHS England and bring them back into the Department of Health itself, and also cut back on the number of people employed, because there’s quite a lot of duplication between NHS England and the department.
And this is something that’s part of an ongoing story of the NHS, which is, is it controlled centrally? Is it controlled locally? Is there a body in between that controls it? But there is a feeling that NHS England hasn’t worked. This is a leaner, a better way to run it and there’ll be no middle body between the department and ministers and NHS trusts. So that’s what he’s announced essentially.
Lucy Fisher
Anna, you wrote a lot about the health service. What’s your take on this? As Robert says, there’s two arguments here. One is about cost saving, avoiding duplication between this management body and the Department for health. And the other is about the principle, isn’t it, of democratic control, that it’s all been very helpful for ministers to spin off functions like this into these arm’s-length bodies.
But ultimately this is taxpayers’ money. It should be ministers who are responsible, at the end of the day, for major public services like the NHS.
Anna Gross
I think that there are people from across the political spectrum who agree that this is a good idea, and I think consecutive secretary of states have wanted it to happen. The issue today — I just came from speaking with the head of a trust in London — is that it’s kind of saying we’re getting rid of something, we’re making this huge, monumental change, but we’re not really clearly communicating what the narrative is or what it’s being replaced with.
Starmer indicated that he wants to increase decentralisation, devolve power from the NHS. But at the same time, the day before, the new chief executive told heads of ICBs, which are the kind of local bodies — there are 42 of them in England and they do commissioning and organising for local areas — told them to cut costs by 50 per cent. So he’s kind of signalling he wants to devolve power, but then seems to be taking away resources from those devolved bodies. So I think there are a lot of people who are saying, what does this mean? And . . .
Robert Shrimsley
That’s the key point. Because whether you think it’s a good idea or not, most people are gonna be saying, well, am I gonna get to see my GP quicker? Is my operation gonna come around more rapidly? And that’s not really been communicated at all, is it?
Lucy Fisher
No, no. And Stephen, is there a potential backlash here that, for the next 6 or 12 months, managers at all levels in the NHS spend all their time on this big organisational restructuring rather than bringing down the waiting lists, which it should be pointed out, Starmer said, have now been falling for five months in a row, and he pointed out, you know, particular achievement given this happened over winter when the NHS faces specific pressure.
Stephen Bush
I mean, that has essentially been the trade-off that has occupied every secretary of state since 2012, when Andrew Lansley, having passed this reform into law, was, as punishment, basically sacked, replaced with Jeremy Hunt, who had a brief from Downing Street of whatever you do, don’t reopen that unpleasantness again. And every secretary of state since then, including Jeremy Hunt, has looked at this reform going, oh, this is a disaster. But if I fix it, am I spending?
I mean, actually, that’s quite an optimistic timeframe. We shouldn’t forget the ICBs are a new reform themselves, right, that aren’t yet fully embedded in the system anyway. It takes a long time to reform something as big as the NHS. So the sacrifice that the government is consciously making here is that time that could be spent on reducing elective, which obviously one of their milestones, is instead going to be spent on unpicking the last bit of the 2012 act. Now, there are really good arguments for doing that, because the 2012 act was a bit of a mess. But there are real risk, which are, as you say, a central part of their re-elect runs through being able to say the NHS is getting better and has improved under our watch.
Lucy Fisher
Robert, it’s not just the NHS, is it? I think that there was the sense that this didn’t just suck up all the health services time in the early 2010s, but it was kind of Cameron’s first term was kind of derailed by this, or at least the energy was sucked out of his reforming programme in the early coalition.
Robert Shrimsley
I mean, possibly. I mean, I think the truth is that what happened was they weren’t paying attention to . . . That David Cameron and George Osborne were so focused on the budget and then the public finances and the need for austerity that they just didn’t pay attention. And I remember talking to someone in the Osborne team and saying, well, actually, Andrew Lansley seems to know what he was doing. We left it to him. And then all of a sudden they looked and went, oh my god, what have we done?
So I think the problem was they didn’t focus on it enough. And I mean, other parts reform, you know, you had the Michael Gove agenda on schools, which also in a way was the same story of we’ve got someone in education who’s looking after it for us, but he was rather more successful in driving his reforms. I think the problem with the Cameron government, they just didn’t focus on this enough at all.
Lucy Fisher
What about this general reform theme that Starmer talked about this week, about sort of bonfire of the quangos, rolling back legislation. Anna, some of it’s been quite small beer, hasn’t it? You know, he looked at reviewing all the regulators — there’s more than 100 — and so far they’ve only nixed one, which is a sort of a tiny one that barely anyone’s heard of.
Anna Gross
Yeah. And I do kind of wonder whether that’s part of the reason for making this huge announcement. They signalled they were gonna do a big speech and it was gonna be all about the change agenda, realised there actually wasn’t much meat in it and then came out with this.
I mean, one of the things that they’re touting, which is actually announced previously, was that they’re gonna ramp up digitisation of the state and roll out way more AI, and it’s gonna improve processes. And they claim it’s going to save about £45bn a year. You know, I’ve been speaking to various people who understand this technology and have actually also been analysing its roll out in public sector, not just in Britain but around the world, and almost always, the actual benefits are so much smaller than the original claims.
And that’s partly because we know you hear all the time about the legacy systems that we have in government. The fact that so much documentation is literally paperwork, and that the IT systems don’t work well. When they do try to launch a whole new IT programme across a certain department, often they fail. So the idea that they’re gonna suddenly plug in these incredible AI systems and it’s gonna revolutionise the system I think is a bit fanciful.
Lucy Fisher
Some of the examples are pretty eye-watering, aren’t they? I was speaking to a minister this week who pointed out the criminal records database dates back to something like the 1980s, and tech experts have to be employed to learn obsolete programming languages for this ancient, arcane system in order to patch it up and make sure it’s still secure. But Stephen, as Anna says, replacing these systems, upgrading them, that’s a huge capital outlay in itself, isn’t it?
Stephen Bush
Yeah. And also one of the reasons why so much of not just the British state, but most states across the world, run on old and janky code a lot of the time is because you can’t stop doing things for a bit if you’re a state to make something better, right? If you’re any bit of the private sector, you do mostly have the luxury of going that’s not working, we want to pause it while we’re reforming it, as opposed to continually having to run two systems at once. And of course, for the UK state, the main domestic cost is the NHS.
Historically, various things that we’ve hoped will bring down costs have brought down costs, but they also increase how long people stay alive, which of course is ultimately the thing that cost the NHS lots of money. So you often end up chasing your tail on this stuff. I think the other really interesting thing about this speech is that there’s not really a theory of how public sector bodies reform themselves or what the actual mechanism, right? There’s the target, which is AI and digitisation. But this isn’t a government which appears to believe in new public management, which was, broadly speaking, the ideological mechanism that the Major and Blair governments believed improved public services.
But there isn’t really an underlying theory from this government or from Keir Starmer about how he . . . What he thinks will drive this transition through. Or indeed what he thinks civil service reform . . . Yeah, like, what he thinks the incentives that you need to change to make the state perform better. And I think that is quite a big hole in the centre of this speech in this agenda
Lucy Fisher
Yeah. I mean, one thing I’m interested in I think people might notice is the government launching this Gov.uk app, where you’ll be able to access all functions, all your interactions with the state, whether it’s reminders about your MOT or access to welfare, or you know, your driving licence details. Having that on an app on your phone, I think by the end of this parliament, if it works — and it’s a big if; it’s launching in beta version this summer — I think that is something people would think would be a Starmer legacy. Beyond that, I’m probably pressed to think of other things that you say, Stephen.
Robert, what do you think about the civil service reform? I think the messaging there feels quite confused. At the weekend, Pat McFadden did say in a concrete way, the civil service can and will become smaller. And in one sense, the government’s trying to lean into this idea that it’s unfocused, overstretched, doing things badly; on the other, trying to praise civil servants and say, you know, they don’t buy into the Tory attack line that the blob is obstructing how things work.
Robert Shrimsley
I’m gonna slightly make a defence for Keir Starmer and what he’s trying to do here, because I think there was a general consensus across politics that the state is not working as it should, that the bureaucracy is . . . It’s got larger, course, partly because of breaks and partly because of the pandemic, because it does more and more things.
The one thing that this doesn’t address, by the way, is, well, if you want a smaller state in terms of its bureaucracy, what do you want to stop doing? As long as you keep doing all things, state is gonna keep growing. But I think there is an argument it’s not working as it should. There hasn’t been really substantial and meaningful civil service reforms since the 18-whatever-it-was Northcote-Trevelyan reforms. And there are all kinds of perverse incentive schemes, which means you don’t get technologists, you don’t get the right kind of experts into the civil service. We look across . . .
Lucy Fisher
Is that just about uncompetitive pay?
Robert Shrimsley
I think that’s a big chunk of it, but also the reward structures, the way you’re moved around within the civil service and promoted, it promotes generalism rather than specialism. There are all kinds of things that don’t work in the state and we can all see it.
And I think equally the point about independent regulators is an argument, which is it has suited politicians for a long time, as Anna was saying, to shift the blame for things that they don’t want to do. I had to do this, environment agency stopped it, or the sentencing council told us we had to do this. And part of what Keir Starmer is saying is people have to see a minister who’s accountable.
And one of the problems, the problem that spurred populism in this country and elsewhere, is the sense politics doesn’t work for me. I say things the government doesn’t listen. We say things have to happen, they say it can’t. So at the core of this is an idea which says people have to see a government that’s working. They have to see a government that is accountable to them and ministers who are responsible for decisions. Now, saying this all is very easy. It’s always . . . The difficult part is implementing any of this.
But I do think we ought to recognise that what he’s saying is something that’s become a consensus. I mean, there’s vast parts of the speech that Jacob Rees-Mogg could have given. There is a consensus about how the state is not working. But the issue is, has he got a better idea than Jacob Rees-Mogg about how to do it?
Lucy Fisher
And is he also a bit guilty of hypocrisy? Anna, the Tories have pointed out that since he came to power, Starmer himself has launched 27 new quangos or task forces.
Anna Gross
Yeah, I think there is definitely an element of hypocrisy there. I wanted to pick up on what Robert said, that I think there’s an element of kind of following — I don’t know how intentional it is — but following a Elon Musk playbook here of, you know, slash and burn this day and be really vocal about it, make the optics absolutely huge, but not necessarily explain what’s coming afterwards. You don’t need to do that. The most important thing is to remove and to create the image, to make people feel as though you’re listening to them, that the state has become too bloated, that it is not working for me. And then let’s figure out the rest later.
But I think that it does create a lot of problems for them, for the people who are working in those organisations because they don’t know what’s coming next. And then you get, you know, the civil service fighting back and saying, this is outrageous and you know, you aren’t explaining what’s gonna happen. NHS boss is saying the same thing now.
Robert Shrimsley
But they won’t slash and burn. This is gnaw and nibble, you know. It will be incremental.
Stephen Bush
But I mean also the real reason why the government does things without a clear destination is that the prime minister doesn’t provide a clear destination to ministers, officials, etc., etc. And indeed, one of the reasons why he doesn’t like this whole oh, I have to do this because the sentencing council style thing you talk about is he really doesn’t like it when ministers . . .
Lucy Fisher
Just remind listeners who are not up to date what that was about. And Robert mentioned it.
Stephen Bush
So the sentencing council had the wizard wheeze that you should . . . That the way that you combat racial disparity in the justice system is by inserting more racial disparity into the justice system, by getting judges to take account of whether or not a perpetrator is from an ethnic minority background, which actually, to be scrupulously fair, in this case, the secretary of state did essentially kibosh the moment they arrived on her desk.
But it obviously was a story that the government didn’t like, didn’t want to have, and a thing with a way to reliably have a meeting with the prime minister go badly is to turn up and basically, Keir, I’ve got a problem. He is very much a, you know, bring me solutions. You’ve been given an objective, go away and do it. But of course, across quite a large chunk of the state, people haven’t really been given an objective. I do think it is worth us pointing out just how rapid the journey on NHS England from day one, the Doswell Dossier report comes in early days of the government, is very critical of the 2012 act, lots of people . . .
Lucy Fisher
And this is just to . . . Just remind people, that was the review . . .
Stephen Bush
The review of the state of the NHS. Basically, Wes Streeting’s first act as secretary of state was to commission this review. Lots of people in NHS England looked at that and went, oh, so this way for the chop then, which obviously had been in the air for a long time, but it’s a reform which would have been felt more to work. About a month in, and instead there started to be this like, oh, actually, the secretary of state really rates Amanda Pritchard. They’re getting on really well, lots of people . . .
Lucy Fisher
She was the chief exec who had resigned recently.
Stephen Bush
Yeah. And a lot of people relax and go, oh, OK, well, it’s fine. Things are going well. Then about a month ago, essentially out of the blue for most people, she’s removed. A new transition CEO is brought in to have a two-year transition to turn it into this leaner, 50 per cent sized, focused on, you know, being the improvement mechanism for the NHS. And then effectively a fortnight after that, actually, no, it’s all being got rid of.
Now, there are really good arguments for any of those choices, right. The question of how you fix this problem, do you try and reform it from within? Do you just decide you need to knock it all down? Fine, whatever. But I think the one thing you can’t argue is, and it shouldn’t have come as quite such a shock to everyone who works in the sector, whether you are the head of a PCT, like the one that Anna was speaking to before this podcast, whether you’re someone who works in NHS England, whether you run a GP surgery, this has come as a shock to you, which is not a good way to bring through change.
And that’s why whenever the government does anything, everyone goes, oh, I wonder what’s gonna happen next, because there is no direction from what’s going to happen next across the whole of the policy piece.
Robert Shrimsley
I mean, the impression you get whenever you talk to Keir Starmer or whenever other people who talk to him, you have the sense of someone sitting in Downing Street fuming about what do you mean there’s a bat tunnel? (Laughter) Or, I said do this and it hasn’t happened. And I think he’s sat there getting more and more angry and frustrated that things are not happening as fast as they should. And that, of course, is the life of a prime minister.
They’ve all . . . you remember Tony Blair’s scars on my back speech. But he is sitting there looking at it and going, this government does not work because I said, this should happen and it’s not happening. So I think a big chunk of what we’re seeing and the sudden acceleration of this argument is the frustration at the centre of a prime minister who knows things aren’t working and wants to see the changes to try and make them work.
Lucy Fisher
And that’s a shame, you know, Robert. But can I ask you about Anna’s excellent point? You know, there is this big inspiration from across the Atlantic with Elon Musk, the Doge initiative. Is Keir Starmer either partly thinking about that or leaning into a populist narrative that’s keen on that? I mean, we hear that this some of these moves were nicknamed ‘Project Chainsaw’ within Whitehall, which sounds like it’s linked.
Robert Shrimsley
I mean, I think they can’t be unaware of what is happening in the United States. And the approach that Musk has taken. I don’t think it’s right to say this is a sort of sub-Musk exercise where they’ve looked at how can we do what Elon did, but in a British way? (Laughter) And I think this has been coming for a while.
And I think at the centre of it are two points. One is the critique that has come from Conservatives and populists, which is the state is too large, it’s bloated and it’s not working. The need to find money and say, look, we need to find cash to pay for things we actually want to do. And we’re paying a lot for a state that doesn’t function properly.
And the final point that they don’t want to raise taxes, and one of the arguments they use is it’s very hard to raise taxes when people look at a system and see there’s far too many managers, not enough frontline workers. We’re spending far too much on X or Y. So they are looking for a way to make it. I think the argument on the size of state has just been one, that you didn’t talk to anybody who thinks the state is working as it should be.
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Lucy Fisher
Well, that brings us on to the next big topic of the week, which is welfare reform. Anna, we know we’re gonna get a big speech from Liz Kendall. There’s a green paper coming from her, the work and pensions secretary. But already ahead of that, there’s been leaks that the government is looking to make £6bn in savings from the welfare bill. Tell us a bit about the big political row that is brewing on the Labour benches about what Starmer is planning here.
Anna Gross
Yeah. So there’s a real political impetus in government that actually, you know, predates even them coming to power, to reduce spending on particularly health-related benefits. I think that has grown and grown, particularly as Chancellor Rachel Reeves’ headroom has shrunk. There’s now a feeling we need to get this money from somewhere, and the welfare state is the place to go.
A lot of MPs feel that they’ve had to bite their tongue when it’s come to other things that Labour’s done, whether it’s winter fuel payments, whether it’s, you know, some of their position potentially on the Israel-Gaza conflict. They now sense that there’s going to be these huge cuts coming down the line. They’re gonna be having to defend those to their constituents. And you know, there are a group of MPs who think, you know, this is the right thing to do. We need to be prudent. We’re aware of the threat that other parties posed to us. And this is an area where we need to be really strong.
But there’s also a significant group of Labour MPs, potentially over 50, who are saying — potentially even more than that — saying, you know, we are gonna fight this tooth and nail and we will not support a Labour government making some of the biggest cuts to welfare, which is what we’re hearing for years.
Lucy Fisher
Stephen, I thought that was just astonishing figure on the FT this week from the editorial board’s view on this, which is that spending on benefits overall — this includes a state pension as well as out of work and incapacity benefits — is going to grow by more than 25 per cent to £378bn by 2030. Is it a surprise it’s a Labour government that’s been left to try and grip this?
Stephen Bush
Well, no, I mean, I would just hope that they support to remove the biggest line item there is pensions, which.
Lucy Fisher
Our ageing . . .
Stephen Bush
Which we’re an ageing population. And there are a variety of reasons also to believe that the outer sickness benefits are also linked to the fact we’re an ageing population, because whenever you raise the state pension age, which is a really important tool both to control state pension costs, but it’s also the most effective thing the government can do against workplace ageism.
There is an exact tracker between when employers start managing out people who don’t want to retire, and it is basically ten years from whenever the state pension is. But whenever you raise it, you create a cohort of people who end up having to claim sickness benefit as they essentially do a kind of grim march to the point, and they become eligible for the state pension. So it’s not surprising just because the passage of time means that sooner or later a government is going to have to go, OK, do you want to fund this differently? Do you want to fund this more?
And an emergent problem in the last term of the Conservative government was that people were on sickness benefit for longer, which is one of the reasons for the mounting caseload. And then, broadly speaking, in an ideal world, right, you get sick whether you are physically or mentally sick, you claim for a bit, you come back on to JSA, which is the jobseeker’s allowance, you get another job and you are therefore off of the caseload. For a variety of reasons, the caseload becomes stickier. You know, it’s become Hotel California benefit — you know, you check in, but you never leave.
So I think it’s not really surprising that they’ve had to tackle it. It was something that Liz Kendall talked about in her white paper on getting Britain working right at the start of the government’s life. They have this very ambitious target to get us to an 80 per cent employment rate, which would be much higher than most of our peers.
Of course, what’s giving it this new impetus, but it’s also made it much more controversial, both within and, you know, inside and outside the government, is this need to find something to say in Rachel Reeves’ Spring Statement about their vanishing headroom. Because if you’re Liz Kendall, your argument has been I can spend this money more effectively in my budget. And the argument you’re now having with the Treasury is they’re going, no, actually, we don’t want that money to be spent at all. We want to be able to say that we’ve reduced it so we can still say we’ve met our fiscal rules.
And I suspect those arguments are a big part of why this green paper feels like it’s been coming for the best part of a fortnight, three weeks, a month, probably because you have the usual back and forth of I won’t say that because I don’t think it can be delivered that way from the spending department and the Treasury going our head room, we need to get our £6bn. So it’s not surprising that they’re the ones facing this, but it’s not clear that they can fix it.
Lucy Fisher
Robert.
Robert Shrimsley
Yeah, I mean, I think Stephen’s put his finger on the key point. He wrote a really, really good article about this at the weekend. In happier times, this is not how a Labour government would reform welfare. That’s the key point.
The key point is the financial straits that we’re in. In happier times, it would take a big chunk of this money and be able to say to its rebellious backbenchers, well, look, I know this feels tough, but we’re putting all this money into helping these people get back to work. This is a positive programme, not a negative programme. You should support it for this reason. And as Stephen said, the argument now is all about how much of that money Liz Kendall can claw back to put into the programmes.
And I think actually, the talk of rebellion is probably quite helpful to Liz Kendall in this respect, because although some of these people will be diehard opponents of any cuts to benefits anywhere, the more that she can say, look, we’re not just cutting, we’re reforming. We’re repurposing money, putting it into getting people back to work. Then it becomes an easier argument for them to make.
Lucy Fisher
Because she makes the point that this is not just about economics and cutting costs, but a moral crusade as well, to help people who are out of work find structure, purpose, meaning, and nobody would disagree. It’s a travesty.
There are now a million 16- to 24-year-olds who are Neets: not in education, employment or training, I think. Anna, one of the things that Liz Kendall wants to do is to retool the perverse incentives that encourage people who are out of work to claim incapacity benefits rather than unemployment support, because it’s more generous and it’s more secure. And you’ve been working on a big data analysis this week that has some quite interesting findings about the numbers of and how benefit claimants have changed over time.
Anna Gross
Yeah. So I’m not entirely sure that the reforms, at least what we know of them at the moment, are actually gonna address these. But, to Stephen’s point, there hasn’t been a very sharp rise in disability and incapacity benefit over the past sort of 10, 15 years. It’s gone from being about 1 per cent of GDP in 2005 to 2 per cent today, and is forecast to rise to 2.25 per cent by the end of the decade. However, there’s been a commensurate decrease in a very large number of all the other benefits like universal credit, housing benefit, tax credits, all of these things. So the actual amount of GDP that we spend on non-pension benefits has remained constant. It’s basically about 5 per cent, going all the way back to 2004, which I think taps in . . .
Lucy Fisher
I think it’s really interesting, as I think most people, I would have thought, it had risen significantly.
Robert Shrimsley
(Overlapping speech) cyclical. I mean, you know, fewer people are out of work, you pay less unemployment benefits.
Anna Gross
Yeah. It feeds into the question of, you know, isn’t it surprising this has happened on the Conservatives’ watch?
Well, yes, in a way it is, but I think it’s also partly because of the cuts that have been made to various of these benefits in an effort to tighten what they saw as kind of opportunities for fraud or perverse incentives and things like that to try and reduce spending, it’s meant that people are kind of pushed towards applying for the highest level of benefits.
And sometimes these, you know, you get the highest rate of incapacity benefit, you are not subject to requirements to look for work, you’re not subject to a benefit cap. And then also, you know, once you’re on these benefits, there’s actually disincentives a lot of the time to find work, because you’re either penalised or there’s a threat of being penalised.
That means that a lot of people think, well, actually I’m quite scared about losing this benefit. If I could try out work for a month or two. So there are all of these problems in the system that are quite intractable.
Lucy Fisher
If we step back, Robert, Keir Starmer pouring money into defence, streamlining Whitehall, keeping the two-child benefit cap, cutting the welfare budget — is he very obviously tacking right? Is he vulnerable to the charge that he’s abandoning Labour’s traditional values? And should we even spare a thought for poor old Kemi Badenoch? What nerve can she campaign on when he’s doing all this?
Robert Shrimsley
I mean, I’m not sure that I think what he’s announced so far would classify as pouring money into defence.
Lucy Fisher
Shoring up. (Laughter)
Robert Shrimsley
But putting a bit more money in.
I think your point is an interesting one. It’s clearly fallen to Labour at this point to do things that it might not wish to do. And what you sort of have it to some extent, is a choice between two parties, both of which are going to do something similar, but one of which feels worse about it.
But I think, in fairness, these are the issues that Labour had to tackle, even if it’s not been the way that many people who voted Labour expected it. You would rather, if you are progressively minded, that Labour was tackling the welfare issue. You would rather it was Labour tackling . . . If foreign aid is gonna be cut, in one sense, it makes absolutely no difference who does it.
But, on other hand, if it’s done by a government that actually wishes it wasn’t doing it, it does at least offer you the hope of something in the future. I just think these are intractable problems that whoever was in power was going to have to address, and maybe Labour could have been more upfront about it at the start.
But the welfare bill is a real problem. There are far too many people, particularly young people, who are out of work for too long. The numbers have been going up significantly since the pandemic, and I think any government would probably have to do this.
Lucy Fisher
Anna.
Anna Gross
I agree that these are intractable problems. I think the Labour government has seemed kind of overly pleased sometimes with having to do them. And I think one of the issues as well is there aren’t many bones that are being thrown to its kind of old school left-wing supporters. Like what policies has it said, you know, to indicate that these are where our values are?
We’re in financial straits. These are things we have to do. These are intractable problems. But, you know, this is where our values really are. And if things like the two-child benefit cap or . . .
Robert Shrimsley
They are clear about that before.
Lucy Fisher
(Overlapping speech) workers’ rights, rise in minimum wage.
Stephen Bush
Yeah, I was going to say that, the thing is actually there are large parts of the government’s agenda that are significantly to the left of any government we’ve had since the 1970s. But they are, I would say, a . . . well, there are two risks to them.
One, it’s not obvious that the far-reaching employment reforms, the fact that we now have one of the highest minimum wages in the developed world, it’s not that essentially everyone will be eligible for statutory sick pay and linking to the number of people who aren’t in work. If you have a situation where anyone, regardless of how long they are working as a small employee, you know, as a medium-sized employee, you’re eligible SSP, There are a lot of disincentives that the new government has inserted into the system for hiring people part time at this point.
All of the left-wing things that the government are doing are kind of your traditional structure of the economy stuff of the kind, you know, Labour governments in the 1970s and 60s, which tended not to last very long, didn’t run the economy all that well, have done and they’ve abandoned the sort of modern traditional agenda of a centre-left government, ie there is very little on cash transfers, consciously nothing for the world’s poorest.
Exactly as Anna says, often accompanied in this like, oddly gleeful way where it’s almost this kind of like, this almost sort of like, yeah, like, you know, we can’t wait for this opportunity to cross the road to punch a starving child in Mozambique in the face. (Overlapping speech)
Robert Shrimsley
I disagree because I think we’re taking as the template for being properly left-wing a sort of old Ed Miliband or even to the left in Jeremy Corbyn view of what the left, what being left means and I think the point is . . .
Stephen Bush
But no, these are new Labour era approaches, right? The increase in (inaudible). And that is a new Labour legacy.
Robert Shrimsley
Absolutely.
Stephen Bush
But I mean, cash transfers rather than getting businesses to hold the build up. Yeah.
Robert Shrimsley
But my point is different, which is that I think there’s been this strand, this strand that was in New Labour, the Blunkett-Straw standard of New Labour, which says that actually the things that matter to people who are most in need, the traditional core Labour supporters, is the quality of their public services, is whether, you know, people are running riot and causing crime on their streets and whether they feel they can live securely in their own home, and that actually there’s nothing inimical to being, you know, pro the working class, which if you are trying to improve the situation in the public services, which they are most reliant upon. And I think the whole Blue Labour argument, if taken to extreme, is a dead end for the Labour party.
But the whole argument is, if we are going to improve the quality of life for the kind of people who normally vote Labour, we’re not going to do it by chasing the old nostrums of progressive policies. It’s going to be by getting these ordinary things right, things that people notice every day. I don’t think it is inimical to being a Labour party is at all. (Laughter)
Stephen Bush
It’s not inimical, but it might not work as part of the (inaudible).
So let’s take, say, the renter’s rights bill, right? Now, this is hugely transforming the rental sector already, even before it’s passed. I know this effectively because my partner’s very busy doing a solo property search to a lot of flats that you can tell are coming on to the market because they would not pass the decent home standard.
This now, you know, and this is obviously hugely important in terms of the living condition of renters, also hugely important in terms of the opportunities for people who want to buy ex-rental properties to live in for themselves.
However, I am yet to meet a single financially straitened renter who voted Labour last time who goes, oh, I know this is happening because renters come into contact with their lack of rights only when they’ve been impinged. However, I have met an awful lot of landlords and ex-landlords who are very angry about the reforms. Ditto Labour’s employment reforms, right? I do not meet an awful number of people who go, oh thank goodness I will get x number of guaranteed hours. I do meet an awfully large number of people who run small and medium enterprises who are spitting blood over the reforms.
And the thing which would haunt me if I worked for this government is the fate of the Biden administration, where they had a bunch of reforms where the beneficiaries did not vote for them or did not thank them. But the losers at the top of companies did not vote for them and really, really, really did blame them.
And the gamble, right, is this kind of in some ways, this is sort of like an inverse mirror of New Labour, right? New Labour, you had the private sector free to do what it wanted and largesse funded by taxing the private sector. Now you have very little largesse in terms of cash transfers, condition of the public services, but huge amounts of prescription in terms of what the private sector should do, how long it should hire people, how it can fire people, etc, etc.
And those are both left-wing approaches, right? Those are both ways of being on the centre left. But what I would say about the history of the Labour party is it’s only the New Labour approach that has shown that it can win more than once reliably. The approach . . . this consciously back to the Labour, traditional old Labour right has never been able to hold power successfully. I would say it remains very open whether or not the Starmer government will be able to hold power successfully for a long time.
Anna Gross
I was just gonna say that, you know, your point that making those kind of incremental changes to the public sector, that is something that a lot of people, whether they’re kind of traditional Labour voters or Conservative voters, you know, that they will appreciate. It’s just that I think that they could have been done by a Conservative government. They’re not kind of traditional left-wing policies.
Robert Shrimsley
And I think people like us care; voters don’t care. They don’t care which government could, what they care about is did you improve the NHS? They don’t care, oh, you improve the NHS by being a bit Conservative. They don’t care about that. They just want to see the results.
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Lucy Fisher
Well that brings us on to another big story of the week, engulfing the Reform UK party, who may, of course, be the beneficiaries of any failure by Labour to improve public services. The party has suspended one of its five MPs, Rupert Lowe, ostensibly on account of allegations about his conduct, alleged bullying of workplace staff and the threat of violence against the party chairman. He denies those claims and says that this is a stitch up based on a personality clash with Nigel Farage and a difference over policy. Anna, tell us more about this row and how serious it is to Reform.
Anna Gross
I don’t really think it’s much of a problem for the party. I think, you know, Nigel Farage is one of the most recognisable figures in British politics. I think he’s probably the second or third most well-known politician. Rupert Lowe, I reckon, I don’t think one in 1,000 people would be able to pick him out of a line-up. Maybe football fans. (Overlapping speech)
Robert Shrimsley
Very popular in Portsmouth. (Laughter)
Anna Gross
So look, I very much doubt it’s going to dent Reform’s current poll lead. I doubt that it’s going to have much of an impact on local elections in May.
I do think the one thing, you know, that they’ve been making this big drive towards professionalisation and trying to present themselves actually as a totally different party altogether, that’s attracting a really completely different electorate that’s never voted before.
I think the reality is, to anyone who’s paying attention, and that is a small circle, that this really undermines that image. Nigel Farage has consistently, throughout his time in politics, fallen out with people in his parties. And this is just part of the same playbook. It’s the same guy. It’s the same party.
Lucy Fisher
Can I say in a slightly smug fashion, that when others this week have been saying, I didn’t expect this fallout to happen so soon. I did, and I think I’ve said that on the pod before.
Robert, I agree with Anna that, you know, Reform is basically Nigel Farage, but is that in itself a structural problem for the party?
Robert Shrimsley
You see, I don’t agree with either of you at this point. Obviously, I agree with the broader point, which is that Nigel Farage is the person who matters. Anna’s right, most people have never heard of Rupert Lowe. So in the end, as long as Farage is still powering ahead, that’s what matters. This row will not touch the sides of the country. But I think there are reasons why this does matter a little bit, even though it is primarily a clash of egos.
One reason is because Rupert is not going anywhere. He’s in Parliament now. This isn’t some minor — I mean he’s quite minor, but this isn’t some figure in the remote wilderness of the Reform ranks somewhere down the line, who you’re never, ever going to see. This guy’s in Parliament. He’s not going to stop being an MP.
And more importantly, there is a fight within the broader pool of, you know, the radical right that Reform has lived in about which direction it should go. And while Farage will win that battle, in most senses, there is this caucus of people who take the Rupert Lowe line of wanting mass deportations, you know, not just foreign criminals, but their families, too, thinks they should make nice with Tommy Robinson, taking what you call the Elon Musk critique of Reform. Whereas Farage has worked very hard to have this cordon sanitaire around his party, you know, this far and no further. We don’t have truck with real extremists.
And the point is, this is gonna be a big distraction within the ranks of people who are actively pro-Reform, because this fight goes on social media, which they’re all paying attention to, particularly on X. And there is an argument at which direction you need to go. And Farage’s view is essentially, although he wouldn’t say it in these terms, it has to become a bit more mainstream.
I was very struck by an interview he did this week where he suddenly said, I’ve thought about this and realised I’m not a populist, and all the people who will take the Rupert Lowe position, if you’ve got to be more hardline, you’ve got to be purer in your policies. So I think this is gonna be a running sore for Reform for quite a while. And even though I don’t doubt Farage will win, I think it’s more problematic than people assuming.
Lucy Fisher
Yeah, I liked a column by Daniel Finkelstein in a rival publication — they do exist — about the split between broadening support, which is what Nigel Farage wants to do to try and win more seats, potentially in an election, versus deepening the support among the most hardcore purists, as Robert points out. Stephen, what’s your take?
Stephen Bush
Well, I sort of agree with Robert. I mean, ironically, since we’ve left the European Union, it’s like we’ve gone out of our way to prove all of the ways that we’re a typical European country, which is that, broadly speaking, you always have on the populist right, a party which is very dependent on the politics of it, on the personality of its leader and their ability to launder positions that people agree with, but they often react against when they hear expressed by politicians.
So basically, at the moment, the reliable Reform core are people who would agree with one or more of the sentiments which would correlate with supporting the BNP — unease about the amount of diversity, unease with mixed race relationships, etc, etc — but had always been repelled by the BNP because of its neo-Nazi past and its association with violence, right? Which is one of the reasons why he’s always had such a firm line on, you know, Tommy Robinson can’t be in here. And in all of his parties, he’s faced these challenges from people who think that the party needs to be more open.
One of the central disputes is that Rupert Lowe wanted to talk about deportations, and Nigel Farage did not think that was a good thing for Reform to talk about. Now, the big challenge here, whether you’re Le Pen or Geert Wilders, whose parties are, very institutionally, that is the prototype that Reform is based on, right? Where he wanted a party where he could go, I’m kicking out these troublemakers, I’m not going to be pulled off and made to look less respectable than I want to be.
And so I think it matters because it shows even in the new model, Reform is a party which is designed so Farage can only ever win its internal power struggles, in which he got to pick all of the candidates, essentially. They only have five MPs, and he wasn’t successfully able to pick four other people who would reliably stay onside and on message. And I think the most significant thing about the Farage-Lowe row is this is the thing that the structure of Reform was meant to inoculate his party against, and it hasn’t worked.
Lucy Fisher
And, Anna, you had an interesting story this week about Elon Musk’s persisting interest on the populist right in Britain. Do you think he’s gonna follow through and give some sort of donation, either to Reform or potentially even back Rupert Lowe to start a new party that would try and outflank Reform on the right?
Anna Gross
Well, yeah. He seems to have gone very cold on Reform. It was in early January, he said that Nigel Farage wasn’t the right person to lead the party, and then his interest and excitement in the party seems to have really waned.
And then I got told by some of his allies over here that he had said to them that he would be interested following this route with Lowe in potentially backing an alternative.
Lucy Fisher
(Overlapping speech) his money, don’t we? He’s marched us up to the top of the hill several times now.
Anna Gross
Exactly. He’s made a lot of claims. I am sceptical that that will materialise. I think he likes to throw his weight around. I think he likes to feel powerful in British politics, but feel a bit doubtful.
Robert Shrimsley
Well, since this is Farage’s vote . . . I mean, you could peel off a bit, but this vote belongs to him.
Stephen Bush
What’s really interesting is in the polls, there’s now a chunk of the Reform vote, about a quarter of it, which disapproves of Farage. Now it’s worth thinking back to 2010, which was when Ukip was then led by a peer whose name I’m afraid I’ve forgotten, but it was in one of its . . .
Robert Shrimsley
Pearson?
Stephen Bush
Yeah, it was in one of the intermittent periods of not being led by Nigel Farage. And it did what Ukip has tended to do when it’s not been led by Nigel Farage, which is to move still further to the right. The combined score of Ukip and the BNP in 2010 was 5 per cent. What is 20 per cent of the existing Reform vote? 20 per cent.
So basically, the group of people who disapprove of Nigel Farage are the group of people who will turn out to vote for that mode of politics, expressed in a way that is repellent to the much larger number of people you need to have if you want to win five seats in the House of Commons, win 20 seats, become prime minister, you know, run the Welsh Parliament, etc, etc.
I think, therefore, that 20 per cent is significant because it shows what would split off if Elon Musk did suddenly decide he wanted to put his money where his mouth is. But does he want to put his money where his mouth is and get 5 per cent? I think that’s always been the weird dance that Reform is having with these various people who keep saying they’ll give money tomorrow. It’s that they want proof of life first.
And I think that the fear for them is what happens if they underperform in the local elections, the Conservative party turns out to have more life in it than people think, they don’t win the Runcorn by-election. And then suddenly people are going like, oh, you know, maybe I should just give my money to the Conservatives instead.
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Lucy Fisher
We’ve just got time left for Political Fix stock picks. Robert, who are you buying or selling this week?
Robert Shrimsley
Perhaps counter-intuitively, I think I’m gonna sell Bridget Phillipson this week.
Lucy Fisher
Bridget Phillipson, the education secretary.
Robert Shrimsley
Because when I look at the nature of the reforms that Starmer is pushing forward with, they seem . . . It seems to me that she, in her education reforms, is entirely out of kilter with them, that she’s pushing in a different direction when much of what, on welfare and NHS, it’s all about, you know, getting closer to the people, giving the public more choice, not being too patronising in our socialism about what we tell people they have to have.
Her schools bill has gone the other way a bit and peeled back Reform, particularly around issues of the right of successful schools to expand. I think she’s out of kilter with the way direction of Labour party policy is going. So I just wonder if she’s got some problems ahead.
Lucy Fisher
Well, I’m gonna jump in there because I’m buying this week, John Healey, the defence secretary. Finally, he’s got in hand the strategic defence review he commissioned. Let’s see how many revisions it undergoes now in the hands of the government. But I think largely in defence circles and government circles, he’s seen to be doing a good job.
And there’s a lot of talk about him potentially being moved on to another problem-solving role next, if there is a reshuffle. And I just, it sprung to my mind, Robert, that maybe he would be a key candidate if there were to be a move.
Robert Shrimsley
Would you move the defence secretary at this stage?
Lucy Fisher
Not at this stage necessarily, but further, I don’t know, further down the line. It depends when you think the reshuffle is, which I don’t think will be soon. Anna.
Anna Gross
So it’s not a British politician, but I am selling Elon Musk because there was a period late last year where he seemed to a lot of people, I think, like possibly the most powerful, most impactful person in British politics, and he could change the course of British politics with an absolutely colossal donation that was being touted. He’s gone pretty quiet on British politics, and he doesn’t tweet about it half as much, or even like, you know, a hundredth as much.
And, you know, if reporting from the US is to be believed, it seems like his star is somewhat waning as well, and Trump is going a little bit cold on him. So yeah, I think he’s likely to have a bit of less of an impact on British politics going forward.
Lucy Fisher
Stephen, how about you?
Stephen Bush
I’m going to sell Lisa Nandy.
Lucy Fisher
Lisa Nandy, the Culture Secretary.
Stephen Bush
Although I agree with you, then I don’t think a reshuffle is . . . I think there’s a lot of wish casting going on in parts of the Labour party where the people are like, oh, I hear there might be one. But there will of course be one at some point. I think probably after the spending review, maybe actually even as far in the future as after the local elections next year.
And there is someone who has, in their handling of their brief, their clear lack of interest, the way they’ve annoyed so many of the stakeholders, just made themselves the prime target for the painless sacking, and it’s Lisa Nandy. So if we’re doing reshuffle chat this week, it just seems like a good point to yeet her out of my portfolio.
Lucy Fisher
Well, that’s all we’ve got time for this week. Stephen, Anna, Robert, Thanks for joining.
Anna Gross
Thanks, Lucy.
Robert Shrimsley
Bye, Lucy.
Stephen Bush
Bye, Lucy.
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Lucy Fisher
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. They’re 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. Plus, please do leave a review or a star rating if you have time. It really helps spread the word.
Political Fix is presented by me, Lucy Fisher, and produced by Lulu Smyth. Manuela Saragosa is the executive producer. Original music and sound engineering by Breen Turner. The broadcast engineers are Andrew Georgiades and Rod Fitzgerald. Cheryl Brumley is the FT’s global head of audio. We’ll meet again here next week.
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