Coffee House Shots
Just how ‘painful’ will Starmer’s October Budget be?
The Spectator magazine is home to wonderful writing, insightful analysis and unrivaled books and art reviews. Subscribe today for just £12 and receive a 12-week subscription in print and online, along with a £3, £20, John Lewis or Rachel's voucher. Go to spectator.co.uk/voucher Hello and welcome to Coffee House shots. I'm James Hill and I'm joined today by Katie Wools and Fraton Alson. Now this morning, Katie, after five days of briefing, we finally get the equivalent of Keir Starmer's equivalent to the Gettysburg Address. He gave us a big speech in the demonstrate garden. Tell us more about it. Yeah, so heavily trailed as you say, it is still a week until Parliament returns. That happens next week, but it certainly seems to me at least, as though they both have been punished by slightly not putting enough out in recent weeks. You've had a series of quite negative labour stories, where it is accusations of cronyism, unease over the winter fuel payments, or just heat on publics, like to pay as a live. And they're all stories that would get some attention. Is the reason they're page one and page two, because the government is not saying much else? There's definitely a concern amongst some in the Labour party, that it's saying we'll focus. And I think today giving that speech is really an attempt to seize back the agenda, set the narrative ahead of the return to Parliament and ahead of a few difficult months in terms of decisions. Now, there have been various trails. One was that Keir Starmer would declare the end of performance politics. Certainly, I found some light humour in Keir Starmer declaring the end of performance politics from a rose garden. In a stunt clearly meant to draw parallels with dominant comings, and with all the festivity around that. But in terms of, I suppose, the main points of this speech, you had the usual of Keir Starmer talking about how awful the Tory inheritance was, talking about that fiscal black hole several times, fiscal black hole to be debated, I'm sure later on in this podcast, and saying that lots of the tough decisions he'd had to make already hadn't wanted to, such as early release of prisoners, such as the winter fuel payment making it means tested. But he felt he had had to because of the situation that he finds his government in. And therefore, you have to make tough decisions and where obviously Tony Blair was known for things can only get better. Keir Starmer said, well, things can actually only get worse, but hopefully in the short time, and then things will go good again. But I think the purpose of this speech is really to try and hammer the Tory inheritance point more, lay the groundwork further ahead of more difficult decisions. And you could see that from the fact that Keir Starmer on the budget said that October budget is going to be painful. It's a clear hint that there are going to be tax rises, which I think when he said ordinary people are going to have to do their bit too, potentially going to be more wide-ranging than some had expected. Yeah, I mean, Fraser, this was all about rolling the pitch really for what could be a winter of discontent, as Katie says then has written on Coffee House for us. Do you think that Keir Starmer did enough today in this speech to kind of roll the pitch ahead of what's going to be return upon the next week and thereafter party conference season? Well, I think this is verbal positioning. I mean, we were told during the campaign, of course, that there wouldn't be any sort of serious tax rises and Rachel Reeves would come up with a form of words saying she would increase taxes and working people. But broadly speaking, our plans she was saying do not really involve moving the tax dial. And then you had this kind of fake discovery of, oh my god, there's a black hole. And so then she changed her language to saying there would be tax increases at the budget. So moving from the election campaign, we're saying there's no need to increase taxes, just saying now there will be tax increases. Today, this has been upgraded to painful. That's the word being used by Keir Starmer today. But the next budget is going to be painful. Now, why is that given that the picture is exactly as we knew during the campaign? Now, in the Rose Garden, he's saying, oh, we've discovered 20 billion of opportunity billion black hole. So to sign the fact that the black hole was the largest single part of that. We're in his own decisions on public sector pay. You can't really call that black hole. If you're intending somebody to spend more than the previous government had decided, even if that was 20 billion black hole, that's against a context of a 1.1 trillion tax receipts and a new year. That's how much this government is collecting from the economy, 1.1 trillion. So 20 billion in that context isn't that much of a dial mover. But nonetheless, you are seeing sort of the magicians pieces being put together to conjure up this idea of there being a terrible, terrible crisis. And therefore, let's blame the Tories for basically bait and switch and reneging on the tax assurances that we gave during the campaign. So it's clear, but this is what the overall impression is supposed to be. Plus some of the language about how this Downing Street, the place that was once used for parties, is now being put back to work for you, the ordinary people, et cetera. So again, I mean, it's funny that it's almost as if this is a kind of language which you use after a revolution, you know, like the old corrupt regime we're doing this for themselves, we're now doing just the people. I mean, it was run by the Tories before, because almost half of the electoral voted for the Tories in 2019 was how democracies work. But so it's funny that he's now presenting this as a great liberation of the people previously held by this Tory clique. Again, the verbal positioning is important because it's obviously preparing us for something we're really not going to like in next month's budget. And of course, your Tory populism in quotation marks is our sensible, grown-up government, very much more sort of positioning oneself to appear as the moderate reasonable choice. Yeah, and by the way, you can say this is all part of the course for a new party. I mean, tattooing Blair would be doing that as well, saying that we are the political wing of the British people. In a way, it's sort of almost like a cliche to come in saying, "Oh, we never knew things would be so bad." And our first budget, of course your first budget is going to be tough. Your last budget pre-election is usually quite easy. This is how political cycles work. But when we listen to him, there's no reason for us commentators to get sore anybody else to actually go along with it or believe it. So this is what we're seeing here is a very old and time-tested, conjuring trick. An era of digital media, I think he's going to struggle to pull it off because when that budget comes out, I think then we're going to see how much tax revenue there really is going to be and whether that 20 billion whole actually exists or not. It wouldn't surprise me at all if it turns out with the economy, we know recently it was growing actually a lot faster than was expected. It will be that his inheritance is better than he expected. And there isn't actually a genuine rationale for the tax hikes. Okay, is there not a danger perhaps that Kirsten was being too negative in all of this? Obviously, one takes a point about fiscal realism and they want to sort of blame the blame on the conservatives. But is there not the sense perhaps they need more of the how labor we're going to do this and more of an uplifting sense that in the medium to long-term things will work out for the better? Yeah, I mean, he has to do just quite an awkward dance because on one hand, the main way that he plans to get growth is by attracting private investment. So Rachel Reeves needed to go to New York as she did recently and kiss Tommy's meetings to say, "We're a great place to invest for all these reasons, our planning reform, etc." But then in terms of their messaging to the public, which is we're going to do a load of things we didn't explicitly say we're going to do despite the Tories repeatedly saying we were going to do it. Yeah, and while we might till the letter of not lied, it certainly I think risks are voted back that they've got to say things keep looking really bad, yet you get some conflicting figures on this, you know, borrowing figures, perhaps more in the doom and gloom camp, but some of the growth expectations more in the high camp. So I think it is a hard point to land anyway. And then I also do think there is a risk that people say, you know, come on, May, he was currently on 70 days, but how long can you spend all that time just blaming the government before? Now, of course, I think there are senior figures advising kids down in Rachel Reeves who look at George Osborne and David Cameron, and they take a lot of inspiration from that in the sense that they think that the pair of Tory politicians did a brilliant political job of tying everything to the last Labour government, and they're trying to do something a bit like that. But I think there comes a point when people start to say, "Well, is it now your problem? You can't keep blaming it on the other side." That speech, I think, was largely aimed at voters. Yeah, obviously, very to that. But he also has a party management problem because the unhappiness over the current plan on winter fuel payments and cutting it, there is back bench unhappiness, there's light ministerial unhappiness, and lots of them are hoping that by the time you get to this budget, Rachel Reeves was found a way to not restore the winter fuel allowance for everyone, but to find, you know, more of a solution so others can access it. But the fact was so early into the new government and they're facing this shows that, you know, if there aren't tricky decisions to come, Labour MPs are going to have to be taught to weather them too. They're probably Labour MPs are going to be more relaxed about tax rises and spending cuts. I think that's always been the case traditionally with a parliamentary party, but you can't take it all from granted. Of course, one of the very first things that Keats Thomas said today was that World Creation was his number one priority, and of course, how do you kind of raise those taxes without encouraging a flight out of London as well. Fraser, of course, one of the reasons we go to these things and hear these things is for the speech themselves, but the other particles is the questions and the Q&A that followed thereafter. One of the ones that struck me was Andy Bell of Channel Five asking about all these new appointments to the government and this, you know, perception of cronyism around what Labour's been doing over the weekend. There's been the story about Wuhid Ali getting a number 10 pass and the so-called passes for glasses, Rao. What do you make of this kind of sense perhaps in certain circles that the new government risks coming involved in the stories about cronyism and appointments, etc. And how well did Starmer kind of brush that off today with his big speech? Well, I think this is a really important point. Perhaps one James people like you and I will be more interested in than the average punter. I mean, it will seem strange to your ordinary person that if you become Prime Minister, there are so few appointments you've got the power to make. Most cabinet members can appoint a lucky two or three sort of relatively junior advisors. Now, I became editor of the Spectator 15 years and one day ago. If I had been able to only make two appointments, there was no way I would have been able to successfully run this magazine. And this is a magazine with only 35 journalists. So how a government is supposed to effectively learn itself with having so little power of appointment? I just don't know. I've long been in favor of more of these appointments. Now, what we saw with the Conservatives were their hands were quite tied. I mean, Tony Blair famously gave power of direction to Jonathan Paul Nastock Campbell, the power of direction of civil servants. Yeah, that was sort of deeply controversial at the time. Oh, I thought it was perfectly sensible. We now see of Cure Starmer that the appointments he's been making aren't just special advisors, but in civil service positions as well. Now, we know that Michael Gove, when he was Education Secretary, had to jump through various hoops to get people into various civil service positions. But that was effective. That means he was able to get the expertise that he needed. So I am a believer and supporter in Prime Ministers being able to bring in more expertise inside a government that they want to get something done. The interesting thing is that the Labour seem to have been able to somehow get around the rules which stopped the Tories from doing exactly the same thing. I'm not quite sure how they managed to do it, why you ended up with Lord Ali wandering up with an access all areas passed to Downing Street, for those of you who are, but in principle, I'm not against it. I just think there should be more of an open debate about how our country is run. And I'm in favor of Prime Ministers being able to make a lot more appointments, getting in expertise, if they've got a specific agenda of reform. I mean, right now we know that, for example, you can get Lord Timsons, our new Prisons Minister, who used to be taking the SSU of Timsons and put into the House of Lords. That's what he had to do. Something as dramatic as that if he wanted to get an outsider to run a policy department. So I do believe in what he's done, but I think journalists are quite right to scrutinise why they were able to skip the rules. Yeah, I think we have all these appointments. You can see a way they can be justified. But it's almost Labour's response to them that's more interesting. I mean, I think even today in that press conference, when Kirsten was asked about it, he seemed quite rattled to be asked. He dismissed it on the grounds that lots of the stories were coming from his opponents, which I'd, you know, you can say things are more partisan of his role. But if this is about the things you were doing, and I was noticing it, I think that that is a deflection, really. And then I think generally, just probably looking at the past week or so, does feel that times Labour just tying themselves in not slightly on some of these cronyism routes where there probably is a way to make the defence would make an argument a bit like the one phrase that just made. Instead, you were initially told, I mean, Harriet Harmon on the Ian Corfield appointment. So there was someone who has donated 20k to the Labour Party, 5k specifically to Rachel Reeves, was given a civil service role within the treasury initiative that was defended. But then he himself has decided to step back from that and now take an unpaid role, which suggests perhaps he can be bothered with the rap, but you know, that's the changing of position. And then you had Harriet Harmon interviewed, you know, saying, well, actually, he's very rich, so it probably didn't feel very much to him giving 20k. Interesting line from the Labour Party. You think, well, would Harriet Harmon say about a Tory donor being given a civil service role? Of course not. Clearly, there's just a classic point in scoring politics, but I think given Keir Starmer has made such a big thing in the past and an opposition about how he's going to clean up politics, they should be a little bit careful, almost just to think to themselves, if the Tories were doing it, would be attacking it. If the answer is yes, maybe they should at least try to be careful or be a bit more gracious when they're being asked about it. Thank you, Katie. Thank you, Fraser. And thank you for listening to Coffee House Shorts. And if you'd like to hear this fantastic podcast live, you can actually do so, Katie, is that correct? Yes, we have a Coffee House Shorts live event next Wednesday. Myself, Fraser, Kate Andrews, perhaps a special guest. We're still working on him. We're working. We get him. That's the clue. And now we can announce some gin and tonics. Yeah, so the idea is that we have live podcasts and everybody comes round of a spectator office afterwards for a G&T to toast the end of the summer and the new political season. And now our garden is quite small, so we can only fit to think a couple of hundred people in, so there are a few dozen tickets left if that. So if anybody does want to join us, I would advise booking now because they'll probably go by the end of the day. And it's spectator.co.uk/live. So come for a drink and book now. [Music]