Coffee House Shots
Has 'gamblegate' become ridiculous?
The stage is set. Get a front row seat and run up the election by subscribing to the spectator for just £3 for three months. We'll even send you a free election mug. Go to spectator.co.uk/mog. Hello and welcome to Coffee House Shots, the spectator's daily politics podcast. I'm Cindy Yu and I'm joined by Katie Bose and the Financial Times' Stephen Bush. So earlier this week, the Institute for Fiscal Studies came out with a report analysing all of major parties' financial pledges. Katie, tell us what it says. So it's looking into the manifestos, having had time to dig into some of the details in terms of spending commitments. Now, it was pretty withering all around when it comes to the poor Johnson-IFS verdict. And I think there's particular aim at some of the smaller parties, such as reform or suggesting. What they want to do is further than this trust would have gone and you can see how the markets reacted to that. It's similarly the Greens and others and it was saying these smaller parties are not making things easier because they know that it's very unlikely they're about to be in government as the main party. They're not having to make the numbers add up in the same way. But I think where the report was most interesting is on the Tories and Labour manifestos. Both parties claim that they are fully costed. Poor Johnson was effectively saying no such thing and there is a conspiracy of silence, which is a line that IFS have used before. But I think it was more delving a bit more into the detail. And the point that poor Johnson was trying to make is that if you look at ageing population, social care, if you look at the current debt interest, if you look at the size of the welfare bill, if you look at what we're expecting in terms of the need for public service costs to go upon, even on the current trajectory, it's really hard to avoid the sense that there are some tricky decisions coming up the track. And neither Labour nor the Tories have properly acknowledged that. The Tories on one hand, ultimately talking about always efficiency savings on welfare, on levelling up in other areas, savings they didn't actually do when they were in power, but are now apparently going to do and find it really easy, even though they look incredibly ambitious. And that's going to fund many policies such as compulsory national service, but also some of these tax changes that they're doing now. Then on the other hand, you have Labour, who are trying to be really reassuring and saying, look at our special triple lock, you have to have triple lock in a slogan to make it mean something. But the triple lock tax pledge, we won't raise national insurance VAT or income tax, and the sense that they're going for growth, and there's not going to make the sense of growth will fix all these problems. And therefore, they don't need to get into, well, they're trying to get to in specifics of tax rises, but is that really the case? And the point being, whichever party wins the next election is likely going to have to borrow more or raise taxes. Now, Keir Starmer, and I think one of the key things in the Labour Manifesto is trying to say, no guys, you know what hasn't been tried before? Growth. No, no, growth has been tried by some, by many governments. Obviously, you know, it is the answer you want really to these things, but it's hard to get to. And those close to Keir Starmer will say that they think that the Labour Manifesto is actually a bit more revolutionary than people said it was, which was perhaps on this podcast. It had no surprises, but they say by making growth so central, you've got to realise in the first couple of days or 100 days of the Labour government, that is going to drive loads of these decisions of planning reform, relaxation and so forth. But I think the point is the IFS report makes quite clear that if that growth doesn't come, and maybe even if it does, there's probably going to be some quite unpalatable decisions that voters are not being told about now. Now, this is clearly a bigger problem for Labour than the Tories, because it's Labour who are, you know, barring the strangest polling error of all time, it's Labour who are going to be in government, it's Labour who are going to have to explain to voters why perhaps things they said or suggested don't square what the pan's doing a couple of years time. Yeah, and Stephen, what stood out to you from that report and also Labour have been keen not to say that they will raise taxes, but also not to deny that either. Yeah, I think to me, the thing which really stood out from Paul Johnson's remarks was the point that he made that actually if you look at what Labour have not ruled out, they have not ruled out a lot of taxes, a lot of new taxes on assets. Now, the thing is, is although you can get more revenue that way, it's also an area of tax policy where it's very easy to accidentally change the economy and you don't like, hit your growth prospects for everything. Like, taxing assets in general is more difficult than taxing income. And he also made the very good point that actually wealthiest owners do actually now pay a larger proportion of the government's tax station than they were in 2010 or under the last Labour government. And so if you want to have the lavish spending commitments of the kind that the, you know, the kind that although they body doesn't have, they're kind of envisaged in there. Like, although you can look at the party manifestos and go, Labour isn't planning to spend very much the most ambitious commitment in the conservative manifestos on national service and defence spending. If you look at the sort of vibe of what they're offering, right, they are both suggesting that, you know, health care outcomes will improve, schooling outcomes will improve. Well, that obviously involves more, more spending. And I think it is the, the, which stood out for me is that, then you have got to accept, if you want to do these things, that you can't just get all of that by taxing the few, they have to be broad based tax raises for most people. And Kate is exactly right. This is a problem for the Labour Party because, yeah, barring, not only are polling this, but a miss from all of the major political parties. Like, Richard Sak wasn't going to suffer coastal because he was like, Oh, you know, the weather's so nice. I love the stuff that suffered coast this time of year. He's going there because he thinks that the conservatives are in deep, deep trouble and are going to lose many, many seats. And I think there are lots of ways this election reminds me of 2019 in reverse. But one of which was, is that the IFS and people in rooms like this were having exactly this kind of conversation about the conservative parties pledges to increase spending on schools, hospitals, the police, while leaving income tax, value added tax, and national insurance flat or falling. And we were all going like, Hmm, doesn't seem like they can keep all of those promises. Of course, they couldn't keep all of those promises. And although that is not the biggest reason why they are now on course for a very heavy defeat is part of why. So I think it is a reasonable question. Is this next parliament going to be the 2019 to 2024, but with the colors changed? And Katie, if growth is the Bjorn Endle, does Labour say much about how they're going to grow the economy? I mean, the last time someone talked about that in government was maybe distrust in a kind of branded way. And she had lots of ideas, not that she had time to enact them. What are Labour's ideas? Liz Truss and Kirsten often do sound a little bit similar language around growth. Now, of course, Labour love to attack the Tories on this trust, put on as many banners or pages as possible. But I think just in that sense of going for growth as the main ambition of your government is something and using it almost as an answer to all your difficult questions is a similarity they have. I mean, I think it's hard to find a party that isn't pro-growth. I think debately he'd get some of the Green Party's policies. And there are some views to be had there. But, you know, what does this look like in government? There are two main parts of Labour's growth strategy, I think, which is the Green agenda, which has obviously been scaled back in terms of the 28 billion. When that happened, lots of people are saying, oh, another portrayed promise, but also what does that mean for Labour's growth agenda? And then also, I think, in terms of their planning reforms. Now, part that is about housing, but also these planning reforms that should bring in a whole load of infrastructure and divestment. So, I think you're imagining what Labour would do quite quickly and quite early on. I think lots of the planning reform legislation would be very important. And then I think there's going to be a big effort to try and bring in private investment. And Labour will talk about the stability premium, which is the counter to the super majority talkers. Well, if you actually have a very stable government, it looks like it's going to be here quite a long time. Businesses, yes, might not like some of the things the Labour government might bring in terms of conditions for workers, raising those, or they might make a little sceptical. But also, Richard Reeves has done that pledge that she's not going to raise corporation tax. But really, she's going to make sure that we stay competitive in that area. So, that would provide some reassurance. So then, can you, which I think I thought Labour would like, almost get this, or do you want to say, no, cool, but I don't think we're quite there yet, because you get some buzz around the UK, change room, and bring in private investment in that way. And then it contributes. And Stephen, if and when the Labour Party does come into government, how long would it take with them to start enacting some policies when they, you know, know what's going on with spending? As Rachel Reeves herself admits in an interview with The Financial Times, thanks to the existence of the OBR and the IFS, we all know what's in the books now, right? Now, I'm sure Labour will do some kind of theatre around the inheritance is even worse than we thought, because the inheritance- Payback for this, no money left. Yeah, because also because the inheritance is bad. You know, like, it's not like 1997 where the Conservatives bequeathed excellent economic record to the incoming Labour government. The inheritance is mostly poor, although Jeremy Hunt did some very good things in his budget on full expensing, more investment into quantum research. The national insurance cuts and the use of all his fiscal firepower to do so is deeply irresponsible, and coupled with the changes on student visas, that does mean it is going to be a very tight initial spending round. Now, Labour will hope that a combination of their planning reforms, a decisive victory, and also, like, let's be clear, just as one of the things Emmanuel Macron did very effectively when he became president, is he when they just voted for Brexit. That country is an atmosphere like, hey, there's another big Western European country which doesn't do mad things and it's led by a lovely, pretty centrist. Labour will hope, not unreasonably, that a French election in which you have, yeah, in which you have Le Pen's party doing well on one side and the leftist alliance doing very well on the other will be on which people will look afresh at the United Kingdom. So the thing that we don't yet know is it is certainly possible that by the time of Labour's first fiscal event, they will be able to point to a better picture for growth than we currently expect. If they don't, however, then, yeah, we are back to these as the IFS says 9 billion pounds of cuts nominally in Labour's plans, 19 million nominally in the Conservatives' plans. Of course, the other thing of course we don't know is what the shape and complexion of the Conservative party will be, because I think part of what will shape how much riggle room Labour thinks they have is what type of Conservative party they think they are facing and what type of dividing lines they will want to be drawing in their budget. But yeah, the first thing will, yeah, it will of course be planning reform and will be some sense of what, but they yeah, but they do already know what I see. And finally, Katie, you know, we've talked about this on the podcast for a lot, but the betting scandal continues and actually has rolled in even more people. Tell us about the latest. Yes, now Gamblegate, who knows at this point, has come to the Labour Party. You have a Labour candidate who has been found to have placed a bet on himself to lose. And they were very quickly learned, simply to reshoot doing belatedly, very quickly kiss, Dominic, the measure that Richard Sinek had taken by saying, Labour rituals support for this candidate. Now, what does it mean in the grand scheme of things? I'm not sure it means that much, if I'm being honest. I think the Tories will latch on to it, because they can be a little bit plague on all our houses. You know, everyone's as rubbish as one another, it's harder to attack us now, because you also have one in your own ranks. Now, I think there's an interesting question on political betting in general, which is not to say, I have placed bets my time. I haven't done political bets. And I think it should be pretty obvious to either those who have been elected or want to be elected, that they need to hold themselves to a high standard. But you also have Alice DeJack, the cabinet minister coming out, and last night saying he made two grand off betting for a July election. And then later said clarifies, oh, no, no, but the bet was placed before June. The implication being, this is not inside a trading where I knew Richard Sinek was going to hold an election, I just took a chance on it. Now, is there a discussion to be had about whether a cabinet minister who every day sees people walking around rooms, goes to cabinet, speaks to it, are they into pre-religious position to bet on political markets, which are fairly small, or is it fair game? I mean, lots of political journalists bet on political markets. I think there is a question as to if a source tells you something, but you haven't written it publicly, that's probably something which could be called insider. If you have written it publicly, but you've got it from your source, but you've written it publicly, then it's the same, then are you allowed to bet? I mean, some things are completely black and white. If say the prime minister had told you the date and then you placed a bet on it, but it now feels to me that while lots of things just look very stupid on the surface, we're soon going to get into when a political bet some others, because there was a big spike, which one the big reasons the gambling commission is investigating on a July election in the days before. But we have an FT journalist here, in the FT weekend Saturday long political read, they opened the first thankful paragraphs with the rumours around Westminster that there's going to be an election call on Wednesday on the day of the inflation figures. Now you've got five paragraphs down there with the usual disclaimers, because we've been there many times before, and I'm saying, well, lots of people say this is rubbish. Then the day before the election on this podcast, I did something James Hill may never forgive me for. And I said, there are lots of rumours in Westminster that Richard Grant's going to call an election tomorrow when you get the inflation date. So James suggested it might not be the case, but it does mean he didn't try and make money on the betting market. If you are an eagle-eyed Westminster watcher and you're kind of picking up these things and there's good odds on it, that could be partly why there's some betting. So I don't think a Labour candidate having placed a bet they shouldn't have done, is going to think his Dharma's campaign. It gives the Tories a bit of cover maybe, but generally speaking, I suspect the next election, there's going to be a very different approach to betting than there is currently, where I think it's pretty relaxed. The fact that you've come is talking about, you know, it has been the past couple of years. Yeah, I think Kate is exactly right. I think... That's why we love having you on. Yeah, come again. I think this scandal has now moved from the entire legitimate question of, did some people in Rishis and Acts in a circle have privileged information which they made money on versus... But Alice to Jack betting on, we all knew that an election was going to happen sometime between now and January 2025. And Alice to Jack having a flutter on that is perfectly fine and legal in his ditto. A paper candidate, yes, the Conservative campaign has gone so badly that now this paper candidate might not have been a paper candidate, but a paper candidate, the Labour candidate in central Suffolk betting that they're going to lose, does not require you any insider knowledge beyond having heard of central Suffolk or indeed the Labour Party. He really tried to do this. I mean, yeah, yeah, it's like what would try and collusion involve being the Labour candidate in central... I mean, that's like, I think every, every Conservative candidate in Hackney North, where I live seems to have tried to lose by standing in one of the safer, safer seats in the country. I mean, this scandal has definitely got to a point of, yeah, a point where it's moved, it's become ridiculous. I think it, I think it's exactly right. It slightly helps the Conservative Party to have something to say when it comes up in the debate, but everyone knows that there is a clear difference between what Alice to Jack was doing, between what this Labour candidate was doing, and what is alleged to have happened in the, in a circle of the Prime Minister. And I think, broadly speaking, the long-term consequence will be even a bunch of people will be prohibited from making bets in future as a condition of being candidates. I think to be honest, that's actually a little bit unfair on the, you know, the teacher, you know, paper candidates are already giving up quite a lot of their time. They have all of the downsides of being candidates. I, everyone goes like, well, you must be biased because you were the Labour candidate for so-and-so, but they never actually, sorry, spoiler alert, most paper candidates remain just that paper candidates. But yeah, that will be the lasting legacy that, you know, there'll be tighter restrictions on, on, on all bets. Stephen and Katie, thanks very much. And listeners can catch us after the debate tonight, where we'll be back with coffee workshops. Thanks for listening. [Music]