This is an audio transcript of the Political Fix podcast episode: ‘Ask Political Fix: Trade, tax and leftwing pacts’
Lucy Fisher
Welcome to Political Fix from the Financial Times with me, Lucy Fisher. We promised you, and it’s finally here: our first ever Q&A episode. Thanks to all of you who’ve sent in such a great range of burning questions spanning political strategy, trade, foreign affairs and I must say some beautifully niche policy queries.
Here to help me answer them are my colleagues, Stephen Bush. Hi, Stephen.
Stephen Bush
Hi, Lucy.
Lucy Fisher
Miranda Green. Hi, Miranda.
Miranda Green
Hi, Lucy.
Lucy Fisher
And Robert Shrimsley. Hello, Robert.
Robert Shrimsley
Hello, Lucy.
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Lucy Fisher
With the news of the long-awaited UK-US trade deal this week, we can get straight into our first question, which was sent via email from Nick Skinner. He asks, is any US trade deal worth the paper it’s signed on? Won’t it be tossed out on a whim anyway? Robert.
Robert Shrimsley
I think it’s worth the paper it’s signed on. Whether it’s actually worth very much in broad terms is a different question. At the time we’re recording this, we’re still waiting for a lot of the detail. It sounds as if the 25 per cent steel tariffs that Trump imposed are going to go, that the 25 per cent tariff on cars will be removed, or knocked down to 10 per cent for about the number of cars we export to the US already. The UK is going to remove a lot of the tariffs on American beef products, that kind of thing.
But I think the key point about this trade deal is that while it puts the UK in a better position than it was a month ago or so, it doesn’t put the UK in a better position than it was last December, because the core point is that Donald Trump’s 10 per cent as he calls them reciprocal tariffs on all British exports, goods exports to the US, is going to remain in place. So essentially, we have negotiated a less bad situation than we were in, and I don’t want to knock that entirely — I think it’s good to have steps in the direction of free trade — but the fundamental point is, while one broken leg is better than two, one broken leg is still not great.
Lucy Fisher
Stephen.
Stephen Bush
So the ghost at the feast here that this question kind of alludes to is the USMCA, which is the trade deal done between the United States, Mexico and Canada during Trump’s first term. Now of course, now, Donald Trump seems so unhappy with that deal and he is continually publicly flirting with the idea of annexing Canada. So that kind of shows in some ways, no, it isn’t really worth the paper that it’s written.
So in terms of the broad outline of this deal where the UK has dropped some tariffs on US goods has basically done what Juncker did in the first Trump term of going, hey, what are some things we’re gonna do anyway? Let’s present that as a concession by going BA is going to buy x number of Boeing aircraft.
Lucy Fisher
And at the time Juncker was . . .?
Stephen Bush
President of the European Commission at the time. Now, obviously British Airways were going to continue to buy Boeings, right? So it’s a meaningless concession in some ways.
However, yes, I think it is likely that if there is a third term for either Trump or a Trumpist candidate, you would see this deal coming under the same pressure as USMCA. Ultimately, if you are employed either directly or indirectly by Jaguar Land Rover, getting almost all of the cars you sell into the United States tariff-free is worth something.
Yeah, I ultimately, you know, to put it discreetly, right, if you are a 40-something whose putting, you know, whose kids are at university or who is saving for a deposit, who works somewhere in JLR’s supply chain, you can kind of worry about Trump being unreliable tomorrow. And so from that perspective, I completely agree with everything Robert says. I think we do have to see it as worth quite a lot because those jobs are worth quite a lot.
Lucy Fisher
And of course Downing Street is claiming that there are 250,000 jobs alone in the UK automotive sector, although that might be a little bit of an overstretch. Miranda, I’m keen to your tape. This trade deal, of course, people are saying it’s good news for the UK, Starmer looks very front-footed being number one in the line to secure a trade deal.
But the truth is the White House was also under a lot of pressure here to try and stabilise the sort of the turmoil that Trump caused in the market with the April 2nd ‘liberation day’ tariffs, wasn’t he?
Miranda Green
Queasy markets, yeah. So he’s kind of like some sort of weird application of I think in America it’s called Pepto-Bismol, isn’t it, which you take if you’ve got indigestion. Yeah. Pouring Pepto-Bismol on queasy markets. I mean, just on this sort of question of whether the trade deal’s worth anything with the UK and the US, I think we should give Starmer credit. You know, if he’s sort of duelling in a tennis match kind of way against a completely unpredictable opponent, it’s true that they may decide to start berating the umpire and walk off at any moment.
But even so, you know, getting some things in the box is points, you know. However, as pointed out in an excellent piece by our very own Alan Beattie, which our listeners can look at, he points it out . . . For free, because we’ll add it, wouldn’t we, Lucy?
Robert Shrimsley
Tariff-free.
Miranda Green
Tariff-free, exactly. Tariff-free FT content. He points out, you know, this famous quip about paying Danegeld to the Vikings. Once you pay Danegeld, the Danes are gonna come back for more. This is how Trump does business; he comes back for more concessions.
If he gets annoyed about something else, maybe he’ll come back against the UK in some other area. And a lot of sectors are not included in this announcement this week. So we just don’t know yet.
Robert Shrimsley
One point I want to push back on is this notion that it’s a good thing to be first in trade deals. It isn’t a good thing to be the first in a trade deal because every trade deal builds on the trade deals that have been done before.
So in fact, although there’s a nice bit of cache in getting the Oval Office treatment, in fact it might have been quite handy to be fifth or sixth. So you know, the things that we give Keir Starmer credit for — and he may deserve it, I don’t know because I haven’t seen the detail — but being early . . . It’s not important.
Lucy Fisher
It also feels like we can’t necessarily give a final verdict until we’ve seen what terms our other rivals (overlapping speech).
Robert Shrimsley
Precisely. That’s my point.
Lucy Fisher
Yes, exactly.
Stephen Bush
I think I would slightly push back against the use of the term ‘rivals’ here not because, you know, we are, to quote David Cameron, ‘in a global race’.
However, ultimately, the difficulty to the United Kingdom is none of these blocs are our rivals because also, yeah, for the same reason that, you know, my five-a-side football team is not a rival to Manchester City, but broadly speaking, of course the EU is going to get a better set of terms. The EU is a huge trade bloc. Of course, China is going to get a better set of terms. What are the comparable peer nations in terms of countries which have chosen to be outside of their major trade bloc, but in this weird situation where they’re basically refusing to negotiate on the things which would stop them maybe one day deciding to go back, even though at the moment they’re not choosing to go back? There isn’t really a peer country.
So in some ways, I kind of think that one of the UK’s few assets in these trade deals was like, he’s desperate to have done a deal, therefore we should be first, because it’s not like anyone else’s benchmark was going to be relevant to the United Kingdom because the answer of, well, the EU got this, is gonna be like, have you seen how much smaller you are than the EU?
Lucy Fisher
Well, listen, we’re gonna come back to trade in a big way in future weeks, because of course we’ve had the UK-India trade deal on Tuesday. We could see the hat trick of the UK secure some kind of reset with the EU in this Lancaster House summit that’s coming up on May the 19th, but I am gonna press on with the Q&A. So Miranda, another question, from Sam Pratten. He wants to know, could the UK start a brain drain campaign from the US?
Miranda Green
So I think it’s ripe for exploitation, this situation, if we played it carefully. And in fact, there has been an initiative from Whitehall, from the science department, with a certain amount of money behind it to say, you know, let’s identify teams of scientific researchers, help them relocate to the UK and fund their research because of course one of the most bizarre things that’s happening from the Trump administration is a sort of crackdown on American science, which leads the world because of the money behind it.
So if we can find the funding to do it, we should absolutely tempt as many people here as possible to innovate from the UK and hopefully register their IP here and all the rest of it. It’s a real shame, I have to say, that the previous government here left the university system in such an appalling mess that our institutions are not as best placed as they might be to benefit, but it is an opportunity.
Stephen Bush
Yes, I’m giving an even more depressing answer, which is, could they? Yes. Are they going to? No. (Laughter) Yeah, and then we should acknowledge, as Miranda says, of all of the indefensible and irresponsible things that the Conservatives did in the ’22-’24 period in a doomed attempt to turn around their popularity, given that students don’t vote for them anyway, not even letting tuition fees rise year on year was a catastrophic mistake, which has put huge pressure on our university sector.
However, the new government, yes, they have taken the difficult decision to let tuition fees rise and they will continue to rise throughout the parliament. However, they’re not going to do the kind of cash injection that universities would need and all the kind of visa liberations and visa liberalisation that universities would need because when you’ve got to the position that the government currently is where you’re obsessed with net migration and what you can do to pull down the numbers, well, the levy you can always control if you’re the government is the ability of universities to invite more overseas students. And if you are hitting universities’ revenue lines, well, they can’t become an attractive destination to US researchers.
So unfortunately, despite the fact we have the advantage of language, history, strong research base, the UK university sector is going to shrink, not grow under this government.
Miranda Green
No, you’re talking down the life sciences. It’s our only hope. I mean, there are serious areas where we are world leaders.
Stephen Bush
I agree that it is something . . .
Miranda Green
Get behind it, Stephen!
Stephen Bush
It’s something that we should be doing well at, but let’s imagine that you are the government and you care about life sciences. Would you create a situation in which Paul Bristow — in the nicest possible way, not I would say a Conservative MP who many Conservatives think was an A-tier candidate to be Cambridgeshire and Peterborough mayor — would you create situation in which a political opponent wins that mayoralty because you haven’t been sufficiently organised to change the electoral system back? No, you wouldn’t do that; this government did.
Would you be clamping down on visas and talking about how what you’re really concerned is overstaying a thing which doesn’t exist really in the graduate visa and also ultimately, yeah, that’s the point you want to attract them so they stay? No, you wouldn’t; again, they’re doing that. Would you be putting more cash into universities directly? OK, yes, they are doing fees, but, you know, it’s not a very large injection.
So broadly speaking, despite those historic strengths we have in life sciences, they aren’t going to get the level of backing that they ideally need from government for a variety of political reasons.
Miranda Green
Well, you know, I think we should storm the home office and demand change. (Overlapping speech)
Robert Shrimsley
Although I broadly agree with Stephen, I do think the scale of what’s happening, particularly in health and human services department in the US under Robert Kennedy is something that is shocking anybody who works in the pharmaceuticals and life sciences sector. And there is simply no good reason to be pioneering in the US at the moment in this space.
So you may as well develop your vaccines, develop your medicine somewhere else and hope that a different US government will take them later on. So I still think there’s space there. I mean, the problem, as Stephen was suggesting, is they might be better off going to Germany, but I do think there is an opportunity there still.
Miranda Green
Don’t say that! Go here!
Lucy Fisher
FT talking down Britain!
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Our next question is from Patrick in Leeds.
Patrick in Leeds in audio clip
My question is about Labour before the next election. If they continue on the current trajectory and Keir Starmer himself remains very unpopular, is there any possibility or is there a mechanism within the Labour party for them to try and replace him? Or now he’s there, is he pretty much guaranteed to be the leader at that point, regardless of how poorly he might do in the polls if he doesn’t turn things around?
Robert Shrimsley
There is a possibility, I don’t think it’s a very substantial one. I think if you’re a Labour supporter, the bad news is he’s going to lead you into the next election probably. I think that it’s overwhelmingly likely that he does this and we’ve got a long, long time to go.
So who the hell knows where the Labour party is going to be in four years’ time. I do think that the start has been really, really dreadful considering the opportunities they had. They do feel like a government that’s just tiptoeing around all the major issues. So things could carry on getting worse for them for quite a long time. You never know, but my strong bet would be that Keir Starmer was to lead them into the election.
Stephen Bush
The Labour party rule book, quite consciously by a series of weak Labour leaders, has been engineered so it’s very, very difficult to get rid of the Labour leader if they don’t want to go. Parliamentary management is an Achilles heel of this Downing Street. Many people at the heart of Downing street seem to believe that Labour MPs should just be happy to be there for the ride, so I suppose it is possible that if they continue to be this unpopular, this clearly sort of overcome by what is, we should acknowledge a terrible inheritance, it is possible that they might be able to build up a sufficient headwind.
But I don’t think it’s that likely, not least because we shouldn’t forget, of course, that for all Labour’s unpopularity, he does still lead all of his named rivals in the best Prime Minister Question. And when you do the forced choice of what type of government would you like, a Labour-led government of some description currently enjoys a 10-point advantage over all of the others. So you can . . .
Lucy Fisher
So who are the key rivals? People talk about Wes Streeting . . .
Stephen Bush
Oh, no, as in his key rivals externally. I mean, so . . . Wes Streeting is not going to become Labour leader in a million kajillion years. Like, anyone who’s betting on that outcome, do something useful with your money. Like, I don’t know, invest in the stability of the United States government. You’ve got more like chance of getting that money back.
Plausible rivals, Angela Rayner, I think is the overwhelmingly well-placed candidate, assuming that she chooses to run. I think almost everyone else is actually for some reason, one reason or another, quite vulnerable, right?
If you’re Yvette Cooper, you’re home secretary, not a position where you’re doing things that Labour activists are going to like. If you’re David Lammy and you’re foreign secretary, you’re travelling the country, you’re not exactly building a base in the parliamentary party. If you are one of the various loyalists who does the difficult media round like Peter Kyle or Darren Jones or Bridget Phillipson, well, you’re often the face of things the government doesn’t like.
If you’re Bridget Philipson at the Department of Education, you’re almost certainly gonna have a very difficult spending round and you will have to continue to announce these salami slicings that have already contributed to the negative press she’s got in that department. So yeah, I mean, I think to be honest, it would be Angela Rayner or no one.
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Lucy Fisher
The next question is from Jordan.
Jordan in audio clip
My question is about the future of the Conservative party. By the end of their 14 years in government, we saw the Tories become essentially the party of the elderly, but the Conservatives have historically been known as the party of aspiration and fiscal responsibility. Given the reality of an ageing population, can the Tories credibly claim to be any of these whilst keeping their older voter base happy and their inability to do anything on helping younger people with measures like planning reform?
Lucy Fisher
Miranda, can I add a supplementary thought to that excellent question? What about the pensions triple lock? Is that a shibboleth that the Tories are willing to take on before the next election?
Miranda Green
Yeah, that is a good question. I don’t know the answer, frankly. I feel much more confident talking about the strategic challenge they face because, as Jordan’s question implies, they’ve got a huge problem with the younger age groups.
Part of this is about being economically shut out. Part of it is being about being shut out of property ownership and the terrible housing shortage and the expense of housing in the UK. But the electoral problem they’ve got as well is that they don’t appeal to the hugely growing graduate population across the country, which is prevalent and has been concentrated in some constituencies. And now the number of the constituencies where that graduate voting bloc is more powerful is growing all the time.
So there are sort of projections from political scientists that show that essentially, unless the Tory party can come up with some sort of platform, a message that speaks to that sense of aspiration, people getting on, changing their lives through education and then getting, you know, fulfilling careers, probably more white-collar careers to be honest, then they’re kind of stuffed over the long term because demographically you can’t just stick with your older voter base from sort of social classes that you relied on before.
Lucy Fisher
Robert, I mean, the Tories are in a bit of a trap, aren’t they? Because I think it’s some polls to show it’s only the over-75s for whom the Tories have a lead in support. So they can’t abandon that cohort. And at the same time, they do need to massively broaden their support base with a wider offer.
Robert Shrimsley
Yeah, I mean, I think this is a false dichotomy, though. I don’t believe that you can’t be a party of aspiration and for younger people while still having a significantly older vote. And obviously, let’s not forget that the Conservative vote has shrunk so massively at the moment that it’s going to have more of its core people and those core people are older.
But old people have children. They have grandchildren. They understand that the world still has to go. Now, there are areas of blockers for them because the older population tends to be asset-rich. They don’t want other houses built near their houses, they’re concerned about the state of their pensions — those things are there. But I don’t think these have to be existing conflict necessarily, particularly since Labour will have done the hard work on planning reform for them already.
As Miranda was saying, what’s fundamentally lacking is a plan for prosperity, a forward-looking agenda, which says, this is how Britain will be a richer country, your children will be better off, you will be able to get a house and they have to look a bit more modern. One of the things I thought, going back a long way to when the Conservative party lost office in the 90s, is they stopped looking like a party that liked much of the country. I think that’s where they are again. You win power by looking like you like the country you aspire to govern, or at least enough of it to win, and I think this is all part of the same piece.
The Conservatives have to be forward-looking, they have to have a prosperity agenda that people believe, they have to persuade people that they will be the party that makes you, your family, your children better off. So I just don’t accept the argument that says, if you’re looking after the old, you can’t do this.
Lucy Fisher
Well, so you remind me of someone who is very good, who’s a Conservative making the country feel good about itself, is Boris Johnson. And Robert, I was struck, you went to a briefing earlier this week that suggested he was the only leader of the Tory party that could beat Reform and Labour at the next election.
Robert Shrimsley
Yeah, and that’s partly because he’s the only one that anyone’s ever heard of (Laughter) in these polls. But they did Kemi Badenoch and Robert Jenrick. Truthfully, no one knows who these people are. But we were hearing this towards the end of last year.
There is a point at which the Conservatives press the red button that says Nigel Farage is gonna be prime minister if we don’t do something. The only person who can stop him is Boris Johnson and the bat-light goes on, the Bojo light goes on, some hapless Conservatives forced to bail out of their seat, and they send for him. It’s clearly possible. Like, whether it works is a totally different matter.
Lucy Fisher
Stephen, I’m going to throw you this question from Nicola Scally.
Nicola Scally in audio clip
I live in Lincolnshire, which has always been conservative with a lower and upper case C. Now the country appears to have switched to an upper case R as an answer to its conservative instincts. Will this be widely replicated in other conservative areas of the country and will it be enough to take Reform into national government?
Stephen Bush
So I think this was the actually still under-appreciated story of the local elections in that I think we all knew that in the parts of Lincolnshire where Ukip had done well, the Reform party would do well. But they did well in the part of Lincolnshire that had continued to return Conservative councillors even during Ukip’s good years, just as they did well in Staffordshire.
Like, you know, in some ways I would say if we summed up all of the things which have made the Conservative party electorally successful here over the years, it has been their hold on, you know, affluent bits of the West Midlands. They essentially replaced the Conservative party in Kent in sort of just pick a ward at random. Ashford Rural, where the Conservatives got 60 per cent of the vote last time, they finished third. This time, this is somewhere they won in 2024.
So I think what we have seen in these elections is Reform being able to not just win in sort of Ukip-y places, but to take a sufficiently large chunk out of the Conservative vote that it can become a plausible party of the right. And that means, of course, that once you are the second party, you do occasionally win even if you only win by default. I think the important difference is that, just as one of the reasons why the Conservatives have won more elections than they’ve lost is the Labour party has often been quite scary. Reform does have an element and I think Middle England, well, visibly in the polls, Middle England does worry about Reform being too extreme.
So I think we might be about to see a shift in which we shift into a different type of two-party politics, in which the right is seen as more of a risk. The great strength of the British right is it has never really gone into elections where it has been seen as a risk. It might have been seen as incompetent or out of time or, you know, not liking the country that seated them, but people did not think that Michael Howard was a risk. They did not think William Hague was a risk. And I think that’s a big change.
Lucy Fisher
Miranda, Lewis Campbell says that Reform-Tory pacts are flawed as an idea in his view. He says we need a Lib Dem-Green-Labour pact to keep them out of power. It’s an interesting idea, isn’t it? We do talk a lot about this sort of ‘unite the right’ phenomenon. What’s going on on the left is the fragmentation of our political system, meaning that we could end up having to see some kind of electoral pact, whoever takes power at the next election.
Miranda Green
Well, we could, but what we saw very effectively in the July general election already was extremely sophisticated voting in local areas by supporters of those three parties, depending on who was best placed to oust the Conservative.
And I think what you might get in the next general election, I mean, anything we say about the next general election comes hugely caveated because so much can change, but you might get quite efficient anti-Reform voting as well by support of those three parties. So I think you might get stuff that’s not quite a pact, but that’s organised voting to counteract whatever’s happening on the right, with kind of power through numbers on the left.
So that’s one thing that I think will be a kind of significant Newtonian physics law of politics at the next election. Whatever happens on the right will have a counterweight happening on the left. I think in terms of sort of what might happen after an election result, that’s a hung parliament.
It’s quite interesting that we’ve had this question in actually because there’s a bunch of new detailed polling by YouGov on what the country would like to see in those situations. And the thing that comes out on top as a coalition option, it’s not supported by a majority, but the highest level of support is for exactly that Labour, Lib Dem and Green deal of some sort to govern and a Conservative-Reform deal is considerably below that.
I mean, with all of these things, there are reasons why it’s never happened before, right? So the unlikely coalition between David Cameron and Nick Clegg, although it turned out they were roughly the same sort of people when it came to doing a personal deal, the politics were very different. And in a way, the kind of surprise factor, I think, facilitated it.
On the left, you know, it’s often talked about as the narcissism of small differences, but there is no love lost between those three parties. I personally have slight doubts about the idea that Green votes and Green voters are completely fungible in the jargon with the votes of Labour and the Lib Dems. I think they actually have very different politics.
Lucy Fisher
And pretty radical politics, right?
Miranda Green
Yeah, very radical politics and particularly on international matters. And they’re radical in a way that neither Labour or the Lib Dems actually are.
Lucy Fisher
I’m interested in some of the polling that I’ve seen lately shows that a huge proportion of young people really support the Greens and it makes me wonder whether Labour will actually go ahead with its vow of votes for 16 and 17 year olds because it could potentially backfire if some of polling stacks up. Robert.
Robert Shrimsley
I think, to go back to the question, a Lib-Lab-Green pact, first of all, there essentially already is a Labour-Lib Dem pact.
They basically did a deal at the last election where Labour recognised there were all these seats where the Liberal Democrats are far better placed to oust the Tories and then let them get on with it. And it did the most minimal amount of work and it worked very well, and there’s no reason why that roughly won’t happen again. And it will continue to serve the Lib Dems well until the countryside wants to get rid of the Labour party, at which point that will be a problem.
But the Green part of this coalition idea, I think, is a disaster for the Labour party, actually, because the Greens are a very left-wing party. And although their reputations are still slightly cuddly reputation apart from in the councils where people have actually experienced them.
Lucy Fisher
Bin collections once a month, anyone?
Robert Shrimsley
The Greens’ set of policies are seriously left-wing and the Labour party is not competing in that space. It is competing to be in the centre of and the mainstream British politics. And the mainstream politics is socially conservative at the moment.
So I think being attached to the Greens will be a problem for the Labour party in an election. I think it will make them more vulnerable to attack. What you wanna do is steal their voters rather than join them. And the way you steal their votes is by scaring them about the alternative. And if the alternative is Nigel Farage, that seems like a plausible strategy.
Stephen Bush
Yeah, I think Robert’s right.
Both in it would be bad for the Labour party, but I also think it would bad for the Greens because, broadly speaking, there is a type of voter who’s too right-wing to be considered Labour party who will go Lib Dem. There’s a type of voter who’s too socially authoritarian to trust the Lib Dems who will go Labour, and there’s a type of voter who’s too radical to go for Labour or the Lib Dems who will go Green.
And I think the mistake with all of these pacts, whether it’s on the right or the left, is to think that voters are wholly fungible whereas actually like people are cross pressured and they go in different directions.
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Lucy Fisher
OK, on to the next question from Karen Freer.
Karen Freer in audio clip
We’re now in the era of multi-party politics and have been for some time in Scotland, Wales and Northern Ireland. So my question is, how will the Westminster media cope? TV regularly provide government and opposition voices, but sometimes miss out the Lib Dems and the Greens. So with the election results going forward, this is clearly not sustainable. What are your thoughts and will there be more scrutiny of the Greens and Reform?
Lucy Fisher
Our favourite subject, Robert, ourselves. (Laughter)
Robert Shrimsley
Well, a couple of points, obviously, the multi-party politics that we talk about is mostly associated nowadays with the Scottish and Welsh parliaments, which have a different electoral system, which is one point.
But actually, in both Scotland and Wales, and indeed in Northern Ireland, there are bigger parties and smaller parties. And we talk about multi-party politics in Scotland because we also have the SNP, but the truth is the SNP and the Labour party are the parties that count in Scotland most of the time; the Conservatives occasionally, Lib Dems hardly at all.
And although I’m not an aficionado of Scottish media, I suspect that’s reflected in the way things are done. In Britain, it’s the same. You’ll see a bit more attention given, certainly more attention to Reform, you will see the Lib Dems being treated moderately well on panel shows, less well on the news, and the Greens will be mostly ignored except for those odd occasions when television media remembers its statutory requirements.
Miranda Green
I love the idea of more attention for Reform. (Laughter) I don’t know, I’m not quite sure how they could squeeze in more attention for Reform at the moment.
Lucy Fisher
I think it is a question now.
Robert Shrimsley
Just you watch. (Laughter)
Lucy Fisher
Our broadcast colleagues have to contend with more than us in newspapers with maintaining political impartiality. Now, this question is coming from Chris via email. How risky is sending a peace force to Ukraine? Is anyone in government thinking about the real implications of this and would they willing to see UK troops die?
Stephen Bush
Well, at the moment, we should be frank about the fact that it’s not actually really possible to send a UK force in the way that is envisaged because this reassurance force of, you know, even when the Anglo-French military alliance has gone it alone on things which the then US government thought were incredibly ill-advised, either intervention in Libya, the bases that those planes took off from were American ones.
So this idea is actually currently a bit of a pipe dream of a, you know, Britain and France going it alone while Trump invents new forms of tariffs and sits at home.
Lucy Fisher
And also we should say we need to see a ceasefire between Ukraine and Russia.
Stephen Bush
But I think, you know, we should be, yes, people in Westminster are very serious about the consequences, not least because we shouldn’t forget that the country after Ukraine is Estonia, which is a Nato member, which we do have a joint treaty with to, you know, an attack on one against is an attack on all. So it is obviously in our interests for Vladimir Putin to stop at or rather before Ukraine.
But I think it is something that British politics hasn’t really absorbed, is just how significant a change and significant a commitment that is, both in terms of funding and also in terms the scale of what could be at stake.
Lucy Fisher
I’ve been very interested how the UK involvement in the joint air strikes with the US against the Houthis hasn’t really taken off yet, but with Trump saying no more of that, I wonder if Britain’s left a bit exposed having just been part of that without much parliamentary debate on our role.
Miranda, can I give you this question from Paul Knowles who wants to know, what role does Israel-Gaza play in the fracturing of the two-party system? It’s a cause that many on the left care about, and the Tories and Labour seem to hold similar positions.
Miranda Green
So I think that’s a really important question actually because when we were discussing earlier, you know, the fracturing off to the left of Labour and the threat from the Green party and how much of a reality that becomes at the next general election, obviously in July’s general election, last year we saw, you know, several independents standing on a Gaza ticket, you know, snatch seats away from Labour and even where Labour figures escaped such a fate, you know, some of them were very prominent, so Wes Streeting himself only just managed to get reelected with a threat from an independent. So I think it is potent.
This sort of bubbling of a left-wing force that’s a real problem for the Labour party is so interesting because from time to time something comes up quite often with the unpleasant figure of George Galloway somewhere in the story and it tends to fade away again. And at the moment, you know, those independent MPs don’t have that much of a profile. I haven’t necessarily made much of it, but I think it could be a real threat if the problem doesn’t go away.
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Lucy Fisher
I’m gonna race through a few more. Here’s David from Archway.
David in audio clip
Given the government wants us to save more and increase the investment rate, why isn’t it encouraging us to put more into our pensions?
Robert Shrimsley
Well, I think it is encouraging us to put quite a lot into our pensions. I mean, if you mean there ought to be more tax breaks or specific things, then I think that’s partly because the government doesn’t have any money to spend. But if you look at one of Rachel Reeve’s big ideas, which is to force British pension funds to invest more in British assets, it’s very important to the government that they get more of our money into British companies, British VC schemes.
And so, I mean, it worries me, frankly, that the idea of a pension, that my pension should be run in the interest of Rachel Reeves’ industrial strategy. But nevertheless, I think they are quite keen on this, so I don’t quite accept the premise that they don’t push it.
Lucy Fisher
I guess, Stephen, put it this way, perhaps this is what David is getting at, you know, that we’re not saving enough for our retirements, are we? And should the government be doing more to ensure that we are?
Stephen Bush
Yeah, I mean, because I think in terms of policy encouragement, if you want to reduce your marginal rate, the salary sacrifice for your pension is a pretty good deal than comes with a fairly hefty cost to the taxpayer as it is.
Lucy Fisher
That’s if you want to reduce your marginal income tax rate for higher earners.
Stephen Bush
Yeah, if you want to reduce your marginal income tax, yeah. So, they’re already doing quite a lot of incentivising at the top of the labour market and then auto-enrolment does quite a lot of useful stuff at the bottom. But a rhetorical thing that loads of people in Westminster should knock off, for example, is talking about the triple lock like it is a subsidy to the old, because it’s not true.
Ultimately, even if the triple lock were to stop tomorrow, without wanting to start intergenerational warfare on the panel, I would be better off than Robert because I would have slightly more years of my pension sitting there acquiring interest. And if more people understood that, one fewer young people would be angry about a triple lock that ultimately does benefit them, but it would encourage people to think more sensibly about the value of saving in the here and now.
I do think there is a problem that often when we talk about intergenerational unfairness, we encourage a sort of political fatalism about, oh, you know, will the state pension be around when I retire? Well, yes, unless zombies start voting, in which case we will have bigger problems, like the state pension is going to remain a part of the system. And I think, political rhetoric around pensions does encourage young people to not save and to be fatalistic.
Robert Shrimsley
Who’s there to speak for zombies, by the way?
Lucy Fisher
Yeah, I . . .
Robert Shrimsley
Totally unrepentant.
Lucy Fisher
I, having introduced triple lock earlier, should have explained exactly what it is for anyone who’s forgotten.
Miranda Green
Oh no, you didn’t tell me this was like a quiz episode as well as Q&A. It’s gonna go up by either 2.5 per cent or wages or inflation or like whichever, the highest of those three is guaranteed to go up by, and it’s sort of taken as talismanic of overindulging the old in some way and as if it’s gold plated.
I personally think that a lot of the people leading the conversation on abolishing the triple lock have never met a poor pensioner and have themselves gold-plated pensions from elsewhere, which makes them think that everyone else has the lifestyle that they do.
I’m not a big fan of this debate the way it’s conducted. There may be room for changing it, there may be room for adjustments, but as I said before, it was introduced for a reason.
Lucy Fisher
And it was introduced when there was a big problem with pensioner poverty and it’s been ratcheting up the level to an extent that people now think it should be tweaked because it’s become overly generous. And of course, if you’re raising it over average wages growth, you are giving a boost to people above what the working population is getting.
Miranda Green
You totally are but the whole point about the old is they can’t go out and take a second job to make ends meet. So there are reasons why you have to support them as the state.
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Lucy Fisher
OK, here’s another one from Bertie. Um, Miranda, is a land tax even discussed in government? (Laughter)
Miranda Green
This is a brilliant question because these kind of slightly esoteric economic questions are discussed the whole time at FT Towers, where, I mean, Robert knows more than I about the secrets of the leader writers conference in the mornings, and I think, Stephen, you go too, don’t you? I stay away.
But these sorts of big tax reforms that would solve a lot of the UK’s problems at a stroke of a pen somewhere in the Treasury are very popular with FT pointy heads, and dramatic changes are much less popular with the political class because there’s always a loser. And I think with anything like this, you know, once you start looking at the losers, it’s the same as the debate about council tax bans, right?
So this ridiculous situation where the council tax we all pay is based on valuations stuck in the early 1990s. Clearly the rational thing to do would be to update the valuations in the council tax bands. Good luck with that in your manifesto. So I don’t know, my colleagues may disagree, but I’m not sure.
Robert Shrimsley
I mean I think it depends what we mean by land tax, whether we mean essentially a wealth tax on the homes and the land that you own, or whether we’re talking about essentially development, a tax that is designed to be placed on land that is not being developed, which is one of the ways it is discussed, to say we will make you pay for this land that you have bought and not developed, a tax on builders essentially. And that certainly is discussed from time to time, but at the moment I don’t sense it’s coming down the line.
Miranda Green
But the land value tax, Martin Wolf, for example, loves writing about the land value tax.
Lucy Fisher
I’ll put one of Martin’s excellent columns in the show notes, which are free to read.
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OK, well, just before we get to stock picks, we actually have had a few questions on this. Joe Rose, who’s 17 from London, wants to know why the panel always buy high and sell low.
Miranda Green
Ouch!
Stephen Bush
I mean, I have pushed back on this as someone who has this slightly ill-advised purchase of stock in the Conservative party shortly before the 2024 election at a point where I believed I was buying its stock at a record low. Now, I accept I have not bought at a low and then my stock is possibly was bought for what is now an overvalued price.
But I think we do occasionally, I mean also let’s face it, we are partly using it to let the light in on the magic. We’re slightly using it to talk about other topics, but I think we do have counter cyclical acquisitions. I’ve bought Kemi Badenoch this year.
Lucy Fisher
OK, Steve Sheppard is asking, how do you calculate stock picks?
Robert Shrimsley
Well, I’ve been asking this question, too, because I’ve looked at the people who were named winners. (Laughter) Um, is that question with us?
Miranda Green
Well, it’s usually George, isn’t it?
Stephen Bush
Well, I won last year.
Lucy Fisher
It is you. Oh, well done.
Robert Shrimsley
It seems to be very much that you have to have a piece of action, an action event has to happen that shows you were right. So it has to be they were sacked, they were promoted, they got a big job, rather than the much more textured, clever and nuanced approach, which we occasionally try to take, which recognises slow incremental growth of the kind that Warren Buffett enjoyed for so many years.
Lucy Fisher
Miranda, how do you calculate your stock picks?
Miranda Green
Oh God, I mean, I just, that’s the most flattering verb use I think that anyone’s had for a long time. There’s no calculation involved. Quite a lot of it is who I sort of have warmed to that week for some reason or other. Yeah, sometimes, sometimes.
Lucy Fisher
Yeah, it’s a really bad idea to open the bonnet, isn’t it, on this question?
Miranda Green
It’s a really bad idea. Let’s, you know, you don’t want to know what happens inside the sausage factory, I think, dear listeners.
Lucy Fisher
On that note, Miranda, who are you buying or selling this week?
Miranda Green
Well, to prove the point of our critical listeners, I don’t know whether I am actually buying or selling, but it’s definitely Yvette Cooper because, you know, as Stephen actually pointed out in one of his newsletters this week, the looming huge figure of the home secretary sort of hovers over the whole of the Starmer government and all its decisions in a really quite spooky way. You know, it’s like one of those cartoons where there’s a sort of person as a cloud over a city.
And you know, nothing can happen now that would encourage economic growth or solve any other problems unless the Home Office says yes, and unless Yvette Cooper says yes. And on this big question of bringing down the net migration figures, that’s stymying a lot of things. It’s sort of as if the government’s mindset is stuck because Yvette Cooper says no to stuff, and I think it’s a real problem. So I think I’m selling because I disapprove, but maybe I should be buying because she’s just so damn powerful.
Lucy Fisher
I’m gonna put you down for selling. Stephen, who are you buying or selling this week? And I’ll choose for you if you don’t make it clear.
Stephen Bush
Yeah, so I think I am going to . . . I’m buying . . .
Miranda Green
This is live calculating, folks.
Stephen Bush
Yeah, live calculating. I’m going to buy Plaid Cymru. The underrated story of the next couple of months is, I think it’s going to be very hard to see how Labour’s national strategy, which is to try and hold on to the votes it’s losing to its right flank and hope that fear will keep the votes on its left flank in line — a strategy which clearly has something to recommend it in seats where voters are locked in a room with Labour and one of the Reform or the Conservatives.
But in places where there’s no loss or risk to transferring across, which the new Welsh electoral system means there isn’t really a risk, that is a dream for the parties that are positioning themselves or are to Labour’s left. Plaid Cymru, I think, is gonna be very well placed to pick that. So, yeah, I’m buying stock in them.
Lucy Fisher
Cool. I don’t think we’ve ever had the Welsh nationalists on our spreadsheet before. So that’s a new one. Robert.
Robert Shrimsley
So, Stephen slightly anticipated my own stock picks, which is that I am selling both Eluned Morgan and Anas Sarwar, the Labour First Minister of Wales and the Labour leader in Scotland because they’re both gonna get tonked in the elections next year. Just to stress my bitterness about the way we calculate these things, of course, I will derive no benefit from this because it won’t happen until next year, but nonetheless, this is a stock I would recommend.
And also to answer the point about buying when stocks are low. Is that actually, although both are falling stocks, they’ve got a long way to go still. And what about you, Lucy?
Lucy Fisher
I’m going to sell Steve Reed, the Environment secretary, because while we haven’t seen the detail on it, as we came into the studio to record the pod, I did see that Labour has agreed access for American beef to the UK market, while insisting there’ll be no lowering of food standards.
And he’s already getting slow-clapped at farming conferences with the changes to inheritance tax which will affect farms. I think there’s a lot of questions to be asked about this and I think Steve Reed is the first line at which the mouldy cabbages will be pelted by the farming community.
Robert Shrimsley
He is almost Morgan McSweeney’s oldest friend in politics, isn’t he? In terms of certainly in government.
Lucy Fisher
That’s true. And that’s one reason people say he’s not been sort of moved or binned from the cabinet as it is. But I think he’s got potentially some difficult weeks ahead.
Well, that’s all we’ve got time for. Thanks to everyone who sent in a question. I’m sorry we only had time for a small selection this round, but do keep sending them in because we’re gonna make this a semi-regular format and do let us know what you thought about it, whether you loved it, indifferent, hated it.
But for now, Miranda, Stephen, Robert, thanks for joining.
Miranda Green
Thank you very much.
Robert Shrimsley
Thank you.
Stephen Bush
Cheers, Lucy.
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, as I’ve been trying to remind everyone during the body of the show.
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 do leave a review or a star rating if you have time, it really helps spread the word.
Political Fix was presented by me, Lucy Fisher, and produced by Lulu Smyth. Flo Phillips is the executive producer. Original music and sound engineering by Breen Turner. The broadcast engineers are Andrew Georgiades and Rod Fitzgerald. Manuela Saragosa is acting co-head of audio. We’ll meet again here next week.
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