Sunak’s short honeymoon

This is an audio transcript of the Payne’s Politics podcast episode: ‘Sunak’s short honeymoon’

Sebastian Payne
Rishi Sunak faced a bumpy political week when the prime minister faced policy attacks on numerous fronts from both his opponents and his own side.

Rishi Sunak
This summer, I stood on my principles and told the country (crowd shouting) what they needed to hear even though it was difficult. When he ran for leader, he told his party what they wanted to hear. (Crowd shouting) And even now, even now, he says one thing and he does the other.

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Sebastian Payne
Welcome to Payne’s Politics, your central insider guide to Westminster from the Financial Times, with me, Sebastian Payne. In this week’s episode we’ll be examining whether Sunak’s honeymoon is well and truly over. With the prime minister under fire over immigration, the economy, the union, planning reform and pretty much every other topic you can think of, we’ll be asking, can this government actually do anything? Our columnist and associate editor Stephen Bush will analyse with deputy opinion editor Miranda Green. And later, we’ll be looking at the battle for business between the two main parties at this year’s CBI conference. With more and more businesses believing Labour is on course to return to power, is it a done deal with Keir Starmer? And will they get what they want on the economy? Chief political correspondent Jim Pickard will discuss with our chief business correspondent Dan Thomas. Thank you all for joining.

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Rishi Sunak has been prime minister for just over a month and already it feels like the honeymoon has finished. He came in on a wave of relief following the disastrous Liz Truss premiership and he managed to get through that tricky Autumn Statement with £55bn of tax rises and spending cuts. But now the question is what does the Sunak government actually do? What can he get through parliament and what are Conservative MPs willing to wear? At prime minister’s questions this week, opposition leader Keir Starmer highlighted the problems facing the administration.

Keir Starmer
He won’t follow Labour’s plan to scrap non-dom status. Instead we’ve got an NHS staffing crisis. He won’t follow Labour’s plan to make oil and gas giants pay their fair share. Instead, he hammers working people. And he won’t push through planning reform. Instead, he kills off the dream of home ownership. Too weak to take on his party. Too weak to take on vested interests. Twelve long years of Tory government, five prime ministers, seven chancellors. Why do they always clobber working people? (Crowd shouts)

Sebastian Payne
Well, Stephen Bush, welcome back to the podcast. So as I said it’s literally been a month since Rishi Sunak became prime minister and the single biggest thing he’s done is of course that Autumn Statement we analysed last week as well as making a trip to the G20 summit and the COP27 summit. But essentially now, things are getting down to the actual grind of governing. And it’s become pretty apparent this week that when you look at any of the sort of things this government could do, it’s gonna be difficult to actually get them done because first of all, this malaise has set in. It’s sort of feels like people are just fed up with the Tories, but also Tory MPs seem fed up with being in government too.

Stephen Bush
I think what we’ve seen over the last month is there was kind of a period of the media being able to go “things are fine”, right? And then remembering, “oh, no, they’re still not fine.” There are still a large minority of Conservative MPs who, not necessarily the same on each issue, but, you know, don’t like this, don’t like the other thing, don’t like that trade-off, don’t like this one. They now have a prime minister who doesn’t actively frighten people. They do have a situation where if they wanted to do anything particularly significant, they would have to reach out to the opposition party, which for a variety of reasons is not something that this prime minister really wants to do.

Sebastian Payne
Now, Miranda Green. When you look at all the various topics, and even just the mood of politics at the moment, you can feel like the atmospherics are turning against Rishi Sunak because he sort of got through the Autumn Statement, which many Conservative MPs obviously didn’t like, but it’s actually gone through, I’d say, relatively well. It’s probably the best that the prime minister could have hoped for. But then it’s this question sort of what next? And we’ll take these topics in turn in a moment. But when you saw him at prime minister’s questions, when you’ve seen him out and about, where would you judge his political standing right now?

Miranda Green
It’s very puzzling, isn’t it? Because you said at the beginning, Sunak’s honeymoon — I mean, in fact, it was a bit more like a kind of rebound, wasn’t it? After the madness of the whirlwind romance that the Tory party had with Liz Truss and Kwasi Kwarteng, it’s sort of back to reality and back to team sanity — or that’s what they hope. But as you’ve said, the reality that they’re having to get to grips with is extremely challenging, on some of these domestic policy questions. The essential problem they’ve got is that the Tory backbenchers are composed of several different groups, all with a completely different set of political priorities and with different preoccupations and different voter bases that they need to appeal to at the next election. Plus, you’ve got quite a lot of Tory MPs thinking, well, the game is up, I might as well look for another second career. And then you’ve got the problem of the mood on the Tory backbenchers becoming potentially really quite unmanageable because what’s in it for them? Because as we’ve said time and time again on this podcast, the only real power British prime minister has is the power of patronage. And if the Tory MPs don’t care about that some more because they know the game is up at the next election, that’s almost no power to influence them towards voting the government’s way at all.

Sebastian Payne
Well, Stephen, we did see the announcement of two MPs this week announcing they were standing down: Chloe Smith, the former, very briefly, work and pensions secretary, but someone who’s been a minister, has been in parliament quite some time; and William Wragg, who chairs Pacac committee and again has been quite a prominent face in parliament. And both of them are pretty young that I think Chloe Smith’s 40, and Will Wragg’s still in his thirties. Now you could look at both their seats and say actually they’ve got tiny majorities, that Hazel Grove — William Wragg’s constituency — that’s almost certainly gonna go Lib Dem at the next election, and Chloe Smith’s seat in Norfolk is almost certainly gonna go Labour. But again this adds this sort of decaying sense and I want to take on the issue of planning, first of all, because this is the single biggest thing the government could do to try and ease the growth issue at the moment. And it was in the 2019 manifesto. They wanted to build 300,000 homes a year and simplify the planning system. Under Robert Jenrick, Boris Johnson’s first local government secretary, they tried to do it, there was big backlash and it failed, and it was blamed for losing the Chesham and Amersham by-election. And now Michael Gove’s trying to have a second fist of it and there was going to be a crunch vote on this. It had to be delayed a week. Is there any form of planning reform you could see that could get through the Conservative party as it stands? And what might that look like?

Stephen Bush
This form of planning reform could get through. We aren’t just talking about a reform that does come on the support of a majority of Conservative MPs. Now what it doesn’t do is command the support of a majority in parliament if you are determined to pass it only with Conservative votes. The reason why the prime minister has got himself into a bit of a mess on this issue is that if you pass something with the opposition’s vote, it can either be seen as a victory for you — you know, you destroyed the centre ground, they’re forced to sort of play catch-up — or a victory for them. And he’s allowed Keir Starmer to steal a march on him rhetorically on backing this planning reform. But he could pass this. He just would have to do it with Labour support. Where it gets difficult is Labour’s support would probably also help Simon Clarke, party’s pro-onshore wind amendment. And there are other sort of pro-growth amendments that Labour voters like, but are more complex for the Conservative electoral coalition. And you can easily see the Labour party adding to this bill essentially as a condition of its support. And then you of course have a situation where Keir Starmer would get a stand up and go, you know, look, you know, I’m the future, you’re the past. I’m in control of my party, you’re being controlled by yours, etc, etc. All of which we all know to be true. But obviously in politics, people spend a lot of time trying to avoid the other side saying things we all know to be true.

Sebastian Payne
Exactly. Miranda, one point that I think Stephen made when Liz Truss made her famous anti-growth coalition speech that I think included the Financial Times, was that the Tory party is actually the anti-growth coalition in many respects, that if you wanted to pursue an agenda that would really unlock things, it would be dealing with migration, which we’re talking about later in the podcast. It would be liberalising a Brexit deal to reduce barriers and it would be planning reform. But it feels like that intended purpose has gone because as you said, the party has kind of decided the next election’s already done, we’ve lost it, so actually there’s not really that much point in doing this difficult stuff. And we either prepare ourselves for life outside of politics or just do what is necessary to shore up my local seat, which is why so many MPs in the south put their name behind that amendment that forced Gove to delay planning reform because that amendment would have helped them save their seats by not building anything.

Miranda Green
Well, that’s absolutely right. But there’s a great puzzle here, isn’t there? Because, in fact, the two domestic policies on which Sunak is under pressure currently, through this now-delayed Levelling Up bill, are the onshore wind, which Stephen referred to, liberalising planning, which you’ve referred to. But in fact the Tory backbenchers who opposed those two parts of the bill are completely different sets of people with completely different motivations. You know, Simon Clarke, Middlesbrough MP, saying we have to have onshore wind, this is a crucial part of meeting our net zero commitments and also it will bring green jobs, etc. And then you’ve got Theresa Villiers, very much more a sort of traditional Tory saying, you know, leading a kind of, for want of a better word, a Nimby wing saying no more greenfield housebuilding in our backyards. So that really does illustrate quite clearly the political problem that Sunak has with his own backbenches. I mean, I think you shouldn’t overplay this as an existential crisis. And this is, I think some Tory MPs were saying to the FT this week, Sunak is actually facing what you might call ordinary political crises, not existential crises for the party. And that is somewhat of a relief to them. But I think on the housing question, it becomes an existential crisis for the future of the Tory party because as Keir Starmer very cleverly said in PMQs this week, denying the dream of home ownership to future generations is a long-term massive problem for the Tory party because that’s how you get people to vote Tory.

Sebastian Payne
Absolutely. Now, Stephen, the other thing as well we should talk about that’s been a challenge for the prime minister is Scottish independence, because there was that long-awaited Supreme Court ruling on Wednesday, which has said what we all knew was going to happen, which is that the Scottish parliament can’t hold independence referendum without the consent of Westminster. And you’ll be shocked to hear that Ian Blackford, the Westminster leader of the SNP, was very unhappy.

Ian Blackford
The prime minister has every right to oppose independence. He has no right to deny democracy to the people of Scotland. (Crowd shouting) If the prime minister keeps blocking that referendum, will he at least be honest and confirm that the very idea that the United Kingdom is a voluntary union of nations is now dead and buried?

Sebastian Payne
So Stephen, how can the government cope with this? Because their answer is to say, you know, this is a great victory for the union and we’re just going to ignore this. But we now know that in Scotland the next general election is going to be a de facto referendum on independence. Nicola Sturgeon has said that. She’s gonna argue throughout that this idea of a coercive Westminster, it now exists, and fundamentally that is going to be a problem for unionist campaigners. But it doesn’t seem as if the Sunak government has much of a strategy to deal with this or combat it.

Stephen Bush
The election thing, I suppose, I don’t think that is that much of a problem. Ultimately, the present risk to the union between England and Scotland is the yes to independence vote getting to above 50 per cent of the vote. There was a brief period in 2020 when it did, but it’s kind of gone back to a period when the status quo is narrowly in the ascendant. And then the sort of secondary risk would be a situation where the next election is inconclusive, and through the mechanics of a hung parliament, the SNP is able to force some kind of referendum vote. But Nicola Sturgeon herself has got quite a difficult balancing act here than sort of . . . Her most committed activists basically are arguing for things like holding illegal referendum, doing unilateral declaration of independence, all of which the party leadership, who basically think the marginal voter in this referendum is someone who voted to stay in the union in 2014 and then to stay in the European Union in 2016, but is basically convincing that type of person that independence is not a mad proposition.

I think the issue, though, is what is the British government doing at present to argue positively for the union from a sort of delivery perspective, right? What is the thing that being in the United Kingdom gets you, if you are a Scottish citizen, you can hold in your hand? Now of course we would make all of the correct arguments and what it gets you is a huge amount of financial transfers. Avoid a much sharper austerity even than the austerity that is heading Scotland’s way anyway. But you know, thus far in this parliament, the government’s big idea has been to build a building — I was actually in Edinburgh this week — a building which looks an awful lot like an embassy, which I’m not convinced is the right energy to be sending if you’re a unionist government.

Sebastian Payne
And Miranda, and like, how can you deal with this? Because we’ve actually seen from Labour what their answer is going to be, which is Gordon Brown’s idea to sort of shake up the House of Lords and change the UK’s constitution. We’re still waiting for full details on what exactly that’s going to look like. But again, if fears of Labour’s sort of starting to get some clearer, bolder ideas on what it would do in government, whereas the Sunak government is just sliding into, as I wrote in a recent column, managerialism over any kind of clear ideology. And if that continues with the lack of growth, with continued strikes, with Tory MPs just rejecting everything, then it’s just gonna be quite a tedious sort of two years into when we assume the next election is going to be. Things will obviously always turn up in politics but I think for me the union thing does symbolise this much bigger issue.

Miranda Green
It is a bigger issue. But you know what? I think that it also rides on questions of the economy and whether people think that’s the right direction for a prosperous future and for well-funded, efficient public services. So I actually think that that question will come back again to, as Stephen said, what’s in it for us to stay in the UK. So I actually think that Labour making a big fuss about putting representatives of the nations and regions into the House of Lords is almost neither here nor there. I think it’s all gonna be about what’s the most prosperous future for Scotland. And I think actually Scottish Labour is doing much better thinking about what that might look like because whether Labour can re-establish itself in Scotland as a really, really strong challenger to the SNP at the next election will be as important to keeping Scotland inside the UK as anything that Rishi Sunak does or says now.

Sebastian Payne
And finally, Stephen, let’s try and be a bit more upbeat and optimistic because obviously, as we said, the sense that I pick up is the next election is not going to be until the end of 2024. There’s very little chance really of a poll unless of course something turns up as it often does in politics. But if you are offering some advice to Rishi Sunak’s government, what would you look to try and do? Would you like to try and do a set number of big things, lots of smaller things? And this is obviously a topic that I think that you’ve written about as well in your columns of late.

Stephen Bush
One I can recommend, and everyone should see the new film Living, which is a remake of a very good 1950s Japanese film about a dying bureaucrat who put his final energies into building a playground. And that’s actually a much better insight into prime ministerial effectiveness than anything you’ll see near the West Wing or Baron Noir or whatever, because broadly, successful ministers have projects. So the two things that the Rishi Sunak government should do is junior ministers. Because governments are so large everything they do is significant, right? So just find small projects.

But actually, one of the things Jeremy Hunt is doing really well with his two commissions, right, where he’s brought Patricia Hewitt to do it on the NHS and Michael Barber on skills, is that he’s trying to find big and radical policies that are going to have a constituency inside the Labour party. In general, whether you’re a government in power for two years or 20, you’re always better off trying to find ways. Then come on, cross-party support. A lot of the education reform, which has been a cross-party thing. And I think, you know, Jeremy Hunt has got the right idea there. I think that those are the kind of big things: have projects, find areas of radicalism where you agree with the other party and try and bring people in from the other party to sort of bolster you, as Hunt is doing. And in some ways, I do think the kind of interesting contrast of the last week is we’ve had Hunt getting a lot of plaudits, including from some unusual people through the use of those commissions. And we’ve had Rishi Sunak being slightly flat-footed by going, “Oh no, it’s not good enough to have a planning reform if only 300 Conservative MPs vote for it. You know, the votes that get me over to 325 come from the Labour party”.

Sebastian Payne
And briefly, finally, Miranda. What would be your advice for Mr Sunak in getting out of this funk?

Miranda Green
I think that Sunak — people talk a lot about his inexperience, but that’s because he was elected to the Commons only in 2015. Actually, since then it’s a meteoric rise. He was Chancellor of the Exchequer during a genuine, unprecedented global crisis, ie Covid, and coped pretty well. I think the Tory fortunes are gonna rest on whether they can claim that there are green shoots of recovery at the next election. And so he should really concentrate on that. And I agree with Stephen that Hunt’s understanding from his previous cabinet roles of how important public services and infrastructure are to the nation’s, you know, functioning, you should let him get on with that, because then they might get some good legacies that even a Labour government will have to take forward next time.

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Sebastian Payne
Stephen and Miranda, thank you very much.

The Confederation of British Industry met for its annual conference in Birmingham this week, where the great and good of business gathered with one topic on their mind: immigration. With severe shortages in the labour market and a big skills gap and that pressing need for more growth, they had one message for the politicians: give us more workers. But neither the prime minister nor the opposition leader were willing to immediately help. In his address, Rishi Sunak chiefly talked about small boats and not reopening the Brexit deal. In his keynote address to a packed room Keir Starmer delivered a similar message.

Keir Starmer
Of course we understand that we need to act now so that we help business and drive growth. But we have to address and run towards the challenge that is skills, run towards the challenge that is ensuring we have everybody back in the workforce because there are hundreds of thousands of people who aren’t working now who were working just a few years ago.

Sebastian Payne
Well, Dan Thomas, it’s great to welcome you to Payne’s Politics. I think for the first time we were both at the CBI conference. You were there longer than I was. You’ve covered many of these things in the past. What did you make of the mood in Birmingham about the economy but also politics generally?

Dan Thomas
I was there until the bitter end. I’ve got to say, overall, the mood was fairly gloomy and you can understand why — a lot of these companies are seeing clear signs of recession hitting their businesses. You know, slowing sales. Many multinational executives were saying you can see the trading down of their clients to lower price points. At the same time, as they’re seeing rising inflation, rising costs on their own balance sheet. So they’re getting crunched. Added to that, they’re seeing all sorts of additional problems around labour shortages, skills shortages. And they don’t think they’re necessarily getting the right attention from the government that they would like, actually.

Sebastian Payne
Well, Jim Pickard, great to have you back. This general mood is that I can’t think of a time when politics and economics and the business linked to it have been so disconnected in a way. And that was the mood that I picked up speaking to people in the conference halls in Birmingham, that they really felt that they have got some very clear need to try and boost growth, which everyone in Westminster says is the core priority for the country. But in fact, no one’s really doing anything about it. And the overwhelming message that we kept hearing at this conference was all about migration and labour market shortages.

Jim Pickard
One thing that business leaders crave is political stability and regulatory stability. And then instead of that, we have so much political volatility and chaos that we have all sorts of changes in the rules, changes in policy approach, changes in taxation all over the place. If you’re an investor in shale gas, for example, and one minute shale gas is banned, then it’s allowed, then it’s banned again. With onshore wind, you’ve got that changing all over the place as well. They’re prepared to pay higher taxes if they have fiscal certainty. And it’s the chopping and changing which drives people a little bit mad. And I think Rishi Sunak’s idea of just keeping things a little bit calmer is something that business will welcome. They can live with the higher corporation tax. There’s a real sense from them that they’re not hearing enough rhetoric or actual policy on growth, which for all the faults in Liz Truss’s “mini” Budget, at least you did have all sorts of ideas on how to grow the economy.

Sebastian Payne
Well this is one thing Dan, that when that “mini” Budget happened, I remember some quite positive responses from the CBI and businesses because they were saying she wants to keep corporation tax lower, that’s good; she’s gonna cut taxes, which is gonna stimulate growth — that’s good for us. But what they didn’t really get was the wider macro picture of how this was going to play. It feels like there’s been a bit of a reverse ferret.

Dan Thomas
Exactly right, Seb. I think individually a lot of the stuff in the “mini” Budget under Liz Truss was welcomed and I think they just were so surprised initially to have, all the Christmas presents came at once and they just got absolutely giddy and reacted as you might expect, with a great deal of enthusiasm. Only after a day did they come to reflect that it was a bit too much and the sugar rush came back to haunt them a bit because they then realised that was about to crash the economy, which is exactly what they did not want to happen. So they had to take a step back and I think that’s the reason why Sunak is getting a reasonably fair wind behind him with the business community.

Jim’s absolutely right. They want stability and they wanna know that the economy is at least going to be unadventurous, let’s say, into next year, so they can make some plans. That was one clear message from many of the companies I spoke to, was how difficult it was to think about 2023. A lot of these companies are making their plans for the year ahead and just said, “How can you?” So difficult to predict what the new year brings. I think Rishi Sunak brought a little bit more stability to it. But as Jim says, I mean, they want to hear also, you know, some ideas about how we’d come through this. Some war words to suggest that there will be some growth strategies, some pro-enterprise, you know, moves, perhaps on taxation incentives, which is one of the big things that the CBI wants, perhaps on skills and productivity. Some of these longer-term issues are still need to be addressed.

Sebastian Payne
Now, Jim, let’s talk about Labour briefly because that really felt where the momentum was at this conference, that Keir Starmer spoke to the hall, it was a packed-out hall and I did a little fringe event at the CBI conference where we were dissecting the politics and nearly every question from the business’s president was about Labour. No one really seemed that interested in the Tories and we’ve got this equivalent of the famous prawn cocktail circuit that took place in the 1990s when Labour was going around the City trying to woo business and calm them all down, saying, “Look, Tony Blair’s going to come in, it’s going to be fine. We’re not gonna come after you. You can still keep making big profits as long as you keep paying your taxes”. And it feels like that disappeared under Jeremy Corbyn years but is back big-time under Keir Starmer. Tell us about it.

Jim Pickard
So, I think the first thing is that business leaders, along with an awful lot of people, I would say, are now taking it for granted that Labour win the next general election. Now we all know that they are very much not home and dry. There was a point under Liz Truss where I think even most political commentators thought, if the Tories keep her as prime minister then yes, Labour has a very high chance of election victory in getting a majority. I think with Rishi Sunak, in a, most of stable character doing less risky things, Labour still has a huge challenge. It still has to win 130 seats, even to get a majority of about one, that’s a 60 per cent increase in seats. It’s something that the party has never achieved in the past, but that’s kind of one for the psephologists.

I think as far as business leaders are concerned, they look at the polls, they see Labour’s 20 points ahead. They presume that that is precisely what would happen in the general election, which may or probably may not be the case. And therefore, of course, they want to know what Labour’s policies are. Dan was at the Keir Starmer speech in Birmingham and tells me that business leaders received it rapturously. He had a much better response than Rishi Sunak did. That’s pretty similar to what we saw at Labour conference back in the autumn where business people had quite a positive view of Labour conference. But I think the one fly in the ointment is his comments about immigration and his suggestion that Labour government would not exactly be hugely welcoming to waves of immigrants seeking employment in the UK.

Sebastian Payne
And there is this disconnect — I will come on to the Tories in a moment. But on immigration, you know, Keir Starmer has got this political issue that he wants to win back those parts of England that voted for Brexit and want lower migration. Of course, this comes in the week where we’ve seen some extraordinary migration numbers reaching 500,000 in the year running up to June, which is being compared by the Daily Mail to the equivalent population of Liverpool. And the government’s been saying there’s unique circumstances. But, there is this big disconnect, so Keir Starmer’s not saying what businesses want to hear on migration. I don’t think anyone is actually going to say to them “look, we’re going to liberalise, give more visas”. Instead, all they talk about is skills. How did you feel that went down?

Jim Pickard
That was a constant refrain. Businesses want to have an easier time recruiting the workers they need to do all sorts of functions. A lot of the time is talking about skilled workers but factory work, manufacturing, there’s so many different areas which we require additional labour. And you can see that in the wage spiral’s up, which is also affecting companies quite badly at the moment. There was this desire for Starmer or for Sunak to say at least a plan forward to see that problem be solved. And instead, they were very disappointed that they felt the conference was being used as a party political broadcast as opposed to a chance to talk to them. Because, you know that, for a lot of these businesses, they don’t get to meet prime ministers very often. This is where, once a year, to hear it from our prime minister or from a leader of the opposition, to meet the politicians, to have their voices heard. And to feel that they were just being used as an audience was disappointing. Starmer got a much, much longer round of applause than Sunak did, which was very desultory actually, and it was really quite sharp. You know, you’d see people, hands in the air, clapping. I don’t think I’ve seen that at the CBI conference in my time.

Sebastian Payne
One of the reasons for that is because in his speech to the CBI, Rishi Sunak focused on Brexit.

Rishi Sunak
Let me be unequivocal about this. Under my leadership, the United Kingdom will not pursue any relationship with Europe that relies on alignment with EU laws. Now, I voted for Brexit. I believe in Brexit and I know that Brexit can deliver and is already delivering enormous benefits and opportunities for the country.

Sebastian Payne
With Jim, again, this is something as well. I imagine a lot of those gathered at the CBI would disagree with what Mr Sunak said. And this comes off the back of last week’s Sunday Times, which reported senior figures within government were examining a Swiss-style relationship. And for those who are not in the weeds on this, Switzerland has a much closer relationship to the EU than the UK. It is a route taken in more areas but has more market access and crucially has free movement of people, which would be anathema to, I think, pretty much any government I could think of being formed in the UK in the foreseeable future. But that single report of a whole wave of angst amongst Tory MPs, and Rishi Sunak slapped down quite a lot there. But again, if you speak to businesses, they would love a Swiss-style relationship.

Jim Pickard
Yeah, and I don’t think that either Rishi Sunak or Jeremy Hunt, the chancellor, wants an actual Swiss still, because the Swiss relationship with the EU is massively complicated. It’s a hodgepodge arrangement. And as you say Seb, it involves free movement of people, which is anathema to this government. But we have this strange situation where even though Sunak was a Brexiter in 2016 and Liz Truss was a Remainer in 2016 — we had that with some leadership contest where because she was more kind of out there in terms of her tax-cutting idealism and her gung-ho approach towards Brexit, that she attracted the support of loads of hardline Brexiters. And a lot of the kind of mid-market newspapers were sort of questioning Rishi Sunak’s commitment to Brexit. It was all a little bit surreal. It was like a kind of parallel universe debate. But basically, they’re paranoid about anything that makes it look like he is not dedicated to a total split. He’s aware of that vulnerable flank on his right for people like Nigel Farage taking potshots. And that’s why they’ve closed this down very, very quickly. But what we do know is that there is an economic case for a closer relationship with the EU. The question is how and at what cost, and is it a political price that they could pay?

Sebastian Payne
And that point about Nigel Farage is something our colleague Robert Shrimsley wrote about in his column this week that within Downing Street there is this fixation, potentially rightly so from a political point of view, that if Mr Farage was to re-enter politics, take over the Reform party, which is what used to be the Brexit party, which used to be Ukip before that, and all they need to do is take five, six points off the Conservatives in the polls, and that’s it for the next election. Because it would allow Labour into the first-past-the-post system just to sweep in. So the rhetoric that you heard of Mr Sunak talk about a small boat, because this is a big national issue. It’s one that I think dominates MPs’ inboxes like nothing else. But it’s probably not on the top of the list of attendees at the CBI conference. And as Dan said, it sort of felt like they were using it as a bit of a platform to make a national speech.

Jim Pickard
I think the curious thing about immigration is that, all of the media focus is on the people coming, crossing in the small boats, which is in the sort of low tens of thousands. Whereas, half a million people came to the country to work in the last year, which is so hilariously the opposite of what a lot of the Brexit supporters were telling us would be the outcome of the 26-16 result. And you know, I did scores or hundreds of vox pops at that time. I have no doubt, whatever anyone says, that the driving motivator for most Brexit voters was probably they wanted to get a grip of immigration. And yet, we have a situation where, it’s much harder than it was before we left the EU. And what Keir Starmer was trying to do with his speech — where he was saying, you know, we don’t want to just rely on cheap foreign labour— he’s basically trying to close down his political difficulties in the red wall seats in northern England, in the Midlands, that they lost the Tories in 2019, by trying to reassure those voters who’d left Labour, that Labour’s learnt its lesson, it no longer wants to rejoin the EU, and it would back immigration controls. Those who listen to what Starmer said very carefully, will notice that he didn’t actually say that he wanted lower levels of immigration. And when Dan asked him the question “do you want higher or lower levels of immigration?” he completely swerved the question. He’s instead talking about how, if you companies want more visas for specific industries, we’re gonna make you pay a price. And that price is basically paying more for training of British-born workers.

Sebastian Payne
And finally Dan, it does feel like, on the Brexit question, we all know that the majority of businesses were in favour of Remaining with, in the EU, and during the 2016 to 2019 Brexit wars they were very much chilled, trying to keep their head down, talking about avoiding a no-deal Brexit. Not that many voices in the business community was saying “we need to overturn the referendum and get back in the bloc”. But it feels like over the past couple of months, people are starting to get more emboldened on this. Do you think that’s true? And why is that the case and will it go anywhere?

Dan Thomas
Yeah, so I think you’re right. I think CBI is just a case in point of an organisation who’s got quite badly burnt for their quite strident opposition ahead of the 2016 vote. And after that, they got rather stepped down by all the ministers for the next five years. And so, they all felt quite bruised by this, they all felt like they’d rather be in the tent, you know, being quiet, than outside the tent shouting about Brexit. So, there’s a long period of time when business didn’t really have much of a say around the negative connotation, the impact on their balance sheets. It has changed. Someone mentioned to me as the sort of tectonic plate shift. They could feel that the ground’s slightly moving and they could feel the door slightly opening. They could hear the conversations with ministers, you know, one immediately being closed down when they mentioned Brexit. There was more of a realistic and more pragmatic approach, they’re starting to feel at least. I don’t think it’s the door wide open yet. I don’t think this is, you know, let’s talk openly and easily about this stuff. It’s still obviously very politically sensitive and people are still nervous about putting their head too far above the parapet to be shot at. But at the same time, they’re increasingly vocal in their demands for changes about that hard Brexit agreed by the government. They wanna, you know, improve the border situation, improve the labour situation, improve the relationship, make it a friendlier relationship. And they can see that perhaps now the opportunity they’d potentially have under Liz Truss.

Sebastian Payne
And finally Jim, obviously we know Labour’s gonna go into next election with the slogan “Make Brexit Work”. That’s what Keir Starmer has put the centre it, which is trying to say we’re going to adapt the existing Brexit deal and somehow make it a bit better. But 2025 is going to be the year at which the TCA that was signed by Boris Johnson’s government is up for review. If Labour won the election, with a decent majority, shall we say, could you see a situation where they actually go beyond and really try and change the deal quite significantly? Or will they be so worried about the election and on what we talked about earlier, that they keep it exactly where it is?

Jim Pickard
I think they could seek to tweak the TCA and they could look for things like, you know, youth visas where young people can have easier access to the mainland to work and study. But I think, I think that’s kind of marginal, isn’t it? That’s fiddling around the edges. You could send that as signal to their supporters that they do want close relations to the EU, but there’s no way on earth they’re gonna be talking about allowing freedom of movement and brands from the single market and that kind of thing. I think, those things are closed down politically for a little while longer, possibly quite a long time.

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Sebastian Payne
Well Jim and Dan, thank you very much for joining us. And that’s it for this week’s episode of Payne’s Politics. If you like the podcast, then we’d recommend subscribing. You can find us through all the usual channels to receive episodes as soon as they’re released. And yes, we do love positive reviews and nice ratings.

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Payne’s Politics was presented by me, Sebastian Payne, and produced by Anna Dedhar and Howie Shannon. The sound engineers were Breen Turner and Jan Sigsworth. Until next time, thanks for listening.

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