Farewell Sir Gavin, for the third time

This is an audio transcript of the Payne’s Politics podcast episode: ‘Farewell Sir Gavin, for the third time’

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Sebastian Payne
Rishi Sunak lost the first senior minister of his government this week when Sir Gavin Williamson was forced to resign following a slew of allegations involving bullying.

Rishi Sunak
Unequivocally the behaviour complained of was unacceptable (MPs shouting) and it is absolutely right. It is absolutely right that the right honourable gentleman has resigned.

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Sebastian Payne
Welcome to Payne’s Politics, your essential insider guide to Westminster from the Financial Times with me, Sebastian Payne. In this week’s episode we’ll be delving into the resignation of Williamson, which you heard Sunak discuss in the House of Commons there, why he was hired in the first place and why it was obvious he had to go. Plus, we’ll be looking at what it tells us about the prime minister’s judgment on whether Home Secretary Suella Braverman will be next to leave. Chief political commentator Robert Shrimsley will analyse, along with deputy opinion editor Miranda Green. And later, we’ll be looking ahead to next week’s Autumn Statement and how the Treasury’s plans to fill the fiscal black hole are shaping up. Which tax rises are coming into view and where exactly will spending be cut? Jim Pickard, our chief political correspondent, will dissect, along with special guest Torsten Bell, chief executive of the Resolution Foundation think-tank. Thank you all for joining.

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Sebastian Payne
Gavin Williamson has proved himself so useful to Tory prime ministers that he has been hired by three of them but let go by two. David Cameron used his services for collecting gossip, Theresa May as her chief whip and defence secretary, and Rishi Sunak for helping him corral MPs. But after several stints in ministerial office, his caustic personality created plenty of enemies, many of whom went public this week with allegations of bullying, intimidation and harassment. Eventually, Sunak decided that Williamson would have to go and he was forced to resign. At prime minister’s questions on Wednesday, Sir Keir Starmer sparred with the prime minister over his decision to bring Williamson back into government.

Keir Starmer
The truth is simple. He’s a pathetic bully, but he would never get away with it if people like the prime minister didn’t hand him power. (MPs shout “Hear! Hear!”) So does he regret his decision to make him a government minister? (MPs shout “Hear!”).

Rishi Sunak
Mr Speaker, I obviously regret appointing someone who has had to resign in these circumstances. (MPs laughing) But I think . . . But I think what the British people would like to know is that when situations like this arise, that they will be dealt with properly.

Sebastian Payne
Robert Shrimsley, welcome back to the pod. It did feel pretty inevitable, but after this drip, drip of allegations, Williamson would have to go. We know why he was hired within government as someone who could bring MPs together and be the de facto chief whip. But do you think Rishi Sunak made the right call in even considering bringing him into government?

Robert Shrimsley
I have to say, as I watched this saga unfold, I was reminded of nothing less than the famous scene in Casablanca, where the police chief pronounced himself to be shocked, shocked at the discovery there’s gambling going on at Humphrey Bogart’s joint even as he collects his own winnings. Nobody could be in any way surprised about any of the stuff that came out about him. I suppose I’ve merely “just slit your throat” and “jump out the window” line — it was taking it to a new level, but nevertheless, Gavin Williamson had a clear reputation. Everybody understood the way he worked. He was an extraordinarily effective whip and was trusted by three prime ministers for his party management. So the idea that Rishi Sunak was in any way shocked to discover all of this is risible. What I think happened quite clearly is he hoped that by putting Gavin Williamson back behind the scenes, rather than a front-facing job like defence secretary, education secretary, he could take advantage of what I universally acknowledge to be his formidable whipping and party management skills while making the much more avuncular Simon Hart, the official chief whip. It was interesting in the leadership contest, you saw the two of them walking round Portcullis House together, almost and separately, through that contest. So clearly the hope was he could benefit from the advantages that Gavin Williamson definitely does bring in terms of party management without all of the backlash. But, unfortunately, Gavin Williamson has just made far too many enemies. There’s far too many WhatsApp messages buzzing around, far too many people prepared to go on the record or nearly on the record with his transgressions. And it just became cumulatively impossible.

Sebastian Payne
Well, Miranda Green, great to have you back on again, as always. And I think this whole point is that Rishi Sunak put Gavin Williamson in government for a purpose, which, as Robert said, was to be the sort of the ying to Simon Hart’s yang as chief whip — someone who would do this kind of political dark arts, who tried to corral MPs together when the Conservative parliamentary party is now increasingly fractious, increasingly lacking in a unified purpose. But it was always going to be a risk that one of the issues that’s been highlighted this week is what did Rishi Sunak know? Because Jake Berry, former Tory party chairman, he said that Sunak had direct knowledge of these allegations about Wendy Morton, and there’s been some debate about these to a specific. The prime minister’s spokesperson saying there’s no specific allegation, but that, of course, means any of the generalities. So you can understand why he brought him in. But fundamentally, it does just feel like a big mistake.

Miranda Green
It raises questions about Rishi Sunak’s political judgment. But, on the other hand, I would like to point out that, you know, you and Robert have summarised very well exactly why he was brought back into the heart of government, and it was for those dark arts. And because, you know, this is the unpleasant side of politics and by having him as minister without portfolio, which sounds like a slightly ridiculous title, but actually is often given to people who have a certain amount of power at the centre of the operation. You know, he was there for his enforcer skills and for his ability to manipulate the Conservative backbenchers into doing what the government wants them to do over the next few months. In terms of votes, that could be quite tricky against the economic background if they’ve got to make cuts and tax rises. There are two problems, really. One is the kind of accusation of slight tinges of hypocrisy against Sunak, who, when he became prime minister, sort of promised a new era in terms of ethics and probity. And then it’s all sort of got a bit unpleasant around both Williamson and Suella Braverman, the home secretary, and her security breaches via email, etc. So there’s that problem. And there’s also just the problem of having appointed to your government unexploded bombs in the form of these personalities who’ve then exploded within a matter of days around him. So I think there is a real question about Sunak’s judgment and Sunak’s ability to manage the Tory party in the weeks and months to come. But I mean, you know, Gavin Williamson himself, he probably did more damage as education secretary than he was doing as minister without portfolio, even as unpleasant as those WhatsApp messages are.

Sebastian Payne
Well, that’s true. And if we just listen to this clip from Mel Stride, the work and pensions secretary who’s a very close ally of Rishi Sunak and again was chairing his two leadership campaigns. And he highlighted this issue about what the prime minister did or didn’t know about Gavin Williamson’s behaviour.

Mel Stride
The suggestion was that the prime minister knew about it at the time and yet still gave him a job.

Robert Shrimsley
Well, I understand what he knew was that there had been a disagreement between Wendy Morton and Gavin Williamson, but what he didn’t know was the substance of the allegation. In other words, he hadn’t at that point, for example, seen the texts.

Sebastian Payne
But Robert, when you hear that, you know, Rishi Sunak did stand up outside Downing Street and said this is going to be a government of a competence and integrity. And clearly, he was trying to draw a line with Boris Johnson, who, as we know, was undermined by all these questions about truth and behaviour and as we saw with the partygate scandal throughout the Chris Pincher affair. But I often do wonder, without being too cynical, is it a good idea for politicians to try and draw that line? Because politics is a contact sport, it is a messy business, whatever phrase you want to use, and you do end up having to do things that most normal people would look at and say, “Well, hang on a minute, you wouldn’t get away with that in a normal workplace”. And so Sunak was trying to defend himself with his predecessor. But in fact, he’s just created for rod for his own back, because every time somebody has to resign or do something, Labour are gonna throw this back at him and say, “You promised integrity yet instead, you’ve given us X”.

Robert Shrimsley
A big part of this he’s drawing a distinction between himself and Boris Johnson. And I suppose if he wants to make the case for the defence here, you would say, well yes, this happened, but within a couple of days he was gone. So, Rishi Sunak does act on it. I also think, by the way, the arguments he had with the chief whip, which was over whether he could get a ticket to the Queen’s funeral, they’re very demeaning, but I don’t know that they amount to as much as some of the other stuff. It looks pathetic and the language is ridiculous. But whether this really amounts to a great big hill of beans, I’m not sure.

I think the bigger issue for me is that I was talking to quite a senior Labour figure earlier this week and they were saying that for them the key issue is portraying Rishi Sunak as weak because he’s running ahead of Keir Starmer personally in the opinion polls, he would be a best prime minister. Labour needs to land a few gloves on him and they need to show poor judgment, mistakes. You know, whatever the details that were or were not known to Rishi Sunak before he appointed Gavin Williamson. The character and the nature of the man was well understood. So this is a way of saying he’s weak because he needed these people. And it goes to a second weakness, which is Rishi Sunak has around 100 ex-ministers on his backbenches. Corralling them — a very fractious, difficult party — is terribly difficult. So you do need all the skills, all the dark political skills that you can muster. And the fact is Rishi Sunak, over his relatively short political career, has shown that whatever his other strengths, he’s not always been completely brilliant at working the Conservative party, and he does need people around him who can do it as he heads into a couple of very difficult years. So I think the real weakness that is exposed is that one, which is that he needs people who can help him with the crude politics of party management because it’s not his greatest strength. And I think, this is a line of attack that we’re gonna see for two years.

Sebastian Payne
I completely agree with that, Robert, Miranda. And one comparison a senior Tory made to me this week is this: Rishi Sunak’s historical sort of lineage is much akin to Rab Butler, who of course was the famous education secretary who brought in mass secondary education after the second world war, was seen as very pragmatic, very technical. Never made it to prime minister because he was seen by his colleagues as not being very political. So you can see why he’s brought in people like Gavin Williamson. But there is still this question about ministerial ethics, because if we cast our mind back to the joys of the partygate scandal earlier this year, and there was a row called the independent adviser on ministerial interests, and that was held by a chap called Lord Christopher Geidt, and he resigned after a long series of disputes with Boris Johnson and ultimately actually quit over steel tariffs, but he was not replaced by Johnson. He was not replaced by Liz Truss. And Rishi Sunak, they say he’s going to be replaced. I was watching Mark Harper, the transport secretary, on Question Time and he was saying, yes, he will be replaced. But there is this sense that there’s actually nobody overseeing the ministerial code, there’s nobody actually monitoring this. If you’re a civil servant and you want to complain about a minister or secretary of state, there’s no real recourse mechanisms. It feels like for Sunak, if he wants to push this integrity point, that’s an easy win.

Miranda Green
That would be something that soon I could do immediately. To try and mark a difference between his own premiership and Boris Johnson’s would be to fill that unfilled role of prime ministerial ethics adviser. But also, it’s true what Robert was saying. Once the details came out about Gavin Williamson’s behaviour, he went relatively quickly. Sunak has said that he had, regrets the appointment. But I think actually if you look at the political realities, what he’s probably regretting is also that he has felt it necessary to appoint to his government senior-level people who he perhaps wouldn’t have chosen himself for reasons other than merit and whether they’d be good at the job, because we’ve seen this for several years now. The cost of unity of the Tory party is having people in government who the prime minister themself doesn’t necessarily think is the best person for the job. And that is really a problem not just for managing the Conservative party but for the quality of the UK’s government. And I think that’s again one of the wider lessons that we’ll all be drawing from this debacle.

Sebastian Payne
And finally, Miranda, this being starting to get some speculation about who is driving all this and this is not of course dismissing the allegations of bullying. We will see if they are proven to be correct through the parliamentary, independent complaint and grievance scheme. But it has been noted by Rishi Sunak’s allies this week that both the questions about Gavin Williamson and about Suella Braverman have been raised in the public domain by Sir Jake Berry, the former Tory party chairman under Liz Truss, but more crucially, a very close fixer for Boris Johnson, a close friend of his for many years. And this kind of a question here, is this a revenge mission, a vendetta mission, not only for Liz Truss but for Boris Johnson? And if that is the case, then this is really ultimate proof the Tories just given up on governing because nobody thinks Rishi Sunak is gonna go over this stuff. He’s overwhelming likely to be the next prime minister going into the next election and the next Tory party leader, of course. So if you’re a sort of disgruntled Boris Trussite, and you’re fighting this warfare campaign to try and damage the new prime minister, and it really just shows you just don’t care anymore. Do you think there’s any truth to that?

Miranda Green
Yeah, I do. I think there’s a kind of nihilism that grips parties when they become kind of sick and tired. The Tory party’s will, by next year, have been in power for 13 years of Tory-led or purely Tory governments. And they are tired. They’re getting to the end of the available personnel to keep up the quality of the operation. And they descend again and again into internecine inter-factional fighting. And of course what you’re talking about is then the worst sort of that, which is just sort of point-scoring because of personal grievances. And, you know, there’s a real danger I think that Boris Johnson becomes a bit like the unfortunate Ted Heath in his later years, who was described as the “Incredible Sulk”, because he would never let an opportunity go to waste to get out his peashooter and attack Margaret Thatcher’s government and her, what he saw as her mistakes because he felt he should still be in the top job. So I think there is a real danger of, particularly the Boris supporters, continuing to want to undermine Sunak, because they feel that the chap should be given yet another go at the top job. So it’s gonna be a real problem for them because also of Sunak’s weakness, which is what Robert alluded to. I think that’s actually quite promising for the Labour party if they can try and make some of that stick and having a former prime minister taking potshots the whole time and undermining the operation really will not help any old impression of Sunak, trying to show himself as a strong leader either.

Sebastian Payne
Robert, Miranda, thank you very much.

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Sebastian Payne
Next Thursday, November the 17th, will be the day that makes or breaks Rishi Sunak’s government. The Autumn Statement, which sets out how the prime minister and his chancellor, Jeremy Hunt, will seek to fill the fiscal black hole created by rising inflation, the war in Ukraine with a dab of Trussonomics thrown on top. How that is going to be resolved is starting to come into view with a mixture of tax rises and spending cuts, some of them very far into the future. But the political and economic balancing act is going to be a tight one, which is why it’s such a big test for Mr Sunak and Mr Hunt. Rachel Reeves, Labour’s shadow chancellor, said that many of the country’s woes were the fault of the Conservative government.

Rachel Reeves
It’s incredibly concerning the forecasts from the Bank of England about the contraction of the economy and that we are already potentially in recession. Families are already incredibly worried about what’s happening in the economy, with higher prices for everything and no economic growth to be seen. The government have had 12 years and what have we got? Low growth, low productivity and a cost of living crisis.

Sebastian Payne
Jim Pickard, welcome back to the podcast. So we’ve been chewing over the Autumn Statement for a couple of weeks now. What’s your sense of how this package is going to shape up and what might the key elements be?

Jim Pickard
So the details jump around from day to day, but what we roughly know is that Jeremy Hunt, the chancellor, is seeking to tackle about £54bn worth of tax rises, spending cuts. And as of today, we think it’s about £31bn of spending cuts and about £24bn of tax rises. Now, the thing for listeners to understand about this is most of it is geared towards the back end of the period we’re talking about. So we’re talking about tax rises and spending cuts after the general election, which the Tories currently expect to maybe lose. And therefore that creates a challenge for the Labour party about what would they do. So in terms of the tax rises, I think the best way to explain this is that there’s an awful lot of stuff that’s already happening, such as tax thresholds that are already frozen or aid spending that’s already reduced, which is going to continue for another two years. So we think they’re probably going to get about £5bn by carrying on with aid spending being at 0.5 per cent of GDP instead of 0.7 per cent. We think they’re going to get another £5bn by extending the income tax freeze and the threshold which is already frozen in 2026. They would freeze it again to 2028. That raises £5bn and there’s a lot of heavy lifting being done by freezing tax thresholds, not just income tax, but also capital gains tax, also inheritance tax and also pension tax relief. And they call this fiscal drag. Economists! And it basically means that as income keeps going up, you keep the thresholds the same, the exchequer holds in more money. And I did a story in the FT on, I think it was Thursday morning where the IFS, Institute for Fiscal Studies, points out that the fiscal track on Rishi Sunak freezing income tax from April this year to April 2026. Leaving aside what’s in the Autumn Statement, that alone was meant to raise £8bn — because of inflation, that’s now raising £30bn a year by 2026.

Sebastian Payne
I’ll toss the balance. Great to have you back on the podcast after quite a long break, I think. But give us your sense of the economic picture by hearing these big numbers from the Treasury. And the one that’s been kicking around is the size of the fiscal hole of being in the region of 50bn, 55bn, depending on which particular briefing things are going on. Is that still where we’re actually at or we still got some expectations management going on? So by the time we get to next Thursday, Jeremy Hunt can stand up and say, “Well, actually the picture’s looking better, we’ve not got as big of a hole to fill. And we don’t need to do some of the more difficult things that have been flown as kites over the past week or so, which we’ll get into in a moment.”

Torsten Bell
It is a big deal. The Autumn Statement next week. It’s been brought forward, delayed and renamed just in the course of the last few weeks, but we’re pretty sure we’re going ahead next week. It looks like the Treasury has been managing expectations with lots of tough choices being trailed in the course of the last few weeks. But I think overall they are planning to go ahead with announcing some pretty bad news in terms of for policymakers, including for Conservative MPs and in lots of ways is actually like a first budget of a new government. And it is in some ways, we’ve got a new prime minister. If you think back to George Osborne in 2010 and in 2015, it was the first budget straight after elections where he set out the tough choices and then later tried to soften those slightly. So it looks like that’s what we are heading for again here. In terms of the scale of the fiscal hole, I think it’s worth saying it is very uncertain in reality how big it is. It depends a lot on things like what happens to global interest rates over the course of the next few years, what happens to British growth? And although Liz Truss deserves quite a lot of responsibility, I think we are getting a bit confused about what she deserves responsibility for. So she’s responsible for a minority of the fiscal hole, maybe £10bn in terms of higher interest across the UK’s paying, maybe £20bn in terms of tax cuts that she has announced that are still going ahead. So that’s 30bn. But really, we’re talking here about they’ll be all downgrading their fiscal forecasts by something more like 80bn. So she’s responsible for a minority of the fiscal hole, if you believe those forecasts that is coming along. What she’s really responsible for is the loss of or the reduction in room for manoeuvre for the Treasury and for the chancellor, which is that everyone’s paying attention now, because you think about lots of European countries are facing deteriorating public finances right now. They’re all dealing with the same energy crisis, slowing economy. Are they announcing tax cuts and tax rises and spending cuts right now? They are certainly not.

Jim Pickard
I think the explanation, though, is that a lot of people listening to this might think, well, hang on, they had this disastrous budget under Kwasi Kwarteng and Liz Truss with £45bn of unfunded tax cuts, they were forced to unwind almost all of it. So where the hell is this inverted commas black hole coming from? In shorthand, it’s that the economy is going to be much worse than people thought. But the political point here is that the Labour party is going to seize on the fact that this is coming in the wake of the disastrous “mini” Budget and they are going to blame Truss, Kwarteng, the Conservative party, including Rishi Sunak, for all of these.

Sebastian Payne
Well, there’s been quite a lot of kind of tough rhetoric about what causes. Let’s hear from another economist, Paul Johnson of the Institute for Fiscal Studies. And he’s saying, “we’re not actually in a full-blown fiscal crisis.”

Paul Johnson
I think it’s probably a little overstating it to say we’re in an immediate crisis in the way that we were in Covid or the way we were during the financial crisis. But we’ve got a series of challenges. We’ve got obviously historically high inflation and a very, very slow-growing economy, and we’re certainly in recession at the moment.

Sebastian Payne
When you hear that, towards in this point about very slow growth like this is obviously what Liz Truss talked an awful lot about. Came with her shock and awe “mini” Budget, which was very much focused on trying to deal with the growth issue but obviously creates a whole other set of problems. Are there gonna be any pro-growth measures in this Autumn Statement or is this all entirely about consolidation?

Torsten Bell
Growth is definitely a large part of the problem, and actually it isn’t just rising interest rates around the world causing these public finance problems. The lack of growth itself is causing it. If you just compare the Office for Budget Responsibility’s growth, the potential of the UK economy back in March, which when we last had them and the Bank of England, which we had just a few days ago, the gap is huge. It’s a big downgrade in terms of what the overall thought back in March and what the Bank of England is now expecting to happen to the UK economy could be something in the region of over 4 per cent of GDP just by the end of 2024. That’s knocking, say, £50bn off your tax revenue. So the lack of growth does really matter. And the OBR is going to get a lot more pessimistic on that front. The chancellor will inevitably talk a lot about getting growth. He may even have some things to say about it, but in the end, this Autumn Statement is going to be remembered for what taxes are going up and what spending is getting cut, not by how much somebody else wanted growth.

Sebastian Payne
Now, Jim, let’s look at some of the kites that have been flown this week and there’s quite a lot of them. The sky is full, you could say, of different ideas. The most striking one that’s got the Conservatives very annoyed is potentially the term of the 50p top tax rate. That would obviously bring in a lot of extra revenue. But then if you’ve got your highest earners giving half of their income over to the Treasury, you can see why many Tories are not going to go with that. It feels politically “that’s almost impossible to do”.

Jim Pickard
Yeah. You have to bear in mind that a lot of the stories in the newspapers in recent weeks — with all due respect to Fleet Street — some are kite flying, some are basically a bit exaggerated. Some are things which could still happen, but they could drop them at the last minute. And I think the truth of what’s happening with the top rate of income tax is that we’ve been told there’s no plan for a 50p rate. They’re gonna keep the 45p rate — we’re told now. But what they probably will do, they’d probably take the £150,000 threshold at which people start paying that rate and they may bring it down a little bit. Now, on the one hand, that doesn’t raise an awful lot of money, but I think the politics of that would probably be they might want to send the message to the country, which is, do you remember those very excitable characters, Kwasi Kwarteng and Liz Truss? Somebody wants to give tax cuts to the richest people precisely while you guys — middle England — were suffering. We’re the opposite, we’re gonna put a little bit more tax on those high-earners ‘cause basically it’s all about broad shoulders taking more of the weight. So I think that’s one of the kites that’s being flown. I think another thing that will probably happen is that the social care reforms which we’ve heard about for years and years, never-endingly and now be kicked into the long grass. And that saves maybe a billion or so a year . . . 

Sebastian Payne
That one, though, Jim, is quite a tricky one, though, politically and there’s been some gang noises coming off that Boris Johnson might intervene on that because social care reform was one of the few big legacies the former prime minister had. And if Sunak delays, that will potentially scraps the cap on house prices entirely — he’s not going to be very happy and he will rally his MPs against it.

Jim Pickard
Yeah. And Boris Johnson would have a point. I mean, this whole debate seemed to have begun when I was a young man. And it feels like we’re still gonna be arguing about this when I’m in a care home.

Sebastian Payne
And tossing about some other ideas kicking around. So investment zones, which were very much a hobbyhorse of Liz Truss and Simon Clarke, the former levelling-up secretary’s, Jim reported this week — they are going to be binned and we’re going essentially back to where we were before. Again, just trying to pretend the whole Truss premiership didn’t really happen. There’s also talk about some reforms to capital gains tax and the energy support package. What are you picking up on that and what do you think’s likely?

Torsten Bell
So on investment zones, it’s going to turn out that the only people that will ever remember that they were announced are the poor and local government officials who have just spent the last month running around, filling in application forms for investment zones that won’t exist. That is entirely predictable. The Treasury never liked the proposal at the time, totally uncapped number of areas, all having tax reliefs. At some point you’re just cutting taxes rather than having special investment zones. That was always going to get scrapped. On energy support, there is a big question mark, which is the chancellor has done the easy bit from the Treasury’s perspective, which is to say I’m not gonna go ahead with Liz Truss’ quite generous energy support package for next year, the energy price guarantee. But he hasn’t done the hard bit saying what he’s going to put in place to replace it. He said he’d be more targeted but not what it will be and there aren’t that many good options available to the Treasury and that in general might point you towards thinking, well, he’s going to wait before he announces the package because he’s gotta work through what on earth is going to do. I think pushing the other way in No 10 and the Treasury, or at least a political bit, the Treasury would quite like to get on with announcing it one, because, you know, it gives people certainty about what happens to energy bills in April. But also, remember, without the energy price guarantee, energy bills in April and calls for heading for £4,000 for an average household, much higher for those with high energy bills. So they might want to go ahead. But as I say personally, I think there’s a case for waiting, given the huge uncertainty about energy prices.

Jim Pickard
Yeah. I get the impression that the Treasury haven’t quite worked out which decision to go on on that view at the moment. I mean, you could do something a bit strange like say, “Well, we can make this amount of money available and then reverse-engineer the precise details of it, case at the time”. But they do seem to be in a bit of a quandary. The thing I’ll say about investment zones is that you know, Rishi Sunak . . . I get the impression he felt agreed that he already had this free put idea that was already going full steam ahead. And then Liz Truss in the summer basically invents investment zones as a way to kind of trumps Sunak with something fresh and shiny new. But the idea of having two or 300 of them was always a bit ludicrous. I think we might be in a weird situation where they say investment zones aren’t going ahead, but Rishi Sunak with Charles Michael Gove with coming up yet a new reinvention of the wheel on that front. Now, that was one of the growth policies which business groups really liked in the “mini” Budget, that was a disaster. They’d like investment zones, they’d like the planning reforms, and they’d like more capital infrastructure spending. I think we might hear something on planning. I think we might hear some warm words about, you know, change in national planning policy and that kind of thing to get mobile ‘cause they don’t sound like they’re totally anti-growth, but it’s just not quite clear what they’ll have that.

Sebastian Payne
And finally, Torsten, a lot of this is based on speculation because we don’t know what the forecasts are going to look like in a big part of the Autumn Statement is getting that crucial element that was missing from Kwasi Kwarteng’s disastrous “mini” Budget, which is the OBR forecast on what the economy’s gonna look like, what growth is going to look like and what the tax sheets are going to be. So at this stage, we don’t know how they are. So and then on energy prices, well, again, we don’t know what’s going to happen to wholesale energy prices, particularly with the situation in Ukraine. So given all that, what’s the feeling going to be, do you think, when we hear Jeremy Hunt speak, when we look at these decisions like obviously it’s pretty bleak — and I think it’s fair to say — there’s no good options here and whether it is these personal allowances that get frozen with difficult decisions in 2025, 2026, if it’s capital spending cuts, day-to-day spending cuts, that’s all pretty downbeat. But ultimately, it feels like we don’t really know for certain.

Torsten Bell
The uncertainty is not we don’t know exactly what the OBR is going to put in its forecast. The uncertainty is a substantial uncertainty about the future path of the UK economy. So although next week we should be very confident that the general mood will be quite different to Liz Truss, it will be sombre, it will be honest about difficult times ahead. But most households are going to see falling incomes next year, in some cases very large falls in their income, in their living standards. So I think the tone will be more like that in terms of the uncertainty. I think actually in lots of ways the discussion that you hear over the last few weeks, which is Liz Truss created a big fiscal hole and Rishi Sunak is about to fill it, is kind of inaccurate partly because I was saying because Liz Truss didn’t create fiscal hole but also actually ‘cause I don’t think Rishi Sunak is really going to fill all of it. What he’s going to do is announce a downpayment, some tough choices in the near term, and then pencilling in freezes to allowances and spending cuts for the medium term. Whether those happen or not will depend on what actually happens to the economy.

Sebastian Payne
And also what happens at the next election when the Labour party comes in and does something very different potentially in 2024, but if the Tories do get back in, then they’ll have to try and deal with this. Finally, Jim, what about the politics of all this? Because obviously many Conservative MPs aren’t going to like the idea of tax rises and spending cuts. It’s not what was in the 2019 manifesto. This package has got to be credible because when the markets look at this, they’ve got to know it’s going to get through the House of Commons, which is why I think some of the more outlandish proposals being floated are not going to happen because two MPs won’t vote for me. It only takes 40 MPs to come out against something. Do you think Jeremy Hunt and Rishi Sunak have the political dexterity to pull this off?

Jim Pickard
What I would say about that is that it’s extremely unusual for backbench MPs of a governing party to vote against the budget. I can’t think of a time where it’s really happened. Torsten, can you think of a time?

Torsten Bell
When government has been brought down by its own MP on a budget? No, you’ve definitely had people overturned on individual policy measures that come out of a budget and remember what they’re saying really important to remember, which is, to put changes, tough choices that have been called into the forecast. You just need to announce them. You don’t need to win a vote. The vote is only necessary when the measure comes in. So if these are tough choices for 25, the vote doesn’t need to happen until after the general election.

Jim Pickard
There was a lot that speculation that the Kwasi Kwarteng measures would be overturned by rebellion. But 40 Conservative MPs voting against big budget measures basically saying “We’ve got no confidence in our own government.” It’s easy for people to make a noise. It’s a lot harder for them to actually vote in that way. But that doesn’t mean that there won’t be loads of unhappy rightwing MPs lining up saying “These guys are anti-growth that bring back austerity”. They’ll start to get a very sort of shiny view of the Truss-Kwarteng budget and say, if it wasn’t for those pesky markets, we’d now have huge growth instead of this horrendous recession, which in about years time we’re all going to be immersed in a very dark way.

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Sebastian Payne
Jim and Torsten, thank you very much for joining us. And that’s it for this week’s episode of Payne’s Politics. We’ll be back next week for a special looking at that Autumn Statement and what exactly is in it. If you like the podcast then we recommend subscribing. You can find us through all the usual channels to receive episodes as soon as they’re released. We also like 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 are Persis Love and Jan Sigsworth. Until next time. Thank you very much for listening.

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