This is The Guardian. I want to lead the most pro-growth, the most pro-business treasury that our country has ever seen.
Some of the decisions taken at budget have made it harder for businesses to invest, to take a risk on people and to create more jobs in their local communities. We will provide those opportunities for young people to be earning a learning because it is a disaster for you to have bases. I'm hearing the carer. I'm hearing the carer. I'm hearing the state. Let me finish. I'm Pippa Carrera. And I'm Kieran Stacey. You're listening to Politics Weekly Westminster for The Guardian.
Here we are again, Kieran squeezed into the little studio in the House of Commons. We've not had the smoothest to start us today, have we? Turned up in the office, freezing cold, because eating wasn't working. I sat down at my desk, which was covered in water because the roof is leaking, and obviously it's been quite wet over the weekend, and then turned on my computer. Nothing.
Sometimes I wonder whether Lindsay Hoyle and the parliamentary authorities go around sabotaging our offices every weekend to help build the case for massive refurbishments of parliament, which are clearly needed. We get in this morning and we basically can't do our jobs, and only those of us with laptops are able to do any work. Apologies to Guardian readers on Tuesday.
I'll be spending all day drinking coffees and seeing contacts. Obviously not. Anyway, here we are. Unfortunately, at least the equipment that we use to make this podcast is working. We are here, as I say, in Westminster, and just across the road in the Queen Elizabeth Second Conference Centre is the CBI, the Confederation of British Industries Annual Meeting. Now, this has become a regular fixture
in the political year. Some years it's more eventful than others. I remember one recent CBI conference, I think it was maybe three years ago, where Boris Johnson then Prime Minister got into a terrible mess with a speech by Peppa Pig and got all his pages jumbled up and in the wrong order. I imagine when Rachel Reeves addresses
the CBI delegates today, she will have presumably an autocue or at least something sort of a bit more reliable when she addresses business because of course after the budget, the first big budget that business was looking to as a sort of a signal as to what direction this government was going to be going in over the next five years, relations aren't quite as smooth as she might have wanted. It's quite different from all her years in opposition, isn't it? Because she spent the last few years basically being fated at every business summit that she's turned up to.
doing the smoked salmon canopays and the wrong cocktail offensive 2.0. Businesses, if anything, have been upset that they haven't had enough time with her because they've been desperate to see the person they thought was going to become Chancellor of the Exchequer. I think that labor was quite successful in wooing business and convincing them that they didn't post them a risk.
And then of course the first thing they do is hit them with a great big whopping tax rise. And that is what the CBI has been talking about this morning. I thought Rain Newton Smith, the head of the CBI, had some very punchy comments that were kind of released that she's going to say, I think on stage, while Rachel Reeves is there, basically saying, you've hurt business confidence with your tax raises.
don't do this again. And I think that message is being heard. There are some questions about whether this budget is falling apart and whether Rachel Reeves might have to you turn on this or that. I have to say, I think the national insurance bit of the budget is one thing she's not going to you turn on because it raises so much money. 25 billion quid. 25 billion pounds.
But what is interesting, I think, is that businesses are being quite successful at the moment at putting a line in the sand and saying, OK, this far, but no further. Otherwise, you've got a revolt on your hands. And in Richard Reeves' defense, she did, after that budget, go on the media and say, look, we're not going to do one this big again. This was the big tax-raising budget, the first budget of our four or five years.
In power, obviously, we'll have to see how the economy goes and whether she can stick to that promise. But she herself were expecting to be quite defiant when she gets on stage, aren't we? She's going to stand up there and rebuke her critics, saying that they haven't offered any alternatives.
to her plans and that the government, this familiar line we've heard on many occasions now, trotted out about the 14-year Tory inheritance and how the government really was faced with no choice other than making some really tough decisions that it didn't want to make. And I was chatting to a small business owner over the weekend.
And they were suggesting that the bigger companies, so many of those represented by the CBI, can just absorb the costs for the most part. They have enough margin, enough profits to be able to do that. But the ones that would really be affected are the small ones, and particularly in sectors like hospitality and retail and care, where not only the hit by the national insurance rise for employers, but also by the increases in the minimum wage. And that while they can see that that is fair, that the minimum wage goes up,
they will still struggle, and the example I was given was of a cleaning firm, which has turned over about 7 million quid, so pretty well, but it's now going to have a recruitment freeze because those combined costs mean that they can't then expand. And if what the government also wants to do is to boost employment, then if companies like that cleaning firm right across the country are experiencing the same fate, that is going to be harder to do.
But I think that word fair is really crucial. And while there obviously has been a real pushback from the big lobbying, the big business lobbying organizations and some of the right-wing press on their behalf, I think when people think when the average man in the street thinks about this budget and whether it's fair or not, labor went to great lengths to emphasize the fact that they were trying to protect workers' pay. And if that meant hitting employers, then they felt that that was the fair approach.
Where I think the fairness argument falls apart is where you get farmers, and that's one which I think has resonated really strongly with a lot of people. We've heard of the last few days, no indication that there's going to be like a dramatic screeching euterine, but that the treasury might be looking at different calculations, different ways of potentially softening the impact of that going forward.
Well, yeah, I mean, going back to the CBI, you mentioned that some companies now talk about having recruitment freezes in place. I think Labor will be quite worried about that. And the CBI knows that because what the CBI has done overnight is to put out a poll of 266 companies, which suggests that nearly two thirds of those companies are now reconsidering their recruitment plans. And to a certain extent, that's unsurprising. And then that is what you would do.
if it's going to be much more expensive to hire new workers. And you mentioned, not only have we got the new national insurance tax rise, but the threshold coming down is a huge deal for companies with lower paid workers, exactly the sectors you're talking about, retail, hospitality, care.
And you've got the new employment rights going in. And again, even if you think the new employment rights are fair and the right thing to do, they are going to increase costs of business and they're going to increase, just simply complying with them is going to be difficult. And you have to go through all sorts of legal processes. It's costly for businesses that don't necessarily have
great big fat profit margins. On the farmers, I was talking to a senior treasury official on Friday who is completely defiant on this. No, absolutely. No, you turn. The only mitigation is to try and improve how quickly we get farming subsidies out there is several billion pounds worth of subsidies that the government has that it distributes largely through the rural payments agency. And it's worth just saying on those, isn't it? A lot of the anger that farmers feel towards government is not just about this measure at this budget.
It goes back a long time and one of the biggest problems that they encountered was of course post Brexit. There's huge farming subsidies which came from the European Union dried up.
Yeah, exactly. What I thought was quite interesting in terms of just reading the runes here over the weekend was Dan Needle, the tax advisor, who I think is Labour has consulted in the past, was quite influential, has written a blog where he's saying, wait a second, this tax does actually appear to be hitting the wrong people that there are
genuine family farms that would be caught up by this. He's done a calculation as to how many people have owned the land as investments and how many are actually farming it. And he thinks that too many farmers are being caught up in it. And he suggests, well, actually a better way of doing it would be to set the threshold much higher and then to increase the tax. That may end up raising just as much money as they've raised through what they've already announced, which is certainly about $500. That's not a huge amount of money.
The problem is, when you've got Rachel Reeves out there doing her Iron Lady shtick saying there is no alternative just like Margaret Thatcher used to do, it then becomes an issue, not necessarily of what's the best policy, but of I'm not going to back down because I need to look strong and I need to show everybody that I don't just get pushed around by lobbying.
Yeah, and she's, you know, she's not afraid to own it either, is she? And I mentioned earlier that she went out on the media round after the budget, which is normally chances go out before the budget. Not necessarily the most sensible approach given that you can actually ask some questions about what was in the budget, so it does make more sense to do it after. But anyway, she was out and she was doing the media rounds after the budget and taking the questions. And then today, again, at the CBI, should be taking questions from the floor, we're told.
So she is making herself accountable, but not necessarily very popular. I chuckled to myself when you mentioned the Thatcher comparison, because that's actually one that I think they kind of doubled down on. They quite like the idea of her being described as the Iron Chancellor. Remember a headline that appeared a couple of years ago after a speech that she gave in which she referred to her as the Iron Chancellor?
and her press people coming into the press room where we all wear a post-speech beaming because of this comparison. Of course, that sure told the Conservative Women's Conference, if you remember, in 1980, before you were born here in New England, and I was only four years old, so I can't claim to have first-hand knowledge of it. But she told them, I believe people accept there's no real alternative. And of course, her cabinet colleagues called her Tina, didn't they? There is no alternative.
I think Rachel Reeves will be quite comfortable with that sort of tough sounding comparison, although the politics of it are now currently quite tricky. And I think certainly from business people that I've spoken to in recent weeks, their concern is that some of these decisions that the government are making seem to have unintended consequences, whether that's the treasury civil servants who should have been wary of those, or whether that's sort of a lack of political nouse around the very new operation. I mean, they've only been in power for four months. Let's not forget this.
It's not clear, but pretty much every controversial decision they've made so far, including winter fuel and the inheritance tax for farmers, have spiralled into a bigger political row and probably could have been avoided if they'd worked out ultimately what possible consequences politically were going to be. It might just be that it's the early days of the administration and they'll get better at this stuff, but that's the thing that's making business
Very slightly jittery, more really even than the measures themselves, because they do see, compared to, you know, Boris Johnson, that example we gave, you know, his F business remarks, the instability of the last few years, they do see that this government looks at least sort of steadier and more stable. But there is a political, one word that was used was naivety, they felt, in seeing ran corners and what the impact on businesses day to day would actually be.
Yeah, well, just given that you mentioned Boris Johnson again, I was reading our colleague Heather Stewart's write-up of Rachel Reeves' comments, what she was expected to say on Monday morning. And I had forgotten that not only did Boris Johnson spend that speech rambling about Peppa Pig World, he also at one point imitated the sound of an accelerating car.
Yeah, that's fair enough. Completely bizarre speech. Tied in to Labour's business policies. The next thing I think that Keir Starmer and Rachel Reeves are going to want to talk about this week will be their welfare white paper, because it's being launched by Liz Kendall. Britain working.
I think I've heard that before. I think I've heard it several times. I think this is all feeling quite familiar. So this is a new white paper all about how to tackle worklessness and get the benefits billed down. There's some interesting ideas I think that we were expecting to see in there. One that was brief last week was that 18 to 21 year olds would face benefit sanctions if they don't accept job offers or offers of training or education.
That's, I think, as far as I could tell, a relatively minor tweak to the situation at the moment, which is that they already face benefit sanctions if they don't take up job offers. Now they're going to extend that to education and training as well. And there's also going to be some, what look like fairly sensible attempts to tackle the problem of long-term sickness by having things like mental health professionals in job sentence and having a little bit more support to help people get back into the workplace.
What I think we're not expecting is any talk of great big-swinging cuts to the welfare bill, particularly on personal independence payments, which is the thing that the Tories have been talking about slashing back. Now, it is absolutely true that the bill for personal independence payments has gone up a lot, partially because so many more people are now off work long-term sick.
Whether just taking that money away is the answer or whether Labour's It was slightly more gradualistic and more carrot than stick approaches Liz Kendall describes it is the better way forward What I do know is that there's I suspect going to be a lot of rhetoric and we saw this a bit in the mail on Sunday. There's gonna be a lot of war on benefits Britain rhetoric, whereas actually I think the policy Detail doesn't really stack up to any kind of war whatsoever
And of course that rhetoric is interesting because it's all about making it more politically palatable to some of the sort of critics of Labour on welfare policy. I think we'll probably hear more when it comes to sort of the money side of it, we'll hear more in the spending review next spring, because that's when the big decision to be set out for the next few years of this government and of their term.
And that, I think, will be the moment that, you know, in the mix, we have a better idea alongside what they're doing in other departments as to how they're going to tackle this. Now, I had a cup of tea with Liz Kendall, the work and pension secretary recently, and she was absolutely underlining to me that, as far as they're concerned, the importance of aligning what happens in her department, work and pensions, with what happens in the department of health and social care, and how her and Wes Street are going to have to work very closely together. And I think that in itself
is quite a good sort of indicator of the direction they're going with this and the recognition that they have that you can't just strip out the work side of all of this from people's health conditions, whether that's bad backs, whether that's waiting lists and not getting hit replacements, whether that's their pro-mental health.
As you also talked about their ambition to get 80% to hit the 80% employment rate, because Britain's the only major economy that has seen that rate fall in the last five years, and most of that has been driven by a rise in the number of people with long-term health conditions, thus again underlying the need to work with the health service on this. And just to sort of set out for a listeners of the figures, if you like, about 9 million people in this country are currently economically inactive. Of those, about 1.5 million are unemployed.
And about 2.8 million are out of work due to long-term sickness, thus underlying the importance of working with the health sector and in terms of Whitehall, the health department. And a particularly concerned, she told me about young people. You mentioned already the plan to encourage or forest, depending on which way you look at it, more young people into not just employment, but also education or training.
And currently, one in eight young people aren't. The so-called NEATs, not in education, what do the other ones stand for? Employment training. Employment training, yes. There's another eight or nine million adults without the essential skills. So I think we'll hear a lot more about emphasis on getting those skills and supporting people with long-term ill health.
back into the workplace as they published that white paper. Do you know what? She probably won't appreciate the comparison, but I remember the last work and pension secretary to talk seriously about this kind of link up with the health service was Ian Duncan Smith. He was always very interesting. She wouldn't appreciate that. Sorry, Liz Kendall. But yeah, Ian Duncan Smith used to talk very interestingly about how
The government, the public sector has multiple points of contact in people's lives, especially people who maybe aren't in the workplace, people who are underprivileged for one reason or another, or have health conditions or whatever. One of those points of contact might be the justice system, one of them might be the health service, one of them is likely to be the work and pension system. But those three systems never talk to each other. And yes, there's problems with the amount of data you can share and you've got to respect people's privacy.
But if you could manage to combine this information into some kind of more holistic picture of what people are going through and where early intervention might actually work, you know, if somebody's been into A&E three times in a month, does something else need to happen here? Yeah. You know, if somebody's regularly interacting with the justice system, is there something else that's going on in their lives that you can help with?
If you can manage to make that work, it is a great thing to be able to do, but the problem is trying to get that joined up across Whitehall has proved so difficult for multiple governments. And that's also a reform which to reflect what happens in some European countries as well, where the emphasis is on not just early intervention in all the examples that you give, but also if someone loses their job, the state basically pounces on them,
They keep there in a much higher proportion of their wages. They'll get housing support to pay their mortgage or their rent. And the idea being that if you support someone in those crucial early weeks and months to get back into the workplace, then they won't end up in a situation where they lose their home, they lose their self-confidence, they lose their ability to find a job. The longer you're out of work, the more likely you are to stay out of work. But that shift in
approach is, you know, quite fundamental reform. And it's the sort of thing which, you know, obviously would take years to do. And even if the imperative is there,
And the sort of, you know, the political will is there. It's not going to be easy. Well, and the other, the flip side of those European style systems is one, it's often teamed up with the contributory principles. So you tend to get more in benefits if you've been working for longer. Now that's controversial itself. And the second one is yes, people do get much higher proportion of their salary when they first
leave the workplace. But then it falls off very quickly, unlike the British system, which stays in place for basically as long as you need it. So it's a very, very different approach to the British system, which is basically that everybody deserves a basic, decent amount of money to support them. And they will get that for as long as they need it. Whereas the European style systems tend to be, you'll get almost as much as you used to own, but only for a limited amount of time. And then you have to be back in the workplace by the end of that.
So from one controversial issue, we moved to another that is happening this week. And we've spoken about this before. This is, of course, the assisted dying bill, which is going to finally get its second reading vote, which is the first chance MPs get to vote on it in the House of Commons on Friday. And we have, you know, we heard from pretty much every quarter in the debate now, haven't we? You know, pro-enanti and all the different sort of permutations in between. And it has in recent days started to get a little bit spikeier, having been
Having been actually fairly cordial thus far over the weekend, a bit of a row erupted when Shabana Mahmud, the Justice Secretary, set out her reasons for voting against it. And Charlie Faulkner, Lord Faulkner, who is one of the biggest supporters of the legislation, suggested that Shabana Mahmud was trying to impose her Muslim beliefs on those in favor of assisted dying. Now that kicked off a goal on my two row.
Or an almighty round, maybe I should say. Just not to take sides between the two sides with some of the critics suggesting that it was hugely offensive and discriminatory and saying that he should apologise. That Shabana Munmoud and along with Wes Streeting, who was a Christian, that they were capable of making their own decisions based on issues around safeguards, for example, and coercion, rather than based on their own religious beliefs. But I think it just shows
that the point where I are at with it now is that real strength of feeling on both sides. And yet, from what I can pick up, there's still a hefty chunk of MPs in the middle that still haven't made the minds up and probably are waiting to that debate. So here are the arguments set out to the floor of the comments. Yeah. And then Rachel Maskell was on the today program on Monday morning saying that Charlie Faulkner was in some way being discriminatory because he was bringing up Shabbat and my moods religion. I mean, I think that actually people's religious beliefs are, you know, are valid.
topic for debate in this. It is not coincidental. I think that the biggest opponents of this bill have tended to be the most religious MPs. And I think that that's fair enough to say, maybe Charlie Faulkner should think about exactly the terms he uses. But that's a fair point that people are being guided here by things that won't necessarily apply to everybody.
And also, I think it's not just about individual MPs and their positions. It's also about some of the campaigns that have set up. And I was chatting to an MP last week who was saying that their mailbag on this, their emails from constituents, there's vastly more from people opposing assisted dying, opposing the legislation. But they're all written to a format as though a campaign group has said,
you know, here's the template for your email, you know, whack on your, your dear or whatever at the top and sign off yourself, but then send it through to your MP. And the smaller number were from people in support of it, who they themselves had either had to nurse or care for a relative through their, you know, the final days of their terminal illness, because of course, that's not forget, this is about only, there's only applied to people that are terminally ill.
Or in some cases, it even taken loved ones to dignity and Switzerland and been through the process themselves and wanted others to be able to have that experience much more easily without living in fear of retribution for breaking the law. Pop polls say that this is popular, right? And there was an M.R.P. I remember saying it was popular in every single constituency of the country apart from one.
I'm fascinated to see which way the debate goes on Friday. I know that supporters, Kim Lebeater and her supporters, have been saying that they're confident they've got the numbers. I think the Labour Party is mostly in favour. Certainly, Qistam has expected to vote for it on Friday. Yeah, and we've done our own tally in the Guardian of senior cabinet ministers and which are in favour and which are not, and most of the cabinet is in favour.
You know, I don't know how the government's going to manage this, given that the two cabinet ministers in charge of implementing this, where Streeting and Shabbat and my mood have both come out so strongly against it. I mean, maybe there needs to be, it needs to be handed to more junior ministers within their departments to actually take their reins.
And of course, if it makes it through the first vote on Friday, that's just the start of the process, the point that Kim Lidbetter and others have made, that it will, of course, go to committee stage and report stage, that it may be that the bill ends up being amended or changed quite substantially to add in more guardrails, more protections, or it may end up getting voted against. And that's it for a generation. I mean, I know a lot of MPs who are quite suspicious about exactly that argument because it often gets used by supporters of particular bills saying, don't worry, we'll change it, you know, committee stage or whatever.
But committee stage is not open to the whole house and is often quite a secretive process and promises don't necessarily get fulfilled. So I think this vote, the Friday vote is the one that matters. This will be fascinating to watch with more than half of MP's new to Westminster at the general election and already within just a few months of being here, having a free vote on such a seismic matter.
While that's all from us, please like and follow Politics Weekly UK to make sure you keep getting our episodes in your feed. John Harris is back on Thursday. This episode was produced by Frankie Toby, music by Axel Kakutie, and executive producers are Phil Maynard and Nicole Jackson. Goodbye.
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