Labour MPs rebel against UK welfare reform

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0:32Good morning from the Financial Times. Today is Friday, June 27th, and this is your FT News Briefing. Sir Keir Starmer is having a hard time keeping his party in line, and European officials say that Iran's uranium stockpile is still largely intact. Plus, online gambling is taking off in Nigeria, and a big part of it is thanks to social media. There are about 165 million internet users in Nigeria, And according to betting executives I've spoken to, the internet has been solely responsible for this boom in gambling. I'm Mark Filippino, and here's the news you need to start your day.

1:18There's a rebellion going on in the UK Parliament, and it's over welfare reform. More and more Labour MPs are planning to vote against the government's proposed cuts next week. That puts Prime Minister Keir Starmer in a tricky spot. Here to explain is the FT's Robert Shrimsley. Hey, Robert. Hi, Mark. Robert, first off, what are these proposed reforms to the UK's welfare system? Okay, so first of all, Mark, I need to put a bit of context on this. Sure. There is a general acceptance that the welfare bill is getting dangerously high in Britain. the amount of working age health-related benefits the UK pays out set to rise from around£36 billion in 2019 to£63 billion by 28, 29.

1:58It's a huge rise. And that's a problem for any government. That's a bill that is hard to fund. So the measures themselves, they focus on two things. There's basically one measure which cuts the payments to people who are claiming health-related benefits or freezes it and then cuts to be more precise. And the other one which tightens up the eligibility criteria. It's a points-based eligibility system, which between them should save around£5 billion a year by the end of the decade. Remind me, why is the Labour government under so much pressure to save to begin with? Well, there are two reasons. One is that spending is very, very high across the board.

2:35It's not especially high by comparison with other European countries, but it is high by British standards. And Labour went into the election promising not to raise any of the main taxes that people, because they thought voters wouldn't tolerate further tax rises. So it doesn't have much room to increase revenue. Borrowing is very high. The debt-to-GDP ratio in Britain is around 96%. So it doesn't want to do much more borrowing either. If it wants to meet, for example, the new defense demands being made on the country, then it has to find savings elsewhere. And now what are the rebels saying about this reform?

3:10I assume that they're not in favor of it. Yeah, well, I mean, the first thing to say is that people don't become Labour MPs to cut payments to the disabled. So they're very uncomfortable with the idea of cutting welfare payments. But what they are saying is, firstly, this is entirely a money-saving exercise. It's not doing enough to reform the system or help people into work. They're also saying that the points-based system for these personal eligibility, the changes to that are cruel and unfair and will deprive a lot of people of money they need. If it goes through as it's currently envisaged, eventually 800 ,000 people will lose their entitlements to those payments.

3:42Oh, wow. So why is this rebellion such a big deal for Starmer and his Labour Party? The reason this is a big deal for Keir Starmer is because the numbers are not looking good for him at the moment. He's going to have to make, it would appear, some serious concessions, and that will damage his authority very, very badly at a time when his authority is already being questioned. So this is a double-headed rebellion. It's firstly against the principles of the policy, and secondly about the way Keir Starmer runs his party. So if he loses or has to back down in any major way, it's a very, very serious problem for him.

4:16How do you think this battle over welfare is going to play out with voters? I think there are three parts to that. The first is any battle which makes the prime minister look weak or losing his authority is bad for him with the voters. The second thing is that it's generally true that voters are split on the issue of welfare cuts because broadly speaking, they like the idea. They like the idea of cutting it back and people going to work. But the moment it moves from the broad mass to individuals, they're a bit more queasy. So the moment it's about the disabled, they then become a little bit less supportive of the idea.

4:49And the third part is that one of the fundamental missions of the Labour Party when it was elected was promising change to a state that is not really working as it should. So the other issue voters will look at is say, well, do you as a party have the gumption to deliver the kind of reforms that many people think are necessary? So how voters will view this is a collection of all those three things. But what one can generally say is prime ministers looking weak, splits within governing parties never play well for them. Robert Trimsley is the FT's UK chief political commentator. Thanks so much for joining us, Robert.

5:24It's a pleasure.

5:31Iran's highly enriched uranium stockpile is mostly intact, according to intelligence given to European governments. That's what two officials told the FT. These sources say the information provided suggests that the U.S. strikes on Iran's main nuclear sites didn't really make a dent in its supply. And this indicates the stockpile had been relocated by the time the U.S. attacked last weekend. Now, U.S. President Donald Trump has dismissed claims that the uranium was moved. In addition to the European intelligence we're talking about, a provisional American assessment was also leaked to the media, and it said Iran's nuclear program had only been set back by a couple of months.

6:18Take a soccer-crazed country, mix it with a bunch of new social media influencers, and add a lot of economic instability. And what do you get? Well, in Nigeria's case, a gambling boom. My colleague Anu Adeoye recently dove headfirst into this trend, and he's here to talk to me about it. Hey, Anu. Hey. So tell me about this confluence of factors that I mentioned. How are they driving this surge in gambling? Yeah, as you mentioned rightly, Nigeria is a football-mart country, soccer for our cousins on the other side of the pond. And now you have influencers who have tapped into this large market of football fans who want to stake on football in this country.

7:03And I think when you then add the third and perhaps the most important factor, which is the economic downturn that Nigeria is experiencing right now, inflation is more than 20 % in this country. The local Naira currency has lost more than 70 % of its value in the last 18 months. It adds up to people who are looking for alternative streams of income, legitimate ways to make extra money. And that's where people have settled upon gambling as the solution. And according to betting executives I've spoken to, the internet has been solely responsible for this boom in gambling. Tell me about the people who are giving gamblers advice.

7:43Yes. I spoke to one of them called Abi Odrun, or better known as BoomBetNG on social media. Because when you win on betting, it's a boom. BoomBet. So BoomBetNG. BoomBetNG. And I went to Twitter. He has more than 50 ,000 followers. And these influencers are kind of like a different breed from what we were used to in Nigeria. My betting story was kind of a thorn in. It didn't start as a passion, right? I had passion for sports and I had passion for journalists in my soul. He told me a story of how, you know, in late 2018, he was working as a radio sports presenter on radio and he had a 95 as a facilities manager.

8:29He needed money. Basically, he wanted to pay his first child's school fees and the sums did not add up. I studied better with tennis and I just tried it out. He was talking to a colleague who said, you watch so much sport, why don't you put this knowledge to use?

8:52And that's how he got into it. Where does he fit in the wider gambling environment? I mean, how exactly does he work within the network of other influencers? He's basically a middleman between the betting companies and gamblers, right? Because these influencers come with an audience already. They have people who listen to them every other day, every other match day. And these gambling companies, the bookmakers, you know, then pay their money to funnel users to their websites. And that means that the influencer doesn't use a competitor's website. Anu, you're based in Lagos. How are you seeing the rise of online betting play out culturally?

9:39I mean, you see it in billboards across the city. You see it when you watch TV. You see it in music. Sometimes there's music mentioning someone, you know, who has won money. So it's kind of a quick way to make extra cash in this really tough economic environment in the country. Yeah, but given the economic hardship that a lot of Nigerians are facing, I guess I'm wondering, what are the risks to this gambling boom? I mean, the main risk here is problem gambling, right? There's very little regulations in how betting is conducted. Beyond, below the age of 18, cannot bet. It is a tough discipline, betting.

10:19And that's why people talk about the addiction of betting. That is something that needs to be curtailed. There isn't a big infrastructure to assist people if they have problems with gambling. In my conversation with BoomBet, the influencer, he told me something else that's contributed to the rise of gambling, not just in Nigeria but also elsewhere, is the booming business of sport. Right. And I do want us to look at betting in isolation. I want us to look at sport as a whole. So sports has become a big business. And he reckons that this will only contribute to a continuation of an upward trend in gambling, that people will continue to gamble the more and more money there is on offer in sports globally.

11:09That's the FT's Anu Adeoye. Thanks, Anu. Thanks for having me.

11:19before we go if you didn't know already i host another podcast at the ft it's called swamp notes it's all about how u.s politics and the global economy interact and i want to know what questions you have about american politics these days email me a voice memo with your questions about the biggest political stories of the week and i'll get some answers for you on swamp notes make sure to leave us your name and where you're from on the voice memo. And you can find my email address in the show notes.

11:49This has been your daily FT News Briefing. Check back next week for the latest business news. The FT News Briefing is produced by Sonia Hudson, Fiona Simon, Ethan Plotkin, Kasia Broussalyan, Henry Larson, and me, Mark Filipino. Our intern is Michaela Sia. We had help this week from Michael Lello, Peter Barber, and Gavin Coleman. Blake Maples and Kelly Gary We mix the show. The FT's acting co-head of audio is Topher Forges, and our theme song is by Metaphor Music.

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