What’s next for the UK after Starmer?

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0:32Joe Daniels: Good morning from the Financial Times. Today is Tuesday, June 23rd, and this is your FT News Briefing. We'll take a look at what a post-Cure Stormer UK looks like. And we've got another signal that private equity is struggling. Plus, Colombian voters are fed up with the return of violence in their country. I'm Mark Filippino, and here's the news you need to start your day.

1:02Joe Daniels: Keir Starmer announced yesterday that he's stepping down as UK Prime Minister. The question my party is asking now is whether I am best placed to lead us into the next general election. I have heard the answer, and I accept that answer with good grace. The Labour Party leader made the call just days after the crucial Makerfield by-election. Greater Manchester Mayor Andy Burnham won that seat in Parliament. And it looks like he'll make an uncontested bid for PM. Burnham's main competition, former Health Secretary West Streeting, backed down yesterday. The FT's Political Fix podcast talked about all this.

1:45Joe Daniels: You're going to hear an excerpt from Monday's show where the FT's political editor, George Parker, and deputy political editor, Jim Pickard, joined Whitehall editor, Lucy Fisher. They broke down what this all means for the future of UK politics. Here's Lucy. George, some sense of anxiety, even within Labour, about whether Burnham will be properly tested. And it springs to mind for me with Theresa May. It was said one of the failings of her administration was that she hadn't been put through her paces properly in a leadership contest when she got down to the final two and her rival Andrea Leadsom dropped out.

2:20People in hindsight thought maybe if there'd been more scrutiny of her policy platform, that would have strengthened her. Is Andy Burnham going to fall into the same trap? Quite likely, I think, because he will enter number 10 pretty much untested. We know from the last few weeks, as we started to ask questions about Andy Burnham and his slightly sketchy policy prospectus, that if you poke some of his ideas enough, they start to fall apart. You know, the idea of excluding defence from the fiscal rules, abandon that. There are a whole load of things that Andy Burnham has said that he'd like to do from the vantage point of Manchester, but he will soon be, in the next few weeks when he becomes Prime Minister, part of the Westminster elite, which he's been decrying for quite a long time and facing exactly the same political economic constraints that Keir Starmer has.

3:06And there are a lot of people nervous about him arriving untested, without a team, and with some of his ideas really not fully formed, to put it politely. Jim, it feels to me there's going to be a period now of soul searching in Westminster where people really try and engage with this question of whether the UK has become ungovernable. I've really detected a sense of quite a lot of regret, even among some opposition MPs, that we're now about to see our seventh prime minister in 10 years, likely to be our eighth chancellor, our 10th foreign secretary in that time. It's not good for the future of the country, is it?

3:45No. And one of the things that Keir Starmer ostensibly promised was that he said there would be stability. We wouldn't have all the constant churn that we had under the Tories when I think they had something ridiculous like 15 housing ministers in 15 years and that there would be a period of stability. And I think there is a danger to the Labour brand that the one thing they still kind of had going for them was that things could have been a little bit more stable. But I've been thinking about this this morning. And I've thought for quite a long time that we as a country or as a political Westminster bubble are far too led by opinion polls.

4:21Our whole political system is obsessed with, if you're behind in the opinion polls, even midterm when political parties that are in government are always less popular. So that was just one thought I had. I also thought as well that, you know, there is a sense to which we, the media, are part of the process in which once the idea takes hold that a premier is done for, we write more and more about how done for they are to the point where cabinet ministers are reading what we, the media, write. And they think, well, maybe these columnists are correct and he's done for. Well, maybe I do need to start sucking up to Andy Burnham.

4:54And it starts to possibly become somewhat of self-fulfilling prophecy.

4:58Joe Daniels: sake. You can listen to the full Political Fix podcast on Starmer, Burnham, and the future of UK politics. Just check out the link in the show notes.

5:12Joe Daniels: Private equity executives are attempting to borrow against their personal shares of future profits from successful deals. It's another sign that the industry is struggling. London broker Ennis Global told the FT the number of inquiries for this type of loan has more than tripled this year compared to the same period last year. Those requests are coming from buyout dealmakers across Europe. Now, this type of borrowing isn't new, but the broker said it had never seen such high demand. Private equity has been in a downturn that was initially sparked by interest rate hikes in 2022. That's meant firms have struggled to sell their holdings at the valuations they want to.

5:51Joe Daniels: So they've been holding onto companies for longer than usual, which means there's less cash coming in now. The executives getting these loans are betting it's going to come down the line and are borrowing against those future earnings.

6:11Joe Daniels: Cocaine production is booming again in Colombia and with it, more violence. There was a peace agreement in 2016 with a large guerrilla group called Revolutionary Armed Forces of Colombia, or FARC, That calmed things down for a while, but now FARC has been replaced by several smaller groups. Colombians won an end to the violence, and on Sunday, they elected a new president who promised a military crackdown. The FT's Joe Daniels is here to talk more about this. Hi, Joe. Hi, Mark. So, Joe, you visited a rural part of the country where a lot of drug production and trafficking is taking place 10 years out from this peace deal with FARC.

6:46Joe Daniels: Tell us more about this area and what you heard from the people that live there. So this is an area that used to be controlled by the FARC almost totally. And since they demobilized, other smaller players have moved in. And I met there several indigenous community members, including 36-year-old Nora Takanes. Who is a member of the Nasa indigenous community from the town of Toribio. She told me that when the peace deal was signed in 2016, there was actually a bit of peace and stability in her community.

7:36But that was shattered in 2019 when a massacre was carried out against her community by some of these gunmen who were jostling for control of the region. In that massacre, a prominent community leader was killed. Nora was pregnant at the time and survived the shooting, but fled the town and went to another municipality in Colombia for a few years. And what happened to Nora isn't isolated. This was happening to communities across rural Colombia.

8:18Joe Daniels: Okay, why did this happen, though? Why didn't this peace deal a decade ago lead to lasting security? Well, a number of things happened externally. The global market for cocaine only continues to grow. And the price of gold is way up on where it was 10 years ago. Then, of course, the FARC leaving created a huge vacuum. whereas before the FARC held a sort of monopoly on the drug trade in the areas that they operated in what we've seen now is the FARC left and the area became more fragmented between dissident groups that didn't go along with the FARC deal and other organisations that were never part of the FARC they're all scrambling for control in these regions So all of this together has created a kind of perfect storm that when you bring in the Colombian state's kind of inability to access rural areas as well, it means that security has just been very hard to get a handle on.

9:25Joe Daniels: So Joe, the country has just elected the right wing, Avilardo de Espriella, as president. Tell me more about his strategy for dealing with gangs. So while his policy is light on details, he is promising a military crackdown on organized crime. He's saying that he'll get support from the US and Israel to do so. And like El Salvadoran President Nayib Bukele, he's also planning on building massive jails to house all the criminals. He says he'll lock up. While on the face of it, Bukele's approach appears to have worked and crime rates are way down, his critics would say he's eroded political rights very quickly in El Salvador.

10:12Joe Daniels: So Joe, this is, you know, this region of Colombia, but let's zoom out a little bit more and talk about wider Central and South America. Are we seeing similar things happen throughout? Well, what we're seeing throughout Latin America really is an expansion of organized crime as the profitability of illegal economies becomes greater and greater. And we're seeing violence erupt in places that weren't so violent before. And in these countries, the politics are destabilized by this violence and by the perception of insecurity. As a result of that, we've seen candidates who promise a tough line on crime, who seem to have the U.S.

10:59backing in fighting crime. We've seen those candidates do well. We saw it happen in Chile. We're the right one. We saw it happen in Honduras, the right one there this year. And we've now seen it in Colombia.

11:13Joe Daniels: Joe Daniels is the FT's Andean correspondent. Thanks, Joe. Thanks, Mark.

11:24Joe Daniels: Before we go, former Federal Reserve Chair Alan Greenspan died yesterday. He was 100 years old. Greenspan headed the central bank for nearly 20 years, from 1987 to 2006. Some considered him the world's greatest central banker because the U.S. economy grew quickly in the 1990s and early 2000s. But he's also been criticized for missing the signs of the financial crisis that hit just two years after he left office. hey guys do me a favor and take this five minute survey we're doing on a crazy idea that we have a saturday version of the ft news briefing now we know that there were some technical difficulties with the survey link yesterday but we've got it all patched up let us know what you think about a weekend ftnb and you could be entered to win a pair of bose headphones that link is in the show notes this has been your daily ft news briefing check back tomorrow for the latest business news Thank you.

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