205. Are Reform Looking For An Argentine Tango?

0:00I mean, I really liked her as a person, but I also don't get, I really genuinely don't understand how she could have made such a basic error. hello and welcome to the rest is money with me steph mcgovern and with me robert paston wow well i feel like we always start our podcast with some you know sense of a dramatic week and here we are again having had another dramatic week i can see you shaking your head so but what's it been like for you with you know reshuffles obviously the reform conference um people defecting from parties, Deputy Prime Minister's being binned off. It's been wild again. It has.

0:44I mean, Parliament's only been back for a few days, but it feels like a few months. An awful lot has happened. I interviewed Farage at the Birmingham conference on Saturday morning and we can get...

1:06Order provisionen bis zu 500 Euro. Flatex. Besser richtig handeln. Investieren birgt verlustrisiken. Bedingungen gelten externe Kosten fallen an. And onto my view of all that, perhaps in the second half. But as you say, the big earthquake was the resignation of Angela Rayner. I mean, just on the sort of personal side of, you know, her fall from grace, I still genuinely can't really get my head around the very simple basic story, which is she buys a house or a flat in Hove, a place next door to Brighton. She is told by two lawyers that they think she can classify it as her primary residence, which would mean she pays less stamp duty.

1:59but they both, one suggested she get proper tax advice and the other one recommended she get proper tax advice. She didn't. The ethics commissioner says that means she didn't uphold proper standards in public life, that she breached the ministerial code and therefore she had to resign. And my goodness, when people are at the top of any institution, those sort of if only moments, they're sort of extraordinary aren't they i mean what must she be thinking now why didn't she you know why didn't she follow their advice she must be thinking because her whole everything about her life would be so different if she'd just taken her lawyer's advice i think that's the thing isn't it i think we can all make mistakes but the whole point is when you get to the highest most highest profile levels in society you get the most scrutiny so you've got to check everything on the way like you'll be the same as me i constantly will go through my tax returns and everything else countless times get it checked loads of times because i don't want to be on the front of the daily mail and and that's the the the thing here is totally you can make mistakes but you i think at that level you just can't afford to as you say i you know you one does relate it back to one's own conduct.

3:22And, you know, as you say, I mean, my job is way less important than hers. But like you, I've always felt one had to be 100 % scrupulous, because quite apart from anything else, even if you don't make it on the front page of the Daily Mail for doing something dodgy, you know, if we're holding people to account, we can't take what is sometimes a slightly ethical position if we ourselves are being dodgy. And so I genuinely, I mean, I really liked her as a person. So I feel sort of sadness for her, a bit of empathy for her, you know, just to see what will feel to her like a terrible disgrace. But I also don't get, I really genuinely don't understand how she could have made such a basic error.

4:15I know, I know. I think for me, the saddest thing about it politics aside is just I remember looking at the you know the front bench after Labour got in and thinking do you know what I could have gone to school with her like that actually looks like people that I've grown up with you know that's a good thing isn't yeah exactly that's what I mean for the first time ever I thought that could be people I went to school with and you know everyone's talked about her you know being a teen mom and growing up in housing state and how she's defied the odds to get to the top and it's just such a shame that that dynamic has gone um you know like i really did feel like that similar with bridget phillipson you know free school meals kid grew up around here um and you're like oh whatever you know i don't necessarily agree with what she says politically but i just thought oh that's great for as a role model and it and you just that's the thing that's really sad about it is is just where she's come from.

5:15There is a sense in which this was a cabinet that slightly felt more like the country than previous cabinets which were so dominated by people who went to free-paying schools like Eton. Yes exactly so shall we have a look then at what this reshuffle means and kind of our take really on whether this is a good thing for the economy because there's a few things within it that we should definitely look at to do with workers rights to do with skills. The timings around all this reshuffle are interesting as well, aren't they? So Friday morning, I mean, actually from Thursday night, it was pretty clear to me that Angela Rayner was going to have to go.

5:55Friday morning, we're just waiting for the announcement. But I'm already being briefed, which is quite interesting, that although there'll be a reshuffle, one job will not change. And that is Rachel Reeves as Chancellor. And that was that that job was never in play, which is quite interesting that they wanted that out. And I'm assuming they wanted that out because had there been speculation, they might have worried, given, you know, that pretty much the most consistent thing that she talks about is, you know, sticking to the fiscal rules, not allowing debt to increase. I assume they worried that if there'd been a period of speculation about who the new chancellor might have been, maybe they thought, you know, guilt prices would fall a bit and there'd be a bit of instability in markets.

6:48Anyway, fascinating to me that Keir Starmer, despite the fact that there are plenty of people who think that Rachel Reeves could have done a better job over the past 15 months or so. Nonetheless, her fate and Keir Starmer's fate are inextricably tied together. Do you think it might also be to do with her crying and if he got rid of her and having just lost another woman? And I know that the cabinet is made up with. It means there's more women in the bigger positions now with this reshuffle. But do you think it might also be because he didn't want to look like he was a bully? Because there was a lot of people at the time who, when she cried, said that makes her invincible in a way because you can't get rid of a woman when that happened so publicly.

7:33I don't know, really, if I'm honest. I mean, certainly, had she gone, all those pictures would have come out again. And, you know, it would have been a very bad look for Keir Starmer at that particular juncture, just in that sort of perceptions space. But in the end, I think most people take the view you've just got to have the best person. You know, that's such an important job. You've got to have the best person in that job. We've got this massive budget coming up, as we've discussed at the end of November. But he obviously thinks she is the best person and we'll just have to wait and see whether his judgment is correct.

8:05But there have been some quite eye-catching appointments in the sort of business economics area. Peter Kyle has become the business secretary. He is very much on what is still referred to in Labour as the sort of Blairite wing of the party. He's on the right of the party, very much somebody who believes in free enterprise, private sector. built up close relationships with the tech sector as Secretary of State for Science and Technology. Some have argued that he became too friendly, too close to the Silicon Valley giants, the alphabets, the metas, the Amazons, and so on. that relationship between him and, you know, as I say, the giants, including OpenAI in the AI space, just a bit too chummy.

9:02I would say his appointment is a signal to markets and to the private sector that Keir Starmer is not at this juncture moving in a leftward direction. Johnny Reynolds going though, he was doing an all right job, wasn't he? They needed his chief whip, somebody who has decent relations with the parliamentary party, but is also close to Keir Starmer. And so they just took the view that that was playing more to Johnny Reynolds' skill set. So he's now the chief whip, which is not, frankly, an unimportant post, let's be absolutely clear. I mean, it's not that one is arguing that Reynolds did a bad job, but I do think that Kyle will make a sort of last ditch attempt to slightly soften the impact of the workers' rights package.

9:58My understanding is that Kyle is a member of the cabinet who worries that the provisions in the legislation for giving pretty much full rights to employees, employment protection to people who are hired on day one of employment is something he is anxious about. that he feels it might discourage employers from taking hiring risks. And actually, this is not just about, you know, normal hiring. This is a government that wants the private sector to employ more disabled people as part of their welfare reforms. And, you know, again, there are concerns that day one rights may discourage that kind of hiring as well.

10:47We're very, very close to this legislation becoming law. the legislation is coming back from the House of Lords slightly changed there's an amendment in the House of Lords which would delay those full employment rights to six months in the job it will be interesting as a first test of what kind of Secretary of State Peter Carr will be whether he does push for a slight softening of this legislation and then whether he persuades the Prime Minister to go along with him. So I think that is going to be a very interesting issue that'll be with us any minute now. Yeah, because the workers write stuff.

11:30I mean, we talked about it at the time. Do you remember they put out that make work pair, that 24 page document, and it was all about trying to improve things for employees. So it was getting rid of, you know, the suggestions in it were things like getting rid of zero hours, contracts, stopping employers from firing people. only to then rehire them on worse terms. And as you say, giving workers rights from day one for things like sick pay, maternity, unfair dismissal, all those things that in the past would have been much further down the line. And as you say, if that amendment is six months, that's still a big risk for businesses to take on.

12:10You know, you and I have both talked about you with your charity and me with my business about employing people. The problem is it's not, you know, any decent employer is very careful about who one hires, but sometimes people just don't fit in initially. And the problem, as you point out, is it's a risk issue. So you're going to get businesses who will go, well, hang on a minute, let's not take that risk on that woman who is potentially going to have a kid soon. Or let's not take a risk on that person who's very different to who we'd normally employ. and that's not good for the economy because you want you want employers to be diverse in who they employ because that's better for everything it's better for business it's better for the prospects of social mobility and things like that and the danger is having really strict workers rights was making that difficult for businesses and yet you of course you've got to protect employees you don't want them to be treated badly but it felt like it was a lot of pressure on business to take that burden.

13:15And we know when that happens, businesses tend to will look for ways, either ways around it, or will avoid employing people because of it. So the interesting question is now that she's gone and Justin Mattis, who was in charge of this aspect of her department, has also been moved on, whether, you know, the likes of Peter Kyle will amend the legislation. So it feels to employers a bit less onerous to them. There have been a number of other changes. And there's one I wanted to ask you about. We've seen Liz Kendall go to become the new Secretary of State for Science and Technology, replacing Peter Kyle.

13:57Now, to be absolutely clear again, she is also on the right of the party. She's very, very much in favor of the private sector. she will work very closely with Peter Kyle. And actually one positive thing about that change is given the issues that you and I have talked about often about the problems for fast growing, particularly tech businesses in the UK is getting scale up finance. Certainly my understanding is that Kendall and Kyle hope that because they know each other so well and get on well, in a sense, the science and technology departments department's relationship with these smaller growing businesses and Kyle's responsibility for the British Business Bank.

14:41And we had the head of the British Business Bank come on the podcast recently talking about the scale up finance that they want to provide. It is possible that getting two like minded ministers there will help a bit with the provision of this very, very important finance to the younger businesses that want to grow and become world leaders. But there's a knock on from all of this, which is taking over at the Department of Work and Pensions is actually another minister very much on the right of the party, Pat McFadden. But the really significant thing in a way about his appointment there, quite apart from the fact that he is going to be somebody who is going to try and push through the kind of welfare reforms, reforms for disability benefits that stumbled, were essentially blocked by angry Labour MPs before the summer recess.

15:38He will definitely try and revive those welfare cuts. But he's also taken responsibility from the education department for the skills agenda. Now, the positive thing to say about that is he is passionate about the skills agenda. But I know you have concerns about a government reorganisation that sees skills going from education into the Department of Work and Pension. So what worries you, Steph? If you look at it from one perspective, like I've been talking to a couple of businesses and their public affairs departments are saying, oh, this means the government are taking skills more seriously now because they're putting it into the work and pensions department.

16:22But for me, I think segregating it and taking it out of education and putting it into work and pensions means you're compounding that societal view that education is purely about academics and not necessarily about the needs of employers. and that's what worries me. You know, it means that we'll carry on this view that you just go to school to pass exams and that's how you'll be judged for the rest of your life, these peer academic exams and not shaping education a bit so that when people come out of school, they come out of FE or HE, they will have the right skills for the jobs that we need them to have and that's my worry about it.

17:08It just perpetuates this, you know, difference between vocational learning and pure academic learning. Now, the only thing that potentially is a saving grace here is the skills minister, who I know very well, Jackie Smith. I've worked, obviously, former home secretary and she is a former teacher as well. So I know she gets education. She actually, although she's heading up the brief under Pat McFadden for skills, She is actually also still working for Bridget Phillips and in education on skills as well. So I don't understand how that works. I'm actually talking to her this week, so I'm hoping I'm going to find out.

17:50But she, as a skills minister, has actually got two bosses now. So she's two bosses Smith at the minute. So it'll be interesting to see how that works. So whether that, like you've just explained about Peter Kyle and Liz Kendall, whether Jackie Smith sitting under both Pat McFadden and Bridget Phillipson will be the thing that bridges that skills gap and whether that does actually mean both sides are catered for. But on first glance at that, seeing it move from education to work and pensions, it did worry me. The thing that also, which is sort of reinforcing your point that worries me, is the kind of skills we're talking about can be associated with really high paid, really challenging jobs.

18:36But they're almost saying by shoving it into work and pensions, you know, the kind of skills we're talking about are just about or just for those people who will be on universal credit or at most at risk of drawing benefits. And that's a crazy signal to because, you know, whether we're talking about engineering or all sorts of technical skills, you know, these are literally the most valuable employment qualifications you can get at the moment. Yeah, because to be honest, and we keep talking about, you know, we're waiting to hear their big plan on skills, the government's big plans on it. But it's got to sit across all departments quite frankly because housing need to build 1.5 million homes you know within this parliament currently we don't have enough people to do the jobs we need to build them and there's you know there's everything else there's environment climate change that's skills as well because we currently don't have enough people with the skills to be able to do all the net zero jobs.

19:40So skills shouldn't be like a one department focus. It really should be across all of them. You're totally right. And before we go to a break, though, I just want to share a sort of mini scoop, really. Improving skills is at the heart of getting the growth rate up. You know, it is one of those levers a government can pull, try and make the whole country more prosperous. Another one that they need to pull is to try and get energy prices down, absolutely central to growth. So the little scupette is, I understand the one bit of the reshuffle that did not go Keir Starmer's way is he very much wanted to move Ed Miliband to Angela Rayner's brief of housing and communities.

20:23And Ed Miliband dug it and said, no, he wants to continue with the energy and climate change brief. And so whether that will make some businesses a little bit pessimistic, that getting energy costs down fast enough will happen is, again, something we're going to have to follow very closely in the coming weeks. He's making a big announcement soon, isn't he, Ed Miliband? Because he's been... I work with an engineering charity and he's been desperate to announce whatever it is with us in a few weeks, the week beginning the 20th of September. So I wonder if... Well, there you are. That can be your scoop for the next episode.

21:01Oh, yeah. I probably shouldn't have said that out loud. I'm going to need to get it. But look, should we go for a quick break? Because it's important to talk about Farage. So let's do that after the break. It definitely is. Right, we'll be back in a couple of minutes.

21:14Welcome back to The Rest Is Money. We're going to talk now about, it was obviously the Reform Party conference. I mean, I have gone down a dark hole of re-watching Andrea Jenkins walk on stage about 15 times now in a sequined jumpsuit singing Insomnia. It was one of, I mean, I thought it was funny when Theresa May came out doing Dancing Queen that time, but this took it to a whole new level. And actually, it's an earworm, that song, so I've also had it stuck in my head for two days as well. But it was quite a moment. And then, of course, Nadine Doris defecting as well to reform. Jacob Rees-Mogg telling us his daughter's in it.

21:54Give us your take on it. You were there chatting to Nigel Farage, weren't you, on Saturday morning. So what did he say? So, look, the first thing to point out, and it's implicit in what you've said, is this is by no means a conventional party conference. It feels a bit cultish, truthfully. It's a sort of, you know, when you go there, it just feels like a great celebration of Nigel Farage. For example, right in the middle of the sort of area where the media hang out and the various stands of various exhibitors are is this sort of huge stand and selling these Reform UK football shirts, where, you know, you can buy a football shirt with the number 10 and Farage's name on the back.

22:46And then obviously the producers of the football shirts didn't get the memo from Farage because he said just on Friday that he thought the election would be in 27 but the other shirts all have 29 on the back so they obviously didn't get the Farage 27 memo and they've got Tice and god knows whether anybody buys a who do you think anybody's buying a Zia Yusuf or a Tice um football shirt I don't know I was actually reading somewhere that they were on display but actually the only one you could buy was a Farage one but the interesting thing is that when I was there, there's this massive, rather deafening announcement that Farage is coming down to sign the shirts.

23:28And do you know what they were charging? Have a guess. Go on, go on. It's a hundred quid a shirt, right? Wow. And they were queuing, literally. I mean, the queue was huge. That's like Premier League, like even more than that, isn't it? I think it probably is rather more. So anyway, I go down to see him on Saturday morning. he is a phenomenon in uk politics right so he's got this television program on gb news right and so i was interested in whether you know he's just going to keep doing it all the way to the election and you know his his response which of course if you want to win an election in the modern world is the correct response which is yeah of course he wants to do that because you know he's looked took Trump and how Trump's, you know, connection with American voters was very much built up, particularly on television.

24:19Farage, you know, but, you know, basically Farage's position is he'll do it for as long as the regulator Ofcom allows him to do it. Now, my assumption is the nearer we get to the election, you know, the more anxious, you know, Ofcom may, you know, it's like in a field that he's got an unfair advantage. But truthfully, even if they knocked, even if he gets knocked off TV news, look, you only have to look at the huge numbers of viewers that Piers Morgan has built up with his show, which is only on YouTube. I mean, if Faraj just switches to YouTube, doubtless he will acquire huge numbers of viewers again.

24:59And once he's on YouTube, my understanding is Ofcom, you know, it's out of Ofcom's hands. Yeah, like podcasts. You know, he can continue to reach out in that way, completely free from any regulation by Ofcom. And actually, I suspect he will do it sooner rather than later, because potentially he could also make quite a lot of money for himself, you know, detaching from GB News. And it is certainly the case. I mean, let's get on to the substance in a minute. But, you know, one of the reasons he succeeds is because it's not just that he uses television. He uses media, particularly social media, so much better than pretty much any other politician in the UK.

25:45I mean, Reform and his TikToks, they have vast numbers watching them and including vast numbers of young people. I mean, again, one of the things that's really striking, the interview I did with him for ITV, you can see all of it on YouTube and indeed on ITVX. And it starts with a little bit of a back and forth between me and him, a bit of a Barney between me and him, because I'm sort of teasing him about, you know, the fact that, you know, reformers historically, all his parties have historically been protest parties rather than credible parties of government. And he then does this spiel about, but we're no longer crusty old white men we represent.

26:24And it's true, if you look at the opinion polls, once you're getting 30 % plus support from the electorate, that is a pretty wide cross-section of British people. I mean, truthfully, you know, when I was there, it feels quite white male, but not totally. At the party on Friday night, which I didn't go to, believe it or not, the musical entertainment was provided by two of the Jackson Five. Did you hear they'd asked Morrissey and he wouldn't do it? They'd asked Morrissey to come and do the music. That's interesting. Why is that? Because they presumably because they eat meat. well no he put out a statement i think he was he said he wasn't party political and therefore he'd never do any but it was interesting that they asked him though because that again it's really interesting though because this sense and we've talked about this before of playing to people's unease and then legitimizing having an opinion on that unease which would be seen as being divisive or not PC or whatever, and then popularising that, which has worked for Trump, it's working for Farage.

27:35But also that, and we talked about this actually when we were talking to Mariana about if you start, if you tell people that you're doing well, and then, you know, you've got to, at the start, you've got the kind of opinion polls to show that a bit, but then that then carries it. So then you do do well because you're telling everyone you are, and then people go, all right, yeah, yeah, no, they're doing really well. okay so it's it's self-perpetuating which is what i think that's going to carry them here is the the sense that you know like when i'm talking to people here anecdotally living in the northeast everyone's like oh yeah no nigel farage is going to be the next prime minister it said as a done deal which suggests that people might then go all right yeah it's going to be a vote for it i don't i don't know but it just feels like it's self-fulfilling and it's a really smart thing to to have that kind of positive and just telling everyone that is going to be what happens he He keeps talking about when I'm Prime Minister, not if.

28:29It's fascinating that people, as you say, have sort of factored it into their thinking as a given. That is certainly not true around Westminster, but around Westminster doesn't decide it. It's more around your way and just obviously voters who decide it. He also does this thing better than anybody else, which many would say is pernicious and which is often described as sort of dog whistle politics. So I asked him about this claim he made that he would stop the boats within two weeks. Right. And that sounded like two weeks of reform winning an election. He then clarified it and said two weeks of them passing the relevant legislation to pull out the European Convention of Human Rights, pull out of various refugee conventions and so on.

29:18But, you know, I said to him, right, hang on a second. You can't stop the boats as efficiently as that. And he then says, oh, but look, in Australia, they did that because they used their warships, basically, to force back the boats that were coming to Australia. so so i said to him okay so you are telling me you will use the british fleet to push uh the boats back into french territorial waters um and i said to him you do realize that's effectively a declaration of war against france at which point he burst out laughing right and it not in the most and he actually also said that would be a last resort that he would use but what he's playing to, I'm afraid to say, is there are very large numbers of British people who love the idea of sticking it to the French.

30:22So, you know, there will be quite a lot of people who will be laughing along with him, even though, I have to say, I regard it as a really quite terrifying prospect, the idea that you would simply, you know, without permission, go into, you know, because just imagine if France, you know, came into our territorial waters without permission, somebody like Nigel Farage would go absolutely ballistic. Yeah, it's the consequences aren't thought about. It's just the headlines that are given, but the headlines are the things that stick, not all the caveats. I should also talk a little bit about the sort of economic fiscal side of things, which I did talk to him about.

30:58In the last manifesto, which they called a contract from memory, you know, there were these enormous numbers being, I mean, these are often numbers that were put on it by outside commentators like the IFS, but the kind of tax cuts they were looking for were like 90 billion. There was about 40 billion of increased spending. So in terms of resources they needed to find, they needed to find, actually it was 50 billion, I think of it. Yeah, 50 billion of increased spending. So they needed to find something like 140 billion pounds, either from borrowing or from cuts. And they insisted they weren't going to take, you know, Liz Trust style mega risks with borrowing, and therefore they were going to find cuts.