384. Labour’s War on Welfare, Trump’s Tariff Secret, and Britain’s Fight for Farming

24:32Welcome back to the rest of politics with me, Rory Stewart. And me, Alice, to come more. Just before we get deeper back into farmers, just remind people to listen to our leading interview with Peter Carl, who's the sectionist state responsible for amongst many other things, technology and AI. And as we like to say, extraordinary personal story, very, very charming individual, right at the heart of some of these policy debates. And I think we're also quite tough on him too. I think we're sympathetic towards him. We like him, but we're also pointing to some of the challenges that this government may be facing in terms of being bold enough.

25:09Yeah, and people can also see the moment when his career came to an end, when he called me wet.

25:18So Rory, you want to talk about farmers because you've had lots of misiffs. I've been talking to farmers, some of them are relatives, but also very grateful to the new president of the National Farmers Union, Tom Bradshaw, who's been very helpful in sharing his analysis. I'm going to interrupt you here because you very carefully, and this is you as the government press spokesman said that you'd been relying on the analysis of Tom Bradshaw. I actually know what this means because I spoke to Tom for an hour yesterday evening. And he revealed that actually he'd been speaking not to you, but to Rory Campbell your son so that you're now turning research into a family business.

25:58Guilty is charged. I didn't say I'd talk to him. I said he relied on these analysis. I think that's fair enough. Very good. All right. You've got your bust in me. So why do you tell us what Tom Bradshaw says then? Actually, we might get Tom on sometime because you remember we did a very good leading interview with the netts, which went very well. So he's the new president of the NFU. I think Tom is in a really, really tense difficult situation because farmers are really under the cost. They're under the cost for three reasons. The first is Brexit. And this goes all the way back to leaving the European Union and what the Conservative government did, which already put farmers in a very, very difficult situation, which is they were losing a lot of that European Union support.

26:41The second thing is you're people remember the inheritance tax changes. So farmers who are often on very low incomes can be sitting on land, which because of the increase in land values is worth a lot. They want to pass it on to their families, the family business. They're not trying to sell it for cash. So you never get that cash. But if they're hit with inheritance tax, which they use not to be, but the Labour government now says they would be, would mean they'd have to lose their business, or really sell a lot of it. But the most recent thing is that the government, Labour government, suddenly is announced with no warning that they're stopping the central payment mechanism, which was supporting farmers, with only about 50 % of them in it.

27:22This is something called the sustainable farming initiative. You mentioned Brexit. So we had the common agricultural policy. Now caricature time, that was basically caricature as a policy created by the French for the because the French farmers are very, very, very powerful. But actually it worked despite all the kind of propaganda against it. It worked pretty well with British farmers as well. They were paying a flat rate for every acre that they farmed and it was the purpose of trying to keep them on the land and also keep food prices relatively low. When Brexit happened, one of the many, many night mayors, and I remember we didn't talk to them about the interview, but I talked separately to Michel Barney about this, that working out what would replace the CAP from a British perspective was one of the most sort of thorny issues.

28:12And I think that's CAP common agricultural policy. That was one of the most difficult post -Brexit debates for the British government because ultimately, once we were out, we were out, it was kind of up to us. And then the budget comes along. And up until the budget, British farmers, they had full relief from inheritance tax for agricultural property and business assets. The budget capped that relief at £1 million and for anything over, it would be 20 % and that could be spread out over 10 years interest free. Now, when this, I think we talked about this at the time, and if you remember, we both said, or this is a bit of a feeling to it that I'm not sure this has been thought through.

28:56Well, if you talk to the NFU as you have done and as others in my circle have done, or they're analysis is that, so the government said 27 % of farms would be impacted by this. The NFU put the figure at 75 % because what they say the government isn't doing is making a distinction between working farmers, people who work the land, and what you might call lifestyle farmers, people who have lots of land because they want to own lots of land. And so when you then get into the kind of profit margins that these guys are operating out, and this is, you know, something that my family members have complained about, most of their farming careers is that the, they're saying that the tax change resulting from a million pound threshold would pretty much wipe out the returns that they get, which are already very, very thin.

29:50And they think the government, I don't know if John Bradshaw said this to you, but they think the government is looking for a way out of this, but looking for a way out that doesn't necessarily present itself as a terrible climb down. Farming subsidies, it relates quite a lot to our conversation about tariffs. It's about governments deciding to support particular sectors, and there are three reasons why traditionally we supported farming more than, more than other sectors. The first one was a food security. So the idea was that we needed to grow some of our own food, and that Russia, Ukraine, reminded us when suddenly wheat ceased coming across and food prices went up in supermarkets why we need to grow some of our own food, and that might become more pressing and climate change.

30:38That's something Tom Bradshaw's really pushing. He's saying as we get into a world of national security threats, and when we get into a world of climate change, we need to produce more of our own food, and that means being serious about the fact that in the UK, we've taken about 2 million hectares out of production, out of 11 million. Just jump in there, is that if the government were to tweak this policy, and were to, you know, whether it's the clawback scheme that the NFU are talking about, or to tweak it in some way that made it more palatable to the farmers, is it possible that actually the sense of the country needing to go, I hate to say war footing, but in these more dangerous times, when we are going to have to become more self -sufficient in all sorts of different ways, whether that is the way that you might be able to do this within that big of frame.

31:26Yes, yeah, I think you're right. I mean, I think that's that's almost a question big of use, so if label were looking for child's change, that's certainly what Tom Bradshaw thinks the strongest argument should be, would that seem to you to be the strongest argument? I think it was part of a bigger package, yeah. I mean, I don't think, I don't think there's a problem in governments changing their minds because of, I wouldn't worry about the fact that the knives of Rao's and Kevin Badenock have been out on these rallies for farmers and what have you. I mean, I think if they get to the point of thinking, this hasn't quite worked out as we planned, there's no harm to my mind in saying we need to tweak it.

31:56And I'm just saying, I think it might be better done politically if it was in that part of that bigger package. Yeah, well, there are two other reasons why we subsidized farmers. The second really big reason was environmental. So there was this, when, as you say, the basic farm payments stopped, the payment by A cup stopped. We shifted from, when I was in deferral, when I was in the deferral minister, I was responsible for the environmental payments, agri -environment schemes under the European Union. And it was billions of pounds a year, but it was still a small percentage of the overall money.

32:27Under Michael Gov, after Brexit, that swapped to being more than 80 % of the money was going in these environmental grants and the slogan which you might remember is public money for public goods. So the idea was going to be that we'll give farmers subsidies, but we're going to give them subsidies with very, very detailed plans on how they're going to improve nature, climate, and other things on their land. And it sounds great in many ways, you know, public money, public goods. There are some problems with it. The first problem is it's these schemes, the more detailed you specify what a farmer does, the more money you have to spend on monitoring the valuation to check they're doing it.

33:10Secondly, the more money, out of the money they receive, the farmer has to spend on implementing the scheme. But thirdly, the way they were designed was that you had to bid for them, they were demand led. So that was easier if you were a really big wealthy landowner, you can hire a fancy consultant who can put together a really beautiful scheme describing everything you're doing with your head roads and your birds in nature. If you were a small upland farmer, you were already locked in quite a complicated previous scheme which was very incompatible with the terms of the new scheme. And in the case of most of them, they never made the transition and they were supposed to be getting into this thing called the sustainable farming industry.

33:50So most of their money was meant to be coming for this new environmental scheme, but only about 50 % of farmers made it in and far less than 50 % of the small upland farmers. And those guys are now in real trouble. So they've lost the pillar one payments, they've lost their basic acre payment, they're no longer going to get their environmental payment. Effectively, they're going to get no subsidies at all. Now, why does that matter? Well, it matters because the farmers that I represented in Cumbria are often on incomes of 16, 17 ,000 pounds a year. They've got farms of some of them 100, 200 acres, my friend Steve Patonson and Buchstern, I think at one point, had 67 cows.

34:29Now, if you're a crazy free market Tory like Liz Trass, who was my boss, she would say, why don't care? You know, why should we be subsising these people? But the reason why we did it is the third reason we haven't talked about, which is community, culture, heritage, landscape, schools. So what does Steve Patonson doing? He's not just farming the land in an area where his neighbour Trevor Telford has been there for literally 600 years. It's their kids that are in the Buchstern primary school keeping it alive. It's their tractors which are clearing the snow off the roads. It's their money, which is spilling through into the wider economy, supporting fence contractors, drivers, there was a study in Wales that suggested for every pound of direct payments to a poor rural farmer, nine pounds goes into the broader economy.

35:18So really, what we need to get back to is what the Welsh and the Scots are still doing. They're still doing basic farm payments because they still care about small farmers and they still understand rural communities. Yeah, I haven't quite realised just how tight these margins are that farmers are working to. Average of 0 .5 % annual return on the value of their land livestock and machinery. And that's pretty tight. If something comes along that makes that even a little bit harder, then the chances are that you're in real trouble. Just something on the politics as well, because this is labour traditionally seen as very much as an urban party in many ways.

35:56But labour with the huge landslide that they got, they've got a lot of rural MPs now. And these are probably in areas where historically would be conservative, might be at risk to reform, lib Dems have done pretty well down the years in rare areas. But they've now got a lot of labour MPs who are under real pressure. And there was an article in the Times recently which was quoting a lot of rural labour MPs saying that they're really struggling when they're going back to their constituents. Because and it's not just the inheritance tax point, it's that broader point that you're making about whether people are appreciated and understand the role that they play in broader society.

36:38Well, let's illustrate this very kind of direct things. I represented the largest most sparsely populated constituency in England, most sparsely populated districts, extreme ruralities, small community hospitals, tiny primary schools with 11 or 12 people in some of those schools, some of them down to seven or eight. One of the biggest farming constituencies in the country were all this stuff matters and who represents it now? It's now represented by a labour MP, right? A labour MP in fact called Marcus Campbell Savers, that's pulling through the sort of theme that keeps coming through and some way reflections on the new breed of the labour party which is they often seem to have family relations to to previous MPs.

37:22Dale Campbell Savers was a really, really splendid MP. He did all these local stuff and we'll have you but I'll tell you something about Dale Campbell Savers. He was one of those MPs who would get bones and then he would be like a dog with them. He would not let stuff go and he was the sort of MP we need more of. He just a light upon causes and they just bombard you. I really like Dale Campbell Savers. Well, so just to come up with this, so Marcus Campbell Savers, labour MP is now sitting in my constituency worrying about all these same issues of farmers on 17 ,000. He's not sitting in your constituency, Rory.

37:55He's been elected as the labour MP for your former constituency. He's not your constituency. He's been elected as the labour MP for my former constituency. So he is worrying about all these issues and the question is why is the labour party not listening to people like him and probably a hundred other MPs, labour MPs across country? Is it that they've already given up on those seats and don't think they'll win them again in the next election? Is it that or is it that the key policy makers, Kierstam or Rachel Reeves don't really get rural areas? It's not something they feel comfortable with. It's not something they empathise with.

38:37And this is where the farmers get a bit paranoid because they had a really good relationship with labour before the election. They were really chaired up before the election and now they're beginning to think that there's something a bit vindictive about it, that the people that labour picking on are farmers consistently and they can't quite understand why this is happening. I don't think they are picking on them and you're right by the way, they were very pleased because Kierstam went to their conference last year. I think Rushi Soonak sent a video and Kierstam made a real kind of big thing about we're going to protect any future trade deals, farmers are going to be the heart of it and the also he said we would protect the family farm.

39:16Well, this kind of goes to some extent against that. First thing I do know, because I've been talking to some of these MPs, they are making these points pretty vociferously. I think they're getting quite frustrated that they don't feel they've been listened to and this goes back to our interview with Bed Wallace, which you want to get bangy out about how the Treasury just wants the Treasury's decided something. But I think politics on this could come into play. There's no way they've given up on rural seats because if they give up on rural seats, they're giving up a large chunk of the majority they're defending.

39:52So no, I still think I said there's a week one, I still think this can and should be tweaked at some point. I think the question really is when and how, but right now the government doesn't seem to want to know. Final one for me, Julian Glover has set up a new organization called Future Countryside, which is trying to do something very difficult, which is try to explain how we could think about an integrated view of our landscape. How do we really think about how much of it we want to have as solar panels, how much as wind turbines, how much is rewilding a national park, how much is productive farm.

40:29And at the heart of it, and this is something that I've been sad that the national trust hasn't been talking about more, which is beauty. Do we care about what it looks like? The national trust actually, I think it's full name is the national trust for beauty. It's what it's set up for. And for the first time, the national trust, which is, I think almost our largest landowner isn't really talking about beauty anymore. This is something where something is very odd about Britain, our former colleagues in the European Union. For example, France, for example, Italy, understand this absolutely instinctively.

41:03They understand the horror of what happens when rural areas are hollered out, when you end up with abandoned villages with schools closing. They understand that yes, it's about national security, yes, it's about food production, yes, it's about the environment, but it's also about heritage, culture, community, everything that areas like the lake district dart more represent for people, some of the most precious bits of what it is to be British. And I wonder whether a really imaginative political party couldn't begin to build more on the natural affection that British people have for farmers that we see in the popularity of Jeremy Clarkson's TV program.

41:40Maybe that's why you said earlier about Scotland and Wales maybe holding onto this better. Maybe that is because they do have that great appreciation partly because without upsetting all the English people, take away the lake district parts of Yorkshire and Lancashire. Scotland and Wales, Scotland obviously is the most beautiful country in the world. We all know that. And then Wales is pretty good on the landscape side of things as well. So yeah, interesting, but thank you very much to Tom Bradshaw for speaking to anybody who called Rory this week. And thank you, thank you to my relatives for briefing me as such details as they did as they winjed on about their terrible profit margins.

42:22Maybe the link to the next discussion welfare is the issue of labour MPs and the limits of their tolerance. But first of all, if you were still in Parliament now following the debaters you have done, where would you be sitting on this welfare reform, benefits reform debate? Well, obviously the odd thing about it is that Kirstner is much closer to the old Tory party. I mean, he's basically holding on to a lot of the policies which were George Osborne's policies. But in his proposals last week and Rachel Reese's proposals last week, it felt a say they were going even further. So what happened under George Osborne is that Universal Credit was set up, which was bringing all these different benefits schemes together into a single scheme.

43:08But he did it at the same time as he reduced the benefit bill. This was all austerity trying to balance the budget, which meant for Ian Duncan Smith who was pioneering this that he got very angry because he felt that Universal Credit, which might have been a good idea in theory, which is bringing different benefits together and getting rid of ridiculous cliff edges in the past. When I began as an MP in 2010, it was true in many cases that it didn't make sense to work because you lost so many benefits when you went to work that it didn't make sense. So Universal Credit helped to deal with some of those issues, but it happened a time when welfare collapsed.

43:43The exception that Osborne made was in different forms of disability payment, which he broadly upgraded with inflation, so that over time you ended up in a situation where your out -of -work benefits were worth less and less, and your disability benefits got more and more. The government ends up with a bill of I think £80 billion a year on disability, and is very anxious then that the gap between the two is incentivising people to claim disability benefits. You wouldn't otherwise claim them. There were studies from policy exchange and times, there's done quite a lot of this stuff, suggesting that many more people are now claiming disability benefits than before.

44:23COVID and many more of them are claiming it compared to European competitors. There's something odd about the British system. We have a loss of people out of work. So the government thinks we've got to save money as something odd going on, and actually it's good for the economy and it's good for individuals to get back into work. So we're going to try to deal with it by controlling the disability spending, but that means that they've put themselves in a position where they're being in some senses more extreme than George Osborne, and that is a big problem for their backpatch every year. This point I heard Pat McFadden on the media this morning, the cabin office minister who was sort of put out, Pat's very good at going out when the wicket is very tricky and sounding very progressive and very labour when being challenged.

45:09As you say from a perspective where people say this is something George Osborne didn't try to do, but there is something really strange. You made this point about the UK being an outlier and international outlier. What is going on that we're now the only major economy whose employment rate hasn't recovered since the pandemic, and a lot of this is about mental health, mental illness reporting. And we've now got almost 3 million people who are not working and who are defined as long -term sick. It's the highest in the G7, and if you imagine the entire population of a greater Manchester, that is how many people are now defined as long -term sick.

45:50One in eight young people not in work or in some sort of full -time learning. So I think there is something going on that we don't fully understand. It's really uncomfortable, isn't it, because it's also very recently focused. So in places like Blackpool, it can be as high as one in three people, not working, and down in London, Southeast, it'll be much smaller proportion. But this is, I'd love to talk to you about this, because this is right at the very, very hard difficult edge on things like mental health. Obviously, if you are trying to save money and you're in the treasury, you're tempted to suggest that we're overdiagnosing now on mental health.

46:31The way it's treating it that we can said that we were. Now, as I've said to you before, I really worry that mental health is getting driven back down the agenda. This won't be helping. But I think that there is, the point that Pant was making this morning, where I have a lot of sympathy, is that the reasons why people end up being signed off sick, the ease with which it is then possible to say, I will have been signed off sick, and I'm not going to get better. And I'm not, I don't buy this idea of lifestyle joy, welfare benefits, lifestyle choice, which I think was born used to talk about. But I can see how that can become a pattern that's very hard to break.

47:11What I hope they're saying is that we want to help more and more people break that pattern. But that on the mental health agenda, that does mean persuading employers that actually discrimination on the grounds of somebody admitting a mental health problem is not allowed. And on the contrary, that people who admit to a mental health problem actually might be a good person to hire back, because they're being honest, they're showing resilience, whatever it might be. But I really worry the way mental health is being driven down the agenda again. So there are reports out from think tanks, which say things like there's a massive spike in the number of young people being diagnosed with different conditions, ADHD, autism.

47:51And that as you get into your teens and early 20s, one of the reasons why a lot of people are out of work is that they have been diagnosed with mental health conditions. And as you say, West Streeting says overdiagnosed, if you have a child or a friend who has one of those conditions, you would feel very, very, very resentful about that. You would think this is outrageous. Basically, what's happening is ministers are coming quite close to suggesting that people are faking it, or that they are claiming that they've got problems that start from working when actually they can work. They're also implicitly being very, very critical doctors and the health service more generally for perhaps for signing people off too easily.

48:34I think they're onto something in terms of the scale of the problem. But the nature of the debate, I think, needs to be broader and bigger. And how does it work politically? Because the problem politically is that when Tories try to make these arguments every single Labour MP, including Kierstammer and Rachel Reeves, were totally unsympathetic, totally brutal, suggested that any attempt to talk about cutting the bill on disability benefit was offensive to people with mental health conditions, was offensive to the disabled. So, Stammer in opposition ramped this up, spoke absolutely as though the two child benefit cap was the most inhumane thing imaginable.

49:17Well -fair needed to go out, the Tories were completely irrational and mean. And then they come and then they flip. And that's got to be a problem. I mean, it must mean that his MPs are thinking, well, where are your values? I mean, were you serious about social justice? Was this just a political game against the Tories? Can it really have been true? And this is my question with Rachel Reeves. Can it really be that she didn't realise until she became Chancellor that there was a problem with the disability benefits bill that she'd missed that £80 billion on the budget? And that somehow she thought when the Tories were doing it, they didn't need to do it, but when she comes in, she does need to do it.

49:54And what's going on? Just to go through some of the figures that because I was on the last leg last week and because the programme is often about disability, I knew this would come up, so I dug into a lot of the facts on it. There are a couple of things that really were thinking about. So the number of people that assessed this too sick to work has gone up by 400 ,000 in the last 12 months, risen, 400 ,000. Young people, 250 % increase in young people using incapacity benefits who are on universal credits. That's the pandemic. So look, I totally get your points about the politics. And the answer, of course, is that they didn't want to talk about it because they wanted to be able to talk about the last government.

50:33Did they know that the situation was bad? Probably. Did they know it was quite as bad as this? I'm not sure that they did. And by the way, I'm not blaming the last government on this. I mean, I can blame them for lots of things. I just think there is, I think there was something gone on since the pandemic that we haven't fully understood. And I don't know, I mean, I've not really followed the COVID inquiry that closely recently, but I wonder if this is something that they're getting into because there's no doubt whether or mental health and long COVID is a part of this, but I don't think it's a huge part of these numbers.

51:05These numbers are just too big for that. The other point though that goes back to the farming discussion, we had Rory, I can't remember these exact numbers, but we had a very big rebellion fairly early in our time in 1997. I think it was almost 50 MPs voted against 100 abstained. Now we had a huge majority. And because ultimately, I would argue, we did deliver on welfare to work, the new deal was a real program. So they're putting the focus now on getting people, rather than assessing people of what they can't do, and then writing them off forever, assess people of what they can do, and then try to help them find ways of getting into the labor market.

51:48That's going to require almost like a national crusade with a different set of attitudes from employers. And I'm not hearing that within the current debate. One policy choice they've got is they can stop raising the benefits. So let inflation eat the benefits away. And that might be a sort of belief that what you're doing there is you're forcing people back into work. The second thing you can do is you can set up whole new procedures. I don't know, new panels, different types of training of specialists to work out whether people qualify to go into work or not, combined as you say with very complicated schemes to support employers to bring people in.

52:29That'll be very expensive, but a lot of money into it. And we don't really know how to do it because at the heart of the whole problem, I talked to David Gaulk here today who was not just my hero, but amongst other things was the Secretary of State for this department for a few months. And his point is that it's very, very, very difficult from a distance to work out whether somebody is able to work or isn't. I mean, even for a doctor, he's sympathetic to them. I think the sense that I got from David is that he would have roughly been trying to do the same thing because he just doesn't say, I mean, he's a guy who comes partly from the Treasury.

53:02He just doesn't think we can afford for this money to keep increasing. I mean, we'll end up in the situation which are great here, if in the IFS. I think at one point projected, we would get quite quickly into hundreds of billions being spent on welfare and benefits. Just on the scale of this, Roy, we'll find out later today whether this talk of freezing PIP personal independence payments is happening. It sounds like it's not, but when there was the talk of it being frozen, how many people with arthritis do you think would be hit by that? I don't know how many? 463 ,261. Cancer, 117 ,000, Cardiovascular, 95 ,000, chronic lung disease, 91 ,000, schizophrenia, 83 ,000, and so it goes on Parkinson's, dementia, HIV, AIDS, motor neurone disease.

53:57And I'd be really interested because I've not been an MP you have. If an MP, I had an email this morning from somebody I know very well called Sam Carlisle. She's a very, very big campaigner on special educational needs and disabilities. And she's got a daughter who's really severe learning disabilities and she says, this is tough. It is mentally exhausting. The government I had so much hope for is making it 100 times worse. Now, if MPs are getting those sorts of correspondence related to the sorts of numbers of the people that were refactored, this becomes very, very difficult politically. And I guess that's why they're doing it reasonably early.

54:37Well, let me sort of finish on that. I think that's absolutely right because it's different as a conservative MP, but the point is that your party broadly stands for something. And there's a particular voter base you particularly care about. So if you were a Tory and things were being done against veterans or in my case, as I say, small farmers in Cumbria or for other people, small businesses, you'd be absolutely up in arms. You'd feel that more than almost anything else because it would be your people, your key party activists, your key voters. So for Labour, that's absolutely right. These are people who felt the Tories were evil, who partly went into politics because they're part of a social justice crusade.

55:25And their key party members and activists care far more about issues of social justice, welfare, equality than almost anybody else. And they're the people, the people that you have to campaign with every day, the people who got you in, who voted for you in your selection, whose membership money you depend on, who are writing to you saying we've been completely betrayed what the hell is this government up to. But you must have sensed a bit of that because I guess one way of reading it is that Starma is going down a bit of a Blair route that he's heading towards the centre and is gambling that he can pick up.

56:03Presumably gambling he can pick up Tory votes and he will accept the fact that he will end up with the generation of alienated Corbans. No, I think it's I'm hoping that it's more honourable than that, that it's actually if I can genuinely sort the system and genuinely get people who aren't currently able to work working, that that will have benefits for them, will have benefit the economy. And by the time we do get to the next election, overall our welfare system will be more productive, more economically efficient. I'm hoping is that. But you watch I guarantee you this is going to become for Raj's next week course.

56:45Okay, so for Raj will now become a campaign for this. Absolutely. Well, absolutely. Tending out outflanking the normal right left division. See some more of a question time. We've got a lot to get through, we've got to do Ukraine, we've got to do Gaza, Serbia protests, we were planning to talk about hungry protests, there is a lot going on. Great, so looking forward to what will be a big international session tomorrow. See you soon. Bye bye. Bye.