Brexit, oil and immigration: Labour's three rows

0:00I bumped into a cabinet minister who was almost walking on air. they were euphoric that we were having the debate about the return to free movement. You have a government with a set of stated economic objectives, and then the Prime Minister just says, oh, the EU was great, wasn't it? And so what is Whitehall meant to do? That's kind of headspinning for these ministers. Suddenly they've got to embrace the openness of this discussion. Welcome to this week's episode of The State of It, the political podcast from The Times and The Sunday Times. I'm Stephen Swinford, the political editor of The Times.

0:28I'm Ben Riley-Smith, the political editor of The Sunday Times. I'm Patrick McGuire, Chief Political Commentator for The Times. And I'm Lara Spirit, the Deputy Political Editor of The Sunday Times. This week, we're going to be talking about two broad topics. The first is that the Cabinet splits are starting to show on multiple fronts. There are splits over Brexit. There are splits over new oil and gas drilling in the North Sea. And there are splits over legal migration and how long it should take people to settle here. So we're going to go into them in some detail. And then, of course, we're going to come to the budget.

0:58And we're going to ask the question, given the challenges that Britain is facing and how hard this winter is going to be, is this enough? That is the big question facing this budget. But look, first of all, we want to talk about Brexit and we want to talk about a really big scoop that Ben Riley-Smith delivered for the Sunday Times this weekend on free movement. I'm going to give a little summary of the events of the past few days and then Ben's going to explain in more detail. Essentially, Andy Burnham did a series of great interviews with Ben in which he reopened a conversation, a discussion about free movement.

1:34And that kind of set the political paper alight and everything has been going since then. And we've had a kind of Andy Burnham hokey-cokey for the last 72 hours. So we had him opening a debate on free movement. We then had an interview with Richard Madeley on GMB in which he went further and said, I'd like to rejoin the EU in my lifetime. And we then had Downing Street trying to kind of row back on some comments where he suggested there'd have to be another referendum. They were saying they wouldn't. And then they seem to try to suggest that they wouldn't be a return to free movement when very clearly that is what is on the card.

2:07So it's been quite a confusing 72 hours. Ben, talk to us about it. Well, why don't we go back to where the comments came from, which was last week on Monday, the fourth of these interviews I did with the prime minister for his first hundred days. sometimes as we all know with interviews with political leaders you were told by their team beforehand that they really want to talk about x topic they got something to say that wasn't actually the case with this one so he wasn't planning to raise free movement he didn't want to have this huge public debate now but i just asked him in this world where he's considering options look would staying out of free movement be one of your red lines and ultimately he said uh i don't think it would be a red line unlike joining euro or the schengen passport free area And then he began to lay out an argument for why he thought it could be a good thing to go back in.

2:53He said, look, migration is different now than when it was with free movement. That was a revolving door. People would come here, go back. With migration now, people more often permanently coming here. That was his argument. He references Dan Roy, who went to Germany in the 1990s, came back. And he said, look, we've lost access to EU databases like Eurodac. He wasn't saying he definitely wanted to return. that he was spelling out the argument for why that's something the country should consider. He called it an honest discussion. Since then, as you say, you've had these couple of days of people being slightly blindsided because suddenly ministers are being bounced on the radio.

3:29Well, are you supportive of this? Is this what we're going to do? What kind of democratic consent would you need to think about this? I think it all comes back to this slightly curious position we're in, where we're operating on two planes with this EU debate. So there's the summit next month, November the 20th, where there's a number of relatively small iterative changes the government's hoping to do on agri-foods and possibly a youth free movement deal. And then there was this wider huge debate that Andy Burnham very deliberately opened up with his conference speech where he said, look, I want to have a big discussion about why Brexit has been damaging in his view and what they can do about it.

4:06And in all the interviews after that, he said, well, I want to spell out a load of options. One of them might be rejoining the EU, one of them might be rejoining the single market customs union, or maybe we can stay where we are. But it means in the last 48 hours, you've got this position where he says it's correct to both say he's not advocating for a return to free movement. And also he's deliberately opening up the debate about free movement and seeing how it's going to play out. I think the prime minister's team are testing the water. As he said in that interview, the British people will lead where I end up on this.

4:37And I think it's a conversation on Brexit that might last all the way to the end of next year, where he says, look, here are the various options. Where are the public on it? What's politically advantageous for us? And then it might still be before he comes down on one side or the other. What I also find interesting about the remarks on migration is what he was really doing there, or how you can read his comments, is as an implicit critique of the Boris Wave settlement, i.e. we've got the wrong kind of migration. The current migration settlement doesn't work. But it is phrased as a pro-European argument when actually it is saying, we can all agree the current migration settlement, just as Nigel Farage or Kevin Bay, not whoever say, is terrible.

5:20It hasn't worked. But we're not reading it as such because he's phrased it in a different way. And also what was also telling, the free movement thing was not phrased as, wasn't it great when we had Polish plumbers? Wasn't it great? Isn't it nice when you have a Spanish barista? It is, my dad went to Germany. Auf Wiedersehen, Pep was the comparison made in the Sunday Times news copy. That wasn't a feel-good story about European solidarity and cultural enrichment. It was a load of Geordie Britlayers who couldn't get jobs having to go and work in Germany and the low countries, very common in the 80s.

5:51And also our migration settlement is a complete mess. And almost anything, including the thing that radicalised loads of people to vote against the EU in 2016, would be better than that. But Andy Burnham has somehow made it into a sort of classic argument on Europe, which, by the way, I'm not sure is good for the Labour Party at all. What I can't work out in my mind is, is this something tactical from Andy Burnham? We know everybody on the left, three quarters of Labour, Lib Dem, Green Vosers, want to rejoin the EU. It makes sense in the short term, politically trying to group those all behind him, talking up Europe.

6:20Or is it a strategic move that he knows in his heart of hearts where he wants to be, late 27, early 28, assuming he doesn't go early in the election, which is, say, for argument, returning to the EU or single market. Does he know his end point? Or my sense is he doesn't know his end point. Well, no, exactly. What if it's neither? Right. This sort of reminds me slightly of when we all used to go around the houses saying, what's Keir Starmer up to? Oh, does this mean this? What's the real Keir Starmer? All of these sort of great imponderable questions that kept us in work for ages. Actually, the real answer was Keir Starmer isn't very good at politics and nobody likes him, right?

6:55Well, some people did like him. That's unfair. But the answer, the thing that explained everything was very simple but hard for the Labour Party and also I think for the media to accept this guy just isn't very good at his job. With Andy Burnham, is it possible that it is neither tactical nor strategic? I mean, it may end up having, it's certainly tactically helpful. It may well be strategically helpful. But is it not just you asked him a question and he answered it? Yes. And, you know, maybe he's not giving it thought. The impression I get is that Andy Burnham is sure of himself enough as a political operator and feels like he knows himself and the game, not that he would say it was a game, that he thinks, well, I'll just say what I think and I back myself to make the machine of government work and to argue and debate my way out of any answer I give, even if my team are looking at me saying, what the hell are you talking about?

7:45This wasn't in the grid. I think it's definitely true, that thing about backing himself and his instincts. I think I would go, he was posed the question, he answered the question. I think what it felt like to me, he had done quite a lot of thinking about how you frame free movement in a positive sense. My gut feel is he doesn't know where he's going to be at the end strategically, but he knows he wants to be closer to Europe and he wants to feel out where the landing zone is. Yeah, and he would say, and I'm sure he said to you, you know, I've thought about these issues for a long time. As he said, you know, as he sat with the Pope and told the Pope his vision for social democracy in the 21st century, he's been thinking about a lot of things for a very long time.

8:22He's been imagining being prime minister for a very long time. So, you know, he has a sort of fully worked out, almost single transferable vision for most issues that you could bring up in an interview. Lara, what was your gut feeling when you saw free movement back at the top of the headlines? Well, I think, I mean, I do think it's worth not underestimating the fact that they and number 10 will know how helpful it is in Europe to say positive things about free movement at the moment in advance of the summit. it is whenever you talk to people who who are negotiating with europe engaging with the commission on these subjects they say it is remarkable how outsized an impact this issue is for a lot of these particularly elite europeans who want their children to go to british universities these kinds of questions yes on the youth ability scheme but also more broadly on freedom of movement to have those opportunities in the uk that it is almost offensive to some of these british negotiators who think this is actually crazy when you look at the full gamut of issues that we should be discussing just how important this issue is to Europeans.

9:20I think the timing of it is going to be really frustrating for a number of cabinet ministers. I mean, we've already seen that. We saw all of us saw Jonathan Reynolds, the business secretary on the radio this morning. But, you know, I'm told there's a cabinet committee on Europe meeting today in 70 Whitehall where they will be discussing these kinds of questions. And it is interesting the impact that we'll have on the kind of nitty gritty discussions about this reset, as you say, these kinds of two things that are running at the moment and are being mixed up in people's minds, very forgivably, given the fact that I think in Andy Burnham's mind, they are not two separate things at all.

9:54But it will be interesting that these ministers that we'll be meeting today, including a number of Secretary of States, will have to discuss these things with those comments from Burnham in the back of their minds, when actually, as Patrick has laid out before, this reset has been underway for a very long time. The other thing, Laura, is it's really divisive in cabinet this. So I bumped into a ministerial corridor the other day, a cabinet minister who was almost walking on air. They were euphoric that we were having the debate about the return to free movement and, you know, possibly a second referendum, election manifesto, whatever the mechanism is.

10:25They were delighted with it. It wasn't Steve, come on. I can't name names, can't name names. The ministerial corridor shall remain a place of sanctity. But what was interesting is the divisions are there in plain sight because you can just look at what people have said recently. Shabana Mahmood has said some quite sceptical things publicly about returning to free movement and broadly Brexit. There was some comments that she made at Labour conference on it. Lisa Nandy has been highly critical of it within the last five months. Lucy Powell has been highly critical of it in the past five months. I could go on.

10:57This cabinet, there are suggestions that John Healy is much more neurosceptic than people think. He's a committed Atlanticist and he might not be someone, although he hasn't said anything publicly on it. But the divisions are there. The important thing to note as well is just take yourself back to when Andy Burnham first selected this cabinet. He'd just come in. Everyone had been hearing endlessly about the Makerfield test. It was a leave voting constituency. This would shape him in ways people didn't understand. Imagine if he'd won a Gorton and Dent, this would be so different. He picks a cabinet in which some of the most committed and open Europhiles have been expelled.

11:28Peter Kyle, David Lammy, a number of others. And people were saying, OK, well, look, this issue, you heard him on the campaign. This has been banished, basically. And so it is very, very interesting, and some would say ironic, that now you have Andy Burnham making these comments to Ben in the Sunday Times. and a number of these ministers who I think will have felt political cover being openly fairly Eurosceptical in recent months now find themselves in a position of real political vulnerability where they do have to basically work out if they're going to repeat and restate these kinds of positions in the coming months in circumstances where, as you've written, there will be a level of collective responsibility around these kinds of questions.

12:04They're not going to be able to express their views. They have to row in behind Andy. But Andy is kind of making it an open debate in which there's some plausible level of engagement that's allowed from these ministers before they are light on this position. But they have to work out where they should be on this. This whole collective responsibility applies from the moment the options are set out on November the 20th. Of course, but now... By the way, by historical standards, remember 2016, remember 1975. That's quite a radical... For Mr, you know, the whips of the HR department, happy, clappy, you know, we're all mates here, let's have the debate.

12:35That is quite draconian, actually, for Andy Burnham to say, no, it's my way or the highway. And also collective responsibility this time last year was, do not open the box mark Brexit. Don't talk about EU membership. Don't talk about a single market. Don't talk about customs unions. So it's kind of headspin for these ministers who have spent two years and four or five years being shadow ministers trying to close this down. Suddenly they've got to embrace the openness of this discussion. But I think a big tick in the box, if we're trying to categorise what the hell's going on here, a big tick in the box for it is just the prime minister honestly answering questions that are put to him, is the extent to which even talking about rejoining the EU cuts so dramatically across the stated and institutional objectives of this government.

13:21One of its big priorities, one of its three big priorities is reindustrialisation. Okay, you're rejoining the EU. What does that mean for reindustrialisation and state aid, level playing field, emissions rules, all of that stuff, the extent to which you want to diverge from the EU on regulatory stuff that is so important for a new industry. Okay, what does that mean? AI is another big one. We had a big song and dance about Kanishka Narayan being the first AI minister in the cabinet. Britain's sovereign AI capabilities. Oh, the EU wants to fetish it with regulations, all of that stuff. Okay, we're going back into the EU.

13:59Where's our competitive edge in AI if AI is a big part of our growth strategy? I mean, you could go on. So this is the, you know, you have a government with a set of stated economic objectives. And then the prime minister just says, oh, the EU was great, wasn't it? And so what is Whitehall meant to do? Because, you know, okay, we have the summit on the horizon, but to what extent is this now being blown out of the water? I don't know. Andy Burnham has actually started an amazing argument with his former self. And I mean that in two senses. I mean, when he was in Makerfield and said, we're not going to re-elistigate Brexit, he says this is a debate about the future, not the past, but still, that is an argument.

14:32And there's this amazing clip doing the rounds from 2016. There is nothing socialist about a system of open borders that allows multinationals to treat people as commodities and move them around Europe to drive down labour costs and create a race to the bottom. It was after he'd left Jeremy Corbyn's shadow cabinet. He was speaking from the back benches. And that is a very, it's a classic argument often made from the Labour left, sometimes made from the Labour right, more commonly made from the Labour right these days, against the single market and all of its provisions. It's actually a very old school.

15:05Andy Burnham has described himself as old school to me in the past. It's an old school Labour argument. Also, I mean, let's see if producer Ewing can find this. Andy Burnham's maiden speech in 2001. He strikes a discordant note about Europe if you compare it to the sort of blurite consensus on Europe. Only days into this job, I've been made painfully aware of the challenges we face to stay competitive in the new Europe. Ingersoll Rand has announced it is considering relocating its manufacturing operation for portable compressors from Hindley Green to the Czech Republic. So there's been a remarkable through line of scepticism in Andy Burnham's relations with the EU.

15:41Obviously, you offset that with the fact that his wife is Dutch and his kids are half Dutch, hence why his son is very tall, I imagine. So we can cut that bit out. Don't cut that out. And, you know, Andy Burnham is obviously married to a Dutch woman, Marie-France van Heel, and is in some ways a living example of the post-war vision of free movement and peace and love. Or is the connecting line through all of that political pragmatism? Because when he comes in in 2001, yeah, you know, the kind of immigration from Eastern Europe is beginning to creep up. 2016, he realised, you know, a lot of the areas around Manchester were Brexit and he had to dial that up.

16:20and now a lot of the votes on the left seem to be cheering for an embrace of EU again. So that might be the other connect. Okay, let's move on to round number two because we've got three rounds. Brexit obviously entirely dominates the oxygen but there is an amazing round going on in Cabinet over new drilling at Rosebank. So a decision is coming near Christmas. This is a big oil field that effectively they've got a decision crunch point coming up and there was a report at the weekend that Andy Burnham and John Healy, from the man on Sunday, are just going to basically push it through, that they think that this should go through.

16:54And they're going to... Miata Fan Buller has made no secret of the fact that she's opposed. She's intimated it very strongly and publicly in her comments. She's the Energy Secretary. She holds the pen on it. But will her hand be forced? And what was interesting in following up on that story is, yeah, John Healy really, really strongly wants Rosebank. He thinks it's jobs and he thinks it's tax revenues. Why would you not do it? That's his argument. Johnny Reynolds, the business secretary, really, really strong at Rosebank for the same reasons. I can't yet get where Andy Burnham fully is on it, but it wouldn't surprise me.

17:27But I think if this story plays out as we think it would, you could end up in cabinet resignation watch from Yata Farnbulla because she feels very strongly she's opposed to this. And also one other guy, Ed Miliband, the foreign secretary, who over his dead body was opposed to Rosebank. Climate vandalism. Climate vandalism. Yeah, I mean, worth going back to the moment that Burnham appointed his cabinet because Mehta van Buren was not originally slated to be in that job. Remember, there was a hold up that was meant to be Lisa Nandy. And it was I was told it was made clear to Mehta at that point that Jack Doran Rosebank was very much on the table.

18:03But this this was going to be a really big part of her brief. And so I would be surprised if she resigned over it, given that I do think from the very moment she took this job, that was kind of the price, really, for her being able to be in that position. And yet, for the reasons that you've explained, Steve, it's so politically difficult for them. And I think people should understand the differences between these two projects when they look at it politically. Rosebank is going to be so much harder to square with the progressive base than Jackdaw is. You can make a very sensible argument on Jack Dorr, if you're Andy Burnham, that's extremely easy and that we saw him do in the Commons around the fact that this is, you know, this is gas.

18:36This could have a meaningful impact on Britain's energy security in a way that Rosebank, when you're sending oil into the international market and the environmental impact of this is much greater. When they've looked at this in the recent process and they've done environmental impact assessments on it, the vast majority of the environmental harm from these two projects comes from Rosebank. That's why you've got Ed Miliband saying that this is climate vandalism. And we should remember, Ed Miliband, according to reports in The Times, was pretty much there with Jackdaw a long time ago anyway. And so it's always been Rosebank that is the most controversial, difficult part of this puzzle.

19:09And which is why I think for Miata Van Bulle, it is so hard for her at this point. What do you think Ed Miliband would do? If you think Miata wouldn't resign, what would Miliband do? If he was still in that position? Well, if he is the foreign secretary and they say yes to the project. Oh, as foreign secretary. Cultural vandalism. That's a very interesting question. I honestly don't know. He quite likes being Foreign Secretary, doesn't he? I think he's interesting. Work out a way to square your culture. Remember, COP is coming up, and even with Jackdaw in Number 10, they were having these discussions around, you know, what are the other announcements that we could possibly make to try and just, I mean, obviously in the context of the Holborn and Pancras by-election, this was seen at the time as being, you know, something that was much more sensitive.

19:48I think now, given that that's squared off, perhaps they feel ever so slightly more relaxed about the prospect of going forward with these projects. But even so, I think they are very keenly aware of the fact that a number of these voters that they've won back are people that care about the environment and they do have to handle this very sensitively. And that doesn't mean, oh, we can't go ahead with Rosebank under any conditions, but it does mean we have to make sure that the way that we announce these things and go forward with them is sensitive. And knowing as we do that Ed Miliband, for example, has previously been, you know, openly pretty opposed to it, I think does make it even more difficult.

20:16They quite cleverly did that thing with Jackdaw, which was, oh we'll create a wealth fund some of the revenues will go into that and the fund will be used to spend on green energy Ed Billaband has shown more flexibility on this issue than he's often given credit for there were several iterations of the policy under Rachel Reeves first was our proposition then it was tieback so you could authorise new drilling in existing sites then obviously Jack Doran Rosebank or hangover projects from a Tory government that were gummed up in the courts I think the big thing I was picking up hints from around the cabinet table last week or the week before last that there was a sort of tentative discussion within government.

20:57Again, classic example, Andy Burnham sort of hinted at this in a meeting with MPs. Then it turned out he'd either misinterpreted himself or the MPs had misinterpreted him. He'd misinterpreted himself. Very great phrase. Missing services his own policy. But there was a brief flurry of excitement among MPs and some in Cabinet that there was going to be a discussion about circumventing or getting around the ban on new licences in the manifesto. It's since been made clear, not least by Miata Van Bulla, but also by John Healy and the Prime Minister, that the ban on any new licensing, i.e. something beyond Jack Doran Rosebank, remains in place.

21:35But I think there's certainly appetite for that in the Parliamentary Labour Party on the cabinet table. I think that's the point at which this would get explosive, right? Because Ed Miliband has cover, even for Rosebank, which he desperately wouldn't want to do. I mean, Antriman Fumbler is the same, but you can at least say, look, the approval was initially given many, many years ago. Fine. It wasn't our decision to start this. Anything above and beyond that, and this is what some people in government would ideally like to do, I think that's a big problem. And that's where the political fight starts.

22:05And look, who knows? They may well end up there. And look, the third round, we'll talk about it briefly because we talked about it before, but it is this issue of legal migration and making it harder for people to settle here permanently, increasing the amount of time that people have to be in the country before they get permanent residence from five years to 15 years. This was a flagship plan from Shabana Mahmood. She really believed in it very strongly. And obviously, it's now open season. You've had two cabinet ministers in particular come out and launch very strong attacks on the policy, justifying it on the basis that, well it's out to consultation so the policy could change i mean no no just to be clear you are attacking another cabinet minister's policy there is collective responsibility this is getting headlines because basically there is a bit of a pile on on shabana mahoud and it's highly unusual to see that so publicly so that is the other aspect and when you stand back you look at all three of these things you've got a labor party and a government that appears to be doing quite well in the polls it's enjoying a bounce but beneath it all these tensions on lots of different fronts are starting to come out it's a question of definition and people in those spaces are clashing and starting to come out and they're doing it publicly and i'm going to say this now because it's probably going to happen more it's starting to feel a bit similar to the tories nothing like a psychodrama as that was yet nothing like a bit shiolik but when you get cabinet ministers publicly contradicting each other something is going on under the top of it or you have a Scouse Boris who sort of rules by personality and force of personality and has a clear vision for the country.

23:38But the sort of where is the actual definition? Is that born out across the government? I'm not entirely sure it is yet. And the problem is when you change leader amid parliament, you do your thinking real time out in the open. Saw it with Liz Truss and Rishi Sunak coming in, because when you have a manifesto and you've been in opposition, the entire front bench gets behind that manifesto. You get elected on it and you stick to those pillars. If you're you coming in and you start shifting around where you want to be on some of these massive topics, then the cabinet doesn't know where they are because they're still working out their positions.

24:07Right. Let's head to the interval. And then when we come back from the interval, we are going to talk about the budget. And we've got a couple of scoops on where we think that's going.

24:16Welcome back to The State of It, the political podcast from The Times and The Sunday Times. Right. Let's talk budget. So this was the budget that has military-grade security. We're not supposed to know anything in it. Actually, we know most of the big measures in it. And we will do a rundown of those in a moment. What I wanted to talk about firstly was the OBR. Now this is the official forecaster and it's going to produce a report and I'm going to look into my crystal ball and tell you something that that report is going to say. It is going to say once again that the tax burden is on course to rise to a post-war record level and it says this every time by virtue of stealth taxes and this is the freeze in the threshold.

24:54So whatever else happens in this budget, you are going to get millions and millions of people dragged into paying higher rates of taxes because those thresholds remain frozen. And that is a huge revenue raiser for the government. And then on top of that, you're going to have taxes on banks. But that is the first thing I'm told about that report, that once again, taxes are going to a post-war record. And then secondly, I'm told that there is real uncertainty, obviously, over the course of global finances, that they are raising concerns about the Iran war, the uncertainty on that. We could be in a situation after the midterms in the US where Trump mounts yet more airstrikes on Iran.

25:33You've got energy bills already going up to£2 ,200 in January. Deep breath. It's not good. And the OBR will be reflecting on that and how hard it is to predict the path for the economy going forward. So that is the broader landscape. And then we should just talk to some of the measures. Ben, you gave us a bit of a synopsis of it last week, But obviously, there is going to be a cost of living package in there. Yeah, well, I think the first thing we should say is, while a lot of it has got out there, we don't know in this military grade system whether there's something in the vault. There's a rabbit.

26:03There's a medium sized rabbit. That we're all going to be talking about on Wednesday. So you've always got to kind of flag that up. I mean, broadly, we know what's coming on a lot of it. It's cost of living, both for people and for businesses. So fuel duties are expected to stay down and to not rise and to be froze and longer than we're expecting. Some targeted support for the energy spike that is going to hit everybody in January. And the numbers are really alarming. I think they've accepted they can't universally freeze energy bills for everybody because it costs way too much money. We know some of the measures on the high street business costs.

26:40Patrick, when the Chancellor talked to you, he was stressing that a lot. We know one measure they're going to increase the threshold for the small businesses in the hospitality space to stay out of business rates. There may be some more moves coming there. And then we do wonder whether they're going to do something on this million, the million needs that are not in education, employment or training to offer some support there. Devolution runs all the way through it. I do wonder if there's going to be one or two more things. The Sunday Times, we reported they're going to announce billions more in defence spending, which sounds very attractive.

27:13done through a slightly strange mechanism where they give money to these kind of government-run investment banks, the National Wealth Fund and the British Business Bank. Some of them will then invest in British military companies. It all counts against that critical NATO target. So John Healy can say that's ticking up. The big question going into it is, is it meeting the radicalism that Andy Burnham promised on the steps of Downing Street? And is it enough, given what's coming, right? It's a really hard way to do that. Well, as John Healy himself said to Cabinet last week, and I reported this in The Times this morning, that he said exactly the same as the OBR was going to say.

27:44Look, it's not just headwinds, guys, he says to the Cabinet. It's an economic storm coming. And there was also a comment, well, actually a monologue from John Healy that was interpreted by some of the Cabinet ministers present as a rebuke, which was, just to remind you, you're going to need to find cuts in your budgets as we reprioritise our policies, or if you have a new policy, you're going to have to make cuts. They've already had this conversation with Yvette Cooper about new NHS funding for averting a new pay deal for nurses to avert a strike and also general inflationary pressures on hospital budgets.

28:16So the straightened finances plus the appetite for radicalism, much of it worked up by the prime minister. Where's the money coming from? And I do wonder whether one of the stories, you mentioned the defence spending and that coming from the puffins, as they call them, the public financial institutions. It's more borrowing. it should be make fair. Yeah, no, exactly. So you wonder whether the search radicalism, do we actually end up with one of the narratives tomorrow afternoon being about borrowing? Because you'll have, via the puffins, I mean, I thought Paul Johnson, later of the IFS, the Institute of Fiscal Studies, one of the great gurus of fiscal and economic policy in a week like this, always worth listening to.

28:53He made the point that the devolution drive, one of the biggest changes to our constitution in history, not just on the democratic and electoral side, but also the economic side. Because when you devolve shares of tax to these combined authorities, what can they do? They can borrow against them in future for new infrastructure. So actually we're creating loads of new borrowing capacity in the economy. How do the markets respond to that? Do they actually look at that, have a sniff and say, no, thank you? There's a lot in this budget actually beneath the surface structurally that we just don't yet know how people are going to react to.

29:31There are the limits here, Laura. That's one of the things I think is going to be the threshold. So if you are on benefits, you will get energy support. But if you're not, you don't. And you bear the full brunt of the energy price rise. White van man gets something and there's something for high streets. But there's a limit to what the government can do. And a lot of Labour voters, millions of people, are not going to get help, basically. There's not going to be support. And that's the question that Darren Jones, the former Chief Secretary to Keir Starmer, has been posing. Is this budget going to meet the moment?

29:59And that will be something that you'll hear a lot from Kemi Baden-Ock and Nigel Farage, obviously, who want to position themselves as a party, parties of hardworking people. And we've seen that from particularly Robert Jenrick, Reforms Treasury spokesperson in recent days, trying to make that point. So I think that will be interesting. It will also be just be very interesting to watch in the next few weeks how cabinet ministers privately get on with this budget. Because, I mean, already I'm told, you know, they're being told you can't dip into your reserves. There's a lot of tightening. It's getting much more difficult.

30:27but actually some of them smart against this idea that a lot of the energy and a lot of the announcements have come from number 10 in recent months. So a lot of these ministers will just be told, we've come up with this idea in number 10, this is how much it's going to cost, you're announcing it in a few days, or Andy's announcing it in a few days, you can maybe be there too. Lucky minister. And that's quite tough, because the point at which they're being told to make savings, but they're also being basically, given the direction that they're often going with, along with the price tag, that's difficult.

30:56And if this budget is hard in that respect, I think it will make some of them feel a little more awkward on those points. On the big politics, just back to your point, Steve, it cannot meet the moment in the sense that there is no way this government has the money to protect people from what is happening. And they have to admit that, right? They have to admit that. And I asked Burnham as part of these interviews on Monday, do you accept that it's going to get harder for people rather than better economically in the coming months? and he didn't say yes, but he said, look, I've got to accept. People need to realise that the impact of the US-Iran conflict is going to hit them.

31:27And there's only so much the government can do about that. If petrol prices are increasing 50, 60, 70%, the government cannot step in and cover the price of the 50, 60, 70%. So it's a tricky message to land, which is essentially we can help out a bit, but we can't help out with everything. And then it's very tough politically because people are getting whacked in their wallets for something the government doesn't have much control on. at all, which is whether Donald Trump's going to keep bombing Iran. But that means the politics is people are hurting economically. And when people are hurting economically, they normally turn on the government.

31:59We're actually going to be back tomorrow for a budget special. So we'll see if we're correct broadly on the budget and where it's going and see what John Healy's medium-sized rabbit actually is at that point. Or is it slathered in HP sauce? I'm not eating the rabbit. Thank you as ever to the three degrees of podcast producer, Molly Guinness, Harry Kitson, and the one and only you and Daughtry. Thank you very much. Make sure you like, subscribe, share, and comment, even if they're unsympathetic to me, wherever you get your podcast from. Excellent. Thank you, everyone.