Guns or Butter: the great defence spending row

0:00I'm looking at the agenda for our Life Sciences Summit on May the 21st. There's so much turmoil right now over drug pricing. It's a massive conflict between industry innovation and the reality of the NHS budgets. Yeah, it's a fascinating topic and the NHS has done its job of getting extremely cheap drugs and then President Trump has done his job of saying, but hang on, you're free riding on all of our research money and marrying that tension has been really hard. This is something that I think we'll be looking into on the day. Yeah, it's going to be really interesting to hear from our speakers like Patrick Vallance and Melanie Iverson.

0:29I should warn everyone listening, it's already a heavily subscribed event. We've got over 200 of the best in the sector signed up to join us. I'm definitely looking forward to tackling those tough conversations, though, and having a real look at what's happening across the sector. Yeah, look, I mean, obviously, go to thetimes.com forward slash events to find out more.

0:48And in relation to the language about destroying a civilisation, Could I really be clear with this house? That was wrong. The bombing should stop now. It's a referendum on Starmer. It's boat reform, get Starmer out. And in the inner cities, they'll say boat green and get Starmer out, probably.

1:10Patrick Maguire: This election is between the Green Party and the Reform Party. It is a straight-up battle between hope and hate. It's an examination of a two-party system that's run us for just over 100 years. Welcome to The State of It, the politics podcast from The Times and The Sunday Times. I'm Stephen Swinford, the political editor of The Times. I'm Patrick Maguire, chief political commentator of The Times. I'm Laura Spirit, deputy political editor of The Sunday Times. And this week we are going to be talking about guns or butter. We're going to be taking you inside the massive rail that has been gripping Whitehall for some time now, over defence spending.

1:52We're going to be talking about the seismic juggernaut that is the local elections. And we have a minor scoop for you on the first bit of expectation management we've heard about the local and broader national elections that are coming up on May the 7th. And we are going to be talking about Brexit and whether what Keir Starmer is putting on the table is enough to win over the hearts and minds of progressive voters. But let's start with guns or butter. So this is the story of the defence investment plan, which has been delayed since autumn now. So for some time, months and months and months, it has become a running embarrassment for the government and is causing absolute fury in the defence world where they need the money.

2:33They need firm, hard commitments of cash. And today you've seen Lord Robertson, who's a former Labour cabinet minister who knows just about everything there is on this subject, go over the top with a really aggressive attack on both Keir Starmer and Rachel Reeves for failing to cough up the goods, basically come up with the money. So we just wanted to dive into that to start with and talk to you about what is going on in the Treasury and why this is such a difficult issue. And it won't shock you to hear, dear listeners, that this is ultimately about money. There is not enough money. There are clearly massive cost of living issues coming down the track on Iran and the Iran war.

3:11And Rachel Reeves and her team of the Treasury have been looking at this and they're deeply concerned about it. And what they're really concerned about is if you want the kind of numbers that are being talked about in the defence world, defence is asking for the not small sum of 28 billion over the next four years, then that is going to need to be paid for. They won't change the fiscal rules. So you're looking at extra borrowing or tax rises. So it feels like it is ultimately a no-win situation for Keir Starmer. He will inevitably come in with a number which is going to be lower than the ask. And at that point, he'll be accused of reneging on his commitment to defence.

3:45So it's a really tricky position for the Prime Minister. Yeah, I mean, it's almost impossible for them. When I spoke to someone in the Treasury about it a few weeks ago, they said the process of trying to work out a settlement on this defence investment plan was like pinning a tail on a moving donkey. that actually since the start of this war, you may think that, yes, there's been a great impetus towards giving our armed forces and the military what they need. But actually, simultaneously, there's been a bit of a re-evaluation about exactly what that might mean, what the war actually means for funding these particular issues and a huge amount of pressure on Starmer.

4:15And I mean, you know, I reported a couple of weeks ago that Lord Robertson was very unhappy and had actually written to Starmer, urging him to go further on defence pending. Clearly that hadn't been heeded and we're in a position where for this new Labour grandee to go out over the top, as you say, is really extraordinary. I think it's worth pausing on that. This is somebody who wrote the Strategic Defence Review and who, yes, has, you know, clearly been unhappy about the fact that there's been a delay in getting it over the line, but who has not been a kind of disloyal member of this wider Labour fold and is at this point actively criticising the government for not giving it the money that it needs.

4:47Patrick Maguire: Yeah, and he ran NATO as well. Let's not forget that about Lord Robertson of Port... something, which I should definitely know off the top of my head. Port Ellen, I think. Port Ellen. He ran NATO. He was Secretary General of NATO. So he knows where he speaks. And for a man of his standing and otherwise impeccable loyalty to make such an explosive and aggressive intervention, impersonating at the prime minister and the chancellor, is not remotely helpful and is a sign of just how badly these relationships have deteriorated. and it's also unfortunate because this is a feature and not a book of Labour governments in times of geopolitical crisis.

5:31Patrick Maguire: The Labour government everybody venerates in the Labour Party, Clement Attlee's government, right, became a cropper on this very issue. Why did Nye Bevan and Harold Wilson resign from Clement Attlee's government? Because ultimately the Chancellor at the time, Hugh Gaitskel, had to make a really crunchy, politically painful choice about how to pay for the Korean War. What's he do? He levied prescription charges on NHS glasses and NHS dentures and introduced prescription charges for the first time. That is a sign. And Paul Ovenden, Keir Starmer's former director of strategy, wrote broadly on this subject a couple of weeks ago for us in the Times.

6:10Patrick Maguire: That's the sort of choice that Keir Starmer will eventually have to make if, and we do know this, people who know the Prime Minister personally, people the Prime Minister speaks to, when he's talking about his vision for the next however many years he's got. It's all about security. It's all about, yes, I recognise we have to move faster on defence spending. Yes, the world has changed. Yes, the foreign leaders I spend all my time speaking to, we all recognise this is a big issue. But is anybody thinking about the upshot of that? If the Treasury is saying we've got to be fiscally orthodox about this, they're going to have to go somewhere.

6:48Patrick Maguire: It can't just be the welfare budget. Other crunchy, toxic political choices are going to have to be made. Otherwise, you'll have Keir Starmer paying lip service to higher defence spending. And today it's Lord Robertson. You know, it would be the Chiefs of Defence Staff. It'll be the first sea lord. Who knows, at some point, maybe it'll be John Healy or another minister who comes out and says, we need to put our money where our mouths are. I think one of the issues whenever this story comes up is, So if you look at Robertson today, he is making the case for cutting welfare spending. And that is something that the Tories argue for, reform argues for.

7:24But I think it's an easy thing to say. But actually, the politics of it are a total nightmare. Let's not forget that the Tories attempted repeatedly to cut the welfare budget. They couldn't do it. They ended up trying to just mitigate the rise and they actually failed in that. Then you had Labour, again, attempt to cut the welfare. Well, not again. it was mitigating the rise in the budget, not cutting it. And that led to the biggest revolt of Keir Starmer's premiership. So I guess when people in defence circles talk about this debate and talk about welfare, particularly in spending on welfare, what they don't recognise is the politics of it.

7:59But it's all very well to say that he should do that, but it is politically impossible for a hugely unpopular prime minister in a massively weakened position compared to when he got into power to cut the welfare bill. It's too simplistic, which then leads you in the Treasury to a conversation about tax and borrowing. And if you are looking at what is coming down the line, I mean, it is seismic what's coming down the line. So they've set up a new, really boringly named committee today in the Cabinet, which is called the Middle East Response Committee. It's going to meet once a week. It's ministers, it's officials.

8:31That's really inside baseball. And sorry for the criminology, it sounds really dull. It isn't, because what it shows is that Keir Starmer thinks this conflict in Iran is here to stay. and he thinks that the economic tail is going to be long and it's going to be painful. That this autumn and winter, you're going to have people with really big energy bills that's going to need some kind of bailout. You have higher prices, 10%, possibly as much as 15%, 20 % in supermarkets caused by the conflict, depending on how long the strait is closed. God knows where we'll be on petrol by that stage. The government's secret or not so secret rationing plans may well have kicked into force by then.

9:07Holidays could be being cancelled. So I'm just, I guess, trying to balance out the debate. Why can't you just cut welfare? Well, it's politically difficult and money has to come from somewhere.

9:15Patrick Maguire: Well, no, you're completely right. For the Labour Party to be trying to do this, and the Attlee, Wilson, Bevan example, is a good one because it shows you the toxicity of this for the Labour Party and government specifically. You know, let's look at the 70s. There is literally a song about this sort of thing, right? Going underground, the jam. You choose your leaders to place your trust, but their lies wash you down and their promises rust. you'll see kidney machines replaced by rockets and guns, right? That is the way your median British progressive, and you'll hear Zach Polanski talking about this as well, you know, in these terms as well.

9:48Patrick Maguire: Kidney machines replaced by rockets and guns. That's the way people look at the defence spending trade-off. Look at, you know, people talking about Palantir, all of that sort of thing. It is a live wire the Labour Party is going to struggle to touch without being shot to death. And it's all very well and good to say, Keir Starmer, you know, it wants to make security, the lodestar of his premiership, the centrepiece of his premiership, security at home, security abroad. And that's fine if it means, you know, the prime minister walks on stage at a summit and gives a passable speech in front of a lectern, you know, without soiling himself on camera.

10:19Patrick Maguire: That's fine. But, you know, show me the money to use the Jerry Maguire phrase. That's the challenge. It's the gap. Once again, it's a consistent Starmer theme between his rhetoric and what he is saying, resilience, the core of my premiership, it will cut to everything and the reality of what he actually does. I wanted to give you a small scoop that we're working on today but one thing that stood out, a liaison committee just before Parliament went into recess. So for listeners who aren't familiar with it, the liaison committee is a body of MPs, the most senior backbenchers, question the Prime Minister and can ask him anything.

10:53There was a particularly painful exchange over this 10-year defence investment plan and the Prime Minister was asked repeatedly, have you got an offer on the table in front of you? Is is something you're looking at because it just wouldn't say it wouldn't confirm it now what i am told is that there is an offer that he is looking at so there is a number from the treasury i'm not sure what it is but what i am told is it's significantly below the 28 billion that the mod is asking for and that is the problem that's fascinating that's fascinating and i think i mean one of the important questions that will follow from that is uh where is that money coming from because if we know that welfare seems politically impossible we also know that cutting foreign aid is politically impossible and has been actively ruled out after the efforts of some of those more progressive aid-centred Labour MPs who stopped that being considered a few weeks ago.

11:40Our colleague Gabriel obviously reported that. And speaking to some officials in other departments who have been asked to find possible savings on this, they're really not very happy either. And I think at this point at which this is confirmed, and we do learn about whatever sort of uplift it is and where that money is coming from, I think there'll be a number of questions about just who is losing out and what that says about Keir Starmer's priorities, because as you say, there are a number of these areas that are seen as very important and that Keir Starmer has said are very important, but are probably now going to lose that on funding.

12:07So it is very politically difficult. I think, you know, for Lord Robertson, he didn't necessarily have to say that they should find the money using welfare. It's not really his responsibility to tell the government how they need to find the money. It's his responsibility to say that there is a completely indisputable need to fund a massive rise in defence spending and that the government has committed to that. They endorse the Strategic Duke Defence Review to the letter and they haven't come good on their funding promises for that and it's not really his problem to say where the money needs to come from it's actually on Rachel Reeves and Keir Starmer to find it.

12:34I mean the other thing that's always been suggested to me is look this is the politics of trade-offs and Keir Starmer struggles with trade-offs right but there is a clear decision it is his decision he's going to have to own it so when's it going to come that's the question when are we going to actually see this this thing what's being suggested to me is this thing could be months off still we could trundle all the way through to so Keir Starmer may not even be prime minister by the time we end up seeing this defence investment plan. So you've got this real tension between an immediate ask for the here and now from the military that they say they need to put Britain on a war footing to make it ready for conflict with Russia, conflict in the Middle East, whatever it may be.

13:10And then you've got the reality, which is you've got a PM who is running into the elections against Greens who are talking about, as you say, kidney machines or rockets, that kind of dynamic. And so you're certainly not going to see it before the locals and then after that i mean how long was a piece of string yeah and look if john healy were

13:29Patrick Maguire: sat with us on this podcast secretary yeah he would say you know there is a political narrative we can weave out of high defense spending because it's all about re-industrialization it's all about regenerating places like barren finesse and other places manufacturing drones or whatever in the uk the problem is and you mentioned the greens we've always talked about the greens but politics has sort of moved on from that you know not that the issues are any less pressing but the thought of a labour defence secretary getting up and saying this is how we're going to re-industrialise the red wall actually you know your average member the plp is now worried about you know the greens running the council down the road and wanting to sound more loud and proud progressive and saying have you seen this bomb factory you've just opened down the road that's training load of apprentices i think it's hard to sell now we should talk about the real politic of this briefly just before we move on to the forthcoming elections in full.

14:23Successive Tory governments reduced the size of the armed forces and they did that for a reason. They did it because it is not as big an issue with voters as things like the cost of living, the NHS and migration. And so what you've got is a Prime Minister that's actually taken a principled stand here. It's not one that's rooted in what is going to be popular voters, It is rooted in his belief that there needs to be more money for defence and security in uncertain times. And the problem is if you can't then match up that vision with the reality here. That's the challenge. I mean, defence spending is becoming more popular with the wider public.

14:58And I think they are keenly aware of that in Number 10. They do know that. So I think there's a level in which actually I think that they're underestimating just how punished they would be if they leave this to linger for a very long period of time. God forbid something terrible happens. And you have every opposition leader saying, well, they weren't prepared and they didn't do enough. And if the money isn't enough, you will have eminent generals, past, present and future. You'll have allies, this guy called Donald Trump over in the US going for Starmer and they will gun for him at a time of war, at a time for conflict.

15:25At the moment, they're in actually quite a favourable position in that they can say at some point we're going to find the money for funding defence. But at the point at which they actually have to set in stone how much they are going to fund, you're immediately going to get into questions of exactly what is therefore not going to be funded. very, very tangible questions of which parts of our defence capabilities are going to be chronically underfunded. And there'll just be weeks and months and months of stories about how underprepared we are as a result of the less funding. Even though from Rachel Rees' perspective, she'll say, I've actually worked quite hard to cough up some money here.

15:54And I now feel, you know, in a pretty difficult position because you're punishing me for it.

15:57Patrick Maguire: Yeah, and we know two things about Rachel Rees. The first is that the fiscal rules are literally, as the cliche goes, cast iron, right? She did not take the cue from Friedrich Mertz in Germany, breaking, actually rewriting the law of Germany to allow more borrowing for high defence money, which didn't take that cue when there was the big blow up over Ukraine and Trump last year. We know that. And we also know that the Treasury has an innate scepticism about special pleading from departments. So all you retired generals, Tuft and Buffett types coming out saying, you know, we need more money or the sky's going to fall in.

16:30Patrick Maguire: You know, these regular interventions we see saying, you know, the UK is going to be invaded, et cetera, et cetera. That's almost exactly the sort of public intervention that is could have been grown in a lab to cheese off a treasury minister right there was a there was a meeting between darren jones and kubra on something similar on police funding during the last spending review during which darren jones is said to utter the immortal line the problem with the police is they always want shiny new walkie talkies and that i think does get you close to the treasury worldview on this stuff it's like well obviously you're going to come knocking on our door saying, please give me many billions of pounds for, you know, new armoured cars and tanks and guns or something.

17:10Patrick Maguire: It's a big sort of cultural clash between departments, between bits of the Labour Party. And is Keir Starmer the man to navigate these very sort of choppy, rocky political waters? I mean, on past evidence, you doubt it. So look, we're going to head to the interval. And when we come back, we're going to talk about the elections, this huge juggernaut event coming down the line. And we're going to be talking about Brexit and Keir Starmer on Brexit and whether what he says is enough. I'm looking at the agenda for our Life Sciences Summit on May the 21st. There's so much turmoil right now over drug pricing.

17:44It's a massive conflict between industry innovation and the reality of the NHS budgets. Yeah, it's a fascinating topic and the NHS has done its job of getting extremely cheap drugs. And then President Trump has done his job of saying, but hang on, you're free riding on all of our research money. And marrying that tension has been really hard. This is something that I think we'll be looking into on the day. Yeah, it's going to be really interesting to hear from our speakers like Patrick Vallance and Melanie Iverson. I should warn everyone listening, it's already a heavily subscribed event. We've got over 200 of the best in the sector signed up to join us.

18:14I'm definitely looking forward to tackling those tough conversations, though, and having a real look at what's happening across the sector. Yeah, look, I mean, obviously, go to thetimes.com forward slash events to find out more. Welcome back to The State of It, the politics podcast from The Times and The Sunday Times. And we talked about the elections on May the 7th last week. They are a juggernaut. They are a huge moment in British politics, seismic. You will see the scale of the change of British politics moving towards five-party, sometimes seven-party politics, depending on where you are in the country, and so many skirmishes everywhere.

18:49But the Sunday Times, Lara, this weekend had a really interesting step back. You did what's called an MRP in common parlances, is basically a mega poll where they go out and they speak to 10 ,000 plus people and they work out what constituencies would do. And why they're interesting is they terrify the hell out of cabinet ministers and MPs because the top lines are pretty grim reading. Yeah, I think at the moment, obviously, we're all focused for extremely good reason on those May elections. But the big question after May will be, well, what does that actually mean for the makeup of parliament after the next general election?

19:23And to the extent that we can, this MRP is obviously a very useful indication of that. It is still disastrous for Labour. So the last time More In Common this pollster did this kind of mega poll was back in January. Back then I think something like 12 Labour cabinet ministers lost their seats. Now 16 cabinet ministers are forecast to lose their seats. So more than half of the cabinet. That includes 12 to reform. Who are the big ones? Well, I mean, basically most of the big ones. I mean, Rachel Reeves loses her seat to reform. John Healy loses his seat to reform. Yvette Cooper loses her seat to reform.

19:54Thanks, Steve. you're like a backbench Labour MP and PMQs but the the big shift since January is in the surge in support for the Green Party so up from five MPs to 22 MPs so more than quadrupling the number of MPs in this poll and the one of the consequences of that is that three Labour cabinet ministers are now forecast to lose their seats to the Greens so Peter Kyle, Darren Jones and Hilary Benn all of whom were previously considered, I mean, if not safe, then at least were forecast to keep their seats. That's now no longer looking like it's the case, according to this poll. So it will have been extremely concerning to those in number 10 who were already, let's not forget, grappling with this question of just how to tackle the Green Party, but also to still be mindful of those voters that they are losing to reform.

20:42And I think the key thing to remember here is, of course, 12 cabinet ministers still lose their seats to reform. They're still a massive threat. And And actually, the unambiguous winners of this poll on Sunday were the Reform Party, who win 324 seats in this. And that's more than 200 clear of their nearest rivals. I mean, Labour little over 100 seats here. So, I mean, while Reform actually not winning enough here to win a majority, so they had slipped back slightly from January. I think in some ways, some of the Labour Party have become inured to the fact that the Reform Party is now so strikingly popular.

21:10And now that they've got this green threat, it means that they're being pulled in multiple directions, neither of which are very comfortable for them. and I think this poll is going to be pretty worrying ahead of May. Well, look, we should talk about expectation management. So last week on the podcast, we said that these elections were extraordinary because at that point in time, there was no expectation management. Traditionally, parties say, oh, it's going to be this bad. And then when it's actually slightly better than that, they can say, well, it wasn't as bad as we said it would be. We weren't getting any of that.

21:37Labour says it's going to be terrible. Tories say it's going to be terrible. Reform says it's going to be great. Greens say it's going to be great. But, Patrick, we have news. We have some expectation management. the first of it, of this campaign? Well, call it expectation management.

21:49Patrick Maguire: I'd call it healthy scepticism of the numbers from Professor Stephen Fisher that have been doing the rounds. He's an Oxford University guy, works on the exit poll. Yes, exactly. Really good sophologist. Exactly. And everybody has been quoting these numbers as gospel. I wouldn't for a second impugn the integrity and sophological chops of Professor Stephen Fisher. But the idea that reform are inevitably going to win more than 2 ,000 councillors. I spent the day with Nigel Farage in the Northwest last Thursday and chatting to his team about those numbers. There's a little bit of scepticism about those numbers because they're very, very high.

22:24Patrick Maguire: Now, that is not to say reformers saying, God, it's really tricky for us on the doorstep, because bluntly, it isn't. In deep England, even bits of deep England that are frankly quite posh, I think anybody who observes Nigel Farage with the public, with voters, will be surprised. Particularly people in Westminster who go in for the sort of, oh, have reform peaked? Is it over? Is the Trump thing going to blow things up for him in May? Orban's lost. Nigel Farage is never going to be prime minister. Ultimately, Laurie used the phrase strikingly popular. That is still the best way to describe reform in vast swathes of the country.

23:04Patrick Maguire: And reform, senior reform people hear numbers like reform are inevitably going to win more than 2000 councillors, right, have a record night. And what they hear, I think, when they hear that is, OK, well, the bar is being set impossibly high for a party that was, you know, struggling to win more than 3 % in polls. What, all of like two and a half, three years ago? So they say, look, we're going to do well. You know, we are going to win councillors in councils we've never had before. There's not going to be a single Labour councillor left in Sunderland. And they say the same in Labour HQ, by the way, in bits of Merseyside that UKIP never won in.

23:41Patrick Maguire: The reform are going to win sort of, you know, more than a dozen councillors. Labour heartlands, Labour cabinet ministers' backyards, reform are going to clean up in large parts of the country. But I think there's a sense in Reform HQ that you set a really high standard. It's like, okay, reform haven't won 2 ,000 seats in these elections. And the story the next morning will be, oh, Nigel Farage didn't quite do it. When actually it's partly maybe this is... Still seismic. It is still seismic. And it's very... Because this has been the status quo for a long time now, reform have led in, you know, something like nearly 200 consecutive opinion polls.

24:19Patrick Maguire: Anything that isn't sort of reform sweep all before them, we sort of say, well, that's a bit underwhelming, isn't it? and that is why reform people hear numbers like 2000 and say one you know do us a favor it's probably it'll be an amazing night if it's that high and it will be high but it probably won't be that high and two you know it doesn't really serve reform's interest for them to be repeating those numbers and anyone who's tried to get projections or predictions out of reform people will know they try very hard not to get swept up in that game because you know it never ends well if you do.

24:49Patrick you did a great piece over the weekend you were out on the doorstep with Farage can you give listeners a flavour of how people respond because where were you uh so i uh it was an interesting experience for me because i was with nigel farage in places i knew very well

25:03Patrick Maguire: so we went first to formby on merseyside which listeners may know it's a it's an affluent sort of commuter town between liverpool and southport where i'm from and so we're on formby's high Street, middle of a Thursday morning. And I thought to myself, demographically, this is an interesting place because it's the sort of place, and apologies if there are any scousers or fellow wolves listening to this who think I'm generalising, but broadly, it's the sort of place that a scouser with a bit of money moves to. So I thought, you know, when we're on Merseyside, demographically, should be nailed on for reform.

25:45Patrick Maguire: Reform did quite well, especially in Liverpool seats in 2024. in white working class Liverpool streets. But in middle class Merseyside, is Farage going to get a good reception here? And inevitably, Farage walks down the street. It is like a royal funeral is rolling through town or Concord is flying through overhead. Everybody stops. People run out of shops to see him. And he's self-aware enough to say, look, I'm a celebrity. It's not because, you know, everybody here is running reform. And there was, in the words of one of his entourage, you know there's a bit of aggro in Formby you know one of my favorite exchanges to observe standing a few paces back from Nigel Farage was him doing a sort of hail fellow well met morning how are you to which your man said all the worst for seeing you uh and then there was quite a lot there was a few people who said you know you're a horrible man we don't want racists in our town you know Farage was standing reverently beneath the war memorial being interviewed by ITV Granada and there was a roundabout behind us and a man in an expensive SUV stopped halfway over the exit, holding up traffic to scream abuse at Nigel Farage, calling him a scumbag, calling him a racist.

26:57Patrick Maguire: But, you know, that was, say, four or five people. That's a very animated minority. The majority of people are fascinated. And I have to say, even in a place like Forment, most people came up to Nigel Farage and said either, we need you in power, shake it up, Nigel. Not that, you know, people weren't coming up to him saying, stop the boats. It was a sort of, it was a more generalised, you are the standard carrier for everything we hate about politics. Now, a woman came bowling out of Oxfam, grabbed Nigel Farage by the hand and said, Nigel, you must meet my mum, she's an M &S. That sort of thing.

27:30Patrick Maguire: You know, we go to Southport, we go to Pledge Land at Southport, the fair, you know, inundated with the request for selfies. Now, you know, reform don't think because Nigel Farage is being asked for a selfie. He is, you know, he is the future of British politics. He's the prime minister. But it tells you something about how people respond to it. Ditto, you know, we then went to a place called Bursker in West Lancashire, another very pretty village that I know well. We're in a pub Thursday afternoon. Again, handshake selfies. Yeah, again, some people look askance and like, what are you doing in my local?

28:00Patrick Maguire: I don't like you. the whole day I came away thinking one you know reform are going to clean up in bits of deep england we didn't even know they had a presence in just as they did last year and two and this goes either way for reform I think these local elections are all about Nigel Farage and there is upside to that but there is also downside right because he is the person everybody's talking about from Keir Starmer to Zach Polanski and yes the voters Nigel Farage says are at work and then only come home. That's his message to reform people. Only knock doors after five o 'clock because that's when our voters are home.

28:33Patrick Maguire: I don't think we should be any doubt. This will be a very good night for reform by any objective standard, not the standard we are setting in Westminster. Well, I'm going to do a creaking segue at this point. So the creaking segue is to Brexit. What does Keir Starmer do about this? Where does he go? So Laura, we spoke last week about how David Lammy thinks that Labour needs to be talking more about Brexit. And lo and behold, your wishes came true. They announced plans for dynamic alignments from new legislation that is going to be in the King's speech that will mean Britain effectively automatically aligns with EU rules as they come on.

29:07It's a kind of, it uses something brilliant called Henry VIII powers, and it's an inversion of what the Tories once did. They used these Henry VIII powers, which is called secondary legislation. They don't require the same level of scrutiny, so you can kind of ram it through Parliament with a rubber stamp. Boris used that to diverge from the EU is now being used to converge again with the EU in a kind of beautiful circularity of parliamentary procedure. But obviously, Keir Starman thinks he's on to a winner here, that talking about Brexit will help him. Well, yeah, but by far the more interesting thing about what we read in the papers yesterday, what you've just explained, was not the fact, which actually, to be honest, we've known about for a long time, that dynamic alignment was going to be seen and has been seen by many inside government who are aware of this and who are following this as the key price of closer alignment with the European Union.

29:53They understood it before the May summit last year. They understand it now. It was more that I remember writing a column about this a year ago when they were very nervous about this. What was very interesting was seeing that they are trying to lean into this headfirst now as a possible fight. I mean, politically, they've now decided this is actually something that they want to make more of a big deal of. Whereas when I was writing about it before, the question they were asking was, I know that Nigel Farage has missed a couple of seemingly key votes on EU alignment and stuff before. But is he going to miss the opportunity to make a big fight about this with us because we're really nervous about it?

30:25Whereas now it seems to be actually we're going to bank on the fact that they probably will oppose it. We want to have this fight and we want to actually really make the case that closer alignment with the EU is in our interests and that that may involve following some rules. But actually we were taking a bet on the British public to say that they're going to be happy with that. And the war is obviously the wider context for this. It's the reason why they feel that they're more confident in saying this, not just that they think the EU attitudes are changing, but particularly because they see the attitudes towards President Trump are souring so significantly that it gives them an opening to be able to say, OK, actually, this is the reason why we're going to be moving closer towards the European Union.

30:59I think there's still a lingering question about whether or not they're overestimating just how fine and comfortable voters will be with this objective rule-taking. I mean, that is literally what this will be. There will be people who are really upset about this. And actually, the initial reaction from both Reform and the Conservatives was pretty aggressive. So I think we are heading to a territory where this does become politically very interesting and very fraught, where neither side actually does want to move away from this. And it will become one of the big political questions again over the weeks and months ahead.

31:25There is a question here over the substance. When you look at this reset deal, which is being in the King's speech, there are three areas they're talking about, which is they're all important in their own rights, SPS, food standards, carbon adjustments and electricity. But in the grand scheme, It is economically, it may help businesses, I'm sure it will, and reduce regulation, but it's relatively small beer when you've got people that are talking about in opposition rejoining the EU.

31:51Patrick Maguire: Well, no, no, totally. And you have Sadiq Khan saying, rejoin the single market and customs union now and fight the next election on a rejoin platform. You have Keir Starmer saying Brexit was a mistake, right, very explicitly. You have Rachel Reeve saying the same thing. but if you speak to the people with the negotiating mandate in the cabinet office about this and say well clearly we're head over heels for the EU and we're going to jump in with both feet and rejoin the single market they say absolutely not we've got a negotiating mandate from the prime minister we've got some quite tightly drawn red lines we're not exceeding those the politics of this are not straightforward either at home and you know you can't just go to the EU and say, hi, can we have everything on our terms, please?

32:36Patrick Maguire: Like the EU have quite a lot to deal with. So the rhetoric comes back to what we were saying about defence, right? The rhetoric sets a bar that ministers have no ability to jump over or even sort of reach with their fingertips. And it leaves the Labour Party in a place where, you know, they sound like the pro-EU party, but then as in you scratch the surface and look at the detail and say, well, hang on, what is it you're actually offering here? What has Nick Thomas-Simmons gone on the Eurostar to achieve? It's not a small achievement, but it's not the political achievement it's being sold and packaged as.

33:11Patrick Maguire: And that's the issue. Yeah, there's the gap between the rhetoric and the reality once again. I think that brings us to an end this week. So thank you everyone for listening. To Molly Guinness, Ewan Daughtry, and Harry Kitson, as Gordon Brown used to say, thank you for all that you do. Business is booming, but you know what really helped? Zero. The accounting platform for small businesses. I used to think unpaid bills were just part of it. But batch payments? Wow. Automated accounts payable? Even better. All in one place. That's a big one. And I can keep track from my phone while I get the job done.

33:50No bills in sight. What a life. Do right by yourself and your business and search XERO for your free trial. Conditions apply. I'm looking at the agenda for our Life Sciences Summit on May the 21st. There's so much turmoil right now over drug pricing. It's a massive conflict between industry innovation and the reality of the NHS budgets. Yeah, it's a fascinating topic and the NHS has done its job of getting extremely cheap drugs and then President Trump has done his job of saying, but hang on, you're free riding on all of our research money. And marrying that tension has been really hard. This is something that I think we'll be looking into on the day.

34:24Yeah, it's going to be really interesting to hear from our speakers like Patrick Vallance and Melanie Iverson. I should warn everyone listening, it's already a heavily subscribed event. We've got over 200 of the best in the sector signed up to join us. I'm definitely looking forward to tackling those tough conversations, though, and having a real look at what's happening across the sector. Yeah, look, I mean, obviously, go to thetimes.com forward slash events to find out more.