Does Labour need to own its move to the Left?

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I absolutely do believe that we've got to lift children out of poverty. We've had a two child cap in place for the best part of ten years. The net result of that is hundreds of thousands of children have been living in poverty. That has a massive impact on their health. Go to any hospital and ask them what is...

What is the link between poverty and health? There's it's a direct link and those children will not have the opportunity to go as far as their talents will go. I'm not gonna apologise for lifting half a million children out of poverty. That is the Prime Minister Keir Starmer sounding irritated, perhaps Perhaps even Tetchy on questions around whether his government's budget delivered yesterday has broken Labour's manifesto promise.

Make no mistake, this budget shows a Labour government that wants to spend big and tax big. But if that's where they are, why don't they own it? Why don't they lean into it and stop pretending they're something different? Welcome to the news agent. The news agents. It's John. It's Lewis. And the thing that has struck me in the sort of 12, 24 hours since the budget. Is the touchiness of the Of Starmer, of Rachel Reeves.

Of Torsten Bell, who we had on the podcast yesterday afternoon when we were trying to put so serious questions about isn't He went down well with all of you? Yeah. Isn't this a breach of trust? Haven't you can't you just admit that you have raised taxes? And that you have increased spending massively and that this is not what you said you would do in the manifesto which we were all consuming less than eighteen months ago. And it's really striking how they must have known.

That those would be the questions. that would arise out of this budget when Rachel Reeves a year ago said it was one done. And here we are and she's come back for more a lot lot more. Yeah, I mean she's misses a Rachel Reeves the Chancellor that working people will indeed need to pay more. after the as we were talking about yesterday, the the freeze, a substantial freeze on income tax threshold. But she said that she had kept that to an absolute minimum through her other measures.

And look, this is a budget where the pieces are st still settling. It is notable there is pretty negative, almost universally negative reaction across the different bits of of the press, more or less. A lot from the economic

sort of commentariat, also pretty scathing, particularly on this question of a lack of growth, which is again something we were talking about yesterday, which is basically what Reeves is doing is sort of moving the pieces around on the board rather than growing the size of the board or changing the game.

Uh so that's all pretty bad. The one area or the one group of people who have been considerably more sanguine, apart from the markets in fairness, have been Labour MPs, who have reacted pretty positively to it. There haven't been p noises off, there have been very few critics sort of articulating any sort of deep criticism insofar as there has been. It's just some of the sort of soft left, more left wing MPs saying, Great start, but would like to see this

go a a lot further. And I think what is absolutely true to say is that, you know, if you really strip out all of the noise of the first eighteen months of this Labour government and the two budgets, the two big fiscal events that we've What we actually see is a government which in many ways is classic bread and butter social democracy. A classic centre left. to left wing government, which is using the means of the state, the mechanisms of the state to be

Highly distributive. Yes, it's not doing the things that its most left-wing critics would like, which is to borrow even more. It's borrowing quite a lot, but borrow even more and spend even more. But if you compare it, we're we're still basically right, living in a time of scarcity. In the sense that the British state

has less and less money each year than it might have done if growth had kept up as it did before two thousand eight. And the demands upon the state are getting bigger and bigger every year because of an ageing population and and other things. You've had two Chancellors in particular who've had two different approaches to how to meet those challenges. One was George Osborne, who basically did most of it through spending cuts on an eighty twenty ratio.

Rachel Reeves is doing the exact opposite. She's not cutting spending. She is keeping spending going. Not it's not rising as highly as it might have done in the past, but she's still spending a lot of money, especially on welfare and in certain government departments like health. She is financing it.

through tax increases. At exactly almost exactly the same ratio, inversely, to George Osborne. That is a big different economic and political story than that which we saw under the Tory governments. Of course. But that is not the argument. That labour made to the British people is During the general election.

They didn't make any argument. Well they did they said that we were going to be the fastest growing economy uh in the G seven. We were going to be you know, the kind of our number one mission was economic growth. Everything was going to be done to unleash those forces so that Britain became you know, productivity increased and economic growth would rise as a result of it. And what have we seen in this budget? We've seen next to nothing.

That will generate economic growth. And we've got that quote that you know we we mentioned yesterday from the OBR, which says that we've assessed that none of the policy measures in this budget have a sufficiently material impact to justify adjusting our post measures potential output forecast. In other words

There's nothing here that is going to generate economic growth. That is not the arguments that Labour made during the general election. And so I'm not surprised that a lot of the questions But haven't you lied to us? Haven't you told us you would do one thing? And you're doing something quite different. And that is always, rightly so, an uncomfortable place for politicians because if you wanna get disenchantment, if you wanna get disillusionment, if you wanna increase cynicism

then you promise one thing and deliver something else. Well I think the question is it's two questions. One is the centrepiece of the budget budget as we were saying yesterday is around income tax thresholds. And the Chancellor has chosen to freeze those rather than increase income taxes because the Treasury thinks that people don't notice it as much.

There has been a huge amount of coverage to it over the last twenty four hours. I suspect there will be continue to be considerably more coverage over it over the coming days. Most people don't know what fiscal drag is. Sounds fun, but it's not. Believe me. Uh I've tried it. And it is something that is starting I know. It is something that is potentially now starting to enter the political consciousness in a more significant way. Just because, as we were saying yesterday,

Occasionally you've had b chancellors who sort of mess around with those thresholds a little bit or freeze them, but this is gonna go on for such a long time, basically for a decade, starting on the Tories for a decade, and such big such a profound restructuring of our tax system that It is possible it starts to increase in salience. And so the question is is whether the public do start to notice it.

And or, the second question, if they do notice it, can does Rachel Reeves and Keir Starmer or do Rachel Reeves and Keir Starmer have the communication skill to be able to explain why it is they've done what they've done? I mean I would say probably gently in the last twenty four hours or anything to go by. Probably if I'd shift the last sixteen months or anything to go by, the answer might well be no. Yeah, and and that is, you know, look, it's fine. What we are seeing now.

From this second budget, very clearly is that this is an old Labour budget. This is the Labour Party of old, of high taxation, high public spending. growth in welfare bills and all the rest of it, with no particular measures that you can see on the horizon that are going to lead to dramatic reform of that and an increase tax tape To pay for that. Now that is going back a bit. I mean that was as far away from, you know, the Blair

mantra and the Blair kind of economics. Now of course th the world has changed since then. The two thousand and eight financial crash has changed an awful lot of the calculus and the w kind of the way we view the global economy. But I do think that this is puts Labour in a position now where it is very much a party of old uh you know, people in the Although in fairness the interest that so many of the current

Crop of Labour MPs have in child poverty. Indeed, Rachel Reeves herself is born from the legacy of the Blair government. I mean the Blair government, you know, was Partly because of you know Gordon Brown's influence, who have been very influential on this budget as well, and this question of the welfare of the benefit cap. You know, one of the key metrics.

that it talked about all the time with child pov poverty and indeed it had a very successful record on child poverty. So in a way you you I I think John you're right that um in its hallmarks in the way it approaching is approaching politics, it is, uh, in lots of ways a more sort of classic iteration of Labour.

sort of pre new Labour, but there are sort of new Labour kind of hangovers that one of the reasons they're all so interested in child poverty is partly because it casts such a long shadow from the new Labour years. Yeah, and look, you know, you can't go back And rewind the clock and just say that the new Labour policies

kind of w did everything. They didn't do everything. Although as you say, there there were all sorts of kind of things like Sure Start and whatever else that were kind of made a significant contribution.

Towards the alleviation of child poverty. What I'm struck by is you said it about surely your economic policy, if you want to generate growth. is you've got to grow the size of the cake, that you've got to make the economy bigger. And in that sense, I think there have been a variety of measures that have been introduced in these last two budgets. which I can't imagine a Blair government ever introducing.

That would have had such an effect on business, you know, and employee national insurance contribution. And although there's been a I think a bit of a sigh of relief. From some sections in business that it you know, this budget could have been a lot worse.

It's that kind of judgment that not much is happening that is going to grow the economy significantly. Well what I say is I think the danger for Labour here is that they're caught betwixt and between two things, which is uh It is clear, as I say, the big story of these two budgets is in many respects Rachel Reeves and Keir Starmer nudging us towards

a more continental style European social democracy sort of economy, right? Where the state is bigger and bigger, more money is spent on on tax mo more money is taken from the economy in in taxation, um working people on middling incomes do pay more in in tax and that is spent on public services and welfare. It's nudging us f closer towards the Amer European direction and away from the American di direction and we've already always sat somewhere in between.

That's fine. I mean that might be what you want to do and lots of people will will support that. But you might as well own it. Exactly. You might as well own it and say and find very clear arguments.

to say that this isn't the late nineties anymore, it's not the nineteen eighties anymore. We're doing this because the demands on the state have got bigger and bigger and bigger. We live in an uncertain, insecure world and we need the state basically to look after us. Now, you again you can I'm not saying that's right or wrong, I'm just saying That is basically the direction they're going in and they might as well own it.

their problems for them up to now in a sense have not been owning it from the beginning because that was always their sort of instinct and they didn't level with people enough about it. So, you know, you're going into the election saying

that they're not going to increase taxes on working people. Let's be clear, they are increasing taxes on working people. A freeze in income tax threshold is tantamount to an increase in income tax in in all but name. And indeed you know, I think probably and we saw them lead up to this, in our heart of hearts the chance they would have preferred it would have been cleaner, simpler and fairer for all sorts of slightly complicated reasons, just to increase income tax.

I think it would have been politically disastrous'cause of the manifesto commitment, but she's clearly backed away from that for that reason. But as the Resolution Foundation, who, you know, I say very close to Labour, have said, you know, just in the last twenty four hours that sticking to that manifesto pledge and freezing income tax thresholds rather than just raising income taxes actually hurt low and middle income earners most.

And they're saying that in effect they have broken the pledge regardless, because the tax burden on working people has increased by twenty six billion in this budget alone. So You know, it is that I think they're caught in a bit of a vice where their instincts and what they're trying to do and what they want to do and what they're comfortable their backbenches are comfortable doing is nudging us.

in that more classic social democratic direction. Torsten Bell, when he sat down yesterday before we started recording, we were having a bit of a joke about taxes going up and he said, Well you don't want proper bread and butter social democracy You know, that that

That's the direction of travel. That's how they're thinking, right? But they're not being explicit enough with the public and explaining the reasons why. And I just think, look, three times yes. Own it. If this is what you're doing, own it and make the argument for it. But what I think lands really, really badly with the public, and I you know, I was struck by it when we were interviewing Torsten Bell yesterday, and I think I said to him For God's sake, just have some humility and tell us what

Truthfully, that yes, you've raised taxes and you know, and this is why you've done it, rather than trying to pretend that everything is not what we can clearly see. And I think that is where politics gets itself. Such a bad rep when everyone can see with their own eyes what it's gonna do to their own household income and what it's gonna do to their savings or whatever it happens to be. And yet Labour is trying to pretend that it's absolutely not that.

It's all fine and that these were necessary measures. You know, look, you've taken the measures, you promised in the kind of manifesto that you'd need eight billion in tax rises. So far in the 16 months of this government, you're going for 66 billion in tax rises. That is quite a big difference. Now you've got to have a story that accompanies that and at the moment they're saying there's nothing to see here. There's plenty to see here. Just tell us what it is.

And honestly that just doesn't wash. It doesn't wash because everything they cite happened bef they knew about. Yes, there is the OBR downgrade in productivity. Hard thing to talk about. Very hard thing. As soon as you mention it, you know, people have already turned turned off. Even though there is some some truth to it. But the fact of the matter is.

is that, you know, the things they cite, whether it was Brexit, whether it was uh was it Covid, whether it was Ukraine war, whatever it is, that was all known about in July twenty twenty four. The Chancellor knew about that when she made her manifesto pledges. By all accounts she said, in terms of boxing herself in,

on those income tax pledges and so on, she said, Well that would be a nice problem to have Well it's turned out not to be a nice problem to have. It's been turned out to be a vice around her. And the argument to say that things are a bit worse than all those things that we knew about isn't very credible, isn't very convincing, because you knew how bad they were, roughly. Yes, the OBR might have come back and said they were even worse, but you knew about them, so why did you

not take account of them when you made that pledge in the first place. And we had Paul Johnson who was then running the Institute for Fiscal Studies, the kind of you know the economists and analysts who go through all these numbers. Who kept on saying during the election campaign this is all bullshit? You're gonna have to raise taxes significantly. There is a black hole. You've got to be honest with the British people.

And Labour, for uh understandable reasons in campaigning terms, wanted to absolutely minimize what they would have to do and now they're in government. You know, everything that Paul Johnson said has Turned out to be correct, that they would need to raise taxes significantly, and that is what happened yesterday.

Right, when we come back, we're gonna be talking to the Deputy Leader of the Labour Party, Lucy Powell, who as we've talked about on the show before, has this intriguing position where she's sort of half in, half out of the tent. Both Keir Starmer's deputy were also elected very much only a few weeks ago as a riposte to Kstama's leadership by the party members themselves. We're gonna ask her what she made of yesterday's budget. Stay with us. UK under ranked

News here in Edinburgh. I'm Simon Marks. My American Week is next. Reporting from the heart of app or the new LBC app. LBC, leading Britain's conversation. The news agents. Well we're joined now by Lucy Powell, the deputy leader, still uh relatively freshly minted uh leader, deputy leader of the Labour Party. Lucy Powell, thanks so much for joining us again on the News Agents. Very simple question really.

What did you think of the budget? Was it everything you hoped it might be? Well look, it was a good strong Labour budget from a Labour government and I think look we can't do everything in one budget, so it's part of a longer term programme but I thought, you know, what Rachel set out was really positive, lifting the two child benefit cap in particular, but also setting out a fairer tax system and how we're gonna deliver the kind of change that the country has voted for.

And I thought there was a a really clear narrative about that and I think it's important now that we all come together as one Labour team and really take head on some of the arguments that she's begun to open up and make the case over the coming weeks as to why the decisions that we've taken are the right ones in the long term interest of the country. You and others have argued recently about the merits, potential merits of a Welltech.

There was no wealth tax in there. Did that disappoint you? Is that something you'd like to see in the future? I don't know that I particularly um specified that. I've s I've spoken to you about it during the leadership contest. You said you thought it was a good idea. There were definitely some big measures in this budget around a fairer tax system, you know, equalising taxes.

on uh uh income earned from uh assets, for example, rather than just on uh work, the mansion tax, if you want to call it as that. Uh that builds on further measures that that Rachel had set out in a previous budget on the VAT on private schools, private jets, many other changes. Th there definitely is part of a wider programme here of making a fairer tax system so that it's not just

uh the many, if you like, that pay for things, we do have to tackle uh inequalities right across the tax system. There is quite a lot of criticism this morning, not just from other parts of the political spectrum, because you'd expect But from think tanks, even from Labour-friendly think tanks, including the Resolution Foundation, about this question of freezing income tax.

thresholds. Now in opposition, Rachel Reese when she was shadow chancellor said that that hit working people in their pockets. Do you agree? Well I think she w she levelled with people about that in her statement. uh yesterday. Um we we face a very difficult environment that we're in. Things are changing all the time. We are de Butter. We are dealing with you know years and years of austerity. We need to invest.

In the country, we need to invest in public services, we need to invest in the infrastructure so that we can turn the economy. uh round. But would you accept Lucy Powell Lucy Powell, would you accept that you are increasing taxes on working people? We have che we have frozen the thresholds, as you uh rightly uh say. And obviously that is everybody is having to pay to towards that. But we have introduced a a a range of other measures that really will support

the most in need in art. You said you wouldn't increase taxes on working people. But I've got that was a manifesto promise. Yeah, I've got the manifesto right here in front of me, Louis,'cause I keep a copy on my desk at at home. And uh, you know, I think that the budget set out was very strongly in the the spirit of the manifesto. There's a lot of things in our manifesto, like reducing child poverty, like getting waiting lists.

down, like ensuring that we deal with the cost of living crisis, that we get wages up, that we build more social housing. There's a huge program that we set out in this manifesto and this budget is not the only thing. This budget's not the only thing we're doing. It's part of that programme of renewal that we set out very strongly in our manifesto.

that we're delivering on people and the first word it says there is change and people want change they want change the way the economy works the way the country works Uh and that's what we're setting about doing. And look and I'm up for that.

I look for that conversation about who pays and how that's done and that's what I think we should be taking head on in the coming weeks. We interviewed one of the Treasury Ministers yesterday, Torsten Bell, and tried to ask the same question. Why is it so difficult just to give a straight answer to that simple question? Are taxes going up for working people? The answer is yes.

Well more more people clearly are going to be drawn into um in into to to paying uh different levels of of taxes. That's what Rachel made absolutely clear. She was She had a clear um ask there. She had a clear ask. She had a clear ask. But our manifesto, you know, I'm very uh happy with the the fact that our manifesto, we are following through on our manifesto commitment.

Which are far ranging and are really important. And I'd sure I'd really like to talk to you about how we are doing some of those things because there are deep there are deep problems in the way in which our economy has worked over the last

Well let me just ask you. You're addressing those. We're talking about the manifesto, and there was that whole period, uh maybe a week, two weeks, where we thought income taxes were going to be increased and there was all that pitch rolling and the extraordinary Rachel Reeves news conference that took place at ten past eight in the morning where she kind of hinted at such

I was told there were two reasons principally why she didn't go ahead with that. One was a Danny Finkelstein op-ed article saying that she would have to resign if she did that. The other was Lucy Powell. Well I think I I'm quite happy to have influence, which I have influence. You know, we are one Labour team working through these difficult uh issues and questions, trying to make the right decisions.

uh for the for the country and it and it isn't easy because the legacy that we are dealing with is is deep and difficult and it is going to take long term decisions to turn to turn those things around. So let me just ask can I just ask you this? Look, I am pleased that we are sticking by our manifesto commitments. I think that's important that we do that. Um and they include

strong commitments to reducing child poverty, to reducing waiting lists, to making the country work in the interests of ordinary working people, to increase wages, build social housing, sure. All the good label things that we were elected to do. And this budget this week was a clear Labour budget.

that we are are now clearly governing as Labour and I think that's something she's welcoming. Can can I ask you how much input you had into the framing of the budget? Were you at political cabinet meetings? Were you at cabinet meetings? I just kind of want to get an impression.

Well, I'm not gonna go into all the sort of private di private discussions or or anything like that. But look, I'm the the deputy leader of the Labour Party. I think when I was last in your studio you asked me about uh you know would I uh be able to to influence things, would I be able to to affect my uh role as deputy leader?

And y yes, I am doing that and I'm I'm really clear about that. Operating politically helping the Labour government to uh tell that strong story about our Labour values and our Labour purpose. Um and and you know, I fully support Rachel and Kia in the decisions that they've taken this week. which are Labour and do show our values and our purpose and you know and I'm really up for having that that big fight with our political opponents, especially on the right.

who say that we shouldn't be taking action to tackle child poverty, who say that we shouldn't be taking the steps that we are taking to make the tax system fairer. And I disagree with them on that and I'm and I'm up for that argument and I'm up for that fight. Did you argue against breaking those manifesto pledges? Because Clat was clearly the direction of travel. I don't know if it was the direction of travel or not. We were all I think we couldn't

I'm sure that there'll be long, long discussions about all the the sort of speculation in the in the lead up to to this particular budget. But I think what we what we all wanted, and actually what Rachel and Keir really wanted as well. was that we were we were clearly delivering that Labour budget, a budget that was about change. It was about changing the way the economy worked. That the Tories in the form who are

economic uh bedfellows completely locked in in terms of their view of how the economy works, which is a trickle-down economy, the status quo economy. We want to change the economy so that it works in the interests uh of the many. And it's gonna take more than one budget to do that. It's a whole series of things that we're doing. And uh, you know, and I'm I'm I'm here to help tell that story and make sure that our values

uh on our purpose really do shine through as the Labour government. Do you think this is a different sort of budget? A different sort of budget politically, which I think you sort of hinted at just now, than Rachel Reeves' first budget.

Well I actually thought our first budget was a very Labour budget, but maybe we didn't follow through strongly enough in making some of those uh arguments at uh at at that time. But you know, the first la Labour budget also prioritised uh investing in the NHS, uh long term capital uh investment so that we can increase productivity and and make sure that we've got a higher wage, some more secure employment uh economy and so on.

Um so I think yeah, we are doing these we've we've done lots of good Labour things over the last fifteen, sixteen months since we won Yn ymwneud â'r ymwneud â'r ymwneud â'r ymwneud â'r ymwneud â'r ymwneud â'r ymwneud. the the measures and the big bold decisions. They were big bold decisions. Yeah, Rachel knew that lifting the two child benefit cap

would be decried by our political opponents and would lead to the right wing press and others saying it was the wrong decision. It was the right decision to lift it because in the long run, um, we we pay a lot more for dealing with all the consequences of child poverty than lifting the cap a alone uh would would cost. When you say it wasn't Labour enough and now is

More labour and needs to be more labour still. D do you mean more left wing? No, I I think people want a clearer sense of our story, of our purpose, of our values coming coming through. And that's not to say that things that we've not we've been doing up till now uh have not been uh Labour. I just think we haven't been able to to mo more strongly tell that that story.

And um and and that's why taking some big decisions, some big bold, strong decisions that that Rachel has taken in this budget, I think really help us to do that. And they reopen um more strongly those political divides that exist. uh in our politics today, with the Tories and Reform on on the one hand, who want, as I say, more austerity, they want trickle down

uh economics, they want the status quo to to carry on in our economy, and you've got labour uh on the other side. We want that big change in the way that the country works and the way that the economy works. so that ordinary working people get the benefit of economic growth and our economic prosperity and we are going about doing that.

But ordinary working people are going to be paying For the huge amounts of extra money that's going to be spent on the first time. On welfare. with no sign that any serious meaningful reform in the welfare budget is taking place. We saw what had happened uh in the summer and you know, the failure of that, which I think you you kind of said it was a a misguided adventure in the first place.

To do that welfare reform, we've also had the OPR saying that there is no measure in this budget that is going to have a serious impact on economic growth. So the economy is not growing, taxpayers are paying more and there is no attempt to cut down the the kind of ballooning welfare bills either.

Well, the the stagnant growth we've seen over uh the last uh fifteen years, you know, that that is gonna take a while to turn around, but the OBR Yeah, they make these forecasts and they usually have to end up revising them up, as they have done uh for the short term uh growth in their latest uh forecast.

they they haven't costed in, you know, lots of measures that we've already uh taken and that we are taking to increase uh growth. So let's see what actually uh happens there. Look on on welfare We have been, I mean under the Tories by the way, welfare spending ballooned at the same time that child poverty went up massively as well because uh they were constantly chasing in the welfare system that we had and the the economy that we had uh in the past and that we're trying to change.

We are spending a lot of money dealing with the the symptoms of a broken economy and not its root causes. So we are effectively in this country now we subsidise low pay, we subsidise high housing costs. and we pay more and more for dealing with the symptoms of things like child poverty than we do in investing in getting them right. So we need a higher way

uh decent uh job market in this uh country. We need to build more social housing, which is what we are doing, to drive down uh those high housing costs which we uh subsidise, and then we need to deal with the root causes. of child poverty, of better education, better health uh people having more money in their pockets to to bring up uh their children outside of of poverty and not just spend more and more on food banks, on charities, on teachers having to spend

uh time uh supporting uh children and all the costs that linger through our economy for a long time. Just a as an example. Children in poverty, only a quarter of them go on to get five good GCSEs. You know, my kids in a more affluent uh background like my kids will will y uh three qu three quarters of them will get five Uh good G C S. So Lucy, can you imagine a world? Can you imagine any world where Labour MPs will go through the division lobbies to vote for welfare cuts?

said time and time again. you know, the PLP are absolutely up for a conversation and up for looking at how we can reduce uh welfare and welfare reform. It needs to be a bit more of a conversation though, doesn't it, Lisbon? I mean like the the the it is spiralling the cost.

It it's not just a conversation. We are up for that. And and by the way, one of the other real legacies, you know, in our welfare system at the moment, which we're risk seeing so startly coming through, is the number of young people outside of jobs. uh or education or or would you ever vote for cuts? Would you ever vote for cuts? Can you imagine a world where you voted for to a for actual cuts to welfare? We we need to reform welfare. I think when we're trying to

um short term cut welfare, not looking at the outcomes of how we can deliver better outcomes for people. Sure, but we do need to spend less, don't we? We do need to spend less. So I'm just asking you, could you is there a world, is there a package where you could vote for cuts in welfare. I would vote every day of the week.

for better systems that that that deliver better outcomes that often require in the first instance for you to invest in that, which over time leads to those budgets going down and down. I'll give you another example, by the way. Here in Manchester, We're the only local authority where the number of children going into care is now falling, not rising. And this is a very, very high need.

um poor uh city. And why is that? Because the city council and partners up here have invested hugely into early intervention and support in the very earliest years through the shore start. Model and other measures to make sure that that families are better supported so that children don't need to go into care. So that is now reducing.

Mae'n ymwneud â phobl sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n But it's not driven um purely by a need to short term reduce uh costs. But is it comb at the moment right now, combined incapacity and disability benefit?

Oh we're now spending about sixty four and a half billion pounds on those benefits. That is up by forty percent in real terms. Since twenty thirteen. So there clearly may be a moment when you and Labour MPs are confronted with a prospect of not just reforming the specific system, not just spending money in the short term on the system, but having to vote for cuts. So I'm just gonna ask one more time, is there any world where you would vote for a cut, cut?

In disability related benefits. Well I I it's a it's a it's a ri bit of a ridiculous question to be honest. It's not really because I want to get the welfare bill down. Because the welfare bill being so high is a symptom of failure. It's a symptom of our failure to deal with the root causes of why welfare is so high. People out of work, people who are in work, who can't but work doesn't pay for them, so we're having to subsidise it.

people in expensive yet awful, awful private rented uh housing, people struggling to get by, people on uh young people who after COVID, you know, I've got a twenty one year old and I'm sure you've experienced this as well as well, young people who were completely thrown on the scrap heat by the previous government. After COVID, because they didn't invest in those COVID catch-up years that they needed to do, who are now consigned.

to a a a a life of being on benefits. We've got to turn that around. I want to see the welfare bill coming down because it's a symptom of failure across a range of things. And there's no silver bullet for that. Taking money off people doesn't solve that problem. It just creates you other problems elsewhere. We've got to deal with the root causes and that's what we are doing as a Labour government.

investing in social housing, a young people's job guarantee, uh making sure that work pays and that there are decent jobs there for people, investing in the new industries of the future. And that's how we will get the welfare bill down. This budget is being characterized

as more about party management than what is right for the country. Has Kirstama bolstered his position and Rachel Reeves bolstered her position. Are they there now for the long haul or there are still dangers ahead? Come the May local elections. They were always there for the long term. They are in it for the long term. We support them in the the long term. We are But you know how sulphurous you know how sulphurous the mood has been on the back benches.

Arguably your election as deputy leader was the absolute vivid symbol of how unhappy Labour backed benches are were with the direction of travel and you've influenced the shape of this budget. I asked you again, d uh are are Labour MPs happy now? This was a good, strong Labour budget, which we are all absolutely uh behind. We we really, really are. I just want to make that absolutely ki clear. Um Key and Rachel.

Uh were uh brought in or elected rather as our Prime Minister and our Chancellor only fifteen, sixteen months ago, and they are in it for the long term and we are all in it for the long term and we all work So what would you say to your colleague? Who are still thinking Rydyn ni'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd.

continuing to support them uh going forward. And I I do reject this idea that somehow this is a a sort of budget for for Labour backbenches, not the a budget for for the country. You know, tell that. to the five and a half thousand children here in Manchester Central who are now over the next two or three years going to be lifted out of poverty because of decisions that we have taken. These are

the right decisions for the country and this is a good uh Labour budget and it's one that we are all gonna proudly go through the voting lobbies next Tuesday to vote for. Every single Labour MP will be doing that. You're saying that there's no one's plotting to remove the Prime Minister? No one at all. All those plots we've been reading about centred on West Street and others, just nonsense, not happening.

Well, it's not a good idea. We've got to face out to the country now, and we've got to be really clear about that. about our purpose, about our values, about what we are uh doing. We've got a big job of work to do and it's not over just because we've delivered uh, you know, this budget this week.

this budget this week is is helping us to re-establish the agenda that we're pursuing to help us have those big arguments out in the country about the long term decisions that we are taking to get the country back on on track in all of those ways, whether that is the public services, whether that's good, decent jobs, but whether that is about the country and the economy working for the many and not the few. And I know that every Labour MP this weekend and beyond

is going to be out making those uh making those arguments and they're the arguments we should be talking about and not any other tittle tattle. So you're one hundred percent confident that the Prime Minister and Chancellor will still be Prime Minister and Chancellor taking your party into the next election? Uh Lucy Powell, Deputy Leader of the Labour Party. Thanks so much. Thank you. Thank you.

The news agents. I thought what was interesting there with Lucy Powell was she wasn't gonna obviously give me chapter and verse of the meetings that she had been in, but I thought there was a kind of almost smug satisfaction that yep. I've had an influence, you want to believe it, I've played my part in shaping this budget, and I think that you know an awful lot of labour backbenchers.

I'm sure, you know, was significant in terms of the psychology of No. ten and Keir Starmer's thinking because they could see that even within the Labour Party his position was becoming shakier and more difficult and that therefore

that that would have affected the sort of course course of the budget. And and as we say And in answer to your question, a hundred percent. Well hundred percent, exactly. And she didn't always sound like that during the leadership campaign, notably. I thought that her answers on

welfare were very, very revealing. In a sense that look look, there is a lot of good reasons or a lot of good reasons why welfare spending ha have gone up. We should never forget as well that the the mainstay of welfare spending is pensions, which, you know, government after government has prioritised via the the maintenance of the triple lot.

nonetheless we can see that particularly with sickness and disability related benefits and other forms of benefits as well, these are rising very, very rapidly, particularly among young people. And I think that You can kind of see in her answers or hear in her answers the psychology of a lot of Labour MPs, which is that

Labour has sort of got itself into a position psycholog psychologically, perhaps because of the the MPs that it's got and their backgrounds sometimes, where it is almost a sort of third rail to even contemplate voting for something that might discrete or particular benefits and that that is on labour in some way. Now I think that is a complicated, very complicated and very difficult bit of psychology to get into because

it almost implies that almost any sort of expansion of that spending and the state is inherently a a a good thing. Now I hear what she's saying, of course. Like very often when you reform welfare it might mean you have to spend a bit more upfront. in order to to change the system and you don't want to do what the government did which just come along with some blanket cuts and just say, Here you go, you want to think about it more thoughtfully But ultimately the aim

There's gotta be two aims with welfare reform, right? Like one is to create a better system which is more helpful to people. both who really need that assistance but also in helping them get back into work. But also it will be to spend less money ultimately than we might have done otherwise because

Frankly the British economy isn't sufficiently productive right now to justify or to pay for the sheer gallop the you know the the galloping rates of increase that we're seeing. Well look you talked about the real term growth. in kind of disability benefits that are being paid now by the state. What if they continue to grow? Indeed. Do you come back for more and more and more taxation to cover that? Or do you start saying, Well hang on

Is we really that sick as a society compared to our European neighbours where they're not seeing those same increases in spending in the way that we are here? And those are big questions for Labour to answer. At the moment, looking at this parliamentary Labour Party, I'd say there is absolutely no appetite whatsoever. for voting for welfare cuts. We've seen it in practice.

this summer and you know, unless it is dressed up very, very differently, it's hard to see them doing that again. And some analys I mean some analysts have said and I mentioned that sixty seven billion figure to Lucy Powell, some analysts have said that working age sickness slash disability and incapacity spending

Could reach over a hundred billion by the end of the decade. I'd say that's that's up from sixty about sixty five billion now. You know, th that is not a sustainable rate of of of increase. It's not sustainable for the people involved, it's not sustainable for the British state. It's also not

Labour. It's not a labour thing to want people to see. I mean, Lucy Powell mentioned labour and labour values many, many times in that interview. It is I'm sure she would agree with the statement that it isn't Labour to want to see people be on benefits when they don't need to be and when they could be in work and they could be living a more flourishing life a and so on.

But then it's all very well saying that. At some point you might have to vote for something that does entail maybe a bit of pain or a bit of difficulty in order to get to the end goal. And yeah, you want to do it comprehensively and you wanna do it thoughtfully, but I I'm struck by the lack of urgency about it because this is a this is a huge part, hugely increasing part of public spending. And we should not forget that, you know, for every pound, for every pound that we spend

on increasing that budget. It's a pound less that we can spend on education. Education which now, for example, is looks like is forecast to fall in real terms in terms of school place uh in in terms of uh school funding per pupil. On defence on the health service, on all of these things and yes, sometimes those things are interrelated those bits of spending, but nonetheless

You know, I would have thought that certainly for any Labour MP they would far rather see ev as many pounds spent as possible on education and on health and whatever it happens to be than on spending on a system which is clearly not fit for purpose and is getting worse.

In slightly more positive news for the government though, which is something we'll be hearing about a lot, I'm sure, there were some figures released today, not to do with the economy, but with my it's to connect with migration. Net migration the ONS is saying has fallen sharply. To just over two hundred thousand in a year to June. That is a fall from six hundred and forty-nine thousand for the year before, and it's a drop of nearly eighty percent. from its twenty twenty three peak.

So, you know, there's a very substantial fall. Going back to the sort of figures that we used to see pre Brexit, about two hundred thousand. um a year. Obviously the government will be talking about this a lot. It's fair to say some of it is definitely down to the reforms that the Conservatives brought in due to in the tail end of their period, particularly James Cleveland

Home Secretary, but you know politics is politics and I'm sure the government won't be having that. Which is not such good news. Some of it is obviously immigrants going home, some of it is

British people going to move abroad. But anyway, I think that is the two hundred and four thousand in the year to June, that is a figure you'll be hearing a lot over the course of the next few months. Well I promise that Lewis and I will be here tomorrow. We're not going anywhere. We're not emigrating. We're not emigrating some of them some of them want to re emigrate us.

That's the latest thing. And uh we will be joined by the acclaimed the brilliant novelist Sir Salman Rushdie and that should be fascinating. See ya later. Bye bye. Bye bye. This has been a Global Player Original Production.