Labour leadership dynamics and by-election stakes

Subscribe to the Spectator and get twelve weeks of Britain's most incisive politics coverage, unrivaled books and arts reviews, and so much more, all for just twelve pounds. Not only that, but we'll also send you a twenty pounds Amazon gift card absolutely free. As a subscriber, you'll also be able to listen to all our other podcasts ad free. Go to www. spectator.co dot uk forward slash voucher to claim this offer now. Terms apply Hello and welcome to Coffee House Shots, the daily politics podcast from the spectator. I'm Noah Hoffman, the Spectator's political correspondent, and today I'm delighted to be joined by Michael Simmons, Economics Editor at The Spectator, and Tim Shipman, political editor at The Spectator 2. Michael, let's start with the economy. In recent weeks we've had some positive signs. Should we all be relieved that that the cost of living crisis is over? Is that set to continue? Where are we at now? Well you're right. In the the last few weeks, kind of against the trend, Keir Starmer and Rachel Reeves have have had a few things to to celebrate. I mean we had the news last week that our first quarter growth is um the highest in the G The IMF has upgraded their forecast for Britain's growth. It's usually always saying things are gonna get worse. But the good news, I'm afraid, stops there, because this morning we've had the latest figures on the labour market from the ONS, and they find that the unemployment rate has ticked up to 5% , having come down slightly the month before. But actually the news is even worse than that because we've spoken about this in the spectator and we've done pieces on it um many times. The labour force survey, which is what the ONS uses to work out what the unemployment rate is, what wages are, etc. etc , is notoriously useless. And in the February figure, it's got this implausibly low reading for unemployment, which is what's been dragging the rate back down. And in fact, if you look at the March estimate alone, it was actually five point five percent. So in the next few months, we're likely to see unemployment get even worse. And what I've kind of written about today is a report that we've had from the Institute for Fiscal Studies, which is looking at the NEETs and the rise of youth unemployment. And they point out that we're heading towards a kind of youth unemployment spike that's not far off the size that we experienced in 2008 and also the size that we experienced during COVID. Now they're kind of stud iously neutral and they haven't blamed Labour policies. They've said that the minimum wage and the national insurance there's no data to like exclusively prove that that's what's caused this. And this is a trend that started under the Tories. But I mean I think if you speak to employers, the evidence is is pretty conclusive that unfortunately I think the legacy of this Labour government is going to be that they contributed quite a lot to destroying jobs for young people. And speaking of labour and economics, we've had Keir Starmer's top contender for the job in Downing Street, Andy Burnham, come out and U-turn on his previous statement that he is not going to consider bond markets when formulating policy. He's now said that he will stick to Rachel Reeves's fiscal rules. How significant is this latest intervention and what does it mean for the economy going forward? Well he he had absolutely no choice but to make that comment. I think he he saw what happened, you know, last week when Josh Simon stood down and earlier on when there was speculation and we and we saw spikes in the guilt markets. And by the way, these spikes are not just something that happens in the the city of London. It's directly translated across to increased costs for taxpayers because of what we have to pay in our debt interest. And it's clear that um Andy Burnham's opponents outside of the Labour Party are going to use this to to target him. I mean I've just come from a speech by the Shadow Chancellor Mel Stride where he was talking about how we're now paying the Burnham pen alty. So Burnham had to do something like this if he's if he's to have any credibility. But I'm not sure it's it's enough of a move. I mean his position is now completely inconsistent. I mean, how can he do the the the sort of the redistribution, the the reversing privatization that he was talking about yesterday whilst also wanting to be relatively fiscally conservative? I mean it's he's got to square that circle and I I'm not sure he's pretty And to humour Mel stride with some space on the podcast, what else did he have to say in his speech? Well, Mel was um setting out, you know, what how serious this problem the problem is, how how bad the guilt yields have got um the the extra borrowing that that has come from this um Labour government. And then essentially the bulk of the speech was recommitting the Tories to their golden rule where half of any savings they make will be used to deficit reduction. But then when it came to kind of questions, I mean the two obvious ones were what are you going to do with all the uh sort of slightly troublesome organiz ations that um that are involved in our economy, so the Bank of England, the OBR, troublesome in the sense of they kind of box you in from radical changes. And it's all well and good you saying this, but you're never gonna get the public to um to vote for for the policies, things like um getting rid of the triple lock. And I I'm afraid he d just doesn't have a solid answer for that because you know he he trotted out the line we'll never touch the triple lock. He said um they won't go near Bank of England um independence. So most people would say that's right to do so, but I think it m it leaves the Tories in a position where their only hope is an economic disaster, because that is where they do have elite on the economy. And I think that's that's probably a sensible strategy from Mel Stride is to be like, Look, we understand these policies, we're sorry for Liz Truss, things went wrong under us, but it was going okay until COVID. And basically that strategy works if Burnham does blow up the bond market. So uh And I'm sure they would publicly dispute the characterization that they are sitting with their fingers crossed for an economic disaster. Tim, let's turn to Labour leadership land . We've got Andy Burnham ramping up his campaigning in Makerfield, despite not yet being officially the candidate, but no doubt will likely go ahead unchallenged and receive that CLP approval. He released his first campaign video yesterday. Oasis gave him permission to use their music in the background. He was really playing up the so-called King of the North image. What did you make of the video and how have you seen his campaigning going so far? In a sense, it doesn't matter what I made of his video. What matters is what the voters made of it. And I think you get some indication of what people made of it by the utter raptures of some of our fellow journalists in the parliamentary lobby, people working for The Guardian, people like Lewis Goodall from the Los Angeles, who have been in utter raptures about the state of Burnham's video. And look, this was highly professional. Anyone would think he'd been thinking about doing this for a little bit of time. It was very moody, it was very I'm the guy. It was more about the sort of sense of, you know, who I am and what I want to deliver and what I stand for and what what I represent, which is a sort of, you know, a kind of northern independence and fight back against you know failing politics elsewhere. And you know, it what as a piece of political art it was magnificent. But I think as we've already been hearing from Michael, what is going to matter ultimately, and what Labour MPs really need to ask themselves is not can this bloke uh deliver a good video, but is he going to be able to do what is needed to turn this country around? And however moody you look and however many Oasis songs you play, you still, as Michael has pointed out, have to be credible on the economy and you have to be able to say what you're going to do differently. Because as Starmer discovered, going in and just being the Labour Party and being a nicer bloke than Keir Starmer is no more going to work for Andy Bernard than than Keir Starmer going in and being a nicer bloke than Rishi Sunak or whatever he uh imagined himself to be. You've got to be able to be competent, you've got to be able to deliver, and you've got to have a plan to deliver. And I think it's fair to say that so far in this campaign we've seen, you know, two pretty significant shifts from Burnham. One on uh the bond markets, which you know, uh muttering about hating the bond markets is is is a sort of new Labour uh left wing Labour sport. But you know, w we borrow so much money that they've got huge amounts of power. I mean James Carville, the American political strategists always sort of said, you know, I always thought I wanted to come back as some terrifying monster, but then I realised I want to come back as the bomb market because that's what everybody's actually frightened of. And rightly so, if you're gonna borrow as much money as we're borrowing and pay, you know, the colossal sums that we pay in uh debt interest, then you've got to care about that stuff. And we've also seen a slight pivot on uh the European Union. He's now saying he's not advocating that we rejoin, even though he personally would like to rejoin. Well, you know, that's not quite as incoherent as it sounds. There's a lot of people who quite like to rejoin, but um or wish we'd never left, but look at it and think that the practicalities of this are rather problematic. Um but that of course is not what he was saying uh last autumn. And you know those people who know have known Andy Burnham for years know that he has something of a tendency to move with the uh the prevailing winds. I guess fortunately for the country if they fear a massively leftward lurch. Uh the prevailing winds are a minute are that the bond market has huge amounts of power and that he's running in a leave seat where vast expressions of pleasure about the European Union aren't going to do him any favours. So uh as I suggested on Coffee House yesterday, I think there's a degree to which this campaign will actually turn Andy Burnham into probably a better prime minister if he ends up winning in Makerfield and then goes on to take over from Keir Starmer. But you know, there must still be some doubts about that. However, I think look, you know, the video is interesting because A , it was professional. Had it not been, that would have been one of Andy Burnham's sort of USPs kind of thrown away because he is a good communicator and he is good at the sort of visual and more importantly the emotional side of politics. He can do that stuff in a way that Keir Starmer can't, and I guess some of the people on the right of the Labour Party who are supporting Burnham will tell you that if Burnham can make more emotional, heartfelt arguments for kind of the same stuff that Starmer was doing, then he will A be more effective than Starmer and B will do both the Labour Party and the country a favour in some of these regards. And so while it's easy to be snippy and um sort of sarcastic and say he's always changing his mind, I think on both of these things, the change of mind is a sensible one and probably, you know, is beneficial to the longer And speaking of the Prime Minister, he is digging his heels in, insisting that he will fight any challenge to his leadership. How realistic is that statement if Andy Burnham does pull off? What will probably be viewed as a relatively spectacular given the context, given the circumstances? When in Makerfield, we also had this morning members of the cabinet, Pat McFadden in particular, coming out and calling the whole by election unnecessary. So the guard around Kira ramping up their rhetoric in anticipation of a fight. Is that smart or stubborn from Starmer? Well, it's definitely stubborn. And it it makes sense until the point it doesn't make sense. And the point it won't make sense is if Andy Burnham wins the by-election. Um what Starmer's trying to do, I think, is say , I'm here, I'm still fighting, he's trying to see off Ed Miliband and Angela Rayner and Wednes day and say, look, if this doesn't happen, you can all get stuffed, I'm gonna fight you. And if you look at the some of the polls of the membership that we've seen, it's not it's by no means certain that all of those people would be uh would beat Starmer in a straight fight. So certainly not by streeting. And there's some suggestion that he might, you know, uh he might do rather better against the other two than uh but we perhaps assume. If Burnham wins this by election he will be carried on a sedan chair at Whitehall and he will knock politely at some point on the door and most of the cabinet will tell Keir Starmer to quietly go and find himself something else to do at that point. Now he can try and fight, but all the polling suggests he'll be obliterated and no prime minister wants to be obliterated. So I think what happens is that this is a perfectly logical uh position to adopt until such a point as Bernard has won the by-election. But as we know, there's a forty-five percent chance that he wins the by-election. Maybe it's fifty percent, maybe it's fifty-five percent. But it ain't much better than a coin flip. Um and so it's sort of worth Starmer uh indicating Well, strap in everyone because we have a month of by-election