This is an audio transcript of the Political Fix podcast episode: ‘Iran shock for Starmer’

Donald Trump audio clip
By the way, I’m not happy with the UK either. So we are very surprised, this is not Winston Churchill that we’re dealing with.

[MUSIC PLAYING]

Lucy Fisher
President Trump there who is clearly not content with Sir Keir Starmer’s position on Iran. So after months of diplomacy and flattery of the US president, is the special relationship now in tatters. The same could perhaps be said of the spring forecast, which looks like it’s been blown out of the water by recent events. It’s been another difficult week for the prime minister, and this time it’s foreign policy that’s been dominating the domestic agenda.

Welcome to Political Fix from the Financial Times with me, Lucy Fisher. To discuss the UK’s handling of the war in Iran and more, I’m joined in the studio by my FT colleagues, chief political commentator, Robert Shrimsley. Hi, Robert.

Robert Shrimsley
Hello, Lucy.

Lucy Fisher
Deputy opinion editor, Miranda Green. Hi, Miranda.

Miranda Green
Hi, Lucy.

Lucy Fisher
And our economics editor, Sam Fleming. Hi, Sam.

Miranda Green
Hi, Lucy.

Lucy Fisher
Well, I think we’ve got to kick off talking about Iran this week, don’t we? It’s been quite a contorted position that Keir Starmer finds himself in, having initially refused to allow UK bases to be used by the US to launch strikes on Iran. But after Tehran then retaliated against Gulf countries that hadn’t been aggressors, Starmer and his government found there was a legal basis for UK bases to be used.

And jets are in the sky performing defensive activities, intercepting missiles and drones. And just a reminder, we are recording on Thursday evening. Robert, give us your sense of how Starmer is handling this. He’s come under a lot of fire, both domestically and internationally, hasn’t he?

Robert Shrimsley
Yeah, I think, how you think Keir Starmer is doing depends very much on what you think the country itself would like him to be doing. So there is clearly a critique, you hear it from the conservative leader, Kemi Badenoch (Inaudible) the rightwing press that this is a gutless craven human rights law.

Apparently being a lawyer is just a terrible thing these days its almost like being a Mueller. Who’s gone out of his way to keep Britain out of this war, to not be standing shoulder to shoulder with our great ally as they go in and that this has been not good and he’s hidden behind legal advice and then he’s been forced to U-turn and allow the bases to be used little bit, as you say, for defensive positions.

And you know, you’ve got Donald Trump attacking him for not being very Churchillian. So if you subscribe to that point of view, then it’s been a bad week for Keir Starmer. If you subscribe to the point of view, which I think actually most of the country does, that it doesn’t love seeing Britain in these wars, that it didn’t like the Iraq war, it doesn’t trust Donald Trump, doesn’t particularly see why Britain needs to be in this. Then I don’t think Keir Starmer has done particularly badly in terms of the positioning he’s taken.

I think you could possibly make an argument around the area of, well, could Britain have moved more quickly to take out missile sites? But I think fundamentally, although he’s coming under a lot of fire. I’m not sure that the position he has put the country in is one that the country will be unhappy with.

Lucy Fisher
Well, I’ll just note the latest polling from YouGov that says Only 8 per cent of people think Britain should be actively involved in the attacks, while 46 per cent think UK forces should be involved in purely defensive operations. So there’s quite a significant chunk of the population backing what Starmer is doing. Miranda is there nonetheless, a discrepancy in Starmer’s thinking between saying it is right that Iranian missiles, the depots and launchers should be taken out by attacks, but then the UK not being willing to do it itself and wanting to leave the US to do it.

Miranda Green
Possibly. I mean, I do think there have been mis-steps. One for example, failing to turn up quickly enough in Cyprus, for example. I think that does seem like a serious UK failure. If you have a military bases somewhere, you should be on hand immediately to defend your hosts and your own people and there is a certain amount of flat-footedness and I think that some of his statements and PMQs were a little ill-advised.

But I actually think that the position is really interesting that polling that you read out, I actually think as Robert said, that the position itself is pretty logical. And once you are engaged in preventing an escalating situation, getting any worse for the citizens and the military forces that you have to defend, you obviously do have to think about degrading the capabilities of your opponent. So I don’t think it’s that illogical, I think actually he’s just trying to walk this strange tightrope between the realistic demands of the international situation as it’s developing and developing horribly fast.

And the unwillingness of not just the country, but also his own party to see the UK shoulder to shoulder, as Blair famously said with George W Bush in Iraq. I don’t think his party would wear that. He’s vulnerable and perhaps he’s not convinced that’s a good idea anyway. I think it is a genuinely tricky situation. I don’t love the way that our politics is responding to this. I don’t love the way that people are impugning the other side of the arguments motives. You are naive, you know, you are a warmonger.

It really doesn’t help, it’s a horribly complex situation that seems to be escalating all the time, and we should be looking sensibly at de-escalation rather than saying, oh, as Robert said, the kind of attacks on a sort of legalistic point of view. I can see where that’s coming from, quite a lot of humanitarian actions even have not been technically legal in recent decades. I’d point to the Kosovo action by Nato, that wasn’t technically legal, but it was done to protect a population that was under attack from a tyrant who was later in The Hague. So, do you know what I mean? There’s a kind of tendency to polarise the argument rather than deal with a situation as it really presents itself.

Robert Shrimsley
I think Miranda’s right, but let me just polarise the argument for a moment. I think your point about Cyprus is a good one. I think actually that is an area where. Britain hasn’t looked quite on the on the ball when you . . . 

Lucy Fisher
We should just recap for listeners that Cyprus, the UK has two military bases on the island, really key to our defences in the region. And on Sunday a drone hit the base at RAF Akrotiri on Monday. Other drones have been intercepted and there’s been this kind of growing criticism openly from the Cyprus government that the UK has not done enough to protect the island.

Robert Shrimsley
I think that the criticisms about Cyprus are valid, but I do just think if you step back and look at what the different political parties have, what they’re arguing for, if you look at the Conservative position on this, which is essentially we must always be there with America.

So what you are actually arguing for is that Britain should essentially just commit to supporting the US in attacks whose clear strategic goal is imprecise, whose end game is unsure, whose leader may decide at any point to quit the field and declare victory and who has said in recent weeks they don’t need British forces any of the times that they’ve been engaged in military action before. And you think we should just agree to everything that Donald Trump asked in this basis for the sake of the special relationship, which doesn’t really exist in that way, and with the most transactional president ever, you think we just give a blank cheque. And I find that an astonishing position for political parties to be taking.

You know, as Keir Starmer is so unpopular nationally that he can get whacked for things, even when people think he’s in the right. And as Miranda was saying, he’s been flatfoot in certain ways and the press certain areas are going for him. But I think the position that — Of those who are just saying we should be their shoulder to shoulder with America. It just makes no sense from a country standpoint.

Lucy Fisher
I’ve also been really surprised by how hawkish both the Conservatives and Reform have been, and Nigel Farage has said it’s pathetic Keir Starmer’s inaction.

I just wonder if you guys have any sense or even speculation about what the end point is here for either Kemi Badenoch or Nigel Farage. Is it simply to egg on Trump, to criticise Starmer, to try and further fuel fissure between the UK and the US that will lead to him continuing to dump on the UK prime minister in the way that can be amplified by the Rightwing press.

Because I have to say, to me, it’s not enormously clear. And Robert, as you say, this is a very unreliable transactional president and people are already taking bets on when he might attack her, you know.

Miranda Green
Well you kind of wonder would they have argued for the UK to go into Vietnam as well? And famously we didn’t, and Harold Wilson then had difficulties with the White House then. And I think Kemi Badenoch, it was who said even Australia is backing it. Australia also, they also backed Vietnam. So that’s not a great comparison. And the Anglosphere as a whole is not obliged to act in unison. So it is a bit nuts.

I think you are right, Lucy. That has to be it, doesn’t it? That they think that in some way this is going to be humiliating for the UK, humiliating for the UK government. And that sort of helps their case, you know, generally about we must restore British pride and also they can hit the government on defence spending, I guess. You know, if you are Reform, you can say neither main party has been properly fulfilling the number one mission of any government to protect through defence.

Robert Shrimsley
And I think there are two attack lines that they got, one viable, one lesser. The less viable one is you are ruining the special relationship, and the country’s looking at Donald Trump and going, well, OK, the other one, which is you are weak. You look weak and incompetent in the nation’s defence, that’s a much more damaging line of attack. And so I can see the attraction of that for opposition parties.

Lucy Fisher
And just on that point, we’ve seen this curious reporting from The Spectator this week about the idea that Starmer couldn’t carry his cabinet with him in a crunch meeting of the National Security Council on Friday when they first discussed this idea of allowing the US military to use UK bases. Very detailed reporting from The Spectator suggesting that Ed Miliband, Rachel Reeves and Yvette Cooper all raised resistance to that idea. And it wasn’t until a second meeting on Sunday that Starmer was able to really bring them round, lead opinion and get that over the line.

Again, that does look weak, potentially, Robert, doesn’t it? And it plays into that sort of now pretty entrenched narrative that Stamer’s political authority is shot within his own cabinet.

Robert Shrimsley
The only quibble I have with, as you say, it was a very well reported piece, and the calls I’ve made on this broadly back up was being said, but the one quibble I have is whether the characterisation that Starmer went into this meeting with a fundamentally different position and was forced to back down rather than this was a slightly more open conversation where he was also taking the temperature of key figures in his cabinets.

I think there may be a touch more nuance in that, but you know, fundamentally, whichever way you read it, he would not have been able to carry important allies, notably Rachel Reeves on the course that he had on a more militaristic course. So whether he was pushed into this or whether he realised it for himself, there is something there.

Lucy Fisher
The other flank from which he’s facing pressure is international allies in the Gulf that have been hugely affected. And of course, it’s led to the shutdown of a lot of oil and gas production and exports through the Strait of Hormuz that many ships are not daring to cross at the moment in order to transport that energy out. Sam, tell us a bit about how the war so far has thrown the global economy into turmoil.

Sam Fleming
I mean, it’s a global shock. These are global commodities, global prices, and so anyone that imports oil and natural gas is affected. It is definitely the case, the UK is at the sharp end of this as a big importer of natural gas, not necessarily from the Gulf, but again, the LNG cargoes that we import will go up in price with the global price.

Gas is a huge input in terms of electricity pricing in the UK so it has a very strong impact. This big surge in the natural gas, worth remembering. The natural gas prices have moved very sharply, even compared with oil prices. And so that’s what makes, not only the UK but a lot of European countries, Italy, for example, as well, very vulnerable to this big commodity price surge and certainly more vulnerable in inflation terms than the likes of the US, which is more or less energy self-sufficient and where the gas price is less of a determining factor in terms of inflation.

So if you’re looking at some of the numbers that are coming out now, you could see an uplift which is twice as big to UK inflation from this energy price shock than the uplift by the end of the year for the US, for example, or Canada, another massive producer of fossil fuels.

So it’s terrible news for the global economy, bad for growth depending on how long it lasts, I should caveat all this. If this is a fleeting increase in commodity prices then clearly it may not have such durable effects on growth and inflation. But if this is something that lasts for a while, it will hit most countries. But I think that Europe looks pretty exposed, Asia as well, very exposed because a lot of what goes through the Strait of Hormuz ends up actually in Asian economies led by China, as well as South Korea, Japan as well. So these economies are gonna get hit pretty hard.

For the UK government, it’s pretty bad news, especially if this is a government which is hoping to see interest rate cuts again, has been pushing the cost of living messaging that I’m sure will come to. What does it mean when you suddenly have this big energy shock clobber you?

Lucy Fisher
I could ask, how does this compare to the sort of precipitous price rises we saw just after the Russian invasion of Ukraine and has the UK government done anything in that relatively short amount of time in sort of energy policy terms to insulate the UK economy from these energy price volatility spikes?

Sam Fleming
I think the comparison with ‘22 will hinge, as I said, on the duration of how long this goes on for because that was a long duration impact. Europe as a whole then, because it was having to rightly remove itself from Russian gas and oil supplies so which that meant that it had to then seek alternative supplies in order to diversify its supplies of energy.

The UK right now is going to, again, it depends on how long it lasts, but is going to see probably an increase in inflation weaker growth. It’s why the Spring Statement forecast early this week looked out of date the moment it landed. And there’ll be an increasing amount of pressure now as there was during the crisis after the invasion by Russia of Ukraine for government intervention, fiscal intervention, to cushion some of the impacts of this on household incomes.

But the problem is the fiscal position now is in a worse state than it was back then. We’ve had the impact on public debt of the Covid crisis and then the energy intervention that we had in after ‘22 invasion. So the government is just not fiscally well placed to do much in the face of it but I think the political pressure to do so will get bigger and bigger.

Lucy Fisher
We’ll come back and talk a little bit more about the spring forecast and anything else we learned from that in just a moment.

Robert, just on this idea of the impact on the global economy and the fact we’re seeing other European allies like France be pretty robust in their response militarily, sending a carrier to the region and so forth. Is that not an argument perhaps for the UK to be doing a bit more — to maybe bring about a quicker end to this war as that’s gonna be a key factor as Sam outlines.

Robert Shrimsley
I don’t quite get the argument because France is going (inaudible). France certainly didn’t feel that it had to go to Iraq because Britain did. If all of that in some way would end this conflict, there might be an argument.

But as far as I can see, what ends this conflict is either the destruction of the Iranian regime or America deciding it’s had enough. I mean Israel’s not going to end this conflict of its own volition because it thinks this is a winning strategy. So I’m not sure any of that reduces the conflict. If anything could go the other way and that it would fortify our allies in the Gulf in thinking we’ve got more protection now, we can hold out a bit longer. So I don’t see why that changes the calculation on it.

It’s fundamentally about and I think one has to look at this a little bit again through the prism of Ukraine, the nations of Europe, wanting to make sure that America can’t say down the line, where were you when we needed you? You know, we are done with Ukraine, which is hanging on by fingernails anyway in terms of the American position. So I think there’s a desire to show that you are good allies. And I think that’s a pressure Britain feels too but I’m not sure it would make a difference militarily.

Lucy Fisher
No. Miranda, how do you think the foreign office, the UK government, has been handling the 200,000 odd British citizens who’ve been stranded in the region? It’s been pretty chaotic, the attempt to get even a single charter flight off the ground from Oman to get the vulnerable out, hasn’t it?

Miranda Green
It’s not ideal. We do often seem to struggle with these sorts of logistical operations and I’m not quite sure why. Since we know where our citizens are. It should be possible to get them back more quickly. And I think it could cause a certain amount of ill feeling if they don’t manage it. I mean, we have had some extraordinary stories, of course, in the FT because the Gulf tends to be a place where the more well off contingent of Brits find themselves at sometimes for tax reasons. And we’ve got an extraordinary story about them actually trying to get back out there.

Robert Shrimsley
That’s brilliant story.

Miranda Green
In case they lose their tax status and are forced to pay full UK income tax, CGT, all the rest of it. So the self-interest of the Brits in the Gulf is a sort of interesting political conversation. I didn’t note that Ed Davey was deciding to say that they should be forced to pay more of their taxes, these tax exiles, if they’re expecting military defence of their lifestyle in far-flung places. Rescuing people from an imminent danger is clearly extremely important.

Robert Shrimsley
I mean, it comes particularly tourists but I do wonder how much the country would look at this. Well, if you choose to base yourself in the Middle East, you have to accept that this is something that happens occasionally. Is it the responsibility of the British government to get you out when you knowingly put yourself there? I think there is a humanitarian need to do this but I do think . . . I do wonder how bad it will have to get before the country starts getting terribly concerned about them.

Miranda Green
Well, I don’t know. I mean, there are isolated cases, aren’t there? Even before the current crisis, there was a couple, I think, who did a motorcycle tour across Iran. And then captured out still by and still banged up and they were told not to go, you know. I mean that’s . . . 

Robert Shrimsley
If there was street dogs, that’d be a different matter. In street dogs, so you’d get a rescue flight in ofcourse.

Miranda Green
Well, it’s a really good point because going back to the Boris Johnson era, all the controversy about whether the soft-hearted Brits were trying harder to get animals out than humans from Kabul in the last days of that evacuation. We don’t always come across in a great light.

Lucy Fisher
Well, let’s move on to talking a little bit more about the spring forecast. Sam, you’ve made clear why a lot of it is completely outdated because events in Iran have overshadowed the OBR’s forecasts. Are there any key takeaways that still stand beyond that?

Sam Fleming
Well, look, I think that we . . . if you think about what Rachel Reeves is trying to do with the spring forecast, it was precisely nothing on that basis. It was a success because she really didn’t do anything at all. (Laughter) The attention, therefore, of the media, people like me was, OK, fine, there aren’t gonna be any policy but there could be a forecast and there could be interesting trends and developments since November.

In the OBR’s outlook, not really much of that either. In the Outlook, it marked down growth. This year a bit then comes back a bit more strongly down the road, that this is an OBR, which currently doesn’t have a director. They aren’t making big calls right now on the British economy. Firstly, not that much time has passed since the November forecast, needless to say, which was chaotic for all sorts of reasons that we’ve spoken about on this show before.

But the point now is that the OBR is gonna do a lot more work in the lead up to the Budget in the autumn on the economy and longer term trends and that’s when you might see some bigger changes. This was an update more than a full forecast worth remembering also that it did not provide a judgment on whether Rachel Reeves’ meeting her fiscal rules or formal judgment. It was still perfectly possible to see whether she was.

And if anything, the trends have gone slightly in her favour since November so her headroom against her key fiscal rule is up by £2bn or £3bn. Since then, so broadly before this shock, this Middle Eastern energy shock, she was probably expecting to be able to say, look, the strategy is working. I’m not doing anything now. It’s all about stability. The public finance incrementally improving growth. OK, fine. Bit of a downgrade this year but it comes back afterwards. Inflation lower than expected and the strategy is working. Yeah, that became impossible really as an argument to sustain in the midst of an equity sell-off, surging oil prices, surging gas prices and all the chaos that we’ve been discussing.

So I think right now, the best thing you could say about this event is that no further damage was done by the government policy-wise and the OBR forecast was largely benign but totally outta date.

Robert Shrimsley
I do think there were a couple of interesting data points in the OBR forecast which jumped out to me, both of which I’ll now get wrong and Sam will have to correct me on. One of which was that after a bit of a period of decent wage growth, it’s going to slow down considerably next year and beyond. So what is almost a 20-year stagnation in incomes? There’s been a bump up but it’s gonna come to a halt and I think that’s quite a worrying thing.

For the other one I noticed, it was just the number and it was the rise in the welfare Budget. Between now and 2030 welfare, and this is a number that includes pensions as well as welfare benefits. And I think it went from somewhere like £330bn a year to over £400bn.

By 2030, it’s just absolutely staggering numbers and some of the numbers on the people on claimant of disability benefits, I think I saw one. It’ll be up by £8.8mn. By 2030 and you think these numbers are very hard to sustain. If you start to extrapolate those into debt against GDP, you’re getting into some very ugly territory in the not too distant future.

Lucy Fisher
And yet, Labour’s already had one go at cutting welfare which in fact wasn’t going to cut the bill over at all. It was just going to reduce the rate of increase. And now we know Pat McFadden’s gonna come back a second time. I slightly wonder if the government should make more of the argument that unless they take action to really grip this issue. Then either the economy is at risk of forcing a massive haircut or it’s going to bolster the chances of a sort of radical insurgent party like Reform to just completely overhaul the whole system.

Sam Fleming
And I think that it’s worth pointing out here that some of these pressures are gonna crystallise quite soon. Now, defence is one where, again, Keir Starmer was being asked on Thursday about his suggestion that he wants to go faster in terms of his catching up towards the higher Nato defence spending targets but not really giving any clarity as to how he intends to do that.

It’s clear that this unaddressed defence spending gap is going to have to be dealt with as a political issue in the coming months. This isn’t something that is an issue for 2030. It’s an issue now. So the pressure fiscally is getting really intense.

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Lucy Fisher
Something else that’s happened this week which I think will make a ripple in the headlines amid everything else that’s happening is Home Secretary Shabana Mahmood announcing immigration policy. Miranda, limiting financial support, offering asylum seekers money to return a block on student visas from certain countries, what’s the main takeaway for you from what she announced?

Miranda Green
So what I thought was difficult about her démarche on this tricky area of policy was that it had started out pitched as, you know, crack down. Shabana Mahmood, tough on immigration, tough on the causes of immigration and asylum seekers, which is obviously a very complicated policy area where no government has solved the issue in recent decades.

But then when she came to give her speech launching the policy, it was couched as this is all of a piece with Labour values. And I didn’t think it quite worked in either direction, but I also think that in the wake of the Gorton and Denton by-election result, this whole Starmer government strategy of trying to play to the right and outtough Farage, or at least placate that wing of their potential support, it looks in trouble and looks sort of misguided and I’m just not sure. I’m just not sure.

Almost every psephologist now, well actually before Gorton and Denton, but certainly in the last week, has been pointing out that one in 10 Labour voters may be drifting away to Reform, but it’s more like one in five to the Greens and possibly the Lib Dems. And actually playing to this sort of wing isn’t helping them electorally at all, and it’s partly responsible for the kicking they got in Greater Manchester last week.

Lucy Fisher
Robert, you’re looking quizzical.

Robert Shrimsley
I get the argument Miranda is making and I do see. Yeah, obviously there’s a political point, there’s a policy point here.
On the political point that Miranda’s making, you ought to be tacking more towards the people who’ve gone to the Greens, tacking Left. I have an instinct, this is not quite right. I think that actually, if you look at what happened in Gorton and Denton, essentially 70 per cent of the voters voted for a populist party. In the part of the constituency that you thought would vote Reform, it did. And in the part that you thought would vote Green, it did. So basically there’s a whole bunch of people, and although they’re completely different in terms of their analysis of what needs to change, they’re not different in their point of view that actually what’s the problem with Britain is it’s a rigged society which doesn’t give a fair shake to ordinary people.

Now if you’re in Reform, you think it’s because we’re spending too much money on immigrants and favouring them. And if you are in Green, you think it’s because we’ve not attacked billionaires enough. But fundamentally, there’s a view that says, we are not giving anybody a fair shake. And I think this argument that you should either attack Left to get the Greens back or Right to get the Reform voters back is slightly missing the point.

You’ve actually got to run down the middle of this and say they’ve got an argument on immigration. We don’t go as far as Reform because we don’t like the way their couch is and what they’re about. And they’ve got an argument on fairness and affordability and somehow you’ve got to weave a course. And so I don’t think that what Shabana Mahmood is trying to do, and I think by the way, she’s one of the most impressive people in the cabinet. She’s driven, she’s focused. And she’s got energy. What she’s trying to do I think is not at all wrong tactically in the big picture terms, even if it gets a bit of flak now. Where I think there’s a problem is in some of that details, the policy. So for example, the retrospective . . . 

Miranda Green
That matters. That matters even getting it through the Commons, you’ve got hundreds odd backbenchers signed up to a letter opposing it.

Robert Shrimsley
But I mean, if you look at the point, the point about extending the time it takes for people already here. So retrospective saying you thought you could get citizenship in five years, it’s gonna be 10. And I think that’s one of those things it feels to me that’s one of those policies. There’s there to be, you know, forced a compromise. A compromise forced on that actually. Our MPs will force it back to seven or whatever it’s, or six. I think it’s one of those things that sounds fine. When you think of immigrants just as an amorphous lump of people you don’t know and they’re these people, they’re coming here, why shouldn’t they do X, Y, and Z?

But we’re talking about people that the public know. They’re talking about your neighbours, the people who look after your parents in an old age home, teachers, whatever it is. They’re real people and all of a sudden you’re dealing with real people whose chances of settling in Britain are being changed and people you know and like. So I think that’s where this is gonna hit the buffers a little bit and I think she’s gonna be forced both for the part of the reasons Miranda’s mentioned and just because of a wider public pushback on this. I think she’s gonna be forced to rethink some of that.

Miranda Green
I don’t disagree with that at all. I think that’s right. But, and also on, on the specific policies, some of the stuff around visas for those in education is a bit nuts. It takes a lot longer than five years at the moment for people who go through the higher education system because they have to do it afterwards, so they’re already waiting a long time. As you say, there are people embedded in communities. Does it help community cohesion to make it more uncertain whether people can stay here even after five years?

Lucy Fisher
This clamp down on legal migration has an impact on the economy. We’ve already seen the projections for net inward migration undershoot this year, and I think that’s true of the years ahead.

What does that mean for the economy going forward? Could we end up in a similar situation to Denmark that’s had so much success in its clamp down that it’s led to labour force problems?

Sam Fleming
I think that it is a genuine question now as to whether the migration story becomes a drag fiscally and therefore an economic and fiscal drag because of this attempt to drive it down rapidly. And it does have very direct effects on the public finances in the short term, and not necessarily in the longer term, but in the short term, if you are thinking, you know, horizon of under five years, which is what politicians currently in power are.

This could really come back to bite them quite severely because if you get a downgrade in the migration forecast by the OBR following the next updated figures from the Office for National Statistics. If that comes later this year, and a lot of economists think it will because of the extent of this dive in net migration, that will carve a very big hole in the public finances. And the government is gonna have to explain how it responds to that.

On top of that, then you can talk about what Miranda and Robert have been talking about in terms of the wider implications societally from this immigration policy. But broadly speaking, the country needs to be attracting bright people into the workforce. It has relied in terms of the modicum of overall headline growth it’s had on pretty high migration numbers for the past few years, including under Boris Johnson. We’re now seeing a very sharp reversal of that, and that will have real economic impacts.

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Lucy Fisher
We’ve just got time left for Political Fix stock picks. Miranda, who are you buying or selling this week?

Miranda Green
Well, I’m selling first-past-the-post. Our voting system, which famously is supposed to ensure predictability and large, majoritarian stable government because under what’s happening at the moment on the dramatic fracturing of the electorate, it’s actually become what the professor of politics, Rob Ford, calls an amplifier of volatility because as we saw last week in Gorton and Denton, if you’ve got three way fights where it’s really close, obviously the result in the end wasn’t quite as close, but across the country, you are gonna get probably several hundred places where it’s the toss up.

It’s very hard for the electorate to work out who is in second place if they want to vote tactically. We’re gonna have complicated tactical anti-Starmer voting, as well as anti-Farage voting, probably maybe even anti-Green voting for those on the Right who are scared about Green influence in any sort of coalition. And it’s just gonna be an absolute mash-up. So first-past-the-post is not serving us that well under this European style multi-party democracy situation.

Lucy Fisher
Robert.

Robert Shrimsley
OK, so coming down here, I was slightly conflicted. My first instinct was to buy Hannah Spencer, the new Green MP who won last week’s by-election because I thought she was a sensational candidate. I think looking . . . 

Lucy Fisher
Yeah, agree.

Robert Shrimsley
In hindsight, they could probably put a muppet up there and won, but they didn’t do that. They had a working class plumber. She was great, she was articulate and the kind of candidate who both Reform and the Labour Party would quite like to have had if she felt her views aligned with them. And I just think we’re gonna see a lot of her because she’s gonna be a sort of a poster child for the new Green strategy of we’re talking to ordinary people. So, so I was tempted to buy her but . . . 

Lucy Fisher
You’d be buying at the top of the market? Yeah.

Robert Shrimsley
Well, I don’t think, no, but I don’t think we, I will, I think that she’s gonna keep rising, but nervous of that point I have decided. And in doing so, to almost certainly finish his political career, I’m gonna buy Keir. I think he’s had what will be seen as being a decent week. I think that in the way he’s handled this, in spite of the errors that Miranda talked about earlier.

And I recognise those points, I think the public will A, look at him and think, well, which of the other potential Labour leaders would I rather have seen handling this crisis this week? And the party will be thinking that too. And B, they will think he has stood up to Trump a bit. He hasn’t gone thrown us casually into war, and I think this will help him a little bit.

Miranda Green
Good point. What about you, Lucy?

Lucy Fisher
I’m going to buy Dan Jarvis, the security minister who had to come to the floor of the Commons this week to announce that three men had been arrested on suspicion of spying for China. And ultimately, I think we’re gonna be hearing a lot more from Jarvis because this issue with China and its risks, it poses on the security front aren’t going away.

We’ve got a review urgently commissioned in December into financial interference in UK politics that’s expected out shortly that he’s gonna have to work out what to do with. And also I think there is going to be changes to the foreign influence registration scheme in the UK that it’s gonna make it more difficult for people based in the UK to do business with Chinese entities that are linked to the state in certain capacities. So I think Dan Jarvis will be someone we’re hearing a lot more from this year.

Sam, who are you buying or selling?

Sam Fleming
So I think the Labour frontbenchers might be unusually pleased to hear they’ve got two buys this week because I’m gonna put my money where my math is and buy Rachel Reeves because there was genuinely a bit of stability. And if you think about the fiscal story last year, it was total chaos leading up to the Budget, as we all know.

The speculation was started in the summer and it got more and more frenzied and more and more mad with U-turns. And we don’t need to rehearse that story. This was a far calmer event. She did what she set out to do, which was precisely nothing. Now, if the way you achieve some sort of fiscal stability is by doing absolutely nothing, then it’s probably not a sustainable strategy in the longer term, or even in the medium term, but in the very short term, and therefore a short term by perhaps, I would say she was right to try and aim for one fiscal event a year. She was right to do nothing this week. And so there’s a why.

Robert Shrimsley
Just to pick up on standpoint, I was talking to a Labour minister who said actually there’s been a shift in the power balance between her and Keir Starmer. Until a while ago, it was being said he was keeping her in her job, whereas now she’s actually, because of the security of the markets, the way they like her. She’s actually a little bit more powerful against him, so I thought was interesting. But I do like the idea of her doing nothing and doing it very well.

Lucy Fisher
Well, that’s all we’ve got time for this episode of the FT’s Political Fix. Sam, Miranda, Robert, thanks for joining.

Miranda Green
Bye.

Robert Shrimsley
Bye, Lucy.

Sam Fleming
Bye.

Lucy Fisher
And that’s it for this episode of the FT’s Political Fix. I’ve put links to subjects discussed in this episode in the show notes. Do check them out. They’re articles we’ve made free for Political Fix listeners. There’s also a link there to Stephen’s award-winning Inside Politics Newsletter. You’ll get 30-days free.

Political Fix was presented by me, Lucy Fisher, and produced by Clare Williamson. Laurence Knight is the executive producer. Sound Engineering by Sean McGarrity. The broadcast engineers are Andrew Georgiades and Petros Gioumpasis. Cheryl Brumley is the FT’s global head of audio. We’ll meet again here next week.