Bloomberg Audio Studios, podcasts, radio news. You're listening to Bloomberg UK Politics. I'm Stephen Carroll and.

Bloomberg Audio Studios, podcasts, radio news. You're listening to Bloomberg UK Politics. I'm Stephen Carroll and.

I'm James Walcock. So Stephen, I come in very early into work and I often worry that this is increasingly becoming slightly too much of my identity. But I do notice that it's getting increasingly dark outside.

I'm James Walcock. So Stephen, I come in very early into work and I often worry that this is increasingly becoming slightly too much of my identity. But I do notice that it's getting increasingly dark outside.

Oh, James, it's mid August.

Oh, James, it's mid August.

I know, I know, and I'm the early one, so I'm the canary in the coalvine here, but I even sort of colleague growing a proper jacket, and so you know what that means. It is turning, the seasons are going and someone who I think is going to be quite concerned about the sunlight fading is Chancellor Rachel Reads. Now we know that autumn is going to be a very difficult time for this new Labor government. You have a civil servant spending review, and that's coupled with the budget and likely tax increases, and we can already see some of those difficult decisions in her announcement. The winter fuel ounce will from this year be means tested. It's caused a lot of controversy recently, a petition to keep the measure by charity AGK has surpassed four hund thousand signatures, and on top of that, a new survey shows that a quarter of UK residents are considering turning off their heating due to fears about rising bills this winter, when the energy cap price is going to be unleashed this Friday. So all of this is going to spell quite a difficult picture for the new government as it has promised to lower energy costs and help the country's most vulnerable.

I know, I know, and I'm the early one, so I'm the canary in the coalvine here, but I even sort of colleague growing a proper jacket, and so you know what that means. It is turning, the seasons are going and someone who I think is going to be quite concerned about the sunlight fading is Chancellor Rachel Reads. Now we know that autumn is going to be a very difficult time for this new Labor government. You have a civil servant spending review, and that's coupled with the budget and likely tax increases, and we can already see some of those difficult decisions in her announcement. The winter fuel ounce will from this year be means tested. It's caused a lot of controversy recently, a petition to keep the measure by charity AGK has surpassed four hund thousand signatures, and on top of that, a new survey shows that a quarter of UK residents are considering turning off their heating due to fears about rising bills this winter, when the energy cap price is going to be unleashed this Friday. So all of this is going to spell quite a difficult picture for the new government as it has promised to lower energy costs and help the country's most vulnerable.

Yeah, it certainly seems too a bit of a string of bad news and warnings that things are going to be less optimistic, more gloomy, perhaps after the rush of optimism that we've had since the election. As well, because of course the price cap announcement to the expectation from one researcher from Cornwaller saying that they're expecting to go up by some nine percent this Friday, which course will come in to force from October. So that's something to watch out for as well. But there's a question too about I suppose how you politically talk about these difficult decisions. Could Labor have been more upfront for the election about some of the difficult decisions they were going to have to make. You could argue that they said it often enough that it was going to be difficult. We had that, of course, press conference and Rachel Reeves and they talked about the fiscal black hole that they'd found in the finances as well. So the questions are is how important were how politically astutes us to make decisions like that around the winter fuel allowance. It's clearly going to cause some people quite a lot of pain. There's going to be about ten million fewer people entitled to that fuel allowance this year as a result of it becoming means tested. But then there's the question of do you get the bad news out of the way first when you've been elected. Think back to twenty ten and the VAT hike under George Osborne. Is that something that voters really remembered when they went to the polls the next time after that? Well, let's get the view of someone who's very well versed in labor strategy, John mcturnaman. John McTurnan served as political secretary to Tony blairn advisor to labor parties. Now it's senior advisor at the communications firm BCW.

Yeah, it certainly seems too a bit of a string of bad news and warnings that things are going to be less optimistic, more gloomy, perhaps after the rush of optimism that we've had since the election. As well, because of course the price cap announcement to the expectation from one researcher from Cornwaller saying that they're expecting to go up by some nine percent this Friday, which course will come in to force from October. So that's something to watch out for as well. But there's a question too about I suppose how you politically talk about these difficult decisions. Could Labor have been more upfront for the election about some of the difficult decisions they were going to have to make. You could argue that they said it often enough that it was going to be difficult. We had that, of course, press conference and Rachel Reeves and they talked about the fiscal black hole that they'd found in the finances as well. So the questions are is how important were how politically astutes us to make decisions like that around the winter fuel allowance. It's clearly going to cause some people quite a lot of pain. There's going to be about ten million fewer people entitled to that fuel allowance this year as a result of it becoming means tested. But then there's the question of do you get the bad news out of the way first when you've been elected. Think back to twenty ten and the VAT hike under George Osborne. Is that something that voters really remembered when they went to the polls the next time after that? Well, let's get the view of someone who's very well versed in labor strategy, John mcturnaman. John McTurnan served as political secretary to Tony blairn advisor to labor parties. Now it's senior advisor at the communications firm BCW.

John.

John.

Great to have you with us on the program. Is this the case that Labor told us things were going to be difficult, The decisions are coming now and we're sort of just getting an idea. I suppose of how difficult the situation is, Well.

Great to have you with us on the program. Is this the case that Labor told us things were going to be difficult, The decisions are coming now and we're sort of just getting an idea. I suppose of how difficult the situation is, Well.

I think you knew how difficult it was going to be because the government, the Tory government, held an early election. If they thought there was any headroom in the budget available, they'd have had a September fiscal event, probably another cut in National insurance and attempt to make tax cuts versus tax increase in the dividing line of an election. So I think both parties knew it was going to be hard. The Tories did their best to kick things down the road so that they will crystallize under Grewevers the next government. And I think that's what the intention of Rachel's early statement on the state of the budget was to frame this up as we've had a terrible inheritance.

I think you knew how difficult it was going to be because the government, the Tory government, held an early election. If they thought there was any headroom in the budget available, they'd have had a September fiscal event, probably another cut in National insurance and attempt to make tax cuts versus tax increase in the dividing line of an election. So I think both parties knew it was going to be hard. The Tories did their best to kick things down the road so that they will crystallize under Grewevers the next government. And I think that's what the intention of Rachel's early statement on the state of the budget was to frame this up as we've had a terrible inheritance.

And yes, that is, you know, an attempt to.

And yes, that is, you know, an attempt to.

Do the same thing that George Osborne did with attacking the labor government. Consistently blame the labor government formed the global financial crisis. And the key about the global financial crisis is it was global.

Do the same thing that George Osborne did with attacking the labor government. Consistently blame the labor government formed the global financial crisis. And the key about the global financial crisis is it was global.

It wasn't made in Dining Street. It was made on Wall Street.

It wasn't made in Dining Street. It was made on Wall Street.

I think though, in hindsight now we're sort of out of the blitz of the election campaign. Do you think the Labor administration was that the shadow administrations that was then tied themselves too tightly in their campaign promises.

I think though, in hindsight now we're sort of out of the blitz of the election campaign. Do you think the Labor administration was that the shadow administrations that was then tied themselves too tightly in their campaign promises.

Oh look, I think they should probably stuck much more rigidly to the line that Tony Blair and Gordon Brown had in nineteen ninety seven. The election campaign then, when Labor basically said I will not raise the basic creative income tax, which left a great deal more of flexibility, and Labor were forced by a weak Tory government who were who didn't move in the polls, didn't move in the polls really from October twenty twenty two when Rashi took over to the election day. So dying Labor, a dying Tory government, a dying Tory government I was unable to shift the needle at all in anything they did.

Oh look, I think they should probably stuck much more rigidly to the line that Tony Blair and Gordon Brown had in nineteen ninety seven. The election campaign then, when Labor basically said I will not raise the basic creative income tax, which left a great deal more of flexibility, and Labor were forced by a weak Tory government who were who didn't move in the polls, didn't move in the polls really from October twenty twenty two when Rashi took over to the election day. So dying Labor, a dying Tory government, a dying Tory government I was unable to shift the needle at all in anything they did.

But Labor got too scared. I think.

But Labor got too scared. I think.

So if you rule out any changes on any level of income tax of any of the bands, you rule out any changes on VAT level or coverage, and you rule out anything on national insurance, you rule out a huge amount of revenue. Just simply reversing the national insurance cuts that were pushed through by the tours to try to buy votes but failed to buy votes, would give labor a lot more spending power. And I think that was understandable caution because labor had lost four elections in a row. But if you rule out all of those taxes, which are basically on individual workers, you end up with only two areas to tax, which is pensions and property. And I don't think they are going to be any easier to tax than any of the other areas. So labor has got itself into a difficulty on tax and spend trying to answer the Tory accusation, which is.

So if you rule out any changes on any level of income tax of any of the bands, you rule out any changes on VAT level or coverage, and you rule out anything on national insurance, you rule out a huge amount of revenue. Just simply reversing the national insurance cuts that were pushed through by the tours to try to buy votes but failed to buy votes, would give labor a lot more spending power. And I think that was understandable caution because labor had lost four elections in a row. But if you rule out all of those taxes, which are basically on individual workers, you end up with only two areas to tax, which is pensions and property. And I don't think they are going to be any easier to tax than any of the other areas. So labor has got itself into a difficulty on tax and spend trying to answer the Tory accusation, which is.

That labor will always spend more, will always.

That labor will always spend more, will always.

Increase taxes, the problem being the country versive for change and you vote for more of the same.

Increase taxes, the problem being the country versive for change and you vote for more of the same.

So I mean, I'd argue that characterization you just gave is kind of one of the unforced political error I guess to a lot of our listeners. You know, people in business, finance, senior in the civil service, they will be wondering if they are tied in too tightly for any kind of easy solutions. They're going to have to make some portions of the population suffer. And at the moment, like you say it's pensions, it might as be property holders. We will see what are the core missions of this government. Who is going to suffer the least? Who is going to be prioritized If, like you say, we are going to have to renege on some of these promises.

So I mean, I'd argue that characterization you just gave is kind of one of the unforced political error I guess to a lot of our listeners. You know, people in business, finance, senior in the civil service, they will be wondering if they are tied in too tightly for any kind of easy solutions. They're going to have to make some portions of the population suffer. And at the moment, like you say it's pensions, it might as be property holders. We will see what are the core missions of this government. Who is going to suffer the least? Who is going to be prioritized If, like you say, we are going to have to renege on some of these promises.

Well, I don't think. We don't think promises being reneged on.

Well, I don't think. We don't think promises being reneged on.

I think the the the unarguable core of the non negotiable core of the Labor and Manifesto, the labor missions, the government's missions.

I think the the the unarguable core of the non negotiable core of the Labor and Manifesto, the labor missions, the government's missions.

Is to create a fairer country.

Is to create a fairer country.

Fairness is at the heart of all that Labor stands for, what labor governments do, and that's really the core of the change on the winter fuel allowance is it's no longer fair to give that money to every pension. Of that money should be targeted. I think that is a good argument and a good way of understanding it. Because this year's operating of the state pension is larger than the winter fuel allowance, next year's operating of the State pension will be larger.

Fairness is at the heart of all that Labor stands for, what labor governments do, and that's really the core of the change on the winter fuel allowance is it's no longer fair to give that money to every pension. Of that money should be targeted. I think that is a good argument and a good way of understanding it. Because this year's operating of the state pension is larger than the winter fuel allowance, next year's operating of the State pension will be larger.

Than the winter fuel lowance.

Than the winter fuel lowance.

For fourteen years there's been the triple lock, which links pensions quite often gets linked to earnings, which is a big uplift. Labour's give it the triple lock for the next five years the term of the government. That means nearly twenty years of the triple lock. The winter fuel allowance is an old allowance. It was brought in when pensions were only linked two prices, and there was one year, wasn't there when the pension only went up by seventy five? So you can see there's a fairness argument lurking in what labor's done. I don't think it's been pushed hard enough or made hard enough.

For fourteen years there's been the triple lock, which links pensions quite often gets linked to earnings, which is a big uplift. Labour's give it the triple lock for the next five years the term of the government. That means nearly twenty years of the triple lock. The winter fuel allowance is an old allowance. It was brought in when pensions were only linked two prices, and there was one year, wasn't there when the pension only went up by seventy five? So you can see there's a fairness argument lurking in what labor's done. I don't think it's been pushed hard enough or made hard enough.

If labor were.

If labor were.

Clearer that actually what's driving what they're doing is not balancing the books. But what's driving is an aim for growth and the name for greater fairness. That would be stronger ground to stand on.

Clearer that actually what's driving what they're doing is not balancing the books. But what's driving is an aim for growth and the name for greater fairness. That would be stronger ground to stand on.

But fairness can be subjective as well from certain people's point of view. And certainly, while you lay out the mats of it very clearly, it's still it's very difficult to shake off the idea of pensioners switching off their heat because they say they can't afford it, or they feel they can't afford it. How does a new labor government with the wind in its sales, try to push back against that pretty stark image.

But fairness can be subjective as well from certain people's point of view. And certainly, while you lay out the mats of it very clearly, it's still it's very difficult to shake off the idea of pensioners switching off their heat because they say they can't afford it, or they feel they can't afford it. How does a new labor government with the wind in its sales, try to push back against that pretty stark image.

Well, the.

Well, the.

Fact is that pension credit has increased as well as the.

Fact is that pension credit has increased as well as the.

State pension.

State pension.

You know, state pension was in twenty ten wars it was around one hundred pounds seven pound. One hundred pounds is now around too and twenty pounds has.

You know, state pension was in twenty ten wars it was around one hundred pounds seven pound. One hundred pounds is now around too and twenty pounds has.

Been really big. Increases have come through.

Been really big. Increases have come through.

Correctly and rightly to to to to pensioners. The issue that it was underplayed, I think it is probably the the weakness in the argument is of the you know, two point three two point four million pensioners who could who could claim pension credit and therefore bring bring the poorest vents be brought, brought, brought higher up, and the pensions are going to be targeted with winterfields. Over a third of them don't pay pension credit, and so the balancing policy with targeting has to be to you know, use local government, use government national government data, use use machine learning in AI to identify who are these who are these eight hundred nine hundred thousand pensioners who are entitled the pension credit don't claim it. There's kind of a lack of sophistication in a way, which is that we know the money should be targeted.

Correctly and rightly to to to to pensioners. The issue that it was underplayed, I think it is probably the the weakness in the argument is of the you know, two point three two point four million pensioners who could who could claim pension credit and therefore bring bring the poorest vents be brought, brought, brought higher up, and the pensions are going to be targeted with winterfields. Over a third of them don't pay pension credit, and so the balancing policy with targeting has to be to you know, use local government, use government national government data, use use machine learning in AI to identify who are these who are these eight hundred nine hundred thousand pensioners who are entitled the pension credit don't claim it. There's kind of a lack of sophistication in a way, which is that we know the money should be targeted.

We know that the targeting of the benefit Penchrick.

We know that the targeting of the benefit Penchrick.

Credit, that this is meant to be the vehicle together the mid fuel other people, and we know that's not reaching over a third of the people who should be should be receiving receiving that support. And I think that's the kind of thing if you you know, if if if fairness and and tackling inequality is the core of the labor missions, because it's right there at the heart of all the missions, the five missions, then it needs to be there in the delivery of the heart decisions as well, because the heart decisions, you know, in terms of labors, labor pressure inside inside the movement, inside the Partnership party, even inside the cabinet is to end the two child limit in support for children. That's because the two child limit is putting kids into poverty and that has to be something that a labor government stops doing. So this test you fairness may well be something that's contestable, but unfairness is objectively clear, and it's clear in lots of areas in the Country's clear in the lack of access to council housing it's clear in the impact of rents on individuals, as clear in the impact of house and so there's a sense in which Labors not arguing strongly for its mandate. It's a mandate for change, it's a mandate for the missions, it's a mandate for tackling inequality and can bring greater fairness through the system, whether it's social care or whether it's access to social housing.

Credit, that this is meant to be the vehicle together the mid fuel other people, and we know that's not reaching over a third of the people who should be should be receiving receiving that support. And I think that's the kind of thing if you you know, if if if fairness and and tackling inequality is the core of the labor missions, because it's right there at the heart of all the missions, the five missions, then it needs to be there in the delivery of the heart decisions as well, because the heart decisions, you know, in terms of labors, labor pressure inside inside the movement, inside the Partnership party, even inside the cabinet is to end the two child limit in support for children. That's because the two child limit is putting kids into poverty and that has to be something that a labor government stops doing. So this test you fairness may well be something that's contestable, but unfairness is objectively clear, and it's clear in lots of areas in the Country's clear in the lack of access to council housing it's clear in the impact of rents on individuals, as clear in the impact of house and so there's a sense in which Labors not arguing strongly for its mandate. It's a mandate for change, it's a mandate for the missions, it's a mandate for tackling inequality and can bring greater fairness through the system, whether it's social care or whether it's access to social housing.

See John, This is why it's so good to have you on because I would argue that you just there very eloquently painted a much clearer picture than some Labor politicians of what they want to do. I think, like you've already noted and Poles have said, people voted to be rid of the Conservatives, and in many ways Labor haven't defined this mission as clearly as you have. So I think like you say, you look at social care, you look at immigration, obviously a big issue at the moment, local government finance, the number of crises looming. Is there a risk that because Labor haven't defined themselves in the election campaign, they are now going to be defined by their tough choice of an office.

See John, This is why it's so good to have you on because I would argue that you just there very eloquently painted a much clearer picture than some Labor politicians of what they want to do. I think, like you've already noted and Poles have said, people voted to be rid of the Conservatives, and in many ways Labor haven't defined this mission as clearly as you have. So I think like you say, you look at social care, you look at immigration, obviously a big issue at the moment, local government finance, the number of crises looming. Is there a risk that because Labor haven't defined themselves in the election campaign, they are now going to be defined by their tough choice of an office.

The danger is to end up seeming like technocrats not politicians, because the country didn't vote for better management of a conservative approach to the United Kingdom. They voted for change, change of management and change, change of direction. And it's clear the country understands it took fourteen years to destroy the economy, it took fourteen years to destroy public services. It will not be reversible in fourteen days.

The danger is to end up seeming like technocrats not politicians, because the country didn't vote for better management of a conservative approach to the United Kingdom. They voted for change, change of management and change, change of direction. And it's clear the country understands it took fourteen years to destroy the economy, it took fourteen years to destroy public services. It will not be reversible in fourteen days.

And the Labor.

And the Labor.

Government, one of the interesting things is it have only been in part for six weeks, seven weeks, hardly been in office for a minute. And so the way to get people to buy into a project of change is to be clearer, and here was during the election campaign, but there's been less of this in government. Renewing is what's required, and a decade of renewal means making slow but steady and irreversible progress. And I think that sense of the political narrative that colors in the missions, the political narrative that sits around all the actions, a political narrative.

Government, one of the interesting things is it have only been in part for six weeks, seven weeks, hardly been in office for a minute. And so the way to get people to buy into a project of change is to be clearer, and here was during the election campaign, but there's been less of this in government. Renewing is what's required, and a decade of renewal means making slow but steady and irreversible progress. And I think that sense of the political narrative that colors in the missions, the political narrative that sits around all the actions, a political narrative.

That explains why the hard choices are.

That explains why the hard choices are.

It cannot be that a labor government, a labor cabinet, a labor chancellor, a labor prime minister stands up and says we'd like to do this, we don't have the money.

It cannot be that a labor government, a labor cabinet, a labor chancellor, a labor prime minister stands up and says we'd like to do this, we don't have the money.

That's not the.

That's not the.

Ideology a social democratic party, it's the ideologian accountant.

Ideology a social democratic party, it's the ideologian accountant.

John. Thank you very much for your time and insights in the program today. John McTurnan serves as political Secretary Tony Blaine Senior Advisor of the communications firm b CW. That's it from us for today. If you like the program, don't forget to subscribe and give it five stars so other people can find it on Apple Podcasts, Spotify, or wherever you listen.

John. Thank you very much for your time and insights in the program today. John McTurnan serves as political Secretary Tony Blaine Senior Advisor of the communications firm b CW. That's it from us for today. If you like the program, don't forget to subscribe and give it five stars so other people can find it on Apple Podcasts, Spotify, or wherever you listen.

This episode was produced by Tia Adebayer and Sophie Arundel and our audio engineer. It was Pete Nicolino, is Will Cock.

This episode was produced by Tia Adebayer and Sophie Arundel and our audio engineer. It was Pete Nicolino, is Will Cock.

And I'm Stephen Carroll. Will be back with more tomorrow. This is Bloomberg

And I'm Stephen Carroll. Will be back with more tomorrow. This is Bloomberg