This is an audio transcript of the Political Fix podcast episode: ‘Cabinet fightback — the revolt over spending’

Lucy Fisher
We’re now firmly in Budget season. Robert, just how miserable are ministers?

Robert Shrimsley
They’re miserable. There’s no way past it. There’s no one walking around with a spring in their air and smelling the flowers. They’re all down.

Lucy Fisher
George?

George Parker
Everyone says it’s grim, very miserable. It’s cheese-paring, it’s cutting stuff back. They hate this kind of stuff. But you know, it’s part and parcel of the spending review process.

[MUSIC PLAYING]

Lucy Fisher
Hello and welcome to Political Fix from the Financial Times with me, Lucy Fisher. Coming up, the cabinet fights back. Ministers revolt against Starmer and Reeves’s dire plans to cut public spending. Also, we’ll take a closer look at the justice system, drowning in cases and unable to cope. Plus, the Tory leadership race enters its final stretch. To discuss all of this and more, I’m joined in the studio by Political Fix regulars Robert Shrimsley. Hi, Robert.

Robert Shrimsley
Hello, Lucy.

Lucy Fisher
And George Parker. Hi, George.

George Parker
Hi, Lucy.

[MUSIC PLAYING]

Lucy Fisher
So let’s talk first about the spending review, shall we? That’s been the big kind of crunch point this week. George, you’ve written a lot about how Keir Starmer and Rachel Reeves are now facing down this cabinet revolt. Ministers are in complaining mode about just how strict the Treasury are being. Tell us more.

George Parker
It was quite a while since we had the last spending review. I think we tend to forget how these things actually play out. Robert and I remember the old days when the spending review was always conducted in some dodgy hotel room in Blackpool during the party conference. It used to be an annual event and all sorts of backroom deals were being done in the Imperial Hotel in Blackpool.

Nowadays, it’s done on a slightly more irregular basis. This one is a one-year spending review covering the financial year ’25-’26. But it’s important because it sets the baseline for all the future spending decisions going forward for the rest of this parliament.

And what’s going on is that Darren Jones, the hatchet man in chief, the chief secretary of the Treasury, has been negotiating with spending ministers, trying to basically trim out what they regard as vanity Tory projects, waste. They’re trying to get voluntary redundancies, strip out the consultancies and all the rest of it. But it all adds up to quite a sort of tough negotiation.

And what we’ve seen this week is that some ministers have put in letters to Keir Starmer complaining about the way that they’re being treated. The Treasury have retorted, as they always do, about the usual what they call bleeding stumps in the Treasury or shroud-waving. This is all part and parcel of the game.

And we’re into sort of the briefings on both sides that some ministers are saying they’ve been asked to make impossible cuts. People in the Treasury are saying, well, look, if you want to save £200mn on that project, that’s gonna have to come off someone else’s budget, so you’re gonna have a word with them.

So it’s becoming quite bruising, quite brutal. But it will be resolved by the time of the Budget on October the 30th.

Lucy Fisher
I mean, Robert, the argument made by many Labour figures is that there’s just no fat left to cut after 14 years of Conservative rule. Many cabinet ministers already think their department’s, you know, are gasping for more funds; not, you know, easy to make cuts. Who’s worst affected and who’s fighting back?

Robert Shrimsley
Well, traditionally, it’s the unprotected spending department. So you would expect that local government funding is always very, very hard hit. And that’s a particular issue at the moment because of social care, which everyone recognises to be in crisis. Justice has traditionally been a hard hit department.

But the ones where you can attack and it’s very hard to attack, although there are definitely gonna be major welfare savings, I would expect DWP to have to take some pain. It’s also the case that those payments are sort of cyclical and pushed in. So you can’t do much.

Health is obviously protected, but how protected, how much room there is more expansive is a question; education, semi-protected.

So it’s a tough one for a lot of departments. And one of the classic Treasury tricks, as George was suggesting, is to say, OK, yeah, that’s a great thing. We have to do that, but you’ll have to fund it yourself from your existing budgets. So it’s very, very tough.

Lucy Fisher
It does feel to me like the messaging has ricocheted quite a bit from in the summer. Starmer warning of a painful Budget to come and that includes the spending review. Then I think both him and Reeves realising they got a bit far with that messaging and trying to kind of talk up a more optimistic picture. And this week George, it’s again it’s back to feeling all very difficult again, isn’t it?

George Parker
It’s a very confusing message, particularly on public spending, that Keir Starmer and Rachel Reeves repeatedly say that there will be no return to Tory austerity, as they put it. And it is quite a confusing picture, I think, for lots of people because you’ve got this quite tough spending round in the first year of the Labour government, ’25-’26.

But then what you’re going to see in the Budget in a couple of weeks’ time is Rachel Reeves putting up taxes to fund the public services. So you’ll probably remember that the Conservatives’ Jeremy Hunt had a plan for public spending into the next parliament, which basically set increases at 1 per cent real increases, which amounted to the unprotected departments that Robert mentioned real cuts of about 3 per cent a year per person consuming those public services.

And so what Rachel Reeves will do is she’ll start to chop up those budgets so they don’t have those real-terms cuts later in the parliament. So this is very much a Gordon Brown tactic, if you remember that: the idea of actually basically sticking to Tory spending plans in year one, making some really tough decisions. But then, as the parliament progresses and in brackets, as we get closer to the next election, the money starts to flow back into those public services.

Robert Shrimsley
It’s also important to note that because of the time in the election, this is a one-year spending round and these are three years of rounds. So Rachel Reeves and Darren Jones are doing one year now and then there’s years two and three are sorted out next spring. So there’s sort of two bites at this as well.

Lucy Fisher
That’s right. And I’m certainly picking up from insiders in the Ministry of Defence that they are expecting, you know, a difficult settlement potentially this year for the next financial year, but then in spring, potentially a slightly more generous settlement. So again, it could be along the lines you’re talking about, George: do the difficult things first and then start to turn on spending (inaudible).

Robert Shrimsley
It’s quite a good incentive, it’s quite a good lever for the Treasury. Say play nice because we’ve got years two and three coming down the track as well. (Laughter)

Lucy Fisher
Well, some cabinet ministers might have fallen foul of that. We’ve seen reporting that Louise Haigh, the transport secretary, Shabana Mahmood, the justice secretary, and Angela Rayner, in charge of housing, have all sent these letters of complaint. So they’ve sort of come out into the public domain as being unhappy.

George Parker
I think they are unhappy. Some of them, by the way, have said that they haven’t sent in letters, at least not yet. So I think we should be a bit careful about who’s actually sent these letters in. But they are all unhappy because, as Robert mentioned, they’re the departments which are, you know, in the firing line. What we also know is that the Treasury aren’t impressed by the idea of people going behind their back to the headteacher — in this case, Keir Starmer — and sending these letters in. 

Robert Shrimsley
Well, there’s not much that impresses the Treasury, actually. (Laughter)

George Parker
Well, that’s true. We know who these people are and I can tell you it’s gonna be counterproductive, is the message they’re getting. The briefing from Number 10, as you mentioned at the top of the programme, Lucy, is that Keir Starmer and Rachel Reeves are absolutely steadfast on this. A lot of departments have now settled their spending round for this financial year we’re talking about. And what you get then is a diminishing number of holdout departments which haven’t quite signed up yet. And as you get fewer and fewer, then the trade offs become more and more stark. You know, if you’ve got let’s say, Shabana Mahmood of the justice department saying we need another 500mn for this then they’ll say, well, that means you can take £500mn off Peter Kyle over at the science department. 

Robert Shrimsley
I mean, it’s a tricky game, as George implied, going to the prime minister, because once you’ve played that card, you’ve got no others. So, I mean, it’s very common historically to see the MoD, the defence department, going over the heads of the Treasury, which hates defence spending, to the prime minister and often with some success, because defence is one that the prime minister feels the need to protect a bit more. 

But I think they’ve gone quite early in this respect. I think it’s probably been counterproductive. And justice we’re gonna talk about, but there clearly is a major problem that’s got to be addressed. But I think too many ministers can’t appeal to the prime minister. This is a trick you can’t play very often. 

Lucy Fisher
I think it’s a good point. I do think as well, George, as you say, like it feels there is an earlier cigarette paper between Keir Starmer and Rachel Reeves. They’ve quite self-consciously modelled their relationship on David Cameron and George Osborne in terms of the closeness, working in tandem, not allowing people to sort of see a chink of light and try and exploit that. 

George Parker
I think that’s definitely true. I think it’s also a fact that Keir Starmer, you know, respects and trusts Rachel Reeves to make these tough economic decisions. I think it’s also fair to say that Keir Starmer is prime minister, the first Lord of the Treasury, but I don’t think he’s instinctively that fascinated or gripped by economics. So there’s a real understanding about how the partnership works. And I think, you know, we had no reports of splits between Number 10 and Number 11 and over many years. That’s not always been the case, has it, by any stretch of the imagination. 

Robert Shrimsley
I’m not even gonna see it as . . . For the two of them they have to persuade their party that this is a long game. Look, we know it’s gonna be tough in year one, and it’s still quite tough in year two. But if we’ve got this right, if we’ve got our tactics right on growth, things will begin to free up. And of course, the other thing they do still have is a significant amount of investment funded by borrowing. And I think that’s gonna be most of the sweeties in the Budget is gonna be what Rachel Reeves can deliver in extra capital investment. 

George Parker
And one other thing that I think people are causing a bit of disquiet in the spending department is this. There was a cabinet meeting, a political cabinet meeting on Tuesday this week where Rachel Reeves set out the priorities for the Budget: fixing the foundations, protecting working people. 

And the third priority she mentioned was fixing the NHS, which was the first time that we’d really heard the NHS being talked about in the context of this Budget. Because, you know, the NHS is one of the protected departments in the next few years. But the message was that the NHS is the number one priority for the people. 

Now the thing about the NHS, a vast organisation, an extra £1bn for the NHS is a drop in the ocean; it’s a rounding error. £1bn extra for the Ministry of Justice is a huge amount of money. So you can see why there’s a lot of nervousness that if Rachel Reeves is gonna start looking after the NHS in the next three years, what does it mean for our Budgets? 

Lucy Fisher
And Robert, another sort of big story this week has been one George Parker scoop about the funding gap that Rachel Reeves identified. 

Robert Shrimsley
I never trust those. (Laughter) 

Lucy Fisher
Very well-sourced, I’m sure. She’s identified a funding gap of £40bn, significantly higher than previously this figure of £22bn fiscal black hole, which of course was in-year and a kind of direct inheritance from the Conservatives. But this bigger sum now that they need to raise taxes to fill in, don’t they? And that speaks to her wanting to give a bit of extra cash to some departments like the health department. 

Robert Shrimsley
Yeah. I mean, black hole is a terribly abused word and we’re all guilty of it and so are they. What I took that to mean is that’s what she needs to spend so it doesn’t feel like we are standing still or, as George said, returning to Tory austerity. There has to be a bit more. So I took that as part of the cover for the tax rises that we all know are coming.

[MUSIC PLAYING]

Lucy Fisher
Just before we move on, there’s a Political Fix live special scheduled for November the 1st in which we’ll ask if Labour’s Budget will boost growth. I’ll be hosting and listeners will get to quiz the FT’s economics editor, Sam Fleming, and other colleagues, including Robert, in the subscriber webinar. You can register for free at ft.com/ukgrowth. The details are in the show notes.

[MUSIC PLAYING] 

Well, we’ve spoken on the podcast before about the prisons capacity crisis, but a related problem is the dismal courts backlog. And the FT’s chief features writer Henry Mance has been investigating and joins us now in the studio. Hi, Henry. 

Henry Mance
Hi, Lucy. 

Lucy Fisher
So you set out to examine how a record backlog of criminal trials has left lawyers drowning in cases. Tell us about what you found. 

Henry Mance
Yeah, exactly. Well, we don’t know quite what the backlog of cases is in the crown courts because the Ministry of Justice’s data has gone haywire. But we do know that at the end of last year, we hit a record figure of nearly 70,000 cases awaiting a trial or a hearing. And that’s up from, you know, less than half that in 2019. So the backlog had started to rise before Covid. Covid hits, there’s a barristers’ strike. 

And now if you have a serious but not incredibly serious criminal offence and if you’re lucky enough that the police actually go out and catch the person who did it and the CPS think that they’ve got enough evidence to to charge them, you might expect the trial would happen this year. You know, it’s nothing, you know, may not be a complex case. It might be a drugs case or, you know, an assault case — you know, nothing too investigatively taxing for the police or the CPS. 

But no, because of the backlog in the crown courts, you might be waiting not till 2025, not till 2026, but to 2027 before this goes to trial. And I think lawyers and barristers who are, you know, never the shyest people around, but they are tearing their hair out and saying this is ridiculous, we are overwhelmed. And the question is, what, if anything, can the government do about this so that people feel that justice is swift? 

Lucy Fisher
Yeah. Well, as you note in your piece, justice delayed is justice denied. And there are concrete impacts if witnesses don’t remember events as clearly and convictions become less likely when cases take place a lot later. You mind just telling the listeners a bit about what you heard at Snaresbrook court when you went down for the day. 

Henry Mance
Yes. So Snaresbrook, England’s sort of biggest and busiest crown court, and I went down for a couple of days. And on one of these days a very incredibly polite judge . . . I mean, if you are in the dock in a crown court, don’t necessarily be worried that the judge is gonna be terrible to you. But this judge in particular had this problem where he was dishing out this stern warning, saying to these people like you must come back for trial and, you know, if you are guilty, you should plead guilty because it has these benefits now. 

Robert Shrimsley
And try not to murder anyone else. 

Henry Mance
(Laughter) Try not to murder anyone else. But he had to say, look, I’m terribly sorry about this trial date. We are setting a trial for you in 2026. And I know this is gonna hang over your life, and it does not feel right to me as someone who’s spent decades in the legal system. He grew up with certain expectations that you would have a trial within a year of someone who was charged, if they weren’t in custody. If they were in custody, within six months. And it offends the kind of sensibility of these people who have grown up proud of English justice that they are having to offer these trial dates. And so it was this ridiculous scene of seeing this judge apologising to these possible criminals for the way that the justice system is working at the moment. 

Lucy Fisher
I mean, what’s needed to fix the crisis? Is it simply a case of more money? Is there any kind of measure out there that doesn’t have a fiscal impact that could help? 

Henry Mance
So there are two things you can do, both broadly. One is to just increase the capacity. So there has been money going in and it means that there are at the moment courts that aren’t working on it on a given day that a judge could be sitting, could be hearing cases and you could increase the capacity of it. But that takes money because every courtroom that’s open every day costs money. And that’s money at the moment that the Ministry of Justice doesn’t have. It suffered years of real-time cuts. So that’s one thing. You increase the capacity and that’s what judges have called for. They want this number of so-called sitting days to be increased. 

The other thing you can do is to make changes so that the speed at which cases are heard is increased. And one thing the government has announced this week is it’s gonna give magistrates more power to sentence criminals. So at the moment, magistrates can sentence people up to six months in jail. They’ll be able to sentence them up to 12 months in jail, which takes some of the burden off the crown courts, which normally deal with those more serious sentences. 

So that will speed things up a bit. Magistrates tend to be more likely to find people guilty and they tend to sort of rush through cases a bit quicker. They’ve seen it all before, unlike crown courts, which tend to take a little longer. 

The more radical thing you could do is to say, look, on some offences, some drugs offences, some kind of assault against an emergency worker, we’re not gonna have a jury trial here. You’re not gonna have that right. We’re gonna give that to, you know, maybe an enhanced magistrates’ court or some form of slicker justice where we don’t go through the whole rigmarole of getting 12 ordinary citizens together, you know, working round all their sickness and all their sort of work commitments and that things that people have done jury service will know all about. That’s very unpopular. New Labour tried it. David Blunkett when he was home secretary tried it and it was sort of seen as this affront to English justice. But it would speed up cases. 

The problem at the moment, you know, it’s a lot of the court backlog, a third of the cases are sexual offences. These are incredibly complex crimes. There’s a lot of phone evidence you have to go through. People do not plead guilty to sexual offences. So overall, these very serious crimes, two-thirds of people plead guilty. They say, yeah, OK, I did break into your house. With sexual offences, it goes down to 40 per cent. With rape cases, adult rape cases, it goes down to 15 per cent. So you have to go through these very lengthy trials, very complex evidence, and there’s a lot at stake. 

And so there is some question about whether you could speed that up by having more specialist courts, specialist prosecutors and judges who really know how to handle these cases without getting things wrong and, you know, stepping over the line. But at the moment, it’s a mess. And I have to say that when I looked at this and I looked at, you know, what the Labour as an opposition and the government had outlined, the answer is not very much. 

Robert Shrimsley
I mean, in these rape cases, I mean if you’re waiting two or three years, I mean, a lot of them hang on identity evidence as well, don’t they, and, you know, one person’s word against another. So two or three years down the line, that makes it much harder to get a conviction, doesn’t it? 

Henry Mance
One of the cases I saw in Snaresbrook was an alleged rape of a girl at her 15th birthday party by a person who was then 16. And several years have now passed and the people are now in their early 20s. And for a jury to get their heads around the scenario they’re talking about when the people have changed completely in age, it must be impossible. 

And I think so often juries really aren’t familiar with these cases, but they’re looking for signs that people might be lying. They’re looking for sort of hints. And if someone gets the detail wrong, even though that’s completely natural thinking — human memory is to get details wrong — they say ah, they must be making it up. And of course, the benefit of the doubt goes to the defendant. 

George Parker
Are there enough lawyers? Is that part of the problem? 

Henry Mance
That’s exactly part of the problem. And criminal law has always been a sort of poorly paid, much of it publicly funded part of the law. Lots of barristers do very well-remunerative work and at the moment they have options. If you train as a criminal barrister, you might go into that part of law, you get lots of court time, that’s great. 

But then you might say, I could do family cases. They pay much more. I could go and work on a public inquiry. There’s, you know, Covid inquiry, lots of public inquiries. They pay £120 an hour if you’re relatively experienced but not a hugely experienced barrister. Much better than trekking around crown courts and, you know, having hearings that cancel. At the moment you got huge numbers of trials that just don’t go ahead on the day that they should because there aren’t the barristers available. 

Lucy Fisher
What about Britain’s sort of burgeoning, prosperous civil legal sector and the commercial courts? I mean, would it be an idea to try and tax those, either solicitors or those big court cases to try and fund the poorer criminal sibling? 

Henry Mance
This was an idea that one barrister said to me. He said, look, it’s ridiculous. We’ve got these people making, you know, millions of pounds and yet we’ve got these courtrooms leaking. And yet it’s the courtrooms where these dramatic criminal trials occur which are the ones that established the reputation of English justice, that make people, you know, comfortable to have their legal proceedings here. I mean, we can all think of sort of high-profile trials down the years. 

But if that sort of front door starts to look really shabby, then yeah, of course the better remunerated, the commercial stuff might suffer. I mean, I think we can all see some scope for, you know, scratching something off the top of some commercial law firms. It feels like they do have a lot of money. But I haven’t seen that as a serious proposal. 

Lucy Fisher
George, I mean, shouldn’t we be expecting more from Keir Starmer, given he’s a former director of public prosecutions? Shouldn’t he be taking more grip of this? 

George Parker
You’d think so, yes. I mean, I think a lot of people listening to Henry’s brilliant account, or having read it in the Weekend FT last weekend, will be absolutely shocked. I mean, Keir Starmer is across this. I mean, he’s spoken quite eloquently about the problems in the court system. But we hear that in this wrangling over the next year’s spending round, the minister of justice is very much one of those departments which feels it’s being hard done by. And we’ll be looking over its shoulder at the NHS and fearing that other departments are gonna get a big share of the cake. And the problem, as we all know, is it’s not seen as by the public wrongly, as Henry’s eloquently put it, as a number one priority.

Robert Shrimsley
Is it also . . . I mean, presumably this must have a knock-on consequence to prison spaces because you’ve got all these people on remand or waiting for their trial incarcerated.

Henry Mance
Yeah, you’ve got 80,000-odd people in prison. About 17,000 of those are on remand. They’re people who are awaiting a judgment or a sentence. And what the Ministry of Justice says is that the problem is not just that you’ve got this quantity of people, because a large number of them will be sentenced to prison . . . 

Robert Shrimsley
(Inaudible) go back.

Henry Mance
But they can’t. They can only go in certain prisons, reception prisons, and so you can’t disperse them. At a time when capacity is really stretched in the prison system you want flexibility to be able to put them in the right prisons. I mean, I think a lot of the focus has been, as far as I can see the debate on, you know, are the police actually catching criminals and what are we gonna do with prisons? So this is the bit in the middle that gets forgotten. But the prisons, you know, crisis absolutely affects what happens in the court.

Robert Shrimsley
It is quite a good holistic approach, isn’t it because the police won’t catch anyone, (laughter) we won’t try anyone, and there’s nowhere to send them if we actually convict them. It’s a joined -p government at its best, really.

Henry Mance
But one of the most ridiculous things about going to a court — and anyone can do this, go to a crown court and you go in for a basic hearing, a pre-trial hearing. And it’s like, well, we need the defendant to be present at this hearing. They’re in a prison in Manchester, in London or wherever. Can we just get them along for this video hearing? And the prison won’t be able to find them and they won’t be able to produce them for this hearing. And it’ll be what on earth is going on? And the sort of the levels of communication or the levels of inexperience on the prison system.

And lots of explanations were given to me why prisoners don’t turn up for video hearings, causing all kinds of waste of time at the court (inaudible). Well, they don’t turn up in person to their actual trials. And they’re, you know, just down to the practical details of Serco, which is the company with a contract for bringing prisoners to court in the south of England, doesn’t have enough people who are trained on 12-seater vans, which is a more efficient way than bringing people on six-seater vans to court. All of this stuff adds up, but it just shows that the system is at sort of breaking point in many ways.

Lucy Fisher
Well, Henry, final word to you. Is there any reason to feel optimistic from your sort of examination of this area?

Henry Mance
I’m gonna say no. I think that the whole diagnosis of the Labour government is so far is that we have to keep the economy and the fiscal balance sort of very tight, rather than saying making this case of public services are broken, our first job is to fix them, whatever it may be. So I think, you know, most people, most voters will not go in a criminal court and that is why governments don’t bother fixing them.

Lucy Fisher
Henry Mance, thanks for joining.

Henry Mance
Thanks so much for having me.

Lucy Fisher
I’ll put a note to Henry’s excellent article in the show notes.

[MUSIC PLAYING]

Well, it’s slightly better news for Starmer. His investment summit seemed to go off pretty well, George, earlier at the start of this week. It was a confident agenda. And you were there?

George Parker
I was. I was locked up, like most journalists, in the crypt of the Guildhall in London. We were only allowed out with escorts from the Department of Business to talk to people. But talking to people on the way out, you know, it seemed to have gone well. And there was the usual amount of grumbling beforehand about the logistics. And did they know who was gonna come and people saying that they weren’t sure their chief executive was gonna come. In the end, over 200 pretty powerful financiers turned up at the Guildhall. They saw Keir Starmer and Rachel Reeves give quite a positive pitch for the country, which was well-received. And they were treated afterwards to a slap-up meal and an Elton John concert in St Paul’s Cathedral.

And I was speaking to a couple of people, actually French businesspeople who’d come over, and they said actually, there was a bullish mood in the room towards the UK. They were looking a bit beyond some of the stuff we were talking about earlier about taxes and the forthcoming Budget, looking more at the macro picture of the UK. Where does the UK sit as an investment destination against the backdrop of political uncertainty amongst other western countries? And actually in that respect, quite well.

And they were sort of sizing up, Keir Starmer and Rachel Reeves, I think. More than talking about the detail, they were trying to — I got this from someone in the government side — they felt that they were being checked out by these people to see whether they were actually serious about what they were saying.

Lucy Fisher
That’s interesting. Robert, we heard investment pledges of £63bn of investment pledged at this summit, at least if you believe the government spin-doctors. Of course, the vast majority of that was all pre-arranged and a lot of it under the Tory government. But it does feel like the early signals to the market have gone down well from Keir Starmer, would you say?

Robert Shrimsley
Yes. I mean, I think, as George says, the macro message from the government is we’re serious about partnering with business, we’re serious about investment, we’re serious about financial stability. We’re not gonna take risks with the Budget. This is what business wants to hear. We want to be a long-term partner in some of the big infrastructure projects. This is what people want to hear. And you know, these investment summits they’re always a little bit for show. But I think as a show it did what they wanted it to do. There were odd blips, but it did what they wanted it to do.

Lucy Fisher
One hiccup that did threaten to derail it, and I will have to remind you, Robert, you bought Louise Haigh in last week’s stock picks.

Robert Shrimsley
(Laughter) About 45 minutes early before it happened, I think.

Lucy Fisher
You’re right, actually. Excellent timing. So she, of course, waded in saying, to my mind, two different and quite distinct things. One was she criticised the fire and rehire practice of P&O historically, which I think is, you know, totally understandable. Previous Conservative administration did that. And then — and this is, to my mind, shows where she’s not quite had a mindset shift from being in opposition to government — she, as transport secretary, urged the public to boycott the company. And perhaps unsurprisingly, the parent company, DP World, then threatened to pull £1bn of investment in the UK.

Robert Shrimsley
Yeah, maybe they did. Or maybe they just decided to make sure that they got a bit of bended knee from Keir Starmer before they announced the investment.

I mean, I felt slightly sorry for Lou Haigh. I think you’re right that it was a naive mistake to go the extra mile saying, I boycott them. But, you know, she didn’t know DP World were coming. There was no joined-up discussion. Downing Street had approved some quite aggressive quotes against P&O, the company they own, as part of the (inaudible) employment rights package. So, you know, I think she thought it was fair enough to go in all guns blazing again. And no one would just tap her on the shoulder and go, do be careful when you do that because we’re getting a billion off them later.

So I thought slightly sort of I was also slightly unimpressed at the way Downing Street dumped on her quite so quickly, given that although she had crossed the line, she’d gone a bit further than Downing Street. It showed a bit of weakness when they could have toughed this out a bit more. Nonetheless, it was naive. You have a big investment summit; that’s not necessarily the week to be attacking businesses, though one might also say it’s not really the week to be unveiling your employment rights package, which bans fire and rehire. In the end of the day, it didn’t matter very much. But it was a useful warning to the government and to Louise Haigh in particular, is when you are dealing with global players who can go anywhere, you have to play nice.

Lucy Fisher
That’s right, George, isn’t it? And it shows that this reset in the heart of Downing Street, there are still lessons they’ve got to learn.

George Parker
Yeah, I mean, the whole media operation around it was pretty shambolic. I mean, the fact that they had to have Varun Chandra, who’s the business adviser to Keir Starmer, on the phone to DP World pleading with them to come, was bad news.

Also, I mean, just around the investment summit itself, the story that ran off the back of it, including on the front page of the FT, was all about the fact that Rachel Reeves, who was attending the summit, had talked about the probability that national insurance contributions for employers, straight tax on business, was likely to feature in her Budget.

So the next day’s headlines weren’t about £63bn of alleged investment, but more about the fact that taxes were going on business. So yeah, the media operation’s still got some way to go, I think.

Robert Shrimsley
And the timing was odd. I mean, you could have done it after the Budget. It was two weeks before the Budget, and so two weeks after it is . . . 

Lucy Fisher
(Inaudible)

George Parker
Yeah, definitely.

Lucy Fisher
Well, it’s gonna be quite a foreign affairs-themed few days ahead. Next week, Keir Starmer is off to Samoa and Jim Pickard, our colleague, is the lucky FT bod chosen to go with him — 36-hour flight each way, so we’ll have to get Jim’s update on that.

George Parker
I think Jim nominated himself before he realised quite how long he was gonna be on a plane.

Lucy Fisher
I think he saw himself sipping piña coladas by a pool, perhaps more. But we’ll have to wait to hear from Jim. But before then, David Lammy on Friday is off to Beijing; he’ll spend Saturday in Shanghai. He’ll be meeting his Chinese counterpart, Wang Yi. George, is this part of the sort of stepping up of engagement with China that Labour are undertaking, and they don’t face the same sort of hawkish backbench pressure that the Tories did?

George Parker
Yeah, you always felt that Rishi Sunak as prime minister was being pushed around slightly on his China policy by the Tory right. You know, if you recall Sunak was prepared to restart the financial and economic dialogue with China while he was chancellor, and soon as the Tory right got hold of this during the leadership contest — the first one against Liz Truss — he had quickly abandoned this plan and disowned China and taken a much more hawkish stance on China, which then persisted right to the end of his premiership.

But you’re right that the Labour party seems to me to have a sort of more open approach to China. I think they’ll adopt in practice a similar sort of approach to the Tory government in terms of having this what the Americans call a small yard and a high fence — you know, basically having a constructive commercial relationship with China, but strong defences against areas where there might be Chinese interference and in national security. But you can tell that things are warming up. They need growth, they need China to be part of the growth picture.

And the interesting thing is that not only is David Lammy going to China this week, but we hear that Rachel Reeves, the chancellor, is probably going to China as well early next year to hold exactly the economic and financial dialogue that Rishi Sunak was supposed to cancel back in 2022.

Lucy Fisher
I think it’s striking that this will be David Lammy’s first trip to the Chinese mainland since taking office, but only the second taken by someone at that level in the UK government in the past six years. James Cleverly did go last year and during that same period I think there’s been eight high-level trips undertaken to the Chinese mainland by senior US politicians of the same rank or above. So it does feel, Robert, doesn’t it, like the UK has allowed itself to get a bit out of sync with the pack?

Robert Shrimsley
Yeah, I mean it was a side effect of Brexit that, you know, the UK dropped out of its importance to China, became less important to China because it’s not in the EU at a time when increasing hawkishness was also moving into vogue. So it became very difficult. I mean, in practice, I’m not sure I think this will move the dial very much. It’s always better to be friendly, but the issues and security concerns that underpinned some of the Conservative problems in the relationship aren’t going away.

We could have Donald Trump back in the White House, which will certainly, you know, change things, because in the end, whatever Britain wants to do, forced to choose between China and America, it will choose America. And, you know, part of the defence strategy in the Aukus pact and all those things is to be one of the bulwarks against Chinese expansion. So I think it’s a good thing. Maybe there’s some benefits at the margins. I’m sure China would like to peel Britain off from complete obeisance to America, but I’m not sure how far it will go in the end.

[MUSIC PLAYING]

Lucy Fisher
So this week, the Tory leadership, the lengthy marathon contest, enters its final stage as party members finally get their votes. There’s already been a row about people getting votes earlier than others. Robert, what’s your take on how the contest is shaping up in this final stretch?

Robert Shrimsley
I found it slightly strange in one sense in that there’s all this activity from Robert Jenrick. He’s making speeches, writing articles, coming up with new initiatives, promising new things like Jacob Rees-Mogg is gonna be party chairman. He’s busy, busy, busy campaigning.

And I’m struggling to think what I’ve heard from Kemi Badenoch in all of this time, so either she’s got a very, very good ground game and is just under the surface running an exceptional campaign, or she’s reached the conclusion that her best chance is to say as little as possible. And given that every time she has spoken out on an issue in the last few weeks, there’s been some kind of backlash. It’s just a very strange contest, a very small number of people. And although Kemi Badenoch is installed by the bookies as the favourite, it doesn’t feel like one you feel confident calling yet, I’d say.

Lucy Fisher
I think you’re right. I mean, I logged in to a Kemi Badenoch online rally, which was a slightly weird thing to watch. Her and her supporters, Claire Coutinho and Lee Rowley, two other Tory MPs, sort of sitting by separate computer screens. It wasn’t the most dynamic sort of rally, and I’m not quite sure why it had to be online.

George Parker
Well, that was an online rally.

Lucy Fisher
It was online. It was like watching a Zoom call with, I think, you know, blurred-out backgrounds. She said in that on Wednesday that she’d taken part in three hustings earlier in the day. So perhaps she is doing more that is below the visibility line.

George, I mean, we’re speaking before a sort of televised hustings event on GB News on Thursday night. But a lot of what Tory MPs are saying is that Badenoch is more popular in London and in the south, and Jenrick is more popular in the north and Midlands. And Badenoch backers point out there are a lot more Tory members in the south. I mean, does that bode well for her?

George Parker
Well, I think it probably does. She’s (inaudible) the MP for Saffron Walden. She’s very accustomed to talking to home counties, Tories, she moves in those circles. And I think so. You know, when you heard Robert Jenrick at the Conservative party conference in Birmingham saying, I’m from Wolverhampton, it was all . . . you could almost hear a . . . 

Lucy Fisher
Tumbleweed.

George Parker
Tumbleweed blowing across the stage because there seemed to be very little recognition or maybe people not necessarily knowing where Wolverhampton was or not really caring very much. So I think he does have a problem, Robert Jenrick in that respect. Robert mentioned the fact that he’s named Jacob Rees-Mogg as his party chairman-in-waiting. I just . . . I mean . . . 

Robert Shrimsley
He is a . . . I mean, he is a party favourite, so a lot of activists. I thought that was an effort to get some . . . I’ve got some celeb gold dust around as well.

George Parker
Yeah, I know. But I think back to James Cleverly — now no longer in the contest, of course — at the party conference talking about the fact we need to seem more normal. I mean, for all Jacob Rees-Mogg’s many sort of positive features, accusing him of being normal certainly wouldn’t be one of them.

Robert Shrimsley
We haven’t all got nannies and a sixth child called Sixtus. (Laughter)

[MUSIC PLAYING]

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

George Parker
Well, I’m not gonna be buying Louise Haigh, but I think I will be buying . . . 

Robert Shrimsley
I’m holding her now. It’ll come (overlapping talk). It’s gonna come good. (Laughter)

George Parker
This is gonna be a very long-term investment, Robert, I tell you. I’m gonna be buying Jonathan Reynolds, who’s the business secretary. Went down very well by all accounts with the international high rollers at the investment summit at the Guildhall this week, sort of strikes a very moderate tone, explains Labour’s employment rights package in quite a measured way, sort of presenting it as not pro-worker, but pro-business; gets the tone right, I think, quite self-effacing.

And significantly, I was at a drinks reception at 11 Downing Street this week where Rachel Reeves said that Jonathan Reynolds was her favourite cabinet minister because he’d already settled this year’s spending round.

Lucy Fisher
Robert, how about you?

Robert Shrimsley
OK, so I’m gonna go for a penny stock. I am gonna buy Penny Mordaunt, who is not overpriced at the moment, having lost her seat and having once been the favourite for Conservative leadership. But I’ve been very struck by the way that both the rivals for the Tory leadership are working very hard to claim her as a prized supporter in this contest because they know that she’s popular with the party.

There’s quite a lot of chatter about the by-elections coming up in the near future. People talk about whether Oliver Dowden, the former deputy prime minister, will stay long, even whether Rishi Sunak will stay. And I just think there’s a lot of people who’d like to see Penny Mordaunt back at the front rank, especially now the leadership contest is over. So I’m gonna buy Penny. How about you, Lucy?

Lucy Fisher
I’m gonna buy David Lammy. I do think when there has been some concerns about pace and sluggishness on the domestic agenda, it does feel like he has upped the tempo of foreign visits, he has got under way the things he said he wanted to do before the election in terms of resets with not only the EU but specific countries like Germany, France, Poland, Ireland. And I think it’ll be interesting to see how he gets on in China this week.

[MUSIC PLAYING]

Well, that’s all we’ve got time for. George, Robert, thanks for joining.

George Parker
Thanks, Lucy.

Robert Shrimsley
Bye, Lucy.

Lucy Fisher
And that’s it for this episode of the FT’s Political Fix. A reminder, as I mentioned earlier, don’t forget to sign up for free to a Political Fix live webinar on November the 1st, which I’ll be hosting. The event will ask if Labour’s Budget will boost growth. You’ll get to quiz the FT’s economics editor, Sam Fleming, and other colleagues. I’ve put links and details in the show notes.

Also there, you’ll find articles we’ve made free for Political Fix listeners, as well as a link to Stephen Bush’s award-winning Inside Politics newsletter. You get 30 days free.

And do subscribe to the show and leave us a review or a star rating. It really helps spread the word.

Political Fix was presented by me, Lucy Fisher and produced by Tamara Kormornick. Manuela Saragosa is the executive producer. Original music and sound engineering by Breen Turner. Andrew Georgiades and Petros Gioumpasis were the studio engineers. Cheryl Brumley is the FT’s global head of audio.

We’ll meet again here next week. 

[MUSIC PLAYING]

IF the quiet East Yorkshire town of Bridlington is good enough for Captain Mainwaring, then it is good enough for me.

Despite posing as the fictional resort of Walmington-on-Sea in the 2016 Dad’s Army film, it has remained relatively off the map as a holiday destination in the UK.

5

5

Advertisement

Cinema-goers saw Toby Jones lead a star-studded cast along the pretty High Street as the bumbling fictional Home Guard leader.

And this coastal gem has plenty to draw people in.

Placing a generous platter of scones and sandwiches on my table at The Georgian Tea Rooms, owner Katherine Furmidge tells me: “Bridlington has so much to offer — people just don’t know about it.”

She’s right.

There really is a lot going on here.

And because the town hasn’t been in the spotlight yet, it’s still great value for money.

It’s also home to some of the most undisturbed and striking walking trails in the country with miles of pathway carved into the cliffs that border a thrashing sea.

I headed to Danes Dyke, a wooded ravine cleaved in the rocks as if from a Viking’s axe — apt, as the area was invaded by the Scandis in the 8th century.

The ravine opens out on to a white pebble beach sheltered by pale cliffs and lapped by gleaming waves.

Across Flamborough Head is the majestic RSPB site Bempton Cliffs, a corner of heaven for serious bird-spotters and novices.

Puffins, dolphins, seals and owls all make seasonal homes here and when I visited, the air was thick with more gannets and fulmars than you might think possible.

I hadn’t given much thought to gannets since seeing Steve Backshall’s Deadly 60 TV series as a toddler, but it turns out watching them in flight or at rest is an almost religious experience.

Fulmars, meanwhile, are furtive little seabirds which can spit foul-smelling oil for yards.

Bridlington has the biggest lobster catch in Europe

Harry

They can also smell fish from miles away, so probably caught an envy-stirring whiff of the lobster thermidor I had for dinner back in town.

Bridlington has the biggest lobster catch in Europe, and the Salt On The Harbour restaurant is the best place to try it fresh, having served more than 500 of these crustaceans to customers this summer.

Overlooking the tethered boats, it’s a great spot to order a glass of wine and some scallop popcorn while observing the vessels which caught your meal earlier that day.

Like many joints around Bridlington, Salt On The Harbour is dog-friendly — though it would take a saintly pooch to resist swiping their owner’s dinner.

Grinning like a kid

If you’re not into fish, Highfield House, a mock-Tudor mansion in the nearby market town of Driffield, has a more varied menu plus a handful of dog and family-friendly rooms.

I dined there on my first night, tuck­ing into venison tartare, Yorkshire trout and a chocolate-coffee pud that had me grinning like a kid.

Too much gluttony calls for penitence, so the next morning my better half marched me down to Bridlington’s South Beach for an outdoor yoga class in the North Sea wind.

5

Kitted out with an England shirt and a panic-bought towel in place of a yoga mat, I wobbled, flopped and shivered through the downward dogs and tree poses — even the local OAPs were putting me to shame.

Yoga teacher Kimmy Palmer runs the Active Coast classes entirely for free over the summer months.

Come winter, East Riding ­Leisure in Bridlington has a fabulous gym with floor-to-ceiling glass overlooking the bay.

I was rewarded for my yoga efforts with one final treat (for a history fan, like me).

One stop away on the train is the market town of Beverley where you can meander around the old shipyards — much of the North Sea fishing fleet was built there, as well as some of the landing craft for D-Day.

The shipyards have now all closed but Beverley remains a fascinating spot for lovers of history with Beverley Minster, a gorgeous example of Gothic architecture at its centre, as well as St Mary’s Church.

Look out for the church’s stoney white rabbit, said to have inspired the character in Alice In Wonderland.

Alice’s white rabbit led her to Wonderland, whereas mine took me to East Yorkshire — but it was an adventure nonetheless.

5

5

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Thames Water’s battle for survival intensified on Friday when debt holders fell out over a proposed £1.5bn emergency loan and restructuring plan that would help the UK’s largest privatised water utility stave off financial collapse by Christmas.

Crisis-struck Thames, which provides water and sewerage services to about 16mn households in south-east England, is struggling under a £19bn debt load and has faced lukewarm demand for an attempt to raise as much as £3bn in equity from infrastructure investors.

On Friday, a group of creditors wrote to Thames Water complaining that they had been cut out of negotiations around a new loan to prevent a cash crunch at the utility, which has warned that it risks running out of readily available liquidity shortly after Christmas.

These creditors, which hold some of the utility’s lower-ranking bonds, have hired heavyweight litigation law firm Quinn Emanuel to represent their interests, after a large bondholder group ejected them on Thursday.

“Our clients are concerned that [Thames Water] and its advisors appear to be close to launching a restructuring plan without having consulted an important creditor constituency,” Quinn Emanuel wrote to Thames Water’s legal advisers on Friday evening.

Thames Water declined to comment.

The dispute raises the stakes in the company’s bid to avoid financial collapse, given the sheer numbers of creditors that need to reach agreement on any proposal. The company risks being renationalised under the government’s special administration regime if it cannot agree a restructuring with creditors.

The creditors behind Friday’s letter include hedge funds, banks and insurers, according to people familiar with the matter, and represent a significant portion of Thames Water’s £1.4bn of class B debt. They stand to take heavy losses or have their bonds wiped out should the company be renationalised. The utility’s class B bonds were trading at less than 20 pence in the pound on Friday, reflecting their low recovery expectations.

Holders of these lower-ranking bonds were ejected earlier this week from Thames Water’s largest creditor group of more than 100 institutions, which owns more than £10bn in bonds.

Some of this group’s remaining class A debt holders have been negotiating a restructuring plan and emergency loan of at least £1.5bn that would rank ahead of all existing debt, according to people familiar with discussions.

This group’s advisers warned the class B holders on Thursday of a “significant risk of a conflict of interest” emerging between them and higher-ranking class A holders. Thames Water has about £16bn of class A debt outstanding, and this would rank ahead of the class B debt in a special administration or insolvency.

The largest holders within the class A bondholder group have been negotiating with Thames Water around a “new money” loan with an aim of formally proposing terms in the coming weeks, according to people close to the discussions.

“It is clear that negotiations with a single creditor group cannot lead to the objectively best available deal for [Thames Water],” Quinn Emanuel’s lawyers wrote on Friday. “It is also critical that any new money contribution is not structured in such a way that limits the runway for an equity-raising process.”

The letter also claimed that the class B holders would be able to “contribute significant new money” to Thames Water and could potentially “provide funding on competitive and potentially attractive terms”.

Stay informed with free updates

Simply sign up to the Investments myFT Digest — delivered directly to your inbox.

Greggs’ shares have fallen by 10 per cent over the past month as investors reacted badly to normalising sales growth. But the sausage roll seller’s store expansion programme continues at pace as it bets on continued success despite lower inflation (having been seen as an affordable luxury when prices were rocketing).

In a third-quarter trading update this month, the company disclosed that like-for-like sales growth at its managed shops had slowed from 7.4 per cent in the first half to 5 per cent in the 13 weeks to September 28.

However, September was the strongest month of the quarter. Growth has been helped by menu changes (such as new iced drink ranges and pizza deals), the extension of evening trading hours and progress with delivery options.

Management is still aiming for “significantly more” than 3,000 shops, and supply chain investment means that 3,500 shops could soon be feasible. Greggs had 2,559 shops at the end of September and is on track to open a net 140-160 outlets this year.

Analysts at Shore Capital said that “quite when we see peak Greggs is an interesting question, but with the very material infrastructure expansion now well under way, the company is indicating that is not any time soon”.

Recent distribution centre work has added capacity to support another 300 shops. Capital expenditure is guided to come in at £250mn-£280mn this year, up from the £200mn spent in 2023.

Meanwhile, margins should be aided by softening cost pressures. Company guidance is now for annual cost inflation to come in at the lower end of a 4-5 per cent forecast range.

Despite recent weakness, Greggs’ shares have risen by almost a fifth over the past year. Chief financial officer Richard Hutton’s sale of £1.85mn-worth of shares on October 8 should be seen in that context.

The shares trade on 20 times forward consensus earnings, against a five-year average of 29 times.

Vistry directors rebuild their stakes

This summer, it seemed as though the only way was up for Vistry with the company announcing it was on track to deliver more than 18,000 completions and a year-on-year increase in profits. Then came the profit warning that sent shares tumbling.

In a short trading update on October 8, the housebuilder said that costs had been understated by about 10 per cent at nine out of 46 developments in its south division, resulting in a 20 per cent reduction in full-year profits to £355mn.

Shares fell by 33 per cent over the course of the morning as investors worried that the cost overruns might not be confined to nine sites. Vistry tried to reassure the market that the issues were confined to the one division, adding that “changes to the management team in the division are under way” and that it would be commencing an “independent review to fully ascertain the causes”.

Following the warning, directors began to buy in. Chief executive and chair Greg Fitzgerald went first, buying up £198,000 of shares on October 8. He was swiftly followed by Margaret Browne, who bought £75,000-worth of shares the following day. Browning West, an American activist firm whose founder, Usman Nabi, sits on Vistry’s board, bought £7.4mn-worth.

The hope will be that these dealings will help to soothe market fears about a wider problem with Vistry’s new model, which sees the housebuilder prioritise fixed-price contracts with private rental providers, registered providers and other institutional clients, over open-market sales. This model makes it harder to pass on cost increases to consumers, since the contracts are fixed in advance.

Unlock the US Election Countdown newsletter for free

The stories that matter on money and politics in the race for the White House

The writer is director of economic policy studies at the American Enterprise Institute

Donald Trump and Kamala Harris seem to agree that one of the nation’s most important challenges should remain unaddressed — a problem that has been slowly eroding the foundations of economic prosperity for decades.

That problem? The national debt.

The non-partisan Congressional Budget Office reports that federal debt held by the public averaged 48.3 per cent of GDP for the half century ending in 2023. The debt is currently far above its historic average. The CBO projects that next year, 2025, the national debt will be larger than annual economic output for the first time since the US military build-up in the second world war. 

In 1946, the ratio of debt to annual GDP was 106.1 per cent. The CBO projects that the debt will top that amount in 2027 and will rise to 122.4 per cent in 2034. It is expected to be on a steady climb thereafter.

What’s driving this trajectory? The specifics of the US debt situation point to a clear culprit. By 2034, the CBO expects federal tax revenue to be 18 per cent of annual GDP — 70 basis points above its average over the past 50 years. At 24.9 per cent, federal outlays in 2034 are projected to be nearly 4 per cent of GDP above their historic average. 

In other words, both tax revenue and government spending are projected to rise over the next 10 years, but spending is projected to rise at a much faster rate. The US has a spending problem, not a revenue problem.

More precisely, the US has three main spending problems: Social Security, Medicare and interest payments on the debt. Other government expenditure — such as on the military, education, law enforcement, disaster relief and national parks — is projected to fall. Strikingly, the budget office expects the US to spend more on interest payments than on national defence in 2024.

Of course, revenue reductions resulting from the 2017 Trump tax cuts have increased the size of the budget deficit and national debt. Tax cuts (generally) don’t pay for themselves. But increasing the level of tax revenue would not change the upward trajectory of future government spending. 

According to the non-partisan Committee for a Responsible Federal Budget, repealing the Tax Cuts and Jobs Act of 2017 and increasing capital income taxes on high-income households would only lower the 2034 debt-to-GDP ratio by two percentage points (from 119 to 117 per cent). This additional tax revenue would lower the 2050 ratio from 160 to 157 per cent.

The first step to solve the budget problem is to acknowledge it. But at Harris and Trump’s presidential debate, the word “debt” was not mentioned once. Nor can it be found in the 2024 Republican party platform. Harris makes only passing references to debt and deficits in her campaign policy book, arguing that she compares favourably to Trump.

In fact, both candidates’ tax and spending plans would make the problem worse. Each firmly opposes Social Security and Medicare benefit reductions. The CRFB estimates that Trump’s and Harris’s policies would add $7.5tn and $3.5tn, respectively, to the debt from 2026 to 2035. 

An unwillingness to properly address these difficulties is one of several unfortunate developments in America’s post-2016 populist turn. George W Bush’s tax and spending policies increased the budget deficit, but he made addressing the long-term problems in Social Security his top domestic priority in 2005. Barack Obama presided over large deficits, but he attempted to modestly slow the projected growth of Social Security benefits.

As is often discussed, growing national debt could trigger a fiscal crisis. But the absence of a fiscal crisis does not indicate that all is well. The US’s fiscal imbalance has been slowly eroding wages and incomes for decades. 

Economists find that each one percentage point increase in the debt-to-GDP ratio increases longer-run real interest rates by one to six basis points. According to the CBO, private investment falls by 33 cents for every one-dollar increase in the budget deficit. 

Less investment reduces the nation’s capital stock, making workers less productive, lowering their wages and reducing workforce participation. Over the decades, these effects accumulate. Moreover, the US is borrowing to finance current consumption, not to invest. Large budget deficits are sacrificing long-term growth and higher future living standards to support the spending of today’s middle-class retirees. 

Rising debt also crowds out needed investments in defence and scientific research, as well as making it harder to expand economic opportunities for the working class, as Harris and Trump propose. The federal government already spends more on interest payments than on programmes that benefit children.

For good reasons, Trump and Harris are seen as vastly different candidates and their parties as trapped in gridlock. But if you define what government does based on how it spends taxpayer dollars, there is seemingly a strong consensus. According to my calculations, 78 per cent of the projected increase in total government spending from 2024 to 2034 will come from rising spending on Social Security, Medicare and interest payments on the debt — three items neither candidate or party wants to touch. 

This bipartisan consensus is a threat to future prosperity.

JAPAN is surprisingly affordable for a family getaway now, with the Yen at a decades-long low against the Pound, making everything incredibly cheap.

With hot meals from just 85p, Disney and Universal tickets half the price of their US counterparts and return flights from £426, the country has become a long-haul option for more and more families.

4

4

Advertisement

On a wallet-friendly holiday, my wife Morgan, two-year-old daughter Lena and I explored Tokyo and Osaka, expertly guided by Inside Japan Tours.

First stop was OMO5 Otsuka, a city-break hotel in the low-key neighbourhood of Otsuka offering stylish, compact rooms.

Sword-like knives

The less-well-known Tokyo suburb is home to the Toden Arakawa Line, the city’s last remaining electric tram, which the hotel celebrates with a special kids’ room themed around the traditional trolley-cars.

OMO’s 17 affordable properties in 11 cities across Japan are about connecting guests to the community, whether that’s through the food at the cafe, the gift shop promoting local makers or tours run by the staff.

OMO Rangers are on hand to escort guests on bar crawls or foodie trips (from £4.81), helping holidaymakers see what is behind intriguing shop fronts that they might be too intimidated to visit alone.

Making the most of the inevitable jet-lag, we caught the 4am subway to the famous Tsukiji fish market.

Shouts from fishmongers pierced the salty air, mingling with the rhythmic thud of massive tuna being sectioned by sword-like knives.

Lost in translation, we stopped at one of the open-air food stalls and accidentally ordered four sticks of wagyu beef for an eye-watering £70.

Blissfully unaware she was dining on the Rolls-Royce of cows, Lena quickly devoured almost our entire holiday budget.

Next day, teamLab Planets (£18.30), an interactive art installation, offered a mind-bending digital playground that had us all channelling our inner toddler.

Shoes off, we waded into knee-deep water, squealing alongside Lena as digital koi darted between our legs and bounced through a galaxy of giant colour-changing balls.

Our favourite? A spongy, undulating floor that had us all wobbling like we were walking on the moon.

For an hour, we were all awe-struck tots in a joyful chaos where art and play merged.

Switching gears, we time-travelled from cutting-edge tech to timeless craftsmanship at the Tokyo Toy Museum (£3.85).

Housed in an old primary school, it is a tribute to traditional Japanese playthings and the art of play — and it makes for a mellow contrast to teamLab’s digital dazzle.

4

Advertisement

Best was the indoor play zone where every item is made from wood, right down to the balls in the ball pit.

From Tokyo, it took two and a half hours on the bullet train to reach Japan’s second city, Osaka, where we checked in at OMO7 Osaka.

The affordable hotel had the same winning formula as our Tokyo base but with a few extra comforts, including a full restaurant, nightly free beer and takoyaki (Osaka’s signature street food of fried batter and octopus balls).

There’s a huge outdoor green space the size of a football pitch and sleek hot baths with a hyper-modern design.

The hotel is set on the edge of the Shinsekai district, a warren of traditional cheap eateries (a hot bowl of udon at Matsuya cost just 85p) and fairground-style attractions centred around the 103-metre Tsutenkaku Tower and observation deck.

Shinsekai, or “New World”, has a charming retro atmosphere that’s come back into fashion with Japan’s Eighties nostalgia revival.

Mario, Luigi and gang

OMO7 Osaka is also popular with visitors to Universal Studios Japan, thanks to a free shuttle bus to the park and specially trained experts to help you plan your day there.

A day ticket costs £41.34, less than half the price of Universal Studios Orlando at £92.42.

Newly opened Super Nintendo World was a highlight, immersing us in an interactive universe of Mario, Luigi and their gang.

Lena fell in love with the mushroom character Toad and got a kick out of the power-up bands that let guests collect coins in an app by punching Mario’s signature blocks or completing other simple challenges around the land.

As we bid sayonara to Osaka, our hearts were full of memories and our pockets were still jingling with Yen, proving that Japan is possible on a budget.

Just mind the prices when ordering your two-year-old a steak for breakfast.

4