This is an audio transcript of the Political Fix podcast episode: ‘Is the shine coming off Saint Starmer?’

Lucy Fisher
Hello, I’m Lucy Fisher and this is Political Fix from the Financial Times. This week we’re thinking, is sir Keir Starmer a bit, dare I say it, grubby? If it’s a shocking question to ask, that’s only because the prime minister has enjoyed such a squeaky clean image to date. But are the rows this week a sign the sheen is wearing off? With me in the studio to discuss it all are Stephen Bush — hi, Stephen.

Stephen Bush
Hi, Lucy.

Lucy Fisher
And the FT’s Jim Pickard. Hey, Jim.

Jim Pickard
Hello.

Lucy Fisher
Also in the show a little later, our chief business correspondent, Michael O’Dwyer, is going to pop into the studio to tell us what message the business community has been giving the new Labour government.

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This week, there’s been a sense that the shine has come off Keir Starmer a bit, both over donations he’s accepted from Lord Waheed Alli and over Sue Gray’s pay packet. Now, we’ll come on to Gray’s pay shortly. But Jim, you’ve been writing a lot about this Labour donor, Lord Waheed Alli. Just tell us briefly, who is he? And why has there been such a row about what he’s given to Keir Starmer?

Jim Pickard
So Lord Waheed Alli is a media tycoon who’s made money in not only media, but also in finance and in fashion. He was put in the House of Lords by Tony Blair back in 1998, so he’s been a Labour peer for nearly 30 years.

The row basically this week has three elements. The first is the sheer volume of fun free stuff that Keir Starmer, the prime minister, has taken from various donors, from huge numbers of football matches, quite a few pop concerts and also clothes and spectacles and accommodation from Lord Alli.

The second issue is where Keir Starmer . . . first, he failed to disclose £5,000 of clothing for his wife from Lord Alli and then remedied that. And secondly, we worked out this week that the actual £16,000 of clothes that he took from Lord Alli, he initially declared in a very vague way as basically office costs, and then he was advised a month later, back in the spring, to properly register that as a gift of clothing.

And then the third element — we can come back to all this in a minute — is the question mark about what exactly Lord Alli has been doing for the Labour party.

Lucy Fisher
Great. Well, thanks for summing that up so clearly. Stephen, let’s talk about the freebies. Is it a bit whiffy? I mean, to my mind, it is striking that since 2019, Keir Starmer has accepted more than £100,000 in gifts, benefits and hospitality — more than any other MP in that time period.

And there has been this question mark, hasn’t there, as well as going to things like, you know, Taylor Swift concerts, you know, worth £4,000, the kind of the football matches that Jim mentions. The clothes have become this real flashpoint, haven’t they? Sixteen grands worth of clothes for him, five grand for his wife. Is there something specific around clothes and how they’re personal that people find especially icky, I suppose, in all this?

Stephen Bush
What I think is really interesting is I was really surprised at how muted the reaction to our initial story about Keir Starmer’s trips was. Because to be honest, you do not have a god-given right to go see Taylor Swift or Arsenal. I think the fact that the reaction to that was kind of almost like, oh you’re a bit of a lad.

Jim Pickard
Because this was July; £76,000 of fun free stuff that we read about a couple of months ago, and the thing that surprised us was that he was top of the leaderboard of 650 MPs in Parliament. He’d taken more fun stuff than anyone else.

Stephen Bush
And what I thought was interesting, it kind of didn’t get the wider impact in the bubble or indeed in society than it kind of deserved. We expect spouses of politicians to wear fancy clothes and to look the part, and they are mostly donated or gifted. I think it’s fascinating that the clothes story, which is much more normal and I think much more defensible, has attracted this reaction.

So I think it is in part old-fashioned sexism. The reaction to a man going to see Arsenal in a box is most people go, well, I’d quite like to go and see Arsenal in a fancy box, fair play to him. The reaction to someone spending a lot of money on suits — and I say this as a massive clothes horse myself — is to go, that’s a bit excessive, isn’t it? So I think it’s partly how the two things are seen and how the two things are kind of gendered.

Lucy Fisher
I’m kind of interested that you think it’s sexist because I think that starmer’s come under a lot of heat for how much he’s accepted 16 grand in total — four grand alone on spectacles. I mean, how many pairs does one person need? And when I’ve been with him abroad on trips, I noticed on one that he was wearing box-fresh Hugo Boss trainers. I mean, who wears trainers from designer brands?

Jim Pickard
I totally agree that it’s not sexism at all because I think there has been more focus on Keir Starmer’s £16,000 of clothes than there has been on his wife. And I think there’s just something tangible about the fact that you’re walking around in this stuff and it is on you all day long and you’re gonna feel grateful because you’re going to look in the mirror and think I feel good thanks to my pal Lord Alli, who’s giving me these clothes. And it’s more tangible than just someone helping pay for your research or your paper and photocopying costs or whatever else these donors help people with.

Lucy Fisher
But Stephen, I agree with you that, you know, the spouse of a PM, whether they’re a woman or a man, are expected to look good. I’ve been interested reading that, you know, the US president gets this $50,000 expenses allowance and several former chiefs of staff and Downing Street advisers coming out of the woodwork in the past week saying you’ve no idea how bad the provisions are for the prime minister of the day. You know, dishwater, coffee, you know, congealed food that’s cold by the time it’s sort of wheeled in from 70 Whitehall and that many prime ministers leave with debts because, you know, they have to cover the costs of much of their board. Dickie when it comes to Chequers, if not Downing Street.

Stephen Bush
Downing Street is actually quite an underpowered centre as far as centres of government go. So it’s true to say that he’s underpowered. However, I think the clothes has kind of given people the way in to the trips where people go, that’s a bit weird isn’t it? And the trips are obviously just de facto, I think, indefensible.

Jim Pickard
We should say, at this point as well, that Keir Starmer does have a plausible excuse for taking quite so many trips to football matches. He’s an enormous football fan who used to go to Arsenal all the time to watch home games, and his point is that as prime minister or indeed as leader of the opposition, you have security issues if you would’ve sat in the stands with everyone else. And therefore he feels obliged to take people’s hospitality seats to watch football. Not everyone thinks that excuse washes.

You know, we haven’t really delved yet into the issue that Keir Starmer has defined himself as a Puritan in very much a kind of (inaudible). You know, he was always during the Conservative government, one of the first people to jump on, you know, perceived or real misdeeds or sleaze of the Conservative administration. And he’s the one that’s always saying, you know, if anyone does anything wrong, he works for me, that their feet won’t even touch the ground, you know, absolutely uncompromising about anything that even has a faint whiff of sleaze.

And that, I think, is what has captured people’s imagination a little bit more than, let’s say, Boris Johnson taking all that free food in the (inaudible), but when there were rows about it at that time, but it seemed on-brand. The Starmer stuff seems off-brand.

Lucy Fisher
That’s right. Well, let’s move on to talk about what’s happened regarding Sue Gray. Yet again, another week, her name is up in lights — and not for positive reasons. So it’s emerged into the public domain that she earns £170,000 a year, which is three grand more than the prime minister. Now, Stephen, what’s the significance of this story?

Stephen Bush
Yeah, so the long run policy background is that essentially since 2010, everyone who works for the government, whether you are a road sweeper or a senior civil servant or a spad or the prime minister has had a real term cut in their pay and, you know, she’s being paid slightly less than Ed Llewellyn, David Cameron’s chief of staff, was being paid in 2010 in real terms.

Lucy Fisher
Can I also jump in, now you’re covering Whitehall, I think it’s instructive to compare her role to permanent secretaries who head up Whitehall departments. They get between 150 and 200 grand. And if you look at the latest civil service data, there are 30 senior civil servants now earning more than 200 grand. That’s up by 50 per cent, albeit a small number. And the number of people in the civil service earning between 150 and 200 grand has also increased 50 per cent to 260 people in the last year.

Jim Pickard
And I don’t even know if that includes the people running quangos. A lot of them traditionally have been on even more than that, you know, £300,000, £400,000. So the debate seems to me a little bare. Should we be discussing how much Sue Gray is getting, or does it just underline the fact that it’s kind of a bit weird maybe that the prime minister is getting less than hundreds of other people in government when he does seem to have an awful lot of responsibility on his immaculately covered new suit shoulders.

Lucy Fisher
Yeah.

Stephen Bush
But the important political context here is that there are loads and loads of new political advisers being appointed who are not getting a pay increase that brings them back up to something near 2010 levels. In fact, they are being offered something which is a real terms cut on what they were being paid by the Labour party in May.

And one of the reasons why it’s provoked such anger among special advisers is loads of them thought that what was happening is there was some kind of Downing Street or Treasury pressure to be able to go, we’ve spent less on spads and they thought, this is stupid, but at least I understand why I’m going through this stupid process. Now they see at the same time someone went, oh, I know it would be a good idea to increase the chief of staff pay.

And yes, she wasn’t involved in setting it, but as one of these spads were saying to me, you know, I remember when she said to all of us, you’ve stuck with me, I’ll stick with you. Yet I’m being asked essentially to go into debt because of the cost of childcare this person would be incurring to do this job while she’s getting an uplift.

Lucy Fisher
So we should say that Sue Gray on £170,000 is being paid at least £25,000 more than her predecessor in the role, Liam Booth-Smith, now a peer who performed that role for Rishi Sunak. So it is a big uplift. I just want to move on from the specifics about pay to talk about how much sort of trouble Sue Gray is in politically. You know, there’s a lot of reporting about the sort of rival empire she has to Morgan McSweeney, who was Starmer’s campaigns guru. And also the suggestion that there’s no love lost between her and Simon Case, the Cabinet secretary, even the claim this week denied by those around him that he might have been involved in some of the sort of leaks that have been damaging for her. So it feels like she’s very politically exposed right now.

Jim Pickard
There are people in government who are describing Downing Street and its environs as a bit of a hornet’s nest at the moment, and that’s one of the more polite descriptions of that. So I haven’t seen the comprehensive proof yet from anyone that Morgan McSweeney and Sue Gray hate each other and briefing against each other.

But that doesn’t mean that there aren’t loads of people unhappy with how Downing Street is operating and specifically people who see Sue Gray as someone who meddles a little bit too much in areas which are a bit kind of low grade and they wonder why she’s getting involved in such specific small things. It’s much more, as I understand it, that they are both in sort of positions of equal political strength.

So there’s a potential conflict there that, from when she came in right at the start, there was always the potential for them to become hostile to one another because they have these competing power bases. And yet on the cusp of the election, people were telling me that they were working together reasonably fine.

So the question becomes, is it journalists hoping they’re gonna hate each other? Is there other people briefing against them at this point? It’s hard to say at this moment. I think what’s never (inaudible) that they will eventually end up in conflict with one another because of the amount of pressure around the situation at the moment. And the problem with Sue Gray is she’s become the story far too quickly, you know? It’s quite hard to stick it out. And journalistically, it’s easier to make her the story because we know so much about her before she went into government, because she was the standards person, because she wrote the partygate report.

The Simon Case issue is another interesting subplot — the Guardian suggesting that he may or may not have been behind some of the briefing. I think there’s another interesting subplot here, which has to do with Sue Gray working very closely with Lord Alli, who we were talking about only 15 minutes ago. Because in the run-up to the general election, she was looking at who should be getting which place in government and Lord Alli was helping on that. And that, of course, raises probity questions because he’s simultaneously the guy who’s responsible for bringing in the nation’s party as the chief fundraiser.

If he’s then got some kind of shadowy, inchoate role helping on public appointments, and it’s really not clear whether that stops on the day of the election or whether it carried on for a bit, which is why he, of course, had that Downing Street pass for a few weeks, there’s a legitimate question for us to be asking as journalists — and the opposition politicians ask the same question. We’re not getting very clear answers on why did they have the Downing Street pass, what was this transitional stuff he was working on, etc.

Lucy Fisher
Just finally on the subject, to you, Stephen, we’ve talked about how the freebiesgate has captured the public’s imagination. How much resonance does the Sue Gray issue have, if any, with voters?

Stephen Bush
So I don’t think the Sue Gray issue has any electoral resonance. But I think the reason why it matters isn’t what we’re kind of seeing is what happens when you have the system trying to do what it did in 2010 to new spads, but basically to a party with a strong tradition of unionisation and workplace organising, which means instead of people getting unhappy and going, well, I guess I better sign it, they get very angry. They start lobbying for their pay and conditions. And because spads matter so much to the effectiveness of government, this row is not, I think, going to have any electoral resonance, but it’s gonna cause a mistake somewhere down the line that will have electoral resonance. 

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Lucy Fisher
Well, none of this sounds much like stability — the precise thing that Starmer was promising in his election manifesto — and that has been worrying business. Our chief business correspondent Michael O’Dwyer has just walked into the studio to tell us a bit more. Hi, Michael.

Michael O’Dwyer
Hi.

Lucy Fisher
So you’ve been speaking to executives this week to pick up what they are feeling about Labour just around three months into the job.

Michael O’Dwyer
That’s right. So when Labour got elected, there was a sense of, I think, relief, primarily after what the UK has been through in recent years and even back as far as I suppose the Brexit debacle in 2016, where business for the most part was against the UK leaving the EU. And since then you’ve had Covid, you’ve had massive inflation, you’ve had huge political instability and a stream of prime ministers and ministers in just about every job in government. It’s all felt uncharacteristically chaotic, I guess.

And so the promise of stability was the biggest thing. Even if there were bits of the sort of broader policy offer from Labour, which seemed that they were not that desirable, things like employment rights reforms, for example, or from a business perspective, just there was missing detail. They could live with all of that to a degree. Where are we now? We’ve reached a point where we’re sort of two-and-a-half months in and not very much has happened.

And, OK, government goes slowly to a degree, and people need to make decisions and lots of the things that Labour is trying to do, like set up a national wealth fund, are actually quite complex and I think there’s a recognition that they do need some time to do the job properly.

But I think what has alarmed some business people that we’ve spoken to is just this sense that the government is being extremely negative about its economic inheritance. And I think those with broad shoulders, such as those in the banking industry, have sort of raised their eyebrows and thought, goodness, does that mean we’re in line for a windfall tax or other taxes that are not going to suit us? I think there is concern among business people that we have another month-and-a-half to go until the Budget, and if ministers are going to continue to be this negative until then, then that slightly undermines this primary aim that this government has of boosting economic growth. It makes it harder to convince people to invest in the UK. And so that tension that’s there, I think is causing some pain.

Lucy Fisher
Well, absolutely. And, you know, gaining private investment, both from businesses already existing in the UK and, you know, foreign direct investment from overseas is absolutely core to Starmer achieving what he says is his number one priority, which is growth.

Michael, you pick out two key areas that are causing businesses concern. One is what happens with the employment rights package. But also around the Budget, what the tax landscape may look like.

And Jim, something you know, you and I have picked up a lot of is bemusement in business circles about why the government, two weeks before the Budget, where they will actually unveil these tax changes, which businesses are quite worried about whether they will, you know, press ahead with changes to capital gains taxes, there’s been a lot of speculation about.

Two weeks before that they’re having this big investment summit and many executives are saying this timing is completely back to front. You know, it could really fall flat and then the government could suffer a loss of momentum, really, if there isn’t, you know, a huge sort of raft of big investments announced to kind of keep up that sense of optimism.

Jim Pickard
Yeah. I mean, the government will announce load of big investments. I’m sure some of the friendly businesses they’ve got coming will also announce various investments that may or may not be new, as is the way.

But yeah, what are they gonna be asking ministers if they’d managed to bend their ear in some corridor or over a cup of coffee at this conference?

They’re gonna be wanting to know, what are you doing on inheritance tax? What are you doing on capital gains tax? Are you removing this loophole? What are you doing on private equity, carried interest? Please, please, just discreetly tell me what’s in the Budget so we can decide whether or not to go offshore or not. It would have been more fortunate if the two events were the other way around in some sequencing, that is for sure.

Lucy Fisher
And Stephen, I mean, obviously Rachel Reeves and Jonny Reynolds made a lot of what they called their smoked salmon and scrambled eggs offensive with business that is sort of the prawn cocktail offensive redux before the election. Do you think they did enough? Do you think they’ve really understood how the transition into government means they need to kind of tool up engagement or follow through on some of the nice sentiment that they managed to create with business?

Stephen Bush
Well, since some of this is linked to what we were talking about earlier, right? The person whose job it is to be doing that engagement is in often cases still uncertain about their own future employment prospects. But I think the big problem in the Labour party, by making all of those promises about taxes on working people, has ended up with a series of promises on tax and spend, which it is very, very difficult to see how you reconcile with their growth strategy, right?

There’s no amount of smoked salmon you can eat that makes up for, yeah, if you’re saying to someone there’ll be changes on carry, there’ll be changes on CGT potentially, and a bunch of other issues, then that is difficult for your come and invest in the UK, we love business. Even before you get into the fact that, you know, the Liberal Democrats have also this week gone, let’s spend more on the NHS by taxing the wealthy entrepreneurs and the banks. So there just is, I think, an inevitable tension between where Labour have pitched themselves on tax, where the expectations that voters have with them on public services and the growth they want to see.

Lucy Fisher
Michael, let’s talk about this employment package, the new deal for workers’ rights, which I’m sure Jim will correct me to update me on what the latest title is. It’s been through so many iterations. Jonny Reynolds, we know, is gonna bring forward some sort of draft legislation in the first 100 days. That’s coming up next month. How are businesses feeling about that?

Michael O’Dwyer
The bit that comes up most often in conversations with executives is the day one rights stuff. And Jim can explain to us the latest on that because he’s been writing about it this week. There’s just at this point still a great lack of detail. I think to Labour’s credit, they have kept saying that they are continuing to engage with businesses. They have been having a huge number of meetings even since coming into office with businesses and talking to them about it. But you talk to the executives who are going in to meet them. And when they come out of those meetings, it feels like they’re still none the wiser about what the exact timing on any of these individual measures will be.

As you said, there will be a draft bill, but no one’s clear on what provisions exactly will or will not be included in it or when they might be implemented, which, let’s face it, is the bit that businesses really care about. So it feels at the minute like businesses would quite like to know what it is Labour are doing. And given that they’ve been talking about this since, is it 2021 that they first started, you know, cooking up this policy, I think there is a bit of frustration that we aren’t a bit clearer on what the parameters are that businesses have got to be facing in the coming months.

Jim Pickard
I went to see some lawyers last week, employment lawyers who were talking about this enormous mismatch between a lot of the newspaper headlines on this, which, you know, one employment lawyer described to me as hysterical and the reality of what’s actually changing. The issue the government’s got is that a lot of the slogans here sound like something enormous is happening. Rights from day one sounds enormous, right to disconnect sounds enormous, getting rid of zero-hours contracts sounds enormous, but in the years time there will still be zero-hours contracts. My news editor will still be calling me at 11 o’clock at night and people who think they’re getting rights from day one at the start of a job can still be put on probation period.

And we’ve revealed in the FT midweek this week that the probation period will be about six months, which I think is kind of Michael might disagree, but I think employers can kind of live with that. I think they would have been very upset if Angela Rayner had got her way and had been a much shorter period. So with a lot of this stuff, there is this smoke and mirrors, but I’m not underestimating how big this is in aggregate.

I’m not, you know, underplaying the fact that unravelling all that Tory anti-strike legislation means that it’s gonna be an awful lot easier for people to go on strike. I don’t want to underplay the fact that, you know, letting unions into basically every workplace in the country to try and recruit new members of their unions is a big change. In aggregate, there are an awful lot of changes. It’s just that we shouldn’t be taking every slogan at face value.

Michael O’Dwyer
I think that’s right. And the other thing is that different businesses will be affected differently, right? Some highly skilled workforces where people are paid an awful lot of money, everyone as part of the deal accepts that they’re going to be working late into the night. And so, you know, a code of conduct that suggests it would be preferable if people weren’t contacted out of hours unless it’s at all necessary is sort of, you know, everyone shrugs and moves on.

And I think other industries where, for example, zero-hours contracts are a fundamental part of the business model, even if, as Jim correctly says, there will be basically provisions that allow that to remain in some form. Anything that makes that more difficult is potentially more painful there, but different measures will bite differently depending on which part of the economy you’re in.

Jim Pickard
And I think small business definitely has a legitimate point when they say that we don’t have the lawyers and we don’t have the bureaucrats to deal with what is gonna be an awful lot more red tape and working through all this employment legislation. And interestingly, when we’re writing about this probation period, you know, I was asked in the question of people who know what was going on, you know, will there be some kind of carve out for small business? And the impression I got is that there won’t be. And I think organisations like the Federation of Small Businesses will be upset about that.

Michael O’Dwyer
I think that’s absolutely right. I think there is this sort of sense of, OK, if you’re going to introduce these tougher rules on us, then at least provide the infrastructure that when things go wrong, problems can be dealt with reasonably efficiently.

Lucy Fisher
And Jim, just finally, you’ve just interviewed Jonny Reynolds, the business secretary. What did he have to say to you about this?

Jim Pickard
Well, Jonny Reynolds is always quite a perky politician. And he was putting quite a positive gloss on the situation. You know, emphasising his message to investors, which is that there is political stability here for the next five years. We think they’ve got all these planning changes and they’ve got a much more pro-business attitude, certainly than a lot of their predecessors.

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Lucy Fisher
OK. We’ve just got time left for Political Fix stock picks. Michael, so just in the studio, let’s start with you. Who are you buying or selling this week?

Michael O’Dwyer
Can I choose someone who’s not a person, but a place or a thing? What about the dive bars of Liverpool? So we’re all gonna be heading along with half of Westminster and a lot of corporate executives to Liverpool in the coming days for Labour’s annual party conference. Clearly there’s gonna be, from the corporate sides, a lot of people trying to get close to people like Jonny Reynolds, Keir Starmer, Rachel Reeves. But also, as I discovered last year on my first year of party conference, a lot of after-hours activity and I think certainly the Liverpool night-time economy will be helped.

Lucy Fisher
Jim, how about you?

Jim Pickard
I’m gonna shamelessly steal Michael’s idea. And at first, I thought maybe we should be selling bars and pubs in Birmingham for Tory conference. But then I thought, there’ll still be loads of people there. And there’ll be less serious work than the last 14 years. And maybe we will be filling those bars, letting our hair down and, yeah, let’s buy central Birmingham.

Lucy Fisher
Stephen, how about you?

Stephen Bush
So I’m worried that this is gonna count as insider trading, seeing as I’ve dumped on this person quite a lot in this podcast, and I’m gonna dump on them in a newsletter that will have come out by the time the listeners listen to this. But I’m gonna buy stock in Keir Starmer because he’s obviously having a pretty difficult time of it at the moment.

Government is struggling to find its feet in the way new governments often do, and I suspect that their popularity will have further to fall in, you know, the 2nd of November, there’ll be a new Conservative leader who you assume will get a, ooh a fresh new face bounce, and there will be a very painful Budget with all the stuff we talked about earlier on. But first-term governments usually re-elected, he’s more popular than any of the four candidates, well, or rather, he’s less unpopular than any of the four candidates in the Conservative leadership race. And so, yeah, I just feel like while the price is low, it’s probably a good time for me to do a defensive acquisition of Keir Starmer stock.

Lucy Fisher
Things can only get better, aye?

Jim Pickard
Lucy, what is your stock pick?

Lucy Fisher
I’m afraid I’m gonna sell Ed Davey. The Lib Dem conference happened this week. You may not have noticed it. It didn’t exactly generate headlines.

Jim Pickard
Where was that?

Lucy Fisher
Where was that? Well, quite, Brighton. I’m not sure their night-time economy will have seen quite the bump we’ve talked about. Look, the Lib Dems had a victory rally of sorts. You can understand that they got to a record high of 72 MPs in the general election. But I don’t really think that they found their footing or, you know, a raison d’être in this parliament. And Ed Davey’s still doing his old gimmicks of getting on a rollercoaster for an interview. I’m not sure the kind of the slapstick sort of stunts work outside of campaign season.

Well, that’s all we’ve got time for this week. My thanks to Stephen, Jim and Michael.

Jim Pickard
Thanks.

Michael O’Dwyer
Thanks, Lucy.

Stephen Bush
Thanks, Lucy.

Lucy Fisher
And that’s it for this episode of the Political Fix. I’ve put links to subjects discussed in this episode in the show notes. Do check them out. They’re articles we’ve made free for Political Fix listeners. There’s also a link there to Stephen’s award-winning Inside Politics newsletter. You’ll get 30 days free. And don’t forget to subscribe to the show. Plus, please do leave us a review or a star rating. It really helps us spread the word.

Political Fix was presented by me, Lucy Fisher and produced by Tamara Kormornick with help from Leah Quinn. Manuela Saragosa is the executive producer. Original music by Breen Turner and sound engineering by Simon Panayi. The broadcast engineers are Andrew Georgiades and Rod Fitzgerald. Cheryl Brumley is the FT’s global head of audio. We’ll meet again here next week.