A rumbustious start to 2023

This is an audio transcript of the FT Politics podcast episode: ‘A rumbustious start to 2023’

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George Parker
A new year, but Britain enters 2023 with the same old problems and two party leaders who know that in all likelihood, there’s going to be a general election next year.

Rishi Sunak
Mr Speaker, when it comes to the NHS, it’s crystal clear: the Conservatives on the side of patients, Labour on the side of their union paymasters.

George Parker
Welcome to FT Politics, your essential insider guide to Westminster from the Financial Times with me, George Parker. I’m delighted to be in the hot seat vacated by Seb Payne for the next few weeks, before the pod is relaunched with a great new format. And in this week’s episode we’ll be looking at the problems facing Rishi Sunak at the start of a year that could shape the outcome of the next election. And with Sunak and Keir Starmer, Labour leader, setting out their plans for 2023, I’m delighted to be joined by two of the FT’s top columnists, Stephen Bush and Robert Shrimsley, to read the runes. Later, we’ll have a look at the outlook for business and the economy ahead of a really tough year. I’ll be talking energy prices, the recession and the March budget with Syma Cullasy-Aldridge of the CBI and Dan Thomas, the FT’s chief UK business correspondent. Thank you all for joining.

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So we’re two weeks into 2023 and already Rishi Sunak and Keir Starmer have made big speeches on the year ahead, and this week they were in rumbustious form in the first session of prime minister’s questions after the New Year break. Here’s a taste.

Rishi Sunak
Mr Speaker, I’ve laid out my priorities for the country: waiting lists down, inflation down, debt down, growth up and the boats stopped, Mr Speaker. All he does is flip from one thing to another, and that’s the difference between him and me. He’s focused on petty politics, I’m delivering for Britain. (MPs shout “Hear! Hear!”)

Keir Starmer
There’s not a minimum level of service any day because they’ve broken the NHS. (MPs shout “Hear! Hear!”) And after 13 years in government, what does it say that the best they can offer is that at some point they might stop making things worse?

George Parker
So, Robert Shrimsley, what do you make of the opening skirmishes of 2023 and what do you think they tell us about the way the year is likely to pan out?

Robert Shrimsley
I think the one thing we can be absolutely certain of is that they focus-grouped the hell out of them, and they polled the hell out of them and these are the things that voters are saying they care about. And therefore Rishi Sunak was saying these are the things I care about. And that’s just the way politics runs these days. So he wants to be able to say to voters, we stabilised the economy, we managed more boats and so on, that we sorted out the worst of the NHS crisis. These are your top three priorities. And look, we’re on them. Clearly for the Labour party, therefore, the need is to persuade voters that the Conservatives haven’t done these things because the Conservative analysis of the things that matters to voters is correct. Labour party knows this. Therefore, the challenge for Keir Starmer and Labour party is firstly to say, “Well, look, you haven’t sorted out the NHS and even to the extent that you have met your own target, this is a crisis that you brought upon us. You, the entirety of 13 years of Conservative government brought on us through your period of austerity. The economic crisis — you may have stabilised the country, but look, it was your predecessor Liz Truss who did this”. So I think the challenge is going to be one of, can the Labour party pin the blame for the problems that bother the public on the Conservatives, even if the Conservatives have made some progress in tackling them?

George Parker
Yes. Now, Stephen Bush. Strikes have obviously dominated the first couple of weeks of 2023. Rishi Sunak came back after the break, seems to be steeped with a much more conciliatory approach, talking about sitting down with the unions, talking about a reasonable and affordable pay settlement. If he climbs down, does that make him look pragmatic or does it make him look weak?

Stephen Bush
Both, I think. The thing that lots of people in the trade union said at the start of this approach is how, well, look, during furlough he claimed that we were going to exit much earlier than we did, and he climbed down. He claimed this and we climbed down. So he’ll climb down for us because he’s actually quite pragmatic. That’s both a compliment and an insult. I suspect for him it’s much more important to be pragmatic, I think, than to be seen as strong, because broadly speaking, if there aren’t enough nurses, if there aren’t enough teachers, if the public services continue not to work, that matters a lot more than whether or not he looks tough. But given that the Conservative party is quite mutinous, the risk is, yeah, he looks weak. People start going, oh, wouldn’t it be great if Boris Johnson came back?

George Parker
We come on to him in a minute, of course. Robert, do you think a climbdown is coming?

Robert Shrimsley
I think the key tactical error the Conservatives will be making if they don’t climb down in some areas is lumping all the strikes together. Because the truth is you can be beastly to the train drivers and the public will support you, and you cannot be beastly to the nurses where the public is less sympathetic to the government’s position, and therefore trying to lump them all together and show we’re being horrible to all public service workers, I think, will rebound. The Conservatives want the issue of militant trade unions because this party has long been a Thatcher tribute act and they see the benefits of tough anti-union legislation and they think they can put one over on Labour party and you heard in the clips, Rishi Sunak is very keen to keep rolling out this phrase “union paymasters” on Keir. So they quietly address the issue, but they don’t want these strikes rumbling on for weeks and weeks and weeks and weeks because the country will look at them and say, “Well, you’re the government. You sort that. There’s no point you attacking Labour party endlessly because you’re in charge and we’re looking to you to resolve it.

George Parker
And it does feel a bit like, doesn’t it, that the health strike is the one they have to resolve because they can’t afford this running into deep into 2023, possibly with a one-off payment, possibly with some backdating next year’s payable to January. Stephen, I wonder what you think about Keir Starmer’s approach to this because essentially he seems to be sitting on the sidelines. He wants to get off the ‘union paymaster’ hook, obviously, and his main line of attack is that Rishi Sunak hasn’t been negotiating with the unions. Is that good enough to the people who’ll then hear more from him about exactly what he’d do?

Stephen Bush
Starmer has two vulnerabilities here. He doesn’t want to talk about specifics because he does not want to open up all of those anxieties people have about Labour and tax. But he carries this vulnerability and people think he’s shifty. So he’s successfully avoiding being tagged as a tax riser by not saying very much, but the number one way for him to eradicate the perception that he is shifty would be for him to make some concrete commitments on difficult issues. Now, there are lots of positive things you can say about, you know, his climate agenda or, you know, his plans to devolve things. But these aren’t difficult issues for the Labour party, and there’s no constituency in UK politics which wants less action on climate change.

George Parker
Is this starting to rankle with voters, do you think, that . . . you talk to people, I don’t think focus groups pick this up, don’t they? People say they don’t know what Keir Starmer stands for, that he’s always carping from the sidelines. Does it matter, Robert, do you think, that he’s not giving people more detail of exactly what he’d do in these difficult circumstances?

Robert Shrimsley
I think it will matter if that is still what people think by the time we get close to a general election. I don’t think it necessarily matters at the moment because people do expect the government to resolve issues. I think he could be much clearer. I think he could, like the government, discriminate between the different unions and the areas or who he sides with. But none of these unions are actually affiliated with the Labour party. He could start by siding with the ones that are affiliated and not worry about the ones that aren’t so much. There is this one piece of inertia which works against oppositions, which is that voters who are fairly contemptuous of all politicians look at people and go, “Yeah, but I don’t know your lot would do any better”.

George Parker
Yeah.

Robert Shrimsley
And we certainly came across that a lot during the pandemic, even when the government was manifestly getting things wrong, people were saying, “Well, why are you always carping and you would make no better fist of it?” And so I think at some point he has to show how he would make a better fist of it. And I think this goes to a broader point than the strikes, which is if you’re saying Britain is broken, the NHS is in, you know, A&E, well, how are you gonna get it out? So at some point he’s gonna have to start answering those questions. And the challenge for him is the extent to which he can answer them through talk of reform rather than spending, because spending, as Stephen says, means taxes.

George Parker
So Stephen, you mentioned the B-word earlier on, not Brexit, surprisingly, on an FT podcast, but Boris Johnson. And of course, given the fact that we’re now into a sort of more of a technocratic, managerial phase of British politics, everybody in the media is dreaming of a return of Boris Johnson and the high-octane excitement and chaos that he brought with him. This week he unveiled a svelte-looking portrait of himself for the Carlton Club. What do you think? Is he gonna make a comeback?

Stephen Bush
(Sighs) I think it’s unlikely. Broadly speaking, the reason why he was able to become leader is that that group of people in the Conservative parliamentary party who would say, you know, “I’d rather chop my leg off than have Boris Johnson be prime minister”. Look at how badly they’ve done in the European elections, in the council elections in 2019, and when . . . Actually I can live without my leg, but I can’t live without my parliamentary seat. Now it’s possible, right, that in May, well, the local elections be very bad and enough of that group of people goes, “I know then I said he was awful. I know I resigned from his government, but I don’t want to lose my seat”. I think it’s unlikely because the average Conservative MP didn’t just have an ideological objection to Jeremy Corbyn. They thought that he would be a, you know, a sort of a moral and political and social disaster, and therefore they were much more willing to do something they didn’t really want to do to avert that. Conservative MPs just don’t talk that way about Keir Starmer. And so I just assume that even though I think there’ll be some kind of eruption in May, there’ll be an attempt for him to come back. I don’t think that enough of the parliamentary party is going to think it’s a good idea.

George Parker
Robert, you wrote an excellent column headlined “Boris Johnson’s the itch the Tory party’s got to stop scratching”. Do you think he’s gonna make a comeback?

Robert Shrimsley
No, I don’t. I’m just for the sake of being tough on this issue. I mean, I broadly agree with Stephen, which is that it’s very unlikely. But I don’t think he will come back and Rishi Sunak will take the Conservatives into the election. The one argument he has in his favour is that, or the two — The first is that there’s no reason to think the opinion polls are going to massively improve for the Conservatives this year. If Rishi Sunak is to pull it off in any way, it will be a last-minute at-the-tape victory rather like Major’s in 1992. There’s not much warning of its coming. The best he can do is hope to close the polls a bit. So Conservatives will be panicked towards the end of this year because the polling, I think most will tell them this. Even the most head-banging Conservatives concede that four prime ministers in two years looks a tad dysfunctional.

George Parker
Only three, if you count Boris doing it.

Robert Shrimsley
Well, that’s my point, (laughter) that actually, if you’re gonna have another leader, it’d be better (George laughs) to have one we had before and better still, the one who was elected in 2019. But I don’t think he’ll come back. I think that he is firstly, a little bit cowardly as he showed when he pulled out at the end of last year. And secondly, I think there’s enough Conservatives in the party just think: this is insane. Also, and thirdly, could well be hammered in a couple of inquiries that are coming this year — both the partygate inquiry and the public health inquiry.

George Parker
I would say that you wouldn’t bet, though, against him turning up as a triumphant king across the water at the Conservative Party conference and hundreds of adoring . . . 

Robert Shrimsley
Being difficult. For sure.

Stephen Bush
I think the cowardice point is really, really astute because we shouldn’t forget: he did have the numbers to get on the ballot last time, but it would have been difficult, right? And essentially, the most significant thing that happened last year in terms of the Boris factor was Kemi Badenoch going on the record in the Times and basically saying, “I don’t think this guy is really up to it at this time”, which signalled to him, “Look, you can have this but you’ll have to break a lot of china”. And he’s not a . . . he’s not someone who’s willing to break a lot of china. He wants to come back and be, you know, the oh, you know, “We’re so glad the Messiah’s back”.

Robert Shrimsley
He’s not the Messiah. He’s a very naughty boy. 

Stephen Bush
Yeah. And the things he’s . . . he’s not someone who’s ever really been willing to have, you know, bad feeling around his government. And I can’t see a way he could come back without an awful lot of bad feeling.

George Parker
Now, one of the bits of good news around this week on a geopolitical front was the fact that there was actually a breakthrough in the talks on the Northern Ireland protocol. UK government and the EU did a deal on sharing of information on goods coming across the Irish Sea, and they even agreed a joint statement, which is unique. Robert, generally there seems to be a lot more goodwill around these talks. Do you think there’s gonna be a deal on the Northern Ireland protocol?

Robert Shrimsley
I think there’s the possibility of a deal if it were left entirely to the British government, the Irish government and the EU. I think there would be a deal, because I think it has been clear for a while now that the EU has recognised that it implemented the protocol too ferociously and that in the implementation of the protocol it could do better, it could be more relaxed. And I think the data-sharing agreement that came this week was significant in greasing the wheels of that. The question, however, has never been about what the grown-ups in the room might be prepared to do. It’s about the other two parties that are problematic here, namely the Democratic Unionist party and the Brexit ultras in the Conservative party, the ERG. But what those other two parties want is a fundamental rethinking of the protocol. They want the European Court of Justice out of issues affecting Northern Ireland, and that’s a very, very difficult thing. And therefore, the question is to me less whether Sunak, Varadkar, Brussels can do a deal than whether Sunak is prepared to drive that deal through against the Democratic Unionist party and the ERG. For the Democratic Unionists it’s an interesting one because, you know, they’re not a cohesive unit. One of the problems is that Jeffrey Donaldson can’t just deliver his party, but they could quite easily decide to say we’ve got major concessions here. They could declare victory and quit the field in triumph. But that’s simply never been how the DUP works. There is no victory they’re prepared to take if defeat is available. (George laughs) And so I think the question will be whether Sunak is prepared to drive this through against those two very dangerous constituent bodies.

George Parker
Amusingly, Keir Starmer was in Belfast this week making a speech in which he offered Labour political cover to Rishi Sunak should he wish to take on the ERG. I’m sure that’s an offer that Rishi Sunak will be able to resist. What do you think, Stephen? Do you think there are encouraging signs for rapprochement between the UK, not just in the EU, but some of the member states? Even going to be an Anglo-French summit for the first time in five years?

Stephen Bush
Yeah, I mean, one of the things Keir Starmer is doing very astutely with his “I’d love to help you” is he’s raising the stakes internally for Rishi Sunak of seeking any kind of deal that he needs Labour support to get through. We saw last year that Rishi decided and he did not want to pass planning with Labour votes. And in some ways that does mean he’s kind of made the decision that he won’t do anything that controversial.

Robert Shrimsley
I mean, there is one small thing which is worth factoring in, which is that he has two very, very committed Brexiters in the Northern Ireland Office, in Chris Heaton-Harris and Steve Baker. Is this a deal they can support even if the most ultra Brexiters can’t, because that can actually divide the ERG? If he’s got to deal Steve Baker, be prepared to come out and say, “I think this is the best we can do”. Might not make much of a difference to the DUP, but it’ll make a huge difference within the Conservative backbenches. And so the one thing that’s interesting is it’s always that risk when you put poachers in to become gamekeepers. But will they actually deliver for Rishi is an interesting question to which I don’t yet know the answer.

George Parker
So I think we’re all agreed that at the end of 2023, Rishi Sunak will still be prime minister?

Stephen Bush
Mm-hmm.

George Parker
Right then. How big, if indeed there is a Labour lead, how big do you think the Labour lead will be at the end of 2023, Stephen?

Stephen Bush
(Laughs) I think it’ll broadly be the same as it is today.

George Parker
Okay.

Stephen Bush
I don’t think the global economy will have improved all that much. The UK continues to be a global underperformer and it will therefore continue to lag the global recovery. And broadly speaking, I think a sort of a fundamentals model has performed pretty well in this parliament.

George Parker
Robert.

Robert Shrimsley
Yeah, I think the parties will be not much different to where they are now. Rishi Sunak might be clawing back a bit, but we’re not gonna see a major change. The one I’ll be interested to look at is the ratings for him versus Starmer as prime minister, which is much, much closer.


George Parker
Yeah.

Robert Shrimsley
And I think if you start to see Rishi Sunak getting ahead of Starmer meaningfully and consistently, it answers the question of who would make the best prime minister, then I think that says to me, we’re gonna have a game on in 2024.

George Parker
Robert and Stephen, thanks very much.

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George Parker
If the politics look remorselessly tough, what about the business outlook for 2023? A recession, labour market shortages, inflation and of course the ongoing energy price crisis? This was Jeremy Hunt, the chancellor, announcing a much reduced package of government support for businesses with their energy bills this week.

Jeremy Hunt
We’re announcing a further five and a half billion pound programme for next year, lower because gas prices have come right down. But I am concerned that even the wholesale prices are lower than before Putin invaded Ukraine. A lot of businesses have yet to see the benefit of that in the bills they actually pay. So I’m also asking Ofgem to do an investigation to look into the market.

George Parker
Syma Cullasy-Aldridge from the CBI. From a business point of view, was Jeremy Hunt generous enough?

Syma Cullasy-Aldridge
I think it’s totally understandable that the government needed to pare back the very expensive scheme. ‘Cause everybody needs their energy bills paid. I also think they need to make sure they’re looking at things like energy efficiency and demand side reduction so they can make sure that the energy usage is going down. At the same time, there’s pretty good domestic plans on energy efficiency, not so much on the business side. So we could see some more detail on that in due course. So it’s understandable. Good that they’re still doing it out of 12 months. Just keep an eye on it because energy prices are volatile right now. And what you don’t want when the economy looks like it does is people worrying about how they’re paying their bills rather than worrying about how they’re investing and growing.

George Parker
What did you think Dan, of the energy package this week?

Daniel Thomas
Yeah, hi George, I think it’s gonna be really tough for a lot of businesses, I’ll be honest. You know, talking to particularly the smaller business end, they’re gonna be facing much higher bills from April. It scales back from April down to this lower level. And it’s, you know, roughly five and a half billion over the two-tiered scheme that they have launched compared to the 18bn from the previous six months. So you can see that really, really curtailing the support for many businesses and they can have a tough time. We don’t know where gas prices are gonna be, we don’t know where energy prices are gonna be, but we’re pretty sure they’re gonna be higher. And for a lot of businesses, particularly as they’re coming out of that Covid period, they’re already facing the need to repay debt, for example, if they took some of the Covid bounce-back schemes. So for them particularly, they’ll be looking at next winter and really fearing for themselves.

George Parker
There was some talk, wasn’t it, having a more targeted scheme, trying to focus help on retail and hospitality, for example. But that proved to be just too complicated, didn’t it?

Daniel Thomas
Mmm. Yeah, basically they don’t have the data to try to target it as they would want to do. And you can understand that would be a very attractive way to do it. But ultimately they can’t. They’ve had to go for a very thin layer of universal coverage and ultimately that’s just not gonna please that many people.

George Parker
Yeah. Now, Syma, what does business want from government in 2023? And do you think, given the financial constraints the government’s working under, it will be able to deliver?

Syma Cullasy-Aldridge
I was quite encouraged by the prime minister standing up this year and already saying, “Here are my pledges”. It’s refreshing that he’s standing up and he’s saying, “I’m gonna act with integrity. Here are some promises I’m going to make that you are going to judge me by”. That is a good thing. That moves away from some of the politics we’ve had in the last year. You can’t kind of take away from the fact that stability is a good thing. I think we should rebrand the dullness dividend to be stability sticking.

George Parker
Mmm.

Syma Cullasy-Aldridge
We’re happy about that. You gotta follow through, though. You have to put some action behind your plans. The prime minister’s talking a lot about innovation, for example. Perhaps not enough about green. So what I would love to see is some action on some of these plans so we don’t lose some of the economic opportunities that we have. You know, we’re competing with Biden’s Inflation Reduction Act. We have businesses who are worrying about surviving rather than worrying about investing. We do also have some businesses who are like, “I’ve got money, I’d like to invest, for example, in green. I just don’t know where. Which way to point? Do I invest it in wind or is the politics around planning too difficult?” If you want to transform the economy, you want the next gigafactory. You want a big offshore wind farm. The prime minister set himself a pledge to get the country going back to growth this year. If you were to generously mark his own homework, you could argue that getting us to nought point 1 per cent growth in Q4, which you only get if you compare Q4 of this year to Q3 of this year. If you look at the overall year, the economy is actually contracting by nought point 4 per cent.

George Parker
Mmm. 

Syma Cullasy-Aldridge
If you want to generously mark the prime minister’s pledge on getting back to growth, it’s nought point 1 per cent.

George Parker
The target’s not especially ambitious.

Syma Cullasy-Aldridge
They’re not ambitious . . . Exactly.

George Parker
To put it very mildly. And yeah, it seems to sort of want to take the credit for halving inflation, but I don’t remember him accepting the blame when inflation went up above 10 per cent. It’s strange though, isn’t it?

Syma Cullasy-Aldridge
Credit for gravity . . . 

George Parker
Well, indeed. Now, Dan, some of the things that you’d like to have heard a bit more about green in the prime minister’s speech at the Olympic Park at the start of the year, there wasn’t very much in there about manufacturing and making things, was there?

Daniel Thomas
Very little in manufacturing and very little really on the overall growth agenda, as Syma says. You know, there was, a lot of people were looking for that bit of magic that would really get people excited, that people would think that businesses could grab and say, “That is the policy . . . that’s the policy that’s gonna get us through the next 12 months. It could have been some incentives on the tax side. It could have been something which actually gave them some hope that the next 12 months is just not gonna be a hard slog of just gradual recession and getting through. And that was lacking, I think. The green thing is exactly right, you know. Alongside the universal package on energy support, they could have, for example, given some incentives for businesses to invest into this area, to get into transition, to reduce their dependence on carbon fuels. But they didn’t do any of that sort of stuff. It was pretty modest stuff, and I don’t think many people are inspired by it.

Syma Cullasy-Aldridge
We’ve got a budget coming up. We’ve got the budget in March. So, you know, that would be the opportunity for the government to look . . . 

Daniel Thomas
Okay.

Syma Cullasy-Aldridge
 . . . at some of those things.

Daniel Thomas
Give us a shopping list, then. So what do you want in the budget?

Syma Cullasy-Aldridge
One thing I’ve been quite encouraged by this week is the conversations that appear to be happening about workforce inactivity. So if you want to grow the economy, it’s not that complicated. You need workforce, you need productivity. That’s how you grow. We don’t have those things enough in the UK right now and conversations around workforce inactivity have started. You either increase the workers in the UK by getting people back to work or by migration. We all know how both sides of the House feel about the latter, but the fact that conversations are happening about the former is positive. But some of that stuff costs money, whether it’s childcare or increasing social care, so people can get back to the workplace and not be caring for people who are long-term sick. Those things are things that the government can do.

George Parker
To be honest, the migration bit is the easier thing to do apart from the politics.

Syma Cullasy-Aldridge
Yeah (Laughs) we’ve talked about before, there’s tough political choices and tough economic choices. If you’re not gonna make the political ones you’ve got to do the economic ones.

George Parker
And how do you see the budget as being a moment where the government does the big reveal if its growth structure, if things will be a bit more incremental than that?

Daniel Thomas
Well, at the moment it feels a bit more incremental and there’s no suggestion there’s going to be some, you know, overarching grand plan to keep the economy booming in the next 12 months. And arguably, what can he do? We know he hasn’t got a lot of money to play with. So you can understand why he perhaps can’t do what he would want to do to really pump-prime the economy, which perhaps in a better time he could do. Equally, there will have to be something in there for companies to hook their wagons on to say that we are gonna start investing. These are the key areas for us to invest in it, be a green, as you say, the workforce. There has to be something there and we’re not sure what exactly that’ll be just yet.

Syma Cullasy-Aldridge
Incremental is okay though. So take capital allowances as example for expensive is really expensive. I understand that it works, I understand why the fiscal situation might not allow it all to happen at once, but you can do things incrementally. The point about stability is that you can’t only do stability, you have to do both. If you can’t do it all at once, have a plan for how you are gonna have a road map for capital allowances, a road map for tax reform, a road map for getting people back. But do that in March. Don’t shy away from those things.

Daniel Thomas
Yeah. And to your point about manufacturing and making stuff, there’s still no sign of an industrial policy for example.

George Parker
Does the government actually believe in having an industrial strategy, have you worked that out yet?

Daniel Thomas
(Laughs) They’ve all sorts of strategies, haven’t they, but they haven’t got an industrial one.

George Parker
What is it? It’s not as we remember that there was an industry. I mean, the business department is the Business Energy and Industrial Strategy department. But back in, think it was 2021, Kwasi Kwarteng when he was the business he canned the industrial strategy, he called it a pudding without the theme, didn’t he? I’m still not sure whether the theme has returned. So serious question, does the government believe in industrial policy?

Daniel Thomas
Well, you’d hope though, that the business department, given their name, would have a view on this (laughs), but . . . 

George Parker
You’d hope so.

Daniel Thomas
 . . . I mean, but you’re right. I mean, the focus is not currently on manufacturing in the purest sense of what you would describe as manufacturing. The focus is very much on creating. And this is a, this feels like a very much a Rishi Sunak thing, creating a sort of science superpower of the UK, like investing heavily into life sciences. And to be fair, life sciences can be manufactured, right? GSK, they manufacture things not perhaps in the sort of the way we think of the Midlands Powerhouse or whatever else, but they are to some degree betting on those industries of the future. They’re saying actually life sciences, we think, is gonna be a stellar boom right in the next decade. It already has been. We’ve seen it was a great success. The UK is incredibly well-positioned in this with the Oxford and Cambridge spin-outs. You know, we’ve got a very vibrant biotech industry and so you can see very good reasons why they can put some of their chips into that. As yet, we haven’t seen what exactly those chips are yet, so we could see some actual support for those areas rather than warm words would be useful. But you can see some sort of manufacturing base coming from that.

Syma Cullasy-Aldridge
And I think also the focus on innovation is lots of different kinds of innovation. So what is the future electric vehicle, for example? You know, what is the future battery technology? That is old manufacturing. But the prime minister has been talking a lot about how you focus on innovation. And part of the Valence review is looking at where, you know, regulation could be done differently to encourage that innovation a little bit more. So there are glimmers of it.

George Parker
So we’re talking a little bit earlier just to conclude on this, and no discussion on an FT podcast would be complete without mentioning Brexit. There seems to be an improvement in relations so far. The mood music improved but the substance changes is another question. What do you think the government can do, Syma, or should be doing in 2023 to try to soften some of the edges of Brexit for business?

Syma Cullasy-Aldridge
This is not the first conversation that you and I have had about this. I agree with you on the mood music. It definitely feels different. You’ve seen some progress over the last month and even this week you had the foreign secretary and the Northern Ireland secretary in Northern Ireland having productive conversations and the mood music from Europe feels different, too. So, you know, the ask remains the same. Move past the North Island protocol, start having conversations about things like Horizon and let’s you and I be having a different conversation next year when we’re talking about this.

George Parker
Actually, Dan, just to conclude with you: Syma mentioned Horizon, which is this 95bn pan-European Research Spring, which at the moment Britain is excluded from. We hope to be a part of it. Do you think Britain needs to go back into that? I think Rishi Sunak’s a bit sceptical.

Daniel Thomas
It feels that way. It feels they’re making alternative plans now, it has to be said. And I think, you know, that is absolutely fine. If they follow those plans with significant amounts of money, because that’s what would be needed to, you know, even match that near, the sort of Horizon scheme which we obviously now are very much outside. But they can teach more simple things. I mean, the biggest complaint I’ve heard in the last few weeks is around the R&D tax credit scheme, which a few months ago they decided to effectively scrap for some reason. And that is unbelievably toxic for a lot of companies out there. And then the bigger plans, the big science superpower that is the UK in the next decade, that can come in the next budget.

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George Parker
Well, Dan and Syma, thank you very much for joining us. And that’s it for this episode of the FT Politics Podcast. If you like the podcast, we’d recommend subscribing. You can find us through all the usual channels to receive episodes as soon as they’re released. And we always appreciate positive reviews and ratings. The FT Politics Podcast was presented by me, George Parker, and produced by Anna Dedhar and Manuela Saragosa. The sound engineer is Breen Turner. Until next time, thanks for listening.

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