Northern Ireland: Rishi Sunak’s big test

This is an audio transcript of the Payne’s Politics podcast episode: ‘Northern Ireland: Rishi Sunak’s big test’

George Parker
Rishi Sunak was supposed to announce a deal to end the ongoing political crisis over the Northern Ireland protocol this week. But it’s the end of the week and still there’s no deal in sight, prompting Keir Starmer to ask him in the Commons:

Keir Starmer
Why doesn’t he just get on with it? (MPs shouting)

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George Parker
Welcome to Payne’s Politics, your essential insider guide to Westminster from the Financial Times with me, George Parker, in the hot seat vacated by Seb Payne for just a few more weeks before the pod is relaunched with a new format and a new name.

Coming up, are we looking at the moment of truth on Northern Ireland for the prime minister? If he gets a deal with the EU, it could be trouble. If he doesn’t, it could be double, as The Clash once said. I’ll be discussing the question with our columnist Robert Shrimsley and our Ireland correspondent Jude Webber. Plus, the dire state of public services were laid bare by the Institute for Government this week. Keir Starmer set out his five missions to sort out the country, and the Treasury got a £30bn windfall. A lot to get our teeth into there. We’ll get the lowdown from the FT’s Jim Pickard and Hannah White from the IFG.

Rishi Sunak faces many questions in his attempt to strike a deal on the Northern Ireland protocol, particularly from the Democratic Unionist party and his own Eurosceptic Tory MPs. Mr Sunak’s been trying to sell the outline deal to both groups this week. There are plenty of backbenchers in his party who think the only solution is to remove all traces of Brussels from Northern Ireland, former Cabinet minister Simon Clarke among them.

Simon Clarke
We need to make sure that if a deal is struck here that it is genuinely a better one than that which we can achieve through our own legislation to fix the protocol. I think that is quite, quite a high bar because it is going to involve the EU accepting that Northern Ireland cannot be subject either to EU law or in the single market.

George Parker
It’s comments like that from backbenchers that honed Keir Starmer’s attack on the prime minister in the Commons this week.

Keir Starmer
It’s the same old story. The country has to wait while he plucks up the courage to take on the malcontents, the reckless, the wreckers, on his own benches.

George Parker
Robert Shrimsley, where have we got to at the end of this week of backroom discussions and high-level diplomacy?

Robert Shrimsley
Well, I think we’re not that much further along from where we were at the end of last week. We know that there is the structure of a deal in place. We have a reasonable idea about some of the key components. And we know that Rishi Sunak has been actively trying to sell it to the Democratic Unionist party and to his own Conservative backbenchers. But what we also know is that they’re not satisfied with it. They’re pushing back on certain key points. And I think the fundamental point that he’s struggling to get past is this: that the EU is not prepared to budge on the fundamentals of EU jurisdiction in Northern Ireland if it remains in the single market for good. And so what’s been proposed is a deal in which essentially Britain accepts that point and the EU responds by not actually using the powers that it has very much at all, by being very generous on the implementation of this deal — that’s clearly roughly the shape of the fudge that’s being offered. And what Rishi Sunak is being faced with are people, particularly on the Unionist side, saying, “No, no, it’s got to be full and complete sovereignty”, which is not on the table. So we’re reaching a moment, I think, quite soon where the prime minister is gonna have to decide whether to push ahead with what will be to everybody an imperfect deal but clearly a substantial advance on where we are now, or whether he’s going to back down and run the risk of looking weak.

George Parker
Ah, Jude, Rishi Sunak met the DUP leadership at the end of last week at the five-star Culloden Hotel just near Belfast. They don’t seem all that happy. This was Sammy Wilson, the DUP’s chief whip at Westminster.

Sammy Wilson
We’re British. And we expect to be governed by British law, not Brussels law. And we’d certainly not collaborate in administering Brussels law in our part of the United Kingdom.

George Parker
So Jude, what’s the mood in the party?

Jude Webber
Well, the party leader, Sir Jeffrey Donaldson, came out of those meetings with the most conciliatory language we’ve heard for a long time, praising the progress that had been made and all the rest of it, and then this week in the Commons asked the prime minister to rewrite legally-binding parts of the protocol text. So the mood is really one of intransigence, I would say. And the thing is that whenever a deal is put to the DUP, the DUP won’t say yes or no straight away. They will take it back and scrutinise it. There are 12 party officers — Jeffrey Donaldson is one of them — that will look at this and then it will go to a wider executive of the party. And the mood very much among those people is that even though there are different wings in the party, you know, some more hardline, some more moderate, they’re really quite united on this front and they really don’t like what they’re seeing. So it doesn’t look like it’s going to fly at this point.

George Parker
Now, Mr Sunak obviously hopes that whenever he presents this deal, it won’t immediately be thrown back in his face by the DUP. But what will the DUP do if Mr Sunak presents them with a deal and says take it or leave it?

Jude Webber
I think they’ll leave it. I think what they’ll do is they’ll say, you know, it’s made progress and they’ve addressed some of their key concerns, but they’ve marched themselves up to the top of this hill. They’ve got seven tests by which they’re going to be judging this deal. And although it’s highly unlikely that they will get all of those seven tests satisfied in full, they really are sticking to their guns at the moment on this point. For example, as Robert was just saying, if they don’t get satisfaction on the issue of EU law and oversight by the ECJ, then I think it will be very difficult for them to accept it. And so that means that power-sharing in Northern Ireland, the regional executive at Stormont, will just have to remain down. It’s been collapsed for longer in the past. There was a period between 2017 and 2020 when it didn’t meet. So that could be the casualty here.

George Parker
And Robert, will Rishi Sunak have failed if the DUP refuse to go back into the power-sharing executive at Stormont?

Robert Shrimsley
Well, it depends to some extent on what your measurements of success are. If the measurement is restoring Stormont and getting back to a power-sharing executive, then yes, clearly that will have failed and there’ll be no clear reason for them to go back in any time soon. The EU then would end up essentially banking the winds from the deal and staying out of Stormont.

If, on the other hand, your measure is averting EU sanctions on the UK for breaching the Northern Ireland protocol, getting the UK back into the Horizon science scheme and generally improving the mood music of relations between the UK and the EU, then he might succeed even if he doesn’t get the Unionists back onside immediately. If he does, this deal kills the Northern Ireland protocol bill and ties up relations, it shows himself offering a constructive approach to the European Union. That may bring other benefits, including such areas like small boats, which is a much more important issue to Conservative MPs and their voters than Northern Ireland. But no, if his measure is getting power-sharing back then that will not succeed, I suspect.

George Parker
And Robert, you know, we met a minister this week who said in terms of the mailbag of Conservative MPs in Great Britain, they would like to get zero letters a week on the subject of the Northern Ireland protocol, which I think probably puts them there in the pantheon of their list of priorities.

Robert Shrimsley
I do think that’s absolutely right, George. And it’s also worth remembering that, you know, Stormont has been down a number of times and for long periods of time. But I do think as we come up to the 25th anniversary of the Good Friday Agreement — we’re meant to be celebrating it, even talk of Joe Biden flying over for it — it’s going to look fairly hollow if Stormont can’t meet. And I think at some point the British government is gonna have to make a decision, how long it’s prepared to put up with this before taking back some direct powers, if not full direct rule, which is something that unionists might like and nationalists wouldn’t. But taking back the power to legislate for people in Northern Ireland in some instances, because there’s all kinds of issues around health provision, public service provision around the economy and helping with the cost of living which can’t be introduced if Stormont isn’t in place.

George Parker
Now Jude, Robert, mentions the 25th anniversary of the Good Friday Agreement. I just wondered how you regarded the stability of the political situation and the peace process, especially in the context this week of the shooting of an off-duty police officer at Omagh.

Jude Webber
First of all, this shooting was very shocking and it managed to do what nothing else has done, which is unite politicians in their condemnation of it. And it’s really, really stirred some very, very unhappy memories of the Troubles. It’s brought back a lot of pain and a lot of suffering. So I think everyone’s clear that nobody wants to go back to the Troubles. But even though it was a very, very shocking attack, I don’t think it was prompted by the protocol. Over the last couple of years, we have seen buses being burnt and things like that by, in that case, largely loyalist paramilitaries in protest against the protocol. But this seems to have been Republican paramilitaries, a very fringe splinter group. So I think it’s wrong to sort of conflate this and imagine that Northern Ireland’s teetering on the brink and we’re about to plunge straight back into violence. It’s not like that, but it’s clearly not normal either. And the fear of violence is ever-present. And I think there’s a fragility there because the Good Friday Agreement wasn’t just a peace deal. It was also a political deal, almost like a constitution for Northern Ireland. So the one side of it, the political institutions aren’t working very well, but also, you know, the peace side of things is fragile and there’s work to be done there.

George Parker
And Robert, finally, to you. Rishi Sunak’s gonna face trouble from some in the DUP and the European Research Group if he strikes a compromise with Brussels. But he’s gonna be pilloried as weak and useless by Labour if he backs away now. What do you think’s the bigger danger?

Robert Shrimsley
Oh, that’s a really good question. I think the bigger danger is backing off because a lot of the people who are against on this issue are against him anyway. They were the people who supported Liz Truss. They’re very angry on taxation. They are absolute hardliners. They’re never going to be reconciled to him. So if it’s not this issue, it would probably be something else. I think backing away and looking weak now, looking like he’s at the mercy of his hardliners would be probably fatal to his premiership because the one thing that gives Conservatives hope in the long run is the country warm to a leader who looks competent and can solve problems. That’s not to diminish the dangers. History shown us many times what happens when a Conservative prime minister gets a drift from their backbench, as we saw with Theresa May, we saw it with John Major. But I don’t yet think the numbers are quite there to cause him more than aggravation rather than complete disintegration.

George Parker
And Jude, finally to you, if Rishi Sunak gets the deal, do you think the Stormont Assembly is gonna be functioning in time for this Easter and the 25th anniversary of the Good Friday Agreement with Joe Biden touring Belfast and all the other commemorative events?

Jude Webber
No, (laughter) no, I don’t. Also there’s council elections in May, and the suggestion has been that if there’s any pain to be had for the DUP by not agreeing to any deal, for example, they might well as take it in those elections rather than any others further down the line. So, no, I just can’t see it. I mean, the anniversary’s just a little over a month away now, so really, that would be an awful lot of ground to cross. I just can’t see the DUP getting events resolved to its satisfaction by then.

George Parker
Robert Shrimsley and Jude Webber, thanks for joining us.

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This week, the Office for National Statistics gave the Treasury a £30bn windfall, notably derived from higher-than-expected tax receipts and lower-than-expected government subsidies to household and commercial energy bills. That was the good news. The bad news for Chancellor Jeremy Hunt is that demands for higher spending are piling up, with public sector unions demanding more pay and the services they run showing chronic signs of failure. Hannah White from the Institute for Government, you did a report this week on the state of our public services. What did it find?

Hannah White
Well, the headline of our performance tracker report, which we produced in tandem with Cipfa, was that it is unlikely that public services are going to return even to pre-pandemic levels before the next election. So, if the government is wanting to go into the next election being able to tell a good news story about its approach to public services, it has an enormous mountain to climb.

George Parker
Well interestingly, of the five tests that Rishi Sunak set himself, only one of them relates to the public services, and that’s to have the NHS waiting list falling. That’s hardly a massive commitment, is it?

Hannah White
Well, you wouldn’t think so. The thing is, there are quite a lot of different sorts of NHS waiting lists and some of them are possibly going to turn around. But there are others which are definitely going in the wrong direction. We have 7mn cases on the elective waiting list. We have bed occupancy above 95 per cent in the NHS. So he may be able to claim some progress in some areas, but the overall picture is looking very difficult.

George Parker
And is this Covid, George-Osborne-era austerity, an ageing society? What’s the problem?

Hannah White
It’s a combination of all these things. It’s the demographic pressures, it’s the impact of austerity, particularly on capital budgets, lack of investment across the public services and then the impact of the pandemic on top of that. But the key thing is that public services are going to struggle even to get back to pre-pandemic levels. So it’s a difficult picture. It’s interesting, I thought, that Keir Starmer’s five pledges, his missions as he’s calling them, three of those are related to public services. So he went for crime and education as well as the NHS, whereas Rishi Sunak only had the one, as you say.

George Parker
So normally in an election, Jim, if public services are at the forefront of the campaign, that’s pretty bad news for the Conservatives. And we have Keir Starmer this week, as Hannah was saying, presenting himself as a man with a mission or indeed five missions. He tried to explain what a Labour government would do to fix some of these problems. Here’s a clip of what he had to say:

Keir Starmer
When we say growth depends on seizing the opportunities of tomorrow, not falling behind. On embracing technology, innovation, science. We could say the first steps are a reformed planning system, a more powerful British business bank that can support start-ups to grow and scale, and a credible industrial strategy that gets everyone around the table and removes barriers to investment.

George Parker
Jim, did it sound credible to you?

Jim Pickard:
It sounded vaguely persuasive if you were in the mindset of wanting to be persuaded, but I think in terms of tangible, hard policy which represents solutions to these absolutely enormous problems, it was fairly thin gruel. Take, for example, he said that we, the Labour party, have this huge policy of decarbonising the electricity system by 2030. That’s actually a fairly minor policy in the sense that the government’s own target is to hit 95 per cent low carbon sources for the electricity system by 2030. He’s trying to make it sound dramatic and innovative, but there was not an awful lot there. And there was a very good question from Andy Bell at Channel 5 TV who said, is the subtext of all of this that basically there’s no money left and therefore you can talk long-term vision and long-term missions. But actually when it comes to spending, it’s an awful lot harder. And I think he had a very good point.

George Parker
And basically, how would Labour fix public services? Given what you just said and given the fact that they’ll be operating essentially under the same fiscal constraints as this government?

Jim Pickard
I would say we don’t precisely know. We have a couple of tweaks to the system. So for example, changing the VAT-free charitable registration of private schools — which would raise a couple of billion, which I guess you could funnel into other spending — inherited the policy from Jeremy Corbyn of scrapping tuition fees, but he’s not gonna keep that. He’s gonna come up with something halfway between keeping them and scrapping them. It’s gonna be a very constrained set of reforms. I mean, going back to Sunak, I think it’s a really good point that Hannah made earlier about the only public service pledge on the Sunak pledges was the one about reducing waiting lists from 7mn for elective surgery. Given that I think they’ve been standing in about 4-4.5mn before the pandemic, to reduce it from 7mn, if he achieves that, it’s not really an achievement.

George Parker
So basically those target is cutting it by one.

Jim Pickard
Exactly. Exactly. Yeah.

George Parker
I mean . . . And also, as we’ve as we’ve discussed before on this podcast, he won’t necessarily be judged on the same tests that he set himself by the public. Hannah, what do you make of Labour’s approach to public services, given the crisis that you outlined very eloquently in your report? Do you think that Labour’s response comes close to matching the scale of the challenge?

Hannah White
Well, I agree with Jim, we just don’t know. We think that the idea of thinking in the long term, thinking of the NHS, health, things like prevention and so on, have to be part of the solution in the long term. But there is no clarity yet about actually what Labour are planning to do. And as you’ve said, they haven’t got a lot of money to splash to address things. You know, what public services need is long-term investment and serious programme of reform. That’s what in the past has succeeded and had some success under new Labour in turning public services around. But the economic situation now is completely different for the government.

George Parker
Can we just turn the clock back a little bit further back to 2010, when the Conservatives came to power, part of the coalition government, of course, in those days. When they stand for re-election after almost 15 years of having a Conservative leader in Downing Street, what are they gonna have to show for it in terms of schools, hospitals, the courts? How will they look compared to how things are 15 years earlier?

Hannah White
Well, I think what they are bound to do is to emphasise some of the difficult headwinds that they have faced over this period. You know, they have faced the pandemic. They have faced, you know, some difficult circumstances which have been shared internationally, economically by other countries. We’ve had the war in Ukraine, which of course has driven up inflation and so on. I think, inevitably they are going to want to say that these are the things which have meant that public service standards across the board have really fallen back and de-emphasise as it were the impact of the austerity period. But it is undeniable that that had a fundamental impact.

George Parker
To put it bluntly, are hospitals and our experience in the health service worse today than they would have been in 2010?

Hannah White
I think that’s right. And you know, part of that is down to the pandemic. But part of it is because we’ve just had a sustained period of low investment. Take the case of hospitals. There’s just been a lack of investment in the hospital estate that is inevitably having a bad impact on the ability of the NHS to deliver services.

Jim Pickard
And I think the elephant in the room with this report to some extent is that it’s saying that by the next election public services won’t have returned to where they were pre-pandemic. But it’s almost ignoring the fact that Jeremy Hunt in his Autumn Statement has sustained spending, actually increased spending for a couple of years on public services up to the election point, not by coincidence. And then there are these really deep cuts. And to be fair, the report does say that it’s a terrible inheritance for who gets it. But you could go even deeper on the fact that whoever gets in is gonna either have to put up taxes or impose really deep cuts.

Hannah White
The funding is very much front-loaded into the early years.

George Parker
Yeah, absolutely. Now Jim, what do you make of Rishi Sunak’s decision this week that we start public sector pay talks? Do you think that’s linked to the fact that there was this 30bn windfall from the ONS? Or just an acceptance that this simply can’t drag on any longer?

Jim Pickard
So I was with Jeremy Hunt, the chancellor, on Tuesday, along with a hundred other people, not on our own (laughter). So I did get a chance to ask him a question and I said “You have this £30bn windfall, it seems, chancellor, are you gonna spend it, and are you gonna spend it on pay rises for public sector workers?” And what Jeremy Hunt said was that firstly, most of that £30bn drop in borrowing is gonna be eaten up by a fall in the windfall tax receipts that the government received from the energy sector, primarily oil and gas companies. And he also pointed out that, if you do spend it on stuff like putting up pay for public sector workers, that’s a recurring cost. Whereas, the windfall is not only temporary but is also subject to the vagaries of energy prices and all sorts of other factors and could easily be avoided again. But somewhere between him saying that to a roomful of journalists at about two o’clock in the afternoon and George, you’re writing your excellent story overnight on the front page of the FT, something changed and we think that only, that it was Downing Street basically authorising or telling the chancellor to change his tune a little bit on these negotiations.

George Parker
Yeah, I mean, essentially it seems that the government was looking to one of the big unions settling their pay dispute, hopefully from the point of view of the rail union, the RMT. But that didn’t happen. The RMT’s now balancing for more strike action so they were horrified that this snowball effect they hoped to see wouldn’t happen. That was interesting, isn’t it, Jim, that they’ve focused their efforts, at least for now, on the Royal College of Nursing to try and get this fixed?

Jim Pickard
Yeah, I mean it seems that Rishi Sunak has said, like, you’ve gotta get this sorted, it’s hanging over the government, the optics of it are terrible. And I think they believe inside No 10 that if you could get one union to settle, and as you say, the nurses are the ones who have the highest level of public support according to all the opinion polls and according to common sense. If you can get the nurses to settle, then it’s a lot harder for, for example, train drivers who are paid quite substantial sums and who’ve actually had above-inflation increases in their pay over the last decade. If you can get the nurses to settle, then hopefully there’d be a bit of a domino effect, they hope.

Hannah White
But the trouble is that if the pay deal that they do with the nurses involves finding that money from elsewhere within the existing budgets, then that’s gonna necessitate further painful cuts in a service which, as we’ve described in our report, is already suffering.

George Parker
And for now, Jeremy Hunt says, yes, they do have to find the money from existing budgets through productivity and efficiency savings and all the usual things that Treasury says, though, as Jim noted earlier, that in the past they have topped up departmental budgets in the autumn to try and help them out. Now Hannah, one final question to you: what does the next government have to do to fix the growing sense among some voters that Britain basically has simply stopped working?

Hannah White
(Laughter) Well, I mean, public services, I think, is absolutely key to that. Having a long-term plan to address the sustainability of public services is going to be key to credibility. But people don’t just want a long-term plan. They want a short-term fix, which means that, you know, if they’re one of the 7mn cases waiting for elective surgery, that they see a change. They see those appointments coming through. They see teachers in their children’s schools because, you know, at the moment it’s a real crisis in teacher training with fewer than three people training for every five places in secondary schools. The government thinks there is a need for teacher. And so, you know, there’s got to be a credible plan, short term and long term, to turn around people’s experience of public services.

Jim Pickard
And I think the politics of this is that our experience of Keir Starmer’s speech is they don’t have the solutions for a lot of this stuff, but for now they’re hoping to be able to point to the government and say, “Look at the last 13 years, look at the state we’re in.” And this report basically outlines it, a pretty grim picture of Britain today with not only the waiting list but also hundreds of preventable deaths a week, recorded crimes going unsolved, case backlog in the crown court. I think Labour will see this as a kind of rap sheet to hold up against the government. Whether that’s enough to win elections without the actual kind of vision, you know, brighter future on the hill, no, not quite sure, but this is a, quite a convincing description of a country that is not in a very great state at the moment.

George Parker
And on that cheery note, that’s it for this episode of Payne’s Politics. Hannah and Jim, thanks for joining us. If you like the podcast, we’d recommend subscribing. You can find it through the usual channels to receive episodes as soon as they’re released. We also appreciate positive reviews and ratings.

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Payne’s Politics was presented by me, George Parker, and produced by Anna Dedhar and Manuela Saragosa. Sound engineer is Breen Turner. Until next time. Thanks for listening.