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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
It’s my fault. I should never have used that cursed monkey’s paw to wish that Britain’s political class would spend more time talking about making money. The biggest revelation in the “Mandelson files” — the release of government correspondence, relating to and with Peter Mandelson during his brief tenure as the UK ambassador to Washington and for half a year prior to that — is that the disgraced former cabinet minister received a £75,000 payout.
Following a consultation by the Bank of England, the next banknotes will feature native wildlife, and this was the landslide choice of 60 per cent of respondents. That, at least, I can’t be blamed for: I voted for more historical figures. The change has been called the “definition of woke” by Nigel Farage. Winston Churchill “deserves better than to be replaced by a badger”, says Sir Ed Davey. The Conservatives, meanwhile, produced a mock-up of a £5 note featuring Prime Minister Sir Keir Starmer as a worm, claiming that this was what the government wanted instead of Churchill. (That the BoE decides what goes on our money appears to have passed them by.)
One of these stories matters more than the other — that Starmer’s ill-advised appointment of Mandelson left the government paying out to dismiss him reveals a bigger problem with the prime minister’s judgment. I defer to few on my enjoyment of history and my lack of interest in wildlife, but what the British public wants on banknotes they increasingly don’t use is not worth expending any emotional energy on.
And yet both are taking up an outsized chunk of political argument in a week in which the price of oil has surged, nearly 500 mortgage products have been taken off the market and the chances of a prolonged war in Iran have increased. This is a reflection of a Westminster that struggles to talk seriously about most topics and in particular to talk frankly about the British economy.
For all the talk that the economy no longer matters at elections, this is visibly untrue. Yes, how you feel about so-called culture war topics decides where unhappy voters defect to. Those particularly exercised by immigration and keeping the UK outside the EU have abandoned the Conservatives and Labour for Reform. Voters who want to get back into the EU, are less bothered by immigration and are socially liberal have deserted Labour and the Tories for the Greens and Liberal Democrats.
But what unites the voters who have walked away from both main parties is that they are feeling the pinch economically. The best way to understand what is happening in British politics is that voters are holding two referendums in their heads: the first on how they feel about their own finances, the second on how they feel about Farage.
Both Labour and the Conservatives are becoming parties of the most economically secure. Labour is the home for the most comfortably off working-age voters; the Conservatives are the party of pensioners who have paid off their mortgages and have generous pension schemes. They have lost, respectively, the support of young professionals in the private rented sector, and of pensioners on the new state pension or on less generous defined contribution schemes.
Some MPs do get this. On the Labour side, there is a growing awareness among backbenchers that they will have to be the principal and vocal generators of an intellectual renewal: Starmer lacks either the interest or, frankly, the capacity to oversee this himself. Many were heartened by Chris Curtis, the former pollster turned Labour MP, setting out, cleanly and clearly, that Labour’s problem is that it is overseeing a crummy economy that has sent its voters off in multiple directions. All too often, however, the MPs and thinkers who have most influence over the prime minister meditate on what it reveals about Labour’s soul that the party’s remaining voters are quite so affluent. (Answer: it reveals nothing about Labour’s soul and everything about the economy they have presided over, due to both bad luck and bad decisions.)
Kemi Badenoch’s leadership of the Conservative Party is at its least disastrous when she returns to what were once traditional Tory themes of economic competence and fiscal restraint. But she is hamstrung by her own lack of genuine interest in economic policy and her party’s continuing commitment to Brexit.
Labour’s problem, and that of the wider political class, is different. The reason why many in the government and the press prefer to self-soothe by talking about the culture war, or even ministerial payouts, is that these are all things that the government can, up to a point, control.
We might think it unwise to over-rule central bank independence in order to put Vaughan Williams, say, on a £10 note. But the government could at least do it. Accepting that what matters is the performance of the overall economy means accepting, for the government of a middle power like the UK, that many decisions about the next election are out of your control. You can avoid self-defeating tax rises on businesses, yes. But you can’t prevent disastrous and ill-thought-out wars of choice that push up energy costs, whether conducted by Donald Trump in Iran or Vladimir Putin in Ukraine. Having realistic debates about economic policy involves accepting that government is sometimes a passenger: small wonder that many politicians prefer instead to discuss hedgehogs on bank notes.