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- [00:00]
BBC Podcast Advertiser
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- [00:34]
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- [01:05]
Adam Fleming
hello, it's day four of the US and Israel's war against Iran. Although lots of the news stories today have been related to the uk, so we will discuss what's going on in this latest episode of Newscast, which was streamed live on YouTube and iPlayer on Tuesday. Tea time. Newscast.
- [01:22]
Chris Mason
Newscast from the BBC. Fat Boy Slim and me in the classroom doing our violin lessons. I was the tattletale in the class.
- [01:28]
Adam Fleming
Can I have an apology, please?
- [01:30]
Donald Trump
I trust almost nobody.
- [01:31]
Chris Mason
Then daddy has to sometimes use strong language. Next time in Moscow.
- [01:36]
Darshini David
I feel Delulu with no Salulu.
- [01:37]
Chris Mason
Take me down to Downing Street.
- [01:39]
Adam Fleming
Let's go have a tour.
- [01:41]
Chris Mason
Blimey.
- [01:42]
Adam Fleming
Hello, it's Adam in the newscast studio and panorama filmmaker Jane Corbyn is here again. Hello, Jane.
- [01:47]
Jane Corbyn
Hello, Adam. It's good to be here.
- [01:49]
Adam Fleming
I'm glad you are here because you're a real expert in this region. So I've been relying on you ever since. Since this military action started. Also, BBC's deputy economics editor Darshini David is here. Hello, Darshini.
- [01:59]
Darshini David
Hi Adam. Thank you for letting me back.
- [02:00]
Adam Fleming
No, thanks for coming back. And also we had this situation where you've obviously got the dramatic events unfolding in the Middle east and then we had a quite sort of traditional Westminster event, which was the Chancellor doing her spring economic statement, which felt almost a bit like it was in a parallel universe, didn't it? It felt very normal considering the abnormal world that we're in.
- [02:18]
Darshini David
It felt quite surreal, didn't it? It almost felt like, you know, on these days, normally you have traders gripped to the screen watching the Chancellor's speech and Corner Eye people are watching the markets. This time it's the other way around. Everyone's watching the markets and out the corner of their eye thinking, oh, she's doing something there, unfortunately. And you've got to feel really sorry for the Chancellor. Is she jinxed? It felt like it was out of date before she even stood up. It may not be things could be okay, but even so, it was a really unfortunate set of circumstances.
- [02:44]
Adam Fleming
Do you know what? We'll come on to the spring statement in a minute because it's worth looking at the numbers, even though it's kind of a little bit out of date in terms of what's happening in the world now. But Jane, just before we started making this episode, Donald Trump was in the Oval Office. He was with the German Chancellor, Friedrich Merz. That was a pre planned trip that the German Chancellor was going to make and everyone was kind of glued to it because this was the first chance we'd had to see Donald Trump answering questions from journalists about his military action in Iran. And rather than the subject being what, I don't know what targets the US had hit or what his objectives were, so much of it ended up being about the uk. So let's have a listen because this is Donald Trump having a massive go at Keir Starmer. And this was over Keir Starmer's initial reluctance to let the US Military use British military bases.
- [03:35]
Donald Trump
By the way, I'm not happy with the UK either. That island that you read about, the lease, okay, he made it. For whatever reason, he made a lease of the island. Somebody came and took it away from them and it's taken three, four days for us to work out where we can land there. It would have been much more convenient landing there as opposed to flying many extra hours. So we are very surprised. This is not Winston Churchill that we're dealing with.
- [04:07]
Steve (Cachava Advertiser)
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- [05:07]
BBC Russia Editor
Rosenberg, the BBC's Russia editor in Our man in Moscow. I'll show you what it's like being a news correspondent in Russia as the Russian authorities wage war on Ukraine and try to silence dissent.
- [05:19]
Darshini David
The sound of war has reverberated around Ukraine for three years.
- [05:23]
BBC Russia Editor
Dramatic geopolitical upheaval alongside threats of intimidation and imprisonment. Our man in Moscow. Watch with a subscription to BBC.com and the BBC app to learn more. Ever wonder why we make the choices we do and how to make smarter ones? Introducing Choiceology, an original podcast from Charles Schwab Join Wharton Professor Katie Milkman, an award winning behavioral scientist and author of the best selling book how to Change, as she shares true stories from Nobel laureates, authors, athletes and everyday people about why we do the things we do and how to make better choices to help avoid costly mistakes. Each episode covers the latest research in behavioral science and dives into themes like the power of self control, shaping your mindset for success, navigating new beginnings and why starting over can feel so hard. Listen to Choiceologywab.com podcast or wherever you listen.
- [06:30]
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- [07:01]
Adam Fleming
and Chris is at Westminster. Chris, I mean the President there is is conflating a few things which is the long term future of Diego Garcia, which we've discussed many, many times in the last year or so, but also just the the more immediate thing about the the government's changing opinion on on whether the Americans can use those bases.
- [07:20]
Chris Mason
Yeah, and the government would say that they haven't changed their opinion and I can walk you through that as well, even if the outcome might have changed. So yeah, the President there was conflating two things. One is the long term future of the base at Diego Garcia on the Chagos Islands in the Indian Ocean where the Trump administration has changed its mind several times on whether they think the UK government's proposed solution to a bit of a tussle over the whole question of its sovereignty is a good idea or not. The UK thinking it is in the long term interests of the base there to hand it to the Mauritians in terms of sovereignty and then loan it or lease it back. We've seen President Trump adopt both positions as to whether that is a good or a bad idea. What President Trump's view is unequivocally is that the UK were not helpful to him when America asked for the UK's assistance in the initial attacks on Iran to use the Runway at Diego Garcia, another one at RAF Fairford in Gloucestershire. And the judgment of the Prime Minister, as we heard set out in the House of Commons yesterday, is that he believes that the UK's involvement in the conflict at its outset and using, allowing the use of runways would have amounted to involvement, would have been unlawful. It's also his view that it would be wrong. Now, you might regard those two things as one and the same thing. It's possible to regard those two things as overlapping or indeed separate things. The Prime Minister clearly believes that it is both unlawful and wrong, and he said no. Now, the argument we then heard from the Prime Minister in the last 48 hours or so is that once Iran was firing indiscriminately, apparently indiscriminately, at British allies and British assets and people who are in the Gulf region, it is, in the view of the government, lawful for the UK to be part of what they describe as defensive operations trying to prevent Iraq from hitting our assets in the Middle East. In other words, authorizing America to fly planes from those two airfields a very long way apart, but both useful for overflying Iran because that is deemed in the UK's interpretation of international law, as defensive rather than offensive.
- [09:35]
Adam Fleming
And Jane, watching those events in the Oval Office, that wasn't Trump doing it in a sort of diplomacy, politics sense. It seems quite personal and quite visceral. And comparing Keir Starmer to. To Winston Churchill, that's personal, isn't it?
- [09:49]
Jane Corbyn
Yeah, we're not dealing with a Winston Churchill. He said. There was real edge in his voice when he said it. And he had preceded this with an attack also on Spain and Spain's leaders. And he'd also praised the German Chancellor to the skies. So you had three different countries, as it were, in the sights, in Trump's sights, two of which he was very anti and obviously not happy with the uk, either is what he said, and it seemed very personal, both about the Diego Garcia situation. He said that it took them three or four days to figure out how to refuel those planes. It added expense. He went into some detail as to why they were unhappy about Diego Garcia not being allowed to be used by the British government. And yeah, I think he was pretty pointed in that and it showed up against the praise that he lavished on the German Chancellor in that meeting.
- [10:46]
Adam Fleming
And Chris, what sort of calculations will be going on in Westminster and Whitehall about this, what this means for US UK relations?
- [10:53]
Chris Mason
A lot of calculations and I think it's wounding and it's winding from the Prime Minister's perspective. You know, so much has been, we've talked about this extensively on newscast, but so much has been invested in the unlikely relationship between a real estate magnet and reality TV star and the human rights lawyer of very different political hue and very different personality. And, you know, there was early evidence to suggest that it had, it had worked. There was a warmth and a bonhme to the relationship, I think helped by the fact that President Trump has a long standing personal connection, family connection with the UK and business connection with his golf courses. It's not the first time they've had something of a flare up. You'll remember the Prime Minister was pretty outspoken about President Trump's remarks about the loss of non American personnel service personnel in Afghanistan, which the Prime Minister sort of publicly rebuked the President over. But I think what takes this to another level is that the President was stopped from doing something that he wanted to do in short order by the decision of Keir Starmer saying no to the use of those of those two runways. Now, as we've seen before, with previous arguably less significant flare ups between the two of them. But publicly, Downing street are not rushing out to offer a commentary. I think their view is there's enough rhetoric out there already without contributing to it enough. But the thrust of what I hear from folk I speak to in government is they, they're doubling down with a sense of pride. Actually, I'm struck by this, by a sense of, with a sense of pride in the argument the Prime Minister made yesterday that he is a British Prime Minister acting in the British national interest, that he believes the majority of British public opinion is on his side. There's early opinion poll evidence to suggest there might be something in that, particularly in terms of opposition to America's initial actions. Effectively him saying and he picks his language diplomatically. The Prime Minister, unlike the President, you know that he is a sovereign, democratically elected leader himself and he'll make decisions on behalf of the British people, you know, thank you very much. And if that means, you know, something of a flare up with a gobby American president, so be it.
- [13:01]
Jane Corbyn
But.
- [13:02]
Chris Mason
But it's clearly awkward. You know, where does the relationship go from here? Two things I would say, though. One sort of short term and one a broader sweep of history. So just because you've been on the receiving end of vitriol from President Trump doesn't mean the end of the relationship necessarily. Sometimes these things blow over quite quickly. We've seen that, perhaps most spectacularly with the Ukrainian president and how that public relationship has ebbed and flowed, to put it very gently. And then the sweep of history tells you that, you know, the UK refused American requests to send British troops to Vietnam. That was a big splintering of the, the, the relationship, the transatlantic relationship. And, and it recovered from that. My learned colleague Ben Wright, who has an eye for political history to a greater extent, I must admit, than, than I do, just pointed out to me as I walked towards the newscast studio for this recording that it is 8, 30 years to the week since, yes, you guessed it, Winston Churchill first used the phrase the special relationship to describe the friendship between London and Washington. And here is the latest page on the contemporary chapter of that ongoing story, I suppose.
- [14:14]
Jane Corbyn
Yeah, and President Trump has spoken about that as this spat has continued over the past couple of days. He's talked about the special relationship, how important it is, and he's been on the brink of almost saying it's broken, but somehow he's pulled back and he said that's not how we feel about the British people. So I think he's cautious when he comes to actually taking that sacred phrase, the special relationship, especially in its 80th anniversary year, and, and trashing it effectively. So I think that, yeah, he's more being more cautious about the way he talks about the special relationship than the way he seems to talk about Keir Starmer.
- [14:51]
Adam Fleming
And as we've learned many, many times with Donald Trump, he can say things that sound really bombastic, but whether the American states, the American government or the apparatus of the superpower, whether they then do anything about it is a different thing. Chris, we had a question from newscaster Paul and Devin, and I'll sort of paraphrase it a bit, he was basically just asking, are there any sort of domestic political considerations that are informing Keir Starmer's decision here about the UK's role or not role in all of this?
- [15:20]
Chris Mason
Yeah, good question, Paul. Just on that point about the special, I was Speaking to somebody who sort of operates in the sort of the deeper parts of the state, should we say. And I was asking them about the quote, unquote, special relationship, which some people raise an eyebrow about, because it tends to be a phrase that is used more on this side of the Atlantic than on the other side. And this person reflected that whilst the political special relationship ebbs from perhaps special with a capital S to special maybe without an S at all, if that's possible. The relationship that exists militarily and it's an intelligence level, is very deep, is very special, and is, to all intents and purposes in modern history, perpetual with the embedding of each other's staff deep within, you know, aspects of intelligence gathering and all the rest of it. Paul, to your question about the Prime Minister's considerations. Look, there's a few things in the mix here. For me, I think the biggest factor is, look, here you have a former senior lawyer, a human rights lawyer. I think there is a reverence for international law. With Keir Starmer that runs deep. Now, of course, you can have an argument, and there are arguments already about how you interpret international law. We've seen the Shadow Attorney General for the Conservatives, Lord Wolfson, suggests that you could have made an argument within international law that could have advocated the UK's involvement or endorsement of America and Israel's actions. But that was not the view of the legal advice that the Prime Minister was presented with, it would appear. So I think there's a reverence there for international law. I think, secondly, on the kind of moral argument which, as I say, might overlap with or not the legal argument, but it is separate. We know, and the Prime Minister has referred to it, his opposition to the Iraq war prior to that conflict more than two decades ago. And what he feels is the lessons that the UK should learn from that. That phrase he used yesterday about not delivering regime change from the sky, I think it's probably also true into the mix, but probably a second order consideration that the kind of coalition of voters that Labour might try, try, try to keep together may be particularly skeptical about this American President and this kind of military adventure, if you like. That said, as I say, when you look at the. The single opinion poll that I've seen, there may have been others. It was a YouGov poll yesterday suggesting a majority of people across the piece in Britain were opposed to America's initial action. I should also say a majority were opposed to, to the UK authorizing the use of a couple of runways for the American military to go after missile launch sites in Iran by America. So there's a strand of what the Prime Minister has authorised which doesn't appear popular, and a strand of his reaction that appears more popular.
- [18:22]
Adam Fleming
Right, let's talk about what's been happening in the region today and the consequences in the rest of the world. Darshini this is where the economics come in. If you look at some of the targets that the Iranians have struck in other countries, a lot of them involve infrastructure to do with the oil and gas industry. And the Straits of Hormuz, which is that kind of crucial economic choke point for the oil and gas industry, that's very, very tricky for ships to navigate now. And that's had huge consequences financially.
- [18:50]
Darshini David
It has in the markets, we should say. And things have calmed down a bit in the latter stages of today. But even so, oil prices are hovering around that $80 per barrel mark a little bit over at the moment, up about $15 higher per barrel than the treasury had assumed it was going to be at this point, just to give you an idea. And gas prices more dramatically, up quite sharply. And this is to do with the fact that, as you were saying, a fifth, as we've been saying, of the world's oil goes through that particular waterway. Similar amount of liquid natural gas and natural gas. And on top of that as well, there is this disruption to production as well in the region. And that, of course, causes concerns globally. And it just goes to show how united we all are. It's really interesting when we talk about the implications for people around the world, because people go, oh, this is about China and India. They buy most of this oil and natural gas from that particular region going through that waterway, because the impact on prices are global. It is actually American consumers who are the most energy intensive in their use and are therefore, in some ways most vulnerable. So, one thing to bear in mind as we talk about President Trump and
- [19:59]
Adam Fleming
his possible strategy here, and of course, the price of electricity in the UK is linked to the price of gas on the world market. So even though we have the price cap and people are in all sorts of different energy contracts, actually it comes to us in the end in some by hook or by crook.
- [20:15]
Darshini David
Absolutely. And if we had a blackboard up here, or, you know, we could draw the big sort of diagram of how this all works, but we won't bother. We'll just cut out the middleman and just say that, you know, if. And it's a big if, I keep saying if this is sustained, then we are looking at perhaps potentially a situation where in the summer, because of the delays in our energy market, you could see higher domestic bills. Now, we've heard the head of the OBR today being asked about this very thing. And he said, yeah, we could get to a situation where it is a serious risk. We could be, you know, looking at the kind of thing we saw happening a few years ago when it came to the war in Ukraine. But for that to happen, don't forget, we saw gas prices in particular at a very elevated level for about three months. And we're not at that stage yet. So we've got a long way to go. But, you know, unfortunately, it's not a risk that any of us can really escape. And we're all scarred about what happened a few years ago.
- [21:05]
Adam Fleming
And in terms of US And Israeli military action, Jane Stanford, a lot more activity today.
- [21:11]
Jane Corbyn
Yeah, I think US has said tonight that you've now hit 1,700 targets in Iran, which is a huge number. And running through what's happened today, there have been more strikes from Israel in Iran, including on the presidential office, that compound that was hit at the very beginning, which sparked it all off, which was the compound where the Supreme Leader himself was killed, and a whole group of the top brass in the defense area from Iran. So there have been more strikes on that presidential office in Tehran. And in addition to that, there have definitely been strikes to the east of Tehran. There's been pictures on social media of huge plumes of smoke. We're not quite sure what the targets were there, but BBC Verify has verified two videos which were filmed in the city of Kum today. Kum is the holy city which is the center of the Islamic revolution. It's where all the clerics live and it's a very holy city. And these videos show the aftermath of a strike. And we know that that is where the assembly of Experts are based. And the assembly of Experts are the 88 senior clerics who are tasked with appointing the next supreme leader following the killing of Ayatollah Ali Khamenei on Saturday in that pre emptive strike. So we're waiting to hear more about that. And I think overall, the Iranian Red Crescent has now upped their estimates of the death toll to 787 people who've been killed. And you know, back to what Darshini was talking about, there was a warning from the US of an imminent attack on this Saudi city of Dhran, which is absolutely central to the Saudi oil industry. We haven't seen that yet, but obviously that threat is out there. So it seems that the US and Israel are continuing to target and Iran is targeting back at the energy supplies that come to the West.
- [23:08]
Adam Fleming
And one of the things I've struggled with as a journalist throughout this story is to just get a sense of what is actually happening in Iran and how it feels for the Iranian people. For example, we saw the story of the school being hit yesterday, and obviously that's school children's lives being lost or schoolchildren being injured. And the fact is there's still an Internet blackout in the country and we're just having to rely on snippets or what you might call propaganda from the remnants of the regime.
- [23:38]
Jane Corbyn
Well, I've seen some pictures. Again, it's very difficult to verify them. Absolutely. Taken obviously from on high, from a drone of a mass gathering in Minab where the school is for the funerals. And pictures of men carrying those coffins, we are told, at the funerals for the children that were killed in Minab. And in fact, the Iranians have upped their estimate of the death toll. They're above 100 now. It started out at 50. These are all figures that it's impossible for us to verify. I mean, in terms of Tehran, the pictures I've seen today suggest that it's quiet, a few people are out in the streets, cars are moving around you, you do see plumes of smoke. There are lots of places being hit in Tehran and people are essentially afraid to go out on the streets and very few people moving around in cars.
- [24:27]
Adam Fleming
And Chris, back to what you were saying at the start of this episode about the UK operating in a defensive capability. Here we've learned a little bit more about what that will mean practically over the next few days.
- [24:38]
Chris Mason
Yeah. So a warship, HMS Dragon, is being sent to the Mediterranean. I think it'll take the best part of a week to get there. I'm told from speaking to folk who know things about military hardware, that the real capacity of this ship is as a spotter, being able to spot from a considerable distance incoming drones or missiles or whatever they might be that can either then be intercepted by the ship or by helicopters or UK based drones that attempt to, to take them out. In fact, I was told a stat which I'm going to find in my notebook. It's a classic newscaster type stat about what this particular ship can do. A type 45 destroyer. It can see an object the size of a tennis ball traveling three times the speed of sound from 250 miles away. Someone suggested in a week's time when it Gets there. Yeah. Somebody suggested to me that's a bit like someone serving at Wimbledon and someone at Roland Garros in Paris, that, you know, if the boat was there, they'd be able to see it. And obviously the ball would be going not quite as fast as 250 miles an hour if it was served by, you know, Andy Murray or whoever. He's retired, doesn't he? But you know what I mean?
- [25:51]
Adam Fleming
Excellent analogy.
- [25:52]
Jane Corbyn
Yeah.
- [25:52]
Chris Mason
So anyway, that's the sort of sense of the hardware that's going. A couple of helicopters are going as well, not on the ship. They will go out separately and be there quicker. That can also shoot down drones, basically. So it gives you some sense, I think, of the. The kind of, through a British prism, the escalation of this conflict, even through a outlook that is repeatedly defined as defensive. Given the concerns. There have been about Akrotary, the base on Cyprus being. Being a target.
- [26:22]
Adam Fleming
And at about quarter past six, the Ministry of Defence put out a tweet talking about British operations in the area taking out Iranian drones. And I've now managed to just close it off my screen. But basically it was an F35 operating in Jordan and then other facilities operating in. In Iraq. And so that's a little bit more detail about. About the. The UK military in. In action and also an RAF typhoon which took down an Iranian drone in Qatar.
- [26:55]
Jane Corbyn
So.
- [26:56]
Adam Fleming
So you can see all the sort of the ripples of the story spreading out across the region and involving the UK now. Darshini, you've brought a prop to the studio today.
- [27:05]
Darshini David
A prop?
- [27:05]
Adam Fleming
Sorry, not a prop. It's a real important document. Although it's got prop like elements. It's actually from a parallel universe, isn't it? It is from a parallel universe. It is the officer budget responsibility take on the public finances, which was basically finalised at the weekend before all this happened.
- [27:22]
Darshini David
It's normally Friday they finalize it. Right. And I mean, I hate to call it a work of fiction. An awful lot of people have spot an awful lot time working on this. Someone said to me earlier, shouldn't you just bin it and get rid of it? And I said, that's a bit harsh, but yeah, I mean, it's an unfortunate thing that. And the Chancellor really must feel jinxed about this, that it is practically out of date now because things have moved so quickly. But it is still an important piece of work because what does it tell us? It tells us, you know, what kind of foundations are there before we face the economic potential, economic fallout of this war and Actually, things are looking a little bit better in some regards. Not all regards. Growth is still looking a bit shaky. Unemployment's not great. Public finances though, have been on slightly more solid ground than previously thought. Having said that, a lot of economists, as you might expect tonight, Adam, are saying things like, you know, all you need to see is this sort of turbulence in the markets carrying on and then the Chancellor's going to have to say, well, I can't really do away with that freeze on fuel duty. Oh, and also there might be a hit to inflation, might be a hit to growth and you get that surplus, that so called headroom wiped out. So, you know, as you say, you've got to wonder. This is feeling pretty much out of date already, isn't it?
- [28:33]
Adam Fleming
But Chris, in the parallel universe, if we were doing a normal episode of newscast where there wasn't a massive war in the Middle East, Rachel Reeves would probably be kind of having a good day, wouldn't she?
- [28:45]
Chris Mason
I think to a degree, yes. I think, look, we shouldn't obviously there's a huge story going on in the Middle east, which means any other news story pretty much seems sort of pretty trifling in comparison at the moment. That's just the sort of inevitable nature of day to day news, isn't it? That said, even without what we're reporting on in the Middle east, the absolute stated aim of the treasury, although they were kind of reluctant even to state this because they just didn't want to say very much in advance of the, the spring statement, was that this would be something of a non event. Firstly, in a big picture sense, their view that you should have one budget a year because inevitably budgets lead to sort of speculation and briefing and all that kind of stuff. And that can be destabilizing, particularly if you indulge in the volume that they did before the last budget, what a handful of months ago, around about three months ago. The metric I've adopted with this spring statement was when was the first time the words spring and statement in that order came out of my mouth in front of a microphone. Answer 10:30 last night. So as opposed to about a month prior to a budget and sometimes reporting on it on a nearly day to day basis. So you know, here was the Chancellor and then indeed her political rivals responding to this, to this forecast with as Darshana was hinting at some hastily added in words that acknowledged pretty much perhaps as the document was heading to the printers, that there was rather a lot going on in the Middle east and indeed there'd been the Latest back and forth around Donald Trump's tariffs. I think there's, you know, in a big picture sense, when I speak to folk in the treasury and more widely in government, you've heard it from the Prime Minister in the last 10 days or so they feel. And they. They approach this tentatively because they don't want to be accused of overdoing it, but they feel that there are the beginnings of some economic indicators beginning to point in the right direction. Now, yes, there are others that aren't, unemployment being one of them that's referred to in the. In the OBR's book. But there are others that they are feeling a bit more confident about. And I thought what was really interesting, and it'd be interesting, Darcini's take on this was the kind of central framing from the Chancellor at lunchtime, which was, to adopt a kind of Reaganite phrase, asking the question, will you feel better off at the next election than you did at the last one? And Rachel Reeves making an argument, based in the figures from the obr, that there is evidence right now, at least, that that might be the case. Now, whether that's enough, of course, is a decision for the electorate in several years time, and there'll be lots of other context around that. But just very interesting that that is an argument that she feels comfortable making, because I guess that's what every Chancellor starts out a Parliament, hoping will be the case. And she's pointing at evidence right now, at least that suggests it might be.
- [31:32]
Adam Fleming
Although she did it with terrible grammar. She said, do me and my family feel better off at the next election? When she should have said to my
- [31:38]
Chris Mason
family and I, oh, come on.
- [31:39]
Darshini David
Did you get your. It's a really interesting one, isn't it, Chris? Because when you look at what's actually there, you know, I love a graph and I love a spreadsheet. It's incremental. And, you know, she can sit there and go, actually, the last Parliament was the worst on record for living standards improvements. Right.
- [31:54]
Adam Fleming
This one is basically people were poorer at the end of it than at
- [31:57]
Darshini David
the beginning of the.
- [31:57]
Chris Mason
And there was a massive once in a century kind of shock, wasn't there, with the pandemic.
- [32:01]
Darshini David
There was. And, you know, to be fair, this one isn't looking that much better. So it is a bit of a gamble saying that at the moment and what you have to do to get there, right, you're going to have to boost growth. We're going to apparently hear more in a couple of weeks from the Chancellor on how she intends to do this.
- [32:15]
Adam Fleming
Oh, yeah, she's going to do this big lecture in the city.
- [32:17]
Darshini David
This is the maze lecture. Exactly. And on top of that, you know, we've got still tax bills going, regardless of what's in there today. If you look back at the last budget and what happened before that, tax, tax bills are still rising. And in the fine print here, you see that actually various bits and pieces mean that that tax burden, as we call it, is set to hit a historic high in the next few years. At the same time, spending growth is going to slow down. All of that hits just before the election. So something's going to have to give somewhere along the line if we're really going to feel better off.
- [32:48]
Chris Mason
And as important as charts are on days like this, and they are in terms of painting a picture of the economy, the thing I always fall back on, which is perhaps the classic crutch of the political journalist who is infinitely less numerous than people like Darshini, is that sentiment matters too. Do people feel come the next election better off than they did either at the last one or whatever? And to what extent does that shape their view of how we've been governed over the previous so many years? Of course, politicians will point to, because they matter, data sets and big macro pictures about the economy. But how does collectively, from the electorate's perspective, a sense of sentiment about their economic well being feel? And that is arguably more important than any spreadsheet a Chancellor chooses to point out totally.
- [33:38]
Darshini David
And I wonder, Chris, if why there's been a slight shift in emphasis onto the cost of living. Right. Because that is what people notice first and foremost. And talking to various, hearing from various callers today on, on various radio stations, someone said, of course I'm not feeling better off. A cucumber has gone up to 90p.
- [33:53]
Jane Corbyn
Yeah.
- [33:54]
Darshini David
And it's that shellfish feeling, isn't it? And so you could see the chance of stay putting inflation front and center. But of course, you know, and again, this is something economists don't always quite twig slow inflation doesn't mean that prices are coming down. So there again they've got a bit of a, bit of a job on their hands, a PR job to make us feel better off in that sense.
- [34:10]
Chris Mason
And that brings us back, and we've touched on this on newscast before about the big picture, a kind of storytelling challenge that the government's been trying to take on since just before Christmas, which is talking all the time. So they had hoped about the cost of living all the way back to that first trip, the prime Minister did on day one of the political year, on January 3rd or 4th it was. He went to Reading. Labour folk were handing out these kind of mocked up rail tickets, talking about what they've done around regulated rail fares in England. The Prime Minister was going to go on this cost of living tour. He has been doing that. But such has been the volume of domestic and international news pretty much non stop for the last eight or nine weeks. You would be forgiven for not noticing that. That's an argument they've been trying to prosecute but absolutely Darshani, they want to ground the argument in the sort of politics of the kitchen table, if you like, the economics of the kitchen table, paying, paying the bills each week, the cost of a cucumber, et cetera, et cetera. Because talk of, you know, GDP and economic growth is all very well but it feels very big picture. They want to try and deliver a message that people feel is, is resonating in their own, in their own sort of bank balance. Right.
- [35:20]
Adam Fleming
Chris, I'm told we've got to let you go. You've got other commitments.
- [35:22]
Chris Mason
I do.
- [35:23]
Adam Fleming
Thank you for your newscast today.
- [35:25]
Chris Mason
Cheers.
- [35:26]
Adam Fleming
See you later on.
- [35:27]
Chris Mason
Take care. Cheers.
- [35:28]
Adam Fleming
Dashini. The things I took away from that Blue Book having read it.
- [35:31]
Darshini David
So you did enjoy reading it?
- [35:32]
Adam Fleming
I mean I always do. I never miss an opportunity to read an OBR document. Although we all had to wait for it this time as opposed to reading it in advance when it was accidentally posted on their website. Number one, and it's something we've talked about before, a lot of the government's spending and taxing plans are based on very tight public spending numbers towards the end of the Parliament and that could be tricky because it's quite hard to deliver spending cuts politically. Also there's always extra demands on the health service and social care and things like that. So it's quite, maybe quite hard to make the numbers add up at the end of the Parliament. Anyway. The second thing is the OBR talking about the tax burden in a few years time and you said it's going to be historically high. The obvious thing that could have all sorts of unpredictable effects, how people behave and what the knock on effect of the economy is. And then they link back to one of their old versions of that Blue book which they prepared in 2024 which was looking at a massive war in the Middle east that affects oil and gas prices. And in their model there was a recession that lasted for a whole year in the sort of the modeled war that they did. So that's a reminder of just how huge the consequences of all of this could be.
- [36:43]
Darshini David
We're going to make people feel very downbeat by all of this, aren't we? But, I mean, a lot of these things are very uncertain, including the impact of a war in the Middle east, of course, all sorts of factors to think about there. But you're absolutely right. When you look at that sort of bigger picture, you stand back and you go, how realistic are these numbers? You know, that we're not going to have to see further tax rises. For example, as you mentioned there, unrealistic spending totals is potentially unrealistic spending totals is one of them. Public sector productivity. Right. Places the health service is turning the corner, but it is still less efficient than it was prior to the pandemic. Law courts are too. So those kind of areas need to see improvements if we're going to see money stretched to cover services taxes without finding extra money from somewhere else, perhaps, let's say. So there's all kind of risks. And the risks of more U turns. Well, all those kind of things means that the tax bills could still change. As it is, we must forget that the fiscal drag is still looming there in the background. People are still feeling worse off in that sense.
- [37:34]
Adam Fleming
In other words, people being drawn into higher tax brackets as their pay go up. Jane, I'm just looking over our colleagues on the news channel and they're running these live address to the French people by Emmanuel Macron, the French president. It seems to me the first bit is about the safety of French citizens in the region, isn't it? Although it'll be interesting to see. Does. Does.
- [37:52]
Jane Corbyn
He just said our responsibility is strictly defensive. Yeah, just said that. Which is ties with what Kirsten's view is. So. Though of course, France and Canada were amongst the first to openly support the American action a few days ago. But that seems to be much more what Macron is saying now, in line with the British stance. Purely defensive.
- [38:17]
Adam Fleming
So then, going back to where we started then with the scenes in the Oval Office, does Trump then think of Macron as like a Starmer type figure or as a Mertz type figure? Somebody who's helping him or somebody who's worthy of criticism? I guess we'll find out.
- [38:31]
Jane Corbyn
Guess we'll find out. I mean, yeah, I mean, he certainly was very, very complimentary about the German Chancellor, but he's been complimentary about Macron in this context. Not always in the past, but in the last few days in the context of the action in Iran.
- [38:46]
Adam Fleming
Although it's interesting, something we didn't have a chance to talk about yesterday was what Emmanuel Macron was doing yesterday, which he did this big speech in front of one of the French nuclear submarines. And it was all about, actually, in the future, maybe France will not be more aggressive militarily when it comes to nuclear weapons. But I think he was trying to send the message that he's been trying to send for his whole presidency, which is that Europe has to stand on its own two feet because America's less reliable.
- [39:13]
Jane Corbyn
Yeah. Although again, Trump today in the Oval Office praised the head of NATO, Mark Rutter. So, you know, it's interesting. Interesting.
- [39:23]
Adam Fleming
Right. That's where we are at five past seven on Tuesday evening as we finish recording this episode of Newscast. Thank you to Chris, who's had to dash off at Westminster. Dashini, thank you to you in your blue book.
- [39:32]
Darshini David
Thank you.
- [39:33]
Jane Corbyn
And Jane, redundant blue boot.
- [39:35]
Adam Fleming
Redundant blue boot. Well, no, still important, just not 100%.
- [39:38]
Darshini David
It gave me the excuse to come and be on Newscast with Jane, which you're always welcome.
- [39:42]
Adam Fleming
And Jane, thank you. Thank you to you too.
- [39:44]
Jane Corbyn
Thank you, Adam. Thanks, Dashini.
- [39:46]
Adam Fleming
And that's all for this episode of Newscast. We'll be back with another one very soon. And just a reminder, you can get our episodes every single day on BBC Sounds. And if you like the analysis that we give you, then you can click on subscribe and you'll never miss an episode. Thanks very much, Newscast, Newscast from the
- [40:02]
Newscast Outro Host
BBC, from one newscaster to another, thank you so much for making it to the end of this episode.
- [40:08]
Jane Corbyn
You clearly do, in the words of
- [40:10]
Newscast Outro Host
Chris Mason, ooze stamina. Can I also gently encourage you to subscribe to us on BBC Sounds? Tell everyone you know. And don't forget, you can email us anytime@newscastbc.co.uk or if you're that way inclined, send us a WhatsApp on +4403301239480. Be assured, I promise we listen to everyone.