This is an audio transcript of the Political Fix podcast episode: ‘AI — Is Britain prepared?’

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Lucy Fisher
AI is moving fast. Is Westminster keeping up? Hello and welcome to Political Fix from the Financial Times with me, Lucy Fisher.

AI is getting smarter. It holds great opportunities, but also major risks, whether that’s for jobs in the economy, for security, even perhaps human civilisation. So why isn’t it higher on the political agenda? And is Britain at risk of getting frozen out of access to the latest frontier models?

On the show this week, we’ll be getting into all that, plus the trade ban on goods from illegal settlements in the West Bank, the Met announcing a police investigation into Reform and Andy Burnham unveiling a new tourist tax in his latest step down the path to greater devolution. To discuss it all, I’m joined by UK chief political commentator Robert Shrimsley. Hi, Robert.

Miranda Green
Hi, Lucy.

Lucy Fisher
And deputy opinion editor Miranda Green. Hi, Miranda.

Miranda Green
Hi, Lucy.

Lucy Fisher
Miranda, Robert, I’ll come to you both in just a moment but first I want to kick off with a development that’s causing real alarm in Whitehall, and for that, Madhumita Murgia, the FT’s AI editor, is also in the studio with us. Hi, Madhu.

Madhumita Murgia
Hi.

Lucy Fisher
Madhu, this week we’ve been writing about Anthropic and a development that’s put fear into the hearts of officials. Tell listeners briefly what’s happened and why it’s important.

Madhumita Murgia
So together we wrote a piece about Anthropic, which is the largest AI company in the world today. It’s coming up to a trillion-dollar valuation. It’s getting ready to go public at probably $2tn. It will be the biggest IPO in history. It makes Claude a chatbot that people might use. So they usually submit their models to be tested by the UK AI Security Institute, which is a world-leading research organisation — one of the only ones of its kind, really, in the world that’s able to test these systems.

But we reported that in their latest installation of this model, the latest release, they didn’t submit it to the UK Aisi, which is kind of unprecedented because of what we think is pressure sort of from the US government, which sees Anthropic’s models as sort of a national security asset at this point.

Lucy Fisher
Why specifically was it worrying that this latest model wasn’t shared with them?

Madhumita Murgia
So this . . . the particular model we’re talking about is called Mythos 5.1, which sounds very innocuous but it’s sort of billed as their most advanced model in cyber security as well as life sciences. So this model is able to do scientific experimentation but also identify code vulnerabilities and essentially hack and also act as a defender.

So given it’s their most powerful model, but also that it was the first time since Aisi was set up that a major model release wasn’t submitted to Aisi for testing. So it’s both because the model is a powerful and important model but I think kind of more importantly that this was the first time that they didn’t kind of have that relationship that they’d previously had. And it comes right after the US government has shown that it wants to be more protectionist by sort of applying export controls on previous models that Anthropic has released. So you can just see the sands shifting here.

Lucy Fisher
So there are huge concerns that this could be a harbinger of things to come with the UK being frozen out of Aisi, this institute you described being able to test the latest frontier models. It also seems to me that Aisi, perhaps along with DeepMind, that being founded in the UK, is a huge part of what allows the UK to sort of sit, if not right at the top table, then at least in the sort of higher echelons of the nations involved in AI. We’d be at risk of sort of losing our position if Aisi begins to get cut out, right?

Madhumita Murgia
Yeah, I think, you know, it’s been a surprisingly successful innovation that’s come out from the last two, three years. We live in . . . 

Lucy Fisher
And it was a Rishi Sunak initiative, right?

Madhumita Murgia
Exactly. So it’s only three years old and, you know, it comes in a world where basically all the innovation is happening in California. But when Aisi, the AI Security Institute, was founded, it was sort of an experiment, right? Because there’s no laws that force the companies to submit their models to Aisi. And it’s also sort of weird because it’s in the UK and not the US, which is where these companies are based.

So you wouldn’t expect it to work, but it did because of the sort of technical quality of the people that this institute managed to hire, and it was seen as an independent pioneer and really high-quality research institute. And somehow, even though it was voluntary, they have really good relationships with these companies, and that’s actually part of the problem. It’s all dependent on these relationships that has meant both OpenAI and Anthropic and Google DeepMind have shared their models ahead of releasing them with Aisi, and that’s meant that we have been aware in the UK ahead of time what the capabilities of these new models are. We’ve sort of had a glimpse into the future in that sense, which no one else in the world has had.

So it’s really quite unique, and we saw this with Mythos, which was a model that Anthropic released a few months ago at the beginning of the year, which, sort of, it was seen as the most advanced cyber security model. And in that case, no other country in the world outside of the US had any access and Aisi. So Aisi was the only sort of non-US organisation. So yes, I think if those relationships start to weaken or there’s pressure from the US government to restrict that in some way, that does put us at a disadvantage here in the UK because we no longer have that access.

Lucy Fisher
If I’m allowed to say this, our story really flew this week. It got picked up at Prime Minister’s Questions by Ed Davey, the Lib Dem leader. There were Tory, Reform, Labour front benches, the Labour chairs of the science and innovation committee, the Labour chair of the business and trade committee in parliament, who were sort of raising concerns off the back of this.

But Robert, I think one of the reasons it got so much pick-up is it coincided with a slew of interventions by people linked to Anthropic, basically suggesting the end of the human species might be nigh because of AI. It’s interesting in a way that this week the subject’s blown up, but heretofore, it really hasn’t been that high up the agenda in British politics. Do you agree?

Robert Shrimsley
No, I do agree. I mean, I think we have to be careful not to get overly chauvinistic about this issue because although obviously there’s a concern what happens to the AI Security Institute in Britain, I mean, the broader point is these models are being developed and they’re coming.

And you know, we are ever, ever closer to superintelligence. We have frontier models that have shown their ability to break out from their sandboxes. That’s the thing that really matters. I mean, like, although I think the AI Security Institute was a tremendous thing that Rishi Sunak did and that Andy Burnham’s commitment to addressing AI is nothing like as impressive, and it worries me.

The big issue is this stuff’s coming and nobody does anything about what to do with it and its development lies in the hands of sort of overgrown children who I don’t entirely trust with our future. The thing you’re referring to, we’ve had whistleblower statements of people saying, well, there’s probably a one in 10 chance that it could kill us all.

Lucy Fisher
Within a decade.

Robert Shrimsley
Within a decade. Some people say, well, one in 10, that’s not that high. I don’t know how many activities you’d engage in with a 10 per cent chance of death. Mine would be on the low side, I think. And so, I think the bigger issues and I almost think a little bit like this about the way we feel about climate change, is we’re all very, very stoic in the face of something that’s enormous coming towards us. That with the decline of multilateralism, no one knows how to do anything about it. You require an engaged America on the multilateral field. We don’t have one. China is advancing with great speed, but is still behind, so would actually benefit from a moratorium or a pause, which is why America doesn’t want to give us one. So the bigger issue is the world’s politicians have no idea what to do and what they’re dealing with.

Lucy Fisher
Madhu, just tell us how seriously we should take the suggestion that we’ll all be annihilated within 10 years.

Madhumita Murgia
This is not the first time that we’re hearing this, even from an employee of Anthropic, let alone others. We had Geoffrey Hinton, the Nobel Prize winner, saying this a couple of years ago. I’ve covered AI for more than a decade now, and I’ve heard this sort of, this talk about existential risk almost as long as I’ve been writing about the development of the technology itself.

And within Silicon Valley, they have, like, a mathematical term for this, which they call P (doom), which is the probability of doom. (Laughter) You know, it’s very self-explanatory. But because they love putting numbers on things, so this . . . 

Robert Shrimsley
It’s very reassuring they actually felt the need for the term. (Laughter)

Madhumita Murgia
Exactly. And this is how they socialise. What’s your P (doom) number? Not even joking.

Miranda Green
Domesticate the terror basically.

Madhumita Murgia
Exactly. And socialise it, right? Anyway, but 10 per cent isn’t even that high in that bubble. You know, Sam, for instance, Sam Altman’s P (doom) is probably the highest of anyone and I don’t even wanna get into what that might be but it’s more than 50 per cent, possibly. So all of these people have been anticipating doom for a long time.

In terms of how seriously we take it, I think the reason this has had lift-off this week in particular is because there have been some recent incidents that show us that AI is becoming increasingly more sophisticated. Robert mentioned the breaking out of the sandbox. Basically, we found that they were able to come out of their guardrails or their sort of prison that they were meant to stay in and hack into third parties without the knowledge or permission of their owner, which was OpenAI. OpenAI had no idea for weeks.

Robert Shrimsley
And then they boasted about it on social media, didn’t they?

Madhumita Murgia
Well, exactly. They were just like, it’s so powerful. I mean, I think, but now that’s shifted the debate a little bit, where more people are starting to be concerned about what actually can these models do. And so, yeah, I think it’s hard to engage with the number of whether we’ll all be wiped out within 10 years, but I do think we should take seriously the possibility that there will be harms that we don’t have an idea of how to control.

Lucy Fisher
Miranda, I mean there’s a big debate going on in Whitehall, isn’t there, about regulation, whether to follow the US laissez-faire model or the EU high-regulation model, or sit somewhere in the middle. But if you do seek regulation, the issue of compulsion comes about and we saw with all the arguments about social media, encryption, it’s quite difficult to bring the tech companies to heel.

And one of the big dangers is they think, well, it’s not worth it for the economic upside of having specialist models for the UK that fit their country and therefore we won’t bother. And then we’d lose access to it altogether. There are so many considerations for lawmakers, aren’t there?

Miranda Green
Well, it’s so interesting that this AI Security Institute was set up under Sunak, because if we . . . it’s so hard, ’cause there’s been so much going on the last two years, but if we cast our minds back to that period, one of the things that Rishi Sunak was so keen on was taking advantages of, well, what he called the advantages of Brexit, ie, being outside the EU and being able to set our own course in the parlance.

And part of that was to say we’re not bound by EU strictures on future technologies, and it’s really Britain’s chance to be, you know, a hub and to sit in this sort of almost sort of proto-Blairite way as a bridge between Europe, America, Asia as well, and to be the referee. And it’s sort of interesting that the UK’s tried to be that referee when, as Robert says, there is no legal structure and it’s a very difficult thing to pull off.

But I definitely think that the kind of fear factor around future technologies has taken over in the public imagination in recent months beyond sort of the idea of opportunity. You know, when you look at the potential impact on jobs and on safety, and now these sort of fears of doom, in your word, Madhu, then I think sort of politically it’s much more of a defensive posture for the political class. I think this kind of talk of opportunity has sort of gone a bit quiet in the last few weeks.

Robert Shrimsley
There is something fabulous about the question you just asked, Lucy, which is basically this technology has a 10 per cent chance of killing us and we’re missing out. (Laughter)

Miranda Green
Yes, exactly. It’s like the nuclear arms race in a way, you know, because science is always about, you know, huge scientific innovation is often about slightly strange objectives. But then you can have an advantage as a nation if you’re ahead.

Lucy Fisher
But at least with nuclear technology from satellite imagery, you can see who’s enriching vast quantities of uranium. We can’t really see behind closed doors. I mean, just moving away from the existential risks, Robert, the economic threat posed by AI to the economy, again, I’m just surprised I don’t hear more Labour MPs talking about it. It’s the Trades Union Congress coming up next week. Perhaps we’ll hear a bit more about it there. But driverless cars are coming. We’ve had a glimpse of some sort of briefing from those around Burnham that they are concerned about what that will do to the many cabbies and Uber drivers and so forth. But it feels, it just doesn’t have a lot of grist in Whitehall and Westminster.

Robert Shrimsley
I mean, the problem is we still really don’t know. If you talk to our colleague, Sarah O’Connor, who’s really put a lot of work into this, she says that the spectrum of possibilities is very large. It could be utterly catastrophic for the jobs market, or it could be not that catastrophic for the jobs market and people adapt and move on.

So part of the problem, I think, is that we still don’t know. We’re certainly seeing, if you look at youth employment, an impact and a knock-on where entry-level jobs are proving harder to get. But I do think it’s something politicians haven’t engaged in. And one of the other problems which we haven’t engaged when we think about this is that if you think about it, it’s often likened to the Industrial Revolution.

And if you think about the Industrial Revolution over a landscape of 100 years rather than over five or 10 years, this fundamentally altered everything beyond the economy and industry. Also, it altered our politics. It led to the gradual enfranchisement of people, a changing of the voting structure, new political parties, new political alliances. And I think you have to think about the possibility that if this technological revolution is as vast as that and it’s gonna happen much faster, you have to also think about the impact this could have on politics.

Just to offer you a simple example, one of the fundamentals of the Industrial Revolution and the Reform Acts which followed is the creation of a substantial middle class who are the bulwark of society and keep support for institutions and are align, have their interests that are aligned with the wealthy. If all of a sudden this vast middle class is unemployed or can’t get the jobs it wants and suddenly finds itself economically disadvantaged, well, that has huge knock-on consequences for the nature of our politics and the stability of the country. So it’s amazing that we’re not talking about all of this more.

Madhumita Murgia
I mean, I think what’s really notable is, yes, it’s hard to predict, and Sarah and others, John Burn-Murdoch as well, have done great work looking at the data and showing that it hasn’t changed dramatically just yet. But the companies themselves are loudly warning that they expect to see huge unemployment.

And you have people like Sam Altman and Dario Amodei, the leaders of the companies, putting forward proposals for universal high income, as they call it, not basic income because they think there’ll be a time when there’ll be so much sort of largesse and riches generated by AI that we won’t have jobs but we also won’t need them and we’ll all just, I don’t know. They always give the examples of you can go to and hang out at the beach. I feel like there might be a bit more sense of, I don’t know, sort of doom amongst us if we suddenly have no purpose and we don’t, you know, there’s, as you said, like a large-scale change in how society operates if none of us are going into work.

And the government, I think it’s really interesting that the British government isn’t paying that much attention to the jobs question because we could sort of start thinking now about what could happen. Can we start modelling out different scenarios in which, you know, the different sort of levels of unemployment and what would be the impact of that and the consequences and think a bit more deeply about it ’cause they’re warning, and they are sort of calling for more government intervention both in the US and internationally.

Miranda Green
I think also if you start looking at some of the campaigns locally against data centre building and the techlash in America, I think that’s coming to our politics quite fast as well. And the next general election, there’ll be a lot of it. And really strange unholy alliances actually from people who are scared about different aspects of this tech revolution. Some of it slightly eccentric and some of it based on very real fears about the labour market and, you know, disenfranchisement of vast swaths of people who previously could rely on good employment prospects life-long.

Robert Shrimsley
I mean, it’s story, it is spectacular. We have these people, the people who run these corporations, the people at the driving seat, they’re suddenly saying, well, it could kill you. It’ll definitely make you unemployed. You guys should do something about it. I mean at some point.

Miranda Green
Well, I was saying as you would earlier, but it does seem very immature the way that they think about the power of what they’re creating.

Madhumita Murgia
Well, it’s . . . I think it’s because of the speed of how quickly they’ve accrued power, right? And it’s so concentrated amongst such a small group of companies and people. There’s probably a couple of hundred people in the whole world who really understand how this stuff works. And to be in that position where you think you know more than basically everybody running the world,

Madhumita Murgia
It’s kind of a big burden but also they think they know more than they do because it’s this fallacy, right? If you’re an expert in one thing, you suddenly, like Elon Musk, think you know about everything.

So we’re in this position where they sort of think that talking about policy and jobs and whether people should have more children or not. They just talk about everything. They’re experts now.

Lucy Fisher
So obviously we’re talking about the risk of this technology leading to the death of us all. Why are the companies still pursuing this technology?

Madhumita Murgia
Primarily money, you know, they have had billions invested into them and now that’s got to pay off. But I think there is also, you know, they all, Dario and Demis Hassabis, who leads DeepMind, these were originally scientists. And so there is this kind of push to build something, the greatest invention that humanity has ever done and that sort of idea that we could make something that’s even more intelligent than ourselves, I think appeals.

A lot of them are sort of, they want to extend their lives. They talk about uploading their minds on to the internet. It’s just part of this kind of way for them to increase their power and their longevity and make a mark. It’s a very weird thing but there’s a lot of them who live within this bubble.

Miranda Green
It’s kind of the myth of Prometheus, isn’t it? There’s always been this tension and suspicion about the scientific mindset, just push and push and push to the extent of what it’s capable to achieve, even if you risk destruction. I think that tension’s always been there and they’ll just push it as fast, as far as the science will go, won’t they?

Madhumita Murgia
Yeah. But I mean, I guess not to be, to sort of play the other side, there are huge benefits that could come from this as well and that’s what they like to talk about.

Robert Shrimsley
Well, like not death.

Madhumita Murgia
Not death.

Miranda Green
Oh, healthcare.

Madhumita Murgia
Forever life. Yeah.

Miranda Green
Well, I mean, healthcare is amazing.

Lucy Fisher
Well, that, yeah. I mean . . . 

Madhumita Murgia
And I like to look at the more short-term things. There are risks in the short term as well. We’ve talked about employment and bias and such but there’s also, yeah, there’s healthcare, there’s scientific advancement, not just for the sake of it but when it comes to materials, it could help us invent much more sort of energy-efficient materials that could help resolve the larger questions within climate change.

And even just, you know, we saw recently the huge breakthrough in the mathematics, the Navier–Stokes equation, which is one of the, like, six most sort of inscrutable mathematical problems ever. It’s like a 200-year-old problem and we’ve never been able to solve it and we have used AI in the last week to show that it’s false. I mean, it’s . . . If we just take a moment to see how amazing that is that we, like, have been able to solve something that, like, the most brilliant minds haven’t been able to do for 200 years, it’s kind of exciting. But that’s kind of the other side to the coin.

Lucy Fisher
Well, Madhu, I know we’ll be returning to this a lot in the months ahead. Final word to you. What’s the next big milestone or sort of shock or circuit breaker in the AI revolution that you foresee on the horizon?

Madhumita Murgia
The big theme that people are worried about now is this idea of recursive self-improvement or RSI, which is essentially, you know, AI models teaching themselves and improving themselves. And you can kind of plot out what that means. They are starting . . . we’re starting to see them building themselves and improving very quickly and they can do it much quicker than humans can. So I think the big question in the industry now is, like, how do we control that? Because that sort of seems to be where if we lose oversight of that is when we sort of break off and it becomes the agents versus the humans.

Robert Shrimsley
Is it the big question in the industry, though? How do we control it or do they not want to control it?

Madhumita Murgia
Yeah, it’s what they’ve been doing all along, which is dual, which is building as quickly as they can and then also very loudly.

Robert Shrimsley
Incorporation for IPOs.

Madhumita Murgia
Well, exactly, and also they just seem to have a motivation to just get as far as they can despite knowing what could happen, but at the same time, talking loudly about the risks of what could happen. So we’re sort of . . . that’s it’s coming and the question is whether we smarter people can intervene and think about regulation and control and yet.

Lucy Fisher
Well, on that joyful note, Madhu, (Madhu laughs) thanks for joining.

Madhumita Murgia
Thank you.

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Lucy Fisher
So Robert, a really significant pivot on UK foreign policy was unveiled this week. Andy Burnham announcing a trade ban on goods and some services linked to illegal settlements in the West Bank, accusing Israeli settlers of ethnic cleansing of Palestinians in the territory. There’s been a furious backlash from Israel and parts of the Jewish community in the UK. Curiously restrained response from the US, though. Tell us more.

Robert Shrimsley
This really is a doomy episode, isn’t it?

Lucy Fisher
I’m afraid it is.

Robert Shrimsley
After death through AI . . . On a lighter note, Israel-Palestine, I think it’s fascinating. It’s very clear and we knew this was going to come, broadly speaking, that ever since Andy Burnham won the Labour leadership and the premiership, there was going to be a degree of a reset in their positioning on Israel and Gaza and Palestine because the Labour Party had gone adrift, run adrift of its own support base, on top of which a lot of people in the Labour Party actually felt they had got the policy wrong. And so we’ve been waiting for the moment where we see where this happens.

And Ed Miliband, the foreign secretary, has leapt upon the issue of illegal settlements on the West Bank and, in particular, the violence that has been surrounding this as Israeli settlers moved in, push Palestinians out of the areas they’ve been in and there’s been very bad violence. The Israeli defence forces haven’t been quick enough to stop this. So it’s been a really, really grim aspect of what’s going on.

And it’s also very clear-cut for a government to say, well, we don’t support these settlements. We’re very clear in our opposition to them. And also, as Ed Miliband said when he unveiled this plan for sanctions, is that if you have any belief in a two-state solution, and it, of course, it looks more and more hopeless all the time, the West Bank has to survive intact as a core part of the Palestinian homeland.

And what you’re seeing with these settlements is the pushing further and further into the West Bank. So for that reason, he unveiled these sanctions. There’s all kinds of questions about the efficacy of this and whether it will work. But it got a furious backlash from some places, including the US Ambassador to Israel, Mike Huckabee, from parts of the British Jewish community, though interestingly, other parts, the progressive rabbis, for example, did not criticise it.

And so there’s been a backlash to this. But as you say, so far, we haven’t heard anything substantial from Donald Trump. And indeed, the secretary of state, Marco Rubio, gave a very measured, understate response, which essentially said, well, we’ve seen what they’re doing. We’re probably not going to do this. And I think some of the reason for this is that Ed Miliband played quite an effective role, convening role in making sure that a number of other countries, specifically France and Canada, who’d been looking at doing the same thing, did it on the same day. So this isn’t just a British exercise.

One other thing that was interesting, which I heard when I was looking into this, is that although we can see the domestic political argument for this, one of the reasons I think why they did this now is that they didn’t want to be doing this after an Israeli election, which had seen the defeat of Benjamin Netanyahu. Now, there’s quite a lot of rifts in that but therefore they wanted to do this before in case there was a new government that you wanted to have a better relationship with.

But I do think it’s been a fascinating moment and it’s also been fascinating to me as someone who’s in the Jewish community to see the significant percentage of the Jewish community that is actually OK about this and is saying, yeah, look, what’s going on in the West Bank’s not acceptable.

Miranda Green
But this is partly, isn’t it, because Ed Miliband was very careful to also explicitly condemn the kind of wider boycott Israel tendency, which is quite popular in parts of the left. So I mean, he was very careful, wasn’t he, to try and say this is very targeted on the illegal settlements and no wider. But I do think it’s a tricky moment politically because you’d be a fool in politics to ever search for pure motives, right, in this fallen world that we operate in.

And there is also a huge by-election coming up in North London, where they’re gonna be choosing the successor to Keir Starmer in the Camden seat. There’s gonna be a concerted campaign to get Zack Polanski, the leader of the Green Party, in as MP for Camden in that seat. And Labour knew they had a huge problem with Keir Starmer specifically, his position on Israel. And they had to do something very noticeable.

Robert Shrimsley
And I think the bigger . . . (Overlapping speech)

Miranda Green
I’m not saying that’s the main motivation but I do think that they will see it as a help.

Robert Shrimsley
I mean, I think they were well down the track before that by-election was dumped on them. But I think the bigger domestic political interest was the Labour Party conference where there were motions coming down. I mean, you could tell . . . I thought Ed Miliband’s speech to parliament was extremely clever and well calibrated, even with the beginning as a proud British Jew, which he only ever says when he’s about to whack Israel more or less. But I think they’ve played this quite well and there was a significant amount of support for the Jewish community in Britain and as you say, Miranda, support for Israel’s existence. So it was quite cleverly calibrated.

Lucy Fisher
I also thought Andy Burnham was quite canny in the way that he spoke about it during Prime Minister’s Questions. It’s the most impassioned I’ve heard him be at the despatch box so far, albeit he’s only been two weeks of parliament back since he became prime minister. But I felt he has used it as a framing device, as a riposte to Tory leader Kemi Badenoch’s claim that he’s all about vibes rather than leadership on the one hand and that he’s continuity Starmer on the other hand. I think this is something he can bring forth to sort of say, look, it’s not just words, it is deeds and it’s a clear shift away from Starmer’s policy on Israel. So I thought that was interesting to watch.

Miranda Green
Yeah, I think that’s right. But also, I think Robert’s point about trying to preserve the possibility, some possibility, any possibility of a two-state solution means it’s about an issue of substance as well.

Lucy Fisher
Yes, a moral issue.

Miranda Green
So it’s . . . I think that the opposition’s accusations of gesture politics fall quite flat when you consider what’s actually happening on the ground in the West Bank.

Lucy Fisher
Just to dig into the detail of the headline part of this reset, Robert, explain what the trade ban affects and how significant is this in the terms of UK-Israeli trade?

Robert Shrimsley
Well, I mean, I think the detail is going to be everything. And one of the things that Ed Miliband said is this could take six to nine months because there is a ton of detail. It’s very complex because at the headline level, you’re talking about any organisation that does business in the West Bank settlements, which are judged to be illegal, any financial services institution which helps facilitate them. So that’s an awful lot of things.

And one of the complaints from sort of Israel itself is, well, where they’re so entangled, how the hell will this work? Are you gonna wipe out every Israeli financial service? It’s going to be complicated and the detail will be very important, and we’re going to have to see. In terms of the significance, it’s an interesting one because Britain doesn’t do that much trade with Israel. It’s not an enormous thing for Britain, although there are some very important, for example, medical tech and even defence gains that we get from Israel.

What Israel gets from Britain is actually probably a bit less. So it’s more the global impact of this. But I do think if they go through the detail and it’s as sweeping as he implied, that will have a major impact within Israel.

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Lucy Fisher
Burnham’s also been talking this week about the tourist tax, which we knew was coming down the line. Interesting decision not to cap it, you know, he’s setting himself up for another row with the hospitality and leisure industry, who are very angry about this.

But Miranda, it does show he’s serious about fiscal devolution by allowing local areas to keep the proceeds and to set the percentage themselves.

Miranda Green
Yes, and I think also there’s been some quite effective lobbying campaigns by the arts and culture sector who don’t want to increase their own prices, and for example, the museums. It was one of the most popular things that the incoming Labour government under Blair-Brown did was to make museum entry free, and there’s a lot of powerful people in that sector who’ve been saying, we’re gonna have to go down the route of the Louvre, for example, who’ve introduced charges.

Lucy Fisher
And so just tell us what does this tax apply to?

Miranda Green
I think it applies to hotels essentially.

Lucy Fisher
An Airbnb.

Miranda Green
An Airbnb, so you get charged a sort of supplement as a local tax. And it is one way to go. Local authorities are really sort of starved of cash for all the important things that we know they need to do, from potholes to social care. But yeah, whacking the hospitality industry when they’re down may have some uncomfortable backwash in the next few months, I think.

Robert Shrimsley
I mean, this is a rare market mechanism. Not putting a cap is effectively saying well, you’ve got to see how far you can push this. If you’re a great city that people are flocking into, like Edinburgh, which, you know, where this has already been put in place, you could probably get away with squeezing your tourists and your visitors quite a lot. Other places, that’s gonna be a struggle.

Lucy Fisher
So Edinburgh’s 5 per cent sort of supplement on top.

Robert Shrimsley
Up to a maximum of five nights. Is that right?

Lucy Fisher
Exactly. But I saw Amsterdam has a 12.5 per cent charge on accommodation, which seems pretty high for any UK city to attempt.

Robert Shrimsley
But in the end, I mean, the market will determine this. It will become clear if people have pushed too far and obviously the councils will try and grab as much money as they possibly can, ’cause the only people not paying are their own voters. But at some point, it will become clear you’ve pushed this too far, and we’re going to see what that is.

Lucy Fisher
The other big development this week was the Metropolitan Police announcing that they are launching an investigation into Reform over the Channel 4 sting, which we discussed on the podcast last week.

Miranda, I thought there was a great round-up on our website of the five financing scandals now engulfing Reform and this is far from the only police investigation into the party. It’s becoming a big problem for them, right?

Miranda Green
I think it’s a big problem for them on many levels. And politically, we shouldn’t forget that in the last general election in July 2024, that whole question of sort of probity in public life and whether people are clean, literally, and whether they’re perceived as clean became quite important in some electoral battlegrounds.

And I actually think the sort of build of these stories around Reform and the money and the donors and the fundraising has sort of reached such a pitch that you can’t not notice it. And I think when we come to this analysis of the next general election and these negative voting patterns, ie who do you most dislike and want to stop, and how do you do that in your area?

The kind of hygiene test on Reform and on Nigel Farage personally is going to become one of those significant factors. So I think politically, this run of stories are bad for them. Actually, I did just want to share with you the most extraordinary quote, the pre-briefing about the Reform Party conference, which kicked off conference season already.

Before all of that Channel 4 sting broke, somebody told The Spectator, “The plan for conference is for the country to fall in love with Nigel again.” Well, that didn’t go according to plan and they’ve actually got . . . 

Robert Shrimsley
Did you not? (Laughter)

Miranda Green
Did you fall in love with Nigel again, Robert?

Robert Shrimsley
Of course. That suit.

Miranda Green
But, you know, this hostility, actually, when you translate it into voting patterns in individual constituencies, that’s gonna be a hugely problematic dynamic for them.

Robert Shrimsley
I mean, I think the interesting thing, I totally agree with what Miranda said, is whether Farage and Reform can break out of their own bubble on this one a bit. Because what you see, what you saw at the Reform Party conference and what you see is the faithful, the base, they don’t care about this stuff. They’re not that bothered.

The Reform vote is holding up to what it was a few weeks ago. We’ll see what happens in the coming weeks. And they’re all standing there going, we don’t care. They’re all dirty anyway. Who cares? And also you have this attitude that says, well, you know, we saw what happened with Trump. Everybody threw all this stuff at Trump, and he still won.

And I think there is a sort of self-reinforcing bubble for Reform when, if you take a step back, you say, well, the difference is Trump was leader of the Republican Party. They had a base support of 45 per cent or whatever going into the election, and he’d been president before, and a wider group of people loved him. The truth about Farage and Reform is that while their vote has been holding up, you now have 76 to 77 per cent of people who express an opinion who are anti-Reform. And so that’s more than the 24 to 23 who aren’t.

And so this is where Miranda’s point kicks in. And I think a fundamental question, obviously we might, we don’t know when the next election is. But there are two possibilities probably for the next election. One is it’s an election all about getting rid of the Labour government, or that it’s an election about stopping Reform, and at the moment it feels to me that that’s the danger that Farage is facing. And we’ve talked about this before on the pod, but the challenge for him over the last year was to expand his base of support, to broaden his appeal beyond the core.

And partly because of the threat from Restore and for other reasons too, they’re going the other way. And I’m not sure this is gonna end happily for them. And you’re seeing the bolstering of Kemi Badenoch and the Conservatives all the time. The Conservative Party vote hasn’t really moved in the polls. They’re still in a terrible place.

Lucy Fisher
It trickled up a little, to be fair to them.

Robert Shrimsley
Yeah, but I mean, look what happened in the Manchester mayoralty. What did they come, fifth or something? It’s hopeless. Kemi Badenoch’s own personal popularity has risen. So the question is, can they take advantage of this opportunity? ’Cause if you can get the Conservatives back ahead of Reform in the opinion polls, all kinds of unpleasant things will happen to Reform.

Lucy Fisher
I do think Badenoch goes from strength to strength and this week focusing on defence again, when normally you see opposition parties sort of ricochet between campaign subjects, and getting Burnham to say this line at PMQs, to be fair, I think it’s something he wants to lean into, that national security can’t come at the expense of social security, is a complete gift for the Conservative Party, who are now campaigning heavily on cutting welfare in order to fund the military. I think it’s going to be a quote that comes back to potentially haunt Burnham for months to come.

Robert Shrimsley
I thought it was fascinating, ’cause one of those quotes was exactly as you said, we won’t put national security at the expense of social security, is one of the things that will have played very well in the chamber with Labour MPs, and they will have liked it. And I thought, but Andy Burnham was meant to be one of those politicians who could look beyond the chamber. And I was struck by how quickly he defaulted back into a crowd-pleaser for Westminster rather than the wider country with that statement.

Miranda Green
I agree with you, Lucy. I think it was a trap.

Robert Shrimsley
It was a trap.

Lucy Fisher
And the Tories were so quick on it.

Miranda Green
Yeah, exactly.

Lucy Fisher
They press-released his comment and their response and their sort of attack lines on it, even before PMQs had finished, which I thought showed that they knew they’d struck gold.

Miranda Green
But it is a bizarre situation, though, that we’ve got three parties basically, Luke Tryl of More in Common was pointing out when they released a new poll a couple of days ago, three parties within the margin of error of each other and of being in the lead position. It’s a completely bizarre situation. So you can’t say confidently anything about the prospects of any of those three parties.

Lucy Fisher
Well, it makes our jobs more interesting if it’s a three-horse race as it increasingly seems to be, rather than the two-horse sort of race we’ve been talking about for months.

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We’ve just got time left for Political Fix stock picks. So Miranda, who’s overvalued? Whose stock are you dropping this week?

Miranda Green
Well, so it was a huge week in the education world because the Pisa study, which is a big international study of the standard of 15-year-olds in lots and lots of economies in reading, maths and in science as well, and England did really well — held up against a lot of other countries, sort of on the slide, but not Scotland, not Wales and not Northern Ireland. So it’s a sort of proof that what’s been happening in English schools for the last couple of decades, with an extraordinary degree of consensus about it, secondary schools that is, really has worked for those important basic subjects.

So I am going to sell Lucy Powell, the new education secretary, ’cause this is not the sort of message that she’s been putting out since she got the job. To my mind, there’s a bit too much we need to tear up the system and redesign it and start having people going down different pathways at 14 and all the rest of it, when actually we know what works and we now have the international study to prove it, and to deviate from it would be a large, bad decision.

Lucy Fisher
Robert?

Robert Shrimsley
Well, I was thinking of breaking out of our usual sandbox and buying the RNLI, the lifeboat charity, which has yet again found itself under attack from Reform-supporting people for the fact that they rescue people who are drowning who happen to be immigrants, and they’ve come up . . . people, their members have come under attack again this week.

But to stay back within the rules, I am, for the reasons we’ve slightly discussed, going to buy Ed Miliband, who I was, I had some doubts as to whether he as foreign secretary would work when it first started, but I think he’s played this last week extremely well. He will have annoyed people, but only the people he wants to annoy and doesn’t mind annoying.

And the other thing he’s shown, which we all sort of knew, is that he is just a major figure in this government, and wherever he is, he will drive policy. He’s not in this for the hell of it. He wants to do things in government, so he’s shown he didn’t get the Treasury. Well, he’s going to the Foreign Office and he’s gonna drive policy there.

What about you, Lucy?

Lucy Fisher
Well, sort of the inverse. I’m gonna sell Angela Rayner, the housing and communities secretary, for the sense that she’s becoming a very minor figure in this government. There was a lot of fanfare around her coming back to Cabinet after the debacle over her tax issue on a second home.

And you’d think, in her department, what with Burnham’s focus on devolution, that she’d be a major player. But actually, it’s Louise Haigh in the Cabinet Office, Burnham’s key fixer, enforcer, longtime ally, and of course, John Healey in the Treasury, who are both really leading on devolution. And it made me sit up and think when I saw Rayner’s involvement in announcing the tourism tax. I thought, blimey, I’ve not thought about her, read about her in weeks, so I’m selling her.

Robert Shrimsley
She’s a . . . good point. She’s also had this reverse and the U-turn, hasn’t she, on the councils, where she’s had to call off a number of the mergers of local authorities, so another, also a bad thing this week.

Miranda Green
But that department’s actually a bit of a hospital pass, isn’t it, when you also think that she’s now responsible for the housing target and how they meet that— tricky.

Lucy Fisher
We must come back to that on another episode. But for now, that’s all we’ve got time for. Miranda, Robert, thanks for joining.

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Miranda Green
Thank you.

Robert Shrimsley
Bye, Lucy.

Lucy Fisher
And thank you for listening. I’ve put links to subjects discussed in this episode in the show notes. Do check them out. They’re articles we’ve made free for Political Fix listeners.

There’s also a link there to Stephen Bush’s award-winning Inside Politics newsletter. You’ll get 30 days free. And don’t forget to subscribe to the show, and please do leave a review or a star rating if you have time. It really helps us spread the word.

Political Fix was presented by me, Lucy Fisher, and produced by Persis Love. Manuela Saragosa is the executive producer. Original music and sound engineering by Breen Turner. Our broadcast engineers are Andrew Georgiades and Richard Topping. Flo Phillips is the global head of audio.

We’ll meet again here next week.

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