FROM SPIES TO SPENDING CUTS

As Keir Starmer wrestles with a security scandal and Rachel Reeves preaches fiscal restraint, the government’s “steady hands” narrative shows early wobbles. It has been another week when Westminster felt less like the sober seat of governance, but more like a failing test of nerve.

The China case collapse: Starmer’s uneasy inheritance

The Chinese Spy case collapsed, unsettling the government which, in fairness, had inherited the whole mess. Nevertheless,  the “decision” to drop the charges raised eyebrows from MI6 alumni to backbench MPs (Financial Times, 10^th October 2025).

No 10’s spin on this was absurd, self-defeating and unnecessary. Following an “unusual” direct intervention from Stephen Parkinson, the Director of Public Prosecutions, who cried foul. (Bang goes the knighthood one imagines.) Downing Street insisted that the decision to drop the case had been the Crown Prosecution Service’s alone. As ever, perception is the problem: for a prime minister who built his reputation on legal rigour, the optics of a collapsed spy case are “not ideal.”

Ministers scrambling to reassure allies (clarification, the Trump & Vance Show) that the UK has not “gone soft” on either China, or counter-espionage more generally, then demonstrated that less-than-able Ministers should not be sent out to bat with dodgy messaging. The most obvious case? Bridget Phillipson, who quickly proved why it would be a disaster for her to be allowed to manage a School PTA coffee morning by insisting on and then repeating a far too narrowly defined messaging response. In a “firendly fire” interview by Lewis Goodall on LBC on Sunday 12^th October: Bridge insisted repeatedly that Jonathan Powell (do we pronounce that Pow-all or Pole, the nation needs to know) the UK’s National Security Adviser was not involved in “the substance, or the evidence” of the case AT ALL. EVER. IN ANY WAY. Phillipson thus made it all too clear that No 10 had been involved, just not directly in “the substance, or the evidence” (whatever that means, Ed.) For a true throw yourself behind the sofa to avoid the embarrassment moment give yourself a blast of Lewis Goodall on LBC from 10:29am.

Goodall: “Can you give us your assurance that the Prime Minister and no-one who works for the Prime Minister and in this you’ll know I am referring to his National Security Adviser, Jonathon Powell, were in any way involved with this decision?”
Phillipson: “I can give you the assurance that the National Security Adviser was not involved in discussions about the substance of the case, or about the evidence connected to the case, yes.”
Goodall: “Was he involved in any way?”
Phillipson: “No he was not involved in this case, either on the substance, or the evidence. I can give you that assurance.”
Goodall: “He was not consulted and he didn’t give his view about any of it at any point?”
Phillipson: “Well I am sure he has opinions on lots of topics…that’s the way of…”
Goodall: “But he wasn’t consulted? I mean: he didn’t give a view?”
Phillipson: “He was not involved in the evidence, or in the taking forward of this case. That was… He was not involved in the substance of it. It is deeply frustrating, deeply disappointing.”
Goodall: “What does it mean that he wasn’t involved in the substance? What do you mean by that?”
Phillipson: “He was not involved in the substance of this case, in material considerations including considerations in relation to the evidence. That’s … I’m trying to be as clear as I possibly can that this is fundamentally a matter for the Crown Prosecution Service and, yes, we are frustrated too…”

That’s telling them eh Bridge? So No 10 were involved and had the case halted. We’re all pretty clear on that now.

The fact that Phillipson seems to be the Prime Minister’s preferred candidate for the Deputy Leadership of his party is toe-curlingly embarrassing. Our Bridge is clearly not capable of anything beyond parrot repetition of a script and in this interview was a long way from understanding the import of the formula she insisted on repeating, let alone able to amend it in the heat of battle. A Deputy who offers the PM no threat is, it seems, that PM’s best hope. Still, the Education Secretary’s elevation might give the Chancellor someone to feel smugly superior to. Which is an achievement in itself.

Reeves, restraint and the “confidence campaign”

Chancellor Rachel Reeves is reportedly preparing another round of fiscal tightening: higher taxes, deeper spending cuts, all to be wrapped in the language of prudence (Financial Times, 9^th October 2025). This package,  apparently designed to build a fiscal “buffer” against future shocks, will sound to many, not just Reform UK supporters, as the soft if obvious prelude to a very hard Budget.

Meanwhile, the Treasury, God bless ’em, has launched a charm offensive to coax business leaders into talking up Britain’s prospects, warning that pessimism itself is becoming an economic risk (Financial Times, 8^th October 2025.)
The idea: if investors feel optimistic, growth might follow.
The risk: it can look like stage management rather than strategy.
The background: this effectively represents HMT announcing that Rachel Reeves’s (ie their boss) strategy through 2024/5 constantly re-announcing that everything was worse than she had expected, was itself a significant contributor to stagnation. Good move Rache!

Markets are listening; so are voters. Both, at the moment, seem deeply sceptical of both the UK’s short-term economic prospects and the Chancellor’s competence. The IMF report expected on Tuesday will no doubt suggest that the UK will grow amongst the fastest of the G7 economies. The problem with that will be that ALL their predicted growth rates will be dismal, so no great victory there.

Smaller parties, shifting ground

The Greens announced that they had reached 100,000 members for the first time, riding the wave of Zack Polanski’s more energetic leadership. The numbers still don’t translate into Commons seats of course (for diehard PR supporters), but the Greens are starting to matter, especially in marginal Labour–Lib Dem constituencies where a few thousand Green votes could swing things.

Reform UK, meanwhile, simultaneously claims 260,000 members AND a newfound taste for restraint. Nigel Farage dialled back his free-market pyrotechnics, talking instead about “efficiency first, tax cuts later” (The Times, 10^th  October 2025 behind its really tedious paywall, sorry.) Whether this signals Faragian maturity, or just tactical patience, Westminster is watching (and I suspect that the latter is closer to the truth.)

Labour seem to be unkeen to confirm their membership numbers after accepting that their count was down more than 10% since the time of the General Election and estimated by Labour List to stand at just 309,000 in February 2025. Still the largest membership party in the UK, but falling fast and with Reform UK closing the gap and expected to pass them imminently.

Meanwhile ,the Liberal Democrats remain in search of a storyline not involving parascending or mudlarks. After a brief post-election glow their polling and profile have flattened as always, a familiar malaise (The Sun, 11^th October 2025.) The LibDems’ membership pattern has been relentlessly downhill with the glory days of 118,000 who greeted Sir Ed Davey’a leadership in 2020 reportedly plummeting to just just 60,000 today. It’s always a bad sign when you can address your WHOLE party at a random football ground.

Migration, digital IDs and political friction

Labour’s “one in, one out” migrant returns deal with France is proving more symbolic than functional as many predicted. Still, pushing Mrs Balls over to Foreign climbs should allow Shabana to re-announce everything that Yvette had already tried to do. Returns remain sluggish, while right and left find fresh reasons to be unhappy (BBC News, 9^th October 2025). As a headline strategic initiative one could be forgiven for scraping the bottom of the inflatable and noting that it was already well on the way to sinking without a trace. Rwanda, where are you now? What’s the weather like in South Georgia at this time of year?

At the same time, the government’s digital ID plan, designed to “streamline” immigration and public services, has drawn inevitable cross-party concern (The Guardian, 13^th  October 2025.) If someone was searching for a scriptwriter for a re-boot of “Groundhog Day” they could always see if the Digital ID card maestro might be available. My guess is that they will be shortly. Civil liberties groups see it as creeping surveillance, while ministers insist that it will be a significant and efficient modernisation. “White Elephant” cry the voters.

Charities working in the migration and equality sectors report rising hostility from the public, blaming an increasingly toxic tone in political debate. For a government promising a calmer, more “grown-up” politics, this seems to be a reputational hazard in the making. Then you’ve got “Two-Tier Kier” and the whole “Freedom” of speech debate while screenwriters are picked up by armed policemen at Heathrow in connection with three “suspicious Tweets.” It’s not a good look. (I never really “got” Father Ted, but still, give the poor guy a break.)

Devolution watch: quiet tremors

John Swinney’s “Fresh Start” independence blueprint scraped through the SNP’s  conference. That is fails to ignite much excitement (The Scottish Sun, 10th October 2025) should come as no surprise as the “let’s just interpret any majority vote in the next election as a rousing endorsement for independence” manoeuvre is the one the ever-less-substantive SNP have adopted in the last two elections without success. The independence question remains firmly parked.

In Wales, attention turns to the Caerphilly by-election on 23^rd  October, triggered by the death of a Labour MS (BBC Wales, 8^th October 2025.) Normally a footnote, this could end up mattering as Labour’s Senedd majority is slim and both Reform and Plaid Cymru smell opportunity. (But included here AS A FOOTNOTE, Ed!)

Mine’s a doner kebab thanks

The Labour government is trying to regain some discipline following the Starmer Restoration and the rout of Burnham’s Boys in the fetid conference hall gangways of Liberpool, but the edges are fraying. The spy case has punctured the attempt  to project a sense of at least some Starmerian competence while fiscal hawkishness risks taking the public mood from “dour” to “despairing” all too soon.

The ship of state may appear to be ploughing ahead through choppy seas and First Mate Burnham may have retired to his cabin to plan his next mutiny move, but it’s not clear that there is even a hand on the tiller, let alone a hand connected to a controlling brain with anything that could amount to an electoral map for the journey of the next three years.

Next week: “Can the government’s projected competence survive contact with headlines?”
Clue: NO.