Burnham, Streeting, and Rayner’s race to No. 10

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0:17Ed Balls: We would like to steal you for our new podcast. It's called Bad Chat.

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0:35Ed Balls: That is a bit of bad chat. From me, Greg James.

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2:10This is Political Currency with Ed Balls and George Osborne.

2:24Ed Balls: so we are remote this week the studio refit is still underway and uh we are recording after what

2:31George Osborne: has been a wild wild week hasn't it yes people competing for the very top job and um i want to commiserate with you because you've missed out on the very top job in Britain which is I wasn't a candidate I know you well I think you might have been a candidate even if you didn't know it I'm not talking about the premiership oh I see I mean the prime ministership or indeed the football league premiership but um I'm talking about the strictly come dancing presenters who have been announced the replacement of Claudia and Tess, right? And I thought there was an outside shot. You might be a runner for that.

3:12George Osborne: Call my agent and all that.

3:14Ed Balls: What can I say? I do quite a lot of live television already. And so, but no, I was not a candidate. Although Susanna and I had Josh Whittacombe on the sofa on Good Morning Britain this week on Tuesday morning. And it was like interviewing the chancellor the weekend before the budget. I mean, he basically very friendly and very professionally refused to answer any questions. And then he's got the job. Yeah.

3:43George Osborne: With Emma and Johannes. Anyway, maybe I think you need to maybe you need to do the what's the one called, you know, the sort of second show that the strictly the sort of after show on Strictly comes up.

3:54Ed Balls: It takes two.

3:55George Osborne: That's you need to work your way up. It's like politics. You need to get yourself into Parliament. We're going to be talking about that in a minute. and then you need to get yourself you know into the cabinet or the shadow cabinet you know you

4:05Ed Balls: you need to do the hard slog. George can I just sort of you know just say to you not all of us spend our whole time trying to work out what is the next job to apply for and aspire to. I'm very happy with the jobs I'm doing and it's quite busy and it's quite enough. You know actually the photos of Emma, Josh and Johannes were so cool. I actually think this is going to really work. It was a surprising set of choices wasn't what anybody has speculated about i think it's really going to um to work and what it tells you is when there is a leadership election you never quite know what the outcome is going to be and sometimes it can surprise you surely surely there's another lesson

4:45George Osborne: ed which is when you know your time's up leave the stage gracefully and or indeed leave before they're even calling for you to go which is what uh claudia and tested right they did it very classy

4:58Ed Balls: To great acclaim. Although, of course, Tony Blair left to great acclaim in the end by putting a large gap between his departure and him being turfed out. So there are different strategies for this. We last week did our main podcast, but we did the first section of it live because things were happening so fast. And we'd done one earlier in the week. I mean, it's almost been hour by hour British politics has developed over the last week since we did those podcasts. We actually now do a newsletter for our Kitchen Cabinet members, which we've decided to make every week now. It comes out on a Monday because we have to do an update on what's happened since our last show in advance of the next show.

5:39George Osborne: Yeah, that's right. You get our downtake on what's been happening in politics since we recorded our last show. And you can actually hear us speak about it as well as read it if you want to in the newsletter. And we also give you some cultural recommendations, which you are free to disregard.

5:55Ed Balls: And there's normally a photo of George meeting the latest celebrity he's managed to unveil an invitation to meet, whether that's the Pope, the Dalai Lama or Steve Hilton.

6:03George Osborne: We're coming on to Steve Hilton in this show, aren't we? We should get on with the show. The first thing we're going to talk about, of course, is the leadership of the country, the battle to be the prime minister. What has happened since we recorded our podcast a week ago? Wes Streeting, Andy Burnham, Keir Starmer, all of that.

6:19Ed Balls: And then we're going to look at economic policy. We're recording this on the day when Rachel Reeves is making a statement to the House of Commons in what looks suspiciously like a mini budget, although I'm sure she won't be calling it that. But there's a tax announcement and public spending announcements and wider economic policy announcements. But we're going to also look ahead to the leadership election and the leadership candidates on the Labour side and ask, if you have an Andy Burnham premiership or West Streeting or Angela Rayner, what are the dimensions which will stay the same and which might change when it comes to economic policy?

6:59Ed Balls: because having a public debate about economic policy in government between leadership candidates is quite difficult. And as Rishi Sunak and Liz Treffs found out, can end up being quite destabilising.

7:12George Osborne: Yeah, and the ballot papers are out. I'm not talking about the ballot papers for the Labour leadership contest or even the Maker Fiat by-election, but for the race to be the next governor of California. And there is an extraordinary story unfolding. We don't know the ending yet. But Steve Hilton, later this parish, David Cameron's advisor who I work with, is leading the race still to be the next governor of California. And the primary vote is coming in just a couple of weeks' time. Indeed, the postal ballots are already being sent in. So we're going to go over to California to check in on what could be the most remarkable British political story of the whole year, despite everything else we're talking about.

7:51George Osborne: Anyway, that is what we've got up for the show. But let's turn first to the events of the last week in Westminster in the Labour Party. And since we recorded our podcast a week ago, when we recorded our podcast, literally as we were doing it, Wes Streeting resigned from the cabinet. And we were speculating whether he had enough votes to mount a leadership challenge and for that to happen that day. But what's true is that after we recorded the podcast, Josh Simons resigned as the MP for Makerfield and created the vacancy that Andy Burnham is now putting himself forward for. Let's do a little medley of the various characters who have been popping up on the news over the last seven days.

8:34George Osborne: Well, the breaking news, Ben, is that West Streeting has resigned as health secretary. Having lost confidence in your leadership, I have concluded that it would be dishonourable and unprincipled to remain as health secretary. The Labour MP Joss Simons this morning resigned his maker field seat. It potentially paves the way for Andy Burnham to return to Westminster and ultimately make his way into number 10.

9:01Ed Balls: He does now have backing from Labour to run, though. The party's ruling body confirming they wouldn't block him ahead of the official selection on Thursday. We need a new special relationship with the EU because Britain's future lies with Europe and one day, one day, back in the European Union. These are the things we need to focus on rather than getting trapped in a debate about the EU. We've got to focus domestically, sort out Britain and that has got to be the first priority.

9:32George Osborne: I want to fight the next election. I've said, I don't know how many times, that I'm not going to walk away. I feel very strongly that I must serve the people who voted me into office.

9:43Ed Balls: That was a variety of presenters for BBC ITV Sky. We heard Wes Streeting last Saturday after he had resigned from the cabinet. Then Andy Burnham clarifying his position on rejoining the European Union. And then Keir Starmer saying that he wasn't standing down. In fact, he wanted to fight the next election. I mean, this is a really unprecedented situation, isn't it, where you have a leadership election underway. I mean, West Streeting, Andy Burnham are now active participants in a leadership election. Andy Burnham's platform for his leadership election is a by-election in which he is the Labour candidate.

10:21Ed Balls: He's explicitly saying to change Labour, to change Britain, that he's clearly standing as an alternative prime minister in that by-election. And Keir Starmer, while saying he's carrying on as Prime Minister, today we have Keir Starmer and Rachel Reeves essentially announcing a new economic package for the future. Simultaneously, Keir Starmer is saying that he and his cabinet will back Andy Burnham, who is challenging Keir Starmer for his job. I mean, it is a unprecedented, unstable, I mean, actually kind of slightly unseebly state of affairs. I mean, what does the country think? I mean, what are kind of foreign leaders around the world think of what's going on in Britain?

11:04Ed Balls: Who do you ring? Who do you call?

11:05George Osborne: Well, I think it's pretty chaotic, conversations I've had through my work with governments around the world. I think, you know, there's a great Winston Churchill quote, lots of great Winston Churchill quotes, but one of them is the problem with committing political suicide is that you live to regret it. And I was thinking of two people this week who that now applies to. So the first, you know, she didn't have any options in this, but if you're the Chancellor Exchequer, one of the jobs you have is to sign the letter that appoints a Member of Parliament to the Chiltern Hundreds or the Manor of Northstead.

11:42George Osborne: Now, this is all a sort of medieval kind of procedure, but it's essentially the way for an MP to resign. But the Chancellor has to sign the letter. I remember signing the letter for Gerry Adams and Martin McGuinness as they exited Parliament and many other characters. So Rachel Reeves would have had to sign Josh Simons' letter and appoint him to the Chiltern hundreds. And if anyone wants to send us an EMQ on how that all works, please do. But she knows she's not going to be the trans-exchequer in the coming months. It's always highly unlikely that anyone's going to retain her. Doesn't mean she's out of the cabinet, but almost certainly out of the treasury.

12:18George Osborne: So that was one act of sort of political suicide. But to be honest, she had no option. The other much more kind of debatable act of political suicide was Keir Starmer allowing the ruling NEC of the Labour Party, the National Executive Committee of the Labour Party, to give the green light to Andy Burnham to stand in the Makerfield by-election. Because people will know, if you've been listening to this podcast or following British politics at all, that just a couple of months ago, when we had the by-election in Gorton in Manchester, the NEC ruled quite decisively that Andy Burnham couldn't be a candidate, even though he wanted to be.

12:59George Osborne: But here they essentially raised the white flag. And it's interesting, I was talking to someone who is pretty familiar with all of this at the top of the Labour Party, and they were saying, actually, Starmer could have used his votes on the NEC, because he's got a number of placemen and women, and there are a couple of unions that he could have persuaded, I'm told, and he could have blocked Burnham and he would have had a straightforward answer as to why he's doing it, which is the same reason he gave a couple of months ago, which is we don't need a by-election in the Manchester morality, because that will be the consequence of Burnham going for Makerfield.

13:34George Osborne: And it's a diversion of resources. And it was an interesting argument put to me, which is Labour's got to show that it's serious about occupying power and we occupy the Manchester morality, and we should not abandon it. And so you could have made an argument. I mean, it would have been an enormous row for sure, and possibly led to some cabinet resignations. But surely it's better than the alternative, which is that, in effect, Sama has committed political suicide. I mean, I don't think anyone seriously thinks he's going to be the prime minister by the Labour conference.

14:09Ed Balls: There was, of course, a third act of political suicide, which is the Labour MP Josh Simons falling on his sword to trigger this by-election. And he's somebody who's only been an MP for less than two years. He's had a kind of a rocky time because of that Labour Together scandal, which he was implicated in. I assumed he was going to work his passage from the back benches. Very hard to see that he can do this and then tip up in number 10 as some kind of advisor. That would look very strange indeed. I thought he would, as I said, just spend a period of time on the back benches and come back because he's smart and he's good.

14:49Ed Balls: He probably gets a bit too involved in the politics, as we've seen, or the dark arts. You know, but he had time. So that was a surprising decision from my point of view. I think in terms of the biolet, of course, don't forget the National Executive Committee chaired by Shabana Mahmood, who was the cabinet minister who was most forthright in saying to Keir Starmer and to the newspapers eight, nine days ago that Keir Starmer needed to set a timetable. Back in February, by keeping Andy Burnham out, I think it strengthened him. It made him even more the prince over the water. It didn't work as a strategy to push away the Burnham challenge.

15:25Ed Balls: If anything, it gave it more charge. So I think it was very difficult for Keir Starmer to do anything other than to allow the NEC to allow Andy Burnham onto this ballot.

15:36George Osborne: Well, hold on. Can I just pick you up on that. So first of all, if he had let Burnham in, in Gorton, if Burnham had won Gorton, by the way, he might have lost Gorton and Starmer would have seen off his rival. If Burnham was an MP, there would now be a proper leadership contest. We're talking about a kind of virtual leadership contest underway. But if Burnham was an MP, he would have had the 81 votes and would have triggered the contest. And yes, you're absolutely right. It would have been extremely tricky for Starmer to have got the NEC to block him second time round. But what's the alternative?

16:08George Osborne: The alternative is he's sitting in number 10, waiting on the result of a by-election, which if the people of Makerfield return Andy Burnham, Keir Starmer's out.

16:16Ed Balls: Well, I understand that. I did make the argument to you back in February that you should let Andy Burnham fight the by-election. He might have won. I think that is very, very far from clear he would have won Gorton and Denton. And by the way, Makerfield is a harder seat for Labour to win than Gorton and Denton, based upon the numbers. But at that point, you could have brought him in, made him Secretary of State for DEFRA, and said, sort out our relationship with the farmers. I mean, what we saw eight, nine days ago, it was...

16:46George Osborne: Is that your idea of a poison chalice? No, no. In Tory circles, it's like the health secretary jobs, the poison chalice. Are you saying DEFRA job is the Labour poison chalice?

16:57Ed Balls: No, I'm just saying that given Andy Burnham's a talent, make him prove his mettle in a job where he has much harder decisions to make as Manchester Mayor. I think it would have been good for Andy, actually, but I think that would have made it more complicated for him. And we saw last week the Cabinet found it harder to push from the outside without doing the actual resignation. It would have been hard for Andy Burnham to come into the Cabinet and resign after six weeks. We're now in this really unusual situation. I mean, aside from, let's come back to Keir Starmer and what he should do in a moment.

17:30Ed Balls: Aside from the fact that Keir Starmer, the Prime Minister, is still the Prime Minister, but also threatening to be a candidate in a putative leadership election. But you also have now three candidates who are clearly in the running, who are clearly on the campaign trail. Andy Burnham, who is not even an MP, he's fighting a by-election, not in the cabinet. You have West Streeting no longer in the cabinet on the backbenches, and you have Angela Rayner out of the cabinet, clearly turned down the opportunity to come back into the cabinet as health secretary. Can you remember a time when you had the three leading candidates to be the new prime minister, all from outside the cabinet, therefore with the freedom to campaign and say what they like?

18:18Ed Balls: They aren't bound by a collective responsibility. And then the second thing is none of them have ever been one of the big officers of state. They've never been chancellor, home secretary or foreign secretary. Can you remember a leadership election in government where the candidates had not done the biggest job? So this is a very, very unusual situation and quite an unstable situation because there is no check. I mean, we saw last weekend West Streeting on Saturday says, I disagree with Keir Starmer. We should rejoin the European Union. He's now softened that to, you know, in due course or in the end, he's sticking with the manifesto because he knows that this is not without.

18:59Ed Balls: risks. Andy Burnham has also slightly tempered his position because he's got to fight this by-election against reform. But the fact is that they are not bound by collective responsibility in the way that Andy Burnham would have been from the cabinet, the way that Ed Miliband is from the cabinet at the moment. And that is why this leadership election is underway unchecked. If you're a cabinet member at the moment, it's quite hard to come out and say, I disagree with Keir Starmer on this fundamental issue. Let me tell you my alternative. It's quite hard, therefore, to be a candidate in this quasi-leadership election from the inside.

19:33Ed Balls: But all the candidates are on the outside now.

19:35George Osborne: Yeah, although Wes Streeting deliberately put himself there precisely for that reason, didn't he? Let me put the question the other way, because I think it's a very interesting observation. Yeah, okay, so these three candidates are on the outside now. I mean, you know, obviously, you're married to the Foreign Secretary, so I won't make it kind kind of personal to her, but why is the Chancellor, the Foreign Secretary, the Home Secretary, the former leader of the Labour Party, Ed Miliband, who you mentioned, Bridget Philipson, you know, who ran to be the Deputy Leader of the Labour Party, these big Labour beasts are sitting on their hands.

20:09George Osborne: And this is the contest. And, you know, these leadership contests, you don't know, maybe there's going to be another one in two years' time. But equally, sometimes these leadership contests happen, and you don't have another one for 15 years, and then like a whole generation. But I mean, that's what happened when Cameron won the leadership, when Tony Blair won the leadership. So, you know, I think it's surprising the kind of silence of the top of the cabinet. Sorry, David Lammy, also deputy prime minister. He's not. So there's a whole set of kind of big labor beasts who have decided that they either don't have the numbers or the appetite or the whatever.

20:43George Osborne: They don't want to be in the fight.

20:44Ed Balls: I think we shouldn't forget why the government is in this position because it just had very, very bad local election results. And that was Keir Starmer at the forefront, but also the whole of the cabinet in the dock. Andy Burnham's kind of great advantage, and we should play this in a second, is that he can run from the outside. And that's where Angela Rayner has found herself. It's where West Street he wants to place himself, although it's harder if you've been in the cabinet recently. I mean, Rachel Reeves, why isn't she a candidate? Well, because Keir Starmer is hugely unpopular and Rachel Reeves' polling is worse, for both Yvette and Shibana Mahmood, they have been putting through in the last two years reforms to borders and asylum, which are brave and difficult, but they're not hugely popular in the Labour Party at the moment.

21:36Ed Balls: So that is a challenge for them. And there's, I think, a broader point, which will be a dilemma for Ed Miliband, which is, if you're on the inside, does that mean you're sort of tainted by being part of the problem? But on the other hand, if you step out, is that seen as being the disloyal thing to do? That's the card that West Streeting chose to play. Then when you then go to Andy Burnham and his pitch, this is what is so striking. Keir Starmer is urging his MPs all to campaign for Andy Burnham as a candidate in a by-election in which Andy Burnham is saying that he is running against the Labour Party, against Keir Starmer, but not just the Labour Party of the last one or two years.

22:22Ed Balls: He's actually running against the last 40 years of failed privatisation, de-industrialisation, I mean, Labour and Conservative. He can run as the outsider in a way that none of them can. This is just a flavour of how Andy Burnham is pitching himself in his early campaign video in Makerfield, but also then his reform opponent, a local self-employed plumber who was the candidate in the general election, which was one of reform's most successful seats in the general election, even though they didn't win. And they then went on to storm that local election result. This is Andy Burnham and Robert Kenyon.

23:06George Osborne: It was growing up in and around these streets that I saw what Thatcher's government did to places like this, the de-industrialisation, the draining away of economic, social and political power. It left places like Makerfield behind and Britain has been on that path for the last 40 years and it was the sense of injustice I got about the way this country is run that took me towards politics. I was born in Makerfield. If I was elected I'd be the first person born in the constituency to become the MP. I don't think any MP that's ever stood in Makerfield was actually born in the area. I don't know, it gets me a bit emotional sometimes, thinking there's a chance that I could be representing people in Parliament because it's a massive honour and people will be thinking, I want a minute, he serviced my boiler last week.

23:49George Osborne: So let's start with Rob Kenyon, the plumber. Plumbers are really popular candidates now in fire elections because the Green candidate in Gortem was also a plumber. And she won, Hannah Spencer, and Rob Kenyon is putting himself forward as local Makerfield boy. And they've obviously chosen a pretty effective local candidate in that respect. If you watch the Andy Burnham video, I mean, it's very good. You know, the production values are high. It's very real. You know, he's kind of walking around the streets in casual clothing. And they include a lot of clips of people saying, Hi, Andy. How are you doing, Andy?

24:25George Osborne: And he's here, All right, mate. And he does have connections to Makerfield. I mean, he went to school not far away from there. His children went to school in the constituency. So I think to claim, as the plumbers claiming that, you know, he's the only Makerfield man is a bit of a stretch. I thought what's interesting, we'll come on to this framing of the last rejecting the last 40 years. Just want to pick up on something you were saying earlier. If you watch the video, it is absolutely explicit that he's running to be the prime minister. There's no pretense that this by-election is all about local politics in Makerfield, because he includes a vox pop from a member of the public who says, we need him to be our next prime minister.

25:05George Osborne: And you wouldn't include that if you were trying to claim, oh, no, I don't have ambitions for higher office. And Andy Burnham himself in the video says, some people say this by-election is unnecessary or a distraction. I say it's the most consequential by-election of my life. and uh so he's so it's very it's a really interesting video i mean i couldn't help but think what a contrast as well to kia starmer whose performances are so wooden and has found it so difficult to articulate a personality even though he's got an interesting story and he you know comes from his um you know lower middle class or working class background in surrey he's he's not been able really to articulate that and he can't communicate in the way the burnham video shows that andy does have you know a very good easy touch which i think he's learned as mayor because i don't think he particularly had it when he was a cabinet minister or a politician in westminster before he was kind of easy to talk to i remember you know and we we were quite friendly as mps um but he's you know he's really come on a long way as mayor what about this framing of the 40 years you know rejecting which is of course a rejection not just of Margaret Thatcher and David Cameron and John Major, but it's also a rejection of Tony Blair and Gordon Brown, isn't it?

26:22George Osborne: And Keir Starmer.

26:23Ed Balls: You are right. It's a very skilled video. And Andy is somebody who has reach now, political reach, communication, charismatic reach, which is why he is currently in pole position. But this is a hard challenge for him because he has to both challenge from the outside. And he's using the sort of the kind of language which we hear from Nigel Farage or Zach Polenski or Kemi Badenock about, you know, the failures in Westminster and which I'm going to disrupt. I'm the outsider. But at the same time, he also wants to be prime minister very soon. And he wants to be prime minister of an existing Labour government, which fought on a manifesto.

27:07Ed Balls: He's a Labour candidate for this by-election. He's got a whole parliamentary Labour Party and cabinet of people who have voted for policies and supported and implemented individual policies. And he's going to come in from the outside and potentially pick up on that if there was no challenge to him very quickly indeed. And if he's doing this from the outside, I mean, the Tories will say, well, if you're not supporting the manifesto and if you're already rejecting the last two years, shouldn't there be a general election because this isn't legitimate on the 40 years point that i do um i worry about this i know why he's running as the outsider put aside the fact that andy was um in the government and then a member of the cabinet for quite a large chunk of those 40 years in which he implemented rather a lot of policies and which were very important and put aside kind of my he was a special advisor wasn't he beforehand so he's a real westminster insider in that respect And put aside my recoil from the accusation that introducing the national minimum wage and tax credits and reducing child poverty and having the biggest increase in health spending for decades and putting in place through the regional development agencies and then mayors the infrastructure to turn around growth in our economy.

28:26Ed Balls: And the list goes on and on. The idea that is Thatcherism and de-industrialisation and 40 years of neoliberalism. I'm sorry, Andy, that is just complete garbage. But I know why you're saying it, because you need to be the outsider. But just remember this.

28:39George Osborne: You're Mr. Trickle-down, aren't you?

28:41Ed Balls: For God's sake. I mean, you know, it's so fascinating to live your life both as Mr. Trickle-down and, you know, the lefty scourge of kind of right-way economics. And, you know, and to embody both of those. And that is fine. And that is politics. but you've got to own your history. Boris Johnson in 2019, he didn't spend his whole time slagging off David Cameron, George Osborne, austerity, the ERM, John Major, Margaret Thatcher. He would have had things he disagreed with. But if you want your brand to be taken forward into the next phase, it's not clear that the right way to do that politically is to spend your campaign trashing that brand, especially if you want to become prime minister within government, within parliament.

29:30Ed Balls: And so I just think Andy has to be careful that he doesn't end up scorching the earth. He then needs to organise his troops to fight to defend.

29:42George Osborne: This is something we're going to have to return to, because if we could spend a whole hour talking about this, which is a critique I have of the Labour movement, which is it's incredibly nostalgic and it's very rooted in the past. In his campaign video, he actually has pictures of miners walking down the street. I mean, when was the last time anyone pulled coal out of a coal mine in Britain? I mean, decades ago.

30:04Ed Balls: And so - Says George Osborne, who's shed a tear at Margaret Thatcher's funeral. I mean, you know, it's important. The thing which binds political parties is shared history and shared values. Doesn't mean that they don't adapt for new challenges.

30:16George Osborne: I know, but I think there's a constant Labour a sort of drumbeat of the past, a nostalgia for steel mills and coal mines, which, you know, most of which, not all, there were one or two exceptions, but most of which closed 40, 50 years ago. You know, you have to be pretty old to remember that world. And, you know, you could do a campaign. I mean, I think if, let's imagine a young Tony Blair was doing this campaign video today. I think that it would have, yes, he would have had a couple of left-wing touch points because he wanted to win the leadership contest, which he did when he ran his own campaign back in the 90s.

30:51Ed Balls: And he wouldn't have mentioned in 1983 running on a manifesto to be a Labour MP for leaving the European Union and getting rid of nuclear weapons, because I think he's forgotten that. He'd forgotten that.

30:59George Osborne: But he would have, I think, talked. There was nothing in the video about the future, really. There was nothing about technology, why the world's changing. It's an interesting... quite uh and you know i was thinking who who are the last when did i last hear people in office saying oh the last you've been failed over the last 40 50 years rishi sunak tried it do you remember he did he did try he had a disaster criticizing strongly and said the jeremy corbyn

31:26Ed Balls: tactic doesn't work yes it was a fiasco for sunak own your history yeah he had to retreat about two

31:32George Osborne: three months later and you could argue you could argue that kirstama tried something similar as well, I'm the outsider, Westminster's failed, now he's like Mr Insider, Mr Westminster. And Andy Burnham fundamentally is a Westminster insider. I think a much stronger argument is, I know how to get things done. That's the argument.

31:53Ed Balls: Even last Monday, Keir Starmer did a bit of, you know, plague on all your Westminster houses. And look, people want outside disruption, but actually it's got to be authentic. And Andy knows that the challenge to Andy is always who is the authentic Andy Burnham and is he consistent? And he just needs to be careful he doesn't fall into some of these traps. Can we just end by with this question for this section that, you know, this is on a knife edge. It's not all clear Andy wins. People say, by the way, if he does win, there's then a colonization. That might be the case. Although let's wait and see where we are at the end of the by-election.

32:31Ed Balls: Even if Andy wins, if in these four weeks it's been divisive, then there could be another candidate who gets 81 nominations to force that contest. If he loses, there's talk from Keir Starmer's camp that this is a victory for Keir Starmer. I mean, I have to say, if Keir Starmer's Labour Party losers make a field, that is not a victory. And it won't simply be Andy Burnham's failure. it will be even Andy Burnham couldn't win this one. And if you can't win this one against reform, where are you going to be in so many other seats across the country?

33:09George Osborne: But will people blame Keir Starmer? I mean, I think then the challenge will come back to the current MPs, which is, OK, who's got the 81 votes? Wes Streeting didn't have the 81 votes. It seems pretty obvious over the last week.

33:22Ed Balls: And there will be a candidate on the centre-left who will have the 81 votes. That is why if I were Keir Starmer, I would have taken control of the situation last weekend. I would have learned from the Tony Blair experience of 2006-7. I would have said, look, I understand there's going to be change, but we must put the country first. We must do this in a stable way. There's things which I need to complete. I will announce that I will be standing down and there'll be an orderly leadership process, which I will make sure is done properly. I think, you know, a week and a half ago, he could have said September.

33:59Ed Balls: He could have said December. He could have even said January, February. In Tony Blair's case, it was nine months. But by saying no, I fight on, there's no challenge.

34:10George Osborne: I bet you enjoyed those nine months.

34:11Ed Balls: Well, it was. When you were drumming your finger, get out. No, no, but there's a very important point there, which is Gordon Brown had had a lot of time in the Treasury to prepare. I mean, arguably, he didn't prepare enough. Andy Burnham is not going to have a minute to prepare because he's got to fight a by-election first and he's been on the outside and actually having the personnel and the plan and the infrastructure to then go straight into Downing Street. It's in Andy Burnham's interests and in Keir Starmer's interests for there to be a substantial or a marked gap between the point when it's clear Andy Burnham will take over and it happening.

34:50Ed Balls: and if I was Keir Starmer I would have taken control because I think at the moment he's not in control of events or his narrative and it looks unseemly and I don't know who's advised him that this is the right course because clearly from all of the newspaper briefings there have been different people giving different advisors and he's looked in different directions. The plow on strategy, the opposite of Margaret Thatcher 1990, it's not going to work and it's not good to secure his place in history or the strength of a Labour government?

35:21George Osborne: I think, isn't it, it was once described to me, I think I'm going to credit this to Andrew Cooper, the former Tory strategist, who actually was a friend of Keir Starmer's at his school, which he said, you know, he was referring to the Tory strategy at the time, but you could apply it to Keir Starmer. It's a combination of John Travolta and Mr. McCorber, and that is staying alive and hoping for something to turn up. And that is what Keir Starmer's doing. And, you know, you never know in politics, the only thing I'd say about you, you're like, let's have an orderly transition and a few months for Andy Burnham to work out what he's doing.

35:53George Osborne: In politics, you want the prize and you don't want to risk events interceding and throwing you off course. So I think the moment Burnham's in, he's going to make a bid for the crown. And it's quite possible you have a coronation. It's quite possible he wins, no one else stands, Starmer resigns, and he's prime minister by the summer, right?

36:14Ed Balls: But my point is this, that is still, it's harder now than a week ago, it is still in Keir Starmer's power to preempt that. If Keir Starmer announces, I will serve until the 1st of January, and there'll be a leadership election in the autumn, I don't think anybody in the cabinet will support Andy Burnham coming in and saying, that's not good enough, I want the change now. I just don't think that will happen. So Keir Starmer has the power at the moment to manage. And there was a great piece in the Daily Mail on Monday. I say a great piece, I didn't agree with it, but it was by Stephen Glover. And it says, when you look at Ed Miliband and West Streeting and Andy Burnham, don't you ask the question, why are we getting rid of the stable, reliable and solid Keir Starmer?

37:02Ed Balls: And what would happen in this period, there will be both a proper appreciation of Keir Starmer's achievements in turning around the Labour Party and becoming the leader and winning a general election. And also, I think he will get more credit for some of the very good things he's done, particularly on foreign policy in the first two years. But to do that, he has to take control of the agenda and become the statesman. And at the moment, do you think at the moment Downing Street looks statesman-like?

37:27George Osborne: No. I mean, well, sorry, it looks utterly powerless, which is the worst thing for Downing Street to be.

37:32Ed Balls: Take back control. That was a famous slogan. If I was Keir Starmer, that is what I would be thinking at the moment. I need to control this agenda. At the moment, he looks like he's losing control of it very, very fast.

37:40George Osborne: And there'll be quite a few cabinet ministers who might support that. Like, let's wait till January just to see what turns up. The ones who haven't entered the competition yet. Of course, the big question is what would Burnham actually do, or indeed a West Streeting prime minister actually do in Downing Street? Would they do any better than Keir Starmer, who is wrestling with his chancellor with the cost of living crisis at the moment? And we're going to turn to some of the policy questions that are going to be thrown up in this campaign. We're not going to answer them all today. But we're going to just flag up the things to watch over the coming weeks, and we'll do that next.

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39:40Ed Balls: So welcome back. We're going to have a quick agenda conversation about where we think over the coming weeks, not just from Andy Burnham, but from West Streeting and others, where we think the differentiators are, where they're going to try to open up clear water between the current economic policy stance of Rachel Reeves and Keir Starmer in their campaigns. Of course, our starting point, though, is Rachel Reeves is making a statement today. As I said, it has a sort of slight feel of the mini budget because she's making tax and spending announcements. So she has decided, maybe under pressure from number 10, to announce she's not going to go ahead with the fuel duty rise in September, which is pre-programmed in the numbers.

40:24Ed Balls: So that's going to cost her some billions of pounds. She's going to finance free bus travel for young people in August. She's strengthening the powers for the Competition and Markets Authority to challenge retailers who are price gouging, who are putting up prices to try and make excess profits because of higher oil or gas or food prices. And then she's got another announcement, although by the looks of it, this is still work in progress. She wants to cut tariffs on foodstuffs coming into Britain, which she can now do because we're no longer in the customs union. Although it's clear they're going to have a discussion about which prices they're actually going to seek to cut.

41:08Ed Balls: Because, I mean, I have to say, come back to it in a second, this is fraught with dangers. It was floated earlier in the week. She was going to expect the supermarkets to cut the prices of basic essentials. The government seems to be running away from that, not least because the government of the Bank of England and the retailers all said, are you crazy? Even Paul Johnson, former head of the Institute for Fiscal Studies, came out to say, I've seen nothing like this ever. A government seeming to introduce price controls on basic food essentials in the most competitive sector of the British economy, retail.

41:42George Osborne: I mean, it would help, wouldn't it, answer that question, what's the price of milk, if you set the price of milk? I wouldn't have that problem as Chancellor if I got to choose the price of milk. It's a pretty thin list, isn't it? And it's full of contradictions. You know, we actually touched on some of these on previous podcasts. I mean, we both said the moment she produced her budget, well, that 5p fuel GTIs ain't happening. You know, that was sort of transparent. They'd have to turn on that. And even on the Russian sanctions, I think on the day that Keir Starmer announced that the Royal Navy was going to intercept Russian ships in the channel, which turned out they couldn't do anyway, the US was cutting itself or backing off sanctions on Russian oil.

42:25George Osborne: and ministers complained about that on the airwaves. And now, you know, a month or two later, they've gone and done exactly the same thing. And it's very, sort of feels very contradictory and confusing. I think at the core of it is the problem which any new leader of the Labour Party is going to have to address. And, you know, you have been on this for two or three years on this podcast, which is there is no coherent economic narrative of what a Labour government is for. And so they've ended up with like, we're tackling the cost of living crisis, which is, you know, inflation driven, a lot of it external, although some domestic.

42:57George Osborne: And governments are not powerless in the face of that, but certainly they don't have very many fiscal tools with it. And it's fundamentally a job for the Bank of England to address inflation. And so you end up with a really sort of bitty agenda. It's actually where some of the conservative governments, the tail end of those conservative years, ended up with kind of cost of living plans that just look very thin and have no kind of intellectual coherence. And this is the big challenge for Andy Burnham, Wes Streeting, and anyone else who wants to put up. There's just no coherent argument. I mean, that tariff announcement, as you said, that's pretty complicated, isn't it?

43:34George Osborne: This is cutting tariffs on food imports, right?

43:37Ed Balls: The cost of living squeeze in the coming months is going to be higher energy prices when the energy price cap is revised up in July, and higher fuel prices. And I think that's going to persist and that's going to swamp anything else. The government's clear and rightly that they're not going to have a List Trust style massive subsidy of all of our energy bills because that would cost billions. But they're clearly looking for other things they can say which might have an impact. There's this great phrase in the civil service called Chesterton's fence. And Chesterton, it comes from a GK Chesterton novel, which is never tear down a fence until you know why it was put up in the first place.

44:17Ed Balls: And they are at the moment going to tear down tariffs on foodstuffs. Now, there will be a sort of traditional treasury argument. Well, that's fine because it will reduce prices for consumers. And why do we have them in the first place anyway? But let's hope they've worked...

44:33George Osborne: It's good, a bit like Robert Peel and the repeal of the corn laws. We could all get behind that, can't we?

44:37Ed Balls: Let's hope they've worked out, one, the impact this will have on domestic producers and farmers who, in a competitive environment, have made all their plans based upon a particular tariff regime. Let's make sure that the individual bilateral trade deals they've negotiated aren't undercut by them suddenly reducing their negotiating power by cutting tariffs which they had previously negotiated before. And the other thing is, there's this whole system of preferential tariffs and trade for particular developing countries who export particular sensitive foodstuffs. And it may be reducing the tariffs into Britain help consumers, but it might be at the expense of whole parts of industry in certain developing countries where there's been a longstanding bilateral relationship between Britain and those countries in trade.

45:29Ed Balls: So I just think it's one of those things where the headline is a good headline on the first day, but I just hope they've really done the work and they know what is behind this little fence they've torn down.

45:41George Osborne: I think you have to go back to David Ricardo, don't you, and comparative advantage. And anyway, I think his argument is good to reduce tariffs anyway, regardless of whether you're good at making something.

45:51Ed Balls: That is true in a first best world. But in a world of imperfect competition and developing countries, you've got to know what you're doing.

46:01George Osborne: Now, what about a new economic theory, Manchesterism? Awesome. So the response to what I would say is this incoherence around the Labour Party's economic plan from Andy Burnham has been to say, look at what I've done in Manchester. He's explicit in that video we played a clip of before. I've not only rejected neoliberalism, I've taken the buses under public control, which Margaret Thatcher deregulated. But he does also say, I've worked hand in hand with business, and he had pictures of skyscrapers in Manchester in this bit of the video, to create the fastest growing economy in Britain. Is there anything to Manchesterism?

46:40George Osborne: If you were a kind of progressive centre-left politician looking for an economic agenda, could you look at what's gone on in Manchester? I would like to say, when I was Chancellor, I worked very closely with the Labour leaders in Manchester. So it wasn't and helped create the Manchester mayoral authority that Andy Burnham occupies. But people like Howard Bernstein, the chief executive of the council, Richard Leaves, the Labour leader of the council. You know, there was something and has been something specific about the way the local council and the local public authorities have intervened in the Manchester economy with business to create what looks like a pretty good success story.

47:17George Osborne: So Manchesterism, is it for real?

47:19Ed Balls: Of course it's for real. And you and I have been urging the government to go faster on this agenda for the last couple of years in a sort of consensual cross-party way to give mayors the resources and the powers they need to revive our city region economies. And I think there's some signs the Treasury is getting into that agenda now, but they've been quite slow to get there. I mean, I think the challenge for Andy Burnham is that West Streeting and Angela Rayner will both be as equally enthusiastic about more devolution and more powers for mayors. And all three candidates, if those are the three candidates, are going to face the same challenge, which is there's a fiscal constraint.

48:00Ed Balls: If you want to build the houses, invest in the infrastructure, improve the local transport, back the innovation, which are all needed to make that model really work, it's hard to do that in a fiscally constrained environment. and what we've seen in as we sort of predicted a week and two weeks ago both West Streeting understandably because he's in the cabinet and Andy Burnham because he understands now the financial market pressures which he's facing are all saying they will stick to Rachel Reeves's fiscal rules Andy is now saying that the thing he floated before about a defence carve out something I talked about a year ago is now off the agenda as well so there isn't an easy way to change the macro fiscal regime, I think there will be continuity in the fiscal rules and in central bank independence.

48:47Ed Balls: The macro framework won't change. So how do you find the resources to actually make that Manchester model sing with a bit more vim?

48:55George Osborne: No, it is interesting that both candidates have committed to Rachel Reeves' fiscal rules, despite Andy Burnham being critical of them in the past. Do you think that is because because they're genuinely worried about the bond market. And Andy Burnham's had some people in to tell him about it. There's a great headline, perhaps one of my all-time favorites, actually in today's Financial Times, which is Ed Milliband advising Andy Burnham on how to calm bond market fears. That noted expert in the bond market, Mr. Ed Milliband, might be an expert in lots of things. Don't think he is a massive expert in fixed income trading.

49:33Ed Balls: but um can i just say that um ed milliband with me spent 10 years in the treasury when um we had our triple a credit rating because the bond markets trusted our macro fiscal approach i don't think we lost a triple a rating until you were chancellor i think that's when it

49:49George Osborne: happened was there was that the time when you said no more boom and bust and then you had the

49:53Ed Balls: biggest financial crisis in history i think it may have been a global financial crisis but uh

49:58George Osborne: there we are there we are um do you think it's because they generally just ask you this question. Are they genuinely worried about the bond market? Or are they kind of manoeuvring in a Labour leadership contest that they don't want Rachel Reeves or Keir Starmer coming out and saying, well, these people are completely incredible. And I mean, I know they link those things, but is it more to internal politics or a sort of genuine penny drops moment?

50:25Ed Balls: It is the Liz Truss effect. It is, they've all seen what happens if you have in government a leadership election in which candidates make macro fiscal promises which then can't be delivered and you get destroyed by the bond market and that's i don't think this is the only place this is going to happen i mean one aspect of the manchester model you mentioned buses is this soft language about public control but it's not clear what control means of you know buses and And then utilities. Andy in the past has kind of speculated about energy, water coming back into public ownership. But, you know, in this by-election and then whatever comes after, he's got to have answers to those difficult questions.

51:11Ed Balls: Jeremy Corbyn and John McDonnell found out what it was like to have a manifesto where you make promises and then you couldn't explain where the money was going to come from. the difficult questions. I would be very surprised if Andy Burnham spends the next six weeks telling us he's going to renationalise our water, gas and electricity industries, because that is tens of billions of pounds in compensation to shareholders, which he would have to pay. And where is the money going to come from from that? So I think, as on the fiscal rules, you know, you've got to answer the difficult questions in a leadership election.

51:45Ed Balls: And I think there will be more scrutiny in this one than there was on List Trust and Rishi Sunak back then. And if you can't answer the questions, don't raise the policy.

51:54George Osborne: Yeah, and it's worth noting that bond yields in Britain hit a 30-year high just a few days ago.

52:00Ed Balls: That's true, which I think is more to do with people thinking the Bank of England is going to raise interest rates because of higher inflation. But there is definitely some labour fiscal risk in that as well.

52:09George Osborne: Right. Wes Streeting's come out saying we need a wealth tax. Well, what he's actually saying is we need higher bands of capital gains tax, and he wants capital gains tax to go up to 40 % or 45 % for top rate taxpayers. We were on the podcast last week talking about successful centre-left governments in the world, and we pointed to Mark Carney and Anthony Albanese in Australia. And both of them are trying to attract foreign investment. Mark Carney's cut capital gains tax. You know, If you were to approach this from a conservative or sort of center-right point of view, you would say, hold on, all this talk of nationalizations or public control of utilities, raising capital gains tax, all wealth taxes, I mean, this is all going to drive away even more the foreign investment that Britain desperately needs.

53:04George Osborne: And in a world where global investors have a lot of options at the moment, they're going to take one look at Britain and say, what a basket case. I mean, why are they taking a quite different route from what looks to me like the successful progressive centre-left governments at the moment in the world, which I think personally, Wes Streeting or Andy Burnham could very easily present themselves as?

53:25Ed Balls: Well, isn't the point that they are looking for differentiation, but actually they come up against lots of kind of macro market reality checks. And that's why on fiscal rules, on nationalization, with the reform electorate in Makerfield rejoining the European Union, these are all quite difficult things to get involved with. but saying I want a wealth tax I mean who was the first person who made a move in the last few years on taxing wealth more strongly it was actually Jeremy Hunt as Chancellor when he said he was going to abolish the non-dom regime then Rachel Reeves tried to do it in a bigger way and she had to retreat and the same thing happens on farmers and inheritance tax I think the judgment West Streeting and Andy Burnham will make is that in the Labour Party which is the selectorate that West Streeting will be entirely focused on and Andy Burnham is half focused on.

54:22Ed Balls: This is quite popular, but actually amongst the reform voters of Makerfield is also probably quite popular. But what you've got to do is say things which are not going to then lead to huge U-turns when you face the reality of governing, which has been so challenging for Rachel Reeves over the last couple of years. I think they will probably think it's safer than some of the other things which you could speculate about. But, you know, it has risks and dangers in terms of what it says about your government. And the danger is you get into 10 Downing Street and then find that actually implementing it is rather harder than it looked from the outside.

54:56George Osborne: So final question in this section, where does the money come from?

55:00Ed Balls: Isn't this the hardest thing for any potential replacement for Keir Starmer? Because there is going to be a challenge from Kimi Baden-Ock and Nigel Farage. This is not what people voted for. We want a general election. And you can counter that by saying that isn't our system. It's a party manifesto. The prime minister is the person chosen by the party to be their prime minister. And the conservatives changed from Theresa May to Boris Johnson, and then from Boris Johnson to Liz Truss, and then from Liz Truss to Rishi Sunak. And neither of those required a general election. But the problem is that it was clear in the Labour manifesto in 2024 that there was going to be no increase in taxes on working people on VAT or national insurance or on income tax.

55:53Ed Balls: And we have discussed this a lot over the last few years, and we are both worried that it was hard to see how you could meet the defence challenges of our time, the social care and ageing population challenges of our time, the need for investment in our economic infrastructure in this time, and keep a lid on the tax burden on working people. But that's the manifesto commitment. And if you don't break from that, then I think it's very hard to make these sums that out. But if you break from that because you think you have to, and you break the central 2024 manifesto pledge, doesn't that just supercharge the general election outcry?

56:35And so I think it's a huge dilemma for them.

56:40Ed Balls: And I think the reality is that they'll all end up saying they'll stick to the manifesto. And then it will make, as we've seen in the last two years, governing very difficult indeed. I think one thing which might come into play here is defence. We saw last weekend, Keir Starmer, at his moment of great weakness, when everybody's expecting him to announce a timetable for his departure, suddenly briefed the times, he has decided, with the Chancellor, I presume, a big increase in defence spending over and above the spending review settlement in this Parliament. I don't know if that was discussed in the Cabinet.

57:17Ed Balls: We have no idea where the money's going to come from for that. If there was a budget this week, rather than just a series of announcements from Rachel Reeves, you'd have to answer that question in terms of the fiscal rules. If I were Andy Burnham all West Streeting. I think I would say I'm not going to agree to any increase in defence spending over and above the spending review settlement until I've seen that the defence department know how to spend it, that they've cut out waste and inefficiency. I don't think being bounced into a tax rise for defence in that way is good governing. And by the way, that's actually quite good politics when it comes to the Labour leadership election as well, because I'm not sure the Labour selectorate will think spending more money on defence is the first priority, even though I personally think it's very important so um watch out for that one spears into plough shears that's

58:06George Osborne: what they say in politics um let's turn briefly after this to another race that's underway and that is for the california governor and there's a there's a british candidate in that as well although he's now an american citizen steve hilton

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59:39Ed Balls: So welcome back. We're going to return to California, this time not George with his rucksack on some trip to OpenAI, but instead to keep tabs on the race for the governorship of California, which we have been talking about regularly on this podcast because George spotted very early on that Steve Hilton, former Downing Street advisor to David Cameron, and I think himself, was not only a candidate, but a credible candidate. And we're actually now in a position where Steve Hilson is topping the polls, or at least there or thereabouts. The voting is underway. Polling day is the 2nd of June. Just to be clear, this is an Arnie Schwarzenegger reform.

1:00:22Ed Balls: The way they do it in California is they have a cross-party primary. So there are Democrats and Republicans all competing in this primary. And the top two candidates go into the final runoff. And it looks like Steve Hilton's got a good chance after the 2nd of June of being in that runoff. And on the Democrat side, it's been a big mess because the leading Democrat candidate, Eric Swalwell, had to pull out of the race in April after some allegations against him of sexual misconduct. And then another frontrunner, Katie Porter, kind of feisty Californian scourge of Republican malpractice, then got into big trouble herself because she was captured on tape, abusing her own staff and telling them to get out of her shot.

1:01:12Ed Balls: And it sort of rather tainted her campaign. So the frontrunner is now a guy called Xavier Bequerra, former Biden health secretary. I think he was actually Attorney General for California as well. He's the front runner for the Democrats, although he's quite a dull and stodgy candidate. And his own campaign has been plagued by some scandal. One of his top aides took money out of an account and Becker knew nothing about it, it seems. But in the leadership debate just at the end of last week, Steve Hilton was storming it. I have to say, I've watched this debate and rather putting Mr. Becerra on the defensive.

1:01:54Ed Balls: Let's take a listen. Honestly, it pains me to say it because I like you personally, Javier, but you shouldn't be on this page. You shouldn't be in this race. You should be preparing your criminal defense. Thank you, Mr. Hilton. Mr. Becerra, you'd like to respond? You have 30 seconds. Sure. With friends like that, who needs enemies, right? This is what happens when you take the lead in the polls and you're ahead of everyone else. They all come at you. So I get it. I'm getting in the polls. I think you'll find it. I get it. I get it. I get it. So they have to try to bring it down. This is a great Trump tactic that's used.

1:02:29Ed Balls: I didn't expect it to come from fellow Democrats.

1:02:32George Osborne: So I remember going to see Steve in his house in Atherton, which is in Silicon Valley, almost exactly a year ago. I've just been looking at my photos on my phone and there's me and him. uh we'll put this in the newsletter this photo that goes to our kitchen cabinet members it's me and him standing in his drive outside this uh pickup truck he's got which he's painted yellow and it's got steve hilton's name on it it's not a battle bus it's a battle pickup truck and i i think in you know steve and i have had a long history and we've had our ups and downs but i am full of admiration just for the sheer kind of guts of saying i am going to run for this And when he started, it was just him.

1:03:16George Osborne: He has no machine behind him. He has no big organization. You know, he didn't have any money behind him. He literally painted a pickup truck and started driving around California. And I know he has worked unbelievably hard. I saw him. I met him a few weeks ago when I was in California at his home. And, you know, he'd just come back from late night from some fundraiser and so on. And, you know, he has worked so hard for this. And there is a thing in politics, which is, do you really want it? And I think voters sense whether you really want it. And he really wants it. And look, it's still a huge uphill task to try and become the Republican governor of California in the current environment, where A, California hasn't voted for a Republican for a long time, Arnold Schwarzenegger being the last one.

1:04:00George Osborne: And B, of course, you know, Trump is not particularly popular and, you know, the backdrop of rising gas prices and so on. But he's got a shot and to even get himself into the final two is an amazing achievement if he pulls it off. And what's interesting is he does have a sort of solid program. It's quite policy rich, his program. It's not all about, I think when people think of Steve Hilton, they think, oh, he's all like windmills and cycling to work and, you know, the sort of fluffy stuff around Cameron. But there's actually a policy agenda here, and it's quite different from the one we've just been talking about in terms of it's actually about cutting taxes on working people and cutting food prices and gas prices by removing regulations and so on.

1:04:45George Osborne: And, you know, it's quite a right wing agenda, but he packages it all up as califordable. This is to make California affordable again after the caliphailia of the Democrat establishment. And a bit like Andy Burnham and 40 years of, you know, neoliberalism that he says he's running against. You know, Steve Hilton says, I'm running against 40 years of the Democrat establishment running this state into the ground. Anyway, you've got to hand it to him, even if you don't agree with him in particular. It is quite an achievement for someone who still sounds utterly British, as you heard, even though he's an American citizen, to have got this far in this race.

1:05:25Ed Balls: Look, that is, I think, a very, very important lesson and warning and pointer for us to take back into Britain from this race. but before I get to that the Democrats I speak to I was just talking to Bob Shrum the famous Kennedy speechwriter who worked very closely with us who said you know in the end he can't win because unless it's two Republicans at the top of the list in the end the state will vote for the Democrat against Steve Hilton and I think the problem is Chad Bianco who is the other Republicans too far behind and Steve Hilton just got the just last month the support of Donald Trump Donald Trump, Steve can turn it around before it's too late.

1:06:07Ed Balls: And as president, I'll help him do so. It might have been better for Steve if Donald Trump had backed Chad Bianco, because that might have got him up the list. Because in the end, it's going to be hard for Steve to beat a Democrat, even if the Democrat is not hugely inspiring, because it is such a Democrat state. On the other hand, you never know what happens in elections. Once you've got a leadership election or a governorship election or choosing the prime minister election, and there's two candidates, things can happen. The other guy can take a tumble. There can be a scandal. They can say the wrong things.

1:06:44Ed Balls: They can behave badly. So I would not write Steve Hilton out at all of this race because if he gets on the ballot and it looks like he's going to, he's got a chance. And the lesson, of course, is that here in Britain where there may well be a leadership election to replace Keir Starmer, it's kind of already underway, as we said earlier, in shadow form. You know, would you be confident today that you can foresee who will emerge at the end of this process? And will it be Andy Burnham, the front runner, or West Street or Angela Rayner? Or could something else happen along the road? In politics, you never know what's going to happen.

1:07:24Ed Balls: Steve Hilton could be the next governor of California.

1:07:26George Osborne: That would be, I think, one of the most extraordinary stories of British politics, not just American politics, if he pulls it off. Anyway, we are going to continue to monitor the race. It's great if you love American politics and you are interested in what Steve's up to. You should definitely follow what he posts on his socials because it is a news... He was good at this, actually, 20 years ago, and he's good at it now. He comes up with fresh approaches to campaigning, and he's now delivering it for himself.

1:07:58Ed Balls: And if you want to get the latest update from George, plus a photo, then our newsletter will deliver. That's it for this week's episode of Political Currency. We'll be back on Monday for X-Ministers Questions, where we answer all your big questions and political challenges.

1:08:13George Osborne: If you can't wait until Monday, you can get the episode early and ad-free by becoming a member of our kitchen cabinet or indeed one of our gold subscribers.

1:08:21Ed Balls: And it's not just ad-free episodes and a mug and a members-only chat.

1:08:27George Osborne: you also get George the newsletter yes did we mention you get a newsletter yet on the show I don't think we have but I think you should now yeah well in the newsletter you get a reflection on what's happened it's a fast-moving situation and although we do hot takes we don't do them every week so this is a way to catch up with what we're thinking as events unfold we also give you some cultural recommendations books to read films to go and see you don't have to pay attention to those but I've actually paid attention to quite a few events and followed up on them and that That newsletter is going to be out on Tuesday next week because Monday, of course, is the Whitson Bank holiday.

1:09:04Ed Balls: That is right. If you want to send in your questions for EMQs, you can message our social media or email us at questions at politicalcurrency.co.uk. Do make sure to include a voice note. And just to reiterate, if you become a member of our kitchen cabinet, get a weekly newsletter.

1:09:20George Osborne: And a mug. We're going to see you on Monday for EMQs.

1:09:23Ed Balls: See you then.

1:09:31George Osborne: Thanks for listening to Political Currency. This has been a Persephoneca production.

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1:10:51Ed Balls: Hello, podcast listener.

1:10:53George Osborne: Hello, you.

1:10:54Ed Balls: It's me, Greg James.

1:10:55George Osborne: And me, Alice Levine.

1:10:57Ed Balls: Now look, I know that you're very much enjoying this podcast that you're listening to, and we're sorry to interrupt. We really are.

1:11:04George Osborne: And it genuinely might not be our place to say, but is it time to try something new?

1:11:09Ed Balls: We would like to steal you for our new podcast. It's called Bad Chat.

1:11:13George Osborne: And it sounds a bit like this. This one goes out to the walkers and the talkers and the late night. Stalkers. Stalkers. Maybe not that one. Alice is my best friend. I am not Alice's best friend. Do you know that horses' legs are their fingers?

1:11:27Ed Balls: That is a bit of Bad Chat. From me, Greg James.

1:11:30George Osborne: And me, famously, Alice Levine.

1:11:32Ed Balls: Listen wherever you get your podcasts.