Can Starmer hold on as PM?

0:14This is Political Coquancy with Ed Balls and George Osborne.

0:27so welcome back it is half term week i know this because driving back from good morning britain this morning the traffic was lighter but it looks like i mean sitting here george that sofa the pictures the decor it looks like you're in some kind of bland hotel room somewhere in the world you're just being rude you know i'm at home which i don't often do the podcast from that is your home oh it's beautifully furnished i do apologize i don't i don't know i don't know how i could possibly have thought that i found uh you know an uncluttered corner to do the podcast from but anyway it's very nice to be at home i'm at home because it's half term this week so i was taking my son arthur to a class this morning and yesterday i was in diggerland in the thames estuary Have you been to that?

1:15It's absolutely brilliant. It's not like any theme park you've ever been to. You basically just get to kind of drive JCBs and dig out bits of earth and drive bulldozers. It's absolutely fantastic. I have driven past Diggerland in Castleford many times, never gone in. Our kids were a bit too old by the time it opened. Although I can imagine you liking it because for you, you can put on a hard hat and high vis and remember nostalgically being Chancellor of the Exchequer. Yes. Well, actually, the bit of nostalgia I did have afterwards, we were going to have lunch at the McDonald's in Medway Towns, the Medway McDonald's.

1:51I was thinking, God, I did spend quite a lot of my life campaigning in the Thames Estuary. Do you remember, I mean, for us, when we were sort of facing off against each other, those Thames Estuary seats on the north and south side of the Thames in Essex and Kent were absolutely kind of critical battlegrounds. I was talking to a Kent MP as it happens yesterday and I was saying, oh, I've just been actually in Rochester. I was saying, and it used to be this battleground. He said, well, there's not a battleground with Labour anymore. It's going to be a big battleground with reform in the next election.

2:22So anyway, I did have nostalgia for the kind of campaigning in that area. Although back in 1997, that landslide, it was in the North Kent coast that Labour was winning those seats for the first time. And, you know, as you said, Rochester, Chatham, Dartford, all across there, there were seats which Labour was winning after a long time. And as you say, by the time we got to 2010, Labour was then wiped out in those seats. I, as well as working, have also been in rehearsals. Centrist Dad are playing our Christmas concert in December. And you'll be pleased to know, because I know you like to come and want to know what to pogo to.

2:57And as well as, you know, our normal Ramones, Abba, Bowie, The Cure, we're now doing Stone Roses, Resurrection, Chapel Rowan, Pink Pony Club. And we're doing a Taylor Swift song, although I can never remember whether it's Shake It Up, Shake It Off or Shake It On or Shake It Out. Anyway, we are shaking some kind of Taylor Swift. Well, you're the drummer, so you don't need to know. I don't need to know the words. And to be honest, the thing about my drumming is I play the same thing on every song anyway, so it makes no difference. I was listening this morning at my son's class thing that I went to, to Avril Lavigne's Skater Boy.

3:31And this is how much I care about your band. I was listening to it thinking this would be a real banger for Centrist Dad. Well, you know, we're always pleased to get your suggestions. I don't know whether... I'm the kind of Brian Epstein of the band, you know. I'm nurturing you, helping you reach the big time. The use of the word Brian there was important. I'm not sure about Avril Lavigne. But then to be honest, Charlie XCX and Carly Rae Jepsen were not their natural kind of songs of choice anyway. And now they love them. So there we are. Should we talk about what we know about rather than what we don't know about?

4:07We should. We're going to start by looking back on the last week. We recorded our podcast last Thursday when the by-election was underway in Caerphilly. And also the deputy leadership election for Labour was closing. I think we were anticipating those being tough results, both of them, for Keir Starmer. And if anything, the weekend got tougher. So we're going to talk about Keir Starmer's last seven days and what he needs to do to turn things around. And then we're going to look ahead to the budget. We've already done that a couple of times on the podcast, but it is turning out to be the absolute critical moment of the autumn for the government.

4:43And we're going to look at this very specific question that Rachel Reeves has to address. This is not about her housing and how she leased her house out, which is on the front page of the newspapers at the moment. But instead, this big question of whether Labour should break its manifesto promise and raise one of the big taxes in the budget, income tax, national insurance or VAT. And finally, President Trump's been on his whirlwind tour of Asia in the last few days. And just before we have started recording this podcast, he's finished in South Korea. He's bilateral with Chinese President Xi. And we're going to talk about what the Trump Asian trip, and in particular, the American-Chinese relationship, tells us about how this president is doing and what it might tell us about what's to come in the United States and in the global economy in the coming months.

5:37There we are. But we're going to start with Labour's tough week. Here is just a little medley reminder of those events. We said on our podcast a couple of weeks ago that we thought Carefilly was going to be the sign of things to come, that we'd be looking ahead to next spring's May elections. And we talked to Rob Osborne from ITV about whether or not Wales was getting enough attention. where it got plenty of attention last Thursday, Friday, Saturday in British politics. It certainly signifies change, change to a massive degree. The Labour Party now is dead. We have to offer hope, to offer the big change the country's crying out for.

6:18We must give a stronger sense of our purpose, whose side we're on, and of our Labour values and beliefs. So I do think we need to react to this result in the way that we did Hartlepool, which is firstly to acknowledge the scale of the result and the message that voters have sent. The worst thing you can do after a result like this is pretend the voters were sending a different message and you've got to take it on the chin. But I can assure you that he will be deported as he was expected to be deported. I expect that to happen this week. So that was the Plaid Cymru candidate in Kefili who beat Labour by a wide margin in that Senate by-election.

6:53Then we had Lucy Powell, who's the new deputy leader of the Labour Party in her acceptance speech. Then we had Wes Streeting, putting in his thoughts about what this all means for Labour and drawing a direct comparison to Keir Starmer's lowest moment as opposition leader which was the Hartlepool by-election which Boris Johnson won or Boris Johnson's candidate won and then we had David Lammy as the new Justice Secretary explaining why an asylum seeker from Ethiopia who had been convicted of sexual offences was released by mistake, although it should be said he has been re-arrested and deported.

7:32All made for a pretty horrific week for Labour. Where do we start, Edward? Do you want to start with the Kefili by-election? I suppose, working backwards in a way, the Kabartu case is a terrible case, Chambolic, and governments face these moments, these problems, and they deal with them. Kabartu is the name of the Ethiopian asylum seeker who was convicted, yeah. And we had the news yesterday. He was deported and forcibly deported, but with a cash payment of£500, which is, of course, quite a lot of news. Because if not, he was going to make another legal claim, delay everything. Oh, hold on. But you're doing yourself down here.

8:07The reason we know this is that the Jeremy Paxman of our era, Ed Balls, actually extracted this from the government doing a day job on Good Morning Britain yesterday, right? Yeah, it just, I mean, it actually also goes back to Paul Brown from ITV a few weeks ago, who had done a report on people leaving and receiving payments of two or three thousand pounds. It's a common thing if people are being removed and going voluntarily. In this case, he was being deported, but there was a danger he was going to delay things through some kind of legal challenge again. And it would have meant all the flights had to be cancelled.

8:41And that would have been very, very embarrassing. David Lammy had said he'd be deported this week. So Alex Norris, who I think is a very good silent borders minister, wasn't on top of the facts, didn't have a good answer to the question. You never want things to be dragged out of you in that way. But, you know, what I was going to say on that one is, you know, these things happen and they come and go. All governments face those kind of moments. Also, the deputy leadership election, I don't think it is a terrible trauma for Keir Starmer, but it is important. And it's important partly because he chose to make this a bigger deal after Angela Rayner was forced to resign.

9:14He didn't have to have a member of his cabinet standing. He didn't have to encourage slash cajole slash push Bridget Phillipson into standing in this election. But Downing Street chose to do so. They made it a bigger deal and was, as I'm afraid, inevitable. His candidate lost. I think actually Bridget Phillipson did very well. It was a closer result than people might have expected on a low turnout. I think she's strengthened by it personally. But Lucy Powell, with a critique of the leadership who had just been ejected from the cabinet in the recent reshuffle by Keir Starmer, then comes back saying that the government isn't Labour enough, is not listening enough, that's making the wrong calls, and that she's going to challenge the prime minister from outside the cabinet on behalf of the members.

10:00I mean, that is not a good outcome, but it's worse because they made it a bigger deal. Carefully, it's a midterm by-election. However, it was a devastating result from Labour. From 46 % last time round into the low teens, they'll take some comfort from the fact that Plaid Cymru ended up comfortably beating reform. There was clearly a lot of tactical voting from Labour voters, maybe some Liberal Democrats or Tory voters even, going to Plaid to stop reform. But even so, as an indicator of what may be going to happen more generally in Wales and Scotland and across the north in the spring, it's significant.

10:35But I also think Wes Streeting, who has been, you know, I think flexing his muscles a bit in recent weeks, he's not been towing the inner cabinet line. He was being sceptical about ID cards. He's been vocal on issues where he didn't have to be vocal. For him to invoke Hartlepool, which, of course, back in 2021 was the by-election where Labour lost and, it is said, Keir Starmer considered resigning, that was a pointed remark. And I think it kind of goes to the heart of the Starmer challenge now, which is, you know, he needs the economy to strengthen. He needs the NHS to get better. He needs the government to start looking as though it's going in the right direction.

11:15He can say, you know, these things happen to governments in midterm. But what he doesn't want is for a sense in the parliamentary party and into the cabinet that this isn't going to turn round, because that starts to become dangerous for him. I think that you could make a perfectly straightforward case that Keir Starmer can be quite relaxed about the events of the last week. Okay, so they lost the by-election, governments lose by-elections, and okay, reform did well, but Plaid did better, which suggests there's a sort of anti-reform vote out there on a very high turnout. And there would have been definitely a sigh of relief in Labour HQ that reform hasn't won that by-election, even if Plaid did.

11:57On the deputy leadership contest, Lucy Powell might not be Downing Street's candidate, and she might have been fired from the cabinet rather in opportunity a few days before the vacancy arose. But she is a moderate. She is not a troublemaker. She'll, yes, make the case for Labour being more left-wing and she would put it truer to its values. and she actually said in her acceptance speech, we're not going to be reformed by out-reforming them, which, by the way, is good advice for the Tory party as well on this issue. It's not like, you know, Starmer has as deputy leader someone who is a mortal threat to his leadership and a rival leader of the Labour Party right now.

12:39You know, the accidental release of the asylum seeker and sex offender, you know, is the sort of thing that can happen to any government, let's be honest. The risk is that you could take some comfort from all of those if you're sitting in Downing Street. that things aren't as bad really as they could be. But I think that you would be sort of missing the bigger picture, which is that the government's approval ratings are terrible. The prime minister's personal approval ratings have hit a kind of new low. I mean, they should be called disapproval ratings at this point. And I guess still another week has gone by, and we're still early on in this government.

13:15This is, you know, the second year of a government is when you're absolutely motoring and you're pushing through the big reforms and you're establishing the big narrative about what this administration is about. And yet, you know, another week's gone by, another month has passed, where you absolutely have no idea what is the central objective of this government. What is this government for? What's Keir Starmer trying to achieve? You know, the headlines are bouncing around from one thing to another, mostly negative for the government. And there is not any kind of overarching narrative, let alone kind of policy delivery, which is telling us why people voted Labour and why they should be re-electing Labour in a few years' time.

13:56I think that's right. And this goes to what conclusion does he draw, in particular from the Lucy Powell election as deputy leader and what he listens to from her, but also more generally these events. And I think he will feel frustrated. Why isn't it turning round? It was only a few weeks ago that I had a big reshuffle. I changed Downing Street, that I announced a big new policy, ID cards, the centrepiece of my administration. I did a big conference speech. And what effectively looked like a one year in relaunch, it's not working, things aren't turning round. And the danger is he thinks to himself, well, maybe I need another relaunch.

14:37Maybe I need more change. Maybe I need to try a different approach. and I would say that the thing Keir Starmer has got to do is to go back to the prospectus upon which he was elected, which is that he's in for the long term. He's going to deliver Labour values. He's going to end the chaos. There's going to be some stability in what he offers. It's not going to be exciting, but things will get better. And in particular, on some key things people see, the economy getting better, the NHS waiting times coming down, knife crime falling. We saw that in than the statistics are being announced today, police numbers up.

15:12What he can't afford is to have more instability, whether that's in cabinet changes or Downing Street changes. I'm not sure why he suddenly announced out of the blue to announce ID cards, which were then not mentioned throughout the Labour Party conference. It is clear, not just from West Streeting, but more widely in the cabinet, there is a great deal of unease about Labour hitching itself to what is turning out to be a very unpopular policy, according to the opinion polls. Why is the NHS involved in some massive reorganisation because of the abolition of NHS England? Why are cabinet ministers picking fights with the civil servants from the cabinet secretary down, just get back to delivering on things which matter?

15:57And when Lucy Powell says, you know, the winter allowance, violence welfare reform these weren't labor things to do and not actually on child poverty well that's what you ought to be doing he's got to listen to that and think to himself are there things i can do to show people that i'm delivering what we said we would do with a bit more stability the last thing he wants more chaos more relaunch more personnel change because that is not turning things around for keir starmer yeah but you say no more relaunches of course when you're in this situation, every attempt to sort of try and draw a line under chaos or internal party stories or, you know, the sex offender being released from prison case looks like a relaunch, doesn't it?

16:39Because the press are on to it's a relaunch. You probably can't rush the fences. We're going to come on and talk about the budget, but that's probably the moment. Another autumn relaunch, and you try and restate what the government's for. The one thing I was going to pick you up on was, You know, you said, you know, he was elected to end the chaos, agreed, after all those Tory prime ministers. You said he was elected to sort of deliver Labour values. I'm not sure that is the right interpretation of his win. And I think a lot of the problems Labour has got itself into in the last year and a bit has been a kind of misunderstanding of the election result.

17:14Fundamentally, on a very low turnout, one of the lowest turnouts, I think maybe the lowest turnout the British government's ever been elected, despite the size of the majority. You know, he was elected as the not Tory candidate. Let's end the chaos. But he was also elected because he was a, you know, a centrist, pro-business, safe pair of hands. And that's what won over quite a lot of people. There's some parallels, I thought, with, I was thinking about this, with sort of Joe Biden, you know, who got elected because he wasn't Trump and he looked like a safe pair of hands and he wasn't a kind of crazy left-wing Democrat.

17:45But then kind of embarked on quite a left-wing agenda, much more, I would say, organised and clearly articulated than this government's agenda of Bidenomics and subsidies and tax and spending and so on. But, you know, people said, well, hold on, that's not what we voted for. And there is a risk, isn't it, that if Keir Starmer's response to being defeated by Plaid in Wales, to Lucy Powell's election saying we need to be more Labour, and to kind of West Streeting saying, you know, we've got to regroup and kind of relaunch and whatever. If you end up with quite a sort of left-wing agenda, we'll come on to maybe sort of part of the discussion about the budget for a moment, but if you come up with quite a sort of left-wing agenda, that might make him more secure within the Labour movement, Keir Starmer, but it's not what he got elected to deliver and it's not clear to me that it would help his big problem, his political problem, which is he's not very popular in the country.

18:41Look, Keir Starmer was not elected to take the winter allowance away from poorer pensioners. He wasn't elected to take away personal independence payments from people on low incomes with disabilities. He wasn't elected to rip up the whole of NHS England in the country. He wasn't elected to pick fights with the civil service. And that has been dominating a lot of the agenda. Those things, those are the mistakes which Lucy Powell calls out. I agree with you on the winter fuel payment. That was absolutely clear. I don't know. So, I mean, maybe he was elected to sort out bureaucracy in the NHS, to deal with growing, you know, incapacity benefit roles, which the Tories weren't dealing with, modernise the government and the civil service.

19:24I mean, you could present some of those things. I know they have not been well executed at all, to put it mildly. You can imagine a sort of progressive centre-left-ish government getting on with those things. Look, the reason why this conversation is difficult for you is because I say centrist, stable, end the chaos, deliver for the people. That is returning to Labour values. They were the things which shaped Tony Blair and Gordon Brown in 1997 and 2001. If I say Labour values, you want to equate that with what you then called a left-wing agenda, attacking business, attacking the rich. I'm not saying that at all.

19:59When I say go back to a Labour agenda, what I mean is you want poverty to go down, not up. You want pensions to think you're on their side and you're doing things which are fair. You want your core economic message to be, we're going to make people better off. And your core NHS message to be, we're going to get waiting times down. And what you're doing on spending or tax or welfare reform or on civil service reform are all about delivering those things which are in the Labour Manifesto and which he was elected to do. And I think that what's happened is there's been flailing around here or there.

20:31Look, I mean, if you go back to... What about on borders and security? Because I would say that's somewhat different from the time when we were active in politics. It's become such a kind of dominant issue. What's the kind of labourish approach to that? The Tony Blair government of 1997 to 2001 and 2001 to 2005 was all focused on getting down the numbers of asylum seekers, which had got out of control with the previous government. But securing your borders, like raising taxes fairly, those are fundamental purposes of government in the same way as defending your country from threats from abroad.

21:06So absolutely securing your borders is what any government would do. I don't think of securing your borders as being a Tory value or a Labour value. I think of it as being what governments do. But when, for example, you see Katie Lam and Kemi Badenock say, we're going to take away the right to be here from people with indefinite leave to remain if they've received any benefit or they earn less than£38 ,000. And Katie Lam says that will make our country more culturally coherent. I would say that is not a labour value. That is divisive and dangerous. And Keir Starmer has to contrast what he's doing on tackling asylum and securing our borders from what reform and it seems the Conservatives are doing.

21:50There is a difference between the Labour and the Conservative approach in how you do it. But securing your borders, stopping the small boats, making the streets safe, those are kind of fundamental core values, centrist values. Labour values, I think you would say they were Conservative values. I would say those things transcend politics. what you can't do is lurch around and you can't have Lucy Powell. See, I don't think of Lucy Powell as being a great lefty. She's not a Corbynite. She's not far left. You wouldn't even call her left wing. But when she says that people seeing the immediate cuts to people with disabilities or take away the winter allowance was seen as unfair and that's not Labour, I think that was seen across the country.

22:31And that's part of the reason why the polling has gone wrong. What do you think of the point that governments need? a, it's a kind of terrible phrase in kind of Hollywood, isn't it? That elevator pitch. You've got to be able to sort of sell your movie in a single line. What about the kind of elevator pitch for this government? Because I think you could say, I was trying to think back, you know, Margaret Thatcher, economic revolution at the beginning of the 80s. That's what she promised. And although it was tough and there were, you know, moments when it looked like it wouldn't succeed, that's what she delivered.

23:02I think the early period of the Blair government was modernisation was the word and it felt like a modernisation of public services, a modernisation of social policy on things like women's rights and gay rights and so on. Although the 2001 election was one on schools and hospitals first and that was like the core, make public services we all need better. Yes, it was like we run a strong economy and we use some of the proceeds to invest in public services which the Tories had not been doing. There's an overall kind of, you could sort of sum it up in a sentence. And I don't know what people would say of the Cameron government, but I think there was a combination of like the new politics of the coalition and also getting the deficit down was clearly like the central kind of policy.

23:44And if you think of the early Brown budgets, it would be prudence for a purpose. But the prudence, tough decisions were for a better NHS and reducing child poverty. What is, you know, if you were to look at the Starmer government and try and sum up what's Starmerism about, if that's a word, what's he trying to achieve in office in a phrase, and what's the elevator pitch for this government? If you look at the Keir Starmer Twitter feed, quite revealing, I'd be very surprised if he's writing these posts on X. Unlike the President of the United States. Unlike the President of the United States, who it seems does.

24:18You'll see in recent weeks, it's all about the word renewal. Renewal means this, renewal means that. Yeah, but the fact I don't even know about it is I'm a bit of a political obsessive and I do a podcast. I'm not. Well, that was the theme of the conference. It's a techie political word, renewal. And so I think you're right. And we're about to move on to it. The biggest moment of this parliament possibly, but certainly this calendar year and the next 12 months is a budget, which is four weeks away. and they have to, Keir Starmer and Rachel Reeves, answer your question in that budget. And it has to be, I would say it's about a growth plan for the long term, turning public services around and making them better so you can rely upon them for the long term, making our country fairer, also more confident in our ability to make our way in the world.

25:10But it's got to be a plan which sticks, which lasts, which doesn't unravel with the markets or in Parliament or with the public in 48 hours. But I think that is absolutely the test now for the budget. They don't need another relaunch, even a renewal relaunch. But the budget is now the moment where you've got to set out that plan in a way which is compelling. And it's about the phrase, but also the time perspective and about the policy. And if people are wincing from it, if they don't understand what its point is, If people think, well, that's not what a Labour prime minister should do or not what they were elected to do, or they don't understand the purpose, then they're in real trouble.

25:51This budget is now the biggest moment. And just before we get to the budget, what about Keir Starmer personally? I mean, going into the Labour conference, there was actually quite a lot of speculation that there might be a move against him. But it feels like, although his situation has definitely not improved and arguably got worse, certainly the opinion polls has got worse, have we passed a moment where the Labour Party will get rid of him at some point? and he's not going to fight the next election. There were clearly Tory leaders who, it was clear, were not going to fight the next election, like Theresa May after the 2017 election.

26:22It was kind of known that she wouldn't make it to the election after that. Have we reached that point and there's a kind of resignation or we're still a long way from that point? Look, it's so early in the government, this premiership, this prime ministership, for people to reach that conclusion. surely. I mean it took until 1990 for the cabinet to conclude that about Margaret Thatcher. Even after Gordon Brown had been the prime minister for two years and Labour had been in government for 12 years there still wasn't a clear cabinet view that a change would make a difference. And on the economy and on the NHS surely you think Keir Starmer deserves more time to turn this round.

27:04But as you said earlier, the poll ratings are dreadful and dire. And the next year's spring elections are now a very big test. Carefully sort of paves the way for the nature of that test. So I definitely don't think that Keir Starmer is shrugging his shoulders and thinking I'm secure for this parliament. And, you know, politics has become more short-termist and more unstable in recent years and the Conservatives were changing leaders all the time. So I think Keir Starmer will be thinking, and I think his Cabinet colleagues will be thinking, that all of us together have got to turn this around, but we haven't got that long to show that we can.

27:44What they'll all be worrying about, of course, as you saw with the Tories in the last Parliament, is if you descend when you're unpopular into massive internal fights and division. I mean, that is your guaranteed way of handing over political leadership in the country at the next election to somebody else. And so I think people will be very kind of cautious, but I don't think anybody would be saying, including Keir Starmer, this is all just fluff and chat. No. And of course, the thing in politics is when the public take a settled view, it's extremely hard to shift that view. And you only really know they've taken a settled view after they have.

28:17Let's turn then to the budget and we'll discuss that after this.

28:31Welcome back. As is often the case in politics, you're trying to make your big long-term decisions, you're focusing on your budget, and then some short-term issues, some scandal, crisis, something about your personal finances comes and dominates the papers. And that is so time-consuming in government, and it also drains your political capital. Rachel Reeves, over the last couple of days, has been dealing with all these headlines that she did not get a license from Southwark Council, which she was required to have. before she rented out her family home in South London. And Keir Starmer has said, you know, we've looked into this, the ethics advisor has checked on it, and she's apologised, and there's nothing to see here.

29:10The Tories are saying her position is untenable, which feels like moving immediately to DEFCON 1 on the Chancellor when you don't necessarily have to. But nevertheless, not to be underestimated, there's yet another blow to Labour's reputation for being ethically whiter than white or better than what came before. look she'll be so frustrated because um as you know you move into downing street you have to rent out your house unless you can afford not to but at the time when you're kind of dealing with the intensity of a new and massive job you rely upon other people who give you advice there's this unusual thing in that particular part of london where some parts of the borough you have to have a special license which you pay for to show people who are renting your house that you sort of pass a number of different tests.

29:57And the difficult thing is that it's a criminal offence not to have one of these licences if you're required to. And the doubly annoying thing for Rachel Reeves, it turns out, because Mel Stride raised this with us this morning, the Shadow Chancellor, that Rachel Reeves herself had campaigned for parts of her own constituency to introduce that kind of licensing for landlords. And so she probably ought to have checked when she was renting out her house in London and she didn't. But there was no financial gain for her. This is not like a tax or financial matter. The moment she finds out, she apologises, says she got it wrong, and immediately seeks to get that licence.

30:34And so I would think that this will pass. And as you say, the ethics advisor, who a few weeks ago said that Angela Rayner didn't meet the highest standards of probity as a cabinet minister in her housing tax matters, has said that Rachel Reeves has, or at least he said there was nothing to investigate further. that is what Keir Starmer tells us. He was told by the ethics advisor after he was consulted. Annoying and messy and embarrassing, but I'm not sure there's more to it than that. No, I mean, I'd be very surprised if this leads in any way to Rachel Rees' resignation. But I mean, I guess there's a broader point.

31:13Well, two points. One is I think Labour governments set themselves up as being kind of more ethical or moral than Tory governments. And that is part of the kind of history of the Labour movement. And then when you have these sort of stories, this one, Angela Rayner on tax avoidance or evasion, and then you have, you know, Keir Starmer kind of accepting suits and glasses from Labour donors, you know, to the public, it's like you're all as bad as each other, which always comes as a kind of bad news to, I think, Labour politicians, whereas Tory politicians say, well, we don't set ourselves up as higher than Labour.

31:45but we're just more realistic about the world. And then I think, secondly, you know, I think this defence, which you were doing a bit of, to be honest, and Angela Rayner was doing in her case, which is they're very complicated rules. She was very busy. Yeah, but these are the rules everyone else has to live by. And everyone else is very busy in their lives and getting on with things. And they may not be a point of chance exchequer, but they may have other things that are important to them. And I mean, I thought the most effective thing the Tories have been saying is not she should resign, but like it's one rule for them and one rule for everyone else and that i know that's a absolute tried and tested line in politics but the reason it's tried and tested and repeated is it's very effective against incumbent governments i think if rachel reese was here she would say to you fair cop let's turn to the budget then what do we think now that we've got to you know with still several weeks to go what is the big strategic choice which i think at this point They'll either have taken or they'll be taking.

32:42And when I say they, you and I have done this. You know, this is a very small number of people. The chancellor, her leading political advisors, and the most senior treasury officials, plus the prime minister, his chief of staff, and a couple of the kind of top political team in Downing Street alongside the chief of staff, and maybe the cabinet secretary, although maybe he's not in the room these days. They'll be having this conversation in the prime minister's office, and they'll be spending quite a few hours of each week, the two of them in conversation, maybe more, and maybe having dinners together and so on to try and really work out.

33:20We talked about the political decision. The budget needs to relaunch the government or the mission of the government. What's the sort of treasury strategic choice here? In the last few weeks, we've talked about two things, which I think are still very relevant to this conversation in the next few weeks. One is the role of the Office of Budget Responsibility and the fact that he's now so involved, measure by measure, in costing what the government is going to do, but also other things which are happening around it, things which may not be a measure in the budget, but which are becoming more expensive.

33:53as the OBR changes its mind on whether that's the trend rate of growth or productivity or the benefits of a planning reform or the benefits of a trade policy move or the rising cost of special educational needs provision in local authorities. These things kind of keep moving the goalposts for the Chancellor and for the Treasury, which will be very frustrating, but that's partly a bed that they've made and encouraged the OBR down. They like it when they say positive things, it's tougher when they say negative things. So that is going on. We should explain, shouldn't we, just so people who aren't so versed in the book, if the OBR says, oh, the Indian trade deal is actually going to add a little bit to GDP, or the planning reform is going to add a little bit to, you know, that is basically then a gift to Rachel Reeves.

34:38And it means there's a, you know, she can avoid one of the tax rises that potentially she's got to do, or one of the spending cuts she's got to do. So they are there, So the Treasury officials will be arguing hard with the OBR for each of these individual things. And it's all within a framework that she's got fiscal rules to meet and which she's not meeting at the moment. So that's why these things have assumed importance, haven't they? Exactly, because if the special educational needs spending is said by the OBR to cost more than thought before, that is a direct addition to her fiscal challenge to public spending and therefore the budget deficit.

35:13if she persuades the OBR that the Indian trade deal is going to boost GDP growth by 0.2 percentage points of GDP, that then has a direct result in terms of more tax revenues which come in from profits of companies or taxes paid by workers. Whether you want the OBR to be involved in the micro detail of all of these different measures and they're up to the budget, I'm very sceptical that this is a good idea. I don't think it's what you intended. I think our advice was they should back off a bit. Absolutely. This kind of micromanagement of kind of individual components of GDP. And then the second thing which we talked about last week was what is the fundamental political budget narrative and how much of it is about the past and why things have gone wrong and how much of it is about the future and what the budget is aiming to deliver.

36:02And we talked about that last week. I would say, though, if we're talking now today about the strategic choices, Strategic choice one, Rachel Reeves is not going to change and cannot afford not to meet her fiscal rules. She can't have debt rising. She can't have the budget deficit bigger than her rules allow. And I think she's also deciding she wants to have a greater margin of error to meet those rules than she had at the last budget. It was too tight to therefore she is too open to the whims of little changes in the forecast or in the economy. And the second thing, which is a given, is that the Office of Budget Responsibility forecast is going to mean she will have to either cut spending or raise taxes by upwards of£20 billion every year in this parliament and into the next parliament.

36:52lower growth, higher spending on debt interest is going to mean she needs to find£20 billion plus. And some people think it might be£30 billion if the forecast is weaker, or even more than that, if she wants to increase that margin. So she's not going to ditch her fiscal rules, and she has got to find a lot more money. So two strategic choices. Strategic choice one, does she seek to do that only by raising taxes, or is she also going to cut public spending? And then secondly, if she's going after taxation, which I think most people would say is the bulk of what she's going to have to do, is she going to do that sticking to her manifesto promise not to raise income tax, VAT or national insurance rates?

37:36Is she going to stick to her promise not to raise taxes for working people? Or is she going to have to renege on that manifesto commitment in order to deliver her budget outcomes? Independent of which individual taxes she chooses, that is a big strategic choice. So should we talk about those two in turn? Yeah, although before we do, I don't think they're making enough of the decision they've made, you correctly say they've made, which is they're going to stick to their fiscal rules. I still don't feel that that big, big decision is at the center of everything the government is saying. They've made a big decision to be, you know, within their own terms, fiscally conservative, small c conservative, you know, to stick to the fiscal rules, to avoid a big increase in borrowing and deficit.

38:23And they're not making use of excuses out there in the world that they could have used. And you were suggesting earlier this year they might have used. And maybe they're doing that because they're terrified of the bomb market at the moment. But nevertheless, it's a big choice around fiscal discipline, being safe with the public finances and so on. And if I think back to kind of early Gordon Brown, a lot of the language was about iron discipline. You mentioned it earlier in the podcast, prudence, but for a purpose, and so on. And of course, I was all for sound money, fixing the roof when the sun was shining, and so on.

38:58I had my various slogans. They were big features of those two governments, and it's still not a big feature of this government, even though it's the biggest decision they've taken in the last year, that they are not going to come off the fiscal rules that they committed themselves to in opposition. I don't disagree with that. I think that partly goes back to what we discussed last week, which is narrative, which is I think they've got stuck into what from the past are they going to blame? and they're not focusing enough on what the long-term plan will deliver and within that the importance of fiscal stability.

39:32I think Rachel Reeves would be annoyed at us for saying this and she'd say, I'll say this all the time, but it's not at the moment hugely part of Keir Starmer's script either. But I think the reason for that is because they're slightly afraid of where it takes them. They've got a£20 to£30 billion hole. They don't want to change the fiscal rules. And if you look at the moment, whether it's the Resolution Foundation or the Institute for Fiscal Studies or Rachel Reeves and Keir Starmer saying no return to austerity, I think that they know at the moment it's very hard for them to do this by public spending cuts compared to the public spending plans that they've already got.

40:08Rishi Sunak in his new column in the Sunday Times business pages last weekend. This is Rishi Sunak, by the way, who as Chancellor and Prime Minister presided over the biggest rise in the tax burden in Britain in any parliament since the end of the Second World War. Lectured Rachel Reeves that it was absolutely vital to sort out the deficit by cutting spending rather than raising taxes, even though, as I said, he was the great tax raiser. But the problem is that she set out her three-year spending plan in the summer. It's actually tight for local government or policing or for defence to get to the defence commitment they've made.

40:46The NHS is not improving fast enough. Welfare reform, we discussed a couple of weeks ago, you can see how they will have a strategic approach to promoting work for young people. but they cannot return to the mistakes of the spring and say there's short-term big savings to come from the welfare bill. I don't think that they can afford to do that. So the problem is, it's going to be about tax. Well, hold on, before you say that, Ed, but the territories has just been in Saudi Arabia at what's called the Davos in the Desert. The FII, that's the Future Investment Initiative in Riyadh. By the way, it's the first time a chancellor of the Exchequer has been to the Gulf in six years.

41:23That's pretty extraordinary, isn't it, given the importance of the goal in the world at the moment and in the global economy. Anyway, so all credit to her for going to that important meeting. But in that conference, she said, we are looking, of course, at tax and spending to ensure we both have resilience against future shocks and sufficient headroom and the fiscal rules are adhered to. So she's now taken yet another opportunity to put the spending word in alongside tax. So I totally take what you're saying. And I think if you were the chief whip of the load body at the moment, you'd be saying, you know, we can't anyway pass through our parliamentary party obvious spending cuts, by which I mean, not just sort of holding back budgets and freezing kind of departmental spending, but the kind of welfare cuts that they attempted earlier this year.

42:08but she is still keeping the door open on spending which suggests to me that there will be some of the effort at least used to close this say 30 billion pound gap done by spending restraint don't you think i think that there will be at the margin something done no chancellor who's keeping their options open ought to be saying i'm never going to reduce spending or i'm only going to raise taxes of course you shouldn't do that i shared a piece in the guardian which started off by saying the always keep running our economy down and then went on to explain why the economy being weak was why she was facing a fiscal challenge so there's always a bit of tension in your in your messaging but i don't see how she can find savings which start to come anywhere near the scale of the fiscal tightening she needs to do right now without big and radical changes she could decide to change the triple lock for pensioners she could decide to start talking about introducing kind of charges for certain public services, she's not going to do that.

43:05And if anything, I think the Labour expectation is she will act on child poverty and spend money rather than reduce it. That's clearly what Bridget Phillips and Lucy Powell both agreed on in the deputy leadership election. So there will be something said, but I don't think public spending is consistent with the Stama strategy, which means it comes back to tax. And that is when you get into the big manifesto dilemma, because they can seek to raise tens of billions of pounds a year, not by increasing taxes on working people. But as we know, getting the numbers up on taxing savings or pensions or the wealthy into double figures, let alone 20 or 30 billion, is very hard and risks sending very complicated signals about Britain as a place to live and invest.

43:51If you are a footloose international financier type person, and you've been making that warning for months and months, which is why I think we are now into this debate about the manifesto. Should we just hear Keir Starmer from Prime Minister's Questions this week? Because this is Keir Starmer who, against our advice, with Rachel Reeves, boxed the government in hard with these manifesto commitments in the election last year. This is Keir Starmer who in the summer was saying very clearly, we will stick to the manifesto. He spent the whole of the Labour Party conference doing interviews where he said, we stand by our manifesto commitments on taxation.

44:28And then in Prime Minister's questions yesterday, it felt as though the message had changed substantially. In its manifesto, Labour promised not to increase income tax, not to increase national insurance and not to increase VAT. Does the Prime Minister still stand by his promises? I can update the House, Mr Speaker. Retail sales are higher than expected. Inflation is lower than expected. Growth has been upgraded this year. And Mr Speaker, the UK stock market is at an all-time high. The budget is on the 26th of November and we will lay out our plans. But I can tell the House now that we will build a stronger economy, we will cut NHS waiting list and deliver a better future for our country.

45:18What a fascinating answer. It is not the same answer that I received when I asked exactly the same question word for word on the 9th of July. And of course, when Keir Starmer was asked that exact same question by Kemi Badrach back in July, he just said yes. You know, we stick by our manifesto promise not to raise taxes on working people. Yeah. And we should say, by the way, Kemi Badrach has got her own challenges inside the Conservative Party, is doing much better at PMQs and landing more punches on Keir Starmer. But let's kind of confront the big question here. Do you really want to break your big manifesto promise on tax?

45:54It's not unprecedented, interestingly enough. If you take the last two Tory governments, they actually did break manifesto promises on tax. If you take the 2017 manifesto that Theresa May was elected on, there was a promise of no increase in national insurance. And then Philip Hammond did increase national insurance on the self-employed in his first budget and then had to U-turn, partly because of the manifesto promise and the Tory MP saying, hold on, we stood on a manifesto. And then if you look at the 2019 Tory manifesto, which although we then had three prime ministers, was the one that they'd all been elected on, that also promised no increase in national insurance, income tax or VAT.

46:34And Rishi Sunak, as Chancellor of the Exchequer, under Boris Johnson's premiership, did increase national insurance in a very straightforward way, increased the rate on both employers and employees, although it was subsequently reversed by Liz Truss and never reinstated. So the last two Tory manifestos on tax in terms of Tory governments were broken, but it was not happy for either. Both those were very, very difficult episodes for that government. And I think also John Major back in 92 has said he wasn't going to increase the tax burden and the tax burden did go up in that parliament and he was repeatedly quizzed about that.

47:12So what do you say? I mean, yes, I absolutely agree with you that a bunch of taxes on enterprise and entrepreneurs is going to be extremely damaging for a country that's already struggling a bit with its reputation out there in the global economy. But really, an increase in income tax, an increase in national insurance, I mean, wouldn't that be curtains for Keir Starmer? Well, it would be the first rise in the base rate of income tax since the mid-1970s, if the Daily Telegraph front page is to be believed, which is a two percentage point rise in income tax. We said before the election, in the manifesto discussions, don't do this, don't box yourself in, because chancellors always need room for manoeuvre.

47:53And they decided not to do that. And you and I were both very worried about them doing that a year and a half, two years ago. There's no doubt that doubling down on that in last year's budget, those comments to the CBI saying that is our tax rises for the parliament have made it much, much harder. It boxed them in further. But if they're not going to break the fiscal rules and they're not going to do, as you say, very kind of draconian things to particular groups and sectors in the economy, a broad-based tax, it's very hard to see how you make the numbers add up without a broad-based tax rise.

48:29It's so late to be doing this. That is what worries me. But come on, I'm going to put you on the spot. Would you do it? Would you not? You see, I have an answer, which is I would squeeze spending and then do some small tax rises, small compared to a big increase in income tax or VAT. That would be my solution right now, even as a Labour Chancellor. I don't think I would break my manifesto promise on income tax rates, national insurance tax rates, let alone VAT. Otherwise, because the Chancellor did increase VAT because I hadn't boxed myself in on it. Well, I think if I was Rachel Reeves, I might be saying to Keir Starmer, for us to now break our manifesto commitments this far into the parliament after everything we've done is so politically difficult.

49:12I don't think we can do it. And I would say, if it was me, I would say, yeah, but I would never would have started from here because I would never have made those manifesto commitments. And I would never have boxed myself in in last autumn. And I would have had a much kind of bigger look at the growth deficit and the spending review gaps and our defence challenges. and I would have used, as we've discussed many times in this podcast, the things which have happened in the world, the Trump tariffs, what's been happening between Russia and Ukraine and the pressure on us to spend more on defence. By the way, Rishi Sunak gave Rachel Reeves those excuses in his first column.

49:45I mean, if I was the Labour spads, I would be, hold on, the former prime minister said that we've got these global headwinds. So, you know, there you go. There's a gift for the budget speech. And even if you'd made that manifesto commitment, the time to have used those arguments was last autumn into the spring, and they chose not to do that. So that is why it's so hard to do it now. I think the answer to the question is, I never thought this Labour government could deliver what needed to be done on defence, health, social care, crime, and the economy and capital spending, and stick to those manifesto commitments.

50:20And I've said that from before the election. But the only way you can do it is to have a forward-looking argument where you level with people, this is what we've got to do for growth. This is what we've got to do for our defence. This is what we've got to do for our public services. Everybody's got to make a contribution. It's hard. And here's our timetable, our 10-year plan. Judge us at election day as to whether we are on track and be very open and forward-looking about it. I think if you try and have a backward-looking argument where you say it's the Tories' fault on austerity or Farage and the Tories' fault on Brexit or it's Trump's fault and therefore I'm forced to do these things because of them.

50:59And it's like a backward looking excuses. People will say, yeah, but none of that washes because you knew all of that before. So I do think it's really hard. If I was Rachel Reeves today, I think I might be resisting it because I'd be worried this was politically very, very difficult and damaging. But I do think it is the right argument. And I wish that they'd made that argument earlier. And you feel from Keir Starmer and Prime Minister's questions, and some of the briefings are now coming from the Treasury, that that is what they're going to do. That is what they're softening things up for. It could be some subtle strategy to throw everybody's off course, to kind of get everybody worried it's going to be an income tax rise, and then in fact come along in a month's time and say, aha, we didn't need that after all.

51:43It could be, which is quite clever, clever. That could be what they're doing. But I would say this, if they haven't got a compelling, open, honest, long-term argument for what the money's going to be spent on, which people can say, well, that makes sense to me, and I'm going to sign up to that, then it definitely will unravel and won't stick and won't hold. In the end, the narrative challenge, the political challenge, what Keir Starmer needs to do to not lurch from relaunches, but stick to the long-term plan, and this manifesto choice, they all come together this far into the government. It is now a massively difficult communication task.

52:18But I don't think for Keir Starmer or Rachel Reeves, it's possible for them to do what you say, to do it through spending cuts. And I don't think it's possible for them not to do it. So I think that's why they may be gearing up for it to be the budget of the century. Well, well, well. One thing's for sure. I doubt that Keir Starmer or Rachel Reeves, when they've delivered their budget, are going to say, out of 10, how was that? 12. And that is what Donald Trump said about his trade negotiations with President Xi overnight. And we're going to briefly look at that next.

52:59Welcome back. Now, I've got a general knowledge question for you, Ed. do you know what holmium is or samarium or gadolinium or yttrium or europium they are rare earth materials which are vital in weapon systems semiconductors smartphones and also in the production of cars oh it's so annoying you know the answer about that i um to be honest i'd not heard of those words before but i immediately saw where you were going and decided to take a punt and i'd be surprised if donald trump knew huge amount about these rare earth metals and these rare earth materials before but um china has been playing a brilliant game using them in the last few months and um looks like it's worked yeah so these are the rare earths these are you know you look at your periodic table for those who did your chemistry gcse and uh these rare earths are used as you were just saying in lots of uh modern technology there's 10 kilos of them in a in a regular electric car.

54:03More to the point, there's 400 kilograms of them in an F-35 fighter jet. And the problem the United States has run into is that China has basically sewn up the global supply of these on the quiet over the last 20 years when no one else in the West was paying much attention. And this turned out to be a decisive weapon in China's hands in terms of its negotiation with the United States because we won't go through the whole history, but Donald Trump has announced these big tariffs on China. You know, he said he was going to sort of take China to the brink in a trade war. And then China said it was going to license, which is clue for suspend, the export of these rare earths.

54:44And that has hit the American economy right in the solar plexus. Anyway, all of that is the prelude to the overnight meeting between Donald Trump and President Xi, the first, indeed, of this second Trump presidency in Busan in South Korea. And I think the overnight reports, I always think sometimes of these things, you just step back and you say, it's a good thing that the American president and the Chinese president are meeting and talking and discussing. And it's a good thing that they both agree, China in more kind of conservative and moderated language than President Trump, that things are being resolved and they're trying to reduce tension in terms of the trade war and so on.

55:27And indeed, President Xi went out of his way to say, look, you know, of course these kinds of issues are going to come up when you've got two of the world's largest economies debating each other. That's normal, but, you know, we're working to reduce tension. And Donald Trump had his hyperbolic praise for the results of their summit. This is how he described his success. But overall, I guess on the scale of from zero to 10, with 10 being the best, I would say the meeting was at 12. We agreed I'll be going to China in April. He'll be coming here sometime after that. So I think an interesting question for us to discuss, and it relates a bit to how Keir Starmer and other Western governments have handled Donald Trump, is that China played hardball.

56:15I mean, China, you know, retaliated. And most other countries in the world, including the Southeast Asian countries that Donald Trump has visited as part of this big Pacific tour, did not. They instead played the, you know, well, you know, Donald Trump, you're so brilliant. You've got a point and we'll go along with it approach. That is right. China has turned out to be the exception in that they've had a credible escalation threat. and it seems to have worked. The days before, Trump went over to the ASEAN meeting, which is the Southeast Asian countries, a group of countries which he's shown less interested in, but President Obama was a great champion of the ASEAN bloc.

57:01But these are countries who were heavily clobbered by Trump tariffs in the spring of this year. Countries like Malaysia or Vietnam accused of being locations for cheap exports to America, huge increases in tariffs. But the red carpet was laid out and lots of promises of access for American companies or investment into the US from those countries. And Trump, in a sort of power broker kind of way, was giving out some benefits here and some benefits there in terms of reduced tariffs. But what they didn't do was do the big retaliation. Although there was a slightly snarky moment from the Malaysian Prime Minister Anwar Ibrahim, who, of course, was himself put in jail for nine years in an earlier part of his political life.

57:54Very much a kind of a political jailing, referring to Donald Trump's own convictions on 34 counts last year in the United States. This is what the Prime Minister of Malaysia said. World needs leaders who promote peace strongly. And to achieve that, you have to break some rules, as you did today. When the President arrived, he asked me to join him in the car. I said, that's against the security and protocol rules. And he was delighted to break the rules, and I... It was a nice ride. It was a nice ride. We share a lot of things in common. I was in prison, but he almost got there. but we're very good exchanges on a number of issues so uh so he's basically saying to zonald you almost went to prison yeah i did you almost did that is slightly different from the keir starmer strategy but the starmer strategy of staying close not retaliating not um kind of picking fights and hoping to negotiate better outcomes other countries doing a similar thing china's exception hold on south korea are you you pass over them too quickly they gave him a a gold crown and they awarded him the grand order of mugenwawa i've pronounced that right which is the country's highest decoration and the president president lee especially wore a gold tie for his meeting with donald trump because he said his uh he said gold's uh the president's favorite color and i think when he arrived in malaysia he was accompanied on his air force one by a phalanx of air fighter Malaysian jets in order to make sure he was, you know, that he regally arrived in the country for the ASEAN meeting.

59:38China is the exception. What China has done in the last year is Trump's put up tariffs. They put up tariffs. They retaliated by hugely restricting imports of soybeans, which is a huge market for American Midwest soybean producers. Yeah, the governor of Illinois, the politicians in Illinois are up in arms with Trump's trade war because their big soybean market in China has been cut off and they've been pleading with him to reopen it. As you said, they use these restrictions on the export of rare earth materials to put the squeeze on, but also rouse about big increases in port fees. And I think Trump has responded to escalation in the case of China by doing a deal.

1:00:23And we don't know the detail of this deal. It will emerge in the coming days. But, you know, for Trump and for China, this was very dangerous. The Chinese dealing with, you know, rising youth unemployment, consumers not spending, bad debts in the banking and wider corporate sector, worrying about declining growth. But Trump hugely exposed to lower growth and higher prices from the result of his tariffs. And but China chose to put the squeeze on to escalate. And I think it will show that for a country as big and powerful as China, the squeeze has worked. But I mean, they had leverage where most countries didn't.

1:01:05I mean, Britain had very limited leverage. The European Union actually has, well, the European Union, I guess, as a big trading bloc, could look to China as an example of what it might have done as an alternative approach. Those small Southeast Asian economies are so dependent on the US market. I'm not sure they had much leverage. I mean, China had the leverage because of the rare earth materials, because of some of the imports from the United States. I mean, the US also had leverage over China. I mean, they had these high-end microchips. I've got another quiz question for you. Do you know what Blackwell is?

1:01:40Don't say a bookshop in Oxford. No, that's Blackwell's. And wasn't he a guy who became the chair of Lloyd's, having been an advisor to past conservative prime ministers with the first name Norman? Norman Blackwell. Blackwell's the name of the latest NVIDIA chip that the Chinese are keen to get their hands on. So I think the export of high-end chips, though possibly not the Blackwell chip, are included in this deal. I mean, look, you know, take a step back again, and you would say, this is all good for the world economy, isn't it? The risk of a big, and good for Rachel Reeves with her budget, good for the Labour government as an incumbent government in the West at the moment, which is, you know, trade tensions which were, you know, rocketing at the beginning of this year.

1:02:28As we come towards the end of the year, things are calming down. The big meeting has happened between Trump and Xi. They've decided not to pursue a trade war. We don't know all the details yet. But, you know, the overall message is things are more under control than they were a few months ago. And that the overall impact of all of these tariffs has not been as damaging on the world economy as people predicted and expected. Look, this is crazy Osborne Trump relativism. It's like saying that compared to what it looks like, J.D. Vance is actually a better guy than it seems. The reality is compared to a year ago, there has been a massive increase in tariffs across the world, which will hit America and the global economy.

1:03:09Trade will be restricted as a result. You are totally right that it's not turned out so far to be as bad as feared. And it's now slightly better than it looked in May. But still, objectively speaking, it's been a big step backwards. Of course, just to say, because we're almost out of time, the big thing actually in tariffs isn't the Xi meeting or what's happening in Asia. It's the fact that next week, the Supreme Court starts oral hearings on whether any of these tariffs in America are legal. And this is so fascinating because the lower courts have actually found against the tariffs that the president doesn't have the power to do this.

1:03:45Because he doesn't have congressional, he hasn't passed these things through Congress. He's just announcing them on his ex-feed and whatever. But he says that what he's doing is invoking a particular piece of legislation, which is called the International Emergency Economic Powers Act. And to do that, he has to say the US trade deficit is a national emergency rather than the product of American overconsumption, that the powers in that act include tariffs. And by the way, the first article of the American Constitution says only Congress can raise taxes and tariffs. He's saying, no, no, I can do that myself using these emergency powers.

1:04:28It overrides the Supreme Court convention that when it comes to big economic decisions, Congress has to be appointed. if the Supreme Court decides to say the president without congressional approval can raise taxes any time he decides there is a national emergency in contravention of Article 1 of the American Constitution and past convention, that would show you this is one hell of a bendable and compliant Supreme Court. And the other thing out there in Asia this week, Donald Trump said, you know, I'm not standing for a third term. The thing which stands between him and trying to stand for a third term is the Supreme Court.

1:05:09And I would say if the Supreme Court give him these tariff powers, who knows what follows. Fair enough. And of course, we haven't had time to discuss the brand new ballroom he's put onto the side of the White House, knocking down the East Wing, all done without any planning permission or even telling anyone he was going to do it. Yeah, quite extraordinary. And you can't help thinking that the whole foundation of the United States was the Boston Tea Party and a row about excise and tariffs. and that they... No taxation without representation. Anyway, we will end there because we could go on, couldn't we?

1:05:41As we often do on this podcast, talking about the extraordinary features of the Trump presidency. And we will have plenty more opportunity to do that in the future. But thanks so much for listening this week. That is all for Political Currency. And back on Monday for ex-Minister's questions, or you can get it early and ad-free if you are a member of our kitchen cabinet or one of our gold subscribers. You can find the link to subscribe in our show notes. And we're also on YouTube. Search Political Currency. You can watch all our best episodes and interviews, including our Inside the Rooms, which I think stand the test of time.

1:06:15And anyway, I hope you've enjoyed this week's episode. And we will see you next week. See you then.

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