Could the Epstein files cost Trump his MAGA base?

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2:47George Osborne: This is Political Currency

2:49Ed Balls: with Ed Balls and George Osborne.

2:59Ed Balls: so we are back in the studio in hoxton a week on from your first day at lords the the test i think you missed the first session because you were dedicating yourself to um political currency amazing test it was so hot should have been there on the last day right when england won but um

3:20George Osborne: Yeah, I had a lovely day after I'd recorded the podcast. Not saying I didn't have a good time talking to you, but I ended up sitting with Rishi Sunak and John Major. And someone came up and said, oh, look, two former prime ministers. And I went, well, what about three former chancellors? And John Major was asking me about the podcast and about you. And then, of course, he remembered that while he'd been prime minister, Michael Hesseltine had given the conference speech. which had outed you, basically. And we both decided that had been the making of you, that essentially the major government was responsible for the Ed Balls career.

3:59Ed Balls: Thank you, John. Thank you, Michael. I mean, look, it was definitely the speech highlight of Michael Heseltine's career. It's not Browns, it's Balls. We splashed the Telegraph. I was slightly appalled by it at the time, but I'm sure you're right. So was Gordon, presumably. I'm totally appalled, but all publicity is good publicity. It was an amazing test match. Brilliant to see that John Major moved from the Oval up to Lourdes to see this Test match. I know he's a big kind of Oval attendee. That last day, if you wondered why Test cricket is still so popular, the tension of that fifth day was quite astonishing.

4:35George Osborne: I did enjoy having Chelsea's win in the Club World Cup as a Chelsea supporter. I mean, much as the cricket is a kind of genteel way to spend the day. May I say that, you know.

4:46Ed Balls: I'm watching Donald Trump, but you know. Grab the trophy. You are possibly the only person in Britain who was actually watching the Club World Club, but that's presumably because you're a Chelsea fan. For the rest of us, it passed us by. We actually had a message, though, from Australia, correcting me. Reggie from Melbourne, who sent us in a question. in passing he says he's just been elected as a delegate to his local branch of the victoria labour party and can we give him advice on how to engage and the answer is get involved reggie and you know and good luck for your political career but he starts off by saying first of all ed you've got to be taking the piss with india being the best test side in the world australia holds every single bilateral test trophy and i did say india the best side in the world and it is true Reggie you know that on the most recent numbers Australia's just got to the peak although if you look back over the last 10 years consistently India more than any other country best test side in the world and while this brilliant series is happening between England and India is going on also a test series out in the Caribbean where the Australians have been winning because the West Indies are pretty weak but the Australian batting has been pretty poor and I've got to say bodes well for the Ashes Tour this year.

6:11Ed Balls: England, Australia in November. We are on form. We are on song. I think if you asked Ben Stokes, who does he fear most, Australia or India? He'll fear India most because they're consistently the best test side. But does he think we can beat Australia? Absolutely. I tell you, Reggie, your guys are in trouble.

6:30George Osborne: I think you're on form in how you respond to complaints because when Harriet Harman said you'd got it wrong on how Labour had voted on the two-child cap, you basically said, well, I didn't really. And when Reggie corrects you on Australia, you said, well, actually, you're not right.

6:48Ed Balls: Reggie, if you want to get on in politics in the Victoria Labour Party, bring it on.

6:52George Osborne: He's actually blushing a little bit for the first time.

6:55Ed Balls: Ah, got him. I actually had lunch this week with Harriet Harman and we had a very, very lovely time and talked about what it's like to be out of Parliament. Of course, you know, we are both people who, as cabinet ministers, also had very senior political partners. Jack Dromey for Harriet, who sadly passed away, a very lovely man, and a vet. And so, you know, she's a great person. And, you know, but, you know, I was right. And Reggie, may I say, Australia, bring it on. We should get on with our podcast.

7:28George Osborne: Yes.

7:28Ed Balls: We are going to start, first of all, with Chancellor Rachel Reeves' Mansion House speech earlier in the week. That set piece city occasion for the Chancellor, which she proceeded by a meeting in Leeds where she set out a series of reforms. She's calling the Leeds reforms, which she says are going to take the boot off the neck of business. And we're going to ask, what are they and are they? And how does this fit into the wider government economic strategy this summer? Yeah.

7:58George Osborne: And then we are going to look at the agreement that has been announced between France and the UK on the use of their nuclear weapons, the coordination of our nuclear deterrent with the French one called the Northwood Declaration. And that lifts the veil on a kind of secret area of government policy, which is nuclear policy. And what does it say about the relationship not just with the French, but with the United States? So we're going to delve a bit deeper into that.

8:27Ed Balls: And then we're going to look across the Atlantic, where Donald Trump is facing a full MAGA revolt. His base are up in arms because, to I think all of their great surprise, having said for a very long time that he and his administration were going to reveal the Epstein files, the whole conspiracy around Jeffrey Epstein and his death in prison, but all the clients he had and the things which had gone on. And suddenly they've said, there's nothing to show. There's no files to publish. And the QAnon conspiracy theorists are going mad. And they're asking, Donald, are you now part of the conspiracy?

9:10Ed Balls: And we're going to ask, how big a deal is this for Donald Trump and what it says about his presidency? But we're going to start off with the Mansion House. George, you and I have been to very many Mansion House speeches. When I first went to mine in 1997...

9:25George Osborne: You ditched your black tie, didn't you?

9:27Ed Balls: We ditched our black tie. No, you actually ditched the white tie and then didn't turn up in the black tie. Well, no, I think the black tie had already replaced the white tie. It wasn't white tie in the final period of Ken Clarke. Gordon thought, though, if he said, I'm not going to wear black tie, that would mean nobody would wear black tie. And they all said, well, fine, if you don't want to, up to you. But all the rest of us are going to continue in black tie. So me and Terry Burns, Gus O'Donnell, we all had to arrive in lounge suits to support the Chancellor. We stood out like a sore thumb.

9:56Ed Balls: They also at the time had a thing called the Loving Cup. I mean, it's hard to imagine this now, especially in a post-COVID world. But there was this big, like a football trophy full of, I guess it was champagne, who knows what it was. And it was passed all the way around. hundreds of people and everybody drank from the same cup we all sucked from this loving cup and as you drank you thought what am i catching here that was the love affair between uh labor new

10:20George Osborne: labor in the city the the culmination of the prawn cocktail offensive we had a different version of the prawn cocktail offensive this week didn't we because you know for a labor chancellor a year into office uh rachel was making a big effort to woo financial services i mean this was really the first speech she's given, I think, since she's been in office, where she laid it on with a trial about how important financial services were, how important banking was, and then unveiled, as you said in the introduction to this podcast, a set of reforms which she's calling the Leeds reforms, which I'm sure is only coincidental that she's a member of parliament for Leeds.

11:00George Osborne: A series of, you know, I would say kind of sensible adjustment at the margins to the regulatory regime.

11:07Ed Balls: It's true. When you do something portentous, like saying the Leeds reforms, Jeremy Hunt talked about the Edinburgh reforms a couple of years ago. I think outside the experts, maybe you and me, I would say most people have no idea what the Edinburgh reforms were. If you think about Big Bang or Sarbanes-Oxley, you can think of what those reforms were i certainly can but um were the we should we should say big bang was the nigel lawson

11:36George Osborne: deregulation of the city and sarbanes oxley was the u.s regulation of banking wasn't it or breton

11:42Ed Balls: woods in 1944 45 the you know the emergence of the new global economic order these are all kind of labels which um say an approach a set of reforms do you think that what she announced will go down as landmark? Will they be remembered? Will people talk about the Leeds reforms? Because I would say in the newspapers, the reception was, it wasn't hostile, but it was quite lukewarm. People aren't saying these are ambitious or risky, but maybe that's because they aren't hugely consequential.

12:20George Osborne: I thought they were, as I said, sensible. You know, I know the financial services team in the Treasury, led by a very capable civil servant, Gwyneth Nurse, you know, I thought did a good job of saying, let's clip the wings of the financial ombudsman who's got a bit big for their boots. Let's have a look at the capital requirements we put on challenger banks in Britain. Let's have a look at the senior managers regime, which was something I introduced. Let's reform ring fencing, but not replace it, which we discussed on this podcast previously. I mean, all of it is incremental, all of it perfectly solid stuff, nothing radical, nothing revolutionary, nothing even approaching the big bang of Nigel Lawson.

13:04George Osborne: And you could say, well, you know, maybe those things don't exist anymore. Maybe all the kind of heavy lifting has been done. I would say it's quite different from what is going on in the United States at the moment. And one of the guests at the mansion house was the new head of the SEC, the American regulator, Hester Pierce. Hester Pierce and the Trump administration are passing pretty radical financial services legislation, particularly in the cryptocurrency stable coin, which is a form of cryptocurrency. But unlike Bitcoin, it's backed by real world currencies like dollars. And I think in the US, there's a pretty radical reform going on.

13:42George Osborne: And I would therefore, as always in politics, sometimes you need to notice the things that aren't happening rather than the things that are. And the speech that a chancellor could have given, which would have been Britain's moving fully on, full on into this revolution. We want London to be the home of new digital financial services. You know, we're going to see off the challenge that's emerging from Abu Dhabi and Dubai in this space to non-US jurisdictions like London. But you didn't really get anything. I mean, Rachel mentions stable coins in passing, just saying we're going to move forward on it.

14:19George Osborne: But nothing, nothing of any note. And then you actually had Andrew Bailey saying this in his speech, because he also speaks on the night about stable coins and digital currencies. There are other innovations. There may well be a role for stablecoins going forward, but I don't see them as a substitute for commercial bank money that creates credit in the economy.

14:44George Osborne: There may also be a role for retail central bank digital currency, but I have to be honest with you, I remain to be convinced why the natural next step needs to be to create a new form of money rather than put digital technology into retail payments and bank accounts. Now, look, I have a very high regard for Andrew and appointed him when I was chancellor to both the PRA, which is one of the regulators, and the FCA, which is the other financial services regulator. So I appointed him to two key jobs. And I think he's doing a good job as governor of the Bank of England. I don't really understand, though, where Britain is on this crypto debate.

15:20George Osborne: And I should absolutely declare an interest here because I'm on the advisory board of Coinbase, which is one of the big companies in this space. But I joined that board because I'm interested in this. And I think there's a lot of potential future in it, even if there's risks. Britain is saying, and the governor of the Bank of England is saying, he doesn't really see what these stable coins are for. And he's against, he said this in an interview with The Times as well at the beginning of the week, big banks issuing stable coins. Okay, fair enough. It's a perfectly respectable position. But the United States is literally at the moment passing a major law called the Genius Act, which is going to allow very large American banks to issue these stable coins.

16:08George Osborne: And JP Morgan has just announced that they are going to. So they're the biggest bank in the world. And so Britain is deliberately deciding to not go along with this and essentially prevent or make it much harder for UK banks to do so. And at the same time, the European Central Bank, Christine Lagarde, who's president there, has announced that it's issuing a central bank digital currency. And Andrew Bailey's saying, I don't really see the point of doing that in Britain. Now, he would justify those as sensible, cautious steps. But the rest of the world is moving on. And it's another case, I think, of the UK, particularly in a sort of post-Brexit world where it can't influence some of these European decisions.

16:52George Osborne: essentially choosing to opt out of a big piece of innovation in financial services. And that is at a time when the Chancellor's Exchequer in her Manchin House speech is reminding us all that financial services has been huge for the UK economy, is our largest single sector. And it's quite a moment for the UK to say, we don't really want to be part of the next revolution.

17:17Ed Balls: I think if you are the Chancellor or the government of the Bank of England, you have to strike a balance between encouraging business and innovation and not taking what could turn out to be big systemic risks with the financial system and I think one of the kind of questions for Rachel Reeves's speech was was she taking big risks which might have been exciting but also dangerous and I think what she's done in her reforms are all sensible I don't have any problems with them I don't think she should have gone further on for example mandating pension funds to invest in certain kinds of British assets.

17:50Ed Balls: And I think the ring fencing reforms done through a review are that that's the right approach, although I hope they will soften the ring fence because I think it's turning out to be quite anti-competitive. But there is a balance. And if they'd taken risky decisions, we would have been worrying about that as well as wondering how it will work. What is clear in the case of Stablecoin and the wider and the wider crypto debate is that Andrew Bailey thinks that unchecked and unregulated, and let's be clear, part of the problem with the crypto world is people like it because it is outside the government's purview.

18:23Ed Balls: It is unregulated. He thinks this could turn out to be a major risk to financial stability and also dupe individual savers and investors because you claim this is a kind of money, a stable coin, you know, a token is a dollar, but there's no guarantee that would be the case. And his concerns are reflected by the Bank of International Settlements, you know, the committee of central bankers. The previous pre-Trump leadership of the Securities and Exchange Commission, the SEC, shared those worries. I think there is a real question as to whether what these reforms end up doing is unleashing, you know, a new bout of financial instability and financial risk.

19:06Ed Balls: I mean, what people say is happening.

19:09George Osborne: Could I just say, all of that might be true, or at least there's a risk of it. But there's a choice for the UK, which is, do you engage in something that's happening around you in order to mitigate it or adjust it or be part of the conversation about how it develops? Or are you really saying, look, we don't want any part of it? And isn't that a delusion that Britain can isolate itself from global financial markets and developments in financial services?

19:40Ed Balls: Well, I hope that's not what they do. Andrew Bailey is about to become the chair of the Financial Stability Forum. He is going to be the guy who is looking across the world in a leadership role at the direction of financial regulation. And I think what he is saying and what the BIS are saying is that unless you regulate this carefully and properly, the danger is that it becomes kind of wild and destabilizing. And it's not clear to me that the motive of US legislation is to get regulation right as opposed to enable an unregulated, a more free market, free for all world. If you go back to the 19th century, there was a period between the 1830s and the 1860s where banks within individual states could issue their own dollars, which were underwritten by those banks within a very light touch state regulatory framework.

20:36Ed Balls: And it led to wild durations in the values of those dollars. A dollar from one place didn't have the same value as a dollar from another place. It was quite destabilizing for firms who put their money into those dollars and turn out they weren't worth what they thought. And I think what Andrew and the BIS are saying is unless you understand what you're doing here with stablecoin, the danger is you unleash that kind of instability and financial systemic risk.

21:06George Osborne: So are they saying that no one is, you know, that message, you know, is a bit after the fact because the US Congress has just legislated. The US administration is moving forward. The Gulf is pushing forward. China is developing its own separate digital currency regime.

21:24Ed Balls: So what should we do? Should we say, well, OK, given it's the Wild West, let's join the Wild West. Or do you say, hang on a sec, this has the potential to destabilize global financial markets and we need to make sure we do this in a regulated way.

21:35George Osborne: I think it's a big risk for the UK and financial services to miss out on major pieces of innovation because that has been our history as a home of innovation.

21:45Ed Balls: Even if they're flawed?

21:46George Osborne: Well, look, like any piece of innovation, it comes with, you know, downsides as well as upsides. But the more you're part of the conversation, the more likely you are to be heard on how you mitigate this.

21:57Ed Balls: See, I just wonder, I just think that George Osborne, who introduced ring fencing and higher capital controls, and was worrying about the aftermath of the global financial crisis, I think you, as Chancellor, would have been more cautious and worried about this than George Osborne in 2025.

22:13George Osborne: As Chancellor, I used a Bitcoin ATM on camera. The first Bitcoin ATM in Britain, it was in Canary Wharf. And I put in£10, took out some Bitcoin, and then made one of the bigger mistakes in my career, which was return to the Bitcoin after the cameras turned off. Because, you know, for ethics reasons, it wasn't appropriate for me to keep the Bitcoin. If I had, I would have made a lot of money.

22:42Ed Balls: Well, you'd have made a lot of money, and then the value would have gyrated all the way wildly down, and then it would have come up again.

22:48George Osborne: because yeah but real well currently hold on the dollar's gone down 10 percent in the last three months and you know there are shares you know companies there are major british companies who shares prices today half what it was six seven years ago i mean and others of course have doubled so or more so you know there are some the idea that money itself doesn't change in value relative to other forms of money is itself of course a delusion but you know we're having this conversation on the day, sorry, in the week, which we just heard that UK inflation has gone up again to 3.6%. So the value of the pound is anyway, you know, losing value relative to other assets.

23:29Ed Balls: That is true. But a dollar is a dollar is a dollar at the moment. It can go up and down in value. But my dollar, my dollar bill note and your dollar bill note is the same dollar. What the danger is in the stablecoin world, you give the impression that this is, money you can rely upon but it turns out not to be people end up on that assumption getting involved in a whole bunch of kind of financial commitments they then can't deliver and unless you do that in a regulated environment the problem with with crypto is by definition people want it to be unregulated but it also brings it reduces a lot of the middlemen and

24:13George Osborne: the costs of transactions and the inefficiencies and and the money rules and and the oversight

24:18Ed Balls: which means that very many people think that this is no you could argue you could argue a crypto transaction is easy as a follow than a 20 bill but listen we um we could do a whole podcast on this i'm just worried about it and you know i'm not anti-crypto i'm uh i'm worried about it happening in a wildly unregulated fashion and that is what america is now doing which the sec weren't before

24:42George Osborne: I guess I'm making a broader point about Britain trying to stay competitive and, you know, trying to earn a living in this world at a time when lots of people have a big question mark over the British economy. I think we should just turn, shouldn't we, to something that Rachel Reeves said in passing at the Mansion House speech about the government's record on the overall economy, which I think people listening to would have put a big question mark against. This is what she said.

25:07Ed Balls: When we came into this office, it was government, this government, that restored Britain's reputation as a beacon of stability by putting the public finances back on a firm footing, getting debt on a downward path while investing prudently alongside business. That was and still is the right choice. So, look, I mean, I wish what the Chancellor was saying was true as somebody who lives in this country.

25:35George Osborne: But I don't think around the world Britain is seen as a beacon of financial stability. And I don't think people think at the moment that this Labour government has got a grip on the public finances because of the events we've been talking about in this podcast over recent weeks with the U-turns on welfare changes. And this big looming question, which hung over her speech to the city audience, which is where are the tax rises coming? And is she going to tax wealth creation, business and enterprise in the autumn? And, you know, I thought that was a little bit complacent to say that. I think you can say we're working at these things.

26:14George Osborne: It's a big task. It's a lot, you know, the job's not yet done. but I don't know whether it was just you know the way the speech was constructed or she really thinks the job is done because I don't think anyone else does.

26:27Ed Balls: I don't think she can possibly think the job is done. The headwinds are getting tougher on growth disappointing, inflation a bit higher. Nobody looks at what's happening in the global economy and feels more confident at the moment. We discussed last week the scale of the tax rises which will be needed in the autumn and the government's had a very confused week about what they mean by a working person, what the manifesto commitment really means in terms of who can and can't pay more tax when they come to the budget. And then we had the news today that as Parliament finishes for the summer, the government has just taken the whip away from four of the rebels, the most public of whom was Rachel Maskell, the York MP, who was involved in the welfare rebellion.

27:11Ed Balls: But there is a real kind of tension here,

27:13George Osborne: But I have to say, I was listening to Rachel Maskell being interviewed this morning. I thought she was so naive. I mean, she says, I've been in the labor body for over 30 years. She's been voting against her government on three line whips, as has these other three MPs. It's done huge damage to the reputation of this government, that it's got a grip on parliament. It's got a big majority and get things done. I was talking, as it happens this week, to a major, major international investor. and they were saying, what a contrast between Trump and Starmer. Trump's got a tiny majority in Congress and has just passed what he calls his big, beautiful bill, which you may not like, but it's full of tax cuts and spending increases and the like.

27:58George Osborne: And Starmer, with a majority of whatever it is, 170-odd, can't get his changes in fiscal policy through Parliament. So I think if you're the Labour government, I mean, you do need to send a message to your supporters in Parliament. Hold on. This is not a free for all. We're a parliamentary party and we have to follow our three line whips.

28:18Ed Balls: Of course, that's right. But you've also got to be consistent in your messaging. And they did a U-turn. They said they'd got it wrong. They said we're going to go away and listen and come back and do things differently. And then a week later, they take the whip away from four of the rebels. and I mean it's not quite clear what kind of listening that you know I think taking trade jobs away from people who rebel makes sense I mean they were a Gordon Brown

28:48George Osborne: invention weren't they to increase the number of jobs that he could hand out I guess so but

28:53Ed Balls: I mean they were very useful to subsequent Tory Prime Ministers but I think but taking the whip away from people who a week ago you conceded to is quite confusing. You turn Rachel Maskell into a martyr. I'm just not sure how wise this is. It may be that people in Downing Street said, we've made threats to people, and now we've got to follow through. Although if you're going to follow through, you follow through at the time. You don't follow through a week later. I think it's quite confusing and quite messy. There'll be some people who think, as you do, good on them, finally a bit of discipline.

29:30Ed Balls: But the truth is that, you know, I'm not sure it clears up the mess.

29:34George Osborne: I thought they voted, some of them have voted against the government on other issues like planning reforms and the like. I mean, I do think the number 10 has to, on the domestic front, restore a sense that it has control,

29:48Ed Balls: that there is a plan. How many times did you and David Cameron take the whip away from people? I seem to remember there being over 100 conservatives who voted against you on that referendum bill in 2011. You didn't take the whip away. Tony Blair and Gordon Brown didn't take the whip away. The first time that really happened in a big time way was Boris Johnson. And look what happened to him. I'm just not sure this is wise politics.

30:09George Osborne: No, we never. I mean, the John Major, we were talking about him earlier. Of course, he took the whip away from the Maastricht rebels and in the process eliminated his own majority. And yes, I mean, Boris Johnson knifed Ken Clarke and Philip Hammond and so on. I don't think we ever took the whip away for simply voting against the government. What we said to people is.

30:29Ed Balls: Neither did Blair will bring.

30:30George Osborne: What we simply said is you're going to be on the back benches for the rest of the parliament. You're not going to get into the government.

30:36Ed Balls: I'm just not sure whether in the end this is Wives' parliamentary handling. And, you know, but we will see. We should move on because we need to take a break. And then we're going to come back and talk about the arrival of the German chancellor, Mr. Mertz, into London today. And in the context of what Britain and France have agreed on nuclear weapons a week ago.

31:27Ed Balls: Thank you.

31:39Ed Balls: Thank you.

32:01Ed Balls: That's U-P-W-O-R-K dot com. Upwork dot com.

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34:15Ed Balls: so last week on the podcast we discussed um the hugely important agreement between france and the uk um announced by um prime minister kia starmer president macron um around a one-in-one out returns deal for migrants but that wasn't the only major agreement which um was discussed at the summit they also came out with what they called the northward declaration which is a deepening of cooperation between the uk and france in their use and management and coordination of their independent nuclear deterrence and with the arrival into town today of german chancellor Mertz. This again is going to be on the agenda for discussion.

35:09Ed Balls: This is what Keir Starmer said about that agreement at his press conference.

35:13George Osborne: This morning we signed the Northwood Declaration confirming for the first time that we are coordinating our independent nuclear deterrence. From today, our adversaries will know that any extreme threat to this continent would prompt a response from our two nations. There is no greater demonstration of the importance of this relationship.

35:40Ed Balls: So we have talked before about how the Donald Trump presidency is throwing into doubt assumptions which have shaped the whole post-war era in terms of both the economy and a commitment to free trade or open trade, but also to security. The recent NATO summit, Donald Trump ended up going away having, I would say, reaffirmed American support to NATO and the kind of Article 5 mutual dependency of all the NATO members. But this agreement between France and the UK in this declaration with no reference to the United States is a sign that things are changing, that you have to think about how defence in Europe would function.

36:36Ed Balls: and in particular the independent nuclear deterrence in a world where America is becoming less engaged, potentially less reliable, certainly where you couldn't assume that a Trump presidency would be there if Article 5 was being invoked.

36:55George Osborne: There are a couple of interesting observations here. First of all, for a German chancellor to come to Britain to sign a defence deal is pretty extraordinary. It's actually the first time it's happened since the Second World War. So it is a major, major step forward, not so much in terms of this country's defense, but in terms of Germany's attitude to defense, post-war Germany's attitude to defense. And, of course, sits alongside the major reforms that Friedrich Mertz is making to the fiscal rules, essentially, in Germany, changing the Constitution and spending a whole lot more money on defense.

37:29George Osborne: Second, on the kind of French cooperation, I think if you listen very carefully to what Keir Starmer is saying, he's saying we confirm for the first time. He's not saying we are for the first time cooperating. He's merely confirming what was already happening, which was that there is quite a lot of cooperation already between France and Britain on their nuclear deterrence. And this is actually a relatively recent thing in the history of this. So if you look at the post-war history of developing nuclear weapons, obviously the United States used the atomic bomb in Japan. And then there was the decision of the Attlee government and the de Gaulle governments in Britain and France to develop their own nuclear weapons.

38:13George Osborne: But in the 1960s, basically Britain decided it couldn't afford any more to go it alone. It had to work with the Americans on developing these nuclear weapons, particularly the missiles. They tried to develop their own British missiles and failed. and John F. Kennedy and Harold Macmillan did a deal. And that's the state of the British deterrent to this day. The French deterrent was always separate. And the French deterrent didn't rely on the US and didn't rely on Britain. And that has all been the case until quite recently. And then suddenly, I think partly driven by the sheer cost for France of trying to sustain this system entirely independently, there has been more cooperation, not just with Britain, but also with the US.

38:56George Osborne: and so I think what you're getting today is really a sort of statement of reality which is cooperation is already happening and I thought the final thing I'd observe in this space is you know we're very focused because of Brexit and everything on the European Union we were just talking earlier about money and the Eurozone and the European Central Bank when it comes to defence Britain is absolutely at the heart of European cooperation there may be sort of parts of the EU, which are supposed to be sort of defense and foreign policy agreements. But I wouldn't say they're meaningless, but they don't have much force if Britain's not engaged because of the size and importance of our military forces and the existence of this independent nuclear deterrent or semi-independent deterrent using American technology.

39:46George Osborne: And it's so interesting that Brexit was not the last word on Britain's relationship with Europe. And it's in this defense space, which we're being pushed back center stage, partly because of real world things like Ukraine and Russia's aggression, and partly because of events in the United States with the Trump administration.

40:07Ed Balls: That's right. But the arrival of Mertz today, kind of makes this more acute, because if America is a less reliable ally, and the recent Defence Review, there was a really good article by Lawrence Friedman, the defence expert on Substack this week, where he quotes the recent Defence Review, with the US clear that the security of Europe is no longer its primary international focus. US and European allies must step up their efforts. So if the US is pulling away, France has always kept its nuclear capability outside the sort of NATO coordination. Britain has always been not only central to the NATO process, but wanting to make sure that it didn't in some gaullist way think about a world without America.

40:59Ed Balls: But maybe that is the world we're in. Suddenly, from a Germany point of view, if you aren't sure that the American umbrella is really reliable, then suddenly what the commitment of Britain and France to collective of European defence is becomes much more acute. And in the use of nuclear weapons and independent deterrence, it's partly about capability. Have you got the capability? So from a German leader's point of view, do France and Britain actually have the nuclear capacity if America's not engaged? But then secondly, it's about resolve and how decisions are made. And can Germany and other European countries rely upon France or Britain to be there if needed, if there was some kind of Putin incursion which threatened nuclear weapons on the eastern border of Europe.

41:49Ed Balls: So for Germany, it becomes a question, can you rely upon Britain and France to be there when you need them? That is a European conversation.

41:57George Osborne: I mean, it'd be interesting to see whether in German politics over the next 10, 20 years, they start to discuss whether they want to develop their own nuclear deterrence. I mean, that's...

42:07Ed Balls: Legally, very complicated for Germany constitutionally.

42:09George Osborne: Yes, but Japan, which is, of course, was on the receiving end of the only time nuclear weapons have ever been used, now quite explicitly says it has the capacity in very short order to build a nuclear weapon. So it doesn't have one assembled, but it can. And I wonder whether Germany will move in that direction. And Poland has already indicated that it's thinking of doing that. Because in the current environment, you are constantly reminded that nuclear weapons do provide you with that kind of additional layer of defense. I mean, that's what we know. We've, of course, been discussing on this podcast why Israel took out with American help the Iranian nuclear deterrent.

42:53George Osborne: I remember when we had a discussion in the coalition government about the cost of replacing the Trident submarines, unbelievably expensive. I think it will cost over 100 billion pounds probably, this program, once it's finished. And we looked at alternatives. The then cabinet secretary, now sadly deceased, Jeremy Hayward, conducted a review of kind of potential other options such as cruise based nuclear weapons and so on. Did you have to have these submarines that fire these ballistic missiles into space and then can land in cities on the other side of the world? And he concluded that was required.

43:33George Osborne: The coalition concluded it was required. You know, I had a very interesting dinner once when I was actually the shadow chancellor. I was in Cornwall and I had dinner with John Knott, who's now also sadly deceased. And he was Margaret Thatcher's defense secretary.

43:51Ed Balls: During the Falklands War? Yeah. And he had commissioned. Famously stormed out of a Newsnight interview with Robin Day, I think it was.

43:58George Osborne: As a here-today-gone-to-demorrow politician. That's what Robin Day had accused him of. And he had replaced the Polaris submarines with the Trident submarines. And that was a really expensive commitment at the time. And I said to him, do we really need these incredibly expensive submarines? And surely if you can just have some sort of cheaper, smaller nuclear weapons, that in itself is a deterrent. And he said, you have to be able to convince your enemy that whatever they do, whatever they throw at you, you will be able to hit back. And that was, and because these submarines could be anywhere in the world and they, you know, these missiles aren't interceptable once they're on their way.

44:38George Osborne: You know, that's why you need it.

44:41Ed Balls: And he said, look. It doesn't mean you have the same number of warheads as your enemy. You just have to be able to always hit them hard.

44:46George Osborne: Whatever they do, even if they try and preemptively strike you. And I remember him saying to me at this dinner room, you know, it was around the table in his house in Cornwall. He said it is 1 % of Britain's budget and you've got to think overall government budget. And you've got to think of it as an insurance policy, something you'll never probably have to need. But the kind of thing that if you didn't have in a catastrophe, you know, let's imagine a Russian invasion into Europe, the United States totally detached, not wanting to get involved, as it didn't the last time there was a conflict in Europe and the time before both Second World Wars.

45:23George Osborne: It took a long time for the United States to get involved. Would you not regret the decision you'd taken years earlier to give up on this capability?

45:32Ed Balls: And you concluded there was not, when you were chancellor, a cheaper way to do it.

45:35George Osborne: I basically brought into the argument, and I was quite skeptical. And certainly I was not skeptical, but I was very open-minded to alternatives. And I kind of came to the conclusion, you know, I think this is the only thing that absolutely guarantees you have a deterrent. A deterrent in the true sense, which is your opponent thinks there's nothing they can do that would ultimately stop you using it if you had to.

45:59Ed Balls: And absent America, is the French and British deterrents, are they deterrent enough? Do they pass that test?

46:05George Osborne: Yeah, they're very similar. You know, both countries have four submarines. These are very expensive things to build. If you think of them, they're about the size of an aircraft carrier. They're underwater. They have to stay completely undetected. You have to have people living in them and, you know, not being radiated. by the nuclear weapons and the nuclear reactor that powers them. You have to be able to launch missiles into space that then come back into Earth and hit targets. You have to make sure that when they receive the instruction from the British Prime Minister or the French president, that's not a fake instruction or someone hasn't kind of somehow gobbled the communications.

46:40George Osborne: They have to be able to fight off, you know, another submarine trying to attack them. I mean, they're really expensive and complicated things to build, of which, you know, almost no one in the world can do it. And we're very – one of my kind of great theories about geopolitics is that Britain and France are so similar, same size countries in terms of population, GDP, same kind of history of empire in the world and the heart of kind of the development of Western Europe, same military presence in the world, same sort of diplomatic reach around the world. And yet we always rub up against each other, partly because we're sort of like twins.

47:22George Osborne: And I think it's a very good recognition by Emmanuel Macron, Keir Starmer and David Cameron and Nicolas Sarkozy before him, you know, when they first started this defense agreement. And in fact, back, you know, I think in the Brown Sarkozy year, that there's a lot we need to do together in the world.

47:39Ed Balls: However, the way in which that rubbing up together was mediated was also by the role of the Germans and others in the European Union. We're outside the European Union now. We have a bilateral deal with France. We're talking about a bilateral agreement with Germany. But actually, it's the conversation between France, Germany and Britain together, which you really need to know how you'd respond to threats and to give reassurance to non-nuclear powers in Europe. And I would guess at the moment, a collective conversation outside of NATO between France, Germany and Britain together is still quite hard to do when it comes to the nuclear guarantee.

48:18George Osborne: Yeah, but I think Germany is actually the hardest of those three. I remember we had a discussion again when we were in office about whether Airbus should merge with BAE Systems, the big British defence company, and create a kind of European super defence company. and the French were in favour of it, the British were in favour of it and it was the Germans who said no and blocked it at the time. And I think it was a foolish decision back then, but foolish for Germany as well. And maybe Germany is changing very, very rapidly. And so the most interesting, I come back to sort of my first observation here, that the most interesting thing of all this that's been announced, it's not really the sort of British-French corporation because that's been going on.

48:58George Osborne: It's as you say, that Germany understands it needs to lean in and it can't, you know, quite understandably since 1945, it has basically checked out of defence because of its history. Now it needs to check back in.

49:14Ed Balls: I kind of think it's almost the other way around. Mertz is saying, I'm the one who's now doing much more than any of you to increase our domestic defence capability, but we want to have a conversation with you about the capabilities we don't have, that you have. So in some ways, they're forcing themselves into this conversation now rather than the other way around. Very interesting. It does surprise me. If you think back to the 1980s, when we were growing up, the Cold War, there was a huge conversation about disarmament, about multilateral disarmament. Thatcher, Reagan, the Reykjavik summit with Gorbachev.

49:50Ed Balls: We now have nuclear weapon conversations about Iran. We knew who knows what's going on in North Korea. India and Pakistan kind of, you know, at loggerheads. We're worrying about Putin, but nobody's talking about disarmament. It's sort of off the agenda.

50:04George Osborne: It's such a good observation, yes. So you've got a Labour government. It was a Labour government that commissioned Britain's first nuclear bomb. And now you've got a Labour government doing nuclear agreements with France and saying that we're going to develop a new class of nuclear weapons that can be used off bombers, fighter jets. With no parallel conversation about multilateral disarmament. So why is the Parliamentary Labour Party up in arms about disability benefits? And, you know, the Labour Party I grew up with, observing, you know, the battle with CND inside the Labour Party was a big deal for the Neil Kinnocks of this world.

50:41George Osborne: Why is it there's not a squeak?

50:43Ed Balls: Because it's a dangerous world.

50:45George Osborne: It was a pretty dangerous world in the 1980s, I seem to remember.

50:49Ed Balls: Maybe people think it's a more dangerous world. I don't know the answer to that. But it's true, isn't it?

50:54George Osborne: Yeah.

50:55Ed Balls: I wonder, you know, we've often wondered what will Donald Trump do next? You know, the peacemaker Trump. He's not making much progress on his peacemaking initiatives. Maybe he'll suddenly become the Nobel Prize. Maybe he'll become the champion in a Reagan-style way of multilateral disarmament. Who knows? Yes. We should go to a break and then we're going to discuss the Donald after that.

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53:53Ed Balls: So after the presidential election back in November, we had a number of conversations on this podcast about how the Trump presidency would go and in particular how it would be different from Trump in the first term. And one of the things I remember us talking about is how the Trump's response to the January insurrection and his embrace of the sort of hard end of the MAGA conspiracy wing, how that would shape him in government, because there was always the potential for huge disappointment for Donald Trump. Having sort of played into it, I mean, he was always a conspiracy theorist. He was the guy who made great play out of the Obama birther accusations, which were all untrue.

54:47George Osborne: This was that Obama hadn't been born in the US, so couldn't be the US president.

54:51Ed Balls: So he's always been inclined in that direction, but he really doubled down after the January insurrection because, you know, at the time he was vulnerable and he needed support. And one of the things he doubled down on, and so did J.D. Vance, his vice presidential candidate, was on the idea that Jeffrey Epstein, the convicted paedophile who ended up taking his own life in prison, that he was actually…

55:17George Osborne: Wow, that's one of the points of contention. Or maybe he was murdered.

55:22Ed Balls: Maybe he was murdered. Maybe there is a whole cover up here that there was there was a whole pedophile network, which he was at the center of, including senior figures in the establishment. Maybe he was a Mossad agent who was controlled by the Israelis. They managed to take this into an anti-Semitic direction as well. And but these these conspiracies were played to by Trump and his team before the election. As recently as a couple of weeks ago, the Attorney General, Pam Bondi, was saying, you know, the list is on my desk, the list of his, you know, his clients. A massive expectation that Donald Trump in government was going to open the files.

56:04Ed Balls: But he actually said he was going to.

56:05George Osborne: He did.

56:06Ed Balls: But we had this conversation, which was he's riding a tiger here. And when it comes to the reality of government, will he be able to deal with the Bannon QAnon conspiracy world without disappointing them? And in the last week, he's delivered major disappointment.

56:23George Osborne: We should listen to there are so many clips we could play. But we decided that this piece from The Daily Show, which is like a U.S. comedy show that focuses on current affairs with Jon Stewart. But here's a clip from The Daily Show and one of their reporters, which both has Donald Trump trying to say, look, there's nothing to see here, which is not very convincing, and then makes fun of that. He's still got all his supporters breathing down his neck to release the Epstein files. And no matter what Trump does, he just can't get them to shut up about it. I know you've urged people to move on, but I'm curious, why do you think your supporters in particular have been so interested in the Epstein story?

57:08George Osborne: I don't understand. How about how it's been handled? I don't understand why they would be so interested. He's dead for a long time. He was never a big factor in terms of life.

57:27George Osborne: Not the guy you call to give a eulogy.

57:32George Osborne: Also, you don't have to like Epstein, but he clearly was a big factor in terms of life. He's America's most famous sex criminal, which is quite a competitive category.

57:45Ed Balls: This does go to the heart of his problem, because either there was never a conspiracy, in which case it was all made up. I mean, either there are no Epstein files, or they're refusing to publish them. That's right. Only one of those two things can be true, right? And if there aren't, how could he and J.D. Vance have told everybody there was? But if there are, why isn't he publishing them? And, you know, the conspiracy theorists all now think Donald Trump is all part of the conspiracy, not least because Elon Musk, as one of his wild lashes out as he was departing from the administration a few weeks ago, said, you know, Donald Trump is in the files.

58:28George Osborne: and then woke up the next morning and a bit like having a sort of hangover and said, oh God, what do I do?

58:33Ed Balls: He apologized. Although you have to say, I mean, he did know Jeffrey Epstein quite well.

58:40George Osborne: He knew him very well. And Epstein was a member of the Mar-a-Lago Golf Club and they knew each other in Palm Beach and so on. I mean, I guess where I could...

58:48Ed Balls: They shared planes. Yeah. They shared interests.

58:54George Osborne: Yeah, I think they, yeah. I'm trying to think of a non-litigious way to – I think that's not going to get me sued. But the only thing I would question – and so I think you're completely right that it's a classic example of sort of being hoist by your own petard. You make a career out of stirring things up and kind of giving kind of credence to various conspiracy theories and saying, look, when I get an office, I'm going to publish all the details. Then you get into office and you don't. And that begs a whole lot of questions. Therefore, well, either you were not telling the truth before or you're covering up now.

59:34Ed Balls: And we don't know what the answer to this is. We don't know. I mean, you know, there could be files. But Donald could be in the files. It could all be made up. We don't know.

59:42George Osborne: You know, the only thing with Donald Trump, maybe I'm so sort of desensitized to stories about him and his private life. I mean, would it would how devastating would it be? I mean, we've sort of heard so much about Donald Trump's private life. And, you know, he had all those cases before he got elected. As I say, I may be sort of desensitized. I think he's got such a sort of thick skin and such a, you know, every attempt to kind of bring some issue against him that tries to bring him down on kind of ethical grounds or personal behavior grounds has failed. And it only made him stronger.

1:00:18Ed Balls: I think it's a bigger deal than that. And let me give you three reasons why it's a bigger deal. Bigger deal one. Trump is a very skilled person at being in opposition, even when he's in power. You know, he's always got somebody else to blame. It's always somebody else's fault. But the thing which undid him in the first term was he was the president in a pandemic and he had to say to people, take vaccines. And, you know, but he did so in a rather cat-handed way that may have lost him the presidential election. But that is now seen as a charge against him by the QAnon conspiracy. theory guys and this is another time where very hard for him to be in opposition and also to be the president when it comes to these files.

1:00:59Ed Balls: If these files exist, publish them. If they don't exist then you have to admit that and you can't just dismiss it and say there's nothing.

1:01:06George Osborne: There's no way you can ever convince people they don't exist. No. Because it's impossible to prove a negative.

1:01:12Ed Balls: And he's trying to say, you know, Obama got rid of the files or Comey the former head of the FBI or Clinton. But I mean, in the end he's the president I mean he knows what's going on secondly there's going to have to be a Republican nominee chosen to succeed Donald Trump what are they going to say now about the Epstein files what is you know let's say Tucker Carlson's running or JD Vance is on the ticket are they going to publish the files the files which Donald wouldn't publish or are they going to say we were wrong there aren't any files they're totally doubled down I mean it shapes the way this issue how the next candidate is chosen.

1:01:50Ed Balls: And thirdly, what do we know about Donald Trump? When he's in a hole, he tries to distract. He's in a big hole at the moment. This is actually quite a big crisis in American politics. What is Donald Trump going to do in the next week to try and do a dead cat bounce, to say, look over there, to do something different? I mean, you know, if he's wild and a bit desperate, who knows what he'll do?

1:02:11George Osborne: But is he really in, I mean, as we were saying earlier on the show, he's just passed a big piece of economy legislation. that is called the Big Beautiful Bill through Congress. I mean, he's had a string of domestic policy successes.

1:02:23Ed Balls: But people are laughing at him. And he can't do any interviews at the moment when he's not asked this question. What does he do about Pam Bondi, the attorney general? If he sacks her, he's got to publish the files.

1:02:35George Osborne: I mean, I'd be quite nervous.

1:02:36Ed Balls: And if he doesn't sack her, then he's standing up the idea that it was all a lie.

1:02:40George Osborne: What does he do? Well, Donald Trump quite often has found the sort of, you know, third answer in politics, which hasn't always been clear you know there'll be something we haven't thought of i think the um you know maybe the advice should be you know just i don't know head off to one of your golf courses take a week off because that is exactly what he's doing he's actually coming to britain isn't he in

1:03:00Ed Balls: the next couple of weeks to play golf in scotland i know for a private meeting with keir starmer which means it won't be militaid although i have a feeling well keir starmer has to fly to scotland

1:03:09George Osborne: to, I can't imagine, I don't really see Keir Starmer on his plus fours on, you know, Turnberry on the, you know, eighth hole No.

1:03:19Ed Balls: That's not his environment, is it? I think they'll probably meet in the 19th, would be my guess We are out of time, but actually just before we are out of time just seen on the BBC News website, the government while we've been recording has just made an announcement 16 and 17 year olds to be able to vote in the general election The voting age is going to be lowered. It was in Labour's manifesto. Keir Starmer says it's really important. Conservatives say the plans won't get parliamentary scrutiny until September. Why weren't they announced yesterday? Which doesn't seem to be the biggest issue for them to be saying.

1:03:56Ed Balls: A surprising thing to do the day after Parliament's gone.

1:03:58George Osborne: I think a very positive thing. I've always been in favour of trying to reduce the voting age to 16. I was quite alone in the Conservative Party when I said this in government. and we've had an experiment of this you know we did allow 16 and 17 year olds to vote in the scottish independence referendum uh and you know they showed of course that they as you know young adults they could engage in the debate and they took part and exercise their vote we you know if anything actually 16 and 17 year olds because many of them are at school are you know engaged in a political conversation by their teachers and then you deny them that vote in the european referendum which may have been well i was in favor of getting it that was a kind of concession that we made to the brexit people which was you know one of the many mistakes in the build-up to our referendum so i'm in favor of it i think you know we want younger people to be engaged in our democracy uh they're perfectly capable of making those decisions uh they have a stake in society um you could argue they've got a bigger stake in society than many others because they've got a whole life ahead of them.

1:05:04George Osborne: And, you know, so first of all, I think it's a good thing. I've always been in favour of it. And second, I would really plead with the Conservative Party, do not fall into the trap of opposing this. I mean, it will be the stupidest thing. For a start, it's going to happen, you know, a huge majority in Parliament. So all you're going to do is send a message to all these voters at the next election who are 16 and 17, or I guess at the moment, you know, 13 or whatever it is, years old, that we weren't in favour of you having this vote. And the Tory party was against lowering the voting age to 18.

1:05:32George Osborne: The Tory party, you know, with elements of the Labour and Liberal Party was against female suffrage. But they should take a leaf out of Stanley Baldwin, one of the most successful Conservative prime ministers, who was in favour of extending the female suffrage in the 1920s. originally they limited the age at which women could vote. And he realized it was a big thing that the Tory government could do, created essentially universal female suffrage and won the female vote. And the greatest, arguably British Conservative Prime Minister of all, Benjamin Disraeli, made his reputation in the Second Reform Act, extending the franchise to the middle classes and locked in their support for a generation.

1:06:21So, you know, Kemi Badenock,

1:06:23George Osborne: if I were you, I'd pay less attention to some of your parliamentary party and take a leaf out of Stanley Baldwin and Benjamin Disraeli, which might be better models of how to get back into office.

1:06:33Ed Balls: Good advice for Kemi Badenock. The only thing I would say is 18, 19, 20 and 21 year olds are much less likely to vote than people who are 10, 20, 30, 40, 50 years older. And we don't solve the problem of youth disengagement with politics simply by lowering the voting age.

1:06:52George Osborne: Yeah, but I think you'll find that 16 and 17-year-olds will vote actually in higher numbers than 18, 19, 20-year-olds because they're at school and there'll be classes on the constitution, classes on the election. And maybe it will kick in a habit which will last. Yeah.

1:07:05Ed Balls: Very interesting. That's all for political currency. We'll be back on Monday with ex-minister's questions.

1:07:09George Osborne: Yeah, of course, you can also hear it earlier and ad-free if you become a member of our kitchen cabinet. And you can find the link to subscribe in our show notes.

1:07:19Ed Balls: See you next week.

1:07:19George Osborne: Goodbye.

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1:08:08Ed Balls: Hello, I'm Monica Reinagle, host of the Nutrition Diva podcast. Summer is here and with it, the hot and sticky weather. A morning working in the garden or maybe on the golf course can leave you more depleted than you realize. And plain water isn't always the most efficient way to restore the balance. That's where liquid IV comes in. Its science-backed formula is clinically proven to hydrate faster than water alone. Whether you're exercising, playing outside, or simply surviving a summer heat wave, it's an easy way to stay hydrated. Shop now at liquidiv.com. Liquid IV, hydration that goes wherever life takes you.