EMQs: Keir Starmer’s problem with ministers

0:00You've got social dialed in. Search is doing its thing. So why do your marketing results look the same as six months ago? That's because you're fishing in the same pond as everyone else. Podcast listeners are a different audience entirely. More engaged, harder to reach through traditional channels, and ready to act when someone they trust makes a recommendation. We're Acast, and we put them right in front of you. Browse thousands of the world's leading podcasts, book host reads or run your own ads, and track every conversion in real time. Same skills you already have, brand new results. Acast.

0:35Acast.com slash advertise.

0:40George Osborne: The Chancellor of the Exchequer. Getting a lesson from the Shadow Chancellor on how to balance the books is like getting a lesson from Dracula on how to look after a bloodbath.

0:49Ed Balls: Egg balls. A steady-as-she-goes budget. What kind of ship does he think he's on, the Titanic? They're married, Celeste.

0:57George Osborne: Welcome to EMQs from Political Currency. With Ed Balls and George Osborne.

1:08George Osborne: Hello, welcome to Ex-Minister's Questions, EMQs. We are broadcasting from our new studio in Hoxton, our newly decorated studio here. It's a bit more trad in the kind of style than the studio we had before. It is. But we like it. It's very cosy. There's a nice pot plant next to me.

1:31Ed Balls: Yeah. I mean, if you haven't seen the pot plant, it's a pot plant.

1:35George Osborne: I fear it might be plastic.

1:38Ed Balls: Let's move on.

1:39George Osborne: Anyway, before we get on TMQs, you know, one of the kind of big giants of politics from my childhood, when I was watching on TV, has sadly died. Roy Hattersley. So he was, I think he's died at the age of 94. And I was just looking up. I mean, he was a minister in the 1960s. And of course, in the 1970s, he was the Secretary of State for Prices and Incomes. I probably thought we'd never again have another Secretary of State for Prices and Incomes. But the way the conversation of British politics is going at the moment, we might have a future Secretary of State for Prices and Incomes. But I think from my perspective, speaking for myself, I remember him really as kind of Neil Kinnock's deputy in the kind of battle to get the Labour Party back into the kind of centre ground of British politics and electable again.

2:25George Osborne: But I'm not sure I ever did meet him in person. I met Dennis Healy. I met Roy Jenkins. I met other people of that kind of generation. Maybe they're a slightly older generation. But no, but presumably you did meet Roy Hasley or you knew Roy Hasley.

2:39Ed Balls: I did meet Roy Hattersley lots of times, but actually rather unusually always at the football. He was a Sheffield lad, a big Sheffield Wednesday fan and went home and away. And I've been in the director's box at Hillsborough with Roy Hattersley.

2:56George Osborne: Oh, the director's box. That's how those Labour politicians roll, ladies and gentlemen. Also. Never in the stands with the working man.

3:04Ed Balls: Also at Carrow Road. He, I mean, he was sufficiently embedded. into the club. What's Carrow Road? Norwich City's ground. And he would travel with the directors. I bet he did.

3:17George Osborne: But we don't speak a little of the dead, but you champagne socialists, what's wrong with the hoi polloi?

3:22Ed Balls: I was the unpaid chairman of Norwich City Football Club, a great act of public service, and had lunch with Roy Hattersley and Maggie, his wife. And he was a very nice man. He was actually somebody who was as well known as a writer than as a politician. In that sort of tradition, like Roy Jenkins, Winston Churchill, who were kind of very skilled and very prolific, Roy Hudson was a writer. But I think he was part of that kind of rather tragic generation of Labour politicians who, I mean, he did have a brief time in the Cabinet, as you said, with Jim Callaghan, but 18 years in opposition, which was the prime of his political life, without a chance back into government.

4:07Ed Balls: He lost the leadership election to Neil Kinnock, but then won the deputy leadership election and served with Neil Kinnock all through those years. He was Shadow Chancellor, Shadow Home. And I think he's a bit of an unsung hero, really, because Neil Kinnock rightly gets huge credit for taking Labour from the catastrophe of Michael Foote and the 83 defeat through to electability, although he couldn't get there himself in 1992, handed over to Tony Blair and Gordon. Or 87.

4:37George Osborne: He lost twice. I mean, Labour stick with their leaders after they lose elections.

4:41Ed Balls: He lost in 87 and then stood down in 1992. So he lost once.

4:48George Osborne: No, and 92. He lost the 87 election and the 92 election.

4:51Ed Balls: Oh, I see. Yes. But they didn't stick with him when he lost in 92. He was gone. But Roy Hattersley with Neil Kinnock was there throughout that period. Very loyal deputy, very much part of that sort of early modernization. The interesting thing about Roy Hatterley, he ended up being a rather aggressive critic of the Tony Blair government, particularly on education. He was a big champion of comprehensive education, very critical. Of academies. Yes, and the broader education push. And he said that he never changed his views. he just went from being on the right of the Labour Party under Harold Wilson to being on the left of the Labour Party under Tony Blair and it wasn't me who changed, it was them.

5:38George Osborne: We all say that, don't we?

5:40Ed Balls: He became a lord but I don't think he ever participated in the House of Lords. He really moved on from politics to writing. I remember seeing as part of the obituaries the Granada lecture he did about Coronation Street. He's a very thoughtful, interesting guy. That was a kind of telephone lecture. He did a lecture about Coronation Street. He did a lecture about Coronation Street and its cultural impact as an avid watcher. He was a good man, Roy Hattensley. Of course, for most people listening to this podcast, what they'll actually remember him for is the spitting image caricature.

6:12George Osborne: And the no-show on Have I Got News For You. That is right. They put a big tub of lard in his place because he didn't turn up.

6:20Ed Balls: And Neil commissioned him to write an article for the Sunday Times. He thought that was more important. He pulled out of Have I Got News For You at the last minute and they put a tub of lard in his place and took the piss out of him for 25 minutes. I think, you know, if you were Roy Hansen, you probably loved it.

6:35George Osborne: No, I think you probably didn't. But I think you've sparked a memory, which is you say that he spent, you know, the best years of his sort of political life in opposition and that was a waste. When I became a new MP, there was a leadership contest almost immediately because William Hague had resigned. and it came down to a vote between Ken Clark and Ian Duncan Smith and it was a vote of the members of the Tory party and I was the member of parliament for Tatton and the Tatton Conservative Association was the biggest conservative association in the north of England. So it had the most members. So therefore, if you wanted to win this contest, you had to come and speak at Tatton.

7:12George Osborne: So I arranged for Ian and Ken to come and speak separately, not on the same occasion, to the members in this packed hall. I was the brand new MP. age 30 ken clark got up and this very opening line was i don't want your new mp george osborne to be the next roy hattersley and i looked there was this room of what on earth is he talking about and i was like what is he talking about and he said i don't want george to spend the best years of his political career in opposition we've got to get back into government that was his argument And at that point, he'd won the room. Unfortunately, he then started talking about the euro and everything.

7:53George Osborne: I could see the room being completely lost. But I remember thinking that was such a sort of powerful and fairly straightforward message about winning in politics.

8:02Ed Balls: Neil Kinnick, Roy Hattersley, Joel Kaufman, all at the top of the Labour Party for years.

8:07George Osborne: Remember him? Who? Brian Gould. Brian Gould. Went back to New Zealand, didn't he? It's true. Anyway, we wish Roy Hattersley's family well, and he made a big contribution to our public life. Let's start with our first question and that comes from Jude. Hello Ed and George. Been loving the podcast lately, especially last week's impressions. In a recent interview with The Telegraph, Al Cairns revealed he'd only met with the PM in an official capacity once in his two years as a member of the defence ministerial team. How does this compare with the frequency other PMs have met with junior ministers and will we see this have a negative impact on his relationship with them and a potential leadership challenge following the by-election later this week?

8:51Or could this buy in political capital in order to leave on his own terms? Thank you.

8:57George Osborne: Jude, thank you for your question. I mean, I was pretty staggered when I saw that. So it's perfectly normal for a Prime Minister to spend most of their time with members of the Cabinet. Indeed, most of their time with senior members of the Cabinet. The truth is the Prime Minister spends a lot of time with their Chancellor and their home secretary and with their team in Downing Street. And they wouldn't regularly have a meeting with a junior minister without the cabinet minister being there because that'd be a bit disobliging to the cabinet minister. But two things. One is, certainly, you know, the experience I had with David Cameron, which is the one I can speak to, David would bring in the ministerial teams from departments for regular checkups.

9:34George Osborne: So it would be the health department, the education department. So as well as meeting the secretary of state separately, you bring the junior ministers in, with the Secretary of State and they have a discussion. And then there were some junior ministers who were clearly kind of rising stars or that their junior ministerial brief was sufficiently important. Some of the junior ministerial jobs, like Minister for the Armed Forces, the job that Al Cairns was doing, or Minister for Prisons. There are some of those ministerial state jobs which are almost kind of cabinet level in terms of the responsibilities, where absolutely they would have the sort of lead on the policy and the Prime Minister would engage with them.

10:11George Osborne: And that wasn't just to make sure that the government was being well run. That was also Cameron making sure he was keeping check with the most important supporters any prime minister has, which are his junior ministerial ranks. You know, that's where the strength a prime minister has in the parliamentary party often comes from, what's called the payroll. And I'm sure that would be true of almost all other prime ministers. I'm not saying Cameron was in any way special in this respect. So it was absolutely staggering. that Keir Starmer only met with Alcoun once in his two years. And particularly with a row kind of brewing on defence and rows about the defence investment plan.

10:54And I find it quite surprising, maybe quite revealing.

10:59Ed Balls: Let us try and be charitable first. I don't think in the year I was economic secretary, 2006-7, junior minister in the Treasury, I had meetings with Tony Blair. I think Tony Blair would have talked to Gordon Brown. And I think the truth is, if Keir Starmer is talking about defence policy, it's not clear that what he gets out of a conversation with Al Cairns, he can't get with a conversation with John Healy when he was defence secretary. There are times where you have unusual junior ministers. Think about Josh McAllister, who's on special education needs reform over recent months, or Jess Phillips on violence against women.

11:34Ed Balls: The junior ministers really know the subject. But I think it would be usual for prime ministers not to meet quite a lot of junior ministers. Although, as you say, it's not necessarily good politics not to see the whole...

11:48George Osborne: But hold on, when you were Secretary of State for Education, or so families and schools, I think you'd call it, would you have sort of brought your junior ministers into a Downing Street strategy meeting or not?

11:59Ed Balls: I think that the schools minister, Jim Knight or Vernon Coker, the children's minister, I think you're Bev Hughes, I would have wanted them there because they had an expertise and I thought they would help us in persuading the prime minister of the right path. But I'm not sure number 10 would necessarily have asked for it. I think the issue here is, though, about what you hear about this number 10. And I think West Streeting has said this quite openly, and I know from him this to be true. I mean, West Streeting as cabinet minister didn't have very many meetings. In fact, very few meetings with Keir Starmer and outside the sort of formality of a big cabinet office stock take.

12:39Ed Balls: They were very rare indeed. And if you look back to last weekend, Tom Baldwin writing about Keir Starmer, clearly briefed by number 10 how in the case of defence policy, Keir Starmer, you know, in a room on his own with all the spreadsheets pouring over the detail, trying to find the answer. when you look at the profiles in recent months from Tim Shipman has written this about how even number 10 staffers, let alone cabinet ministers, get very little face time with Keir Starmer. I think the striking thing about the way he's run this government is not that he's not spent much time with junior ministers.

13:18Ed Balls: He doesn't seem to have spent a huge amount of time with cabinet ministers either. And that actually may be a deeper problem. It's a team sport. and you need to have the people around you to sound off and engage. And if Wes is right, this is quite unusual.

13:35George Osborne: Good question, Jude. Thank you. Now, our next question is from someone who's been a government minister, a Labour government minister, Baroness Jan Royal. And Jan, it's good to have you on the show. She is the chair of the Joe Cox Foundation. Hello, Ed and George. Jan Royal here, chair of the Joe Cox Foundation. It's the 10th anniversary of Joe's murder, after which many promises were made. Reflecting on the last 10 years, what progress do you think has been made in living up to Joe's message that we have more in common than that which divides us? And what more do you think we need to do in politics and society to uphold that message?

14:16George Osborne: It would be great if you could discuss this. Thank you.

14:20Ed Balls: So great question from Jan. Jan, not only chair of the Joe Cox Foundation, also ex-Labour leader in the House of Lords under Gordon Brown, worked for Neil Kinnick back in the day, I think was head of Somerville College as well. But she has a kind of a very active House of Lords lineage. And it was actually Jan who came to us a few months ago and said, if Century's dad are playing the Water Rats this summer, could it be with proceeds to the Joe Cox Foundation on the 10th year anniversary? and that is what we are doing. And as we said in the main podcast, we're also giving out two tickets to anybody who sends us in a question as a Kitchen Cabinet member with Centrist Dad in the title.

15:01Ed Balls: But Jan's...

15:02George Osborne: Sorry, that's just a gratuitous plug and got Sid Sodal to do with the question.

15:06Ed Balls: It's a gratuitous plug for the Joe Cox Foundation who get every penny of the ticket prices from our gig at the request of the fabulous Jan Royal, Baroness Royal, who has sent in this question. So is it a plug? Yes. But it's a plug for a good cause. It's a very, very good cause. But getting to the seriousness of the, you know, and briefing notes put out this week by More In Common, Brendan Cox, I know, wrote an article. Jan has been saying these things as well. If anything, I think the judgment of the foundation is that things have gone backwards, not forwards in the last 10 years. Whether you talk about threats to members of parliament, loneliness or the sense of community cohesion and cross-party commonality in our society their view is things have gone backwards and that is is a worrying and depressing message to get from jan and the foundation but i'm afraid it's it's true and uh it's to in a way reflecting what we talked about on the main podcast if you look in the make and field by election i think there's some Social Market Foundation research, which highlights this.

16:17Ed Balls: Since the beginning of the by-election, there has been in that area on social media a big rise in social media propagated untrue myths, mainly focused on Andy Burnham and his family. That's a material thing which has happened as a political consequence of this by-election. On the one hand, have we moved away from politics, politics, you know, kind of person-on-person abuse. If anything, it's sort of got worse, the way in which our politics discourse is so doubting of the integrity of politicians on the other side of the aisle. I don't know whether you saw this. David Lammy called this out in Prime Minister's Questions this week.

17:00Ed Balls: When the Conservative MP Matt Vickers, being interviewed about the Keir Starmer and the attacks on him from kind of seemingly Russian infiltrating individuals, the arson attack. He started saying, you know, well, you know, no smoke without fire. I mean, what's really got on here? He was actually sort of propagating some of the pretty disreputable myths which are around. So, I mean, Matt, don't do that. That is not the right way to conduct our political discourse, politician on politician. but then also as we said last week um there is now a more overt conversation about ethnicity and kind of social uh division uh rishi sunak removed suella braverman for saying there could be two-tier policing which was um anti-white this has now become a commonplace thing to say four

17:56George Osborne: years on yeah i mean you know it's still um very much actually in my memory the the day poor joe was killed, terrible day. And it was, you know, because it's the 10th anniversary. And if you've listened to our main podcast, you'll have been reminded if you didn't already know it's the 10th anniversary of Brexit. You know, she was killed just a week or so before the Brexit referendum. And it was the day I was giving the Mansion House lecture or speech with Mark Carney, now Prime Minister of Canada. He was governor of the Bank of England. And we, you know, I called him up and said, this murder's happened.

18:28George Osborne: I don't think we should give our speeches. We should just, you know, we're going to have to just, we can go to the dinner and get up and say I think it's appropriate to give a big speech and I think every MP thought gosh there but for the grace of God goes I and of course since then we've had another MP murdered by a constituent David Amess.

18:44Ed Balls: It was a terrible day for us because it was reported without a name that this had happened to a West Yorkshire MP and all of our children were straight on to me asking that question and it was deeply traumatizing for them in particular. I mean, that is just the nature of politics in modern Britain. But I mean, it was a terrible day, which particularly for our kids lasted a very long time.

19:12George Osborne: You say it was a, I mean, it sort of heralded an age. Until, I think until then, I've always felt, I actually had police protection as chancellor, but I just felt as a constituency MP, basically very safe. And I think after that, every MP thought, you know, actually I don't know who's walking through the door and they've had to spend lots of money on kind of security measures for surgeries and so on constituency surgeries but I mean to Jan's question I mean I wish I could give a more positive answer I don't think Joe's message about you know reflecting on what unites us rather than divides us is heard in our politics in our society and so it hasn't been heard so much in the last 10 years um and whether that's you know because everyone's angrier because of the kind of general economic sluggishness of the country whether it's you know the rise of populists all you know interconnected with that whether it's social media that means people seek out you know to say more extreme things in order to grab attention who knows but i don't think it is heading in the right direction what i do think is heading the right direction i think you know the fact often when someone's uh killed in a tragic situation um the family and friends do set up kind of foundations and legacies and that kind of thing and they quite often don't last that long they're like gestures of love and support in the immediate aftermath and then you know two years later they kind of quietly um why you know wind down frankly But the fact that 10 years on, the Joe Cox Foundation is going well, the more in common work is very prevalent in our sort of political discourse, I think is a real tribute to all those who have taken on her legacy.

21:03George Osborne: And of course, her sister came into parliament in her seat. Anyway, we wish Joe's family well on this very painful anniversary.

21:12Ed Balls: And there is something we can do. It's partly about the discourse of politics in the couple of years after this tragic murder, when this was first being commemorated. Michael Gove and I did Gangnam Style together in a lift in the department. It's possible to do cross-party things.

21:30George Osborne: That's what Joe would have wanted.

21:32Ed Balls: The discourse of politics doesn't have to be divisive and nasty. But also, returning to also what we said in last week's podcast, social media companies are not platforms, they're publishers. And they have to take some responsibility. If you go to make a field, I mean, whether it's driven by politics or driven by seeking advertising revenue, if you see a surge in fake news in a by-election aimed at Andy Burnham, the publishing platform can do something about that, and they should.

22:00George Osborne: This gang was on the lift. Was anyone else there?

22:03Ed Balls: A camera. Right.

22:05George Osborne: I mean, like the security camera.

22:07Ed Balls: No, no. No, no, no. It wasn't illicit.

22:11George Osborne: Oh, you were both closed?

22:12Ed Balls: We were entirely clothed and we intended to do it. And, you know, I didn't leave my wife for him.

22:18George Osborne: And who was underneath him? Who was on top and who was on?

22:22Ed Balls: No, we were dancing, standing up.

22:26George Osborne: But doesn't someone go through someone else's legs in Gangnam Style?

22:29Ed Balls: We didn't do all of it. For Kitchen Cabinet members, we'll put a clip in our newsletter.

22:33George Osborne: And you can see it in its pure, unindulterated, but innocent truth.

22:40Ed Balls: And on that note, we'll take a break.

22:52you've got social dialed in search is doing its thing so why do your marketing results look the same as six months ago that's because you're fishing in the same pond as everyone else podcast listeners are a different audience entirely more engaged harder to reach through traditional channels and ready to act when someone they trust makes a recommendation We're Acast, and we put them right in front of you. Browse thousands of the world's leading podcasts, book host reads or run your own ads, and track every conversion in real time. Same skills you already have, brand new results. Acast. Acast.com slash advertise.

23:36Ed Balls: Welcome back. Here's a question from David. Hello, Ed George. I love your well-produced podcast. you can tell this as I've now caught up the last two years worth. My question is whether politicians would be better off truly listening to the people and acting earlier. We have a habit in this country of letting a problem that everyone knows about build up and up and then doing a large reactive overcorrection later. Had politicians listened to the public around Maastricht or Lisbon, some of the heat might have been removed from the Brexit debate. The most pressing current one is around immigration.

24:06to summarise, as Emily Thornberry found out on her excursion to the suburbs, how able are politicians to change the view of a nation? Or is it that white van man is always right and politicians just trail along in their wake?

24:23Ed Balls: Goodness, white van man. Do they speak the truth?

24:28George Osborne: Well, what do you think? Presumably, white van man was very prevalent as a... For people who don't know, I mean, I'm sure many people do, White Van Man was a phrase, I think, really coined by the Sun newspaper, wasn't it? To speak to a kind of, I think, what in a previous generation they might have called like Essex man, who's basically a hardworking builder, plumber, self-employed, going out to work, aspirational, wants to own their own home. You know, wants the police to do their job, not very keen on welfare, that kind of thing. And back then, the two mainstream political parties, Labour and Conservatives, would kind of fight over White Van Mann.

25:11George Osborne: And I think White Van Mann even had a column in The Sun, obviously not written by White Van Mann, but probably ghostwritten by George Pascoe Watson or something like that.

25:21Ed Balls: I can, in fact, tell you a story about that, which was, I can't remember which budget it was. It may have been 2000 or 2001. We were doing welfare reform, but increasing the generosity of tax credits while being tough on work rules. And the Dorian political editor, Trevor Kavanagh, was in touch to say they want the Treasury to calculate whether white man van would be better off. And white van man was, in fact, in his white van driving around Parliament Square. And we set up a call with the Treasury officials who investigated the detail. and without going into you know the kind of the murky reality because I don't know what the murky reality was senior civil servant came in about an hour later while White Van Man was still driving around Parliament Square to say it's a bit complicated and we've looked at the tax benefit situation and you know you asked whether we could get the numbers and allow a photo opportunity in Downing Street, they said, we just don't think that would be wise.

26:23Ed Balls: It would not be a wise move.

26:26George Osborne: What, with this specific individual or just with any white van man?

26:30Ed Balls: I didn't want to know the detail of this individual, but they had found out the individual's details and I didn't ask them the individual details. I don't know. And the individual details weren't passed to me. And I rang Trevor Cowder and said, Trevor, I don't know the individual details. I don't want to know. And you don't want to know. but rather than do the photo tell white van man to drive south fast and um and let's just

26:53George Osborne: leave it there but isn't it part of the white van man thing is of course he does like cash in hand jobs that was the i mean i remember there was an attempt when i was a treasury it was um one of the junior treasury ministers was talking about you know tightening up tax enforcement to getting trying to get rid of uh kind of cash in hand uh jobs from the building trade and everyone was outraged. The God-given right for your self-employed builder not to pay any tax.

27:22Ed Balls: I don't think, you know, there's cash in hand, there's complex family situations, there's all sorts of things which are entitlements and truths and realities. And all I know is in a very civil service-y way, I don't think a photo would be wise. We thought, oh. Raised eyebrows. However, serious point. What about David's question?

27:40George Osborne: This is about politicians leading

27:43Ed Balls: opinion or being led by a serious point if you don't start by listening and you don't hear what people are saying if you decide you know better and they're wrong you fail politically so on the immigration debate you have to listen you have to hear and what white van man does is express you know a um often a widespread view and it's not about one individual but if they're expressing a widespread view, you've got to listen politically and understand that. However, you've also got to then lead and persuade. And you don't have to sort of take a view as a truth. You don't have to be passive. Yes, the answer, David, is that you can persuade people of the right path.

28:26Ed Balls: But you don't do that if you don't start the conversation.

28:30George Osborne: Yeah, I think this is always the central kind of dilemma in politics. To what degree are you following opinion? To what degree are you leading it there's no doubt politicians who simply look at opinion polls or focus groups and repeat back to the public what the public have said are not going to succeed it's not leadership and and the public holds a set of contradictory views of course which even they kind of often acknowledge that are somewhat contradictory what they want is leadership and you don't get i'll say you don't get real change unless politicians make arguments and then try and change people's views definitely and there's lots you know we don't have time here but the history is full of very successful examples of people quite dramatically changing the country's views on things.

29:11George Osborne: I mean, most obvious, you know, something like the death penalty or gay marriage or, you know, things that people were very against or in case death penalty, very for. And then over time, you know, political leadership in the face of majority opinion did change that opinion. So I think it's a, but you're right that if you do it with a kind of sense of, I think the public can detect if there's a disdain for the public. You can treat them with enormous respect, listen, and still say, I respectfully disagree and I think we should do this and I'm going to persuade you why. That's leadership rather than I don't really care what you think.

29:50George Osborne: That's not leadership.

29:51Ed Balls: You're going to vote leave. You're stupid. Let me tell you why you're wrong. You're going to vote leave. Let's talk about what is going wrong in our society. What can we do better? Is leaving the European Union really going to help? Those are the two versions of that conversation. We'll need to move on. Next question is somebody who wants to remain anonymous. We'll call it Emily. And this has been voiced by one of our producers. Hi, Ed and George. Do you think the free childcare hours that are routinely mentioned by government ministers in TV interviews should be available to those earning above£100 ,000?

30:23Alternatively, do you think the tapering of the personal allowance at this level should be reassessed? There is no tapering at this salary level, but a cliff edge. I fully appreciate that I'm in a fortunate position, but I currently earn a salary that puts me in the£100 ,000 tax trap. I've done the numbers and realised that I would be better off earning£99 ,000 and thus gaining the free childcare hours. It seems a perverse position in our tax and benefits system that the government is actively encouraging me to earn less and pay less tax, especially as if a couple were both earning 99 000 each and thus a lot more money overall

31:06Ed Balls: they would not lose the child care hours so this is a complicated one and um and it's it's the kind of conversation that we will have had very many times when we were in the treasury at different times. And the economic evidence is that tax rates and incentives don't tend to have a big impact on the behavior of people who are working 40 hours and whether their tax rate is 40 or 45%. But in particular for people with children who are deciding whether to work or not and how many hours to work, whether you're better off, whether you get the benefits really has an impact. And That's what all the historic evidence is.

31:52Ed Balls: And this is a good example of that, because in this case, Emily, because of the particular perverse way the tax system and benefit system works and childcare entitlement, as she says, she's worse off if she earns over 100 ,000 and loses childcare than if she works fewer hours, earns less money. And the real reason why that's happening is because of this cliff edge, which happens at 100 ,000. And in making tax and benefit policy, a cliff edge is cheaper and cleaner and clearer. But it can also lead to this kind of unfairness and perverse incentive.

32:28George Osborne: Explain to people what do you mean by cliff edge versus a taper.

32:32Ed Balls: A cliff edge means up to 100 ,000, you get it. From 100 ,000 on, it goes entirely to zero. And the same thing happened with child benefit when you withdrew child benefit. The alternative thing to do is to say, OK, well, you get all of it to 90 ,000 or 100 ,000. And then for every pound you earn, we will only give you 50 percent and then 30 percent and then 10 percent. So you taper it away. And as she says, the personal allowance, which is a benefit to her, is tapered away over time. And that's been taken away. But the child care, which is a benefit to her, is removed entirely in one cliff edge moment.

33:11Ed Balls: And that is where the unfairness or the perceived unfairness comes from. And, you know, in general, if you dig into the politics of cliff edges, they tend to become messy and difficult. And it's better to spend the money and manage the taper. In my experience, I don't think generally we did cliff edges because in the end, they cause exactly the kind of problems that Emily's talking about here.

33:37George Osborne: No, look, I have a lot of sympathy for Emily's situation, even though on any kind of broader look at society, she's definitely one of the highest earners in the country. But the statistics don't speak to what her experience will be, that earning£100 ,000, she's still struggling with all the pressures on her and feels she's being very unfairly treated by the tax system. And the truth is, she is being quite unfairly treated. Now, it's not much of a consolation that, as Ed says, in fact, the Chancellor of the day and Treasury officials will know that. This is not something that is unknown inside the Treasury.

34:17George Osborne: because every time you do a budget, you get presented with a chart which shows the marginal tax rate for individuals at different points in the income scale and what potential reforms you could make to basically alleviate it. And for some time, ever since Alistair Darling removed the personal allowance as part of the post-financial crash, you know, initial dose of like, we've got to fill the black hole, he removed the personal allowance for people earning over£100 ,000. And that started to create this sort of very high marginal withdrawal rate. Add to it some of the changes I introduced, like removing child benefit.

34:59George Osborne: Add to it, this is the change I think the SUNAT government did on childcare hours. And then Jeremy Hunt actually, I think, reduced in the rate at which the 45p tax comes in, And all of which speaks to, you know, if you're earning somewhere between sort of£120 ,000,£125 ,000,£130 ,000, you're facing much higher tax rates than people who, okay, earn less than you, maybe no surprise there, but than people who earn more than you. And that's very unfair. Why does it happen? I mean, it happens for two reasons. One is, it's just, you know, when you're trying to tax millions and millions of people, you do get these messy situations.

35:37George Osborne: It's not always as neat as it should be, or you would like to believe if you were designing a tax system from scratch, it could be. The problem with the tapers, which you talked about, is that they are themselves very complicated. Quite often can require people to fill in tax returns who otherwise wouldn't have to fill in tax returns. It could all be done through PAYE. And so it's a big administrative burden on individuals and on HMLC. And I can see, you know, I wasn't there at all for this decision around childcare, but I can just see like we're trying to introduce this thing. it's expensive how are we going to be able to justify giving this thing to millionaires i know we'll just have a cut off at a hundred thousand pounds and that kind of decision it feels quite bald and you know slapdash but that is how policy making often happens you've just got to make you make a decision but it creates these perverse situations the problem is this i don't want to disappoint emily there's no i can't really see the politics at the moment of anyone trying to solve it.

36:34George Osborne: I imagine if you had a prolonged period of prosperity where people weren't trying to kind of nick little bits of tax revenue here and there, freeze thresholds, you know, do stealth taxes like this. You could imagine a sort of chancellor reforming this whole area in a budget. But until that point, I'm afraid it's not working for you.

36:57Ed Balls: And as she points out, if you are a two-earner couple with independent taxation, both earning£99 ,000, then that feels particularly unfair. But that is the independent taxation system. And if you don't do this as a within the household assessed kind of benefit system, you do it through the tax system. This is the kind of perverse incentive which gets thrown up. Thanks for your question, Emily. We'll be back after the break with one more question.

37:30Here's a tip for you. There's a podcast out there with fans waiting to be your next customer. They tune in every week. They trust the host. And that host wants to talk about brands like yours in their own words to their audience. The problem is you just haven't been introduced yet. We're Acast, where that introduction happens. As the world's largest podcast marketplace, we let you browse shows, see who's listening, and book host-read sponsorships or run your own ads all from one platform. Transparent pricing, real-time data, complete control. Start advertising on podcasts by visiting acast.com slash advertise.

38:16Ed Balls: Our final question is from Duncan. And George, I think this is going to be a challenge for you. Duncan from Ottawa, Ontario here. I was sorry to hear George conclude that he thinks Ottawa is a dour place based on one visit in the rain. I hope that Prime Minister Carney can convince George to return when it might be sunny when Ottawa presents much more colorfully. My question is, what do you think are the big swing elections in history? For example, if Al Gore had won the 2000 presidential election, the United States would have gone to war against climate change and would not have gone to war against Iraq.

39:02What are the other elections that might have produced a much different result in history?

39:09Ed Balls: So, George, Duncan says you don't understand Ottawa. It's not dour.

39:15George Osborne: hmm i well i i'm maybe i um didn't explain myself very clearly so the day i was there two days i was there it was pissing the rain it was so even even the most even venice uh or florence in the pouring rain is quite hard to um uh you know really enjoy let me put it that way It was more a kind of commentary on the architecture. I meant Doerr in a kind of Edinburgh, Glasgow, so it reminded me very much of a kind of northern British city for good reason. which was at the time built as the new capital and, you know, the new capital of Canada and somewhere between Toronto and Quebec and or Ontario and Quebec.

40:04George Osborne: And, you know, it's a bit like Canberra is halfway between Sydney and Melbourne and Washington is halfway between the north and the south. You know, these new capitals are built like that. And it was clearly, you know, there's a there's a big Scottish ancestry, isn't there, to some of the Canadian settlers. and it just, the builders sort of very monument.

40:24Ed Balls: George, you are talking at length in your desperate desire to justify the fact that you basically trashed Ottawa. When I went, it was suddenly I really liked it.

40:32George Osborne: I thought the parliament was spectacular. I mean, from the outside, they're renovating it, which is what we should be doing in Britain.

40:36Ed Balls: I think we should get onto the substance. Honestly, this is the whole thing. Stop digging.

40:41George Osborne: I'm saying anyway, I didn't not like it.

40:45Ed Balls: Okay. Dig, dig. Now. I mean, look, he's totally right that the Al Gore election was one of those?

40:53George Osborne: Well, okay, it's a good question because you could... 9-11 would have happened, right? Would it? Yes. Oh, definitely. Okay. Oh, come on. Those people were planning for years to fly into the Clintons.

41:05Ed Balls: But it may have been that the intelligence would have been taken more seriously by Bill Clinton than Al Gore. I think you're probably right.

41:12George Osborne: You say George Bush than Al Gore, not you said Bill Clinton.

41:15Ed Balls: No, but Bill Clinton had received intelligence, taken it seriously. Al Gore might have treated it differently. Maybe their eye was off the ball. Maybe they wouldn't have gone into Afghanistan. Maybe that wouldn't have led to Iraq. I don't know. The thing which you know is that on climate change, it would have been different.

41:31George Osborne: Okay, no, sure. Look, I think, to start with the Iraq war, I think there's almost, 9-11 would have happened. There would have been the Afghan war, but it's pretty likely there wouldn't have been the Iraq war, right? But you're not 100 % sure, but climate, yes. You know, every Democrat president engages in the kind of global climate fight and every Republican president essentially pulls the U.S. out of it. So I'm not sure that 01 was really consequential any more so than any other presidential election on climate. I think what about I thought I'll tell you two kind of really consequential elections in my view.

42:11George Osborne: So first is the 1980 presidential election, the election of Reagan. You know, I think that is a big shift in American policy, which lots of people, you know, didn't applaud at the time and don't like. But I think if Carter got reelected, I don't think we would have had the kind of Reagan decade, obviously, self-evidently. But what I mean is it felt like America turned a corner, which I'm not sure Carter would have been able to pull off. although I have a huge amount of respect. I met Jimmy Carter quite a few times and went to his home. So personally, I like him a lot. And I think in British politics, I think there are two elections.

42:51George Osborne: If you look at the 1983 election, which easily Thatcher could have lost after four years of pretty painful economic medicine and a recession, but the Falklands War kind of essentially helps her and Michael Foote being the Labour leader helps her. But I think, you know, if the Thatcher Revolution hadn't happened and you'd snap back to a Labour government, that would have been pretty consequential in Britain. And I was thinking, what about the 2019 election or the 2017 election? Jeremy Corbyn against Theresa May in 2017. I mean, he gets within three or four seats of being the prime minister of Britain.

43:30George Osborne: I mean, it is an unbelievably close election. She only survives by cobbling together a deal with the Ulster Unionists. and we would have had Jeremy Corbyn as our leader. I mean, who knows what would happen with Brexit, which we've been discussing on our main podcast and all of that, because it was all in the aftermath of Brexit, of the Brexit referendum, but not the actual deed. But think of how, you know, it would have been like a very British coup, you know, that novel from the past, that TV series as well, of a kind of radical left prime minister and essentially ousted by the kind of army and the intelligence services.

44:03George Osborne: Or would, you know, how would a Corbyn premiership played out?

44:06Ed Balls: Well, see, it's interesting. I wrote down on my way in this morning, two different elections. I didn't choose 2017, partly for the same reason, as I said, on the main podcast. I think that after the 2016 referendum, the Conservative Party was going to get Brexit done. And I think probably if Jeremy Corbyn had won that election, then Boris Johnson and a Conservative majority would have followed in due course. By the way, Jeremy Corbyn was the person who first said we should trigger Article 50 to get Brexit done. I chose 1983, not 1979, because 79, it was another change of government after 70 and 74.

44:49Ed Balls: And actually, Margaret Thatcher was in real trouble midway through that parliament. But the fact of winning in 83 cemented the Conservative majority and gave her, I think, more of a mandate than she had in 79 for the Thatcher reforms. And the biggest changes happened after 1983. So I chose 1983. And the second one I chose was 1945. And interestingly about 1945, not because of welfare reform, because, of course, the Beverage Report had been published by a liberal beverage during the coalition government and not because of the 1944 Butler Education Act. again um a tory a tory in the coalition government but i think if labor hadn't won in 1945 in the context of um that immediate post-war controlled environment i don't think we would have got the national health service in the way in which we we did and the whole shaping of british health policy and all the things which could flow from that i don't think you would have had the nhs if it hadn't been for 45 and then Anir and Bevan.

45:57Ed Balls: And so I think in terms of... I mean, there are other things which we could debate. By the way, I think there would have been a sterling crisis in 49, whether you'd had a Labour or Conservative government. But I think the NHS is one thing which is probably 1945 election dependent. So that was the other one I chose.

46:13George Osborne: What about the 92 election if Roy Hasley had become deputy prime minister? because there's an argument that John Major kind of seals the Thatcher revolution, i.e. the Labour government that comes after it, Tony Blair's government, you know, really accepts that Thatcher has changed the country, which is even by 92, Kinnock and Hassett. Just so we end where we started.

46:35Ed Balls: In 1992, Neil Kinnock, the leader, and John Smith, the shadow chancellor, are both absolutely committed to the ERM policy. There's an attempt to say, I know, but would Neil Kinnock have changed it? Would John Smith have changed it? no way they would have changed it. It would have been too difficult for them politically. Black Wednesday would have happened. And I think it would have been, you know, the same catastrophe for Labour as it would have been for the Conservatives, maybe even more so because of a Labour government with all those memories of the 1970s. So in the end, I think... That was the one to lose.

47:06Ed Balls: It was... Which I normally hate. No politicians ever wants to say that, but that is probably right. would that have stopped Tony Blair? I think in the end it was more of a postponing election rather than a change in the course of direction. Anyway that's a really really great question there from our Ottawa resident Duncan.

47:30George Osborne: I'm definitely going to return and hopefully it will be Sunday.

47:33Ed Balls: That's all we've got time for this week. If you have any questions of your own you can always send them to questions at politicalcurrency.co.uk

47:39George Osborne: Yeah, politics, culture, history, anything else you can think of we do like a variety. We deliberately choose a variety for you. So you enjoy the line and length of the questioning.

47:48Ed Balls: And we'll be back on Thursday with our main show. Don't forget Centrist Dad in the title. If you're a Kitchen Covenant member, George will be there, Madonna, Chaperone, the Beatles. You've got to love it.

47:59George Osborne: They're not going to be there, are they? Just in spirit.

48:02Ed Balls: The Water Rats is the venue in which Oasis, Bob Dylan, the Pogues, and Centrist Dad all played their first London gig live. and look what happened to the other three. So, you know, be there.

48:14George Osborne: It was also your last.

48:15Ed Balls: It was our first one. And be there. And, you know, history. Wembley Stadium next.

48:20George Osborne: We'll move on, Harry Styles. There's someone else who wants to take up residency.

48:25Ed Balls: I've actually played the O2 Live before and Wembley Arena, but I'm happy to return to both. And on that note, we'll see you next week.

48:31George Osborne: Bye.

48:39George Osborne: Thanks for listening to Political Currency. This has been a Persephoneca production.

49:11perfect audience, set your budget and launch. And if you want a hand, our podcast specialists are there to help you launch with confidence. This is podcast advertising without barriers. Get started at a cast.com slash advertise.