Inside Trump’s Davos Moment

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

0:27so we are remote today i'm in london george is still in davos a health warning for our listeners he has a very bad throat he has been on the davos lash for the last two nights and you know it's even more unhealthy than a party conference but the exciting thing is i was seeing a tweet from Faisal Islam, the BBC economics editor, who said that yesterday for the Trump speech, 5 ,000 people in the room, people fighting to get in, world leaders, foreign ministers, were excluded in the crush. They couldn't get in, but George Osborne was there. I know from a photo he sent me that he had a ringside seat.

1:08So despite the sore throat and presumably the multiple hangovers over three days, you still heard the president. I mean, there are no lengths I won't go to, to be able to report to political currency listeners what's really going on in the world. Was that your main motivation, rather than schmoozing and networking and sort of being part of the global elite? It's all for the podcast. You know, whether that involves elbowing out billionaires and world leaders to squeeze my way into the room to see Trump. I mean, it was literally like a crush. It was like sort of, they've just opened a door at a pop concert and you're rushing in to get the front seat.

1:43So that was all a bit mad. And then last night watching Marcus Mumford of Mumford and Sons play his guitar standing on a bar and seeing Katy Perry walking around. No wonder you've got a hangover. And having a drink with Howard Lutnick, the US Commerce Secretary. Did you actually elbow a world leader? I mean, as in like one kind of world leader to another, of course. But did you elbow a world leader to get into the speech? I did what was required to be able to report to you and our other listeners what is going on. We are going to get the colour and the inside story from Davos because first of course we're going to talk about Donald Trump, his week, his arrival in Davos, his strategy for these meetings and then the rather surprising turn that things took after the speech in his Q &A.

2:32We'll talk about that first. Then we're going to turn to British politics. While I've been here in Davos, another Tory MP Andrew Rosendale has defected to reform and Robert Jenrick's been explaining his decision and of course Nigel Farage has indeed turned up here in Davos. So we're going to take a sort of health check on the state of relations between the Tory party and reform and whether we're going to see more defections to reform. I'm looking forward to that because last week you had no notice at all of the Jenrick defection. You had to respond in the here and now but a week on. How is this affecting the Conservative Party.

3:07Fascinating. Finally, I said last week I was off to the Franco-British clock to, look, it's not quite Davos. There were no hangovers. There were no late night discos and, you know, Munford and Sons didn't turn up. But we did talk about the British... Hold on, there are late nights at the clock. There's hanging around in the bar till one in the morning chatting. I seem to remember. With you, indeed. I know, but I just, look, Katy Perry wasn't there, is what I'm saying. But the governors of the Banque de France and the Bank of England were both there. So in a way, we had our own stardust, as well as, you know, politicians and journalists and whatever.

3:45And we were talking about the Franco-British relationship, which is fascinating at the moment, but also what's happening in French politics. Are we going to see a massive upset in the French presidential election in a couple of years' time? But we're going to start with Davos. Now, I'm so looking forward to hearing from you about that speech because the days before it has been such a wild few days you had the end of last week Donald Trump announcing tariffs on Britain and other European countries big tariffs if they didn't give him Greenland him saying that he didn't rule out military action him doing a press conference where he has a map of North America with a big American flag slapped on Canada.

4:29He announces his board of, we thought Gaza peace, turned out to be world peace, chaired by him personally, in which he's invited a series of dictators from around the world as other world leaders. He himself chooses his successor. He has a veto on every decision which is taken by this board of peace. And you have to pay a billion pounds as a country in order to be a member for more than three years. And rather surprisingly, some other world leaders have been wondering whether they should join this. So a wild few days, I mean, kind of more Trumpian than any few days I can remember since he became president for the second time.

5:05And then coming into this speech, there must have been such anticipation in the room. What is he going to say? Yeah, I mean, I think just to set some context. So first of all, quite often the complaint at Davos is that the Americans aren't here. The American political team isn't here in Davos. You get leaders from all over Europe and around the world, but often the Americans might send their Secretary of State, but that's it. It's very different this week. The Americans are here in massive force. And it's not just Donald Trump, but you've got Marco Rubio, and you've got Scott Besant, and you've got Howard Lutnick.

5:37And there's a very, very strong American presence. As it happens, the leadership of Davos itself, the World Economic Forum, has passed from the Swiss founder, Klaus Schwab, who presided over it for many decades, to essentially Larry Fink, who is the founder and CEO of BlackRock and a Wall Street Titan. And so it feels much more American. And as a result, feels very relevant to the kind of conversations going on in the world right now. And of course, it was right here that the kind of Greenland, the Farago played out. I mean, I'll just make one. I have never seen Donald Trump give a speech. This is, for me, was the first time I was in the room watching him.

6:19And it's long, you know, I was in that room for almost two hours. The actual speech was an hour and a half. And then there was a Q &A afterwards, a fireside chat. What is interesting about it, if you're sort of trying to detach yourself from the content, he's very sort of accessible. He'll answer any question. He'll stay and answer questions for hours. There's nothing sort of controlled about the media in the way that sort of previous presidents and you know would have micromanaged he's here in davos previous american presidents didn't come here this is actually the third time he's been it must have messed up the traffic the traffic is unbelievably i mean it's already bad remember this is a tiny swiss ski resort and then the american presidential cavalcade comes to town i mean presumably block every road and i think while we're doing this podcast you might hear the helicopters because he's due to leave with his sort of apocalypse now helicopter cavalcade.

7:09I think the thing about the speech, it's just endlessly fascinating because you don't know what he's going to say. He has a speech on an autocue, you can tell, and then he diverts from it for long periods and then sort of comes back to it. And, you know, he tells these stories about world leaders. The language is so undiplomatic and unexpected. And everyone is slightly on the edge of their seats. I think my favourite bit was this idea that if it hadn't been for America in the Second World War, we'd all be speaking German and a little Japanese. And you think, I mean, you're the American president.

7:47What are you saying? I mean, it's so, it's astonishing. In a room in the German speaking part of Switzerland. The other thing is, you know, on the front row there was a series of reserve seats for christine lagarde the president of egypt didn't you get one i did not get the front row seat but they're all there a bit like kind of hostages waiting to see you know if he calls them out because he keeps going i can see you in the front row you don't know what i'm going to say about you do you and didn't christine lagarde walk out of a speech the night before which howard luck was speaking because she was so affront it.

8:23She just walked out. But she didn't walk out of the president. But the interesting thing is no one walked out of this speech. There were no boos or anything like that. Everyone listened. Almost all that he talks about is, in fact, the economy. The bit about Greenland, which was important, and that's where he announced essentially, you know, the US was sort of backing down of its sort of implicit threat that it might use force or that it was going to escalate the economic war with tariffs to get what it wanted in Greenland. You know, All the retreat was signalled in the speech. And so that was the most important content.

8:55But a lot of the speech is about the economy. You know, he's a very economy-focused president, and he directly links economic strength to military and foreign policy strength in a way that, frankly, I don't think European leaders, including the British Prime Minister, do. And I think there's a sort of big lesson in the world, which is you are sat on the front row listening to this guy, essentially with limited options of how to respond if you are not going to be able to match the United States' economic power and commercial reach around the world. And the reason why people have to pay attention to him is because he holds a lot of the cards, not all the cards, but a lot of the cards.

9:35And I think that economic content is a bit lost because the reporting of the speech and indeed, you know, the events here in Davos have been all around the kind of foreign policy issues. But as I say, the most important thing he said in terms of newsworthiness and what everyone was waiting to hear was on Greenland, although he did throughout the speech interchangeably call it Iceland as well as Greenland. No one in the room went, actually, it's Greenland you're talking about. But here's what he said on Greenland. We probably won't get anything unless I decide to use excessive strength and force, where we would be, frankly, unstoppable.

10:11But I won't do that okay now everyone's saying oh good that's probably the biggest statement i made because people thought i would use force i don't have to use force i don't want to use force i won't use force so when when he said that in the room you know you could hear a ripple everyone going like oh that's the news he didn't say in the speech that he was going to back off the threat to impose these tariffs on the uk and other european countries that came later and i'll tell you If you want an idea of how international diplomacy works these days, I was at a dinner, you know, and these things are private, so I have to sort of respect that up to a point.

10:47But I was sitting next to the head of government of a European country, and this head of government gets a message on their phone, and he shows me the phone. And the message is Trump has just posted on Truth Social, his social network, that he's not going to do the tariffs. and he's agreed there's going to be some kind of Arctic security meeting. And then that's read out to the dinner, which had lots of foreign ministers, heads of government, including quite a lot of people from the British government. It's the first anyone in the room has heard of it. So they heard at the same time as everyone else in the world heard because he was paying attention because he posted it.

11:28There was no advance notice. The hero of the hour is actually Mark Rutter, was the Dutch prime minister for many years, now is the Secretary General of NATO, has been criticised, as to some degree, I think, Keir Starmer has been of being too kind of compliant with Trump and not standing up to him and so on. And, you know, famously called him daddy, as Trump reminded him in the speech. But, you know, Mark Rutter seems to have pulled off this deal with Trump yesterday that was then broadcast. And I think, you know, in the kind of Davos circles, people are giving Mark Rutter a lot of credit for diffusing the situation.

12:04Although, as far as I can see, you have to put the word deal in inverted commas, because it's not clear that there is any deal here. I mean, with Donald Trump, you never know, is he going to double down and raise the temperature even further, or is he going to retreat? And there's this phrase, taco, Trump always chickens out. But actually, he doesn't always chicken out. Sometimes he doubles down. And I think the fear in governments, in defence ministries and foreign ministries in the last week was, is he actually going to do something really crazy around Greenland? But then he not only retreats on the military incursion, he also retreats on the tariffs.

12:44And he says a deal's been done. Nothing in this deal, well, look, first of all, it's not really been revealed because neither Mark Rutger or Trump have told us anything about what's been agreed and neither are the other foreign ministers. But also everything he's talking about was on the table before. There have always been American bases in Greenland. There's a clear desire within NATO to up NATO presence across the Arctic. If Trump wants to do that in a particular way, there's never been any indication at any point in the last years that there was any blockage to that. The only blockage was him saying, I need Greenland and I'm going to take it from you, come what may, even by military force.

13:23And so the conclusion is that he's backed down. And in a very Trump way, what he does is he says, I've won. I've got my deal. You know, you've all blinked. But actually, they've not blinked at all. They just stayed there and waited. and probably the combination of market instability and business leaders saying to him, what are you doing? And his own political operative saying this is massively unpopular means he is withdrawn from this. I mean, he's actually pulled away. As I understand it, his next big move is a speech about the economy and farming in Iowa. Wouldn't surprise me at all if he now, I mean, look, who knows?

14:02Because he might decide to bring this all back again next week. I think politically he'll be being told within the White House, let alone more widely, get back to domestic issues and the economy here in America. This wild foreign policy incursion is not doing anybody any good. That is the truth, that it is actually a humiliation for America, what happened yesterday, because he's not got anything and he's just pulled away. Now, it was also very interesting to hear from a very senior American pollster yesterday that, you know, his approval rating is now the lowest of any president in modern times.

14:41And that three quarters of Americans opposed the kind of Greenland, you know, excursion. Three quarters of Americans don't agree on anything. So it does a sort of striking backdrop. I think there's an interesting question, which is how you should react to these moments. Because what you hear from the Trump senior officials, the key aides, whose job it is to kind of, you know, speak for Trump, but also engage with European leaders and business leaders is like, stop taking everything so seriously. You know, don't overreact. Don't take the president literally. You're all too serious. And interestingly, that is what I hear from some of the senior British officials as well, which is the Europeans overreact.

15:27You've just got to play not even the long game. You've got to kind of wait a few days. But of course, the problem with that is you never know whether this time it's real. And if you're the ex-president of Venezuela sitting in a Brooklyn jail, who didn't take seriously Trump's threats that he was going to get rid of him, you can see what happens. So that's the problem. You don't know whether this time it's for real. It does feel, and by the way, I think I agree with what you just said, but it does feel as though the foreign policy diplomacy world is catching up. with what business and markets had worked out already.

16:00We were talking last week about the huge assault on Jay Powell, the head of the Federal Reserve. And I was pointing out that although Trump is saying he wants 1 % interest rates and he's going to get it and he'll change the Fed, actually the market's view is interest rates are going to come down to 3 % and no lower in America. The financial markets didn't really move when that diplomatic row broke out with Jay Powell because they don't really believe it. And similarly, a year ago, there was all this massive worry about the impact of the tariffs. And then Trump backs down on some of the tariffs, doesn't go so far.

16:36The market reaction is more muted. It feels as though the business and the financial markets world doesn't take the rhetoric that seriously anymore. But over the last week, the foreign diplomatic world did. But then maybe they ought to because in the world of foreign diplomacy, the words you use and the relationships you build and your willingness to torch those relationships for your own ends have long-term implications and you know doesn't it feel as though even if Trump is backing down and even there's not going to be a big kind of confrontation over Greenland what has been done to the NATO alliance and trust between allies is a big deal and quite deep and will change the way things go in the future, even if Trump doesn't return to the saber rattling again.

17:26Yeah, I think that's right, because alliances put in place after the Second World War, with America at their core, sort of depend on a predictable response from the United States in a situation that, you know, an attack on a NATO country leads to the United States coming to defend that country, for example. And that sort of predictability is entirely gone. Let me just say one thing which some people say here, which I guess we'll find out in the next week or two, that all of this has been a diversion, a deliberate diversion, as the United States moves into the Gulf region, its carrier strike groups, which were close to Venezuela, but have been sailing to the Gulf ever since, and are preparing for a strike on Iran.

18:06You do hear very kind of credible people. I'm not sure I entirely kind of buy this, to be honest, but it's worth just reporting on this podcast. I have heard that from quite a lot of people, so we will see. But let's come on to this question of how everyone else should respond to Donald Trump, including initiatives like the Board of Peace, as you were describing, fairly extraordinary creation of Donald Trump, this board of world leaders, you know, and he's invited Putin and Xi and various people, and you all have to pay a billion dollars to join. Isn't it being launched today in Davos? It's being launched today, as we do this podcast, and European powers don't know whether to join or not.

18:45On the executive board Tony Blair sits, you know, that's the kind of implementing board. So, you know, how do you react to that? So Tony Blair is on the executive board, but Keir Starmer and the British government are not going to actually join the Board of Peace, it seems. Neither Britain or France seems to be going along with this. He's saying pretty clearly today that we're not joining a Board of Peace which has Putin on it. Doesn't this put Tony Blair in quite an uncomfortable situation? To be fair to Tony Blair, you know, he is very focused on the reconstruction of Gaza and, you know, the poor, benighted people at the centre of all of this.

19:18And, you know, I think he feels he can do a lot of good there. And I think the executive board is actually going to be doing much more of the work than this, you know, overarching board of world leaders. The president of Kazakhstan is joining. And the prime minister of Hungary is actually the only European leader who has signed up. But, you know, the standout speech here, apart from Donald Trump, the one that people are still talking about, and remember, there are so many speeches, you know, every day here that it's quite hard to be the one that people really notice and remember, was the speech from our friend Mark Carney.

19:50It's a really, really powerful speech. I would recommend people who, you know, listen to this podcast, I think are interested in politics and world affairs. And it'll take 15 minutes of your day to listen to Mark Carney's speech at Davos. It was very, very well crafted. I would say Mark, when he was a central bank governor in Britain, you know, was actually not necessarily a very fluent speech giver. He was sometimes a bit stilted, but he's obviously grown into this role as Prime Minister of Canada. I saw him privately as well. He's on very good form. And I think we'll be very pleased with the way the speech was received, because what it basically said is, we have got to call out this behaviour, he says of the great powers, by which he sort of means China and the United States.

20:34But obviously, being the Canadian Prime Minister, the fact that he's putting the United States in the same category as China is striking. And he says what he calls the middle powers need to club together because they're going to be picked off by these great powers. And the worst thing to do is to fawn and pretend that, you know, all this is fine. And the most powerful bit of the speech, which we'll play a clip of here, was when he referred to something that the former Czech dissident and then president, Vaclav Havel, said. Anyway, this is the bit from the speech where he refers to the Havel metaphor.

21:11In 1978, the Czech dissident Václav Havel, later president, wrote an essay called The Power of the Powerless. And in it, he asked a simple question, how did the communist system sustain itself? And his answer began with a green grocer. Every morning, the shopkeeper places a sign in his window, workers of the world unite. He doesn't believe it. No one does. But he places a sign anyway to avoid trouble, to signal compliance, to get along. And because every shopkeeper on every street does the same, the system persists. Not through violence alone, but through the participation of ordinary people in rituals they privately know to be false.

22:01Havel called this living within a lie. The system's power comes not from its truth, but from everyone's willingness to perform as if it were true. And its fragility comes from the same source. When even one person stops performing, when the green grocer removes his sign, the illusion begins to crack. Friends, it is time for companies and countries to take their signs down. What did you make of Mark's speech? I thought it was very powerful and brave. I wasn't 100 % sure what to make of it because, of course, Mark Carney had just come back from a bilateral trip to China where he had been in a rather performative way meeting President Xi and doing a trade deal between Canada and the Chinese in a bilateral way.

22:55And that sort of slightly jarred with the message of this speech. There is a danger. The golden age lives. Well, exactly. And there is a danger of overreacting. On the other hand, if you're the Canadian Prime Minister and you see Donald Trump in the White House with a big American flag slapped over the country of which you're Prime Minister, you can see why you feel it's time to take the sign out of the window and call it out. Keir Starmer has not done that, and he's been criticised for not going as far as President Macron or Mark Carney in that speech this week. But on the other hand, you know, I think that he will think that the backing down of America around Greenland and on tariffs is a success for the quieter form of diplomacy that he has taken.

23:40And as you said, the British have been arguing for. And actually, Keir Starmer had quite a good moment in Prime Minister's questions when Kemi Badenok tried to back the Trump line on Chagos. Trump had suddenly rather out of the blue, having agreed to this sale and lease back of the Chagos Islands with the American base on which the British have negotiated, then said suddenly this is a terrible thing, a big betrayal, a failure of British national security. Kemi Badek decided to make that her issue at Prime Minister's questions. And I think the general consensus back here in Britain was this was Keir Starmer's best PMQs for quite a few weeks because of the quiet way in which he took Kemi Badek down.

24:24We all know, we all know that the people of Greenland do not want to be ruled by America. But does he agree that just as those in Greenland should decide their own future, so should the Chagossians?

24:42Mr Speaker, I've made out my position on Greenland absolutely clear on Monday at a moment ago. President Trump deployed words on Chagos yesterday that were different to his previous words of welcome and support when I met him in the White House. He deployed those words yesterday for the express purpose of putting pressure on me and Britain in relation to my values and principles on the future of Greenland. Mr Speaker, he wants me to yield on my position and I'm not going to do so. So I guess the question I would ask you, I mean, I have been very sympathetic to Starmer's approach to Trump, and I think it's kind of largely worked for Britain.

25:29But how long can he sustain it when there's going to be this domestic pressure from the left, from the parliamentary Labour Party, from the Liberal Democrats and Greens and so on, to be more outspoken, to be more like Mark Carney? And, you know, let's be clear for Mark Carney, this is both a principled stance, but it's also helping him enormously in Canada, where there's always a prospect now, because it's a hung parliament, although he's in charge, that there may be an election at any time. And his poll ratings are at a kind of record high. So, you know, for how long can number 10 keep domestic politics out of the Trump relationship?

26:07Because it feels like this week it was really, really hard. Yes, but I think if Donald Trump hadn't backed down overnight, then Keir Starmer would be under a lot of pressure and the Khabib-Badenok attack and the Mark Carney comparison and the Macron comparison would have been more acute. But because Trump has pulled away, then for now, Keir Starmer, I think, can justifiably say that my strategy worked. And as you say, unlike Mark Carney, he isn't facing the threat of an imminent general election. So I'm sure as you get closer to a general election, then that pressure grows. Although, of course, it's not clear Donald Trump will be the president by the time you get to a general election here in the UK.

26:51Things may have moved on. So he's choosing to play a long game. And I think he will think he can absorb Ed Davey or Kimi Baden-Ock in the House if he can keep arguing for the national interest. I actually think the person who's most worried in these days isn't though Keir Starmer or Kemi Badenoch, it's Nigel Farage, who was actually out there in Davos. He is the one I think who's got the biggest dilemma because on the one hand, you know, he has this close association with Donald Trump historically. On the other hand, he knows that whether you are Zach Polanski or Ed Davey or Kemi Badenoch, they're getting traction out of distancing from Trump and goading Keir Starmer into doing the same.

27:32and you know for somebody who always wants to be authentic and clear in his communications Nigel Farage isn't clear in his communications at the moment about what he actually thinks about America or Greenland or tariffs he's sort of slightly walking a tightrope what he's worried about and we've talked about this on this podcast before is that there are some people who agree with that strategy within reform and I think Richard Tice would be one of them but he has a right flank who think he should be more full-throated in his MAGA rhetoric and you know whether that's people within his party or people on the outside Rupert Lowe you know Tommy Robinson who has sort of been critical of Farage and his big worry I think is if Donald Trump decides in the way he lashes out and the way he lashes out you know this week at Keir Starmer or Macron or whoever if Donald Trump decides to say you know to Nigel Farage you're not really one of us you can't really be trusted you're not really on side you aren't really standing up in the way I'm standing up for Britain on free speech or security or whatever suddenly that's quite exposing for Nigel Farage so I think of all the party leaders he's the one who's more nervous more nervous than Keir Starmer at the moment yeah and of course that's this other balancing act isn't it I mean part of his relevance and, you know, power is that people know he's got the ear of the American president in a way that Kemi Bain not clearly hasn't at all.

29:06Keir Starmer obviously has conversations with him, but he's not a kind of fellow traveler. But as you say, it then can backfire, and particularly if Trump becomes more unpopular over the coming years. Domestically, I mean, he's already pretty unpopular in Britain. But we should come on, shouldn't we? Let's turn next to domestic politics and these defections from the Tory party to reform and what they mean for both parties and we'll turn to that next.

29:43So welcome back we were just finishing our podcast record last week when the news broke that Kemi Badenock was announcing the defection of Robert Jenrick to the Reform Party, ditching him from the Conservative Party in the process. And George, you gave an immediate reaction, which was that this may be a good moment for Kemi Badenock, but it's challenging for the Conservative Party. And I think probably it's fair to say in the days afterwards. Polls say Kimmy Bednock has been strengthened by this, that the public supports the action she's taken. But for the medium term, where does it leave her?

30:23I mean, I sort of stick with the judgment I made a week ago, which is there's no doubt that Kimmy Bednock handled, you know, a very difficult situation, which was news that Robert Jenrick was going to defect, as well as she could. I mean, she played the hand she had as well as she possibly could. She preempted his decision. She made him look, you know, a bit lost and all at sea. She delivered a kind of strong performance. And then she delivered a strong performance in the kind of way she's spoken to the Tory party since. That is all absolutely true. And, you know, a lot in politics is about conveying leadership and strength.

31:00All that said, it remains the case that a very senior Conservative MP who was the runner-up in the last Tory leadership contest and could have been a future leader of the Tory party has defected. And that picture of Farage with Jenrick on the front page of the Daily Telegraph and lots of other newspapers and the press conferences and rallies and whatever that have happened subsequently is a very visual sign that Farage is the winner. Farage is attracting people to his camp, not losing people from his camp. And of course, you know, I also said a week ago, I thought a key thing would be, are any other Tory MPs about to defect?

31:34And actually, Kemi said she was 100 % sure that wasn't going to happen. And then the next day, Andrew Rosendale defects. And Andrew Rosendale, I've known, you know, for a long time since we were in our 20s. I like Andrew, although I don't really agree much of his politics. He's very clearly, has been very clearly on the right of conservative politics for a long time, long before the sort of Brexiteers emerged as a force and so on. He won Romford from the Labour Party back in 2001 and then has held it despite big defeat the Tory party suffered at the last election. To be fair to her, didn't she say that she was confident nobody from the shadow cabinet was going to defect?

32:15And he's a shadow minister, so he's not shadow cabinet. So it wasn't a direct contradiction, but, you know, I think your point still stands. Yeah. And, you know, I think the thing about Andrew is, you know, a successful Tory party can't have only Andrew Rosendale's in it. It needs to be much broader. And I think one of the lessons for all of this will come on to is the Tory party needs to move more to the centre. But, you know, losing Rosendale is also quite significant. And, you know, then there's a possibility that a Welsh Senate member for the Tories might go as well. he's been suspended by the Conservatives because they think he's about to defect.

32:52This is just not a good sign. You're trying to persuade people that people are coming to your cause and people are leaving. And you can't ignore that kind of overall fact. And I think the kind of second point is, and this is a kind of big challenge both for reform and the Conservatives, if you look at the polling, it's interesting. The reform is not that far ahead now of the Labour Party and the Conservative Party. You know, they kind of hover in the late teens around 20 % and reform is in the mid 20s. So it's a few percent ahead, but it's not miles ahead. Of course, it's three years next election, that is a long way to go.

33:25But unless the reform party pulls off some sort of spectacular rise, and it's, you know, quite baked in now, it's going to face a very divided right at the election. and neither the Conservative Party nor Reform are going to be able to win and they're going to be cannibalizing each other's vote. And, you know, these defections are the sign that they are nowhere near any kind of agreement on how to operate together. And that shuts them both out of office because it allows Labour, probably in a painful relationship with the Liberal Democrats and maybe even the Greens, to remain in office after the election.

34:03So somehow Farage and Kemi Badenok, they don't need to do it now. But the ruthless calculation is, if we can't win by crushing our challenger in this part of the political spectrum, we're going to have to find an accommodation. I think what Farage is doing at the moment is saying, I'm still going for crushing them. Whether that will endure, we'll see. There's no doubt that for Labour, if there was to be a conservative reform pact, that would be very damaging. But there's a really interesting substact by Peter Kellner, where he points out how hard this is. If you look at the last election and seats where the conservatives and reform came second to Labour within just 10 percentage points, in the case of the conservatives, there were 85 seats where they were close behind.

34:52In the case of reform, it's only three. So if you were to have a deal where you said that parties would keep the seats they won and fight the seats in which they came second, that would be hugely advantageous to the Conservatives over reform. So on that basis, Nigel Farage is not going to agree. Whereas if instead the deal is to try and even out winnable seats between reform and the Conservatives, that's hugely disadvantageous to the Conservatives who'd have to give up a load of seats where they actually had a much better chance of winning than reform. Lots of candidates would be denied. So you can see why, as Peter Kellner says, very hard for there to be a deal which actually can be agreed between Kemi Baden-Ock and Nigel Farage.

35:38Why would that be in her interest? Why would that be in the interests of her supporters to pull out in that way? Because, you know, you also have to be ruthlessly focused on how I'm going to get myself to Downing Street. And I think at the moment she would say, and other leading conservatives like Mel Stryd and the like, and James Cleverley. Presumably James Cleverley quite pleased that Robert Jenrick has departed the scene, because that reopens the door for his potential leadership ambitions. But if I was a senior Conservative at the moment, I would sit down and write down what you think are the essential differences between the Reform Party and the Conservative Party.

36:12Because at the moment, it's pretty muddled. And it's not really clear that reform is that different on policy terms. You know, is it very different on immigration policy? Is it very different in terms of relations with the EU? Is it so different on, you know, public expenditure and welfare and the like? The answer is there are differences. And Mel Stride, you know, has actually worked hard and gave an important speech we talked about a few months ago, trying to reestablish the Conservative Party as the party of fiscal probity, cutting welfare, opening up a path to sustainable reductions in tax.

36:47And that's a very important ground that the Conservative Party needs to recapture. But still, a lot of the conservative noise is around immigration. If immigration is the issue of the next election, that is a disaster for the Conservative Party, because the only thing people are going to remember is there was the Boris wave, and then there was the small boats under Rishi Sunak. And Kemi Beynot was a member of that cabinet. And so they don't want immigration to be the issue of the election, because that plays into Farage's hands. They've got to try and make the economy centre ground. And I think they also have to develop and revisit, you know, the painful issue of Brexit, not in the sense of trying to overturn it or anything like that.

37:23But after the result in 2016, where two thirds of Conservative MPs voted remain, it became unacceptable in the Conservative Party to say Brexit was anything other than a brilliant idea. The then Tory government pursued a hard Brexit. Labour is rebuilding these trade deals with the EU. And, you know, maybe we'll do quite a lot more. The Conservative Party does not want to be like Nigel Farage of the election saying, elect us, we're tearing up all these trade deals, because Farage is going to win that argument. What the Tory party does is needs to get back in with the middle class part of Britain that it severed its links with after 2016.

37:58I want to ask you one question, because I haven't spoken to Rob Jenrick since his decision, but you interviewed him this week. What was your sort of sense? Was he kind of comfortable in his skin, comfortable with his decision, comfortable with the lines he was deploying, or was he a bit uncomfortable? I think there's kind of a mirror image with what we just said about Kemi Badenock there. I mean, it may be still challenging for her in the medium term, but in the short term, she has gained from the way in which she handled decisively getting rid of him over the last week. And for Robert Jenrick, this might work to his advantage in the medium term.

38:36Look, he's an ambitious guy. He wanted to be leader of the Conservative Party. He carried on his campaign to be leader of the Conservative Party, even when he lost the election to Kemba Beynok a year ago. And that is undimmed. And I respect that ambition. And it might be that in the end, if he plays a long game, he will become prime minister. I'd never believed that Nigel Farage actually wants to be prime minister. I've always thought he was the kind of politician who thought that he had more influence and more freedom by trying to change the nature of British politics from the outside. But if you said to him, do you want to do Prime Minister's questions and take responsibility for all those decisions?

39:14I kind of think he might run a mile from that. He would think that is far too challenging to the Farage brand. As we saw with Boris Johnson, it's very hard to be Prime Minister in the way you can be, as Donald Trump is President of the United States and give the impression of still being in opposition. In Britain, if you're the Prime Minister, you are actually in charge of everything all the time. And is that really what Farage wants to do? So I'm not sure Farage sticks around in the end. Maybe the generic moment will come. I reminded you of your lunch with David Cameron and Robert Generic last summer.

39:48Of course, the thing I forgot was, wasn't Nigel Farage at the next table in the restaurant? But I think it was a separate conversation. It wasn't the same conversation you were having. But in the short term, I think he's got it wrong. I don't think he's handled this well. even though there was all that planning and all those memos and all that kind of thought you know whoever wrote you're the new sheriff in town I don't think they intended that to be leaked to the Sunday Times but there's a bigger problem he's just done something deeply untrustworthy betrayed his party and his colleagues to jump ship and that may be the rational thing to do and it may be he can say you know the Conservative Party is just not facing up to the big issues not admitting to their mistakes.

40:30But in order to be a successful politician, he has to say to the country, I'm the one you can trust. So he does the untrustworthy thing, but at the same time, he has to say to people, trust me, you believe in me. And that is a political challenge for him. And his strategy over the last week has been to say, I am putting the national interest first, even if it's not in my personal interest. I'm putting personal ambition to one side. And I think most people look at that and think, do you think we're idiots? I mean, do you think we're fools? I mean, you know, why would you say such a thing? I put this question to him on Good Morning Britain on Monday.

41:09You could feel his discomfort. There's nothing wrong with you deciding the Tories were going to lose, you think reform might win, and therefore to go for with the winners. No, that's not right. When you say I put my personal ambitions aside, We all think that's absurd. Well, I think most people, I want people to be ambitious. Most people in the country are ambitious. And so I'm not ashamed to say, look, I want to be on a team which has the opportunity to fix the country and to turn things around. Is it a dead set? No, absolutely not. Look, it's in the balance, as it is for the country right now.

41:39We don't know what the future holds. You know how uncertain politics is at the best of times, let alone in the febrile world that we live in right now. He is running away from that line. him saying, I've put my personal interest to one side to put the country first. I mean, I think generally across Westminster, people thought that was ridiculous. Do you think defectors ever shake off the label of being untrustworthy? I mean, Winston Churchill did. Yeah, well, Churchill is the kind of outstanding example. But remember, the Tory party deeply, deeply distrusted him. And it was only literally the circumstances of the Second World War and the Second World War going badly that kind of force him in.

42:18And in fact, even then, they don't make him leader of the Tory party, although they make him prime minister. I was thinking like Sean Woodward, you know, actually had a long and successful career in the Labour government. And you served in the cabinet with him. But had he had been a Tory MP, is it the right calculation? You know, I mean, even if it's for the very narrow reasons, which is you don't want to be in opposition for most of your time in parliament. You want to jump ship. Do you think Jenrick will forever be now like untrustworthy? I think, look, Sean Woodward was a cabinet minister. but he was always the guy who defected and he was supported by Tony Blair and Gordon Brown but I don't think he was ever going to be leader of the Labour Party or leader of the Conservative Party so I don't think the parallel quite works with Robert Jenrick because he's more ambitious than that and therefore he's looking for you know a big personal political appeal in the way that Sean never did outside of his constituency.

43:10I'm sure that when you sat down with him for lunch you and David Cameron have told him not to defect because that is such a difficult and dangerous thing for him to do. But if you do it, you have to do it with a sort of, you know, I think you have to be open about why you're doing it. And I don't think those were good lines from Robert Jenrick. I think actually, the interesting thing now is what Nigel Farage does. Because as I said, Nigel Farage may not in his deep bones want to be prime minister, but he wants to run the country. I mean, I didn't challenge you on that earlier. But I mean, I think it's nonsense.

43:41Of course, he wants to be Prime Minister. Really? Don't you remember in the general election in 2015, when there was talks of hung parliaments, and he came on the radio to do a Today Pregnum interview, and he was asked whether if it was a hung parliament, he'd be willing to serve, and he ran a mile. You know, I think Nigel Farage has always managed to not be there at the scene of the crime in the things he massively influences. You know, we had Brexit, and then who is responsible for the Brexit aftermath? Not Nigel Farage. He didn't have to shape the economy or the deal or the immigration system, anyway, I might be wrong, is just a theory.

44:14Because he's a smart politician, and he cares about his place in history, he might think his place in history would be undermined by doing a Boris Johnson. But Kemi Badenok was very clear, you know, he's your problem now, Robert Jenrick. And Nigel Farage, on the one hand, you know, he may not, as I said, in his bones want to be Prime Minister, but what he doesn't want to do is be displaced by anybody else either. And Robert Genric is now in there and Kemmy Badenock is saying to Nigel Farage you know he is your snake to deal with. Robert Genric needs to be on his best behaviour but the revealed preference of Robert Genric we called him in our Christmas edition the traitor in plain sight.

44:55The moment he starts to do anything which looks like it's extraterritorial stepping outside his frame now he's not the shadow chancellor he's not the shadow forward minister the moment he does this as an opportunity for Nigel Farage, because at any point, Nigel Farage, the next two years can say, you know, this guy, Jenrick, you can't trust him. Badenot was right. I was always suspicious of him in the past. And now he's proved why I should be suspicious and he is out. I'm not sure reform pays a great cost for that, depending on how Robert does the next couple of years. But Nigel Farage might get quite a big boost out of that.

45:34And if I was Robert Jenrick, I would be on my best behaviour. I wonder whether between now and the next general election, Nigel Farage might decide to boot out Robert Jenrick and use that to strengthen his own position as the kingmaker. He wants to be the kingmaker. He wants to choose the king. He doesn't want Robert Jenrick to turn up and say, I'm the king, Nigel. Yeah, and well, certainly Rob has gone from being a free agent, essentially, in the Tory party with Kimmy Bainlock, you know, not strong enough to fire him from the shadow cabinet to now absolutely a hostage because he's got like no options has he really inside reform but we will see but on the other hand reformer ahead in the polls and certainly lots of people here in davos keep asking me you know isn't nigel frosh going to be the next uh prime minister but let's go across the um english channel where you were a week ago in paris or in versailles of course because you know you like to stay in grand circumstances So we're going to take a temperature check on French politics and indeed on relations with the UK from this key ally after this break.

46:50So welcome back. Our very own Roi Soleil, Ed Balls, has returned from Versailles. You would know this if you're one of our Kitchen Cabinet members, because it was in the newsletter. Tell us, you know, what was your impression of the state of French politics, and particularly this guy, Jordan Badella, who's the big coming force? And then tell us about the state of Anglo-French relations. So I've been going to this meeting for pretty much every year for 30 years now, and kind of always fascinating to take the temperature of French politics compared to any other year in the last 15 years. this was the year where the French absolutely believe a far-right, a Le Pen party, now called National Rally, used to be the Front National, that they have now a really good chance of securing the presidency in a couple of years' time.

47:37Marine Le Pen is unlikely to be the candidate. She has a legal case about using European money, which excludes her from running. And I think people expect that she won't win the appeal she has coming up but even if she won the appeal Jordan Bardella just over 30 written a book about the future of France which he's been mobbed in his book signing tour across the the country he is I think now seen as you know the post-Le Pen the better candidate he's the one I think we referred to this a few weeks ago been reaching out to the business community. And the polls say that he will come top in the first ballot, and it's going to be hard to beat him in the second ballot.

48:20There's an interesting parallel with Donald Trump in 2020. You remember there was a period where people were saying, how can the Democrats take on Trump? You've got to have somebody who will really take him on from the left. We need a Bernie Sanders candidate. Can't have some centrist like Joe Biden. And then what actually then became clear was that only Biden could win and managed to do so in 2020. I think what the polls say is if one of the left candidates, especially the harder left candidate, Mélenchon, if he comes second in the first ballot and then goes up against Bardella, then what happens?

48:56Because Bardella is now seen as more reasonable and electable, the centre-right vote doesn't, as with Macron, go over to vote for the non-Lemagne candidate. They actually support Bardella. For example, talking to Sophie Pedder, I've talked about her before, the Paris bureau chief for The Economist. Her view was, if it's a left candidate, Bardella wins. The only person who can beat him is a guy called Edouard Philippe, who was the prime minister in the first three years of the Macron government before and is now back as the mayor of Le Havre. He is a declared candidate and he could be Bardella, but, you know, he's been a prime minister in the now pretty unpopular Macron administration and he's their best hope.

49:42For the first time, I felt a pessimism amongst the French who never really kind of want to acknowledge this fact. And they all sort of think we shouldn't talk to the Le Pen party. But actually, they think Bardella has got now a really high chance of winning. But is that because the left and the right voters will no longer combine to beat the Le Pen candidate, which has happened in previous presidential elections, both for Marine Le Pen and indeed for her father? I mean, there've been quite a few French presidential ballots where there've been two candidates and Le Pen has been one. But is that because, you know, the left won't back the Conservative candidate and the Conservatives in the country won't back the left candidate?

50:19Or is it because Jordan Bardella has detoxified the Front National or the national rally? Maybe both the kind of temperature of French politics has changed and he's a much more appealing and modern and contemporary character and the issues he talks about are no longer outlandish, but are more mainstream. I think it's both those things. The polls say he's detoxifying himself for the centre-right voter who in the past, as you say, have voted for the candidate to beat Le Pen. And if it is a left candidate, they won't do that. But it's also the case. It's not clear who is the unifying candidate who left and right can come around and everybody's got baggage and nobody is hugely popular.

51:07So it's hard to see. I mean, as I said, Philippe is the front runner amongst the people I spoke to of who could do it, but whether he will do it, he might not do well enough in the first ballot and you end up with Mélenchon being defeated by Bardella in the second round. I think the other thing though, which is kind of worth thinking about in French political terms, they are totally stuck since that disastrous Macron decision to call elections and then end up with a hung parliament. They can't get their budget through. They're having prime minister after prime minister after prime minister. The normal pattern in French politics has been that whoever wins the presidency has then got a pretty good chance of getting a majority in the elections for the parliament, which come a few weeks after.

51:53That is less clear in this scenario. You could end up with Bardella winning, but then the French public not giving him that majority in parliament a few weeks later. And therefore, although you have a national rally president from the far right, he's actually sort of a bit of a lame duck from the beginning because he doesn't have the ability to get things through Parliament. He ends up being rather more Macron-ish than he would like from the beginning. So French politics may be stuck for years. Of course, I've said to you on the podcast, what do they actually really think is going on? They think Macron is standing back, thinking to himself, let this guy have a go and screw it up.

52:33and then Macron comes back in 2032. He can't stand for three consecutive elections. Nothing in the constitution stops in standing for a third. And, you know, Macron returns to save the day. Wouldn't rule it out. Wearing his mirrored sunglasses, which he's been wearing here in Davos, indoors as well as outdoors. He's got an eye condition, but I would have thought there was quite a lot of different sartorial choices you could have made about your eye condition. Quite why he wanted to look like Tom Cruise. I have no idea. I think you've answered the question yourself. If you've got an eye condition, why not look like Tom Cruise?

53:08Just a really final point. I mean, we'll obviously come back to this. I mean, it's interesting. You know, Maloney was elected prime minister of Italy as a far-right leader. And she's now become an absolute sort of mainstream European leader and was pretty critical in these discussions with Greenland. And, you know, she has a good relationship, as far as I understand, with Keir Starmer. Maybe Bardello would actually be a bit of a sort of reset for UK-French relations. because one thing I did pick up here in Davos was a sort of frustration amongst the British team here with France, you know, saying, hold on, look, all this is going on with Trump, Greenland, you know, we want to have a much closer relationship with the EU.

53:43We're not the Brexiteers. And yet, you know, France is being unbelievably difficult on the kind of detail of these agreements. You know, won't, for example, let Britain be part of the defence procurement arrangements that actually Canada has joined. You know, that guy did see it kind of bubble over and sort of British officials say, come on, France, see the bigger picture. Stop continuing to pick these petty fights with us. There was a real difference between the Brits and the French as to how they see Trump. French are much more likely to say that these different ways he behaves, in the end, the sign of the emerging dictator, we've been there before, fascistic tendencies, the Brits are more inclined to say, look, don't over-interpret Trump.

54:29It's about domestic politics and he isn't about to destroy American democracy and the transatlantic alliance. While the Brits want to go with plan A, which is to try and make this work, they also need a plan B. What happens if America is pulling away? What happens if we need to strengthen the European alternative? And on that basis, you know, Macron and Stalin have been working closely together in recent months around Gaza and the Middle East, around Ukraine and security guarantees. I think you could say, and there was a sense of this in the meeting, there is more common interest between France and Britain and also more imperative for them to work together than there has been for a long time and a desire for that to be the case.

55:16And yet history and the sort of underlying sibling style deep antagonism between these two countries just gets in the way. And, you know, if we want the European arm of NATO to be more effective, and if America starts to pull away from the kind of security understanding we've had for decades, and if you need to try to build that alternative, surely in defence and in defence procurement, we ought to be trying to strengthen collaboration. And yet the big frustration amongst the Brits is when it came down to it, the French didn't actually want Britain to be part of, I think it's called SAFE, the sort of broader defence procurement collaboration.

56:02And people think, come on, France, you know, surely, surely we can do better than that. And I'm sure that their frustrated Keir Starmer, you know, why won't he be stronger joining with Macron in his rhetoric challenging the president? So it's still the case that the old politics gets in the way. If only there were a bilingual politician, speaks fluent French as well as English, maybe prime minister of a close ally of Britain and France, who could get these two siblings together and knock some heads together and say, come on, the middle powers need to stand up together and take down the shop sign.

56:38Maybe this is a role for Mark Carney, because he's friends with both Macron and Starmer. I thought you were about to make the case for a return of Nick Clegg as a British ambassador in Paris. I had a very good lunch with Nick Clegg last week, actually. And he speaks fondly of you, as always. Well, I always speak fondly of him as well. There were moments where I disagreed with him strategically, but I've always gotten well with him as a person. I think he's a nice guy. He's just, you know, not sure he got it right in 2010. Just can't let it go. Anyway, that's all for Political Currency. We're going to be back on Monday with Ex-Minister's Questions.

57:13And you, of course, can hear all of this earlier. And Adfrey, if you become a member of our Kitchen Cabinet. Don't forget as well, if you're a Kitchen Cabinet member, you get access to our live recordings, our fortnightly newsletter, our members only chat, even your own political currency mug. And I'm very pleased to say a new consignment of mugs has arrived. And luckily, they didn't come from the United States and no tariff threat on the mugs. Now I'm off to get on Marine One and come home. So I need to say goodbye. Are you getting a lift back? Presumably the number of people offering you a lift back.

57:47We're going to be stuck in the traffic waiting for the president to go. Well, we'll see you next week, George. See you then.

58:00Thanks for listening to Political Currency. This has been a Persephoneca production.

58:09This is a juga available