Is it the final blow for Starmer as Healey resigns?

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0:40Ed Balls: Hello, Ed Balls here. Welcome to Political Currency with me and George Osborne. This is actually just a quick update from George and I before we start our usual episode, because we recorded our main episode this morning before John Healey's rather dramatic resignation this lunchtime. And we wanted to be able to respond to that and incorporate that into our main show. I mean, this was not just any old cabinet resignation. It's devastating for the government. John Healey, the defence secretary in his letter, not only talks about the security assessment that there could be an attack from Russia into Europe by 2030.

1:24Ed Balls: But he says of the defence settlement, which he was given at the beginning of the week, he says, I am being forced to make decisions that would reduce the readiness of our forces and increase the risk to personnel on operations and could make the country less safe. And on that basis, he has resigned as the defence Secretary. Now, George and I couldn't get into a room together at such short notice. George was off at the Oxfordshire Tech Conference, which we talk about in the main episode. But we're going to start with George's take and how he first found out about this news.

2:04George Osborne: Well, I've just come back to my laptop here to do this update on the podcast because I've been at this Founders Forum event and a government minister came up and told me, a Labour minister, said, oh, you know, John Healy's resigned. And so I looked at my phone and I saw what had happened. I don't think it alters the episode you're about to hear because it's all about the problems that Keir Starmer faces. But here are my immediate thoughts. First of all, it reinforces everything you're about to hear from Ed and me. These really are kind of end of days for Keir Starmer. and any pretense, which I think you had at the beginning of the week, that maybe he could spin it out a bit longer, his premiership, and maybe he could contest Andy Burnham in a contest.

2:53As you're about to hear, we didn't think much of that.

2:57George Osborne: And John Healy's resignation, I think, reinforces that because it shows the prime minister's authority is shattered. you know a very strong prime minister would find this a difficult day at the best of times but wouldn't make an argument you know that the ultimately economic security comes before defense security or you can't have strong defense without a strong economy and you know it's a shame defense secretary is gone but he'll be replaced and so on that's so much harder for for Keir Starmer to make that argument because ultimately people know that he doesn't really carry weight anymore. His voice isn't really being heard.

3:41George Osborne: So it's a huge problem for Keir Starmer, but really speaks to the problems he already had. I'm quite surprised, frankly, that the Treasury allowed the situation to get to this point. And we haven't talked that much about Rachel Reeves' position as Chancellor. Not many people are expecting her to remain as Chancellor if there's a change of Labour leader. I think that's very unlikely, but there's an open question of what future role she might play in a government. The Treasury and the military have been arguing for hundreds of years. In fact, the Treasury was created to fund the military originally a thousand years ago.

4:16George Osborne: So these rows are not new. And if you look at the kind of ups and downs of British history, you quite often get situations like that. But a smart Chancellor, a smart Treasury, can push things and then know when to hold back. And ultimately, the job of the Prime Minister, who's both First Lord of the Treasury and ultimately the person most responsible for national security, their job is often to overrule the Treasury at a key moment on defence spending. Happened a few times with David Cameron and me, and I always understood that's like my job is to push as the Chancellor. His job is the Prime Minister and weigh up the national interest.

4:51George Osborne: And I'm just surprised that Rachel Reeves allowed this situation to develop, where it looks like she's been insensitive and inflexible. Maybe we just haven't heard her story yet. A couple of final thoughts. I mean, first of all, John Healy is not a regular Labour politician. He is a veteran. He is seen as a complete loyalist to Labour, not to a particular Labour leader. He's been Keir Starmer's defence spokesperson for six years, but he did serve in the shadow cabinet with Jeremy Corbyn. He was a Labour minister when I was a shadow minister way back in the Treasury. And he's seen his Labour through and through, utterly loyal, not someone with a reputation for kind of being flighty or briefing against people, didn't actually brief against the Treasury much in the build up to this resignation.

5:44George Osborne: so it's a real hammer blow this is not a kind of regular member of the cabinet who you go well you know they come and go in this case john healy is seen as a very very reliable labor figure so hugely um kind of damaging as a result of that there'll be some people um you know politics has got its cynics let's put it that way you'll think well maybe he's trying to book his place in the next cabinet. But I think the problem he's got, and this comes to a wider problem, is that all the suggestions are that Andy Burnham, and indeed anyone else who might be Labour leader, but as you'll hear in this podcast, we think it's very much going to be Andy Burnham, was actually going to trim back on defence and the promises that Keir Starmer had entered into.

6:30George Osborne: And there's no suggestion that Andy Burnham is going to build up the defence budget more than Keir Starmer. And since he's committed to the fiscal rules and he's spraying money around with commitments in Maconfield, I don't think there's any money for defence. And as Ed has speculated, if anything, the defence commitments that Keir Starmer has already entered into might be reduced. I don't think he's necessarily booking his place in the next Labour cabinet, John Healy. And my final observation is if lots of the opposition spokespeople have been piling in from my old party, the Conservative Party, and from reform.

7:04George Osborne: Yes. But I'd just point out, this is going to be your problem if your dreams come true and you're in government, because fundamentally Britain's got an economy that's not growing fast enough, huge pressure on public spending, additional requirements on defence. The Conservatives, quite rightly, identify savings, but then go and spend it immediately on tax cuts. Reforms plans don't really add up. So the defence problem is a problem for the country. right now it's a problem for Keir Starmer and it's a real, real blow to his premiership. But as you'll hear in the podcast, we had anticipated that anyway.

7:40Ed Balls: So that was George's take on the John Healy resignation. And I've got to say nothing in that that I disagree with George over, but let me add some thoughts. First of all, John Healy's motivation. And I should say he's a very old friend of mine. I've known John for 30 years, worked very closely with him before I was a member of parliament. When I was at the Treasury, we've written many things together about regional growth, but know each other extremely well. It might be that John Healey is thinking to himself that there is a path for him to become the next Labour leader. And that is nothing to be ashamed of, to have that ambition.

8:19Ed Balls: It might also be the case, as George hints at, that John may be thinking this strengthens his position if there is a change of Labour leader to be in the next cabinet, if that's led by Andy Burnham. But the John Healy I know, I don't think he's motivated by ambition in that way. I think to be the Defence Secretary was the most important thing which would have happened in his whole political career. And I think he has been very frustrated for weeks and months about the failure of the government to come up with what he thought was a credible defence plan that he could sell. And on the basis of his letter, and clearly the frustration he's felt this week, I think that is the primary driver of his resignation.

9:07Ed Balls: The fact we've already seen Al Cairns, the junior defence minister, who we've spoken of as a potential candidate himself for a leadership election, coming out and criticising the defence investment plan, which John has resigned over. that tells you that in the ministerial team in the MOD, more widely in the defence world, concerns about this plan are very deep. And so far, recording this at four o 'clock, there's not yet been a new appointment to the cabinet, going to be a difficult job to be the next defence secretary. And somebody who comes in and says, I need to see all the detail from first principles, that will delay this plan for weeks and weeks.

9:47Ed Balls: And so I guess Keir Starmer, but Rachel Reeves needs somebody who's going to agree with them. Who will that be? For Andy Burnham, this is also a dilemma. We talk in our main podcast about him hinting that he wanted to support billions of pound compensation for the WASPy women who found out poorly about changes to the pension age. He's now U-turned on that over the course of the day, saying he's not talking about financial compensation, I think he will know that this ups the pressure for defence spending, whoever is the Prime Minister in Britain in the next years. But as George says, fundamentally, for the Prime Minister and for the Treasury, this is a disaster.

10:33Ed Balls: It could just cast doubt on the whole economic and security strategy of the government. And it is so frustrating. It is such a microcosm. It is just one more example, and in this case, a very big and significant one, of this government's inability to look round corners, to solve long-term problems, to see what's coming down the track, and then put together a strategy which can deliver this. And we've talked about these issues a lot over the last two years. There are three different points at which the government should have acted differently to deal with these defence challenges and didn't. First of all, as we've said before, when straight after the election in 2024, John Healy, as defence secretary, launched a defence review, a defence spending review, chaired by George Robertson, at that point, the Treasury should have insisted that there was treasury and economic and efficiency input through a person on that review.

11:37Ed Balls: Even if they didn't get that. They needed a parallel efficiency review to ask the question, is the Defence Department spending with value for money at the forefront? And to address some of the clearly big problems in recent years and decades in the way in which defence spending has been managed. If that had been put in place, then the Treasury would have been all over the numbers. You wouldn't have had these big changes in the defence spending assumptions in the last year, which have caused huge problems, I think, for the government. The fact that John Healy's letter doesn't even refer to efficiency savings.

12:13Ed Balls: I mean, I think that's a mistake by John. I think he should have stressed that. But it shows you he's not been under pressure from the Treasury in the last two years on the efficiency of spending. Secondly, over a year ago, when Donald Trump became president, was casting doubt on whether or not NATO was working, whether America was a reliable ally to Europe in NATO. At that time, there was an opportunity. It was an opportunity seized by the new German Chancellor, Mertz, who said, I'm going to change my fiscal rules to increase defence spending. On this podcast, I urged the Chancellor to look at that and Keir Starmer.

12:50Ed Balls: Not only did they not try to find an international way to focus on increasing defence spending, to look at whether or not within or outside the fiscal rules, something could be done. They set their face against that. Rachel Reeves said it would be the wrong thing to do. She went out of her way to say that last autumn in the build-up to the budget. And then, of course, the spending review. It was clear last summer that more money was needed. And how can we be in a position where a year on the Defence Secretary is resigning because those issues still haven't been addressed? I mean, why didn't Keir Starmer with Rachel Reeves and John Healy in the room a year ago saw our plan or six months ago how can it end up where we are it is so frustrating to see this happening and so damaging and you know to see the treasury saying this afternoon well the problem is that John Healy just wants to cut health and education spending in order to spend on defence I mean that's not the John Healy I know.

13:54Ed Balls: And that just, to me, smacks of a failure to find out a way to finance this plan over the last three years. Now, as George says, it leaves the government damaged. It leaves the Prime Minister and the Chancellor further weakened. As George says, I think the analysis in our podcast, which we recorded earlier, stands up. If anything, I think it puts more pressure on Andy Burnham to spend on defence. And it might mean that the chance of a straightforward coronation is reduced if Andy Burnham is to take over, and that there is a leadership challenge, because I think there'll be a huge temptation, whether it's John Healy or an Al Kearns or somebody else, to say, from the security wing of Labour, slightly to the centre-right of Labour compared to the soft left to say we must make sure that the defence and security argument is properly heard in this leadership election, even if it's somebody who doesn't end up winning, but ensures the debate happens, puts pressure on Andy Burnham in a leadership contest.

14:59Ed Balls: That may be a position that West Streeting takes up if they can get the numbers at the margin. I think it makes it more likely they'll get the numbers. It makes it more likely there will be a contest. And whoever is the Prime Minister in the UK in the coming six months, they will have to now address the defence spending issue in a way that has not been addressed in the last years and months and has led to John Healy's resignation today. Now, we're going to be discussing this in much more detail in the coming weeks. We'll have our newsletter out on Monday and we'll reflect further on the fallout from the Healy resignation then there's bound to be more developments over the weekend in the meantime here is the main episode that we recorded earlier today

16:00this is Political Currency with Ed Balls and George Osborne

16:13Ed Balls: so we are recording remote today george osborne um on his travels again although i think this time in the uk the background as i look at it i mean it's quite i don't know it's quite shishy i think that the quite high standards for the interior design although as we know it has to be quite a Because if the camera slightly turns to the right, you see a very louche, almost Tracy Emin, slept in bed, cigarettes, packets, who knows what. I mean, so we've had to stay tight on George.

16:46George Osborne: No, you see a very neat little bed that I've attempted to make up here at Soho Farmhouse. That's quite shishy. It is quite shishy, which is where Founders Forum is happening, which is the kind of annual gathering of lots of tech people in the UK. Actually, it's a pretty impressive event put together by a guy called Brent Hoberman. You know, if you're a bit down on the UK and we're going to come on to all the problems Britain faces in this podcast, actually, you come here and it's, you know, you feel there is actually quite a lot of good things happening as well. And there's a bit of an energy in the tech sector here.

17:23George Osborne: So I'm very pleased to be here. Can you just tilt your camera so we can have a quick look at the bed?

17:27Ed Balls: Well, there you go. Look at that. Tracy Emin. It could be at the Royal Academy on display.

17:33George Osborne: I think not. But listen, what about talking about like shishi festivals in swanky parts of the country? Didn't you go to the Adam Smith Festival or the anniversary of Adam Smith's birth or death in Kerkoddy, which the last time anyone heard about Kirkoddy was when the local MP became the Prime Minister,

17:57Ed Balls: Gordon Brown. It was a great event. My third time going there, organised by Gordon Brown. 250 years of Adam Smith. The people of Kirkoddy come out. Sorry, how can it be the third time that we've celebrated the 250th anniversary of Adam Smith? No, it's the third time I've been to the festival. The festival's every year, but this was 250 years. So I think the last time I went, it was about 239, but that wasn't putting lights. It wasn't seen to be such a significant moment. We had a full room, 100 in the overspill, Stephanie Flanders and I. We first of all talked to some Nobel Prize winners in economics, which went down really well in Kokodi.

18:33Ed Balls: Chris Pissaridis and Mike Spence. And then we spoke for an hour to Andrew Bailey. In some ways, our podcast was good preparation because he is a very serious practicing Catholic. And having discussed on EMQs, the papal encyclical on AI, I was then able to put those issues to Andrew Bailey. It was really good. But the highlight was this. You wouldn't believe this. After we finished, and we're thinking it's the end of the evening, 38 to 13-year-old girls, some boys, from the local town come on to the stage to perform a rap in full dance mode called the Adam Smith Rap. Adam Smith, the man, the myth.

19:12Ed Balls: Adam Smith, the man, the myth. Adam Smith. He came from Kokodi, but his wealth of nations wasn't a folly on it went. I mean, it was like, you know, unbelievable.

19:23George Osborne: And can I ask, does Gordon preside over this as the sort of emperor?

19:26Ed Balls: I kept pushing Gordon up to join the rap, but he felt as though he didn't have the moves. And I obviously do have the moves, but thought I wouldn't get in the way. So I just, I stood on the side with Stephanie and Andrew Bailey. Andrew Bailey was gyrating to the rap. So there we are.

19:42George Osborne: It would have been more convincing if Gordon had said back in the day he had an Adam Smith wrap on his iPod than the Arctic Monkeys.

19:48Ed Balls: Well, it would have been more convincing. For our Kitchen Cabinet members, we will put some pictures of the wrapping in our newsletter, which comes out on Monday with our cultural and update politics. Let's get on with the podcast. We're going to start by looking forward to Andy Burnham's weekend because we've now got seven days till the by-election. And obviously in a week's time, lots of conversation about what happens next immediately in politics. But there's a sort of wider question for Andy Burnham this weekend, which is, you know, after his interviews, the campaign is underway. It's all about the ground game now.

20:26Ed Balls: What should Andy Burnham be spending the next seven days doing? And I think we're going to talk about the things he should be thinking hard about now to make sure he's ready if he becomes prime minister. What's his timetable transition? What's his 100-day plan? How does he sort out staffing in Downing Street? Most importantly, what is his economic plan? And as ever, you've got a lot of advice to give him on the economy.

20:51George Osborne: Yeah, well, so do you, I think. And I would say Keir Starmer would have done well to take our advice over the last couple of years. We are then going to talk about Manchesterism. So it's a bit of a mouthful of that. But that is the word that Andy Burnham has himself used. He, of course, is the mayor of Manchester, though he may not be for much longer. And he has said that there's a special economic recipe that has helped Manchester be one of the fastest growing cities in Western Europe. And it's going to be applied to the rest of the UK if he becomes prime minister, or at least that's what he says.

21:24George Osborne: So we're going to ask, what is Manchesterism? What does it actually mean? What is it? What isn't it? And could it be applied nationally?

21:31Ed Balls: And finally, on the day the World Cup hosted by America, Canada and Mexico kicks off, we're going to look at the politics of World Cup 2026 in Trump's America. I've got some interesting economic research to share on how past World Cups have driven nationalist sentiment, who tends to get the red and the yellow cards and how it's related to your political background. So we're going to discuss the World Cup third.

22:00George Osborne: We should declare an interest as well, shouldn't we? Because we are both members of the lobby league that Paul Waugh or Paul Waugh's son has put together. So we should disclose that we do have an interest in who wins the World Cup.

22:13Ed Balls: But what we're not going to do is disclose who we are putting top in our list of 10 to win because, you know, of course we want England to win. Of course we want England to win. Let us start, though, with Andy Burnham's weekend. I think a week or so ago, we were discussing whether Andy Burnham would like a long transition. Would he like to have, after the by-election, if there's a coronation because nobody stands against him, some weeks, maybe even months, to get himself ready before Keir Starmer stands down? And I made that argument that he wouldn't be ready after the by-election. He needed the time.

22:50Ed Balls: You said, nonsense, just get on with it as fast as possible. if West Streeting can't get the numbers, well, you know, he could be the prime minister by the end of July. But it doesn't quite feel as secure, that path, whether it's short or long, as it did a week or so ago, because Keir Starmer is fighting back.

23:10George Osborne: Yes. I mean, I still hold to my judgment that if he wins the Makerfield by-election, and of course, that's the big if. I mean, all bets are off in terms of the future of the Labour leadership if Andy Burnham loses the Makerfield by-election and therefore can't be a candidate. But if he wins the Makerfield by-election, I still think there's going to be a sort of collapse of the cards, collapse of the House of Cards. The sort of pretense that there'll be a contest or the pretense that Keir Starmer can hang on, I think will be exposed because there'll be such momentum behind Burnham arriving in Parliament.

23:44George Osborne: All that said, politics is, of course, very unpredictable. And there are 400 odd Labour MPs who have got to make decisions. What is interesting is that Keir Starmer is clearly trying to mount some kind of rearguard action because it's been pretty widely reported in the last few days that he has been meeting with the junior ministers in batches. And this is a classic thing. The junior ministers often aren't obviously as prominent in our media as the cabinet ministers. But the junior ministers are your kind of rank and file, what they used to call the payroll for a government. They are the people who are loyal to the government because they've got a job.

24:28George Osborne: They don't want to lose their job. It's risky for them. They've got something to lose rather than nothing to lose, like a backbencher. And normally a prime minister can count on them. And normally when a prime minister is in trouble, they turn to the middle ranks. These are the sort of captains and second lieutenants of your army, if you were, rather than your kind of generals and colonels. I don't know what you think, Ed. I mean, is it an absolute, it strikes me as a sort of hopeless cause, but I might be wrong about this. I mean, it seems to me hopeless to believe that Keir Starmer, in the situation in which Burnham wins the by-election, will fight off a Burnham challenge.

25:09George Osborne: Now, maybe Keir Starmer is just thinking, yeah, but hold on, we might lose the make-a-field by-election, in which case all bets are off because they might prefer me to Angela Rayner, Wes Streeting or A &Other.

25:20Ed Balls: In a way, you can answer that question by just thinking for a minute if Andy Burnham loses the by-election next Thursday. If this is the Burnham challenge, Andy Burnham loses the by-election, Keir Starmer, challenge gone, he's in the clear. I don't think anybody thinks that because they think that independent of Andy Burnham, the local election results were dire. The Mandelson files expose the kind of terrible state of the government in the last two years. And if even Andy Burnham can't win in Makerfield, well, I think the crisis is deeper. So the opinion polls, to the extent they've been done of party members, say Andy Burnham wins comfortably against Keir Starmer.

26:00Ed Balls: And the Starmer strategy at the moment looks very high risk. Because as I said last week, if he announced a timetable, quite a long timetable, he could spend three, four, even five months securing his legacy. Whereas if he goes for conflict with Andy Burnham and loses, that is the absolute destruction of his legacy. However, look, on Sunday on Sky, David Lammy, the Deputy Prime Minister, Starmer Bakker, says, if there is a leadership contest, I will be backing Keir Starmer. So, Cabinet Minister...

26:35George Osborne: Why does he say that? Why does David say that?

26:37Ed Balls: Well, I think he probably said that because he was asked to say that by Keir Starmer and Number 10. But not everyone in the Cabinet is doing what Number 10 is asking them to do at the moment. No, but I think David Lammy, as Deputy Prime Minister, thinks he has a duty as a Deputy Prime Minister to be loyal to the Prime Minister. He also was a backer of Keir Starmer from the beginning. So, he's not a Johnny-come-lately when it comes to Keir Starmer. As you said, you then have these ministerial meetings in which Keir Starmer is saying, I will fight. I am going to take him on. He's not going to push me out.

27:10Ed Balls: The interesting question, I think, was which junior ministers got invited and which didn't. I think there's quite a lot of junior ministers wondering, why didn't I get the call to this meeting? On Good Morning Britain this week, we had Jackie.

27:20George Osborne: They know they're not in the Praetorian Guard, which when the emperor is about to be assassinated, it is a good thing not to be in.

27:26Ed Balls: We had Jackie Smith on Good Morning Britain on Monday, Anna Turley on Wednesday, the Labour chair. Both of them, I asked whether they would follow David Lammy's lead and say, if Keir Starmer is standing in the leadership election against Andy, are you supporting the prime minister? Both of them extremely sensibly chose not to answer that question. But then the Financial Times reported yesterday, too, that Keir Starmer is telling people, if you won't declare publicly for me, then you can leave my cabinet and leave my government. Now, I put that to Anna Turley. Immediately, Downing Street was on the phone to Good Morning Britain to say Keir Starmer didn't say that to the ministers in the meetings.

28:08Ed Balls: But, you know, it's clearly being said because it was in the FT. It's in the FT again today and in the Guardian. I mean, if Keir Starmer chooses that kind of fight, when Andy Burnham is clearly going to get at least 80 nominations, I mean, this blows the government wide open. And if he wins, well, maybe it's a victory. But if he loses, I mean, what has he left behind him? I mean, utter chaos.

28:34George Osborne: Yeah, it's a bit reminiscent, isn't it, of Boris Johnson trying to cling on and then swathes of ministers resigning on him day after day. So I think you can't say, if you don't publicly support me against Burnham, then you've got to leave the government. Then most of the government will leave. And that's the problem with prime ministers who are in a very weak position. If they try to be tough, their bluff can be called. What about the interests of the Labour Party and arguably the interests of the country, because, you know, we don't want to repeat the last two years where someone comes in who doesn't appear to have given enough thought to how they're going to do the job.

29:14George Osborne: And to be fair to Andy Burnham, he's fighting a by-election, you know, all of his hours at the moment are spent walking down the streets of Makerfield. Would it be a good thing if there was a gap? You know, from what I understand, people like Tony Blair, and this is kind of reflected in his essay that he published, say, well, we need some time to know what these people's policies are before we decide. Let's not make it a personality contest, that's what he wrote in that essay. And that can't happen unless there's some gap. And there's also the small matter of the Manchester mayoral by-election, which will be triggered because Andy Burnham will no longer be the mayor.

29:52George Osborne: And if Labour loses that, that could be quite a big blow to the kind of Burnham momentum. So there are various reasons why you might want a gap. And I don't think there are direct parallels because, you know, obviously this is in the middle of a government rather than an opposition. But, you know, Michael Howard did create a space for the Tory party to have a proper discussion after it had lost, you know, for the third time an election in 2005, what kind of future it wanted.

30:20Ed Balls: The much more direct parallel is Tony Blair announcing in September 2006 that he will cease being prime minister, but not until the following July. And Tony Blair himself attempted in that period to foment a policy debate and to bind Gordon Brown into continuity in terms of policy. And that's absolutely what Keir Starmer could do as well. What is in the interest of the country and the Labour Party? There's one argument which says, you want this to be as fast and smooth and seamless as possible. And therefore, what you want is a deal between Keir Starmer and Andy Burnham on a fast timetable. Nobody else will challenge Andy Burnham because as you said, he's got the momentum, he just becomes the Prime Minister.

31:03Ed Balls: And there are lots of people who think that. There are lots of people who think any of this is not in the interests of Labour Party and the government because we shouldn't be ditching a Prime Minister after two years and the last thing we want is a contest. But there is a counter argument, which as you said, is that you need to have the debate. Why is Keir Starmer and his number 10 operation so wound up against Andy Burnham this week compared to one or two weeks ago? The opinion polls haven't improved for Keir Starmer. I think it's partly Andy Burnham has been so clear that he's ditching everybody.

31:39Ed Balls: It's a whole new approach. The end of Starmerism, the end of Labour and government, the end of 40 years of neoliberalism. So everybody in Downing Street at the moment thinks, well, they're all out of a job. So they might as well fight hard if they can to defend their position. I'm not sure that's wise. I think if I was Andy, I might be reaching out to some of the people in number 10. But the second thing, which goes to your point. We saw last week on Newsnight, Andy getting into a bit of trouble with Victoria Derbyshire about what are the fiscal rules. He's obviously had to make some shifts on Europe.

32:14Ed Balls: He's obviously made some shifts on house building. He's today seemingly opened up the possibility of a£10 billion plus compensation for WASPy women, which had been taken off the agenda by the government. These are all sort of messy policy issues. And I wonder whether Keir Starmer and his people aren't thinking, you know, if you have this big debate, not only would it be good for, in the end, governing, because we'd sort out some of the confusions, but actually, maybe Keir Starmer could prevail against Andy Burnham in that kind of serious policy debate. Now, I have, like you, grave doubts about that.

32:52Ed Balls: But that is clearly what they are thinking, that the policy debate would not only be good for the party and the country, it might even be good for Keir Starmer.

33:00George Osborne: Yeah, but the complaints about the Keir Starmer premiership is it has not had a policy-rich plan. That is precisely the charge against him, that he hasn't really had a plan for government and he hasn't been able to stick to a policy course. So I'm pretty sceptical about that. What do we think Andy Burnham is doing by means of preparation? Or rather, what do we think he should be doing in terms of preparation? And maybe we should... Should we just play a clip? Because to take you back down memory lane, this is what prime ministers have said when they get into office, not at a general election, but through an internal party fight.

33:35George Osborne: This is a whole set of clips that will jog your memories. Leveling up and not leveling down. It's giving people without education the chance of education. It's giving people without a house the chance of a house. Giving people in old age the chance of security. That's leveling up. That's the way I regard it. In particular, I want to see us build a country that is at ease with itself, a country that is confident, and a country that is prepared and willing to make the changes necessary to provide a better quality of life for all our citizens.

34:04Ed Balls: If we can fulfill the potential and realize the talents of all our people, then I am absolutely sure that Britain can be the great global success story of this century.

34:16George Osborne: It means we believe in a union not just between the nations of the United Kingdom, but between all of our citizens, every one of us, whoever we are and wherever we're from.

34:29Ed Balls: We're going to restore trust in our democracy. And we're going to fulfill the repeated promises of Parliament to the people and come out of the EU on October the 31st. No ifs or buts. That was the very opening statements as they became prime minister in government from Jim Callaghan, John Major, Gordon Brown, Theresa May, Boris Johnson. I'm afraid we decided Liz Truss and Rishi Sunak too recent for us to draw deep lessons from.

35:02George Osborne: Didn't you think it was interesting Jim Callaghan used that language about levelling up? I didn't know that. I thought that was a more recent sort of political phrase. Anyway, that was good to hear.

35:10Ed Balls: Well, see, in the case of Jim Callaghan, education was his passion. But of course, he ended up in continuity handling the economic crisis, which deepened very early on in his premiership through the IMF. John Major handed on a plate to him change for Margaret Thatcher, because of course, the poll tax had become the symbol of the end of her premiership. And that was something that he immediately was able to ditch. Gordon Brown, I think, was pressured to differentiate from Tony Blair, hugely pressured from Tony Blair not to differentiate. Gordon Brown's opening salvo, I mean, I think the most memorable was going to 90 days in terms of the ability to detain terrorist subjects without a charge, which was very continuity, very controversial.

36:00Ed Balls: In the case of Theresa May, she was in charge of Remain, but it wasn't at all clear what her differentiation was from David Cameron because she was a Remainer. Boris Johnson handed it on a plate to him because he was all about getting Brexit done. Isn't the answer that you have to decide that, first of all, your first 100 days, you've got to have a whole slew of policy announcements to just deliver loads to the lobby. They have to go to your passion to show who you really are as a leader. And they have to show why you are different. If you take Keir Starmer in the early period of him becoming prime minister, what did he do which was differentiating from the Tories other than I'm saying I wasn't a Tory?

36:43Ed Balls: I mean, there was very little. He didn't use helicopters, but kind of glasses and suits and all of that felt like continuity. He didn't go out to define his purpose early on. If you're Andy Burnham, you've got to find a way to do this very differently from, as you say, the lack of vision in the early period from Keir Starmer.

37:05George Osborne: I think I accept all of that. And, you know, what an Andy Burnham premiership has to demonstrate early on is there's a clear sense of purpose, there's a clear plan, and that he can run the ship well. Because what the Mandelson files have revealed, and of course, what we saw from the endless changes of personnel and chiefs of staff and directors of communication and cabinet secretaries coming and going, was that there was no grip at the centre. And that became pretty painful within a couple of months of the Starmer premiership. So that's all true. But I think the risk is, and I certainly saw it in the Tory years, when you become the prime minister, you're so in yourself confident that you're different from your predecessor.

37:50George Osborne: So we didn't clip Rishi Sunak, but Rishi Sunak comes in. He's so obviously not Liz Truss. In fact, he's just argued about why Liz Truss's economic policies are mad in the leadership contest, but lost. And he's very different from Boris Johnson because he's resigned from Boris Johnson's government as Chancellor Exchequer. So he doesn't need to, in his mind, explain why he's different because he's confident that he's different. But as a result, that's a kind of big mistake. And I think prime ministers who take over midterm need to explain to the country why this has happened. They need to have an explanation for why the previous person who they were loyally supporting in public, you know, a few months earlier, has left.

38:34George Osborne: And you can't just sort of pretend, oh, it's a sort of accident we're not going to talk about. You have to come up with a coherent explanation. And, you know, although it pains me to say it a bit, the most successful of all of those transitions was Boris Johnson, because he had a very clear explanation of what had gone wrong, that Brexit had not been delivered, and that he was going to deliver it. And then sure enough, he did by winning the general election and so on that he then called. That for me is the kind of Burnham challenge. He has not defined in this by-election the change he says Labour needs to bring.

39:07George Osborne: It's a bit, we're going to come on to some of the economic aspects of it, but he hasn't really got a kind of, at the moment, a compelling story for the country about Labour. and what went wrong. And that is a big challenge because obviously the country might conclude, well, if this has gone wrong for Labour, let's choose another party. So he also has to convince people to stick with Labour.

39:28Ed Balls: And he's going to do this in a very tight fiscal situation. So look, you had Rachel Reeves this week opening up the possibility of another tax rise, although that would be for defence. And that may well be the right thing to do. And Andy Burnham can't resile from that, but that's not going to define Burnham in office. As I mentioned, the Waspy women, I don't think£10 billion for the Waspy women is the thing he'll want to define his premiership on, and he's not got the money for that anyway. Very hard for him to reopen the tax pledges halfway through a parliament when everybody else in parliament was elected on a manifesto which committed them to these pledges.

40:09Ed Balls: We talked about social care last week, He's passionate about that, but it's a long road to get to a solution. Europe, I'm not sure Europe has ever been an Andy Burnham passion. He could, you know, do something quick on cost of living. I mean, he could, you know, for example, abolish VAT on domestic fuel because he can do that now. We're outside the European Union. But, you know, is that too small?

40:30George Osborne: I mean, I certainly would advise not trying to stand against the sort of wind of price rises because that's exactly where Keir Starmer has become a cropper and Rishi Sunak. If you make Kostor living your issue, it's not within your control or entirely within your control because, of course, there's inflation and global forces like the war in the Middle East. So that is a mistake.

40:53Ed Balls: Europe is a big... But you can see why then it pushes back to personality because actually that's the one thing that he can control and doesn't cost him money. But he can't spend every day for the first 100 days saying, this is my burning priority, different priority every day. not spend any money, not really have a huge amount of substance in any of them. And people say at the end of it, well, what was that then?

41:13George Osborne: What about quickly on personnel and this question of an early election, which maybe we'll come back to. But on personnel, so the kind of key people around him, obviously Lucy Powell, the deputy leader of the Labour Party, who's a Manchester MP, has, you know, very clearly in the kind of Burnham camp. Lou Haig is also, isn't she, kind of, I think, behind the scenes helping him. And Josh Simons, the MP who resigned to create the vacancy, I hear is pretty involved in policymaking. He's a very smart guy and still somewhat of a surprise that he kind of sacrificed his own parliamentary career, but may mean that he emerges as a kind of key advisor.

41:51George Osborne: And then there are some long-term people out there. There's sort of long-term members of his staff, basically, like his chief of staff. What do we think about the people?

42:01Ed Balls: Well, I think, look, there are some good people in there. We've talked about Louise Hay and the way she was pretty unfairly treated when she lost her job in 2024. But I think you've got learning the lessons from history to start from who is going to be running your Downing Street. You've got to start with getting the chief of staff right and knowing who that will actually be. And everything flows from that. So if you take Keir Starmer, Sue Gray had loads of skills in the civil service and policymaking. but she didn't have the political depth and experience to be an effective chief of staff. Morgan McSweeney was a very effective political strategist, but he didn't have the policy, civil service, institutional experience to really drive the machine and make it work.

42:51Ed Balls: And I think Keir Starmer in particular, without a chief of staff, has been a bit at sea, a proper chief of staff. And who you put in to do your comms and to do your policy, they all flow from the person of the chief of staff. I mean, look, loads of people have got this wrong. On the one hand, if you look at the operation you were in in 2010, actually the Cameron government had a massive fallout between the head of policy and the head of communications very early on between Steve Hilton and Andy Coulson. But de facto, you were the chancellor and the chief of staff with Ed Llewellyn. And that was the thing which held it together.

43:31Ed Balls: and everything flowed from that, that's an important lesson to learn. Tony Blair, Jonathan Powell wasn't the all-conquering chief of staff, but he was the person who made, actually, Alistair Campbell and Angie Hunter be de facto a team chief of staff. Everybody knew he was really in charge, but they worked as a very tight team, but they knew what they wanted. The case of Gordon Brown in 2007, I don't think... He struggled, didn't he?

43:57George Osborne: Come on, I'm going to challenge you. I mean, partly, I think, because... No, I was going to say that.

44:00Ed Balls: I don't think people understood the extent to which Gordon Brown would struggle with the transition from the Treasury, issue by issue, budget from budget, to the massive number of issues every day. It was also the case, lots of the civil servants, really good civil servants who came over, struggled with his struggle to manage that. And then, look, people who had made it work for him in the Treasury, in particular me and Ed Miliband, we weren't there. We didn't go into number 10. Gordon didn't ask us to. at least not at the beginning, we went off to do two jobs. Maybe that was a big mistake. The point is this, George, you've got to start with what is the actual job and what are all its capabilities and who is the person who can do that for me?

44:44Ed Balls: If what you start doing is divvying up between your supporters in your campaign, say, well, you know, Lucy Powell, Louise Hague and Josh Simons have been loyal, so let's give them these jobs rather than starting from what do you actually need in there? And of course, Louise Haig and Annalise Midgley, I mean, they won't be at number 10. They're going to be going off to do ministerial or cabinet jobs. And so if they're the people who are holding this operation together at the moment, which I think they are very effectively, and they disappear, does Andy Burnham get left with a vacuum? So there's lots of history to learn from here.

45:20George Osborne: I mean, there's a guy called Kevin Lee, isn't there? Who's his sort of right-hand man and been with him for years. I don't know whether he... Kevin's brilliant. Yeah, is he capable of being the number 10 chief of staff?

45:29Ed Balls: I don't think Kevin Lee for a second would think he should be the chief of staff in Downing Street. I mean, you need a really good political secretary to make the PLP work with you and the Labour Party. Kevin's got deep experience in that. I think that was an area where Keir Starmer didn't get it right. But if you're running the Manchester morality, it's a different political role to running Downing Street, where you've got domestic, foreign policy, such complexity, such policy complexity. If you haven't had experience working with making the civil service machine drive and interact with cabinet ministers and politics, I think it's very hard to come in from the outside and think you can be able to do it.

46:10George Osborne: But isn't it also a problem to bring in someone from the outside? I mean, the point about Ed Llewellyn and indeed me was we were friends of David Cameron and Ed Llewellyn and known him for years. And, you know, the problem for Gordon Brown was, You know, when you leave to be in government and Ed Miliband leaves and the earlier kind of Brown operation goes, he brings in very smart people like Tom Scholar, who we both know very well, you know, who's permanent secretary of the Treasury later, Stephen Carter. I mean, he brings in these people who on paper are very, very qualified. But but the fundamentally they're not so close to him that they everyone knows that when they speak, they're speaking for for him.

46:50George Osborne: I mean, you know, and then you or you can make the, you know, Boris Johnson was ultimately brought down by the guy he made his chief of staff, Dominic Cummings, who he didn't particularly know very well. And Cummings only comes on board when he becomes prime minister. So it's, you know, it's hard if you don't have someone like Kevin Lee, who's been with you for years. It's quite hard to just find someone who who looks good on paper.

47:13Ed Balls: If Kevin Lee is not at the centre of this machine with Andy Burnham, it will fail. That's not the same as being the chief of staff and driving the whole of Downing Street. The problem with Dominic Cummings wasn't only that he was an outsider who Boris didn't know. He was also somebody who, when he came in, couldn't actually make the civil service and the government work because he was an antagonist rather than a team builder. But then the counter argument to that, Theresa May, she becomes prime minister. She brings in her two chiefs of staff who've been with her in the Home Office for all those years.

47:49Ed Balls: Surely they know her really well. Surely they can grip things. They end up being turfed out a year later. And why? Because they thought that they didn't have to build a team in Downing Street. They could just issue the orders and issue the instructions. And there was a rebellion because they didn't do the job in the right way. So I think that all argues for being really clear what you actually want. and then finding somebody who can do the job which needs to be done rather than starting with the people and saying, what titles should we give them? And, you know, I hope Andy's been thinking about this for months.

48:22Ed Balls: And, you know, he may have a few more weeks to think about it. But history tells you if you simply hand out the jobs without working out how it's actually going to work, then it all falls apart.

48:36George Osborne: And what about his chance to exchequer? Obviously, that's the key ministerial appointment, I would suggest. But let's come to that when we talk about his economic plan and Manchesterism, which we're going to come to next.

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49:38George Osborne: So welcome back. There was a time about 150 years ago when everyone looked to Manchester, everyone in the world as the first great industrial city for a clue of how to run economies of the future. I have to say then there was a pause when people didn't look so much to Manchester, but maybe Manchester is back in the frame. And this phrase has been used. It's, I think, a relatively recent invention. When I was an MP near Manchester, I don't remember this phrase being used. It's Manchesterism. And of course, Andy Burnham is the mayor of Manchester. And he himself has been deploying this phrase as an explanation of what his economic plan is going to be.

50:19George Osborne: Let's hear him talking about it first.

50:21Ed Balls: I think some of this is about reversing some of the damaging things of the 80s and 90s that harmed productivity in this country. When transport was broken up and sold off so that people couldn't afford the fares anymore to get into work, or where water bills and energy bills have become too high, hurting both individuals and businesses. Some of these things have been part of the problem and housing perhaps biggest amongst any of them. The housing crisis is still holding back our residents and holding back our economy here. So yes we say the vision of the left about making sure these essentials of life are there for everybody at a level they can afford is absolutely part of Manchesterism and the way that we think here.

51:08Ed Balls: But they are also the drivers and the foundations of a more productive economy. The drivers of a more productive economy. Both you and I, since the very beginning of this podcast, have been urging the government to get a proper growth strategy. And you drew upon your experience in the Northern Powerhouse. And I drew upon all the work I've done talked about lots of times, Harvard Kings, about the drivers of regional growth and the experience of regional growth policy in the last 30 years. And having Andy Burnham on this same agenda, I think from our point of view, we're both celebrating that. I know you at the House of Lords Economic Affairs Committee this week talking about this.

51:56Ed Balls: So let's come to what this really is in a moment. But first of all, should we just start by talking about what this is not, because I think, as often happens in politics, when you have somebody with a phrase, lots of people then pop up and say, yes, well, you know, let me tell you what it really is. And there are lots of essays being written in left journals at the moment, claiming Andy Burnham for their particular strand of political economy. So first of all, in his experience in Manchester as mayor and in the Manchester economic model of the last 20 years, has breaking from fiscal rules to borrow more been part of the model?

52:41George Osborne: No, is the short answer. I mean, first of all, Manchesterism, if it's a thing, predates Sandy Burton. The real kind of authors of it were two leaders of Manchester City Council, first of all, Graham Stringer, and then very much Richard Lease. And it's been carried on, it should be said, by the current leader of Manchester City Council, Bev Craig, who I think incidentally is very likely to be the Labour candidate to be Mayor of Manchester if Burnham wins in Makerfield. And Howard Bernstein, this sort of legendary chief executive of Manchester City Council. I was very honoured to speak at his memorial service.

53:20George Osborne: And that speaks to something else, which is it was done in cooperation, often with Tory governments or Tory chancellors. In particular, although he wasn't chance, I should say, Michael Heseltine initially, and then me as chancellor. So it had these features to it, that it was pragmatic, it was non-partisan, that it was very focused on delivering the income before deciding how to spend it, that it was very keen on attracting inward investment into Manchester, not just from the rest of the country, but from the rest of the world. Think of Manchester City Football Club and the UAE, the Emirates, investing in Manchester City Centre.

54:00George Osborne: And of course, they were Labour councils, so they were progressive in that sense. But they worked closely with the private sector as well. And it was very unideological and remains very unideological. And that was the big contrast with some other Labour-led cities in the north during this whole period.

54:19Ed Balls: So it wasn't a rejection of markets or open economics or somehow the neoliberalism of the last 40 years. It wasn't a rejection of the 2000s or even parts of the Thatcher reforms of the 80s and 90s.

54:39George Osborne: No, not at all. It was the Labour leadership that didn't go to war with Margaret Thatcher. I mean, obviously, the big contrast is with the nearby metropolis of Liverpool, you know, just down the road, effectively, and the long battles between the Labour leadership in Liverpool and Thatcher. Now, it's not to say that it's laissez-faire. I think Andy Burnham is quite right to say, you know, it's not. It's different. And some of the interventions, you know, which were all about things like the council asking the government for money or the power to borrow money against projected tax incomes that would come if they invested in the city or if there was growth in the city.

55:20George Osborne: And the deals I did in 2012 and 2014 with Manchester were things like, OK, well, we'll give you some money. You can borrow some money for housing or the construction of those tower blocks, you know, the skyscrapers in the middle of Manchester that have popped up. And that will generate, you say, more business rates for the exchequer, for example. Well, you can keep some of that if you do it because you're delivering economic growth. and that's an incentive on you to get it done rather, you know, because lots of local authorities have no incentive to go ahead with planning because they don't keep the benefits that accrue to it.

55:55George Osborne: So it was, you know, there was definitely a state intervention in the form of local government intervention. It's not laissez-faire, but it's also not a rejection of neoliberalism or let alone the private sector. It's very much in partnership with the private sector.

56:09Ed Balls: And how about the idea that this is also about not just a rejection of privatisation, but the renationalisation of the economy. And in Manchester, things have been taken back into public control, the buses, and therefore this will then lead to the nationalisation of water or electricity, will tackle the cost of living by the public sector taking control. Again, I don't see really any of that in the Manchester experience. Even bus reforms Andy has done, which are good bus reforms, are all about the public sector more effectively regulating private operators to deliver bus services.

56:49George Osborne: Yeah, I mean, look, transport links have been a key part of Manchester's success, and I would say a key part of the theory of the northern powerhouse, which, although I articulated, was devised originally by Jim O 'Neill, the economist who came into the Treasury, even though he's sort of leftish in his politics, and he's clearly also helping and advising Andy Burnham behind the scenes now. The deregulation of the buses and the reversal of that was actually something Richard Lease wanted in the agreement I struck with him to create a Manchester mayor long before Andy Burnham was a potential candidate.

57:21George Osborne: He was still a member of parliament and a member of the Shadow Cabinet, I think, at the time. But transport, investment in the science and the universities and the cultural infrastructure of the city. And yes, and then these partnerships with the private sector. Energy and water, I personally think, I don't feel that strongly about what I'm about to say, are a bit of a distraction. There's lots of issues about how they've been regulated in the private sector. But usually the argument is that cost is trying to keep down consumer prices by the powerful regulators has actually what's driven underinvestment in the infrastructure, which has led now to higher prices as the infrastructure creaks.

58:01George Osborne: And in the energy sector, I think you can quite convincingly say a succession of governments, including Ed Milimand in this government, have imposed climate targets on energy bills. And that's what's driven the cost. So that's actually state intervention. So I don't think that utilities is where I would go to first. And here I am at this founders forum, lots of tech entrepreneurs from around the world here. You know, what they want is a sign that Britain is, you know, a place you can do business, set up a business, be an entrepreneur, employ people. That's what they want to hear. And Labour governments have been able in the past to send the signal that that's very welcome, including, of course, the government you were part of in 1997.

58:44George Osborne: That is also the message that Richard Lees and Howard Bernstein and Andy Burnham as mayor has sent come to Manchester to do your business. And that, to my mind, is what Andy Burnham, if he becomes prime minister, needs to communicate to the world.

58:58Ed Balls: Of course, it doesn't only have to be about come to Manchester. And actually, the learning, which has been learned in Manchester, has also been learned in other parts of the UK. I mentioned the Harvard King's work, which we did. We looked at America and in Europe and said there is something particular about Britain, which means that our city regions are underpowered. They're too small. They're not productive enough. You actually need to make your city centres places to live in. They need to be scaled. And therefore, whether you have proper local transport, whether you invest in housing, whether you actually encourage innovation and ideas to the region through the universities to attract in the businesses, those are all the things which matter rather than being able to borrow off budget or being able to nationalise the commanding heights of the world.

59:50Ed Balls: the economy. And I think Manchester has been better at telling that story, partly because it had better collaboration between the local authorities, even before the mayor came along in the first place. But actually, what we need to do in Manchester, what Andy Street was doing in Birmingham, what is happening in West Yorkshire, we're also learning from the rest of the world. And I think Manchester was earlier and better at telling that story. But it's really important to understand this is about the drivers of growth in our economy. When we say Rachel Reeves needs a growth strategy, what we've really, what has been so frustrating at the Treasury in the early period of the government, a bit of signs have changed more recently, have been unwilling to engage in the regional growth agenda, the Manchester, but I would say also the Leeds and Birmingham agenda in the way they should have done.

1:00:41Ed Balls: Angela Rayner was a champion, but of course she then left the cabinet and Steve Readers I think done a good job carrying this on but he's not the deputy prime minister and it's different for him because he's a London-based politician doesn't have the same depth understandably as Angela or we would have in northern cities but he's been a big champion of the mayors and of course in particular a big champion of the role of the mayor of London but the good thing to say is that you know whether it's Andy Burnham or actually West Street in in terms of the things he said, certainly Angela Rayner, I think there was the opportunity to embrace this growth agenda with more enthusiasm in the next period of the government than we've seen in the past.

1:01:23Ed Balls: And the really important thing is the Labour government and Keir Starmer didn't ditch the mayors and the combined authorities, which would have been such a retrograde step. You were at the House of Lords this week.

1:01:36George Osborne: Yes, I was appearing before saying called the House of Lords Economic Affairs Committee. And I have to say, when you sit down, it's quite intimidating because sitting in front of you are all these faces like Robin Butler and Terry Burns, two former permanent secretaries at the Treasury, or in Robin Butler's case, cabinet secretary. You have Dave Prentice, the great union leader during the 90s and the 2000s when I was in office, I dealt with him, and various political characters from the past. So you look at this group of people and you go, wow, these people do know what they are talking about.

1:02:13George Osborne: And they were interrogating precisely this. They were looking at fiscal devolution. What's the next great step? Because the big disappointment, one of the big disappointments of the Starmer government, is I think everyone had assumed, I think you and I had assumed, that they would come in and there'd be the next big step of not just keeping the mayors, but giving more powers to the mayors. And nothing happened. There's a bit of a hint of it that it might happen or would have happened if Starmer had survived, because Rachel Reeves put it in her recent MACE lecture. But it hasn't happened. Anyway, the main argument I was making is that I think there is scope to learn from Manchester, where there was quite a lot of fiscal innovation, which I was referring to earlier about letting them keep the proceeds of additional tax receipts and indeed potentially levying some additional taxes themselves or sort of surcharges on taxes and sort of turbocharging that.

1:03:02George Osborne: Because it's not like the current model is working for the UK or certainly for England. And I think some things have changed. A, we've got examples like Manchester, which clearly have pulled away. And Manchester is a real success story relative to some other cities. And second, it's not like people have confidence now that the people in Whitehall and Westminster know best anymore. So I hope that whoever is the new Labour leader or whoever becomes the next governor after the election can double down on Manchesterism in its true and understood form, which is pragmatic, pro-growth, think about income before spending, and trust well-run local cities.

1:03:41Ed Balls: Definitely. You'll be pleased to know that our final paper in our Harvard Kings series, assessing the government's first two years on regional growth, including Lessons from Manchester, we're publishing that in July. It's becoming a book in the autumn, trying to kind of give a bit of an impetus to the next phase of the government on this agenda. And Manchester will be in there. And I think we may talk about some of the things that should be done in the world other than Manchester. But there'll be a bit of Manchesterism in there, I promise. The House of Lords Select Committee is where lots of serious economic thinking happens, isn't it?

1:04:15Ed Balls: And I think, in fact, you and I both gave evidence there jointly about the Bank of England a couple of years ago.

1:04:22George Osborne: Yes, yes, we did. So there was lots of serious discussion of policy at the committee, but I did use the opportunity in Parliament on the record to pay tribute to Kevin Whelan, who has been the chancellor's messenger for 40 years. So the first chancellor he worked with was Nigel Lawson, and there have been a lot of chancellors since then. And he would deliver the confidential messages between the Treasury and Number 10. He'd take the budget books within government. He'd deliver the red boxes. He'd produce his cups of tea and coffee. regularly during the day. And this is what I said with him. And I got a nice little, not a rebuff at all, but a sort of quip from Robin Butler afterwards.

1:05:03George Osborne: Have a listen to this. And I should mark in Parliament the retirement of Kevin, the Chancellor's messenger, who's been doing that job for 40 years, starting with Nigel Lawson. He retires, I think, this week. Lord Burns and I were in the Treasury even before Kevin.

1:05:24Ed Balls: Very good.

1:05:25George Osborne: Of course, what we don't know is who the new Treasury messenger is and who the new Chancellor Exchequer is likely to be, because that's also going to be a lively topic of discussion around a Burnham premiership if it comes.

1:05:39Ed Balls: Well, I would say, as with the Chief of Staff, so with the Chancellor, work out, first of all, what job you want doing and what your underlying strategy is. and then make sure you have a chancellor who can deliver that.

1:05:54George Osborne: Let's discuss it next week.

1:05:56Ed Balls: And happy retirement once again to Kevin.

1:05:58George Osborne: Yes. Now, the rest of the world and probably the rest of the country are not remotely interested in what's going on in the House of Lords or indeed probably what's going on in the Labour leadership because all eyes are on the World Cup, which is kicking off. And we thought we'd just do a quick look at whether the World Cup has any impact on politics or vice versa. And we're going to turn to that as our final item.

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1:07:13George Osborne: so tonight the world cup which is being held in the united states mexico and canada all together is kicking off with mexico playing south africa in the first game and um people who like sports don't want to mix it with politics but uh that's not what the politicians think they've sometimes tried to jump on sport and particularly soccer. One of the great what-ifs of British politics for aficionados is the 1970 general election, which Harold Wilson calls. And everyone expects he's going to get re-elected. And the problem is about three or four days before polling day, England, who are the holders of the World Cup, because they won in 1966, they lose to West Germany.

1:08:01George Osborne: And I think 3-2. And West Germany fight back because it looks like England are going to win and then West Germany come back. And a lot of people at the time thought that that kind of depressed the national mood and delivered a punch to Harold Wilson's chances and Ted Heath got elected. So that's kind of one of the what-ifs of British politics. These days, a load of boring political scientists tell us, oh, no, that's not true. But I like to believe, I mean, I wasn't even bored, but I like to believe maybe there was an element of truth to it. But what do we think? Do we think we'll come on to again of all the politics around Trump being the host or one of the hosts of this World Cup.

1:08:38George Osborne: But do we think is there any interaction between how your team fares and your national politics?

1:08:46Ed Balls: Oh, well, there's some great academic research on this. I was actually kind of digging into it the other day. Andrew Bertoli wrote a very interesting paper in International Studies Quarterly on Nationalism and Conflict Lessons from International Sport, in which he shows that those countries which have a tighter qualification, a more tense and difficult qualification process, end up building up nationalist sentiment in their countries. and therefore they are more likely to end up in external conflict or, you know, and with separatist forces. So why is that? Why?

1:09:28George Osborne: They have a tougher... Is it because they succeed also, presumably?

1:09:31Ed Balls: Because they succeed. So they get to the World Cup, having had a tough fight, and it builds up nationalist or separatist sentiment, which means that the population is then more up for stuff. And of course, you know, in 1978, when Argentina won the World Cup, I mean, that time, The generals absolutely saw this as a way of hyping up Argentinian nationalist sentiment. You know, arguably ended up with the Falklands invasion four years later. What this means for Scotland. Are you saying the World Cup led to the Falklands? Well, it did because the World Cup was 78 and the Falklands was in 82. But the international evidence.

1:10:07Ed Balls: Was the only time we beat Argentina in the World Cup. Look, I mean. If any of the England football team had been. Anyway. That is true. But I mean, if you think about Scotland, I mean, amazingly tight qualification into the World Cup, Kenny McLean's goal in the dying seconds. I mean, for John Swinney and the SNP, does Scotland getting to the World Cup and doing well, does this rocket fuel separatist and nationalist sentiment in Scotland? I mean, you know, they've got a bank holiday on Monday and they're only playing on Sunday morning.

1:10:41George Osborne: I remember when I once foolishly inside the Conservative, some Conservative discussion, saying, why can't we just field one UK team like everyone else? Because, you know, then we'd have like Gareth Bale playing rather than he's, you know, Captain of Wales. Anyway, there was the looks around the room said, George, I don't think you completely understand this.

1:11:02Ed Balls: Can I give you another paper? Yeah, go on. Miguel, Edward, Saïd and Shanker, Civil War Exposure and Violence. Is that the back four? Economics and Politics Journal 23, number one, 2011, 59 to 73, in which they point out that players who have been exposed to violence in their upbringing because of living in more conflict-orientated zones of the world are more likely to be booked. They're more likely to get yellow or red cards in the World Cup and in football tournaments. I mean, what these political scientists do, God only knows. But I mean, there's some great papers out there.

1:11:44George Osborne: And what about Trump? I mean, one of my great memories is, I was only watching on TV, but do you remember when France won the World Cup in 1998 against Brazil? And Jacques Chirac, president of France, was sort of in the receiving line. And the president of FIFA was supposed to hand over the trophy to the captain of the French team at the time, Didier Deschamps. And Chirac just grabbed the trophy and handed it to the French captain himself. So, you know, good luck to Gianni Infantino, the controversial, let's say, president of FIFA, if he attempts to hand over the World Cup standing next to Donald Trump, because I think Donald Trump will hand it.

1:12:24Ed Balls: But of course, we saw that last year. Last year was the FIFA World Cup club competition. And Donald Trent went on to the pitch. Chelsea won it.

1:12:33George Osborne: I know.

1:12:34Ed Balls: Donald Trump goes onto the pitch and then not only hands over the trophy, he then refuses to let go of it and ends up standing in the middle of the Chelsea team when they do their big celebration with all the fireworks. And the Chelsea players were all saying, well, you know, we thought he was going to leave and he wouldn't go. In fact, I think I'm right in saying that the actual cup ended up being taken by Donald Trump to the White House and they had to give Chelsea a replica. I'm not sure if that's true. What I do know is that Donald Trump was shown one of the winning medals and he put it in his pocket.

1:13:06George Osborne: Well, it's true. If you go to a Chelsea game now and you pass all those kind of stalls on the way to Stamford Bridge, they've all got these sort of cutouts of Donald Trump and you can get kind of Chelsea shirts with Trump on it and a rather bemused-looking Cole Palmer standing next to Trump. who sadly will not be in the World Cup squad.

1:13:21Ed Balls: If you think of poor Giannini, I mean, this is going to be the biggest World Cup ever, but it is so complicated. We're going to be on a knife edge, not just waiting to see whether England win, but also whether we actually get to the end of the tournament. You've got three host countries, not one. Donald Trump has been incredibly rude about his other two hosts, Canada and Mexico. America is at war with Iran, who are in the tournament. There's a whole series of countries where the Americans slapped full visa and travel bans on people coming from those countries to America, but they're playing in the World Cup in America.

1:14:01Ed Balls: And as we know, this week, I think a referee was denied a visa. We've had the Iranian team. I think they finally let in the striker, but quite a lot of the backroom staff were not allowed to travel to the World Cup. Big question, will people be safe? In American cities, if you come from, you know, had the terrible events in Northern Ireland and Britain in the last couple of days, which should have been targeted on ethnic minority communities, all that violence. But I think if you were coming from a supporter from certain parts of the world, would you be worrying about whether America is a safe place to be?

1:14:40Ed Balls: I mean, this is the most politically complicated and highly charged World Cup ever. and it could be the best ever and it could be a disaster.

1:14:50George Osborne: Well, it'll be the best ever if England win. So the first time we win not on home soil. But I'm not sure. I'll just end by taking issue with the most politically charged ever. They're always, I mean, remember last one was in Qatar and there was all the controversy about that. The one before that was in Russia. So, you know, I'm not sure. Yeah, I agree. There's a lot of politics though. And maybe it's a chance for the Canadian prime minister and the Mexican president and the American president to solve some of their own issues when they get together for games. But listen, we'll just end with the clip when a reporter informs the American president, who appears not to know this, that Iran is indeed a team in the World Cup.

1:15:30George Osborne: We'll end with this because we think we might enjoy it.

1:15:33Ed Balls: A little while ago, the president of FIFA said that when the World Cup is here in the US, the team from Iran will be playing in the games.

1:15:41George Osborne: Well, if Johnny said it, I'm OK. Are you kidding? Did Johnny say it? Johnny Infantino, that's a piece of work. What if they win? Well, if they win, we'll have to worry about that. I'm going to have to worry about that one. You know what? Let them play well. Johnny's fantastic. He's a friend of mine. He talked about it. I said, you do whatever you want. You can have them. You don't have to have them. Probably have a good team. Do they have a good team? Do you have any idea? I have no idea. It would be hard to believe, actually. But I think let him play. By the way, Gianni Infantino, when quite correctly being pressed by the BBC about some of the issues you just raised, Ed, just told everyone to calm down and stop worrying.

1:16:29George Osborne: Anyway, that is it for Political Currency this week. Enjoy the World Cup. Good luck to England. We are going to be back on Monday with EMQs or earlier if you're one of our Political Currency gold subscribers or, of course, Kitchen Cabinet members.

1:16:45Ed Balls: Don't forget you get the episodes early and ad-free of EMQs if you're a Gold member. But if you're a Kitchen Cabinet member, you also get our chat room and a political currency mug, and you also get our weekly newsletter, and that comes out on Monday. So sign up to Kitchen Cabinet if you want to stay in touch.

1:17:05George Osborne: Yeah, you can do that via Patreon. And, of course, we record the newsletter in between the shows You get an update on what's going on in politics and the world, and you get our cultural recommendations, as you were saying it. And do send us a question for EMQs. They can be sent either through our socials or questions at politicalcurrency.co.uk. And we're going to see you next week. See you then.

1:17:35George Osborne: Thanks for listening to Political Currency. This has been a Persephoneca production.

1:18:08Ed Balls: We'll see you next time. 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.