Is Labour reaching a breaking point on Palestine?

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2:15This is Political Codency with Ed Balls and George Osborne.

2:28Ed Balls: so it's thursday we are recording our podcast we are remote today i'm not sure where george is in the world but um i've just come off uh um good morning britain dash back to do the the podcast i was actually down in south london to see my daughter's the preview of her play didn't get back until 11 didn't about didn't get to bed till 12 up again at 3 30 i must say i am tired but nowhere near i think as tired as george osborne because you know kids under how old are they kids under three they are four two and one that is that is even more exhausting than getting up breakfast television i reckon we're recording an episode of heidi here we're in switzerland with the kids uh and uh it's lovely uh metaphorically recording that's all white rolls or brown rolls is it oh is it you obviously don't know the story of heidi in heidi she gets very excited because she gets to eat a white roll and she stores them in order to be able to send them back for her grandfather because she thinks he will really like white rolls rather than kind of crusty old brown rolls well a cheeky slice of white toast is always a good thing isn't it but you're not wearing your ponytail which you feature in the front page of the daily star it's normally if you're a politician you're told you're on the front page of the daily star that's not a good thing but you are uh you're on the front page apparently with um wearing a you haven't got a ponytail on you now so you haven't suddenly grown one in the last week i know in fact this morning on good morning britain we were discussing with francis rossi from status quo the role of the ponytail in rock music and also in football because um the england women won their semi-final on I think it was Tuesday night and brilliant win against Italy.

4:16Ed Balls: Real cliff edge, classic England. But the Daily Star, do you remember the sun having their sort of cut out kind of St George's cross hat? Well, the Daily Star did a St George's ponytail, which looks like this, cut out from the centre of the Daily Star. And so to support the women and urged on by the Good Morning Britain deputy editor, I did a photo of me with my ponytail are front page the daily star there we are i should say to credit the england women's it's not unlike the england men it's not sorry i should say to credit the england women it's not like the england men it's the england women who win in the last few minutes against italy to go through to the final rather than lose in the last few minutes so we we really wish them well against spain where apparently they're the underdogs but i don't really believe that i think they've got every chance of winning well look in in recent games the spanish have done well versus england but But, you know, it's all to play for.

5:12Ed Balls: And as you said, anyway, as a lucky charm, I'll have to get my ponytail out on Sunday night. They've got balls on their side. They have. Yeah, but let's just hope they get the ball. Anyway, we are on the ball on this podcast. We have got several things to talk about this week, haven't we? So we're going to start with a review of the state of the parties as we go into the summer recess. So we're going to look at the Tory reshuffle, what Labour are up to, reform, the Greens. even and of course our friends the liberal democrats so we're going to do a review of where the parties stand as we head into the summer then we've had terrible pictures on on our tv screens and on the front page of newspapers from what's happening in in gaza deaths amongst and and starvation amongst people queuing for for food in occupied gaza and we're going to talk about whether international opinion and also in the UK British public opinion is now shifting and what that's going to mean for British politics and international politics over the summer on this issue.

6:22And then Donald Trump is paying a private visit to Scotland to inspect his golf courses and play a few rounds. I mean that in itself is pretty extraordinary. American presidents paying private visits to support their commercial interests. But he's managing to fit in a bit of politics since he's also the president of the United States. And the British Prime Minister Keir Starmer and indeed the First Minister of Scotland are both going to be visiting him on the golf course. We're going to talk about that. And before he goes, he's put in a surprise visit today to the Federal Reserve in Washington.

6:58And I suspect markets will be a bit more interested in that than they will on his antics in Turnberry up in Scotland. So we'll talk about that and see what that says about the state of the American relationship between the federal government and the Federal Reserve.

7:16Ed Balls: But first of all, the state of the parties, the state of the party leaders going into their summer recesses, they're thinking they'll have conference speeches in the autumn, hoping for a bit of a break in August. But the mood of your party and your leadership and the state of things has a big impact upon your sense of purpose, well-being and security if you're a political party leader at the end of July in the week Parliament rises. I think we should run through them all. Let's start with the Conservatives because Conservative leader Kemi Badenok marked this last week of Parliament in July by having a surprise reshuffle.

7:54Ed Balls: And in our August episodes, we're going to chat about some political themes while people are on holiday, we thought we would talk about reshuffles. I think one of the key things with any reshuffle, and I think we're going to talk in the summer about the first government reshuffle, but this is the first opposition reshuffle for Kemi Badenok. And the question is always, with a reshuffle, what's the story of the reshuffle? What's the purpose? What does it say about the state of the party, the state of that leader, and the direction they are taking things in? And in this reshuffle, she kept her main players in place.

8:31Ed Balls: Mel Strider, Shadow Chancellor, Preeti Patella, Shadow Foreign, Shadow Home, who's, what's his name? Chris Philp. Chris Philp. You're only doing that deliberately as that Cooper spouse. No, I just forgot. He's a very nice man. And then she then, but she brought back James Cleverley to shadow Angela Rayner. Not, I think, to shadow her as Deputy Prime Minister. I don't think Kemi Badenock is anointing James Cleverley as her de facto deputy, but certainly to shadow him on housing, communities and local government. But the question is, what did this reshuffle say about Kemi Badenock and her leadership?

9:09Ed Balls: What was the point of it? Yeah, so I think Kemi Badenock's been doing a little bit better in the last few weeks. and you know as i've said an incredibly tough job a being the opposition leader when you know the government's got a huge majority and just been elected and being the first opposition leader when a government comes to office and i think the reason she's doing a little bit better is is sort of evidenced in this reshuffle she's got first of all she's got the strength to do a reshuffle you know for some political leaders a reshuffle is an extremely risky maneuver to undertake, you know, because people can refuse to move, people can refuse to serve.

9:49And I think the fact that she can undertake this reshuffle doesn't create any internal dissension, as far as I can see. And that James cleverly chooses to be part of the team. I mean, many would think that James should be the Tory leader if he'd got his, you know, sums right in the MP ballot. He would have won the contest. But the fact he then chose to be on the backbench, the fact he wants to be part of the team the fact she's confident that she can bring him in and not he's not seen as a kind of threat to her i think that all speaks to the you know more solid position she's got i just make two other observations i mean there are lots of people moving around in reshuffles i i'd observe this generally with opposition reshuffles it's a it's a bit like musical chairs you you just want to make sure you're in the right chair when the music stops and you you know you into government that's the kind of key moment to get your positioning right but um the two things i would observe is first of all that you know in promoting or rather appointing james she has created a kind of balance to robert jenrich now you know in the in the at the top of the party there's another kind of cat there's a counterweight to jenrich which at the moment Priti Patel and Chris Philp aren't really providing.

11:06So, or indeed Mel Stride. So I think, you know, cleverly, because he's clearly got ambition still to be the leader, is a bit of a balanced agenda. And that actually helps, Kemi. And then the second observation is that, you know, what most people wouldn't have noticed, is that John Glenn, who's a pretty experienced Tory politician, he's been in the Treasury, I know him well, He's a really sort of sensible, nice, moderate, smart person who I think, you know, he became chief secretary. So he was pretty senior in the Tory government. He has been made her PPS, which is the sort of parliamentary aide.

11:46And normally you would not have a former chief secretary as your parliamentary aide, even if you're the leader of the opposition. But I think that shows that she knows she's got to connect more, manage the parliamentary party more, and speaks to actually an interview she gave in today's Financial Times, which is she's learning on the job. And I think it's fine for her to admit that because no one's been the Tory opposition leader for 15 years.

12:11Ed Balls: Very interesting. It's the front page of the Financial Times. As you say, she's been doing better in recent weeks because she's been going on the economy, the national insurance rise. the front page she's obviously been listening to our podcast she has bade not we told her to stop we told her to stop all the culture war stuff and said focus on the economy so that is one satisfied maybe she's even uh you know one of our kitchen cabinet members the front page is bade not pledge to model leadership on state slashing argentine president i thought to myself you know this is quite interesting she's sort of doubling down on the small estate posing tax cuts once public spending cuts like the new Argentinian president, Mr.

12:50Ed Balls: Millet. However, a conservative leader saying she wants to emulate an Argentine president. Margaret Thatcher should be turning in her grave at the idea of an Argentinian role model for a conservative party leader. I thought that was quite surprising. Well, except there's Xavier Millet, the Argentinian president, who is doing a pretty impressive job in Argentina. I think for people on the right around the world, their hero at the moment is Millet. He literally gets the chainsaw out on stage and he's imposed dramatic cuts in public expenditure to try and bring the Argentinian basket case economy under control and get inflation down.

13:38But Millet himself said that Margaret Thatcher was a hero of his, and that caused all sorts of issues in Argentina, not you know because obviously margaret thatcher beat the argentinians in the valklands but he said well why would why what do you want me to do pick as a hero a loser i pick winners um the only thing i detect here the hand of my good friend neil ferguson like one of the country's top historians and i did an event with him at the center for policy studies on the future of the tory party And he was telling me and the audience how Kemi Baden-Walk should be following the model of Xavier Millet.

14:16And I know that they are close, Neil and Kemi. And Kemi was, for example, at his birthday party, as I was. And so I detect a bit of Ferguson's hand behind the curtain. The only thing I'd warn Kemi about is I think Millet is doing a pretty impressive job. But in opposition, you certainly don't want to arrive, particularly as the Conservative leader at the time of a general election, with some kind of radical plan to slash public expenditure, because you will be made mincemeat of by the Labour high command. And you've got to play a more cautious positioning role on the economy, reassuring whilst also saying, obviously, we'd be better than the current government.

15:01Ed Balls: on a downer though for kemi badenock there is a very long profile in this week's new statesman by will lloyd the deputy editor you know they did a very good an interesting challenging profile of keir starmer a few weeks ago by the new editor to tom mctaig this piece kemi badenock isn't working the tory leader was supposed to save her party went what went what went wrong hugely um kind of depth of sourcing here. I think the core argument it makes is in the middle. Some of those who know her well, including those who once believed that she had something special, think the loss of confidence derives from a realisation that she is out of her depth.

15:40Ed Balls: Her decisions as leader are not geared towards big wins, but ensuring her survival. And I sent a message to Will Lloyd about his piece and he replied to say I've said I've had some funny messages about this and forwarded one so I don't know who this is from but the message said it's fair to say all living former conservative prime ministers have read your piece I've spoken to two of them myself today well done Will so this is the new statesman causing a stir in conservative circles I mean it is a you know it's quite heavy I don't know whether you've read it yet. I haven't. I will read it. I mean, I did read actually Harry Lambert's piece on Robert Jenrick in New Statesman a couple of weeks ago, which had quite a broad readership as well.

16:30So it's good to see the New Statesman firing on all cylinders. I'll definitely read the piece. But I did see commentary that they had got hold of a notebook that apparently, well, it's certainly handwriting that looks like Kemi's. that was left in the Dorchester Hotel. And in it, it's got all her sort of musings on how useless various members of her team are and how the various sort of things she needs to do, you know, sort of memos to herself to, you know, speak better and speak louder and focus on, you know, certain issues and whatever.

17:08Ed Balls: Whereas the Woolworth piece is mainly their musings on her. So it definitely bears study and paints a very pessimistic view of her chances of turning things around by next year's local elections. The other thing that you said, you know, the return of James Cleverley, very interesting. We actually interviewed him on Good Morning Britain this week. I was asking him whether he was going to be Deputy Prime Minister, whether he actually agreed with Kemi Badenok on ECHR or on kind of green issues. But when I asked him about Angela Rayner, this is what he said. So I know Angela Rayner very well. We were elected at the same time.

17:42I think she's formidable.

17:44Ed Balls: I think anybody who has worked their way up through a political party from the start in life that she had has got to be respected. I think if more of her Labour colleagues respected her, they might they might do better themselves. So, yes, I look forward to sparring with her. No, I think that's smart from James. First of all, it makes him sound what he is like a human being and very relatable to. second there's nothing you want less from your shadow than being praised because it makes you think what am i doing wrong you know it certainly makes your colleagues a bit suspicious of you and of course what he's really doing is stirring up trouble in the labor party by saying that angela rayner is doing well and kia starmer should be paying attention to her so i thought i thought that was all smart and um i think it's good to have him back on the front line of politics now Now, one of the things he's also spoken about before he joined the shadow cabinet was the appeal of reform and how the Tory party might deal with that.

18:46You know, we we're doing a kind of brief survey of the party, so we won't go into an in-depth analysis of what's going on with reform. But I think we should just focus on this one issue which might blow up over the summer. certainly the Labour government seem to be warning us, it might, which is unrest outside asylum hotels. I mean, it started with an asylum hotel in Epping. These are the hotels that the government basically commissions and pays for asylum seekers to be placed in while their claims are processed. These are the people who've come off the small boats, typically. And people have been gathering outside these hotels and you know the i guess mainstream opinion has been you know people should not gather this is all very um unsavory and so on but farage has jumped in there and said but they've got every right to be there and he said in fact he's sort of taken it to the essex police saying why on earth are you policing it in the way you are and why are you bussing in pro-immigration protesters who he calls Antifa, which is, I think, a kind of implant from the United States, isn't it?

19:59And the anti-fascist movement was what it means. And it's kind of radical left, I think would be a kind of way of characterizing it. I mean, you know, again, he does, you know, you might not like his politics, but he is sort of putting himself at the center of things, causing all sorts of problems for the Tory party, but also, you know, forcing the Labour government kind of onto his agenda. I mean, the message from Labour in recent days has been about this issue and the potential for unrest this summer.

20:30Ed Balls: Well, I think that caused a lot of upset, the idea that that would be the message from Labour out of the Cabinet meeting on Tuesday. On Monday, you had the big John Cunliffe independent review of water, sorting out a kind of big issue, water quality, getting rid of off what the regulator, sorting it all out. You'd have thought they would have had a day or two talking about this big reform and suddenly Angela Rayner's words in the cabinet were being briefed by number 10 to the Times and with her sort of speculating about why this this unrest might be happening knock things right off the agenda for Labour in terms of the water story and in a way you know I think Labour being drawn into the Farage style speculation is very kind of risky from their point of view.

21:20Ed Balls: I have to say, I think Farage may be overplaying his hand. I mean, don't forget, this is a year on from the Southport riots. He made his speech where he was raising the spectre of more civil disobedience. This is what he said. On Epping, I don't think anybody in London even understands just how close we are to civil disobedience on a vast scale in this country and I regret saying that. Of course there were some bad eggs that turned up at Epping. There were the usual far-right thugs. But equally, what about Antifa? Why are Antifa allowed to go to these demonstrations to wear balaclavas to not be identified to do gestures last night of them shooting at members of the public?

22:13Ed Balls: Why are Antifa allowed to turn up outside a meeting I do in Cornwall three months ago. I mean, I think this is just very risky from his point of view. Tommy Robinson, the far-right activist, is out there straight away saying he's off to Epping. The far-right organised fascist groups wanting to join these demonstrations. Nigel Farage, to win, has to reach into the centre ground and challenge reasonable centrist, centre-right conservative opinion. I'm not sure this is the right way for him to be doing it. He started in that speech as well. He joined in, doubled down on one of his reform MPs saying, we don't want all these women police officers going around patrolling.

22:57Ed Balls: Pairs of women police officers is a bad idea. We want big burly men, which kind of very upsetting to police leaders who are trying to get more women into policing. If you go back to some of the conversations we had a year ago about Nigel Farage, there is there is a parallel with donald trump donald trump doubled down on that sort of the anti-vax conspiracy theory far-right maggot world and that is currently biting him back on epstein hold on hold on he's the president united states who did work for it that's that's right but he's but he's being bitten back on that now and for for nigel farage um what does the kind of conservative opinion that he needs to win over think of nigel frage in this sort of anti-police anti-establishment anti-law and order i mean the idea the police were busing in protesters is absolute total nonsense what they're doing is making sure that there isn't violence between two sides that are demonstration but don't you think that this is um something that he can live to regret?

24:06Well, I, you know, as a sort of citizen, I wish what you were saying was true. But as someone who was a political strategist, I wonder whether that is the case, because I'm not sure he can overplay his hand on issues like this. I mean, well, sorry, he can, but it's a long way beyond this. I think what he is doing... There is no way, George,

24:29Ed Balls: Margaret Thatcher would be doing this. She wouldn't be on the side of the lawless, violent rioter against the police and our society. She just wouldn't do that. But I think she was a very, very different opposition. She was leader of the Conservative Party. She was an unknown. She was trying to establish herself. I mean, she'd been in the Heath Cabinet, but she was basically unknown. She was the first female party leader. Farage has been around for a long time. As we've discussed before, the polling shows his toxicity is right down now. People don't have an objection to him being prime minister in the way that they used to.

25:06And I think he's identifying issues which don't just, I would say, agitate conservative supporters or former conservative supporters. But I think there'll be a lot of Labour supporters as well who are agitated about things like these asylum hotels. Now, just, you know, a very sensible, good friend of mine, Sajid Javid, when he was the MP for Bromsgrove, and I think he was Home Secretary at the time, I remember talking to him about these asylum hotels. And the government spends billions of pounds on hotel bills. And as Faraj says, well, they don't spend hotel, but, you know, they don't pay your hotel bill.

25:41They're paying everyone. These, you know, people have just turned up. And Sajid said to me, you have no idea in the communities where these hotels are. You know, it is really, really difficult. and these you know you get large numbers of young men who've just come into the country they don't they don't just sit in the hotel they can't work they tend to kind of congregate in the town center because they've got nothing else to do and it you know it's it's very very dangerous for incumbent governments to ignore it and that's what the sunak government found to its cost on the on the asylum or its inability to deal with the problem proved you know in sunak's own words It's very, very damaging.

26:21And I think for this government, just to sort of say, oh, well, you know, it's the far right and we better not have a riot this summer, I think it's just a little bit risky that you are misreading where a lot of Labour support also comes from.

26:35Ed Balls: Yeah, but I'm not saying they should say that. I mean, I think Labour has to be showing that it is trying to tackle an asylum backlog which was ignored for the last few years, tackle the small boats issue which um was essentially kind of stalled by the previous government because rwanda failed um trying to get to a returns agreement with france and more widely trying to increase the policing the announcement this this week that they are now have an agreement with deliveroo and the other delivery driving firms if people are illegally working out of asylum hotels they can now be identified and tackled not something which happened in the past of course you've got to be doing something about it um but the question i But do you match Farage's rhetoric?

27:18Ed Balls: That's a terrible idea. But they are stirring it up because they're briefing that we're heading for a summer of discontent. And I'm saying to you that was a mistake. And I don't know why that happened. And I don't think Angela Rayner intended that conversation in the cabinet to come out in that way. I don't think it's what she said in those terms. I think it is, you know, it's very dangerous for the government to get involved in joining or competing with Nigel Farage in that kind of speculation. What you should be doing is tackling the issue while saying we aren't the kind of society which condones and excuses violent protests outside hotels in this way.

28:00Ed Balls: And that's what Nigel Farage is currently doing. and I actually don't think that is what conservative politicians are doing at the moment. I think if you asked James Cleverley or McKinney Badenock they would be very cautious about doing that and I think as this develops over the summer you may be right that for some this works for Nigel Farage politically but I think he also plays potentially a big cost in terms of wider public opinion What about Labour? We've talked a lot on this podcast in the last few weeks about Labour's problems on the domestic front, the U-turns on welfare, and the problems with developing an economic plan that people can buy into and understand.

28:45Is there anything else we should add as they head into their summer?

28:49Ed Balls: I think we've covered this all in the last couple of weeks, and they need to come back with a story and a budget plan and that is going to be you know the defining event of this autumn now the the budget i was just looking at the recent there was an ipsos issues poll which was just looking back over the um you know the issue of economic optimism and whether people think that the economy is going to get better or get worse over the um next 12 months and currently the pessimism in the UK is today lower than any time since the first year of the Margaret Thatcher government in 1980. So economic optimism and the mood around jobs, incomes and the budget needs to improve in the next few months.

29:43Ed Balls: I think that is going to be the defining challenge. Or Xavier Milley needs to invade the Falklanders. That's what Doug Margaret Thatcher had in that particular but the um that's not the bad not that is not the bad not strategy as we know from the today's financial times the other thing i mean just i think one thing to note about labor is uh whether kia starmer makes further personnel changes in downing street because you know i've picked up quite a lot of speculation that they might try and create again a kind of permanent secretary for number 10 which is a role that jeremy hayward played for gordon brown after i think i don't I don't know whether you would acknowledge this, but Gordon Brown took a while to settle into number 10 and went through a couple of chiefs of staff and it didn't work out.

30:27And they kind of got Jeremy Hayward out of retirement. Well, I say retirement, he was in investment banking to come back, but didn't want to come back to his old role of PPS, which is kind of the senior civil servant tradition in number 10. So they created this role of permanent secretary at number 10. And so I've heard there's talk of that and there's, you know, his current PPS is meant to be very good, but she's from the NHS and doesn't have that kind of broader experience of the Treasury and how domestic departments operate. The Cabinet Secretary, Chris Womold, who is a man of great integrity and smart and so on, but he wasn't the most kind of dynamic choice they could have made.

31:07And they're beginning to think, well, we need something a bit more dynamic. So we will talk, as you were saying in the summer about how first government reshuffles tend to work. But I would just look at the kind of reshuffle of his own Downing Street team because the foreign affairs team is working well with people like Jonathan Powell and Michael Ellum and Ollie Robbins at the head of the Foreign Office, Peter Mandelson in Washington. Domestic team, I don't think anyone doubts the abilities of Morgan McSweeney, but he is sort of stretched pretty thin. They need to get their domestic program working better than it is at the moment.

31:44Ed Balls: Look, there isn't really a big figure, equivalent to Jonathan Powell or Mike Ellum, as the civil servant domestic policy coordinator in the Cabinet Office and in Number 10. Rachel Reeves has just announced in the last couple of days that her advisors, I think John Van Rienen, going back to the London School of Economics, and her other economic advisor, Anna Valera, also going back to the LSE. If I was Rachel Reeves, I'd be trying to persuade Mike Ellum to move over from number 10 and come back to the Treasury. I might be trying to persuade John Kingman, if I was Keir Starmer or Rachel Reeves, to come back from the roles he plays in corporate life to play that kind of role in driving growth and domestic policy.

32:29Ed Balls: You could even get Sir John Cunlef after his water report to come and do some work in those areas. Get the old band back together. They do need some grip and drive, and it needs to kind of look across policy and strategy and communications and Whitehall coordination. And I think you're right. It still feels as though that's a gap to fill. And to be fair, both Keir Starmer and Rachel Rees are now looking for people to do those jobs. So there was definitely a gap there. The Liberal Democrats, I'm just going to say, George. Oh, you've got a man crush on them, haven't you? Or on Ed Davey. I actually think, look, in July, we aren't saying Ed Davey's position is in peril.

33:07Ed Balls: I think he's actually quite secure. They haven't been driving the news and making big waves. But I bet you behind the scenes in this new, more complex, multi-party world where you have to be very efficient in how you target your resources to target your votes. I would think the Liberal Democrats behind the scenes are working really hard to hold on to all those seats they won last year. They were one of the winners from last year's elections. And so I would think the Liberal Democrats were going into the summer feeling quite happy at the leadership level about the direction they're going in. Yeah.

33:43I mean, by the way, if you'd been as nice about them in 2010 as you're being now, they might have gone into coalition with you.

33:53Anyway, what about the Greens? We didn't talk about them much in 2010, but they are a feature of politics today, aren't they? and there are votes on the left of Labour leeching off to the Greens. Of course, they won seats like the Bristol West seat in the general election. I think they've got a leadership contest on, haven't they?

34:14Ed Balls: They have. Well, the two small parties on the left of Labour, the new Corbyn-Zao Soltanis party and the Green Party, both of them are in complete chaos. But I'm not sure how much that matters in terms of the threat to Labour. Because to the extent that those are people who have voted Labour and are getting very frustrated about issues and decide to vote for another left party, they aren't voting for a prime minister. So it's a protest vote or it's a turning away vote. But as I said, the chaos isn't only in Jeremy Corbyn and Sultana trying to work out whether they have or have not formed a new party.

34:53Ed Balls: The Greens are in a leadership election at the moment because they've had a joint leadership between two of the party's MPs, Adrian Ramsey and Ellie Chowns. She's then decided she's going to stand down. There's a new leadership election. There's an insurgent eco-populist greed called Zach Polanski, the current deputy leader who's taking on Ramsey for the leadership. And, you know, it's all quite tense. I don't know whether you saw last night on the Ian Dale programme, he had the two of them on for a debate. And I mean, this is such a classic piece of bad politics. Ian Dale asks the two of them if they like each other.

35:31Good grief. Are these two the best they have? Their contempt and dislike for each other is barely contained. I don't think you've won her over, either of you. I'm afraid we might not have done, Deborah. Do you like him? We've worked together on all sorts of things. Do you like him, yes or no? I've enjoyed working with Zach over the last few years, of course. I really like Adrian, so that does hurt. That's quite something. You can't even bring yourself to say But you like Zach Polanski. Zach is a valued colleague, absolutely. You don't like him? I like working with Zach, absolutely. You either like him or you don't like him.

36:06You're making it quite clear that you don't like him. Well, I'm saying that I want us to have an effective Green Party. We're debating it. This is a professional debate, as Zach has just said. That's the important thing. But if you ask me, do I like Zach, I'll say yes. If you ask me, do I like you, I'll say yes. absolutely i've worked with zach effectively i like working with zach i like zach absolutely

36:28Ed Balls: i don't understand what the issue is we got we got we got there in the end do you do you like i really like adrian there's lots we disagree on and i think he's wrong on a lot of the things he's saying tonight but do i think he's a good person do i like him absolutely carnage oh i love it when the hard left preach fraternity and brotherhood and murder each other or uh at least don't say they like each other why but why is it why is it by the way that all the green activists They have to be called Zach in our politics. That's another mystery. Anyway, we will turn to, I think, the issue that really could unsettle the left, and particularly Labour, over the summer, and of course is unsettling millions of people around the world, and that is the desperate situation in Gaza, and we are going to turn to that next.

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39:51So I don't think anyone doubts that the situation for people living in Gaza is getting ever more desperate, if that's possible, because, of course, things have been desperate. ever since the horrific attacks by Hamas on Israel back in October 2023 and the taking of hostages. And it should be noted, of course, that there are still many hostages believed to be alive under Hamas control. But in my view, that is not in itself an excuse for what is going on in Gaza. And I want to draw people's attention to a newspaper I don't turn to first every day, the Daily Express. The Daily Express has been a very strong supporter of Israel over my political career.

40:30and it has this week put on its front page an absolutely heart-wrenching photograph of a starving little boy called muhammad and it says for pity's sake stop this now the suffering of little muhammad clinging on to life in gaza hell shames us all and it's one of those photos it's a bit like the photos that the legendary don mccullen took of the biafra conflict which kind of brought it to life or brought people's deaths there to the attention of the British decades ago. It's a bit like that terrible photo of the little boy dead face down on the beach. And when they had those crossings in the Mediterranean a few years ago, I mean, I think this photo, and there have been a couple of other photos coming out of Gaza, because of course, broadcasting is so difficult from Gaza, I think really has shocked everyone, even people who would like myself, support Israel and, of course, defend absolutely its right to exist.

41:31And I think it is really sort of shaking up what's going on right now, which, you know, the deaths of people queuing to get aid, being shot down by Israeli soldiers and bombed by Israeli jets, and sometimes with the IDF saying, oh, well, our bombs didn't work properly. You know, that is becoming completely unacceptable in world opinion. And of course, it has to be said, there is a parallel between these, and I think deliberately, the newspaper was trying to do this, a parallel between these pictures of a starving child and the victims of the concentration camps in the 1940s. So it is shocking world opinion.

42:07I think it is shifting the global politics. And it's going to have quite a significant impact on the domestic politics here. Let's just hear what David Lammy, the Foreign Secretary said about this in the House of Governments this week. It's a grotesque spectacle, wrecking a terrible human cost. Almost a thousand civilians have been killed since May, seeking aid, including a hundred, Mr Deputy Speaker, this weekend alone. There are near daily reports of Israeli troops opening fire on people to access food. Israeli jets have hit women and children waiting for a health clinic to open. An Israeli drone has struck down children filling water containers, which Israeli officials blamed on a technical error.

42:59The Israeli government must answer what possible military justification can there be for strikes that have killed desperate, starving children?

43:08Ed Balls: That came, that statement, as Britain, with other countries issued a joint statement calling for an immediate end to the war on Gaza for Israel to comply with international law. In that statement, I think on Monday, they said the Israeli government's aid delivery model is dangerous, fuels instability and deprives Gazans of human dignity. David Lammy said that the situation was grotesque. At the same time, in Israel, former Prime Minister Eud Olmert, the Likud Prime Minister back in 2006-7 said that the humanitarian city Israel's defence minister has proposed building on the ruins of Rafa would be a concentration camp and forcing Palestinians inside would be ethnic cleansing.

43:53Ed Balls: I mean very strong words from a senior centrist centre-right Israeli politician I mean nobody quite... I should say Ehud Barak one of Israel's greatest prime ministers and most decorated military commanders has also been, you know, venomous in his attacks on the Netanyahu government and what's going on in Gaza, which he thinks is despicable. And although nobody quite knows what is in the mind of Donald Trump, increasingly loud briefings of anger and frustration within the American administration. And you do wonder to yourself what is happening now in the mind of prime minister netanyahu i mean is he now at a stage where where international opinion doesn't matter anymore that actually he's in such an internal fight for survival with his coalition and his own survival politically within israel that um that the wider economic and political context um you know in the in the case of the uk we were in discussions with Israel for a free trade agreement that is all on hold that statement I refer to a moment ago says that you know there'll have to be further action to get you know a better set of outcomes what are these actions David Lammy talking earlier in the week was you know clearly has an open mind the kind of sanctioning that he has decided to do against individuals in the Israeli cabinet that could become more widespread more and more systemic i mean but does netanyahu care at the moment about that is he is he just um is he so doubled down on this strategy well i think you know what has happened is that israel has emerged as the kind of local superpower in the middle east i mean it is absolutely humbled iran uh it has destroyed hezbollah and of course you You know, it is conducting this now, you know, two year campaign almost in Gaza with this goal of trying to eliminate Hamas.

45:58But many sensible people, including, you know, commentary I've read from senior former IDF commanders, that's the Israeli army, are saying that on Gaza, not on Hezbollah or Iran, where there's been a lot of support for what Israel's done. But on Gaza, it's all tactics of this particular bloc or this particular Hamas cell they're going after. And there's zero strategy. And they are, of course, radicalizing not only many tens of thousands, presumably, of citizens inside Gaza who will have now had many relatives of theirs killed in this conflict, but radicalizing a whole generation, not just of Muslims around the world, but creating, I think, a huge antipathy towards Israel amongst people who previously had no antipathy towards Israel and probably were mildly in support.

46:48So I think, you know, for Israel's own security, and I say this again as someone who is, you know, a strong supporter, it makes zero sense.

46:55Ed Balls: And it is so dangerous and worrying for the Jewish population in countries around the world. I mean, here in the UK, anti-Semitic attacks on the rise, a real sense of fear in that community and worry about the future. I mean, it is so dangerous and tragic what is happening. And it speaks to this kind of dilemma, which I think Israel has always had. And indeed, the whole, you know, the Jewish population since the Second World War, which is they don't want to rely on anyone else ever again for their safety because of what happened in the 1940s. But that and and they, you know, applaud their kind of technical and military prowess, even if it was found desperately wanting back in October 2023.

47:42But now it's reestablished. And so they say, who do we need? And, you know, they they think the only country they really need to pay attention to is the United States. And of course, the U.S. helped them with that bombing of Iran recently. But I think that's kind of risky. That is a very risky strategy if you're a supporter of Israel and a believer in Israel, that you are kind of turning global opinion. And those countries, the 29 countries that you said have just signed this thing. OK, it's Britain, but it's also France. OK, but it's like Switzerland, Sweden. It's a whole list of countries that you would definitely not want to feel that you are conducting something approaching ethnic cleansing.

48:19So anyway, that is the kind of politics in Israel. And there are very, very large numbers of Israelis who are as worried as we are. But what about the kind of domestic politics here in the UK? Because I'm going to sort of, you know, challenge you a bit as someone who used to be a Labour politician. You know, isn't that? I mean, David Lammy can say all those things in the House of Commons. He can say we're not proceeding with the trade deal. There are other things the UK government could do, right? It could ban the sale of arms to Israel for a start. from the UK. Not actually that important for Israel militarily and not important for us economically either.

48:55But in some ways, that lends itself to something you could do, therefore, without much kind of cost. You could move towards the recognition of a Palestinian state at the UN, which lots of members of the Labour Parliamentary Party want to do, including, it's pretty clear, senior members of the cabinet like Wes Streeting. So there are kind of things that you could do. Why is Starmer and Lammy choosing not to take these steps? Is it because, you know, they genuinely want to maintain open channels of communication with Israel? Though personally, I think Netanyahu doesn't care to who's what Starmer or Lammy think.

49:33Or is it really about the Trump relationship, that they don't want to sort of go on the wrong side of Trump? And maybe they don't want to expose ultimately their and Britain's powerlessness in this conflict.

49:44Ed Balls: Well, I think it has shifted internally in the last week as well. But standing back, I mean, there has always been a worry that the UK has leverage when we contribute to an international effort towards peace, and that that has to include the United States. I remember back in 10 years ago, conversations about whether Labour and opposition should call for the recognition of the Palestinian state in the UN, which the large majority of countries do. But the big European countries and the United States don't at the moment. And it's not possible to believe in a two state solution, which is what we all talk about, unless you see Palestine as a state, as one of the two states in this two state solution.

50:33Ed Balls: But how you play that in, the timing of it, and how you do that with the Americans has always been a concern. And you don't want to go too early. A couple of months ago, there was a real expectation that the UK with France were going to push forward that recognition agenda. But then, of course, you had the conflict between Israel and Iran. And that sort of, I think, slowed things down a little bit. But if you just take in the last week, you had the David Lammy statement. You had Emily Thornberry, the chair of the Foreign Affairs Select Committee, a backbencher, but a senior backbencher, speaking to the views of scores of Labour backbenchers saying now is the time to move this agenda forward.

51:21Ed Balls: This is Emily Thornberry speaking to Sky News earlier in the week. We saw Macron coming to Britain and when he addressed Parliament, the British Parliament, he said we should recognise. And I know that most people in the room agree with him. And I think that, you know, and most of us in the room agreed that we should be doing it immediately, which is also what Macron said. So you're talking here about recognising Palestine as a state. Recognise Palestine as a state. And that's not going to stop the killing, not immediately. But what it should do is be like a starting gun, a renewed initiative.

51:51Ed Balls: Why do you think Keir Starmer hasn't done that? I think because Keir Starmer has, I mean, we all want the same thing. He just has a different idea of how to get there. And I think he's wrong about that. Since her interview on Monday, Sadiq Khan, the Labour mayor, has come up publicly calling for the state of Palestine to be recognised. There was a report in the newspapers that Keir Starmer was under pressure from cabinet members. It mentioned Shabana Mahmood, Hilary Benn and West Streeting wanting a move on this publicly. West Streeting then in Parliament on Tuesday referred to the case for this recognition, saying it needed to happen while there was still a Palestinian state which could be recognised.

52:36Ed Balls: This morning on Good Morning Britain, when I asked Jonathan Reynolds whether this was the plan, he said, absolutely. This is a very important part of the step towards peace and a two-stage solution. I do think that there is a growing pressure on the Labour side to move on this publicly. It's not something that Keir Starmer has yet done. And he will be worrying, I guess, about the timing and the American relationship. But, you know, we talked in the days after the terrible Hamas attack and hostage taking on October the 7th, how Keir Starmer got behind the curve internally, politically on that issue.

53:17Ed Balls: and he won't want to do that again. So I do think even compared to a week ago, there is now growing pressure on him to make a move on this, maybe to do that in concert, but not to wait for the Americans because at the point when the Daily Express, as you said, two days running, is splashing on starvation and the plight of Gaza children, Palestinian children in Gaza, that is not a moment where you want to be behind public opinion. And presumably the Labour High Command is extremely vulnerable to a Commons vote on some motion on this. It has all the kind of hallmarks of the disability benefit vote, which is what Labour MP is not going to vote to recognise the Palestinian state.

54:07And are you going to really be able to whip your MPs against that?

54:13Ed Balls: And we know that Shabana Mahmood, vulnerable to that in her constituency in Birmingham. We know that West Streeting, absolutely vulnerable on this issue in a very marginal seat, Ilford North, which he almost lost. And when there is a big Muslim population who will be very upset about what is happening in Gaza and if it looks as though Keir Starmer is dragging his feet. And last summer, independent candidates. I mean, Jonathan Ashworth lost his seat in Leicester South because of that independent vote. But others came close. And so I do think that things are shifting. As I said at the beginning, maybe Netanyahu doesn't mind.

54:54Ed Balls: Maybe he doesn't care anymore. But I think domestically, this is going to become an increasingly hot and salient issue in the coming weeks. What about Palestine action? I mean, that's the kind of radical group that have broken into air bases and kind of lobbied and sprayed paint all over the kind of headquarters of companies which are associated with Israel. And, you know, been very intimidating, I think, if you were a Jewish person living in Britain. I mean, they've actually been designated and they've been made a prescribed organization by this government, which is what you do with terror groups.

55:33And I was wondering whether, you know, on the left, people are kind of happy with that. Maybe do they feel the government's overreaching in this space? Or do you, a bit like Just Stop Oil, which was ultimately, you know, Just Stop Oil, you know, hilariously declared victory just at the moment when everyone seems to be backing off the Green Pledges. But principally, because as far as I can see, many leading Just Stop Oil people were put in prison and are currently in jail. So that may be the approach here with Palestine action, but that presumably has some repercussions amongst areas of the left.

56:08Ed Balls: There is no doubt that people moving to the Greens or moving to the Corbyn Zoltan party would be motivated by concern about Palestine action being prescribed as a terror organisation. And very many Labour members on the left upset about it as well. And the danger with these things is the appearance that protesting, that demonstrating, that marching to protest against what is being done to Palestinian children and to say that I support Palestine, that that is the thing which is being prescribed. And of course, that isn't the case. It's not demonstrations or supporting Palestine. It is a particular organization called Palestine Action.

56:54Ed Balls: and I think there, I mean, as you'll know well, it's always complicated because there's only so far the government can go in being public about the kind of details of what is happening. But one, there is an independent process which advises the government on whether or not to prescribe. It's advice which comes on the basis of clear definitions in statute of what a terrorist organisation is or what terrorist action is. And in the case of Palestine Action, you mentioned some of the things we've seen happen publicly. I think it's been widely reported that there are currently live cases of individuals who are going through the court process in the coming months where they are being charged for terrorist offences for actions which are not yet in the public domain because they are subject to all those right and proper court restrictions on what can be reported and talked about.

57:58Ed Balls: But I think, you know, demonstrating or waving a flag or holding a placard is not the issue when it comes to Palestine action. The actions of leadership individuals and what they've done and how that fits within terror legislation absolutely is. And that's something which is just really important for the government to keep explaining. It's quite hard, isn't it, for Nigel Farage to say, oh, left-wing groups don't get the same kind of tough treatment from the police that right-wing groups do when there is this very tough treatment being taken against Palestine action. Let's just turn to, you know, I guess someone who's been looming over our conversation as he does often on this podcast, and that is Donald Trump, because ultimately Palestine state recognition, doesn't matter what Britain says if the US is going to veto it at the UN.

58:48But more broadly, he is about to turn up on holiday here in Scotland and visit a couple of his golf courses. But he's preparing for this vacation by, first of all, paying a surprise visit to the Federal Reserve. That's the Central Bank of America. And we're going to turn to that next.

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1:01:31Ed Balls: So welcome back. We know that Donald Trump is coming on a big, all bells and whistles, state visit to the UK in September, meeting the King and the Queen. And what a complex moment that is going to be for the British government and all the policing and security and demonstrations which will happen around that. But as you said, George, he's coming on a private visit, first of all, to visit a couple of his golf courses. Of course, you know, it still costs just as much in terms of the limousines and the security and the policing and lots of talk about whether there might be demonstrations as well.

1:02:08Ed Balls: But this is not a public or state visit. However, Keir Starmer's had the call. He's been invited up to have a word with Donald Trump. I mean, it is amazing the extent to which Donald Trump, as president, continues to prosecute his own commercial and business agenda, whether that is having dinners in the White House to raise money for his own crypto coin or lobbying as he travels around the world governments to give him planning permission for a new golf course here or whatever. However, put that to one side. Keir Starmer has had the call. And it is interesting, isn't it, that nine months on from the presidential election, six months on from inauguration, Keir Starmer is still managing to sustain that kind of that effective working relationship with Donald Trump.

1:02:58Ed Balls: It's quite an achievement. I'm not sure if I fully understand it. It might just be Donald Trump's kind of pro-British views and an enjoyment of UK pomp and circumstance, and also his commercial interest with his golf courses. But I think there must be also something about the way which Keir Starmer has handled this kind of interesting question. At what point can Keir Starmer to sort of try to cash that in? At what point can he say, whether it's UK tariffs or whether it is the way that Donald Trump engages with the Middle East and Israel, that Keir Starmer can show he has some influence which comes out of that effective relationship.

1:03:46Ed Balls: But you'd have to say that so far it's been a very effective piece of diplomacy. So if he was Donald Trump, he would ask for a free membership of Turnberry for life. What he wants is a return for having to fly up there and see the president. I think Donald Trump offered him a game of golf and Keir Starmer said no. Isn't that right? Yeah, if I was Keir Starmer, I would also say no, because presumably Keir Starmer either can't play golf or is certainly not as good as Trump. Although there's a very good book, which is all about just about how Trump cheats at golf. Which is by kind of moving the ball a bit and whatever.

1:04:24But even despite that, I think he is a pretty good player.

1:04:27Ed Balls: I wonder if they're going to have some tough discussions, though, about the UK-US relationship. Because we've seen in the last week, we were talking last week on the podcast about Epstein and all of the huge complexity that Trump has been dealing with. And he has been trying to divert attention with his security advisor, Tulsi Gabbard, onto other issues. And they've been accusing former President Barack Obama of being involved in a conspiracy to deny Trump his rightful position as president back in 2016 by winding up the FBI and security agencies to look at the way in which links with Russia to win the election were being managed.

1:05:17Ed Balls: And Obama's had to issue a statement saying that this is all nonsense. This was after Donald Trump had bizarrely posted on social media pictures of Barack Obama being arrested in the Oval Office and then in an orange suit incarcerated. I mean, these are all AI invented images, but Donald Trump, the president, is posting them on his own social media account. Do you know who Jake Angeli Chansley is? No. he's the shaman man the big the man with the big buffalo horned uh head dress that stormed the congress on the 6th of january back in 2021 and the reason i bring him up is that he has tweeted f you donald trump over epstein so even and and he was pardoned by he was actually serving many many years in prison for his uh his role in the capital rights he got a personal presidential pardon.

1:06:18It's just to say that it's the issue we were talking about last week with Epstein, that the MAGA base is definitely fraying. And Donald Trump is, I think, trying various things to divert attention.

1:06:30Ed Balls: But the point I was going to get to is that this issue about security agencies destabilizing Trump with Obama, and this would presumably include British security agencies as well. Is this a conversation that Donald has with Keir Starmer when he is over. I mean, we know that that would have been closely monitored and coordinated back in 2016. I think the British agencies concluded at the time the Russians were trying to do this and failed. But does this become a problem in the Starmer-Trump relationship? I don't think it does. Do you remember there was also that former MI6 agent who was sort of dragged into the kind of row about who had Christopher Steele prepared a dossier on Trump for his political opponents?

1:07:16I don't think any of this matters. I think what matters to us is the economic relationship, because I don't actually think Trump is going to listen to Starmer on Gaza, sadly. But what's significant in the last week is that Trump has announced new trade deals with Japan and Indonesia. So following on from the UK, he says he's going to refine the trade deal with the UK while he's talking to Starmer up in Scotland, which hopefully is a good thing rather than a bad thing.

1:07:45Ed Balls: Although, let's be clear, the trade deal is bad. It's just not as bad as it might have been. It is still the case that the new Trump trade deal imposes big tariffs on the UK for our exports to America. Yeah, but I still think Starmer can say yes, but they are lower than the tariffs, for example, that Japan and Indonesia have just agreed to, although they are countries with a trade surplus with America, whereas we have a trade deficit. And of course, they're a lot better than... As you know, George, the counterfactual is always dangerous in politics. You know, growth is weak in Britain, but it would be even weaker if we hadn't agreed.

1:08:17Ed Balls: Well, that's true. It's not so bad trade deal compared to what it might have been. In the end, if growth is weak, growth is weak. Yeah, but I think a lot of European Union negotiators who were very sniffy about Britain signing up to the American deal, saying it was a very bad deal and that they wouldn't sign up to such a bad deal. I think now in Paris or Berlin, they would jump at the deal that Britain agreed to. They're digging themselves into a hole when everyone else is settling. But we should just conclude by focusing on this thing that Trump is doing in terms of his relationship with the Federal Reserve and his row with the chairman of the Fed, Jerome Powell, who he himself appointed back in his first term as president, because that potentially has a much bigger impact because it impacts things like the bond market and global views of US inflation.

1:09:06It could have a much bigger impact than even these tariff rows and deals, let alone all this stuff about Epstein and kind of conspiracy theories. And Donald Trump has taken the absolutely extraordinary step of essentially undertaking an unannounced visit to the Federal Reserve in Washington. This was supposed to be, I think, a visit from sort of mid-ranking administration officials. And he suddenly said, no, no, I'm coming instead. And we don't know this is happening today, isn't it, while we record this podcast. But, you know, the last time the markets had a real wobble was when it looked like Donald Trump was going to fire Powell a couple of months ago.

1:09:47Ed Balls: I think this fits in the same category as his bizarre Obama tweets. He needs things to do to divert attention from this, as you say, deepening Epstein row. He needs to throw meat in the direction of the MAGA conspiracy theorists. And one of the things that they hate is the Federal Reserve because it's all at the centre of an establishment network to undermine the dollar and to try and control the economy. And so him turning up and throwing his weight around and allowing this kind of rolling speculation that he's putting the Fed under pressure. I mean, it's all of a piece. are the markets reacting badly today and all over the place?

1:10:37Ed Balls: No. Do they think that this is Donald Trump's move? I think they think that Scott Bessent, the Treasury Secretary, has been quite clever at sort of allowing Trump to lean in a little bit, but not go wild. I think this looks like more sort of slightly bullying, throw your weight around. Even if he moved against Jay Powell, there's still a majority in the Federal Reserve Board for sensible policies. The kind of people who are being talked about who might replace Jay Powell are not kind of wild men. If he was going to appoint some crazed ideologue, that would be different. That's not what is being talked about.

1:11:19Ed Balls: But I would be surprised. I think the real reveal preference of Trump is to have a lot of noise. But when it comes to the economy, as opposed to kind of legal cultural wars on the economy to be cautious and a bit more risk averse. And so we'll see. I might be wrong. And if something comes out over the course of the day, which suggests he's actually going to do something more drastic, then markets will be destabilised. and I will kind of eat my England ponytail. But I would be surprised. I think this is another end of July Trump diversion to trying to shift the agenda away from Epstein. Well, we will see.

1:11:58By the way, the Federal Reserve has got itself into a bit of a mess domestically because it's undertaking a two and a half billion dollar renovation of its building, which is giving Donald Trump a good club to beat them around the head off. But you're right that if he really moves against Powell or fires Powell, then I think you'll see markets react. But what will probably be one of the biggest events of the autumn will be the appointment of Powell's successor. And we will, of course, cover that on this podcast.

1:12:25Ed Balls: That's right. Thank you so much for listening this week. We have covered a lot of ground, but I hope you enjoyed it. We're going to be back on Monday for Ex-Minister's Questions. But of course, you can listen to that ad-free and early if you are a member of our Kitchen Cabinet or a Political Currency Gold subscriber. And don't forget, you can find the details of how to subscribe in our show notes. We'll see you next week. See you then.

1:12:56Thanks for listening to Political Currency. This has been a Persephoneca production.

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