Is Reform unravelling?

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0:46George Osborne: This is Political Currency

0:48Ed Balls: with Ed Balls and George Osborne.

1:00Ed Balls: So we're in the studio this week, but I have to say, George Osborne has been very hard to pin down in the last few days. He was watching the football and texting about this week's episode from Jakarta in Indonesia. And then we had a meeting yesterday. Didn't turn up for it because he was in the royal box, it turned out, spotted on the television at the tennis.

1:22George Osborne: Yeah, I'm sorry about missing that meeting. It's fine.

1:24Ed Balls: We sawed it in your absence. Yeah.

1:27George Osborne: Well, I was very lucky because I saw King Arthur on centre court, Arthur Ferry, get through to the semifinals. He's come from nowhere to become a British star. Yeah, but he's only one or two wild cards ever to get to the semifinals. And the other guy, Ivan Isovic, went on to win.

1:44Ed Balls: He grew up in France, went to university in California, but he's now a British star.

1:48George Osborne: Yeah, went to Stanford. I tell you, I've been to Wimbledon a few times in my life, but I've never been there on a big moment when a Brit wins. so I never saw the kind of big Andy Murray wins. It's quite a thing. It's quite a cauldron, particularly in the heat, literally a cauldron. But listen, obviously all conversations inside the Royal Box are private.

2:07Ed Balls: Of course.

2:08George Osborne: But I'm going to report on one, which is urgent for our podcast, which is a conversation with the director of the Victorian Albert Museum, Tristram Hunt.

2:15Ed Balls: Former Labour MP for Stoke. Yeah. Shadow Cabinet Minister.

2:19George Osborne: Yes. Who says to me, really likes the podcast but hates this bit of it. The bit we're doing right now, the bants, as he puts it at the beginning.

2:29Ed Balls: Sorry, Tristan. He says he fast forwards it. Look, the world divides into those people who send us messages saying this is their favourite bit and could it be longer? And those people like Tristan who say, oh, for goodness sake, get on with it.

2:41George Osborne: What do you think?

2:42Ed Balls: Well, I mean, you know, you can't please everybody. And Tristan just...

2:48George Osborne: Well, that's what, sorry, Andy Burnham's trying to please everyone. You can please everyone.

2:52Ed Balls: Yeah, well, that is when you are the candidate. it but when you're in the hot seat and we're in the hot seat on our podcast in the end uh tristan we really appreciate um your curation yeah but not of this podcast but you can always press 30 seconds jump and get through it anyway so to those people who don't like this part of the podcast look we're really sorry what we're supposed to do for those who love it you know it's going to be slightly shorter today because of tristan hunt yes and we'll give you his email at the end of the show you can send your complaints to him so uh come on we've got to talk about lots of things

3:26George Osborne: haven't we we are going to talk about nigel farage and reform obviously the financial scandals i don't think that's too strong a word for what's going on uh engulfing reform at the moment and that extraordinary decision to resign as an mp and trigger his own by-election and then stand in the by-election potentially only against count binface it's quite astonishing then we're going to look at

3:48Ed Balls: I think week four of the Andy Burnham transition to the prime ministership. Today, nominations open, but it looks like only he's going to get nominations. And we're going to see how things have been going in the last week with his preparations, in particular, looking at foreign affairs. He has an article in The Times today about the world. And that coincides with the end of the NATO summit, which Keir Starmer has been at his last foreign visit. And Donald Trump has been, as always, saying some controversial things. So we will ask at the end of that segment, what does the NATO summit tell us are going to be the challenges for Andy Burnham in the world in the coming months?

4:26George Osborne: And then finally, the one thing we do know about Andy Burnham's economic policy is that there's a big focus on devolution. We've talked about it before on this show, but it's going to be a clear and important theme of the early weeks and months of the Burnham premiership. And you, Ed, Professor Balls at King's College London, with others, put together a paper on regional growth. And last night you had Michael Gove and Angela Rayner turn up. And so we're going to have a report on what that study shows us, what those two leading politicians who both held the post in the cabinet around local government had to say for themselves.

5:04George Osborne: And what this means about the economic plan that we're all waiting to see unveiled. So that's what we've got on the show for you. We're going to start with Farage, though, because obviously it's been dominating the news. You know, it is interesting. Britain's about to get a new prime minister. And yet the front pages are about another politician. And that is the man who wants to be the next but one prime minister, Farage. We're not going to go into huge detail in the show today about all the various allegations against reform and the role of Christopher Harbin. He's the man who gave Nigel Farage£5 million, whether that should have been declared, being investigated by the parliamentary authorities, or the arrival of someone called Posh George.

5:47George Osborne: I'm thrilled that someone's taken the moniker from me at last. I know.

5:50Ed Balls: I mean, I have to say one Posh George is enough.

5:53George Osborne: Do we need two Posh George's? I think this guy, at least on paper, is posher, although may have tarnished his, tarnished it. Maybe that's what aristocrats get up to, you know, dodgy financial dealings and end up in prison. That is the case of George Cottrell. But he is a key figure in the kind of Farage entourage and has been for years. And it's his donations and the donations of people connected to him, which are back in the headlines, thanks to, it has to be said, an excellent piece of investigative journalism by the Sunday Times. So all of this has triggered the by-election. Let's just start with that moment earlier in the week.

6:34George Osborne: to get us into the mood. Here is Farage announcing his resignation. I've thought about it hard and I've decided today, today I will resign as a member of Parliament for Clacton-on-Sea, thereby forcing a by-election, which should happen, I hope, in short order. Now, I've decided that the people of Clacton should be the judges of my actions. This will be a people versus the establishment by-election. Now, that announcement was made in a broadcast which Reform put together and just released. It wasn't a BBC or ITV or Sky coverage or anything. It was just this clip.

7:16Ed Balls: It looked like a press conference, but there was no press there and no journalist questions. And it was just a statement from Nigel Farage.

7:21George Osborne: A bit like a sort of foreign autocrat, just sort of broadcasting. Anyway, he made the announcement, but of course, he hadn't really, I think, hadn't bargained for, we'll come on and discuss this, the reaction of the other main political parties. This is a desperate stunt from Nigel Farage. And it's obvious why he's doing it. He is up to his neck in sleeves. I mean, what I saw was a man who was cracking under the pressure. He went on telly having a hissy fit. This is a fake by-election. This is a fake by-election. There's going to be a real by-election in Clacton, we will stand a candidate there.

7:55I just think it's just a stunt, and I think people are really seeing that for what it is. So will the Deputy Prime Minister join us in urging the Chancellor to delay the honourable member for Clacton's resignation until the investigation is complete? So the good people of Clacton have all the facts before they cast their votes.

8:11George Osborne: Nigel throws his toys out of the pram, has a hissy fit, calls an unnecessary by-election, I got wind of that. I've turned around the starship pronto. How about that? Lovely.

8:22Ed Balls: What is your appeal going to be to the people of Clacton? I'm not Nigel Farage.

8:30George Osborne: That was in order our Prime Minister, Keir Starmer. That was Kimi Baden-Ock. That was Hannah Spencer speaking for the Greens. She's the new MP up in Manchester. Daisy Cooper speaking for the Liberal Democrats. And the man of the hour, if you can call him a man because he wears a, looks like a giant bin count bin face um who was taking questions from justin webb there on the today program and looks like at the moment he is the only other candidate in the clacton by-election which is which is underway i mean nigel frage has resigned as an mp that the chancellor exchequer we discussed this actually on one of our episodes before the chancellor appoints a resigning mp to a office of profit under the crown the manor of northstead in this case.

9:18George Osborne: And the by-election is underway. Ed, you have had a theory, which I've challenged, but I guess you're on even stronger ground today, that Nigel Farage doesn't actually really want to be prime minister, that that's never been his game, or at least the closer he gets to it, the more he recoils from it. And I mean, obviously, there's so much here to unpack, but what's your sort of overall take on the financial scandals, Farage's reaction, and then this extraordinary by-election.

9:46Ed Balls: Look, I do think that this is the chickens coming home to roost for Nigel Farage. And I think it may be because he's never really kind of taken properly seriously the path he was on. Maybe it's a bit unexpected. I mean, just to say, we had Count Binface on Good Morning Britain on Wednesday morning. So we were asking him, is he in it to win it? Is he in it to bin it? And I actually thought...

10:08George Osborne: Is there any chance he could win?

10:09Ed Balls: Well, I think there's a real chance he could win. Let's come back to that in a moment. I think also Kemi Badenoch saying that the Conservatives are going to be standing in the real by-election, not the stunt by-election. Because, of course, Nigel Farage, what he wanted to do was to say, I'm having the by-election while these two parliamentary standards inquiries are underway, in order that if he can then get an overwhelming victory, he can say the people have spoken. And I'm not going to be pushed aside by an independent parliamentary standards commissioner saying I've broken establishment rules or then a committee of the House of Commons suspending him in the way that happened to Boris Johnson.

10:47Ed Balls: And if you remember Boris Johnson, there was a question as to whether Boris Johnson might choose to have a by-election to say the people should decide. But this is different.

10:55George Osborne: Yeah, we should say, I mean, Boris, he just resigned, Boris, rather than face the suspension. And then that leads to a process called a recall in the constituency, which almost certainly would lead to a by-election.

11:07Ed Balls: And what Kemi Bainock is saying is that if Nigel Farage, look, he denies the allegation. But if he's banged to rights and the parliamentary commissioner for standards says so and he is then suspended and there is then a recall petition, which triggers a, in this case, now second by-election, that is the one.

11:24George Osborne: By the way, David Cameron's been texting me over the last week saying, you see, George, I was right about this recall petition because we were part of the government that introduced it. I was quite sceptical. I was like, do we really want to have this recall mechanism? And David, Prime Minister at the time, he insisted on it. In fact, Nick Clegg was also quite sceptical. But it's that this recall mechanism has had kind of big moments in British politics in the decade or so since.

11:50Ed Balls: And what Nigel Farage is trying to do here is to preempt it and come out in advance of getting to that recall moment. When people talk about whether Boris Johnson would call a by-election, as you said, he then resigned. That was after the reports had been published. Nigel Farage is trying to get out in advance of not just one, but two investigations. And who knows, there may be more. And I think, see, this is the bigger point. In a way, we've been talking about this for the last couple of years. I've always felt that Nigel Farage, he's an iconoclast. He's an outsider. He wants to shake the system up.

12:24Ed Balls: He suddenly found out, because he decided to stand for parliament rather late in the day before the last election, he suddenly found out that even though they've only got a handful of MPs, they're ahead in the polls. Suddenly, he could be the next prime minister. He's now subject to a much greater scrutiny than he's faced before, which he's obviously kind of kicking back hard against. But also the scrutiny is about things which happened in the year before he became a Member of Parliament, but then also subsequently the Harbourn£5 million was in the year before he became an MP. But the question is, should he have declared that?

13:03Ed Balls: But it also raises a whole series of wider questions, which is, where did the money come from? Was it just a gift? What did Harbourn expect in return? What is the money actually being spent on? And then the question is with posh George, how much money has actually been handed over? George Cottrell has a business card with reform on it, as the Sunday Times revealed. Very hard to say this was a personal gift with no strings attached when George Cottrell is also standing or posing as a reform apparatchik. This is George Cottrell, who also Tommy Robinson rallies and, you know, with his team around those rallies.

13:40Ed Balls: I think if you are a politician who really wants to get to the top, you know all the way through your rise that you have to be conscious that every decision that you take will survive scrutiny and accountability. that when the spotlight comes onto you, which you hope it will in due course, if you'll become a candidate to be prime minister, if you're ahead in the polls, you've got answers to all of those questions. And I think what's pretty clear to me, and we've discussed this on the podcast before, I don't think Nigel Farage has thought that way. I mean, he's clearly taken massive amounts of money.

14:20Ed Balls: When we interviewed him on GMB, he's saying, you know, it was like winning the lottery, just getting a£5 million gift. But, I mean, that is not what most people in Clacton... They don't get gifts like that. And they don't seem to have answers to any of the big questions on the media this week. It's an establishment attack. It's a way of trying not to answer the detailed questions. And I think that Nigel Farage is asking himself, do I actually want to answer those questions? Do I really want the job?

14:48George Osborne: I do, but I will answer to the people of Clankton. That's why I've triggered the by-election.

14:52Ed Balls: But it's not going to make any difference, George, because even if he wins the by-election...

14:55George Osborne: We'll come on to the fact that the Tories and Labour are saying...

14:57Ed Balls: But he's still going to have the standards inquiry. And he can't, I mean, the problem I think he has in Clacton is this. When I was making the Donald Trump documentaries a few years back, there was this moment, it happened the first time, and it happened lots of times subsequently with Trump supporters. They'd say the great thing about Donald Trump, they would say, the reason I love him is he's not in it for the money. You thought, what? What are you talking about?

15:22George Osborne: Now we know he's made about a billion dollars in the last year as president.

15:25Ed Balls: They say he's not in it for the money. They say he's already rich. And therefore, he can be for us against the system. He's not just going in there to make money in the swamp. The problem for Nigel Farage…

15:36George Osborne: That was part of Farage's appeal, wasn't it? I'm a business guy. I made money in the city. I'm not like all these other hacks who are politicians who all they ever do in life is politics.

15:46Ed Balls: So now he's doing a press conference where he's telling us, actually, it's all been quite expensive and he's quite poor. And he's been the politician who's been most subject to attacks on him. I mean, forgetting, by the way, Joe Cox and David Amos, who lost their lives in the last 10 years through attacks on politicians.

16:04George Osborne: And any frontline politician, I'm sure you, certainly me, has been pursued by camera crews through airports and railway stations and worried about our family's exposure in the media and so on.

16:13Ed Balls: But his problem is that people are going to say, he seems to be making quite a lot of money out of this politics game. And he brushes it off and says, you know, people don't care. It's just a gift. if he really wanted to have been Prime Minister and if he really thought this was the path he was on he would have been much more careful and I'm not sure that they've got answers to the questions which are currently being asked including by the Sunday Times but also there may be very many other questions still to come about other donations and other gifts and don't you feel as though there is now a vulnerability here for Nigel and for reform because it looks like they're trying to get ahead of this because it's not clear that they can deal with discreetly.

16:55George Osborne: OK, well, there are lots of questions there. And I think the thrust of it all is, does this really matter? I mean, is it going to impact on the fact that reform is currently leading in the polls and Farage, many people think, may be the next but one prime minister? So if you take it in, let's unpack it a bit. I think, first of all, on the investigations, I personally would draw a distinction between the parliamentary ones, which I think he will dismiss even if he wins this by-election and then there's another by-election triggered by him being found guilty of breach of parliamentary status. He'll just say, well, this is all a stitch-up.

17:29George Osborne: These are Parliament's rules by the establishment. All the MPs are on the take. And by the way, this committee that ultimately will decide in Parliament is full of Tory and Labour politicians. I mean, the thing about Boris Johnson was he lost the support of that committee, even though it had Tory MPs and the majority on the committee and he lost them. Here, Farage will say, oh, you know, of course my opponents are going to try and kick me out. I think there's a whole set of other allegations which are much more serious, but we just don't know where they're going to lead, which are potentially criminal investigations, which is a whole different ballgame, I think, for Farage.

18:06George Osborne: I think he can deal with the parliamentary ones as just like their rules, the establishment.

18:10Ed Balls: Are you sure? Daniel Greenberg, the independent commissioner, is very forensic. He will publish a report that will go to the committee. People will see the breaking of the rules and the questions about where the money has come from.

18:25George Osborne: But ultimately, Labour and Tory MPs and Liberal Democrat MPs are going to be the people deciding. And he's going to say, well, of course, it's a stitch-up. And I also think for the Tories, there's a real problem, which I've mentioned on this programme before, which is that Christopher Harbin gave Boris Johnson a million pounds. And the Tories say nothing about it. So it's very hard for them to, you know, until they move on ethically from that period of government, they're always going to have a problem on this front, in my view. The criminal investigations, if there are them, by the National Crime Agency around George Cottrell, and he did go to prison in America, I think there are a whole other set of questions because that is game over if that all starts on winning because that's the courts and the police.

19:07George Osborne: And then, you know, what about the court of public opinion? at the moment there is very little evidence in the polling that this has had a big impact at all on reform or indeed any impact on reform now it's early day very early very early day so and it's true that you know generally reforms poll rating which was at around 30 seems to sort of slipped a bit to the kind of 26 27 28 it's just a couple points still quite a long way ahead of both the Conservatives and Labour. But I think the risk in this by-election, isn't it, is obvious now, is ridicule. It reminds me a bit of David Davis's by-election, for those with long memories, in East Yorkshire, where he kind of resigned as shadow Home Secretary, caused a by-election.

19:51Ed Balls: On an issue of principle about the detention without trial.

19:55George Osborne: Yes, the Labour government was introducing. And then no one understood why on earth he was having this by-election.

20:01Ed Balls: I mean, if you resign and then stand yourself, it does look like a stunt.

20:04George Osborne: And then the other, Labour didn't contest it. I remember being on the track, it's quite a hard part of the country to get to from London, East Yorkshire is one of the harder places. It takes hours. And I just remember being with a kind of carriage full of Tory MPs going up to campaign in this by-election, wondering like, what on earth is this all about? What a waste of our day. It's interesting because there is a, you know, we just had a self-imposed by-election in Makerfield.

20:27Ed Balls: That's right.

20:28George Osborne: In the sense of Labour didn't have to resign or Labour MP wasn't forced to resign. But he was creating a vacancy for Burnham and Burnham successfully turned the Makefield by-election into a, you know, a sort of national event. I think the problem for Farage now is this thing could look ridiculous for the next few weeks. But he has to go through with it because otherwise he's not an MP. He's currently not an MP. He's ceased to be an MP in the last couple of days.

20:54Ed Balls: And as you say, look, the polling hasn't shifted yet nationally. although it's tightened for reform over the last six months and they did vote on the local elections. But if the betting markets show bin face gaining...

21:09George Osborne: Yes, what do you think? I asked you the question earlier.

21:11Ed Balls: If people decide... Look, do you remember Boaty McBoatface?

21:15George Osborne: Yes.

21:15Ed Balls: I think the National Oceanographic Society or something. And they were naming a boat and they were going to name it after David Attenborough, but they foolishly asked the public and the public decided, well, you know, what's this all about? and they turn it into a bit of a joke and it ended up being called Boating But Both Face. You remember the monkey...

21:32George Osborne: It was all organised by Boris's brother, Joe, the brother I prefer. He was trying to be, you know, let's engage the public in this choice of a name for our Antarctic research festival. In the end, they named the lifeboat on it, Boating But Both Face.

21:49Ed Balls: And they also elected a monkey as a mayor in Hartlepool back in the day. If people decide that it's not serious...

21:56George Osborne: For those who don't remember me, this was a guy who dressed as a monkey.

22:00Ed Balls: He wasn't a natural monkey. Yeah, but he became the mayor. And I remember meeting him at a football match. He used to come on the pitch at the beginning of Hartlepool Games.

22:07George Osborne: Remember, Zelensky was a comedian. He was elected president of Ukraine as someone who had played the president in their equivalent of the West Wing.

22:14Ed Balls: And the big challenge for Count Binface is that at the moment, the rules stop him coming in to parliament wearing his bin. But I think if he comes in a normal clothes, he wouldn't quite have the same impact. However, if the people decide it's a laugh, then it could be a joke moment. If they decide that Nigel Farage is actually playing fast and loose with the rules and with money, and he's actually behaving like the caricature of the politician on the make, that's when it starts to get more serious. And the gamble Nigel Farage is making is that his core vote don't care and see it as establishments stitch up.

22:49Ed Balls: But what we know is that for reform to succeed politically, they need to reach towards the centre ground. They have to bite more into Tory boats. And so I'm not sure that it's only embarrassing as a stunt. I think the politics on this could shift. It all depends, as I said, whether or not Nigel Farage and reform have got all the answers to all the questions. It's very hard to dismiss the Sunday Times as being, you know, a left wing newspaper.

23:19George Osborne: No, but he says it's a Murdoch conspiracy, doesn't he? I mean, wouldn't be the first person.

23:23Ed Balls: But it's the Guardian who've also been exposing this over recent weeks, in particular, the journalist Anna Isaac.

23:27George Osborne: OK, but here's an interesting, if you take a few steps back from everything, there are a couple of sort of thoughts about this. First of all, it may not at the moment be damaging the reform's poll rating, but it might be cementing certain things. It will make it much harder to attract other defectors. There's an argument that reform has somewhat lost its way ever since it took in Suella Brabman and Robert Jenrick and Danny Kruger and so on. And there's a kind of tension within reform between the lifers, the long marchers and the new Tory defectors. I'm sure Tory MPs who might have been thinking, let's get on the bandwagon, will be like, I'm not sure where this bandwagon is going at the moment.

24:09George Osborne: So it's going to stall that kind of momentum. Second, I think it probably some people who don't like reform voters will be even more cemented in that. And I think that's the kind of central issue, which we saw a bit in the in the by-election, which is there's a stop reform tactical voting. Actually, you saw it in the Kefili by-election, which Plaid Cymru won, which is people will unite, including the people who continue to say, I'll support the Tory party. If you look at it, when they're asked the question, how do they feel about reform? Many of them are never reformers. They are not people who will switch to reform.

24:49George Osborne: That bit of the Tory movement has already gone to reform, or at least in the polling indication, you know, how they expect to vote in the future has gone to reform. But the people who continue to say they're going to vote reform, plus people who say they're going to vote Labour, plus people who are going to vote Liberal or Green, you know, this will just harden that alliance of anyone but reform. And when you get to the general election, what that kind of means is it'll be easier to unite the left against reform than to unite the right, if that's the right word for it, but unite the right against Labour.

25:23George Osborne: So I think ultimately Labour is the beneficiary from all of this. Would be my guess, because I think they will start to be able to present themselves as the only alternative, credible, winning alternative to reform. And all of this will have created more stink, more noise, more, you know, not sure we like these reform people.

25:46Ed Balls: I'm not sure about that. What I know is the people who say Andy Burnham will be annoyed about this because, you know, he was going to be the big story of July and suddenly he's going to be overshadowed by Nigel Farage in his by-election. That's all nonsense. I mean, Andy Burnham will think that he fought the Maker Fiat by-election on the basis that I can take on reform. And at the moment, reform looks much more vulnerable and potentially divided than a few weeks ago. So I think he's probably thinking this is all going in my direction. if it turns out that this is strengthening for Nigel Farage, he can brush off these inquiries, he can win two by-elections, he comes out as the guy who's fought the establishment, fine.

26:26Ed Balls: I don't feel that is the way it's going to go. And I think there will be conversations for the first time happening in reform, which is, you know, is Nigel actually now becoming a bit of a liability? What would reform look like post-Nigel Farage? And look, the truth is, if you look at the rows you've seen in recent weeks between Zia Yusuf and Robert Jenrick over who's in charge of policy, kind of fighting and dividing. But that Nigel Farage, is reform actually going to have the credibility and the leadership and the strength to hold? No, no. I don't think so. And Richard Tice will be sitting there thinking, look, I always said that it was dangerous kind of going over in this more right-wing direction.

27:06Ed Balls: We should have been leaning into those disgruntled Tories. He will be feeling kind of quite cross about all of this. But who is the one person who has stood against all the pressure for her to lean towards reform, do a deal, try and keep Robert Jenrick, stop them defecting? Who is the person who said, actually, I'm not going to be part of that? It's actually been Kemi Badenock. If you see reform getting into disarray, it's vindicating for Kemi Badenock, who in any case has been doing better in Prime Minister's questions over the last six months. She also, I think, then can start to reach, as we've urged her to, back towards the centre ground on the economy.

27:46Ed Balls: And for Andy Burnham, a stronger and more effective Kemi Badenock is the thing he doesn't want in the next year and a half. I wonder whether Kemi Badenock may turn out to be the winner out of all of this.

27:56George Osborne: Well, there's no doubt that if reform implodes, if Nigel Farage disappears from the stage, Kemi Badenock is the winner.

28:05Ed Balls: Having got rid of Keir Starmer, she then sees off Nigel Farage and then she turns to Andy Burnham.

28:09George Osborne: No, that's the Tory dream. Let's have, again, they want the politics we used to be part of, which is let's have a crack at this Labour government without having to worry about anyone else. So you're obviously right about that. But if the result of all this episode is a more toxic reform, but still led by Farage and a bunch of reform supporters who are even more convinced it's an establishment stitch up. You know, I think that leaves the right still divided, which means very hard for Tories to get elected in places because in any constituency, there's a reform candidate.

28:42Ed Balls: Which is why Kemi Bednock said in our medley earlier in the show, she's fighting not the fake by-election, but the real by-election. She's in it to win it because what she needs and what Labour needs, both of them, is to see Farage through the standards commissioner process really taken to task.

28:59George Osborne: Remember, that second by-election, if it happens, if he could win it, doubling down, if you're his opponents, in his own backyard, Clacton, he'll just say, I told you it was a stitch-up. I've won this once. I'm going to have to win it again.

29:14Ed Balls: But that becomes a test of your theory, because the thing which we know from the polling which has been done is that people's desire to beat reform is strong enough that they are willing to bite their lip.

29:26George Osborne: Yeah, you'd have to get it.

29:27Ed Balls: And, you know, the person who should win that by-election against Nigel Farage in Clacton is the Conservatives. It was a Conservative seat before 24, before 2014. And so the question is, does Labour and the Liberal Democrats decide, can we not winning that seat is the most important thing for them too? That would be the test.

29:45George Osborne: Yeah. Now, if you look at the results of the last election, you'd have to get all the other, you know, Labour voters, Liberal Democrats, Greens. and they did, you know, there were thousands of votes for each, all coming behind the Tory, Giles Watling, very nice guy, by the way, was the MP before 24. And then maybe, anyway, we're getting ahead of ourselves because there's his first by-election against Count Binface. Maybe he's going to be. I know, as I said, is he in it to bin him?

30:10Ed Balls: Is he in it to win it?

30:11George Osborne: Could he, by the way, would he be called Count Binface MP?

30:14Ed Balls: Well, he has to wear a business attire to come to the House of Commons. Although there are Labour MPs saying, look, if he's elected as a bin. He can speak as a bin.

30:22George Osborne: He can speak as a bin. Anyway.

30:24Ed Balls: Oh, my goodness. It is the silly season of July, but it's also very serious.

30:29George Osborne: We are talking about serious. We are about to have a new prime minister, and it's not Nigel Farage. It is Andy Burnham. Labour nominations, nominations for the leadership of that party have opened today, and we're going to turn to Burnham's impending premiership next.

30:54This Monday.com ad was created by a team of people and AI agents. The agents wrote the copy and managed the timelines, while our human creative director made sure it all made sense. Easy. Create your own AI agent today on Monday.com.

31:15Ed Balls: so we are in i think week four post baker field of the burnham transition nominations open today the 9th of july for the labour leadership election process but it looks like andy burnham is going to be the only candidate so de facto or be clear from the next few days he's going to be the prime

31:34George Osborne: minister it is a coronation that's amazing isn't it i mean still it's worth pausing there are 420 odd labour mps not a single one of them feels they have the support to run for the premiership even

31:46Ed Balls: though would love lots of would love to be prime minister even al cairns has now decided that he's not going to stand he's now indicated he's it's not too late no one no one met his five tests including him somebody's got until the 16th to find the 81 but um i don't think it's going to it to happen. And then there have been a few interesting things.

32:04George Osborne: We should just pause on the date, shouldn't we? Burnham's going to become the Prime Minister on the 20th.

32:09Ed Balls: That's true.

32:10George Osborne: Which is, by coincidence or by deliberate design by Keir Starmer, one thing you can say about Keir Starmer is he's a genuine football fan. He has sorted this time table out so that if England are in the World Cup final, he will be the Prime Minister.

32:24Ed Balls: He will be the Harold Wilson a la 1966. And I don't know. I'm pretty sure that is what is going on here. When the nominations close on the Thursday the 16th, there's going to be a special Labour leadership conference on Friday the 17th. Andy Burnham could leave that, go to the palace, appoint his cabinet. They could spend the weekend getting into their new briefs. But instead, Andy Burnham can't take over until Monday. They claim some precedent. But Keir Starmer has definitely said, no way. Is Andy Burnham handing a cup to Harry Kane? But the other thing which has happened, reported yesterday, is that Keir Starmer also wants to announce, be the Prime Minister who decides to announce a bank holiday.

33:11Ed Balls: You would think the bank holiday would be the day after we win the World Cup. If we win. Yeah, if we win. If we win. Of course, if we win. And by the way.

33:18George Osborne: Erling Haaland, I think, has got other thoughts about this.

33:21Ed Balls: The game against Mexico was so good. and the Argentinian comeback against Egypt was quite amazing as well. So there's lots to get through. But Keir Starmer, if he's announcing a bank holiday, you'd think he'd be announcing it for the next day. But that would mean Andy Burnham becomes the Prime Minister on a bank holiday, Andy Burnham Day. Can't have that. So they're now talking about the bank holiday not being until the Friday, the end of the week, which apparently is because it takes four days to organise a bus tour. Really?

33:49George Osborne: In Manchester, presumably.

33:52Ed Balls: let us just let us just say all right keir starmer we know what's going on but that is fine because you know it's his prerogative to yeah i i would not begrudge him that i mean it's a book

34:02George Osborne: we've we've learned a bit since we talked about burnham last week the two new pieces of kind of information have come out if you like in burnham's own hand the first uh is an article in the times today which we're going to come on to which is about national security defense policy It's his first statement on foreign affairs, having had that speech last week on the economy. And then second, there's, I mean, leaked is probably a strong word for it. He sent this to all MPs, Labour MPs. He sent essentially a text message explaining how he was going to handle Parliament, work with Labour MPs, what he would expect of ministers and cabinet members.

34:41George Osborne: And essentially, it's all like we want to hear much more from Labour MPs. and it's all going to be much more collaborative, which is exactly what you do say if you're running to be the leader of a party.

34:50Ed Balls: And especially if in the last few days you've been to meet delegations of select committee chairs and backbenchers and the Parliamentary Labour Party committee who have all said, you know, can you do things differently? So Andy Burnham is, you know, I think probably playing back what people want to hear. And that's probably a good thing.

35:08George Osborne: Presumably you said that kind of thing when you were running to be Labour leader.

35:11Ed Balls: Absolutely. I had a whole section in my manifesto on all of that. And him saying...

35:16George Osborne: David Cameron was always like, we're going to involve the 1922 committee. Every Tory leader says...

35:22Ed Balls: And saying that, you know, as prime minister, I will always be there in the votes. And, you know, but he might... Look, he may tell you that to be in Manchester rather than, you know, in number 10 North. By the way, before we get on to foreign policy, the other significant thing, I think, was a leak of a James Pennell meeting with junior ministers. Now, there's been a bit of noise. There are access... He's the putative chief of staff, isn't he? There are access talks going on between Andy Burnham, James Pinnell, and Antonio Romeo, the cabinet secretary. It's always the case that civil service wants to get in and manage these transitions, and there are always access talks before a general election.

36:01Ed Balls: There's been a bit of noise saying, very hard to do these access talks when we don't know who are actually going to be the cabinet members, and it's all a bit disorderly.

36:08George Osborne: I mean, whoever said that, there was a story in the FT. Just nonsense. And the Institute of Government, who I like, but I mean, they rode in by it. I mean, the idea that Andy Burnham can appoint his cabinet when he wasn't one of the Labour leadership. Can you imagine a parallel cabinet?

36:25Ed Balls: And also saying, you know, Rachel Reeves is the chancellor until the 20th of July. But actually, my chancellor is going to be Ed Miliband or whoever. What happens for the next week? I mean, utter chaos. You can do that when you are in opposition, coming into government. when it's the governing party, of course you can't do that.

36:45George Osborne: Also, you had the sort of civil service type saying, and these poor cabinet ministers are going to have to pick up the brief on the day. Yeah, like every reshuffle in government ever.

36:54Ed Balls: It's what I did. I mean, it's what so many of us have done before. The other thing was that James Pinnell, talking to a group of junior ministers, said there would be continuity. And actually, I thought this was quite interesting. Well, you would say that, wouldn't you? You can't tell the room you're all going to be fired. That is true. But there was also, I think, a more serious point here, which is that if you are Andy Burnham and you're taking over at this point, you don't know who are the good junior ministers. You don't actually know, probably, Andy doesn't know personally quite a lot of the cabinet members, certainly doesn't know the junior ministers.

37:26Ed Balls: if he comes in now and says this is a big reshuffle not only does he destabilize the civil service put a whole bunch of people in junior jobs who suddenly have to sort of learn everything from scratch all over again it means that he is then judged from day one as to whether or not these guys are doing a good job whereas actually the smart thing for him to do is to wait a bit have continuity see with his team in number 10 who are the ones who are actually good on the media in parliament, the civil service like, good on policy. If he wants to do a defining reshuffle, which shapes his government in the burn and mould, he's actually better off in general.

38:08Ed Balls: Of course, he's going to change the chancellor or a big job here or there, but he's better off waiting until he's sure who he really wants to be in those big jobs in the 18 months up to the general election. If he does it too big now, then if he has to change it after six or nine months, It looks like he's having to correct his own mistakes. And I think it's better. So I think James Miller's smart about that. It's better to play for time.

38:32George Osborne: Yeah. And once you start firing people, they never forgive you. I mean, before we get on to the foreign affairs piece and his article in The Times, I'm going to sort of pose a bigger question. I've been talking to quite a lot of Labour folk over the last couple of weeks. And there's a kind of unspoken thing. It's a bit like, I don't want to overdo it. It's not like the emperor's got no clothes, but there's no one I've spoken to. And to be fair, I haven't spoken to Lucy Powell and Lou Haig, some of the kind of really key people around Andy Burnham. There's no one I've spoken to who doesn't have quite a sense of foreboding about how this is all playing out.

39:08George Osborne: That this guy, Andy Burnham, known to both of us, no one doubts he's smart and charismatic and so on. But he is becoming the prime minister of this country with next to no scrutiny at all. He's given one speech on regional devolution. He's written one article in a newspaper about NATO. And that is it. And the hopes and dreams of the Labour Party are pinned on this. And if you speak to people in private, as I do, there's a big, big, I mean, this could be a huge mistake. Or is this guy really up to it? And you don't get a sense of kind of real excitement and optimism that Labour's turning a corner.

39:51No doubt people think it's got to be better than Keir Starmer.

39:55George Osborne: They do say that. But in some ways, there's a risk of repeating the Keir Starmer mistake for Labour, which is you choose this guy because in the case of Starmer, he's not Jeremy Corbyn. Here's Andy Barnaby, he's not Keir Starmer. But there's no plan that we know of. There's no solution to the big economic issues and the big fiscal challenges. There's not really a sense of how he's going to govern. The policy debate that Tony Blair called for in that big essay we discussed a few weeks ago has not happened. There's no challenge. There's no argument. and the big tough questions, which Andy Burnham is all about, we've got to level with people, we've got to do politics in a different way, we've got to be much more...

40:43George Osborne: The really big trade-offs, which include things like the defence budget and how on earth are you going to pay for this NATO commitment, which we're going to come on to the NATO government, that's just like utterly undiscussed. And so Labour is about to choose a leader without really knowing what on earth they're getting.

41:01Ed Balls: Look, there are lots of people who are very worried. If you had the leadership contest, then you end up with a Liz Truss style problem at the end of it, because you have a very navel gazing, aimed at the members, not clear those debates help. They end up boxing candidates, including Andy Burnham, into positions which they then struggled to get free of. And the same thing did happen to Keir Starmer, the promises he made in 2020. So I think there was always scepticism about whether let's have a heated debate was going to work. And Makerfield sealed it because I think there has been a worry in Labour, but actually in mainstream politics, There was an existential threat from reform and Andy Burnham in his communication, but also in his standing with voters in that constituency, did something which people think many other politicians, including senior people in the cabinet, wouldn't have been able to do.

42:04Ed Balls: So there was a sort of sense, well, maybe he's the guy who can do it. And then clearly in Manchester, let's be honest, without a lot of power, without the ability to make many controversial, difficult decisions, he didn't have to raise taxes. He didn't have to do things which upset lots of people, but he delivered. And he certainly delivered in terms of the standing of his office and his ability to unite politically. and he's learnt a lot about politics and himself over the 16 years since he was last a cabinet member and the Andy Burnham who was the chief secretary or culture media and sports or the health secretary is a long time back in the past now there'll be lots of people who work with him in that time who will think we didn't really ever think Andy Burnham was going to be prime minister and maybe that is what you pick up, that sense that back in those days...

43:00Ed Balls: Really him, yeah, yeah. I mean, back in those days, you didn't think that Andy was going to be the one. I mean, I think Andy Burnham may have thought that, but I'm not sure lots of other people did. And even if you go into the 2010 leadership election, you know, he didn't storm it.

43:15George Osborne: No.

43:16Ed Balls: And he didn't in 2015, but it's a long time ago and he's a very different person today.

43:22George Osborne: And he's demonstrated ruthlessness. and courage and gambling you know courage taking the decision to call the by-election and he did

43:30Ed Balls: something and make a field that but very hard so we don't know what his you are right the central

43:36George Osborne: critique of Keir Starmer was not that he was a poor communicator because I think he was able you know as the sort of serious guy who's gonna you know run the country properly after years of chaos you know that was his appeal it's that he turned out not to really know what he was governing for, that he had no central kind of plan for his government or what he wanted to do for the country. And he was therefore sort of blown around by things and events and the last person who spoke to him and so on. We don't know what Andy Burnham's plan for government is, do we?

44:05Ed Balls: But the other critique of Keir Starmer, and we'll come to that next week when we reflect upon the transition, you know, on the day it's happening, is that he never managed within his cabinet or within his own team to build relationships of trust and team, which got him through difficult periods. And it wasn't only the country who didn't know what Keir Starmer was going to say or do or stood for. That was true of his own staff members.

44:31George Osborne: I don't think there's any doubt that Andy Burnham will be a lot better at doing that. And there's a real loyalty to him amongst people who've known him for a long time, including, for example, James. But the central kind of policy challenges remain unanswered.

44:43Ed Balls: Did you see in The Guardian last Saturday, I think it was Saturday, an editorial in The Guardian newspaper saying George Osborne on political currency gives Ed Miliband his seal of approval as a chancellor? You know, if he gets the job, it was George what did it. Posh George.

45:00George Osborne: Well, I don't think I'm betraying too much when I was saying that I was actually jumping up and down at the water rats listening to you with Ed Miliband's wife. She was there as well. Justine. It's great. Now, I was not giving my seal of approval. I was saying that if I was Andy Burnham, I could see why I'd pick Ed Miliband. On the foreign affairs side, I mean, the Times article today, in one sense, there's nothing new, is there? I mean, that's, I guess, its strength, and that's what it's supposed to communicate. In fact, he goes out of his way to say, for a start, I'm keeping Jonathan Powell as the national security advisor, who was Tony Blair's chief of staff back in the day.

45:37George Osborne: So there's a lot of continuity and it's all about the importance of NATO and about new threats from AI and working with, you know, what he calls the European three, i.e. France and Germany and more cooperation with the EU. I mean, I will say it because, you know, you can't. There's a huge continuity with what Yvette Cooper's been saying. And she wrote this down pretty much word for word in an essay a while ago. And then William Haig, in his column, pointed this out and endorsed it and endorsed what Yvette's been up to. But I would also say that Times article today could have been written by a Tory prime minister.

46:16George Osborne: I mean, there's nothing distinctly Labour about it. There's a bit of re-industrialisation in the heartlands and spending the defence money on kind of boosting industry and apprenticeships. But again, I think a Tory prime minister would happily say that these days. there was in fact less focus than Keir Starmer had at the beginning of his premiership on human rights and you know the human rights lawyer was going to bring all of that to foreign policy so is there anything new in what we said or is the very fact that it's all continuity and very similar to what the current foreign secretary and the former foreign secretary William Haig would all sign up to.

46:55George Osborne: Is that the kind of reassuring thing?

46:58Ed Balls: I mean, he did talk in the article about values. And I think he also talked about the importance.

47:06George Osborne: He talked about values in about one sentence.

47:08Ed Balls: And he also talked about, as you said, kind of the link between economic policy and defence. Although, of course, the IMF say that that's all a bit more tenuous. But what he's fundamentally saying, I think, is that unlike Keir Starmer, he wants to be judged on the domestic agenda. But he knows that domestic resilience depends upon getting these international calls and relations right. And this week, we've seen the NATO summit. We've seen Donald Trump with Keir Starmer and NATO leaders in Turkey. And that is, I think, a reminder these days for Andy Burnham, quite how much international events can bear upon your domestic agenda.

47:50Ed Balls: I mean, look, first of all, I mean, the Straits of Hormuz are on fire again. We now have the Iranians bombing commercial ships and the Americans retaliating. That directly impacts back into Andy Burnham's cost of living agenda.

48:05George Osborne: And so it shows you it's a very dangerous agenda for a prime minister to adopt. And Rishi Sunak did it. Keir Starmer did it. You're not in control of the cost of living. Yeah, ultimately.

48:15Ed Balls: And then for Keir Starmer, it will have been a very difficult few days. his last summit, because the truth is at that summit, I'm pretty sure every prime minister, foreign secretary, defence secretary will be saying to the British delegation, tell us about Andy Burnham. Who is he? What does he stand for? How do we get in touch? How is he going to be? But in particular, the big push here is to say to Donald Trump, Europe is responding. Europe is responding on defence spending. We are taking a lead. we are more than filling the gap left by the de facto American withdrawal from Europe's defence. So the immediate test this autumn for Andy Burnham in the first budget is, is he going to make real the commitment to deliver more than the defence investment plan?

49:02Ed Balls: He's got difficult decisions on tax and spending coming up, but it's going to be very hard for him to be a credible leader in NATO unless he does more than Keir Starmer has delivered so far. So again, that is the NATO summit directly impinging onto the domestic agenda. And then the third thing he's going to have to decide, we discussed this last week, is Donald Trump and how he handles that relationship. And does he take the Starmer approach, the Carney approach, the Rutter approach? I mean, these are all difficult choices. Donald Trump was up to his usual tricks this week. And I'm not happy with NATO because of the fact that they didn't want to help us with the number one state sponsor of terror.

49:42That's Iran. They were unwilling to help us. Now, in all fairness, I didn't speak to Mark about it. I think if I did, it might have been different, but we didn't need help. But I was really testing. I wanted to see whether or not they'd be there. And the answer is they were. I spoke to Germany. I spoke to France, spoke to UK, spoke to Italy. I spoke to I didn't speak to Spain. Spain is a wasted cause. We don't want to do any trade business with Spain anymore, by the way. I'd like you to cut it off. Spain is a terrible partner.

50:12George Osborne: in NATO. That's President Sanchez of Spain, he's not a fellow traveller.

50:18Ed Balls: What was amazing, because he also said, again, opened up Greenland, what they've realised, these NATO ministers, other leaders, is that you just absorb it. You know, if somebody says...

50:30George Osborne: Yeah, but the late Ayatollah probably thought that. Look what happened here. You don't know. That's the whole point. You don't know. You know, if you're sitting in Greenland, it might all be talk and then suddenly one day an American aircraft carrier might turn up.

50:42Ed Balls: But what you rely upon is all the people around you as a prime minister talking to all the people around Donald Trump, just trying to absorb and calm and move on. And I guess if you are directly attacked, if you're Spain, you probably have to say, hang on a sec, Mr. Trump, you're wrong about this. But other than that, what you don't do is react. And Andy Burnham, he has to decide what his strategy is going to be.

51:06George Osborne: You're the FIFA president, you do react and you rescind the red card. Well,

51:11Ed Balls: utterly astonishing. And it didn't help. I mean, it got the whole of the rest of the world cheering when Belgium beat America in that game.

51:20George Osborne: Yeah, but I think most Americans would be good on our president. You got the red card. Anyway, just one final thing on Burnham's article, because I think it speaks to the whole kind of approach to NATO and everything. There is a kind of contradiction at the heart of it. And I would say at the heart of sort of British foreign policy at the moment, generally, you know, which is, you know, he says in his article, we want to focus on reducing foreign dependency, securing inward investment and building new industrial partnerships with allies. And that is just a contradiction in terms, that sentence.

51:49You can't reduce foreign dependency whilst increasing inward investment, i.e.

51:54George Osborne: from foreigners, and building new partnerships with foreign allies. There's not yet a kind of coherent theory. I think You know, Mark Carney has tried to put together a coherent theory about middle powers cooperating on things where the superpowers, i.e. the United States and China, won't, particularly the US. Now, that has lots of problems in practice trying to operate without the US. And the NATO summit has reminded everyone of exactly how dependent they are on, for the foreseeable future, the American hard power. I thought it was interesting the article was a bit bland. The flip side of the continuity is he doesn't have anything new to say in this space.

52:32George Osborne: And he's not trying to create some new, he's not trying to do what Carney's doing, which is I'm going to lead the kind of non-American bloc. He's saying, isn't he, I'm an utterly domestic focused prime minister. I'm going to fix our problems at home and I'm going to leave it to my foreign policy or Keir Starmer's foreign policy team to carry on business as usual.

52:55Ed Balls: Although, if you remember, before the general election, the attack on October the 7th, Keir Starmer stumbled in an LBC interview and said some things.

53:07George Osborne: He said it was fine for the water to be cut off from Gaza.

53:10Ed Balls: And that caused huge political problems for many months after. And I think if you are Andy Burnham and you're thinking about the domestic agenda and you're thinking about how you manage Labour voters who might have drifted to the Greens or to the Liberal Democrats, as well as thinking about Labour voters who may have gone to reform, that's a much smaller number. you're thinking about how foreign affairs impacts back into domestic politics and so if you're domestically focused and you focus on the next election you're going to need to talk about those issues but what you don't do is get to those domestic foreign policy issues until you set out your wider store and so i think this article in the times is very important but i don't think it'll be the end of the story i think he will say some important things on climate change or on the Middle East or on our nuclear capability.

54:02Ed Balls: I mean, we'll see. But I think this was the thing he had to do first, which is to set out a broad stall. And actually, now that's done, he can then focus on some detail to come.

54:14George Osborne: Well, the detail is going to be how you pay for all this. That is the kind of key issue. And we're going to come back to the economy in our final section. And we're going to have a look at when Michael Gove got it together with Angela Rayner. And that's next.

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55:17George Osborne: Welcome back. So while the rest of us were watching Arthur Ferry win at Wimbledon and getting excited about England's match against Norway, Professor Balls here was at King's College, not too far from where we are today, setting out this regional growth paper. And before you all switch off the podcast at this point, Ed, explain why this matters.

55:43Ed Balls: Well, I mean, it mentions you positively and the Northern Powerhouse. Keep listening. I don't think you'd want to have it switched off. It's the fourth paper in a series. We've talked about this before. We talked about the economics of why we had big regional divides and what needs to change. We talked about the experience of past policymakers and why it's gone wrong. We said before the last election, here's the 10 things they've got to do. And we decided we would do our final paper on a stock take. How are they doing on the key tests we set for the government? And we set out to do that, not realising that it would come out just at the point when the first two years and the Starmer prime ministership was ending.

56:22Ed Balls: So our paper becomes a judgment on the last two years of Keir Starmer. But then what Andy Burnham should do to turn things around, because we say in the paper that this was a great opportunity. And for the first time, they didn't rip up what had come before. They carried on.

56:38George Osborne: This is a great opportunity, you mean, of a new Labour government with a big majority.

56:41Ed Balls: A new Labour government coming in, but carrying on.

56:43George Osborne: Not getting rid of things.

56:45Ed Balls: Not getting rid of everything like you did in 2010, happened so many times before, but that they've been missing the opportunity. And across our 10 measures, we say in some areas they are on track. In particular, the work done by housing communities and local government, in particular done by Angela Rayner in her first year, carried on by Steve Reid about putting in place combined authorities and mayors across the country, giving mayors some more powers, the single pot of money for the mayors to have more discretion.

57:15George Osborne: So housing a tick, even though Burnham himself makes housing a big issue, which he says he's going to change.

57:21Ed Balls: Although the housing numbers are not coming through. And I'm not sure that's about the devolution agenda, but that is a challenge. We then say in some areas there's been mixed progress. So capital spending is up, but it's mainly gone on defence and the National Health Service. And if you look at skills, science, innovation, it's been flat or even falling. Transport's been up a little, but nowhere near up by enough.

57:46George Osborne: Starmer, his parting gift is a cut in every department's capital budget to fund new weapons.

57:52Ed Balls: Well, what we say critically is that what every past practitioner has always wanted is a prime minister and a chancellor together really driving the devolution and growth agenda. And that we say that in our paper, our past stuff, that for you and for Gordon Brown, part of the problem was you never quite had the firepower of number 10 backing the Treasury when the Treasury was leading this agenda. You can't do it without the Treasury, but you need that partnership. And the truth is, we haven't had that because the Keir Starmer number 10 never properly engaged on this. And the momentum went out of it very fast.

58:28Ed Balls: The Treasury has not really engaged on it. Certainly at the chancellorial level, it's not been a big theme for Rachel Reeves. I think the Treasury...

58:35George Osborne: She came to it late in the MACE lecture she did a few months ago. But by then, the nails were in the coffin.

58:42Ed Balls: There's never been a coherent growth strategy, which we've talked about so many times, really diagnosing what's gone wrong and what needs to be turned round, whether that's about dynamism and markets and competition or transport or innovation and science or about the gaps in skills. You haven't had at the centre the Chancellor and the Prime Minister driving the devolution agenda, getting recalcitrant departments like education or work and pensions into line. We said you need to have like a central delivery drive. It hasn't been there.

59:17George Osborne: But it is what Burnham's promising. I mean, that's a whole number 10 norm. Exactly.

59:20Ed Balls: So our paper says missed opportunity so far, not too late to turn it round. For the first time, we're going to have a prime minister and a chancellor, if he chooses the right person, really committed to this. The ball's on the penalty spot. Shoot and score. Absolutely. And then in our paper, we go through a lot of detail. I won't say it now. The things in detail he's got to do. But it's a partnership between the Prime Minister and the Chancellor, really trying to turn around capital spending and focusing on growth with a growth plan, giving mayors the powers they need to then deliver that. And actually being relaxed that sometimes it will go wrong.

59:58Ed Balls: And there's going to be mayors who are going to be conservative or reformers. That's OK. Embraces agenda.

1:00:04George Osborne: And there can't be growth in every postcode. I mean, that's the problem.

1:00:06Ed Balls: Although it's not a bad thing to say we want growth to be driving not just in London or Manchester or Birmingham, but in Bolton and Wigan and in Wakefield as well. But isn't the kind of central challenge here that everything you're saying, even if he embraces it and delivers what he says in his speech last week, you know, it's all going to take a couple of years to pass the legislation to get the new powers in place.

1:00:31George Osborne: And then the mayors themselves have to come up with ideas for what they're going to do with their new powers. And, you know, I mean, be lucky if there are actually things happening by the time the next general election in three years time. His immediate problems are going to be how does he fund the defense commitment? Is he going to have to raise taxes to pay for new social housing that he's promised? The things that ultimately flawed Starmer and Reeves was an inability to make the sums add up because they couldn't borrow more money because the bond market said no. They couldn't cut public spending and particularly welfare because the parliamentary Labour Party said no.

1:01:07George Osborne: They could raise taxes, but that has lost them the support of the business community and arguably delivered lower economic growth. So he faces the question that ultimately Starmer and Reeves couldn't answer.

1:01:21Ed Balls: That is right. But he can't fight the next general election on the basis that in two years I have delivered. And I think if he goes out there and says, here's my metric for delivery, I will have solved the cost of living crisis. I will have raised the growth rate. Then those aren't tests he can pass. And I think part of the problem Keir Starmer and Rishi Sunak made is they set very short term tests which failed to deliver. What he has to persuade people of is there is a plan. It's coherent. He's delivering it. It is long term. He has to fight the next election on a lot done, a lot more to do. He has to say, trust me, we're going in the right direction.

1:02:00George Osborne: There'll be something done, a lot more to do. It can't be a lot done, can it? Because it's only a couple of years.

1:02:04Ed Balls: No, but they will be able to put, look, in the end, it's going to depend substantially on whether the economy is growing and whether the kind of economic and cost of living pressures are starting to ease. And that's not going to be directly in his control. But if you don't have, I mean, you remember your rhetoric about your economic plan. And, you know, we all used to think, you know, they don't believe in an economic plan. But I think you persuaded people we've got a plan, stick with us. and part of the reason why Keir Starmer and Rachel Reeves have struggled in the first two years is that nobody's really ever known what the economic plan is and they had the chance to embrace you know regional growth as part of the plan and they didn't really take it.

1:02:46Ed Balls: If that is all of Andy Burnham's plan it won't be enough because he's also got to think about markets and competition and Europe and as you say the tax spending choices but he has the potential here to deliver this and every politician we spoke to for our work says if only we'd started earlier and that included George Osborne and so Keir Starmer and Rachel Reeves are probably thinking we should have got onto this earlier Andy Burnham is now coming in start now I think he's going to.

1:03:20George Osborne: Yeah it'd be a great disappointment if the first mayor of Manchester becomes prime minister and doesn't do something for Manchester. We gave

1:03:27Ed Balls: He gave him a very detailed template of all the things he's got to do. And let's hope he reads it and James Pennell reads it and the guys in there read it. The other thing, we had our event at King's last night.

1:03:35George Osborne: Tell me about the romance between Angela Rayner and Michael Gove. I mean, they're a sort of unlikely couple, aren't they?

1:03:41Ed Balls: So we had 200 people there. And we also had Kim McGuinness, the newly elected Labour mayor for the Northeast, who's very good. Nick McPherson, to have a dose of cod liver to make sure everybody understood all the fiscal and boring challenges that you set out. and rightly so.

1:03:57George Osborne: He was the permanent secretary of the treasury when I was chancellor and before.

1:04:01Ed Balls: And that's right. But Michael Gove and Angela were both former secretaries of state for housing communities and local government who championed this agenda. And Angela said, you know, how much these days she agrees with what Michael says. And I pointed out that when Michael now says that he was wrong to abolish the children's agenda, that he was right about that. And if only he thought that at the time rather than subsequently. He also said it was wrong to abolish the audit commission, which again was not something he thought at the time, but he's now come to.

1:04:30George Osborne: And what about leaving the EU? Did he say that was a mistake?

1:04:32Ed Balls: We didn't get into the EU in that conversation.

1:04:35George Osborne: I feel like Michael Goves could be more remembered for that.

1:04:37Ed Balls: Angela Rayner chose not to challenge him on this. But there was a very nice exchange between Angela and Michael and me towards the end of our session where Michael endorsed her. Have a listen. If Andy Gurnan really wants to do this agenda, you should make Angela Chancellor.

1:05:06Ed Balls: I then said, look, we can't expect Angela to tell us what job she's going to get. And she may not even know. But she definitely doesn't know, I would imagine. I expect so. Although, you know, Andy Burnham and Angela have been talking about this for some months. And so, you know, who knows? I think she'd have expectations to get a good job. I think what she actually wants to do, it's interesting, when you've done a job and you've really driven it, and then you come out, maybe not through your own choice, certainly in the case of her, and have time to reflect, what you really want to do is go and finish the job.

1:05:39Ed Balls: And most politicians don't get a chance to go and finish the job. But I think if Andy Burnham rang her the weekend after next and said, back to housing communities and local government and finish what you started, I think she would...

1:05:51George Osborne: But not as deputy prime minister, Nick.

1:05:52Ed Balls: I think that's unlikely.

1:05:55George Osborne: Because she's not deputy leader anymore.

1:05:57Ed Balls: And Lucy Powell is the deputy leader and is back to Andy Burnham all the way through. So I don't think she's expecting to be deputy prime minister. But back to housing communities and local government would be a good decision for her and for Andy Burnham. So we'll see. I hope she gets it.

1:06:10George Osborne: I do think there's going to be, I think it's all part of this, like, essentially Burnham's being unscrutinised. I think it's going to be more challenging than they all think to bring back Angela Rayner with all these issues about tax, to bring back Lou Haig with all the issues about the mobile phone that was nicked. I mean, suddenly, as Nigel Farage has discovered, once you're in the hot seat, suddenly all these questions come that you think have gone away or never going to be asked. Anyway, we've got to have lots of time to talk about this in future podcasts. So that's it for this week's episode.

1:06:44George Osborne: So we'll see you on Monday for Ex-Ministers' Questions or indeed tomorrow if you're one of our Kitchen Cabinet or Gold subscribers.

1:06:50Ed Balls: And why not sign up? The gifts are so fabulous. Anyway, we'll see you soon. See you then.

1:07:03George Osborne: Thanks for listening to Political Currency. This has been a Persephoneca production.

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