Is Tony Blair the Logan Roy of Britain?

0:00Ed Balls: Hello podcast listener.

0:01George Osborne: Hello you.

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0:03George Osborne: And me, Alice Levine.

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2:13George Osborne: This is Political Currency

2:14Ed Balls: with Ed Balls and George Osborne.

2:26Ed Balls: So it's half term this week. The schools are off. I'm not on Good Morning Britain this week. Parliament is not sitting. We've both spent a bit of time in sunnier climbs this week, haven't we, George?

2:41George Osborne: Yes. Well, you say sunnier climbs. Actually, I went to Washington where it was pouring with rain the entire time I was there. But I went for a flying visit with my four-year-old son, Beau, to go to the swearing in of Kevin Walsh as chair of the Federal Reserve at the White House. We've talked about him before on the podcast. He is the godfather to Beau. It wasn't completely random that I took my four-year-old on this trip. But when we got the invite with, you know, 48 hours notice, literally I got in my inbox, like the President of the United States invites you to the White House. My first instinct was, well, I can't do that.

3:17George Osborne: And then I was like, no, you've got to do something like that.

3:21Ed Balls: And poor old Beau. I mean, from Diggerland to the swearing in of a Federal Reserve chair at the White House. And which did he prefer?

3:30George Osborne: Well, he was the youngest person there. And I think I was the second youngest person there. There was quite a big age gap. Do you know, I mean, it's always very special when he goes to the White House. I mean, obviously, I've been quite a few times in my life. But every time there's a little shiver goes down your spine. And it's been a while since I've been. So the first impression is it's a building site. You know, he's building a ballroom. That's very obvious when he turned out. The whole thing is a building site. You know, you have to sort of go through various building fences and so on. And then in the actual main hall, which is not where the political meetings tend to happen.

4:08George Osborne: They happen in the West Wing famously, but in the main kind of reception hall, which has got those big, famous portraits of the American presidents, the famous one of John F Kennedy looking down the Barack Obama one the Lyndon Johnson one as you walk in there's this enormous portrait of um the moment Trump was shot at that rally or the bullet hit his ear and of course normally presidents don't put up their portraits but until they've left and they normally put up a sort of you know portrait of them just looking at the painter but this greets you as you come in, this enormous Trump photo. But the whole ceremony was magnificent.

4:46George Osborne: I was obviously thrilled for my friend and the swearing in. And, you know, it's a great kind of a moment in the American Republic. And you get a real sense of kind of American power on display. The cabinet there, the head of the CIA, the banks, the hedge funds. You know, I mean, it's an American power in the room.

5:07Ed Balls: It sounds your perfect milieu. George Osborne. Look, it's a White House, not a yacht, but George Osborne with the power breakers.

5:16George Osborne: It was fun. I've never witnessed one of those ceremonies. And I have to say, Bo was extremely well behaved. And then we went off to the Air and Space Museum to see the space shuttle and the Blackbird plane. This is the one near the airport. It's brilliant.

5:33Ed Balls: That sounds a bit more Diggerland. I, after recording this podcast, I'm getting the train through Wigan. Although unlike most Labour reform conservative politicians, I won't be getting off at Wigan. I'm not going to the make-a-feel by-election. I'm off this weekend to climb Helvellyn with a couple of my mates, and I'm hoping the weather will be a bit cooler.

5:53George Osborne: Just to remind me, of course I do know, but just remind me where on earth Helvellyn is. Is that some island in the Caribbean?

5:59Ed Balls: Before we were recording this podcast, you said to me, is this an island? I said, no. No, it's a mountain in the Lake District, which famously has striding edge, the sort of narrow rocky pathway when you're going up or coming down. I think we'll come down striding edge.

6:15George Osborne: A mountain, come on. It's not like a mountain in the layers or the Alps.

6:20Ed Balls: Look, the Lake District always feels like mountains, even though they aren't. I mean, you know, it's over 3 ,000 feet, so it's a proper climb, but it's not. Everest is 8 ,000 meters. Having climbed Kilimanjaro, what's the highest mountain you've been up, George?

6:37George Osborne: Oh, actually, I have climbed Mount Stanley in the Ruinzori Mountains in Africa, which is a proper high mountain. It's definitely over 4 ,000 metres and it may be higher. It's not the highest. Not Kilimanjaro.

6:51Ed Balls: No?

6:51George Osborne: No.

6:52Ed Balls: Anyway, we should get on with it because, as I said, there'll be people getting off the train in Wigan, going to the Makerfield by-election, which has still got three weeks to run before people actually vote. But this week we've had Andy Burnham's launch. We've also had a rolling row between reform and restore the Rupert Lowe challenger to Farage's party. So we thought we'd talk about the by-election first.

7:17George Osborne: And then, of course, the master returns. Tony Blair has made a dramatic intervention into British politics with a five and a half thousand word essay and then a bunch of interviews to follow it up, explaining what is wrong with the Starmer government, what is wrong with the Labour leadership contest, which he doesn't even pretend isn't happening, and indeed what is wrong with the British political classes, because he's not very sparing about the other actors in British politics either. Why has he done it and what do we think of the critique?

7:49Ed Balls: And then in his campaign launch, Andy Burnham revived his past policy to introduce a social care levy to reform social care, to replace inheritance tax with that tax on death to fund social care. And we thought we would ask, why has social care reform consistently failed to be delivered by government after government, including when Andy Burnham was last the health secretary in the Labour government, 2009-10? And this time, what advice can we give him about how he should go about it if he's going to deliver when all others have failed.

8:27George Osborne: But let's start with the by-election. And, you know, all the polling suggests it's still very close, even though I think it would be fair to say that Andy Burnham's campaign looks like it's firing on all cylinders and he's certainly hit no problems early on. And the kind of social media content looks pretty professional, a mix of professional and authentic. Both the reform candidate, we'll come on to this in a moment, Kenyon, and the Green candidates have got into trouble. In fact, the Green Party has had to change its candidate, and the Conservatives are nowhere to be seen. So, you know, it looks like it's off to a sort of strong start for Burnham.

9:07George Osborne: And before we get on to, you know, the clip, we just note in passing that there is still a Prime Minister sitting in London, there isn't a formal leadership contest underway. And he reminds me a bit of a sort of medieval king, sort of stuck in London, the armies deserted him. And there's this sort of force of rebels coming down from the north. He's just waiting for the outcome of this by-election. Anyway, Park Starmer for a moment. Andy Burnham has started doing a kind of daily TikTok. I think it tells you quite a lot about Burnham himself and the campaign. This was the very first of the daily TikToks.

9:44George Osborne: This is a clip from it.

9:46Ed Balls: We haven't been good enough and we need to be better locally and nationally. Locally, I was with residents in Winstanley last night talking about green belt issues and I know we need a change in the borough, shift the burden of development from green fields to the local centres and that's a change nationally.

10:02George Osborne: The reason why I highlighted that clip is, first of all, right at the beginning, he's making no pretense that this is just about Makerfield. He's making an argument about the country and about the Labour Party He explicitly says, the Labour Party has not been doing well enough, we've got to change that. But then when you actually get into the kind of issues of the by-election, he's straight into trimming and U-turning on existing government positions in order to try and win, because the by-election is close, or at least appears to be close at this point. And I thought you had a very good example.

10:34George Osborne: The one thing you would say, and we've talked about it on this show quite a bit over the last two or three years, is that Keir Starmer did make a bold promise to build on the Green Belt to tear up the planning laws. What's the very first thing Burnham announces in the by-election? Oh, he's going to reverse that and he's going to protect the Green Belt. Why? Because it's an issue in Makerfield. It's an outer Manchester constituency and he'll have bits of the Green Belt in it. I think it kind of highlights this big question Burnham's going to have, and we'll come on to the Blair critique, which is you promise change.

11:07George Osborne: You say everything's got to change, but when it actually comes to it, what is the change you're promising?

11:12Ed Balls: It's very interesting. And I think partly why this by-election is going to be tight. There was a very good piece of analysis by Rob Ford, the University of Manchester professor. And I don't think I'd realised until I read this in detail quite how similar this constituency is to the constituencies I fought Normanton, Morley and Outwood when I was in Parliament, because there isn't a place called Makerfield. It's a set of villages, maybe small towns, close to the M62. It's not Wigan. It's not Liverpool. It's not Manchester. And the residents will look to all those places but feel separate from them.

11:52Ed Balls: It's a place which has lower unemployment than the national average, much higher car use, a lot of greenfield land. I mean, this is not kind of urban city centre labour. It's not industrial labour, but what it has...

12:09George Osborne: It's not the road to Wigan Pier, is it? I think when you say Wigan, there are people who don't know Wigan, and it's a bit unfair on Wigan these days, but have a kind of view, don't they, of sort of depressed industrial area.

12:20Ed Balls: It's not that at all. There'll be a lot of people living in new build, commuting by car to Liverpool or to Wigan or to Manchester. But what it's had is a Labour heritage because of an old tradition of coal mining. I think until Ian McCartney, who was the last MP but one, all the MPs before that had been linked to mining, had been in coal mining. In Normanton, I was the first ever MP not to be a coal miner. But in Morley and Outwood and in North Wakefield, Stanley Outwood, those were places which didn't really feel either part of Leeds or part of Wakefield, but where lots of people commuting by car and where those old industrial ties were waning.

13:07Ed Balls: and that has held Labour's in that seat in the parliamentary elections but in the most recent local elections reform stormed it as happened by the way in Wakefield as well and my old constituency so those old historical ties are waning this sort of idea that that's always how we vote and suddenly issues about well can I use my car and are they going to build on the green belt and other schools good enough, those are things which will really matter to voters in that constituency. And Andy Burnham, you know, he's doing what I did back in 2015. You know, let's protect valuable green belt and let's build on the brownfield sites.

13:50Ed Balls: It's a bit different from builders, not blockers. It's reflecting the fact that he knows that this is the kind of constituency which has undoubtedly become more marginal over the years.

14:03George Osborne: Yeah, I mean, you referred to the car used to that because the second TikTok he put out, day two of his campaign vlog, was him saying, look, I'm against a low emission zone in Manchester. And I fought Boris Johnson, who tried to impose one on Manchester. And, you know, there is one in London that Sadiq Khan was proud to introduce. And there'll be lots of people on the sort of progressive end of politics who say, yeah, low emission zones is exactly what we need. Clean air campaigns, net zero, etc. etc. Again, Burnham is actually moving in a more classic sense, rightwards. I mean, it's not quite because it was actually a Tory government trying to get this thing imposed on Manchester.

14:45George Osborne: I mean, I represented much more affluent area than Makerfield, but not dissimilar on the outskirts of Manchester. Also towns and communities. Tatton didn't exist as a place except as a kind of local national trust property. And I imagine people don't even know they live in the Makerfield constituency particularly. Just like people didn't particularly know they lived in the Tatton constituency. But car use was a big issue. You mentioned it several times. It's not to be underestimated. There was an attempt to introduce a congestion charge in Manchester, which I wasn't against as the local MP, but I found my constituency was hugely hostile to it.

15:23George Osborne: It's interesting because Burnham is an adept politician. I think he's come on a lot since he was in Parliament, partly because he's been the mayor of Manchester. So he's had to do that thing that only really prime ministers or opposition leaders have to do, which is kind of own the whole project with their personality, be the front man or the front woman of the operation. So he's already had to do that. And, you know, he has a very kind of easy touch, which is going to be, I think, quite effective when it first arrives in Westminster. You know, he wears a T-shirt. He's not his campaign literature has got a sort of emoji style picture of him on it and so on.

16:00George Osborne: but then you get to the policy and it's not really clear what he's for. It's kind of clear. I'm not for building on the green belt. I'm not for a low emission zone, but does that mean you're not for net zero? Does it mean you're not for building homes? In which case, where are you going to build the homes? Aren't you just going to be in the same hole that the Tory governments were in where they said we want to build homes in city centers, but you know, that doesn't in practice happen. So, you know, I, it's interesting. He has a sort of vague promise, doesn't he, of moving to the left, taking control.

16:33George Osborne: He continues to repeat this thing. Public control, not ownership, public control of the utilities, Manchesterism, which I think there's something real there. But he hasn't sort of articulated exactly how you'd bring that to the national stage.

16:48Ed Balls: There's no doubt that he is a very good communicator and good at this kind of retail politics. There's two things. One, which goes to a point you made earlier. Normally in by-elections, with all the media attention, you kind of want your candidate to be likable and low profile and able to speak about the local issues. But if you try simultaneously to both run a by-election campaign and also a campaign for national leadership, then suddenly you have to answer all the questions about what is your vision for Britain's place in Europe? Do you want a social care levy? What would you like to do to taxation?

17:27Ed Balls: Which wouldn't normally be questions by-election candidates have to answer. And let's be honest, they aren't questions which mayors have to answer either, because normally mayors don't have any purchase over the level of corporate taxation or income taxation or our relationship with the European Union or how we pay for social care. Andy Burnham, by putting himself at the centre of a national campaign, brings all those questions to him. And it's going to be difficult and at times a bit jarring answering them in a by-election contest. But the other thing I think, which is, you know, this is just a straw in the wind, but I pick it up from reading Dan Hodges has been there a lot.

18:02Ed Balls: Jennifer Williams, ex-Manchester Evening News now at the Financial Times. If you have this kind of...

18:07George Osborne: She's, by the way, a great journalist. Very good journalist. I dealt with her quite a bit when she was at the Manchester Evening News. And she didn't always write nice things about me, but I always respected her approach.

18:17Ed Balls: She's really good. And this is another parallel with my experience in Morley and Outwood when I was, you know, in the media spotlight, shadow chancellor, lots of cameras coming, lots of media attention. I think you and David Cameron tipped up during my campaign, certainly in 2010. If you are like...

18:35George Osborne: No, no, I was there in 2015 as well. I was popping in to say hello.

18:40Ed Balls: Well, that's good.

18:41George Osborne: With the now reform mayor of Greater Lincoln, Andrew Jenkins. I think we were building a roof on a house, actually.

18:49Ed Balls: If you have a constituency like this, which is not, you know, Leeds or Manchester, a small town and villages, it's not clear that the voters particularly like all this media spotlight, all these cameras in the streets. You know, there was a bit of that, I remember, in the campaigns I fought. I pick it up from those journalists I mentioned in terms of their reporting. There is a danger here that voters start to kind of be a bit grumpy about this. If I were reform, I would be going heavy on this is all about Andy Burnham's rise to the prime ministership. This is an unnecessary by-election. We didn't need to have this.

19:29Ed Balls: It's all about him. It's not about us. I just get a feeling from the reporting I've been seeing that there is a risk in that for Andy. And actually, he needs to be, maybe this is his Greenbelt point, maybe he needs to be the local candidate a bit more. The trouble is, it's very hard to do that now because, you know, the prime ministership genie is out of the bottle. That is what he's going to be asked the whole time. But, you know, the problem is, given there's been rather a lot of media coverage for the reform candidates in his social media posts, it's quite hard to say, you know, don't turn Makerfield into a circus if at times you are grabbing the media spotlight and clowning around yourself.

20:09Ed Balls: So, you know, there are dangers for reform in this too. But I think, you know, straw in the wind, what do the voters of Makerfield think about this massive three-week long media circus in a by-election they didn't have to have? That's something just to be conscious of if you're fighting the Burnham campaign.

20:27George Osborne: Yeah, I think that was very good advice. It's hard to know what he would actually do about it, given that he is very likely to become the Prime Minister, in my view, if he wins this by-election. What about the other candidates? You say straw in the wind. There are some straws in the wind on there for potentially British politics over the next couple of years. I mean, I mentioned the Green candidates. I say candidates because the first candidate, Chris Kennedy, you know, he had to be dumped because he had described. Do you remember that terrible attack on the Jewish ambulances in North London? He had gone on social media.

20:58George Osborne: Gold is green. Yeah, saying that was a false flag. And I do think the Green Party is going to have a whole set of issues over the next couple of years with anti-Semitism and the things that the various candidates are going to put up have said.

21:11Ed Balls: The rather thin skinned Zach Polanski says he's being unfairly targeted because why do they keep asking him all these questions about his council tax and things he said and done in the past? And you think, well, that's actually because you're a party leader and that's what scrutiny is all about. And everybody kind of has to deal with it. and if you can't deal with it you know you're in the wrong job and if you say you're bringing

21:34George Osborne: honesty to british politics you shouldn't claim you worked for the red cross when you didn't um then we get on to reform so it looked like they'd chosen the perfect candidate the plumber we've mentioned before plumbers are popular in these by-elections at the moment but again people have trawled through the social media perhaps unsurprisingly so there are two complaints against him one is a very legitimate one which is he said you know he's he said all these essentially misogynist things in fact he doesn't even pretend that he's not he says i'm sexist i'm sorry but i am and then says some very unpleasant things about abortions and makes the observation in his view that women can't ref i guess something is be a referee drive or give directions so um i don't think that's going to go down well with at least half of the voters in makefield the other complaint against him is, you know, the most heinous crime is that he, along with 48 % of the country, voted remain in the referendum.

22:32George Osborne: And that is the thing that the Tories have piled on. And, you know, reformers saying this is a terrible lie. And in fact, he voted leave, but it's not always a good idea to contradict your own candidate in a by-election. You know, a majority of Tory voters also voted, former Tory voters also voted Remain. But that's all been lost in the wash over the last 10 years.

22:57Ed Balls: But it does take us to the, I think, the most significant thing happening this week, which is the rows which have been happening within reform about how to deal with, restore the Rupert Lowe party. Rupert Lowe thrown out of reform, set up his own party. They are now running in Makerfield, but with what seems to be a very effective ground game, not based around Elon Musk and X, but I think Facebook ads into local groups, a very powerful technique. And as a result, the polling is that Restore is doing really quite well in this by-election. Now, look, I think reform are still way ahead, but it could be enough to deny reform the victory by taking votes away from them.

23:45Ed Balls: And this all comes down to betrayal and the true path. I mean, the restore argument, and this kind of goes to Kenyan voting remain, I guess, but more generally, Nigel Farage is, you know, that they are not being true to, you know, the tough line on immigration that we want, and the tough approach to Britishness that they want to impose upon a diverse population. and that Nigel Farage is bottling it, that he's not actually being the leader that we want. And you see this, you know, we've had Elon Musk out on X saying, Restore are the real party. You had last weekend J.D. Vance, the American vice president, urging on the Tommy Robinson demonstrations and saying that, you know, these are the people who will take on the scourge of immigration in Britain.

24:40Ed Balls: And then you have that big bust up between Zia Yusuf and Robert Jenrick about whether or not people who are not British citizens living in social housing would be automatically deported, which Jenrick says they wouldn't. And Zia Yusuf says, hang on a sec, you're not in charge of immigration policy for reform. I am. is something which we've talked about a lot on this podcast in the last year or so about the Nigel Farage strategy, which is how does he deal with these attacks from the pure right, saying that he's bending too much in the wind, doing U-turns, moving towards the centre ground. He seems in this by-election to be handling it by being entirely absent and not going there at all.

25:23Ed Balls: Nigel Farage has disappeared, but it is a dilemma for him, and I'm not sure it's the dilemma he's handling well. and his party seems to be in turmoil.

25:29George Osborne: Well, first of all, he may well have concluded they're not going to win, so he doesn't want to be associated with it. And because he was very much associated with the attempt in Gorton and Denton and in the local elections, which reform did well in. And I think, you know, we should come back to this. Isn't it the sort of story of Nigel Farage that he is a very effective, sadly, in my view, but anyway, very effective one man band. But every attempt to sort of construct a party around him, whether it's UKIP or the Brexit party or reform, ultimately struggles because he's not really collegiate. And the characters that tend to associate themselves with him, well, A, aren't nearly as good and B, aren't particularly savoury.

26:14George Osborne: And so and then they all start falling out with each other, which often happens with sort of fringe parties. Not fringe anymore, I understand. I mean, that's one of the kind of big features of British politics. But the fact that, you know, if you're appealing to the kind of bits of the electorate that feel left behind or angry about certain things, then you do create a space for Restore or whoever it is to pop up. And, you know, it's not insignificant they have the world's richest man who owns X pumping out propaganda for them.

26:43Ed Balls: The thing is, though, this is such an opportunity for Nigel Farage. Look, I've never actually believed he wants to be the prime minister. I think he cares more about being a hero. But if he wants to be prime minister, the right strategy, this is looking ahead to our conversation about Tony Blair in a moment, is to reach into the centre ground. His strength was when he said, I don't want Tommy Robinson in my party. That was a good thing for him to do. But of course, that then winds up Restore and Rupert Lowe. That is his opportunity. What I think is in his mind is this. He can deal with Elon Musk.

27:16Ed Balls: He can even deal with J.D. Vance. He can certainly deal with Rupert Lowe. But if Donald Trump comes out in the coming months and says, you know, I'm really disappointed in Nigel Farage. I thought more of him. He's not the guy who's really taking the argument to change Britain. I think that he's scared to death of that because that stops him being the hero with the guy who he probably most wants to be the hero for, who is his own hero. And so as a consequence, he's sort of caught, you know, in the headlights. He doesn't know what to do. If it was me, I would be taking on Restore and saying, no, I'm going to lead the sensible centre-right party.

27:59Ed Balls: But we don't want Tommy Robinson and Rupert Lowe in my party. But he's unwilling to do that. And therefore, he's stuck. I don't think he's absent because he thinks he's going to lose. He's absent because he doesn't know what to say.

28:09George Osborne: Yeah, it's exactly the dilemma the Tories had 10, 15 years ago, which is if you talk up the party to your right, are you just kind of giving them oxygen? anyway talking about Donald Trump one of the many pieces of advice that unsolicited advice that Tony Blair offered to the Labour Party was how to deal with Donald Trump but there were lots of other things in his five and a half thousand word missive and we are going to turn to that next

29:02Ed Balls: Acast gives you that trust at scale, digital precision, host-read authenticity, and performance data that proves it worked. Don't fight for attention. Buy it with ACAST. Learn more by visiting acast.com slash advertise.

29:24Ed Balls: So welcome back. Tony Blair has written a 5 ,700 word essay criticizing the current Starmer-led government, giving advice to who he thinks will be the next prime minister. He clearly thinks the leadership election is underway. You have to give it to Tony Blair. He can certainly capture people's attention. And I think if you're Keir Starmer, you'd be furious because he's kind of written out of the script by Tony Blair this week.

29:53George Osborne: So I'll tell you what came to mind when I read it and it just suddenly appeared on my phone. I'd love to hear what your initial reaction was. But my initial reaction, in fact, I thought of succession and I thought of that great scene in that miniseries where Logan Roy, the media mogul, assembles his heirs, his kids, curiously in a kind of karaoke bar, I think. And he says, you are not serious people. That's his big complaint about his successors. And that is essentially Tony Blair's big complaint about his successors. both Tory prime ministers, but also this current Labour prime minister and those who are contending to replace him.

30:35George Osborne: I mean, he doesn't really hold back. You know, he is pretty withering in his critique of the British political classes over the last decade.

30:43Ed Balls: Since when would you say his critique starts?

30:46George Osborne: Well, the interesting thing is that his critique of Britain, I'm pleased to say, starts in 2016 after I leave office. But his critique of the Labour Party quite explicitly starts in 2007, which is a somewhat gratuitous swipe at his immediate successor, Gordon Brown, because 2007, of course, is the year when Tony Blair is essentially forced out of office. Before we get on to the...

31:16Ed Balls: I have to say, he can set the agenda. I've heard Tony Blair make this argument so many times over the last 20, 25, 30 years. And he is a brilliant communicator and, you know, writer of a popular narrative. But he's never been...

31:33George Osborne: He clearly wrote it himself, by the way.

31:35Ed Balls: I've seen him do it before. He sits there in long hand and writes it in pen onto paper, although it looked to me like there was quite a few paragraphs which had been cut and pasted in from the Tony Blair Institute's policy works along the way. He's never done a lot of humility, Tony Blair, to be fair. And, you know, the... Well, he won three elections.

31:53George Osborne: Why does he need to? As he points out, he's the only Labour leader to have ever won a full second term for Labour.

31:58Ed Balls: It's true. I mean, look, there are some people, we discussed this on our podcast when we went through the 2007 election, who urged Gordon Brown to be more distinctive in policy terms from Tony Blair, particularly around child poverty and equality and opportunity. Gordon didn't want to do that. I mean, I think Gordon was rather reluctant to move to the left in 2007. And, you know, that was partly because he was worrying that Tony Blair and he were less popular than they'd been in 97, 2001, 2005. The thing which kind of rather kind of jarred with me on that 2007 point is, you know, that Tony in his article highlights the scourge of high immigration, which, of course, began in 2004 with the decision Tony championed not to have transitional controls on migration from Eastern Europe.

32:46Ed Balls: That kind of got forgotten in his argument, I thought. I can see. I kind of missed that out. I'm glad he really got under your skin.

32:54George Osborne: Let's start with.

32:55Ed Balls: Oh, there's so much more to say. There's so much more to say.

32:58George Osborne: Let's start with the big argument. We're going to come on to what it means for Labour and indeed, why did he do it? But what about this critique? I mean, it's summed up with Britain is becoming marooned as an island of irrelevance. Those are his words. Did you buy his argument that essentially we don't have governments that commit to the long term, have a strategy? we don't have a realistic view of Britain's role in the world so we pursue kind of crazy policies like net zero even though and he's pointed this out in various interviews he's done around the this essay even though we're less than one percent of global emissions we're spending more on welfare or we're set to on than we are on defense and so what about the kind of big Tony Blair argument.

33:48George Osborne: What was your view, the critique and the solution?

33:51Ed Balls: Well, so first of all, on the critique, I think his argument that you have to win a mandate based upon ideas and an analysis of Britain and the world is completely right. And that Keir Starmer, let's be honest, got elected as Labour leader in 2020 by not being Jeremy Corbyn, and then won a general election in 2024 by not being Rishi Sunak and the Conservatives, but didn't deliver either an understanding of what was happening in Britain or asked for a mandate to really change that other than not being the Tories. And as Tony then says, if you don't have that underlying analysis, then you don't have ballast and you get blown around.

34:37Ed Balls: And he's warning Andy Burnham or West Street not simply to say, I'm not Keir Starmer. You've got to set out your big argument. And I think he's completely right on that. And the second thing is that if you don't have an economy which grows and delivers rising prosperity, then every other thing in politics is very, very hard to solve. And we've said this loads of times on this podcast in the last two years. Keir Starmer and Rachel Reeves have never set out an analysis of why over 20 years the British economy hasn't grown, other than to say it was all the Tories' fault, which means when the Tories have gone, what is their analysis?

35:14Ed Balls: How do they explain what's going on now? It's become Donald Trump's fault. But Tony is totally right to say you have to have a big economic analysis, a big kind of divining of Britain's place and flaws in the world. And that is absent on those two big things. I totally agree with him. I think then his analysis is kind of incomplete. I think actually feels quite out of date now to me. Let's come to that in a minute. But on those two big things, he's right.

35:42George Osborne: No, it's an absolutely withering criticism of the current Labour government from a former Labour prime minister. I mean, he says we don't have a worked out, coherent plan for the country in a fast changing world. And we are in the wrong political position from which we can devise one and win a second term. I mean, that is both a withering attack on the current policy of the government and the political positioning of the Labour Party. I mean, he is not held back at all. And he's quite explicit in saying it's not a problem with Keir's personality or failure to communicate or need to assert more strongly Labour values.

36:18George Osborne: It's that they don't have a plan. And I would say, you know, you have been a Blairite on this, Ed. I mean, you have been saying.

36:25Ed Balls: I've always been a Blairite. I'm proud to be New Labour.

36:30George Osborne: however you have you've been saying this you've been saying this about the starmer government since before the general election that they don't have a plan they don't have an as you just you know i'm not going to repeat what you just said but you know there's there's no analysis and there's no solution so what about let's stick with tony blair he he what about his solution why do you say it's in your view a bit outdated because he would say quite the reverse i'm leaning into, if you read the essay, which I would actually urge people who are interested in British politics to do, he's all about AI as the new industrial revolution, the global geopolitics has changed and there's a G3 of America, or G2 and a half essentially, of America and China and India.

37:17George Osborne: I think he would feel he's leaning very much into the future, but you said just now He thought it was a bit old-fashioned, his analysis, or his solution, maybe.

37:27Ed Balls: So I don't think he is really taking on board the tumult of the last 20 years and quite how challenging this is now for politics and for political leadership. I think he's still stuck in a world, which we were in when we were in government, where you could assume that most Labour voters voted Labour and most Conservative voters voted Conservative, and that you focused on the centre ground, Mondeo Man or Worcester Woman, who were centrist and they wanted government to sort out problems and they weren't particularly left or right, but that's what they wanted. And Tony still thinks that is the political task.

38:05Ed Balls: But the problem is for Labour and Conservatives, their bases have been fracturing and turning away. It's a challenge for Keir Starmer or for the next Labour leader to win Labour voters across the spectrum. It's not simply about the centre ground. And that then I think goes to the analysis where I think is incomplete. It is true that there has been a huge squeeze on living standards for 20 years. It happened during a period when political leaders from the centre ground, including Tony Blair and Gordon Brown, and then you and David Cameron and Theresa May, told people, we can turn this round. And we didn't manage to.

38:43Ed Balls: You didn't manage to. And therefore, there is a distrust about centre ground or all politicians, but especially centre ground politicians saying, we know the solution because people think, but where is it? Then you say, well, people have not only seen their living standards squeezed, but they've seen some people get much richer. and they think well hang on a sec that's not fair why are they getting a better deal than me the reason why you went after corporate tax evasion the reason why you and David Cameron had popped sometimes at business is because people do feel as though that while they've been squeezed there have been some people the richer who have done better and that's why when Tony says let us just stand back and let corporate AI and technology rule the roost and deregulate people think well hang on a sec, they're already the rich guys.

39:33Ed Balls: And by the way, I'm quite worried about my child's use of the internet and technology. They don't want a laissez-faire free-for-all when it comes to corporate power. But then this is the most important point. People feel it's not only that the rich have got richer and I've seen my income squeezed. They also think, hang on a sec, I'm paying into a welfare state. But there's some people who are getting a free lunch and that's not fair. And I'm paying my taxes, but some people aren't paying their taxes. And that's not fair. And, you know, there's immigration coming to our country, people on small boats, young men coming here to take jobs.

40:09Ed Balls: And that's not fair. And there is an argument about what people feel as though it's not been fair and politics hasn't gripped it. And he just doesn't address, it's not that he doesn't talk about inequality. He doesn't talk about fairness. And there is a sense in Britain that hasn't been fair. And I think you have to understand that and respond to that. And I don't think he even attempts to do so. When he basically says, you know, deregulate, government get out of the way, do what the Americans want, cut taxes, cut welfare, I mean, that will work for some. Rachel Wolfe said, the right of centre commentator, this was a very good right of centre manifesto.

40:49Ed Balls: I'm not even sure the right of centre voter who is tempted to go from the Tories to reform thinks that this is enough because they want action to make things fairer as well. But a more Labour-orientated voter who thinks, I want a welfare state to protect the vulnerable, but not to be ripped off. And I want people to come here who are genuine asylum seekers, but protect our borders. And I want growth and dynamism, but frankly, I don't want to feel as though I'm manipulated by corporate global power. Unless you have an answer to those things, you're not getting to the deep challenge to politics and Tony doesn't try to do that because in 2007 we didn't he didn't need to and you have to now okay I think that is all very well said

41:33George Osborne: but he would come back and and I would come back to you and say well when has there been in Britain a successful example of a kind of centre-left Labour government running a very sort of centre-left economic policy. Surely the economic policy you ran under Tony Blair was centre or centre-right. The things he says that Labour should do now restore some form of non-dom tax status so he'd bring wealthy foreigners back. Don't increase the minimum wage above inflation. Don't pursue net zero if it's going to lead to more expensive energy than elsewhere in the world. curb your welfare bills you know i think you would agree with and and you know he points to the only successfully re-elected labor government since the second world war was the blair government and i think most people at the time you will um you know maybe disagree with this felt and but i feel like blair himself would say it and you know now disgraced but people like mandelson would say it which was we don't mind if people are getting really rich we don't mind if people are making good in the city.

42:44George Osborne: We don't mind if these things are happening because we're using the proceeds from this capitalist economy to spend money on tax credits, to double the NHS budget, something Tony Blair has been saying in the last 24 hours, and so on. So what I haven't seen, and I don't think Britain's seen, is a sort of successful social democrat model of running the economy. So the approach Tony Blair is saying to Labour now is you've got to go back to New Labour's kind of free market and then you can use the proceeds to pay for all your left-wing progressive things whereas you know what's the alternative when when when and where in the world is there a successful state interventionist model of running the economy but the thing is we introduced

43:31Ed Balls: a national minimum wage although we had a lower youth wage and we had tax credits and reduced child poverty but we said to people who should work and aren't working we will sanction your benefits so it was rights and responsibilities but that wasn't free market and neoliberal

43:48George Osborne: on competition but on the actual core policy you were you know you were you were fiscal you know i would say until the later years you know you had your golden rules you had your inflation targeting independent bank of england you had your you've said before on this podcast you know aggressive of competition policy and independent competition. You know, it was quite a sort of centrist or centre. And there was an alliance with entrepreneurs and business. You cut capital gains tax. I think Tony Blair's saying, do all that again.

44:19Ed Balls: Yeah, but I'm in favour of doing all that again. But you have to do it at a time when people feel that things aren't unfair and you're going to tackle those unfairnesses.

44:29George Osborne: But you've got to have a growing economy to be able to address. I think your argument would be, well, I don't know, I'm not going to speak for you. Tony Blair's argument would be, yeah, okay, people feel unfair. The best solution is to get this economy growing, be realistic about Britain's role in the world. You know, we can't run a kind of socialist experiment by ourselves. And then you can use the proceeds to address these unfairnesses. There's not some new way of running the economy, which is going to both grow the economy and deliver a better sense of justice. That is, I think, his argument and mine, by the way.

45:01Ed Balls: But I think you have to make the argument for making the welfare state stronger and fairer and tackling abuse. You have to make the argument, if you are making a Labour argument, that we do want people to genuinely come here to seek asylum. We're not going to let our borders be abused. You have to make the argument that we want dynamism and investment. And, you know, as you know, I was always for cutting capital gains tax. but also there's got to be proper regulation, not just in the financial services, but of competition policy as well. Tony's argument on tech is to say, look, let's just get government out of the way.

45:38Ed Balls: We can't be too European. By the way, he's right to say you can't just rejoin the European Union. That's quite a change from his position from 10 years ago, but he's right about that.

45:46George Osborne: His argument we should say is we've got to strengthen our hands to be able to have a negotiation about a structured relationship with the EU, which may not be the same as the membership we used to have.

45:57Ed Balls: And he's totally right about that. But he also says you can't go down the European road because they're going to be too tough on tech. And the reality is, whether you are Labour or Conservative at the moment in Parliament, whether you're Kemi Beinock or Keir Starmer, you are facing huge pressure from parents on left and right who think that what is happening to their children because of weakly regulated technology is damaging them. You can't just say, well, that doesn't matter because we're going to put growth first and therefore or let's just get out of the way and let tech run riot. It's about finding a way to regulate it so you get the growth, but people see it's done in a fair way and which protects them.

46:36Ed Balls: Tony doesn't even, just doesn't address those. I think he would say they're peripheral, aren't they?

46:40George Osborne: I mean, they're peripheral to the central challenge, which is, you know, Britain is drifting into a sort of second tier or third tier status. The economy is flat. You've got to get the economy growing and you, you know, Then you can, yes, sure, the margins, you can do social media bans for under-16s. But that's not the main thing he's saying. He's saying you've got to embrace AI, the new industrial revolution. If we don't do that and we regulate ourselves out of that revolution, we're going to become even more irrelevant.

47:13Ed Balls: Look, I'm in favour of embracing AI, although it's not going to solve the problem of young people's mental health challenges at 21 going on to welfare benefits or how we police our borders. but it's an important part of the solution. But people want things to be done in a way which is regulated and fair as well as dynamic and open. And you have to find the path there. And I don't think Tony just attempts to address that. If you look at what's being said by Nigel Farage, Kemi Badenock, Keir Starmer, Andy Burnham, across to Zach Polanski, they're all talking about fairness. They have different conceptions of fairness and they have different views about the choices they're made, but they're all engaging with where voters are.

47:54Ed Balls: And Tony doesn't engage with that.

47:56George Osborne: Because he says none of them have a coherent economic plan. You know, Kemi Baden-Ock doesn't want any closer relationship with our main trading partner, right, and complains about every step Labour takes to, you know, have more sensible customs arrangements and the like. You know, Zach Polanski he'd regard as a kind of Corbynista. You know, Farage he would be, you know, have no time. And then he has no time for Keir Starmer either. I know, but that's my point about Logan Roy.

48:22Ed Balls: They're all, they're not serious. That's his argument. Yeah, but Logan Roy didn't have to be elected. Logan Roy just ran a big institute based upon money from American tech and got appointed by Donald Trump to serve on the White House Board of Peace. Or was that Tony Blair? Tony Blair doesn't have to get elected. If you want to get elected in our country, yes, you have to have a growth plan. And if your policies damage growth, If you don't go after dynamism and flexibility, it will all fail. But you can't win that argument by just saying to a narrow group of voters called Worcester women, I know what I'm talking about.

49:01Ed Balls: Trust me. I'm Tony Blair. Let's get regulation out of the way. And all of your other concerns are peripheral because actually that's not how people feel. So if we end up lurching to the right or the left in a crazy populist attempt to solve those fairness problems and damage growth in our economy, that is a catastrophe. But if you don't engage with people's concerns and just say, well, they're second order and peripheral, you can't win. And that was the storm opportunity. He was the centrist figure who had a large majority. As Tony Blair said, he should have got into government and said, actually, I'm now going to come clean with you all about the scale of the challenges and what my plan is.

49:44Ed Balls: Instead, without any balance, he gets blown around week by week and we end up back in this situation where we're having a debate between populist and populist. Tony's right to say we need a growth plan, but you've got to start with where we are in 2026, not where we were in 2006.

50:02George Osborne: No, well, I think where you're completely right is that the Tony Blair that I faced, you know, I was an opposition politician and I was shadow chancellor when he was prime minister. So, you know, I stood up at the dispatch box and there he was sitting opposite me. You know, he was a ruthless politician. There was a very good interview on the Today programme where Nick Robinson anticipates what he's about to say. Let's just play this clip of the Today programme interview.

50:29Ed Balls: We've got the agenda now. Let's turn a little bit to the leadership. And people might think, listening to this, well, we know who advocates all this. It's Kemi Badenok. It's the leader of the Conservative Party. She says, let's get rid of net zero targets. She says, let's get rid of business taxes that are doing damage.

50:46George Osborne: She says pretty much everything you've just said. You see, I'm not asking the question about, is it Tory, is it reform, is it Greens, is it Labour? I'm just saying, OK, take a step back, analyse the world, where do we go? And I don't really... I think part of the problem with the way we have this debate is that it always does start, and usually end with politics. You started a sentence there and you stopped. I don't really... I thought you were going to say, I don't really care. Well, I was going to say, I was going to say, I don't really care whether it's left or right in a traditional sense.

51:17George Osborne: You don't really care whether it's Labour anymore, do you? In that sense, what was the politics of that? So first of all, credit to Nick Robinson for picking up on what Tony Blair didn't say, or what was about to say. The Tony Blair I faced 20 years ago was a ruthless politician. He would kill anyone in his path politically. And so he very much did care it was Labour, so long as he was leading Labour. And he did get the comms right. and the charisma was very important and framing the political argument was very important and I think he always struggled to articulate a philosophy or a set of values beyond that and came up with various things like the third way and so on none of which worked and ended up with what you get in this essay which is well I'm just whatever works I'm for effective government but I think you make a fair point which is okay but could you get elected on that platform today it might be a governing platform where once you've got the economy growing you can start to spend money on other things so i think he's a bit he's a bit dismissive of the politics given he was in his day one of the most effective politicians britain's ever seen and then i thought on the solution i thought it's a bit thin the answer i mean i think yes okay let's get the internationally wealthy back it's stupid to be driving them away and that was a kind of both a sunak and starmer decision on non-DOMs.

52:43George Osborne: I thought it was interesting. He says, you know, we should be increasing VAT rather than employment taxes, which is a choice I made, but traditionally one that Labour governments don't. They tend to go for the employment taxes. But yeah, I, you know, I guess...

52:58Ed Balls: I remember when Jeremy Haywood proposed VAT on Greenfield homes rather than the national insurance rise in 2001. And I've never seen Tony Blair go more white. And he just said, thank you, Jeremy, we're going to raise national insurance. That was the end of that one. I don't remember Tony Blair ever saying, I would like to raise VAT at any point, but that's because he was trying to win elections.

53:17George Osborne: Yeah. No, I bet maybe that's allowed for people who aren't trying to win elections to try and take the bigger view. Let's end on two things. First of all, we'll turn to his international critique of Britain's standing in the world and how we should deal with Trump and so on and China. But why did he do this? And if you're Andy Burnham or you're Wes Streeting, what are you thinking when you read this? Do you not care or do you go, actually, there's a lot of home truth there?

53:45Ed Balls: Don't you just think with Tony Blair and with Gordon Brown and maybe with Rishi Sunak and John Major, you just feel their frustration that they see it not going well. And they think, if only with everything I now know, if only could I could do it all again. I mean, you know, Gordon Brown just got announced as Keir Starmer's advisor on global finance. I mean, nothing would have wound Tony Blair up. I mean, he probably wrote 5 ,200 of the 5 ,500 words that Sunday. But, you know, there are all these former leaders competing because they're frustrated. But I think what they're underestimating, or not all of them, I think what Tony Blair is underestimating is that it's actually really hard.

54:31Ed Balls: and you know you need somebody of you know i would say a tony blair or gordon brown level of political skill to navigate through this it's really hard and if you haven't got depth of intellect and communication and you know how to take people with you to win a big values and policy-based argument you've got no chance you get blown blown around and he will be seeing other people trying and not succeeding and thinking, you know, I could do a better job.

55:01George Osborne: Well, that's for sure. I agree. I have to say I agree with almost every single word in the in the essay. But those who know me well, I agree with lots of words in the essay, but I don't think I agreed with the overall argument, because as I said, I thought it was

55:18Ed Balls: out of date and incomplete and not deliverable. I don't think I, you know, Andy Burnham and West street and clearly very frustrated because they're thinking you know tony you're not helping it's so much harder and more complicated than you're giving the impression of and as i said you know i've heard tony blair ever since the early 2000s telling us it's dead easy but it's not no although

55:40George Osborne: he did make it look quite easy when he was actually leading the labor body um as i know to my cost maybe we should challenge tony blair to uh he definitely gets he definitely hears this podcast I don't know if he listens to it, but I've had reports back from things we've said on this podcast where he's had a view. We should challenge him. What would he do as a kind of, if you're putting together a political strategy for a Labour leader? Because he was also very good at that with a great team he assembled. I will include you in that. But, you know, Alistair Campbell and Mandelson back in the day and Philip Gould and, you know, all that crew.

56:18George Osborne: I mean, it was and Gordon Brown, it was a very, very formidable political team as well as a policy team. What it'd be good to it'd be good to hear, you know, how do you actually win with this agenda or how do you win so that you can implement this agenda? Just finally, on the international situation, I thought it was quite stark, wasn't it? His warning to Britain about American presidents. I'm going to claim that it's very similar to what I've been saying about Donald Trump, which is although his methods and his language is very grating for a lot of people and a lot of Europeans and Brits. The truth is that he is this is a, you know, he says it's really revealing what American presidents have always felt, which is they're the shot callers.

57:03George Osborne: American power has been preeminent. And the European answer is not to complain about it, but to become more organized, more powerful, get themselves a stronger economy. And then they can play in the world. But until they do, they're just going to be price takers.

57:17Ed Balls: Look, of course, he's right to say that Britain is diminished and that finding a way to be kind of outward looking and international, a global Britain. I mean, that's a good phrase, which Boris Johnson tried to pinch, but we should have have back. So he's right about that. I do think, though, that, you know, again, Tony Blair, the prime minister in 2026, would be taking a very different approach. He has a pop at Mark Carney about Albanese in the in the essay. But the truth is, on domestic policy...

57:52George Osborne: Although he does call us a middle power, interestingly. He both has a pop at Carney, but uses Carney's language.

57:58Ed Balls: But he has a pop because he thinks that the only strategy for Britain as a middle power is basically to cozy up to Donald Trump. And, you know, Tony Blair structurally is in that position at the moment in terms of the way in which he's pursuing his post-political life. But as prime minister, he wouldn't be taking that approach because it would be impossible in this environment. And Keir Starmer tried it a year ago and has moved more towards the Albanese and Carney position. The thing which really struck me in the essay, and of course he's right, that big power politics has become more important.

58:37Ed Balls: But it's not enough simply to say it's just big power politics. I mean, nowhere in the essay does he talk about international institutions, the rule of law, the way in which countries work together. He says at one point, we should just do whatever it takes to stop illegal immigration. But I mean, what does he mean by that? Does he mean ripping up all of the treaties and international relations which would flow from that? I can't believe he thinks that. We've just had a situation in which, you know, in Turkey, the 20 year President Erdogan has basically locked up his presidential challenger and then through the courts stripped the opposition leader of his leadership position in the opposition party.

59:27Ed Balls: He's a big NATO ally. Power politics is important. But on the other hand, what about kind of the rule of law? And what about the way in which we respect each other's democracies? And I mean, Tony Blair 20 years ago would have been using leverage. Donald Trump is not interested. Tony Blair says, well, if Donald Trump's not interested, maybe that's just all gone. I just don't I mean, I don't believe that as a progressive vision for a 21st century foreign policy. And I don't think if he was in power, that's the approach he would take, however convenient it is to say it in an essay from the Tony Blair Institute.

1:00:03George Osborne: Well, I think the Tony Blair 20 years ago was you do have to get very close to American presidents. But he was also Britain can amplify its power through membership of the European Union. And if European nations, including Britain, don't club together, we can talk all we like about the rule of law and, you know, international treaties and international obligations. but we have no means of enforcing our will on the world and we're going to become increasingly ignored and irrelevant. I mean, that's his.

1:00:31Ed Balls: But he also used international alliances and the international rule of law and institutions to seek to lever better outcomes, not worse outcomes, in places around the world. He didn't say, you know.

1:00:45George Osborne: No, no, but he's critical. He's just about power politics. He's very critical of the Sunak and Starmer decision to abolish DFID and reduce international development assistance in his essay, for example. Anyway, listen, we could obviously talk about Tony Blair till cows come home. And it sounds like he's not completely done, is he, Tony Blair? He's going to keep popping up.

1:01:09Ed Balls: I think the question I'm now looking forward to is, do Rishi Senak, John Major and Gordon Brown try and do it in 3 ,000 words? or do they go for seven?

1:01:22George Osborne: With all respect to Rishi and Gordon, they didn't actually win elections and John Major did win an election in 92, but that was a long time ago.

1:01:31Ed Balls: So, I mean, Tony Blair... Arguably, in 2005, Gordon Brown and Tony Blair came together to win an election, which Alistair Campbell was pretty clear Tony Blair couldn't win on his own.

1:01:42George Osborne: Well, this is one of the reasons I wanted us to talk about this was I knew it would trigger all sorts of reactions like that in you. And I'm delighted that it has. Now, listen, we're going to talk about one problem which Tony Blair did not solve when he was in office, nor indeed did any of the Tory governments, including the one I was part of. And that is social care. But Andy Burnham has put it back on the political agenda. And when he was health secretary in the Brown government, he did make an attempt to solve it. And we're going to talk briefly about social care and why it has proved such a difficult issue in British politics.

1:02:17What are the risks for Andy Burnham if he makes social care a big centerpiece of a Burnham premiership?

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1:03:20George Osborne: Welcome back. So one of the things that Andy Burnham has said he would solve were he to be the prime minister, or he hasn't put it quite as explicitly as that, but you certainly get his intent, is the issue of social care. And this has bedeviled recent governments, Labour Conservative Coalition. It's one of those issues where you get the commentary at go, oh, why can't our useless politicians solve this problem? And Burnham is the latest to step forward and say he can solve it. I say the latest, but to be fair to him, he did at least put forward a plan when he was in the cabinet with you back in 2009-10.

1:04:00George Osborne: But this is what he was saying just a couple of days ago.

1:04:04Ed Balls: Yes, we need to change care. My dad is in a care home in this borough and I look at what the staff do for him and it is humbling to watch what they do. The care that they have got for someone else's dad is unbelievable. but they are working in a broken care system. They are being exploited by that system on poverty pay, a system that puts profit before people. How can that be right? How can we run care in this country on that basis? We need to change it so that it's provided on NHS terms and we have a social care system that supports the NHS because it's a strong front line of defence that supports people every day.

1:04:46Ed Balls: These are the things that I believe in.

1:04:48George Osborne: So back when he was health secretary, he made exactly that argument. He said we needed alongside the National Health Service a national care service. And at the moment, social care is partly run by local authorities. It's partly in the hands of lots of private social care providers and care homes and the like. He was saying we needed a national care service to be paid for our taxation. And he floated the idea, didn't he, of getting a sort of inheritance tax levy to pay for it. What did you think? You were actually in the cabinet with him, sitting alongside him back then. What did you think of his argument then and now?

1:05:24Ed Balls: Well, it didn't work in the election campaign in 2010. Let's come to that in a second. But in the debate we had in the government before that, I remember having these big arguments with Number 10 at the time. I'd been very involved in social care when I was a junior treasury minister before going to education. I said, if you go to how you finance this first before you've won the big argument about what's going wrong in social care and the rising burden on families and the unfairness of it. If you don't win that big argument first and you simply make it about how we pay, you'll lose the argument.

1:06:06Ed Balls: And at the time, I was arguing for a John Brown-style review like we had in university fees, like we'd had with OneLess on the health service back in 2001. And that isn't what Downing Street went for. That isn't what the Gordon Brown Premiership went for. And then rather late in the day, they alighted on Andy's plan and Andy's plan with the social care levy. In his mind, it was, let's tax people when they've died and provide the care free when they're alive. And somehow that, you know, taxing the dead would be better than taxing the living. And it wasn't hugely discussed in the cabinet. It was at the end of the government.

1:06:43Ed Balls: And then, of course, when it came out in the election campaign, you jumped straight in and basically made this a death tax. and we were looking back on your campaign ad in 2010. You got Coronation Street star William Roach, who of course plays Ken Barlow, to come out from behind the screen and appear in a Conservative attack ad in that election campaign. And this is what he said. When it comes to residential care, the Conservatives have set out plans for a voluntary insurance scheme. And that seems like a good idea. It means that people have the option to protect themselves against spending all their savings if they go into care and they don't have the fear of losing their home.

1:07:32Ed Balls: On the other hand, the government has said it is looking at a compulsory death tax of up to£20 ,000 to cover the costs of care. I am very worried about this. I have looked at their reports and it is indeed one of the options they are looking at.

1:07:49George Osborne: so William Roach was a constituent of mine when I was the MP up in Tatton and and I was very friendly with him and he's he's great company he has you know he's in the Guinness Book of Records he has the longest continuing role in any television drama anywhere in the world and he's now 94 years old so if he's listening thank you William for helping me out there uh yeah look it was right at the tail end of the brown government we had a general election coming and uh i think what the government did is exactly what you know it's quite often what governments who are about to lose do which is they sort of they want to prove they've still got some petrol in the tank they've they're still full of ideas i remember john major's government setting out a big plan to reform pensions and new labor very effectively saying oh yeah well that's uh you know the tories are going to abolish the state pension and this was the kind of equivalent to that, which is a big argument about social care way too late in the parliament that just exposes the government to a, you know, an effective opposition attack.

1:08:52George Osborne: And I think the kind of challenge here, we'll come on to the kind of broader issue of social care, but this was an essentially reviving inheritance tax as a kind of labor threat, which we knew was very, very unpopular in the country. And we leapt on it, absolutely. And effectively killed it off. But But what about the kind of Burnham argument, which he's now going to attempt to revive, by the sounds of it, if he's the prime minister in the next couple of months, which is, you know, social care has been way too fragmented. It's a bit, I think he would argue it's a bit like the pre-NHS healthcare system, which is some of it's in private hands, some of it's in local authority hands, some of it's in charity hands.

1:09:34George Osborne: We need to, you know, we need to nationalize care. We need a national care service and it needs to effectively be paid for out of general taxation. He probably would back off inheritance tax, but maybe he'd go for, you know, national insurance or income tax or VAT. Probably not VAT, but he would go for something like that, which is not so dissimilar from the kind of systems you get in some continental countries.

1:09:58Ed Balls: I think the danger for Andy Burnham and the danger of this whole debate, and you've sort of just done it there, you start with the problem and move very quickly on to how you pay for it. Unless you've actually established a consensus about what the problem really is and why we can't just carry on as we are and why it is so unfair, then it never works. And, you know, if you don't do the consensus building first, you've not got a chance. What do you think is the problem?

1:10:32George Osborne: What is the because there are several arguments, aren't there? One is that the Burnham argument there is you've got too many low paid people in the sector. Second, there's an argument that people get very low quality if they can't afford, you know, more expensive nursing homes. And then the sort of third argument, which is more of a conservative argument, is people's savings are wiped out because they sort of lose the lottery of life and they get dementia or something that, you know, lasts for a long time and absorbs all of their life savings and they have to sell their home. So there are several arguments about what's wrong with the current system.

1:11:05Ed Balls: Well, so I don't think that's a conservative argument. I think that is a very legitimate argument. It's an argument you tried to address when you had the Dilnot review, which is that if there is a randomness to whether you will be a person who can live at home until you die or whether suddenly you will need to have extremely expensive care. In the same way, there's a randomness as to whether you will be somebody who will live your life sickness free or suddenly get cancer and need very expensive treatment. And we have a national health system which says if you're the unlucky one who needs the expensive treatment, we all pull that risk and pay for it for you.

1:11:46Ed Balls: But in the case of social care, if you're the unlucky one, you lose all of your home and all of your life savings. And shouldn't that be either insured by the state, which is to make it free, or even if you don't do that, to cap the costs, to say that you only pay up to a certain amount? And that was an argument made by Andrew Dill, not to you, made by Boris Johnson in his reforms in 2019. That's only one part of it, though, because it is also the case that this is a very mixed economy, fragile system with lots of small businesses who really struggle. It's massively underfunded compared to health spending.

1:12:22Ed Balls: Local authorities don't have the money to really provide the care. Staff are underpaid, but also they don't have the kind of career paths you have in the National Health Service. I'm not sure that merging the whole of social care into the NHS is the right solution. I don't think people will necessarily want that. But you need big and radical change and it's going to be expensive. And there's fundamental unfairnesses which aren't addressed. But the question is, what do you do about it? Now, Keir Starmer set up a review when he came into power. It's being conducted by Louise Casey, who made a speech a few weeks ago about how she saw this as the new beverage challenge.

1:13:00Ed Balls: But she's not going to produce her...

1:13:02George Osborne: Maybe she sees herself as the new beverage.

1:13:04Ed Balls: Well, I'm sure she does, and I hope she becomes it.

1:13:07George Osborne: Louise Casey, she's the sort of go-to person for every government, as far as I can see, to do a review.

1:13:11Ed Balls: But the timetable... I know that West Streeting wanted this review to be done very fast and get on with big reform. It was basically kicked into the long grass by Number 10, who said, we don't want an interim report from Louise Casey for ages, let alone a final report. Can you just make this all go away? hey, if you don't have the Treasury and number 10 behind it, it always fails. And let's be honest, you didn't particularly like the Dilnot report and didn't want to spend billions of pounds on it. So it got killed in your time.

1:13:39George Osborne: Yeah, the reason was that it's money that goes to, in the case of Dilnot, I mean, it's a perfectly sort of, you know, laudable aim, which is try and protect the savings of better off people. But, you know, in a time of austerity, that wasn't, we didn't have spare cash to suddenly throw at people who protect many hundreds of thousands of pounds of their savings.

1:14:01Ed Balls: I understand that. But the problem with the Dilnot review, it was looking at one narrow part of the problem. Yes, I completely agree. But there's a bigger issue. There's a bigger issue. You have to have a big process to establish consensus that wasn't what happened in 2009. Andrew Dilnot, who was a policy technocrat, wasn't the right person to lead that big movement. And by the way, if the Treasury is not in favour of it, it's never going to work. Theresa May pulled it out of the bag, suddenly in the election campaign in 2017. And that was dubbed a death tax, this time not by George Osborne, but by Jeremy Corbyn.

1:14:34Ed Balls: A dementia tax.

1:14:36George Osborne: A dementia tax. Yeah, by the way, it almost certainly, it sort of did for her majority, didn't it? I mean, it absolutely had an electric effect in the campaign. Now, whether it was the policy itself or it kind of exposed her weaknesses because she then flip-flopped during the day once it was announced and got a poor reaction.

1:14:54Ed Balls: But it's the same underlying point. she was solving a problem which had not been properly understood and debated and a consensus hadn't formed. Even in 2019, Boris Johnson came out with his national insurance tax rise for social care, him and Rishi Sunak, and with some reforms, Dilnot-style reforms. This time it wasn't George Osborne or Jeremy Corbyn, it was Rachel Reeves who sought to torpedo it by saying Labour would be against the national insurance rise for social care. But then, of course, it was killed off by Liz Truss's wildness. And Jeremy Hunt then came in and ditched the policy. I think the common thread for all of this...

1:15:33George Osborne: Well, it was actually the only thing that Rishi Sunak and Jeremy Hunt didn't reverse of the Liz Truss premiership. They didn't return to Rishi Sunak's policy of a national insurance rise as Chancellor. And actually, I think that was a mistake. That was a moment when you could have gone ahead with a national insurance rise to pay for the NHS and social care.

1:15:52Ed Balls: That's right. Although it wasn't going to be enough, but it was definitely a step in the right direction. And, you know, I was always frustrated that Rachel Reeves was killing because she was opposed to tax rises on working people and national insurance rise, which we needed for social care. But the big point here is you have to win the big argument about why you need to act before you get onto the funding mechanism. And if I was Andy Burnham, this is my advice to him. Don't jump straight to a levy or how you pay for it. Work out how to establish a cross party consensus first. You can do it by having an individual like Wondless, who's not seen as party political.

1:16:33Ed Balls: You could put together a group. The Adair Turner was that kind of, Turner Review on Pensions was that kind of group. You could have a body, you could ask Jeremy Hunt and Ed Davey and Emily Thornberry to form a group to advise. you go out there and try to win the the big argument about why we need to act and then you then put to the country through the election process in what you hope is a cross-party consensual way a solution and you challenge kemi baynock or nigel farage to reject the substantive cross-party consensual nature if you jump straight to the tax rise you'll get blown away again because people won't know what the tax rise is for okay everything you say is fair about process and how

1:17:23George Osborne: to win an argument and whatever although i do think you know there's been no end of kind of reports on what's wrong with the social care system i still think you've got to make a fundamental choice which no government has really wanted to make which is who is going to pay for this thing where is the money coming from it can either come from general taxation to pay for a national service in which case yes lower income people are going to be paying for the care costs of higher income people in some cases or you start means testing it which is sort of where we ended up today or you have to say to people look you know I know you live in a million pound house and you're 85 years old and you've got dementia you're going to have to pay for it you're going to have to sell that home and we're going to have to take some of that money because we're not taking it from general taxation.

1:18:13George Osborne: Those are the two choices on social care where the money's got. It's either coming from individuals who've got money, and there are all sorts of unfairnesses about that, because what about the responsible person who saved compared to the neighbour who didn't save and so on? Or you take it from general taxation, in which case you're kind of increasing the size of the state. And I think Burnham, you know, I would say to Andy Burnham, you clearly believe in this thing. You've been talking about it for 20 years. You were the health secretaries. You're not a complete you know new arrival to the issue make a big argument make the big argument for a national insurance rise I wouldn't do inheritance that's I think it's very toxic do a national insurance rise to pay for a social care system I don't know whether you have to nationalize all the care homes in which case you end up being like Nye Bevan and you're stuffing gold down the mouths of the GPs as he had to to buy them out but you know essentially make your big argument I agree lay the ground in the way you suggest, but essentially you have to take one of the choices that I've set out that all governments, including the one I was part of, refuse to take.

1:19:18Ed Balls: Well, I don't disagree with that, but I think you have to get it in the right order. You have to stop, you know, a George Osborne, William Roach, Jeremy Corbyn, Rachel Reeves assault on your policy by building the... What a great coalition. the strongest case that you can.

1:19:37George Osborne: By the way, Ken Barlow is the only one who's really popular.

1:19:42Ed Balls: I don't think you have to choose binary between either it's fully funded or it's simply everybody kind of has to pay and lose their health. I think there was a legitimate argument, a dillard argument for a cap. I think you have to take away the unfairness of it being funded by local authorities with different rates in every part of the country. the reforms which were being put in place by Boris Johnson to manage costs and to regulate were good reforms and it was a pity that they got ditched you've got to invest in the social care workforce I think it's legitimate for people to make a contribution and for that to be means tested I don't think this would be a big tax rise I'm not sure that's an argument you're going to win but you have to persuade voters this is really important and that if we turn our way from this fair solution, then we will lead to greater unfairness, vulnerability and chaos in the future.

1:20:39Ed Balls: And if you don't win that argument, if you go straight to the tax rise, you've not got a chance.

1:20:43George Osborne: So I've just had an idea. So I would say one of Keir Starmer's mistakes was A, not listening to Tony Blair. Apparently he didn't have much time for it, but he also didn't listen to you very much. What about an Andy Burnham commissioned, Ed Ball's commission?

1:20:58Ed Balls: It's got to be cross-party. How about George Osborne, me, and our politician of the year, 2024, Ed Davey, the three of us?

1:21:09George Osborne: Okay. Because you have worked with him before in government. Well, Ed Davey did everything I asked him to do when he was in government and never complained about any of my budget. So, yes, I agree. He's exactly the kind of person I would want on my kind of commission.

1:21:21Ed Balls: I'm not sure if we're the trio, but I think that is the right way to...

1:21:24George Osborne: The Balls Commission on... The Political Currency Commission, I'm thinking of. Okay. Well, we're all for that, obviously. Anyway, that is it for this week's episode of Political Currency. And you can join us on Monday for ex-Minister's questions, because that's the place where we answer any and all other questions from across the political spectrum.

1:21:43Ed Balls: But of course, you can get AMQs early and ad-free by becoming a gold subscriber or a member of our kitchen cabinet. And if you do that, you not only get the episodes early and ad-free, but you get a mug, a members-only chat, bonus content, And you also get our weekly newsletter, which is now in voice note as well as written form. And this week you could get George's reflections on being in the White House in much more detail than we did on the podcast. And my three novel suggestions for your summer reading, three books I read over the last week. So it's not all about politics, history, cultural recommendations, the lot.

1:22:20George Osborne: and do send in your questions by the way to emqs at questions at politicalcurrency.co.uk or through our social media and we are going to see you on monday for emqs and don't forget a voice note see you then thanks for listening to political currency this has been a persifonica production

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1:24:06Ed Balls: Hello, podcast listener.

1:24:07George Osborne: Hello, you.

1:24:08Ed Balls: It's me, Greg James.

1:24:10George Osborne: And me, Alice Levine.

1:24:11Ed Balls: Now look, I know that you're very much enjoying this podcast that you're listening to. And we're sorry to interrupt. We really are.

1:24:18George Osborne: And it genuinely might not be our place to say, but is it time to try something new?

1:24:24Ed Balls: We would like to steal you for our new podcast. It's called Bad Chat.

1:24:27George Osborne: And it sounds a bit like this.

1:24:29Ed Balls: This one goes out to the walkers and the talkers and the late night. Stalkers. Stalkers. Maybe not that one. Alice is my best friend. I am not Alice's best friend. Do you know that horses' legs are their fingers? That is a bit of Bad Chat. From me, Greg James. And me, famously, Alice Levine. Listen wherever you get your podcasts.