Peter Mandelson OUT. George Osborne… IN?

0:00Ed Balls: This message comes from Jackson. Taxes aren't something you can only think about once a year. With investments, planning for tax days year-round. Fortunately, Jackson offers tax-efficient products. Visit jackson.com for more information on how our products can make your tax bill a little bit less painful. Jackson is short for Jackson Financial Incorporated, Jackson National Life Insurance Company, Lansing, Michigan, and Jackson National Life Insurance Company of New York. Purchase New York.

0:25George Osborne: Quick question. When was the last time a display ad changed your mind? Now think about the last time a friend told you about something they loved. Different feeling, right? That's how podcast advertising works. A host who's built real trust with their audience talks about your brand in their own words, in their own voice. It doesn't interrupt the experience. It's part of it. With Acast, you can access the world's largest podcast marketplace. Choose the right shows, the right audiences, the right format. Then watch the data tell you it worked. You're not buying impressions. You're buying influence.

0:58George Osborne: Learn more by visiting acast.com slash advertise.

1:19This is Political Coancy with Ed Balls and George Osborne.

1:33Ed Balls: so we are back we are remote this thursday and we are recording with big breaking news just as we were setting up our microphones and our audio it's just been announced um from downing street that peter mandelson is being removed from office as the british ambassador to washington so you We're going to have lots to talk about on our show today.

1:56George Osborne: Yeah, I mean, look, a lot has changed, hasn't it, since we did our podcast last week. Angela Rayner has resigned. Peter Mandelson has just been sacked. But the thing that I'm intrigued by is, Ed, you told us last week that you've been watching back episodes of Downton Abbey. And I thought that was just because you didn't have anything to do in the afternoon. But it turns out it's a kind of training manual, isn't it? because you are going to be moving into Chevening, the stately home that is the home of the foreign secretary, who's now your wife, and you're sort of like Lord Grantham. In fact, and you're also going to the state banquet next week for Donald Trump, which we're going to talk about, and you dress up in white tie.

2:41George Osborne: I mean, it is straight out of Downton Abbey.

2:44Ed Balls: Did you not get your invite? No, of course not. To the state banquet? George all those all those phone calls in the summer with JD Vance all of those you know those those drinks parties with the Notting Hill set and the rising stars of the Tory MPs in the Cotswolds I thought the whole point was to get you on the invite list for the Donald Trump Trump state banquet at Windsor Castle did it not come through well I think the invite list is put together by

3:12George Osborne: the foreign secretary so if you know the foreign secretary maybe you can put a word in and at I'm NFI.

3:17Ed Balls: I think the vice president of the United States would definitely have an influence. It is true that I've got through all six series of Downton Abbey and also the two films because I wanted to be up to date for the new film, which I think comes out tomorrow on Friday in Britain. And so I've actually absolutely loved it. Whether it's a good preparation for going to a state banquet in Windsor, I've no idea. In the 10 years, Gordon Brown was the chance to exchequer. I never once went to Dorneywood. I don't think he did either. either so i'm not sure my natural disposition is to want to spend my weekends in stately homes but never say never and you know of course it would be fascinating to go and peer into to evening i'm told that david lammy was a regular attender at evening in his year as foreign secretary and i'm sure he'll you know carry on popping in from time to time as well but um you know i'm not sure my downton abbey 1920s britain training is quite going to equip me for the reality of 21st century global britain but we'll see you'll be on the pheasant shoot before you know it i

4:18George Osborne: i was thinking you're going to be um you must be looking forward to the spousal program that they're going to run for all the you know husbands and wives of the foreign ministers when they meet in you know exotic locations and you'll be taken off to the national museum for a kind of trip and stuff like that what to watch the british museum you hang out with mrs rubio and all that me and

4:39Ed Balls: Thea can do the spouses program while you walk around showing off your marbles or whatever you've got in your museum. The only thing is, though, you know, of course, I don't know if you've had a call. I mean, you were on the shortlist for the ambassador job a few months ago.

4:55George Osborne: Well, as of pressing record on this podcast, the answer is no.

4:59Ed Balls: I've just had a message.

5:01George Osborne: But if I break off mid-podcast and say, I'm sorry, I've really got to go, you'll know why.

5:05Ed Balls: but I've just had a message from one of our um you know I'll keep there I'll keep it confidential one of our esteemed very esteemed listeners of our podcast he says um right now my main thought is that I hope they don't give the ambassadorship to the next person on the shortlist because I'll have nothing to listen to so all across all across the world political currency listeners are desperately worried that you might get the nod and that'll be that'll be the end and uh anyway i can't we are gonna be better qualified but on the other hand um who knows who knows what they'll do yeah well you might but you're not telling me yeah listen the um

5:44George Osborne: very very thick chinese walls listen we are going to talk on this program aren't we about uh the sacking of peter mandelson which is breaking news we were going to we'd already planned to talk about the you know his predicament and the government's predicament with him But we, you know, we can think on our feet and we're going to talk about why he's gone and the consequences for the government. And and then talk about the state visit coming up next week. And of course, that terrible news overnight from the United States that the Trumpian activist Charlie Kirk has been assassinated.

6:19Ed Balls: Then, of course, last week on our podcast, Angela Rayner was still the deputy prime minister, deputy to the Labour Party. we were anticipating that she'd given all the information she needed to to the ethics advisor and hopefully it was going to be in his mind complete and so we were thinking she might stay on but of course she didn't and we got it wrong come on ed we've got to fess up we thought she was going to stay and we thought she was going to stay because we thought that on the basis of the tax advice that she had said she'd received she'd acted on it but it it turned out that as is classic in these cases if you say that you've provided all the information and it turns out that you haven't and in fact she was advised by two lawyers who then said but they didn't give tax advice because they weren't qualified to I'm afraid in that circumstance she was in a great deal of difficulty as it transpired but that then led to a big, big reshuffle of posts at the end of last week, last Friday.

7:21Ed Balls: And so we're going to talk second about the reshuffle and what it says about the government's priorities and how it says phase two of delivery is going for the Stama government.

7:32George Osborne: And then we're going to talk about another consequence of the Angela Rayner resignation, which is the deputy leadership contest in the Labour Party, which is well underway. In fact, there is closer nominations later today. Looks like there's definitely going to be two candidates. But we're going to go into that contest, what it says about the government, who's likely to win. And I guess it's a kind of temperature check, isn't it, on the state of the Labour Party and how the Labour Party thinks about its own government. And we're going to delve into that. So tons to talk about.

8:07Ed Balls: But we're going to start with the news this morning that the Prime Minister has asked the Foreign Secretary to withdraw from Peter Manson the position of ambassador to America. I was on Good Morning Britain this morning.

8:19George Osborne: I mean, you should say that's exactly how they've put it. What you've just said is not just some sort of formal language you've come up with. That is actually how they've announced it, isn't it? The Prime Minister has asked the Foreign Secretary to withdraw the ambassador.

8:33Ed Balls: I don't know the detailed formality of this, but it is clearly an ambassador is an appointment of the foreign office. But the prime minister, I think, has the overall say or the final say on these big jobs. And so that is how the announcement has been made. I was on Good Morning Britain this morning presenting. We had a new minister, Mike Tapp, who did a really good job trying to defend a very, very tenuous position. because overnight Keir Starmer was still saying he had full confidence in Peter Mandelson, but all the papers were saying that he was clinging on by a thread on the brink. Yesterday at Prime Minister's Questions, Kemi Badenok really put pressure on Keir Starmer over the original appointment to appoint Peter Mandelson to this ambassador's job back in the beginning of the year, and whether Keir Starmer had followed full proper process and knew all the information about the Peter Mandelson relationship with Jeffrey Epstein, which is what has brought him down.

9:40Ed Balls: And the explanation I think we're seeing this morning from the government is that, in fact, they didn't have the full information about the nature of Peter Mandelson's relationship with Jeffrey Epstein at the time they made the appointment. That's how they're going to explain it. And I'm afraid the emails yesterday, Peter was sent a big batch of emails disclosed through the court process in America by Bloomberg. He obviously was, you know, I guess not surprised, but pretty appalled. These were about to come into the public domain. He did an interview yesterday with the Sun newspaper, with Harry Cole, on their television channel out of Washington, where he explains his huge upset, his regret, that this guy Epstein, he was deceived by him, he was like something on his shoe, an albatross around his neck.

10:30Ed Balls: But I'm afraid the emails were just so devastating for Peter at a time when a sex offender has been not just charged but convicted. And he's about to go to jail in 2008, and Peter sent an email saying he had to be incredibly resilient to fight for early release and that he had to show the world how big a person he is and he said your friends stay with you and love you and i'm afraid um you know peter will to his um grave regret deeply the sending of those um emails because they were they were so disastrous in the public domain that even though it's a long time ago um it was it was just untenable for such a senior public servant to have sent and defend the sending of those emails.

11:21Ed Balls: And of course, the fear was there was even more to come, but the ones which were in the public domain were devastating.

11:26George Osborne: Yeah, it's interesting, isn't it? The government themselves, in the announcement they've put out about Peter Mandelson sacking, said, and I quote, Peter Mandelson's suggestion that Jeffrey Epstein's first conviction was wrongful and should be challenged is new information. and that wasn't they say known at the time of his appointment so it was not in fact the kind of lobbying for uh lobbying tony blair who was then the prime minister to meet him um it that was not

11:54Ed Balls: the the the kind of fatal blow and that was before he was charged or convicted so that happened six years earlier it's the things which happened in 2008 after the legal process is a long way down the track where Peter is continuing to support and defend and champion that is where it becomes

12:11George Osborne: terrible and it's uh you know it's similar in that respect to Prince Andrew as well isn't it who um kind of continues the relationship up with Epstein after the conviction I think you know if you were doing a quick anatomy of a scandal and an anatomy of how government thinks about problems you know when you when you've got one of these things on your on your plate as a prime minister. I think the considerations are these. First of all, how expendable is this person? You know, what's the cost to me of getting rid of this person? Angela Rayner, very difficult, deputy leader of the Labour Party in my cabinet.

12:46George Osborne: But, you know, the ambassador to America, yes, my personal appointment, Peter Mandelson, an unusual choice, not a career diplomat. But nevertheless, you know, you can get yourself another ambassador. So, and Mandelson comes with no kind of political clout that is going to be a problem for you. So I think in these things, you always think, how expendable, how easy is it for me to get rid of this person? Second, you think, can this person lie low and will this scandal go away? Answer no, partly because the Epstein case is, of course, incredibly newsworthy and we should say awful and tragic, and there's no end in sight.

13:24George Osborne: And you've got the state visit coming up next week which the british ambassador is going to be very deeply involved in because that's what ambassadors do on state visits they're at all the events and all the meetings and so on so there's no easy way of shutting it down and then the third thing which actually relates a bit to the reyner conversation we had last week is do you do we know everything anyway you know have we got a do we know everything that's going to come out you know the first thing in downing street you should always do is say i want to know absolutely everything and i don't want to take anyone's word for it i'm gonna get you know my trusted person in downing street to investigate this and get all the information and in this case you know they would have concluded like we can't possibly know all the things that are going to come out in fact peter is himself suggesting more is going to come out so for all those reasons you know uh it was pretty clear overnight wasn't it that he i mean i i definitely thought i'm not just saying this uh kind of after the event um you know i thought he would not survive.

14:24George Osborne: It begs the question, obviously, who are they going to put in place next? And do they go on trying to find, and I know, as you alluded to, I was considered for the role last year. Do you find a kind of political appointment, a sort of unusual choice, or do you now go for a kind of career diplomat, in which case you lose some of the things that Peter Mandelson undoubtedly brought to the job? Because I will say this, I think he was doing the job exceptionally well. And I think he had made the move to the role of ambassador. And I think he had brought something special. And I think he had made a connection to the Trump White House, which is obviously an unusual place to deal with, in a way that probably, you don't know for certain, but probably a career diplomat would not have been able to do.

15:12Ed Balls: I think the first thing to say is, on a personal level, this is just such a tragedy for Peter. The third time that a prime minister and his spokesperson has had to announce Peter's removal from government. It happened twice when he was a cabinet minister. And, you know, it's tough because I take at face value, I absolutely believe his deep remorse and regret for the relationship he struck up and the emails and the communications he had. And there was always something about Peter. He was a bit of an Icarus figure and he sailed close to, in this case, a dangerous son, in the case of Epstein. But he will be so kicking himself.

15:57Ed Balls: And I think he will also know that in retrospect, when this wasn't all in the public domain, to have taken this job was a mistake and Keir Starmer will be kicking himself that he and his team didn't have all of the information in front of them. But I feel sad and upset for Peter because I think he is somebody who has good values and has a commitment to public service, which has been there since his campaigning for youth unemployment in the late 1970s. And so I feel kind of bad for that. And the second thing, you're totally right. It's a blow because he was doing a good job in a such complicated situation trying to deal with this Trump White House.

16:40Ed Balls: And it did require an unusual figure, Somebody who was willing to take risks and who had that extra ability to reach out and make connections. And at a time when the world is so unstable in foreign affairs terms, but also where our economic relationship with America is so tenuous and so on a knife edge, Peter was trying his best to do a good job. And so I think that is a loss, very hard to replace him. But then the third thing is this state visit was a nightmare. I mean, on the one hand, people were saying, well, does it make it very hard for Keir Starmer to remove Peter Mandelson a few days before the state visit, given that Donald Trump is also implicated in this relationship with Jeffrey Epstein and the allegations against him?

17:28Ed Balls: He was also in the birthday book, it is alleged, although, of course, he's suing the Wall Street Journal and saying it wasn't him. This wasn't his rather lurid drawing. On the other hand, if you take the events of next week with the state visit coming up, the press conference Keir Starmer would be doing with Donald Trump, I think absent the Peter Mandelson issue, that wasn't kind of on the table at all. It's been very hard for the political editor of the BBC to raise with Donald Trump at a press conference in the UK. The question of Donald Trump's relationship with Jeffrey Epstein, while Peter Mandelson was in a media storm over the very same issues, it was going to dominate the whole of this visit.

18:06Ed Balls: And I think, you know, in the end saying, you know, Peter has stepped down because of an issue about what he revealed. And we will not allow this media storm to get in the way of the hugely important economic and foreign policy bilateral and multilateral issues which Britain and America need to be talking about in the coming days on this state visit. That is a better way to handle this and to allow it to dominate the whole summit. So I agree with you that overnight it was clear Peter was going to have to go and he was going to have to go because the idea that this could be allowed to run between now and next Wednesday, Thursday was just impossible.

18:46Ed Balls: And also, as you know, George, when you're making these decisions, you either have to see it through for months or you want to make a decision quickly. The absolute worst place for Keir Starmer would have been to fight this off all day Friday as the growing clamour of people saying these emails are unacceptable. it's shocking and then find out there was some new revelation in sunday's newspapers and then you have to do another u-turn rishi sunak got into terrible trouble with doing that i think in the case of angela rayner kia starmer did it the right way get the independent review quick report quick decision he couldn't afford to allow this to um to run through the weekend if he was then going to have to make the decision he's now made on a thursday morning yeah agree with all of that

19:30George Osborne: And of course, this is a government that wanted this September to have a kind of reset and a relaunch effectively and focus on delivery. And, you know, if you think about it, it's been dominated by kind of personnel issues, if you like. What about the state visit? We should just say, I mean, obviously, you know, in some ways, the purpose of the state visit has already been served. I.e. Donald Trump was offered a state visit. You remember Keir Starmer produced the letter from the king in his bilateral in the West Wing of the White House. And as a result, Britain got a trade deal, which, you know, and this is to Peter's credit, but also the team in Downing Street and the prime minister's credit looks compared to all the other countries in the world like a very good deal.

20:13George Osborne: You know, Britain's got the best deal. and other countries like India are having a really tough time at the moment in terms of their trying to land an agreement with the United States. So in some ways, the sort of state visit has already achieved what it was designed to achieve, which is cement a warm relationship and a working relationship. But what about, you know, it's interesting if you're the prime minister, what would be your priority? I mean, there's lots to discuss. There's obviously Gaza, Middle East, Israel's strike on Qatar, which we could have talked about today. But, you know, there's a lot of pressure on Keir Starmer from his own party on Gaza.

20:55George Osborne: But, you know, is it a bit of a waste of your time and effort trying to lobby Donald Trump on this? You know, you're actually going to be a voice that's heard on it. Ukraine, clearly very important, disrupted Keir Starmer's summer. And that's all up in the air. So I imagine that will be an important issue. But if I was them in Downing Street now, I'd still be kind of going back to the economic issues that are so central to this government's political success and indeed all about prosperity. And I know that Peter was working on a sort of tech alliance between the UK and the US and an AI alliance and getting these US tech companies to do more in the UK and get the pretty good industry we have here in that space.

21:40George Osborne: working more closely with the American market. So hopefully that does not finish with his career as an ambassador. And that can be something that's achieved at this state visit. I mean, certainly I would, you know, very important as the foreign policy issues are, still, you know, getting the British economy moving and tying ourselves to something of what's happening in the United States in terms of the improvements in productivity and growth there is really critical.

22:07Ed Balls: Look, let's hope they can make progress on that economic agreement. I mean, as you know, in these kind of international discussions, personnel matters. And on that subject, it's not only Peter Mandelson who's not only not holding the ring as the ambassador. There's also a new foreign secretary, David Lammy, and his four years of contacts are now in the Justice Department. There's a new business secretary. He's moved over from the tech department, Peter Kyle. There's also a new tech secretary, Liz Kendall, who was the welfare minister before. So a whole load of new people who've got to get their heads around the discussions which have gone on.

22:47Ed Balls: And I know some of them have been quite contentious, but hopefully they can make some progress. On the foreign policy side, again, this is very, very delicate. at the UN meeting the week after the state visit, expectation that the UK, in the form of Keir Starmer, I think it's likely he'll be there, I guess, recognising the state of Palestine, a controversial subject in the relationship between Britain and America. So I think, actually, if you're Keir Starmer, what you want most of all goes back to your starting point. The purpose of this visit was to have a smooth and narrowly defined state visit in which Donald Trump and his wife Melania can do some visits and go to Windsor and meet the king and make a speech and feel as though their relationship bilaterally with the UK is important and with the monarch as well as the the prime minister and what you don't really want it to do is be overshowered by scandal or policy row and if you can get through that in a way which feels like it was substantive and enjoyable for Donald Trump, maybe that will bode well for some of the tougher discussions to happen in the months ahead.

24:04Ed Balls: I'd be surprised now if they are sealing deals in the coming days on tech and the economy. But, you know, maybe they're much more advanced than we realise.

24:12George Osborne: We should say, shouldn't we, and conclude here that, of course, in the US, there won't be much attention being paid to this state visit because all of the headlines are around the shooting of Charlie Kirk, this young Trumpian activist at a public meeting where he was actually taking on his critics. Whatever you think of his views or the views that he had, he was out there in the open debating people. And it's obviously a total tragedy for him. It's a very sort of dark moment for the United States because there have been other politically motivated assassination attempts, of course, on Donald Trump, but also on uh democrat state legislators and so on and i was at a dinner last night in london with a lot of kind of senior republicans and the news came through while we were having dinner and you know there was a palpable shock in the room and a lot of the people at the dinner knew knew charlie kirk and um and you know he sort of brought home this obviously a sort of political event and you know It has implications for how we think about the United States, but it's also a terrible death of a young man.

25:21George Osborne: And the people who knew him were visibly very, very upset.

25:26Ed Balls: It is totally shocking when a senior public figure is shot down, gunned down in public for their views. I mean, that is so contrary to our view of what a mature... open free speech based democracy should be all about um and so it's absolutely terrible i think the the worrying thing though i mean it's um a year ago slightly over a year ago when donald trump um was nearly assassinated in that rally in pennsylvania cross-party anger and support for him, Republicans and Democrats alike, condemning what had happened. I mean, it was a strengthening and unifying moment for Donald Trump and I think for the United States, whereas this feels the opposite of that.

26:25Ed Balls: I don't know whether you saw the way in which the minute silence last night in Congress was disrupted and with kind of shouting and booing and the Speaker needing to try to shush people up. The president's statement from the White House was very strong about allocating blame for the far left. Democrats responding in kind. I mean, this is not a uniting moment. It's a dividing moment. It's a polarizing moment again in American politics. And so when you have kind of extreme violence, which then leads to the entrenching of political division in a democracy, that is always incredibly dangerous. So I find these days very worrying indeed.

27:10George Osborne: And depressing. But let's turn now to something we were just talking about, actually, which is the new team around the cabinet table who are going to be dealing with this state visit. And you mentioned some of the new economic jobs that have been filled. Of course, there's a new team at the Home Office because Yvette has become the Foreign Secretary. We're going to turn to that next. Why did Keir Starmer have such a big reshuffle? what's it designed to achieve and will it work we'll do that after a break

27:47George Osborne: quick question when was the last time a display ad changed your mind now think about the last time a friend told you about something they loved different feeling right that's how podcast advertising works a host who's built real trust with their audience talks about your brand and their own words in their own voice. It doesn't interrupt the experience. It's part of it. With Acast, you can access the world's largest podcast marketplace. Choose the right shows, the right audiences, the right format. Then watch the data tell you it worked. You're not buying impressions. You're buying influence. Learn more by visiting acast.com slash advertise.

28:31Ed Balls: So welcome back. Very unusual to have a reshuffle on this scale at the beginning of a government clearly was forced upon Keir Starmer by the surprise resignation of Angela Rayner as deputy leader and therefore the housing community secretary had to do a reshuffle earlier in the week. We had thought that other than Darren Jones moving from the Treasury to number 10, we talked all about the number 10 reorganisation in the podcast a week ago. We thought maybe a wider reshuffle would come later. And of course, Margaret Thatcher, David Cameron, Tony Blair, none of them did a big reshuffle of top jobs, not just in the first year of their time as Prime Minister, but basically in their first term.

29:17Ed Balls: In all three of those cases, they put people into jobs and then wanted them to get on and deliver. And whether it was because Keir Starmer thinks he got his first government formation disastrously wrong a year ago, or whether No. 10 wanted a bigger headline than Angela Rayner resigns last Friday, they went for a widespread reshuffle. We've seen a lot of reshuffles in recent years, changing prime ministers, changing jobs from Boris Johnson through Listrust to Rishi Sunak. Keir Starmer said, you know, he's going to put all of that chaos, Tory chaos behind him. This is going to be a government of stability and delivery for the long term.

30:02Ed Balls: But this reshuffle so fast into the government does seem chaotic. And it's not what you would want to do in the first few days of your phase two delivery period. Because I'm not sure reshuffles make delivery easy.

30:23George Osborne: It is a bit of a mystery, but hardly. And I hope it's not because they just wanted better headlines than Angela Arena resigns. Because that shouldn't be the way Downing Street thinks about things. Particularly, you know, we're still very early in the parliament. We're one year into a five-year parliament, potentially. And you should be much more thinking, have I got the right people in the right jobs? And have I given them enough time to get on top of what they're doing? Remember, you know, the great advantage when you come out of opposition, and you mentioned Blair and David Cameron and Margaret Thatcher as the three previous opposition leaders who became prime minister, you know, is that these people have also been doing the job as shadow cabinet members.

31:05George Osborne: So they really, you know, got on top of what the issues are on this brief, who are the kind of key stakeholders that have met them many times in opposition and then in government, and have a pretty clear sense of what they want to do. Once you get into a government and you start moving people around, of course, they have no time to think about what they had wanted to do in this brand new job, which they were not expecting to get. So you do lose a lot once you start to move people around. I guess, you know, then it comes to the point you make, well, if it wasn't just about the headlines, and maybe it was, but if it wasn't, maybe they thought they'd made some mistake or the Prime Minister thought you had the wrong people in the wrong positions.

31:45George Osborne: So should we just focus on two groups? There's the economic team, not the chancellor of course key person not moved was the chance exchequer uh rachel reeves but there's the economic team which as you say you know johnny reynolds who was the business secretary actually as far as i could see in my private sector life doing a pretty good job connecting with the business community in a tough situation because business community not happy with the last budget and so on um peter kyle i mean criticized for being a bit close to the tech companies but they're hard to get to know these big uh you know giant american firms and he had clearly done that um so it it seems a bit odd that he's moved those people around then we'll come on and talk about the home office team and the justice team um but let's start with the economic team and what's the logic do you think i think it's really hard to work out what the logic is the um

32:42Ed Balls: The media briefing was March of the Blairites. That was the front page in the Times, putting the Blairites into the growth departments because they're going to turn things around. But I don't know if Johnny Reynolds was a Blairite, but he was, I think, a very well-respected business secretary, only been doing the job for a year, did three huge trade deals in a way which previous business trade secretaries hadn't been able to do, as well as the industrial strategy. Alongside him, Douglas Alexander, the trade minister, who I think also is integral to delivering these trade deals. I mean, the business department was delivering the growth agenda and suddenly Douglas is sent to Scotland and Johnny Reynolds is the chief whip.

33:29Ed Balls: And he'll be sitting there thinking, well, I mean, I don't mind being chief whip, but what did I do wrong? Because I was just getting going on the growth agenda. Peter Kyle, who -

33:37George Osborne: Do you think like Michael Gove took his appointment as being chief whip as a demotion. You know, you interviewed Sarah Vine over the summer. Will Johnny Reynolds think it's a demotion or will he think, you know what, actually chief whip with this Labour Parliamentary Party is an absolutely critical job for the prime minister. Maybe it's more important that the prime minister has a chief whip he thinks can do the job than a business secretary he thinks can do the job.

34:03Ed Balls: Well, if Alan Campbell was the wrong person to be the chief whip, and he's had, you know, decades of experience, why would you make him leader of the House and sack Lucy Powell? I mean, that is also an integral House of Commons job. It doesn't quite make sense. You are right that Michael Gove has clearly been moved out of the education department because he wasn't delivering the political agenda the Prime Minister wanted. Is there any question that Johnny Reynolds was somehow failing politically or in terms of growth and delivery? I'd not heard that. So he might be thinking, I'm the chief whip.

34:37Ed Balls: well that's an interesting job but he'll be thinking why did i get moved out of this the business department just as the key moment in and the person who's gone in peter kyle well and that makes no sense at all because peter kyle was just getting going on trying to work out that tech agreement with the the americans and suddenly he's out of doing that and he's into the business department pat mcfadden was in charge of the whole reorganization of government and public service reform in the cabinet office id card suddenly he's out there and in the department of work and pensions and the person who knew all about work and pensions but had been turned over by the treasury and number 10 on the vote liz kendall well she's suddenly in in tech and is that a move because she is going to be better at growth at tech than peter kyle or is that a move because somehow liz kendall the blairite wasn't doing a good job at growth in dwp i mean it's just very hard to see the logic in any of those moods other than the fact as you said they'd all been preparing for years they were building the relationships they had the policy moving you know from your time as chancellor that when you go in you need two three years to really get from the decision to go ahead through the process of putting the policy in place to actually embedding it and making it work all of that has been thrown up in there steve reid has gone into the housing department to take her from Angela Rayner somebody had to Steve Reid who had worked so hard he was just at the point of implementing the Cuddish Review to turn around the water industry a running saw in British politics suddenly he's out so all the civil servants are thinking well we were told this was all about delivery and suddenly we've got to start totally from scratch again with pretty much every economic department in Whitehall.

36:26Ed Balls: How is that delivery orientated? And just very, very hard to find the alternative logic to throw it up all in the air.

36:35George Osborne: You know, we should say two things, isn't there? One is the announcement of this thing called a budget board, which certainly we didn't have. I don't think you did. It's just co-chaired by Torsten Bell. He used to be a treasury special advisor, now a treasury minister, set up the resolution think tank. That's right. and co-chaired with Manoush Shafiq, who we discussed her appointment last week. I mean, she's the economic advisor in number 10. And kind of a slightly strange cast list of people. Certainly, if I was chancellor, I'd be like, well, I mean, I'm not sure how much attention I'm going to pay to this budget board.

37:07George Osborne: But anyway, we'll see how that works out. And then just on the, you know, we discussed Darren Jones's appointment as chief secretary to the prime minister last week. Well, you know, they actually now made him chancellor of the Duchess of Lancaster. So that is exactly the job that Pat McFadden had and was sort of the fixer in Downing Street. It's what Oliver Letwin was before. It's actually, I think, Peter Mandelson may have done some version of that job back in one of the Blair governments. You know, the Darren Jones appointment doesn't look as radical as it did a week ago.

37:34Ed Balls: Well, I'm told Darren Jones didn't actually have an office in Downing Street, which was probably going to make him doing the job quite hard. And we said last week, it wasn't totally clear to any of us exactly what the job was. But luckily, he's got Pat McFadden's job and he's in the Cabinet Office. And so we know that normal order has been restored. But it could be that he's going to be driving policy more. Although, if he's driving policy more as a former Chief Secretary to the Treasury, maybe he might have been chairing the Budget Board. But in fact, that's been chaired by Torsten and Minouche.

38:03Ed Balls: Although I think we can say with some confidence that the Budget Board is not going to be chaired by Torsten and Minouche. It's going to be chaired by the Chancellor's Exchequer with the Prime Minister. And that's actually where it's all going to happen. and it's a good thing if they are having a flur of information and talking about things but uh you know i wasn't totally sure exactly what that was all about if it was going to be about outreach to the wider world i mean there's a lot of business people who said quite good this budget board um i hope it's going to be me on it and then it turned out you know that it was only internal people from the treasury number 10 so i'm not sure if i fully understand what is um is is is

38:38George Osborne: happening uh there but um what about on the home affairs team i mean uh look is you know it's obviously uh personal to you and that yvette was the home secretary she's been moved to the foreign secretary job one of the great jobs in the world um and uh shibana mahoud has been moved from justice secretary to home secretary it was presented and david lammy becomes justice secretary as well as deputy prime minister um it was sort of presented as you know uh i mean i'm trying to put this in as plight away as possible. They wanted to clear out the team. There wasn't enough delivery on immigration. Shabana Mahmood is a kind of Blairite, get things done person.

39:19George Osborne: And again, it seems a little bit odd because Yvette, you know, I'll say it, you don't have to say it, seemed to me to have set out a range of things she was doing. She'd done the agreement with France. She was changing the asylum rules. The enforcement had been stepped up and she'd obviously had you know a long time thinking about it in the shadow cabinet and indeed as chair of the home affairs select committee um as i say from her point of view i'd be perfectly happy now i'm the foreign secretary and you know lots of home secretaries don't make it out of that department alive politically so but again what what is the logic there well it's really hard again to see

39:59Ed Balls: the logic. David Lammy has spent four years building an array of foreign contacts around the world close to J.D. Vance. Suddenly he's taking through the sentencing legislation through the House of Commons as well as being Deputy Prime Minister, which is always a role you have to struggle to define. The sentencing work which has been all put in place by Shabana Mahmood and her team, her devoted focus for the first year of her time in office. But she's not taking the legislation through. She's been moved. And so you have to start from scratch in terms of working out how to deliver that. I think from Yvette's point of view, as you said, being, I mean, how could you not be excited by the idea of being the foreign secretary?

40:46Ed Balls: But it's obviously frustrating when you've spent years getting to the point where you had a plan to turn this around in terms of migration and whether that's around deportations or getting other departments to pull the weight in terms of housing asylum seekers turning around the appeals system getting the france deal in place the germany deal coming through third country relations which are in in the pipeline all to get to the point where you can actually really put the squeeze on and suddenly defined that um you have to have a new home secretary starting from scratch all over again and you've gone to the phone office i mean of course it's frustrating on the other hand so much of this um tackling of migration depends upon kind of global relations and international relations whether that's the refugee convention how the echar works our relations with our other european countries but also third-party countries and so you know it's not going to be solved without very very strong economic diplomacy and that's what david Lammy and Yvette Cooper had been doing together from him at the Foreign Office and her at the Home Department.

41:54Ed Balls: So that will carry on. And then for Shumana Mahmood, it's a massive change. And I mean, I've just watched this from the outside over the last year. The thing about being the Home Secretary is it is so complicated. It's not like being in the Justice Department, where you could have a laser-like focus on sorting out the problem of prison capacity and sentencing because the migration issue in and of itself has so many complicated moving parts and at the same time every day you're dealing with kind of massive security problems and threats and concerns plus the whole issue of police funding and police reform and police organization and all the you know and the whole managing of the legal migration system as well so you know it is it is It's hard to do the Home Office job well if you've had 10 years preparation.

42:47Ed Balls: It's really hard to do it if you've had, you know, no preparation at all, really, because it suddenly arrives out of the blue. But, you know, Shibana is brilliant and she will do this job.

42:58George Osborne: She's a fan of this podcast, I should say.

42:59Ed Balls: I've spoken to her a couple of times about it.

43:01George Osborne: She's a regular listener. So if you're listening, Shibana, congratulations on the new role.

43:06Ed Balls: And I think that the relationship she has with the Foreign Office and Yvette around the international agreement she needs will be absolutely kind of vital in all of this. And then, you know, when it comes to this kind of wider legal ECHR reform, you know, she's going to have to persuade lots of people this is a good idea and not to be squeamish. But, you know, I don't think she'll have any problem persuading Yvette of that.

43:32George Osborne: we should just conclude this bit by saying i thought the other odd thing about the reshuffers you can quite understand a prime minister needing to kind of wanting to bring on the new talent the younger the the people who weren't in the shadow cabinet but who are going to potentially be in your cabinet when you come for re-election in three or four years time and i didn't feel like there's a whole kind of influx of new blood in you know some junior stars into the into the cabinet um i thought that that again was personally i thought that was a bit of a missed opportunity for the government maybe because the reshuffle was done you know very quickly and we should say look by the way very professionally done reshuffles can unwind uh they're very complicated i know they've got some snazzy new computer i read rather than a whiteboard to make sure you don't make mistakes but you know i remember reshuffles where you get to the end of it you go oh my god we completely forgot about that person and they haven't got a job um so i thought it was all kind of professionally done and presented in a in a kind of difficult situation where you know the uh reyner had just been uh forced to go but no not enough new blood and of course we should come on and talk about this the one kind of really obvious sacking well they they sat the scottish secretary but he's ended up now as the arts minister um a couple of days later um after being fired but um lucy powell was fired as leader of the house of commons and she is now one of the we think two contenders for the deputy leadership contest so again i thought that was on not enough new talent and the one person you fire is suddenly potentially going to be the deputy

45:11Ed Balls: leader of the load body let's have a conversation about that deputy leadership election it's so interesting um we'll do that as our final topic but we'll just take a quick break first

45:46George Osborne: Acast gives you that trust at scale. Digital precision, post-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.

46:07George Osborne: Right, so welcome back. Look, as we record this podcast, we don't know who all the contenders for the Labour Deputy Leadership Contest are because it's closer nominations at 5 p.m. And you need 20 % of the Labour Parliamentary Party to nominate you. And because they've got a very big parliamentary party, because they had a big election win, that's a lot of MPs. You need 80 MPs to nominate you. And at the moment when we record this podcast, it looks like, well, for certain Bridget Philipson, who's the education secretary, has got the 80 votes you need to enter the contest. And that Lucy Powell, who we were just talking about, is very close.

46:46George Osborne: and maybe as we're recording it has gone over the 80 mark so almost certainly those two are in the contest so it looks it looks very much like it's going to be bridget phillipson versus lucy powell if you let's start with this contest i mean brought about by reyner's resignation the last thing presumably number 10 want because it's a kind of vote on the uh labor party although i think if you were number 10 you would think when you um it's a bit awkward that you just fired Lucy Powell, but fundamentally she's not a kind of left-wing crazy or anything like that. So you haven't got a kind of Corbynista challenge.

47:23George Osborne: You haven't got a kind of Gaza protesting challenger. You've got two pretty sensible, mainstream, moderate Labour MPs in the running. So I think if you were Downing Street compared to where you were a week ago, you'd think, I'm happy really, aren't I, with either of these people?

47:40Ed Balls: See, I'm not so sure about that. And I think that may be because they've not fully thought this through, because this is not simply a bit of a distraction. This could turn out to be a much bigger problem for Keir Starmer and the government over the next year, especially if Bridget Phillipson doesn't win. I mean, Angela Rayland didn't have to resign as deputy leader, but she chose to. Once you have a contest, you're going to give somebody a directly elected mandate, which gives them power and clout. Normally, that happens at the same time as the leader is elected. That's what happened with Tom Watson at the same time as Jeremy Corbyn, Harriet Harman at the same time as Gordon Brown, John Prescott at the same time as Tony Blair.

48:22Ed Balls: Normally, it happens concurrently at the Labour Party rather than happening out of sync. there's no doubt in this case with all the worries in the Labour Party and in Parliament about the winter fuel allowance about welfare reform about now the Peter Mandelson appointment and resignation is the government listening are they delivering that is going to be the dynamic is the deputy leader going to be telling Keir Starmer what he needs to hear from the party and from Parliament on big issues whether that's issues of foreign policy Gaza in the Middle East or on fairness and the two-child limit and welfare reform.

48:58Ed Balls: So that is the dynamic. Into that, they've decided to encourage or maybe push Bridget Phillipson, a cabinet member. Now, they may have hoped she was going to be the only person who'd get the nominations, but that's not how it's going to turn out. It looks very likely. It'll be her and Lucy Powell, who's just been sacked from the cabinet. Lucy Powell, a North West MP, very close to Andy Burnham. Andy Burnham, who at the weekend, without being very critical of Keir Starmer and the direction the government is taking and championing the idea of Louise Haig or Lucy Powell being a voice to power on behalf of the membership and the North and MPs.

49:38Ed Balls: So this is going to become Bridget Philipson versus Lucy Powell, a proxy for Keir Starmer versus Andy Burnham. That's how it's going to be seen. But of course, Bridget Philipson has her hands tied behind her back. Lucy Powell, she's out now. She can say what she likes about taxation, spending. She can say abolish the two-child limit and pay for it with a wealth tax. She can say they've got it wrong on the prescribing of Palestine. I never would have done that. She can say we must be much tougher on tech regulation on the side of people and families who are worried about the way in which their children's minds are being warped by these big tech companies.

50:16Ed Balls: Bridget Philipson can't say any of that while she is in the cabinet. while she is part of collective responsibility, while she's signing off policy issues on budget right rounds or championing her own departmental policies, it's really hard to do this particular dynamic from within the cabinet.

50:35George Osborne: Can you be given a little bit of latitude by number 10? Can you be allowed to say, look, of course I abide by collective responsibility, but you should know that in the cabinet, I'm arguing for the abolition of the two-child limit, for example, or that issue which is so contentious, which we did talk about a couple of weeks ago, the prescribing of Palestine action. But if you think about how that would work,

50:58Ed Balls: that means in the discussions about the budget, or a month for the budget, because the contest will be over by the time you get to the final discussions, she would have to stand up in the cabinet and argue for the position she is also explaining in hustings all around the country to members. When she has a right round within Whitehall about policy, she would have to say well I actually disagree with the policy being taken which I'm being asked to support because I'm actually arguing for an alternative position in my hustings as a deputy leadership candidate I don't think how you can possibly make that work without kind of ridiculous conflicts and confusions actually what she should do if she's going to win this I think is stand outside the cabinet she has to leave the cabinet for a period and say I'm going to leave the cabinet to fight this deputy leadership election on the basis that when she wins it she can come back into the cabinet as education secretary by the way you mean take a sort of

51:52George Osborne: leave of absence and let the minister of state be the education secretary exactly and therefore

51:56Ed Balls: then she's free to do the job although of course if her expectation if she wins she comes back into the cabinet well surely lucy powell's expectation is that if she wins she'll also come back into the cabinet from which she was sacked a week ago oh and by the way and when harriet harman was made deputy leader she wasn't made the deputy prime minister something which rankled very hard is lucy powell if she wins being able to take a more critical view than bridget phillips and if she wins does she come back into the cabinet as deputy leader but she's not going to be the deputy prime minister because unlike david lammy and keir starmer north london men as a northern women she somehow doesn't quite make the grade in terms of dpm material you can see why it's complicated so first of all, Lucy Powell is actually very capable, very thoughtful, kind of a centrist-minded, good politician who will not want to divide the Labour Party.

52:50Ed Balls: Bridget Phillipston is one of the rising stars, and she has a great backstory. The daughter of a single parent in the North East fought hard and now fights hard for life chances of kids, of people like her, very respected in the Parliamentary Labour Party, polls very highly when you have those polls of who's doing well in the cabinet but if she fights this election with both arms tied behind her back when lucy powell can say what she likes to the members about what should change in an election which becomes a question about if kia starmer leading things in the right direction you know the danger is she loses and it's a setback to her and a setback to kia starmer now she might turn around and say well but why do i want to leave the cabinet because i never wanted to stand for this election in the first place why did you make me to which the answer is they should never have done this what they should have said was the deputy leadership election is going to happen in the party back benches stand and fight it we're busy running the government you know that of course the deputy leader is an important role in the party and we'll work closely with them but the moment bridget philipson either chose to or more likely was encouraged to stand for the deputy leadership from the cabinet you suddenly make this massively more complicated to keir starmer especially if Bridget loses and Lucy Powell wins.

54:11Ed Balls: And they didn't have to do this. You just think to yourself, why don't number 10 look around corners more? Why don't they see? When they pushed Bridget Phillips to do this, it was, in my view, the wrong call and they will reap what they sow. But I'm not sure if they quite realised what seeds they were throwing on the ground.

54:26George Osborne: I know them both a bit. I know Lucy pretty well, actually. She was a Manchester MP and I was an MP near Manchester and she's been really helpful on the Northern Powerhouse agenda.

54:35Ed Balls: That's true.

54:36George Osborne: As indeed has Andy Burnham. And I don't know Bridget so well, but I met her recently and had quite a long conversation with her and I was impressed. They do represent slightly different strands, partly because of the constituencies they come from. I mean, I would say Lucy is more of a kind of city center, metropolitan left voice in the Labour Party. And Bridget is more red wall. We're up against reform. You know, it's interesting. The first kind of intervention I've really noticed from her in this contest is immigration. and I don't think Lucy would have brought up immigration. She's saying to the Red Wall MPs, isn't she?

55:13George Osborne: I'm on your side. I'm going to, I know the pressure you're under.

55:16Ed Balls: I'm not sure you're right on immigration, but I think there's truth in what you're saying. But don't forget, the Labour Party membership undoubtedly has an urban bias. And so, look, I think Bridget is great and I don't want her to regret having been encouraged to do this. Fighting this with her hands tied behind her back could be very difficult. And Lucy Powell elected, as inevitably will be the case if she wins, on a outsider ticket and who then has to be brought back into the inside, creates a different kind of problem for Keir Starmer than Angela Rayner, with whom he had an accommodation. And as I said, those people who see this as a proxy will be rubbing their hands with glee And, you know, I'm not sure it had to be done this way and that you had to make this deputy leadership election such a big deal.

56:10Ed Balls: But by pushing Bridget Phillipson into it, that's what they've done.

56:14George Osborne: Anyway, I don't think it will be as bitter as the Dennis Healy-Tony Benn leadership contest, deputy leadership contest from the early 1980s. And in terms of, maybe we should end here, you know, in terms of like what is the role of the deputy leader, it's interesting if we dug out some archive of Dennis Healy talking about and pleading with an audience essentially he did narrowly win the contest but it kind of revealed the splits inside Labour at the time he's he we've dug out some a clip of him talking about the role and the relationship with the Labour leader we've also dug out Tony Blair's very moving tribute to John Prescott so I think most people would say played a blinder as a deputy leader of the Labour Party and so let's hear both those clips.

56:57George Osborne: Mr Chairman, comrades this is not a contest for leadership of the Labour Party although some people act as though it were. We already have a first-rate leader in Michael Foote and no one who heard his magnificent speech to Congress on Tuesday can doubt that. This is a contest to choose the best man fitted to work with Michael Foote as his deputy and Michael has made his own views on that crystal clear in the last few days. I worked with Michael Foote in the last Labour government with the trade union movement more closely than every other minister and I worked with him for the last 12 months and I shall work with him till we win the next the election.

57:49George Osborne: John was guardian of the party's conscience, but it's important to remember he was also its educator. Our relationship would never have worked had we been two peas in different pods.

58:01Ed Balls: Absolutely fascinating, George. We will be talking about this death leadership contest a few times in the coming weeks. And, you know, it may still be a coronation. It may still be that, to some reason, Lucy Powell doesn't get the final three nominations. I'm sure she's going to. And it may be that Bridget Phillipson, on her strength and communication skills, storms ahead. But it may be this is going to be fractious and complicated and that Keir Starmer, Rachel Reeves and Morgan McSweeney will look back on these days and wonder why they unleashed this big row in the Labour Party. We should watch this very closely.

58:36Ed Balls: In the meantime, that's all for Political Currency. We'll be back on Monday for Ex-Minister's Questions.

58:40George Osborne: Yeah, or, of course, you can hear it earlier and ad-free if you become a member of our kitchen cabinet. you know and we haven't had a reshuffle you in fact there's no limit on the number of people who could be in our kitchen cabinet and you never get fired from it unless you want to fire yourself uh so you can find the link to subscribe in our show notes that's right and you can have any job

58:59Ed Balls: you like um don't forget we're also on youtube search political currency and you'll be able to watch all our best episodes and interviews yes check them out if you haven't already done so

59:07George Osborne: they're great it's a great format to watch this podcast in and we will see you next week see you

59:21George Osborne: Thanks for listening to Political Currency. This has been a Persephoneca production.

59:43George Osborne: feeling, right? That's how podcast advertising works. A host who's built real trust with their audience talks about your brand in their own words, in their own voice. It doesn't interrupt the experience. It's part of it. With Acast, you can access the world's largest podcast marketplace, choose the right shows, the right audiences, the right format, then watch the data tell you it worked. You're not buying impressions. You're buying influence. Learn more by visiting acast.com slash advertise. Thank you.