Which party will dominate 2026?

0:14This is Political Currency with Ed Balls and George Osborne.

0:38Did I miss a Chapel Rhone concert there, by the sounds of it? What was that? You missed a sold-out Centrist Dad gig for Crisis at Christmas, but the overwhelming view of the sold-out screaming audience was that that was the one number which was definitely better than the original. We've waited till the 18th of December for you to make your most outrageous claim of the year that you and Robert Peston and co are better than Chaperone at her song, right? Well, look, it was a great Chaperone song and she obviously sings it in a very special way. You're speaking in the past tense like this is now the cover.

1:18Look, I don't know if you could hear the voice of producer Ellie singing along. She was filming on her phone, but she couldn't stop herself from joining in. It was a fabulous night and we totally missed you. I mean, it was so full, only your pogoing would have been possible. No other dancing fitted into this tight space at the Water Rats at King's Cross. I'm actually really sorry I missed it because I think it's the first of the gigs at the Water Rats that I have missed. But unfortunately, I was dealing with lots of inquiries about a new job I've got. Well, we have talked very many times this year, sometimes tongue in cheek about your new jobs.

1:56And are you getting another job? And are you applying for another job? And how many jobs can one person have? But this one does feel like quite a big deal. Yeah, well, first of all, this is the big job. This is the main job. Yes, I'm very excited, actually. I couldn't be more excited about, you know, a new chapter in my life, Professional Life, which is going to work for OpenAI as head of their OpenAI for Countries program, which is essentially working with countries across the world to bring the benefits of artificial intelligence to those countries and make sure it's appropriate for them. For those people who are uneducated, like me on AI now because of doing this podcast, this is actually the guys who deliver chat to GPT and are building kind of Stargate-style data centers around the world with country deals.

2:42I guess the thing I thought was interesting about that is we've been talking about AI almost since the beginning of this podcast. I remember the Rishi Sunak AI Summit right back in the autumn of 2024 when our podcast was just getting going. The thing which was striking to me in the conversations we've had is you've always been an enthusiast for what AI can do and for its economic and productivity benefits, but you've always been conscious of the fact that that has to be managed, that there are risks, there are concerns, that you've got to get the regulation right, that you've got to take people with you on this AI journey.

3:19And is that something you take into this new role? Well, I do believe that the technology is quite phenomenal in what it offers. And I think a lot of the problems we talk about on this podcast of, you know, public services, cash strapped, struggling to deliver what countries expect from them in terms of things like healthcare and education. You know, I think artificial intelligence is going to be a big part of the solution. But like with any technology, there's risks as well, any new technology, which are, you know, fairly clear as well. So yeah, it's up to countries and also the companies involved like OpenAI to develop the technology responsibly.

3:58I mean, that is the mission statement of OpenAI, AI, to develop the technology responsibly and make sure the benefits are very widely shared. Because I'll tell you, the other risk from this technology, because we do economics on this program, is that too much of the gains accrue to those who already have in society. And actually, the power of this technology is potentially to give a lot to the people who don't have at the moment. Well, the good news is that the podcast continues. The podcast lives, Ed. The podcast lives. It lives into 26. I think there was a moment, wasn't there? There was a moment a few weeks ago when you thought, maybe he's up for one of these big footsie chairmanship jobs and the podcast might die.

4:35And that would have been pretty sad, actually. I thought there was no way you could have gone and chaired something which was kind of UK or footsie style and carried on doing a podcast. Because you've got to be able to say what you think about such a wide range of subjects. But this is, I think, a bit different. And that's the decision you've made. I will make sure, though, that at every opportunity, I call out your interests so there's no conflicts. just as I always make sure that anytime Donald Trump comes up, I mention your close friendship with J.D. Vence. And you, of course, have no conflicts at all.

5:04There are no personal family connections or whatever that we should ever draw to the attention of our listeners. You're always very good at calling them out. And I always, always appreciate that. And we're going to get on to the podcast. We're going to start with our end of year. We've got some really good podcast stuff coming over the Christmas New Year break. We've got chats with Ed Davey and also with Bridget Philipson and a special what-if episode of our podcast and a Christmas EMQs to come between Christmas and New Year. But we thought on this one, we'd do our end-of-year assessment, first of all.

5:38The state of the parties at the end of 2025 in UK politics. How have things gone this year? Did they go according to plan? Yeah, that's right. And then we're going to look forward to 2026. And we're both going to just pick a couple of moments. These are things we know are coming. what we don't know the unknown is of course the outcome of each of them so we'll talk a bit about things to watch out for in 2026 and then we're going to round off with our end of 2025 political currency podcast awards we're going to look at the bad and good moments of the year surprise of the year our podcast moment of the year and then politician of the year who is in the frame for the political currency politician of the year of course we don't have to agree on that we can have one each, because I don't think you agreed with mine last year, but that is fine.

6:26Well, it turned out to be a schoolmate of yours, so... Well, yeah, but... Talking about undeclared interests. I know you find this hard to believe. The fact that he's a schoolmate didn't get him his job. No, this was someone who served with me in Cabinet. That is true. Well, look, we're going to assess him alongside the others in our first item, the state of the parties as we enter 2026. So let's start with the Labour Party, the Labour government. So this is, you know, we were both active in politics, of course, and we are pro-politician. You know, I know that's not very fashionable these days, but, you know, we think politics is a very important arena for people to get involved in, whether you vote or whether you actually become a member of parliament.

7:09And so rather than just pick the worst moments of the year for everyone, we're going to try the best moments of the year. And let's start with Labour. And I think, you know, the key meeting, the key event that Keir Starmer got right this year. It is my pleasure to bring from His Majesty the King a letter. He sends his best wishes and his regards, of course. But he also asked me to bear this letter and bring it to you. So can I present the letter from the King to you? Thank you very much. Am I supposed to read it right now? Yeah, please do. I've got to tell him what your reaction is. I need to know.

7:52He is a great gentleman. A great, great gentleman. So that was Keir Starmer in the Oval Office in his first meeting with Donald Trump as President of the United States. And I think it's unarguably been the year of Donald Trump, whether you like it or not. He has absolutely dominated and shaped global events. And I think the single most difficult challenge most leaders of countries have had is how to handle Trump, how to handle him personally in encounters with him, how to handle his policies. We've seen some of those Oval Office encounters go badly wrong. I mean, most notoriously this year for Zelensky.

8:34I mean, notoriously, arguably for the White House team. But anyway, you know, that was a really difficult moment. So I would say the thing that Keir Starmer has absolutely got right this year has been the handling of US relations. And that is no small achievement. And you could easily argue that it's the most important thing he had to get right this year. There are lots of other things we can come on to in a moment. But, you know, if at the end of the year, imagine a world in which relations had completely broken down, where Donald Trump was sort of firing off missives against the British Prime Minister in the same way he does against other people around the world or indeed Sadiq Khan, the mayor of London.

9:12Sadiq, you know, takes it in his tribe. But nevertheless, if it was the British Prime Minister and people were really questioning whether this government could function at all with the United States, what that means for our security relationship, our economic relationship, if Britain was on the wrong end of some of the higher tariffs that he's imposed as president on other countries, you know, that would be a massive crisis for Britain. and that has been avoided. And so I think we start, as we review the year, by the thing that didn't happen, which was there was not a huge breakdown in relations between the UK and the US, despite it being a Labour prime minister and a, you know, a certainly idiosyncratic Republican president.

9:50And I think full credit to Keir Starmer for that. But things don't look so good if you look at the domestic agenda. I think that's fair to say, isn't it? It is. Look, Keir Starmer has been criticised by some for being abroad too much, too much focus on foreign affairs. But as you say, the fact that he has been a rock of stability on Ukraine has been effective, I think, in supporting moves towards peace in the Middle East. I mean, that is all hugely to his credit. But if you actually go to the domestic agenda, if at the beginning of the year you had said to a Labour MP, over the course of 2025, inflation down, faster growth than France and Germany, interest rate on the way down.

10:29I expect they're going to come down again today. Trade deals with America, India, and Europe. Waiting list down. Successfully delivering an immigration white paper. The employment rights bill through Parliament. VAT on private schools not causing you a load of difficulty. The Hillsborough law through. I think people would have bitten your hand off for all of that this year. And you'd have thought, well, actually, surely that means the government should be doing well in the polls. And the reality is, despite quite a lot of progress on quite a lot of the domestic agenda and the manifesto commitments.

10:59I mean, it's been the opposite of that. I mean, it's been a year on the domestic agenda so often where it's two steps forward and shoot yourself in the foot. I mean, the comms handling and the communication and the storytelling has been so in contrast on the domestic agenda to the international. I feel as though, this is my feeling at the end of 2025, people say Keir Starmer spending too much time on foreign policy, not often domestic policy. I think the real point to make is on foreign policy, when he speaks and acts and leads, it's authentic and you believe it's really coming from him. And the problem on the domestic agenda, from the Prime Minister and in PMQs and more widely, it doesn't feel solid and authentic.

11:45And that isn't only about the many comms mistakes they've made, you know, having to correct himself on the immigration white paper, the complete chaos of the budget, but also that he hasn't found his voice on domestic policy in the way he has on international affairs, even though he's got a better story to tell than the government seems to be able to tell. Up to a point, I would say. And by the way, while you were speaking, the Bank Bank of England has just cut interest rates to 3.75%, as you were saying there. But okay, here's a slightly more colored view. For a start, the last GDP figures showed a small contraction in the economy.

12:29The last unemployment figures showed unemployment rising. While we record this podcast, the doctors are on strike again. And there's a big, big question mark over whether the immigration proposals that Shabana Mahmood put forward to try and curb the small boat crossings and convey a sense that Britain's in control of its borders are going to work and not fall foul to a big rebellion in the parliamentary Labour Party, which is already brewing, for example, on the issue we discussed in the last couple of weeks on reducing jury trials. And so if you think of the big kind of pillars of the government, economic performance, national health service immigration the three central things that they would say they have to get right you know things aren't that great i think on comms i don't think i kind of completely agree first of all they now have in tim allen and david dinsmore two highly experienced comms people and there aren't like two better people out there in britain you could find you know they've got it's hard to say now they haven't got a very very good comms team who were all in place for the preparation of a budget from September, which we were told number 10 in the Treasury were going to work on hand in glove.

13:41And how did that go? Right, which I would say speaks to substance. And to your point, which is like, at the end of this year, I don't think Keir Starmer and, you know, therefore by extension his cabinet, have really answered the question, what is Labour in government for? What is it trying to achieve? I think if you were a Labour supporter, what must be enormously frustrating is, you know, this is the first full year in government. This is when you do the big thing. You look back at the Blair Brown period, you look back at the Thatcher period, you actually look back at the Cameron years. These are the years when you're doing the big, far-reaching changes for which hopefully you'll be known.

14:18And I think too much political capital was exhausted on very, very difficult and costly U-turns on the winter fuel payment and on the disability reforms and those u-turns and therefore the kind of mixed messaging on the budget to put it politely you know have really overshadowed everything else and this inability on the nhs to kind of get this dispute resolved which i think a lot of people would say well we did tell you don't pay the doctors up front and then expect them to come quietly george i don't think we're disagreeing the sense of pessimism is huge i think within the labour parliamentary party.

14:56The polls are terrible. Those mistakes have been damaging. The point I'm making is that actually there was a tough inheritance. If you'd managed the argument better about, you know, that it'll get harder before it gets better, the living standard squeeze, getting inflation down, there's actually quite a lot of things you could point to which are better than you might have expected a year ago. But they have completely failed to tell the political story of this parliament and in the end it's not the job of the press officers to um deliver that message no and look it's reflected what you say is reflected in the opinion polls so at the beginning of this year labor were on 30 in the polls they are today in the latest poll on 18 which is probably you know got to be a kind of record low and keir starmer has gone from minus 33 so you know he wasn't in a great position a year ago to minus 43 now so in terms of kind of political performance and i thought it was interesting and maybe we should move on to the conservatives after this but that Keir Starmer himself acknowledged in an appearance before the Liaison Committee in Parliament that there was speculation about his leadership.

16:02But once you yourself are acknowledging, you know, there's a big question about your leadership, that sets up the challenge for 2026. The contrast is with Kemi Beidnok. Keir Starmer found his voice on foreign affairs. I just don't think he's found his voice on domestic political leadership yet. And there'll be lots of people wondering whether that's going to be possible. Kemi Badenock, I think over the course of 2025, has found her voice. And in the second half of this year, in promises questions, I mean, she's been much, much more effective than she was in the first nine months of her leadership.

16:38It really kicked off with that PMQs back in September after Peter Mandelson, appointed by Keir Starmer in January, rather controversially to be the American ambassador for the UK, was essentially sacked by Kirsten, were forced to resign. This is Kimi Bainok in PMQs. A load of waffle and whatabout dreams. All they are interested right now is their pointless deputy leadership election while the country is out there suffering from an economic crisis. The prime minister has an ambassador mired in scandal, not focusing on NATO. He lost his deputy prime minister just last week for evading taxes. He's got a new home secretary, a new foreign secretary, just learning the ropes, not able to help with this issue.

17:18We have strikes crippling our capital city and damaging our economy. He could use minimum service legislation, which we introduced, to make the lives of the people out there better, but he won't because he does not have the backbone to face down the unions. The unions are running this government. All the deputy leadership candidates are chasing after them. And while with this government, it is more strikes, more scandal, more chaos. And the link, Mr Speaker, isn't the link between all of this, his bad decisions, his bad judgments and his total weakness. I mean, it is so hard to be the leader of the opposition after 10, 14 years in power.

18:02She's clearly finding her feet. But compared to, you know, a Tony Blair or a William Hague or David Cameron, The thing she's facing is she's got a real threat to her political existence, not on the other side of politics, but on her own side, on the right from reform. That just makes it so, so much harder. But she's been finding her feet. Yeah, I think that's right. I mean, it's interesting. Her approval rating has gone up this year from minus 12, quite a lot better than Keir Starmer, minus 12 to minus 10. So a modest improvement. But the Conservative Party's polling position, you know, as a party, has gone from 23 % to 17%, essentially level pegging with Labour now, who are on 18%.

18:48And I think you're right. You know, if you ask yourself at the end of this year, is Kemi Baden-Ock secure? I think she's more secure in her leadership than you would have anticipated earlier this year, where people were thinking she hasn't taken to the job of leading the opposition well. As late as the party conference, she was really under pressure. Yes. And she kind of turned it around at the party conference and with these PMQ appearances and in fact the budget response in Parliament. But as you say, there's still the kind of elephant in the room, which is the huge structural problem the Conservative Party has, which is reform.

19:21So that is why their vote is being squeezed. And for all the attention we're giving her on this podcast, she's not getting anything like that attention in the country because the attention is focused on Nigel Farage. and I don't feel yet that I hear from the Conservative Party a kind of answer to that. I think there's an emerging answer. They were trying it a bit at the conference which was we're the party of fiscal responsibility. We're the party of business you know which is ground they feel has been vacated by Labour and you know vacated or maybe never occupied by reform. So that's the space you need to be in but I still don't hear it loud and clear the whole time And that would definitely, I think, as you kind of get to the end of the year, it's where we started the economy, economy, economy, economy, economy, because that is the space between labor and reform.

20:11So now what about your politician of the year last year, Ed Davey? You've done an interview with him, which I've not heard yet. So I'm really looking forward to that over Christmas. How do you think he's done? He had a really exceptional election result. You know, he got the most number of Liberal Democrat seats, I guess, since, you know, Asquith and Lloyd George, if that's a sort of meaningful comparison. Although the actual share of the vote didn't really go up. So it was more, again, to do with reform splitting the Tory vote in those kind of Lib Dem seats. But certainly Ed Davey came out of the election with a higher profile.

20:46He did all those sort of funny stunts, which I thought were a good way for a third party or a fourth party to get some people's attention. What do we say at the end of the year? Well, I think the Lib Dems are an election machine and they always have their best periods and they run up to general elections. So it's not a surprise that 2025 would be a better year for Ed Davey. He's not going to win politician of the year this year. But I don't think it's been a bad year for Ed Davey at all. As I said, it's an off year for the Lib Dems, an off election a year. But on Europe and the Customs Union, having been cautious before the election, he's been making the running.

21:22In Prioris' questions, early in 2025, when Keir Starmer and Kimi Begnock were both being very cautious about Donald Trump and tariffs and the relationship, I think Ed Davey got quite a lot of pickup and coverage. Here he is in PMQs. The great British institution is under attack from a foreign government. President Trump is trying to destroy our BBC, not because he cares about the truth, but because he doesn't want to get away with his lies. Trump has undermined press freedom in America. Now he's trying to do the same here, disgracefully egged on by the leader of reform. So will the Prime Minister tell President Trump to drop his demand for a billion dollar settlement from the BBC?

22:12And will he guarantee that President Trump will not get a single penny from British licence fee payers? I think the interesting thing about the Lib Dems, though, a bit like Kimi Baden-Ock and reform, they are facing a bigger challenge in 2025, 2026 than back in the election year because of the rise of the Green Party. Zach Polanski, the new leader, getting a lot of publicity, competing for that sort of progressive anti-establishment position for those people who want politics to go in that direction, strong in the opinion polls. That is squeezing the Lib Dems a bit. Well, you say that, and I would have assumed that, but I was just looking at the polling.

22:56So the Lib Dems have actually gone up in the polls from 12 % to 14%. Even though the Greens, I agree with you, they've had a very sort of strong year. And Zach Polanski is a new feature of British politics. But they've gone from 9 % to 17%. So it looks like all the increase in Green supporters have probably come from Labour. I would just say, we're going to come on to kind of predictions for 2026. And what Ed Davey is raising there is a huge problem for the government. that is Donald Trump's lawsuit against the BBC. And if everyone is sitting either in the BBC or in government saying, oh, well, the Florida court is definitely going to fine for us and fine for the BBC and not for Donald Trump.

23:33If they're resting on that, then that is really, really silly. I think you have to think what happens if the court fines for Trump and there's going to be, is the British taxpayer or the British license fee payer going to pay Donald Trump and what the hell is the government going to do about it? And that to me is one of the absolute central political challenges of next year. And then how about Nigel Farage and reform? I think we have to accept that, you know, he has had a very strong year because he had a very strong election result, not in terms of number of seats, although it was the first time that reform or, you know, the previous incarnations of that party had won seats in Parliament at a general election.

24:13But, you know, in terms of share of the vote, in terms of impact on the election, and then, you know, he could have faded, but he didn't fade through this year. And I think what he demonstrates at the moment is an appetite for power. He wants it. And I thought the best demonstration of it, and people listening to this who work hard will go like, so obvious, I can't believe you're saying this. But basically, the political classes go off on holiday in August, and the government went off on holiday, and the conservatives disappeared. Nigel Farage didn't, and he dominated the political agenda through the summer on immigration.

24:45A lot of people listening to this podcast won't like these issues. Others will say they absolutely need to be aired. But this was the summer of the protests outside the asylum hotels, the flags on the lampposts and so on. And this is Nigel Farage at his party conference at the very end of the summer. But in the middle of this meltdown of these two parties that have dominated for 100 years British politics, in the middle of all of this, there is a new, strong, unified party that speaks with one voice that knows it's determined to put the interests of Britain and the British people above that of outdated international treaties or dubious courts.

25:28We are the patriotic party. We are the party that stands up for decent working people. And we are the party on the rise. Yeah. And of course, look, he is undoubtedly right that reform of the party on the rise because they started the year on 22 % and they are now on 28%. That is a clear 10 % ahead of the government. And I don't think any government can be entirely comfortable when any opposition party is ahead of them by 10%. It's also true, look, a lot of the discussion we were just having about Labour is because Labour and the Conservatives are at the moment in a complete fog about how to handle reform.

26:15Do you lean in towards, I mean, it's all played out in the kind of internal kitchen politics of Downing Street. You know, do you lean into immigration to show that Labour cares about it and don't let Farage run away with it? Or is it a huge mistake to talk up his issues? We've discussed it on this podcast. We won't rehearse the arguments here. But you can't deny that Farage is the name that is on people's lips as they're discussing their political strategies at the end of this year. Look, there's no doubt about that. And that is why I think this is the one place where, in a way, throwing forward is more important than looking back, because Nigel Farage has undoubtedly had a good year.

26:53But there are lots of big questions. I mean, we've talked about this many times on the podcast. Is he in the end aiming in a Richard Tice style way to reach into the centre ground to win over wavering conservatives? Or is he actually going to go to appeal to his other side, that sort of MAGA style conspiracy based nationalism? That's something he still, I don't think, has decided yet. And there's political implications from that. The more scrutiny you're under, the more you have to be able to deal with the past. And reform has issues in the past of some of its big figures, financial issues, past relationships, but also in the case of Nigel Farage and the allegations made about him, his time at school.

27:33I don't think that they have dealt with that effectively yet. And then you get onto big questions about policies in the future. What would a reform government look like? Would the sums add up? Can they afford the tax cuts? When Zia Yusuf says, you know, when he tweets, we're going to put in prison everybody caught with a knife. I mean, that isn't the real world. That is not going to be deliverable. So they're big questions, but they're the questions, I think, which come from succeeding. And his success politically and their standing in the polls means that they're going to be under more scrutiny.

28:05And we'll see whether in the end they can continue to do well or whether they wither under that pressure. That is a big question, isn't it, for this? Well, I wonder if it is a big question for 2026. Maybe we won't really know the answer to that till sort of 2027, 2028, as we get into the general election. But what about 2026? Let's turn to that next. What are the big things that we know now are going to shape the politics, not just in Britain, but around the world in 2026? We're going to turn to that next.

28:41So welcome back and we're looking ahead to the big moments we can already see are going to be significant in 2026. And from that discussion of British politics, you know, first of all, the May elections looking like a real opportunity for reform and for the Greens. A test for Ed Davey, probably a test, but not quite as a cue to test for Kemi Badenok as it may have looked a few months ago. But for Keir Starmer, I mean, under huge pressure, because back in 2025, the beginning of this year, those local elections were not big, significant elections for Labour. Next year's are absolutely going to be in terms of where the seats being contested are, but also the political pressure on a prime minister and a government which is flailing in the opinion polls.

29:28It seems to me like this is a change. When you think back to past parliaments, I'm thinking about, you know, the local elections in 2019, very Brexit dominated, 1989 European elections, 2009 elections, where you saw the rise of the Brexit party or UKIP and people said, you know, is this a significant moment? But actually, it kind of went away and we got back to normal two-party politics and subsequent general elections. It feels this time, these are more like midterm elections, more like in the US where the course of the parliament looks set to be dictated by the big election halfway through the term.

30:06I don't think it's going to be very easy to just shrug off these results and say, well, you know, this all always happens to governments at this point and these small parties rise and then they fade. and it's really all about the economy, I think the May election is going to be a much bigger moment in British politics than we've seen in local elections in recent decades. Yeah, I mean, there's certainly a big set of elections because there are elections for the Scottish Parliament, for the Welsh Senate, there are elections across all the London boroughs and a lot of the metropolitan areas of the country generally, and some mayoral elections as well, although they delayed some other mayoral contests, which felt to me like, you know, just putting off bad news, potentially.

30:42And I think it's worth reminding ourselves that one One of the features of Labour's win last year in 2024 was the revival of Labour in Wales, in Scotland, obviously traditional heartlands for the party. But at the moment, they are trailing in third place in both of those nations. For example, in Wales, Labour is on 10 % of the vote. And in Scotland, where Keir Hardie was born, it's only 16%. OK, so we know it's going to be a test that probably Labour are going to fail, unless something dramatically changes in the next five months. Labour are going to do badly in these elections. I think the kind of central question, which we don't know the answer to, and Downing Street would love to know the answer to, is, is someone going to launch an assault on Keir Starmer's leadership in the hours after or the days after those election results?

31:35Because often local election results have been a trigger for someone to make a kind of lunge of the leadership, often unsuccessfully. But the internal mechanism within the parliamentary Labour Party requires quite a lot of organisation for someone to trigger a contest. And, you know, quite a large number of Labour MPs have to sign up, not just to say they don't like Keir Starmer, but that they like someone else. Well, I say that, let me put this in brackets. William Haig pointed this out the other day, that almost all of the recent changes in party leadership have not been brought about through formal mechanisms inside their party.

32:12It's often just a sort of downing of tools by the parliamentary party, Conservative or Labour, that brings down a leader. So I would say we almost certainly know the local election results are going to be bad for Labour. Don't want to presume how people are going to vote. What we don't know is, is there going to be a leadership challenge? I think, though, the pressure is going to come before the local elections. I mean, there's going to be a lot of Scottish and Welsh politicians up for election, MPs worried about their own constituencies, councillors who in February are going to be worrying if the opinion polls continue to be as bleak as they are now and if the economy isn't turning and if the right direction, wrong direction polling about where the country is going stays as bad as it is.

32:57So I think the pressure is going to come early. The second thing is, as you say, in general in our politics it doesn't tend to be formal challenges. The Conservatives are rather more used to doing that than Labour. I mean, in Labour, it almost never happens that way. I think the last formal challenge would have been when Owen Smith tried to challenge Jeremy Corbyn after the 2016 referendum vote. But that didn't work at all. But the question is, is it different this time? Has politics changed? Is the sense of unease and pessimism so deep? And what kind of conversations will be happening in 10 Downing Street as a result of that?

33:34I don't know the answer to this. I think one thing you can say pretty decisively, it won't be in the days after the May elections, but I think the pressure comes on before. And if the results are bad and there isn't a sense of directional change, then the pressure grows throughout this year. So let's turn to something else we know is going to happen, and it's another set of elections. And I think this unarguably has a much bigger global significance. And that is the US midterm elections in early November. And I think this is probably the central geopolitical event of 2026, because if the Democrats win, and it's a big if, then that is a huge curtailment of Donald Trump's power.

34:16He can essentially be blocked from doing a huge number of things. Because at the moment, it's not just that he is, as I was saying earlier, idiosyncratic, strong-willed, you know, does these things. But because he's got Congress behind him, and arguably he's got the Supreme Court, or at least there's a Republican majority in the Supreme Court, he's essentially unchecked. And in the Constitution devised by the founding fathers, it's the checks and balances which curtail presidential power. If you have a Democrat House of Representatives, then all bets are off, really, because the Trump presidency will be severely neutered.

34:51As Obama's presidency was once after two years, the Republicans were elected and the Clinton presidency was when the Democrats were elected. I think you actually have to go back to sort of George Bush is probably the George W. Bush won his midterms, but that was immediately after 9-11. So that's going to be a big deal. And then you'll also get a whole load of investigations that Congress will launch or one of the arms of Congress will launch into the administration, what it's been up to, all the personal financial dealings. But if the Republicans win, then the Trump revolution continues. And people running for president in 2028, particularly on the Republican side, will have to be Trump acolytes, because that will be where the party is going.

35:33If the Democrats win, Trump's ability to anoint his success will be much, much diminished. But if the Republicans win, that will be a big, big win for Trump. Historically, as I say, the last time I think a president won the midterms was in the very unusual environment of 9-11. And for those who thought, you know, they'd had enough of Trump, they'll be getting double Trump. And the question will be when the double Trump comes, because I think if you looked at the polls at the moment and the economy, you would say the Democrats are on course for a successful midterms, which would deliver the outcome that you suggested.

36:09But I think, first of all, if Donald Trump sees that happening and he's under that degree of polling pressure, what does he do? And he could make decisions in the spring into the summer of next year to anticipate that. I mean, war in Venezuela, we've already seen the seizing of the oil tanker, but you could quite easily see a Trump Falkland style desire to do something strong man to say, I'm going to go hostile against the narco states. He already has federal law enforcement active in American cities. Very unusual for the president to do that, causing much unease in California and more widely.

36:52Do we start to see him doing more of that in the spring of next year to be the strong guy? Does he double down on the kind of assault on electoral rights, the kind of manoeuvring we've been seeing to try and curtail voting rights? So a whole bunch of things could happen which would be very destabilising economically and politically as an attempt by Donald Trump to change the narrative of these midterms before they've arrived. And I think the second dimension, which is really interesting in this, is if you're right, he loses. It isn't only what the Democrats then do to Trump and in America. It's also what happens on the Republican side.

37:28I mean, up to now, backing Donald Trump has been the only game in town for Republicans with ambition. And clearly that's true for Marco Rubio, for J.D. Vance. but if the midterms go badly and if you see that shift that you described that does change the dynamic in republican party politics i mean already we saw this week this totally bizarre series of interviews given to vanity fair by donald trump's chief of staff susan viles in which she says the most astonishing things including she knows from her alcoholic father what the behaviour of an alcoholic is. And Donald Trump displays classic alcoholic behaviour.

38:07He believes he can do what he wants, when he wants, knows no fear. What she says about J.D. Vance is also astonishing. She's saying things which I think probably very many Republicans think, I mean, you have to ask, what on earth was she doing saying them? She's supposed to be his chief of staff. But if Donald Trump does badly in the midterms and is weakened politically, suddenly that kind of more broad-based debate breaks out into the open. So as you described, losing in the midterms can see political power seep away very quickly. What political power seeping away means in American politics at the moment?

38:42Who takes up the mantle? Where does it go? What does J.D. Vance or Marco Rubio do? Absolutely fascinating. So I think you're right, completely pivotal moment. So shall we mention just a couple other things quickly? Definitely. I'll do one domestic one. I think the Office of Budget Responsibility forecast in the spring is going to be a big deal. Richard Hughes has resigned. I don't know whether there'll be a new leader of the OBR in place by the spring. The budget's for the autumn. The government have said there's only going to be one fiscal assessment a year, but the OBR in the spring is going to do an economic and a fiscal forecast.

39:17Apparently the government thinks that somehow they can have an independent fiscal forecast which doesn't require a fiscal assessment. I don't think that's going to work. We'll see. If the economy strengthens into the first couple of months of this year, that'll make things easier. All I've got to say, it's not how it feels at the moment. If the government manages to get a grip on some of the upward spending pressures, but again, I mean, that's going to be really quite hard. I think that the OBR spring forecast will be more interesting than people are expecting. Yeah, I think if you assume in the Treasury that people aren't going to make their own fiscal assessment of whether the rules are being met or not, that may be a a little bit of wishful thinking.

39:54I guess the other sort of event I'd point to is the Trump state visit to China in April. And I think there's going to be a reciprocal visit from President Xi to Washington later in the autumn. Of course, this relationship between the United States and China, very difficult, prickly relationship is still the kind of central motor for world politics. And I think it's interesting that a state visit is happening. Let's just put that into context. If you heard that the British Prime Minister was going on a state visit to China, they'd be all sorts of like, oh, that's outrageous. You know, we can't let that happen.

40:27But here's the President of the United States going on a state visit. That is a good sign. It's a sign that it's functioning, this relationship. It may be difficult. It's got some very, very challenging dynamics of the kind of rising power and the challenge to US supremacy. But it is at least functioning. and you know Chinese have played the game of kind of waiting for Trump to come to them a bit but we'll see because they've got their own huge domestic economic challenges too so so I think you you would look to the Trump state visitors as another known known next year of that will clearly be quite an important moment definitely we'll be watching China closely in 2026 we should take a break and then we're going to end with our award ceremony

41:17right welcome back time for a drum roll oh if only i knew someone who played the drums so here are the categories first what were the bad and the good moments of 2025 well for me bad moment we've just mentioned budget 2025 i mean that was a bad moment and then you said earlier the Trump-Zelensky press conference. I mean, there has been so many wild moments in the Oval Office. And you remember the Elon Musk bizarreness with Donald Trump in the Oval Office. But I think that was such a low moment for kind of global politics. And so I'm not sure whether I want to say Budget 25 or the Trump-Zelensky clash in the White House.

42:01So what, you haven't decided? Budget. Right. I thought the bad and sort of defining moment, certainly bad if you're a free marketeer like me, was Donald Trump's kind of list of the tariffs, you know, in the Rose Garden, where he had them all written on a board and kind of announced them. Based on a methodology which was absolute garbage. But it was a real moment for the world economy and for the stock markets and so on. How about your good moment? I'll tell you what I felt domestically was for Britain. I thought the trade deal with the EU was a real achievement. It was a moment after so many years after that Brexit referendum where we'd been moving away from Europe.

42:39that we started to move towards it. And I think the government should take enormous heart from the fact that they got that deal done, the controversy over it disappeared after about 24 hours, and it'll be making a real difference to the food industry and other sectors of the economy. And we heard recently things like the Erasmus program are going to restart for students. So I think it's a pivot moment when Britain's now going to start to move back towards a closer relationship with the EU, which as someone who supports that, I thought was a good moment of the year. What about your good moment?

43:14I think if I'm in GMB mode, I would say the news from the palace that both the king and Princess Catherine are in remission for their cancer treatment. And I also think the women winning the Euros was fabulous. But in political currency mode, I'm going to say the moment when the German Chancellor Merz did something which I don't think I ever thought was possible in the last 40 years, deciding to shift away from kind of narrow, balance the budget German fiscal policy to realise and to make the argument that Germany needs to, in order to live up to its responsibilities globally, needs to be kind of more sensible about the way in which it approaches fiscal policy.

43:58I think that was an unexpected moment and a big moment and a good moment. So well done, Chancellor Mertz. German fiscal policy. I mean, this award ceremony can't get more exciting. I did tell you I was returning to political currency mode. What is your surprise of the year? I think you have to say the election of Mark Carney as Prime Minister of Canada, don't you? I know it was way back in March, but I think if he'd started the year saying that Mark was going to make a spectacular... I mean, everyone... Mark is a great friend of mine and friend of yours. We all know that he had political ambitions, but it was always hard to see how he could get into Canadian politics.

44:34Of course, he's never been elected. and you know anyway hadn't his moment passed because he's a liberal and the Trudeau government was on its way out and conservatives were coming in and then a kind of unique set this is why it's a surprise a unique set of things happened which was you know Trudeau went Trump comes in okay you could argue both predictable but what's unpredictable is that Trump then makes as a big theme of his kind of initial part of his presidency you know a sort of assault on Canada's sovereignty and calls for it to be the 51st state cometh the hour cometh the man mark carney the you know most respected international player that canada has comes onto the field becomes prime minister and then calls an election and wins the election which no one thought his party had a chance of winning and has had actually a pretty good year since so i would say uh yeah mark carney is my surprise of the year i mean i presume our rules a bit like the oscars allow you to win more than one award.

45:36So, you know, I would think Mark Carney is a pretty good contender for Politician of the Year as well as Surprise of the Year. In Surprise of the Year, you could also, I think, put the victory of Albo, Prime Minister Albanese in Australia, because again, that was unexpected. He was behind and that was like the reverse Trump effect. I, though, I'm going to choose the breakthrough in the polls of the Greens following Zach Polanski's election to be the Green leader. because I think that was not something that I was expecting. Was I expecting Jeremy Corbyn's new party called Your Party to collapse into internecine warfare, as often happens in parties of the hard left?

46:17That is no surprise. The Judean People's Front and the People's Front of Judea comes to mind that Monty Python sketch from, oh, I don't know, 30, 40 years ago. But Zach Polanski, a surprise, and he's done well. What is your podcast moment of the year? What's the moment which you want to kind of highlight from our podcast in 2025? Well, I'm going to be a little bit saccharine here. So if people want to stop the podcast now, they can. So one of the reasons I enjoy doing the podcast with you, and one of the reasons I really wanted to continue doing the podcast, despite the fact I've got a big new job, was because you're one of the people who really makes me think, and you say things that I hadn't previously thought of.

46:54And quite often in politics, people say things that I have already thought of. and dismiss them. You are an exception. And I think the thing you said right at the beginning of the year that they should use the rearmament required across Europe and the challenge of Ukraine as a moment to break their fiscal rules or to create a kind of addendum to their fiscal rules for defence, which is actually an echo of what you were just saying happened in Germany this year, was very, it's not what I would have done as a Conservative Chancellor, but I think for a Labour Chancellor, it would have been a very smart move.

47:34And it would have got them out of quite a lot of the problems they ended up with in the budget, because they had like holes to fill. And they were kind of speculating about increasing income tax and so on. And I thought like, I wonder if anyone's listening to head balls, this is definitely someone who's been there, done it and has come up with a creative solution to a current problem. so I'm a I know past sick bag and I'm you don't have to say anything other than thank you very much George but uh that was my podcast moment of the year well look the time to do it was when Mertz was moving and when you could have had an international kind of agreement this was the right thing for us to do for our collective security the moment it became something which the government was resisting for domestic internal reasons then then the moment had gone I think and so it was impossible to do that by the time you got to the autumn budget.

48:21My podcast moment of the year is something that you set up, which was our Inside the Room at the beginning of the year with David Cameron on his reflections on his first year in government as prime minister. And it was thoughtful and reflective and a kind of different David Cameron to one I think lots of our listeners would have heard before. I think probably one you know well, but not one that I'd heard so often. And in particular... You actually told me at the time, that was actually the longest you'd had a kind of conversation with David, even though, of course, we were all political contemporaries.

48:53By a factor of about 12. I mean, you know, it was more than 30 seconds. So absolutely, I'd never ever had a conversation with him like that before. It was the story he told, and he became emotional telling it, about how, as his father was dying, he was bailed out by President Sarkozy, the president of France, who arranged the transport and arranged for a place to stay. His father was about to die in France, wasn't he? That's right. And I thought that was just a very human, important moment because I don't think that people often see the reality of leadership when you're also facing great personal challenge.

49:31And I thought he explained that very powerfully and emotionally. And I was very pleased and honoured, privileged to have done that inside the room with David Cameron. So thank you, David. And also thank you for the leadership you're showing around prostate cancer. I think that's also been very important contribution he's made in recent weeks. Shall we end with our politician of the year, which I can't even remember who you chose a year ago. I chose Ed Davey. Who did you choose? I can't remember. You can't remember either. It was obviously, I mean, you talk about not wanting to be accountable. No, seriously, who did I pick?

50:07I'm waiting for producer Ellie to tell us, but she's forgotten either. Nobody knows. Listen, we will, on EMQs, we will have to tell people who you chose. But I don't even, I don't even remember. I'm going to guess Wes Streeting. Well, I hope not, because he's my candidate for this year. He's not, is he? Politician of the Year 2025, George Osborne. Yeah, I think Wes Streeting, because, well, sorry, I mean, the actual Politician of the Year, you know, is either Donald Trump or Nigel Farage. In terms of dominating the political agenda, making all the other players move around you, globally Donald Trump has done that and domestically Nigel Farage has done that as we discussed.

50:50But I was just going to pick one moment, which was Wes Streeting's Today program interview. after all the speculation about leadership and Downing Street had come out overnight and said, Wes Streeting's plotting. I mean, I know they dispute this version of events, but essentially they had, and suddenly people have put two and two together and come up with that. And it was a masterclass in how to do one of those interviews, which was to be, you know, sort of indignant without being too kind of pompous to back the questions away, to get in a couple of points about the health service along the way as well.

51:28And I thought it was a kind of how to do one of those interviews. And I think, you know, he's not at an easy time while we're doing this podcast, the doctor's on strike again. And some people would say like, well, what's actually improving the health service? I think as someone who's clearly their own person in the cabinet doing their own thing, now very hard to move, you'd say him. Hopefully he wasn't my choice last year. I mean, you know, if he was, people would think you're obsessed. If he is, then he's like Tom Hanks. he won like back-to-back Oscars or well so look there's no doubt West Streeting has had a a very good year and um despite the challenges I think Bridget Phillips and who you are interviewing um over Christmas has also kind of came out stronger um for the deputy leadership election uh and Lucy Powell was um elected deputy leader they're all contenders I think if you listen carefully though to our um reflections on 2025 um I think in the end there are great vulnerabilities and I'm not sure it's going to last but I think you have to give it to Nigel Farage I think he has had the best political year of any of the party leaders of any of the senior politicians and you know key moments earlier in the year he was willing to to take some risks and that worked for him politically look I don't like everything he says and um and I as I said earlier I think there are some some issues he's gonna have to deal with but I think definitely 2025 was the year of Nigel Farage.

52:54We'll see you. The 2026 and 2027, 2028 is the year of Nigel Farage. The only way you can find out is to carry on listening to our podcast. Well, there are probably other ways to find out, but the best way to find out is to carry on listening to our podcast. I hope you have enjoyed listening to us this year. That's right. We will be back on Monday for ex-Ministers questions. Lots of good questions in that one. Some Christmas surprises. And it's also not too late to subscribe. and give the greatest Christmas gift of all, a gold subscription or a Kitchen Covenant subscription. Details in the show notes.

53:29It could also be a New Year gift. It's a sort of evergreen gift, isn't it? I mean, for any occasion, it is there as a present. But also do keep sending in your voice notes and emails to questions at politicalcurrency.coz.uk as we love that too. And if you haven't done already, you can always vote for us in the Political Podcast of the Year Awards. we will see you very soon see you then

54:00thanks for listening to political currency this has been a persifonica production