Will Burnham’s radical reshuffle work?

0:00The Chancellor of the Exchequer. Getting a lesson from the Shadow Chancellor on how to balance the books is like getting a lesson from Dracula on how to look after a bloodbath.

0:08Ed Balls: Ed Balls. A steady as she goes budget. What kind of ship does he think he's on, the Titanic? Thé-méry, Celeste. Welcome to EMQs from Political Currency with Ed Balls and George Osborne.

0:27Ed Balls: so we are remote today george osborne is on a trip yes actually i'm in switzerland where it's

0:35George Osborne: lovely weather and i walked past someone who was listening to our podcast in switzerland yeah

0:40Ed Balls: our listener we have more swiss listeners we probably do i just love the idea that in Actually, more of our listeners are moving to Switzerland at the moment, I would suggest. No, Paul, I love the idea in Trinidad and Tobago, we have 14 listeners or something. I just wonder who they are. I mean, it's the most amazing thing, you know, the globalisation of media and the way in which podcasts reach all over. So how's your week been? Well, I would say the cultural highlight of the week was going to see the Odyssey. I know everyone's been banging on about this amazing movie, but it is amazing. But what's relevant to this podcast is that I got the last seats available, basically, in the West End, sat in front of this enormous screen, which was only a couple of meters away from me.

1:25George Osborne: And then I found out that my next door neighbor was a Labour junior minister and, in fact, a gold subscriber to this podcast. And we were both there to see a tale of regicide and betrayal and, you know, endless missions. and all of that.

1:42Ed Balls: But he couldn't concentrate on the screen because he was too bothered about waiting for a telephone call from Downing Street. He was preparing for the weekend, but I'm glad to report that he has survived. Like Odysseus, he's made it through the Scylla and Charybidus of the reshuffle and the new premier. The suspense is killing our listeners, although if they're interested. So who are you talking about? I don't think he'll mind. Josh McAllister. We think he's a very smart guy, don't we? Cumbrian MP, Education Department, children's expert. I'm really glad he's been reappointed. The good thing is, we said Luke Pollard, Jake Richards, you know, reappoint them.

2:21Ed Balls: They've done that. People who've asked questions of our podcast generally have been reappointed. That was one of the very few pieces of advice we gave them they took, but at least they took that.

2:31George Osborne: Yeah. So how's your week been? I mean, Yvette has gone from travelling the world to travelling Britain from foreign secretary to health secretary from spears to plowshares this is true look she was supposed to be in the Philippines today and yesterday and instead she went to Reading

2:50Ed Balls: to visit a hospital which I think was a great thing to do at least the there'll probably be a lot of Filipino nurses in the hospital I suspect almost certainly Yvette was first a junior minister in the health department 27 years ago. I remember, yeah. So yes, it will be, I mean, who knows what kind of change it will be, but it will be a change. And I also had my... I think in a Labour government, the health... Well, in any government, but in a Labour government, the health secretary, you know, that's a very big deal, particularly with the social care brief. She's gone from Ernie Bevan, who I think is a rather sort of ambiguous figure in the Labour pantheon, isn't he?

3:27I mean, much like outside Labour, not so much inside Labour. to Nai Bevan, who is worshipped.

3:34Ed Balls: Absolutely. One of the great, great heroes. That's true. But she had something that I've experienced. I don't think you ever experienced, because you were Shala Chancellor and Chancellor, you never had a call to say, go now, come into number 10. She went in as foreign secretary. She drives out to the health department. And I had the same experience. I was in the treasury. and then you suddenly end up in a whole new department, inherit all of the past reviews, policy decisions. You have to get yourself back on top of it. It's such a searingly destabilizing moment that first day. But, you know, that's how our system works.

4:14Unlike Yvette, you presumably knew where Gordon was sending you.

4:17Ed Balls: Only for 24 hours. Don't forget, I thought he was sending me to the Treasury. Oh, yes, I do. But he should have done. We've had that discussion before. But Yvette presumably didn't know. I don't think anyone knew, did they? Yeah, nobody knew. She had no idea.

4:29George Osborne: We will come on and discuss all this, won't we? We will. Because we are, of course, going to start this week's podcast by talking about the first week of Andy Burnham, the reshuffle, his speech on the steps of Downing Street, some of these early policy announcements. Take a kind of first temperature test of the new British government.

4:49Ed Balls: That is true. By the way, I'm just messaging Yvette to say, please stop banging around in the kitchen. It was so much easier when she was in the Philippines recording our podcast remotely. remotely you know she might send me a text from you know new york or um beijing now making a terrible racket in the back there anyway yes we're going to move on secondly um of course the biggest news of the reshuffle was the unexpected appointment of john healy as chancellor and we're going to talk about what kind of chance that john healy is going to be how he got the job and most importantly of how is he going to navigate the huge complexity of the Treasury brief halfway through this Parliament.

5:28Ed Balls: And let's be honest, a complexity which has increased since the arrival of Andy Burnham as Prime Minister. And then finally, regardless of who the Chancellor's Checker is, or indeed the first Lord of the Treasury,

5:41George Osborne: they have to deal with the world as it is. And the pressures are mounting again on the global economy as the Straits of Hormuz close. There's been a resumption of hostilities between the US and Iran. what does this all mean, not just for the global economy, but for the pressures on a British government that has said it's going to try and relieve the pressure and ease the cost of living. So we'll take a look at the global environment in which this new government starts. But let's start with the first week of the Andy Burnham premiership.

6:15Ed Balls: It feels like, I mean, the first week has actually only been three days, but it already feels like a very long time. And it's, you know, they're definitely getting a sense of change. I was trying to think to myself, after the last few days, what is this change like? And what I figured was, here's an analogy. If you are a regular listener to BBC Radio, it's a bit like going from the shipping forecast to the news quiz or Steve Wright in the afternoon. When you're going from somebody who was quite dull, read out a script, and let's be honest, it wasn't always clear that he'd personally written the script, but he He certainly wasn't in control of what he was reading out.

6:56Ed Balls: Too exciting, dynamic, culturally relevant, a bit wild, completely unpredictable. There is a plan. There was always a plan for the news quiz or the Steve Wright show, but you never quite knew whether the plan was being stuck to. And it just feels like, you know, an enjoyable, so it feels like a slightly wild roller coaster. And it all began on Monday when Andy Burnham walked up Downing Street. I have just come from Buckingham Palace, where I have accepted His Majesty the King's invitation to form a government. We will make this moment a circuit breaker for Britain, bringing forward the biggest changes in the last 40 years.

7:41I will bring forward a new plan for Britain, a 10-year plan. can do something to give people some breathing space now, some help with the cost of living. Make this the moment when Britain starts to believe again, the moment we bring back hope. Well, he didn't even thank the shipping forecaster in his speech, did he? It was quite remarkable. Andy Burnham, I think, is the first prime minister, certainly, that I can remember, who paid no tribute to his predecessor. professor uh normally there's a kind of cursory tribute keir starmer did it to rishi sunak and david cameron did it to gordon brown and and so on uh but no not not a word on um on keir starmer straight into what was a pretty bold statement that this was going to be as as he's promised

8:30George Osborne: a circuit breaker with 40 years of neo-liberal consensus in britain that's right and interestingly

8:38Ed Balls: the only policy announcement was a pledge to abolish rough sleeping, which, you know, I guess, I mean, it's important. It's not globally earth shattering, something where his track record in Manchester has been a bit mixed. On the other hand, he knows it's something that he can do, and he knows how to do it. And it's not a huge amount of resources. I thought generally, it was confident, you know, it was clearly a speech he had been writing in his mind for, I don't know, somewhere between six months and 16 years. I'm not totally sure which. I think probably more 16 years. Anyway, he knew what he wanted to say and he decided to say it.

9:18More like 30 years, I suspect. And did it without the podium. So the British media were deprived of hot podium guy, who is the good-looking technician who used to bring the podium out with enormous regularity as prime ministers came and went over recent years. I'll tell you what, I'll give you my sort of overall impression

9:37George Osborne: because we'll come on to the kind of specifics. He's a much more sort of left-wing populist prime minister in these very early days than I thought he might be. You know, he's saying, I'm going to break with, you know, essentially the sort of market orthodoxy of recent decades. I'm going to take utilities under public control. He's distancing himself from the Blair Brown government, which he's sort of written out of the script or written into a sort of Tory script. and yet we're not getting much sort of economic theory or sort of ideology what we're getting is you know i'm here to immediately help you and he's picking some specific things like bus fares and tax on fuel domestic fuel and so on and the language is all very populist and the communication is very populist as well it's quite because i i would say the keir starmer government although it ended up being kind of stolid and kind of stuck in the mud essentially was sort of more of a sort of classic social sort of center-left social democratic government trying to advance things slowly whereas he's kind of obviously decided to use his sort of circuit breaker analogy give the whole thing a kind of an electric shock with to try and get labor back talked about give labor MPs something to go out and sell.

10:58George Osborne: I don't know why, was that your thought?

11:00Ed Balls: I think it's too early to tell for this reason. This felt like these last few days, the end of the make-a-feel by-election. And in the make-a-feel by-election, he was absolutely fighting this as a left outsider populist, listening to people and responding to their concerns and making announcements about cutting VAT on electricity and capping bus fares. And today we've had the announcement, a business rate cut for pubs and small music venues. These are all very small announcements in financial terms. We'll come to how they've handled it in a moment. But they're all things he heard on the doorstep and said he would do.

11:43Ed Balls: And I think the last three days were partly the ending of Andy Burnham's kind of populist ascent to power through Makerfield, whether he will in fact govern in that way, I think we're still going to have to wait and see, because it will depend upon his cabinet and how he works with them and how he deals with some of the big challenges we're going to talk about. The striking thing was not only that he didn't mention Keir Starmer, he had talked about Keir Starmer in his speech last Friday, and to be fair, Keir Starmer also did three different farewell speeches. And I think the best one was the one he did in Prime Minister's Questions last week rather than Mondays.

12:21Ed Balls: But when it came to the reshuffle, which then starts straight away, I mean, the reshuffle, and maybe this is going to support your point, if the reshuffle was Andy Burnham, beyond factionalism, brings together all the talents, you know, a knighted Labour Party for a united country, Maybe that would have suggested that he was moving into the new phase I was expecting. Actually, it was a very divisive reshuffle. And Andy's had to answer questions about this in the days after. Because if you actually look at the details, certainly at the cabinet level, I mean, we'll talk about the Chancellor decision at the moment.

13:01Ed Balls: That was a big surprise. It's actually been rather a messy reshuffle. They're still days on completing the junior ministerial ranks. But the most important thing about it was the blood on the carpet. I mean, when in 1962, Howard McMillan had the Night of the Long Knives, where he sacked seven cabinet ministers after a bad by-election, before an election he went on to lose, Andy Burnham has gone way beyond that. I mean, he cleared out all the people in the cabinet who had supported Keir Starmer. Whether there's such a thing as a Starmer loyalist, I'm not sure. I'm not sure they were ideologues, but they all believed that the right thing to do in that moment was to support the prime minister, the ones who went out into Downing Street after the cabinet.

13:44Give me some examples of people like Peter Kyle, Steve Reid.

13:48Ed Balls: Darren Jones, Liz Kendall, Nick Thomas Simmons. In the junior ranks, lots of junior ministers who went out in the final days. Catherine Atkinson was on our programme supporting Keir Starmer. That was her job. She was a junior minister. Number 10 will have told her to. But loads of people were wiped out. Bridget Phillipson, I thought just in passing, Bridget Phillipson, you know, who was the leadership candidate to be the deputy leader of the Labour Party. She essentially gets a big demotion because she goes from Education Secretary and Minister for Equalities to just Minister for Equalities. So she loses a big half of her portfolio.

14:21Ed Balls: That's right. And I think if you, you know, I think Bridget Phillipson has done a very good job sorting out the problems on special educational needs reform. But that's half done. Liz Kendall has had a huge impact on actually delivering substance around the tech regulation agenda for families, for children under 60. Nick Tom and Simmons has built a network in Europe, very respected. Steve Reid, I think, carried on Angela Rayner's work in MHCLG. You know, there would be others who I think had less impact. But when I look at those, you wouldn't have taken them out of their jobs because they were doing a bad job.

14:58Ed Balls: All of those guys were doing a really good job. And the reason why they went is because they were being loyal to the prime minister of the day. And who were the people who were then rewarded? Well, you know, of course, Lou Haig, who led the rebellion on the welfare reform. She's now the first Secretary of State, backed by Annalise Midgley, who's now the Chief Whip. She's only been in Parliament for a couple of years. Ed Miliband, Shabana Mahmood, Anna Sarwa, who went out and said Keir Starmer must stand down as Labour leader in Scotland. Suddenly, out of the blue, is no longer the Labour leader in Scotland because he is coming down to London to become a member of the House of Lords and become a business minister.

15:38Ed Balls: Whether or not that's a good thing, by the way, I think it says rather surprising things about Andy Burnham's attitude to devolution. This will cause huge problems in Scotland, somebody suddenly deciding to take flight from the Labour leadership to come down to London to be in the House of Lords. But the overall impression is the people who were disloyal are rewarded. And the people who were loyal to the leader of the day, even though they probably weren't Starmer ideologues, have been wiped out. And that, I think, is a big decision by Andy Burnham and the people around him. And it absolutely changes the nature of Parliament.

16:16Ed Balls: They've wiped out lots of junior ministers as well. We talked about some of the ones who have stayed in their jobs. But we advised, don't do your big reshuffle of the junior ranks until you've got your feet under the table in six months' time. You know what's going on. They haven't taken that advice. But Parliament will be a kind of a more divided, difficult place for Andy Burnham because he's decided to do a much, much more radical and rewarding to his supporters reshuffle than you've seen in the past. It wasn't what Rishi Sunak did when he took over. It wasn't what Gordon Brown did in 2007. It's a break with that political strategy.

16:57I thought what was interesting, you're completely right, there's a kind of clear out. They may not have spotted, I know this sounds bizarre, but these rush reshuffles, you can get kind of lost in the weeds a bit and miss the sort of overall picture. Because I think they'll want, probably they started with, there are various people we've got to reward.

17:16George Osborne: Lucy Powell's got to come back in. You know, Lou Haig's got to come back in. Some of the people, you know, who were sort of early supporters of Burnham, like Miata Fambula, she's like coming back in. But of course, then you sort of look at the kind of overall impression. It's, as you say, sort of the people who get punished are the people who didn't make a noise, who were sort of just getting on with it, who were the sort of, as you say, the Starmer loyalists.

17:41Ed Balls: I thought there were a couple of... I think that they were more Labour, kind of like cabinet government loyalists. I'm not sure they necessarily had a huge loyalty to Keir Starmer. Some of them will have been. Oh, sure. But it was more that they thought, you know, it's not clear that we should break up a divide in this way at this time.

17:55George Osborne: So there were a couple of very strong appointments of sort of junior ministers who've been promoted to at least sit at the cabinet. So Kanishka Narayan, who's a really smart minister now, the minister for AI sitting in the cabinet, and Hamish Faulkner, foreign office minister, who's essentially promoted into that Europe job.

18:15Ed Balls: They've abolished the science technology department. How do you feel about that?

18:18George Osborne: Well, I was never a big fan of the department, actually. It was a William Hague idea that he suggested to Rishi Sunak. Sunak adopted it. And normally, I agree with everything William says, broadly speaking. But I thought at the time, it's too small a Whitehall department. It's not strong. In Whitehall terms, it didn't have a big enough budget, didn't have enough clout. And I think it will be the AI brief, the technology brief, which is very important for the economy, now sits in a bigger department back in business.

18:50Ed Balls: Good Secretary of State, Johnny Reynolds, who will have much more clout in cabinet now because of this bigger department.

18:55George Osborne: Right. So I thought that was good. And I thought, you know, appointing, promoting rather, Kanishka and Hamish was good. I mean, in passing, I note, Kanishka went on a full scholarship, it should be said, to Eton and Hamish went to Westminster. And indeed, the balance of this whole radical left circuit breaking government that's anti-market and, you know, tearing up the last 40 years. the end result of all of it is around 40 % of the cabinet ministers are now privately educated, whereas under Keir Starmer, it was less than 10%. So it's anti-market up to a point, anti-private sector up to a point.

19:29Ed Balls: You know, George, from your time in your school, there would have been lots of lefty radicals, wouldn't there? There were, of course. Financed by their trust funds. Of course. Well, Clement Attlee and Tony Blair, the two most successful Labour prime ministers ever, were privately educated. So I thought there were some good appointments, but what I didn't,

19:45George Osborne: I thought if you were going to get rid of a load of cabinet ministers and make a circuit break, to use again, Prime Minister Burnham's phrase, I thought it was interesting he didn't promote more of the sort of young. You could have done a big kind of injection of new blood into the cabinet because a lot of these faces, they may be new to the cabinet table as of like this week, but they're quite familiar faces. They were in Starmer's cabinet. They've been in the shadow cabinet. So I thought there would be more of a kind of changing of the guard than we saw.

20:17Ed Balls: Although I think, let's see how this develops. And don't forget, there's going to be big issues to deal with in the autumn, particularly around asylum and immigration. The cabinet does not have a big influx of 2024. In fact, some of the cabinet ministers who came in recently, people like Lucy Rigby was the chief secretary. She's now a junior treasury minister. But there's been a big influx of 2024 MPs into junior ministerial ranks, promoted by a chief whip who came into parliament in 2024. And a lot of people, and we listed that whole group of more experienced cabinet ministers who are now on the backbenchers, but also that a lot of people in the junior ranks with more experience, somebody like Mary Cray.

21:06Ed Balls: Mary Craig wouldn't have been a Burnhamite or a Stammerite, but she got on with the job. She's now out. And I think the lesson of the welfare rebellion last year was that although Lou Haig was involved in it and there would have been quite a lot of agitation from some more junior backbenchers, new arrivals, actually it was select committee chairs and more senior MPs who'd been around a long time rebelling, which was really destabilising. and you've just got to watch it in this parliamentary Labour Party, but you don't have coming up the new MPs with a chief whip from that intake and the older members of the PLP and the ex-Cabinet ministers thinking, well, let's hope they know what they're doing, with a slight worry that their time may have passed.

21:51Ed Balls: And of course, that kicked off with Darren Jones Tuesday morning. I mean, this is astonishing. Andy Burns hitting the ground running. As I said, three policy announcements. They are indications of where he wants to go. They are make-a-feel promise deliveries, quite small money. And of course, Andy Burnham says he's going to cut VAT on electricity, not on all heating, from 5 % down to zero. And it's going to cost around a billion pounds. And it's going to be paid for by saving the money from the ID cards, which he's decided not to go ahead with. Darren Jones comes onto Twitter, onto X, between 7 and 8 in the morning, Tuesday morning, and saying, good to cut VAT, but this is an unfunded tax cut.

22:40Ed Balls: There was no money allocated for ID cards in this year. They'll have to find the money in the budget. Now, I mean, in passing, I mean, kind of bitter, angry thing to do. In passing, quite what Darren Jones was doing, championing a policy in Downing Street for which there was no money allocated. I mean, why wasn't their funding allocated? But for him to come out and do that, let's hope for Andy Burnham and his government. This is not a sign of things to come because you don't want people like Darren Jones thinking that that kind of lashing out at the cabinet from, in his case, a position of knowledge is something to be repeated.

23:16Ed Balls: I mean, you know, goodness me. Yeah, well, we will come on, won't we, and talk about the pressures facing John Healy. But one of them is going to be, you know, bitter and disappointed ex-ministers.

23:28George Osborne: Just one appointment I want to ask you about. Miata Fambula, she becomes the energy secretary. She's obviously a bright star, very smart, rising up the ranks of the Labour Party. You can see why he moves Ed Miliband out of the energy brief. And there's been lots of rows about net zero. And, you know, the Conservatives in the midst of all of the melee of recent months won a by-election in Scotland, in Aberdeen, on this kind of oil and gas issue, which Miliband had kind of set his face against doing more drilling. And yet, if you look at her record, she's actually more zealous even than Ed Miliband on net zero.

24:05George Osborne: That I thought was, I mean, it's slightly counter to my theory about economic populism and sort of left wing radicalism. I thought it was a sort of odd decision. Maybe they just didn't. Again, when you've got a lot of moving parts, I think people assume there's a sort of perfect knowledge at the centre of Downing Street and they've kind of thought this all through. But they might have been surprised by the reaction to her appointment.

24:28Ed Balls: I think they won't have been surprised, but they decided that was the price they had to pay. As you said, she's one of the few people who think Ed Miliband is insufficiently radical in his approach to climate change and net zero. And she's very smart, but her track record of things she's said and written about in the past are at the radical end. But Ed Miliband was not made the chancellor and he would have been furious and let down. and I'm sure he made Miata taking over his job to carry on his work, you know, the price for agreeing to that. Miata, of course, had been working on all of the policy papers with Andy Burnham and his team on behalf of Ed Billaban.

25:11Ed Balls: They were doing it as a collective and suddenly I'm told that stopped about a week and a half ago and that policy cooperation ended. So I think Ed would have said, I'm only moving to foreign if Miata takes over and they've decided to do that she's up to Scotland today as you say I expect you know some sparks to fly in the coming months and they were not unaware of that that is a choice they felt they had to make maybe it wasn't really a choice at all let's just move on to the other aspect of the last few days we had these announcements The other thing we've seen, on Monday, Andy Burnham did his speech in Downing Street.

25:55Ed Balls: The golden rule of doing a big speech, whether it's a budget like you did or a conference speech, once you've done your big speech. This isn't your golden rule, which, you know, no more do than that. It's a different golden rule. It's an important rule. You don't then go and kind of trample all over your own story. You want that to be the big news. Andy Burnham then on Monday afternoon brought in all the political editors into Downing Street and then had a sort of musing conversation with him where he just set a whole series of hairs running. He said he wanted to have more flexibility within the fiscal rules.

26:29Ed Balls: He started talking again about the importance of having a national care service like the National Health Service, which is, you know, a huge hair to set running. He talked about income tax thresholds being frozen and whether he wanted to kind of move off that. And so there was a swirling in Westminster of all these different news stories. But you got to Tuesday morning. The Financial Times is reporting number 10 saying, no, in fact, Andy Burnham isn't saying he's going to unfreeze tax thresholds because that would cost billions of pounds. It was something he heard, not something he's doing. And then the next day when he's on a visit, he opened it all up again.

27:13Ed Balls: He started talking about the importance of income tax thresholds. And I think there's two things going on here. One is he seems very happy to really raise expectations around things, not just defence, which will cost billions, social care, which will cost very many billions, income tax threshold unfreezing, very many billions. but also that he's happy to sort of, you know, to muse to the media about things he would like to do. It's worth just listening to this clip where he's challenged on this. You also said on Monday that the complaint you heard most often on the doorstep was about the freezing of the personal tax allowance.

27:54So are you going to do something about that or not? Well, it's funny these days. You can't answer a question honestly without them people reading everything else into it. You are Prime Minister. It was, yes. But I want to answer questions honestly in this job, as I said before. I think that's all about trusting politics and doing politics differently. And I'm determined to keep working in that way. It was raised a lot. But I then went on to say, but we'll have to look at it at the budget.

28:23Ed Balls: So in the budget, he's looking at defence spending. It's billions of pounds to get to where John Healy went beyond the billions of pounds to fill the current funding gap. Social care reform. If you go to an NHS style free at the point of use, not just personal care, but all care. I mean, it's very many billions. Unfreeze in the personal allowance, billions of pounds. And he seems to be happy to see expectations boosted in this way. Quite what the Treasury thinks about it, I don't know. But how do you feel when you hear him answering questions in that way? Is this authentic and smart or is it dangerous?

28:59Well, I think when he says, you know, you can't, what is it these days? You can't answer questions. There's nothing about these days. A prime minister speculating about the personal allowances at any point in my lifetime would have been front page news because it's a huge and expensive tax change. It's basically an income tax cut.

29:16George Osborne: It's what I did as chancellor. The income tax personal allowance increases. I did them in every budget and they were phenomenally expensive. You know, they were the kind of central domestic tax policy, the central kind of personal tax policy of the government at a huge cost for other things. And they've been frozen since 2021 by Rishi Sunak. And that's why they're biting. Like always in life, there's no such thing as a free lunch, certainly in Treasury politics. If successive chancellors, including Rachel Reeves, thought they could get away with freezing tax louses, people are starting to notice because it's a big income tax...

29:50George Osborne: increase on people and they see it in their pay packets, even if they don't necessarily understand exactly why they're paying more. So I can see why he's kind of, he's responding, you know, that's the kind of Burnham who's got his kind of fingertips on the pulse of the public, who's just fought a by-election, who knows what the issues are and fits into this piece of like, you know, I'm going to relieve the pressure, I'm going to give people breathing space. But the reality is you've got to pay for all of this. And I guess I would sort of conclude before we move on to the treasury stuff. He promises a circuit break, but the policies like cut business rates for pubs, abolish the ID scheme to pay for a cut in VAT on electricity, undo the cap on bus fares.

30:31George Osborne: It's not like anyone else hasn't thought of these policies. In fact, we've just had a Labour government for the last two years. The reason why people haven't done them in the past is because they've been very expensive and they're bitty and people in the end have sort of looked at the treasury numbers and said we can't afford it. Now, that's the big question. Okay, all very well saying you're a big circuit break, but if you're constrained by the fiscal rules, can you actually deliver that? And he hasn't yet.

30:57Ed Balls: But I'm going to go back to where I started on the Monday speech. This felt to me like the end of Andy Burnham being mayor of Manchester. If you're the mayor of Manchester, you can't cut business rates in this way or cut VAT. And finally, he can. And if you're the mayor of Manchester, you can get the political journalists around and muse about things you'd like to do, because they weren't things you could do. They're things you'd like to do if you could do them. But in fact, they're things which have got to be done by the prime minister and the chancellor down in Westminster. And for the last 16 years and for the last 10 years out of Westminster, most of them as mayor, he's been able to just talk about things he'd like to do because nobody thought he could.

31:40Ed Balls: And the moment you're the prime minister is different. Because if you say it's what I want to do, people think, I know, but you're the prime minister. If that's what you want to do, you can do it. I feel as though we've seen the final days of the mayor of Manchester. And the question is, what kind of prime minister Andy Boleum is going to turn into? I don't think it's happened yet. And that is fascinating to watch.

32:03George Osborne: But why is there not some, maybe it's coming in the next few days. This will be immediately out of date. where's the big sort of radical policy shift these things they came across my desk they came across all the chancellors since they're exactly what by the way there's no reason why a tory chancellor couldn't have scrapped the id scheme to pay for a cut i mean these are not intrinsically labor but where is the big you know by this point in the new labor government you were making the um bank of england independent i mean and having a where is that yeah where's the utilities for a new deal where's the big decision to i don't know rejoin the eu customs union or the big the big you know exactly where's that now maybe it's coming you know we're only three or four days in

32:46Ed Balls: but he said he said his arrival is the most significant moment in british politics in 40 years which by the way is more significant than the end of margaret thatcher the fall of the berlin wall the erm crisis the global financial crisis the emergence of china the global pandemic, the EU Brexit referendum. I mean, more significant than any of those is the arrival of Andy Burnham as Prime Minister, breaking for the last 40 years. We are yet to see its full significance. I think that's a bit of an understatement. Instead, it's a little bit, talking about the pub rebate, it's a bit of a small beer so far, but who knows, the main course might be about to come.

33:28George Osborne: And the person who's going to be central to that thinking is the new chance the exchequer John Healy and we're going to turn to him and the Treasury next.

33:48George Osborne: So welcome back. So here's an apology. You listened to this podcast expecting to get key insights into what's going to happen in British politics and you never heard Ed and I discussed John Healy becoming Charles the Exchequer. We had a long conversation about whether Shabana Mahmood would do it or Ed Milliman would be doing it. Healy was not on anyone's radar. And I'm going to say to you, Ed, because he was a junior minister in the Treasury years ago when you were an advisor, I think, at the Treasury. And when I was a shadow economic, junior shadow economic spokesperson for the Tory party, John was on the other side as a junior minister.

34:25George Osborne: and we'll come on and talk about his personal characteristics, but he's an exception. He's sort of a nice and civil man. I would say to you, of all the junior ministers in the Treasury at the time who came through, you would not have predicted that John would one day be the Chancellor's Checker, would you? Let alone predicted last week.

34:44Ed Balls: I would not have predicted he would have been the Chancellor when he was back in the Treasury in those days. But of course, we're talking about 25, 30 years ago. He was Gordon Brown's parliamentary private secretary soon after the 97 election, then short period as a skills minister. Then I think he was both economic secretary and financial secretary for a number of years. He was never appointed fully to the cabinet by Gordon Brown, 2007 to 2010. But he then stayed in. Thanks, Gordon. Thanks for the loyalty to the principal private secretary. But then he stayed in the Corbyn years and was the defence spokesperson in opposition for Keir Starmer and then defence secretary and then, of course, resigned in a very dramatic way.

35:27Ed Balls: But no, it wasn't on either of our radars or it turns out anybody in the political reporting world. Lots of egg on the face of political journalists. I just think it's worth unpacking for a second what's gone on here, because we talked a lot about Ed Miliband. Ed Miliband clearly thought he was going to get the job. In fact, I think he believes he was promised the job. And then that changed. I think that back two, three, four weeks ago, his conversations with Andy Burnham were absolutely, he was going to be the chancellor. But then things did. And this has been reported in the press. And then that got changed.

36:04And we should say Ed had played a key role in telling Starmie he had to go. This is a former leader of the Labour Party inside his cabinet. So Billiband was critical to kind of clearing the path for Burnham in avoiding a civil war, in allowing an orderly transition.

36:18Ed Balls: But also in doing a lot of the policy work for Andy Burnham's first days in power, his people were being seconded in working on all of the policy work. And then suddenly that all stopped. Now, there's one theory, which I don't think is right, that Ed Miliband wasn't trusted by the financial markets because I think he was working hard to sort that out. There is another theory that originally there was a plan in the Burnham team to break the Treasury and to make the Treasury a narrower finance ministry and have the kind of growth public spending functions moved outside. And that they didn't think that Ed Miliband would be willing to go along with that.

37:07Ed Balls: I think they then pulled away from that and thought, actually, no, that won't work anyway. So we need to make sure that the Treasury is going to be kind of pliant and will serve number 10, the cabin office number 10 north. And they doubted whether Ed Miliband would be agreeable enough, whether he'd be too independent. Although I have to say, when you think about Nigel Lawson, Gordon Brown, you, I mean, you were never kind of pliant and agreeable. I mean, I never thought that was a good strategy. But for whatever reason, they decide that Ed Miliband is the wrong person. What then happens is...

37:43George Osborne: But they must have known, sorry, all those thoughts about Ed Miliband you could have had weeks ago. You don't need to lead him up the garden path. I mean, we had discussed on this program, as everyone else had, well, you know, he's going to have an issue with the bond market and the business community. or he's going to be his own person. That's quite, again, a big sort of important figure in the lay body is in number 11. So you could have anticipated these things several weeks ago. You don't need to let the speculation run until Monday, right?

38:10Ed Balls: That is true. But clearly, Ed has spoken to Andy, but other people are coming into these discussions. I think Lou Haig was there from the beginning. She has strong views on these things. James Purnell comes in as well. I don't know the nature of these conversations. Clearly, something changes. And then into which comes Shibana Mahmood. As we discussed last week on the podcast, she doesn't have an economic fiscal track record. She has an important job to do in the Home Office. She now says she wanted to stay at the Home Office. There's no doubt in those days last week, her people were absolutely talking up Shibana Mahmood to the Treasury.

38:49Ed Balls: that sort of breaks out to such an extent that you have the Financial Times, the Times, all reporting this as a foregone conclusion. Did Andy Burnham always know two weeks ago when he decides against Ed Miliband, he's going to have John Healy? Does he look at this outbreak of briefing and think this is totally unruly and outrageous? And if Shibana Mood's people are behaving like this, well, I don't really want her in the Treasury, how that's going to go. Did he decide, actually, if I want somebody, Think of our tests. Economic track record, John Healy, years in the treasury. Commitment to the Manchesterism model.

39:26Ed Balls: I, with John Healy, were writing pamphlets in the early 2000s about regional devolution and the regional development agencies before Andy Burnham got onto this agenda at all. John's track record of this goes way back. Are those pamphlets still available? They're all still available. Have they been remaindered? No, they are. I mean, I think they are regularly cited by academics around the world, actually, George. In fact, they laid the foundations for the work you then went on to do through the Northern Powerhouse. And we were there while you were still messing around at university and writing these pamphlets.

39:57Ed Balls: You then have John Healy as a communicator. John Healy is not a West Street team, but he has shown in defence an ability to do chancellorial style communication. Totally solid, I would say, on the fiscal rules. Interesting thing to come back to. But did they decide that John Healy would be willing to be the sort of supporting, in lockstep, you know, number two to the prime minister, that they by this point had concluded Ed Miliband might not be and Shabana Mahmood might not be and that therefore, you know, he was the guy to come in and allow, without breaking up the treasury, you know, the treasury to be deferential to number 10.

40:39Ed Balls: Was that their thinking?

40:40George Osborne: Well, we don't know. There was a reason why John Healy was not speculated about, and it wasn't just that he'd left the Cabinet. I don't think people thought, you know, this is going to be the radical thinker Andy Burnham wants at the Treasury. You know, he's talking about tearing up this neoliberal consensus. He's talking about, and I'm going to repeat it because it's like his speech on the steps of Downing Street, circuit breaking from the last 40 years. I don't think anyone would say, send for John Healy to do that. You would think of John Healy as being very reliable. Well, maybe Keir Starmer would have said very reliable until he resigned.

41:14George Osborne: But generally, a Labour loyalist, very solid, hugely experienced, as you say. But, you know, there's a former Treasury Permanent Secretary, not Nick McPherson, who makes the point that there are two types of Chancellor. There are those who are creatures of the Treasury and those who make the Treasury their creature. and the kind of risk for John, I think, is that he allows himself to sort of become kind of captured by the Treasury and he's just a sort of mouthpiece of the Treasury rather than being his own independent thinker, despite those famous pamphlets he wrote with you. He's quite a safe choice for Andy Burnham.

41:51George Osborne: I'm very happy to be proved wrong. I mean, this is not the guy who's going to be the kind of, the guy who really shakes it up and drives a kind of radicalism at the heart of the British government.

42:04Ed Balls: Let's listen to John Healy on Monday night as he arrives at the Treasury. So for me, as for any chancellor,

42:13George Osborne: fiscal control must be the first duty. It is mine. But am I being fair? I mean, he's not a Labour radical, is he? He's not going to be the kind of radical engine of the government. You know, people said, to Gordon Brown's credit, that a lot of the most kind of original thinking in the Blair government was coming out of the Treasury. a lot of the lasting policy changes. Clearly, that's the case with Lawson and Thatcher. Am I being unfair on John here?

42:39Ed Balls: I think you might being unfair. And I think some of the reporting about John Healy has been unfair in the last few days. There's been some speculation that, is he going to be an Alastair Darling-style Chancellor? Somebody, as you said, who's very treasury, quite orthodox. There were two Alastair Darling -

43:02George Osborne: We should just pause for a moment on that, because I think it's interesting. A lot of people would respect Alistair. I mean, the late Alistair Darling. And, you know, he became a sort of non-partisan figure, much to the enormous irritation of Gordon Brown's Downing Street. And so I think a lot of people liked it. But I think if you were sitting in number 10, you would be going like, he's not doing what I need him to do. He's not delivering the political attack on the Tories. You know, where is the kind of a radical thinking that, you know, I want to get myself out of this hole? So, you know, when you talk about Alistair Darling, I think it's worth unpacking that there will be two views of him.

43:38George Osborne: One was he did the job as you would expect it to be done in a crisis. And others saying he did not deliver for Labour. And I think you're all making the point that John could be the former, couldn't he? He could be the kind of treasury, the man from the treasury, rather than the man from Downing Street helping the Downing Street operation.

43:57Ed Balls: I think the important thing is that there were two different phases of Alastair Darling. Alastair Darling in 2007, before the financial crisis, is absolutely brought in to be the pliant chancellor to support the brown reforms driven by number 10. And that's the role Alistair Darling had always played in the Treasury and in other departments in the years before. But that then switches to, by the time you get to 2008-9, Alistair Darling has become much more obstructive to Gordon Brown, much more independent, not going to be pushed around at all. I think that John Healy is much more likely to end up in the latter Alistair Darling than the former.

44:42Ed Balls: I mean, he will want to work with... It's a very good point. Yeah, he'll want to work with number 10. But if number 10s start behaving in ways which John Healy thinks is contrary to fiscal discipline and the right way to do things, he will absolutely dig in. John is quite strong and can be quite obstructive. I think there's two other points about John Healy. First of all, compared to Alastair Darling, John's always been more of a reformer. He's interested in ideas and change. He drove growth policy in the Treasury as financial secretary in skills policy. When we did work together, it was about ideas and new.

45:15Ed Balls: Alistair Darling never engaged in policy innovation in that way. That wasn't his things. He closed things down and managed them rather than opened up new ideas. But the second thing, and this is so important, Alistair Darling at no point between 2007 and 2010 was dominant as an economic financial figure relative to Gordon Brown. Gordon Brown had been the chancellor for 10 years. He was leading the global financial crisis. John Healy has much more economic financial treasury backstory than Andy Burnham. Well, Andy Burnham was chief secretary. For a very short period of time. He doesn't have that sort of depth of experience.

46:02Ed Balls: And, you know, Andy Burnham is not going to say to John Healy, you know, in my judgment on the economy. and in that moment just supervene in the way that Gordon Brown could against Alistair Darling, and let's be honest, I think often should have done more, and we might disagree about that. And that was where the sparks flew. I think that John Healy will have much more ability to say no with economic financial credibility if he chooses to do so. So is John Healy going to be a chancellor who jumps to the number 10 tune? I think only if he thinks it's the right tune. And that doesn't mean he's anti-reform.

46:45Ed Balls: But John Healy will have a view about what's a good reform and a bad reform. And if you think it's not going to work, you'll say no.

46:50George Osborne: Do you think as a person, as I've always gone on pretty well with him, and as I said, I shadowed him. Is he ready to be very unpopular? because, you know, Rachel Reeves two years ago was popular. You know, she thought she was going to have five years as a radical reforming Labour Chancellor, first female Chancellor. And, you know, she ends up being deeply unpopular with the British public because of the decisions she's had to take. You know, John's only thing is we should defend our country. I've got this plan to spend a load more money on defence. It's up to you lot to work out how to pay for it.

47:25George Osborne: And then when they don't, when they can't work out how to pay for it, he resigns. and the service chiefs applaud him and the Tory press says he's our guy. And he's now, he's coming into a very, very difficult economic situation. The arrival of Andy Burnham has not created more money. He hasn't created a magic money tree. If anything, it's taken some of the fruit off the magic money tree. And it certainly raised expectations. Right. So is John ready? Because being a Labour chancellor is actually a very difficult job. I mean, Gordon Brown pulled it off. in a way that no one else has. But normally they can become very, if you think of Philip Snowden, if you think of Roy Jenkins, you know, Dennis Healy, you know, they get booed at the conference.

48:11I think if you're a conservative politician, being the chancellor is, you know, you're not going to be the prime minister, the sort of apex. But for often in the Labour Party, as I said, with the big exception of Gordon Brown, it's a, you know, much hated job because you're

48:24George Osborne: the guy telling the Labour movement, I'm sorry, we can't break the consent. We can't break the markets. We can't ignore the bond markets. We can't afford it. And no one on the centre-left of politics wants to hear that, right?

48:39Ed Balls: So look, there is no way that John Healy would have abolished the winter fuel allowance. No way. Because he's got more political touch or what? Because he's got more political touch. There is no way that he would have got into the same mess on welfare reform, because John, of all the politicians I've seen, is one of the most assiduous about working with parliament colleagues, the networks amongst the backbenchers. I mean, he's just very, very good at that. You saw that on the defence side as well. So he won't end up isolated and making mistakes, which the PLP just can't understand. I think he will be willing to be unpopular, but he will be obviously worried about being unpopular because John Healy will not think like Roy Jenkins in 1967-68 or maybe Alistair Darlene in 2008-9, my reputation is more important than the next general election result.

49:33Ed Balls: You don't want to be one of the Labour chancellors who goes down feted by the Tory press as you lose the next election. So in that sense, he's much more in the Dennis Healy mould as a Labour chancellor. But the problem is that the economy is under pressure. The fiscal position is getting worse. He will be dogged about sticking to the fiscal rules and won't think, I mean, I think if he can find sensible flexibility within them, fine, but debt needs to be falling as a central GDP. And for John, that will be non-negotiable. But he's got, you know, a health service, which is struggling, massive expectations from Andy Burn about social care reform, John Healy embodies by his very existence, the fact that even if he finds 5 billion this autumn for defence, it's not enough.

50:18Ed Balls: Because John Healy's own letter said, if you don't get defence spending to 3 % of GDP by 2030, not only the armed forces less prepared, but our country will not be safe. And if the first duty of the Prime Minister and the Chancellor is to keep the country safe. They've got to spend on defence. Now, can they even wait for the budget? The expectations are so high now. And what does he do? He could decide to go and do a list truss and say, forget the fiscal rules. We can borrow for growth. No way will John Healy or any Labour or Conservative chancellor do that. He could come along and say, look, let's find some fiddling tax rises to fill this gap.

51:01Ed Balls: We know that won't work, but John Healy will know that won't work because he's spent enough time in the Treasury to know if you need billions, it's very hard to get that by a tinker here or a tinker there. And he'll be worried about international signals. Is he going to come along and say with Andy Burnham, look, the manifesto, which John Healy fought the election on, was a mistake. And we have to own up to that now. I think you could have done that in the months after the general election 2024. It's very hard for John Healy. Sorry, you could have done it this week, couldn't you? I mean, you could have done it.

51:34What I mean is Andy Burnham could have done it right at the start, but he hasn't. He's actually reattached himself to Labour Manifesto.

51:39Ed Balls: I just don't think Andy Burnham could have done that because his mandate is for Makerfield. He had to say, I'm sticking with the Labour Manifesto or else his legitimacy is just so threadbare. The alternative thing you say is, look, as Andy Burnham said, it's a 10-year plan, not a 10-month plan. And on the health service and on the cost of living and on social care, it's going to take us 10 years. On defence, take us 10 years. According to John Healy, Putin's on our doorstep. The country's not safe. So the danger for Andy Burnham and John Healy of a backlash if they then try at this point to depress expectations, to say, you promised the biggest change for 40 years, and actually you told us we're going to wait 10 years.

52:26Ed Balls: Goodness me, I personally would have been shaping expectations more aggressively about how hard and long this is going to be. But that's not what Andy's doing at the moment. Can John Healy and Andy Burnham get to the budget being a 10-year plan? Maybe that's the only option they've got unless the economy grows much more strongly this year and the public finances are much better and that suddenly bails them out. I mean, put your finger in the air and hope. Well, I tell you, it's one of those things, if they have an early general election in the autumn, you will look back on these last few days and maybe the weeks to come and say, well, of course, he was laying the groundwork.

53:05They're not making the big, difficult decisions. They're not confronting the straitjacket they're in. They're pump-priming Labour's chances at the polls with some populist moves on VAT and business rates and bus affairs and so on. And they're going to do a short run to the election, maybe get Ed Miliband to tilt left on foreign policy and Gaza and stuff as well to shut down the Greens. And bang, that's the way down the straitjacket. Go and get yourself a new mandate.

53:32Ed Balls: I mean, that is absolutely a strategy. And if that's what you were doing, you would say, as Andy Burnham has said, that is not my plan. I mean, the last thing you want to do is set that hair running. The polls have got to improve quite a lot. But how do you break out of the tax 24 manifesto hole other than by that route? I think the only way is to say, it's going to take 10 years and say, we're going to have to wait for social care reform and the defence of our realm and a better national health service and a break from neoliberalism. But that's what Keir Starmer and Rachel Reeves were saying.

54:09I mean, there's a reason why almost 20 % of all Labour chancellors have been called Healy. Did you hear that? And the reason is it's very hard being the Labour chancellor and the history has not been great because, generally speaking, Labour prime ministers have not been re-elected for full terms. And Keir Starmer was obviously not. There's another one who just failed in that test. So we will see.

54:30Ed Balls: And the other thing, of course, which Andy Burnham is about to learn, because I'm not sure this had a big impact in Manchester, but John Healy will know very well because he's been dealing with this for the last two years as Defence Secretary and all those years in the Treasury, that what actually is going to really shape the growth public finance situation is entirely out of their direct hands. It's shaped by what's happening in the wider world. We're going to turn to that last.

55:09Ed Balls: So welcome back. Andy Burnham wants to give people breathing space on the cost of living. He wants to see people's energy bills coming down, to see their personal finances improving, the economy to start growing. But that is so dependent on what happens in the wider world. I mean, whether or not... Are you sure?

55:30George Osborne: Hold on, Ned. I mean, Andy Burnham has said the only way to control prices is to get their hands on public utilities. I don't know if you saw, he says that's the direct way to manage inflation. Maybe he doesn't believe in all this kind of open economy, you know, ideology that we've all signed up to for too many decades.

55:48Ed Balls: Look, the oil price has just gone above$90 a barrel. It could go higher than that. And by the time you get to October, we may find energy bills, because of the price cap set by global prices, blow out of the water. Any improvement in people's finances.

56:06George Osborne: You're not getting with the program.

56:07Ed Balls: I think we're in a global economy. And let us be honest, we've had 11 days of firing in the Straits of Hormuz. This is how Donald Trump kind of launched this new offensive just a week or so ago. Do you anticipate that the strikes we're seeing this week against Iran will expand? Are you considering hitting energy targets or other locations inside of Iran? I'll save the energy targets for last, but ultimately we'll hit energy targets, yeah. But we're going to hit them very hard tonight. We're going to hit them very hard tomorrow night. We're going to hit them very hard the night after. and then next week it gets really bad for them because next week comes the power plants, next week comes the bridges.

56:56We're going to knock out all their power plants, we're going to knock out all their bridges unless they get to the table and negotiate.

57:03Ed Balls: The agreement negotiated between America and Iran, coordinated by Pakistan, is still in place, but it looks threadbare. We've now had 11 days of strikes. As I said, oil is not flowing through the Straits of Hormuz. The oil price is up. I would say the financial markets are starting to think, you know, maybe things are going to go sour in the second half of this year. This is a very, very difficult backdrop for Andy Burnham going into his autumn budget. Yeah, it is. And let's be honest, he has next to no influence over it because he has next to no experience over it.

57:42George Osborne: I mean, he has retained Jonathan Powell, who is in some of these conversations on Iran, but overall Britain's voice, which wasn't huge, I suspect is even now somewhat diminished because Andy Burnham will have no direct line into the White House at all. there's a kind of risk for him isn't there because i think he will be tempted to follow the example of mark carney anthony albanese the kind of center leftish leaders who have set themselves up against trump albeit you know not not in um over the top ways but you know held their ground and so on and he will probably think kia starmer made a mistake sucking up to trump early on but it does expose you because going up against the world superpower particularly when it's led by president trump is not costless and i was thinking if you were sitting in downing street what's the last thing you need now as you're trying to focus on your domestic agenda it's donald trump to suddenly announce probably without even warning you that the uk is going to be subject to new tariffs because of the new prime minister i mean he's already announced donald Trump in the last couple of days, tariffs against Canada and so on.

58:57George Osborne: And you could argue that one of the Starmer achievements, I mean, sorry, I think it's undoubtedly a Starmer achievement that he sort of spared Britain the worst of the Trump tariffs that other countries faced. And that was the sort of price of appeasing the president. Well, if, you know, I suspect at the moment, it's not like Donald Trump sitting there saying, oh, I really like this guy, Andy Burnham. He just thinks he's a sort of lefty mayor from some town. And he probably does know a bit about Ed Miliband because he rages on about energy and net zero and windmills and so on. And he'll be told, you know, Ed Miliband's the new foreign secretary.

59:34So, you know, there is definitely a risk here. Now, as I say, Burnham may kind of turn that into his advantage if we continue the theme of the podcast, wants to kind of lead a kind of populist left agenda and ramp up possibly even to an election in the autumn.

59:48George Osborne: But if you're just trying to get the British economy through this period and nurse it through these international pressures and create that central thing he's saying he's going to do, which is create a breathing space for the British public, then a bunch of tariffs, inflationary tariffs on the UK is like the last thing you need.

1:00:05Ed Balls: There is an advantage in politics sometimes of being a blank sheet of paper. When you are kind of fighting an election and before you've got to making decisions, people can look at you and they can see what they want to see. And they can see reflected maybe the image that they have in their own mind's eye of what they are after. And Andy Burnham in foreign affairs, including with Donald Trump and with European leaders, is a completely blank sheet of paper. That gives him latitude as well. He can choose his path. The danger of it is if you're a blank sheet of paper and then you step into a big role, the danger is you get very quickly defined.

1:00:48Ed Balls: And because what you say at the start has much greater signaling significance. And that's why I think Andy Burnham is probably going to be very cautious about how he goes about this. But as you say, Ed Williband is much more defined and they've chosen to put into the foreign office somebody who has as a past Labour leader. I mean, Ed fought the 2010 leadership election on foreign policy against his brother. And his first conference speech in 2010 was striking about what it said about America and Israel. Andy Burnham, and the same was true with me. we weren't choosing. I was on the economy, but on foreign affairs, neither of us were choosing to find ourselves in that way.

1:01:33Ed Balls: You mentioned Gaza earlier. I should say in passing, I meant to say this to you. I remember there was a time when I would have said no one who voted for the Iraq war could ever lead the Labour Party again. But of course, Andy Burnham did vote for the Iraq war. He did. Because I thought at that moment when Ed Miliband won the leadership, Labour had said, you know, never again could we have someone. But anyway, I merely observed that in passing. I merely observed that if Ed Miliband had been an MP in 2001 Parliament, he would have voted for the World War. But there we are. Anyway, on Gaza, there will be a move on Gaza.

1:02:09Ed Balls: It's already happening. It already was kind of being prepared and talked about publicly by Yvette when she was Foreign Secretary. And that will work politically. And Andy Burnham will want that. On the environment, there is going to be a move now in foreign policy because Ed Miliband will pump up Britain's environmental global leadership ambitions. And I mean, I think that's a good group. Hold on, you say that. They funded the bus fare move by raiding the international finance that Britain provides for climate projects around the world. which is a hit on international development and on our climate change credentials internationally.

1:02:51Ed Balls: I have a feeling that that may have been agreed in the Access talks of which Ed Miliband was not a part. And when he and Miata Fanbola found out about that, I bet they were slightly appalled. And if they were grumpy before, they're even more grumpy now. The thing we know about the Trump White House is they hate all this environment stuff and all the North Sea oil stuff in a way which is slightly irrational. Why does Donald Trump care about whether or not Britain drills in the North Sea? Because he's got a golf course on the coast. I suppose so. And he was promised by Alex Hammond all these years ago there wouldn't be windmills and now there are.

1:03:25Ed Balls: But even if Andy Burnham decides more generally on Donald Trump to be cautious, is Ed Miliband going to take the same approach? It'll be really interesting to see because the potential for, as you say, Ed Miliband off his own bat on the basis of everything he said and clearly the Americans are 100 % expecting this and will react very angrily or Andy Burnham because he makes a strategic decision despite Jonathan Powell's advice that he wants to define himself in this way and goes for something more carny type approach if they do that against Trump and America which would definitely be Ed Miliband's political instinct based upon the last 20 years the potential backlash there is very great indeed, as you said, and that could totally cut across the cost of living agenda.

1:04:13Ed Balls: So Andy Burnham and John Healy do not have much influence over what is going to affect inflation and energy prices in Britain in the autumn. And to the extent that Andy Burnham gets drawn into left populism on America, the potential for the influence to be negative rather than positive on the cost of living agenda is I would say quite substantial and if I were Jonathan Powell and Ed Billiband and you know if you think about that that decision around using bases who did you have in in that decision a few months ago you had Keir Starmer Yvette John Healy and Ed Billiband was there and now if it was the same people who's it going to be It's going to be Andy Burnham, John Healy, Stilad Miliband, Miata Fambola.

1:05:05Ed Balls: How are they going to think about those decisions? John Healy has a very, very important role to play now in those four. I don't know if you noticed, but the Trump Under Secretary of Defense, Bridge Colby, has had a shot at this middle power strategy that Kanye and others have been saying. saying he said he said the other day the strategy was wasting valuable time money and political capital on a distraction and that people should get with the american program i've got one final question for you if you were in downing street running the communications operation would you pay a hundred thousand dollars to have the premium subscription which has just been launched for trump's truth social so they are charging a hundred thousand dollars for you to get It's essentially a quicker notice of what Trump tweets, which if you're in a hedge fund or in a financial services business, is absolutely critical because it moves the currency.

1:06:05It moves bond yields and so on. And it's a bit like a kind of Bloomberg tournament, except you're creating the news.

1:06:12Ed Balls: I was going to say that if the way in which your ambassador in America finds out the next move of Donald Trump, the White House and the administration is from social media, maybe you're not doing your job. having said that it's almost certainly the case that marco rubio um finds out um quite often the next move from the donald trump white house from what's posted on truth social and he's the u.s secretary of state so i think if you're the if you're the british ambassador you probably quite often find that out and in those circumstances you need the subscription yeah i think the state department will be coughing up to the trump coffers i suspect for all sorts of reasons.

1:06:56Anyway, that is it for this week's podcast. Wow, there's going to be lots to look at over the coming weeks as the Burnham administration settles in.

1:07:06George Osborne: And we'll be back next week to talk about that. But in the meantime, we have EMQs. That's going out on Monday. Unless you are one of our kitchen cabinet members, growing in number, our own army, you get it ad-free and in advance if you do that.

1:07:21Ed Balls: That's true. Gold subscribers as well get EMQs earlier, but they don't get the mug. They don't get the weekly newsletter, which is going to go on through the summer. And they're on the outside. They join Darren Jones in the purgatory of the backbenchers. Stay in our kitchen cabinet. You can always send us a question, social media or email at questions at politicalcurrency.co.uk. Please do send us a voice note. And we hope you enjoy our summer episodes. They're going to be great, I think. Yes. And also go and see The Odyssey. See you on Monday for EMQs. See you then.

1:08:04Thanks for listening to Political Currency. This has been a Persephoneca production.