Is Andy Burnham just Keir Starmer with TikTok?

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0:35Andy Burnham:This is a periscope moment where you look around the corner and say, what is actually about to come at us? How does he stop just being Starmer Mark II? How are you going to balance the books in this context without massively raising taxes or massively cutting public expenditure? He failed to take the action that he knew he should have done on the welfare bill because he was too worried about a rebellion by his own backbenchers. Helping people fight a war is bloody expensive. Things get even worse for Burnham as a result of him doing absolutely nothing at all in the Middle East. We have the highest growth in the G7, tick, but we also have the highest borrowing costs in the G7, cross.

1:22It is going to be challenging because the picture around the world is challenging and particularly the situation in the Middle East. And we will look carefully at all of those things. We won't take risks with people's living standards or with the economy as a whole. So we will take it all into account. It's why we wanted to do an earlier budget. That is Andy Burnham on the political outlook. For all the optimism and sunniness, this is a bleak picture going ahead of the budget. He's been called a traditional tax and spender with better TikTok.

2:01Andy Burnham:So what does he have to do to make this work? Expend some political capital? Cut the triple lock? Rejoin the EU? How does he stop just being Starmer Mark II? Welcome to the News Agents.

2:20Andy Burnham:The News Agents. It's John. It's Maitlis. And Andy Burnham has done a brilliant job since becoming Prime Minister of trying to project this sense of kind of optimism, hope that things can get better, that he can make a difference. It's the small things that will improve people's lives. But when you zoom out and look at the big picture of what is facing the British economy and the headwinds that they are facing, you realise that it's all pretty difficult. I mean, the cost of energy, what's going on in the Middle East, and we'll come back to that. Again, our energy costs are higher than anyone else's.

2:57Our borrowing costs are higher than anyone else's. We've just had the inflation figures, which show that there's going to be, because of the triple lock, a huge amount extra going to be spent on pensions. And how are you going to balance the books in this context without either massively raising taxes or massively cutting public expenditure at a time when, you know, the pledge is we're going to increase defence spending and all the rest of it?

3:24Andy Burnham:Yeah, I think it's worth saying that we are all, I mean, genuinely, we are all massively invested in this working. So this is not a sort of, oh, well, you know, got rid of the last one, the media got rid of the last one, now you're attacking the next one, what's going on here? It's more a point of taking stock and saying he's had this incredibly successful start. Things have gone pretty well, pretty much since the day of the Makefield by-election. He's got off on the right foot. He's made sort of tweaks that have created good vibes. He's definitely got himself out there. And his polling suggests that he's actually pretty popular.

4:00He's got a bounce for Labour on around 15%.

4:03Andy Burnham:Some of the pollsters don't quite agree with where he is. but let's say roughly for 15, 16%. So he's doing fine. But this is a periscope moment where you look around the corner and say, what is actually about to come at us? We've talked before on this podcast about the bond yields and what that does to every penny that we borrow, how much it is actually costing now. We've talked about the Iran war. We've talked about the fact that John Healy, who left his last job because he felt that he couldn't keep the country safe as Defence Secretary because the spending wasn't there, and now his Chancellor is kind of rethinking exactly what we might be able to spend on defence as a country.

4:48Andy Burnham:So that's tricky enough as it is. But I think there are suggestions now, and they are suggestions not from arch enemies, but from people who are genuinely supportive of Burnham, that he has to start sending out quite big signals that something is going to change, that he is going to do the thing that starts to reconnect or re-correct where we are now. And I want you to listen to Andy Holden. He appeared on our colleague Andy Marr's show last night, and he is formerly at the Bank of England and a really close advisor to Andy Burnham when he was in Manchester. Do you think there are areas in government spending that Andy Burnham and John Healy could cut without absolute uproar on the Labour benches.

5:32Listen, any step in that direction would cost you something in capital, political capital with the backbenchers and beyond, possibly. Ultimately, it's only by taking actions that come with a political cost that you convince financial markets that you are serious. The Achilles heel, the fiscal Achilles heel of this government thus far has been its unwillingness and or inability to cut public spending.

6:02Andy Burnham:Within financial markets, we've gone from the cautious optimism of the summer months to the studied skepticism of September. Show us something real. Show us it's for real. The market now suspects that this is a traditional tax and spend socialist government with better TikTok videos. It is such a damning assessment that all you are is just a kind of lipstick. You know, you could put lipstick on a pig, but it's still a pig. You're the polished version. You're the polished version of what came before. And, you know, I was at a thing just the other day with John Healy, the Chancellor of the Exchequer.

6:43And we learned absolutely nothing about what is going on or what the thinking is or, you know, how the government are going to square this circle. Because if it is right, if Andy Haldane's analysis is right, and I should say that the Office of Budget Responsibility, which is the body that kind of scores how well the economy is doing, it's kind of like Ofsted for 10 days. They will go through all the books and they will give their assessment. And that sets the parameters of what the budget will be, because you live within the OBR's recommendations. And if they score it, that actually there does need to be either a massive increase in taxes.

7:26Well, you can only do a massive increase in taxes, really, if you're going to break the manifesto pledge of raising income tax or raising VAT, things that the Labour government said they wouldn't do. Or you massively cut public expenditure, which will then be massive welfare cuts, because you do need to cut the cost of borrowing. Just one statistic. What we spend on interest rates are the debt that the government UK PLC has accumulated is 100 billion pounds a year and rising because the cost of our debt is so high because we're having to pay so much to the money markets to get that debt covered.

8:06And so what you're left with is that after the National Health Service, the biggest area of government expenditure in this country is our debt. And it's getting worse.

8:16Andy Burnham:So you mentioned political capital. And what do we mean by that? We essentially mean that one of the most significant moments of Keir Starmer's premiership was when he failed to take the action that he knew he should have done on the welfare bill because he was too worried about a rebellion by his own backbenchers. In other words, he wouldn't spend political capital. I mean, to break that down, it just means pissing people off, right? Essentially, it means will you actually turn around to your own party and say, we have to do this. You've got to come with me. And I guess the point is that the problems remain the same for Andy Burnham now.

9:00Andy Burnham:And the welfare bill remains the same for Andy Burnham now. And the defence budget remains the same for Andy Burnham now. And the whole question around the triple lock, which is, you know, we keep on coming back to, which is do pensioners really need to have not one security, not two securities, but three different levels of security to guarantee them the right level of pension? And yesterday we saw average earnings come in, which would essentially yield pensioners another, I think, 500. I mean, I say pensioners, you know, anyone who's getting the state pension and they would get another 500 pounds a year because the weight of wages, the rate of wages has risen so quickly.

9:44Andy Burnham:And so a lot of these questions are sort of staring him in the face, really. You know, there is a sort of a communal ether now, which is saying, what are you going to do about that? Aren't you going to do something about that? Isn't it time to look at that? And I think it's fair enough if he takes his time. This is still early days. And obviously, he's not going to announce anything before a budget. And we're still a good five weeks away from that first Healy budget. But I think it becomes really difficult for him to not do anything in a month's time. I think it has to be pretty significant and you have to be able to look at the budget and go, oh, that was it.

10:22Andy Burnham:It can't be a tweak and it can't be a bit and it can't be an extra thing and it can't be something for capital and something for business, something for part. It has to be something where you look at it and go, that was the budget where that happened. Because that will convince the money markets. That will convince the money markets that this is a government that is serious about this stuff and really wants to do it. And that might convince the money markets that actually Britain isn't such a bad bet. And therefore, the cost of borrowing will come down to us. And, you know, we are we have the highest growth in the G7 tick, but we also have the highest borrowing costs in the G7 cross.

10:57And that is the position we're in. And that is what John Healy has to kind of somehow change in the calculus. I'm just going to pick up on one thing you said. where I, you know, it was that Starmer didn't want to expend the political capital over welfare cuts. I don't think he had the votes. I think that the party management was so bad that, you know, hundreds of Labour MPs were saying, screw that, I'm not bloody doing it. And therefore, he was... But that is a ridiculous position for a man with 400 MPs. Oh my God. I mean, bad political management. I do believe that if Burnham went to them and said, look, guys, this is even worse than we'd anticipated.

11:33we've come in this is what we found which would be a bit odd given that it's well it's a bit

11:38Andy Burnham:richard reeves frankly it's exactly her copy book yes exactly but to say look we we've got no other option and look at the money markets and the bond markets and look what they're doing to us we just have to do this and i'm sorry you're going to have to suck it up i don't think that labour mps can say oh fuck that we'll get another new prime minister who's next next one please no We don't like you either. And the next one, please. That's where the Tories kind of descended into madness. Those three prime ministers in one year. Labour cannot afford to do that. So I think Burnham can go and say, guys, we have no options here.

12:12Andy Burnham:You're going to have to suck this up. Look, I don't think we'd be doing this story justice if we didn't actually reach to somewhere that you might not expect us to go. And that is what on earth the Houthi rebels are doing in the Red Sea right now. because you might remember, to give you a sort of very brief potted history, Saudi has been attacked by the Houthi rebels of Yemen. There has been a long standing conflict between Saudi and Yemen. The Houthi rebels are really the part of the Iranian regime in Yemen. And there has been a ceasefire with the sort of Houthi rebels in Saudi since about 2022 for the last three or four years.

12:51Andy Burnham:But ever since Trump's really ill-fated invasion, incursion into Iran, the Houthis have started acting as a kind of proxy for Iran in the region and they have gained in power. And they have worked out that whilst Iran controls the Hormuz Straits, of which we have talked plentifully, the only place where Saudi shipping can actually get its stuff through is this other strait, other part of the Red Sea called the Bebel Mende. And they are getting closer, essentially, to being able to take full control of that and cut off Saudi's access to international traffic shipping. What does that mean? That means that things get even worse for Burnham as a result of him doing absolutely nothing at all in the Middle East, because this is out of everyone's hands, this is out of everyone's grasp, but it is essentially an extra access to the Iranian war, which is being waged in another part of the sea, which makes it even more difficult for us to get oil out, which means, bingo, the prices go up again.

14:09And the other part of that, Emily, is that there is also a pipeline that the Saudis have, which has also been bombed. And that as well has seriously disrupted oil supplies. So just when you think you've got one chokehold that is sort of needs to be broken, the Strait of Hormuz, the Houthis have come along and produced another choke point on energy supplies. And the predictions are that this may be kind of months down the line. But the cost of our energy, the cost of petrochemicals, the cost of fertilizers is going to go up and up and up and up. And we're already seeing, you know, when we go to fill our cars up at the pumps, we're already seeing that the price per litre has gone up massively since February when Trump launched his kind of war against Iran, which has gone so spectacularly wrong.

15:01And it's going to get worse. And this is another factor. So we've got Putin with his kind of invasion of Ukraine and gas supplies. And now we've got Trump and his war in Iran and fuel. and it is screwing the UK economy and the global economy slowly but surely. And the one bit that's keeping the economy looking good is AI, which apparently is going to kill us all anyway.

15:27Andy Burnham:So happy days. That's fine. It got really escalated this morning because the Houthis, who have been this sort of, you know, previously sort of ragtail rebel group, and now the guys who can, you know, make the TikTok videos, stop the boats, and as of today, shoot down an actual Saudi plane. So this is essentially a rebel group taking on, you know, a state army, right? They are much more than a ragtag army now. I think that they have changed their image hugely. But if you think back to how we used to think of the Houthis sort of 20 years ago, the whole thing has changed disproportionately. Thanks to Iranian funding.

16:04Andy Burnham:Thanks to Iranian funding. And this is where it gets quite interesting, because you might remember that last April, we did launch UK airstrikes against Houthi targets in Yemen because this was sort of coming at us. Now the question for Burnham is, well, does he consider sending military support to Saudi Arabia to counterattacks by the Houthis? Now, that is the last thing I imagine that Burnham wants to get pulled into. It's like, A, you don't really want to get involved in any military war. B, you don't really want to start going to the back of Saudi, right? I don't know where that leaves us. But see...

16:40We are a huge arms supplier to Saudi Arabia. So there are very close links between Britain and Saudi Arabia.

16:45Andy Burnham:I'm just saying, imagine, it's not like, let's go and help Ukraine, right? It's not the same thing. It's like, let's go and help Ukraine sort of fight the Russian enemy. It's sort of going to offer Saudi military assistance is something we might end up doing because it might be too expensive not to. But that is a huge headache for Burnham now to think about whether the Houthis are going to be a bigger problem to John Healy than, you know, even the bond markets. Look, the other point to make is we're exactly where we started this podcast on John Healy and the budget. Helping people fight a war is bloody expensive.

17:19You hear what Donald Trump has spent in the hundreds of billions of dollars in terms of what this war has so far cost in Iran. I mean, yeah, oh, great. No, let's, yeah, let's go fight a war in the Middle East is the last thing that this government needs right now. We hate the neocons.

17:38Andy Burnham:That was Burnham's opening line, wasn't it? We hate the neocons. Everything that's happened in the last 30 years has been terrible. Let's just go fight a war in the Middle East. It's not going to sound great, is it? It's not going to.

17:57I've ever had. You were born for it. In 81, the embassy went down. We go 25 million in the wall. Where? Hotel Tehran. This is bad. Like Run for the Hills Band. Do it now. I don't have the money, but I've got something more valuable. You shall know the truth. The truth? They don't make it free. The Fix. Now playing in theaters.

18:33Andy Burnham:Well, we are very blessed to have amongst us, as you know, a local reporter for the biggest by-election on the cards, which is Hobarton St Pancras, formerly the seat of our ex-Prime Minister Keir Starmer. And we have had news in the last few days that the candidate field is getting quite crowded because a certain Moscow resident, I think I'm safe to say, is about to join the race. One George Galloway, who is resident in Russia. Yeah. If you remember, we did raise an eyebrow about how could Zach Polanski possibly stand as the Green candidate when he lived in Hackney. Well, Hackney is about three or four miles away from Hoban and St Pancras, whereas George Galloway has gone into self-imposed exile.

19:24So, you know... Are we sure about that? Yeah, he moved to Moscow after he was stopped, I think, at Gatwick Airport on anti-terrorism kind of... Anti-terrorism police sort of stopped him. And in protest, he moved to Moscow. So you could have on the official registration, you know, where you have to put your address, it could be, you know, George Galloway, Gorky Park, Moscow. Yeah. And so it's not exactly normal. But of course, for the Green Party and for Zach Polanski, where you were hoping to corner the Muslim vote and you were hoping that that would be your way of winning this by-election, the entrance of George Galloway into the race is not exactly welcome news for the Greens.

20:07because, of course, George Galloway has been phenomenally successful in fighting by-elections in constituencies with a strong Muslim population and, you know, pro-Palestinian agenda.

20:19Andy Burnham:Is there a big Muslim vote in Hobart and St. Panky? Yes, 20 % of the population. Is that right? 20 % of the voters in Hobart. I always think of it as like Islington. No, it's 20 % of the population, you know, identify as Muslim in the constituency. And there's a very significant Muslim community there. And so, yeah, this is a sizable vote. And, you know, Zak Polanski was targeting his efforts there and I think has already produced his first bit of campaigning in Urdu, which is the official language of Pakistan and, you know, spoken by an awful lot of Muslims.

21:10Andy Burnham:Okay, I feel like I am already a fluent Urdu speaker. I think I broadly worked out what Eastern does. But I think this has raised serious eyebrows, not for the first time, because there was quite a lot of campaign literature in Urdu around the time of the Gorton and Denton by-election back in February, which, of course, they won. It was the sort of high watermark for Polanski's Green Party. And why it was controversial was, in essence, not just that he was sort of being multilingual in a place where lots of people didn't have English as the first language. And the Greens have sort of said, we're a party that doesn't discriminate between languages.

21:53Andy Burnham:We want everyone to understand. But because the kind of messaging, the kind of campaigning was directed in a very different way in the Urdu speaking literature than the stuff that was in English. In other words, if you're just saying we want bin collections three times a week and you're putting that in Urdu, fine, get on with it. But if you're actually establishing a whole pattern of campaigning, which tries to put the then Prime Minister Keir Starmer alongside Narendra Modi and say, these two are in bed together. How do you like that, Pakistan? Obviously, Modi is India's prime minister. Then you are starting this kind of two tier, twin track, whatever you want to call it, form of campaigning, which the business secretary now, Jonathan Reynolds, has said makes him feel uncomfortable.

22:44Andy Burnham:and it's I think takes you to the heart of a very cynical sort of ploy which is you know we haven't just got one message with it's a bit like the Facebook sort of micro messaging you tell me what you are and I'll tell you and I'll tell you why you've got to vote for us but you tell us first and then I'll tell you exactly what we're doing for you in that way I think it is uncomfortable I think look if you're standing in by election exactly as you say if you're saying the problem we've got here is that we need a new community centre and it's in the same language for everybody or in multiple languages, but with the same message, absolutely fine.