76. Rachel Reeves: Britain’s next Chancellor?

24:07What goes wrong with those things? What lesson might you draw from that kind of example? Let me give you an example of something that has worked rather than something that perhaps hasn't. So under the last Labour government, towards the end, we introduced contracts for difference for offshore wind. We now, I think, produce more offshore wind than any country in Europe. And that's because we created a market for something. It wasn't a direct subsidy to build those wind farms, but it was a guarantee of a sort of backstop price that we were paying. we created a market and the investment flowed in and we are reaping the benefits of that today.

24:39What we didn't do alongside that though was to set up an industrial strategy to ensure that we were building the turbines in this country, patenting the technology. Do you think we, given Germany's failure to do that in solar, is there not a real danger that we would have catastrophically failed to do that in turbines, wasted a lot of money and China would still have been building the turbines? We're not importing our turbines really from China. Some of it's from other European countries, some of it's from other parts of Asia, but some of it's from other European countries who have gone further and fastened us in building those industries.

25:12So I don't want to just host this infrastructure in the UK. I do want to build more of it here as well. But that is an example that things went pretty right that we got the industry here and there are good jobs in that sector. But the next generation is going to be floating offshore wind, which is a new technology. And we've got lots going for ourselves. I think sometimes we talk ourselves down. You say, oh, it's all going to be done in China. We really benefit from the shallow seas around the UK and from our industrial heritage, for example, in North Sea oil and gas, which means that there's lots of good reasons to think that we can lead, host, manufacture the stuff here in the UK and play our role in the decarbonisation of the economy, but most crucially, bringing good jobs here and getting energy bills down as well.

25:56Let me give you one last case that worries me. We want to get energy bills down. We want to do a green transition, but we want to do it in a way that doesn't hit the poorest hardest. So let's say one of the things that we're all trying to do is to get people out of fossil fuel vehicles into electric vehicles. And let's say for the sake of argument that China can produce electric vehicles, good high quality electric vehicles for about 40 % less than anyone else can. It seems to me that you've got a pretty difficult choice here. Either you bring in those cheap vehicles, which will allow people on low incomes to afford electric vehicles, succeed in that energy transition.

26:36Or you try to put up barriers to those Chinese vehicles coming in order to protect your own industries and see if you can develop your own electric vehicle industry and run the risk that you're simply making the cost of energy transition that much higher. Yeah, I agree that that is a dilemma. What we can't have though, is that China having a monopoly on industries, especially crucial, critical industries, because then we become over-reliant on one country, and in this case, a country that frankly doesn't share our values. So I think, you know, when it comes to China, you know, there are areas where we can compete, there's areas where we can collaborate, but there are areas as well where we need to challenge.

27:14And to be fair, the conservatives belatedly, but in the end, did stop Huawei from, you know, building our digital infrastructure. The nuclear power station in Hinkley is funded with Chinese money, but the next one won't be because we cannot be overexposed to China. So, you know, I don't mind buying cars from China, but we have got to make sure we're building up our own industry here. And we must also ensure that we're not having things that are massively subsidised by the Chinese state undercutting British manufacturing, because, you know, that's not right and that's not fair. And other countries are responding to that as well, including in Europe.

27:48But, and then I'll go back to Alistair and I'll stop this, but de-risking, decoupling from China does involve... I think it's diversifying rather than decoupling. So, for example, PPE. We were so reliant on China. No one's saying we shouldn't buy PPE from China, but we shouldn't have the only source of PPE from a country that doesn't share our values. So it's not about decoupling, but it is about diversifying our supply chain so we're not overly reliant on one country. which is coming back to the energy thing. It is why it is so important because it is an essential, a basic essential that we all need, but we have become over-reliant on Russia and other dictators around the world for that basic need.

28:25I guess the only thing I'm trying to keep coming back to is that there's a cost to it. You can't diversify without there being a cost. It will often bluntly be cheaper to import things tariff-free, to really have a fully open global free trade system. And as you put up more tariff barriers, as is more production, as is more subsidies direct or indirect for your own industries, there will be more costs. I agree with you because look at what happened when the pandemic came along. The costs went through the roof because we were over-reliant on too few number of suppliers. Look what happened when Russia invaded Ukraine and what happened to energy prices.

28:58We made a mistake of getting rid of our gas storage facility in the UK and we hadn't built up our homegrown renewables enough And so we were overly exposed to those global fluctuations in oil and gas prices. So, you know, there's a short term, long term trade off here. Maybe it is cheaper today, but actually you're building up huge costs for the future if you don't diversify. And I think we'd be very, very naive if we thought we could just rely on China for things that are essentials in our everyday lives. Can we go back to your photograph of Gordon Brown sitting on your desk when you were a younger woman?

29:34I lived through the Tony Gordon experience, as you know, and have got massive admiration for both of them. But it was very difficult at times. And I just wondered whether in terms of you and Keir, whether actually you might want to be modelled more on the way that Cameron Osborne seemed to operate together. And they seemed in a way to be more united. I just wanted to first talk about your relationship with Keir, how it works, why you think it matters and how you hope that it will work in government. Yeah. So I know that everyone always wants to make comparisons between, you know, today's leader and chancellor or shadow chancellor in my case and ones in the past.

30:09But no, we are going to have to be our own people. It's 27 years now since Labour won in 1997 and 14 years since Cameron and Osborne won in 2010. And so we will do things our own way. But I would come back to that point earlier. The job that I want to do, the job I've always wanted to do is chancellor of the exchequer. And so I think some of those tensions that perhaps have existed in the past, I just don't think they'll apply in the same way. Do you actually have no desire to be Prime Minister at any time in your life? I just really want to be Chancellor of the Exchequer. That is what I've always wanted to do.

30:39And I think I'll be really good at it. When you were talking earlier to Rory about some of these big issues you're going to face, and you were talking there about the way the global economy works, tariff barriers, free trade, etc. And Rory was saying about sometimes you've got these very polished lines. And I know that whenever Brexit comes up, you will say we're not revisiting, We're not joining the single market. We're not joining the customs union. Why do you have to be so hard over about that? Because those will be in our manifesto. And then you have to honour the commitments you make. But why are they going to be in the manifesto so hard over, so limiting?

31:10Because if you're going to meet your growth targets, you're going to meet your mission on growth. So we want a closer relationship with our neighbours and trading partners. We want a reset of that relationship so that we can trade more freely. You know, you look at what's happening at the moment with these import checks that have just come in, adding huge costs, especially to smaller businesses. And there are many small businesses, I mean, I'm not telling you anything you don't know, but they've just given up exporting and given up importing. And that's causing huge damage. You know, exports and imports to Europe have both fallen.

31:38So we want to rebuild stronger trading relationships, but we don't want to relive those battles of eight years ago now. But why not at least, I mean, if it seems to be one big planning, yes. The second big, simple thing you could do to transform our economy is join the Customs Union. First of all, that is not a simple thing, Rory. It just isn't. First of all, I'm not sure. It's not like our economy was doing really, really well before we left the EU. It's not like everything turned at that moment in 2016. There are deeper structural problems that we need to overcome. You sound like Classy Quoting.

32:15That's what he kept telling us. No, I don't sound like Classy Quoting. No, you do. That's exactly what he kept saying when I said, why don't we rejoin the Customs Union? He said things weren't going great before. Yeah, and then I became chancellor, quasi-coating, and then things went really, really badly wrong. So if you were looking for a symbol for those small importers and exporters that you were talking about, if you were looking for a way to simplify things at the borders, if you were looking for... I'm not convinced actually that a customs union is the answer to those things. I mean, by definition with a customs union, those things are addressed.

32:43That's what the customs union is about. Well, no, because you're not in the single market. So you don't have that free movement. So it's the single market that would mean that you wouldn't have any checks, things coming in and out rather than the customs union, I think. But we want to build trading, closer trading relationships. We know that the deal that Boris Johnson secured is not the best it could be. We want to make it better, but we don't want, and actually I don't think businesses by and large hugely appreciate a reopening of this debate. Not the impression we get. I mean, literally every business we address, every federation we go to, if we suggest rejoining the customs union, there is overwhelming support.

33:23I think if you could go back in time, then, you know, I would have voted the same way again. I would have voted to remain. But it's eight years ago now. And I do think we have to accept the world as it is rather than the world as we might want it to be. But if you had anything that was analysed that said event X or policy B has taken 4 % out of our economy, you'd want to address that. And I just feel we have this gigantic elephant in the room that nobody wants to talk about. I don't deny that it has had a big impact on our economy. But what I would argue is you have to accept things as they are rather than as you would want them to be.

34:00And if we could go back in time and fight that referendum again, you know, I'm sure we would have all campaigned even harder to win the argument. But we didn't win that argument. And we now face this inheritance. I want to build a close relationship. We've committed to trying to secure a veterinary agreement to improve those flows of goods at the border. or also want to do more to support the services sector with a mutual recognition of professional qualifications, touring rights for artists. So there are areas where we've already committed to having a closer trading relationship. But those red lines that you articulated will be in our manifesto.

34:36So like, for example, recently when Ursula von der Leyen floated this idea of, you know, freer movement for younger people and Labour's reaction instant, no, we're not going there. And it felt like it wasn't the sort of thought through, let's have a discussion about this, let's see what we think. It was, we are not revisiting this at all. And I just think a lot of people are very disappointed by that. We're not going to bring back free movement. And I think, you know, just a blanket exemption for everyone under the age of 30, I don't think that would be politically acceptable. Why not? Because people voted against free movement.

35:04I mean, you represented a Leave voting constituency, did you? Sure. Yeah. So I represented a Leave, still represent a Leave voting constituency. and the number one issue for why people voted Leave was free movement. But you must hear, as I do, all the time people saying, God, I've had my time again. Now, I'm not asking, by the way. I think if my constituency voted again, they'd vote the same way. Do you really? I do think that, yeah. But is that not partly because the debate has just been parked and nobody's trying to give leadership on this? I also feel that if you went into an election and say, all right, I've got a really good idea, let's have another referendum.

35:36I'm not saying that, though. I'm not saying that. I'm saying that because of the defeat in the referendum and the politics that followed that, We're not even having the debate about the things that we can fix and have to fix. I literally have just said some of the things that we would want to fix. And we want a reset of that relationship because, look, I think the most important trading relationship Britain has is with our European neighbours and partners. And it's too difficult to trade today. Given that, I mean, to return to the Customers Union, right? The great thing about the Customers Union is you don't go around having endless attempts to do bespoke little trade deals with New Zealand or Australia.

36:06you accept the framework of the European negotiations, which then mean that you don't have half the problems that you would have with Northern Ireland and the Republic. Because a lot of these problems are to do with the fact that if Britain fixes a trade deal with New Zealand where it's taking stuff in on different terms, the terms in which the European Union does it, then you have a whole problem at the border to try to address the question of where those things came from. If we did a veterinary agreement, actually I think it would deal with a lot of these issues because a lot of the issues are around food and farming sectors.

36:34So we do recognise that those things are big challenges, but our answer to it is to get a bespoke veterinary agreement rather than just a blanket go back into these institutions. I just imported two pots that I found on eBay from Holland. I found myself facing a£400 bill coming in from customs. How much were your pots? I think they were£1 ,000 pots. My goodness, what sort of pots are they? Big pots. Expensive pots. Sound lovely. But I was thinking, why? Why on earth am I paying all that money to bring stuff from the Netherlands. I think that's a fair challenge, but that is a deal that the Conservative government have done.

37:09But if we were in the customs union, I wouldn't be doing that, would I? Well, look, we have got things where we want to improve the relationship. We want to make it easier to trade, but we are not going to revisit and relitigate those arguments of the referendum. We're just not going to do that. If you were asking Gordon Brown when he was opposition, and I know you don't want to keep going back, but I think the comparisons here are quite interesting. Gordon Brown would probably said he wanted to be defined as the Chancellor, that ended child poverty. George Osborne would probably have wanted to be defined as the Chancellor that delivered the Northern Powerhouse.

37:40Now, Gordon, I would argue, had considerably more success in his goal than Osborne had in his. But if you can say this job you always wanted, let's say you do it for 10 years, even longer, what do you want to be defined as by the end of it? So, our economy to be growing and creating good jobs right across Britain. So, not just a few industries in a small part of the country, but the people feeling better off and having better jobs that pay decent wages that they can afford to live on in all parts of the country. That is what I want to achieve if I'm Chancellor of the Exchequer. Okay, that sounds to me like that's what the Chancellor should be doing as an absolute minimum.

38:13What do you want history to define you as? Well, a successful economy that is firing on all cylinders, that is attracting jobs and investment. And that has changed because we haven't been doing that these last few years. People have felt they've had to move from the town that they live in to access jobs elsewhere, elsewhere predominantly in London and the southeast so I want people wherever they live to be able to get a job that pays a wage that they can support a family uh on and uh and I want Britain to be a great place to do business again and I guess it sort of comes back to you know Rory asking me earlier about you know did I go through a sort of stage where I was idealistic you know look I think that wanting good schools where children have a good start in their lives and an economy that actually works for ordinary people you know maybe it's not shake of error or whatever but it is generally what is going to make the biggest difference to people's everyday lives and i am quite a practically minded person and i think about you know what would have benefited me when i was little and what would benefit young people growing up today and what would benefit my constituents in leeds west is those things good jobs paying decent wages in the places that they live.

39:25Okay, Rachel, Rory, quick break.

39:32So get away from Che Guevara, back to the practical. The NHS. Because people are living longer, because drugs cost more, because there are more demands, health inflation runs at 2-3 % above general inflation. Put a lot more money into the NHS, but the demands on the system keep growing. And you will come in, you'll inherit this very creaking system. You will very understandably, I'm sure, spend the next minute explaining that it's all the fault of the Tories, and I'm sure a great deal of it is the fault of the Tories. Nevertheless, you're going to inherit this system. And you're going to face a system where our population is going to continue getting older, putting more and more demands on the service, demanding more and more expensive treatments.

40:17And you're going to have to find, presumably, 3 % above inflation every year for this year and every year to go to begin to keep up with the existing level of demand. How do we fund this? How do we keep education easier than health? I mean, this could have been said in 1997 as well. You know, the NHS, you can't risk it, it's not going to work. We know what happened there. Gordon Brown borrowed an enormous amount of money and then the 2008 financial crisis came around and we ended up in a bit of trouble. So, there is a way of doing this. Wait a second. What was borrowing? Just remind me what government debt was when Labour lost office in 2010, Rory.

40:50What was it as a percentage of GDP? So there was a deficit running at 130 billion at the point where they went, right? And debt as a share of GDP was 60%. What is it now, Rory? It's higher, but I'm... Yeah, it's nearly 100 % of GDP. So I don't need lectures, Rory. I don't need lectures from you. I'm not particularly lecturing you. You're asking me how did they do it. They did it by borrowing a lot of money and you're not going to do that. You just said you won't borrow. This government have borrowed a lot of money and things are an absolute mess. It's about how you run things. And that's why Wes talks about – you've asked a question.

41:19Okay. So it's also about how you run things. And that's why Wes has spoken about reform of public services rather than just money. But it's also why we've set out how we will tax the non-DOMs properly, which your party's had 14 years to do and never has. Tiny amounts of money, Rachel. Tiny amounts. Five billion a year. Tiny amounts. They hit five billion pounds. It's a small amount of money. For what you need for the NHS, yes. Oh, come on, Rory. For what you need for the NHS, yes. We're committed to have 40 ,000 additional appointments every single week in the NHS. There's a backlog, as you know, under the Conservatives of almost 8 million today.

41:53You know, it's not going to sort out everything overnight. If I promised to do that, I think people would rightly say that's not possible. But we're setting out the steps we're going to take to get the NHS for the future again. And we'll start with those additional appointments. I'm not trying to get into an argument. I'm genuinely trying to look at the big thing. So Gordon Brown had an option which you don't have. he was able to put a lot, lot, lot, lot more money into the NHS. That's what he, between 1997 and 2008, huge amounts more money. The graph of spending increases by Labour on the NHS, which your understanding will be very part of, was huge.

42:25It was funded by growing the economy. And that is the difference between the Labour years when the economy was growing and the difference these last 14 years. Well, no, no, let me just give you this statistic. If the economy had grown at the average OECD rate, it would now be 37 % larger. Yes. Well, you'd have about 40, 50 billion pounds more for public services every single year. But it's why it's right to focus on growth so much. Because unless we grow the economy, you're not going to have the money for public services. And I'm not going to make a load of funding commitments from imaginary money.

42:58But what I am going to do is put in place the things that are needed to grow our economy so we do have the money again for public services. Well, that is, in the end, the only way that you can both improve living standards and having money for public services is through growing the economy. And that's why so much of my emphasis is on that. All my sympathies with you. No, I don't need sympathy. But you're not going to have the situation that Gordon Brown inherited in 97. No, because you've made such a mess of it. Because, as I said, and I knew you were going to say that, and I agree, right? There's a horrible mess that you've inherited.

43:32But that's as it is, unfortunately. But then you have to grow the economy. And I believe that is possible. Yes, but you will not be able to grow the economy enough in order to provide the kind of funding that you will need to deal with health inflation. Well, I just disagree with you on that. If we grew the economy at just the average rate of similar economies, we'd have 50 billion pounds more today. So that is where the money is going to come from. But we also need to run our public services better. What growth rates are you expecting to achieve over the next 10 years? Well, the last Labour government achieved growth rates of around 2.5%.

44:05And you're expecting to achieve 2.5 % growth consistently over the next 10 years? No, we are aiming, our ambition is to have the highest growth rate in the G7. That is ambitious, but we believe... Higher than the US? Well, why not? I think we've got huge potential. I'm not saying a bigger economy, but growth rates. And we've been so behind, there's an awful lot of catching up to do here in Britain. I believe if we reform our planning system, reform our pensions, our skills system, we bring back the stability to the economy that we desperately need, that we can attract investment here, which is what we need to grow the economy.

44:372.7 % growth, 3 % growth over the next 10 years? I'm not going to just come up with a number. But if you're talking about the highest growth in the G7, literally growing faster than the United States. Well, that compares with other countries. GDP per capita growth in the US compared to the UK outperformed the UK from 1870 to 1980. Well, GDP per capita is falling at the moment in the UK. The only thing that's keeping GDP up is immigration numbers. GDP per capita, US against UK, has been falling almost consistently since 1870. Achieving higher growth rates in the US over the next 10 years is an extraordinary thing.

45:11It's ambitious. It's absolutely ambitious. Why should anyone believe you can do that? We're not going to apologise for that. When Labour was last in government, we increased productivity and GDP growth. We were competitive in the global economy. But it was a different context, a different inheritance. But in some ways, because we've fallen so far, we've got a lot of making up to do. I believe we can do it. Can I just bring one other factor that is relevant to this? It's one of the reasons why we're able to get more money into public service is because actually military and defence spending were able to fall because we were living in a much more peaceful world as well.

45:47Do you recognise that security costs are probably going to rise if there's a Labour government in your first term? And does that also make it harder then to get the sort of money that you want to get into public services? Well, obviously, we're going to inherit a world that looks very, very different to what you experienced when you came into government, Alastair, in 1997, where there was that peace dividend. And alongside other countries, we are going to need to increase our commitments around defence spending. I'm not sure that there is a sort of negative correlation between spending on defence and economic growth.

46:26Often, defence R &D, for example, spurs innovation in other parts of the economy as well. But I'll just say what we need to do to grow the economy is to unlock private investments. And that's why the economic policies that we're putting forward to reform the planning system so we can build housing, but also digital infrastructure, labs for data centres, the energy infrastructure we need, the pensions reform to get more investment into long term patient capital, into startup and scale up businesses, reforms to the skill system so that businesses can recruit and train people up. you know, it's why we're putting so much focus on the things that are needed to unlock private investment, because we know there's not going to be any shortcuts of, you know, government spending to grow the economy.

47:13It's got to be about finding ways to encourage private sector investment. And when I go around the world and meet UK investors and global investors, they say to me, there is a wall of capital that is ready to be deployed. But at the moment, Britain is not looking like such an attractive place to invest. Part of because of the lack of stability in the UK economy, but also practical things, holding back investment, like our planning system, like our skills system. So if we can reform those things, which I'm determined to do, working with my colleagues like Bridget Philipson and Angela Rayner, that we can unlock that investment and start growing the economy.

47:50And when you grow the economy, what happens is you bring in more tax receipts that you can then choose to invest in some of the public services, which are in a mess. I absolutely accept that. Our schools, our hospitals are in a mess and we do need to put more money in. We've got some immediate cash that we're going to put in by getting rid of the exemption whereby private schools aren't paying VAT or business rates, cracking down on tax avoidance and ensuring non-DOMs pay their fair share of tax. But in the end, to really have the money that we need for our public services, we've got to grow the economy.

48:23And we're always right. And I know while you're doing it, you're picking on a few certain policies and saying, well, we're going to do this and it will raise this and with that we'll do that. But on this bigger picture about the sort of public realm rebuilding that's going to have to go on, because the bit that was missing from Rory's analysis was austerity and that has done fundamental damage, but it does mean the rebuilding becomes harder. And I just wonder whether you and Keir are deliberately setting expectations reasonably low. I think one of the criticisms made is that the expectations are being set fairly low.

48:58Keir, last time we spoke to Keir, he said, you know, we wouldn't play, things can only get better right now because it's going to be tough. It's going to be really tough for a while. So what is that kind of medium and long-term strategic approach? What are you going to be saying to people at the election? Here's how things are looking a year. Here's how things are looking two years. Here's how things are looking at the next parliament. So that's why Keir talks about a 10-year programme. You know, you can say, well, you know, you haven't even won one election yet, But it is going to take time to turn these things around.

49:26And I think it is important to be honest about that. You know, you could say it's about setting expectations low. I think it's just about being honest. And I think that people respond to that, you know, that things are going to be tough and we're not going to be able to do everything we might want to do straight away. And I know, you know, one of the things I have to say regularly to colleagues and different campaign groups is, no, I'm afraid we're not going to be able to have the money to do that. Certainly not straight away. And, you know, that's not something as a good Labour person I might like to say, but it is the reality of the inheritance we're going to have.

50:01And it's why when we set out the first steps last week, it was all fully funded, fully costed policies like the six and a half thousand additional teachers in our schools. But you said the schools need a lot more than that. I would love to be able to commit to do more, but that is funded and costed through having VAT on private schools and business rates on private schools and the money will be used for the additional teachers in our state schools. That is a choice, a different choice that an incoming Labour government would make compared to the choices that the Conservatives have made. Can I ask a question of character?

50:33Keir, I always feel, is a lot tougher than people realise and a lot more ruthless than people realise. and I think people sort of say the same about you as well. And by the way, I'm speaking to somebody who finds ruthless, quite attractive equality in politics. So don't take it as an insult. I don't. No, good. So what, but give me a sense of your approach because as you say, you are having to say no to a lot of people. That will lead to disappointment. It'll lead to people attacking you. Probably the media at some stage will try and turn against you in the way that they're trying to do at the moment with Angela.

51:07I just want a sense of that character and the toughness that I think you're going to require. And I guess whether you've got it and where you think it comes from. I think the most important thing is that people will respect me and that they'll trust me. And if I said yes to everything, I wouldn't be doing my job. I'd be doing my job incredibly badly. And so I won't make any commitments without being really clear that I know where the money's going to come from. But if we didn't do that, it would be the road to ruin because you'd end up, yeah, having to borrow more or, yeah, find taxes that are going to make it harder to grow the economy.

51:44And I think the most important thing is that people can trust me and that my colleagues respect me. And I think they do respect me. They understand where I'm coming from. They're bought into this. But both politically and economically, it is the right thing to do. I guess some people listening to this might think, if you're confident that you can achieve the fastest growth rate in the G7, you're confident that you can really grow this economy, why not borrow? Because as you say, Gordon Brown borrowed because he was confident that he could grow the economy fast enough to be able to repay that borrowing.

52:17Presumably, the calculation would be, if that growth rate is guaranteed over 10 years, it's going to be the fastest growth rate in the G7, you could borrow quite a lot of money, make quite a lot of investments in public services because you'd get in the tax receipts from your growth, right? Well, first of all, borrowing didn't really go up significantly until the financial crisis. So, it wasn't borrowing to fund investment under the last Labour government. it was through a strong economy that was growing and then you could invest those proceeds of growth in better public services. That's my reading of what Tony Blair and Gordon Brown did during that last period of government and I'm not going to start spending money before it comes in.

52:56I'm just not going to do that and so you know we've said there will be an immediate injection of cash into public services by the limited and targeted tax changes around non-DOMs, private equity, private schools. And put in context, listeners, I mean, you're talking about some of these things sort of£5 billion a year, right? Yeah. And in addition, we've got the energy profits levy that we would extend, which would endow the National Wealth Fund. So, around£7 billion you can get through extending that,£5 billion on tax avoidance, additional money from non-doms, £1.4 billion from private schools and about half a billion from private equity.

53:32But for listeners to sort of compute that, I mean, we're talking 10 billion as the potential compensation package just for people who've been affected by the infected blood scandal, the contaminated blood scandal. So we're talking about twice as much as the revenue. Well, some of those are annual revenues, of course. So they're not just one off. So 1.4 billion pounds a year by the tax changes on private schools, for example. So you're not really comparing apples with apples there. But I recognise that these are limited changes and they're an upfront investment into public services. And then the plan to grow the economy and the plan to grow the economy is what is going to deliver the money to sustainably invest in public services.

54:13It's sort of coming to the end for me. One of the comments here that's been made is that a Labour government, your government, would not introduce annual wealth and land taxes, raise income tax, or equalise capital gain rates and income tax, or rejoin the European Single Market and Customs Union, or change the Bank of England's inflation target, or reform its rigid mandate, or take private utilities into public ownership except for the railways. Is that roughly right as a statement of what you wouldn't do? Yes, but then there's all the things that we will do. One of the things that Alastair often says on this podcast is, yeah, but the great thing is that they can say they're not going to do these things, but when they get into office, they could do those things.

54:54And isn't it lovely? Because in Australia, that's exactly what the government did. They said they weren't going to raise taxes and then they got into office and skippy do they raised taxes and nobody minded. So he's hinting - We want to win a second term. And so that means you have to fulfill the commitments that you've made to people in an election. and you know we've set out the first steps that a Labour government would take and we've explained where the money's going to come from so this is not it's not a cunning ruse where you say you're not going to do these things and then you'll make Alistair happy a year after the election by reversing on all those things.

55:23Well I haven't been in opposition for 14 years to get into government for a short period of time and not be able to affect the change I want to do so I plan to make commitments that I can keep and deliver. So if you say these things you'll stick to them through the five years you won't do those if you say in the manifesto you're not going to do them you're not going to do them. I mean, this may sound like, you know, quite revolutionary to you, Rory, but yes, that is what I plan to do. My last question relates to the fact of you, if I said right, right at the start, you become the first woman chancellor.

55:53And one of the speeches you made in the comms that I remember was, was when Joe Cox died. And, you know, we talked recently, Rory and I talked on the main podcast about mental health of MPs and we took, we had some remarkable figures on assassinations this was in mexico as it happens but we've had two assassinations here and i just wondered how how you persuade young people and young women in particular that politics is a positive warm welcoming plate good place to go and whether actually as a woman who is going to be one of the most high profile women in the country if this is Labour government whether you see that as a kind of added responsibility that you now have to try to get more young women to think about politics as a career.

56:43So Jo loved her job I remember her mum saying to me after she was murdered Jo loved doing the job that she loved in the place that she loved and a terrible way to die and it was a life taken much too soon and she had so much potential and so much to give but her mum said she wouldn't have ever done anything else and she paid the ultimate price for doing what she loved and trying to make a difference. And I do believe, despite all of the scandals and everything that we hear in politics, that it is a noble thing to do, to want to represent your community and to want to change. And I'll disagree with Rory on lots of things, but I know that Rory, like me, came into politics to try and make things a bit better than what we started with.

57:29And, you know, I've got friends in all political parties trying to do those things. In terms of sort of women in politics, I've always wanted to have more Labour MPs in politics, but I've also always wanted to have more women in politics. And when I was born 45 years ago, there were only 19 women in Parliament. And today there are more than 220 women in Parliament. That is a huge change in my lifetime. And that's really exciting. And that didn't come about by chance. that came about because both parties made a conscious effort to change how they do things. Labour in 1997 ushered in the 101 Labour women MPs.

58:10And then because of the way actually Theresa May set up women to win in the Conservative Party in 2010, there was a big increase in female representation on the Conservative benches. And I think that's a really positive thing because I worked in banking and finance before I became an MP. I was, as you said at the beginning, a junior chess player, I've always operated in very male-dominated environments. But in politics, we claim to represent the country that we're serving. And I think it's really hard to make that claim when the institution looks so different from the country that we're supposed to serve.

58:46And so I passionately believe that we need to have people from a wider diversity of backgrounds in politics, including more women in politics, and that would make it a better institution and it would serve better our country. And so something I've always tried to champion is women in politics. I also recognise this point because I'm sort of standing on the shoulders of the women that have gone before me and encouraged me, women like Harriet Harman and Tessa Jowell, who really encouraged me when I first got elected to parliament. And actually, I remember in 1997, obviously, it was brilliant to have the Labour landslide, but all those women.

59:21And for the first time in politics, there were women that looked a little bit like me, sounded a bit like me from similar experiences and backgrounds. And I felt really excited and motivated by that. A bit like Natalie in year 13 from my school who was applying to Oxford. For the first time I could see women role models doing something that maybe I could do in the future. And I hope that if I have the opportunity to be the first female Chancellor of the Exchequer, there will be young girls and women who think, you know what, maybe I could do that one day because no one ever before like me has done that job.

59:58And now there's a woman there doing just that. And so I hope I play just a small part in encouraging more women and girls to go into politics and in banking and finance and business too. Rachel, very last one for me. What is it you think the public doesn't necessarily see or understand about you that you wish they knew or understood more? Look, to win the election, I need people to be able to trust me. and that's what I hope when people see me, when they hear me and I guess, you know, I talk about my experience at the Bank of England and all the rest of it but I remember when I was little and my mum and dad weren't poor, they were primary school teachers as we've already discussed but they split up when I was at primary school and so we didn't have a huge amount of money, we certainly weren't poor but we didn't have money to spare.

1:00:42My mum would keep all of her receipts and every month when she got her bank statement she'd go through the receipts and tick off everything on the bank statement. And that taught me, I guess, the importance of being able to explain where the money comes from, because she had to do that. My mum had to do that when we were growing up. And I remember as well when the energy prices went through the roof and then also then when mortgage rates spiralled. And my mum said she just about managed when she split up with my dad to keep things going. And she doesn't know how people would cope today with the energy prices and the mortgages doing what they did today.

1:01:17And that was really, it was an important moment for me when I was little and seeing my mum doing that. You know, something in me was sort of touched by what my mum said, because you realise, I see it in my constituency, even people who, you know, should be doing okay, really struggle when things go wrong in the economy. And I want people to be able to put their trust in me and know that I will always be looking out for their interests. And I don't want to sound like a cliche, but that's where that motivation comes from, from me, seeing my mum making sure that the money always added up and knowing for a lot of people, that is really, really hard today.

1:01:49Well, thank you for giving me so much your time. Good luck. Are you still, if not when, election result, if not when? No, I'm not complacent at all. Morgan McSweeney, you know him, our campaign director in the Labour Party did a presentation on the local election results and the penultimate slide after sort of talking through the successes we'd had in the local elections, the penultimate slide says, what does this mean for the general election? And the next slide was blank. Absolutely nothing, because not a single vote has been cast yet. So yeah, we have to win back the trust of an awful lot of people, some of whom have never voted Labour, and an awful lot of people who turned against Labour, understandably so.

1:02:29I totally get it at the last couple of elections, and we need to win back their support. Well, good luck. Thank you. Thank you. Very good luck. Bye-bye.

1:02:39right rory now we've got a bit spiky there you and rachel it gives a bit spiky i mean it's so difficult isn't it i mean it's partly probably the fault of my fact i've got a bit of a migraine while i'm interviewing her i think she's kind of wonderful but i found it very very difficult to get her to relax open up and be sort of a bit more personal and natural that's probably my fault as an interviewer which is why we got into some slightly more kind of gritty Well, let's start with a good bit. Why do you think she was wonderful? Well, I think there's something rather reassuring, a bit Theresa May-like, to be honest, about the kind of my job is to reassure people that I'm a safe ham of the finances.

1:03:20And I'm going to reassure people that I'm a safe ham of the finances. And boy, oh boy, did you get the message, I think, at the end of the hour that she's somebody who's going to be very careful balancing the books, right? The thing that seemed to me sparked off a little bit of a, it didn't quite get to Jamie Rubin levels, but it was getting close at one point, was I think she's quite tribal vis-a-vis Labour. And I think she was saying, she thought you were saying that basically the basic Cameron Osborne message, you know, the mess we inherited, Gordon Brown spaffed the economy because of all the borrowing, etc, etc.

1:03:54Well, it's that, but I think it's also that she knows I'm afraid that I'm right. I think she knows that health inflation is - Well, you should have done some proper mansplaining, Rory. No, no, but I think she knows that health inflation is far above general inflation, that the amount of money they would need to sort out the NHS is eye-watering. We're not talking five billions. We're talking tens of billions more every year and onwards to try to sort it out. And she doesn't have that money. And so she has to say, because it's the only answer she can come up with, growth. If I can get this amazing growth from the economy, all the problems will be solved because all this lovely revenue will be done.

1:04:31And I won't have to worry about the fact that at the moment we're bankrupt and I can't borrow any money and the taxes are maxed out and I can't pay for anything because this growth is going to fix it all. It would have worked better for me if she had said, listen, Rory, of course, you are absolutely right. We are in a big hole. A lot of this is your fault, as you said, and I'm not going to bore you because it'll make you defensive explaining why the Conservatives have made the situation a hell of a lot worse. But I agree with you. Health inflation is a lot higher than normal inflation. The NHS isn't a big problem, and it's going to take an incredible amount of money over a very long period to sort out.

1:05:07And we can just do what we can do. It would have worked better for me rather than saying, no, no, no, it'll all be fine because I'm going to generate the fastest growth in the G7. You see, I think, and when you read that list out of all the things that Labour have committed to ruling out not doing, I don't think it's that they're going to do things that they are ruling out ahead of an election, even though one or two of them as you said i i'd rather they didn't rule out that they did if they came into power but i think what they are hoping to be is to be in a position as a newly elected government if that happens particularly if they get a decent majority where they can start to be more radical about some of the things that they've already talked about so whether that's in relation to the environment and this green energy stuff whether it's in relation to some of the law and order stuff whatever it might be education in particular um i also think i think you started to sort of light the match with the question about, you know, oh, here you are with your very polished sort of, you know, soundbite about this, that and the other.

1:06:05I think she sort of felt you were kind of trying to put her in the box of, you know, every other politician who just comes up and, you know, spins the line. Do you not agree with me that with all her strengths, she's not awfully natural? There's not a great deal of twinkle humour, flexibility. I mean, compared to the other people we've interviewed, I don't want to be rude, right? But we've interviewed a lot of politicians on the show, right? Compared to watching David Blunkett operate, compared to watching... They're very different when you're out of power to when you're about to go into power.

1:06:35I think that's who and what she... I think she is very authentic. I think that's who and what she is. I think she's actually... She is quite funny, but she's not going to sit here and be funny. But part of the problem is that... I mean, one of the things that I suppose winds me up a bit is that some of those anecdotes I've seen in four interviews. that story about her dad seeing Neil Kinnock and saying this is who I'm going to vote for I literally it's been in four interviews and she tells it to me a fifth time I don't feel she's treating me as a human being if she can't take the time to come up with some new story that she has to again and what does it mean this story what's the point of the story her dad like Neil Kinnock I mean the point is she was saying see I thought she was from a political family and she put me right on that I don't know.

1:07:22I think you're getting too sensitive about this. So if I was going to be chippy, I'd say, can she lead? She can reassure. She can come across as a reassuring person who's going to look after the family finances. And it's almost sort of Mrs. Thatcher. You know, my mother balanced the household books and we can. Yeah, which I actually I think was I think one of the worst parts of the Thatcher legacy is this idea that the British economy is like running a household budget. But that's pretty much what she's pushing, isn't it? Yeah, I think she was trying to give a sense of character. That was a question about character.

1:07:50I don't know. I came out of that thinking, this is a very, very fiscally responsible, very, very - Which is the message she wanted to communicate. So she's probably gone away thinking, oh, well, I definitely landed the message I wanted. But anyway, my question is, she can do that, but can she lead and inspire? A department. She's not going to lead and inspire the country because she's clear that she wants to be chancellor. I think as chancellor, you have two roles. One is the public role, which is very, very important. Don't give me a role. And I think actually she has got a very clear message about that.

1:08:22And it's interesting, I saw her a couple of years ago, and we just had a cup of tea somewhere. And at the time, she was really struggling to get sort of any kind of profile at all. There was a lot of interest. The feeling was Labour weren't going to win. Keir, there was a bit of interest, but it wasn't really taking off. Whereas now, it's sort of gone to a completely different extreme, where nobody's really interested in the Tories, and people are very, very interested in her. and I think she's still at that stage establishing her basic messages she probably is quite pleased that you're a bit annoyed that she was saying the same things that you've read in her before because that is an important part of message delivery yeah you keep saying the same things but I know I think she's more I think she's actually very very personable um but she's not she's not a firecracker she's not gonna you know she's not Angela Rayner she's not gonna come in and just sort of you know have that amazing yeah she's a current politician we interviewed who was pretty very open but she's but in a way doing a different sort of job and i think she's really taken on this idea that as the chancellor on the back of labor's record on the economy under corbyn in particular followed by the mess of the last 14 years where i think she was pretty light on you to be honest rory given the complete catastrophe of the last 14 years uh i think i think she was um she was landing that message of i'm you can trust me you can trust me you can trust me with your money and that's obviously the biggest thing she wants to do.

1:09:45Very good. Well, thank you, Alistair. Right. See you again soon.