Government Transition and Future Policy Challenges

This BBC podcast is supported by ads outside the UK As yet another British prime Mister steps down, is the country still feeling the effects of Brexit ten years on? I'm Tristan Redmond, one of the hosts of the Global Story podcast from the BBC. Kir Stahmer has become the sixth leader to resign since the Brexit referendum. Ever since that vote in twenty sixteen, the country's been racked with political instability And When will it end? For more, listen to the global story on bbc d. com or wherever you get your podcasts Hello Henry. Hello Joe On Sunday,ne'scast, you were talking Some would argue moaning about how you balance major political events and major international football. How's that going for you? Very badly. veryy badly and I was absolutely moaning I'm I don't moan about the fact that I wake up very early for the BBC because it's privileged to do this job in this week of all weeks. But obviously I was starting from a position of disadvantage with the kickoff times of this World Cup, but I haven't even had a chance to watch any of the highlights. Monday morning, I was in Downing Street from five in the morning hearing people say, oh, did you see when Cape Verd went goal up against I can't even remember who they were playing, Joe. This is this is crazy. The last time there was aol upp in the Americas, I'd watched every single match and look at me now. So it is quite distressing. but I think things have calmed down a little bit now so I might able to watch E to match tonight least Yeah I mean it's now Tuesday, Perfect timing because weirdly Westminster was really busy yesterday. and things have suddenly fallen silent really. And that's great because Actually the Labour leadership timetable maps quite neatly. onto the rest of the tournament We will assuming there is not a full contest and we'll come ono that, have a new Prime Minister two days before the World Cup final. But of course that means quQarters semis It should be pretty quiet now. Do you think there's a coincidence? Well, look, I think it sets up a massive moment, doesn't it? whichich is that when England are inevitably in the World Cup final thats Sunday. It could well present the new Prime Minister with their first opportunity me meet President Trump. Kistama will be very sad to miss that. If it does happen, Plenty to discuss on this episode of Newscast ewscast. Newscast from the BBC. I will resign as leader of the Labour Party. And what will you do? St stare at a. Humanity's next great voyage begins. You know I like my busosses. I'll come ono them. It's supposed to be me as a doctor.. Thinking about it like a pano helped. Do we play music now or what do we it? Hello it's Joe in Westminster. Hello it's Henry in Westminster and it's Drini in Westminster. Let's start guys with an email from newscaster Linda. She has emailed Chris. Dear Chris, Newscast she says is a central listing for me and for a long time, I've been amazed at how you all ooze stamina in every episode Nevertheless, your vocal chords are delicate. I write as a retired speech and language therapist who did a lot of adult voice work. You don't need me to tell you how vital your voice is and how you've quite obviously been overworking it. If you listen to yesterday's newscast, you'll have heard Chris Mason's strained voice he's today been given the day off. In his place, Henry and Darini Let's start with you, Henry Are we? Yesterday Chris was talking about the likelihood of a burnham coronation. Has anything changed? Not really. I think likelihood is still the right word to use to describe it. What we do have are two additional names people who are at least publicly toying with standing for the Labour leadership They are Darren Jones Cabinet Minister Chief seecretary to the Prime Minister, which is a new job that was invented for him beforefore that he was Chief seecretary to the Treasury. So essentially Rachel Reeves is number two. other name Al Carnes. someome newscasters will remember that he resigned as a junior deffence minister just a few weeks ago in protest at the government's plans on defence spending just after John Healey had resigned as Defence seecretary. But even though we now have those two names It seems pretty unlikely still. each of them to actually go through with standing and even if they did, it feels pretty unlikely as it stands that they would get the magic number of eighty one MPs in order to then take on Andy Burnham, who clearly has eighty one and then some with the Labour membership. How visible are their campaigns? Do you have any idea who might be running them if they have anyMPs or is it just the name and the speculation which is out there I don't think we're at the stage of whether they have individual named MPs who are sort of leading surrogates, as they'd be called in America. We can sort of see what wing of the partarty in particular Darren Jones' campaign emanates from the argument being made by his allies is that Andy Burnham needs to be more clear in particular on what economic policies he would pursue. and I'm sure we'll onto this, but the implication of some of the concerns they raise is Is he really going to make Ed Millibant his Chancellor or C? So it is a sort of critique from the right. as well as a call for clarity But then I think because he's been so close to the Prime Minister Darren Jones seems to also have the backing If he were to run of a quite small group of MPs who are very passionately furious about the way Kir Starmer is treated. So it would be a more sort of sort of personal individual loyalty to Kir Starmer and a particular fury with Andy Berham for the way that they see him as having behaved. Al Cares is a much more individualistic thing. He only became an MP in twenty twenty four. He had no political background because he' serving in quite senior positions in the military instantly became a defence minister. His is a sort of slightly different, less ideological force and more about his own personality and his own background And is it skeptical to say are these two men just wanting jobs in a burnham cabinet? It's certainly what a lot of MPs are saying today, including people who I thought might at least be open to the idea of backing them and that's one of the reasons why I say it feels pretty unlikely that either of them is much of a goer Andy Burnham was being followed yesterday by journalists by helicopters on his trip down to London Do we have any idea where he is today? what he's doing? Is he coming TV interviews and face any scrwising? Not today on that last question. He's meeting MPs. I'm not sure precisely where but I think somewhere in But I've spoken to a good handful of MPs today ranging from people who've known him for years, to MPs who have never met him. who have been called to see him Those meetings are being arranged by some of those MPs who we saw accompanying him on the train down and to his swearing in. So Sally Jameson, who represents a seat in Doncaster and Elise Midley, MP for Koseley and Merseyside And they are arranging for Andy Burnham to make his case in private. We saw them behind him on a sort of celebratory event he in Makerfield.x all these women in sunglasses. Yeah who sort of run the campaign. Well, I wasn't there that day, but I mean, it looked sunny. so yeah, fair enough. But I forgot my sunglasses in Down Street this morning so it's a bit of a sore point They're much better prepared than me for all sorts of things. But yes, I think Andy Burnham is meeting NPs because I think you can't make the point enough Sw's a familiar figure. He ran for the Labour leadership first sixteen years ago, second eleven years ago he left Parliament nine years ago and there has been an extraordinary amount of churn in British politics and therefore in the Parliamentary Labour Party since then. twenty seventeen election, the twenty nineteen election where Labour lost so many seats, the twenty twenty four election where Labour won so many seats. So actually, the vast majority of the Parliamentary Labour partarty barely know the man even as the vast majority of the Parliamentary Labour Party appears to have decided that he is the man for the moment. A churn in British politics, What about the churn in the market, Darini? talk about Burnham's economic inheritance in a second. But when Starmer went yesterday, what did we see? All the drama was on Downing Street and not in the city is the short answer to that one. We didn't see much at all. mean It was really fascinating because at the start of the year, when I went and talked to major investment houses, you British ones and international ones and said, what's the biggest concern about the UK? What's keeping you awake at night And they all said political instability and that risk. Here we are. The Prime Minister resigns and have they all gone to the beach? Actually no, because they like us knew that this was likely to be coming.. And the big question, they expected it and the big question was then what next Who are the personalities who are going to be in number ten, number eleven? They've got a fair idea who is likely to be in number ten like the rest of us. But what does this mean for the policies and the way they approach the challenges facing us? And that is the big question. because ultimately, that phrase it bond villains that West Streeting was these. I used to work in the bond trading floor though. I'm not just speaking off on behalf of my former people. saying bond markets are not bond villnds, I think there was the last from that big last week. They are the governmentss lenders. and that's where weve got to think of them, right? So they are responsible for making sure they have the money to carry out plans, but we don't want the interest payments to get too high. whichich is why there's this kind of uneasy relationship between the markets and politicians at the best of timees. So they're saying we want to see how generous the plans are they are credible and also do they ris putting up inflation and interest rates? All of those questions, they've gotth to be answered. We're going to have lots of speculation, of course, in the meantime about who the chance is going to be What the budget is going to look like, all those things, what the fiscal rules may or may not look like eventually. This is all very much deja vous or twenty twenty four whatever again already And what do we know about Andy Burnham's sort of economic perspectives, maybe not much, but much what little bits can we try and assemble together? We know that Beronomics is very hard to say We also know that we don't You did it smoothly. I think so. had a fair bit of practice in the last few days. but we don't know exactly what that would look like. But when you look at some of the things that have been said over recent weeks and months, things like having more state control and utilities, we don't know what that'll look like, more social housing being paid for potentially? Well, this is the big question Overarching this seems to be a philosophy that to make money, make us better off, get that growth, Turbo boosted again you have to spend money. And then the question becomes who' money? And in terms of that big question over who is Andy Burnhams Chancellor if he were to become the next Pime Minister Henry Darsshini, who's your money on Oh Joe, don't tell me like that. it feels like thoseose who've been around Andy Bernon for a while have been proceeding on the assumption that he would probably want to appoint Ed Milliband He is now very quickly the sort of anointed one of a coalition that spans basically the entire ideological range of labour MPs. And that poses an interesting question over how to rebuild unity in the Labour Party and his appointments are absolutely core to that You spoke about Milliband and potentially being divisive, I think on Sundayayss N newswour, didn't you? And what about how that narrative is being formed. Is there almost an anti milliband campaign Yeah from someone what on the right of Yes, abbsolutely. And are they acting on behalf of somebody they'd like to get the job? In some cases, perhaps, but actually I think in most cases not. And I don't think we should make this sound pettier than it is There is in some quarters in the Labour Party sixteen years lingering anger at Ed Miliband for having defeated his brother David to the leadership in twenty ten. There are Labour MPs who will still tell you that's when it started going wrong for the Labour Party. Even if they weren't inarlient. Even if they weren't in Parliament at that time. However I don't think that's really the main thing here. The main thing is ideological. It's a genuine divide within the Labour Party about the kind of political economy that a labour government ought to advocate for. And Ed Milliliband as ennergy seecretary, has espoused a particular vision of U growth fueled by a green transition. and he believes good green jobs are the way to re industrialise Britain that is controversial that know people who are currently sitting around the same cabinet table as him have I you know furiously denounced to me in private and if he were to become Chancellor, that would be a massive endorsement of view of what the UK's economy should look like in the years and decades ahead. So I think we shouldn't see this as a sort of personality based tussle, though obviously it does devolve into that We should see it as a question of what kind of burnamism the country is going to get if Andy Bernam becomes the Pime Minister Rachel Reeves was at that welcome photo call in Westminster yesterday Does anyone you speak to Dashini think that Rachel Reeves will be able to hang on to her job as Chancellor? Because the argument for it is that would be provideability for the market Stability, credibility, all those ways. Do you remember the markets had that major wobble when she frankly had a bit of an emotional wobble in Parliament? tears And which isn't tears. And know that goes to show exactly how much door they put by the path she has chosen, put it that way. And she's been very keen to show that she has chosen that particular sort of path of stability But having said that, is it the case that nobody else can take that one on? Andy Burnham, this whole kind of I'm not going to be in h to the bond market seems to be a thing of the past, and he seems very intent on showing that he's going to stick to this path that she's carved out in some form or other. And does that message carry on and therefore Who do you pick to be Chancellor within that? Is it going to be someone like Ed Milleraband, you say, no, but you have to stick to this particular. These I am the first Oder of the Treasury, this is the path you are taking and you' just had to work out things within that. Because that phrase, firstirst order of the Treasury is literally on the door to number ten. That is one of the titles that PM has. That is. Or when I looked at that statement Wreeting the other day It did read a bit like, didn't it? that kind of cover letter you slap in with an application for a job that been about the economy. So is that a kind of a very overt actually look you know, I get your vision. I'm going to be doing, you know And you mentioned that the markets didn't react to Stara going they react to a choice of Chancellor? Yes It could react to a choice of Chancellor, but I think a lot depends on you know we're expecting to hear off of Mandy Burnham on his vision for the economy And I think a lot will depend on what he sets out there And that case, in that case, it may become more than just about the personalities. And it's not we all look at number eleven, absolutely right thing to do. But don't forget as well that kind of the panel of advisers he's forming around. So when you hear people like Jim O'Neill, Lord O'Neill, that sort of veteran minister, crossbench peer You know, former Chief of Conom Mister Goldman Sachs comes with a certain pedigree and also a certain set of views and also Richard Hughes, formerly head of the Office of Budget Responsibility. That is intended to send out message, isn't it Henry other names for Chancellor, it can't just be Rachel Res hanging on or Ed Miniban coming in. No, so weest streeting is definitely a possibility, at least as far as labour MPs who I don't think have particular access to Andy Burnham's innermost thoughts believe. and look it's really striking that West Streeting in the several weeks that he was running a leadership campaign, even if he didn't ultimately go through it Almost all of his big announcements were about the economy So whether that was at that point intended for a leadership campaign or was always going to end up like this, it feels pretty clear what the biggest job possible he's auditioning for now is. know and there are measures that he talked about equalizing capital gains tax with income tax in certain ways, income tax rates, that you could see appealing to Andy Burnham and perhaps 'm allow a new government to square the circle arguably of The manifesto being quite constraining on personal tax while also raising more money for new government spending. So I think he is definitely a contender. Other names that I've heard, but I mean, this is not necessarily inform speculation on the part of the MPs who have made the speculation to me. but in the course of my rounds this morning, someone mentioned Jonathan Reynolds to me. C say round. Where are you? What are you doing walking around Port Coll'souse try to find the most shaded area. And Aela's house is inside, though. yeah, but it's like a greenhouse. I you mean oh okay, you know, Joe. have I have not been there in this weather's No, no, it's It'sually quite cool. It's not a wonderful example of nineteen nineties's PFI funded building projects.? Anyway, maybe no, I think it is actually. Anyway I could do a whole podcast on this. They used to have massive fig trees U like huge fictories, which I think a lot of the heat out. they had a cooling effect. but they were also under the deal when they built Port Colour's house. I think it was quite uneconomical and they also hadn't got deep enough roots And So anyway they end up taking the trees out and also there were some sort of reflecting pools there That's very topical. And were exactly, notot algae filled, but they got rid of those as well Anyway. Jonathan Reynolds was mentioned to me in Port Gullers House by a Labour MP who's very much in Team Burnham. they were just openly musing on whether he might be simultaneously able to Reassure the markets, he was previously business secretary. currently chief W Y, notptically happy in that job, but he's also a greater Manchester MP. Yeah and wasy Burnham's campaign launch in Makerfield, which felt a little bit provocative at the time, but look Abitious? For sure and has had an economic portfolio in the past, as I say. The other name someone mentioned to me, actually a few people have mentioned is John Healley who of course resigned as Defense Secretary earlier this month. He was a treasury minister under Gordon Brown in the Treasury back in the new labour years. I think for quite a while But obviously, given what John Healley has said, given the reason for his resignation that would commit a Burnham government instantly to quite a steep increase in defence spending and that is one of the many issues where we're not quite sure where Andy Burnham stands. For whoever walks into the treasury in maybe three and a half, four weeks time What will they inherit and what do see any other big challenges ahead? It's really funny, isn't it? We talk about all these people who could be vying for this job or could be in the frame. And I also had, by the way, Pat McFadden and Jet Cooper. So many names. but why would you want this job? Because if somebody said, come in here, it's great. You've got power way But actually you haven't got much to play with. And I think that is going to be the reality. it feels like such a long time ago now when we speak about the sppring statement. But at the time we heard Rachel Reef stand up there and said, Don't worry, I'm going to meet these rules on borrowing, and I'm going to have over twenty three billion pounds topnd three billion pounds, not a huge amount by previous standards, but not a bad amount either. But then the warall came along. And we think we do not know, we don't have clarity on it, and we won't until near the budget time, how much of that might have been kind of used up by the kind of extra strains on the economy B What that does signal is when you hear the kind of scale of plans that Andy Burnham has already hinted at. there may not be enough to stretch to that. and then you have to come up with other ideas, don't you? You're going have to come up with other ideas about do you raise more taxes? Who does that go on? Are you going to have to sort of pull money away from other bits of spending, including perhaps wealthfer reform. So there's all those big questions underpinning this idea that however big your ambitions are, the economic reality is quite different. And talking of calculations, we have a new man with a calculator just appo pointint in. We do I mean this is exciting news in my world, right? I which gives you an insight into what like The Office of Budget Rponsibility has a new head. Well, subject to confirmation from the Treasury Select Committee Professor Jonathan Haskell. Which may not be a household name, but he is the man who has some responsibility for the roofs over the heads of many households because he used to be a member of the Bank of England's Monetary Policy Committee, so he was an interest rate setter. He is not just the person who is going to be looking at the government's plans or Andy Burnham's plans as they may well be and sort of rubber stamping those and saying, haveave you met the rules and does this all add up But there's something additionally a bit interesting about his background, which is that his speciality is productivity and the impacts of AI. And why does that matter? It means that the government can go to him and say, we want to invest in XY inste Can you say that ye, you have the vision to believe that that can boost growth further down the road? And that in turn means they've got a bit more resources further along the way as well. So want to watch and the answer to a question that many of us have been asking for a while And also we seem to have had signs that a process that normally takes place in the run up to general elections with possible changes of government is also now starting in Whitehall. conffirmed by the Prime Minister's official spokesperson a briefing for journalists earlier today, we don't know quite how this will work, but there are going to be acccess talks So any labour leadership contender, of course at the moment, there's only one publicly declared labour leadership contender. So that means that Andy Burnerham and all his representatives will presumably begin talking to Antonio Romeo the cabinet seecretary and the head of the civil Service permanent secretaries who run different government departments I'd assume pretty soon and that's obviously a very significant moment. I think it has happened, by the way with leadership elections in the past when the Conservatives had sort of longer handovers. know I think the summer of twenty twenty two, when it became clear that Liz Truss was likely to succeed, Boris Johnson, she spent a lot of time with Simon Case, the then cabinet seecretary talking about what she would do I am Obviously that ended quite badly for her. But yeah, so it's a significant moment in terms of a symbol of what happened yesterday, which is Kistara gave up office. And what's he up to now? He had some sort of drinks party yesterday evening Are we aware of anything he's doing because of the sort of oddity of his situation he's not really allowed to make many big decisions anymore, is he? No, that's right, although we are told that he will still publish the defefence investment plan long awaited, originally set for publication last autumn. The plan that the funding of which prompted John Hany's resignation as D defeence seecretary. Exactly and possible Labor leadeadership contender Al Chnes as well. Look, it suddenly becomes even more controversial than it already was because When it is published, Obviously One of the massive questions is What do whoever is in the Labour leadership race at that point, think of it because if they a different answer to what the contents of this investment plan should be, then what this government has published under KS Armor is almost instantly redundant. So it is going to have a strange status. I think one of the reasons they probably still intend to publish it is that they had committed to publishing it before this big NATO summit in early July which Mark Rutter, the NATO Secretary General has sort of requested versions of from the different participating countries And Kir Stama will still attend that NATO summit on the current timetable. That will be one of his last big moments as Prime Minister and on the world stage Is it clear what Team Burnham think of the fact that Starmer and co seem to want to on with this big po? Not yet, but I think it'll be fascinating over the course of the day to see whether there are any public signs of resistance to the idea that Kistama should still be allowed to publish this. Darashina, you deal in big numbers And this plan does seem pretty enormous. It does. What is the sort of G us the economic perspective of such significant decisions being made by politicians. By politicians Well,' The economic significance, I can to say, it's already cost the defeenceense secretary, frankly, isobs think this is not. And I thought it was quite intriguing what he said at the time is that there's an unwillingness by the Treasury to commit this money am I talking about billions and billions here, right? U that there is there is that sort of sense when you read that statement that the treasury somehow being a bit sort of penny pinching and a bit sort of You know, but You know, the conversation we've had about the lack of financial resources and public finances, to find that money, you have to take it away from somewhere else, unless you're going to relax some of the rules, right or else you're going to find it from somewhere else. So that is the kind of give and take that anyone is going to have to do if they are going to sign up to this and go, yep, that is the vision for the future And that is why when they talk about difficult decisions. I mean whereere do you get the money from? Are we going to be looking again at areas such as education he? Sh should mention, by the way that we look at the plans that Rachel Reef has drawn up, the way she's made the sums add up and met these fiscal rules means that you've got some really tight spending figures for various departments towards the end of this Parliament And that could mean some services feel the squeeze once again. So let's not pretend there's lots sloshing out there and you just have to sort of P put your hand on back of your thum sofers, that's not you use fund the defence plan It's sort of been easy up at this point for Fry Bern. it's going to get a lot more difficult if he is to get the top job. Well to end where we started, I saw this from Tom Pck times their parliamentary sketch writer Harry Cane, Jhon Stones and Jordan Henderson look set to become the first England internationals to go through a change of Prime Minister during a major international tournament for a record breaking third time Gosh What as well, I guess it's both a sign of their longevity as international footballers because it's slightly surprised two called Jordan Henderson up to the squad. M much I'm a big f But yeah, also that is the most creative way yet that I've heard of describing the political churn we've seen in recent years. Well, well done, Henry. Henry and Dashini, thank you so much. Good luck in trying to watch the games tonight Adam will be back tomorrow. Hopefully Chris's voice has recovered. Newscast will be back very soon