Future of US-UK political relations

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Shop Wayfair's Fth of July clearance now through july six at wayfare dot com d Pay fair, every style, every home. Monday AI agents took over my work And I absolutely love it. Chasing deadlines, writing status reports, updating stakeholders, agents handle the daily grind now. They live inside Monday dot comot So they see the full picture, My work, my team, the whole company. And I don't have to worry about the data. It's safe, whichich means I'm free to focus on the big stuff, knowing everything runs smoothly in the background It's completely shifted to the way we work. Create your own AI agent in minutes on Monday d. com This is political currency. withith Ed Balls and George Osborne. So we are in the studio in Howxton. It is the morning after the football match the night before and quite stressful because I thought England were going to blow it. But then Harry Kane, I've got to say, you know, Harry Kane for Prime Minister. I mean if he can save the nation quite like that, Andy Burnham roll over. Yeah, it was good. I was coming back. It was a stressful day yesterday because I was at Wimbledon watching Jank Sinner, the world number one men's world number one win easily. and then I got the tube back from Wimbledon and so I was missing the first part of the England game. So It was just sort of updating the BBC website and it kept saying, you know, Congo O out, one out, one out Anyway, but got home just in time to watch the two canane goals. so yeah Now we've got a huge dilema. I mean, if you're a parent, what do you do about the fact that England in the last sixteen and the game kicks off on Monday morning at one AM. I have to get up at three thirty that morning to go to work. C just get up a little earlier Well I think that push on through, Ed. How can you not imagine it's like an easy jet flight back from Abithher and you can just go clubbing and then You've got your gig on tonight anyway you could just I You know how to pushher you' a rock star. but rock stars don't sleep I have this view that if I don't concentrate then how can I expect them to concentrate? So if I'm asleep, then will they be sleep in defense? Who Oh the Eng team, right? I don't think you are you're not the mystic Meg. I'm not sure you have any direct impact on that No, but it's just like I just think morally I should watch that. Yeah. Okay. morally is definitely the word we need here. I've been meaning to ask you a question for a whole week. And I reckon some of our listeners also want to ask you this question. What was Gordon calling about? U what was Gordon calling about I'm dead Vy bad because you know For those who don' for those who missed last week's episode Gordon Brown literally calleds in the middle of a conversation about Gordon Brown. Shall I tell you what he's calling about He's calling to say, I'm really worried think they may be going to break up the treasury U I think he was actually calling to say, you've got to discuss this, Ed, you've got to discuss this with George on your podcast. But he called mid podcast. so it was too late. But Gordon, we will make this right Y We're make this right today. Yeah. Now listen, we've got lots to talk about, haven't we? We are going to start by talking about The Prime Minister in waiting, Andy Burnham who's just a couple of weeks away from taking office and he's keeping a pretty low profile he gave a big speech this week, his first big speech setting out I guess the sort of economic approach to is premiership and in particular, focusing on devolution. So we're going to have a look at How Burnham is getting ready for number ten. And then we're going to pick up that issue that Andy Burnham announced a number ten in the North Thromas' office in Manchester And that maybe is a good idea, but is this actually something bigger? Is this a remaking of the British state? Is this saying We we're going to take power away from Whitehall, away from the treasury. Is this going to become the new Wilsonian growth department And what role should Andy Burnham want the treasury to play And what kind of treasury does he need? Tbe back's devolution growth agend. Let's talk about that second And third it's a birthday this week, isn't it? It is someone's birthday or some things's birthday. It is the two hundred fiftieth Birthday of the United States of America We're going to talk a bit about not just our own relationship with the United States, but how the celebrations are going and more to the point How are things going to pan out for the US in the years ahead and how should our new Prime Minister be thinking about his relationship? person who sits in the White House All that to come. But let's start with Andy Burnham's big speech at the beginning of this week in a museum in Manchester. It was a bit of deja vous there because I gave my first my Northern powerhouse speech In a museum in Manchester, I gave it in the Museum of Science and Industry. He chose the Pople's History Museum in Manchester. Is there a coat of yours in a glass case in the museum? I think you're referring to Michael Foot's donkey jacket. And Andy Burnham's black jacket where he did his COVID response to Bis Johnson on behalf the North I I'm sure you're selling the museum Fy Conscott jacket there, weren't you? Yeah, question actually. Anyway, he gave a speech to an assembled crowd that included a front row of various mayors from around England and lots of Labour MPs um anging for a job in a Burnham administration. But you know, it was a substantial speech. Here's a clip that kind I guess sort of sums up the ambition My generation of politicians, including me, must take responsibility We ha' been good enough But instead of being honest about that, the parties have continued with politics as usual. Finger pointing points the wholeo of Whitehall will now be required to get behind our places and work together with them to make quicker More joined up decisions. Ours will be a ten year mission to raise living standards across the land. pololitical direction I set is not up for negotiation. I will build an inclusive team at the very highest level so that all parts of the party and the country can see themselves reflected and represented in it.ability in places that haven't felt it for a very long time. And I know because I heard that from people on doorsteps in the by election. But let's give them that feeling that ability to hope, to aspire to better. Imagine Good growth in every postcode and hope in every heart Well, imagine no more Let's make it happen We cut off the raptuous applause there at the end, but we could have included that What did you take out of that speech? No, I mean, there was lots in the speech. And as you just hear from the delivery there, we've been playing clips of Prime Minister Starmer's speeches over the last couple of years. you can already tell that Burnham is a better communicator and there's more kind of emotional content to his speaking All that said, there are lots of things in the speech I like as someone who a decade ago or more was saying we should do more devolution within the UK. So he's quite specific about handing powers to local areas over things like employment support, creating housing funds for local areas creating a numberum ten in the North, which we're going to come and talk about later on the show The thing I think that was missing is the thing that was missing from Kirstama's preremiership, which is where is the theory of economic growth that sits behind all of this. The suggestion that no politician before in Britain has wanted growth in every postcode is just nonsense. Every prime Minister, consonservative Labour has wanted to get the whole of the country growing. and you know as recently as Boris Johnson, you've hadard prrime Ministers talking about leveveling up There's a long history of this. and Although as I say, I welcome all of the sort policy content. What I didn't hear is a theory of How are you going to improve Britain's economic performance? It's not just going to be sheer will, it's not going to be some new office. you've got to have some theory and I hope he draws on some of the things that inform the Northern Powerhouse, which actually came from Jim O'Neill, who' a leading economist and friend of Aly Burnhams all around kind of cluster theories and agglomerations of knowledge and so on in city areas and how you connect towns to them as I want to see that and it wasn't there in Kistana's speeches, it wasn't there in Rachel Reeves, his speeches and it's not at the moment there in Andy Burnham' speches either I think on that point, the jury is out because we haven't yet seen the detail from Andy, quite a lot of the writers of Center newspapers said this was back to the nineteen seventies, back to statism But as we've said, that isn't Manchesterism I have some sympathy with your argument. I think he would say, but the theory I'm setting out is a theory of devolution for growth and that is part of the story and you As Chancellor, the academic work I've done at Harv and Kings in the last few years has all been about how you can drive through devolution change, but it's also about the investment we put in. I think it's also about the way markets work and the dynamism of markets, whether you have competition and entry and the new firm and a tax system and a finance system which supports the new company being established and growing. and he didn't say anything about any of that, which allows the right wing papers to say, oh, no, it's just statism It's going to be anti market. and that isn't really the Manchesterism We're going to talk about. at the other worry I have, which will talk about in our second section is if this becomes a theory of the state which says reject the Treasury, that isn't going to work. and that would take us totally away from the vision for devolution and growth that you and I have talked about on this podcast and more widely in the last few years. But you know Andy and his new chancellor are going to have to set out a philosophy of what drives growth and that hasn't happened Yeah, I thought the other thing, you are right. that it was very different from H Stma in terms of the Chrisma and the authenticity of the communication It was also When it was quite presidential you know As we played in that clip, the political direction I set is not up for negotiation who is quite e It was a little bit messianic in the room with all of the cheering and the applauding. There weren't very many cabinet ministers in there, a handful, but they were the mayors, but there's lots of cheering crowds. And I think one of the things which Kir Stara got wrong was it was too I to This is what I have decided. There wasn't enough sense of the team and the collective. and I also think Kst armour was inauthentic. when he sort of went for the anti politics, anti Westminister rhetoric Andy does a bit of that. and I know why doing it. But he's got to be really careful. If you remember Emanual macro The outsider Breaking up French politics comes in to become president quite quickly from the inside He looks like he's not delivering, you know, I'm not sure centrist populism or centre left populism works any better than populism from the extremes. Just watch that because in the end he's got to unite a team and rebuild trust in Westminster and in politics rather than playing the anti pololitics card for the inside it doesn't work Yeah, I'm a bit more sympathetic to him. I mean, he's the candidate in theory in a leadership contest. He's not yet the prime Mister So he's setting forward his candacy as his first maybe only speech of his leadership campaign. And he does talk about trying to build an inclusive whichich I'm not trying to be unsypathetic. I'm just saying that it runs out of road and that cannot be how he governs I thought the interesting thing, which will be a real testament It is certainly true that Westminster is absolutely set up to make this fail. is his talk of bipartisan cooperation I mean, that is quite a bold statement And of course, you could argue our politics has never been sort of less collegiate and it's very fragmented But if you go back to Kir Stahmer's election, one of my critiques of him was right at the beginning, he was just utterly anti everything that the Tories had done and totally unsympathetic to his predecessors Whereas David Cameron, who was the last incoming Prime Minister from a general election, was sort of generous towards, particularly Tony Blair and then a bit towards Gordon Brown And Tony Blair before him made a link to the C of Thatcher inheritance. I thought there's interest and of course a key part of Manchesterism has been cooperating with conservative governments er of their led governments So it's good that he's on he's ont something and, you know, it just reminds you why on earth? didn't we have the big act of devolution two years ago when the Labour government came in, you know, Bw way. it didn't happen We are publishing next Wednesday at Kings'ight. We've got Michael Govan Angel Ana coming on. our next Harvard I think it would be our final Harvard Kings paper Because we said two years ago, here's what you should do. And two years on, we're going to do a stock take of whether in the first two years the government embraced devolution and growth And I'm afraid It's not a good story There's been some parts of it very effective around backing the mayors and I think from the housing community's loc government, particularly Angela Rna was there, they went for that agenda, but more generally, no, they didn't embrace it. No, look look, I can't help but be a bit flattered that there's lots of references to me and what I did in Manchester. But that was over a decade ago. and the fact that like not much has happens doesn't speak too well of the various governments that came after. You know you are also reminded this week So he generates headlines with this speech. You're reminded of I think two of the kind of big challenges he's got coming almost immediately on becoming Prime Minister The first is The fiscal challenge. the defense plan I thought element the sort of military parts of the defense plan were quite brave. It's quite hard to tell the Navy scrap your destroyer programme we're moving to drones. and I would actually applaud the Navy for embracing that and I wonder whether the RAF shouldn't be doing something similar. They're still pushing ahead with kind of next generation of manned fighter jets. But I remember when I was doing these defence plans, trying to tell the Navy and the air Force to kind of retire the harriers or scrap the old aircraft goes,' like a hard thing to do. Anyway, the content feels to me quite strong The fat is entirely unfunded I mean, really entirely unfunded, you know, there's a price tag to it. and A, there's sort of five billion odd pounds that literally we don't know where the money is coming from And Th then there's another seven billion or so pounds, which other departments have to cut thingsings like road and energy projects, which we've been saying And this labor government for the last two years have been saying, and every economist looking at the UK has been saying is exactly the kind of long term investment in the economic infrastructure of the country that should be going ahead. So it seems entirely kind of counterproductive And just a reminder Randy Bernham that he has got, you, where is the money going to come from? And if he can't tackle the PLP, the Labour Parliamentary by on welfare bills And he can't go to the bond market And he's got limited room on tax, although I'm sure some taxes will go up. Where is he going to get the money for all these things from? Look, it was classic. Kissara to announce without any qualification a bold plan a big solution and then just to allow it to unravel over the course of the day when people find out it doesn't actually add up. And you know there was a five billion gap to be found in the budget as well as ten billionars of efficiency unspecified. Kir Stama then says at Promas' Qions, that is why we have know a margin in the fiscal rules. Wh we overachieve, no care. you don't have a margin in the fiscal rules in order to spend it halfway through the year on a defence plan. You have the margin in case the economy goes wrong and the public financers aren't as good as you wanted and you don't have to come back with a more tax rises in an emergency way to fix the fiscal rules. Your point is really important. Andy Burnham did nothing in this speech on Monday to depress expectations, to explain to people. I don't mean that in a negative way because I know that he wants to be at hope and optimism But he didn't set out to say, let me tell you how hard it's going to be challenges we're going to face You know that I can't do everything I won't be able to make everybody happy in the start and instead, he sort of opposite of that, which was to say, as we quoted Good growth in every postcode, hope in every heart, let's make it happen. I mean which by the way is a contradiction in terms. I mean devolution means letting local areas succeed and brackets fail You know, if you're really going to trust local communities, it's not all local communities not all local leaders are going to do well Unfortunately, that's the nature of giving people power and empowering them to make decisions You know, some postcodes are going to struggle, but under a devolved system. But he is raising expectations Meanwhile, he tells Kissed Armor and tells theedia that he signed up to the Starber plan. on defence. clearly it wasn't told of fine print. So you know, the first priority for the Andy Burnham government this autumn isn't going to be growth or every postcode or social justice His first problem is he's got to find money for defence So Did he walk into a bit of a trap? Well, I think I can imagine him thinking I just don't need a row with kissed armor I just need the guy out of Downing Street. So I'm not going to say anything. I'm not going to contradict him. I'm not You know, I thought the other thing that happened this week I said there were two. One was the raab at defense spending. The second was actually stories on the news this morning, I listened to which were different stories, quite different stories, but sort of speak to essentially the political challenge he is going to face So the first was that the guy who led the Rochdale grooming gang is being released from prison. And he he was a dual national, a Pakistani and British citizen. His British citizenship has been stripped But it looks like he can't be deported from Britain. And Andy Burnham's sort spokesperson has already said or I think' actually Andy Benham himself, who's spoken about grooming gangs a lot before as mayor of Manchester. has gone on social media saying I'm going to ask my home and foreign secretaries to do everything to deport him. And you just know in a year's time that's going to be loed, Well we can't And Pakistan's not going to have him back until And then the second story was a BBC investigation a very good one from the BBC revealing that people smuggler has been running the small boats across the channel and was imprisoned in France, has come to Britain and claimed asylum under a false name and is living in the East Midlands in Leicester sort of with impunity. You know, he's going to come in as Prime Mister, dealing with all these other issues and a country that isn't very hopeful and isn't very optimistic at the moment. And I think he wants to bring hope. He's obviously very excited about him becoming Prime Minister and will feel I can make a big difference The Parliamentary Labour Party may well feel hopeful that You know, they're going to turn a corner in terms of their political prospects That's not going to chime with the national mood. and therefore I think he needs to think very carefully about his communication In the first couple of weeks as Prime Minister and through the autumn Yes, I do need a message of hope Sama said it's going to be tough and then didn't set a kind of long term goal So you want to lift people's hopes and aspirations, but you can't is not Tony Blair turning up in Downing Street in nineteen ninety seven with cheering crowds and the whole kind of mood of optimism or even the sort of sunny first days of the Cameron Cleg coalition in the Rose Garden and a sort of mood the country, you know was on the up. That's not the country he's inheriting as Prime Minister. And that's precisely the reason why The previous Prime Mister has imploded and the governing party has turned to him an outsider from the current West Mister seemen to solve things the truth is that he is going to inherit a lot of problems and however much your first two week plan is worked out in detail, and let's hope he's got a detailed policy plan, although it's going to be into August, which is going to be harder, events come along and Gordon Brand was thrown entirely of course in the first days of his premiership by the bombs at Glasgow Airport and Haymarket. On the other hand turn out to be very defining for him in the first few months. And so you also have to have dexterity and your media operation has got to be class I actually think we could give Andandy Berham here again just a little bit of advice based upon our experience and what we're seeing at the moment, because we had a conversation last week about the cabinet. There is a lot of stray briefing in the newspapers from friends of Andy Burnham, sources Andy Burnham, people close to Andy Burnham. We've had Andy Burnham The first woman Prime Minister which he's obviously had to distance himself from. the other I have to say was one of the most ridiculous. So for the people who didn't follow this, the Labour Party has not had a female prrime minister And they said, donon't worry in for, Andy Burnham's going to be our first woman prrime Minister because he's so in touch with this feminine side. It would drive him up the wall? All this know we had you know Andy Burnham apparently It was like the thick of episode, wasn't it? Can you imag you like? Our first female primis given the problems Kist Amer had about what a woman is I'm not sure what Andy Burnham wants to to go there. You also had, you know, Andy Burnham to start talks with the Lib Dems for a coalition. Now I'm all for Andy working with parties on solving social care, but I'm not sure you should start now on your coalition talks He was clearly very. So I would be getting friendly with Ed David because he want plan B in case I don't get a majority in the House of Commons. But look hisis people distance himself from the friends of Ernie Burnham saying these things. You have But when you say his people, can I pick up who is is what I'm getting to. I think the other one I was just going to pick up was You know there's a lot I mean he was clearly frustrated on Monday about all of the cabinet speculation. He tried to make a joke of it and push it away, but there's quite a lot of, you know, Unless you are a man who played in a football team in the early two thousands, you don't really have the stature to do the job and there's quite a lot I' quite hopeful for you, Ed. Well I mean, you were there. Yeah you're in all those photos. I'm in all the photos. I had to put up with all the Bullllington Club photos. You've now got all these the football team in bllack tie. Nothing winds up. Women, politicians and members of the PLP. I'm not sure that you and I are in a great position to tell women ever what they should or feel and neither' Andy Burnham. But what I do know is that stories appear in the paper saying we need the men back And we need the men of stature back. We need the footballers back I mean, you know, let's be honest, the latter period of New Labor was not a great time for Harriet Harman when she was an not by Dputy Prime Minister. Caroline Flint talks about a two tier cabinet The only people who resigned over Expenses were Jackie Smith and Hazel Blers, both W women Margt Beckett ditched out. They've got to be careful about this. These again though, mean Andy Burnham is not through his Burnham Balls Perneell Andy Tim Allen. they're all the old gang's getting together. I'm getting to the serious point. Andy Berham is not saying these things. I don't think the people who work directly for Andy Burnham, you know who are doing you know his media and you know telling people what events he's doing and what his speeches are going to say and planning the media strategy, they're not saying these things. But what happens in leadership elections and with new prime ministers is you have a whole bunch of people who think well, you know I'm a friend of Andy and people want to know my views. And so I can say, hereere's what he really thinks, here's what he really wants. If you have going into Downing Street and we both experienced it in different ways, Gordon at the beginning, maybe you with different noises off. If you go in with a cacophony of voices saying Here's what he really thinks and you spend your whole time having to contradict what is being said in the newspapers, it can be chaotic and catastrophic. and my advice to Andy Burnham is you've got to get a grip on this. The only people who should be speaking for you are the people who you say speak for you who are your spokespeople. When I was a cabinet minister, I said On I and Alex Balardadelli who work for me speak for me and always as a spokesman for if it's not me, because if you allow it to go out of control It causes anger and frustration and confusion. Kir Starm is number ten. a lot of the time in the last two years has had open briefing wars between different members of his own number ten. If you lose control of that, it's very hard to get it back and Andy and James Pinell going to be his Chief of staff. they've still got time Get a grip of the media operation and stop all these noises off because it's really damaging I think it's a particular challenge, isn't it if you become the Prime Minister halfay through a parliament Be if you win in an election, you've spent a month talking about your plans in the election campaign and then the run up to it. Everyone knows who the team is because it's assembled and ready to step in electure to you've got to be And you know and you know, you know who speaks on econy because it's the shadow Chancell. You know who speaks home affairs, it's the shadow homeome secretary so on. and they've got there's a press Here, you know, he's got what who is his team? He's literally got. James Pernell, who's said nothing as far as I can see public as Chief of staff He's got a press secretary. He's got a you know that guy Kevin Lee who helped him in Manchester. but they're already good They're not the ones who are appearing as ally sources, friends. They're spending the whole time having to contradict What would you actuallyally do if you're him? I mean, you know, practically, how do you shut down friends of Burnham? you say publicly I mean, he was trying to do that in his speech wasn't he? He was saying you're going to read a lot of speculation about the cabineta I haven't made any decisions. I'm not going to announce anything for a couple of weeks. I mean he was trying to do that, you referred to. He was trying to do that, but on the other hand all of the briefings of the newspapers, which have carried on since are kind of read and people try to understand what's really going on here. What you cannot have in your Downing Street team ten or fifteen people who think it's okay for them to speak to the media. And once that starts, other people think, well, if they can, so can I, young civil servants start doing it. You have to be really clear And you have to say this internally, if I find that you're speaking to the media and you're not authorized to do so yet And you have to say to your team and to the media, the only people who speak for me, no allies, no friends are me and this person and this person. When we were in the treasury, we were very, very disciplined about that. And I'm sure you were as well. W wasn't that briefing in the pp Euro tests. No that wasn't a brieing. that wasn't brie that was Tony Blair rigging Charlie Wheeling to say What is going on with the sun? And I think Charlie said Alistair Campbell, your press secretary was already rugging them and told them we're not joining. I mean, that that was not Charlie's fault. Charlie was not doing the briefing on that day. but you just got I agree was very. No the Brown and Blair operations were very disciplined and actually the Cameron operation was pretty disipant on the press right as well So presumably all these journalists are going to have to trapes up north to number ten north and stand outside that door, which might have the big advantage of not having prrotester down the road drowning out everything that current prrime Misters tried to say outside the number ten door in Westminster. So we're going to turn now to number ten North and to what the treasury might look like under a Burnam preremiership and we're going to come to that next Dhing Still waiting in line againgain. That's time you'll never get back. Save time and money with stamps dot comot Over four million businesses have skipped the line with stamps dot comot Join them to save up to ninety percent off carrier rates from your computer or phone right now. Print postage for certified mail, registered mail and packages in seconds. thenen schedule a pickup right from your home or office. For a limited time, go to stamps dot com and use code podcast for a free welcome gift Taxes and fees a li. You want to get your backyard summer ready, but you don't want to break the bank? Wayfare gets it. Planning on dining alfresco or relaxing poolside Wayfair has everything you need to prep your space. Shop now and save up to seventy percent off during Wayfareair's Fth of July clearance. Score huge deals on outdoor furniture, area rugs, and more. We're talking thousands of products for every style and budget. Plus, sururprise Flash Deals July sixth. Don't wait. Shop Wayfare's Fth of July clearance now through july six at wayfare dot com d This Monday. com ad was created by a team of people and AI agents. Reese, our content agent, wrote the copy based on our best practices, like mentioning Mondayot com three times. That was the second. Johnny, our coordination agent, built a timeline and kept everyone aligned. Olivia, our human creative director, stayed in the loop Because agents are great, but they don't always know when a joke lands. She had one note, tellell listeners it only takes minutes to build an agent. So, minutes. Create your own AI agent today on Monday. com. to welcome back The big news story at the Andy Burnam's feature on Monday was him announcing there is going to be a new office for the Prime Minister in Manchester that you number ten for the North And This is Andy Burnham talking about it on his social media. I have to say his social media is good I left the North again, I tralled south again There was a bit of a smithleric there for you, but I'm back in London. After the speech, please with how number ten North has gone down You know what it will mean in the future is that everyone doesn't have to come down here to have a serious conversation with the government. If you think about it, a North Pole to the South Pole and just make the country feel more balanced. I hope you're excited by it. I'm certainly excited by it So what do we think going on here? What do we make of number ten North Well, I think there are two views about what this means and I think big question is what is in Andy Burnham's mind and the people around him On the one hand, this is showing symbolically that Not everything is run from Westminster for London that this is he's going to govern for the whole of the United Kingdom. He wants a symbolic office outside of London. It means that he can go into the office on a Monday or on a Friday and if he wants to meet The mayor, if they don't have to be summoned to London, he can meet them in his It is Manchester office. I think you know it's challenging if you're the Prime M minister because you have to be able to do the secure conversations you need to do. and governing tends to pull prime ministers to checkers into number ten because of the pressure of the job. But I think this is a good aspiration for him to want to have. If that's what it is good, there's an alternative for you been, you know in particular discussed on their substacks by Tom Watson and then Patrick Mcuire from the Times over the last few days. No, no, you're not understanding the scale and radicalism of this proposal. This is a remaking of the state This is Andy Burnham trying to do Wilson failed to do in ' sixty four and maybe Tony Blair failed to do in the mid two thousands. This is about saying only way to drive growth and devolution. is to take power away from government departments, from Whitehall and Westminster, and in particular from the Treasury, it's the Treasury which has been the drag anchor. on devolution and on economic growth and that if we have an alternative to the treasury growth department called Num ten North in Manchester. some people are speculating and I think this is a widespread kind of debate at the moment, is this going to be the treasury broken up partart of the Treasury carrying on as a narrower finance ministry in charge of taxation and the fiscal rules, but having public spending or growth policy being moved out of the treasury to either a new part of the cabinet office or to number ten North or some combination of the two. On the basis of all the work I've done and I think the work that you did in the treasury If Andy Bernon were to think that the right way to drive his devolution growth agenda was to break up the treasury or try and do it in opposition to a smaller treasury fail and that is such a misreading of history and I truly hope That is not what this is about So you know, there are several things that I think could work. First, there's no reason why you couldn't base yourself as Prime Minister for quite a bit of your time in some other part of the country. Definitely not I think some people made the comparison with like, well, Donald Trump goes to Mar a Lago and That's not because and Ronald Reagan had a Western White House in California and that's because The White House and indeed number ten are courts. I mean, they're a version of the kind of medieval court and you remember from your Hillary Mantel, you know, when Henry VII travels around, so does everyone else. And so you know, power is where power goes for prime ministers. and yes, if he wants to spend lots of time in Manchester then the civil servants and the support mechanism will g up around him, although these things are not remotely as straightforward as you think. I remember very first week that David Cameron's Priminister wanted to stay living at home in West London And then, you know, by the end of the day, of his first day as Prime Minister, there the roads were blocked off, the police had sealed, you know, local residents had to have a pass to go to go to their own homes. You know, onnce that it's fine now and everyone loves Andy Berham I'm applauding him. But once you get a big strike and a big demo and quite so straforward. Anyway, but let's assume They correct that office. Second thing I think is perfectly legitimate and I've always wondered why prrime ministers haven't done it is really beef up number ten You know, I never really understood why you couldn't Take over the cabin office create a proper prime Mister's department. Tony Blair did something a bit like that with a delivery unit, but you know then that we made the mistake of getting rid of it If that's what this is as well Fine big question though break up the treasury. And here where I'm going to disagree with you is fundamentally strong prime mininisters have strong chancellors and strong treasuries working for them and the clue is on the on the door the original number ten door in Whitehall, which says firstirst Lord of the Treasury on it. That is what the Pime Minister is, and they should use the treasury If you want to make some big change I don't think Burnham's got the time to do it now. It's mid Parliament There's an open question of who's going to win the next election And these sorts of changes, big machinery of government changes to the treasury will take a couple of years to actually happen. So if you really do want to create a separate budget director or office of the budget, as many countries have, or separate economic growth away from budget decisions or put financial services in some other if you wanted to break up the functions of the treasury If you try and do it now Absolutely sod all is going to happen on the ground in terms of policy delivery in this country for the next two years. It's going to be a massive white haulle. turf battle, whatever it's the very thing In his speech, if you read it, he warns against which is white haall departments competing against White haall departments. But I think it's a bigger danger simply than two years of blight think of in the last thirty years, the times when governments were really driving the economic agenda undoubtedly happened with Nigel Lawson, undoubtedly happened with Gordon Brown. undoubtedly happen with you a strong dynamic treasury using the levers of policy which is about tax and spending and regulation in order to drive a growth agenda That is when governments are confident and succeeding And the Treasury is not, in my view, an institution with a set of values and prejudices which don't reflect The Chancellor of the Day, the Chancellor of the Day and their standing and their leadership is what drives what the treasury does All the work I've done academically about the Dvolution growrth agenda shows that the big problem has been even when you had strong chaners trying to drive the growth agenda. and devolution, Gordon Brown and you. The problem is unless the Prime Minister is fully throated and signed up to it and telling Cabinet ministers, that is what we're going to do And we are going to drive this devolution agenda. It doesn't work. So what you want is a better partnership between the Treasury and the numberum ten in which numberum ten steps up. And if that is what numberum ten of the North is Great But if you take the treasury out of that If you say we don't want the treasury to care about growth We want it it will still be powerful, but you narrow its ambitions What it means is that decisions being made about taxation or the fiscal rules or the regulatory macroeconomy are less inclined to be about growth than they should be. So it takes you away from that vision. and you what happened with Wilson the sixty four, He thought the Department of Economic Affairs would be his big growth mission led by George Brown. It failed at the treasury was narrow and obstructive because that's what the Chancellor thought their job was to be the finance minister, you do not want your chancellor to be a finance minister. You want to be a finance minister and an economic minister who really cares about driving the growth agenda. So it is just a wrong reading of the history of the last forty years to think the treasury was the block which actually offered number ten And therefore, if you get the treasury out of it, it will happen It won't. So as well as blighting, If you want to drive Northern Powerhouse Southwest Powerhouse Do not say Let's get the treasury out of the way. Let's have a partnership between the chancellor and the prrim Mister. They've got to be the same page, of course. But the prrimeister's got to step up, don't ditch the treasury We're going to end up agreeing with each other I think the kind of challenge you've got though is here. So there's no doubt one of I don't think the treasury has had a great decade, actually the last decade. And also could you say the last two years, if you were Lou Hagig, who's now very close to Andy Burham wasas a Trport secretary. She's been dealing with the treasury in the last couple of years approach they've taken I'm afraid at political level has not been to engage on the growth agenda enough or on the regional agenda. I think that's not true of the Civil serervice. But more than that, the approach the Treasury took to spending reviews was to be arrogant high handed, alth dismissive. and of course it would wind them up, but the chhure doesn't have to be like that. I don't think that you or we were arrogant and dismissive of departers, we actually saw departers as being partners to deliver change. That's what you need That was partly because the whole cabinet, in my case had bought into the kind of fiscal plan and therefore knew that the spending review had there was a kind of collegiate support for the overall economic approach. of which I know you were making fun of it last week. But the fact that Nick Clegg ten years on is still writing in defense of the economic plan shows that whole there was cabinet binding The spending reviews rather felt, that they were a consequence of something that was politically all signed. you struggled to get cabinet ministers to sign up to the Northern power,ggest. And the prrim Minister should have done more to back. Well, I actually think skills know to be fair, I mean, you know, I came too late really in my chancellorship to the Norn Pace. I didn't return to it til halfway through The Manchester Mor, which of course, Andy Burnham became. was driven by the treasury, by me, by Jim O'Nill, who' then a treasury minister by John Kingman, who was the second permanent secretary. you know, very, very effective civil servant. And it had the support of David Cameron and there is no way you could have created the Manchester Mayor or indeed the Mors that subsequently followed in the West Midlands and West Yorkshire and so on if it had been left to the local government department and the transport department and the education department. Although in the interview you did with us for our project, you say you still struggled to get some departments to sign up to the powers out to give away power. And I think unless than number ten and the Treasury are absolutely demanding it It will. Yes. And so we managed to do it for Manchester and then you know, essentially the government ended up being kicked out. So I agree that, but I think u I think, you know, you still come back to this sort of central problem that the treasury has had. You've had a succession just like succession of prrime ministers. you've had I't what, seven Chancellors since me Right, You're about to get an eighth And Quite a few of them have you not really had a kind of clear plan and what they wanted to do with the job or they were kind of dealing with the problems that inherited like Brexit And then they didn't have the political authority because people thought, well, the government's not going to last. And you know, the civil service is not that they make a conscious decision The government's not going to last It's just like the whole system takes a view How long are these people going to be around? And Andy Burnham is, you know, he turns up thinking, I'm the new P prime Mister I've got a huge mandate. I've won this, you know, I've become the labour leader without even a contest. Everyone else is thinking, okay, but you may turn out to be yet another of these prime ministers only last two years, right? And your chancellor may be the eighth or ninth Chancellor. They don't start with the authority of I've just won an election. I've got a huge majority. I've got at least four years, probably five, maybe ten ahead of me, in which case the whole system gets behind you and it's much harder for these midterm prime ministers. There is a reason why 's a midtererm prime minister's because because everything's gone wrong with the government and they've got rid of the existing prrime Minister. And you can't just assume that you turning up with some new thoughts about how to reorganize White Hall, which turned out to be the same thoughts everyone's had for the last hundred years A the answer? It comes down to a sort of political direction, a clear economic plan Yeah, sure, and then get the machinery to deliver it. and it doesn't matter where that's basaced. Andy Burnham is not going to succeed on the devolution growrowth agenda unless he's got a chancellor and a treasury, you are absolutely lockset with him. That is right. And I don't think that has been where it's been the last couple of years, but I don't think Kistam has been driving this agenda either. And I think number ten in the North can help with that. All I'm saying is, look, you don't have to take it from me or from you or from, you know Gordon Brown or from other chancellors, Go and talk to some of the people who've been, you know, go and talk to Mike Ellam, who's in the Cabvenant offffice Go Dr. Richard Hughes who is apparently one of Andy Burnham's advisors and was head of the OBR. Go and talk to Beth Russell who worked with Andy when he' was at the treasury, as Chief Secretary of public Spending. She now runs the Darlington Treasury campus that is in charge of regional growrowth. and ask them, what role does the treasury play in growth policy H they been a block on growth policy in the last thirty years and would locking the treasury out of the growth agenda help him or hinder him? My advice to Andy Bernaman and James Panneell is of course listen to the people who haveve had a tough time with the treasury in the last couple of years, but also talk to people who've been there the last thirty years and really know what they're talking about. do not make The Wilson mistake. Do not waste you thinking it's going's going either breaking the treasury out or blocking the treasury out of growth policy will work for you because it really won't You know I've been changing my view a bit since we discussed this on the podcast the last couple weeks about who should be the next Chancellor? And I am actually warming to the idea of making Ed Milliban the Chancellor I mean, there's a big problem, which is the Tory press will hate it. The business community need massive man of persuasion that he's b business because the first thing you hear from business people is Oh that wouldd be a disaster. But if you wanted a kind of really strong chancellor who knows the treasury who's shown in his own department in the energy department, you might not like the policy, but Nays clearly been delivering it I'm kind of seeing why if you want to take a bit of a gamble and you've only got a couple of years to turn this around, you haven't got five years be sent for Ed. And the idea of Edbill Aband as Chancellor being told all you about is the fiscal rules and about tax policy. and you don't have a role in driving growth and driving reskilling of Britain and driving, you know, the government's climate change objectives as well in a sensible way, then, you know I mean that's he want because because he shouldn't want that because that would be that would be antithetical to Andy Burnham's ambitions. And so look, Optics is important. I can see coming back to where we started. you don't want to reassemble the football team literally in this situation, the Labour government at the very top needs its very, very best players on the pitch. Well, but These days, compared to twenty years ago, U It's actually the England women who win the US.es. It's actually the England women who are doing a better job and don't fall into the trap of thinking that it's the men who have stature. No no or the older Menu are statue. because you know, There's some very, very powerful effective women as well. and No I'd let Sabana Mamou get on and deal with all these immigration problems, which assignment problems, which I was referring to earlier I mean, but the Burnham could definitely throw his weight one hundred percent behind her and have a much better story to tell on that from. Now talking about a bunch of men who set out to build a nation. We should turn, shouldn't we to the founding fathers of the United States of America who I'm afraid're mostly men, as far as indeed entirely men And two hundred and fifty years ago, they set out to create the United States, and they declared independence on the fourth of july in seventeen seventy six It's the two hundred fiftieth birthday this week and we're gonna turn to that amazing moment in history and what it means for our future. Nxt Still waiting in line Again That's time you will never get back. 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Shop Wayfare's Fourth of July clearance now through july sixth at wayfare dot com d Pay fair, every style, every home. Monday AI agents took over my work And I absolutely love it. Chasing deadlines, writing status reports, updating stakeholders, agents handle the daily grind now. They live inside Mondayot comot So they see the full picture, my work, my team, the whole company. And I don't have to worry about the data. It's safe, whichich means I'm free to focus on the big stuff, knowing everything runs smoothly in the background It's completely shifted the way we work. Create your own AI agent in minutes on Monday. com So two hundred and fifty years ago in Philadelphia, the founding fathers of the United States signed the Declaration of Independence. And I think you have to remember that they were basically signing their death warrants at the time. If they had lost, if the British arrmy had succeeded in suppressing the rebellion, those people would have been executed. It was an amazing act of courage. No country in the history of the world was blessed with a more kind of wise collegiate group of people than the people who signed the Declaration of Independence Thomas Jefferson wrote it and here is just to get us in the mood This is the great actor Awson Wells reading us some of the most famous lines of that decloration We hold these truths to be self evident That all men are created equal. that they are endowed by their creator with certain unalienable rights that among these Our life Liberty pursuit of happiness Fantastic. Absolutely brilliant Of course, twenty fifty years ago, America celebrating Now in a rather kind of more fractured, less united political environment. you know, we've all been reading the newspaperser in the last few days about the huge problems that Donald Trump is having, getting the crowds to come to his great American state fair to get singers to come to his concert. If you'd thought five years ago I was in Washington a few weeks ago. should just many people have been to Washington. There's that big central mau, which is the green strip between essentially the Washington Monument and the Congress. And they've turned it over into what's supposed to be like a sort of state fair with lots of stalls and the different states represented. The crowds look a little bit thin, don't they? Well it's because it's become a political Party political, rather uniting moment. If you think if we were talking about this five years ago and you thought planning for the two hundred fiftieth anniversary. If you were going to have a concert with the greatest American singers of our lifetimes all on the stage But they're not coming because it's become Well to be fair to Vy Swift she's getting married. No B. She's got another engagement and, you know Int that very complex environment just a few weeks ago Our king went, King Charles and did brilliantly. he managed to unite Congress, Democrats and Republicans applauding his words. And I had this fabulous reporter of a conversation in those days for the V CD American saying to a British official 's done extremely well King in Congress today Is there any chance he could be our president? And the irony of that because of course that was the different course America took two hundred fifty. years ago. as we are reminded every time We go to see Hamilton. I've been a few times. I knowember how many times you've been I've been four times. I've been four times too. I saw the original with Lyn Manuel Miranda. I was very lucky in New York. This is King George The third telling the Americans done fifty years ago They may have some regrets You'll be back. Soon you see you in me, you'll be back. Time will tell. You remember that I served you well Oceans rise. Empires fall. we have seen each other through it h and when push es to sh I will send a fully armed battalion to remind you of my love Well of course that didn't work. Sdenly the fully armed battalion. and two hundred and fifty years on, there's no going back. I remember watching every time I watched Hamilton, I always think I'm the only person in the audence with some sympathy for George the What he's saying it his cameo performances. And lookook, we both, I think, have a deep affection for the United States. So mine was shaped by going to college there in North Carolina when I was eighteen by many visits subsequently by now teaching at American University Stanford, and of course working for an American company. I mean, I have a lot of fond memories and warm feelings about the U.S. and There's a sort of strand of British politician which I would count you as being an evette as well people who've had some sort of formative experience in the United States And it definitely shapes the way you think about the country, doesn't it? It gives you a kind of well, I would say an understanding, but it certainly gives you a big sympathy, doesn't it? It does. And I think it also shapes your view of politics and you know, there will be some pers people on the on the left, who will completely recall from what I'm about to say, but you know I went to America when I was twenty one to graduate school at Harvard. first time I ever went on an airopplane And in the early months You think, God, this is such a strange place. It's actually it's far more foreign than you expect And despite the language, the language is when you first arrive of draws you into a sense of familiarity and then actually things are not familiar Over time I just came to have such respect for the optimism of America and the sense of hope and aspiration and the potential for change. And part of the reason why I think, you know We sometimes, people like me might sometimes feel frustrated America is not because you think that this is a failing country. this is a country the opposite of that, which aspiire so high and sometimes fall short. but actually that's because you hold America to such a high standard in terms of values and democracy and the rule of law. and they have been, you know, throughout my life Of course America has made very many mistakes and done some things which we'd all disagree with. But they've also been, you the guarantor of, you know, openness and democracy and tolerance and You know, without America. Where would we all be? And so, you know, I I was at the American Embassy on Tuesday, where, by the way, I saw Keby Baynoock. He said she heard our podcast last weekend. Really enjoyed it. It was a good sign. Thank you. Thank you, Keby. But You know, I was there to celebrate because I do celebrate what America has achieved and what it stands for and what it still stands for today in twenty twenty six. On Monday in the British Museum, we opened a small exhibit around hundred fifth anniversary and including a medal that was struck by Paul Revere. the kind of famous revolutionary for the Continental Army then given by the Continental Army to Native American tribe who were supporting them in the conflict and then confiscated by the British when they defeated that Native American tribe and ended up in the British Museum. So you can see that and indeed one of the copies of the Declaration of Independence. And I gave this speech flanked by the American flags and I thought, Oh, I could get used to this. But I tell what's interesting about the United States. I wouldn't bet against the United States going forward. I think there's been a lot of talk of American decline and some years ago there was lots of talk of We're entering a multipolar world and maybe the American dollar is not going to be so dominant and the rise of other Great Nations or Rrise but it's very interesting if you look at objections getting a little bit technical here with you about the US's share of the world economy. today and over this century by the end of what it's projected to be. Basically, the US' share of the world economy projected to stay the same In other words, it holds its own as the dominant economic power in the world, its share of global population stays the same becausecause despite Donald Trump's best efforts and Perhaps because of the Supreme Court ruling this week. There remains, you know a strong influx of immigrants And you look at China, which I have a lot of time and respect for, not everyone does But I respect its kind of long history and its civilization. itss population is expected to halve over this century And it's expected to be six hundred fifty million people fewer living in China by the end of the century. And the European population is declining and Europe's share of GDP is shrinking rapidly. There's a nice thing the UK, partly because of our immigration, is one of the few European countries which basically will kind of keep its own in terms of at least population share. But the main point I want to make is the US is going to all other things being equal and it's hard to predict the future, but on the current trajectory and if you think of American power in terms of financial services, technology, AI, quantum computing, science all of that. country that was created two hundred and fifty years ago, at least in the next hundred years, is going to remain the kind of key player in the world I agree with that. I don't think it's inevitable And this is a country which has in the past fractured politically, very seriously. but I hope and believe that the American political leadership will keep that country United and moving forward the way you describe If you were Andy Burnham You know, come back to our theme of this podcast you know, the conversation of our times. If you're Andy Burnham coming in There will be people advising him, you know, def find yourself early against Trump haveave your love actually moment, you know Pick a fight? What advice would you give anyy Burnham? I think he's in a slightly different position from Kir Stammer. so it's not the beginning of the Trump presidency, It's halfway through. Trump's kind of political power is waning somewhat. although he's still, you know, the dominant figure in Washington I think it would be a mistake to do the kind of love actually, but I don't think you want to do too much sucking out because I think Trump's just going to hit him around the head. I mean, there's some indications already from what Trump said What Bunham really wants to avoid is some kind of retaliatory or tariff moved by Trump which will be completely capricious against the UK because you know that will just make his economic job at home so much harder. So I think you want to be out of the firing line. But you don't want to be you don't want to be fawnning. I wouldn't like extend a second invitation to Palmoral. If you just want to try and hold your ground? I actually you know, I mean er very partarty pre because I admire him a lot and these's re of mine. But I think the way Mark Carney is handling it retty good. and you know, think of how close Canadian economy to the American economy. He's respectful. He's not kind of getting up on the podium and denouncing Trump but he's very clear about Canadian interests and Canadian sovereignty and and he praises Trump where he thinks Trump's done the right thing. And so you know, I think you just have to You have to be quite sort of sober and not try and overthink the How am I going to play him? I just think tried to be a straight hitter and even if it doesn't work because Ultimately Trump is very hard to control. At least people see you being the straight hitter. Of course, Mark Carney was provoked from the very beginning by Trump's fifty first state rhetoric about Canada. it didn't It actually helped Mark. Well it did it was an election campaign, but he had a very big excuse. I think Kir Stahmer actually played it well because he was cautious and tried to keep things calm And only had four years of Trump ahead of him. And Trump was less aggressive to begin with. by the time Kama distanced over Iran. The timing was right, the issue was right If you remember back before the election that I said about Kir Stamber that he just set out You know, his principles, his view of America challenges that they shared values they share, the aspirations for the world Britain and America shared because if you have to say difficult things further down the line, it's easier to to refer back to those