Burnham's first Budget: 'Is that it?' | The News Agents

He signified that there were three things out there in the global economy that are having an effect on what is happening in Britain. What links all three of those is Donald Trump. But I would say the most interesting conversation that happened was over Prime Minister's questions today when Kemi Badenoch basically took it straight to Andy Burnham and said, where are you on Brexit? Although Kemi can wind her neck in a little bit. The News Agents podcast is brought to you by HSBC UK. Opening up a world of opportunity. This is a global production. This will go down as one of the most sweeping, audacious budgets of the modern era. OK, it won't. It was a budget where the Chancellor was hemmed in on all sides and it sort of felt like that. We know who we are. We know where we're going. We can see the Britain we want to be. It's a vision burned into every line of this budget statement. Madam Deputy Speaker, breathing space now, fresh hope for the future, delivered to the British people by this Labour government. I commend this statement to the House. But most people in the country, listening to his budget, will be thinking to themselves, is that it? Really? Is that it? The Prime Minister came in promising to reverse 40 years of neoliberalism. Instead, we got 4p off gherkins. The Conservatives are clearly underwhelmed. Was there anything more that Healy could have done today? Or is an election now looking inevitable? Welcome to the News Agents. The News Agents. It's John. It's Maitlis. It's Lewis. And as John and Emily were both saying at the start there, this was a budget characterised, I think, more than anything else by a tiny amount of economic space in which the new chancellor could manoeuvre and it shows just to take you through some of the principal measures of this first budget of the of the Starmer government the politically salable bit the bit that number 10 will be hoping and i'm sure probably will lead most of the bulletins tonight and with which labour mps can go back to their constituencies and sell something is on energy bills so 100 pound direct payment from the government for 20 million households in council tax bands A to D so that should be a hundred pounds towards your energy bill enough to put your heating on while you read the letter explaining it pay and petrol um minimum wages will rise the minimum wage will rise by nearly four percent the temporary 5p fuel duty cut I say temporary it's been temporary since about 2010 um is going to be extended until July 2027 the planned cash ISA restriction is being dropped preserving the 20,000 pound annual limit there were some further measures on fiscal devolution some further measures on pensions protecting pensioners from having to pay income tax but this was a budget which more than anything else was haunted by a deeply uncertain macroeconomic situation geopolitical situation and awareness I think from the Chancellor number 10 that frankly if some of the rumors are to be believed about Trump resuming incursions in Iran after the midterms or possibly even before the midterms then the figures that the OBR have produced will be out of date the big decision he's basically made is to dig in to the fiscal headroom that's Rachel Reeves bequeathed him as Chancellor um it's down now to about 15 billion pounds that's basically the kind of emergency reserve that he has that he's able to use to meet potential spending pressures or unexpected events of course once you've dug into that reserve it's gone and it is the overall uh picture as I say is of a number 11 and a treasury which is eyeing the bond markets and the global uncertainty very very closely it is not irrelevant that the other story that we're going to bring you today which is what's happened overnight in the Israeli elections actually feeds into exactly what the Chancellor was wasn't able to say today because the price of oil has absolutely rocketed on the assumption now that maybe Netanyahu will remain as Prime Minister of Israel, that maybe Trump and Israel will resume their incursions into Iran, that maybe the Hormuz Straits will remain closed for longer, etc. You know the drill already. This is not going to make the global outlook much easier. And that's why I think when you talk about hemmed in, it is extraordinary to be talking about a budget in this country where, frankly, we do not control the one thing that is actually going to have the biggest impact on all of our lives on all of our pockets and i was looking i have to say um borrowed uh unashamedly from Ed Conway today at the number of measures that there were in this budget which he calculates at 98 in fact a huge number of announcements you know the chancellor stood up at 12 30 and spoke pretty much till 1 30 he had 98 different measures in this budget which sounds like loads of stuff went on but when you actually see the difference it made in terms of taxation either way it resulted in changes of about six billion absolutely tiny so in other words we had something that was full of sound and fury or not fury but full of sound full of a sort of you know an attempt to generate excitement and yet calm and yet here we are understanding you what what has changed hands here hardly anything at all the measures that have been introduced today are absolutely minute compared to the scale of where we actually are i what was so interesting for me listening to it was that he signified that there were three things out there in the global economy that are having an effect on what is happening in Britain and one of them is the war in Ukraine the other is the war in Iran and the other is the more hostile trading environment which he spoke about what links all three of those is Donald Trump i mean the hostile trading environment is tariffs that's what they're talking about making it much more difficult for British exporters that's Donald Trump's policy the war in Iran and you look at the figures and the projections for the way the oil and gas price is going to go up next year against what was anticipated back in March when Rachel Reeves was the chancellor it's massive massive increase the the downgrading of growth for next year again and the upgrading of inflation all down to the war in Iran and then you've got the war in Ukraine where Donald Trump has decided that he is going to lift the sanctions against Russia that he signed into law a month ago and also resume diesel imports from Russia to try and help him in the midterms I thought my God the shadow of Donald Trump over this budget is immense leave aside kind of you know welfare reform in this country leave aside the the manifesto commitments it is a very big presence in the present economic outlook for the United Kingdom watching the Healy budget the thing of the thing I kept thinking of is here is a man here's a chancellor but not just this chancellor here's a government you know in a straight jacket in fact if it's possible he's wearing two straight jackets right one is political and one is economic the economic one is that he has so little room for maneuver wait which one do your arms go into well I think ideally both well hang on where are we in this centenary of the death of Harry Houdini right well um this is this is my this is um in honor of Harry my Harry Houdini analogy and well I don't I'm not sure that one goes on I'm not sure John Healy's that backwards I'm not sure John Healy's that dexterous um but the economic one is is really significant i do think i mean Kemi Ba... not getting up um at the end of course she's the opposition and she's got to sort of critique the sort of unspoken truth of this budget and every budget we're going to have for quite a long time now is we have got to get used to economically being a country at least for the short to medium term with roughly 100 percent of debt to GDP i.e. we owe we owe every single pound that we generate in our entire economy every year if we were to pay off all that debt we would all have to give up all of the money that the country generates in one year to the people to whom we owe it and that is a big difference of say 15 years ago when the financial crisis started when we were the sort of country with roughly 40 percent debt to GDP what it means is is that every move you make is watched by the bond markets it was fine in the Conservative years or most of the conservative years because we had a period of ultra low interest rates we no longer have that our national debt has passed three trillion pounds just to illustrate what i mean by this borrowing was nearly 100 billion in just the first six months of this financial year today's forecast puts annual borrowing at 4.2 percent of GDP and debt interest has more than doubled since 2020 right if this government had a department of debt interest it would be the third biggest government department in terms of spending so that's an economic straitjacket and the political straitjacket is this this government potentially does have quite a radical program we heard it outlined by Andy Burnham at the Labour Party conference electoral reform closer relationship with Europe big changes in terms of fiscal devolution problem is there's no mandate for it there's no political mandate for it he can't turn to turn to his Labour MPs and say right we're going to do this on Brexit or we're going to do this on electoral reform because they'll say well we didn't stand on this so it feels to me that something has got to give and i think if the polling is right i think that the logic of what we saw today or the polling sustains i think that the logic of what we saw today i think does suggest an election sooner rather than later if this government is going to break out of at least one of those straitjackets which is a political one i think that's such an interesting proposition because arguably the most interesting thing that happened in the commons today and this is not to you know denigrate what the chancellor was trying to do for an hour and he did come up with a lot of you know small measures that will have a massive impact on a few people's lives like the cuts to business rates and all the rest of it trying to help entrepreneurs trying to help those in hospitality i mean we can come on to explain some of those later but i would say the most interesting conversation that happened was over prime minister's questions today when Kemi Badenoch basically took it straight to Andy Burnham and said where are you on brexit are you reopening this question are you reopening the debate are you even considering freedom of movement and Andy Burnham i i think actually went further than we had seen even in his comments to the times over the weekend where he's no longer pretending that this is just an honest conversation it's an honest conversation that he's pushing from behind to get onto the table and he reminded Kemi Badenoch that there are three weeks to go until this summit in europe now whether or not that slightly undermined what the chancellor was trying to do day i would say maybe i think she's right i think it is a much more interesting conversation and it's clearly one that Andy Burnham is willing to embrace so i suppose you're stuck in two positions now one is like if that's where the conversation is going and he said there can be no changes to the red lines without a referendum of sorts and that might be an election then yes he has to hold an election in in that case an election has to come next year to allow him to do that but the other way of looking at it Lewis is that and this was basically where Darren Jones was with us yesterday they will never have 400 Labour seats again they will never have that kind of majority to actually effect change with and so as soon as you go to the polls you are not only risking another party becoming the government but you are definitely risking having a really small number a much smaller number of MPs who hate you forever because you know you could have done all this stuff without an election and you didn't it would be a huge risk and I think you know Jones is absolutely right I mean that's clearly the high watermark in terms of seats but I suppose it depends if Burnham it depends what he's going to do with those seats and if you're just going to tread water for three years and he concludes that if we do that there's a danger that we get to 2029 and people say what the hell have you done then I can see the imperative for Burnham as a risk taker or that the the attraction for Burnham as a risk taker for doing it i mean well i completely agree with you i mean it's very rare budget day where prime minister's questions is more interesting than the budget than the budget but that was what we had today what struck me about it was not just that Burnham chose not to resile or to sort of back away from some of the things he's been saying he went further yeah and and i could you could see the contours of political arguments which he's developing in his mind i was so struck that not only was he willing to do something Keir Starmer would never have done and never did which was so directly attacked the Johnson Brexit deal Starmer started to do that towards the end but not as viscerally as Burnham did and secondly connect very directly not just the Brexit deal with the low growth that basically he knew was about to be announced but with uncontrolled immigration you can see i think in the prime minister's mind the contours of a set of arguments that he thinks that he might be able to make and i suppose as well if you think that there is so little room for maneuver on the economy you can sort of see the political attraction of reanimating some of the Brexit wars because it's free and it is something which could potentially bind and gel the progressive coalition which Burnham so far has started to reassert started to reassert look i think that you know again to your point Louis about the timing of the next general election he said look we're not doing anything about the red lines those are manifesto commitments we're not going to do anything until after another election and we've talked about how limited the room for maneuver is because of the manifesto commitments because of the reluctance of a lot of Labour backbenchers to accept welfare reform all these other things where you think god is they're completely hamstrung and there's nothing much that they can do and as you say you've got two countervailing forces haven't you you've got one get a fresh mandate and see if you can suddenly start making progress on all these big policy questions like you know single market whether we rejoin the EU does it need a referendum all those things that would kind of really energize an election campaign and against that you've got the lesson of Theresa May in 2017 where the British people don't much like an election that is called for opportunistic reasons because you think oh this might be a good time to do it and Theresa May had a huge lead in the polls and it all disappeared but you are asking something here you are actually asking a question the point about Theresa May was it was clearly about you know her alpine walk and where am I in the polls whereas this is never go to Snowdonia what's in Snowdonia why do I always think it was in Switzerland oh I thought it was Switzerland no no well alpine I think covers it yeah it looks alpine with a fir tree or two but I think this time you are you have got a question I always go back to that you know the simplest question which is what are you taking to the electorate are you taking a question to the electorate if you haven't got a question to ask them don't go because they won't come out to the polls with no question if they you know or they won't come to say oh we'd like to raise more taxes will you vote for us no probably not if you went back and said we are going to open this whole question of of Brexit because we think that that is the single best way of increasing growth for this country i mean it it's kind of great i'd love to know is inside Number 10 Downing Street is there a plan is there a detailed war plan of right this is how we start the argument this is how we reinforce and you heard it a bit uh the end of and uh at the end of John Healey's speech you know the i've got the CBM i said i've got the Federation of Small Business we've got the this all these groups lobbying business lobby groups who are behind this kind of reshaping of the relationship with Europe i mean you know have they got a plan worked out the battle plan this is what we go to on the election this is how we build the coalition this is how we win the argument in a way that we know they're thinking of Europe on the 20th of November which is three weeks away i mean the thing just to go back to Healey in the budget the thing i was struck with and it comes back to that whole question of audacity or bravery whatever you want to call it he was the man who resigned you know as Kemi Badenoch made clear because the defense spending wasn't up to scratch and yet the whole build-up today was about putting a plan for a plan in place for a future plan, which would then get you to the place Which would then set up a working party And wasn't there something, yeah, there's a working party as well. And you can feel your heart sinking at that point. I love the bit about incubator capital. Yeah. Bad news for neonatal units everywhere, I think. I think there's a really good line from Kemi Badenoch. He has funded the defence investment plan. That is welcome. Yes, there is more support for Ukraine. That is welcome. but he said himself in June that wasn't enough. What he's done is he's given himself a bit of breathing space, given himself a bit of breathing space until next year. Instead, what we have is a plan to have a plan. I bet Putin's really scared now. The point about being prepared for war is that you can't really signal to your enemies that you will be prepared for war, but not quite yet. In ten years' time. In three and a half years, we're fine. Come back to us then. There was a private eye front cover when the Argentinians invaded the Falkland Islands and it said, a task force will be assembled and we'll launch a surprise attack in three months' time. You know, that was the kind of... Although, Kemi can wind her neck in a little bit. I mean, you know, you would think, you would think that, you know... I mean, where was defence spending in the Conservatives? And they say, oh, things have changed. Putin invaded Crimea in 2014. 2014, yeah. You know, and 2020... So, you know, they've got a brass net. But just on the Brexit stuff, the other thing I thought was so interesting, there was a cabinet readout today and it wasn't about the top of the readout wasn't about the budget it was about Brexit Prime Minister opened by setting out how he would shortly write to Cabinet on the UK's relationship with the EU he said the Brexit deal left by the last government had been bad for the UK and had led to a harder Brexit than had been promised at the referendum the Prime Minister said the deal had led to low growth and made it harder to control immigration and it goes on I mean when this started I thought Burnham was just sort of speaking out loud a little bit chancing his luck seeing what we call alcoholic football chants Yeah, and he does that quite a lot. I start to think that he's quite serious. Well, that's what I mean. What is the plan? Is there a plan? Have they worked this all through about how they're going to marshal the argument? And in that case, maybe this budget was the perfect budget for now, which is like, you know, a little bit for retailers, a little bit for dads, a little bit of paternity, a little bit for oil, but wait till you see what we're really doing. I mean, the other thing about an early election, I mean, Brexit or otherwise, which supports that, is, I mean, you know, I mean, you've already alluded to it, Emily. I mean, the spending review penciled in for next year. I mean, Healey basically deferred. I mean, he's right about this. I mean, you know, he basically deferred a lot of the tough stuff of that, particularly defence. And given how parlous the fiscal situation is, if he's serious about getting setting out how to get three percent, that implies, you know, really serious departmental cuts in other departments. You know, not good. And that comes on top of Rachel Reeves other legacy, which is that she did things quite and quite an unusual way in her early budgets. you know normally when chancellors come in they do the hard stuff in the early part of the parliament and then they leave themselves loads of room as you get close to the election so you can do giveaways reeves did it the other way around yes she raised a lot of tax but she also did a lot of public spending in those first two budgets and she partly paid for that on the basis that in the years leading towards the end of the part of the parliament there would be serious quite serious you know two three percent departmental cuts i mean if you think that the Labour Party is going to go into an election with three percent departmental spending cuts in an election year i mean i've got a bridge to sell you right like that is just not going to happen so i think that the political and economic imperatives certainly to me i mean i think that you know i don't i wouldn't be against i don't know if you'd lose too much money if you put a bet on for a May election 2027 i think you have already if memory serves i have i think i put one on for april which i now feel is wrong april would definitely i went i went long i went long so i i think that i've lost that that well i still haven't been paid out for the last time my only thing is uh i don't understand why you you can't i mean i'm just pushing this out there if it was Boris Johnson i mean god forbid but if it was Boris Johnson Boris Johnson would not be if and he had a majority like that he would not be stymied into promises he'd formerly kept oh on the lack of mandate no but i think yeah i agree with that but and i'm sure with but yeah but i think the problem is with the parliamentary Labour Party right if Burnham turned around and said right we're going to rejoin the single market i just don't i think the majority will disappear because there'll be enough Labour MPs who said well we just can't you know i stood on this red wall mps stood on this it will be you know it will be a betrayal and it's absolute catnip for reform and exactly but but but you're not having an election at that point you're just saying we're going to do this and by the time there is growth in the country i mean i understand you know there's a big question of trust a big question of political trust but it's also i would say a question of leadership if you believe that you are opening the door to making everyone's constituents better off then you just say i'm sorry we're going to get on with it there's also another intriguing political possibility right if they're serious about this brexit stuff which is they might not really be thinking so much about reform but about the possibility of a conservative revival because it is awkward for Bay to knock this right her argument at PMQs was no one wants to reanimate this no one wants to have this debate well there are a lot of people who want to reanimate the debate actually and a lot of them her entire strategy parties her entire strategy has been basically reorienting the Conservative Party away from the 2019 coalition she's not doing anything for the red wall she doesn't think they're going to be competitive in those sorts of seats it's basically reanimating the party in its historic heartlands wealthier more affluent parts of the southeast of england london that's her entire policy and political pitch if Brexit re-emerges as a central dividing line that's really awkward for her with that coalition because she's basically seeded the Red Wall bit that Boris Johnson did very well in in 19 to reform and her just going no one wants to reanimate this debate well she's given up on all remainers that's the point and that's really awkward for her and difficult so i you know you can see some of the political advantages or political possibilities but isn't this interesting that we've basically on the day of the budget and we've all sat through pretty much two hours of of Westminster of John Healy Of John Healy and Kevin Baynok. And what we've come away with is the question that actually Andy Burnham started at the weekend four days ago. Well, we'll be back in a minute and put some of those questions to the business secretary, Jonathan Reynolds. Now it's time to thank our partner, HSBC UK Commercial Banking. When you're growing your business, you need a banking partner as invested in your success as you are. And with HSBC UK, business financing is about more than just money. They support ambitious UK businesses looking to grow, whether that's accelerating technology adoption, expanding into new markets or strengthening their workforce through upskilling. And they're not new at this. With over 160 years of experience, sector specialists, regional expertise, tailored financing solutions and a global network to tap into, they bring deep insight into what it really takes to grow your business. 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Just search HSBC Financing for Growth. lending is subject to status eligibility criteria and t's and c's apply well we're joined now by the business secretary Jonathan Reynolds uh welcome to you look you came into parliament in 2010 you've sat through so many budgets on the opposition benches as a member of the government is this the smallest some might argue the most inconsequential budget that you've seen in that time no no i mean genuinely no to that i mean i am a very happy that's not a pejorative that's not a pejorative way well i mean what you mean what you what you maybe mean is is the scorecard as substantial as you know the big moves yeah so what i'm talking about is will it make a difference to people's lives that that's the measure i think we would use and obviously where we had promised breathing space for families and businesses i think chancellor has delivered on that particularly on VAT on energy bills and the relief if you're on council tax bands A to D but for my part what I believe is honestly the absolute number one mission of any government this government in particular which is turning around our economic performance and there are some encouraging signs on that but you had a real you know huge statement of support for entrepreneurs with founders relief that is a new thing EMI share options so for people who create businesses and wealth chancellors backed them for high streets the changes to small business rates relief threshold you know for retail hospitality and leisure that's your life of your town centre and high street and then on really big strategic stuff you know the announcements on energy should not be underestimated the government moving from essentially an objective simply around clean energy to cheap and clean is absolutely crucial for industry for re-industrialization so the big strategic things I wanted the chancellor to deliver upon from my brief he's absolutely been there on the side of jobs and growth and for you know the bigger picture for families for breathing space again i think he's delivered on that so whether you whether you describe that in in terms of the scorecard for me it's the impact on people's lives isn't isn't this a budget that shows a chancellor totally hemmed in by global headwinds whether it's the war in Ukraine Donald Trump's tariffs policies then there's the manifesto commitments which means that you haven't can't do much in terms of you know the big items where you can raise and move taxes Europe the red lines that we heard about this is a you know you just didn't have any room to move look i think the international situation particularly the the impact on trade from the US Iran conflict i mean it had wiped out pretty much half the headroom before it began so yes i think you're right to identify that but Donald Trump has got a lot to answer for it also shows though that even within the kind of pressures this chancellor has been under he's not powerless, we're not powerless, we've made decisions that will make a difference so you know those, those, those set of measures in terms of business investment growth, those are very strong, you know this is also part of a run where we will see the UK EU summit which will deliver, I believe, real tangible benefits for British business and for families as well, for individuals, we've got the Milburn review which is a really substantial piece of work into opportunities for young people and youth employment, the 10-year plan will follow that up, these are major and significant interventions, I would argue, putting the country on the right path so yes, that the global situation could not be more challenging, I mean what this chancellor has had to contend no chancellor has got an easy job, but this was a real set of pressures external pressures coming in and I think within that he has actually performed pretty impressively in terms of delivering against the business sector, you and the chancellor and the prime minister talk about breathing space but isn't it the truth that under this government voters are suffocating, I mean look at this OBR forecast suggests that living standards will fall this year despite the breathing space promised in the budget, OBR forecast that living standards will be just two percent above pre-pandemic levels in 2030, I remember when Keir Starmer when you were in opposition you constantly berated rightly the Tories for being the first having the first parliament history where living standards was lower than where it began, you're about to oversee another, well, the the pressure people are under is exactly why this government is right to pursue the course of action that it has now, it's not if you look, if you look at what is forecast to happen because of, in the main, the huge disruption to global trade through the Strait of Hormuz and the US-Iran conflict, you know the projections, what that means for industrial inputs for inflation for different types of inflation, like food inflation, those are significant and there's going to be at this time real pressure on households that come from that, I would not shy away from that. Will you ever let, but Business Secretary to be clear, Labour is the party self-described for working people. If we get to the end of this parliament where people are worse off than at the beginning, will you ever let them down No, let's just remember in the midst of all this pressure that wages rose faster and by a greater degree in the first 10 months of this Labour government than the previous 10 years but that is the context it's happening in, but let's not forget that for the first time in a long time we are seeing real signs of economic growth that yes, actually not yet where I would want it to be but well, hang on, in the short term because of this international situation but then actually the fundamentals of where we're at if year on year growth, compare the UK to the rest of the G7, okay, I'm not saying it's a job done yet but it is, we are standing out for our level of performance, wages rising faster than prices if the context of this was stronger, will you be it would be a genuine level of performance okay But I'm not shying away from that. But in the midst of those pressures, the resilience of the UK economy, I would argue, is far stronger than even many people project. Will you be comfortable going back to your constituents at the end of this Parliament and saying, vote for us, we saw yet another Parliament of declining living standards? I would absolutely have no hesitation in saying, vote for us, the pressures this country is under are of a level which we recognise. Turns out it wasn't just the Tories' fault, though, was it? Turns out that they had macroeconomic situation to deal with as well. On things like the pandemic, I'm not blaming the Tory party for that, but frankly, if you combine austerity, the uncertainty in the aftermath of Brexit, the difference for the Tories was these were things they had put into the mix. These were choices they had made. No government can control sometimes the international situation, but I would argue, and I think the evidence shows this, that we are starting to see, for the first time since the global financial crisis, real signs of optimism in the British economy. Maybe it's because you've got no vision for the economy. I mean, what is Labour's vision of the political economy in this country? What's John Healy's vision of political economy in this country? John's vision, the Prime Minister's vision. A little bit here, a little bit there. It's for not just wealth, but power to be distributed throughout the country, for growth to reach every part of the country, for industry where ideas and innovation in the UK are no longer lost overseas and scaled up abroad. I mean, this is part of the practical measures brought in today. This is a Prime Minister that at one point people said, look, he's just really good on social media. Then he does a conference where he goes, Because, oh, the agenda is far too radical and bold. I mean, people oscillate between those things. But he has a vision. You cannot argue he has not come to deliver on the big things. Would you say, as the Secretary, that that budget represented the first step of unwinding neoliberalism, as the Prime Minister promised in his conference speech? I think it is absolutely part of restoring power to all parts of the country. So that's ending neoliberalism? Essentially, yeah. When the Prime Minister talks about the country taking a wrong path 40 years ago, the neoliberalism point, he is talking about the fact... That is the point, whether people in London find this easy or not to hear, where many parts of the country felt they lost not just jobs, but power in the country. And I actually think one of the things that is totally underappreciated is the level of not just devolution, but fiscal devolution that this Chancellor built on. Rachel Reeves actually started this process as well. This is incredibly significant. Real economic revenue-raising power, income you can borrow against, power being given not just in a sense of certain responsibilities, but real money and influence to parts of the country i mean we haven't seen anything like this in the political calendar there is probably no more important day than budget day and yet i would argue that the most significant thing we heard today was the statement issued from the press office at downing street that the cabinet have signed off on a document about the relationship with europe that there's going to be a statement at prime minister's questions today uh andy burnham seem to go further in embracing the idea of a completely reshaped rechanged relationship with the eu possibly rejoining the european union and this is a this is kind of eclipsed anything that we heard in the budget it just shows the the scale of the prime minister's ambition so you don't you don't descend from that view this is the most significant thing i could go through the budget line by line and tell you how significant i think it is there's only so much time i think i think what is important as well is first of all the uk eu summit i think is not just going to give us the chance to avoid some real potential harms to the UK because people might have heard of the Made in Europe agenda it's essentially a reaction in Europe to pressures they're under from China but the real consequences for the UK in automotive and aerospace and i believe actually there's there's real there's a real lack of of appreciation for the key parts the premise of the EU UK reset that again the last government began things like SPS which is your food and agricultural rules you know sorting this out removing these frictions between the UK and the EU this is one of the reasons let's be frank so many businesses in the UK just stopped exporting entirely after Brexit these will deliver real benefits so that's the here and now he has also talked about making sure for the long term for the 10-year plan we address some of the problems between ourselves and the EU and they exist are you looking forward to going back to Staleybridge and Hyde and having this argument with your voters who voted for leave that it's a really good idea for us to rejoin the single market to have free movement you're getting ahead of yourself though well i don't think i am really given what the prime minister has said what the prime minister has talked about is if we're looking to the next decade this is his 10-year plan there are no ways we can avoid a conversation about some of the things going on in Europe that impact upon us so made in europe is one example of that i've got steel tariffs in europe john that have huge consequences and we need a solution for we've got the rules of origin left over from the original TCA for the automotive sector if we don't fix those by the 1st of January a 10% tariff under the existing arrangements we have on automotive products transferred between the UK and the EU these are all things that need addressing and we have to appreciate whatever the EU does will have an impact upon us The Prime Minister though, he is a bit different from his predecessors isn't he, in his tone on this I mean I know you're saying we're getting ahead of ourselves but I think it was hard to imagine Keir Starmer certainly at the start of his premiership talking the way that Andy Burnham did i think what you'd have to say there's been a shift right what you say about Andy and a whole range of areas is he just does not shy away from the big issues so whether that is the pension system social care our relationship with the EU you know he he addresses those big issues and i think people find that authentic quite rightly and compelling and i think actually you know politics has got to be about the big issues as well as the retail and the individual it's got to look at the big things affecting the UK and i certainly kind of welcome a Prime Minister who's got that ambition and perspective. Would you be comfortable, just theoretically speaking, do you think you could imagine a situation where the Labour Party did endorse the idea of rejoining the EU? I think that is honestly getting too far ahead of ourselves because if you look at what also needs to be considered in this is there are things going on on the EU side the direction they've gone in since we left. You've got some very strong political currents in the EU and I don't know what the EU itself will see its own future. But would you like to? The PM has said he'd like to see it happen in his lifetime would you for me it's about solving problems in the main for british industry and what is the what is the relationship that is necessary do you think british industry would be better off as part of the single market no i think there is no doubt that when we left the european union there was an economic price for that i mean i that i don't think that is particularly um a controversial thing to say some people have voted not on the economy important to say that they've voted for other reasons around that but yes i mean the the figures that are in the public domain are broadly correct for the difficulties Brexit has caused us. We've talked about the constraints that the Chancellor is under, and the limitation, the limited room for manoeuvre, and part of that is down to manifesto commitments, part of that is you can't know, because of the certain rules and framework that you've got. Would I be mad to put £10 on an election next May? Yeah, I think you would be. Totally mad? You've just got to listen to what the Prime Minister to say it so you can't say it any more times he has got plans for this country that is what we're doing that is the job that we are getting on with i don't think after the five quid okay ten quid a bit you know i think we've had we've had so many general elections in this country in a short space of time that i think we'll never stop speculating on them but just listen to what the prime minister has said on this but even though you are so constrained in what you can do because of the manifesto commitments you heard it you heard the ambition to confront some of these big issues from the prime minister this lunchtime during prime minister's questions but having to acknowledge there are red lines because the manifesto commitment but he is and we are confronting those uh big issues and look i think frankly the speculation partly comes from the fact he clearly has a relationship with the public you know i think he is in a in a very strong position in terms of you know the endorsement he has from the british public to be the country's prime minister and leader and i understand speculation will come from that when when you look at the relative position perhaps of some other parties but again i would just say listen to what he has to say bookies don't agree with your business secretary you're against british business don't get everything 15 to 8 15 to 8 you can get for uh you can get for an election next year you know some people a tenner well that would get john 18 75 profit some people had something to get relegated last year and we qualified for europe so you've got to be careful sometimes of what the bookies uh come forward with i'd also say you need to back british business business secretary on economic forecasts I would point out as well we've outperformed those for the last few years as well so yeah you've got to listen to those things but sometimes the performance is different Business Secretary Jonathan Reynolds thank you very much so we told you we'd bring you up to date on the Israeli elections and when I say bring you up to date this could be a rolling story that takes us into about January but essentially at eight o'clock last night which is 10pm in Israel the polls closed and within a moment of them closing you get a whole load of exit polls it's not like the one exit poll that you have here you get about 11 or 12 and they all have varying degrees of difference but they are trying to predict what they think will be the largest party and how the Knesset the parliament will be shaped as a result what emerged pretty quickly from those polls was that Netanyahu's party Likud would have the largest number of seats but would not have enough for a majority and that the opposition party would have a smaller number of seats but potentially a better share of a coalition government and since then we've been looking at the kind of way the seat tally has been changing up and down and the biggest change of all this election was the number of seats that the Arab parties have won which looks as if it will be 18 or 19 seats in the Knesset they form 20% of the electorate and the Arab voters came out in their droves yesterday and it was an extraordinary thing to see the highest turnout the highest tally forever for any Israeli election ever and i guess what we have now seen is that Israel is as we thought entirely split so what we're trying to work out now is where who gets the first chance at establishing a government and whether it is in fact the person with the largest party which is once again Netanyahu yeah i mean 20 seats for the Arab parties in the Knesset which has a total of 120 seats means they are a really significant voice and could be the king makers the problem is that would any of the other parties do a deal with the Arab parties to get a majority because of the electoral risk and national security concerns and all the other issues and they've all said no and they've all said no and so you are there with well there is one party that can make you the king and make you sit as prime minister but no one will go near and so it looks like you're going to have either a very unstable government which doesn't have a majority and therefore setting the stage oh i i think that's the only scenario i think the only scenario is it's an unstable government and there'll be another general election soon unless Bibi Netanyahu pulls it off again and somehow conjures an alliance but his the other parties that were part of his coalition you know did very badly i mean they originally had the coalition had 68 uh Knesset members yeah he's fallen i mean he's fallen considerably but he's still got an enormous grip and he's and netanyahu is in part the problem is that he's cannibalized some of their seats right within the bloc you know he he Likud itself his own party has not done that badly the problem is is that the other parties have fallen back i mean one of the things that's actually remarkable right is that i mean i suppose you know just taking a step back in some ways the fact that netanyahu remained even seriously competitive given what happened on october the 7th given the security failures which he oversaw yeah and he was the prime minister and has done extremely well sidestepping i mean whatever one thinks of him he is uh an extraordinarily quicksilver political figure i mean he is he is dominant i mean you know when one considers that his first election when he was elected in prime minister was in 1996 you You know, he has dominated Israeli politics for a substantial proportion of the time that Israel has even been a state. You know, I mean, in so many ways, modern Israel is Netanyahu's Israel. The fact, given that everything that's happened and the security failures and what we've seen in Gaza, that he remains so competitive, I think tells you much about the tenor of Israeli politics. Yeah, I mean, I think what you have to remember is that this is not an election so much as a marketplace. You know, once the voting is done, they all start coming and haggling. One of the most interesting negotiation thoughts that came to me today was this, that there would be a plan for a very temporary government with the Arab parties to change the laws and prevent Netanyahu running again. And at that point, they would then dissolve the Knesset and do a unity government with new Likud. Because the irony is that the two bands that can really form a government are the two bands that oppose each other, Likud and Yeshar, who is Gadi Eisenkot's opposition party. Without Netanyahu, could you see something that was Likud and Yeshar? Maybe. Or could Eisenkot bring himself to saying, yes, I am going to reach across the aisle. I am going to work with the Arab parties. I mean, you know, one of the Israelis I was talking to this morning said the most sensible thing they could do is make Mahmoud Abbas the foreign secretary. You know, bring a Palestinian Arab right into the heart of government and just go. That is the sign that we are serious about this government, you know, about security, about peace, about all the rest of it. But is that the end of a political career? That's that's how they will think. Can I just point out one irony in all of this? And that is that Donald Trump came out twice to vocally support Benjamin Netanyahu and that he should be returned to power as the prime minister. Benjamin Netanyahu did far better than people expected in the polls. And what was the effect of that? The oil price leapt because it suggested that there was much greater likelihood that there would be renewed conflict with Iran. And what does Donald Trump want to do before the midterms? He wants to bring the price of oil down. So Donald Trump, well done. You've pushed the price of oil up with your support for Bibi Netanyahu. Exactly what you didn't want. We'll be back tomorrow. Bye bye. Bye bye. The News Agents podcast is brought to you by HSBC UK, opening up a world of opportunity. This has been a global production.