474. Does Reeves' Budget Really Change Anything? What It Means For You

Was this 'the most leaked Budget' of all time? Has Rachel Reeves managed to balance the demands of the public, the markets, industry, and her party? Can Reeves turn around the Government’s and the country's fortunes with this Budget, or will it be her last as Chancellor? Join Rory and Alastair as they answer all these questions and more. __________ Gift The Rest Is Politics Plus this Christmas – give someone a whole year of Rory and Alastair’s miniseries, ad-free listening, early access to episodes and live show tickets, an exclusive members’ newsletter, discounted book prices, and a private chatroom on Discord. Just go to therestispolitics.supportingcast.fm/gifts. And of course, you can still join for yourself any time at therestispolitics.com The Rest Is Politics is powered by Fuse Energy. The Rest Is Politics is powered by Fuse Energy. Fuse are giving away free TRIP Plus membership for all of 2025 to new sign ups 🎉 TRIP Plus gets you ad-free listening, discounts, and early access to episodes and pre-sale tickets for live shows! To sign up and for terms and conditions, visit ⁠fuseenergy.com/politics⁠ ⚡ Get our exclusive NordVPN deal here ➼ nordvpn.com/restispolitics It's risk-free with Nord's 30 day money back guarantee ✅ To save your company time and money, open a Revolut Business account today via get.revolut.com/z4lF/therestispolitics, and add money to your account by 31st of December 2025 to get a £200 welcome bonus or equivalent in your local currency. __________ Instagram: @restispolitics Twitter: @restispolitics Email: [email protected] __________ Social Producer: Celine Charles, Charlie Johnson Video Editor: Josh Smith Assistant Producer: Daisy Alston-Horne Producer: Evan Green, India Dunkley Senior Producer: Callum Hill Exec Producer: Tom Whiter Learn more about your ad choices. Visit podcastchoices.com/adchoices

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• 0:00Alastair Campbell?

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• 1:57Alastair Campbell?

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• 3:28Alastair Campbell?

  Hello and welcome to a live presentation of The Rest is Politics with me, Alastair Campbell.

• 3:35Rory Stewart?

  And with me, Rory Stewart.

• 3:36Alastair Campbell?

  And we're talking about, as if you didn't guess, the budget. UK budget, as you called it on the podcast this morning, Rory. Rachel Reeves, the Chancellor, has just stood up in the House of Commons. We actually knew pretty well in advance a lot of the measures. We then knew all of them because shortly before she stood up, this document was by mistake published by the Office of Budget Responsibility. So she started off in a pretty foul mood, I would say.

• 4:03Rory Stewart?

  Yeah, I mean, just to begin on this, famously, there was a moment where if you leaked anything from the budget.

• 4:10Alastair Campbell?

  You were out.

• 4:10Rory Stewart?

  Yeah. What was this famous moment?

• 4:12Alastair Campbell?

  Hugh Dalton, 1947.

• 4:13Rory Stewart?

  Right.

• 4:14Alastair Campbell?

  Yeah. He was on his way into the House of Commons and a journalist said to him, By the time I write my story, you'll have delivered the budget. Can't you just confirm something? And he confirmed it and he ended up having to resign. And other people have had to resign because of budget leaks.

• 4:28Rory Stewart?

  And the idea in those days was that if you got advance information on the budget, you could profit from it on the market.

• 4:33Alastair Campbell?

  Yeah, well, it's the the budget and the documents that go with it are rammed full of market sensitive information, which can move currencies, can move the markets. And so that's why it's such a big deal. Added to which, the Chancellor's speech was preceded by the Deputy Speaker. And another bit of sort of arcane parliamentary procedure, the Speaker doesn't sit in for the budget. It's the Deputy who is the Chairman of Ways and Means. And she clearly, at the best of the Speaker, criticised and ticked off the government pretty severely for the sort of relentless leaking and briefing that had been about this budget.

• 5:09Rory Stewart?

  On the other hand, to to defend Rachel Reeves, what she told us she was going to do, which was raising contempt, she decided not to do anyway. So all the leaks fell off down the wrong path, making our investment decisions. So that she then

• 5:22Alastair Campbell?

  Yeah, well, we'll get on.

• 5:23Rory Stewart?

  Ferreted back again.

• 5:24Alastair Campbell?

  Okay, we'll get on to that. Look, I think as we go through, we should sort of, we should maybe in our own minds, think about the various people that she was trying to project to. Because there are different audiences on a day like this. Very importantly, over the long term, medium and long term, is the Great British Public, who will follow it fairly closely. They'll get a sense of it. There are the MPs, in particular her own MPs behind her, who cheered wildly at the end, but it looked like they were somewhat being forced to. And then you've got business. And I think on the day itself, maybe the most important audience, whether we like it or not, is the markets.

• 6:02Rory Stewart?

  Absolutely. Well, may maybe we should go through those in sequences. Very good idea. Let's do, begin, I'll try to give a bit of a summary of what's happening. So she came in to office with a commitment, essentially sold by Keir Starmer and Rachel Reeves. Basically that they were not going to raise taxes and that their story was going to be growth. So they were coming in and the story was the Tories are incompetent, squander a lot of money. But don't worry, we're not going to be the Labour Party that comes in and raises taxes. Instead, we're going to drive growth. And my guess is that's pretty close to what you came in with in ninety seven.

• 6:40Alastair Campbell?

  Uh huh.

• 6:40Rory Stewart?

  And so the playbook was pretty similar to Blair and Gordon Brown as the Chancellor then, which is, this is a new Labour, so we're going to invest more. We're going to get the economy growing, but we're not going to do it by raising taxes and having business.

• 6:54Alastair Campbell?

  And it's which we said that we would stick to Tory spending laws for two years. And there was a little bit of that in the in the Labour approach as well.

• 6:59Rory Stewart?

  And and so in a way, the sort of precedent is very important because it meant that broadly speaking, from nineteen eighty through to relatively recently, the British economy has been pretty stable in in terms of its tax spend policies. Because obviously you had the Thatcher major years, you had Brown and Blair, who were quite fiscally responsible, might be one way of saying it, quite cautious with their spending. And then, of course, you had austerity and now she takes over. And this is the key point because she came in and decided or realised this big debate. You know, did she find a huge black hole that she had no idea about or not?

• 7:42Rory Stewart?

  In any case, it turned out that she was going to have to, in the last budget, borrow more and raise taxes more. Taxes in the last budget went up for about forty billion. And she tried at the time to say, okay, this is a one time thing.

• 7:55Alastair Campbell?

  Not coming back for more.

• 7:56Rory Stewart?

  Tories left a horrible mess. We've done it, it's done. But over the last twelve months, unfortunately, it's become clearer and clearer that she probably would have to come back for more and probably come have to come back for more. Because she certainly couldn't borrow anymore because she'd set fiscal rules that limits how much she can go out and borrow. Her backbenchers in the Labour Party weren't going to let her do the kind of cuts that she wanted to do. So she was going to have to raise taxes. And as I was making a slight joke of, it sounded as though she was going to raise income tax by a couple of pence, which would have been a huge move, you know, could have generated about twenty two billion pounds, although she was going to soften it by moving the other direction. In the end, she didn't do that. She did raise taxes, though, by twenty six billion, but she did it through a range

• 8:41Rory Stewart?

  of different measures. And the biggest one is that she

• 8:44Alastair Campbell?

  Thresholds.

• 8:45Rory Stewart?

  froze the thresholds, which means that she's not technically increasing the the nominal level at which you're paying income tax, but as inflation kicks in, as your salary rises, you're more likely to enter those tax brackets. And the government would make in twenty thirty one, another eight billion from that. She's also getting four billion out of things that used to be deductible on private pensions.

• 9:08Alastair Campbell?

  Salary sacrifice pensions.

• 9:10Rory Stewart?

  Salary sacrifice pensions, which will make some people pretty cross, because it'll mean that if you, and it doesn't affect the public sector, so potential grumble will be typical labour being nice to public sector. But if you're in the private sector, you're going to lose tens of thousands of pounds from your

• 9:24Alastair Campbell?

  And also, it's worth pointing out that that measure doesn't just affect pensioners, that in fact, it affects more working people who put money into their pensions as a way up till now paying less tax.

• 9:35Rory Stewart?

  Right. And then the thing that's been headlined a lot, but actually doesn't generate very much money

• 9:40Alastair Campbell?

  Is the mansion tax.

• 9:41Rory Stewart?

  Mansion tax, which will pull in a few hundred million and will mean that if you own a property over two million pounds, you will pay not actually very much, a few thousand pounds a year. And if you

• 9:51Alastair Campbell?

  Two and a half thousand, I think it is annually. But and she calls it a council tax surcharge, but I've been trying, reading the documents, trying to find out how that's going to be collected, whether it's down to local government, how. So I think that I just thought that to take the hit.

• 10:04Rory Stewart?

  Answer just come up, which is that she said it's going to come to the central government. It's the local, local council, so I'm going to be allowed the council tax.

• 10:10Alastair Campbell?

  Ah, okay. But so the, and the other, just briefly to go through the, the other tax, taxes on property savings and dividends, two point one billion. Corporation tax change one point five, electric vehicles and a new mileage based charge on battery E Vs and plug ins, which goes in the face of the other.

• 10:29Rory Stewart?

  So very interesting. That's a difficult balance, just a small one on that. That might mean that some people are estimating four hundred and seventy thousand fewer vehicles will be sold, electric vehicles. On the other hand, people like Paul Johnson are pointing out that she needed to be brave on that because ultimately if we shifted everyone to an electric vehicle fleet and only petrol vehicles were taxed, the government would have no revenue at all.

• 10:53Alastair Campbell?

  Yeah. Gambling, changes to gambling tax, one point one billion. She was at pains to say this wouldn't affect.

• 11:00Rory Stewart?

  Something you you were in favour of.

• 11:01Alastair Campbell?

  Well, I am, but but I suspect that it will, it might lead, in fact, I think it's already started to lead to something of an exodus. Some of the companies will be looking to go elsewhere. She was at pains to say it wouldn't affect horse racing. Then they've got this fuel duty, some changes, tax administration and debt collection gets two point three billion. I think on the mansion tax, what's really interesting, there's been such a debate about this over years and years and years and years. Why take the pain for it for naught point four billion?

• 11:32Rory Stewart?

  I know.

• 11:33Alastair Campbell?

  And I think what's happened here is that having clearly at one stage, she was going to do these income tax rises, and then whether they tested them with the public or with MPs, I don't know, but then to change. So you've got all these, you've now set off all these different sectors and audiences that are going to come back and be, you know, pretty hacked off. So I guess the big question, so let's let's just to go through our our audiences, let's let's actually just start with the markets because they do seem to have reacted well, although I saw I saw one interview with one of the guys, you know, one of his big city office, and he basically said, well, we don't care whether it comes through tax and spend, but what we do care about is seeing the bigger headroom. And

• 12:15Alastair Campbell?

  that's why the market seemed to have reacted quite well. She's increased the the headroom, the sort of spare capacity she has for stuff that goes wrong, from nine billion to twenty two. As a result of raising the taxes.

• 12:27Rory Stewart?

  And that's, I guess, to give her credit positive because people were very worried if she left the headroom too tight, which is what she did last time, she would have to come back.

• 12:35Alastair Campbell?

  Yeah.

• 12:35Rory Stewart?

  Sooner or more likely to come back sooner. Although the O B R being the O B R still says there's a fifty percent chance roughly that she might have to come back for more. And that's just the O B R's way of saying it's very difficult. But on the markets, though, yes, you're completely right. The markets, largely speaking, are happy. And if you were Zach Polanski, you would say.

• 12:52Alastair Campbell?

  Out on leading on Monday.

• 12:53Rory Stewart?

  Yeah, Zach Polanski out leading on Monday. You'd say typical, she's in hock to the bond markets. The bond markets are driving everything. The Alastair Campbell of America famously, James Carville, said he wanted to be reincarnated as the bond markets.

• 13:06Alastair Campbell?

  Unlike Bill, his boss, Bill Clinton, who said he'd like to be reincarnated as a Detroit focus group because they had all the power.

• 13:14Rory Stewart?

  That's good. Whether it's the Detroit focus group or the bond markets, they certainly have a lot of power.

• 13:18Alastair Campbell?

  Yeah, but I think where Zach Polanski, and people can hear this on Monday, where I think he's being unreasonable, is that in the ideal world that he imagines and that you and I might imagine, then they wouldn't have such power. But the truth is they do. If they had reacted, one of there'd been lots of graphs flying around today. And one of the graphs against which some of the market reaction is set is what happened with Liz Truss and her mini budget. And this is nowhere near that. And this is actually, I think so far, the market reaction has been better than last year.

• 13:48Rory Stewart?

  Yes. So the bond markets, just to explain to people what this is, this is how the government borrows money. And a lot of that money is in fact paying fixed incomes to UK pensioners, to pension funds, right? So it's not all of Zach Polanski sometimes likes to imply sort of evil billionaires.

• 14:06Alastair Campbell?

  Getting richer.

• 14:07Rory Stewart?

  Evil billionaires outside the United Kingdom. And the reason why it's particularly important at the moment is partly that we're borrowing a huge amount. Our debt to GDP is about a hundred percent and we are spending currently hundred billion pounds a year. On servicing our debt interest.

• 14:24Alastair Campbell?

  Yeah.

• 14:25Rory Stewart?

  And if the bond markets get frightened, and how do they get frightened? Not, not in the case of Britain that we default, but if they got frightened that inflation would take place and the value of their bonds would be eroded. They'd start ramping up the interest rates and that would be a big problem for the government, but a big problem also for people with mortgages because that will be passed on mortgages. So she's, she's right to be, well, I don't know, right. There's a real reason why she's cautious about it and, and that's the reason why she wanted to balance the books, also a reason why she didn't want to increase borrowing. But then in turn forced us towards tax rises.

• 14:56Alastair Campbell?

  Yeah. And the, the threat is, I think it's important to emphasise that this, this threshold change, which is going to go on for at least three years. Freezing the thresholds. So there's one of the many, many, many, many graphs. I'll just hold it up there, but you can see that as well is this, this is the graph of people who've been brought the so-called fiscal creep. More and more people being dragged into a top rate. So the threshold stays the same, you get a pay rise and suddenly you go from being a basic rate pair to top rate taxpayer. And so that all of these things are going to get attacked from different quarters. And I think the other thing that's, that's worth pointing out in relation to the, the O B R, and I think it's important to emphasise, and in a way, this

• 15:37Alastair Campbell?

  fiasco of whoever pressed the button early to publish this damn thing before it was meant to be and set of all sorts of craziness. The O B R, I, look, I think there should be a debate about the O B R. I think to some extent it has become way too important in our politics and our economics.

• 15:55Rory Stewart?

  So, so just quickly explain, so the Office of Budget Responsibility is set up by George Osborne theoretically as a objective, independent monitor of whether the government was doing its job. And what Rachel Reeves has done is she's now created fiscal rules where the O B R's prediction about what's going to happen to the economy actually has to control

• 16:12Alastair Campbell?

  Yeah.

• 16:13Rory Stewart?

  her entire tax and spending. So although their predictions are not particularly better or different from any number of other predictions out there. They're baked in, as it were, to law. So the whole bond markets, again, keep coming back to the James Carville's bond markets governance.

• 16:29Alastair Campbell?

  And they've got, is, is the other thing that's so frustrating about budget day, I'm trying to remember whether this is something that we exploited, to be absolutely frank, I think it probably is. Where you have, and Gordon Brown, brilliant politician, his, he could present a budget so well because he'd have a big argument. You'd pump it out there, you'd know what the message was. And by the time people had scrabbled around, read the red book and and read the all the papers that went with it. He was still driving the narrative. I think the trouble with it is you have the the Chancellor's speech. You have this red book, which has the government kind of treasury version of the whole thing, then you have the O B R.

• 17:04Rory Stewart?

  Yeah.

• 17:05Alastair Campbell?

  And each one is just quite substantially different.

• 17:09Rory Stewart?

  Yeah.

• 17:09Alastair Campbell?

  In tone, in the things that they emphasise. So it's only, for example, when I start reading through the O B R, just get this. And this maybe should can take us to how the public might over time.

• 17:18Rory Stewart?

  We're going to do public before business or?

• 17:20Alastair Campbell?

  Okay, well, let's just do.

• 17:21Rory Stewart?

  Would you, I, yeah, let's.

• 17:22Alastair Campbell?

  Let's, let's, so it says, the the starting level of real household disposable income per person has been revised down relative to our March forecast by one hundred and fifty pounds in twenty twenty three prices to twenty six thousand three hundred in twenty twenty four, twenty five. Our H D I, real household disposable income per person, is projected to grow more slowly over the forecast than in March. And so that's sort of, you know, you would not have got any sense of that from.

• 17:55Rory Stewart?

  From the speech that.

• 17:56Alastair Campbell?

  Not, not at all, not at all. You you had a sense in that because she kept saying that whereas we thought budget one, the big goal was growth, it now seems to be getting cost of living.

• 18:04Rory Stewart?

  Okay, so so so let's let's take a step back for a minute. So we've told listeners, hopefully, a little bit about what was in the budget. We've told listeners a little bit about why the bond markets in particular are reasonably happy and what the bond markets are. Give us a bit of a sense before we get on to business, party and public. The drama of the event, you watched her speech, you watched Kemi Badenoch's response. What was your sense about the whole way up to Liverpool?

• 18:26Alastair Campbell?

  Well, it was chaotic at the start because you had this, this, I think you can't even call it a leak, it's not a leak, it's a publication of one of the most important documents attached to the budget, which if you go to.

• 18:38Rory Stewart?

  Which was not supposed to come out before the budget.

• 18:40Alastair Campbell?

  No, not supposed to come out until she's.

• 18:42Rory Stewart?

  Finished speaking.

• 18:43Alastair Campbell?

  Finished the speech. And so you can very, very quickly go to a page that tells you literally every single change of the budget.

• 18:49Rory Stewart?

  And I remember this when I was in the House of Commons, because I would sit through all these budgets.

• 18:52Alastair Campbell?

  That you run to the the vote on.

• 18:53Rory Stewart?

  Yeah, exactly. You pick the thing up. Yeah, exactly. Yeah. And you get this lovely document, which you're now wandering around with now. And then you'd get a copy of that as well.

• 19:00Alastair Campbell?

  Yeah.

• 19:00Rory Stewart?

  He handed out to you by the thing. Yeah.

• 19:01Alastair Campbell?

  So that was, so before. Keir Starmer had finished Primus's Questions, the media had cut away from Keir Starmer because they were sort of gobsmacked to be able to read on their phones and on their tablets, they were reading the budget.

• 19:16Rory Stewart?

  So then presumably the media went into a frenzy of speculation about why this thing had been leaked and it turns out to presumably to have been an accident.

• 19:22Alastair Campbell?

  Somebody's absolutely ballsed up, which again, I think is, there's something symbolic about that in relation to the OBR.

• 19:28Rory Stewart?

  Right.

• 19:29Alastair Campbell?

  And then the head of the OBR comes on to his press conference and just has this line to take, he sort of repeats robotically. Rachel Reeves then stands up and she starts by referring to this premature ejaculation of the budget all over the airwaves and is clearly quite angry, you can see she's quite tense about the whole thing. She then goes into the speech, I thought she did okay on a pretty tough wicket.

• 19:53Rory Stewart?

  And what was the fundamental message? If you were a backbencher listening to it, what were you hearing from her in that, in that room?

• 19:59Alastair Campbell?

  Well, if you were a backbencher, what you were hearing was that she was projecting a very Labour budget.

• 20:05Rory Stewart?

  Right.

• 20:06Alastair Campbell?

  And so I think that's why at the end they were all doing that silly order paper waving.

• 20:09Rory Stewart?

  And that's her talking about presumably Tories landed us in the mess, we're fixing it, we're cutting waiting lists, we're doing.

• 20:17Alastair Campbell?

  Yeah, but it was also the, the big thing that got them going was that she did a big build up, a big section of the speech was about scrapping the two child's.

• 20:23Rory Stewart?

  Benefit.

• 20:24Alastair Campbell?

  Benefit cap.

• 20:24Rory Stewart?

  Right.

• 20:25Alastair Campbell?

  Um, which a lot of MPs have been campaigning for. Interestingly, the polling in that is, you, you get a sense from the debate in the Labour Party that this is sort of massively popular. Kemi Badenoch, actually, she talked about this being a budget for Benefit Street. She was clearly coming out as sort of very anti-welfare. But I'd say that the, the one thing, you know, we've talked a lot about Keir Starmer's got resilience. Rachel Reeves showed a lot of resilience today in that she was just sort of, she's quite punchy.

• 20:51Rory Stewart?

  Right.

• 20:52Alastair Campbell?

  Anytime they came at her, she was, you know, she was pretty good with the comebacks.

• 20:55Rory Stewart?

  And then if you, let's say you were the public watching, so I don't know how much, how many of the public actually watched the live budget, but what, what sense would the public have got watching this, do you think? What message is Labour sending to the public? You talked about Gordon Brown's big argument, what do you think her big argument would be?

• 21:09Alastair Campbell?

  Well, I think that is, that is a problem with it. I, I, I don't, I think you'd get a lack of clarity about that with the public. I think that along the way, I mean, she did have a very good line, she said at one point, the OBR report is not about 14 years of a Labour government, it's about 14 years of a Tory government. Now. There comes a point where people just get fed up of hearing you talk about the last law, even though I think it's a reasonable, fair thing to do, given the scale of the mess they left. I think the public would have had a sense of somebody frankly fighting hard to project a sense of a forward plan for the economy. What I think you'd struggle to do, I mean, she talked about stability, investment reform.

• 21:47Rory Stewart?

  Yeah.

• 21:47Alastair Campbell?

  The big sort of three pillars.

• 21:49Rory Stewart?

  Stability, investment reform, yeah.

• 21:50Alastair Campbell?

  And of course, the first time she mentioned stability because of all the chaos at the start, the Tories all just sort of laughed at that.

• 21:55Rory Stewart?

  Yeah.

• 21:55Alastair Campbell?

  And she started to that, stability, investment reform.

• 21:57Rory Stewart?

  Yeah.

• 21:57Alastair Campbell?

  She said, she said, she talked a lot about what she'd promised to do and said she was delivering it. And again, sometimes the Tories shouted back in a way that frankly, I think.

• 22:05Rory Stewart?

  Yep.

• 22:05Alastair Campbell?

  With a Gordon Brown budget, maybe they wouldn't have done.

• 22:08Rory Stewart?

  Yeah.

• 22:08Alastair Campbell?

  And then, and come the end, I think she sort of, she, she, she was strong in the presentation.

• 22:14Rory Stewart?

  Yeah.

• 22:14Alastair Campbell?

  But I think, I think the weakness with it was then exemplified by a pretty brutal attack by Kemi Badenoch.

• 22:21Rory Stewart?

  Yeah.

• 22:21Alastair Campbell?

  And it's interesting, I've got messages from Labour MP saying, Kemi's going way over the top, et cetera, et cetera, et cetera. And to some extent she was, but it was brutal in its.

• 22:31Rory Stewart?

  It was, and I'm afraid, however unpleasant it felt in the House, it was one of the moments where Kemi Badenoch, I think, has provided a very, very effective speech on television and social media. Because of course, you can see that Rachel Reeves and the Foreign Secretary are both sitting, Vette Cooper are both sitting thinking, what on earth are you doing? You pick up a bit of that. But the speech as delivered was very confident, at times quite funny. She had her lines were, this is now Kemi Badenoch literally opposition attacking. She managed to get them going on government spending up, welfare up, unemployment up, debt interest up.

• 23:07Alastair Campbell?

  Don't you hate that when the MP's thinking about you?

• 23:09Rory Stewart?

  And then growth down, investment down, business confidence down, and the credibility of the Chancellor. Down, right.

• 23:18Alastair Campbell?

  She, she had another, another, I thought quite powerful line is that basically said Kirsten Palmer's only clinging on to her because if she goes down, he goes down with her. Look, I thought it was, you know, as you know, I've, I've not been a massive fan of her parliamentary performances, but, but I thought.

• 23:33Rory Stewart?

  That was a very strong performance.

• 23:34Alastair Campbell?

  I thought she was very big, powerful, brutal.

• 23:36Rory Stewart?

  Yeah.

• 23:37Alastair Campbell?

  I mean, even getting to the point of, of mocking, really mocking, seeing as she said the thing about, you know, we've talked a lot on the podcast about the press comments where she was rolling the pitch.

• 23:46Rory Stewart?

  Yeah.

• 23:46Alastair Campbell?

  With that strange speech in Downey Street to Warner's Taxi. And we go, yeah. And Kayleigh Baden was going, you know, oh, public service broadcasting, we're interrupting our taking of our Cheerios to have, and then she did this thing about, you know, all this whining about mansplaining, it's not mansplaining that people don't raise, don't like your voice because you're completely useless, it was brutal stuff.

• 24:06Rory Stewart?

  Right.

• 24:07Alastair Campbell?

  And, and her side seemed very, very, very cheered up by that.

• 24:10Rory Stewart?

  Yeah.

• 24:11Alastair Campbell?

  But I think in terms of the public watching, I don't know what they'd have made of it in the end. It was interesting, ju- just, you know, because I, before a big event like this, I sort of ping out a few messages to a few random people. If you're watching it, let me know what you think. And it was, there was quite a few sort of said, oh, do I have to?

• 24:30Rory Stewart?

  Do I have to?

• 24:31Alastair Campbell?

  So.

• 24:32Rory Stewart?

  That's what we, we employ you for, Alice, that's what, everyone watching, they, you take the pain from.

• 24:37Alastair Campbell?

  I thought, I thought, I thought Rachel Reeves did well on a really difficult wicket as a before, as a parliamentary performance. But I think, I think, what, I think the papers tomorrow are going to be horrific for her.

• 24:48Rory Stewart?

  Okay.

• 24:49Alastair Campbell?

  Because, and partly because, I thought, what can we be not, you know, tax on savers, tax on drivers, tax on sugar, tax on this, tax on that. It went, and very much, and this is, she had this line of attack where she basically said that in order to appease your backbenchers.

• 25:04Rory Stewart?

  Yeah.

• 25:04Alastair Campbell?

  Brackets because she failed.

• 25:06Rory Stewart?

  Yeah.

• 25:06Alastair Campbell?

  Take them forward on welfare reform. You've had to sort of throw them all this stuff, which is basic and the rest of us have to pay tax rate. That was the

• 25:13Rory Stewart?

  Yeah. And so this is an interesting moment for Kemi Baynok, who's really been struggling. I mean, the Tories are in a terrible position in the polls, Reform are ahead of them. Tory MP, obviously, Danny Kruger defected to Reform. She's been under a huge amount of threat for her own leadership. But what I think it means for the Conservatives is it is an opportunity. And this maybe takes us to the next theme that you raised, which is business.

• 25:37Alastair Campbell?

  Yeah.

• 25:37Rory Stewart?

  To present themselves, or to try to present themselves as the party of business. So I was talking to Tory MPs and they're beginning again to say the kind of things that you would have been familiar with from the eighties. They're beginning to say, there's only one person in the Labour Cabinet with business experience. They don't really understand business. You know, we're people who work in businesses. We understand what taxes mean for businesses. They will also be saying, and they'll start, and again, to get sort of technical jargon, they'll be getting back into pushing supply side reforms. In other words, they will be pushing for more deregulation, more business friendly policies, more tax

• 26:17Rory Stewart?

  cutting. And so they'll start presenting a more conventional mini austerity. Let's shrink the size of state, have the private sector bigger. And the arguments that they'll be making are partly going to be based on the fact that the figures around the amount of tax, the amount of government spending as a proportion of our economy are pretty extraordinary.

• 26:39Alastair Campbell?

  It was a record high, though, wasn't it?

• 26:39Rory Stewart?

  I was just putting them together. So, under Callaghan in the seventies, winter of discontent, tax to GDP was about thirty four percent.

• 26:47Alastair Campbell?

  Mm hmm.

• 26:47Rory Stewart?

  Under Margaret Thatcher, not very surprisingly, it drops down to about twenty eight percent. But perhaps what people don't really understand is that under your government, it was only at about thirty four percent, May about thirty three percent. Boris Johnson came in and started for various reasons, spending like a drunken sailor, which is part of the problems going on a lot of this.

• 27:05Alastair Campbell?

  And there was Covid.

• 27:06Rory Stewart?

  And there was Covid. Yeah, that's one of the things he was spending on. Went up to about thirty five percent, but now it's up at thirty seven percent. And this is a level of the amount of tax being paid, it's part GDP, which has almost never happened in Britain. And if you are somebody thinking about growth, you would also notice that productivity is still flatlining. And the OBR, in your blue document over there, yeah.

• 27:30Rory Stewart?

  Has basically got a sentence saying none of these measures in this budget, we think are going to lead us to adjust our growth.

• 27:36Alastair Campbell?

  We have revised down our assessment of medium term productivity productivity growth from one point three percent to one percent. There is a massive problem with productivity. The other thing, the other thing that triggered me was Brexit was mentioned once as one word when she was basically trying to say this is down to stuff that happened on your watch to the Tories. So Brexit, Covid, she mentioned Brexit austerity, Brexit, Covid, she mentioned. If Brexit is the disaster for the economy that it's been, why are we not doing more to fix it? And, and you talked about the, I think the problem the Tories have, you're right, listen, she was much more effective today than she has been, but they have a real visibility problem in this. So Nigel Farage, I had two channels on in the background.

• 28:21Alastair Campbell?

  Nigel Farage press conference was, his, his presentation was done live.

• 28:27Rory Stewart?

  Yep.

• 28:28Alastair Campbell?

  Mel Stride apparently strode into the briefing room. There was hardly anybody there. And, and that's because the media has decided reform are more interested than the Tories. I think she would have rested that back a bit, but I think, you know, I think you as a tribal Tory, obviously Rory, I think you're kidding yourself a little bit if you think this is going to sort of.

• 28:44Rory Stewart?

  Change that much.

• 28:45Alastair Campbell?

  Change, change that dynamic too much.

• 28:47Rory Stewart?

  Another thing that's interesting for me as a tribal Tory is that when all said and done, if you were to step back, I think and look back at it from 10 years' time, it's not the most interesting budget in the world. It's a terrible thing to say to people who are watching us live. But I called my friend David Gork, who was the chief secretary of treasury and absolutely core of George Osborne's team. So very, very much part of the austerity neoliberal economic consensus and said, you know, what's wrong with this budget and what would you do differently? And without being unfair to David, I didn't get a great deal back. I mean, he had some ideas. You know, he said, you know, he would have been a bit more cautious about what was happening on the minimum wage.

• 29:28Rory Stewart?

  He would have thought a little bit about taking on some of the nuclear recommendations, thinking about the triple lock pension. But the message I got from that is this is not enormously different from the kind of budgets that Jeremy Hunt or Rishi Sunak would have brought through. I mean, there are different types of conservative budgets you could have seen, right? It's not George Osborne, it's not let's cut spending, it's not Liz Truss, let's cut taxes and not fund it. It's not Boris Johnson, let's spend like a drunken sailor. It's a pretty mainstream, middle of the road Treasury budget. And I guess the problem if you're business is it's not remotely radical.

• 30:09Rory Stewart?

  I mean, there's nothing in this which really makes you think radical deregulation, radical change, which is suddenly going to make.

• 30:16Alastair Campbell?

  Radical new approach to fixing the massive Brexit.

• 30:18Rory Stewart?

  Yeah, absolutely. Let's rejoin the customs union, let's, you know, you would push for a second referendum. But that, or what have we really got to do to fix this productivity problem? I mean, it's all about productivity, as you've often pointed out. If productivity had remained at the levels that it was at from late Thatcher through Gordon Brown, we'd be about thirty percent richer than we are.

• 30:39Alastair Campbell?

  Yeah.

• 30:39Rory Stewart?

  As it is, productivity is flatlined and sadly the OBR is saying this is not a budget that's going to change that because there's nothing here which really makes. So what are the things that Britain could have done for business? And then I'll hand back to you on the other stuff. There could have been much more dramatic move to reduce energy costs. Energy costs are very high for households, they're very high for business. And there's been some calculations that actually it's imposing a three pound cost on the economy and only getting a one pound revenue to the Treasury, the way that this energy costs are done.

• 31:11Alastair Campbell?

  So the first, the first line of the executive summary is they claim they're taking a hundred and fifty pound off energy bills on average from April next year. I've not read the kind of the detail on that. So they say they are doing something for households.

• 31:23Rory Stewart?

  Right. So questions about how that works and what happens to the carbon pricing and how that happens for businesses. And that's going to be vital because if we're going to be in, if Britain is trying to compete on AI and it wants data centers. These data centers eat energy like you can't believe. So how are you going to have cheap electricity? There could have been other things they could have done. They could have replaced stamp duty with property tax. We talked about David Gork was talking about triple lock pension. This is a big, big problem. More and more money is going to old people. But the fundamental thing that they didn't do is they didn't deal with the fact that Britain is now a complete outlier in the world. On the relationship, weirdly, between the amounts of tax paid by people on the lowest incomes, the amount of people paid by tax on the highest incomes.

• 32:05Rory Stewart?

  The amount of tax paid by people on lower incomes in the United Kingdom is very, very similar to that of the United States. The amount of tax paid by people in higher incomes is much more similar to people in Scandinavia. So we have this very odd situation where we're spending like a Scandinavian country. But most income is coming from the top. So the top 10% pay 60% of all the income tax revenue. The top 1% pay 28% of the entire income.

• 32:31Alastair Campbell?

  Of those who pay.

• 32:32Rory Stewart?

  Of those who pay. The top 0.1% are paying well over five, maybe as much as 10% of the revenue that's coming.

• 32:40Alastair Campbell?

  Progressive tax system.

• 32:41Rory Stewart?

  It is a progressive tax system, but it's a very odd one. Britain is now right out even of the Scandinavian average. If you were Scandinavians, Sweden or Denmark, and you were trying to run a state the size of Britain. Yes, the very rich pay a lot of tax, but ordinary people also shoulder their share of the tax, but they have to.

• 32:57Alastair Campbell?

  But the tax threshold change is the, I'm not saying this is not necessarily good politics, but that is what that is going to do.

• 33:04Rory Stewart?

  It's going to bring more people into.

• 33:05Alastair Campbell?

  Yeah. I think the other thing that's worth saying about that. So look, this is the choice that Britain doesn't, has never really wanted to face up to. We go on about Scandinavian public services. When we had Hela Thorne Schmidt, their former prime minister on the podcast, and she was saying, look, sometimes I look at your public services, how did the public put up with this with all the tax that you pay?

• 33:22Rory Stewart?

  Yeah.

• 33:23Alastair Campbell?

  They pay a lot of tax and they get very good public services.

• 33:25Rory Stewart?

  Yeah.

• 33:26Alastair Campbell?

  The problem, I think, for any government today is we're paying a lot of tax, but we're not getting necessarily the world-class public services that we should get for it. Which brings us to the question of reform. Not the political party.

• 33:36Rory Stewart?

  No, but but her first line was stability investment reform.

• 33:40Alastair Campbell?

  Correct.

• 33:40Rory Stewart?

  Right. So there is a big problem productivity and a lot of that is sadly in the public sector. We talked in previous podcasts about the fact that we're getting in a lot more doctors, a lot more nurses, but we're not seeing the productivity improvements in the NHS. We're seeing waiting lists come down, but there's an amazing figures that, you know, we're getting in in some fields, twenty, thirty percent more people. What the public is seeing is going up by seven, eight percent. The productivity has come dramatically down.

• 34:04Alastair Campbell?

  Yeah.

• 34:04Rory Stewart?

  So one question, I guess, is could Keir Starmer and Rachel Reeves become the real government of reforming and changing these things? And that that brings me to your third category, which is the Labour backbenchers. Because a lot of the sort of stuff that you might want to do if you were more on the kind of tribally Tory side, you know, cut government spending, improve productivity in public services, will have a lot of screams and protests from people who the Labour backbenchers are very sympathetic with.

• 34:33Alastair Campbell?

  Yeah. I see one thing Gordon used to do is he was very good at name checking colleagues and ministers. She did a lot of constituency name checking.

• 34:41Rory Stewart?

  Yeah, which which always cheers everyone up.

• 34:43Alastair Campbell?

  Yeah, exactly. He said, thanks to the representations of the MP for X, I've decided to do Y.

• 34:48Rory Stewart?

  Even with George Osborne's Omni Shambles budget.

• 34:51Alastair Campbell?

  I enjoyed that.

• 34:52Rory Stewart?

  Yeah, exactly. He loved that one. That was the pasty text. But at the time, most of us were shouting and cheering and waving our order papers because we were all getting sort of little tidbits for our constituency. He was announcing for the fifteenth time that the A sixty six was going to be jeweled.

• 35:06Alastair Campbell?

  Well, she did a lot of that. The the big moment for the backbenchers really looking like they were embracing the whole thing was the two child benefit cap, getting rid of that. But along the way, there was lots, she had some very good kind of quite punchy attack lines against the against the Conservatives. But I I think that the, I think the, I think this would have settled the PLP for a bit. But I think, you know, they they know just how fragile the situation is right now. Because you are, as you said earlier, you're talking about government that came in promising growth, it hasn't really happened and that's clear from the reports.

• 35:37Rory Stewart?

  Did the word, I mean presumably the argument without sounding too much like Gordon Brown should have been logically growth, not stability investment reform, but growth, growth, growth. That stability investment reform are the things that produce growth, but the argument is about growth.

• 35:52Alastair Campbell?

  Well, that's why the business reaction, I mean, you know, nobody can say what the business reaction is, is you talk about thousands of different people and organisations, but the sense I've had so far is of them actually thinking this is, actually Ray Newton Smith, who's the, the head of the CBI.

• 36:09Rory Stewart?

  Yeah.

• 36:10Alastair Campbell?

  Said, um, this is a budget for stability, not for growth.

• 36:14Rory Stewart?

  Right.

• 36:14Alastair Campbell?

  And look, we've been saying this for ages, if you would, if growth is the thing, then you have to bend every aspect of policy towards that.

• 36:24Rory Stewart?

  Right.

• 36:24Alastair Campbell?

  And that's why when you do sort of put further regulation in or further taxes on business, national insurance, et cetera, you may have a perfectly sound political argument for it, but you have to be able to say why that relates to your broader growth agenda. At the moment, in budget two of a Labour government, they're essentially saying that they're doing this because they're still on the getting the foundations right, getting the stability before they go for growth.

• 36:50Rory Stewart?

  Yeah.

• 36:50Alastair Campbell?

  And I think that what the next stage has to have is this sense absolutely of go for growth.

• 36:55Rory Stewart?

  Yeah.

• 36:55Alastair Campbell?

  Otherwise, where are they going to end up?

• 36:57Rory Stewart?

  Because, as you say, the fundamentally, all problems are solved by productivity and growth, right? Otherwise, she's stuck in this impossible question all the time of, am I going to cut spending, am I going to raise taxes, am I going to raise borrowing? If she can get productivity and growth, naturally the revenue of the government will go up, you'll be back in that happier situation that you guys were in from ninety seven onwards, right?

• 37:17Alastair Campbell?

  Yeah. One of the, the bits that I was reading ahead of the budget, once this report got pre-published, was the chapter, the, the, I, I think this is always worth looking at in the ONGAR report, risks and uncertainties. Key risks to our economy forecast include productivity growth, and that's where they set that out, bank rate and gilt yields, UK equity prices, and then key risks to the medium term fiscal forecast include.

• 37:44Alastair Campbell?

  Local authority borrowing has increased by around seven billion a year in this forecast compared to March, reflecting recent upward revisions to outturning financial pressures from the costs of special educational send.

• 37:56Rory Stewart?

  Goodness, and what, sorry, sorry, I mean, can I just push back on this?

• 37:59Alastair Campbell?

  And that wasn't mentioned.

• 38:00Rory Stewart?

  Yeah, yeah, yeah, interesting. And I, and insofar as some of that costs is falling on London councils, they may also be a bit cross that they're not getting the revenue on the council tax uplift.

• 38:10Alastair Campbell?

  Exactly. So, so, so that, I thought that was, and then, then in the same paragraph, the same page, other spending risks include the impact to the NHS budget of further strikes, negotiations over pharmaceutical spending, the assumption that the Home Office will reduce small boat arrivals and end the use of hotels for asylum seekers by mid 2028, and deliver savings of 1.1 billion. So sort of indicating there we're not 100% sure that's going to happen. The unfunded cost of digital ID cards at a provisional cost of 0.6 billion, and the commitment for defence spending to reach 3.5% of GDP by 2035, which will cost an additional 32 billion. So they're basically saying there, yes, there's much more headroom, but there are these other factors that maybe haven't properly been costed in. And the point

• 38:54Alastair Campbell?

  about defence, there was one, I was watching on the Parliament channel, and there was a cutaway to John Healy when she started talking about defence, and it lasted about five seconds.

• 39:05Rory Stewart?

  Right.

• 39:06Alastair Campbell?

  You know, I was really hoping today.

• 39:07Rory Stewart?

  There was going to be a big announcement.

• 39:09Alastair Campbell?

  Yeah, a big thing about Ukraine, it was.

• 39:10Rory Stewart?

  Yeah, no, there, there, there isn't, because I'm afraid the truth of the matter is that a lot of the commitments are set forward in time, as you say, there's sort of 2035 commitments. And in real terms, British defence spending isn't really going up in the immediate term, and most of the money is going to be hoovered into our nuclear weapons programme. So there actually isn't going to be money available for half the things that you would hope the British government would spend money on to protect itself against Russia, Ukraine. And I think another example of something that she missed, which she could have done, is there was a very interesting report, which many listeners will have heard about, not all, a bi man called Fingalton, who used to report on nuclear. And it's a really, really interesting report, because nuclear is going to be absolutely at the centre of the government.

• 39:54Rory Stewart?

  Strategy needs to be because it's not emitting carbon, but it's generating energy which acts as backup for wind and solar. So we're going to be building these big nuclear power stations and we've announced them, Hinkley, Sizewell, et cetera. He's pointing out that our nuclear power build is the most expensive in the world. And he thinks that almost all of this is about regulation. And this is a good deregulation story for a bold government. He gives an example that there are stronger restrictions on workers being exposed to radiation in a nuclear plant than on doctors and dentists going near the similar form of radiation at a doctor's surgery or a dentist's surgery. And he says that just fixing these, and he lays out an enormous amount of these things,

• 40:35Rory Stewart?

  could save tens of billions of pounds a year. So this was a real opportunity for a government to say, it's not true that we don't believe in deregulation.

• 40:43Alastair Campbell?

  And I heard, I heard her mention the name, but what, what was said about that?

• 40:46Rory Stewart?

  So, so there was a funny ambiguity because there's a statement saying, well, we're looking at the recommendations, what the Treasury said when it first came out. Then there's a statement on paper saying they accept the recommendations in principle. But I would say it's a huge open goal to say, yes, absolutely. We're embracing this stuff. We're going with it.

• 41:04Alastair Campbell?

  You know how we love our votes?

• 41:06Rory Stewart?

  Oh, yes.

• 41:07Alastair Campbell?

  Whilst we've been talking, one of our marvellous team created a poll of, of the people who are listening. Is this Rachel Reeves' last budget? Yes, forty five percent. No, fifty five percent.

• 41:20Rory Stewart?

  Oh.

• 41:20Alastair Campbell?

  So there you go.

• 41:21Rory Stewart?

  So, so just over half of our left-leaning listeners think Rachel Reeves should remain the Chancellor.

• 41:26Alastair Campbell?

  You think they're all left-leaning?

• 41:29Rory Stewart?

  Well, I think pretty, pretty much.

• 41:31Alastair Campbell?

  Do you?

• 41:32Rory Stewart?

  I, I, I hopefully I'm converting them step by step.

• 41:34Alastair Campbell?

  I had a couple of guys, I had a couple of people on the Tube down here today who were very, very far from being left-wing.

• 41:40Rory Stewart?

  Oh, good.

• 41:41Alastair Campbell?

  And who were absolutely.

• 41:43Rory Stewart?

  Well, I, I, I hope my, my new push for this deregulation, small government, pro-business.

• 41:49Alastair Campbell?

  Pro, get stuck into Europe again.

• 41:51Rory Stewart?

  Yeah, yeah, yeah.

• 41:52Alastair Campbell?

  And, and, and clearly, and.

• 41:53Rory Stewart?

  Winning them all. Here's one more, one more thing. And this will be my last sort of big point on, on the budget. Minimum wage has gone up. So minimum wage in 2015, the UK minimum wage was. Forty eight point seven when the OECD average was fifty one point three. Ten years later, the OECD average is fifty one. It hasn't changed, but the UK has gone from forty eight point seven to sixty one point one. And even the Resolution Foundation seems to be a little bit wary about what the government's doing on the minimum wage. Again, businesses will be worrying about that because it becomes more and more expensive.

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• 44:17Rory Stewart?

  Now, I can't see the questions because you have the laptop.

• 44:20Alastair Campbell?

  So I can completely control the narrative.

• 44:22Rory Stewart?

  Control the whole narrative.

• 44:23Alastair Campbell?

  In fact, the first question is about a narrative. Oscar Aniu, how do Labour reclaim the narrative on the economy? The budget may well reflect macroeconomic trends, but the right wing newspapers will surely play this as Reeves punches down. I did an event at theatre last night about the play Punch. And one of the questions, we're talking about Criminal Justice Report. And one of the questions was somebody on the panel, including Jacob Dunn, the real guy, who we've interviewed a lead in this week with James Graham, the playwright.

• 44:49Rory Stewart?

  Just to explain for us, Jacob Dunn is a man who, as a young man, punched somebody and killed them, an unprovoked punch. They died from a single punch. He was put into prison and the family of the victim then reached out, went through a very complicated process of understanding and actually forgiveness. A very wonderful moving play.

• 45:10Alastair Campbell?

  Yeah.

• 45:10Rory Stewart?

  And anyway, you were on.

• 45:11Alastair Campbell?

  So yeah, and so I saw it again last night. And afterwards, there was this panel, I was on it with him, and a woman called Alice, who ran this Switchback charity, which is about sort of helping people coming out of prison not to re-offend. And they both said that part of the problem is that so many politicians put their policy through what they call the Daily Mail test. And so Sean Fletcher, who was chairing it, he said to me, is that a thing? And I said, well, it was kind of a bit of a thing, not just the Mail, but the media more generally, 20 odd years ago. But now it needn't be a thing, because even though the papers still, they are very right wing, they will say the budget's terrible. But politicians, I think, underestimate the power they have to do difficult things and see them through.

• 45:54Rory Stewart?

  Yeah, well, let me push back a little bit on the gentleman asking the question.

• 45:57Alastair Campbell?

  Oscar.

• 45:57Rory Stewart?

  Oscar, yeah, because I agree with him that there'll be a right wing media narrative. But I also think it's a bit defeatist to say this is all driven by macroeconomic conditions. I mean, if Rachel Reeves and her supporters are really trying to say essentially she has no choice, that the whole kind of macroeconomy of the globe and goodness knows what, I don't know, Covid and coronavirus and the Tories mean that she has no room for movement.

• 46:21Alastair Campbell?

  She did.

• 46:21Rory Stewart?

  That's no good at all.

• 46:22Alastair Campbell?

  Yeah, okay. You'll prefer this one. Stephen London. I'm a centrist dad, Trip Plus member, who believes Rory is the best prime minister we've ever had. So you like that bit. What in the budget will convince my well qualified children that should stay here and not work abroad? They should stay here and fight for a better Britain, Stephen.

• 46:39Rory Stewart?

  Well, but I think it's a good question. I mean, I think if you're a young person listening to this, what you want to hear is a sense of hope and a sense of direction. And I'm afraid stability, investment, reform doesn't quite, I mean, maybe it trips off the fun, but it doesn't quite make me think this is a country that's going places. I don't want to go to Singapore. I don't want to go to Dubai. I don't want to move to the US. I want to be here in Britain.

• 47:02Alastair Campbell?

  It's interesting though, one of the, one of the, one of the people I said, feed me in your thoughts as soon as you have them, was an economist. And he said, he thought that, that, reading through, he thought they were making a pitch to young people, higher minimum wage, freezing rail fares, free training for apprenticeships for small businesses. I thought that was a good move. So, and this is the point about budgets. There's so much in them and it does take a few days to kind of before they, before they settle down. Ollie Richards, on the other hand, does this budget feel like another fiscal event where young people are completely ignored? And then another poll we've done, Rory, God, they get very busy, our team has, I don't know how they're doing this. You think you know our listeners. Have a guess on this one. Is the triple lock on pensions sustainable? No v yes?

• 47:45Rory Stewart?

  I would say no, seventy two percent.

• 47:47Alastair Campbell?

  Not bad, eighty three. I, I'm a hundred, I'm a hundred. I just think it is. Well, how, give the argument for the triple lock.

• 47:55Rory Stewart?

  Well, I suppose the argument is that people have worked hard all their lives. They are at their oldest and most vulnerable, that being poor in old age is absolutely miserable because your life is getting, you're getting weaker and frailer all the time. And younger people have their whole lives ahead of them and we have an obligation to the old.

• 48:13Alastair Campbell?

  Okay, we also, but we have an obligation to the young. But at the moment, they're the first generation to grow up poorer than the generation that worked for them.

• 48:19Rory Stewart?

  There's actually an interesting bit of good news in the macroeconomic data for young people, given that we've had a couple of questions about young people, which is that actually the cost of housing in real terms has been falling very, very dramatically. And nobody's really picked up on this. People like Torsten Bell. Who's the junior Treasury Minister from the Resolution Foundation has really made a lot of his career out of fury about the fact that it's very difficult for young people to get on housing ladder. House prices in Britain have collapsed in real terms and some of them even in nominal terms. The price of a house in Britain is now below where it was in two thousand and seven.

• 48:54Alastair Campbell?

  Yeah.

• 48:54Rory Stewart?

  On average, meanwhile, real incomes have gone up. So actually, in some ways, maybe the Zach Polanski voters of the future uh won't feel quite the sense of burning injustice that people of Torsten Bell's generation felt.

• 49:05Alastair Campbell?

  Okay, okay. Neve from Triplos, from Cumbria.

• 49:09Rory Stewart?

  Oh, brilliant.

• 49:10Alastair Campbell?

  It seemed like the Tories had an open goal in their response to the budget. They could have focused on the numbers, economic effect, how worse off people would be under the tax increases to score themselves political points. Instead, this is really interesting, given what we just said. Instead, Kenny Badenoch launched an appalling, scathing personal exacron release, which I find very disappointing. Has this proved that the Tories are the party of the bullies?

• 49:32Rory Stewart?

  Well, there we are. Well, I certainly think that um.

• 49:35Alastair Campbell?

  I mean, it was tough.

• 49:36Rory Stewart?

  I certainly think aggressive politics um is increasingly divisive. I think the I think there's very different responses to it. There are people who will think that's strength, that's what we like to see, and there'll be people who'll be like, oh, that's that's not unpleasant. Partly because we wouldn't tolerate it in the workplace, I guess.

• 49:52Alastair Campbell?

  Yeah, it was but and and she had that line, you know, and may I say to you, woman to woman.

• 49:56Rory Stewart?

  That was like coming out of the back of the mansplaining.

• 49:58Alastair Campbell?

  The mansplaining, yeah, yeah, yeah. There's one here, DJR, working age disability claims are soaring, taxing more without talent flights is delusional. Brexit style arrogance. Are we waiting for an Argentina style crisis and shock therapy? What do you propose? We're not that bad, are we?

• 50:15Rory Stewart?

  No, no, no, we're definitely not. No, no. I think the the the the bottom line is this was a pretty dull budget. It's quite difficult to think of much to say. If you're Zach Polanski, you would say she should have been much more radical, she should have borrowed more and screw the bond market. And if you're Liz Truss, you would have said, let's cut taxes, you know.

• 50:34Alastair Campbell?

  Oh, Liz Truss has a kind.

• 50:36Rory Stewart?

  Free up, free up, this is the.

• 50:37Alastair Campbell?

  Possibly the most wooden social media post I've ever seen in my in my library. You put it in the user. Now, here, maybe maybe this is a good one to end on because you think you know our our listeners and viewers so well. They've done another poll. Where are you on the political spectrum? Don't look.

• 50:52Rory Stewart?

  Okay.

• 50:53Alastair Campbell?

  Uh they've been given the choice of left, centre and right.

• 50:56Rory Stewart?

  Where are we on the political thing? Left, centre and right? Okay, I think they will put themselves. Sixty three percent center.

• 51:05Alastair Campbell?

  Oh, interesting. Forty one percent left, forty eight center, ten percent right.

• 51:10Rory Stewart?

  There we are. So I'm speaking here to the ten percent. Pull over the ten percent. Pull over the ten percent. And I guess, look, here's another thing that I think has been missed totally. I spent this morning recording this AI mini series that we're doing for Trip Plus members. And AI is the biggest economic story in the world. If AI is rolled right the way through British companies in the way that the champions of AI, I believe it could be in the next two, three years. There will be an enormous number of job losses, right? If it isn't rolled through British companies, but it's rolled through Chinese and American companies that are directly competing with British companies.

• 51:50Rory Stewart?

  Then we're going to lose an enormous amount of value because our life sciences, our services, our professional services. Companies are going to be hoovered up by American AI companies, right? So somewhere in this budget, a really bold Chancellor would be thinking much more front and central about AI. Because I think by the time of the next election, the one thing that will have blown all the OBR forecasts out of the water. Either positively or negatively, either in productivity growth or collapse, is going to be artificial intelligence. But this was a budget that basically could have been delivered by Theresa May.

• 52:25Alastair Campbell?

  Well, that's a pretty harsh final judgment. I know she's the one who's one, and she's your hero.

• 52:29Rory Stewart?

  I love Theresa May, yeah.

• 52:30Alastair Campbell?

  Yeah, I, yeah, if I had one big picture criticism, and I, you know, I don't want to just keep going about Gordon Brown and Tony Blair back in the day. But I think were they doing this budget today, artificial intelligence would have been at the heart of it.

• 52:45Rory Stewart?

  Yeah, because they would have loved that stuff.

• 52:46Alastair Campbell?

  They're just, this is.

• 52:47Rory Stewart?

  They're fascinated by it. Brown's fascinated by it.

• 52:49Alastair Campbell?

  Change, economic challenge, how do we get ahead? I don't think it was even mentioned. The second thing, as I say, that was barely mentioned was defence. I mean, she said the thing about we've got to stand by Ukraine and that's why we're putting more into defence, but. You know, the budget is an opportunity to project some big messages. And the third thing that I saw was another elephant in the room wasn't afraid yet again, Brexit, which has taken a very large chunk out of the economy and out of our productivity.

• 53:16Rory Stewart?

  And I'm sorry, my point about Theresa May is that this is a budget could have been delivered in 2017, and that relates to your point, right? It doesn't reflect of what I mean by that is it feels like it could have happened almost 10 years ago in terms of fact, it isn't challenging what happened around Brexit. It's not recognizing the way in which Russia's actions on the Ukraine border has changed things. It's not recognizing Donald Trump and the way he's changed the whole global order, and it's not recognizing AI.

• 53:39Alastair Campbell?

  Yeah, okay. So Rory Stewart gives it eight out of 10. Thank you, everybody, for watching and listening, and we'll see you again soon.

• 53:50Rory Stewart?

  See you very soon. Thanks again. Bye bye.

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