Has Andy Burnham stopped caring what Donald Trump thinks?

0:00This is a global production. Is there something going on now with Burnham's new administration where he just doesn't actually feel the need to ask permission? Have we broken with America now for a policy? And he just, he had a twinkly desire when he said this. He said, no, John, we haven't broken with America. We're just differentiating. Does Trump actually feel relieved by the position that the UK and other governments have taken? It was a good political operation. Well, I would say that the president is not commented on this. As I said, neither have I at this point. We were made aware that they were going to make this decision. We heard their argument as to why. But look, we share the goal of stability. We don't want to see some uptick and violence or an uptick and conflict or tensions in the West Bank at a very tenuous time. In the region, there's always tenuous times.

1:01But beyond that, I don't think as at this moment we don't have any further comment on the UK decision that I think was announced just a few hours ago. That was Marco Rubio, US Secretary of State, telling us bluntly that they don't really mind what Andy Burnham has decided to do in his sanctions against Israel. Presumably, he's speaking for Trump there too. So is the anger being felt about what is happening in the West Bank as keenly felt in America as it is in Europe? And to say it quietly, does Donald Trump approve of what the British have done? Welcome to the news agents. The news agents. It's job. It's madeless. And I think it's fair to say that yesterday around this time we were expecting the actions of the UK government to have serious repercussions with Donald Trump. We thought there might be a bust up.

2:02We thought there might be an incoming row. And, George is checking his true social account on a minute basis. But so far, there has not been the outrage or the slapdown that we were expecting over those sanctions on Israel. Now, Israel itself is furious. We know that the foreign minister, Gideon Sarr, has announced the closure of the British consulate in Jerusalem. He's put countermeasures and response to new sanctions. He's called it anti-Israel. And he's also talking about the termination of British activities, train Palestinian Authority forces in Gideon, Samaria. And he's denying entry to 12 British elected officials. Jeremy Corbyn's, Eras Al-Tarna, top the list. You can probably work out the sort of flavor of the others. I think it was pretty unlikely they were going to be taking their holidays in their latter anyway. We don't think they were heading off to Tel Aviv in the near future.

3:02The point is that Israel's Ia was kind of bedded in. But Trump's Ia was expected and hasn't come. So today on the episode, we're asking two questions. Does Trump actually feel relieved by the position that the UK and other governments have taken? And is there something going on now with Burnham's new administration where he just doesn't actually feel the need to ask permission. In the same sense that British governments have done of their American presidents for decades and decades. Yeah, it really is interesting what's happening with British foreign policy that's taking place now. I mean, look, when we recorded yesterday, I think we did anticipate that there was going to be some kind of thermonuclear blast from Donald Trump at Britain for this latest, egregious act that the United Kingdom had taken without US authority. And the reason we thought that was that Donald Trump's ambassador to Israel, Mike Huckabee,

4:08form a kind of presidential candidate back in the day for the Republican Party, had come out and kind of warned, talked about Jew hate in Britain and the anti-Semitism that was right here. Well, it looks like Mike Huckabee was acting without the authority of Trump and that they were blindside. You also threatened, do you remember you talked about this yesterday, you also threatened that Florida might take unilateral action against UK that Florida would stop doing business with the UK because it broke Florida laws to sanction Israel. Exactly. So Mike Huckabee went way over the top and also had gone way off the reservation in making those remarks. But the very muted response you got from Marco Rubio was interesting and telling it itself. This morning, Emily, I bumped into someone on the tube who is a very, very senior former foreign office man, Drin. And you know, we discussed in our kind of chat early morning about what we were going to talk about today. And I said to him, have we broken

5:08with America now on foreign policy? And he just, he had a twinkly desire when he said this. He said, no, John, we haven't broken with America. We're just differentiating ourselves from America. And I thought that sounded like a perfect yes minister cameo response. And I think he said it semi-ironically. I, you know, I'm, I'm hamming up the Mandarin's response. But I think that's how they feel that they feel that over Greenland, over Ukraine, overall manner of different things. You know, Britain has been able to say, I'm sorry, no, don't agree with this. Look, and so, you know, you do have a position now where Britain is not saying, oh God, we've got to go along with everything. You don't want to start a fight with Trump. But you do want to say, quietly, we disagree, and we're going to pursue a slightly different policy. I mean, I think that takes you back to the King's speech back in the spring, where the sort of rule that he delivered by was we have no argument with America. We don't obviously eye to eye with Trump. I mean, that has been the sort of

6:09the position, hasn't it? America and the UK are staunch allies. We've been through, you know, hell and back together. But we don't necessarily see eye to eye with Trump. And we like somebody who respects the Constitution. We like somebody who respects the rule of law. Two things have occurred to me. You mentioned the Huckabee comments. The White House has slapped him down. And I think that's really important to sort of understand. They have said, these are not coordinated with the White House. In other words, he's on his own. Rubio sounds pretty statesman like, I mean, I know he is Secretary of State, but he sounded pretty calm in that delivery just now. I'm going to give you one other theory in a moment. Go on. Well, I wonder whether this is also part of the sort of the Rubio positioning himself, not just a Secretary of State, but as a sort of a putative president as the person who takes on from Trump and who manages to do things slightly differently. Because Trump, we know behind the scenes, is angry with Netanyahu. I mean, he has sworn at him

7:16apparently as reported in a phone call, told him to, you know, whatever stop vlogging around. And so I don't think Trump or Rubio likes the scenes that are coming out of the West Bank settlers. I mean, what what Ed Milibani Estate called settler terrorism, settler terrorists. I don't think the White House finds them particularly useful either, but it's much easier to get the Europeans to fight that battle. I mean, let me just give you the one other theory, which is that Marco Rubio made those comments very neutrally because he just doesn't, he had Donald Trump hasn't appined. Yeah. And he didn't know what Donald, he doesn't know what Donald Trump thinks. And he's waiting for to see like us when he makes Trump posts on truth social to find out when the Donald Trump does have a settled view. Because you never know, Donald Trump might get a phone call now from some, you know, very wealthy pro-Israel donor who says it's disgraceful what Britain have done. You've got to do something about this and bang, they'll be a post on truth social. Except that that Burnham talked to Trump ahead of this. I mean, that was what Rubio made clear. We think the phone call between Trump and Burnham happened as sort of a week earlier. I don't think Burnham would

8:21have gone out there or let his foreign secretary and Miliband go out there and make that statement to the commons if he hadn't pre-warned America. And so, you know, it is not unusual for Trump to use that pre-warning and just get straight on social media and decide, you know, remember, he pre-announced Starmer's resignation for Christ's sake. So he's not a man who sort of stands by protocol and waits for the commons to sit or to stand, you know, he would go out there if he didn't like something and do it or say it. And he hasn't. So I do think something is going on here and I think that there may be more of a coordinated response. I mean, something we've definitely learned is that Burnham had the support of a hell of a lot of other countries before he let Miliband stand up in the commons. And in a sense, this is part of, I think, British leadership in a way that we haven't always felt, you know, we haven't always felt that we've sort of led the way. We have

9:21on Ukraine, maybe we have in parts of sort of made a discussion. But I think this is something where we can be quite proud that we're getting out there and we're going first. Look, and maybe it's that Andy Burnham is a more sophisticated and adroit political operator and has, you know, it was a good political operation. Now, look, there are people who disagree profoundly with what Ed Miliband has announced than, you know, the chief rabbiya has made clear that he thoroughly disagrees with the policy. But if you look at the operation that Andy Burnham had pre-warned, Trump had kind of, you know, made sure that that had been neutralised, had presumably got all knew that all these other nations were about to follow suit. So it was a, it was a, you know, a good political operation. The one, you know, Starmar kind of obviously at the start of the Iran war, where Britain had no pre-warning that America was about to start bombing with Israel and said, you can't use our air bases and then sort of changed it. Well, you can use our air bases

10:22if it's for defensive purposes. Yeah. Yeah. That was, and that was, look clunky. It was terrible. It was, look clunky. Just say your line and walk away. I mean, the thing, you know, going back to the Israeli Foreign Minister, Gideon Sahr, he's called the Labour Government guilty of blatant interference in the affairs of a sovereign state. Now, that is categorically not untrue, right? Because the interference has only been in whether we want to trade with the people that are committee atrocities in the West Bank and Burnham government has decided no. So I don't see how you can, for a moment, call it interference in the state, in a sovereign state. And actually, if that is sending out a message that they are taking as interference into a sovereign state, then, you know, you just think they are, what else are they going to push back on, right? If the tiniest bit, because really what he's done, you know, sanction, sanction on goods, which amounts to what we said yesterday, about two million pounds is nothing, right? So if you can't even take that

11:26without seeing it as interference in the state, then where do you start, you know, having those proper grown up conversations with Netanyahu? Well, let's speak now to Ben Judah, because he was special advisor to David Lamy when he was foreign secretary. He's now a visiting fellow at Chatterham House. And Ben, thanks for being with us. Oh, the Mandarin who said to me, we haven't broken with America, we're just differentiating ourselves. Is that about right? Well, one of the things I love about the foreign office is that mastery of language there. What's happening in British foreign policy is, there used to be an old joke from Dean H. Asun, an American secretary of state that said that the UK had lost an empire and not found a role. And what's happened since Trump has returned to power is that as America is abandoned a lot of its old role, leading the West and confederating the West around its foreign policy, the UK has found a role leading these coalitions on issues like Ukraine or now on Israel Palestine to present America

12:33as a rival of a fair complete or to move America. On Ukraine, we saw Britain with France assemble the coalition of the willing. And what that did was pull the Americans away from really the position that they that Trump came back to power with, which was wanting to do a quick and dirty deal with Putin in 24 hours over the head of Zelensky into a common position that's better for UK interests and for European security. And now we see on Israel Palestine that beginning when David Lanney was foreign secretary in Kistama was prime minister a series of coalitions have been built up with France first to put sanctions on extremist Israeli ministers then to recognize Palestine and now to put this wider sanctions regime on illegal settlements. So it sounds from what we're beginning to hear Ben as if Andy Burnham had a phone call with Trump. We were kind of expecting it to be fireworks explosions and Trump wasn't actually that unhappy with the position that Burnham

13:40said he was going to take. Is that is that right? Well one of the things that we've seen consistently since Labour came back to power is a wild overestimation in the press of potential American reaction to the UK taking a different point of view or a different course of action than the United States. And we've seen each time the UK assembles a coalition and presents the Americans with a fair complete the Americans see which way the wider Western community is going and don't want to be seen to to trash that or to clash with that we've seen that on a few instances we've seen that with the coalition of the willing at moments when Trump wanted to meet Putin and was planning to meet Putin in Alaska you see Macron and Keir Starmer assembling a squad of Western leaders with Zalewski to go to Washington say no this is our position you saw that over Greenland

14:41where Macron and Starmer got a team together to tell Trump no Greenland is a red line for us and you've now seen that steadily steadily steadily but subtly build up on Israel Palestine. Now what's going on here and to come back to that sort of wonderful comment from the old manger in it that you began you began with is you've got to be subtle with the Americans you don't want to be looking horns of them and clashing with them the way Spanish foreign policy led by a more sort of left a leftist government has been you've got to make it look as if they're backing the proposal or they wanted it all along and then you can swing them behind you and that's where the kind of the art of British foreign policies been played very rather well here and I think you've seen free successive foreign foot secretaries do that now. Just explain then Ben when we went on yesterday and we were talking about the sanctions against Israel we didn't then know just how wide

15:42that coalition of countries would be was the UK the pay setter for that I mean were we absolutely the first out the traps was Kani always going to come and board I mean what how did that sort of come together do you know. Well what we've seen consistently as Britain has taken a post-American turn in its foreign policy is the UK is not sitting around waiting like it used to to know which direction Washington is going and it has found that the old what used to call the hub and spokes alliance systems around America are are dissolving is that other countries that previously felt well I'm just going to do my geopolitics with with Washington and it's nice to see the Brit sometimes are actually coming to us to try and build coalitions of the non-None-American west and the role that UK has played is bringing together two sets of countries it's not a generic list of middle powers what you're really seeing is the UK bringing together with France European Union countries

16:47and their associates not all of them only some of them and then group a group of countries that the right in this country like to call the cancer countries Canada Australia New Zealand and UK and the UK so we've been a lynch pin in making these slightly bigger than a European coalition and a sort of more global coalition but it's quite different from saying this is a you know generic list of global middle powers like Brazil or Thailand or Vietnam or you know Japan it's still a western grouping Ben are you surprised at how little reaction there has been from the states over this move about you know sanctioning products from the West Bankers was announced yesterday by Ed Milliband because I mean is it that the Americans actually might be quietly supporting us as the outriders on this policy you know we can't be leading the charge here but it's quite helpful for us that you're doing this

17:53because that means that we can apply some behind the scenes pressure on Netanyahu to deal with what's happening with the sector of violence so I don't think they view the UK as an outriders speaking for them but I do think that part of their system is quite happy this is this happening because they're so fed up with Netanyahu's outrageous behaviour not just towards the Palestinians but towards the United States and you have people like JD Vance that I saw a lot in government with David Lammit who are really frustrated and on the record of being deeply frustrated at how Netanyahu has treated the United States in that alliance and will view this action as helping the United States just as you said put a bit of pressure on the on the Israelis to follow US interests just one other question do you overstate our influence I kind of struck by you know reading about what's happening domestically in America when no one stands up to Donald Trump no

18:55one acts as a break no one tells him he can't do this no one says this is dangerous or unconstitutional and here you are saying oh no we've got you know when Macron and Starmor or Macron burn them club together they can alter the president's direction what I saw you know seeing the operation of the White House close up and being an event like the NATO summit in the Hague is that Trump likes being King of the West he likes being the Western Emperor and having all the Western leaders around him and seeing them gen reflect to him and he knows that if you really clashes with them over an issue like Greenland they'll stop doing that and I think that we benefit in this situation from his psychology of wanting to wanting to be seen as the as the center he's not he's not anti-European in the sense that he wants to push us all all away he wants to feel that

19:57he is the the ruler of the West and what the UK has worked out how to do is to within the context of him still feeling like that and him still being able to get that photo assembled these coalitions that go we love you and we love America but actually we'd like to do it this way what do you think we think this is actually your idea by the way at Ben you were at David Lamy's side for a long time I know there was a little bit of discomfort amongst those around Starmor who didn't really like the way Burnham was getting the credit they thought for something that they actually put in motion months earlier I mean is that the sense that you were getting was this ever part of David Lamy's plan well you got to remember that when Kistarmor's government came in it was a very different moment you know the war in the main phase of the war in Gaza was not yet over was not yet over the priority was getting the Americans to a ceasefire was making sure the Americans didn't do what could only be described as a new

21:02Munich with the with Putin over the head of Zelensky in Ukraine and then getting to a position where we'd broken the seal on putting sanctions on extremist Israeli ministers and of course recognizing Palestine which is an important first step to get us to to where we were you know in that that year we were in the in the foreign office I remember David Lamy very clearly telling a group of assembled officials that we were at free out of ten on settlements and he wanted to get to eight out of ten within within the within the year we were focused on recognizing Palestine that was the context then that was the international coalition so bluntly I mean you you must be thinking this is a government now that sort of that's just moving a bit faster that's kind of to be fair getting it shit together a bit more quickly well if if David was still for a secretary and I was still in the foreign office we would have taken measures measures like this I can't say they would have been exactly the same in all the details was the details are you but but but more or less we

22:03would have done we would have done the same thing Ben Juda thanks so much thanks to joining us thank you you're welcome well joining us now is Ed Conway who is the Skinius economics and data editor but also author of this phenomenal narrative history really of the goods that have made up the world of trade and what you do in this in trade world Ed is take us through for example bread wool cotton these sort of individual materials of people of red material world I'll know your your style but essentially you you take us into the world of trade through these sort of really benign everyday articles like the wall trade right and that's the and the idea is to say that the trade is the way it's depicted

23:05so much and you know we're going through these trade wars and everything that we're living through right now it's often quite abstract or sometimes it's about the geopolitics but we you kind of forget about the extent to which literally everything you pick up on a daily basis and now something as simple as a kind of you know slice white bread is a function of trade and there's a function of all these relationships that goes around the world and often the degree to which we are in this amazing but also quite scarily interconnected world that's kind of invisible from us and it's in it's kept from us and and the example you know I sometimes give which is kind of a useful way of anchoring it is if you think about buying a pack of fish fingers you know in the supermarket often the you know the fish finger packaging may say that the fish was caught in the North Sea and that it was maybe breaded or packaged in in the UK often in between those two things it was caught in the North Sea it was put into a shipping container it was frozen and then it was sent all the way to China to be processed to be kind of you know phillated to be put into a kind of block of frozen fish before being sent all the way back to the UK to be breaded and then put

24:10into a supermarket and if you look at the label on the the packet of fish fingers invariably it doesn't tell you about any of that stuff and it's the same thing for bread it's the same thing for clothes it's the same thing for cars. It's easy to get with pharmaceuticals right that actually even the drug companies aren't actually making the drugs. It's something else making the drugs the car company doesn't make the car the you know the clothing company does not make the clothing and it's part of the point of this book is to say that's a very different way of thinking about the modern world isn't it to to the version that is the conventional wisdom and the version that most politicians are thinking about and therefore if you're thinking about kind of going in there and trying to you know to mess with it trying to impose tariffs trying to do whatever trying to re-industrialize as Andy Burnham is then all we to start by thinking about what is the world that we inhabit. So let me do this as a quick far globalization yes or no I mean that's sort of where you you end up right is it is it a good thing that we are also into woven and interconnected or is it a sense that we've actually lost control of everything that we try and do and everything

25:12that we make. Well it's both it's this is it's the world that's the thing it's not it's not an abstract topic it is the way we've arranged the world and the way we've arranged the world is but you know basically we like cheap things and in order to make your fish fingers cheaper or indeed you're kind of you know bread or whatever it might be the efficient way of doing that right now because it is so cheap to get room on the shipping container and send it across the world I mean it's got a little bit more expensive recently but it's nonetheless it's a tiny tiny tiny fraction of the eventual cost which by the way is a total shift from the world you know two centuries ago used to be so expensive to ship anything from the other side of the world that it was only luxuries. Now it's so cheap to do it that it makes economic sense to not employ people in grim speed to do that and to get them to do it in China instead because they're just much cheaper and we like cheap things and you know we like cheap things companies like to reduce costs and the the net result of that is this world in all its magnificence but also all its complexity and all its compromises because the

26:12people doing the gutting of the fish over in in Shangdong a lot of them you know the the labor standards there's questionable you know a lot of these people come from Xinjiang province some of them are weekers so the fish finger might have actually been partially made in Xinjiang it's labor might have come from that so the people might have come from that and but but the key point here is no one is entirely sure and and even the people you know people that with it working within the you know it's not all about fish but like working within that supply chain or working within the clothing supply chain or working within the car supply chain often the people working in those worlds they're not entirely sure where things began and that's kind of amazing isn't it it's quite vertiginous well that's how the financial crash happened of course because nobody actually there was that whole metaphor about how the the sausage meet right it just sort of went out into the world and we couldn't work out where where all the credit default sops came from or went to it was it was kind of lost in the ether right it's exactly the same for trade except that it is far bigger yeah it is far bigger I mean obviously on this podcast we talk an awful lot about Donald Trump and

27:15we don't talk a lot about supply chains and I kind of read the book and I was thinking yeah Donald Trump is right no Donald Trump is completely wrong because on one level when Donald Trump says we've got to re-industrialize America and you made the point you know people want to go to Woolmart and pick up five pairs of trousers for their kids for school for $50 made wherever they are in the world rather than one pair of trousers that cost $50 that are made in America and so you think well he's completely naive there's never going to be a re-industrialization of America those steel factories will remain shuttered those textile firms those textile plants that were once in Georgia have gone forever but on the other hand he is right to be concerned about the fact that these supply chains are just ludicrously long we saw the limitations of that when there was the war for PPE during COVID yeah and think about I mean take back control you know what was what was that remind us of but what was that speaking to to some extent and what what is Donald Trump speaking

28:18to to some extent it's the sense for people that what was once a tractable world around them that they used to make steel here and they made it into products and those products you know enhanced people's lives and you felt like you were part of it and lasted a lifetime my parents immigrated from Canada to the UK with their fridges stoves dishwashers and they had them for like they bought them over on the boat and they lasted 25 years yeah and that and that world has gone and the world of making clothing in these countries for the most part has gone and that process you know offshoring outsourcing whatever you want to call it I would say like that is one of the most consequential things that's happened in our in our countries basically in the West in the last kind of 2030 well kind of 50 years because the jobs that will like you say the jobs in Georgia have now gone to China and yet our understanding of kind of how that happened like I say it is to some extent what lay behind Trump and what lies behind Brexit and what lies behind

29:22the rise of anti-establishment politics our understanding of how that happened is really primitive and so apart the point of this book is to go back and say how did that happen who were the first pioneers inverted commas of that moment and you know that there's that history but then there's also the present day issue which is you you can't put that back in the box very easily and if you are going to put it back in the box and try and get more manufacturing in America or Europe like Nike tried to do it added us tried to do it they tried to bring back manufacturing to to Mexico as North America Mexico into into Europe the trainers were way too expensive and also people have forgotten how to make trainers so the Chinese and Vietnamese are better at making the trainers now than we were Ed I want to turn a corner and do everyone listening a favor who keeps hearing about the state of debt national debt international debt guilt yield yield and once to sound clever about it and can't quite work out well I feel like one of those people who I just

30:26I lose my footing a bit where people start talking about bonds and yields and why why debt has grown so much and why we are so nervous about it apart from the cost obviously I mean it's it's that I think I think that's I think that's a reasonable place to be to be honest with you because of all the stories I cover and I spend a lot of time covering kind of economic stories this this is really it is actually complex it's actually complex and even people who supposedly understand the bond market are still trying to get their head round the explanation for this but I mean my best shot of it you know and people will have their own views is that a whole load of preconceptions about the way the world works and the things we thought we could rely on are kind of breaking down a bit at the moment so you know the conventional example is you've got governments that are abhorring enormous amounts and no one's quite sure at what point you can you can kind of keep on borrowing you've got central banks and who are they borrowing from just to be really obvious well they're borrowing you know every day there are millions of people out there pension funds hedge funds investors making decisions about where to a lot their money and they decide you know okay

31:27some of it's going to go into equity so shares some of it's going to go into bonds and I kind of prefer putting my money into this country to think that country right now because I'm a bit worried about what their government's going to do or what their central bank is going to do because you know might they're you know I don't know if they trust that they're going to keep control of inflation so all of those kind of allocations are happening at the same time and the net result of all of them and on top of this by the way is things like AI so right now you have this enormous flood of money going into spent bail with the building data centers which all else equal should push up interest rates because it's kind of you know that's more money trying to to try to chase for investment so all of this stuff is happening at once at the same time as you're having kind of global conflict and for me you know the thing that kind of ties up back to the thing I'm obsessed with at the moment is all those preconceptions that you can order something off from the other side of the world be it fish fingers or whatever else you can order it from the other side of the world and it will turn up that's being challenged now isn't it because of what's happening in the straight or almost all of that stuff is kind of going on top of each other and it is helping contribute to

32:27higher interest rates everywhere because it is to some extent a sign of concern to some extent a sign of well okay there's a lot of crazy things going on right now and AI and and all the rest of it and it everyone gets caught up in it because like if you're thinking of the most important numbers in the world the the yield on you know people usually talk about the US treasuries but it's the same thing the yield on government bonds is one of the most important numbers in the world abstracts it seems because this is the foundation for so much of the rest of the financial system and so if that number's going up then it kind of means did the interest rates that chance central banks start to go up as well the borrowing costs that we all face start to go up and then that impacts us and it impacts Andy Burnham impacts John Healy because frankly that wipes out loads of the seeming room that they had you know against their fiscal rules which so it all sounds abstract but it is if you think about it as being the cost of having to do anything across the global economy which is what this is then that cost has just gone up and no one's you know no one is sure when it's going

33:31to come down and the UK so I final think the UK is kind of we are kind of the ugly duckling for some reasons that are fair and some reasons that are not which is that was my going to be my question to you which is that look you've explained globally the fact that you know people are chasing money and that pension funds are kind of wanting to balance their portfolio between equities and guilt so whatever happens to be in bonds why is it more expensive for Britain to borrow than say any other European country well because I mean it's so again it is it's a headache and it's complicated because what you're talking about is a single number that is manifesting so many different rationales you know partly it's like down to what the Bank of England is doing versus what the European Central Bank is doing but I think you know the fundamental moment when everything changed and we went from being kind of in the middle of the pack with everyone else in terms of those those borrowing rates to being at the higher end that was the mini budget and so there was this moment where a lot of investors around the world you mean the list trust mini budgets

34:33which wasn't all you know down to her there was also other stuff going on the Bank of England was starting to do quantitative tightening so basically kind of trying to to reverse a lot of the crisis era stuff it wasn't just her but a lot of stuff was happening at the same time and she did something kind of dramatic and then the yields in the UK went up like crazy and we all know what happened next you know there were lots of parts of the financial system that basically malfunctioned and someone who works in the guilt market to told me you know you don't you you don't normally see things breaking down like that but in the UK it was one of the only times in recent history where you saw what happens when you go off the edge and that stays in the institutional memory of investors for a long time so we're not trusted so so you lose that yeah that little kind of invisible element of trust but on top of that I would say then you know storm the stomach oven comes in seemingly they have this big majority it looks like they have a mandate for reform and they're unable to impose any of the kind of structural reform so dealing with welfare dealing with the kind of the country's kind of finances they don't they're not able to push through the stuff they say

35:35they want to and actually you then saw the the yields going up even higher for the UK so it's not just a this trust thing it's not just a starmor thing but it is all contributed to the fact that right now we are just inherently more in the firing line than than other countries and then that feeds into our higher debt levels and it's a look it takes a lot a lot of work to regain that the trust which has been lost basically how conscious do you think I mean you speak to people with the Treasury you speak to people in government you know how conscious are they the present administration the new administration of what to do about this and do you think they've settled done any answers because you know they've been pulled in a lot of different direction they're super conscious they're super conscious you know John Healey got in there wanted you know we know we all know what he wanted to do at defense he wanted to spend more money to try and get up to 3% of GDP by defense spending he got in there and it's almost instantly completely changed his tune and wise that it's because he gets in in the same way that you know the people were saying well why

36:38wasn't quasi told not to do some of this stuff when he became Chancellor quasi quasi John Healey has got in there and the Treasury advisers are saying this looks worrying and we need to do something about it and if you don't do anything right now then the amount of headroom is such an irritating term because it's become this term basically your safety cushion is your exactly yes your safety cushion against breaking your fiscal rules it is a self-imposed thing but it's like it feeds into your credibility and they will be saying right now that's basically gone and it was quite a lot it was like 24 billion pounds that's basically gone part of its down to growth but mostly it's down to bond yields being high it's not your fault but this is the lot that you've had to be dealt with and and as a result this budget will probably have to be about raising taxes and the question to you know interesting question is how much of those taxes can you raise through things like bank taxes which I think bank taxes will come into it but I don't think you can fully fill a hole with that and I find it like it's it's a bit depressing isn't it because how many budgets have been been talking about headroom and difficult decisions but also why would he then I mean presumably

37:43he's put the same red lines around himself as Reeves put around herself as Tom and put around the government I mean he's not going to raise income tax because he can't and he think he probably should do right or I think I think like if if you were going to raise a tax then almost every economist out there would say like that is the simplest way to raise quite a bit of money and do it actually in quite a fair way because it's it's across it's it's everyone but it seems to be politically impossible the same thing with yeah we've talked about the triple lock the triple lock social care so many of the deep seated issues in the UK they they never went away and now is the now is the moment where we find out whether Andy Burnham actually wants to confront it or not or whether he can confront it in the realms of you know given the constraints he set himself but I would say okay look at some some good news to follow that with it is that the economy has actually think about what we've been going through in the last kind of year or so think about we've had a cataclysmic event in the straight off her murs you've had two of the biggest oil

38:45and gas terminals in the world basically going down for a period in anyone looking at this and the Suez Canal might not be kind of operational for many shipping Panama Canal might be down everyone's seeing gas prices going up you would have thought given all of that and diesel prices you would have thought all of that would have precipitated a recession or at least a dip in growth the economy's been growing this year at least faster than people expected and in the US it's going gangbusters partly because of AI so it's not it's not as bleaker stories it sometimes is depicted it's just that there's there's scary stuff out there and you put it all together and that I think that's to some extent what the bond markets telling us and then on top of that and I think contributing to contributing to it is the sense of gosh the entire global trading system that was for a long time something we could all kind of just assume was always going to be there freedom of navigation freedom of shipping like one of literally one of the biggest shipping groups in the world that doesn't speak they don't go out in public for the first time in 60 years since their creation came out yesterday and said we are very very worried about freedom of navigation

39:49about the ability of ships to get around the world like I say if that stuff goes wrong then the financial crisis looks like a walk in the park Ed Conway great to have you with us well done on the book it's brilliant thank you thanks Ed President Trump said he's going to hit the trail for Republicans hard down the stretch are you hoping that he gets out there and it could be great yeah I don't know I mean the big spectacular I invite him California and wherever he wants to show up I think it'll be fantastic it is amazing how everybody's turning their back on him members of the Republican Party and how all these off the record comments and quotes they want nothing to do with them he lives in that that fishball he lives in the bubble of Sean Hannity and a few folks that just tell him how great he is and he needs to get out it that is a big warm welcome to Donald Trump

40:54from the outgoing California governor Gavin Newsom he's essentially inviting Trump to his own party Trump has created a midterm convention he's calling it what do we call it the Trump Alumpa basically is this the Trump party and the only problem with this Trump party that he's hosting in Dallas is that none of his own supporters want to come or want him to be there yeah they're actually putting out calls on local radio saying you know if you want to come to free tickets free tickets it's not exactly the sell out that Donald Trump hoped it would be and we'll be talking all about it on the news agents USA but from us for now we'll see you tomorrow bye bye bye for now this has been a global production