The Rest Is Politics: Leading - 76. Rachel Reeves: Britain’s next Chancellor?

Episode Date: May 26, 2024

How would an incoming Labour government fund the NHS? How does Reeves and Starmer's relationship compare to Blair and Brown? What is the experience of being a woman in the world of banking and politics? Shadow Chancellor of the Exchequer Rachel Reeves joins Rory and Alastair as they discuss all this and more. TRIP Plus: Become a member of The Rest Is Politics Plus to support the podcast, receive our exclusive newsletter, enjoy ad-free listening to both TRIP and Leading, benefit from discount book prices on titles mentioned on the pod, join our Discord chatroom, and receive early access to live show tickets and Question Time episodes. Just head to therestispolitics.com to sign up, or start a free trial today on Apple Podcasts: apple.co/therestispolitics. TRIP FIRST 100 DAYS TOUR: To buy tickets for our October Tour, just head to www.therestispolitics.com Instagram: @restispolitics Twitter: @RestIsPolitics Email: [e-mail] Podcast Editor: James Hodgson Video Editor: Teo Ayodeji-Ansell Social Producer: Jess Kidson Assistant Producer: Fiona Douglas Producer: Nicole Maslen Senior Producer: Dom Johnson Head of Content: Tom Whiter Exec Producers: Tony Pastor + Jack Davenport Learn more about your ad choices. Visit podcastchoices.com/adchoices

Thanks for listening to The Restis Politics. Sign up to the Restis Politics Plus. To enjoy ad-free listening, receive a weekly newsletter, join our members chat room and gain early access to live show tickets. Just go to therestispolities.com. That's therestispoletics.com. Hi, it's Anastair here. And you're about to hear a very interesting, pretty long interview with Rachel Reeves. And as I'm sure, most of our listeners will know by now, Rachel Reeves is Shadow Chancellor of the Exchequer, which means that if Labor, the election, as the polls keep telling us that they will. She will be the first female chancellor in our history. Now, we recorded it before, just before Rishi Sunak announced the election. Nonetheless, it is completely right up to date because she talks about Labor's policies,

Labor's strategy now, but we also tried to get to know her a little bit as a person. It gets pretty spiky at times, particularly between her and Rory. but I think you'll find it interesting, enjoyable, informative, and given where we are now, coming up to the election, pretty important too. Hope you enjoy it. Welcome to the rest of this politics leading with me, Rory Stewart. And me, Alice Campbell, with somebody who, if the Labour Party win the next election, will be Chancellor of the Checker. And I think I'm right in saying she was still at school the last time that the Labour Party ousted Tory government in 1997. and I suspect she'll be inheriting an economic landscape rather rockier than one that we had

and will be facing massive demands for public spending to rebuild the public realm. Daughter of two teachers clearly grew up in a very political household because her sister, Ellie, is also an MP. Chess Champion at school went on to Oxford University, studied politics, philosophy and economics, then got an MSC in economics at the London School of Economics. I worked at the Bank of England, seconded to the United States, States for a period and then work for H-Boss at the time of the global financial crisis. So experience of public and private sector, all of which will be much needed if she does become

Chancellor. So Rachel Reeves, welcome. Thank you very much for having me. And can I go back to 1997? People talk about the similarities of differences, but first of all, what were your memories of 1997? And does it feel the same now? So I joined the Labour Party about a year before that general election in 1997, when I was in the sixth form at school and I was doing my A-levels at the time of the 97 election. But I went campaigning every weekend. I lived in Bromley and Chislehurst. It was quite a safe conservative seat. Eric Forth was elected in 97 to serve that constituency. But we were twinned with the Eltham constituency, where Clive Efford is now, the Labour MP has held it all that time. And I went there every weekend

and knocked on doors and delivered leaflets. So I was a very, very, very small part of that campaign. And you know, it felt like it was really easy to win. I know now how hard it is to win, but we're knocked on doors then and everyone was voting Labour and it felt incredibly exciting to be part of it. Rachel, tell us a little bit about your childhood. So you and your sister, who's also a Labour MP, only two of you, is that right? Yes, Ellie is two years younger than me. We didn't know Alistair grew up in a political family. It wasn't, neither of my mum or dad were involved in politics. Neither them were a member of a political party. but when we were at school, our sixth one was two prefab huts in the playground.

Our school library was turned into a classroom because there were more students than space. And there were never enough textbooks to go around. And I felt really strongly that the government that we had, the government we had since I was three months old in 1979, didn't care very much about schools like mine and the community that I grew up in. And I wanted to do something about it, and so did Ellie. And for us, I know it's not normal, but for us, we joined the Labour Party because we heard Tony Blair, speak about education, education, education, and it really resonated with both of us. And so both of us were members by the time of that 97 election and both of us went out

campaigning to get rid of the conservative government that, yeah, we felt just didn't care less about our school. Rich, just taking a spectacle a little bit, if you'd been part of an earlier generation, I guess you might have been tempted if you'd been in left wing politics to be involved in a kind of more radical bits. I mean, when I was going up to university, I'm a little bit older than you. A lot of my friends thought the Labour Party was a bit kind of main. stream and a bit boring. So I had a lot of people who were interested in joining

Socialist Workers Party. Had that phase all passed by the time, I guess you were sort of 17, 18, maybe the Berlin Wall had come down, the world had changed, or were you ever interested in a more kind of idealistic out there politics, or was it always Labour all the way? I think that it's not inconsistent to support new labor and also be idealistic. You know, for me, I wanted a new school building in our school. I wanted us to have enough textbooks. It was very practical politics and that's always what I've had. You know, it's nice to have the luxury

of being out to sort of indulge in ideology. I just wanted those basic things that I thought was the right of every young person and we didn't have those and that's what I wanted to put right. When you were out of school, you say it wasn't a political family. Did neither of your parents' political affiliates at all? No. No. My mum is now

a member of the Labour Party but mainly because because Ellie is her MP. Oh, right. Okay. So she has to go along to constituency party meetings every now and again and vote the right way. But no, neither of my mum nor my dad. Now, my first political memory, though, does involve my dad. And it does show, you know, his values. It was 1987 and I was eight years old.

And at school, people were talking about how their parents are voting in the general election. And I had no idea what they were talking about. And I felt really embarrassed that they were all talking about this thing that seemed to be really important. And so I went home. and I asked my dad and he put the 6 o'clock news on and he said that's Neil Kinnock and that's who we vote for. And I repeated this story not long after I got elected and it was in an interview. And I said to my dad, did you like that interview? And he said, yes, but I don't believe it's true.

And I said, what do you mean, Dad? He definitely voted Labor. And he said, yes, but if it is true, it's the first time you've ever done anything I've told you to do. Your parents were both teachers? Yes, and my dad were both primary school teachers. Did you go to the school where they taught? I went to the school where my mum was a teacher for a bit. When I was at infant school, she was a special needs teacher.

But the special needs teaching, well, the school budgets were cut. And so the school didn't have the money. And I remember this as well when I was young for special needs teaching anymore. Now, my mum just became a classroom teacher. So that was fine. But I do remember that the kids who got the extra support from my mum, and she was really loved at our school, especially by some of the kids who had the greatest need,

that that support was no longer available for them. And obviously that had a detrimental effect on them, but it did on everybody else as well because the extra support that was needed now wasn't provided. And so classroom teachers were, you know, spread even more thinly than they already were. So I remember that, not having it really as a political memory at the time, but I do remember my mum stopping doing the work that she really loved doing with, yeah, some of the kids of the biggest challenges and becoming a classroom teacher. Both you and your sister got into Oxford University. Yes. And was that one of their thing for your school? Yes, so I was the third person ever from my school to go. And I remember two years before when I was in year 11 at secondary school, so doing my GCSEs. And our head teacher did this assembly. And she said, for the first time, two girls from our school are at Oxford University today doing the Oxford interview. And I want everybody to be thinking of them today. And something just in my head was like, maybe I could go there. Because I was one of the most academic kids and I was getting good grades.

and I'd never thought about it before. My dad had said to me when I was a bit younger earlier at secondary school, you should go to university and you should go away to university so that, you know, you can get that experience. My mum and dad had been to teacher training college, but neither of them got a university degree when they were younger. My dad later went on and studied to get a degree. So I sort of knew I was going to go to university,

but suddenly this talk about going to Oxford. And then two years later, when I was in that position to do my university applications, I asked one of my teachers about it and they gave me the sort of the brochure or whatever for Oxford and there's all these colleges and I didn't know anything about the college system. So I asked what college Natalie had gone to because Natalie was the girl two years older who had applied and got in. One of the two girls had got in. And I just applied for that college because I thought, well, they took a risk on a girl who went to a school that had no history of coming to a university like this. And then I got in and yeah, it was amazing and it was transformational for me.

And you then, some ways, your early career feels a bit like Theresa Mays. She also went on to go into the Bank of England and then went from the Bank England and to becoming a member problem. Have you ever spoken to her about that experience? So I'm a huge admirer of Theresa May. And when I wrote a book about women in politics, and she was prime minister at the time, she afforded me an hour of her time in the summer recess just before she did her surgery in Maidenhead Town Hall. And I thought, you are an amazing woman. You know, it's August. you're still doing your surgeries.

And you've also found time to talk about something that she is passionate about, like I am as well, getting more women into politics and other areas of public life. We've never spoken about the Bank of England. We worked in quite different areas. I think she studied geography at university. And obviously, I was an economist. And I was there after Bank of England independence when the bank had responsibility for monetary policy again. So I worked as an economist in the monetary policy area of the bank.

You did it work with Matt Hancock, though? We were in the same graduate internet. take. What does you get to learn? He hasn't changed. Are you exactly the same age? We were in the same graduate intake. You must be roughly the same age. Yeah, yeah, yeah. Amazing.

And your husband worked with me when I was a minister was one of my officials in, I think, Dephyr of them. I hope he did a good job. He did a very good job. He was a director-general and charged of huge big bits of our department. I remember very well. He very professional, didn't make much the fact that his wife was a Labour MP. at the time, and I think now very successful politician. But there's a very interesting whole public

service story going on here because you're married to a very senior civil servant. Your sister's a member of parliament. She's married to a member of parliament. And the member of parliament, she's married to his father was a member of parliament. His mother was a member of parliament. So it's a kind of extraordinary kind of Labor dynasty sort of connected in short. Well, look, Ellie and me, we both got involved in politics when we were at secondary school because we wanted to change things. And, you know, she met her husband, John, through politics. I met my husband. when we both worked in Washington, I was working at the British Embassy and he was on a succumbent from government and working at the IMF at the time. So we met through our work

too. I'm very interesting this question, changing generations. We just interviewed David Blunkett. And David's career is very much defines a man born shortly after the Second World War, defined by the experience of the late 60s, the 70s, his struggles in Sheffield in the early 80s, his reflections on Thatcher and deindustrialisation. And then I guess John Cryer, who's married to your sister also comes from his Labor Dino's with a father and a mother. He was in the House Commons with his own mother as part of another whole part of labour story. Do you have a sort of sense of deep labour history before you entered it? Are you interested in the labour of the 1970s, the 1980s? Is that part of your kind of DNA or interests? Well, I wrote a book about the first female MP in Leeds, the woman called Alice Bacon, who is the MP for Leeds to North East and then Leeds South. between 1945 and 1970s. So she was an MP in Clement Attlee's first Labour government, and then she was a minister in Harold Wilson's administrations from 64 to 70. She was deputy to Roy Jenkins when he introduced all of the social liberal reforms.

Well, they came from backbench MPs, but ushered in by a Labour government. David Blunkett makes. Yeah, David was very keen to make that point as well. Yes. He keeps saying he gets all the credit, but actually they were all private member bills. Well, okay, fine. But they were given the time on. the floor of the House by the Labour government, and they would not have got through without the

implicit support of the government and, crucially, of the WIP's office, and Rod Jenkins, and Alice Bacon took all of those bills through the committee stage. So social liberal reforms like abortion, homosexuality, the death penalty. She then went on to be an education minister who was involved with bringing in comprehensive education, something which I care passionately about Anthony Crossland was Secretary of State. She was the school's minister. So, yes, I'm very, very interested in Labour history. But just going back to your point,

my politics is defined by when I was born. I was born in 1979. Ellie was born in 1980. We are both children of that Thatcherite revolution, and we rebelled against it. We disagreed with the direction she took our country, which is why when we had the chance, we joined the Labour Party and campaigned for change.

Just talk about the Bank of England. The last person to sit in that chair and talk to me and Rory was Quasi Quarteng. And I don't say you will be following in his footsteps. In that way, I'm that way only. But did they have a point about what they described as this very cautious, very conservative, very establishment, treasury and Bank of England and the financial institutions? Are these deeply conservative institutions? And does that make it harder for somebody coming in, if you do become Chancellor,

as it were, from the left of centre? I think what they did was utterly wrong. I remember during the leadership contest, Liz Trusson-Quarthe-Quarteng said that they didn't believe in abacus economics. Well, I think being able to add up as Chancellor of the Exchequer is pretty important and they forgot that basic rule. And the thing about institutions, whether it is the Treasury, the Independent Bank of England, or the Office of Budget Responsibility only created in 2010 by George Osborne, is to provide checks and balances in the system and institutional knowledge as well. And what Quasi Quoting did was Sack the respected permanent secretary of the Treasury, Tom Scholar. He wouldn't allow the Office of Budget Responsibility to do a forecast. And they spent the summer, the two of them, Truss and Quoting and Jacob Rees-Mogg as well, undermining the Bank of England. That was incredibly dangerous. And you saw the impact of that.

The financial market impact of their mini-budget was in large part because of the scale of the unfunded tax cuts, 45 billion pounds of unfunded tax cuts. But it was also because of the financial. the undermining of the economic institutions that made Britain a safe place to invest, a predictable place to invest. So you're comfortable with how the institutions are and how they operate? Yes, I am. And I think they play a really important part in providing our country with the economic stability

that we desperately need. Families need stability to plan ahead. Businesses need stability to invest for the future. And it's why when Kea Stama and the Shadow Cabinet set out last week, the first steps that we were taking government, the number one thing we committed to. was to bring back economic stability because we haven't had that. Stability is change

after these last 14 years. But you will, when you become Chancellor, find yourself... If I become Chancellor. When you become Chancellor... Rory's gone right over. Find yourself... I'm still here, but Rory's right over.

I'm right over. Find yourself dealing with, I guess, what we've always called the Treasury wisdom. You'll be going into a system in which there is a very, very strong treasury position on lots and lots and lots of things. You know, I experienced it.

trying to deal with money for prisons, you'll deal with it if you try to set up British investment funds or sovereign wealth funds or industrial strategies. These are all things that the Treasury has very, very strong instincts. What's your sense of this? How would you manage that? How would you explain it to the public? How would you navigate your way through all that stuff? So the area where, and I set this out in my May's lecture a couple of months ago that I gave in the city of London, and I set out in that how the Treasury needs to be more focused on growth than it has been in recent years. Under the last Labour government, there was a unit in the Treasury called the Enterprise and Growth Unit. That has been really marginalised in the last few years, where the focus has been more on, I think a lot of it is gimmicks,

like preparing for fiscal events and another set of announcements. rather than actual delivery getting the growth back in the economy like we need it. So there are things in the institution of the Treasury that I would like to change. But I do think that making sure that the sums always add up is crucially importance. And the Conservatives, I'm afraid, tested to destruction, the idea that you can manipulate markets and try and drive through reforms without building a consensus for them. and without explaining where the money is going to come from. And I will never play fast and loose with the public finances in the way that the Conservatives have,

because when you do, you put ordinary family finances in peril, and we're still living with the consequences of that. Very quickly on this. So political communication and what it means to be a politician. So, you know, I will never play fast and loose with the family finances and the way the Conservatives will, because I will always put the households first. We'll sound to a lot of listeners like a very, very polished piece of political phrasing. right down to the playing fast and loose family finances, conservative, as you, as you get ready for an election,

find a way of remaining human, natural, lively while not making mistakes and still winning? Well, obviously, you want to communicate a core message, which is that you can trust me with the public finances. When Keira appointed me to this job, he said, by the next election, people have got to be able to trust you with their money, and they've got to be able to imagine me as prime minister. And I remember that every day that the most important thing that I can do between now and whenever the election comes is convince people that they can trust me with their money, because it is their money, taxpayers' money, that I will be responsible for when they pay their taxes to make sure that you get value for money for the public services.

So, of course, you know, communicating that core message, especially after the damage that has been done to Labor's reputation on the economy in these last few years with a load of unfunded commitments at the last election. You know, I do know every day that I'm only doing my job if I'm building trust in myself and in Labour Party around management of the public finances. When you think ahead to what could be quite soon now, we're talking months, and I said in the introduction that feels like the economic landscape is a lot rougher than it was back in 1997. I mean, do you not feel daunted by the whole thing? There's so many big challenges. I mean, do you...

There are, there's massive challenges. I don't underestimate them. I definitely don't. but I do think I can do this job. It's the job I've always wanted to do in politics. You know, as you've already described, as studied economics, I worked as an economist at the Bank of England. I worked in the private sector and financial services.

It's the job if I would let myself dream that I would always want to do. Some people want to be Prime Minister. That's never been my dream. My dream has always been to be Chancellor of the Exchequer. I'll tell you a story at university. I don't know if you're like this. At university, my friends for one of my birthdays, bought me a picture of Gordon Brown to put up in my room because I knew how much I loved the treasury.

I don't mind it. I don't mind it. But that is always a frame picture of Gordon. Yeah. Prudence for a purpose. A slogan? No, I'm just telling you. That's what I like that.

Prudence for a purpose. For a purpose. Very good, Alastair. I'll let you try that. I'm not going to do that. But one of the things that I guess is most exciting in your vision. is a hint that you may be wanting to be kind of inspired by Joe Biden, that you may be going for a kind of big inflation reduction act,

IRA expenditure, huge industrial strategies, big bets that are going to make Britain take a central place, maybe a bit like Macron sounds in his big Sorbonne speeches, where he's talking about France and Europe, taking the lead on quantum computing, on AI, on new green technologies. Is that right? So there's a global race on for some of these jobs and industries, of the future. You've mentioned a couple of them, technology and AI, some of the green industries. I think life science is another example. And I want Britain to be in that race. I want us to be

attracting jobs and investment here. We're not the US though. We're not a reserve currency. We do not have the deep pockets that they have. So I think we've got to be much more strategic in what we do and what we invest in. And frankly, it can't all be about money because if it's all about money, we're not going to be able to compete. But there are things that we can do and that we've set out. So our green prosperity plan includes a national wealth fund. And we've got a task force at the moment being led by Mark Carney, a former governor at the Bank of England, looking at how we can structure that task force to leverage in as much private sector investment because it can't all be public money because, frankly, it's the point that Alastor made. The inheritance

is pretty grim, you know, debt to GDP, almost 100%. So getting in private investment is going to be crucial. And also things that are practical, like reforming the planning system so we can actually start building stuff in Britain again, including some of the green industry, whether that is offshore wind or carbon capture or green hydrogen. Yeah. I mean, I think the planning stuff is really interesting. We should get into that a little bit. But just while we're on the investment, one of the things that's always struck me as a bit of a problem for Britain is that we will say, David Cameron did this, said, you know, here's this sector in his case. I think it was going to be, for one moment, it was going to be batteries. We were going to have gigabatteries. We were going to have

gigabattery sites who were going to lead the world and the new technology batteries. And we would say, we're going to spend, you know, 100 million pounds on batteries, right, or 200 million pounds. And then we'd wake up when we'd find that China had spent 7 billion, 10 billion, and had taken the entire lead, the battery world. And even the Germans, right, when it came to solar panels, spent 6, 7 billion developing these incredible technologies and solar panel. But still, it wasn't enough.

They got their lunch eaten by China. So looking back on that, I mean, what do you think if you were sort of looking at that sort of moment where David Cameron's thinking, looking around the world, here's this important new technology batteries, UK's going to take the lead, I'll put some public subsidy into this and it doesn't quite work out. What goes wrong with those things? What lesson might you draw from that kind of example? Let me give you an example of something that has worked rather than something that perhaps hasn't. So under the last Labour government, towards the end, we introduced contracts for difference for offshore wind. We now, I think, produce. more offshore wind than any country in Europe. And that's because we created a market for something. It wasn't a direct subsidy to build those wind farms, but it was a guarantee of a sort of backstop price that we were paying. We created a market and the investment flowed in. And we are reaping the benefits of that today. What we didn't do alongside that, though, was to set up an industrial strategy to ensure that we were building the turbines in this country, patenting the technology.

Do you think we, given Germany's failure to do that in solar? Is there not a a real danger that we would have catastrophically failed to do that and turbines wasted a lot of money and China would still have been building the turbines. We're not importing our turbines really from China. Some of it's from other European countries, some of it's from other parts of Asia, but some of it's from other European countries who have gone further and fast enough in building those industries. So I don't want to just host this infrastructure in the UK. I do want to build more of it here as well. But that is an example that things went pretty right. that we got the industry here and there are good jobs in that sector,

but the next generation is going to be floating offshore wind, which is a new technology. And we've got lots going for ourselves. I think sometimes we talk ourselves down. You know, you say, oh, it's all going to be done in China. You know, we really benefit from the shallow seas around the UK and from our industrial heritage, for example, in North Sea oil and gas, which means there's lots of good reasons to think that we can lead, host, manufacture

the stuff here in the UK and play our role in the sort of decarrales, carbonisation of the economy, but most crucially, bringing good jobs here and getting energy bills down as well. Let me give you one last case that worries me. So we want to get energy bills down and we want to do a green transition, but we want to do it in a way that doesn't hit the poorest, hardest. So let's say one of things that we're all trying to do is to get people out of fossil fuel vehicles into electric vehicles. And let's say for the sake of argument that China can produce electric vehicles, good, high-quality electric vehicles for about 40% less than anyone else can. It seems to me that you've got a pretty difficult choice here. Either you bring in those cheap vehicles, which will allow people on low incomes

to afford electric vehicles, succeed in that energy transition, or you try to put up barriers to those Chinese vehicles coming in order to protect your own industries and see if you can develop your own electric vehicle industry and run the risk that you're simply making the cost of our energy transition that much higher. Yeah, I agree that that is a dilemma. What we could can't have, though, is that China having a monopoly on industries, especially crucial, critical industries, because then we become over-reliant on one country, and in this case, a country that frankly doesn't share our values. So I think, you know, when it comes to China, you know, there are areas where we can compete, there's areas where we can collaborate, but there are

our areas as well where we need to challenge. And to be fair, the conservatives belatedly, but in the end did stop Huawei from, you know, building our deal. digital infrastructure. The nuclear power station in Hinkley is funded with Chinese money, but the next one won't be because we cannot be overexposed to China. So, you know, I don't mind buying cars from China, but we have got to make sure we're building up our own industry here, and we must also ensure that we're not having things that are massively subsidised by the Chinese state undercutting British manufacturing, because, you know, that's not right and that's not fair. And other countries are responding to that as well, including in Europe. But, and then I'll go back

to our question and I'll stop this. But, but, de-risking, decoupling from China does involve... I think it's diversifying rather than decoupling. So, for example, PPE, we were so reliant on China. No one's saying we shouldn't buy PPE from China, but we shouldn't have the only source of PPE from a country that doesn't share our value. So it's not about decoupling, but it is about diversifying our supply chain. So we're not overly reliant on one country, which is coming back to the energy thing,

it is why it's so important because it is an essential, a basic essential, that we all need, but we had become over-reliate on Russia and other dictators around the world for that basic need. I guess the only thing I'm trying to keep coming back to is that there's a cost to it. You can't diversify without there being a cost. It will often bluntly be cheaper to import things tariff-free, to really have a fully open global free trade system. And as you put up more tariff barriers, as is more production, as there's a more subsidies, direct or indirect for your own industries, there will be more costs. I just don't agree with you. Because look at what happened when the pandemic came along. The cost

went through the roof because we were over-reliant on too few number of suppliers. Look what happened when Russia invaded Ukraine and what happened to energy prices. We made a mistake of getting rid of our gas storage facility in the UK and we hadn't built up our homegrown renewables enough. And so we were overly exposed to those global fluctuations in oil and gas prices. So, you know, there's a short-term, long-term trade-off here. Maybe it is cheaper today, but actually you're building up huge costs for the future if you don't dive. diversify, and I think we'd be very, very naive if we thought we could just rely on China for things that are essentials in our everyday lives.

Can we go back to your photograph of Gordon Brown sitting on your desk when you're a younger woman? I lived through the Tony Gordon experience, as you know, and have got massive admiration for both of them, but it was very difficult at times. And I just wondered whether, in terms of you and Keir, whether actually you might want to be modelled more on the way that Cameron and Osborne seem to operate together. And they seemed in a way to be more united. I just wanted, first of all, to talk about your relationship with Keir, how it works, why you think it matters, and how you hope that it will work in government.

Yeah. So I know that everyone always wants to make comparisons between, you know, today's leader and Chancellor or Shadow Chancellor in my case and one's in the past. But, no, we are going to have to be our own people. It's 27 years now since Labor won in 1997 and 14 years since Cameron and Osborne won in 2010. And so we will do things are. own way. But I would come back to that point earlier. The job that I want to do, the job I've always wanted to do, is Chancellor of the Exchequer. And so I think some of those tensions that perhaps

have existed in the past, I just don't think they'll apply in the same way. Do you actually have no desire to be Prime Minister at any time in your life? I just really want to be Chancellor of the Exchequer. That is what I've always wanted to do. And I think I'll be really good at it. When you were talking earlier to Rory about some of these big issues you're going to face, and you were talking there about the way the global economy works, tariff barriers, free trade, etc. And Rory was saying about sometimes you've got these very polished lines. And I know that whenever Brexit comes up, you will say we're not revisiting, we're not joining the single market, we're not joining the customs union. Why do you have to be so hard over about that?

Because those will be in our manifesto and then you have to honour the commitments you make. But why are they going to be in the manifesto so hard over? So limiting. Because if you're going to meet your growth targets, you're going to meet your mission on growth. So we want a close a relationship with our neighbours and trading partners. We want to reset of that relationship so that we can trade more freely. You know, you look at what's happening at the moment with these import checks that have just come in, adding huge costs, especially to smaller businesses. And there are many small businesses about, I mean, I'm not telling you anything you don't know, but they've just given up exporting or given up importing. And that's causing huge damage.

You know, exports and imports to Europe have both fallen. So we want to rebuild stronger trading relationships, but we don't want to relive those battles of eight years ago now. Why not at least? I mean, if it seemed to be one big planning, yes. The second big, simple thing you could do to transform our economy is join the customs union. First of all, that is not a simple thing, Rory. It just isn't. First of all, I'm not sure. It's not like our economy was doing like really, really well before we left the EU. It's not like everything turned at that moment in 2016. There are deeper, structural problems that we need to overcome.

That's what he kept telling us. No, I don't sound like Cosby Cawting. That's exactly what he kept saying. When I said, why don't we rejoin the Customs Union? He said, things weren't going great before when we were in the customs. And then I became a Chancellor, Corsy Quarting, and then things went really, really badly wrong. So if you were looking for a symbol for those small importers and exporters that you were talking about, if you were looking for a way to simplify things at the borders, if you were

looking for it. I'm not convinced that actually that a customs union is the answer to those things. I mean, by definition, with the customs union, those things are addressed. That's what the customs union is about. Well, no, because you're not in the single market, so you don't have that free movement. So it's the single market that would mean that you wouldn't have any checks going in and out rather than the customs union, I think. But we want to build closer trading relationships. We know that the deal that Boris Johnson secured is not the best it could be.

We want to make it better, but we don't want – and actually, I don't think businesses, by and large, hugely appreciate a reopening of this debate. It's not the impression we get. I mean, literally every business we address, every... I think maybe people would like to go back. Federation we go to. If we suggest rejoin the Customs Union, there is overwhelming support. I think if you could go back in time, then, you know, I would have voted the same way again.

I would have voted to remain. But it's eight years ago now. And I do think we have to accept the world as it is rather than the world as we might want it to be. But if you had anything that was analyzed that said, event X or policy B has taken 4% out of our economy, you'd want to address that. And I just feel we have this gigantic elephant in the room that nobody wants to talk about. I don't deny that it's had a big impact on our economy. But what I would argue is you have to accept things as they are rather than as you

would want them to be. And if we could go back in time and fight that referendum again, I'm sure we would have all campaigned even harder to win the argument. But we didn't win that argument. and we now face this inheritance, I want to build a close relationship. We've committed to trying to secure a veterinary agreement to improve those flows of goods at the border,

or also want to do more to support the services sector with a mutual recognition of professional qualifications, touring rights for artists. So there are areas where we've already committed to having a closer trading relationship. But those red lines that you articulated will be in our manifesto. So like, for example, recently when Ursula von der Leyen floated this idea of, you know, freer movement for younger people. And Labor's reaction

instant, no, we're not going there. And it felt like it wasn't a sort of thought through. Let's have a discussion about this. Let's see what we think. It was, we are not revisiting this at all. And I just think a lot of people are very disappointed by that. We're not going to bring back free movement. And I think, you know, just a blanket exemption for everyone under the age of 30. I don't think that'd be politically acceptable. Why not? Because people voted against free movement. I mean, I represent, you represented a lead voting constituency, did you? Sure. Yeah. So I voted, I represented a leave, but still represent a leave voting constituency. And the number one issue that, for why people voted leave, was free movement.

But you must hear as I do all the time people saying, God, I've had my time again. Now, I'm not asking by the way. I think, by the way. I think, by the way. Do you really? I do think that. But is that not partly because the debate has just been parted, nobody's trying to give leadership on this. I also feel that if you went into an election, say, I've got a really good idea, let's have another referendum.

I'm not saying that, though. I'm not saying that because of the defeat in the referendum and the politics that followed that, we're not even having the debate about the things that we can fix. I literally have just said some of the things that we would want to fix. And we want a reset of that relationship because, look, I think the most important trading relationship Britain has is with our European neighbours and partners and it's too difficult to trade today. Given that, I mean, to return to the customs union, right? The great thing about the customs union is you don't go around having endless attempts to do bespoke little trade deals with New Zealand or Australia. You accept the framework of the European negotiations, which then mean that you don't have half the problems that you would have with Northern Ireland and the Republic. You have, because a lot of these problems are to do with the fact that if Britain fixes a trade deal with New Zealand where it's taking stuff in on different terms, the terms from which the European Union does it, then you have a whole problem at the border to try to address the question of where those things came from. If we did a veterinary agreement, actually, I think it would deal with a lot of these issues, because a lot of the issues are around food and farming sectors. So we do recognise that those things are big challenges, but our answer to it is to get a bespoke veterinary agreement rather than just a blanket, go back into these institutions.

I just imported two pots that I found on eBay from Holland, found myself facing a £400 bill coming in from customers. How much three pots? I think they were a thousand pound pots. My goodness, what sort of pots are they? Big pots. Expensive pots. Sound lovely. But I was thinking, why?

Why on earth am I paying all that money to bring stuff in from the Netherlands? I think that's a fair challenge, but that is a deal that the Conservative government have done. But if we were in the customs union, I wouldn't be doing that, would I? Well, look, we have got things where we want to improve the relationship. We want to make it easier to trade, but we are not going to revisit and relitigate those arguments of the referendum. We're just not going to do that. If you were asking Gordon Brown when he was opposition, I know you don't want to keep going back, but I think the comparisons here are quite interesting.

Gordon Brown would probably say he wanted to be defined as the Chancellor that ended child poverty. George Osborne would probably have wanted to be defined as the Chancellor delivered the Northern Powerhouse. Now, Gordon, I would argue, had considerably more success in his goal than Osborne had in his. But if you can say this job you always want it, let's say you do it for 10 years even longer. What do you want to be defined as by the end of it? So our economy to be growing and creating good jobs right across Britain. So not just a few industries in a small part of the country, but that people feeling better off and having better jobs that pay decent wages that they can afford to live on in all parts of the country.

That is what I want to achieve if I'm, if I'm Chancellor of the Exchequer. Okay, well, that sounds to me like that's what the Chancellor should be doing as an absolute minimum. What do you want history to define you as? Well, a successful economy that is firing on all cylinders, that is attracting jobs and investment. And that has changed because we haven't been doing that these last few years. People have felt they've had to move from the town that they live in to access jobs, you know, elsewhere, predominantly in London and the South East. I want people wherever they live to be able to get a job that pays a wage that they can support a family on. And I want Britain to be a great place to do business again.

And I guess it sort of comes back to, you know, Rory asking me earlier about, you know, did I go through a sort of stage where I was idealistic? You know, look, I think that wanting good schools where children have a good start in the lives and an economy that actually works for ordinary people, you know, maybe it's not. Shege of error or whatever, but it is generally what is going to make the biggest difference to people's everyday lives. And I am quite a practically minded person. And I think about, you know, what would have benefited me when I was little and what would benefit young people growing up today. And what would benefit my constituents in Leeds West is those things, good jobs, paying decent wages in the places that they live. Okay, Rachel, Rory, quick break. Hi, everybody. It's Dominic Sauerich here from The Rest is History. Now, some of you may have heard

me on your show, The Rest is Politics, when Rory was away and I was filling in and enjoying Alistair Campbell's tremendous banter. And I'm back to tell you about our new series on The Restis history, which is all about Britain in the 1970s, a period with a lot of uncanny resemblances to our own. So right now we're living through a moment when oil shocks generated by war in the Middle East are rippling through the world economy, when Britain feels like it's sunk in a bit of a malaise, people are arguing about Europe, the government has got a few issues with the trade unions, and we have a kind of, I suppose you'd say governing elite, a kind of political class that is really struggling to come to terms with all of these issues. And people are asking if

Britain is governable at all. So there are a lot of parallels between that Britain that I'm describing, which is our Britain and the Britain of the mid-1970s. So in this series that's coming out on the rest is history, we're looking at these and other issues. We'll be talking about the rise of Margaret Thatcher, obviously a colossal figure in our political life even now, whether you love her or loathe her. We'll be talking about the very first Brexit referendum of 1975, a subject that I'm sure Rory and Alistair will have strong opinions about. We'll be talking about the fall of the Labour Prime Minister Harold Wilson and we'll be talking about one of the grimest moments in Britain's economic history, the moment in 1976 when we had

to go cap in hand, as people said at the time, to the International Monetary Fund, the IMF, for a then record bailout. Now, if that sounds good to you, how could it not sound good to you? Of course it sounds good to you. We have a clip for you to listen to at the end of this episode. And if you want to hear more, just search for The Rest is History wherever you get your podcasts. So get away from Che Guevara back to the practical, the NHS. Because people are living longer because drugs cost more, because there are more demands. Health inflation runs at 2, 3% above general inflation. Put a lot more money into the NHS, but the demands on the system keep growing. And you will come in, you'll inherit this very creaking system.

You will very understandably, I'm sure, spend the next minute explaining that it's all the fault of the Tories, and I'm sure a great deal of it is the fault of the Tories. Nevertheless, less, you're going to inherit this system. And you're going to face the system where our population is going to continue getting older, putting more and more demands on the service, demanding more and more expensive treatments. And you're going to have to find, presumably, 3% above inflation every year for this year and every year to go to begin to keep up with the existing level of demand. How do we fund this? How do we keep education is easier than health? I mean, this could have been said in 1997 as well, you know, the NHS you can't rescue it, it's not going to work.

We know what happened there. But Gordon Brown borrowed an enormous amount of money. And then the 2008 financial crisis came around and we ended up in a bit trouble. So there is a way of doing this. Wait a second. What was borrowing? Just remind me what government debt was when Labour lost office in 2010, Rory. What was it as a percentage of GDP?

So there was a deficit running at 130 billion at the point where they went, right? And debt as a share of GDP was 60%. What is it now, Rory? It's higher. Yeah, it's nearly 100% of GDP. So I don't need lectures, Rory. I don't need lectures from you. lecturing. I'm not going to lecturing you. You're asking me, how did they do it? They did it by borrowing a lot of money. And you're not going to do that.

Right. Well, this government have borrowed a lot of money and things are an absolute mess. It's about how you run things. And that's why Wes talks about. You've asked a question. Okay. So it's also about how you run things. And that's why Wes has spoken about reform of public services rather than just money. But it's also why we've set out how we will tax and non-doms properly, which your party's had 14 years to do and never has. Tiny amounts of money, Rachel, tiny amounts. Five billion a year. Tiny amounts. They hit five billion pounds. There's a small amount of money. For what you need for the NHS, yes.

For what you need for the NHS, yes. We're committed to have 40,000 additional appointments every single week in the NHS. As a backlog, as you know, under the Conservatives of almost 8 million today. You know, it's not going to sort out everything overnight. If I promised to do that, I think people would rightly say that's not possible. But we're setting out the steps we're going to take to get the NHS for the future again. And we'll start with those additional appointments. I'm not trying to get into an argument.

And I'm genuinely trying to look at the big thing. So Gordon Brown had an option which you don't have. He was able to put a lot, lot, lot, lot more money into the NHS. That's what he did, between 97, 2008, huge amounts of more money. The graph of spending increases by labour on the NHS, which your understanding of you very part of. But it wasn't actually funded by borrowing. It was funded by growing the economy. And that is the difference between the labour years when the economy was growing and the difference these last 14 years.

Well, no, let me just give you this statistic. If the economy had grown at the average OECD rate, these last... It would now be 37% larger, yes. Well, you'd have about £40, 50 billion more for public services every single year. But it's why it's right to focus on growth so much. Because unless we grow the economy, you're not going to have the money for public services. And I'm not going to make a load of funding commitments from imaginary money. But what I am going to do is put in place the things that are needed to grow our economy,

so we do have the money again for public services. Well, that is, in the end, the only way that you can both improve living standards and having money for public services is through growing the economy. And that's why so much my emphasis is on that. All my sympathies with you. No, I don't need sympathy. But you're not going to have the situation that Gordon Brown inherited in 97. No, because you made such a mess of it. Yeah, because, as I said, and I knew you were going to say that, and I agree, right?

There's a horrible mess that you've inherited. But that's as it is, unfortunately. But then you have to grow the economy. And I believe that is possible. Yes, but you will not be able to grow the economy enough in order to provide the kind of funding that you will need to deal with health inflation. Well, I just disagree with you on that. If we grew the economy, just the average rate of similar economies would have 50 billion pounds more today. So that is where the money is going to come from.

But we also need to run our public services better. What growth rates are you expecting to achieve over the next 10 years? Well, look, the last Labour government achieved growth rates over, around 2.5%. And you're expecting to achieve 2.5% growth consistently over the next 10 years? No, we are aiming. Our ambition is to have the highest growth rate in the G7. That is ambitious. But we believe... Higher than the US? Well, why not? I think we've got huge potential. I'm not saying a

bigger economy, but growth rates. And we've been so behind, there's an awful lot of catching up to do here in Britain. I believe if we reform our planning system, reform our pensions, our skills system, we bring back the stability to the economy that we desperately need, we can attract investment here, which is what we need to grow the economy. 2.7% growth, 3% growth over the next 10 years. I'm not going to just come up with... But if you're talking about the highest growth from the G7, literally growing fast in the United States. Well, that compares with other countries.

I mean, GDP per capita growth in the US compared to the UK outperformed the UK from 1870 to 1980. Well, GDP per capita is falling at the moment in the UK. The only thing that's keeping GDP up is immigration numbers. GDP per capita, US against UK, has been... falling almost consistently since 1870. Achieving higher growth rates in the US over the next 10 years is an extraordinary thing. It's ambitious. It's absolutely ambitious. Why should anyone believe you can do that? We're not going to apologize for that. When Labor was lasting government,

we increased productivity and GDP growth. We were competitive in the global economy. But it was a different context, the different inheritance, no? But in some ways, because we've fallen so far, we've got a lot of making up to do, I believe we can do it. Can I just bring where I Another factor that is relevant to this is one of the reasons why we're able to get more money into public services because actually military and defence spending were able to fall because we were living in a much more peaceful world as well. Do you recognise that security costs are probably going to rise if there's a Labour government in your first term? And does that also make it harder than to get the sort of money that you want to get into public services?

Well, obviously, we're going to inherit a world that looks very, very different. to what you experienced when you came into government, Alistair, in 1997, where there was that peace dividend. And, you know, alongside other countries, we are going to need to increase our commitments around defence spending. I'm not sure that there is a sort of negative correlation between sort of spending on defence and economic growth. Often, defence R&D, for example, spurs innovation in other parts of the economy as well. But I'd just say, What we need to do to grow the economy is to unlock private investments. And that's why the economic policies that we're putting forward to reform the planning

system so we can build housing but also digital infrastructure, labs for data centres, the energy infrastructure we need, the pensions reform to get more investment into long-term patient capital into start-up and scale up businesses, reforms to the skill system so that businesses can recruit and train people up. it's why we're putting so much focus on the things that are needed to unlock private investment because we know there's not going to be any shortcuts of government spending to grow the economy. It's got to be about finding ways to encourage private sector investment. When I go around the world and meet UK investors and global investors, they say to me there

is a wall of capital that is ready to be deployed, but at the moment, Britain is not looking like such an attractive place to invest. part of because of the lack of stability in the UK economy, but also practical things holding back investment like our planning system, like our skills system. So if we can reform those things, which I'm determined to do, working with my colleagues like Bridget Philipson and Angela Rainer, that we can unlock that investment and start growing the economy. And when you grow the economy, what happens is you bring in more tax receipts that you can then choose to invest in some of the public services, which are in a mess, you know, I absolutely accept that.

Our schools, our hospitals are in a mess. And we do need to put more money in. We've got some immediate cash that we're going to put in by getting rid of the exemption whereby private schools aren't paying VAT or business rates, cracking down on tax avoidance and ensuring non-doms pay their fair share of tax. But in the end, to really have the money that we need for our public services, we've got to grow the economy.

And I mean, and I know while you're doing it, you're picking on a few, certain policies and say, well, we're going to do this, and it will raise this, and with that, we'll do that. But on this bigger picture about the sort of public realm rebuilding that's going to have to go on, because the bit that was missing from Rory's analysis was austerity, and that has done fundamental damage. But it does mean the rebuilding becomes harder. And I just wonder whether you and Keir are deliberately setting expectations reasonably low. I think one of the criticisms made is that the expectations are being set fairly low.

Kier, last time we spoke to Kier, he said, you know, we wouldn't play. Things can only get better right now because it's going to be tough. It's going to be really tough for a while. So what is that that kind of medium and long-term strategic approach? What are you going to be saying to people at the election, here's how things are looking a year, here's how things are looking two years, here's how things will look at the next parliament. So that's why Kier talks about a 10-year program, you know, you can say, well, you know, you haven't even one election yet, but it is going to take time to turn these things around.

And I think it is important to be honest about that. You know, you could say it's about setting expectations low. I think it's just about being honest. And I think that people respond to that, you know, that things are going to be tough and we're not going to be able to do everything we might want to do straight away. And I know, you know, one of the things I have to say regularly to colleagues and different campaign groups is, no, I'm afraid we're not going to be able to have the money to do that. Certainly not straight away.

And, you know, that's not something as a, you know, a good Labor person I might like, like to say, but it is the reality of the inheritance we're going to have. And it's why when we set out the first steps last week, it was all fully funded, fully costed policies like the six and a half thousand additional teachers in our schools. But you set the schools need a lot more than that. I would love to be able to commit to do more. But that is funded and costed through having VAT on private schools and business rates on private schools and the money would be used for the additional teachers in our state schools. That is a choice. It's a different choice that an incoming Labor government would make compared to the choices that the conservatives have made.

Can I say a bit about question of character? Keir, I always feel, is a lot tougher than people realize and a lot more ruthless than people realize. And I think people sort of say the same about you as well. And by the way, I'm speaking to somebody who finds ruthless quite attractive equality in politics. So don't take it as an insult. I don't. No, good. So what, but give me a sense of your approach.

Because as you say, you are having to say no to a lot of people. That will lead to disappointment. It will lead to people attacking you. Probably the media at some stage will try and turn against you in the way that they're trying to do at the moment with Angela. I just want a sense of that character and the toughness that I think you're going to require. And I guess whether you've got it and where you think it comes from.

I think the most important thing is that people will respect me and that they'll trust me. And if I said yes to everything, I wouldn't be doing my job. I'd be doing my job incredibly bad. And so I won't make any commitments without being really clear that I know where the money's going to come from. But if we didn't do that, it would be the road to ruin because you'd end up having to borrow more or, yeah, find taxes that are going to make it harder to grow the economy. And I think the most important thing is that people can trust me and that my colleagues respect me. And I think they do respect me.

They understand where I'm coming from. They're bought into this. But both politically and economically, it is. the right thing to do. I guess some people listening to this might think, if you're confident that you can achieve the fastest growth rate in the G7, you're confident that you can really grow this economy. Why not borrow? Because, as you say, Gordon Brown borrowed because he was confident that he could grow the economy fast enough to be able to repay that borrowing. Presumably that the calculation would be if that growth rate's guaranteed over 10 years going to be the fastest growth rate in the G7,

you could borrow quite a lot of money, make quite a lot of investments in public services, because you'd get in the tax receipts from your growth, right? Well, first of all, borrowing didn't really go up significantly until the financial crisis. So it wasn't borrowing to fund investment under the last Labour government. It was through a strong economy that was growing, and then you could invest those proceeds of growth in better public services. That's my reading of what Tony Blair and Gordon Brown did during that last period of government, And I'm not going to start spending money before it comes in.

I'm just not going to do that. And so, you know, we've said there will be an immediate injection of cash into public services by the limited and targeted tax changes around non-doms, private equity, private schools. And put in context, listen, so I mean, you're talking about some of these things of sort of £5 billion a year, right? Yeah. And in addition, we've got the energy profits levy that we would extend, which would endow the national wealth fund. So around £7 billion, you can get.

through extending that. Five billion on tax avoidance, additional money from non-zoms, 1.4 billion from private schools and about half a billion from private equity. But for listeners to sort of compute that, I mean, we're talking 10 billion as the potential compensation package

just for people who've been affected by the infected blood scandal, the contaminated blood scandal. So we're talking about twice as much as the revenue tax. Well, some of those are annual revenues, of course. So they're not just one-off. So 1.4 billion pounds a year. by the tax changes on private schools, for example.

So you're not really comparing apples with apples there. But I recognise that these are limited changes and they're an upfront investment into public services and then the plan to grow the economy and the plan to grow the economy is what is going to deliver the money to sustainably invest in public services. Sort of coming to the end from me,

one of the comments here that's been made is that a Labour government, your government, would not introduce annual wealth and land taxes, raise income tax or equalize capital gain rates and income tax or rejoin the European Single Market and Customs Union or change the Bank of England's inflation target or reform its rigid mandate or take private utilities into public ownership except for the railways. Is that roughly right as a statement of what you wouldn't do?

Yes, but then there's all the things that we will do. One of the things that Alistair often says on this podcast is, yeah, but the great thing is that they can say they're not going to do these things. but when they get into office, they could do those things. And isn't it lovely because in Australia, that's exactly what the government did. They said they weren't going to raise taxes. And then they got into office and, Skippy do, they raised taxes and nobody minded. So he's hinting.

He wants to win a second term. And so that means you have to fulfill the commitments that you've made to people in an election. And we've set out the first steps that a Labour government would take. And we've explained where the money's going to come from for those things. It's not a cunning ruse where you say you're not going to do these things. and then you'll make Alistair happy a year after the election by reversing on all those things. I haven't been in opposition for 14 years to get into government for a short period of time and not be able to affect the change I want to do.

So I plan to make commitments that I can keep and deliver. So if you say these things, you'll stick to them through the five years. You won't do those. If you say in the manifesto, you're not going to do them, you're not going to do them. I mean, this may sound like, you know, quite revolutionary to you, Rory, but yes, that is what I plan to do. My last question relates to the fact of you, I said right at the start, you become the first woman chancellor.

And one of the speeches you made in the comms that I remember was when Joe Cox died. And, you know, we talked recently, Roy and I talked on the main podcast about mental health of MPs. And we had some remarkable figures on assassinations. This was in Mexico as it happens. But we've had two assassinations here. And I just wondered how you persuade. young people and young women in particular, that politics is a positive, warm, welcoming, good place to go. And whether actually, as a woman who is going to be one of the most high-profile women in the

country, if there's Labour government, whether you see that as a kind of added responsibility that you now have to try to get more young women to think about politics as a career. So Joe loved her job. I remember her mum saying to me, after she was murdered, Joe, loved doing the job that she loved in the place that she loved. And there was a terrible way to die and it was a life taken much too soon and she had so much potential and so much to give. But her mum said she wouldn't have ever done anything else. And, you know, she paid the ultimate price for doing what she loved and trying to make a difference. And I do believe, you know, despite all of the scandals and everything that we hear in politics, that it is a noble thing

to do, to want to represent your community and to want to change. And I'll disagree with Rory on lots of things, but I know that Rory like me came into politics to try and make things a bit better than what we started with. And, you know, I've got friends in all political parties trying to do those things. In terms of sort of women in politics, I've always wanted to have more Labour MPs in politics, but I've also always wanted to have more women in politics. And when I was born, 45 years ago, there were only 19 women in Parliament. And today there are more than 220 women in Parliament. That is a huge change in my lifetime.

And that's really exciting. And that didn't come about by chance. That came about because both parties have made a conscious effort to change how they do things. Labour in 1997 ushered in 101 Labour Women MPs. And then because of the way actually Theresa May set up women's win in the Conservative Party in 2010, then there was a big increase in female representation on the conservative benches. And I think that's a really positive thing because I worked in banking and finance before I became an MP.

I was, as you said, at the beginning, a junior chess player. I've always operated in very male-dominated environments. But in politics, we claim to represent the country that we're serving. And I think it's really hard to make that claim when the institution looks so different from the country that we're supposed to serve. And so I passionately believe that we need to have people from a wider diversity of backgrounds in politics, including more women in politics. And that would make it a better institution and it would serve better our country. And so something I've always tried to champion is women in politics.

I also recognise this point because I'm sort of standing on the shoulders of the women that have gone before me and encouraged me, women like Harriet Harmon and Tessa Jal, who really encouraged me when I first got elected to Parliament. And actually, I remember in 1997, obviously it was brilliant to have the Labour landslide, but all those women. And for the first time in politics, there were women that, you know, looked a little bit like me, sounded a bit like me from similar experiences and backgrounds. And I felt really excited and motivated by that, a bit like Natalie in year 13 from my school, who was applying to Oxford, for the first time I could see women role models doing something that maybe I could do in the future. And I hope that if I have the opportunity to be the first female chancellor of the exchequer, there will be young girls and women who think, do you know what? Maybe I could do that one day because no one ever before like me has done that job. And now there's a woman there doing just that.

And so I hope I play just a small part in encouraging more women and girls to go into politics and in banking and finance and business too. Rachel, very last one for me. What is it you think the public doesn't necessarily see or understand about you that you wish they knew or understood more? Look, to win the election, I need people to be able to trust me. And that's what I hope when people see me, when they hear me. And I guess, you know, I talk about my experience at the Bank of England and all the rest of it. But I remember when I was little.

And my mum and dad weren't poor. They were primary school teachers, as we've already discussed. But they split up when I was at primary school. And so we didn't have a huge amount of money. We certainly weren't poor, but we didn't have money to spare. My mum would keep all of her receipts. And every month when she got her bank statement, she'd go through the receipts and tick off everything on the bank statement. And that taught me, I guess, the importance of being able to explain where the money comes from.

Because she had to do that. My mum had to do that when we were growing up. And I remember as well when the energy prices went through the roof and then also then when mortgage rates spiraled. And my mum said she'd just about managed. when she split up with my dad to, you know, keep things going. And she doesn't know how people would cope today with the energy prices and the mortgages doing what they did today. And that was really, it was an important moment for me when I was little and seeing my

mum doing that. You know, something in me was sort of touched by what my mum said because you realise, I see it in my constituency. Even people who, you know, should be doing okay, really struggle when things go wrong in the economy. And I want people to be able to put their trust in me and know. that I would always be looking out for their interests. And I don't want to sound like a cliche,

but that's where that motivation comes from from me, seeing my mum making sure that the money always added up, and knowing for a lot of people, that is really, really hard today. Well, thank you for giving me so much your time. Good luck. Are you still, if not when, election result, if not when? No, I'm not complacent at all. Morgan McSweeney, you know him,

our campaign director in the Labour Party, did a presentation on the local election results and the penultimate slide after talking through the successes we'd had in the local elections. The penultimate slide says, what does this mean for the general election? And the next slide was blank. Absolutely nothing, because not a single vote has been cast yet. So, yeah, we have to win back the trust of an awful lot of people. Some of them have never voted Labor and an awful lot of people who turned against Labor, understandably.

So I totally get it at the last couple of elections and we need to win back their support. Well, good luck. Thank you. Thank you. Very good luck. Bye-bye. Right, Rory. Now, got a bit spiky there, you and Rachel. Dick Gives is a bit spiky. I mean, it's so difficult, isn't it? I mean, it's partly probably the fault of my fact, I've got a bit of a migraine while I'm interviewing her. I think she's kind of wonderful, but I found it very, very difficult to get her to relax, open up and be sort of a bit more personal and natural. That's probably my fault as an interviewer, which is why we got into some slightly more kind of gritty arguments. Why do you think she was wonderful before you... Well, I think there's something...

Why do you think she was wonderful? There's something rather reassuring, but Theresa May like, to be honest, about the kind of my job is to reassure people that I'm a safe home of the finances, and I'm going to reassure people that I'm a safe ham of the finances. And boy, boy, did you get the message, I think at the end of the hour that she's somebody who's going to be very careful balancing the books, right? The thing that seemed to me sparked off a little bit of a... didn't quite get to Jamie Rubin levels,

but it was getting close at one point, was I think she, I think she's quite tribal vis-a-vis labor, and I think she was saying, she thought you were saying, that basically the basic Cameron Osborne message, you know, the mess we inherited, Gordon Brown, spaffed the economy,

because of all the borrowing, etc., etc. Well, it's that, it's that all, it's that, but I think it's also that she knows, I'm afraid that I'm right. I think she knows that health inflation Well, you should have done some proper mansplaining, Rory. No, no, but I think she knows that health inflation is far above general inflation, that the amount of money they would need to sort out the NHS is eye-watering.

We're not talking five billions. We're talking tens of billions more every year and onwards to try to sort it out, and she doesn't have that money. And so she has to say, because it's the only answer she can come up with, growth. If I can get this amazing growth from the economy, all the problems will be solved because all this lovely revenue will be done. I won't have to worry about the fact that at the moment we're bankrupt. and I can't borrow any money, and the taxes are maxed out, and I can't pay for anything,

because this growth is going to fix it all. It would have worked better for me if she would have said, listen, Rory, of course, you are absolutely right. We are in a big hole. A lot of this is your fault, as you said, and I'm not going to bore you because it'll make you defense of explaining why the conservatives have made the situation a hell of a lot worse, but I agree with you. Health inflation is a lot higher than normal inflation.

The NHS isn't a big problem, and it's going to take a lot more. an incredible amount of money over a very long period to sort out, and we can just do what we can do. It would have worked better for me rather than saying, no, no, it'll be fine because I'm going to generate the fastest growth in the G7. You see, I think, and when you read that list out of all the things that Labor has committed to ruling out, not doing, I don't think it's that they're going to do things that they are ruling out ahead of an election, even though one of the two of them, as you said, I'd rather that they didn't rule out, that they did if they came into power. But I think what they are hoping

to be is to be in a position as a newly elected government, if that happens, particularly if they get a decent majority, where they can start to be more radical about some of the things that they've already talked about. So whether that's in relation to the environment and this green energy stuff, whether it's in relation to some of the law and order stuff, whatever it might be, education in particular. I also think you started to sort of light the match with the question about, you know, oh, here you are with your very polished sort of, you know, sound bite. this thing, the other. I think she sort of felt you were kind of trying to put her in the box of, you know, every other politician who just comes up and, you know, spins a line. Do you not agree with me that with all her strengths, she's not awfully natural? There's not, there's not a great deal of twinkle, humor, flexibility. I mean, it was, I mean, compared to the other people we've interviewed, I don't want to be rude, right, but we've interviewed a lot of politicians on the show, right, compared to watching David Blanket operate, compared to watching Very different when you're after power to when you're about to go into power.

I think that's who and what she. I think she is very authentic. I think that's who and what she is. I think she's actually, she is quite funny, but she's not going to sit here and be funny. But part of the problem is that, I mean, one of the things that I suppose winds me up a bit is that some of those anecdotes I've seen in four interviews. That story about her dad seeing Neil Kinnock and saying,

this is who I'm going to vote for. I literally, it's been in four interviews and she tells it to me a fifth time. I don't feel she's treating me as a human being if she can't take the time to come up with some new story that she has to, again, and what does it mean this story? What's the point to the story? Her dad, like Neil Kinnock. I mean, the point, she was saying,

see, I thought she was from a political family. And she put me right on that. I don't, no, I think you're getting too sensitive about this. So if I's going to be chippy, I'd say, can she lead? She can reassure. She can come across as a reassure. assuring person who are going to look after the family finances. I was almost sort of Mrs Thatcher.

You know, my mother balanced the household books and we can... Yeah, which I actually, I think was a... I think one of the worst parts of the Fatcher legacy is this idea that the British economy is like running an household budget. But that's pretty much what she's pushing, isn't it? Yeah, I think she was trying to give a sense of a character. That was a question about character. I don't know.

I came out of that thinking, this is a very, very fiscally responsible, very, very... Which is the message you wanted to communicate? So she's probably gone away to think, oh, well, I definitely landed the message I want to. But anyway, my question is she can do that. But can she lead and inspire? A department. She's not going to lead and inspire the country because she said she's clear that she wants to be Chancellor.

I think as Chancellor, you have two roles. One is the public role, which is very, very important. Don't going to be a role. And I think actually she has got a very clear message about that. And it's interesting, I saw her a couple of years ago in we just had a cup of tea somewhere. And at the time, she was really struggling to get sort of any kind of profile at all.

There was a lot of interest. The feeling was Labor weren't going to win. Kier, there was a bit of interest, but it wasn't really taking off. And whereas now, it's sort of gone to a completely different extreme where nobody's really interested in the Tories and people are very, very interested in her.

And I think she's still at that stage establishing her basic messages. She probably is quite pleased that you're a bit annoyed that she was saying the same things that you've read in her before because that is an important part of message delivery. Yeah. You keep saying the same things.

But I, no, I think she's more, I think she's actually very, very personal more. But she's not, she's not a firecracker. She's not going to, you know, she's not going to come in and just sort of, you know, have that amazing. Yeah, she's current politician we interviewed who was pretty. Very open. But she's, but in a way, doing a different sort of job. And I think she's really taken on this idea that as the Chancellor, on the back of Labor's record on the economy under Corbyn in particular, followed by the mess of the last 14 years, where I think she was.

pretty light on you to be honest, Rory, given the complete catastrophe of the last 14 years. I think she was landing that message of, you can trust me, you can trust me, you can trust me with your money. And that's obviously the biggest thing she wants to do. Very good.

Well, thank you, Alistair. Right. See you again soon.