In the evolving landscape of political discourse, few topics ignite debate quite like the strategies employed by prominent figures such as Donald Trump. In the latest episode of the YouTube series ‘Triggernometry,’ acclaimed British economist and commentator Liam Halligan explores whether Trump’s approach can resonate in today’s climate. With a focus on the intersection of economics, policy, and public sentiment, Halligan expertly dissects the implications of Trump’s tactics and their potential effectiveness. This blog post will provide an in-depth fact check of Halligan’s assertions, illuminating the nuances of the discussion and shedding light on the validity of the claims made. Join us as we navigate through these complex ideas and evaluate the foundational truths behind Trump’s strategy in contemporary politics.

Find a fact check of this transcript on CheckForFacts

Transcript:

[00:00:00,000]: You know outside of the political hurly burly you know the cool calm market analysts they’re thinking well this is going to cause inflation

[00:00:09,079]: This is going to stall the American economy

[00:00:10,920]: You’ve now actually got some really respectable people on Wall Street and beyond predicting a US recession

[00:00:15,920]: I think in my bones he’s still using tariffs because he wants to influence different outcomes

[00:00:21,040]: He doesn’t want Russia and China getting close together or he wants to help to prise them apart by bringing Russia back at least some way towards the Western orbit

[00:00:28,639]: But the rhetoric coming out of China is unlike anything I’ve ever seen in 20 years

[00:00:34,099]: If you mess with China in the way he is then you could do irreparable damage

[00:00:39,020]: You could spark military conflagration

[00:00:42,080]: That’s my concern

[00:00:45,419]: Liam Halligan our go to guy for all things economics

[00:00:48,299]: We want to talk to you about the tariffs

[00:00:49,779]: We want to talk to you about the British economy

[00:00:51,860]: And you have a very particular insight into the civil war that’s happening inside of reform as well

[00:00:56,680]: We’ll touch on that at the end

[00:00:57,880]: But first of all let’s talk about the Trump tariffs

[00:01:01,540]: One of the things I think quite a lot of us assumed is this is just talk right

[00:01:05,500]: He’s going to claim he’s going to put some tariffs on in order to get people to do what he wants but we’re not actually going to have tariffs

[00:01:11,400]: Is that what’s happening or are we actually going to have a trade war of the kind that people fear

[00:01:16,419]: Well it’s the old sage’s response to anything that Trump does isn’t it

[00:01:20,239]: Take him seriously but not literally

[00:01:22,620]: This is just a bargaining ploy

[00:01:24,639]: And I still think there is an element of that

[00:01:27,220]: But in order to be taken seriously if not literally he has to at least put some tariffs on for a while

[00:01:33,459]: And yet what we’re seeing is even though he says tariffs are the most beautiful work in the dictionary I love tariffs his actions suggest that he’s actually blowing hot and cold except it seems when it comes to China

[00:01:46,900]: And that’s my proviso

[00:01:47,900]: We’ll come on

[00:01:48,519]: We’ll come on to that

[00:01:49,239]: So obviously he’s he talked about 25 percent tariffs on both Canada and Mexico in his inauguration speech introduced the beginning of February for a few days took him off again

[00:02:00,540]: Now there’s a reprieve

[00:02:01,720]: Now it seems if they come back there’s the goods that are involved in the NAFTA free trade agreement which was renegotiated during the first Trump presidency

[00:02:10,339]: They’re going to be excluded

[00:02:11,860]: Maybe car components are going to be excluded because U S based automakers you know they use Canadian made car components a lot

[00:02:20,619]: So it seems to be kind of scattergun

[00:02:23,639]: But of course just because Trump has threatened this and is talking tough on Canada he’s propelled you know he’s convulsed America’s relations with Canada and absolutely revolutionized Canadian politics with a complete outsider coming in as prime minister as I’m sure we discussed and his party rocketing ahead in the opinion polls making up a big deficit

[00:02:48,660]: China he has introduced tariffs

[00:02:51,240]: I’m not sure they’re going to be removed anytime soon

[00:02:53,800]: There was already a 10 percent tariff under Joe Biden of course and Trump doubled that to 20 percent and made it more wide ranging

[00:03:00,520]: And he’s been threatening in his rhetoric a 60 percent tariff on China

[00:03:03,960]: And of course he’s also threatening tariffs on steel imports from the European Union and indeed from the UK

[00:03:11,100]: Look just pause one second

[00:03:12,759]: One second

[00:03:13,119]: One thing that occurs to me is that for our audience and for us as well who are not economists like you can you just explain what the point of tariffs is what the impact of tariffs is

[00:03:23,779]: How does it work

[00:03:24,419]: And what is the thinking behind imposing tariffs on China and not taking them off

[00:03:28,500]: A tariff is a tax on imports into your country

[00:03:32,880]: And the historic justification for tariffs is that you’re protecting your domestic industries particularly industries

[00:03:40,220]: It used to be called the infant industry argument when industries were in their early stages

[00:03:43,639]: But of course the U S steel industry isn’t in its early stages

[00:03:46,360]: It’s been around for many many decades

[00:03:49,720]: So what you’re trying to do you’re trying to appeal to domestic voters and domestic interest groups by protecting their market share by shielding them from more competitive imports that are made elsewhere

[00:04:01,699]: If the imports elsewhere weren’t better value they wouldn’t be coming in because the transport costs wouldn’t be worth it

[00:04:07,479]: But of course what tariffs do and the reason why I’m largely against tariffs in most cases is that tariffs mean that your domestic consumers your domestic manufacturers when they buy imports from abroad not least things basic goods like steel they pay more for them

[00:04:26,200]: So then consumers end up paying more

[00:04:28,420]: You generate inflation

[00:04:29,820]: That’s why we’re seeing stock market convulsions in America because outside of the political hurly burly you know the cool calm market analysts they’re thinking well this is going to cause inflation

[00:04:41,559]: This is going to mean that the Federal Reserve can’t lower interest rates as quickly as we previously assumed

[00:04:46,559]: This is going to stall the American economy

[00:04:48,500]: You’ve now actually got some really respectable people on Wall Street and beyond predicting a U S recession

[00:04:53,519]: Well I saw a tweet this morning somebody saying my portfolio’s pronouns was were

[00:04:58,500]: Yeah absolutely

[00:04:59,440]: Because this is completely he’s not just convulsed politics he’s not just convulsed geopolitics and relations with China which we must come back to because for me this is the really big story here when it comes to tariffs

[00:05:10,160]: He’s also convulsed you know the outlook for financial markets everywhere because the old adage holds when America sneezes the world catches a cold

[00:05:20,920]: U S sovereign bond markets the Treasury market when the U S government sells its debt the interest rate that markets charge it to lend to the American government again and that sets a benchmark for sovereign bond markets and government borrowing costs around the world

[00:05:39,160]: But just to talk briefly about China I think I still think in my bones because this is what Trump did in Trump 1 0 if you like from 2016 to 2020 I think in my bones he’s still using tariffs because he wants to influence different outcomes unrelated to trade or at least that benefit the domestic U S market

[00:06:02,100]: So for instance I do believe he wants help from Canada and Mexico on border controls

[00:06:06,619]: And indeed we’ve seen the Canadians and the Mexicans jump on that and indeed stopping not just illegal immigration across America’s huge borders but also drug smuggling and all the rest of it

[00:06:18,940]: We’ve seen the way he’s pushed around the Colombians

[00:06:21,100]: You know he likes pushing around the EU on many fronts not least when it comes to war in Ukraine not least when it comes to defense spending but also when it comes to trade

[00:06:29,500]: Of course the EU is a protectionist bloc

[00:06:31,660]: I mean let’s just be completely clear about that

[00:06:33,880]: He wants the EU to drop some trade barriers

[00:06:35,959]: So maybe he’s messing with the EU threatening tariffs there and indeed on the UK because he wants us to lower our tariff barriers and then he can take away his tariff barriers

[00:06:44,019]: So it may be a bargaining ploy

[00:06:46,540]: All that is I think if not legitimate there’s some kind of rationale and justification for it if you are the biggest economy in the world

[00:06:54,600]: But while you can push around the Canadians the Mexicans the Europeans and even the Brits if you fancy it for a bit not so much that you don’t get to visit the king but because he likes that you can’t push around the Chinese

[00:07:08,239]: And he has put tariffs on China 20 percent now with the threat of them going much higher and already immediately China have reciprocated

[00:07:17,980]: The rhetoric coming out of China which we’re barely focusing attention on because everyone’s wetting their pants so much about Trump and of course everyone’s rightly focused on Russia Ukraine and what’s going on in the Middle East

[00:07:29,220]: But the rhetoric coming out of China is unlike anything I’ve ever seen in 20 years and more of watching China

[00:07:35,940]: It is literally if the Americans want some kind of war a trade war or at least any other kind of war the Chinese will fight

[00:07:44,279]: So my concern is that while you may be able to play tariff games with the Europeans and the Mexicans and the Canadians you can’t play tariff games with the Chinese because they don’t want to lose face

[00:07:55,859]: They don’t want to be pushed around by the Americans

[00:07:57,959]: And the Chinese you know it’s in their swagger now their economic dominance in so many fields be it rare earths be it AIs in their threatening of Taiwan which of course is the global hub of semiconductor manufacturing semiconductors being pretty much as important now when it They are the oil and gas of the digital world

[00:08:23,359]: And that’s before we get to AI then their importance rockets even more

[00:08:27,160]: The Chinese are sick and tired of everyone assuming always that America is top dog

[00:08:32,659]: And my concern is it’s all the art of the deal and it’s all the Donald doing his thing and causing chaos so he can get his own way

[00:08:41,020]: But if you mess with China in the way he is then you could do irreparable damage not just to global financial markets and global commerce and global trade relations

[00:08:50,840]: You could spark military conflagration

[00:08:54,520]: That’s my concern

[00:08:57,039]: What do you mean by military conflagration

[00:08:59,960]: Let’s drill down in

[00:09:00,900]: I’m talking about China wanting to save face to the extent that they move against Taiwan

[00:09:07,119]: That’s what I’m talking about

[00:09:08,580]: And I’m not alone in thinking that a lot of a lot of security services people think that as well

[00:09:13,760]: So you think that by Trump’s posturing and talking and talking about raising tariffs even he has raised tariffs on China and China have reciprocated

[00:09:23,640]: But if they’re real they’re on now

[00:09:26,280]: But the possibility of him raising them even more would actually trigger them

[00:09:30,659]: And how likely do you think that is

[00:09:32,960]: I don’t think it’s you know the most likely outcome by any means

[00:09:36,640]: I don’t think it’s even it’s not probable but I do think it’s a danger

[00:09:42,219]: It’s a lot more of a danger than it was you know a couple of weeks ago

[00:09:46,580]: And you know he can as I say he can bob and weave and bait and switch and bait and switch again with the Western world and his near neighbors

[00:09:57,179]: But you can’t really do that with China

[00:09:59,280]: They don’t understand that kind of statecraft and they don’t want to be seen as someone else’s plaything at this point

[00:10:05,580]: Under some definitions now China is the biggest economy in the world

[00:10:08,599]: That’s the reality

[00:10:10,080]: China is obviously at the center of this grouping which is often derided in the West but actually is of supreme geopolitical importance

[00:10:18,859]: The so called BRIC economies which of course isn’t just Brazil Russia India China South Africa anymore

[00:10:23,380]: It’s got the UAE’s in there

[00:10:25,119]: A bunch of other major economies are now informal parts of that grouping

[00:10:29,059]: Just the original BRIC members their economy combined is now bigger than the G7 under various definitions

[00:10:36,039]: You know they’ve got stonking amounts of currency reserves

[00:10:40,640]: They’re much much less indebted than the Western world

[00:10:43,320]: You know to say all this isn’t to be some kind of anti Western nutter I’m not anti Western

[00:10:48,820]: You know I’m English and Irish Frances

[00:10:52,919]: I’m just being a rational analyst because I don’t see too much rational analysis of what’s actually happening

[00:10:59,979]: And you know I do agree to some extent with the truism so often trotted out at dinner parties that Trump should be taken seriously but not literally up to a point

[00:11:15,059]: And I think Trump 2 0 is now much much more belligerent than Trump 1 0

[00:11:21,359]: He’s much more confident

[00:11:22,760]: He feels that he’s got the deep state in America under control

[00:11:25,719]: He feels he’s got the Democrats and their kind of warfare if you like trying to remove him

[00:11:31,340]: Well we’ll see about that under control

[00:11:34,159]: And he knows this is his last chance his last crack of the whip

[00:11:38,900]: So I think his kind of business wheeling and dealing and gunslinging I think politics needs a bit of that to some extent a bit less nonsense in politics a bit more economic with what Doge is doing and so on

[00:11:57,979]: But I think his tariff policies are incredibly dangerous unless they really are false

[00:12:05,020]: And even if they are false even if it is a ploy a wheeze then the Chinese aren’t going to take it like that because they’re not going to want to be pushed around

[00:12:12,039]: And how much of you do you think this is because of his experiences dealing with the Chinese during Covid with the fact that they were to put it mildly opaque when it came to the And him thinking to himself right well this is payback

[00:12:29,219]: I think everyone was opaque when it came to where the virus actually came from with some honourable exceptions including myself and one or two other British journalists

[00:12:39,859]: You know I talked to we talked to Sir Richard Dearlove the head of British intelligence in mid 2020 who said Covid was an engineered escapee i e non zoonotic i e made in a lab and escaped by accident

[00:12:54,500]: The Chinese didn’t deliberately release it of course because their economy was hammered by Covid too

[00:13:01,299]: And that wasn’t taken seriously at the time

[00:13:03,260]: And it wasn’t taken seriously because Trump had also suggested it because he was also talking to people in security services

[00:13:10,479]: And now it’s the conventional wisdom

[00:13:12,619]: You know the Western establishment has all but accepted it in that they don’t knock people down who now say it

[00:13:19,739]: But when it comes to is that why Trump’s doing this against the Chinese

[00:13:23,460]: No he’s doing this against the Chinese because the Chinese are you know a major economic power that on some definitions is now more powerful than the US

[00:13:33,280]: And of course there’s a massive trade deficit with China

[00:13:37,219]: The Chinese there are more Chinese exporters that need America than American exporters that need China by the way

[00:13:43,359]: And he feels he can get leverage and he feels he can improve the deal

[00:13:46,960]: You know the sort of MAGA T shirts now say you know you must pay for the privilege of access to the American market

[00:13:54,559]: And there’s some logic in that you know it’s still the biggest most valuable market in the world under most headings though of course many other markets have many more people

[00:14:05,719]: Having said that I think if he pushes China too hard then he’ll find that you know the normal rules don’t apply

[00:14:13,299]: The normal rules that he’s used to in the US in Europe you have a spat but then you sort of kiss and make up you know you’re dealing with a different psyche in China and you’re dealing with a power in China that’s been waiting for a long time to assert its dominance

[00:14:29,940]: And they may feel that this is the time to do so

[00:14:34,099]: And I don’t want to test that hypothesis because if China do feel that that’s going to send the world into a whole new sphere of geopolitical pain

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[00:16:14,080]: And what would you say Liam to those people who go look what Covid showed us is that we can’t rely on China

[00:16:20,739]: China will act within its own interests

[00:16:23,039]: We’re too reliant on the Chinese economy

[00:16:25,640]: We need to prioritize American made goods

[00:16:29,119]: We need to prioritize infrastructure in America

[00:16:32,380]: We need to prioritize America first because if we look at the way things are going it’s going to become more and more antagonistic between these two countries

[00:16:43,359]: And as a result of that we need to prioritize America

[00:16:47,539]: Well if we spool back you know the overwhelming likelihood is is that Covid escaped from a lab that was actually funded by Western powers not least the British the French the Americans

[00:17:00,340]: You know we were using a Chinese facility because the research into so called gain off functions isn’t allowed in this part of the world

[00:17:07,500]: So we ship but you know scientists do understand there’s some merit in it because you can use it to find vaccines and other

[00:17:19,186]: behavioural traits of viruses though of course that research is dangerous

[00:17:22,906]: So it was being done in China for that reason

[00:17:25,146]: So I don’t think we can say we can’t trust the Chinese because that happened because we were funding them frankly

[00:17:31,926]: But I think your broader point is correct Francis

[00:17:36,086]: I do think there’s a growing sense that we need to as geopolitics gets more fraught and it’s not just the Chinese thing of course it’s the Middle East and Russia and the West and so on

[00:17:47,806]: You know the Red Sea is currently blocked to all intents and purposes

[00:17:51,286]: One of the major trade routes of the world quarter of the world’s oil goes through the Straits of Hormuz every day

[00:17:58,266]: You know between Oman and Iran and obviously relations with Iran are very very fraught as the geopolitical tensions crank up

[00:18:04,586]: I think in general the dangers with China now really coming into focus as the principal danger for the West are coming in to view

[00:18:14,326]: I mean for instance I think that’s one reason why Trump’s been more emollient to Russia because he is really scared about Russia and China getting very close

[00:18:23,326]: That’s the biggest economic synergy in the world right

[00:18:25,806]: Between the world what will soon be the world’s biggest oil importer and the world’s biggest energy exporter

[00:18:33,926]: Massive explosion of trade between Russia and China

[00:18:36,806]: I mean when Constantine was living under the Soviet Union he’ll tell you Russia and China were mortal enemies

[00:18:42,946]: I mean when when I lived in post communist Russia you know kids are still learning nursery rhymes in the playground that were all about the Chinese are going to come and take us over

[00:18:52,386]: But now Russia and China have had a sort of 10 year loving you know as the Western Russia have fallen out since Georgia then Medan Ukraine

[00:19:01,306]: Then of course the war in Donetsk 2015 onwards which we don’t talk about

[00:19:06,586]: Then of course Putin’s illegal invasion of Ukraine

[00:19:09,186]: Then Russia and China just got closer and closer

[00:19:11,886]: And the Russians have been building oil and gas pipelines facing east

[00:19:14,986]: Right

[00:19:15,566]: East Siberia Pacific Ocean Pipeline Power of Siberia Pipeline

[00:19:19,666]: That’s an oil pipeline a gas pipeline

[00:19:21,346]: They’ve got another big pipeline from the Amalgamate Peninsula in the Arctic

[00:19:25,406]: You know a Russian energy fields that only go to Europe at the moment

[00:19:30,966]: That’s the only place the pipelines go

[00:19:33,046]: And now they’re building a pipeline literally across the Russian landmass all the way to China

[00:19:39,226]: A hugely ambitious pipeline precisely to get closer to China

[00:19:43,946]: And the White House is watching all this and Trump is watching all this

[00:19:46,986]: And he doesn’t want Russia and China getting close together or he wants to help to prise them apart by bringing Russia back at least some way towards the Western orbit

[00:19:55,366]: And that’s not what you hear about what’s going on with the the I mean let’s not call it the resolution because I don’t think this will be resolved for a long time in any permanent way

[00:20:03,786]: But that’s what’s going on with the you know ceasefire or approaches to ceasefire we’re seeing in terms of Russia Ukraine literally as we’re recording this interview is going on in Saudi Arabia

[00:20:15,006]: Right

[00:20:15,526]: But I think that’s part of Trump’s big game plan when it comes to Russia Ukraine is is trying to re isolate China because Russia and China together as Kissinger warned us the three the triangle of great America Russia China

[00:20:29,726]: Kissinger always warned Western thinkers anyone that would listen you really don’t want to be the one left alone

[00:20:35,686]: Yeah

[00:20:36,206]: And so just so just to finish that thought

[00:20:38,826]: So really

[00:20:42,026]: It’s Trump’s priority is Russia within Russia Ukraine and those negotiations if we look at it with cold hard devoid of any type of emotion

[00:20:54,626]: He wants the Nobel Peace Prize

[00:20:55,846]: Right

[00:20:56,086]: I mean can you imagine the Democrats are just going to you know they’re going to have a fit with their leg up as my mom would say if if their nemesis Trump wins the Nobel Peace Prize

[00:21:06,526]: But that’s what he wants to do

[00:21:08,686]: So he wants to bring some kind of peace

[00:21:11,186]: He wants a really good deal for you know the vast array of American business interests that have been sniffing about around Ukraine

[00:21:18,946]: You know since the Soviet Union collapsed

[00:21:21,126]: I know that from spending a lot of time before the Soviet Union back in the day

[00:21:25,066]: You know Ukraine is rich in so many ways not just minerals but agricultural ability you know tech brilliance

[00:21:32,646]: I mean Ukraine is an incredibly wealthy country

[00:21:35,106]: But unfortunately and I say this with huge regrets it’s a country very close to my heart

[00:21:40,306]: It’s hopelessly corrupt

[00:21:42,286]: A lot more corrupt in my experience than Russia

[00:21:44,826]: I mean some some viewers may contest that but that’s certainly

[00:21:48,206]: I would contest that because I would say in Russia the corruption has been nationalized

[00:21:52,366]: That’s the difference

[00:21:54,306]: All of Eastern Europe is basically corrupt

[00:21:56,106]: And the choice is either you have corrupt oligarchs or you have one guy at the top and his team who are all corrupt

[00:22:02,126]: I think it’s a long conversation

[00:22:04,986]: But I think for outside business interests in Ukraine the corruption is so unorganized

[00:22:12,746]: There’s no way to navigate it

[00:22:14,586]: It’s no way to navigate it

[00:22:16,146]: The corruption in lots of other parts of the former Soviet Union is very organized is more organized and more rational

[00:22:21,106]: And you’re not going to put it on a spreadsheet but you can navigate it with sophisticated players

[00:22:25,906]: I would say in Russia you know who to give the bribe to

[00:22:28,886]: In Ukraine you could give someone a bribe but then it turns out they have no power to help you

[00:22:32,926]: That’s sort of how it works

[00:22:34,166]: But the big picture Francis just to finish off this section is Trump wants many things out of the relationship his relationship with the Russia Ukraine war

[00:22:44,846]: Above all he wants to be seen as the good guy who does the deal and the Chinese not doing the deal because for many months it looked as if the Chinese were going to come in and sue for peace in Russia Ukraine

[00:22:55,446]: And the fact that it’s the Americans leading the global news bulletins on this is exactly what Trump wants

[00:23:01,666]: And Liam we weren’t going to talk about Russia Ukraine but since you brought it up something I want to ask you is one of the concerns of mine is there seems to be for the reasons I think partly that you’ve just articulated a very short termist approach to attempting to get a settlement there which I understand after three years of brutal fighting we want the fighting to stop

[00:23:25,166]: Well some people do

[00:23:26,426]: A lot of people wanted to carry on apparently

[00:23:28,286]: Well I think that’s probably slightly a straw man in the sense that I think a lot of people want the right deal

[00:23:36,286]: And they’re prepared to continue fighting to the extent that that might contribute

[00:23:41,226]: I think a lot of people are naive and idealistic and far less educated than you about this issue

[00:23:46,606]: And so they think well rah rah rah Ukraine flag in bio that’s going to solve the problem

[00:23:51,306]: But if we’re talking about serious people I think everybody recognises that Ukrainians did their best very courageously

[00:23:57,266]: We gave them not enough support in my opinion but whatever we were prepared

[00:24:02,086]: Ultimately that has ended up with us in a stalemate more or less where we are

[00:24:06,306]: Right

[00:24:06,546]: So now it’s time to have peace

[00:24:09,506]: The issue that I think is of great concern is that number one if we don’t get a deal that has permanent security for Ukraine this will happen again number one

[00:24:19,746]: So we’re going to be back in square one

[00:24:22,006]: Number two and this I think is even more concerning particularly with a lot of people who say they’re anti war

[00:24:27,686]: And they say the reason for that is they’re trying to avoid nuclear disaster

[00:24:31,666]: Well what happens when all the small countries that have powerful enemies look around and go well look America has been very clear

[00:24:39,486]: They’re no longer the world’s policeman

[00:24:40,966]: They’re stepping back

[00:24:42,366]: They’re not going to protect you

[00:24:43,586]: They’re not going to step in and say this is wrong

[00:24:46,346]: They’re not going to defend you

[00:24:48,606]: Well how do you defend yourself when there’s no police

[00:24:50,906]: You have to get the best weapons you can

[00:24:52,886]: So there’s a risk of nuclear proliferation in that situation isn’t there

[00:24:56,986]: I don’t think there’s a lot in there Francis

[00:25:00,426]: There’s a whole hour of discussion

[00:25:01,886]: This is Francis

[00:25:02,766]: He’s the Venezuelan one

[00:25:05,346]: Yeah it’s confusing

[00:25:07,146]: You look alike you two

[00:25:08,546]: Yeah all foreigners look the same

[00:25:10,166]: We know that

[00:25:11,546]: We know your kind mate

[00:25:15,546]: Look it’s the first thing to say it’s a tragedy that we didn’t go with the Minsk protocols because the Minsk protocols would have left Donetsk that eastern part of Russia that eastern part of what is now Russian occupied territory you know formerly Ukrainian territory that would have stayed within Ukraine

[00:25:33,206]: But that area would have had more autonomy

[00:25:35,606]: And crucially it would have had a say in any future referendum in Ukraine on NATO membership

[00:25:42,206]: They would have had to have a majority as well

[00:25:44,266]: You know the French the Germans the Russians the Ukrainians agreed on Minsk which would have led to peace

[00:25:50,606]: But then suddenly the Ukrainians didn’t agree

[00:25:54,806]: Historians will speculate about why that was

[00:25:58,706]: But I think that would have been the best outcome retaining the territorial integrity of Ukraine

[00:26:03,646]: Now of course as we say we’ve had a million dead soldiers and civilians on on both sides of course the overwhelming majority of the civilians within Ukrainian territory

[00:26:15,366]: Tragically it strikes me that given the losses on the Russian side Russia is not going to give up that territory that it’s annexed

[00:26:25,346]: Yeah

[00:26:25,346]: So what is a good deal for Ukraine

[00:26:27,306]: A good deal for Ukraine is that it’s existing you know effective borders given where the war currently is

[00:26:34,746]: They’re the ones that are guaranteed

[00:26:36,466]: I think that’s a good outcome for Ukraine and some kind of you know decent revenue sharing on a mineral deal because Ukraine itself hasn’t got the wherewithal in the capital to exploit those minerals

[00:26:48,446]: So let’s hope they get some kind of deal there which doesn’t you know completely squander all that wealth and spirit it away overseas

[00:26:58,106]: Some of that wealth actually goes back into Ukrainian infrastructure nation building and all the rest of it

[00:27:04,806]: But it strikes me that we are now in a situation where we’ve got this emerging rift between Europe and America and Trump is going to use that to crank up defence spending in America

[00:27:21,726]: And indeed the Europeans are going to use that to crank up defence spending in Europe particularly the European Union

[00:27:28,086]: And this really worries me Konstantin

[00:27:30,306]: It’s all very well for politicians and others to beat their chest and say yeah we’re going to just take defence spending from 1 of GDP as it is in many big European countries big EU countries and we’re going to make it 4 or 5 of GDP

[00:27:42,706]: You know we had quantitative easing lots of money printing to stimulate the economy over the last decade

[00:27:49,206]: And now we’re going to use some kind of Keynesian war machine building big borrowing and spending to generate economic growth

[00:27:57,766]: I really worry about that

[00:27:59,586]: And I’m sorry to sound like some kind of you know financial nerd here but this is just how it is

[00:28:05,106]: When Germany said it was going to take off the debt break it was going to massively boost its borrowing in order to ramp up defence spending

[00:28:12,986]: You know the yield on German bonds absolutely spiked up

[00:28:18,406]: That’s what the markets charged Germany to borrow

[00:28:21,126]: And Germany is easily the most credit worthy nation across the European Union

[00:28:24,986]: And indeed it bankrolls much of the rest of the European Union through various dark accounts something called Target 2 which some of your viewers and listeners will be familiar with sort of underground plumbing of the European Central Bank and the way countries within the Eurozone help to support one another

[00:28:43,366]: Can Europe really afford this without causing another sort of financial collapse like we saw in 2010 11 the euro itself coming in under threat

[00:28:54,226]: And that may sound that may sound hyperbole but I really don’t think it is if you look at where financial markets are because they know if the big European powers borrow and spend and they spend most of that on defence well they’re basically creating bits of metal that sit in a warehouse you know hopefully never to be deployed

[00:29:14,106]: That is not a productive use of borrowing

[00:29:18,026]: It’s literally like borrowing money off capital markets when you can’t afford to borrow it when you’re already massively indebted and spending it on employing people to dig holes and fill them up again

[00:29:29,746]: Well this brings us on to the British economy which is something that’s not going to lead to the growth that the markets want to see to justify the borrowing

[00:29:35,206]: I think that’s certainly true

[00:29:37,066]: I suppose the question that I was going to ask you about the British economy but I think it applies across Europe is is there a possibility that because of the hard reality we’ve been living in cloud cuckoo land for quite some time I think

[00:29:49,166]: Fiscally yeah

[00:29:49,786]: In every way actually culturally as well

[00:29:51,746]: We’ve believed all sorts of things that aren’t true about men being able to be women and all sorts

[00:29:56,766]: I agree

[00:29:57,206]: We’ve been living in cloud cuckoo land

[00:29:59,266]: Is there some hope that what happens is I mean net zero is a good example of this right

[00:30:04,826]: It’s another cloud cuckoo land policy right

[00:30:07,246]: That because of the harsh reality of the world we now live in where those luxury beliefs are no longer maintainable we actually start

[00:30:15,026]: I mean I see the Labour Party announcing that they’re going to reform the benefit system that it’s too bloated apparently suddenly and there’s too much waste and people are trapped in the benefit system as we had Fraser Nelson in this very room talking about only a couple of weeks ago

[00:30:29,706]: Is there some hope that we wake up from this slumber and go actually we can’t afford to have a military and net zero

[00:30:38,526]: Actually we can’t afford to have bloated social welfare systems like we do in Europe and defend ourselves without the American protection umbrella

[00:30:45,706]: Is there hope that this is a big wake up call for all of us here in Europe and we actually start to go for a productive economy to take the handbrake off ourselves to take the noose off our neck frankly with things like net zero

[00:30:58,046]: Well one silver lining in the sort of storm clouds of geopolitics that seem to be looming over us these days is that it may lead to some more realism

[00:31:10,806]: But in my experience of politics and economics realism only really hits when you have a proper crisis because you can see all the trends clearly that you’ve just summarised Constantine and I can see them and Francis can see them and an objective 10 year old can see them

[00:31:32,106]: But our political leaders can’t

[00:31:33,406]: A lot of the political and media class cannot see them because to see them would be to admit that they’ve been wrong about everything they’ve said for the last 20 years

[00:31:42,186]: And it’s offensive to them that even we are listing these issues that you are talking about

[00:31:48,606]: So my concern for many many years has been on the fiscal side as well as all those other cultural issues that you talk about

[00:31:56,306]: I share your concerns on those but I’ve been particularly focused on the fiscal side

[00:32:00,326]: And I do worry you know think about it

[00:32:02,106]: When Blair came in in 97 you know British government debt was 40 50 odd percent of GDP

[00:32:09,286]: It’s now 100 of GDP

[00:32:11,926]: We’re spending in this country in the UK where we’re all based of course we’re spending 10 to 15 billion pounds a month servicing our debt right

[00:32:21,706]: We’re spending more on debt service a year than we’re spending on the whole of education right

[00:32:28,226]: Schools universities higher education further education vocational education

[00:32:32,606]: Think of the morality of that

[00:32:34,186]: So we’re spending more on servicing our inability of our generation to not be able to spend within our means than we are on equipping the next generation to deal with the debt that we are leaving them

[00:32:47,446]: And this is radicalising politics

[00:32:49,626]: And I was sitting next to you know in my life I often end up talking lots to people in the Treasury people in the Bank of England real kind of establishment straight dealing types people I was at university with used to be in academia with and so on

[00:33:06,066]: And I was sitting with a guy very very senior in the Treasury

[00:33:08,966]: He says oh the thing is Liam no one wants you know the country doesn’t want this austerity

[00:33:13,026]: It’s never going to work

[00:33:14,326]: Because we were arguing about austerity because I was saying under George Osborne from 2010 to 2019 under Osborne and Cameron it was the years of austerity

[00:33:23,526]: And during those years of austerity the national debt went from you know 50 of GDP to 80 of GDP

[00:33:30,466]: So where was the austerity

[00:33:31,846]: I’m not saying that certain budgets weren’t squeezed and certain people didn’t suffer but the state got a lot bigger and we employed you know hundreds of thousands of more civil servants

[00:33:41,946]: Well let me interject one thing on that because it’s very important that for people listening and watching this that we get this

[00:33:48,906]: Austerity or the attempt to reduce our spending is never going to be about simply reducing things that are unnecessary

[00:33:55,746]: Some of those things that we’re going to have to get rid of are things that we like things that are good

[00:33:59,626]: But in the same way that if you have someone for some reason your income halves you’re going to have to let go of things that are unnecessary

[00:34:07,006]: You have to prioritise

[00:34:07,386]: It’s about being a grown up you know

[00:34:09,206]: Economics is a study of scarce resources and how you allocate them which is why you know just if you’re a sort of card carrying you know economist who can add up you’re called right wing because you’re just saying no you can’t actually do that

[00:34:22,406]: Oh you must be evil then because we can’t

[00:34:24,066]: No because we can’t actually afford it at the moment

[00:34:26,226]: But if we do this and we do this we invest this then we can afford it

[00:34:30,026]: So what did this guy say

[00:34:31,186]: So this Treasury guy said oh no one wants austerity and it’s never going to get through

[00:34:35,706]: And I said well you say that my friend I won’t embarrass him by naming him

[00:34:40,526]: But you know I remember 1976

[00:34:43,206]: I remember when the UK went cap in hand to the IMF

[00:34:46,166]: It was our economic suites you know we were literally bailed out by the Americans

[00:34:49,986]: It was the final slipping of the mask that the UK is no longer a world class economy

[00:34:55,646]: Actually it’s bloated

[00:34:56,646]: It’s got all these useless nationalised industries

[00:34:58,646]: It’s massively unionised very sclerotic place

[00:35:03,146]: And it was that crisis and the subsequent political crises of 78 79 the winter discontent that led to a real change

[00:35:13,386]: And Mrs Thatcher was brought in a wave of popularity to sort it out be a grown up

[00:35:19,686]: And people forget after the 2008 nine financial crisis you know the Tories were kind of reelected with the Lib Dems in coalition

[00:35:28,886]: And even the Lib Dems said yes we’ve got to do this

[00:35:31,466]: Yes we’ve got to be more grown up and we’ve got to spend less or increase the rate of spending decrease the rate of spending in order to stop financial markets blowing the country up

[00:35:43,546]: You know there are people in the Labour Party in Parliament who literally say to me things like oh can’t we just abolish the debt markets

[00:35:51,466]: I mean just insane

[00:35:53,146]: That’s where the level of understanding is

[00:35:56,126]: You know there are people in the cabinet now who argue with me for many years about why we should do quantitative easing for the people’s QE

[00:36:04,106]: Let’s just print loads of money and give it to people

[00:36:06,586]: These are people in the cabinet as I speak

[00:36:09,218]: Oh yeah because it worked so well in Argentina and Zimbabwe and the Roman Empire collapsed because of money printing effectively

[00:36:17,658]: But what you’re saying is that we’re being led by people who are fiscally and economically delusional

[00:36:23,998]: There is a huge amount of fiscal and economic delusion not just at the top of British politics but across almost the entirety of the British media class in my experience

[00:36:36,598]: So the question then is how close are we to going broke

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[00:37:57,958]: How close are we to going broke

[00:38:00,178]: Well it depends

[00:38:01,398]: It’s all in our hands

[00:38:02,658]: But we are buffeted by global events because as a country we have a massive trade deficit

[00:38:09,598]: We are massively dependent on foreign creditors

[00:38:12,658]: And we are spending as I said 10 to 15 billion quid a month on debt interest

[00:38:18,918]: So and a lot of the money we’re borrowing each month right if you know how to read the national accounts a lot of the money we’re borrowing each month we’re borrowing to pay the interest on our existing debt

[00:38:31,058]: So we’re taking a second credit card to pay off the first one

[00:38:34,218]: And there’s a lot of that going on

[00:38:35,438]: Now you can fix this

[00:38:37,338]: You can fix this

[00:38:38,258]: You’re never going to fix it by massively massively cutting spending because in a democracy that’s just not going to happen

[00:38:45,358]: It’s just not going to happen

[00:38:46,558]: You have to indicate some control of spending in order to satisfy markets that you’re serious

[00:38:52,988]: But the real ways to get out the kind of fiscal jam that we’re in at the moment and much of the Western world is in particularly Western Europe America not so much is to grow

[00:39:02,558]: You grow your way out of your fiscal crisis

[00:39:06,078]: So your debt to GDP the debt you’re servicing and the shouldering as a share of your economy you make this one go down by making the economy bigger and growing

[00:39:16,198]: The trouble is that we have a media class in this country and we have a government and even the Tories were like this as well under Cameron Osborne for a lot of the time and under Boris actually

[00:39:31,658]: They want to try and solve the fiscal crisis by taxing more

[00:39:36,698]: If you try and solve a fiscal crisis by taxing more oh there’s a hole in the budget

[00:39:40,658]: We have to tax more to fill it

[00:39:42,138]: You just curtail the very growth that you need to rescue your economy from the fact that you’re in a fiscal crisis

[00:39:48,218]: And we’re now approaching a spring statement in the UK towards the end of March

[00:39:54,038]: My concern is that Rachel Reeves budget last October she didn’t even bring in tax increases then though she raised spending by 70 billion a year 40 billion of which was extra taxes

[00:40:10,258]: She indicated those tax rises will come in in April at the beginning of April right

[00:40:15,438]: But just the prospect of them has caused UK growth to stall

[00:40:20,778]: Our economy is now almost certainly in recession

[00:40:23,918]: Hiring is falling at its sharpest rate since the beginning of lockdown

[00:40:29,458]: Manufacturing is now 10 smaller than it was just a year ago because of partly net zero but also these tax rises prospective tax rises

[00:40:39,278]: My concern is Reeves our finance minister our chancellor as we call the finance minister in this country and Starmer and the Labour frontbench far far more left wing far far more ideological than Blair’s frontbench all of whom I knew well it’s my job

[00:40:54,258]: I was a political correspondent back in the day in the late 90s

[00:40:58,758]: My concern is that they are going to double down on the taxes and drive this economy off a cliff

[00:41:04,978]: That is my concern for ideological reasons

[00:41:08,278]: It’s in their bones that they think if there’s a fiscal hole you fill it with taxation

[00:41:13,838]: Taxation increases which are anyway justified because it leads to a fairer society

[00:41:18,898]: No you do not lead to a fairer society by crushing growth and crushing hiring and crushing enterprise

[00:41:26,438]: You lower the living standards of the whole economy including ordinary men and women trying to raise a family on not a big wage

[00:41:34,498]: So you said the words driving the economy off a cliff

[00:41:39,078]: In real world terms what does that mean particularly for the average man and woman on the street

[00:41:43,998]: It means Francis what we’re feeling at the moment

[00:41:46,558]: We all live in the UK

[00:41:48,578]: London’s a bit of a bubble

[00:41:50,118]: I was recently in the centre of Manchester

[00:41:52,858]: I was recently up in the northeast in the centre of Newcastle

[00:41:59,838]: In the centres there’s still a lot of buzz

[00:42:02,538]: People are going to restaurants but in the small towns and the small cities the regional centres the regional cities there is a feeling of economic slowdown

[00:42:13,798]: High streets are shuttering faster even than they were

[00:42:19,238]: Hiring is falling

[00:42:20,498]: There are these very authoritative surveys called Purchasing Manager Index Surveys

[00:42:24,738]: They’re conducted all over the world

[00:42:26,178]: They’re conducted every month

[00:42:27,898]: Surveys of business leaders what they think is going on and their optimism

[00:42:32,678]: And a Purchasing Manager Index reading of 50 indicates the economy is going to stay where it is

[00:42:36,718]: Above 50 indicates growth

[00:42:38,658]: There are ways of predicting where the GDP numbers are going to be when the GDP numbers come out three or four months after the event

[00:42:45,218]: And the PMIs in this country and indeed across Western Europe are pointing down quite heavily particularly again for manufacturing

[00:42:52,358]: Again in my view in part because of the net zero policies which maybe we’ll come on to

[00:42:58,038]: So I think the UK and I say this with regret is probably already in recession because we had zero economic growth in the fourth quarter of 2024

[00:43:10,078]: I think that’s going to be revised down to negative economic growth

[00:43:13,158]: They were preliminary numbers

[00:43:14,658]: And we’re probably in a situation of negative economic growth economic contraction in the first quarter of 2025 as well

[00:43:22,038]: Two consecutive contraction quarters

[00:43:25,298]: That’s a recession

[00:43:25,938]: And when you have a recession Francis once that kind of technical thing takes place it then compounds itself

[00:43:33,678]: Because everyone thinks oh my god we’re in recession

[00:43:36,258]: And then people who are on the edge I might do that investment

[00:43:39,658]: I might not

[00:43:40,398]: I might open that factory

[00:43:41,418]: I might not

[00:43:42,038]: I might take on that extra pair of hands on my small building site or my nail bar my little business of course

[00:43:47,038]: We have so many small and medium sized enterprises in this country

[00:43:49,658]: They’re very sensitive to the economic climate

[00:43:52,358]: They employ 2 thirds of our people

[00:43:53,998]: They generate at least half our growth

[00:43:56,438]: A lot of those SMEs they are on a knife edge

[00:43:59,458]: Is the economy going to recover

[00:44:00,658]: Or is it really going to go down

[00:44:02,338]: And for me a budget at the end of March which increases taxes even more will be the kiss of death for a lot of those entrepreneurs in the sense that they will think you know what

[00:44:12,458]: I’m just going to not do it

[00:44:13,818]: I’m just going to shut up shop

[00:44:15,798]: I’m going to hunker down keep what I got

[00:44:18,658]: And enterprise goes out the window

[00:44:20,898]: That’s what it would look like

[00:44:22,998]: Liam it seems to me you’ve painted a very grim yet accurate picture of our economy which leaves me scratching my head when I go well why are we pursuing net zero

[00:44:32,358]: Isn’t that just a fancy name for deindustrialization

[00:44:37,298]: Well a lot of the trade unions in the UK think that

[00:44:39,518]: There’s a huge rift now between this Labour government and the trade union movement because the trade union movement can see that pursuing net zero the way we are as zealously as we are is massively hollowing out our industry

[00:44:54,258]: We’ve just closed Britain’s largest refinery up in Grangemouth

[00:44:58,878]: We’ve just shut down our last two blast furnaces in Wales at Port Talbot which of course make virgin steel which is very important for defense applications other construction applications

[00:45:10,718]: It’s really hard to get virgin steel in the UK because the Red Sea’s closed because of Hootie rebels

[00:45:17,178]: It just seems madness to me

[00:45:18,898]: Look I’m all for a better environment and I’m all for moving away from fossil fuels in a way that isn’t economically ruinous

[00:45:25,458]: But I think the way we’re doing it is economically ruinous

[00:45:29,418]: And I think a lot of mainstream politicians now are waking up to that

[00:45:33,738]: Until very recently to even question net zero is to be you know you might You’re accused of slaying the firstborn

[00:45:44,638]: You’re accused of being Herod

[00:45:45,278]: You know it’s crazy

[00:45:46,458]: And just the use of the word denier I think is disgusting

[00:45:49,598]: Because of course Holocaust denial is a crazy thing and a disgusting thing

[00:45:54,038]: But that’s the phrase that it kind of tries to echo

[00:45:58,318]: You are that unreasonable

[00:45:59,918]: No

[00:46:00,438]: There are many many many scientists who they just don’t get airtime

[00:46:04,918]: Nobel winning scientists who really do question net zero the whole thing

[00:46:11,258]: I’m not here to do that

[00:46:12,918]: I’m here to say I do want a much cleaner environment

[00:46:15,458]: I do think it makes sense over a period of time to move away from fossil fuels

[00:46:20,758]: I do believe in renewable forms of energy being better for the world

[00:46:26,338]: I think wind is the least efficient

[00:46:29,218]: I believe in hydrogen

[00:46:30,618]: I think that’s a wonder fuel that we are deliberately suppressing

[00:46:36,238]: Vested interests who are making a huge amount of money out of renewables subsidies are deliberately dissing hydrogen as a viable option

[00:46:44,218]: You know JCB have just built an incredible internal combustion engine that runs on hydrogen the only emission of which is water

[00:46:54,538]: Right

[00:46:55,218]: And if you use renewable winds to do the electrolysis that generates the hydrogen in industrial quantities and then use that hydrogen and it emits water you have perpetual clean energy

[00:47:07,958]: Right

[00:47:08,558]: And that will really undermine the businesses of lots of people

[00:47:12,158]: That’s why it’s so little talked about

[00:47:14,418]: I believe in that

[00:47:15,458]: So I’m by no means not interested in this agenda

[00:47:19,958]: But what I would say is that unless this net zero agenda which was introduced in the UK and so many other countries with no debate it was put into law it was waved through parliament just a handful of MPs protested against it

[00:47:34,778]: Unless it starts delivering pretty soon for people in terms of cheaper energy bills and doing less damage to people who are least able to shoulder that economic damage then the political consensus behind it is going to be crushed

[00:47:49,438]: So take for instance electric vehicles

[00:47:53,558]: You know we have in the UK the most stringent electric vehicle introduction laws in Europe even more stringent than in the EU even though we’ve left the EU

[00:48:03,178]: And at the moment now I talk to lots of people in the car industry or they talk to me because they can’t get a hearing with many other journalists you know very senior people in the car industry

[00:48:13,668]: And they are now saying this is going to completely wreck Britain’s entire car industry which employs a million people right

[00:48:22,018]: And then 500 000 more in related industries often in parts of the country that don’t have many decent jobs right

[00:48:30,318]: You know the fact that we now have a situation where car makers in the UK 22 last year this year 28 of the cars they sell must be pure electric vehicles not hybrids pure electric vehicles

[00:48:43,398]: But guess what

[00:48:44,378]: The punters don’t want them

[00:48:45,818]: The punters don’t want them because the charging network is really ropey and really expensive

[00:48:50,618]: They don’t want them because the secondhand market for electric vehicles is awful

[00:48:54,918]: They don’t want them because in many cases they’re unreliable

[00:48:57,318]: So car makers can’t actually sell enough vehicles to get to 28

[00:49:02,238]: And under our rules in the UK insane they’re charged a fine of 15 000 pounds getting on for 20 000 US dollars per vehicle that is below that 28

[00:49:15,018]: So what are they doing

[00:49:16,138]: They’re rationing

[00:49:17,398]: They’re not making petrol and diesel vehicles ahead of the 2035 ban on new petrol and diesel vehicles which means the new petrol and diesel vehicles are going up in price

[00:49:27,338]: People can’t get them

[00:49:28,358]: And they’re laying off workers

[00:49:30,698]: So UK car production it went down 14 last year

[00:49:34,158]: In the first two months of this year it’s gone down another 14 from that much lower base

[00:49:38,878]: And the car companies are laying people off

[00:49:42,718]: BMW because of our electric vehicle rules imposed by Ed Miliband who is completely out of control and needs to be I think reined in

[00:49:51,438]: I think he’s actually dangerous with some of his policies at the moment

[00:49:57,298]: BMW are now not building the electric mini at Cowley in Oxford right

[00:50:04,958]: Cowley has been a center of car manufacturing for over 100 years

[00:50:10,638]: This is one of the most sophisticated car plants in Europe

[00:50:13,358]: And BMW are probably not going to come back

[00:50:16,138]: They’re not saying that now but they’re probably not going to come back

[00:50:18,878]: And look at the ban on drilling for new oil and gas in the North Sea

[00:50:24,758]: Again insane

[00:50:25,898]: Because what we’re doing instead France is even the Climate Change Committee which is our kind of in government think tank that has the legal rights to tell ministers what to do effectively even the Climate Change Committee says that by 2030 we’re going to still use oil and gas for 50 of our energy

[00:50:43,918]: It will actually be much higher

[00:50:44,838]: Even by 2050 it will be 25 of our energy

[00:50:47,158]: It will actually be much higher

[00:50:48,358]: So even the most woke green civil servants say we’re still going to need lots of oil and gas even if we hit net zero by 2050

[00:50:57,198]: So why not use our own oil and gas

[00:50:59,038]: Because if instead of using North Sea oil and gas by the way the North Sea oil complex employs about 300 000 people many of them unionized which is why the unions are upset

[00:51:08,678]: We are importing liquefied natural gas from Qatar and America on ships

[00:51:14,718]: That uses five times the carbon emissions

[00:51:17,618]: Because you’ve got to pump the gas right

[00:51:20,718]: You’ve got to liquefy it which is a very intensive energy intensive process

[00:51:24,718]: Stick it on a diesel ship

[00:51:26,118]: Go 3 000 miles across the Atlantic

[00:51:27,858]: Regasify it here which is a very energy intensive process

[00:51:31,598]: When we’ve got oil and gas in the North Sea to close that down just for ideological reasons because Labour wants to appeal to their trendy urban electorates who are very wealthy is madness

[00:51:46,058]: Because they are not only really now I think threatening the energy security of this country they are also hammering their traditional blue collar base that works in these industries

[00:51:58,418]: And that is why that blue collar base is increasingly looking for alternative political representation

[00:52:05,218]: And on that very subject Liam well done

[00:52:07,318]: See what I did there

[00:52:07,918]: The segue was beautiful

[00:52:10,998]: There was a party until very recently that was very clear about its opposition to net zero and lots of other things that that very blue collar base that you’re talking about feels very strongly about

[00:52:22,218]: And this was summed up perfectly by a friend of the show a friend of ours called Jeff Norkoi a great comedian who said

[00:52:28,478]: Who said how the

[00:52:29,558]: Great podcast

[00:52:30,378]: What most people think

[00:52:31,298]: Exactly

[00:52:31,738]: And what he said is on Twitter how the f is there a civil war in a party with five MPs

[00:52:36,218]: What the hell is going on in reform Liam

[00:52:39,018]: Thanks to today’s sponsor Venice

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[00:53:22,518]: And here’s the thing

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[00:53:35,318]: If you follow trigonometry for long enough you’ll know issues like this are close to our hearts

[00:53:41,118]: That’s why we’ve started using Venice AI today’s sponsor

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[00:54:35,098]: That link is venice ai slash trigonometry

[00:54:39,398]: And now back to the show

[00:54:42,387]: Reform what’s incredible and I’ll say this on your podcast because it’s not said often enough

[00:54:49,047]: Again you know I’ll be accused of being a fascist for just making this observation but in my experience the betting markets are much better predictions of what’s happening in politics and indeed lots of life than the polls and certainly the newspaper commentators

[00:55:05,047]: And for many months now reform have been favourites on many of the big betting sites to form the next government in this country

[00:55:13,887]: That is an astonishing fact given that this party barely existed just before the election in July 2024

[00:55:22,067]: It is of course led by Nigel Farage who has been on the scene of British politics for well over a decade under UKIP

[00:55:32,467]: One of his previous party incarnations

[00:55:35,667]: They won the European election in 2014 the first party to win a national election in the UK that wasn’t the Tories or Labour for over 100 years

[00:55:45,447]: So he’s an incredible economic he’s an incredible political communicator

[00:55:51,227]: And while a lot of people don’t like him a lot of people increasing numbers of people really like him and really like his party

[00:55:57,227]: But you know what

[00:55:59,267]: Because Nigel Farage knows that the key to reform getting into government isn’t going to the far reaches of the British electorate on the right

[00:56:11,467]: What he needs to do is he needs to convince people who were previously conservatives and people who were previously Labour to vote for him

[00:56:20,367]: He needs to convince them that he’s not racist that he’s not an extremist that he’s not a so called far right that he’s just a grown up

[00:56:28,827]: And that’s why he’s come to blows with another of the five MPs a guy called Rupert Lowe who’s not a politician

[00:56:36,547]: He’s a businessman

[00:56:37,467]: He used to be one of the owners of Southampton Football Club

[00:56:40,887]: He’s a very successful businessman

[00:56:42,667]: He liked Farage’s MP for a coastal seat in the east of England Great Yarmouth and Clacton respectively

[00:56:49,087]: Both seats with quite a lot of less well off people with respect to them quite economically marginalised

[00:56:55,747]: And let’s be clear Rupert Lowe is to the right of Nigel Farage particularly on immigration

[00:57:00,667]: Rupert Lowe wants to deport lots of people which is what AFD wants to do in Germany

[00:57:05,487]: And Nigel Farage thinks that’s a bit strong

[00:57:08,427]: That’s a bit strong for a mainstream political party in the UK

[00:57:12,767]: And that is what the essence of this distinct this rift between them is about

[00:57:18,227]: Is it

[00:57:18,747]: Because a lot of people will say it’s about ego

[00:57:21,347]: Oh no of course

[00:57:22,407]: No of course

[00:57:23,087]: Of course it’s about ego

[00:57:24,947]: But that is the hill they’ve decided to fight over

[00:57:28,807]: I mean policy and ego is all tied up in politics isn’t it

[00:57:32,147]: Sure

[00:57:32,407]: We’ve had both Rupert and Nigel on the show

[00:57:35,627]: I think the thing about deporting people I’m pretty sure Rupert wants to deport illegal immigrants

[00:57:40,527]: Yeah

[00:57:41,047]: So why is that an issue

[00:57:43,367]: Like don’t we all want illegal immigrants deported

[00:57:47,587]: I think a lot of people do but I think mainstream British politics isn’t capable of coping with that

[00:57:55,307]: Yeah I do

[00:57:56,027]: But isn’t that like I’m an immigrant

[00:57:57,587]: Yeah

[00:57:57,747]: I want illegal

[00:57:58,907]: I don’t think people should come here legally and then be allowed to stay

[00:58:02,527]: It doesn’t make any sense

[00:58:03,327]: It depends doesn’t it

[00:58:03,707]: It’s all about degrees isn’t it

[00:58:05,147]: Yeah

[00:58:05,387]: I think a lot of people you know if you’ve just arrived then I think it is increasingly becoming a mainstream thing to do what Australia did which is to have third you know third country processing and so on

[00:58:17,047]: I think there’s quite a lot of support among the solid majority for that

[00:58:19,867]: But I think the distinction between Nigel Farage and Rupert Lowe is you know when

[00:58:26,167]: Because under British rules if you’ve been here for five years you know you’re almost certain to get what we call leave to remain

[00:58:32,827]: You become normalised

[00:58:34,027]: And that’s the way we’ve been coping with the influx of illegal immigration

[00:58:39,047]: We’ve just been letting those people sit there and then eventually there’s some kind of amnesty in effect

[00:58:45,467]: And they have their papers normalised even though they came here illegally

[00:58:49,047]: And that’s why so many do

[00:58:50,427]: That’s the model isn’t it

[00:58:51,427]: That’s why they risk their lives doing this crazy thing of going across the busiest shipping lane in the world which is subject to all kinds of squalls and weather surges which is the English Channel

[00:59:01,367]: Right

[00:59:01,587]: It’s only 21 miles

[00:59:02,607]: But as we’ve seen lots of people have died

[00:59:04,727]: But Rupert is much much more adamant that people should be deported you know even if they’ve been here like 20 years

[00:59:12,347]: He hasn’t put a number on it

[00:59:13,847]: It’s all about adjectives and degrees and so on

[00:59:16,607]: But of course eventually it’s about ego

[00:59:18,847]: And everyone knows in politics that if you take on Nigel Farage he will find a way to beat you

[00:59:25,487]: He is the ultimate political street fighter

[00:59:28,627]: There are a lot of people in politics and parts of the media that are very law to him

[00:59:34,287]: I personally think Rupert Lowe is a decent man

[00:59:37,187]: I think he’s conducted himself very very well

[00:59:39,747]: I think he’s a very talented orator

[00:59:42,127]: I think it’s great

[00:59:42,927]: I think we’re getting you know talented business people giving up their time to come into politics

[00:59:48,307]: In many ways I applaud him

[00:59:49,827]: But I think he’s been a little bit naive thinking that the way to take on Nigel is to go to the papers and moan about Nigel

[00:59:57,907]: That is not the way to take on Nigel Farage

[01:00:00,727]: And in the end yes Rupert Lowe is popular on Twitter or X as we must now call it of But he doesn’t have nearly the following in the country that Farage does

[01:00:11,987]: Farage is a national figure because he’s been doing this for so long

[01:00:16,367]: Rupert Lowe is getting you know great feedback on X with a couple of hundred thousand followers

[01:00:21,507]: But you know if people walk down the street then you know with Rupert Lowe very few people are going to know who he is

[01:00:27,967]: Walk down the street with Nigel Farage as I’ve done many times we’ve been broadcast a lot together on GB News and elsewhere

[01:00:35,047]: I’ve known him for many many years as a journalist

[01:00:37,287]: You know walk down the street with Nigel Farage and you’ll be mobbed

[01:00:40,047]: And years ago years ago it would have been largely abuse

[01:00:44,987]: Now the majority in my experience the majority of people that come up to him they want a selfie with him

[01:00:50,747]: They want to shake his hand

[01:00:51,827]: Young people

[01:00:52,867]: He’s got this huge following on TikTok

[01:00:55,107]: He’s the only mainstream British politician that actually has used TikTok

[01:00:59,667]: And so with huge respect to Rupert Lowe I think he’s bitten off more than he can chew

[01:01:04,267]: It’s interesting you say that because the concern for a lot of people isn’t look I say this with all respect to both men

[01:01:11,327]: I don’t care about Nigel Farage

[01:01:13,167]: I don’t care about Rupert Lowe

[01:01:14,807]: I don’t care about reform

[01:01:16,327]: I don’t care about the Conservative Party

[01:01:18,007]: I don’t care about the Labour Party

[01:01:19,607]: I don’t care about the Lib Dems

[01:01:21,007]: I care about the country

[01:01:22,487]: And the concern for a lot of people the concern for a lot of people with this is the following

[01:01:27,907]: Forget about Rupert Lowe and Nigel Farage

[01:01:29,627]: If this is how Nigel runs a party I’m not saying this is my position by the way

[01:01:33,687]: I believe in strong leadership and I think people have to follow the leader as much as that’s possible as much as that’s possible

[01:01:40,787]: But the concern for a lot of people that I’m hearing is well if Nigel Farage can’t run a party of five MPs how is he going to run a party of 200 MPs

[01:01:49,167]: And if the moment anyone challenges the way things are done they get what Rupert’s had which by many people’s reckoning is unfair treatment being accused of things that you may or may not have done and also pretty nasty stuff

[01:02:03,827]: One of the things that people are putting out is he’s got early onset dementia

[01:02:07,787]: You know this is pretty low grade

[01:02:10,267]: You wouldn’t enjoy someone saying that about you or me or anyone else right

[01:02:14,027]: So the concern for people who don’t care about the personalities but care about the country is how is reform going to be a credible challenge to the two mainstream parties which they have a real shot of doing

[01:02:25,567]: Oh definitely

[01:02:25,827]: If they can’t keep five people on the same team

[01:02:29,447]: I agree with you

[01:02:30,327]: It’s pretty edifying

[01:02:31,447]: There’s you know a lot of people in the media a lot of professional political observers they’re pretty disappointed because reform has been going so well

[01:02:39,747]: They’ve been connecting with parts of the electorate they weren’t previously connecting with

[01:02:43,607]: And now they’re having this ridiculous Mexican standoff right

[01:02:49,027]: Having said that with huge respect I do think that’s a kind of bubble view which is uncharacteristic on this podcast because you guys are so good at getting out beyond the bubble

[01:02:58,907]: Yeah

[01:03:00,387]: Two or three percent of the country have even heard of Rupert Lowe

[01:03:03,447]: That’s the reality

[01:03:04,587]: That’s the reality

[01:03:05,267]: Now I’m not saying that among his supporters he hasn’t got at least some of the electricity that Nigel Farage has

[01:03:11,767]: He has

[01:03:12,507]: I’ve seen it

[01:03:13,007]: I’ve been you know as a journalist

[01:03:14,387]: I’m making a different point

[01:03:15,467]: As a journalist

[01:03:15,747]: I’ve been to reform rallies right

[01:03:17,707]: I understand

[01:03:18,127]: But most voters out there for them reform is Nigel Farage

[01:03:22,547]: And they’re going to vote for Nigel Farage anyway

[01:03:25,227]: Agreed

[01:03:25,447]: Agreed

[01:03:25,887]: However much the Westminster bubble

[01:03:27,327]: The Westminster bubble

[01:03:27,467]: Agreed

[01:03:28,347]: Throws at reform for being dysfunctional

[01:03:30,907]: But the argument is different

[01:03:31,807]: My argument is different which is as this thing carries on reform have less than four years now around four years until the next election

[01:03:38,927]: They’re going to have to have a party of 300 people some of whom are going to be the Rupert Lowe’s and et cetera

[01:03:47,447]: How is the concern for I think a lot of people who are paying attention yes I understand Nigel is huge in the country

[01:03:53,967]: He is undoubtedly

[01:03:55,147]: And Rupert isn’t understood

[01:03:56,527]: But how is a party that reacts this way to any challenge to the current structure going to manage that situation if they’re going to be a credible alternative

[01:04:05,847]: I think that’s the test

[01:04:07,527]: I think most voters don’t care about a rift

[01:04:11,387]: And obviously if Rupert Lowe continues to be a thorn in Farage’s side tries to set up another party or whatever then you know that will be a pain in Nigel Farage’s backside

[01:04:22,467]: But is the media going to carry on reporting it

[01:04:24,887]: Is it going to become an old story

[01:04:26,267]: We’ll see

[01:04:26,847]: It’s all it’s all to play for

[01:04:28,327]: You know Rupert Lowe may get a load of money behind him and he may cause a big noise and he may have some massive split in reform and a lot of the political establishment would love that to happen

[01:04:37,287]: And they’re waving the fans the flaming the fans of that and desperately trying to make it happen

[01:04:42,547]: But your fundamental point is absolutely correct though

[01:04:46,607]: They have to professionalize

[01:04:48,527]: And that is what I’m seeing they are trying to do to at least some extent

[01:04:52,727]: So they’ve brought in a young Sri Lankan chairman who’s a very successful business leader Zia Youssef

[01:05:00,407]: He you know he’s part of this row between Nigel and Rupert trying to get Rupert out for whatever internecine reason

[01:05:08,327]: But as well as doing that Zia Youssef and his team are doing a mass screening of candidates

[01:05:14,887]: They’re going to run candidates in each of the 650 constituencies

[01:05:17,747]: They’re taking premises in a lot of the constituencies building constituency offices

[01:05:21,087]: I’m seeing that in the part of the country where I live very much a Tory stronghold where reform are really putting down deep roots

[01:05:28,547]: There are lots of defections at the local level

[01:05:30,887]: And I would say you know I hold no candle for reform

[01:05:34,607]: Right

[01:05:34,747]: I’m not

[01:05:35,327]: I’ve never pinned my colour to any

[01:05:38,527]: I’ve never pinned my colours to any political party

[01:05:41,827]: It’s not really in my nature

[01:05:44,967]: But I would suggest that reform their five MPs

[01:05:49,167]: Yes they got five MPs only but they got 14 percent of the vote in July 2020 for the general election

[01:05:55,667]: The Lib Dems got 71 seats on 11 percent of our weird voting system

[01:06:01,887]: Reform have five MPs now

[01:06:03,867]: Maybe they’re going to have four if Rupert Lowe leaves

[01:06:05,327]: By the time of the next election in 2029 that’s when it is they’ll have 10 or 15

[01:06:09,987]: Because of defections and because of by elections by elections when MPs die or resign in between general elections

[01:06:18,147]: And in our system there’s a one off election in one constituency the whole political class focuses on for a week

[01:06:24,527]: So I think they are going to build their support in Parliament

[01:06:29,667]: I think they’re going to go from 10 to 15 MPs

[01:06:32,127]: Once they go to six MPs they get something what we call short money which is a Westminster convention

[01:06:37,167]: They get money to actually help them be an opposition party

[01:06:41,587]: They are screening candidates like crazy

[01:06:44,427]: I know that Zia and Nigel and Deputy Leader Richard Tice are absolutely focused on getting a candidates list that is shorn of quote the nutters because so many crazy people are attracted to new political parties

[01:06:58,767]: So let’s see

[01:06:59,907]: Now I still don’t think the political mainstream realizes what’s happening

[01:07:04,247]: They haven’t clocked the fact that on the betting markets reform are they’re not odds on but they’re favorites to form the next government

[01:07:12,347]: That is an incredible thing

[01:07:14,067]: And you know when we look what’s happening across Western Europe it isn’t unusual

[01:07:19,127]: AFD could easily win the 2029 election in Germany

[01:07:25,007]: They just came second doubling their vote

[01:07:26,967]: They’re being shut out by the SPD who just got their lowest vote ever and they’re still going to be in government if indeed Mertz of the CDU and the SPD can actually form some kind of coalition

[01:07:39,087]: I’m not sure that they will

[01:07:41,367]: We’ll see

[01:07:41,547]: But this is happening across Western Europe

[01:07:43,827]: I think the UK is slightly behind in our form of you know hard right party if you like is always going to be a bit more moderate than that because I think we are just generally a more moderate country than the French the Germans certainly than the Italians and the Spanish and the Greeks

[01:08:00,747]: Thank God for that

[01:08:01,827]: But I do think reform are coming and they’re coming hard

[01:08:05,587]: And I think these squalls and this internal war is because everyone can see crikey we could be in government and the prizes are coming into view

[01:08:15,227]: And so the venal politics and as you say the egos the clashes are getting more intense

[01:08:21,527]: That makes sense

[01:08:22,167]: And by the way I should say we did invite Rupert on the show but he wasn’t available to come on this week

[01:08:26,827]: Anyway we’ll ask you the last question

[01:08:28,807]: We’ll head over to Substack to ask you our supporters questions and then we’ll wrap up

[01:08:32,847]: Final question is always the same

[01:08:33,907]: What’s the one thing we’re not talking about that we really should be

[01:08:37,347]: Before Liam answers the final question at the end of the interview make sure you click the link in the description

[01:08:43,127]: Head on over to our Substack and you’ll be able to see this

[01:08:46,727]: Can the US increase GDP per capita through additional onshore investment to offset or outpace the inflationary pressure caused by tariffs

[01:08:54,627]: Could we be better off in practice if major continental regions had each maintained internal self sufficiency and traded mainly within themselves

[01:09:05,007]: I think we should be talking about what’s going on across mainstream Europe

[01:09:14,707]: We don’t do that enough in the UK

[01:09:19,527]: European mainland European journalists know a lot more and people about British politics than we do about their politics

[01:09:26,047]: I think it’s absolutely fascinating

[01:09:27,347]: I think the German election was absolutely fascinating

[01:09:30,727]: I’d like to see you know somebody who voted Leave I remain absolutely fascinated by continental European politics

[01:09:42,387]: I think it’s really really important

[01:09:44,247]: We’re so focused on the US you know understandably because they’re kind of our cousins in many ways

[01:09:48,967]: But I think the impact of European politics on British politics is just as important these days

[01:09:54,867]: And of course again despite the fact I voted Leave I’ll always point this out while America is our biggest trading partner we still trade a lot more with the European Union than we do with America

[01:10:04,287]: So I want to see us focusing more on what’s going on on mainland Europe

[01:10:09,007]: And Liam I’m delighted to say that after me badgering you for about two years you are starting a sub stack

[01:10:14,707]: And I think that’s fantastic because your economic analysis absolutely top notch

[01:10:19,507]: Anytime I’m doing any TV show I always call you up and steal your ideas and then say them in my own way

[01:10:27,507]: So I’m delighted that that’s now available

[01:10:29,827]: You’ve bounced around all sorts of different places but your economic commentary has always been right up there with the best of it

[01:10:35,507]: I’m super delighted you’ve got a sub stack

[01:10:37,567]: The link will be in the description of this episode for people to check it out

[01:10:40,487]: And it’ll be great for people to be able to access that directly

[01:10:44,127]: And head on over to sub stack where we ask Liam your questions including possibly ones about mainland Europe

[01:10:48,827]: See you there

[01:10:50,947]: Would getting people of different lines of work change things

[01:10:54,727]: And if so how do we get these to the top of the food chain

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