00:00Another earthquake this week in UK politics. Prime Minister Keir Starmer is facing renewed calls to resign after the election
00:06of Andy Burnham to Parliament.
00:07Burnham, the former mayor of Manchester, is expected to challenge Starmer as Labour Party leader, which would, of course, force
00:14him out of the job.
00:15Starmer has so far resisted calls to step down. Joining us now from London is James Wilcock, Bloomberg UK's politics
00:20reporter.
00:21James, great to speak with you and put this into some context for us here.
00:24So this was a thrumping, I think we could call it, a sizable victory that took place in this part
00:29of England.
00:31What's the path forward now? What should we be watching for next?
00:34I mean, that's such a good question. It is like I don't cover by-elections like this because it is
00:39totally unprecedented.
00:40You don't get a sitting government going into a special election, increasing its majority by 23 percent and then doing
00:49so on a pitch of let's get rid of the current leader.
00:52But that is effectively what Andy Burnham has done. This is where it gets messy, David.
00:57We don't know how Keir Starmer goes at this point.
01:02We are reporting this morning that 15 of his own cabinet ministers privately think it's inevitable that he will go.
01:08But he is publicly telling people that he wants to stay, that he wants to fight.
01:13And so broadly, there are three ways this goes out.
01:15Keir Starmer steps down, which seems unlikely, but it might happen.
01:19He might set a path out. There is a formal leadership challenge, which would be sort of extremely messy and
01:25difficult.
01:26Or there is some kind of form of contested leadership contest or even like a vote of confidence.
01:32We don't yet know. We are in kind of the calm before the storm at this point.
01:37You kind of answered my next question for me, but we have some sound from Starmer that I want to
01:41play for you just about saying that he would, in fact, run in that leadership contest.
01:46There isn't a leadership contest at the moment.
01:49There isn't one at the moment.
01:51But as I've said on many, many occasions, I don't think that's a good thing for the country to plunge
01:56us into chaos.
01:57I would also add that now that Andy has won, which is really important, really good, he's a huge asset
02:03to us, then now will inevitably be a Manchester mayoralty by-election starting straight away.
02:09So it's important that we pull together for that.
02:11But if there is a contest, just to be clear with you, then yes, I will run.
02:15I will stand.
02:16And I've said repeatedly, I'm not going to walk away from that.
02:20Why isn't he going to walk away?
02:22For all the reasons we've been talking about, momentum is really not in his favor, even within his own party.
02:26One of the things I've always admired about British politics is this kind of, you know, resignation of folks when
02:31they see that the room is not with them.
02:33Is this a departure from that?
02:35And what does he think he has to gain by trying to dig in here?
02:38So you could take it a couple of ways.
02:40I think, obviously, you've got to stay eager.
02:42You're in charge.
02:43You want to stay, keep the job.
02:44I mean, London Profit Press is right now a killer, I can tell you.
02:47And climbing a new house up to No. 10 Downing Street.
02:49But, right, on the other side of this, Kirsten was elected after three conservative prime ministers stepped down in one
02:57parliament.
02:57And he built his whole pitch on, I am going to be stable.
03:01We're going to have no more of that nonsense.
03:02And I'm going to be in charge for five years and run a government.
03:05And so his genuine fear, I believe, from, like, talking to people inside the party,
03:09is this would encourage some form of Labour Party internal divisions that would not be recoverable from.
03:18So he's like, if I step aside, what is the democratic process here?
03:22Like, look, Andy Burnham has won this incredible win in a by-election.
03:25And it really is not anything like anything I've covered.
03:28But that's only 70,000, 80,000 voters of the sort of one in 650 areas in the UK.
03:35It's not winning a general election.
03:38And so Starmer's kind of point of view is, I did win a general election.
03:42That gives me five years to do what I want.
03:45Why should I give that up without a fight?
03:48That's anti-democratic.
03:49That would be his view.
03:50Now, the Burnham view, they also look at the Conservatives and they go,
03:53please don't make this vicious.
03:55Please don't make this messy.
03:56We have the votes.
03:57We will engage in a policy of everyone publicly calling for you to go if we have to.
04:03But we would much rather this be a bloodless coup.
04:06Andy Burnham gets signed into sort of office.
04:08There is a coronation, effectively, what we call it in the UK, mirroring our sort of royals.
04:13And that is kind of the safest, most stable path.
04:16They are, this weekend, behind the scenes, basically trying to argue this out.
04:20And we'll see if they manage to sort of reach an agreement.
04:23James, I'm reading up on this and I see the names of a lot of graybeards, Jim O'Neill,
04:29among them, Andy Haldane, another one.
04:30And I'm seeing reference to the UK fiscal rules circa 1997.
04:36For our US audience, our global audience, our non-UK audience.
04:39And for your co-anchor, who did not read up on whatever this is.
04:42Help us understand the significance of the UK fiscal rules and Mr. Burnham's propensity,
04:48if he has it, to kind of bend those going forward.
04:50I love it.
04:51First, it's the algae and now it's the fiscal rules.
04:54David, you have such a hint of that.
04:57So, unlike the US, the UK is really not trusted by foreign investors.
05:02It borrows at more than it puts away in tax revenues.
05:05And so, it has a fiscal rule, which is after we get to five years, the government says in
05:11that five-year forecast, it has to balance the books.
05:14And although it's kind of just a rule that the Chancellor made up, and the Chancellor
05:18Rachel Reeves, it has become something the markets treat as like this quite totemic, Labour
05:23is committed to not borrowing a ridiculous amount.
05:27It's kind of a vibes-based thing.
05:30So, look, Andy Burnham could come in and tweak the fiscal rules.
05:33And the reason why my great colleagues in the UK government team, Jacob Reid, wrote this
05:36piece is because if you look at the people who are backing Andy Burnham, like these are serious
05:40people, the likes of Richard Hughes, who's to run the Office of Budget Responsibility, which
05:44is the independent forecaster he's taken very seriously, like Jim O'Neill, Lex Goldman,
05:48Andy Haldane, they are all very serious economists, the Bond Markets Trust.
05:52As economists, they think this rule cuts off long-term investment.
05:55They think it's short-termist.
05:58But people are concerned in the markets about Andy Burnham.
06:01They are concerned he's more left-wing than Keir Starmer.
06:04They're concerned he's promised to end 40 years of neoliberalism, as he calls it.
06:08And so, he might have quite limited room to manoeuvre.
06:12I have to say, the dog that has embarked on our coverage so far is, this election happened
06:16Friday morning, the results came in.
06:18Guild Markets, Sterling were remarkably muted.
06:21And so, I suspect what we're all watching for here is, A, how this contest plays out,
06:26which is still not a formal contest, I should say, but it is clearly going on.
06:30B, what Andy Burnham, who Andy Burnham, picks to be his chancellor.
06:34That is the big signal markets want to watch.
06:36And it's possible, if he can win the market's confidence, he might be able to tweak the
06:41fiscal rules a bit.
06:42But currently, they are seen as, like, this big totemic symbol that the government is
06:46committed to not spending ridiculously.
06:49James, we've only got about a minute left.
06:51But a couple headlines this week, and a big one in Reuters, talking about how London, for
06:56the sixth year in a row, I've got to pull this up, did maintain, sixth year in a row,
07:00did maintain its status as the top financial center in the world, ahead of New York and just
07:05ahead of Singapore, coming up third.
07:06Is that something that's in the back of the minds of all of these parties as they try to
07:10maintain some sort of stability?
07:12Because you were just talking about how, you know, uncertainty breeds chaos in markets and
07:16people like predictability.
07:18Is that something that everybody has to think about London's reputation as a whole, as this
07:21bastion of finance?
07:23And they need to have a government that is able to support those systems.
07:26I mean, it's not going to be an answer you're going to like, Christina.
07:30No, sadly.
07:31I think when you talk to quite sensible people in these parties, and I do, they do care about
07:35this.
07:35They look at Brexit.
07:36They look at the damage that's caused.
07:37They wonder how long London can keep that crown in the city.
07:40But Andy Burnham won in the north of England, talking about rolling back the pitch to London,
07:45getting the regions having better growth.
07:47So I'm not sure that's what they're thinking about at all.
07:49I'm not sure that's what they're thinking about at all.
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