Ollie Smith: Do you think the Trump tariffs have handed Rachel Reeves a ‘get out of jail free’ card on the economic crisis?
Alastair Campbell: I don’t think any finance minister in the world has a get out of jail free card right now because I think the economic conditions are so tough. I can see politically you might say well Trump has kind of upended the economic order and he’s upended all sorts of things and therefore Rachel Reeves might come along with certain things that she says she has to do in response to adapt to that. And you know the public can be fairly forgiving of those sorts of things but not if it doesn’t work out in the end. So, I wouldn’t look at it like that I think that we’ve been hearing from some of your audience today that tariffs have posed a real challenge to businesses and economies around the world and we’re not immune from them.
OS: Do you see markets as a real check on political decisions?
AC: I was a journalist and it was one of the most extraordinary days of my professional life when we crashed out of the ERM. I don’t think enough is made of the fact that George Soros gets a lot of the blame/credit, wherever you’re coming from, but of course his right hand man here was Scott Bessent who’s now the Treasury Secretary. But I guess because part of their schtick of the MAGA movement is constantly to attack George Soros that doesn’t sort of get in the debate much. And I thought that was interesting about Liz Truss. Ultimately I’ve been involved in lots of big economic events that where the government in particular chancellor of the exchequer is having to frame policy. You have to take account of what the reaction is going to be and you know Liz Truss brought forward a set of proposals that anybody could have told her the reaction was going to be horrific.
So yeah I think look we talked about in this session talking about checks and balances and how Trump is trying to sort of test the guardrails and break the guardrails and so forth. They have to adapt to the change but you cannot claim to be a thriving dynamic economy living as a market economy if you think that you can shape all policy without reference to what the markets are going to do and say.
OS: Is Keir Starmer’s cabinet up to the task of leading the country through its current challenges?
AC: Every generation is slightly saying politicians were better in the old days and but I think there was a real problem with the way that politicians are treated all sides. I know so many people who probably a generation ago would have gone into politics and now they don’t fancy that. So no I think the big thing I think that’s maybe been missing from what the government’s been doing is... I’m obsessed with this idea that politics, of course it’s about policy and it’s about tackling crises and it’s about dealing with issues as they come up. But the bigger thing for me is always what’s the national story what’s the story you’re telling to the country about the country and about where your ideas, your leadership, your policies are going to take the country. And I think that partly because the scale of the challenge is so big right now and where I have a lot of sympathy for Rachel Reeves and Keir Starmer is there was a black hole and the economy was a mess when they came in. Trump’s the opposite. Trump’s the one who’s saying it’s a disaster when actually we know it wasn’t, whereas actually the British economy was in real trouble.
OS: Which trend concerns you more, rising unemployment among 16-24 year-olds or increased job insecurity overall?
AC: When he was leading the Labour Party, Ed Miliband (and Jeremy Corbyn from a much more avowedly as it were left-wing distributionist perspective)...they both really were defining economic inequality as one of the big drivers of political disappointment, disgruntlement, disengagement. And I think that’s real. I think that’s real. And I also think that one of the things that is now a really big part of the political and economic debate, AI, artificial intelligence. It’s fascinating to watch so many of the politicians—and I would put myself in this category as well, as somebody who feels a desperate need to understand it, but doesn’t necessarily fully understand it, how it works, what the impacts are going to be. But I feel that that we have to be honest with people about some of the trade-offs that are going to come. So I think relative to the youth unemployment levels we inherited back in 1997, they were way worse than what we’ve got now.
However, your second point about the job insecurity and people feeling that they’re having to work harder for less, that’s a big driver of some of the political unrest that we’re seeing right across Europe.
Ollie Smith: Have you been broadly encouraged by the global political response to Trump?
So yesterday we had Mark Carney in the White House with Trump. Now I would argue Mark Carney politically has played a blinder since Trudeau stepped down and he stepped in, won the leadership election, has now won a general election, and has been very tough in his messaging on Trump, was very respectful yesterday, but didn’t resolve from the toughness. You saw Zelenskyy, frankly, getting beaten up and was horrible to watch and disgusting on so many levels. Kier Stammer with his letter from the King and Trump loving it. And then Kier pushing back on JD Vance on a couple of points where JD Vance was talking nonsense about Europe and about European commitment to Ukraine.
So they all have to work out their own things, but the fact is that they’re dealing with somebody, you’re always, with any world leader, there’s always a, there can be divergence between what they say in public and what you know they think. That can often be the case. And likewise with the policy, but you can usually get a sense genuinely of the policy that they’re trying to develop, whereas with Trump you can’t. He’s so unpredictable.
Ollie Smith: With Trump’s attacks on the US Federal Reserve, why is independence crucial for institutions like the Bank of England?
AC: Well, I do think that one of the things that Trump is doing it’s not just Jerome Powell, it’s virtually every institution that can be a different source of power or a different body that’s holding him to account. He either gets rid of them or he undermines them. So he’s deliberately trying to undermine Jerome Powell. I think Jerome Powell’s done the right thing [by] just standing up to it and saying “I’ve got a job to do and I’ve got my brief and I’ll just carry on doing it.” And then when he goes, we’ll have to see.
I think with Andrew Bailey, he’s in a similar position, but without that political pressure. And that’s a good thing. I think it’s important that people, if you have an institution like the Bank of England, if you have an institution like the Bank of England, and the big thing that is independent in the specific policy decisions that it has to make, then I think it’s incumbent on politicians not to put the boot in too much. I thought that there was too much of that during the last few years of the Tory government. So no, and you’ve got to remember, my thing is politics and political strategy and so forth, I’m not an economist, but I’ve got to say, Mark Carney, I would say, is a friend of mine, I know Mark Carney very well. I do know Andrew Bailey and I like him and I respect him. And I think actually, I think too often in these positions that are high profile in the public arena, but not political as such, I think sometimes we expect them to be more like politicians. Now, as it happens, Mark Carney has morphed into being a very effective politician and political campaigner. But I don’t expect that of Andrew Bailey and I think we should treat him for what he is: the head of an independent Bank of England with a specific remit that he has to follow.
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