583. Is Burnham’s Budget Too Safe and How Brazil Defied Trump

0:00A budget is one of the big moments in any parliamentary calendar, and you would think that would be especially the case when you have a new prime minister and a new chancellor. Prime Minister Andy Burnham, Chancellor John Healey, and John Healey stood up and gave an interesting assessment about the state of the economy, said he was very, very resilient. He talked about giving some breathing space for now, fresh hope for the future delivered to the British people by this Labour government. There were certainly plenty of announcements, many of them have been trailed. And there was a big commitment on defence, which is why he and Andy Burnham had a phone call with President Zelensky this morning. Interesting thing on

0:40Budget Day is that the Chancellor is immediately followed by the leader of the opposition, Kemi Badenok, who basically got up and said, is that it? Well, how a budget gets felt by the country in the end is a better judgment than how it goes down on day one. Day one, weirdly, I think both sides were quite happy with the performance of their leaders. What the country thinks, we'll be talking about that for some months to come. This episode is powered by Fuse Energy. Most energy companies are counting on you doing absolutely nothing, not questioning what you're paying, not switching, just letting your tariff roll on, which is costing you hundreds of pounds every year. But the apathy goes deeper

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4:22Welcome to the Restless Politics with me, Rory Stewart. And me, Alistair Campbell. And Rory is in the United States. I am in the United Kingdom, where I've just been watching the budget, John Healy's first budget and Kemi Badenock's response. And we're also going to be talking today about three extraordinary elections in Brazil, in Serbia, and of course, in Israel. But Rory, shall I kick off by sort of trying to tell you what happened in the budget? Give us the classic explainer of what the main points of the budget were. Well, it was long. John Healy's speech was about an hour long. I don't think it's going to get down in history as one of the sort of, you know, epoch-making budgets of our time. But there was

5:06a lot in it in terms of announcements and argument. The narrative they were trying to frame was breathing space now, growth in every postcode, fresh hope for the future. And I guess the reason why listeners will be excited and want us doing the budget rather than just snoring is this is the first budget of the new government, right? It's the way in which Andy Burnham's going to define what the difference is with Keir Starmer and John Healey, what the difference is with Rachel Reeves. And is this the budget that's going to define the strategy of Burnham and help him win the next election? Is that right? Is that the kind of background on why we should be caring about this budget? Yeah, you definitely would. That was how normally I would want to see

5:47a budget, but it was interesting how much they were pointing to things still to come. The 10-year plan, the spending review, the Milburn report, the Tims report. There were these things that they were indicating that they would be coming down the track. So essentially, what they were doing was framing this sense of the economy being more resilient than maybe we think. And they were pointing to figures from the Office of Budget Responsibility, from the International Monetary Fund, and so forth. But I think it was very interesting to watch John Healy do the budget, getting a very, very, very warm response from the Labour back benches. But then Kemi Badenot, the Toryroy leader sort of came straight in and it reminded me a little bit of the title of

6:30bob geldof's autobiography which i think was called is that it and and she was she was at her usual pretty snarky best and essentially saying there just wasn't enough in this and also the the troy's are obsessed with this line that Labour are addicted to welfare, and there was nothing on, you know, how they're going to get the welfare bills down, and so forth. For me, in terms of the things I think you would find particularly interesting, I think it's the first time that I've heard him, on the record, in Parliament, commit in the way that he did to 3% of GDP on defense by the end of the decade and 3.5 beyond that unclear exactly how that's going to be paid for i think there was a little bit of again that's something that we're going to be announcing in due course and also quite a lot

7:18about ai your obsession um and this new idea of a data center covenant that people can build data centers provided that there is a sort of local commitment to understanding the role of jobs and the environment and tell me if this is a new idea that if they couldn't get connection into the grid straight away that the data centers would be able to generate their own their own power subject to those concerns. And then the rest of it was really just, I would say, helping particularly people who are really, really struggling with energy bills, both businesses, small firms and medium-sized firms, and also families. So getting rid of gas standing charges, this new idea, which I don't think I'd saw trailed anywhere if you're an a to d council tax home

8:07you're going to get 100 quid off your energy bills the VAT cut on electricity bills is going to be taken forward paid for by a one-off tax on the banks and then other measures that are going to be paid for by a tax on gambling companies. So, and then the other thing that was interesting was there was quite a lot, I felt, of pointing to issues related to women. Fresh commitment on the gender cap, talking about an entrepreneur's fund, particularly for women who are starting up businesses. I thought that was quite interesting. And then also paternity leave for self-employed men. So it was a kind of, you know, on the big picture on the economy, he was basically trying to paint the picture that this is resilient economy, which is going better than people maybe

8:54feel. But he was acknowledging that people's living standards feel very, very challenged, energy prices in particular. So a few things on that. And then, you know, big picture stuff on housing, defense and AI. So that's how I would summarize it, having literally just left my of Healy's speech. I suppose if I was going to be challenging, let's imagine I was like an American journalist covering this, I might say this sounds pretty boring. It doesn't sound like anything really big is happening here. It sounds like a budget which is giving some relatively small giveaways to people who are feeling the financial pinch, but it's in the region of a few hundred pounds. It's reassuring, I suppose, for people who were worried that there

9:51were going to be big changes. There's not been any big changes on tax. Although I'd like to come back to that because one of the things that has kept going wrong with labour budgets is this tendency to pre-brief in advance that there are going to be raises in wealth taxes and are going to be raises in capital gains tax, or maybe not pre-brief, but leaking from unhelpful members of the Labour Coalition and from think tanks and funds who are really keen on these things, which actually terrify business and which the chancellors never do. To be fair to Rachel Reeves and John Healy, what actually happens is that they're staying with relatively orthodox economics. They're not going for wealth taxes or racking up capital gains tax,

10:35but there's this horrible thing that for months before these budgets, all the left of the Labour Party and the think tanks talk this stuff up, which I think has a freezing effect on confidence and investment, makes the government seem much more left-wing than it actually is, puts off international business, and then when the budget actually comes, it turns out that broadly speaking, Reeves and Healy are pretty conventional, trying to keep taxes down, trying to keep public spending under control, trying to reduce borrowing, trying to reduce the deficit, not doing any of the stuff that the left of the Labour Party would like them to do. But this muddled messaging, I think, is a problem. And I don't know how they allow this to happen in the run up to the budget, rather than stamping

11:17on the journalists in a way that I imagine you would have done. If the message is, we are sticking to the fiscal rules, there are not going to be wealth taxes, nothing's changing, you can invest in this country, you can expect the next three years to be a pretty predictable situation where we're going to keep taxes under control, borrowing under control, spending under control, then hammer it home and come down like a ton of bricks on these people who, for the last two years, keep trying to feed these stories saying that they're going to go left on wealth taxes yeah well that is a lot easier said than done i think one of the difficulties the kia starmer government got into was that was such a big gap between the election and the first

11:54budget that is not a mistake that they've made this time i actually think the discipline on this budget has been better than previous budgets it's very very hard though rory with the with the budget because you say come down like a ton of bricks the minute you start defiantly adamantly denying one particular story in one particular outlet the next one that pops up you're expected to have the same reaction you've got to take a judgment I actually think the discipline on this has been pretty good considering. I do think we've got into a habit in recent years of just briefing out too much of budgets in advance. There's been a little bit of that on this one. Whether that's been sanctioned leaks

12:36or it's just been chatter, I don't know. But I think it'd be very difficult to do what you're suggesting without then getting drawn into endless running commentary. Because the truth is, budgets, they're like reshuffles. People just love to write about them in advance. One thing you'll guarantee is that no journalist will today draw attention to stories that they've written where they predicted something that hasn't happened, okay? Or what they'll do, they'll do what you just said to say. This was down to think tanks briefing it out or a cabinet minister saying, I like it if they did this. So I think the point about whether it's, your word, a bit boring, I actually found it quite interesting to watch

13:17as a spectacle because I could see him balancing all sorts of different challenges. He's got the BEMPs behind him that he wants to kind of make think there's a plan and make think that get them going back into the constituencies with something to sell. He wants to discomfort the opposition, which he did in a couple of ways, although Kerry came back pretty hard. But he also has got this problem with the markets, where the truth is, whether we like it or or not the reaction of the markets will be an important judgment on the budget now the immediate reaction seems to be pretty stable we're recording this literally immediately after kemi badenow's response so somebody can tell us if i get that

13:57wrong very very quickly but i think that so i think what he was trying to do was actually what you're saying steady as she goes uh the fundamentals are pretty strong. He mentioned, I lost count after a while, but at least five or six times, he mentioned the conflict in the Middle East. He basically, he wasn't doing it in a sort of big way, I blame Trump, but he was basically five or six times, he said, and because of what's happening in the Middle East, because of the Strait of Hormuz, because of the difficulties caused by the war in Iran, he mentioned that several times. And that was, I think, the sort of backdrop they were trying to paint. That's something, again, which here in the US barely features, but is one of the really biggest

14:39themes in the whole global economy. So what's happening in the British budget will be repeated in the French budget, the German budget, the Japanese, the South Korean, and my goodness, any of the Gulf budgets. That the single biggest thing when people say, you know, is it China shock too, or the US that's really disrupting the global order? You can make a pretty good argument that yes, China is subsidizing businesses and tech and has got a very weak currency, and that's undermining, over the medium term, European industry. But the short-term impact of these US-Israeli fight with Iran is unbelievable, because it's almost boring to keep coming back to it, but the scale of it is so enormous. I mean, this is 20% of the world's oil, an astonishing amount of the liquid natural gas, fertilizers, but also a lot of

15:30specialist products used for things like plastics. And all of this means that America is not feeling it as much directly because they are a net oil exporter, they're energy independent. And the pressure put through particularly energy prices on all its main allies from Britain right the way through to Japan is absolutely unbelievable. One more quick thing, I think, just on the macro picture. It's worth pointing out what's happening under the surface. So as you say, Andy Burnham's budget feels like a relatively stable budget, which probably won't frighten the market and with any luck could actually reassure investors, which is what we desperately need to keep growth going in Britain. And that's why I sort of actually wish that there'd been clearer messaging

16:15for two and a half years from Labour saying that's the kind of government they wanted to be. I think Gordon Brown would have given us that. I think that would have been a new Labour message that this is an investment-friendly pro-business government and really leaning into the idea that their promises on taxes and borrowing are real. And they're not just an accident that happened to beat the Tories. And the problem is that so often, those fiscal promises which Starmer and Reeves made were presented as being a sort of necessary bit of political calculation in order to defeat the Tories in the election. But they were never really owned by Labour as being the central part of their economic and growth strategy. And that's what they need to do. Instead of turning

16:57it into, we made an error in the election, and we're regretting it ever since, lean into it and say, boast about it and say the one great thread that's going to run through all our governments is this is going to be a government that's going to try to keep tax under control, spending under control, borrowing under control, bring the borrowing down, not put up the main taxes and face down the Labour left. You know, make an ideological fight about it. This is a government that's not going to do wealth taxes, not going to put up your taxes. This is a pro-business friendly government rather than sort of apologizing for that stuff. Yeah, he wasn't apologetic about that. And just your point about the fiscal rules, I mean, it'd be very interesting when we,

17:39because it was, you know, this is the first time I think I've heard him set out this, this such a firm commitment on defense. But then when it came to explaining the funding, I think we're going to have to look at that pretty closely. I think it sounded quite complicated. Maybe there are ways of sort of tweaking the fiscal rules when it comes to looking specifically at what he's announced on defense. But the other part that I think you'd have found very interesting there was a big step on fiscal devolution um there was a essentially talking about the that rates and taxes that were raised in local areas being kept in those areas and again how that is how that works in practice we shall have to see but it was in a sense it was of a piece with some of

18:23the broader messaging that andy bernham has been talking about rewiring the state getting more economic activity within localities there was another part of the speech where he was announcing you know relatively small sums of money three million here 10 million there 15 million there i know it sounds like a lot but that in government terms is very very, but in specific places for specific projects. So, listen, it was an interesting – he delivered it pretty well. He's not the most, you know, naturally charismatic sort of politician, but it was delivered with a certain authority. I didn't get the feeling that the response by Labour was, as it were, staged at the end. You know, I love these little rhetorical bits where there's a rhetorical style,

19:11which you then know what's going coming. So I took it. I noted it down. I, this is my message to banks. I celebrate it. I'm grateful for the role that you play. You just, you just know that that you play. You just know that is preceding and therefore I'm going to put 3% on the bank's surcharge. But he did have a very good line there. As you know, I've often felt that the populism is caused by the global financial crisis, socialism for the banks, austerity for the people. And he did say in terms, the British people helped you out 20 years ago, almost 20 years ago in the crash. And now you can help the British people out through this difficult time on their energy bills kind of thing. So, you know, I think putting it all

19:57together, I'll be very interested to see because budgets normally, you know, what happens, the FT does a sort of 24 page pullout. The news does sort of, you know, hours and hours of discussion. There's a lot to discuss. What there isn't is a sort of, you know, a big strategic shift. And I think actually that is part of his messaging. He even started, the only time where I felt the Tories were really laughing at him was when he did a big tribute to Rachel Reeves. Because they're all sitting there thinking, well, if she was that good, why have you got rid of her? The final thing for me is just to look at the big macro economic picture of Britain, and how very much the British economy has changed over the last 20, 30 years. Not just since you

20:39were in office. I mean, the changes there have been unbelievable. The amount of taxes, percentage of GDP has exploded. When you were in office, actually taxes, percentage of GDP in Britain was quite low. We weren't a very heavily taxed country. We're now a very heavily taxed country. Debt interest has also gone through the roofs. But that's also true even since I was in, well, I was last in government in 2019. And if you look at the figures there, in 2019, taxes percentage of GDP was still only about 33% of GDP. It's now at 36.3, heading to 38.5%, which is the highest level, basically, that it's been since the war. Public spending gone from 38% up to 44%. Total expenditure from about 880 million

21:28when I was in to about 1.3 trillion now. And the percentage of the money spent on debt, again, when I was in in 2019, 3.7% of the budget was spent on debt interest. It's now at 6% heading to 7%. And at the same time, health spending. When you were in with Tony Blair, it was about 26% of what the government spent was spent on health. It's now 43%, gone from about quarter of the amount of money we spent was on the NHS to nearly half. So that goes along with also 118 billion pounds in tax rises, of which nearly 50 billion came from the Tories and between 65 and 70 billion pounds of tax rises came from Rachel Reeves. And the oddity of it is that the public don't feel this. So massive increase in taxes, both in real terms and as a percentage of GDP.

22:21But it's not really feeding through into improvements in public services because so much of this is just paying for past commitments, for COVID spending, for debt interest. Which brings us to the final point, I guess, which is the great cliche, which Rachel Rees began with, which is growth. And where is the growth strategy? Because if you're just trapped in a world where all you imagine you're doing is redistributing the pie, cutting spending here, increasing taxes there, borrowing a bit more there. The only way out of that trilemma is growth. And that's where I'd like to see them saying, we're going to learn from France, which is able to build roads for a fraction of the cost, has much cheaper energy bills,

23:03can get its nuclear power stations built much more cheaply to us. Much better riots. Better riots, yeah. But we can learn from Sweden, which has more billion-dollar startups than anywhere outside Silicon Valley. So I'd like to see a sense of what are we doing on planning? What are we doing on attracting entrepreneurs? Are we ever going to be able to unlock this story that we keep hearing that the UK pension funds have a huge amount of money, but they're not being used in the way the Canadian and Australian funds are used to really finance business growth and buy shares? And then finally, I think you'd probably add the European Union. Yeah. He was definitely trying to tap into the kind of keeping entrepreneurs here and supporting young entrepreneurs, supporting women entrepreneurs, etc.

23:45Europe actually, we'll maybe move on from this now, but that was the big clash at Prime Minister's Questions, which preceded it, where Kemi Badenok was trying to get Andy Burnham to say that he wanted a referendum on freedom of movement. It kind of didn't go anywhere, but I think it's interesting how Andy Burnham is definitely sticking to his guns and saying we have to have a debate about our relationship with Europe. Just a quick thing before we move to these extraordinary elections we got some very interesting briefing from luke trill who's you know one of our leading pollsters and some very really interesting stuff in what he was saying and it your point about about tax there's there's been a sense most of

24:22the time i've been been around where when you ask the public do they prefer public more public spending on health and education or tax cuts generally they will the bigger numbers will go for the the public service investment that appears to have not be the case at the moment and the other point he was making is that energy bills are now the number one kind of cost of living issue for people. And the feeling, and this is where Labour have got to still be worried about reform in a way, is the feeling in what Ed Miliband used to call the squeezed middle, is that the people who are very, very poor get a lot of support from the government, and the people who are very, very wealthy get away with whatever they want.

25:04And the people in the middle are the ones that are really really struggling so i think that's why a lot of the messaging was was aimed aimed at them anyway well downless you know the analysis of the budget will go on at least until next week when you'll be back in the country and we can maybe revisit some of the reactions then but that's my my take on the budget. Now, which of these three extraordinary elections would you like to start with? You've got Brazil, you've got Serbia, you've got Israel. If you want a low turnout election, we also had the Bulgarian presidential election with a 22% turnout. So we could... 22%? Wow. Yeah. That makes local council elections in Britain look very respectable, doesn't it?

25:46Yeah, not good. Not good. Okay, let's take a quick break and let's come back to Brazil. This episode is brought to you by Lloyd's. Now, the political landscape, as we talk about in the podcast all the time, is changed out of all recognition. Brexit, Trump, Ukraine, there's so much stuff going on that maybe we couldn't have predicted a while back. No, it's absolutely unbelievable. If you look at just what's been happening in the last few days in Ukraine, it's something that we could never have dreamt of. What's happening in the Strait of Hormuz, what's happening in Yemen. Basically, the whole world order is being reorganized around us at a startling rate. And that all leaves people with a challenge, not just about thinking

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28:05ZepBound contains terzepatide and should not be used with other terzepatide-containing products or any GLP-1 receptor agonist medicines. It is not known if Zepound is safe and effective for use in children. Don't share needles or pens or reuse needles. Don't take if allergic to it, or if you or someone in your family had medullary thyroid cancer, or if you've had multiple endocrine neoplasia syndrome type 2. Tell your doctor if you get a lump or swelling in your neck. Stop, ZipBound, and call your doctor if you have severe stomach pain or a serious allergic reaction. Severe side effects may include inflamed pancreas or gallbladder problems. Tell your doctor if you experience vision changes before scheduled procedures with anesthesia,

28:44if you're nursing, pregnant, plan to be, or taking birth control pills. Taking Zepbound with a sulfonylurea or insulin may cause low blood sugar. Side effects include nausea, diarrhea, and vomiting, which can cause dehydration and worsen kidney problems. Talk to your doctor. Call 1-800-545-5979 or visit Zepbound.lily.com. Welcome back to The Rest is Politics with me, Alistair Campbell. And with me, Rory Stewart. And as we promised, we're coming back to this incredible Brazilian election. I think we want to start with this because it's part of a general theme that we keep coming back to, which is what a different world we live in and what a nightmare it must be being in the polling and prediction business. Because

29:32basically, universally, every single poll, newspaper and analyst in the world believed that President Lula, the incumbent president in Brazil, was not going to win the second round of the Brazilian election. And you could have made a very strong argument. Nobody even bothered to consider the possibility, basically, that he might because Flavio Bolsonaro, Bolsonaro's son, had beat him in the first round. And in Brazilian history, nobody who'd lost in the first round had ever gone on to win in the second round. And in fact, even more than that, it was clear that there were a lot of other right-wing candidates whose votes were expected to go to Flavio Bolsonaro. Add to that the fact that incumbents are very unpopular, the Brazilian economy is not going very well. And it looked

30:21as though Bolsonaro had an attractive offer, particularly for working class people and small businesses. And it looked like Lula's defeat was absolutely guaranteed, instead of which 10 million new voters came out of nowhere, either flipping from right-wing candidates or who hadn't turned out before. And for the first time in Brazilian electoral history, the turnout in the second round was higher than the first round. And this incredible political survivor who's right up there with Netanyahu and Trump and one of the great comebacks of all time, President Lula, won again. Over to you. Is it perseverance? Is it perseverance? you know, putting the brakes on any promotion of Lula. Bolsonaro was getting a kind of free hit on the social media networks.

31:27He had, Bolsonaro had, you know, a lot more money, a lot more support in lots of, in the traditional electoral way. They had a rally in Rio. A million people turned out. And the other thing, I was talking to somebody involved in the campaign the other day, they said, you would not believe how many, this, what they called intergenerational campaigning where they were getting young people to take old people and old people to take young people and they had this guy who started a new whatsapp channel for lula uh and by the end it they had 11 million people on this and they weren't just using it to sort of you you know, say Lula's great, Bolsonaro's terrible. They were saying, we need volunteers now here.

32:11Here's a video of Bolsonaro that you should all share now with all your kind of moderates. So it was extraordinary. Of course, Bolsonaro, he was a terrible campaigner. I'm afraid he admitted himself he didn't have his dad's kind of charisma or political skills. He made a couple of terrible mistakes. The first is in the last debate, he referred to the fact that Lula's only got nine fingers. Well, the reason Lula's only got nine fingers is because he lost a finger in an industrial accident as a young man. And it allowed Lula just to remind people he's a kind of come from a tough working class background against this sort of silver spoon, posh boy. And then the other thing he did during the campaign, he took time off to defend a police officer who had

32:56killed a young girl. And the girl was called Anna Clara. Okay. And she's dead. The mother of Anna Clara turned up at one of the debates where Bolsonaro was speaking. And she's dead. The mother of Anna Clara turned up at one of the debates where Bolsonaro was speaking and she spoke about this. And Bolsonaro tried to do a kind of nice, empathetic, Andy Burnham style, warm, friendly communication, but he called her Anna Clara, the dead daughter's name. And the woman just shouted out, screamed at him, she's dead. And this was like, and of course he had to apologize and all that, but these were terrible mistakes. So he made two terrible gaffes in the last couple of days. And meanwhile, Lula, who's in his 80s, just had a kind of, I don't know,

33:39because the first round, Lula was lacking in energy, and suddenly he found this energy. Maybe Donald Trump shipped him some of his energy drugs. I don't know, but he looked pretty impressive. Listen, it's now going to be tough though because he's got a right-wing Congress, a lot of right-wing mayors, a lot of right-wing regional government. But it is going to be studied in the per-civilian comebacks of all time. There's no doubt about that. So over the last 18 months, there have been seven straight wins by right-wing leaders in Latin America, and we've covered all of them. It's been an incredible sequence from Argentina through to Colombia and Peru. And it looked like this was going to be the eighth. And Trump was all lined up for that. And of course, predictably,

34:22Donald Trump's now come out saying that it looks like another rigged election. So that's, I think, interesting also, the way in which we think about narratives that had he lost, which it looked almost certain as though he was going to lose, we would have had a very, very strong narrative, as it were, of Trump, right-wing people taking over Latin America, which has suddenly been weirdly interrupted. And we'll get onto that, maybe whether the same things happened in Serbia. Yeah, it's the fourth biggest democracy in the world. The other thing that you often talk about is gerontocracy, right? These guys are unbelievably old, right? I mean, it's staggering how old people like Trump are, Lula are. Lula was in as president from 2003 to 2010, right? I mean,

35:09he was right at the height of, he was like a kind of New Labour pinup guy. Obama called him the most popular politician on earth. He was all about poverty, climate change, hunger. And then he got caught up. And this is the other thing that is so difficult. People talk about Latin American politics as corrupt. And a lot of the Brazilian election was fought around this subject of corruption. And corruption and crime are right at the heart of all these Latin American elections. But in Brazil, you see it in a way that you don't see it elsewhere. I mean, you'll remember the Petrobras-Odebrecht scandal in Brazil, which implicated, get this, 271 out of 594 members of Congress were directly implicated in the scandal. 271 out of 594. Lula himself, who obviously,

36:02for people like you and me, is a kind of progressive hero, was sent to jail, right? And there are transcripts of him saying on phones, why can't we intimidate the prosecutors more? He had wine cellars full of wine given to him. He was paid millions of dollars for speeches by construction companies. He had beach French residences done up. And there was this particular thing, right at the heart of it, which was a senator called Delcidio de Amaral, who just sat there and in his plea bargain just revealed every unbelievable deal, the colossal bribes, the hush money, the cover-ups, the paying money to vote-buying businessmen, $3 billion of bribes. And Dilmi Rousseff, who was Lula's successor, tried to protect Lula by making

36:56him, the ex-president, her chief of staff so that he could get immunity from prosecution. So, it's important to understand that this guy who's portrayed kind of as a good guy, you can see why Brazilians are just horrified. And indeed, actually, I'm afraid this is true in a lot of Latin American politics. I mean, often when people say it's corrupt, I'm looking for examples. And I hope I've given a little bit of an example of what we mean by saying this politics is corrupt. The final thing is, it's not just the historic corruption, it's what's going on right now. So listeners who are paying attention on Brazil will have followed the reporting around this Supreme Court justice, Alexandre de Moraes. He was the guy who put Bolsonaro in jail. He was the guy

37:42who shut down social media sites, jailed rioters. He then faced sanctions from Trump and was attacked directly by Trump. And he's now been sucked into corruption scandals because texts have now been released in which a disgraced banker, Daniel Vaccaro, has been sending texts pointing out that he gave tens of millions of dollars to the Supreme Court Justice's wife's law firm. As usual, we've got Brazilian corruption right up to the date, taking out both the heroes of the progressive left and the heroes of the right. And often, it's the same people who are being linked by journalists to payment and influence on both sides well don't forget as well bolsonaro senior uh sentenced to a long prison sentence although he's now serving his hour home and bolsonaro

38:35junior has it seems fled the country um not least because he was worried about a possible investigation into money laundering um so yeah we're talking about fairly unsaintly politics just just on mille by the way you mentioned argentina i don't know if you saw this story he did a absolute he's losing the plot he's going full kind of trumpian he did a speech the other day during which he named he called out five journalists and he named them and said they should be burnt at the stake um Which, you know, when you think about some of the kind of horrible stuff that happens to politicians at the moment, it just sort of seemed a really, really weird thing to do. Before we go into Serbia, joking aside about Perseverance, and by

39:16the way, thank you for your excellent interview. I'm sure it's one of the reasons why the book has gone straight into the top 10 Sunday Times times very pleased about that um but i do want to draw attention to the next interview in our series because we talk a lot about politicians like we've just been talking about who are a bit this and a bit that and a bit the other and this is an interview with david blanket and i just think it's really interesting i think it's the team who were in the room which has recorded, said it's one of the most inspiring, uplifting episodes that they think we've done. And so this is David who's been blind all his life, became one of the most impressive and important figures

39:53in our government. And he's just so interesting talking about how you live with blindness when you're doing a job as difficult as the jobs that he has done. And also a wonderful bit where he talks about his relationship with his different dogs, the dogs that have been his guide dogs down the years. And also some pretty compelling assessments of why politics and politicians are maybe not what they used to be. So if you want to listen to that and all the other episodes in the series, just go to the rest is politics.com forward slash club. Now, Rory, your very close friend, Alexander Vucic, who you got very close to when I introduced you to him in Belgrade. That's a joke, listeners. You should listen to the episode.

40:36What do you think of Serbia? Well, amazing. Absolutely amazing. So there again, again, as a sort of brief explainer, Alexander Vucic was one of these figures who seemed like the most incredible political survivor. He was somebody from the right who had made the most disgusting statements as Milosevic, his propaganda chief, and the guy that was almost working as your opposite number during the Kosovo campaign, who was on record saying that he thought that, I think it was that 100 Bosnians should die for every Serb, which he later said was just a figure of speech, whose government, although he kept a little distance, but not much distance from it, essentially took back Ratko Mladic, the war criminal who was responsible for the Srebrenica genocide, to something pretty close to a state funeral when he returned a few weeks ago.

41:29A man who dominated the media so that when we were in Serbia doing that election, someone from the British embassy had basically got themselves caught up in a horrible situation in a provincial town. And the control that Vucic's team seemed to be able to have over the media and the way that they were able to replay the bits of our interview that seemed positive to him right across the national media were unbelievable. And he then took this gamble, sort of Macronist gamble that he'd hold an election earlier than he needed to. And so that he could remain in power because he'd finished his presidential term, he would run as prime minister. And people were arguing that this again was a classic example of the way in which democracy is subverted and the way in which

42:15people rewrite the rules. And it seemed very difficult to imagine how somebody who'd stitched up so much of the media and stitched the rules in his direction, was going to lose. But boy, he lost. And he lost to nobody. I mean, that's the amazing trick. He lost to a party with literally no leader and nobody that anyone could identify. He lost to a group of anonymous people. Over to you. Well, they're not anonymous in that they were teachers and economists and doctors and just people taken from from civil society really um but just just a a point on the um the media side of things the because remember he said in our interview oh the media give me a really tough time and you're you don't understand i'm always i'm on the back foot i'm the victim etc the main serve tv station read an apology to the nation

43:13the other night after the election the may then one of their star news readers said you know we owe you an apology we have we did not hold them to account we did not tell the truth about this government you know absolutely straight out there. And some of them resigned and sort of, whether in shame or they were hounded out, I don't know. But this is, I think, one of the most interesting elections there's been for a long time anywhere. Because you say they're nobody in that they're not recognized politicians. So we've talked many times about this Novi Sad, this collapse of a of a canopy and a railway station 16 people killed lots of the then demands for the contracts to be exposed the contracts were revealed lots of corruption was was exposed and this they call themselves

43:59the student list but you know one of the cleverest things they did they said that none of us are going to stand none of the students who started this because they were saying, we don't want the power, we want to change the system. They then had this kind of like a mass citizens assembly type, getting the different candidates to stand. And they've got, they've now got a majority, you know, they've got 100, more than 140 out 250 Cs. They got over 50% of the vote. And they're now going to have to form the government. And it's interesting, we should put in the newsletter of a guy I know very well. He worked for me for a while, a guy called Kevin Keith, who now campaigns on the role of civil society in different parts of the world. And he

44:42wrote a really interesting piece on LinkedIn. I'll just give you a couple of lines. For years, power in Serbia had one face. The movement that has defeated it has thousands. For more than a decade, Alexander Vucic dominated politics. On Sunday, he conceded defeat to a student-led movement that refused to organize around a single leader. And he says this, we hear a lot about the loss of trust in institutions. I long believed it's not lost, it is displaced. It leaves those who will not answer and looks for those who will. And if you'd have said, even when we were in Belgrade a few months ago, Rory, if we'd have said, aren't you worried that a bunch of students might actually carry on with this protest

45:24that has been going on for months and months and months, and they'll try and field a slate of candidates from a civil society that way, he would have laughed at us. Absolutely. Which is why he held the election, because he can't have thought this was a significant strategy. He wouldn't have triggered an earlier election. And it's, I think a couple of things that strike me. One of them is that it's something that almost feels like a throwback 15 years to the Arab Spring, which again, was a very, very anonymous, almost social media, civil society organized movement without obvious leaders that toppled someone. And of course, raises the question, what next? Because this is a very odd coalition. You know, we want to believe, because they took down Vucic,

46:06that they're necessarily going to be pro-European, sympathetic to Kosovo, nothing of the sort. There's a lot of ethno-nationalist Serbians in this group. There are people who want to lift sanctions on Russia. There are people who are very supportive, actually quite a lot of the nationalist rhetoric. They just want to get rid of what they saw as a corrupt, useless government. And of course, that's a bit reminiscent of what happened in Hungary, because again, Peter Magyar is again, not a left-wing politician at all. He's very much from the Fidesz-Orban tradition. He is in a sense, sort of right-wing nationalist populist who represents people who just were so fed up with the corruption and uselessness. So there's a sort of sense in which governance issues have become separated from

46:50ideological issues. However, as we said with Hungary, it may begin to unlock things, right? There is an opportunity here. Vucic, although he was very good at charming people, was a big problem. He was a big problem for security in the Western Balkans because he was perpetually threatening Kosovo Albanians, threatening to back Republic of Srpska against Bosnia. He was very, very much flirting with Trump. He had a very strange relationship with the United Arab Emirates, which hasn't been covered much in depth and is something we can get onto in the future, which is the way that particular Gulf stakes create these kinds of alliances. It was an alliance which was with the UAE and not with Saudi or Qatar, and something very interesting

47:34going on there. And I'd hope that this might be an opportunity to give a little bit more energy into at least ideas around single market. The other thing that's coming down the line, which I'm going to talk about but you may not wish to join me on because he's a friend of yours, but Eddie Rama is facing real trouble. So Eddie Rama, the president of Albania, another enormously tall figure, is in real trouble because he got, again, too bloody close to Trump. Yeah. And Trump's property deals and Trump's family and the Board of Peace and all this sort of stuff, which a lot of these Balkan politicians get dragged into. And maybe they feel that their countries are too weak, too marginal to be able to stand up with the European Union against the United States. But he is in real

48:25trouble. And he who, like Vucic, has been a great survivor may well be coming to the end of his tenure too, which again could unlock new possibilities in the Balkans. Yeah, just this point about Trump. So I'm just reading this book at the moment. It's French, Marion Femme Extreme. It's a profile of Maloney, Le Pen and Alice Vidal. But there's a really interesting passage in there about how there was a time when all three of them wanted to identify themselves very closely with Trump. And it's just interesting to see how she analyzes how they're all just slowly sort of, you know, we want to forget the things that we said about Trump. Trump will never see himself as a negative, as a liability, but I think he probably did

49:09damage Bolsonaro ultimately. Lula was able to present himself in that way. And likewise, Vucic liked to project himself as being friendly with Russia and friendly with America. Just before we go to Israel, Rory, steve rosenberg the bbc guy in moscow who um we interviewed a leading not that long ago he does this very interesting review of the russian media where he translates bits that he puts his post-its with very he's got very nice handwriting unlike me um but it's fascinating these aren't editorial lines these are like news stories here's one the serbs this in russia the serbs are absolutely dependent on our gas which they receive cut price via turk stream which meets 90 of their requirements it's easy to guess what would happen to a weakened

49:57economy if these supplies were to stop next one possible sanctions onossible sanctions on Russia would hit Serbia's energy sector. Big letters. It isn't worth it. For Russia, relations with the Balkan country will now become more difficult. The visa-free regime and direct flights are in doubt. I mean, you talk about bullying and intimidation, but that's why the student list, they didn't really have a manifesto they had a kind of document that sort of made a few points but it included them describing uh kosovo as an inalienable and integral part of serbia and a component of our national identity so we're kidding ourselves and we think we've got a nice kind of, you know, Scandita style, Western liberal Democrat movement, but we've got a big, big change. That's the point.

50:50Right, less clear Israel. Less clear Israel. And again, you know, maybe this theme repeats, which is, you know, there is a lot of change happening in Israel. But the question is, what does it really add up to ideologically? So first thing is my normal boring point about how anyone who thinks they can predict elections in advance is either lucky or fooling themselves. We both said this would be closed, Rory. We were right. We both said it would be. We both said it would be closed. But the Israel thing is really interesting because this weird 3.5% threshold that they have, you know, a party like Ram, which is the Arab party, could either pop up with five seats or pop up with zero seats, depending on whether it gets 3.4% or just over 3.5% threshold.

51:37Compared to the analysis that was out last week, Netanyahu has performed slightly better. People thought maybe he'd get 23 seats. Looks like he's on course for probably 27. Yashar maybe performed a little bit worse, maybe got one seat worse. But the real change has been this astonishing Arab turnout. And people who might have been predicting Arabs getting 10 seats, they could be getting close to 18 seats. In Nazareth, they went from a 48% turnout in the last election to 72%. Another Arab constituency from 35% up to 76%. And so, the story that we told that the Arabs are the kingmakers remains. But my fear that we were going to be back to 2018-2022, which was this Israeli election crisis where

52:25basically Likud had the most seats but was never able to form a stable coalition, looks more and more likely. Final thing from me, I want to pay tribute to two extraordinary analysts of Israel, Gil Hoffman and Dalia Scheindlin. So, Gil Hoffman is the man who's emphasized that this is an election which was defined by animosity. Animosity towards Netanyahu, animosity towards Arabs, and animosity towards the ultra-Orthodox. Dalia Scheindlin emphasized what this election was not about. This was not an election about democracy, about human rights, about universal values. It was not an election about peace or concessions or statehood, or even Palestinian well-being. And therefore, almost whoever gets in, if you're a

53:17neighbor, you're likely to have an Israeli government that is still absolutely committed to crippling Iran, to occupying Lebanon and Syria, and to using military force rather than diplomacy to resolve things. This was defined by a lot of people as a referendum on Netanyahu. If you take it as a referendum on Netanyahu, he lost. But he's a great survivor, as we've said many, many times. He's claiming that he's winning because his party got the most seats. But the most depressing thing about the election is the opposition bloc led by Gaddy Eisenkot, they were basically ruling out any sort of deal with the Arab parties. One of the Arab parties, Ram, has been in government before as part of a previous coalition.

53:59But in a sense, it underlines a sort of a sort of apartheid style approach. They're basically saying that those votes don't count. The other parties don't count. And the most interesting thing I've seen today out of all of this was a piece or a statement by Yaya Golan, who leads the Democrat Party, which is one of the Eisenkopf block. And he said this, we must no longer accept Netanyahu's racist division between Jewish votes and Arab votes. The voice of an Israeli citizen voting in Taipei is worth exactly as much as the voice of an Israeli citizen voting in Givat Shemel, no less, not approximately, exactly. He made this point as well, which I think is really, really important. This essentially what both sides have done has said who's got the most zionist votes okay and he has

54:54pointed out golden has pointed out that in netanyahu's block you have 16 knesset members who are from the non-zionist haaredi parties, okay, who promote mass draft evasion, as he puts it, while our children are fighting and dying. So if he's insisting, if Netanyahu is insisting and saying you can only count it as if it's a Zionist majority, he loses 16 on that basis. So I hate the way that both of them, both the Netanyahu bloc and the Eisenkot bloc, are basically saying the Arabs don't have a place in this. Well, as you say, technically, the Arab parties are now the kingmaker. And if they're not going to be allowed to have a role in working out what happens now, they've got no option probably but to have another bloody election. What else are they going to do?

55:38I pity, I guess, the kind of political scientist who's trying to weave all this stuff together, trying to make a story out of Brazil, Serbia, and Israel. What are the themes? I guess one is the theme about great political survivors. So, Lulu and Netanyahu, these aging men who seem to be able to come back again and again, and who were leading their countries before you even came in the case of Netanyahu came in in 97, or in Lulu's case, overlapped with your government and are still sitting around in the same way that figures like Putin are still sitting around. Maybe the second thing is anti-incumbency, but that doesn't really work with Lula either. You know, anybody who said the whole story

56:19is that if you're an incumbent, given how rubbish the economy is, you can never survive, doesn't really seem to be about Lula. Social media, maybe. I mean, part of your Lula story is that if you're an incumbent, given how rubbish the economy is, you can never survive. Doesn't really seem to be about Lula. Social media, maybe. I mean, part of your Lula story that you were sharing with us was how Lula, who hadn't done much social media, somehow between the first and second round, you told that lovely WhatsApp story. No, he didn't even have a phone. Yeah, he didn't have a phone, exactly. He got a smartphone between the two elections and how that may suddenly have made that difference to that critical 10 million votes that brought him through.

56:50And Trump may be a theme. Isn't the theme that autocrats eventually get found out? The Bolsonaro brand is now in deep trouble. Trump's influence on these elections, even though he's claiming credit for Netanyahu having what he called an amazing comeback, Trump's influence was not that great. As I said earlier in relation to Europe, most European right-wing leaders now don't want Trump anywhere near them. Vucic, you know, defined as an autocrat, defeated by this ragbag, as it were. So I think it's that, isn't it? Isn't that where we get hope? Well, I think you're being too optimistic. Yeah, too optimistic. Because I think, unfortunately, it's not a decisive repudiation of Netanyahu in Israel to do with the Arab parties in advance of the election, then one, they made it virtually impossible for themselves to form a government because they were never going to, you know, their the terms of the hard right, which is basically all talk of a Palestinian state, all talk of a two-state solution is for the birds. I just think that's a terrible mistake. And so where was the voice? And I understand the impact of October 7th. Of course, I understand that. But I just think it meant that you were having, once you say it's a

58:25referendum on the existent incumbent leader, unless the others are offering a real alternative, what was the alternative they were offering? They'll basically say we're not as bad as Net and Yahoo. But they weren't saying anything that different. They were still saying he was pretty supportive of what was happening in the West Bank. A little bit pissed off with some of the atrocities, but not much. I think the Arab parties will have been motivated to vote in the numbers that they did. Because there was a talk at one point, should we just sit this out because it's pointless. I think they were motivated by the horrible nature of the campaign. You know, we're basically being told, you lot don't count.

59:02So let's show that we do. Well, my final theme, which maybe is part of this, is that we're in a period of unbelievable instability, which is presumably why Macron got it wrong, calling an election didn't work for him. Why Vucic got it wrong, calling an early election that blew up in his face and led to him losing. Why Bolsonaro and all the pundits on Brazil got it wrong between the first and second round of the Brazilian election. I mean, there is something really interesting about modern politics. If you look at the fact that we're breaking records all the time and what's happening. I mean, what happened in Serbia, nobody's seen it before. That's a very, very weird thing. I can't think of a single example in any European democracy where a party that barely existed with no identifiable leader manages to win

59:51an overwhelming victory. Brazil is literally record-breaking. There's been no example in history of the person who lost the first round turning around and winning the second round, particularly with all the other factors that were in Bolsonaro's favour. And also the inability to follow trends. I mean, you might have thought after seven straight victories for pro-Trump right-wing parties in Latin America, you could imagine the eighth. You can't. So I think we're in a world, and I don't know whether this is social media, I don't know whether this is voter anger anger i don't know whether it's just political culture where even really seasoned operatives like vucic or even lula are going into completely unprecedented elections and it's very very difficult for anyone to quite know

1:00:37what's going to happen in advance so rory we've had a bit of a different different to usual week because we waited for the budget to record the main episode today we've had a bit of a different different to usual week because we waited for the budget to record the main episode today we've had these elections to talk about we're going to record a question time this week which will go out on friday and we're going to exploit the fact that you're in the united states is he from the newsletters in the united states and we've been asking americans as well as people in different parts of the world for their questions about the midterms i'll be looking forward to to your take my rory my son rory's out there as well as people in different parts of the world for their questions about the midterms. I'll be looking forward to your take.

1:01:07My Rory, my son Rory's out there as well, sort of traveling all over the place, getting a sense of what's going on as he goes about his business. I'm not going to make bold predictions, the sort of which you made at the presidential election, but we'll have a very good discussion about it on Friday. See you then. Looking forward to it very much. Ulcerative colitis and Crohn's disease symptoms? Don't pause for the moments that matter. That's why understanding your treatment options matters. Discover what's possible with Trimfiya. Guselcomab. Trimfiya is a prescription medicine used to treat adults with moderately to severely active Crohn's disease and adults with moderately to severely active ulcerative colitis.

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