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Trump speaks with Starmer, and Reeves tries to reset – Politics Weekly Westminster

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January 27, 2025

TLDR: Discussion on Keir Starmer's first call with Donald Trump since Inauguration and its implications for the 'special relationship'. Analysis on Chancellor Rachel Reeves' upcoming speech outlining strategies to boost economy, assessing potential success.

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In this episode of Politics Weekly Westminster, Pippa Crerar and Kiran Stacey explore Keir Starmer's first conversation with Donald Trump since his inauguration and what this means for the UK-US "special relationship." The episode also delves into Rachel Reeves’ plans for boosting the UK economy as Chancellor, assessing their potential impact.

Key Talking Points

Starmer and Trump: A New Era?

  • During a recent phone call, Donald Trump praised Keir Starmer, referring to him as a liberal but acknowledging a good relationship. This call lasted 45 minutes, longer than typical conversations Trump has had with previous UK Prime Ministers.
  • The detailed readout from Downing Street highlights important discussions on trade, economic issues, and even mentions of the royal family, suggesting a more harmonious beginning compared to past UK-US relations.
  • Crerar and Stacey discuss how Starmer's grounded approach to communication may appeal to Trump, and how mutual respect could potentially shape future interactions.

Historical Context of UK-US Relations

  • Comparisons are drawn to previous calls between Trump and Theresa May or Boris Johnson, which tended to be shorter and less favorable, often veering off into irrelevant topics.
  • The episode emphasizes the importance of personal relationships in politics, referencing Japan’s late Prime Minister Shinzo Abe's ability to forge a strong bond with Trump that benefited Japan economically.

Rachel Reeves and Economic Growth

  • Rachel Reeves, the new Chancellor, is set to outline her vision for economic growth in an upcoming speech, emphasizing a “house-building revolution”. This intent focuses on spurring investment and stimulating the economy.
  • Proposed changes include adjustments to the non-dom tax regime and potential approvals for large infrastructure projects, like a third runway at Heathrow.
  • Controversy surrounds her enthusiasm for growth, as there will likely be significant pushback from environmental groups and more established sectors. Crerar and Stacey note that while the talk is positive, actual economic indicators show continued sluggish growth.

Balancing Growth and Public Sentiment

  • Critics within the government harbor concerns about the trajectory leading towards growth, particularly in light of public unease about corporate practices and environmental degradation.
  • Current key statistics reveal minimal economic growth (0.1% GDP increase last quarter), indicating that optimism needs to be balanced with realism to inspire business confidence.

The Future of the US-UK Trade Relationship

  • Discussions delve into the looming US-UK trade agreements, with analysts expressing skepticism about a comprehensive trade deal due to public hesitance around regulatory alignment, especially concerning food safety practices.
  • The podcast highlights the criticality of defense spending and the UK’s commitment to NATO in negotiating with the US, indicating that stability here could sway US interest towards favorable trade terms.
  • Peter Mandelson’s appointment as ambassador also draws attention, with concerns about his perceived ties to China and how Trump’s administration might react to it.

Challenges Ahead

  • Crerar and Stacey caution that while Reeves’ ambitions for growth may resonate, they must be tactically managed within the realities of public finances and public opinion.
  • The critical balance lies between seeking necessary resources and overextending to appease capitalist interests, which may not be sustainable long-term.

Conclusion

This episode of Politics Weekly Westminster underscores the complexities of current UK political dynamics, particularly in relation to transatlantic ties and economic strategy. While optimism surrounds Starmer's potential diplomacy with Trump and Reeves' vision for growth, both face substantial hurdles that need strategic navigation to achieve meaningful outcomes. As the political landscape evolves, all eyes remain on how these relationships will unfold and influence future policy directions.

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