UK PM announces resignation

**Andrew Peach** (0:00)
New leadership in Britain.

**Keir Starmer** (0:02)
That is why I will resign as leader of the Labour Party.

**Andy Burnham** (0:06)
I swear by Almighty God that I will be faithful and bear true allegiance to His Majesty King Charles.

**Andrew Peach** (0:13)
It's World Business Report from the BBC World Service.
This is Andrew Peach. On the way, we'll look at what a new UK Prime Minister will mean for the world's fifth biggest economy. Also today with Cape Verde holding their own against Spain and Uruguay at the World Cup. How many million dollars is that worth? And we've tribute to the great US economist, Alan Greenspan.
First, it was like something from British history centuries ago. A rival leader from the north west of England travelling to London to seize the crown. Today, not two years since getting the job, the UK Prime Minister Keir Starmer announced he's standing down.

**Keir Starmer** (0:55)
The question my party is asking now is whether I am best placed to lead us into the next general election. Every decision I've taken has been about putting the country I love first.
That is why I will resign as leader of the Labour Party.

**Andrew Peach** (1:17)
He'll likely be replaced in a few weeks by Andy Burnham, who was until a few days ago the Mayor of Manchester, now re-elected to parliament and backed by hundreds of MPs from the governing Labour Party.

**Andy Burnham** (1:29)
I swear by Almighty God that I will be faithful and bear true allegiance to His Majesty King Charles, his heirs and successors according to law. So help me God.

**Andrew Peach** (1:41)
So if that's how things play out, what will it mean for the world's fifth biggest economy? I asked the former Governor of the Bank of England, Lord Mervyn King.

**Mervyn King** (1:50)
To be an effective leader, you need to have clear intellectual convictions as to what needs to be done. I don't think we've seen that for a number of years now. And it needs an overarching narrative to explain why very difficult decisions will have to be taken. And I think that if people understand why there is this overall plan, which involves some difficulty in the short run, we're doing this to make the British economy stronger. And that will be to the benefit of our grandchildren. The immediate outlook is tough decisions to be made. And I think it's too early to judge whether Andy Burnham, if he does become Prime Minister, will have a clear overall answer to all that. And we need that, because simply pretending that problems can be solved by not raising taxes and not cutting spending, just to not go to work, we've done nothing yet for defence spending. There are many things which need to be done, which are simply at this stage just promises. But I think Andy Burnham has a record of saying we must do something about some of these.

**Andrew Peach** (2:53)
And a lot's been made of Sekeir Starmer's, perhaps lack of ability to shape a narrative and take the electorate with him on a path of, you know, potentially difficult decisions and hardship, as you say. Do you think it's more than that, though? What I'm picking up from you is this sense of a lack of economic coherence in what the government has been trying to do.

**Mervyn King** (3:15)
You need to have clear and deep intellectual convictions in order to get through the inevitable periods when there'll be squalls and problems, but to keep going in the right direction that you believe in. And I think without that, then governments do get tossed around and they put forward proposals and they back off them and they change their mind. We need leadership with deep intellectual convictions. Now, that doesn't come necessarily just from one person. It can come from a collective, a cabinet. But each of them needs to have those convictions about what they're doing in their area. One of the reasons why the last decade has been so difficult is that in each of the major offices and ministerial appointments in cabinet, we've had massive turnover. People do one year and move on to a different job. You need to be in it for some considerable time to understand what needs to be done. There are many other questions. What do we do about defense? What do we do about social care? How are we going to deal with failing water companies, the railways? What about the tax system? What about the triple lock for pensioners? What about the welfare system?
All of these things need to be looked at together in an overall view of, yes, with this package as a whole, people may lose some things in one area and gain it on the other. The pension system could be sorted out. There are many areas where by looking at problems together, it's possible to portray a narrative which says, this is what we have to do. It will take time. You're not going to feel better off tomorrow. But if we start on this program now, then not only our children, but our grandchildren will benefit from it, as opposed to bequeathing them a large amount of national debt which they will have to pay taxes to service.