WEBVTT - The Exclusive Interview with Chancellor Rachel Reeves 0:00:03.160 --> 0:00:08.240 Bloomberg Audio Studios, Podcasts, radio News. 0:00:09.880 --> 0:00:12.280 Welcome to in the City of podcasts from Bloomberg about 0:00:12.320 --> 0:00:14.560 the story is important to the City of London. I'm 0:00:14.600 --> 0:00:17.480 Francin Laqua. We're bringing you something special today. You'll be 0:00:17.520 --> 0:00:19.800 hearing an interview we did with the UK's new Chancellor, 0:00:19.920 --> 0:00:22.800 Rachel Reeves when she came into Bloomberg offices in London 0:00:22.880 --> 0:00:25.759 earlier today. Afterwards, we'll also be joined by Bloomberg UK 0:00:25.960 --> 0:00:29.600 Economy Senior reporter Phil Aldrake as we debrief the interview. 0:00:32.040 --> 0:00:34.519 Welcome to the City of London, the City of. 0:00:34.479 --> 0:00:36.199 The City, the City of London. 0:00:38.840 --> 0:00:43.520 Please mind the gap between the tree and the financial 0:00:43.640 --> 0:00:50.440 hearts of the country, the city, the City. 0:00:50.880 --> 0:00:52.560 Welcome to in the city. 0:00:54.320 --> 0:00:56.600 Band, clear of the doors. 0:00:58.200 --> 0:01:00.880 Chancellor, thank you so much for joining us Bloomberg. In 0:01:00.960 --> 0:01:04.040 two weeks since the UK election, you've certainly hit the 0:01:04.040 --> 0:01:07.360 ground running. Today there was also, you know, talk about 0:01:07.360 --> 0:01:10.640 this fiscal lock in why do you feel they need 0:01:10.680 --> 0:01:10.960 to do that. 0:01:11.560 --> 0:01:15.319 We've introduced to Parliament today the Budget Responsibility Bill that 0:01:15.480 --> 0:01:19.240 was first announced in the king Speech just yesterday, and 0:01:19.319 --> 0:01:22.399 the purpose of this bill is to provide the fiscal 0:01:22.440 --> 0:01:25.040 lock so that never again can a Prime Minister or 0:01:25.080 --> 0:01:28.560 a Chancellor do what Liz Trust and Quasi Quatting did 0:01:28.640 --> 0:01:32.839 with their disastrous mini budget just under two years ago. 0:01:33.120 --> 0:01:35.960 So this will mean that the Office of Budget Responsibility, 0:01:36.000 --> 0:01:39.800 the Independent Office, can always provide a forecast when there 0:01:39.840 --> 0:01:44.759 are significant and permanent tax and spending changes, specifically worth 0:01:44.760 --> 0:01:47.840 more than one percent of GDP. That would have meant 0:01:47.960 --> 0:01:51.560 it would have triggered an OBR forecast back when Liz 0:01:51.560 --> 0:01:54.240 Trust and Cozikarten introduced that disastrous mini budget. 0:01:54.800 --> 0:01:57.600 And so that I guess it is something that investors will, 0:01:57.680 --> 0:02:01.440 you know, take solos to announced to what the premis 0:02:01.640 --> 0:02:03.600 said that you will achieve that two point five percent target. 0:02:03.640 --> 0:02:05.000 Are you confident that's achievable? 0:02:06.240 --> 0:02:10.760 So the purpose of today really was to give businesses, 0:02:10.840 --> 0:02:15.120 give investors that confidence that Britain is a stable place 0:02:15.280 --> 0:02:18.400 to invest and do business. I'm determined to do that. 0:02:18.680 --> 0:02:22.040 We were elected two weeks ago on a mandate to 0:02:22.120 --> 0:02:26.640 grow our economy based on that stability that is so 0:02:26.880 --> 0:02:30.799 essential to underpin any economic decision making, and so that's 0:02:30.840 --> 0:02:33.880 why this bill is so important. Now. I'm under no 0:02:33.919 --> 0:02:36.720 illusions about the scale of the challenge that I face 0:02:36.880 --> 0:02:40.160 in this job. There are going to be difficult decisions ahead, 0:02:40.680 --> 0:02:43.680 but I was really clear during the election that everything 0:02:43.720 --> 0:02:46.079 that we put forward, whether that is on the NHS 0:02:46.200 --> 0:02:48.920 or on defense or on tax policy, will always be 0:02:48.960 --> 0:02:52.280 fully costed and fully funded. That's very different so what 0:02:52.320 --> 0:02:55.920 we've had these last fourteen years with decisions with no 0:02:56.040 --> 0:02:58.480 regard to where the money's going to come from. And 0:02:58.520 --> 0:02:59.040 I'm going to. 0:02:58.960 --> 0:03:00.400 Be different answer. 0:03:00.560 --> 0:03:02.079 I know a lot of course of what you're trying 0:03:02.120 --> 0:03:04.440 to put in place will depend on private capital coming 0:03:04.440 --> 0:03:08.040 into the UK. Have you had discussions with institutions, investors, 0:03:08.040 --> 0:03:10.639 even pension funds of their willingness to come to the UK. 0:03:11.040 --> 0:03:14.840 You're absolutely right that our plans to grow the economy 0:03:15.320 --> 0:03:19.360 depend on businesses and investors choosing Britain as a place 0:03:19.440 --> 0:03:21.920 to invest. And I want investors to look at Britain 0:03:22.040 --> 0:03:24.680 and see a country that's got a stable government with 0:03:24.800 --> 0:03:27.880 a clear mandate to grow the economy and chooses Britain 0:03:28.240 --> 0:03:30.840 as a stable place to invest in an increasingly volatile 0:03:30.880 --> 0:03:34.520 and uncertain world, which is why the fiscal lot today 0:03:34.600 --> 0:03:37.720 is so important, but also the other changes we've announced 0:03:37.760 --> 0:03:40.920 in the last two weeks. We have announced more policies 0:03:41.280 --> 0:03:43.760 to grow the economy than the last government did in 0:03:43.800 --> 0:03:47.640 fourteen years. In the first seventy two hours in the job, 0:03:48.160 --> 0:03:52.360 I made more comprehensive changes to the UK planning system 0:03:52.400 --> 0:03:55.320 than the previous government did in more than a decade, 0:03:55.520 --> 0:03:59.400 because I know that we need to unlock that private 0:03:59.480 --> 0:04:02.480 investment that businesses tell me they are ready to invest 0:04:02.800 --> 0:04:04.600 if we get rid of some of those blockages, and 0:04:04.640 --> 0:04:06.760 the blockages in the planning system I think are more 0:04:06.800 --> 0:04:11.560 significant than anything else. And so those changes to bring 0:04:11.600 --> 0:04:15.840 back mandatory housing targets for local authorities, ending the moratorium 0:04:16.080 --> 0:04:20.239 on shore wind calling in planning decisions, on data centers 0:04:20.279 --> 0:04:23.640 and on housing really crucial both to send a signal 0:04:23.680 --> 0:04:26.400 to business that Britain is a place to invest, but 0:04:26.520 --> 0:04:29.120 also to make sure that we can get on with 0:04:29.160 --> 0:04:30.880 things and get building in Britain again. 0:04:31.240 --> 0:04:32.120 And are they listening. 0:04:32.120 --> 0:04:34.680 Have you gotten cars from big investors saying yes, that's 0:04:34.720 --> 0:04:36.400 a plan that I wanted to see and I'm. 0:04:36.200 --> 0:04:40.640 In absolutely so. In my first speech at the Treasury 0:04:41.080 --> 0:04:43.479 a week and a half ago, we had businesses, we 0:04:43.520 --> 0:04:47.039 had investors in the audience met afterwards. The following day 0:04:47.480 --> 0:04:50.559 we announced the creation of a National Wealth Fund, work 0:04:50.640 --> 0:04:53.280 led by Mark Carney. The task was led by Mark 0:04:53.320 --> 0:04:55.960 Carney for the Labour Party when we were in opposition 0:04:56.360 --> 0:04:59.719 now reporting to a Labor government, and on that Wealth 0:04:59.720 --> 0:05:02.840 Fund task force, we also had Amanda Blank from a 0:05:02.960 --> 0:05:08.360 Viva Vencat, from Berkley's, Antonio from Energy and other big 0:05:08.480 --> 0:05:12.680 UK investors. And that is absolutely crucial because there's no 0:05:12.839 --> 0:05:15.640 plans that I can draw up in my new office 0:05:15.680 --> 0:05:19.000 in the Treasury that are going to work unless we 0:05:19.120 --> 0:05:22.000 have business buy in. And I hope that businesses saw 0:05:22.040 --> 0:05:24.880 in Labour's manifesto and also in the plans that we've 0:05:24.880 --> 0:05:28.880 announced in government have the fingerprints of business all over 0:05:28.920 --> 0:05:32.120 them because these plans have been co written with business, 0:05:32.279 --> 0:05:36.120 because they're all about unlocking private sector investments into our economy. 0:05:36.520 --> 0:05:39.600 Chances are you considering tax breaks to either boost pension 0:05:39.640 --> 0:05:41.760 savings or make UK investments more attractive. 0:05:42.600 --> 0:05:45.599 I'm not going to announce any tax breaks or tax 0:05:45.720 --> 0:05:49.440 changes without the same where the money is going to 0:05:49.480 --> 0:05:52.680 come from, and we will have a budget later this year. 0:05:52.960 --> 0:05:55.400 But I also just need to be really clear and 0:05:55.440 --> 0:05:58.320 honest about the scale of the challenge that we have 0:05:58.400 --> 0:06:01.719 inherited with the public finances. We're going to have to 0:06:01.720 --> 0:06:05.119 make difficult decisions. We need to fix the foundations before 0:06:05.160 --> 0:06:09.039 we can start rebuilding things in Britain. But unlike the 0:06:09.040 --> 0:06:11.120 previous government, I am going to be honest about the 0:06:11.160 --> 0:06:13.520 scale of the challenge. I'm going to level with people 0:06:13.640 --> 0:06:16.359 and together we're going to rebuild our country based on 0:06:16.760 --> 0:06:20.320 that private sector business investment to get our economy growing. 0:06:20.400 --> 0:06:24.520 Because I asked the Treasury officials to give me an 0:06:24.520 --> 0:06:28.120 assessment of how much stronger the UK economy would be 0:06:28.200 --> 0:06:30.680 today if we'd have grown at just the average rate 0:06:30.720 --> 0:06:34.120 of OECD economies these last fourteen years, and the answer 0:06:34.160 --> 0:06:36.640 is we'd be one hundred and forty billion pounds bigger today, 0:06:36.839 --> 0:06:40.000 worth five thousand pounds for every family in Britain. We 0:06:40.120 --> 0:06:42.719 have got to grow our economy. It's the only way 0:06:43.080 --> 0:06:46.919 to improve living standards, keep taxes low and have the 0:06:46.920 --> 0:06:49.320 money that we need for our dilapidated public services. 0:06:49.800 --> 0:06:53.680 Jenra, you're also promising to reset the relationship with European partners. 0:06:53.760 --> 0:06:55.560 Are there any quick wins there to be had? 0:06:56.160 --> 0:06:59.200 Well, the Prime Minister is hosting European leaders at blenh 0:06:59.240 --> 0:07:02.640 And Palace in England today and that's really important as 0:07:02.680 --> 0:07:08.440 a chance to reset those relationships and foster a new 0:07:08.440 --> 0:07:11.840 era of trust between the UK and our nearest neighbors 0:07:11.840 --> 0:07:15.800 and trading partners in Europe, and we're determined to do that. 0:07:15.960 --> 0:07:18.080 It doesn't mean going back into the Single Market or 0:07:18.120 --> 0:07:21.640 Customs Union or bringing battery movement of labor, but it 0:07:21.720 --> 0:07:25.760 does mean having a closer trading relationship and also building 0:07:25.960 --> 0:07:30.920 a stronger strategic security alignment with our neighbors in Europe 0:07:30.960 --> 0:07:33.640 given the threats that we face as a continent, and 0:07:33.720 --> 0:07:37.520 so Blenheim Palace just today is a chance for us 0:07:37.560 --> 0:07:40.640 to begin to reset those relationships and foster a stronger 0:07:40.680 --> 0:07:43.840 relationship between Britain and our neighbors and allies in Europe. 0:07:44.040 --> 0:07:46.160 But are there any industries that you would see you 0:07:46.800 --> 0:07:50.760 again when in terms of parallel kind of you know, 0:07:50.960 --> 0:07:52.040 some of the laws being together. 0:07:52.440 --> 0:07:54.880 Well, there's a number of areas where we would like 0:07:55.000 --> 0:07:58.600 to make some changes to the deal that the previous 0:07:58.680 --> 0:08:01.880 government secured. We would like the mutual recognition of professional 0:08:01.960 --> 0:08:06.840 qualifications to help our services sector, reduce the bureaucracy for 0:08:06.960 --> 0:08:11.239 our cultural industries when touring around Europe, and a veterinary 0:08:11.240 --> 0:08:15.080 agreement to help our fantastic food and farming sector in Britain. 0:08:15.440 --> 0:08:18.640 That will require negotiation that will require give and take 0:08:18.680 --> 0:08:21.920 on both sides, but we want to boost our trade, 0:08:21.960 --> 0:08:25.280 make it easier for great British businesses big and small 0:08:25.600 --> 0:08:28.400 to sell goods and services right across Europe. 0:08:28.720 --> 0:08:30.679 Given the challenges you were mentioning, when can we expect 0:08:30.680 --> 0:08:32.319 a budget from new September or October? 0:08:33.080 --> 0:08:36.800 Well? I said in my first speech as Chancellor of 0:08:36.880 --> 0:08:40.480 the Exchequer last Monday that before the summer recess I 0:08:40.520 --> 0:08:44.199 would come to Parliament with an update on the fiscal position, 0:08:44.800 --> 0:08:48.760 the spending inheritance that this incoming labor government is now 0:08:48.800 --> 0:08:51.520 having to deal with, and I will set out when 0:08:51.520 --> 0:08:54.200 we do that statement the date for the budget in 0:08:54.240 --> 0:08:54.760 the autumn. 0:08:54.880 --> 0:08:56.480 But did you see that being a three to five 0:08:56.559 --> 0:08:58.600 year spending reviewer, does it need to be shorter to 0:08:58.640 --> 0:09:01.439 make sure that the OBUA doesn't take into the growth 0:09:01.440 --> 0:09:02.120 you're expecting. 0:09:02.679 --> 0:09:05.600 Well, we will set out those the details and the 0:09:05.679 --> 0:09:09.360 dates when I come to the House of Commons in July. 0:09:10.080 --> 0:09:12.520 But you know Francing that I want to bring back 0:09:12.520 --> 0:09:15.640 stability to the UK economy and that gives means giving 0:09:15.720 --> 0:09:19.920 certainty to businesses and families, the state of the public finances, 0:09:20.080 --> 0:09:21.559 what we're going to do to put them on a 0:09:21.600 --> 0:09:24.840 firmer footing. But all that depends on bringing growth back 0:09:24.880 --> 0:09:28.280 to our economy so that we can repair our public services, 0:09:28.320 --> 0:09:33.080 repair our public finances and ensure that living standards increase, 0:09:33.160 --> 0:09:36.720 that working people are better off by bringing investment, bringing 0:09:36.760 --> 0:09:37.800 business back to Britain. 0:09:37.880 --> 0:09:40.160 But chance for that growth target is it two point 0:09:40.160 --> 0:09:42.840 five percent for next year or is that something that 0:09:42.880 --> 0:09:44.080 you'll have to assess. 0:09:44.559 --> 0:09:47.640 Our ambition is to have the fastest growing economy in 0:09:47.720 --> 0:09:50.520 the G seven, with good jobs and productivity growth in 0:09:50.559 --> 0:09:53.040 all parts of the UK. And that's why all the 0:09:53.080 --> 0:09:56.199 announcements that I've made since becoming Chancellor, the planning reform, 0:09:56.440 --> 0:09:59.240 the creation of the National Wealth Fund, the fiscal lock 0:09:59.320 --> 0:10:03.600 that we've introduced to Parliament today all about bringing the stability, 0:10:03.640 --> 0:10:06.400 investment and reform to our economy so that we can 0:10:06.440 --> 0:10:10.160 grow our economy and be competitive in that global economy. 0:10:10.160 --> 0:10:12.280 Again, so difficult to put a number on it. I'm 0:10:12.280 --> 0:10:12.719 not going to. 0:10:12.679 --> 0:10:14.920 Put a number on it, and it's the end up 0:10:14.920 --> 0:10:18.719 to the Office of Budget Responsibility to make those forecasts. 0:10:18.840 --> 0:10:22.320 But I'm doing everything within my power, working with my 0:10:22.360 --> 0:10:26.560 colleagues in the Cabinet, to ensure that we are pursuing 0:10:26.559 --> 0:10:29.920 a pro growth, a pro business agenda to bring investment 0:10:29.960 --> 0:10:33.160 back to Britain because investment is the bedrock of a strong, 0:10:33.240 --> 0:10:37.360 successful economy. We have the lowest share of investment of 0:10:37.559 --> 0:10:40.400 neg seven economy. I want to turn that around so 0:10:40.440 --> 0:10:43.880 we can bring good jobs, bring prosperity back to the 0:10:43.960 --> 0:10:44.600 United Kingdom. 0:10:44.800 --> 0:10:48.200 Chance do you worry about wealthy tax payers moving to Europe? 0:10:48.240 --> 0:10:49.520 What can you tell us about non darmes. 0:10:50.200 --> 0:10:52.520 Well, we were really clear in our manifesto if you 0:10:52.559 --> 0:10:55.600 make Britain you're home. You should pay your taxes here 0:10:55.840 --> 0:11:00.160 and that's what the outgoing Conservative governments we're looking to 0:11:00.200 --> 0:11:03.760 do as well. But it is important that we bring 0:11:03.800 --> 0:11:06.240 in that tax revenue and that if you live here, 0:11:06.280 --> 0:11:09.920 you should contribute to investment in our health service, in 0:11:10.000 --> 0:11:12.520 our defense, in our law and order. And that will 0:11:12.520 --> 0:11:15.800 happen under this Labor government. But we want Britain to 0:11:15.840 --> 0:11:19.080 be a really attractive place for investors and businesses and 0:11:19.160 --> 0:11:22.440 successful wealth creators and entrepreneurs from around the world, and 0:11:22.480 --> 0:11:26.800 that's why we're determined to unlock our economy for private 0:11:26.840 --> 0:11:30.720 sector investment through the planning reforms, through the National Wealth Fund, 0:11:30.920 --> 0:11:33.080 and indeed through the other changes we're going to bring in, 0:11:33.120 --> 0:11:35.720 whether that's through the skills system or pensions reform. 0:11:36.520 --> 0:11:40.360 None. Times will be very different to what the Conservatives announced. 0:11:40.679 --> 0:11:42.280 The plan that you're expecting for. 0:11:42.280 --> 0:11:47.040 Them, well, there's two differences between what the outgoing government 0:11:47.360 --> 0:11:50.760 was proposing and what we will do. First of all, 0:11:50.760 --> 0:11:54.480 we will bring those changes forward by a year, and 0:11:54.640 --> 0:11:58.600 second we will make reforms, for example, around inheritance tax. 0:12:00.080 --> 0:12:01.800 It is right that if you make Britain your home 0:12:01.880 --> 0:12:04.440 you should pay your share of taxes here and an 0:12:04.520 --> 0:12:07.360 outdo data system based on where your father was born 0:12:07.880 --> 0:12:10.640 to determine how you're treated in the tax system. That's 0:12:10.679 --> 0:12:12.920 just not right. It's not fit for a modern economy. Now, 0:12:12.960 --> 0:12:15.679 of course we will have rules that if you come 0:12:15.720 --> 0:12:18.719 to Britain for a short period of time on to 0:12:18.840 --> 0:12:22.800 comment with work, for example, that we will not be 0:12:22.840 --> 0:12:26.440 taxing your global income. But if you make Britain your home, 0:12:26.480 --> 0:12:29.200 if this is your permanent place of residents, then just 0:12:29.240 --> 0:12:31.280 like everybody else, you should pay your taxes here. What 0:12:31.400 --> 0:12:34.560 a modern system fit for a modern economy. We don't 0:12:34.600 --> 0:12:36.640 have that today. Those are reforms we want to bring 0:12:36.640 --> 0:12:37.520 in Chanson. 0:12:37.559 --> 0:12:39.600 When you look at Shean, would you welcome an IPO 0:12:39.800 --> 0:12:40.280 in the UK? 0:12:40.320 --> 0:12:41.160 In the City of London. 0:12:41.320 --> 0:12:45.360 Well, I welcome the FCA changes just last week to 0:12:45.679 --> 0:12:49.840 really turbocharge listings in the UK, and I want businesses 0:12:49.920 --> 0:12:52.839 to choose Britain as a place to list. For the 0:12:52.960 --> 0:12:56.920 last few years, we've seen story after story about companies 0:12:57.000 --> 0:12:59.960 delisting from the London Stock Exchange, listing in New York, 0:13:00.160 --> 0:13:02.680 listing in Europe. I want to turn that around. I 0:13:02.760 --> 0:13:05.439 want Britain to be the place of choice to make 0:13:05.480 --> 0:13:08.800 an IPO to grow your business. That's why I welcome 0:13:08.840 --> 0:13:11.040 the reforms that the FCA put in place last week. 0:13:11.160 --> 0:13:14.840 It's also why I'm determined to change our pension system 0:13:15.240 --> 0:13:18.160 so we can unlock some of those assets under management 0:13:18.640 --> 0:13:21.160 to help start up and scale up businesses access the 0:13:21.200 --> 0:13:23.920 capital they need, so we can keep more businesses here 0:13:23.960 --> 0:13:24.400 in Britain. 0:13:24.920 --> 0:13:25.160 Chance. 0:13:25.440 --> 0:13:28.119 The US is also really going quite hard on tariffs 0:13:28.240 --> 0:13:30.960 with China. We're going up to an election. The UK 0:13:31.080 --> 0:13:33.840 has not really squared with the EU on ev terrorifts, 0:13:33.840 --> 0:13:36.640 for example, or the US. How would you deal as 0:13:36.640 --> 0:13:39.600 a small open economy with China and Chinese tariffs. 0:13:40.360 --> 0:13:42.760 Well, we are a small open trading economy and we 0:13:42.880 --> 0:13:45.880 benefit from those trade links with countries around the world. 0:13:46.400 --> 0:13:49.840 Both for exports and imports, but also for foreign direct investment. 0:13:50.200 --> 0:13:56.319 And our view is that where possible we trade, we cooperate, 0:13:56.400 --> 0:14:00.239 and we challenge in areas where it's important to challenge, 0:14:00.600 --> 0:14:03.400 but we don't want to close the UK economy down 0:14:03.520 --> 0:14:07.560 to imports and exports. We benefit from those trade links 0:14:07.600 --> 0:14:08.959 around the world, including with China. 0:14:09.480 --> 0:14:10.800 Chanceller, thank you so much for your time. 0:14:10.920 --> 0:14:11.440 Thank you. 0:14:15.240 --> 0:14:16.960 With me today in the studio to talk about the 0:14:17.000 --> 0:14:20.720 interview you just heard as Bloomberg's UK Economy senior reporter 0:14:21.040 --> 0:14:23.160 Philip Aldrig. Phil thank you so much for joining us now. 0:14:23.200 --> 0:14:25.000 People have to understand that every time we have a 0:14:25.000 --> 0:14:27.440 big interview, we're like briefed within a ninch of our 0:14:27.480 --> 0:14:30.720 lives with all the greatest minds at Bloomberg, and Phil 0:14:30.840 --> 0:14:32.400 you're one of them. So we spend a lot of 0:14:32.400 --> 0:14:34.760 time trying to figure out, you know, what the message 0:14:34.760 --> 0:14:36.960 of the chancer was, how we'd prepare for questions, what 0:14:37.000 --> 0:14:37.880 we'd ask her. 0:14:38.120 --> 0:14:38.720 What do you. 0:14:38.720 --> 0:14:41.840 Think her key message has been. I mean they've done 0:14:41.840 --> 0:14:43.440 so much in two weeks. 0:14:43.880 --> 0:14:46.400 Yeah, they have been very busy. Actually, you speak to 0:14:46.440 --> 0:14:49.200 the Treasury officials and they were in the immediately after 0:14:49.200 --> 0:14:51.520 the election that weekend they were working away and there 0:14:51.680 --> 0:14:55.120 was you know, they wanted to get going fast. The 0:14:55.200 --> 0:14:57.320 labor government. The main thing, obviously she was trying to 0:14:57.800 --> 0:14:59.800 the message she was trying to give was that you know, 0:15:00.320 --> 0:15:02.640 this is going to be a government that has single 0:15:02.720 --> 0:15:06.800 minded about getting growth, and so prerequisite to that is stability. 0:15:07.320 --> 0:15:10.240 And then the mechanism of growth is going to be investment, 0:15:10.280 --> 0:15:12.920 and a lot of that is the private sector capital 0:15:13.000 --> 0:15:15.720 that she wants released. And so these were these kind 0:15:15.720 --> 0:15:18.840 of three things that which sort of guide the agenda 0:15:18.920 --> 0:15:21.440 and her sort of philosophy of how to get the 0:15:21.520 --> 0:15:22.920 UK strong and stable. 0:15:22.960 --> 0:15:24.560 I thought it was quite telling that actually, so this 0:15:24.600 --> 0:15:28.800 is her first TV sit down interview since being appointed chancellor. 0:15:28.800 --> 0:15:32.800 And it's interesting that she spoke to Bloomberg because we 0:15:32.840 --> 0:15:35.000 speak to businesses. So I don't know whether it was 0:15:35.040 --> 0:15:37.240 it was more of a pitch for you know, private 0:15:37.280 --> 0:15:40.680 capital money coming from abroad, or is it with businesses 0:15:40.680 --> 0:15:42.440 and saying, look, well, achieve growth, but there are going 0:15:42.480 --> 0:15:43.800 to be very tough decisions ahead. 0:15:44.320 --> 0:15:49.120 She clearly wants to win both the investment money and 0:15:49.360 --> 0:15:52.440 business investment in the UK. She actually said there are 0:15:52.480 --> 0:15:54.240 no plans that I can draw up in my new 0:15:54.280 --> 0:15:56.720 office in the Treasury, that are going to work unless 0:15:56.720 --> 0:15:59.480 we have business buy in, which other was quite a 0:15:59.520 --> 0:16:02.600 good telling line for exactly how she's thinking about this. 0:16:02.720 --> 0:16:06.280 So obviously they've their premises as she as she has 0:16:06.320 --> 0:16:08.320 made clear who she kept saying, I'm going to level 0:16:08.320 --> 0:16:10.560 with the public. I'm honest, I'm different. I'm not going 0:16:10.600 --> 0:16:13.320 to pretend that we can spend when we can't spend, 0:16:13.680 --> 0:16:15.800 which is which does set up a sort of interesting 0:16:15.840 --> 0:16:21.400 budget spending review situation in the future. But the fact 0:16:21.520 --> 0:16:23.520 is that the inheritance is pretty poor, so they don't 0:16:23.520 --> 0:16:25.280 have much money. So where do you get the growth from. 0:16:25.280 --> 0:16:27.200 You have to get it from the private markets. Effectively, 0:16:27.200 --> 0:16:28.840 you sort of leverage it in and hope that that's 0:16:28.880 --> 0:16:32.240 going to be the mechanism and obviously the stability of 0:16:32.240 --> 0:16:34.800 this kind of fiscal lock that they have set up 0:16:34.840 --> 0:16:38.160 so that the OBI will always judge whether the government 0:16:38.400 --> 0:16:45.480 is establishing a sort of economic stable economic future by 0:16:46.440 --> 0:16:50.920 testing any of their spending programs which are thirty pounds 0:16:51.280 --> 0:16:53.320 or more, so there will be an automatic thing. 0:16:53.360 --> 0:16:53.640 Now. 0:16:53.880 --> 0:16:56.600 Those things will be absolutely vital to setting the sort 0:16:56.600 --> 0:17:00.200 of bedrock for the UK to try and build sort 0:17:00.200 --> 0:17:03.280 of growth trajectory from there. 0:17:03.560 --> 0:17:06.480 Who do you think that speaks to? Again, it's almost 0:17:06.480 --> 0:17:09.760 like self imposing budget rules, right with an independent third 0:17:09.800 --> 0:17:11.480 party that looks at what you're trying to do and 0:17:11.520 --> 0:17:15.320 trying to spend. Will that be reassuring for global markets 0:17:15.320 --> 0:17:16.880 that we're not going to have a list trust moment? 0:17:16.920 --> 0:17:18.680 And she was very clear that you know she never 0:17:18.680 --> 0:17:21.080 wants that to happen, or is she trying to do 0:17:21.119 --> 0:17:23.720 a president so that no matter what happens four or 0:17:23.760 --> 0:17:28.040 five six years, that you know that mini budget meltdown 0:17:28.040 --> 0:17:28.840 doesn't happen again. 0:17:28.920 --> 0:17:31.000 If you look back to sort of before the pandemic, 0:17:31.520 --> 0:17:34.600 it never happened that you would have it's one percent 0:17:34.640 --> 0:17:38.280 of GDP of either spending uncosted spending or uncosted tax 0:17:38.320 --> 0:17:41.280 carts will have to the OBR is obliged to step 0:17:41.280 --> 0:17:43.159 in and do an assessment of you know, what is 0:17:43.200 --> 0:17:44.840 the scale of the black hole that this will cause 0:17:45.080 --> 0:17:50.359 so effectively will make the government, any government nervous about 0:17:50.400 --> 0:17:52.600 doing anything which is uncosted because they know that they're 0:17:52.640 --> 0:17:55.400 going to have someone breathing down their necks straight away. Now, 0:17:55.560 --> 0:17:57.679 the clear point of that is because we had the 0:17:57.800 --> 0:18:00.440 LDI crisis or whatever it is that you will if 0:18:00.600 --> 0:18:05.040 you're effectively giving any future government reason for thought or 0:18:05.160 --> 0:18:08.120 just a pause for thought before doing these uncosted, big, 0:18:08.200 --> 0:18:11.439 uncosted things. So yeah, that should be reassuring to the 0:18:11.600 --> 0:18:13.960 to the asset managing manager market, to the guilt markets, 0:18:13.960 --> 0:18:17.920 et cetera. That should, in theory, prevent another l d 0:18:18.040 --> 0:18:21.919 I type trust mini budget problem emerging. So I mean 0:18:21.920 --> 0:18:24.879 that's I mean, she's definitely talking to the big pools 0:18:24.920 --> 0:18:26.919 of capital out there that are going to be buying 0:18:27.240 --> 0:18:31.400 government debt. And she did name she actually named Aviva 0:18:31.480 --> 0:18:34.320 and Legal in General as some of the backers for 0:18:34.480 --> 0:18:36.520 her National Wealth Fund, so that you know, she's saying, 0:18:36.520 --> 0:18:39.199 we are getting these these you know, buying from the 0:18:39.280 --> 0:18:40.719 investment community. 0:18:40.920 --> 0:18:43.080 What's the one question you wish she answered. 0:18:44.520 --> 0:18:46.960 It's tax rises. What do you get which which tax 0:18:47.040 --> 0:18:49.240 is going to go up? And actually you did ask 0:18:49.280 --> 0:18:51.320 that when is the budget? She said that we're going 0:18:51.320 --> 0:18:52.679 to tell you when the budget is at the end 0:18:52.720 --> 0:18:55.960 of July. And that is itself is a little bit 0:18:55.960 --> 0:18:58.439 of a revelation because it does suggest that the budget 0:18:58.480 --> 0:19:01.920 won't be until that the earliest budget will be is October. 0:19:01.920 --> 0:19:04.040 Because it's kind of this ten week leading period for 0:19:04.080 --> 0:19:08.880 the OBR. Will there be one year spending review or 0:19:09.040 --> 0:19:11.200 a more comprehensive spending review so that the one year 0:19:11.200 --> 0:19:12.560 one would just give them time to see if their 0:19:12.560 --> 0:19:16.520 growth plans worked. Now, these are really important judgments to make, 0:19:16.560 --> 0:19:19.520 because if you go for a big comprehensive three or 0:19:19.520 --> 0:19:22.159 five year spending review right now, the public finances are 0:19:22.200 --> 0:19:25.840 not strong enough to support, like, you know, a load 0:19:25.920 --> 0:19:29.800 of spending without massive tax rises that would accompany it. 0:19:29.920 --> 0:19:31.480 If you wait a year and you get the growth 0:19:31.480 --> 0:19:32.919 which they say they're going to do, then maybe you 0:19:33.000 --> 0:19:35.640 just have fewer tax rises to pay for this. These 0:19:35.680 --> 0:19:40.080 spending requirements for the public services, which she described as dilapidated. 0:19:40.400 --> 0:19:43.439 So I wish she'd answered those questions as she, of 0:19:43.480 --> 0:19:45.920 course she judged them being politician. I did think that 0:19:45.960 --> 0:19:47.760 this this she did say about she. 0:19:47.720 --> 0:19:48.320 Was quite interesting. 0:19:48.400 --> 0:19:50.760 Yeah, on China, I mean that was like our last question, 0:19:51.160 --> 0:19:53.000 you know, given everything that's happening in the US with 0:19:53.040 --> 0:19:55.119 the noise and of course the US selection of the 0:19:55.119 --> 0:19:58.360 fact that they're really bashing China really hard, and even 0:19:58.400 --> 0:20:00.679 the EU is getting on board with her ups against 0:20:00.800 --> 0:20:04.320 Chinese EV's, she was much more measured, like careful even. 0:20:04.440 --> 0:20:06.359 Yeah, I thought that was that was quite striking. I mean, 0:20:06.359 --> 0:20:08.200 if you think about what's going to happen if if 0:20:08.200 --> 0:20:10.800 Trump wins, and you look at what's happening, as you say, 0:20:10.880 --> 0:20:14.480 with the EU and Chinese evs, and she was like, 0:20:14.600 --> 0:20:18.560 we are a small, open trading economy. We like imports 0:20:18.560 --> 0:20:21.520 and exports, we need foreign direct investment. It was like, 0:20:21.600 --> 0:20:23.520 you know, it's absolutely if you're gonna if you are 0:20:23.560 --> 0:20:27.120