WEBVTT - BONUS: All-Star Bloomberg Panel Discuss Autumn Statement 0:00:03.720 --> 0:00:06.360 Welcome to in the City bloom most podcasts connecting you 0:00:06.360 --> 0:00:09.760 to the conversations and the stories shaping the world of finance. 0:00:09.880 --> 0:00:12.879 I'm Francine Laqua and I'm David Merritt, and we have 0:00:13.080 --> 0:00:15.360 a bonus episode for you this week. Dave I hosted 0:00:15.360 --> 0:00:18.639 this all star Bloomberg panel in Westminster at the Unheard 0:00:18.680 --> 0:00:20.960 Club and we talked about the autum Statement, the economy, 0:00:21.320 --> 0:00:23.160 and frankly, why things should be better. 0:00:23.360 --> 0:00:23.560 Yeah. 0:00:23.600 --> 0:00:25.960 I was sat there in the front row, standing room 0:00:26.040 --> 0:00:29.080 onely at the back at the beautiful Unhurt Club, and yeah, 0:00:29.080 --> 0:00:31.280 you're right. It was an all star lineup, wasn't it. 0:00:31.280 --> 0:00:31.440 It was. 0:00:31.560 --> 0:00:33.440 It was a little bit daunting, but you know, we 0:00:33.520 --> 0:00:35.640 had our usual co host that like Ras Stratton, we 0:00:35.720 --> 0:00:38.400 had our editor in chief, we had opinion columnist Adrian 0:00:38.400 --> 0:00:41.920 Woolrich who's very very, very funny, and our head of 0:00:41.920 --> 0:00:44.400 Economics and Government, Stephanie Flanders, and it was kind of 0:00:44.640 --> 0:00:48.400 it was just good banter. They disagreed, they made up, 0:00:48.560 --> 0:00:49.760 they disagreed again. 0:00:50.200 --> 0:00:50.839 Made friends. 0:00:51.680 --> 0:00:54.680 We had we had, you know, some blueprint of how 0:00:54.680 --> 0:01:02.160 to take it forward. We had this Autumn Statement. There 0:01:02.280 --> 0:01:04.320 was a lot in it and at the same time, 0:01:04.480 --> 0:01:07.280 not that much. There were tax cuts, but actually we're 0:01:07.319 --> 0:01:12.400 still seeing a lot of the taxes at well, the 0:01:12.480 --> 0:01:15.760 highest in a long time. And it was probably meant 0:01:15.760 --> 0:01:19.160 to you know, set out to dividing put dividing lines 0:01:19.160 --> 0:01:21.240 between the opposition labor priorty ahead of the general action. 0:01:21.360 --> 0:01:23.840 So what did you see in it, Stephanie. 0:01:23.360 --> 0:01:25.080 I No, I saw an interesting combination. I want to see. 0:01:25.120 --> 0:01:27.959 The challenge for the Chancellor was to not do anything 0:01:28.000 --> 0:01:31.920 obviously political and irresponsible with the economy with him and 0:01:31.920 --> 0:01:35.960 as you say, a very narrow range of options and 0:01:36.200 --> 0:01:38.679 ideally do a little bit of good that some people 0:01:39.200 --> 0:01:43.679 would notice, while also leaving a thorny challenge for the opposition. 0:01:44.000 --> 0:01:47.600 And I think he's though it's all you know, you 0:01:47.600 --> 0:01:50.360 can see his workings, and it was pretty clear that 0:01:50.400 --> 0:01:52.800 what was going on, especially once people had zeroed in 0:01:52.840 --> 0:01:55.720 on that very big squeeze to public services, which had 0:01:56.320 --> 0:02:00.240 in effect paid for the heady tax cuts. But terms 0:02:00.280 --> 0:02:03.400 of the individual measures sort of over one hundred very 0:02:03.440 --> 0:02:06.480 mostly quite boring measures, some very expensive measures to forting 0:02:06.520 --> 0:02:10.280 business and giving that tax cut on national assurance. You know, 0:02:10.320 --> 0:02:12.760 I think he picked a lot of things that did 0:02:12.800 --> 0:02:17.560 look responsible, did look broadly kind of technocratically helpful for 0:02:17.600 --> 0:02:21.240 the economy while also leaving that challenge for the opposition. 0:02:21.280 --> 0:02:23.919 So I think, you know, within his own, as you say, 0:02:24.080 --> 0:02:29.720 extremely narrow constrained landscape, which I'm sure we'll talk about, 0:02:29.800 --> 0:02:34.400 does not bode well, particularly for next year's election. I 0:02:34.400 --> 0:02:35.800 think he did a decent job, and I think he 0:02:35.840 --> 0:02:39.600 achieved something else which I sort of noticed repeatedly through 0:02:39.639 --> 0:02:41.240 the day, which is to make people forget that it 0:02:41.280 --> 0:02:43.240 wasn't actually a budget. It was an autumn statement. But 0:02:43.280 --> 0:02:45.680 I think we've already referred to it as a budget, 0:02:45.720 --> 0:02:47.359 and I suspect all of us will refer to it 0:02:47.400 --> 0:02:48.600 as a budget for the rest of the evening and 0:02:48.639 --> 0:02:50.920 the pedants in the audience will just have to shut up. 0:02:53.160 --> 0:02:55.800 Adrian, You're a great student of history. Where does this 0:02:55.840 --> 0:02:58.600 side of statement fit? Who does it make a difference to? 0:02:58.960 --> 0:02:59.080 Well? 0:02:59.080 --> 0:03:01.520 I think one of the interesting things about this statement 0:03:02.240 --> 0:03:05.120 is that we're basically back to Cameronism. 0:03:06.000 --> 0:03:08.079 That Cameron and. 0:03:08.040 --> 0:03:12.320 George Osborne were focused on cutting the state as much 0:03:12.320 --> 0:03:19.480 as possible. There were essentially small government conservatives, left wing, 0:03:19.680 --> 0:03:23.160 leftish on social policy, but really quite right wing on 0:03:23.400 --> 0:03:27.239 economic and social policy. Then we had this long period 0:03:27.280 --> 0:03:30.639 of disruption in which you had the return, the supposed 0:03:30.720 --> 0:03:33.960 return of big government conservatism, the idea that the Conservatives 0:03:33.960 --> 0:03:37.480 could incorporate more working class voters by having a more 0:03:37.560 --> 0:03:40.880 active state, bigger public spending, which called Bob Boris Johnson 0:03:41.400 --> 0:03:43.440 was in favor off And now we see we're going 0:03:43.560 --> 0:03:48.720 back to a world in which the Conservatives basically stand 0:03:49.200 --> 0:03:52.240 for a smaller state. They want to cut taxes as 0:03:52.320 --> 0:03:55.680 much as they can, and they are allowing inflation to 0:03:55.760 --> 0:03:58.960 do the work of cutting the states. The state this 0:03:59.000 --> 0:04:01.640 is a big constraint the size of a lot of 0:04:01.840 --> 0:04:05.200 spending departments. They're taking a lot of money out of spending. 0:04:05.240 --> 0:04:09.840 So it's a very classic conservative camera and style conservative 0:04:09.840 --> 0:04:15.520 policy versus quite a classic sort of labor party policy 0:04:15.840 --> 0:04:19.080 in which they say they want to have a more 0:04:19.120 --> 0:04:22.800 active state, but not yet, they can't afford it. Now 0:04:22.839 --> 0:04:25.839 they want to be responsible. So it's almost as though 0:04:25.920 --> 0:04:30.520 this intervening period of Brexit disruption a change in the 0:04:30.600 --> 0:04:35.200 nature of parties. Corbinism Johnsonism have been written out of 0:04:35.279 --> 0:04:36.760 history and we're back. 0:04:38.520 --> 0:04:45.520 Some people might want it to be. 0:04:42.880 --> 0:04:45.599 To a pre Brexit world in which this Conservative party 0:04:45.640 --> 0:04:48.600 sees its job as shrinking the state not incorporating working 0:04:48.600 --> 0:04:52.800 class voters very much appearing to its base. And I 0:04:52.800 --> 0:04:57.880 think another interesting thing that happened today was these migration figures, 0:04:58.720 --> 0:05:02.479 you know, very significant increase in migration, almost seven hundred 0:05:02.520 --> 0:05:06.600 thousand people. Again, it's as though Brexit never happened. You know, 0:05:06.720 --> 0:05:09.520 we voted in Brexit. People voting in Brexit for more 0:05:09.560 --> 0:05:12.480 money for the NHS and control of immigration. 0:05:13.000 --> 0:05:17.120 We have a squeeze on spending departments, not. 0:05:17.040 --> 0:05:19.800 Necessarily the NHS, but the NHS is obviously in big 0:05:19.839 --> 0:05:22.960 trouble and quite a lot of a lot of immigration. 0:05:23.040 --> 0:05:25.760 So it's almost as though the politicians aren't listening to 0:05:26.200 --> 0:05:28.160 what they were told in twenty sixteen. So I think 0:05:28.200 --> 0:05:33.440 it's a weird you know, returned to twenty ten, and I. 0:05:33.600 --> 0:05:35.000 Slightly disagree. 0:05:36.440 --> 0:05:41.920 Credit in that it's both, which is, they cannot afford 0:05:42.040 --> 0:05:44.279 to not take or try to take some of the 0:05:44.320 --> 0:05:46.840 red Wall with them, because if they do that then 0:05:46.839 --> 0:05:49.640 they've got an electoral problem. Just mathematically first, for all 0:05:49.640 --> 0:05:51.080 the politics is learned to can. 0:05:50.960 --> 0:05:56.040 I think they've got an electoral problem whatever happened, Yes. 0:05:55.880 --> 0:05:57.960 But in order to try and try and answer the 0:05:58.000 --> 0:05:59.920 exam question that is the next election, they have to 0:06:00.120 --> 0:06:02.599 and bring both those bits of their new coalition post 0:06:02.600 --> 0:06:05.479 of twenty nineteen, and you see did see an attempt. 0:06:06.160 --> 0:06:09.600 You saw a number of policies like the Freeport deduction 0:06:09.720 --> 0:06:12.320 going from its five years to ten years. That's a 0:06:12.400 --> 0:06:14.880 Tea side, you know, the heartland of the Red Wall. 0:06:16.279 --> 0:06:19.320 The Red Wall has a lot of older voters, so 0:06:19.400 --> 0:06:24.719 that pretty generous triple lock pension boost was partially aimed 0:06:24.720 --> 0:06:25.800 at those groups of people. 0:06:27.040 --> 0:06:28.920 There were a number of efforts. 0:06:29.200 --> 0:06:31.279 I was interested in that because obviously when you see 0:06:31.279 --> 0:06:34.599 the David Cameron appointment, you do wander, you do think like, 0:06:34.760 --> 0:06:37.800 is this to your point, Adrian, you know, is this 0:06:37.839 --> 0:06:40.120 a sort of retrenchment. 0:06:39.560 --> 0:06:43.160 To the Blue Wall. It can't be. They've got they've 0:06:43.200 --> 0:06:44.360 got to try and do both. 0:06:44.560 --> 0:06:47.839 And I think you did see yesterday in Jeremy Hunt's 0:06:47.880 --> 0:06:52.600 comments elements that were aimed at that constituency. 0:06:52.920 --> 0:06:54.200 Obviously the full expensing. 0:06:54.400 --> 0:06:56.320 You know, when I was a TeV reporter and would 0:06:56.320 --> 0:07:01.280 spend a lot of time, indeed in a December election expensive, 0:07:01.920 --> 0:07:04.680 I couldn't possibly comment on that bit. Certainly going around 0:07:04.680 --> 0:07:07.360 the Red Wall in December. God helped me in twenty nineteen. 0:07:07.400 --> 0:07:09.760 I think it was visiting lots of factories. You know 0:07:09.800 --> 0:07:11.160 that the full expensing, Well. 0:07:11.160 --> 0:07:14.040 Right, we'll have a role there, So I know what 0:07:14.080 --> 0:07:14.720 you mean. 0:07:14.800 --> 0:07:17.480 About, you know, oh, especially with the sort of prognosis 0:07:17.480 --> 0:07:20.680 for the next few years on the finances, it looking 0:07:20.760 --> 0:07:24.360 like it feels very twenty ten on Coreen, but I. 0:07:24.280 --> 0:07:25.280 Think it has to be. 0:07:25.720 --> 0:07:28.800 You cannot ignore what has happened in the last seven 0:07:28.840 --> 0:07:31.800 years in terms of that sort of realignment is what 0:07:31.800 --> 0:07:32.920 we called it at the time. 0:07:33.720 --> 0:07:38.000 Done well, I'm trying and discrete Adrian two just on 0:07:38.040 --> 0:07:40.200 the basis of twenty five years are doing that. But 0:07:40.280 --> 0:07:45.640 the basic starting point I came in this morning from America. 0:07:45.720 --> 0:07:47.640 If you if you look at it from that point, 0:07:47.640 --> 0:07:50.560 if you really this difference between labor and conservative. I 0:07:50.600 --> 0:07:54.240 get back to what's definitely said about constraint is I 0:07:54.240 --> 0:07:55.880 think the rest of the world and they look at it, 0:07:56.200 --> 0:08:00.800 they feel somewhat reassured. You've had a budget which looks 0:08:00.920 --> 0:08:04.560 kind of grown up fine. You've had a response from 0:08:04.720 --> 0:08:07.920 the opposition, which again looks grown up fine. From the 0:08:07.920 --> 0:08:09.880 point of the rest of the world and Britain, I 0:08:09.880 --> 0:08:13.000 think through those eyes, and maybe this is reflected to 0:08:13.040 --> 0:08:15.280 tiny bit in those migration things just looks as if 0:08:15.320 --> 0:08:19.200 it's slightly returning to normal and that yes, there is 0:08:19.240 --> 0:08:21.960 a difference between the two parties, but most people outside 0:08:21.960 --> 0:08:26.520 this country think Starmer Suna that there isn't. Yes, there's 0:08:26.520 --> 0:08:30.080 a bit there, but the constraints they're both offer operating under, 0:08:30.160 --> 0:08:33.080 and the fact that they're both relatively boring men at 0:08:33.120 --> 0:08:35.560 a certain age means that most people look at it 0:08:35.600 --> 0:08:39.600 and think this wild era is over, which that bit 0:08:39.640 --> 0:08:41.160 I do agree on, but I don't think it's a 0:08:41.240 --> 0:08:44.320 It doesn't feel like such a massive ideological divide that 0:08:44.480 --> 0:08:45.000 was before. 0:08:45.720 --> 0:08:47.880 It's definitely what does it actually mean for the economy 0:08:47.880 --> 0:08:51.679 going forward? And it wasn't great news in terms of growth, no. 0:08:51.720 --> 0:08:53.440 And actually what was striking about it? So of course 0:08:53.480 --> 0:08:56.200 you've got the householding. There's a lot of discussion around 0:08:56.240 --> 0:08:59.360 the sort of first Parliament where householding comes would have fallen. 0:09:01.000 --> 0:09:04.600 There's some very depressing numbers of The Resolution Foundation has pointed 0:09:04.600 --> 0:09:08.560 out that there's about nine million younger working age Britains 0:09:08.600 --> 0:09:11.640 who've nactually never lived in Britain that had sort of 0:09:11.760 --> 0:09:13.880 rising average wages. We're not going to be back to 0:09:13.920 --> 0:09:17.000 the sort of pre cost of living crisis, real living 0:09:17.040 --> 0:09:19.760 standards until twenty twenty seven according to those numbers. 0:09:19.800 --> 0:09:22.439 So it's all pretty bleak, I think. 0:09:22.480 --> 0:09:25.920 The interesting thing and maybe it feeds into some of 0:09:25.960 --> 0:09:28.280 the conversation around you know, whether this was a set, 0:09:28.360 --> 0:09:30.400 whether there were elements of this that were setting up 0:09:30.520 --> 0:09:34.040 or at least preparing the way for a spring election, 0:09:34.679 --> 0:09:38.280 is even on the economics, the idea that things are 0:09:38.280 --> 0:09:40.680 going to feel better in a year's time, it's not 0:09:40.920 --> 0:09:44.719 entirely clear. This may be almost and it certainly the 0:09:44.920 --> 0:09:48.120 political risk in yesterday was this sense of we're turning 0:09:48.120 --> 0:09:50.439 a corner. And as everyone's aware, you know, there's a 0:09:50.520 --> 0:09:52.959 risk there because a lot of people in Britain will 0:09:53.000 --> 0:09:55.680 not feel its turning a corner, and worse than that, 0:09:56.000 --> 0:09:58.160 they may actually feel worse next year. And if you 0:09:58.240 --> 0:10:01.800 look into the details of the forecast, you know, there's 0:10:01.840 --> 0:10:03.840 one sort of basic fact about this. We've had this 0:10:04.240 --> 0:10:07.920 whacking great interest rate rise, and there's been some sort 0:10:07.960 --> 0:10:10.720 of questioning of you know, how come the economy. You know, 0:10:10.760 --> 0:10:12.600 we haven't had the kind of immediate hit to the 0:10:12.600 --> 0:10:16.480 economy that some were expecting. Part of that, certainly on 0:10:16.520 --> 0:10:18.760 the consumer side, is that the sort of good news 0:10:18.760 --> 0:10:22.080 associated with higher interest rates, people getting more savings income 0:10:22.720 --> 0:10:26.200 has been quite quite quickly realized, and we even discovered 0:10:26.200 --> 0:10:27.680 in the States, if you're not getting a higher interest 0:10:27.720 --> 0:10:29.440 rate from your bank, you now found it easier to 0:10:29.440 --> 0:10:32.240 go to another one. And yet the really bad news 0:10:32.280 --> 0:10:34.800 that we all know is coming for millions of households 0:10:35.200 --> 0:10:37.960 is actually we're barely halfway done in terms of the 0:10:38.000 --> 0:10:41.120 resetting of mortgages. So if you're a sort of wily 0:10:41.200 --> 0:10:43.440 person thinking about actually what's going to affect the way 0:10:43.440 --> 0:10:47.280 people feel today about their finances, many millions more people 0:10:47.280 --> 0:10:50.360 will have set their mortgages, you know, in October than 0:10:50.679 --> 0:10:51.720 in April or May. 0:10:52.280 --> 0:10:55.440 It was the ittem statement inflationary or did they kind 0:10:55.480 --> 0:10:56.640 of get away with not? 0:10:56.920 --> 0:10:58.880 I think, now this is one thing that I should 0:10:58.880 --> 0:11:00.560 have got more into the weeds of. But I was 0:11:00.640 --> 0:11:04.640 quite struck by the Jeremy Hunt's assertion that the OBR 0:11:05.000 --> 0:11:07.959 was said it was the measures in the autumn statement 0:11:08.040 --> 0:11:10.880 were not inflationary, And I think the way he had 0:11:10.920 --> 0:11:12.880 managed to get round that potentially was with some of 0:11:12.920 --> 0:11:16.280 those duty changes which actually reduced the headline inflation rate. Now, 0:11:16.280 --> 0:11:17.760 so there'll be people in the audience, you will be 0:11:17.800 --> 0:11:18.680 able to quickly check this. 0:11:19.000 --> 0:11:21.480 It's inflationary in the sense that it's using inflation to 0:11:21.520 --> 0:11:23.760 do the dirty work of the government. So you're using 0:11:24.160 --> 0:11:27.720 inflation to squeeze the spending departments, and you're using inflation 0:11:27.920 --> 0:11:30.360 to bring more people into the tax system and therefore 0:11:30.400 --> 0:11:32.520 increase your tax revenoruy war pretending to be reducing. 0:11:32.720 --> 0:11:34.880 Well, it's accepting inflation and it's making money from. 0:11:34.760 --> 0:11:38.880 The inforcation, using exploiting inflation. If you think about cynical 0:11:38.880 --> 0:11:39.600 political ends. 0:11:39.679 --> 0:11:41.800 But given before before the. 0:11:41.720 --> 0:11:44.520 Autumn statement, given the freezing of how the thresholds, we're 0:11:44.520 --> 0:11:45.720 going in a really exciting direction. 0:11:47.800 --> 0:11:49.400 You're really up for this. We're going to go right 0:11:49.440 --> 0:11:49.880 into the weeds. 0:11:50.160 --> 0:11:55.240 But before before Jeremy Hunt did anything, you actually were 0:11:55.440 --> 0:11:59.240 obviously raising the tax take taking money out of people's pockets, 0:11:59.320 --> 0:12:01.880 and in that sense it was there would have been 0:12:01.920 --> 0:12:06.000 a sort of disinflationary effect. What's happened is he's taken 0:12:06.120 --> 0:12:08.800 he's actually put some money back into people's pockets, or 0:12:08.840 --> 0:12:10.640 at least given them money that they would otherwise not 0:12:10.679 --> 0:12:12.679 have had with this national insurance. So you could say 0:12:13.080 --> 0:12:16.360 that was inflationary. I think what is interesting is I 0:12:16.440 --> 0:12:19.920 wonder how hard it will be potentially. You know, politicians 0:12:19.920 --> 0:12:21.440 are very easy, find it very easy to live with 0:12:21.480 --> 0:12:25.280 inconsistency one five. But we have had months and months 0:12:25.480 --> 0:12:29.720 of these debates over a public sector pay and strikes 0:12:30.200 --> 0:12:33.920 where we have the Chancellor has said, not entirely accurately, 0:12:34.040 --> 0:12:36.040 we can't give more money to the NHS nurses. We 0:12:36.040 --> 0:12:39.160 can't do this because it's inflationary. Yet it's okay, you 0:12:39.200 --> 0:12:42.000 can't let you can't say that. You can't say that 0:12:42.120 --> 0:12:44.040 and then also say you're putting lots of money into 0:12:44.040 --> 0:12:45.559 people's pockets. So I think there is a bit of 0:12:45.600 --> 0:12:48.319 a dissonance there, But I'm sure on the technicality he 0:12:48.360 --> 0:12:50.680 was speaking the truth when he said it was not 0:12:51.000 --> 0:12:53.600 overall an inflationary autumn statement. 0:12:53.720 --> 0:12:56.319 I mean I should rephrase my question for agent. Is 0:12:56.600 --> 0:12:59.200 it going to complicate the job of the Bank of England. 0:13:02.720 --> 0:13:05.679 No, I mean I think the point about a safe 0:13:05.720 --> 0:13:08.600 pair of hands is correct. I think there's a general 0:13:08.720 --> 0:13:13.080 confidence in amongst the economists and the sort of the 0:13:13.080 --> 0:13:15.480 great and the good about about what's going on here. 0:13:15.520 --> 0:13:18.079 But I just want to make a sense of the 0:13:19.240 --> 0:13:22.320 camera in comparison, going back to the camera era, because 0:13:22.320 --> 0:13:24.200 I think there's more truth in it than my colleagues. 0:13:24.200 --> 0:13:24.320 Thing. 0:13:25.720 --> 0:13:27.120 But one thing is that the. 0:13:27.600 --> 0:13:29.920 Camera in era was in many ways an era of 0:13:30.520 --> 0:13:32.880 sort of optimism. They thought that they could squeeze the state, 0:13:33.240 --> 0:13:35.880 but the private sector would expand and take over and 0:13:35.920 --> 0:13:39.800 people would get richer. Then we had all the pictures 0:13:40.200 --> 0:13:43.560 the big society, that the charities could take over things. 0:13:43.679 --> 0:13:45.839 Then we had all these these. 0:13:45.360 --> 0:13:49.200 These eruptions because of the Brexit thing, and what have 0:13:49.240 --> 0:13:51.720 we got? Now We've got a situation which they're continuing 0:13:51.720 --> 0:13:55.360 to squeeze the state, public, public, the spending departments, the 0:13:55.400 --> 0:13:57.760 big spending departments, apart from the NHS. They're trying to 0:13:57.800 --> 0:14:00.640 continuing to squeeze that. But there's new and they can 0:14:00.760 --> 0:14:03.920 they look trying to do something about our dismal productivity, 0:14:04.160 --> 0:14:07.560 but there's no real optimism there. What you have behind 0:14:07.600 --> 0:14:11.280 all this is a stagnant economy that's failed to solve 0:14:11.320 --> 0:14:16.000 its productivity problem, an aging population and need to suck 0:14:16.080 --> 0:14:21.320 in lots of poorly educated foreign workers to add to 0:14:21.400 --> 0:14:24.160 the you know, to look out after all people and 0:14:24.200 --> 0:14:26.360 to do lots and lots and lots of service jobs. 0:14:26.360 --> 0:14:28.840 So whereas the camera and era was an era of 0:14:28.880 --> 0:14:32.480 I think disguided but a real optimism. This is basically, 0:14:32.920 --> 0:14:36.520 you know, trying to make do make the best with 0:14:36.920 --> 0:14:41.600 a pretty awful economic outlook, and trying very belatedly to 0:14:41.640 --> 0:14:46.080 do a little bit about productivity whilst still relying on 0:14:46.160 --> 0:14:46.760 cheap labor. 0:14:47.400 --> 0:14:49.400 Let me agree with you, then, okay, if you didn't 0:14:49.440 --> 0:14:58.640 have me disagree with you, Yeah, right it so, yes, 0:14:59.320 --> 0:15:01.960 it does look like whoever wins the next election is 0:15:01.960 --> 0:15:05.240 going to be doing austerity mark two or mark three, 0:15:05.720 --> 0:15:06.920 however you cut it. 0:15:07.320 --> 0:15:08.800 I think the thing that. 0:15:09.600 --> 0:15:12.600 We want to reflect on looking back at twenty ten 0:15:12.680 --> 0:15:15.240 is whether that austerity was the right austerity, if that's 0:15:15.240 --> 0:15:18.080 a sort of particularly helpful way of thinking about it. Certainly, 0:15:18.240 --> 0:15:20.640 when I was a TV reporter, most of the reporting 0:15:20.720 --> 0:15:22.760 I ended up doing was around the fact that they 0:15:22.760 --> 0:15:24.960 did these sort of invisible cuts, pushed them out to the 0:15:25.000 --> 0:15:27.840 local government, and actually the huge crises we then went 0:15:27.880 --> 0:15:30.720 to have put to Brexit to one side for a second. 0:15:30.720 --> 0:15:32.960 We were around drugs, were around violent crime, were around 0:15:32.960 --> 0:15:36.760 old people, and about sexual care. So actually I had 0:15:36.760 --> 0:15:40.920 this period of optimism I don't remember as a reporter. 0:15:41.040 --> 0:15:42.800 I don't remember it feeling very optimistic. 0:15:42.840 --> 0:15:44.960 I remember, you know, a lot of kind of anxiety 0:15:45.040 --> 0:15:47.080 about that huge reduction that they did. 0:15:47.120 --> 0:15:49.840 Of course that phrase fix the roof while the summer shining. 0:15:49.880 --> 0:15:51.920 I think that they do. 0:15:52.200 --> 0:15:55.120 They think that actually building up that sort of war 0:15:55.240 --> 0:15:57.480 chest enabled them to go into the pandemic and then 0:15:57.520 --> 0:15:59.680 go into the war in Ukraine and then spend down 0:15:59.720 --> 0:16:01.760 on and so on. So I think there is a 0:16:01.800 --> 0:16:04.840 sort of complexity to all of this. Yes, they are retrenching. 0:16:05.520 --> 0:16:07.600 If they win the next election, label will have a 0:16:07.640 --> 0:16:09.640 similar job on their hands. But they think it's because 0:16:09.680 --> 0:16:11.960 of this sort of you know, the big bazooka of 0:16:12.600 --> 0:16:15.440 the Hoover, Dawn and dorsh that went out to use 0:16:16.040 --> 0:16:18.040 Boris Johnson's phrase of the time, you know, when they 0:16:18.120 --> 0:16:21.040 spent on furlough, when they spent on sea bills, bounce backloads, 0:16:21.360 --> 0:16:23.480 eat out to help out the law, you know, propping 0:16:23.560 --> 0:16:27.760 up theaters, all of that extraordinary amounts of spending. So 0:16:27.800 --> 0:16:29.720 there is a kind of there is a sort of 0:16:29.800 --> 0:16:32.080 question around, you know, once you have spent that much 0:16:32.360 --> 0:16:35.400 on those sorts of things, paying people's wages for so long, 0:16:35.640 --> 0:16:37.240 paying people's energy bills. 0:16:37.560 --> 0:16:38.720 I think we forget. 0:16:40.080 --> 0:16:42.760 Any government is going to find it difficult to move 0:16:42.800 --> 0:16:45.840 on from that if it is the case that we 0:16:45.880 --> 0:16:47.400 are going to go into a period where the next 0:16:47.440 --> 0:16:51.640 parliament is lower spending and we assume that they will 0:16:51.680 --> 0:16:53.960 ring fence in HS, they will ring fence in education. 0:16:54.360 --> 0:16:58.680 Difficult choices for the Labor Party as well. What is 0:16:58.720 --> 0:17:00.520 the right way to do it? Bearing in mind as 0:17:00.560 --> 0:17:03.480 well that those those local government cuts have happened already, 0:17:03.560 --> 0:17:06.440 So that so that kind of there's the low hanging fruit, 0:17:06.440 --> 0:17:08.119 to use the horrible phrase, you know, it is not 0:17:08.160 --> 0:17:09.000 on the tree anymore. 0:17:09.240 --> 0:17:10.439 What do you do next? 0:17:11.480 --> 0:17:12.840 And you know what what I think? 0:17:13.000 --> 0:17:15.320 Rachel Breeze was asked about it this morning on the radio, 0:17:15.359 --> 0:17:16.560 and what do you do? 0:17:17.080 --> 0:17:18.919 John? How do you see the blueprint? I mean if 0:17:18.920 --> 0:17:21.440 you look at the UK and how it grows, If 0:17:21.440 --> 0:17:23.159 it grows, like, how would you compare it with the 0:17:23.240 --> 0:17:24.919 US in three four years? 0:17:25.400 --> 0:17:28.320 I think the world basically there's a kind of there 0:17:28.400 --> 0:17:30.240 is a kind of basic comparaicony you look at the US. 0:17:30.280 --> 0:17:33.080 What's amazing about the numbers is that the private sector, 0:17:33.160 --> 0:17:35.720 Adrians should written about. There's a private sector is doing 0:17:35.760 --> 0:17:38.919 amazingly well. It's doing staggering well. That the public sector, 0:17:39.040 --> 0:17:42.679 going back to my earlier point, is a complete mess. 0:17:43.520 --> 0:17:46.159 So you have the Trump versus Biden scenario and everything 0:17:46.200 --> 0:17:49.360 around that. The politics of America have seldom more dysfunctional. 0:17:50.000 --> 0:17:52.920 Congress running out, people worried about the debt in a way, 0:17:53.440 --> 0:17:56.479 if you think Britain splurged a bit, it's nothing a 0:17:56.480 --> 0:17:59.440 bed with the money it's being pumped out recently in America. 0:17:59.560 --> 0:18:01.080 So all those things have happened. 0:18:01.119 --> 0:18:05.919 But the basic idea of productivity of the private sector 0:18:05.920 --> 0:18:10.240 pushing ahead, even the slightly ludicrous row open AI is 0:18:10.280 --> 0:18:14.639 a memory or a reminder about how much further ahead 0:18:14.680 --> 0:18:17.399 America is in these things and other places. So I 0:18:17.440 --> 0:18:20.280 think it is there is America has got this way 0:18:20.280 --> 0:18:23.360 of saving itself, which is that private sector. 0:18:23.160 --> 0:18:24.560 And just but to push back a bit. 0:18:24.600 --> 0:18:26.040 As you know, there's quite a lot of sort of 0:18:26.040 --> 0:18:29.199 critique of that view of the US, like through the 0:18:29.400 --> 0:18:32.199 through the decades where they're very good at taking leave 0:18:32.480 --> 0:18:35.000 well for private sector to take the credit for things 0:18:35.040 --> 0:18:37.680 that actually had involved quite a lot of public sector investment. 0:18:37.720 --> 0:18:40.120 You know, every failure is public sector, and any success 0:18:40.200 --> 0:18:42.480 is immediately owned by the private sector. 0:18:42.520 --> 0:18:43.200 And there's lots of. 0:18:45.040 --> 0:18:46.440 The American public sector as well. 0:18:46.480 --> 0:18:49.000 So I'd explained the politics as being a total shit 0:18:49.040 --> 0:18:49.800 show if you don't mind. 0:18:49.840 --> 0:18:51.520 But but it's. 0:18:51.359 --> 0:18:53.479 Not that slightly different from the public sector and the 0:18:53.480 --> 0:18:55.440 money that's going in If you look at Biden's you know, 0:18:55.480 --> 0:18:57.119 there may turn out to be an enormous amount of 0:18:57.119 --> 0:19:00.639 waste involved in the infrastructure build of chips or the IRA, 0:19:01.320 --> 0:19:04.560 but that is actually money that's largely going into private investors' 0:19:04.600 --> 0:19:08.520 hands and manufacturers who are actually you know, and innovators 0:19:08.560 --> 0:19:10.200 who are going to take that money. As I say, 0:19:10.240 --> 0:19:11.480 some of it will turn out to be in the 0:19:11.480 --> 0:19:15.200 wrong place because they've been they have quite an ambitious 0:19:15.320 --> 0:19:17.640 way of trying to push that money into different parts 0:19:17.640 --> 0:19:20.399 of the country, but it is almost entirely going to 0:19:20.440 --> 0:19:23.320 the private sector and giving a lot of this dynamism 0:19:23.320 --> 0:19:25.080 and momentum. I mean, just to make you feel a 0:19:25.119 --> 0:19:28.399 little bit worse. Two point six percent growth I think 0:19:28.440 --> 0:19:31.760 the US maybe this year versus zero point four for 0:19:31.800 --> 0:19:34.600 the UK. And what's really striking about the difference is 0:19:34.640 --> 0:19:38.680 that you've also got two point six or thereabouts growth 0:19:38.720 --> 0:19:40.920 in productivity output per head as well as. 0:19:40.800 --> 0:19:41.520 The growth in output. 0:19:42.040 --> 0:19:43.600 Productivity is going down. 0:19:43.680 --> 0:19:45.480 No, no, in the US. Yeah, in the UK it 0:19:45.520 --> 0:19:47.520