WEBVTT - What Does the Next UK Government Do (or Not Do) First? 0:00:03.120 --> 0:00:17.759 Bloomberg Audio Studios, Podcasts, radio News. Welcome to voter Nomics, 0:00:17.800 --> 0:00:21.320 where politics and markets collide. This year, voters around the 0:00:21.360 --> 0:00:25.160 world have the ability to affect markets, countries and economies 0:00:25.320 --> 0:00:28.240 like never before, so we've created this series to help 0:00:28.280 --> 0:00:29.520 you make sense of it all. 0:00:29.960 --> 0:00:32.640 I'm alegra Stratton, I'm Adriam Woodbridge. 0:00:32.280 --> 0:00:33.479 And I'm Stephanie Flanders. 0:00:34.240 --> 0:00:35.199 Right here it is. 0:00:35.400 --> 0:00:38.600 We've finally got here, actually all three in the same place. A, 0:00:38.760 --> 0:00:41.000 we're all together and B what a momentous week to 0:00:41.000 --> 0:00:41.560 be all together. 0:00:41.600 --> 0:00:42.840 It's the week of the UK election. 0:00:43.760 --> 0:00:46.760 In this episode, we're looking beyond polling day, if you 0:00:46.800 --> 0:00:49.720 can believe that, to the administration's first one hundred days, 0:00:49.720 --> 0:00:52.560 and we'll be asking what can the next government really 0:00:52.600 --> 0:00:56.680 do given the economy it's inheriting, and can it create 0:00:56.680 --> 0:00:59.840 the necessary conditions for investors and firms to thrive in 0:00:59.840 --> 0:01:03.480 the So to help us explore those questions, Stephanie, you 0:01:03.680 --> 0:01:07.280 spoke to Douglas Flint, chairman and asset manager Aberdeen. 0:01:07.680 --> 0:01:12.039 I thought Douglas would be an interesting voice to have 0:01:12.160 --> 0:01:15.959 from the business community, and particularly from financial services, one 0:01:15.959 --> 0:01:21.240 of Britain's most important service sector industries, and he's had 0:01:21.360 --> 0:01:24.920 very senior positions at HSBC and KPMG, as well as 0:01:24.920 --> 0:01:28.200 being on the advisory panel for Labour's Financial Services Review. 0:01:28.280 --> 0:01:31.280 He's sort of a thoughtful observer as well as a 0:01:31.600 --> 0:01:34.800 serious player in that world. And I was particularly interested 0:01:35.200 --> 0:01:38.559 with the support he offered, not just to Labour's focus 0:01:38.640 --> 0:01:41.000 on growth, which of course most people in the business 0:01:41.040 --> 0:01:43.919 community want them to focus on growth, but the potential 0:01:44.080 --> 0:01:47.800 need to raise taxes or borrow more to support that agenda. 0:01:47.880 --> 0:01:49.320 He was remarkably open to that. 0:01:49.520 --> 0:01:51.000 Okay, well, we're going to look at that in a 0:01:51.000 --> 0:01:52.920 bit more detail. And second, we do also have in 0:01:52.920 --> 0:01:55.000 the studio with us Phil Aldrich, who is going to 0:01:55.040 --> 0:01:57.040 help us unpick what we can expect out of the 0:01:57.040 --> 0:02:00.520 first hundred days. But first of all, Adrian column today 0:02:01.240 --> 0:02:04.280 is fairly punchy on the possible new labor government. 0:02:04.880 --> 0:02:07.360 My worry is that we are about to elect a 0:02:07.400 --> 0:02:09.639 labor government with all the power that that entails, because 0:02:09.639 --> 0:02:12.440 we have a very centralized system with no real checks 0:02:12.480 --> 0:02:14.960 and balances, and a prime minister with a big majority 0:02:15.120 --> 0:02:18.880 has enormous power, much more so than the American president 0:02:18.919 --> 0:02:22.200 in the sense of being no constraints, obvious constraint on 0:02:22.200 --> 0:02:25.200 that power. And I think we're electing the Labor Party 0:02:25.720 --> 0:02:30.480 and Starmer to this position without any real scrutiny. This 0:02:30.560 --> 0:02:33.799 has been an election entirely dominated by the awfulness of 0:02:33.840 --> 0:02:36.919 the Tories. It's a rejection of the old order, and 0:02:36.960 --> 0:02:41.200 we haven't really asked difficult questions of the new government. 0:02:41.680 --> 0:02:43.520 And I think that the more one looks at it, 0:02:43.639 --> 0:02:46.959 the more I at least and worried. It seems to me, 0:02:47.360 --> 0:02:50.640 in particular that the education policy, which consists of removing 0:02:51.240 --> 0:02:54.720 the twenty percent viaight exemption on schools, in other words, 0:02:54.760 --> 0:02:58.560 increasing the price to parents of private education by twenty percent, 0:02:59.040 --> 0:03:03.320 is symptomatic first of all of a bias towards the 0:03:03.360 --> 0:03:07.519 state sector public sector producer lobbies the teacher unions in particular, 0:03:07.680 --> 0:03:11.959 and secondly, a hostility towards excellence, independent traditions. And I 0:03:12.040 --> 0:03:17.520 think this bad labor runs through all sorts of that's 0:03:17.560 --> 0:03:18.280 a preser. 0:03:18.360 --> 0:03:21.040 I mean, okay, so I think the pushback would be 0:03:21.120 --> 0:03:24.480 and it came partly from your old employer. We saw 0:03:24.480 --> 0:03:27.880 the Economist endorse Labor this week, and of course a 0:03:27.919 --> 0:03:30.600 big chunk of that was as a sort of vote 0:03:30.600 --> 0:03:34.200 against the Conservative Party, which we've seen obviously in a 0:03:34.200 --> 0:03:36.360 lot of the endorsements that the Labor has had. But 0:03:36.440 --> 0:03:39.240 I think that the Economists leader did also take the 0:03:39.320 --> 0:03:44.200 time to make a positive case for Keir Starmer in 0:03:44.240 --> 0:03:46.480 particular and what he'd done to the Labor Party. So 0:03:46.520 --> 0:03:48.840 I think the response to you would be you draw 0:03:49.400 --> 0:03:53.560 a negative comparison with Tony Blair as being more about 0:03:53.680 --> 0:03:59.520 change and about bringing in multiplicity of providers for education 0:03:59.720 --> 0:04:02.080 and health. I mean the argument against that would be, 0:04:02.120 --> 0:04:07.040 actually he has changed, He inherited a very unreconstructed Jeremy 0:04:07.040 --> 0:04:11.040 Corbyn led Labor Party, has brought it back to the 0:04:11.080 --> 0:04:17.760 Blairite center and will have now a mandate to make 0:04:17.839 --> 0:04:21.279 some quite difficult changes in public services, which would actually 0:04:21.320 --> 0:04:24.159 be much harder and more divisive for a conservative party 0:04:24.200 --> 0:04:26.080 to do. We tend to make the classic sort of 0:04:26.160 --> 0:04:28.599 Nixon to China argument that it's easier for Labor to 0:04:28.640 --> 0:04:30.719 do that than the Conservatives. I just wonder why you 0:04:30.720 --> 0:04:32.880 don't think, looking at his record, that he wouldn't be 0:04:32.920 --> 0:04:33.520 quite ruthless. 0:04:33.640 --> 0:04:35.719 I'd love to be able to agree with you about that. 0:04:35.760 --> 0:04:38.560 But if you look at the Labor Labour's education and policy, 0:04:38.720 --> 0:04:42.800 that policy was created under Jeremy Corbyn by Angela Rayner. 0:04:43.040 --> 0:04:45.279 I remember going to labor body conferences in which the 0:04:45.320 --> 0:04:47.919 teacher unions were cheering that to the rafters. 0:04:48.200 --> 0:04:50.720 It's making problems though, isn't it. I mean, this is 0:04:50.760 --> 0:04:53.320 really the argument, right, that that's actually a bit of 0:04:53.400 --> 0:04:57.120 red meat to where they. 0:04:57.040 --> 0:04:59.560 Don't need to be giving meat to these dogs because 0:04:59.560 --> 0:05:00.600 they've been aimed. 0:05:02.040 --> 0:05:02.080 This. 0:05:02.200 --> 0:05:03.320 This is the funder point. 0:05:03.560 --> 0:05:07.640 I think he does believe, because in the. 0:05:07.600 --> 0:05:10.640 Past week they've all come out with quite full throatated support. 0:05:10.760 --> 0:05:13.440 Absolutely, this is a party rooted in the public sector, 0:05:13.960 --> 0:05:18.640 with very very public sector producerist passions. His instincts a 0:05:18.720 --> 0:05:20.920 pro public sector at a time when we really need 0:05:20.960 --> 0:05:24.479 to improve the productivity of the public sector. And he 0:05:24.600 --> 0:05:28.200 has this idea of industrial policy, if you want to 0:05:28.240 --> 0:05:31.799 call it industrial policy whatever, whatever it is, state activism, 0:05:31.880 --> 0:05:34.560 state intervention in the economy, and Britain has a dismal 0:05:35.000 --> 0:05:37.280 record at that. And the Labor Party seems to be saying, look, 0:05:37.360 --> 0:05:40.280 Britain is broken. The state is broken, let's spend more 0:05:40.320 --> 0:05:42.200 money on it and give it more responsibilities. 0:05:42.320 --> 0:05:47.160 Stephanie, anything else you No, I think it's going to 0:05:47.200 --> 0:05:49.720 be exhilarating this new government. People say it's going to 0:05:49.720 --> 0:05:51.560 be terribly boring and they're not doing anything but if 0:05:51.800 --> 0:05:53.599 for nothing else, but we can continue to have this 0:05:53.760 --> 0:05:54.840 very lively debate. 0:06:04.000 --> 0:06:06.760 Patiently listening to all of this has been one of 0:06:07.160 --> 0:06:11.320 Bloomberg's most brilliant reporters, Award winning award winning Phil Oldrick, 0:06:11.960 --> 0:06:14.840 Phil just to go quickly to it first one hundred days, 0:06:14.880 --> 0:06:16.400 What do you think will be most interesting? 0:06:16.680 --> 0:06:18.080 If it's a labor government. 0:06:17.760 --> 0:06:20.000 Well, they're going to have to get through these key bills, 0:06:20.000 --> 0:06:22.360 so the workers rights that's going to be a big development, 0:06:22.400 --> 0:06:24.320 and then the planning reforms, which you know, that's the 0:06:24.320 --> 0:06:26.640 most exciting thing if they could actually come up with 0:06:26.680 --> 0:06:31.840 something which does make you transform the UK's performance. We'll 0:06:31.839 --> 0:06:35.440 probably have the budget in early September or mid September. 0:06:35.480 --> 0:06:37.480 If they don't hold it before the party conferences, it's 0:06:37.520 --> 0:06:40.720 not going to come till sort of late October. And 0:06:40.760 --> 0:06:43.000 then there's this big question of whether we have a 0:06:43.040 --> 0:06:45.360 single year spending review just to sort of roll over 0:06:45.480 --> 0:06:48.000 year so that they can really build some proper plans. 0:06:48.240 --> 0:06:50.800 They say they're going to drive or pay for everything 0:06:50.880 --> 0:06:54.440 by getting growth, So will there be an increasing growth 0:06:54.600 --> 0:06:57.560 prospect in that intervening year, and then you don't have 0:06:57.640 --> 0:07:00.880 to raise taxes quite as much. What are going to 0:07:01.040 --> 0:07:02.640 have to be big spending increases. 0:07:02.760 --> 0:07:05.719 But Phil, you are an expert on all these matters. 0:07:05.839 --> 0:07:08.960 Is it possible for them to be demonstrating kist Armer 0:07:08.960 --> 0:07:11.000 said the other day needs two point five percent growth, 0:07:11.000 --> 0:07:13.200 which is more than America's enjoying right now. Is it 0:07:13.240 --> 0:07:17.040 possible for him to be demonstrating signs or indications that 0:07:17.040 --> 0:07:18.840 they're getting two point five percent growth in the next 0:07:18.880 --> 0:07:19.480 twelve months. 0:07:20.240 --> 0:07:25.000 Yeah, I mean that is stretched. This is the thing. 0:07:25.160 --> 0:07:27.960 If Liz trust as she did, say that I'm going 0:07:28.000 --> 0:07:29.680 to deliver you two point five percent growth and it's 0:07:29.680 --> 0:07:31.960 going to pay for everything, then everyone's going to say, 0:07:31.960 --> 0:07:34.960 what a load of nonsense, and you know, throw the 0:07:35.280 --> 0:07:39.680 sterling out with the bathwater. And that is not going 0:07:39.720 --> 0:07:43.000 to happen under Kistamer because they know that lesson and 0:07:43.040 --> 0:07:46.160 they're not going to basically predicate their entire policy on 0:07:46.200 --> 0:07:48.320 a two point five percent growth schedule. They are going 0:07:48.400 --> 0:07:51.960 to be raising taxes or increasing borrowing and you know, 0:07:52.160 --> 0:07:54.640 so there are you know, you can change the fiscal rules. 0:07:54.760 --> 0:07:56.480 I think it's very unlikely for them to do that 0:07:57.120 --> 0:08:00.560 immediately after winning the election because they've come in on 0:08:00.600 --> 0:08:03.560 a manifesto with a set of very type fiscal rules, 0:08:03.600 --> 0:08:06.080 you know, so they won't be able to release. 0:08:05.800 --> 0:08:07.800 He's borrowing to invest. You don't think they'll do that. 0:08:08.520 --> 0:08:10.920 They limited to the exact same degree because it's the 0:08:10.920 --> 0:08:11.920 debt rule that's binding. 0:08:12.000 --> 0:08:15.680 Rather we should we should just summarize quickly. There's the 0:08:15.680 --> 0:08:18.160 borrowing to invest, which is just how much were making 0:08:18.200 --> 0:08:21.280 sure that what you borrow every year is no more 0:08:21.320 --> 0:08:24.000 than what you're using for investments, so you can't be 0:08:24.080 --> 0:08:27.160 using it to for example, very fast rising bit of 0:08:27.200 --> 0:08:30.160 the bill, debt interest, paying interest on the debt, how 0:08:30.240 --> 0:08:32.760 much you're borrowing year to year. And then there's the 0:08:32.800 --> 0:08:35.280 stock rule. It's like how much is your total debt 0:08:35.360 --> 0:08:38.280 going up and is it stabilizing? And this rather odd 0:08:38.360 --> 0:08:40.320 rule that says in five years time you have to 0:08:40.320 --> 0:08:42.520 be able to show that the debt stock is going 0:08:42.600 --> 0:08:44.640 to fall relative to your economy. It doesn't matter what 0:08:44.679 --> 0:08:47.600 it's doing in the four years before that, as long 0:08:47.640 --> 0:08:50.600 as out and at the moment they are very very 0:08:50.600 --> 0:08:52.439 close to that. Because Jereby Hunter is not given much 0:08:52.480 --> 0:08:52.880 room for men. 0:08:53.080 --> 0:08:55.880 Exactly there was eight point nine billion pounds headroom in 0:08:55.920 --> 0:08:59.560 the last budget, and so they don't have any money 0:08:59.600 --> 0:09:02.920 to spend, and there they're bound by that same figure. 0:09:03.240 --> 0:09:05.960 So there is they are going to have to They're 0:09:05.960 --> 0:09:07.960 either going to have to get better growth and so 0:09:08.240 --> 0:09:10.079 it won't go to two point five percent, but it 0:09:10.360 --> 0:09:12.439 may be the growth projection for the country will be 0:09:12.480 --> 0:09:14.960 a bit better and that will generate a little bit 0:09:14.960 --> 0:09:18.440 of extra income. But inevitably there are I think everybody 0:09:18.480 --> 0:09:20.280 assumes there's going to be some tax rises. 0:09:20.120 --> 0:09:22.920 And tax rise is to prevent a tough squeeze on 0:09:22.920 --> 0:09:25.040 public spending advice. 0:09:24.960 --> 0:09:27.560 So I mean they've got so you've got to settle 0:09:27.600 --> 0:09:32.720 these junior doctors strikes. You know, there's other pay deals. 0:09:32.800 --> 0:09:35.839 So the pay review bodies have delivered there what they 0:09:35.880 --> 0:09:38.360 want this year to the departments, but no one has 0:09:38.360 --> 0:09:41.600 seen these yet because obviously we're having the election instead. 0:09:41.320 --> 0:09:43.280 And the junior dots is are wanting thirty four to 0:09:43.280 --> 0:09:43.840 thirty five. 0:09:43.679 --> 0:09:46.080 Percent exactly, so they're never going to get that. But 0:09:46.160 --> 0:09:49.640 there could be a big extra bill to pay for 0:09:49.800 --> 0:09:53.319 the public sect to workers, and there is the prisons 0:09:53.320 --> 0:09:55.520 are in absolute chaos, so you can see that there's 0:09:55.600 --> 0:09:59.520 going to be immediate demands. So it seems likely that 0:09:59.559 --> 0:10:03.640 there will be some additional tax policy in the if 0:10:03.679 --> 0:10:06.200 it is a September budget, just to get over that bump, 0:10:07.240 --> 0:10:08.120 or they could. 0:10:07.880 --> 0:10:09.079 Sort of fiddle the figures. 0:10:08.840 --> 0:10:12.439 And do some kind of just just try and take 0:10:12.480 --> 0:10:14.320 on a little bit of extra boring. But I think 0:10:14.360 --> 0:10:16.640 you know it's subsequently we're going to see some some 0:10:16.760 --> 0:10:18.520 broader tax rises for next year. 0:10:18.679 --> 0:10:19.960 I mean, you spend a lot of time talking to 0:10:20.000 --> 0:10:23.240 the Treasury and the Bank of England. Do you get 0:10:23.240 --> 0:10:27.080 the sense that they're expecting quite a big first budget 0:10:27.360 --> 0:10:31.959 from Rachel Reeves despite the very limited promises in the manifesto, 0:10:32.520 --> 0:10:33.840 or is it a question of a we're going to 0:10:33.840 --> 0:10:37.280 build credibility. Do they think they've got time to build credibility, 0:10:37.360 --> 0:10:39.320 or do they really need to do something quite dramatic 0:10:39.360 --> 0:10:39.920 on growth. 0:10:40.120 --> 0:10:41.640 I thought originally that they were going to do a 0:10:41.640 --> 0:10:43.559 big first budget, because you know, you can hit the 0:10:43.640 --> 0:10:46.360 ground running. But all the noise I'm hearing is that 0:10:46.400 --> 0:10:48.920 it's going to be it's not going to be a 0:10:49.040 --> 0:10:52.760 huge first budget, and that you know they're going to 0:10:52.840 --> 0:10:55.160 basically it's going to be next year that you're going 0:10:55.200 --> 0:10:58.400 to see, if necessary, these big tax risers. And because 0:10:58.400 --> 0:11:00.480 obviously the big issue is what you do with spending 0:11:01.080 --> 0:11:04.000 and how you fix spending. And they haven't really got 0:11:04.040 --> 0:11:06.160 time to do a proper spending review because the depth 0:11:06.920 --> 0:11:08.959 of investigation that's needed to do at these at the 0:11:09.000 --> 0:11:11.079 departmental level to really come up with proper plans. 0:11:11.080 --> 0:11:12.560 So how do you get around that because they've got 0:11:12.559 --> 0:11:13.880 they need new plans for April. 0:11:14.040 --> 0:11:16.160 Yes, so they'll do it one years, they rolled, so 0:11:16.160 --> 0:11:18.000 they'll beat. They'll have the spending plans for a single 0:11:18.080 --> 0:11:20.800 year and then then they build out the bigger, broader 0:11:20.840 --> 0:11:25.920 plans for three to five years beyond that next year. So, 0:11:26.240 --> 0:11:28.640 I mean, that's one thing that's that's one thing that 0:11:28.920 --> 0:11:31.800 I'm increasingly hearing from, you know, around in the policy circles. 0:11:32.000 --> 0:11:34.040 Good quick question when you say next year, do you 0:11:34.120 --> 0:11:35.720 mean a spring budget or. 0:11:35.760 --> 0:11:38.360 So an autumn budget next year for well autumn budget 0:11:38.400 --> 0:11:39.160 and spending review. 0:11:39.200 --> 0:11:41.680 So like every chancellor, she said she's only going to 0:11:41.679 --> 0:11:43.520 have one big fiscal event, but they never do. 0:11:45.240 --> 0:11:46.280 We'll see. 0:11:47.000 --> 0:11:49.360 I do think, you know, it's not an open ended 0:11:50.240 --> 0:11:53.040 book for them. They've got to crack on pretty quickly 0:11:53.120 --> 0:11:55.079 in order to we all say, you know, landslide is 0:11:55.080 --> 0:11:57.880 going to be huge, you know, two three term prime minister. 0:11:57.960 --> 0:12:00.800 But we did say that about Boris point. It did 0:12:00.840 --> 0:12:03.520 look and you know, not long after twenty nineteen that 0:12:03.520 --> 0:12:07.120 that administration could go on and on and on, and 0:12:07.400 --> 0:12:09.320 part of their problem was how do you deliver on 0:12:09.440 --> 0:12:12.800 leveling up within four to five years? It was always 0:12:12.880 --> 0:12:15.320 going to be tough, and you know, potentially the answer 0:12:15.360 --> 0:12:18.440 is they didn't. But the same challenge is going to 0:12:18.440 --> 0:12:20.520 be the case for Starmer. How does he deliver for 0:12:20.600 --> 0:12:22.680 these people he has persuaded he is different. 0:12:22.960 --> 0:12:24.880 Yeah, well, that's that's going to be the big question, 0:12:24.920 --> 0:12:27.760 isn't it. The I think again, do you think it's 0:12:27.800 --> 0:12:29.360 going to come down to planning and the sort of 0:12:29.640 --> 0:12:31.920 you know, do you bring HS two back, that second 0:12:31.960 --> 0:12:36.559 leg of HS two as well Northern And it's those 0:12:36.640 --> 0:12:38.920 kind of big infrastructure projects where you can demonstrate that 0:12:38.960 --> 0:12:42.520 you're doing something for these regions even if it doesn't 0:12:42.640 --> 0:12:45.040 get completed in time. But the actually, you know, things 0:12:45.080 --> 0:12:48.679 are under way and this general building. 0:12:48.679 --> 0:12:50.920 I mean, doesphologists say that he's likely to get this 0:12:50.960 --> 0:12:53.840 big victor on a pretty small proportion of the vote. 0:12:53.960 --> 0:12:57.240 We also have a very unstable electric for example, and 0:12:57.360 --> 0:13:00.520 there's there's red wall voters again who will go back 0:13:01.080 --> 0:13:06.760 are not going to be permanent demonstrated pus promiscuous is 0:13:06.760 --> 0:13:09.280 a very good word, the right word. But I do 0:13:09.320 --> 0:13:12.840 think there's a big difference between Kirs Starmer and Boris Johnson. 0:13:12.880 --> 0:13:15.800 That Boris Johnson was a liberty jib and Kirs is 0:13:17.880 --> 0:13:21.360 you know, he's clearly somebody who is is interested in 0:13:21.520 --> 0:13:25.480 achieving results and has studied the dynamic, the mechanism power. 0:13:25.880 --> 0:13:29.199 So he will do more. Whether enough, if he does enough, 0:13:29.240 --> 0:13:31.559 that's a different question. But it's a serious person, which 0:13:31.600 --> 0:13:32.200 boris never one. 0:13:32.240 --> 0:13:33.920 I mean the point that you've come back to, I mean, 0:13:33.960 --> 0:13:35.800 just come back to where we started. I mean, if 0:13:35.800 --> 0:13:38.040 he does something that genuinely looks like it's going to 0:13:38.080 --> 0:13:40.720 move the dial on planning and other things that have 0:13:40.840 --> 0:13:46.400 proven obstacles to raising living standards through higher productivity, it 0:13:46.480 --> 0:13:49.120 is possible that the Officer Budget Responsibility, which is marking 0:13:49.200 --> 0:13:51.240 his homework on this and actually give in a sense 0:13:51.280 --> 0:13:53.400 setting how much lee where he has by making their 0:13:53.440 --> 0:13:57.280 growth forecast, they could give him some credit in advance. 0:13:57.400 --> 0:13:59.840 So yes, actually we do think that, and they did that. 0:13:59.840 --> 0:14:02.000 The record of them doing that with Jeremy Hunt when 0:14:02.000 --> 0:14:03.800 he cut Nash Insurance in a way that they thought 0:14:03.840 --> 0:14:08.920 would increase the workforce. So that will be one of 0:14:08.920 --> 0:14:10.920 the things he can play with, which actually he doesn't 0:14:10.920 --> 0:14:14.199 have to deliver. He just has to convince the OBR 0:14:15.080 --> 0:14:17.600 that growth will get up, and that's through those kinds 0:14:17.640 --> 0:14:19.960 of public investments, but also something it came up with 0:14:20.000 --> 0:14:23.960 Douglas Flint, sort of softer investments potentially in skills and 0:14:24.000 --> 0:14:24.520 other things. 0:14:24.800 --> 0:14:27.680 Yeah, and also just a foreign direct investment talking about 0:14:27.720 --> 0:14:31.680 France earlier, the UK is looking more attractive in a 0:14:31.720 --> 0:14:34.640 relative term, so we've been doing pretty well on FDI, 0:14:34.800 --> 0:14:37.520 so perhaps we do get some of this investment boom 0:14:37.760 --> 0:14:40.840 that we've been waiting feels like generations for. 0:14:41.400 --> 0:14:43.720 And at Bluemberg, you will be very well placed to 0:14:43.760 --> 0:14:45.640 be the first to spot that money coming in. 0:14:46.040 --> 0:14:47.720 Yes exactly, the data will be there. 0:14:47.800 --> 0:14:49.640 All right, that's a good place to leave it for now, Phil, 0:14:49.680 --> 0:14:54.080 But come back when we have this possible neighbor government. 0:15:04.960 --> 0:15:06.600 As we discussed at the beginning, I had this nice 0:15:06.680 --> 0:15:09.320 chat with Douglas Flint. We talked a bit about his past. 0:15:09.520 --> 0:15:13.680 He's now chairman of the asset manager Aberdeen, and I 0:15:13.760 --> 0:15:16.239 started by asking him, I mean, after all the upheaval 0:15:16.480 --> 0:15:20.720 we've had under successive Conservative governments and prime ministers. You 0:15:20.760 --> 0:15:23.920 know whether this might be one time where changing the 0:15:23.960 --> 0:15:26.880 party in power might be seen by the business world 0:15:27.160 --> 0:15:28.400 as a vote for stability. 0:15:29.480 --> 0:15:31.680 I certainly think it's the way the business world is 0:15:31.720 --> 0:15:33.920 hoping that it plays out, because I think we've had 0:15:33.920 --> 0:15:39.160 a period of instability, uncertainty and business plans in much 0:15:39.200 --> 0:15:43.280 longer cycles than political cycles to have the ability to 0:15:43.840 --> 0:15:46.640 plan because there's a government with a sufficient majority that 0:15:46.720 --> 0:15:50.200 it can actually command support of the House of Commons, 0:15:50.400 --> 0:15:53.520 to get legislation through, to give clarity on what it 0:15:53.720 --> 0:15:56.920 plans are in important areas of the economy, like infrastructure, 0:15:57.400 --> 0:16:01.200 like pension provision, retirement provision, and the hope is that 0:16:01.240 --> 0:16:03.840 we enter a period of stability where there is clarity 0:16:03.840 --> 0:16:07.200 as to what the policy framework will be. Some people 0:16:07.240 --> 0:16:09.200 may not like that framework, but it's much better to 0:16:09.280 --> 0:16:12.280 operate within a framework of certainty rather than the framework 0:16:12.320 --> 0:16:16.160 of instability and lack of certainty secure. 0:16:16.160 --> 0:16:19.520 Starmer has made much of the changes he's made to 0:16:19.520 --> 0:16:24.880 the Labor Party since Jeremy Corbyn's leadership. Rachel Reeves, the 0:16:24.880 --> 0:16:28.480 Shadow Chancellor, and others have made quite a lot of 0:16:28.760 --> 0:16:32.280 effort to reach out to business, to hold breakfasts and 0:16:32.480 --> 0:16:36.360 lunches with people in the city and elsewhere. Is there 0:16:36.400 --> 0:16:39.960 a basic level of trust for labor among the business community. 0:16:40.160 --> 0:16:43.520 I think there's been a real sense of gratitude that 0:16:43.560 --> 0:16:46.480 there has been that reach out, and particularly because that 0:16:46.640 --> 0:16:49.000 reach out has been you need to help us to 0:16:49.080 --> 0:16:51.240 understand what we need to do, or what the reaction 0:16:51.360 --> 0:16:54.080 will be if we do something different from what you're expecting, 0:16:54.120 --> 0:16:56.400 and so on and so forth. So I think there's 0:16:56.440 --> 0:16:58.840 been a level of reach out which has been help 0:16:58.920 --> 0:17:03.000 us to understand, whether it's an energy or transportation or 0:17:03.040 --> 0:17:06.959 financial services. And that's encouraging because I think the relationship 0:17:07.040 --> 0:17:09.680 between business and government has gone up and down over 0:17:09.720 --> 0:17:13.000 the last you know, fifteen twenty years or whatever, and 0:17:13.080 --> 0:17:15.400 I think business would like to feel that it has 0:17:15.400 --> 0:17:18.119 a role to play, and it's good that there is 0:17:18.200 --> 0:17:21.920 engagement with business today and a willingness to listen. Now, 0:17:22.000 --> 0:17:25.560 how that gets translated is where the rubber hits the road. 0:17:25.880 --> 0:17:29.560 You know, as an economist, it's been an ongoing topic, 0:17:29.680 --> 0:17:32.960 this sort of lack of productivity growth in the UK, 0:17:33.560 --> 0:17:36.520 which of course the only way you really raise living standards, 0:17:36.560 --> 0:17:39.440 making more stuff with the same number of people. And 0:17:39.520 --> 0:17:43.920 there's been a sort of dynamic around this where economists 0:17:44.000 --> 0:17:47.040 and others have pointed to the sort of micro underlying 0:17:47.119 --> 0:17:53.000 reasons holding back growth, planning, lack of skills, these kind 0:17:53.040 --> 0:17:57.160 of broader aspects of the environment, macroeconomic stability. And then 0:17:57.200 --> 0:17:59.879 what successive governments have done when, in the name of 0:18:00.080 --> 0:18:04.119 helping business has been cutting corporation tax and focusing on 0:18:04.240 --> 0:18:07.000 taxes and not on those micro things that are quite difficult. 0:18:07.119 --> 0:18:10.840 Do you think there's an appetite for the reverse of 0:18:10.840 --> 0:18:15.639 that under a new government in return for addressing some 0:18:15.760 --> 0:18:18.920 of those difficult things, you know, making people build more houses, 0:18:19.280 --> 0:18:23.200 pushing through more big infrastructure programs. The business community might 0:18:23.280 --> 0:18:26.439 be open to some increased taxes because it looks like 0:18:26.960 --> 0:18:29.480 there's not going to be many increases in personal taxation 0:18:29.600 --> 0:18:31.520 given how many things Rachel Rees has ruled out. 0:18:31.920 --> 0:18:34.240 If you ask any business or any individual would you 0:18:34.320 --> 0:18:38.240 like higher taxes? The answer istrigued. But on the other hand, 0:18:38.280 --> 0:18:41.520 if you say, if we can build an economy where 0:18:41.560 --> 0:18:44.320 there is growth and your business will prosper and your 0:18:44.520 --> 0:18:47.920 family income will do well, are you prepared to invest 0:18:48.040 --> 0:18:51.439 into that growth in the economy? Growth and the family income. 0:18:51.840 --> 0:18:54.480 Are you you know, are you happy to invest in 0:18:53.760 --> 0:18:57.640 it in a society where you're you can visibly see 0:18:57.680 --> 0:19:01.560 that the infrastructure you operate within and the services you 0:19:01.640 --> 0:19:04.200 enjoy are better. I think you know people will will 0:19:04.200 --> 0:19:06.439 respond to that. But but of course that is the 0:19:06.480 --> 0:19:07.000 trade off. 0:19:07.160 --> 0:19:09.840 I know you've been part of the advisory panel for 0:19:10.000 --> 0:19:15.440 Labour's Financial Services Review. What advice are you giving them? 0:19:15.480 --> 0:19:17.560 Would you give them now? What should they be looking 0:19:17.600 --> 0:19:20.520 out for and their traps to avoid when it comes 0:19:20.520 --> 0:19:22.240 to financial sector in particular. 0:19:22.480 --> 0:19:25.080 Well, I was one of ten that were asked to 0:19:25.160 --> 0:19:29.880 basically review the document they produced on policy for the 0:19:29.880 --> 0:19:33.040 the financial services industry and a policy framework that starts 0:19:33.080 --> 0:19:35.880 off with we will un a shamedly champion the financial 0:19:35.880 --> 0:19:38.080 services industry of the UK is one of our core 0:19:38.160 --> 0:19:44.000 strategic assets. It's a pretty good opening and and the 0:19:44.119 --> 0:19:47.240 kind of the exam question was is there anything in 0:19:47.280 --> 0:19:49.199 this that you think is silly, won't work? Is there 0:19:49.200 --> 0:19:51.240 anything you think is missing? Is there anything you think 0:19:51.320 --> 0:19:56.040 will attry in particular comment from media or other commentators, 0:19:56.040 --> 0:19:59.760 and the vast majority of forres and it was straightforward, I mean, 0:20:00.040 --> 0:20:03.040 the political stuff wasn't in it because that's a political 0:20:03.160 --> 0:20:06.960 choice and wasn't in the policy framework. But to start 0:20:07.000 --> 0:20:09.160 off with a framework that you believe that you need. 0:20:09.359 --> 0:20:13.600 You have a financial services sector that is extraordinarily full 0:20:13.640 --> 0:20:16.000 of skills that you need to grow the economy, and 0:20:16.040 --> 0:20:18.919 you want to harness those skills and control them in 0:20:18.960 --> 0:20:22.040 a an appropriate way without overreach. It's a very good 0:20:22.080 --> 0:20:24.959 start for engagement with the sector. I mean, I think 0:20:25.000 --> 0:20:27.080