WEBVTT - Is Brexit Truly to Blame for the UK’s Problems? 0:00:00.400 --> 0:00:03.120 John, Well, you told them so, didn't you. 0:00:03.200 --> 0:00:05.880 Yeah, I'm feeling really, really, really smug right now. 0:00:06.080 --> 0:00:06.920 What did you tell them? 0:00:07.000 --> 0:00:09.479 I said that the Bank England probably won't raise interest 0:00:09.520 --> 0:00:11.799 rates tomorrow. I got the right side of the heads 0:00:11.800 --> 0:00:12.640 of speak. 0:00:13.039 --> 0:00:15.960 Yesterday you said the Bank of England wouldn't raise interest 0:00:16.040 --> 0:00:18.680 rates tomorrow, and tomorrow is today. Yes, well, they wait, 0:00:18.760 --> 0:00:21.720 we'll just after the decision readers story to disappoint you, 0:00:21.760 --> 0:00:24.040 but we do record this bit a day before you 0:00:24.120 --> 0:00:27.479 hear it. Not read listeners in this case. And John, 0:00:27.560 --> 0:00:30.720 why did you think that? And obviously they read your 0:00:30.760 --> 0:00:31.600 stuff so. 0:00:32.159 --> 0:00:36.519 But they already know is the kind of gut thing. 0:00:36.640 --> 0:00:41.000 So the economy has been showing some glimmerings of slowing 0:00:41.080 --> 0:00:44.120 down a bit, despite the fact that the Bank England's 0:00:44.159 --> 0:00:47.040 kind of embardest about not being good at corn inflation 0:00:47.800 --> 0:00:48.600 the blood. 0:00:49.560 --> 0:00:50.159 Yeah exactly. 0:00:50.280 --> 0:00:54.520 But the path of these resistance was for holding this month. 0:00:54.880 --> 0:00:55.400 I thought. 0:00:56.240 --> 0:00:59.560 Do you think they might have looked at the money 0:00:59.600 --> 0:01:00.640 supply numbers? 0:01:01.200 --> 0:01:07.880 Hmmm, probably not. He I know, I think that's. 0:01:07.720 --> 0:01:10.679 Unfair of you. I think you know, even Bank of 0:01:10.720 --> 0:01:13.959 England governors are capable of learning, and they've been told 0:01:14.000 --> 0:01:16.120 and told and told over the last year or so, 0:01:16.240 --> 0:01:18.120 for God's sake, why don't you just look at the 0:01:18.120 --> 0:01:22.080 money supply numbers, Because there is a connection between money 0:01:22.120 --> 0:01:25.400 supply and inflation. If you increase the money supply massively, 0:01:25.440 --> 0:01:28.800 you'll probably get inflation, and when money supply starts to 0:01:28.840 --> 0:01:32.480 turn down, you will probably see inflation. For that's something 0:01:32.480 --> 0:01:35.520 that has held for quite a long time with gaps. 0:01:35.560 --> 0:01:37.760 Obviously it doesn't always work, but mostly it's a it's 0:01:37.800 --> 0:01:40.560 a pretty good indicator, that's true. 0:01:40.600 --> 0:01:42.520 And to be a feel, I mean Melvin King, who 0:01:42.600 --> 0:01:45.920 obviously actually boys walked at the banking the way, why. 0:01:45.880 --> 0:01:47.760 Did dedn't he might know something about this stuff. 0:01:48.520 --> 0:01:50.880 So for all the accusations a group think, he clearly 0:01:51.000 --> 0:01:54.120 itually thinks in the completely opposite dodiation from the Cordon lawn. 0:01:54.840 --> 0:01:57.800 And so I said, no, you're really the criticism has 0:01:57.840 --> 0:02:02.040 probably stung and Kevin the basest moon. Yeah, But I mean, 0:02:02.080 --> 0:02:03.960 then you get you know, Ben by nanke coming. Then 0:02:04.040 --> 0:02:07.240 you check that they're working. And I'm not entirely sure 0:02:07.280 --> 0:02:09.919 that Ben is a massive kind of fine of money. 0:02:09.680 --> 0:02:11.760 Superparatory, and they'll come to you soon and ask you 0:02:11.800 --> 0:02:13.040 to go in and check their working. 0:02:13.280 --> 0:02:15.200 I do hope, so so do I hope. 0:02:15.080 --> 0:02:16.760 They pay you all. I give you one of those 0:02:16.760 --> 0:02:22.079 defined benefit pensions r P I linked Okay, yes. 0:02:24.880 --> 0:02:25.079 Something. 0:02:25.120 --> 0:02:27.000 Bank of England will come in together, will check any 0:02:27.000 --> 0:02:28.480 old model you like, but we can tell you in 0:02:28.520 --> 0:02:31.720 advance they're all wrong. Right, What does this mean, John, 0:02:31.760 --> 0:02:34.359 They listen, we think, or I think, and I think 0:02:34.400 --> 0:02:36.840 you think as well, that interest rates they're not going 0:02:36.880 --> 0:02:38.560 to go down in a hurry. We're trying to get 0:02:38.600 --> 0:02:40.200 a little bit of back to the old normal. We're 0:02:40.200 --> 0:02:42.079 trying to get to a point where interest rates are 0:02:42.280 --> 0:02:43.959 higher than inflation and. 0:02:44.760 --> 0:02:48.239 Well, yeah, high on inflation, and well usually what happens 0:02:48.240 --> 0:02:50.080 is that wages are a bit higher than inflation. In 0:02:50.120 --> 0:02:53.200 the Bank England rate certainly before two thousand and eight 0:02:54.280 --> 0:02:56.720 was always higher than inflation. So you get real wage 0:02:56.800 --> 0:02:59.920 rises and also savings, but can paid re wentze. 0:03:00.639 --> 0:03:03.040 This is this is this is a real economy. Is 0:03:03.040 --> 0:03:04.480 when you can put your money in the bank and 0:03:04.520 --> 0:03:06.760 you can get a small, real return on it. 0:03:06.880 --> 0:03:09.840 Yeah, and I mean that's it's because we've grown used 0:03:09.840 --> 0:03:10.320 to this, or. 0:03:13.200 --> 0:03:14.160 Young people, yeah exactly. 0:03:14.160 --> 0:03:16.760 Anyone under the age of about four a ish has 0:03:16.800 --> 0:03:19.320 got used to this long period where that has been 0:03:19.400 --> 0:03:23.000 completely the opposite way around. But you know, the long 0:03:23.080 --> 0:03:25.160 term average, I think the last time I checked since 0:03:25.200 --> 0:03:27.640 the Second World War was for the base rate to 0:03:27.680 --> 0:03:31.320 be kicking about five percent and mortgage. 0:03:31.000 --> 0:03:32.880 Rates, by the way, to always kick around two percentage 0:03:32.880 --> 0:03:34.520 points above the rate of interest. 0:03:34.639 --> 0:03:38.240 Oh yeah, so I mean, you know, the I do 0:03:38.280 --> 0:03:42.560 think that this particular at the moment, because the competition 0:03:42.600 --> 0:03:45.640 between banks is quite high and there aren't many transactions 0:03:45.640 --> 0:03:49.400 being written, you're probably actually getting a pretty good mortgage 0:03:49.400 --> 0:03:52.160 deal in terms of the typical spread over the base 0:03:52.280 --> 0:03:56.560 rate over a longer period of time. But I wouldn't, 0:03:56.800 --> 0:03:58.320 you know, if I if I was needing, they can 0:03:58.440 --> 0:04:00.680 buy a house or refinance the host just not. I 0:04:00.680 --> 0:04:03.400 wouldn't make a big bit on rates going much lower 0:04:03.400 --> 0:04:06.040 than they currently are, because you'd already sort of seeing 0:04:06.960 --> 0:04:08.200 you know, I think I'm pretty sure you can walk 0:04:08.240 --> 0:04:10.480 in a five year deal below the base rate in 0:04:10.560 --> 0:04:13.600 the moment. Basically, don't bit on rates going lower. 0:04:13.920 --> 0:04:15.839 Yeah, but also for a moment to just be clear 0:04:15.840 --> 0:04:19.680 that we have it. We saw a lower than expected 0:04:19.800 --> 0:04:22.960 rate of inflation this week, but inflation is still really 0:04:23.040 --> 0:04:27.320 high and the target is two percent. We're still well 0:04:27.320 --> 0:04:30.120 over six percent, and apart from anything else, if you 0:04:30.120 --> 0:04:32.039 want to be honest about inflation, or of the Bank 0:04:32.040 --> 0:04:33.840 of England wants to be honest about it. I mean, 0:04:33.839 --> 0:04:35.760 they're the big if. But you know, let's say they 0:04:35.760 --> 0:04:38.120 do want to be honest about it. You really should. 0:04:38.360 --> 0:04:40.400 You really should if you're being if you're doing this 0:04:40.440 --> 0:04:44.480 stuff properly, you should get inflation down below two percent 0:04:44.800 --> 0:04:47.479 and you should keep it there for a considerable amount 0:04:47.520 --> 0:04:50.279 of time to even things out to a long term 0:04:50.320 --> 0:04:53.240 average of two percent. And that's quite important. You know, 0:04:53.400 --> 0:04:56.080 we've had eight percent percent for a while now, so 0:04:56.120 --> 0:04:57.840 that means we really need to be knocking around one 0:04:57.839 --> 0:05:02.560 percent for a decade. I mean, to be honest, straightforward, 0:05:02.720 --> 0:05:06.160 and to compensate people, we were trying to higher lump 0:05:06.200 --> 0:05:06.839 of inflation. 0:05:07.080 --> 0:05:09.800 Yeah, I mean, maybe you might have done the numbers 0:05:09.800 --> 0:05:12.799 on this, but we did have a lot of sub 0:05:12.920 --> 0:05:17.040 two percent, sub one percent years during the post two 0:05:17.040 --> 0:05:19.600 thousand and eight year. Because that was one argument, wasn't 0:05:19.640 --> 0:05:22.599 for reason the average if I mean that was, I mean, 0:05:22.640 --> 0:05:24.400 that was you kind of knew the Tonning point was 0:05:24.400 --> 0:05:27.440 coming because the point in which the Fed said, I say, 0:05:27.440 --> 0:05:29.520 maybe it's okay if we let inflation go up for 0:05:29.560 --> 0:05:33.240 a bit longer and be higher than usual, because that 0:05:33.279 --> 0:05:34.520 would be a fair way to do it. And that 0:05:34.600 --> 0:05:37.600 was literally twenty twenty, I think, wasn't it, when they 0:05:37.640 --> 0:05:40.280 actually were coming to the Tounning point, And they very 0:05:40.360 --> 0:05:42.919 quickly reversed that. That was within a couple of months, 0:05:42.920 --> 0:05:43.440 they said. 0:05:43.240 --> 0:05:46.840 I really vaguely thinking of the seventies would just be here. 0:05:46.880 --> 0:05:50.880 I do not remember personally when they kept getting inflation 0:05:50.960 --> 0:05:53.839 down again but not quite far enough, and then off 0:05:53.839 --> 0:05:57.320 it went again, So it wasn't ever quite killed. See this, 0:05:57.560 --> 0:05:59.760 and I'm worried that we might do that this time. 0:06:00.000 --> 0:06:06.160 The eye is a really interesting point because I don't no. 0:06:06.320 --> 0:06:10.000 I mean history does suggest, and history across various places, 0:06:10.040 --> 0:06:12.599 not just the nineteen seventies, suggest that winstin fleetion has 0:06:12.600 --> 0:06:14.599 got as high as it got at this time round. 0:06:15.040 --> 0:06:19.240 It doesn't easily come back to target. And I do 0:06:19.279 --> 0:06:22.480 think if you look at oil oil, it's not far 0:06:22.520 --> 0:06:25.760 off one hundred dollars a battle again, So it's not 0:06:25.800 --> 0:06:28.120 a certing. I mean, next year could get kind of 0:06:28.160 --> 0:06:28.799 messy again. 0:06:29.480 --> 0:06:32.560 Okay, you heard it her first, And remember that John 0:06:32.720 --> 0:06:35.800 was right on interest rates. What else might he be 0:06:36.000 --> 0:06:41.880 right on. Welcome to Marin Dogs Money, the podcast in 0:06:41.880 --> 0:06:44.239 which the people who know the markets explain the markets. 0:06:44.279 --> 0:06:48.360 I'm Maren sumset Web. This week we asked the fraud question. 0:06:49.160 --> 0:06:53.800 Is Brexit really to blame for every single one of 0:06:53.880 --> 0:06:56.960 the UK problems? Robert Colville, director at the Center for 0:06:57.000 --> 0:07:01.000 Policy Studies, and economist Julian Jessip joined me to discuss. 0:07:02.200 --> 0:07:04.880 Julian, Robert, thank you both very much for joining us today. 0:07:05.120 --> 0:07:09.440 Thank you. So we just want to talk today about 0:07:09.600 --> 0:07:14.040 how Brexit is unfolded so far. There's a lot of 0:07:14.080 --> 0:07:16.840 talk about Brexist, this Brexit, that it caused, this is 0:07:16.880 --> 0:07:19.560 responsible for that, It's all about this, et cetera. And 0:07:19.560 --> 0:07:22.360 I'm looking at a tweet from a well known remainer 0:07:22.800 --> 0:07:25.040 after the news that civil servants were in tears after 0:07:25.080 --> 0:07:27.120 Brexit vote and the Foreign Office was in a state 0:07:27.160 --> 0:07:30.680 of mourning, which sounds terrible, right, and a Romainer wrote 0:07:30.720 --> 0:07:34.520 above that anyone who knew what it meant for people's livelihood, business, families, 0:07:34.520 --> 0:07:37.960 freedom and rights was distressed. Anyone who understood and cared 0:07:38.040 --> 0:07:41.440 knew that seventeen point four million people had mostly unwittingly 0:07:41.760 --> 0:07:46.240 voted to harm themselves and worse to harm others now 0:07:47.440 --> 0:07:49.800 and talk quite recently, you could point at all sorts 0:07:49.800 --> 0:07:51.640 of things and say, look, you know, we're doing worse 0:07:51.720 --> 0:07:53.880 than the rest of Europe in this area, in that area, 0:07:54.040 --> 0:07:58.000 GDP inflation, et cetera. And that's because of Brexit. Now 0:07:58.000 --> 0:08:00.480 those numbers don't look quite so bad in the perfectly 0:08:00.520 --> 0:08:03.160 reasonable compared to the rest of Europe. So the question 0:08:03.280 --> 0:08:05.080 that I want to ask both of you for starters, 0:08:05.760 --> 0:08:07.720 is it the case that in fact Brexit has been 0:08:07.920 --> 0:08:11.880 verging on irrelevant for the UK economy, certainly significantly less 0:08:11.880 --> 0:08:13.400 relevant than most people think. 0:08:14.280 --> 0:08:15.600 Julian, I think. 0:08:15.480 --> 0:08:17.080 That's for the right way to look at it. I think, 0:08:17.160 --> 0:08:19.880 first of all, it's worth saying, though that bit odd 0:08:19.920 --> 0:08:22.560 to say that Brexit has done no harm to the 0:08:22.680 --> 0:08:26.760 UK economy. After all, we have significantly increased barriers to 0:08:26.800 --> 0:08:30.520 trade with our biggest single partner. We've introduced sort of 0:08:30.520 --> 0:08:34.240 new obstacles to the free movement of people. We've increased 0:08:34.320 --> 0:08:38.240 uncertainty in the British economy, which is undoubtedly held back 0:08:38.360 --> 0:08:40.880 some investment and meant that there's been sort of additional 0:08:41.000 --> 0:08:45.319 risk premiare on British assets for foreign investors. So I 0:08:45.360 --> 0:08:47.800 think it'd be weird to say that there's been no impact 0:08:48.679 --> 0:08:51.440 against that, though I think the impact has clearly been 0:08:51.520 --> 0:08:54.360 a lot less than many people feared at the time 0:08:54.400 --> 0:08:57.760 of the referendum and onwards, and actually it continues to 0:08:57.800 --> 0:09:00.320 be a lot less than many people claim. So there 0:09:00.320 --> 0:09:03.240 are all sorts of big numbers flying around. Your economy 0:09:03.320 --> 0:09:05.840 is four percent smaller or or six percent smaller than 0:09:05.880 --> 0:09:08.600 would other ways have been, but there's simply no real 0:09:08.679 --> 0:09:11.280 hard evidence to support that. Or some of the scared 0:09:11.320 --> 0:09:14.679 stories about the impact on inflation or trade or the 0:09:14.760 --> 0:09:15.400 labor market. 0:09:15.640 --> 0:09:17.280 Well, if you look at that business of four percent 0:09:17.360 --> 0:09:19.400 or six percent or whatever smaller than it might have been, 0:09:19.760 --> 0:09:22.160 we know how difficult forecasting GDP is, So who could 0:09:22.160 --> 0:09:23.760 possibly have known where it might have been in the 0:09:23.760 --> 0:09:24.320 first place. 0:09:24.600 --> 0:09:26.600 Let's talk about where we know it's had a negative 0:09:26.640 --> 0:09:27.679 impact first, shall we. 0:09:27.800 --> 0:09:30.080 You've got immigration, but of course we haven't seen any 0:09:30.080 --> 0:09:32.760 fall off in immigration. It's just a different kind of immigration, right, 0:09:32.920 --> 0:09:34.760 And some may say that it's a better kind of 0:09:34.760 --> 0:09:38.040 immigration because they're using a point system to allow higher 0:09:38.040 --> 0:09:41.600 skilled people into the country rather than we're consistently relying 0:09:41.679 --> 0:09:43.160 on low cost labor. 0:09:43.280 --> 0:09:44.600 Is much better for productivity. 0:09:45.120 --> 0:09:47.839 So immigration is a really interesting place to start, because 0:09:47.840 --> 0:09:50.160 actually a lot of people I know who are quite 0:09:50.200 --> 0:09:54.200 skeptical of Brexit actually regard our sort of post Brexit 0:09:54.559 --> 0:09:57.959 migration regime as a relative success. So we have, as 0:09:57.960 --> 0:10:01.680 you suggested, reduced our dependency on on cheap labor from 0:10:01.720 --> 0:10:06.240 Europe and actually made it easier for us to bring 0:10:06.280 --> 0:10:08.760 in more highly skilled labor from the rest of the world. 0:10:08.760 --> 0:10:12.160 And if you look at the aggregate numbers then record 0:10:12.240 --> 0:10:14.320 net migration over the last year or so, it's a 0:10:14.320 --> 0:10:16.840 bit hard to say that Brexit is a major factor 0:10:17.320 --> 0:10:20.440 behind the labor shortages that we are facing. That said, 0:10:20.760 --> 0:10:24.480 undoubtedly has caused some problems in some sectors, very hard 0:10:24.520 --> 0:10:28.079 for the hospitality industry, for example, swiftly to switch from 0:10:28.080 --> 0:10:30.920 one type a worker to another, and there means some 0:10:31.000 --> 0:10:34.040 quite bigger adjustment costs in other areas as well. But overall, 0:10:34.040 --> 0:10:36.280 I would argue that this is a good example of 0:10:36.320 --> 0:10:39.240 something that perhaps shouldn't have worked in theory, but does 0:10:39.280 --> 0:10:41.840 seem to have worked in practice, which is that real 0:10:41.920 --> 0:10:45.000 wages have risen or at least not fallen by as 0:10:45.080 --> 0:10:47.840 much as they would otherwise have done. That is, forcing 0:10:47.880 --> 0:10:51.280 companies to rethink how they use labor, and it's probably 0:10:51.320 --> 0:10:55.360 one factor contributing to some slightly better news on investment recently. 0:10:55.480 --> 0:10:57.960 So I think I'd actually regard the sort of post 0:10:58.000 --> 0:11:00.439 Brexit migration policy as success rather than. 0:11:00.800 --> 0:11:03.080 You're not doing very well on finding the negative, Julia, 0:11:04.400 --> 0:11:06.360 what about you can you can you find a genuine 0:11:06.360 --> 0:11:07.480 negative for us? 0:11:08.000 --> 0:11:08.160 Well? 0:11:08.200 --> 0:11:10.360 I think there's obviously been a terms of trade shock 0:11:10.440 --> 0:11:13.000 for the UK economy. As Junia said, We've imposed friction 0:11:13.120 --> 0:11:15.880 on trade with the EU, and we haven't really done 0:11:16.280 --> 0:11:20.040 much of the wonderful super diverging that was promised that 0:11:20.080 --> 0:11:24.559 would create massive growth opportunities elsewhere. I think the summary is, 0:11:24.600 --> 0:11:26.800 at the moment we have a sort of poor photocopy 0:11:26.840 --> 0:11:30.600 of EU membership as opposed to something which looks genuinely distinct. 0:11:30.600 --> 0:11:34.400 But that's partly because building something genuinely distinct was always 0:11:34.400 --> 0:11:36.160 going to be the work of many years, and divergence 0:11:36.200 --> 0:11:38.320 was always going to happen gradually, not just as we 0:11:38.400 --> 0:11:41.000 decided to do stuff, but as the EU decided to 0:11:41.000 --> 0:11:42.719 do stuff. I should say up front here by the way, 0:11:42.760 --> 0:11:45.000 that I am a Romainer. I did vote for Remain, 0:11:45.240 --> 0:11:48.120 but reached the apparently novel position that on the twenty 0:11:48.160 --> 0:11:50.760 fourth of June that you know that the people's vote 0:11:50.760 --> 0:11:52.480 should be respected and delivered, and it would be much 0:11:52.520 --> 0:11:55.280 worse to democracy we didn't deliver on that verdict than 0:11:55.400 --> 0:11:58.400 if we just decided that the idiots saw some numbers 0:11:58.400 --> 0:12:00.880 on the bus and got all confused, said dear hearts. 0:12:01.520 --> 0:12:04.439 I think what's sort of happening is that exactly the 0:12:04.480 --> 0:12:06.800 same way as we blame Brussels for everything before Brexit, 0:12:07.400 --> 0:12:10.679 people are blaming Brexit for everything after Brexits. I mean, 0:12:10.880 --> 0:12:14.400 on immigration, for example, it's certainly true that there's a 0:12:14.480 --> 0:12:17.280 change when the new agents come in, but what sends 0:12:17.280 --> 0:12:20.640 all the people from Europe home is the pandemic. That's well, 0:12:20.800 --> 0:12:23.679 that's the huge, great thing that happens. Likewise, the reason 0:12:23.679 --> 0:12:27.240 we start then in recruiting health service workers en mass 0:12:27.320 --> 0:12:29.880 from other countries is the pandemic and the trains on 0:12:29.880 --> 0:12:32.360 the health service. I mean, effectively, the sort of tetemic 0:12:32.400 --> 0:12:35.880 immigrant switches from being the Polish barrista or Polish plumber 0:12:35.920 --> 0:12:39.320 to being an Indian or Filipino healthcare or a social 0:12:39.320 --> 0:12:42.240 care worker. And that's really kept the nhs afloat. 0:12:42.920 --> 0:12:45.640 Just to echo that, if you look at other countries. 0:12:45.679 --> 0:12:48.240 So Germany for example, is in a very similar boat 0:12:48.280 --> 0:12:51.079 when it comes to labor shortages, and part of that 0:12:51.360 --> 0:12:54.680 is that a large number of migrant workers went home 0:12:54.920 --> 0:12:57.959 during COVID, often to countries like Poland that are now 0:12:57.960 --> 0:13:01.360 doing relatively well, and they simply not come back now. 0:13:01.440 --> 0:13:03.679 Of course, Germany is still a member of the European Union, 0:13:03.720 --> 0:13:05.839 but it's got pretty much the same problem in the 0:13:06.559 --> 0:13:09.760 labor market. Other countries you can look at in Europe, 0:13:09.840 --> 0:13:13.600 like the Netherlands, for example, their core inflation rate, so 0:13:13.679 --> 0:13:17.400 that's inflation excluding food and energies, is proving just as 0:13:17.440 --> 0:13:21.720 sticky as ours for similar reasons. Again nothing to do 0:13:21.800 --> 0:13:24.960 with Brexit, because of course the Netherlands is still a 0:13:24.960 --> 0:13:28.520 member of the European Union, but they're also facing labor shortages, 0:13:29.160 --> 0:13:32.120 the legacy of high energy costs being passed through into 0:13:32.440 --> 0:13:36.600 all sorts of other bills, and a tight labor markets. 0:13:36.640 --> 0:13:39.400 So not only we not an outlier in terms of 0:13:39.520 --> 0:13:43.000 headline GDP so the overall size of the economy, but 0:13:43.040 --> 0:13:45.080 also if you look at individual things like the title 0:13:45.040 --> 0:13:47.520 it's the labor market or what's happening to inflation, there 0:13:47.559 --> 0:13:49.960 are plenty of countries in Europe exactly the same position 0:13:50.000 --> 0:13:50.320 that we are. 0:13:50.840 --> 0:13:53.720 There are obviously individual companies which have had many logistical 0:13:53.760 --> 0:13:57.000 difficulties in importing or exporting products from the EU that 0:13:57.320 --> 0:14:00.400 the life has become unnecessarily complicated and might come even 0:14:00.400 --> 0:14:03.000 more complicated if we were to impose the full range 0:14:03.120 --> 0:14:07.839 protections read for food for example. Likewise, HGV drivers they said, 0:14:08.000 --> 0:14:10.160 to all kinds of reasons why it becomes less attractive 0:14:10.200 --> 0:14:13.240 to driver lorry into the UK if you've got these 0:14:13.280 --> 0:14:16.080 extra barriers, then to sort of keep it circulating within 0:14:16.120 --> 0:14:20.120 the European mainland. But the tendency to blame literally everything 0:14:20.120 --> 0:14:23.400 on Brexit is kind of I think it obscures both 0:14:23.440 --> 0:14:26.040 the you know, the massive events that have happened recently, 0:14:26.160 --> 0:14:27.720 the pandemic and the cost of doing crisis. But I 0:14:27.720 --> 0:14:30.880 think also crucially it attracts our attention from the long 0:14:30.960 --> 0:14:33.840 running weaknesses of the UK economy, all the things that 0:14:33.840 --> 0:14:36.040 people like us have been shouting about at the think 0:14:36.080 --> 0:14:40.480 tank I work in, or Julian likewise, scandalously bad performance 0:14:40.560 --> 0:14:43.160 on productivity in real wages for a decade or more, 0:14:43.680 --> 0:14:46.280 utter failure to invest enough as an economy, both you know, 0:14:46.320 --> 0:14:48.600 on the public and the private site like those are 0:14:48.760 --> 0:14:52.000 really really big issues which long pre day Brexit, so the. 0:14:51.920 --> 0:14:55.160 British economy can be completely rubbish even without Brexit. 0:14:56.720 --> 0:14:57.440 Being the point. 0:15:00.080 --> 0:15:00.440 That's right. 0:15:00.480 --> 0:15:05.680 I think Brexit was never a magic wand it created opportunities, 0:15:05.720 --> 0:15:08.880 but it's then up to the government to take those opportunities, 0:15:08.920 --> 0:15:12.640 and there are plenty of examples there where the government 0:15:12.680 --> 0:15:15.920 seems to be moving only slowly, if at all. 0:15:16.040 --> 0:15:18.040 You're absolutely right, but it's a good point to make 0:15:18.080 --> 0:15:20.920 that we see the negatives not being particularly serious and 0:15:21.080 --> 0:15:23.480 obviously there but not so much as to hamper the 0:15:23.560 --> 0:15:26.480 UK economy. But all the positives that people who were 0:15:26.560 --> 0:15:29.440 pro Brexit before the vote were hoping for, all the 0:15:29.440 --> 0:15:32.000 policies they thought might arrived, they're just not coming. 0:15:33.400 --> 0:15:35.120 I think that's right. I don't think it's enough for 0:15:35.160 --> 0:15:37.880 somebody who supported Brexit, by the way, I did vote 0:15:37.880 --> 0:15:40.800 to leave the EU in twenty sixteen. I don't think 0:15:40.800 --> 0:15:42.720 it's enough for people like me to say, oh, well, 0:15:42.800 --> 0:15:45.640 the damage hasn't been as bad as some people feared. 0:15:46.080 --> 0:15:48.520 I think you need to show some tangible benefits, and 0:15:48.640 --> 0:15:52.160 those clearly have been slow to come. I'm very sympathetic, 0:15:52.200 --> 0:15:54.640 as Roberts said, that there are lots of smaller businesses 0:15:54.680 --> 0:15:59.200 and individuals and musicians, for example, whose life has become 0:15:59.200 --> 0:16:01.880 a lot more difficult as a result of leaving the EU. 0:16:01.920 --> 0:16:05.240 I wouldn't want to dismiss those problems, so I think 0:16:05.240 --> 0:16:08.640 we do need to show some tangible benefits sooner rather 0:16:08.720 --> 0:16:11.360 than later. There are a few things I can point to. 0:16:11.680 --> 0:16:13.640 I think the new trade deals that are being done 0:16:13.680 --> 0:16:16.560 are an important step in the right direction. We're moving 0:16:16.680 --> 0:16:19.400 faster than the EU ears on other things, for example, 0:16:19.480 --> 0:16:23.880 reform of agricultural policies, reform with some of the regulations 0:16:23.880 --> 0:16:27.840 holding back the financial services sector. So there are some 0:16:27.920 --> 0:16:30.440 things that we can point to. But I think things 0:16:30.480 --> 0:16:32.080 need to get a lot better in the next few 0:16:32.120 --> 0:16:35.000 years before those of us who did vote leave the 0:16:35.040 --> 0:16:37.080 EU can really say that things are heading in the 0:16:37.120 --> 0:16:37.600 right direction. 0:16:37.760 --> 0:16:39.600 You need the government to do something. Is that how 0:16:39.680 --> 0:16:42.120 you see it, Robert, I think so. 0:16:42.200 --> 0:16:45.280 But I don't think you can underestimate the level of 0:16:45.480 --> 0:16:49.000 what European dysfunction. I mean, I think in the macro picture, 0:16:49.920 --> 0:16:54.680 the extraordinary gap is between American growth and European stagnation. 0:16:55.120 --> 0:16:57.600 And obviously the fact that they didn't depend on floy 0:16:57.600 --> 0:17:00.920 the debuting selling them gas is has been a sort 0:17:00.920 --> 0:17:03.120 of contributing player in that. But it genuinely seems, you know, 0:17:03.200 --> 0:17:04.600 if you look at you and where the big companies 0:17:04.600 --> 0:17:06.680 are being created, where the growth is being created, where 0:17:06.720 --> 0:17:10.000 manufacturing going, where investment is going, like, the fact that 0:17:10.040 --> 0:17:12.400 we are struggling on those things is not a uniquely 0:17:12.440 --> 0:17:13.679 British phenomenon. 0:17:13.720 --> 0:17:15.399 We are despite Brexit. 0:17:15.440 --> 0:17:18.040 We are European economy and we look pretty much like 0:17:18.200 --> 0:17:21.240 many of the other European economies and I think that 0:17:21.280 --> 0:17:23.280 I think that's a really important issue to address. It 0:17:23.320 --> 0:17:26.240 may be, it hopefully could be that Brexit gives us 0:17:26.240 --> 0:17:28.919 the opportunity to do more things to galvanize that. I 0:17:28.920 --> 0:17:30.680 think one of the startly things about Brexit is we've 0:17:30.680 --> 0:17:32.920 just all completely lost interested in what Europe is doing 0:17:33.200 --> 0:17:36.679 and now completely under reporting pretty much anything that's happening 0:17:36.840 --> 0:17:39.199 in Brussels, which I think is really interesting. But you know, 0:17:39.359 --> 0:17:42.520 for example, on digital services and technology, you know our 0:17:42.600 --> 0:17:45.040 legislation is bad, their legislation looks worse. 0:17:46.880 --> 0:17:50.479 So what do you put the big gap between growth 0:17:50.520 --> 0:17:53.119 in the US and growth in European economies and in 0:17:53.119 --> 0:17:53.879 the UK down to? 0:17:55.760 --> 0:17:57.080 I mean, I think there's all sorts of things. 0:17:57.520 --> 0:17:59.160 I know, it's a long list. Pull out a couple. 0:17:59.440 --> 0:18:00.960 Yeah, US is a huge market. 0:18:01.000 --> 0:18:03.439 I think local competition is a really important and are 0:18:03.440 --> 0:18:06.040 completely underplaced part of this. What you see in the 0:18:06.040 --> 0:18:09.119 States is a huge shifting growth from basically the places 0:18:09.160 --> 0:18:10.680 where you pay lots of tax and you can't build 0:18:10.680 --> 0:18:13.520 houses to the pla is where you can build houses 0:18:13.560 --> 0:18:15.960 and you don't pay much tax. Companies are fleeing New 0:18:16.040 --> 0:18:19.000 York for Miami, They're fleeing California for Texas, and the 0:18:19.080 --> 0:18:22.480 Sun Belt states are doing incredibly well. We don't be 0:18:22.560 --> 0:18:26.080 in Britain, don't have that dynamic of internal competition at all. 0:18:27.200 --> 0:18:29.040 As energy pressed tax rates. 0:18:29.560 --> 0:18:32.320 We could competition if Scotland could cut them, not keep 0:18:32.320 --> 0:18:35.000 putting them up, then you know British companies might flee 0:18:35.000 --> 0:18:36.119 to Edinburgh and Glasgow. 0:18:36.880 --> 0:18:38.840 Well, the case for the union would be approved. 0:18:39.440 --> 0:18:41.720 I suppose. So yeah, sorry I interrupted you. What was 0:18:41.760 --> 0:18:42.400 your second point? 0:18:42.560 --> 0:18:43.600 Energy energy costs? 0:18:43.640 --> 0:18:43.840 Right? 0:18:43.880 --> 0:18:47.960 I mean, the shale revolution has absolutely smashed the cost 0:18:47.960 --> 0:18:49.680 of energy in the US. It's made in America and 0:18:49.800 --> 0:18:54.119 energy exporter, which is extraordinary. And as the cost of 0:18:54.160 --> 0:18:56.840 solar power is tumbling by the minute, it seems and 0:18:57.359 --> 0:18:58.919 guess guess where they're building solar panels. 0:18:58.920 --> 0:19:01.080 It's in Texas and where they have a lot of sun. 0:19:01.760 --> 0:19:01.960 Yeah. 0:19:02.000 --> 0:19:03.600 So the price of energy in the UK is going 0:19:03.640 --> 0:19:05.840 to continue to go up and that's going to hamper 0:19:05.920 --> 0:19:06.800 us long term. 0:19:06.640 --> 0:19:10.280 Isn't it unless we start building an awful lot more 0:19:10.440 --> 0:19:12.600 generating capacity than we have today. 0:19:12.680 --> 0:19:15.119 Any Yes, Jillian, what do you think you see is 0:19:15.160 --> 0:19:17.359 the big problems in the UK that have nothing to 0:19:17.359 --> 0:19:18.000 do with Brexit. 0:19:19.080 --> 0:19:21.119 Well, I think actually the comparison of the US is 0:19:21.119 --> 0:19:24.160 a great starting point. Robert's already touched on some key points. 0:19:24.160 --> 0:19:28.000 So the greater flexibility that is easier to move around 0:19:28.240 --> 0:19:30.480 in the US, partly due to the fact that it's 0:19:30.480 --> 0:19:33.200 real to be easy to build new homes and factories 0:19:33.240 --> 0:19:37.080 compared to overhear the high level of energy costs. Initially, 0:19:37.080 --> 0:19:38.840 I think some of the recent growth in the US 0:19:38.880 --> 0:19:41.920 has been flattered by a fiscal boom that is not 0:19:42.040 --> 0:19:45.680 sustainable to a big increase in government spending, a lot 0:19:45.720 --> 0:19:47.760 of which I think will turn out to be wasteful, 0:19:47.880 --> 0:19:49.960 and in the meantime it's actually starting to worry a 0:19:50.000 --> 0:19:52.919 few people in the financial market. So even though the 0:19:53.000 --> 0:19:55.760 US has the enormous advantage of still a shrewing in 0:19:55.840 --> 0:19:59.959 the world's major reserve currency, the dollar. It's credit rate 0:20:00.200 --> 0:20:02.600 has been downgraded recently by at least one of the 0:20:02.640 --> 0:20:06.360 major rating agencies, so there's at of spending boom from 0:20:06.359 --> 0:20:09.240 that government may not be sustainable, but the underlying fundamentals 0:20:09.240 --> 0:20:13.720 of the economy are still relatively sound us compared to 0:20:13.760 --> 0:20:16.320 the rest of Europe. I mean, there are a few 0:20:16.320 --> 0:20:18.600 additional things that I think are going wrong. One, obviously, 0:20:18.640 --> 0:20:21.960 is the direction of tax in the UK. It's true 0:20:21.960 --> 0:20:25.199 that our level of tax isn't particularly high compared to 0:20:25.680 --> 0:20:28.320 other countries, but the big difference is the extent which 0:20:28.320 --> 0:20:32.160 we've increased it over the last few years, and that's 0:20:32.240 --> 0:20:35.600 most obvious in the case of corporation tax. So raising 0:20:35.600 --> 0:20:38.320 our main rate of corporation tax from nineteen percent to 0:20:38.960 --> 0:20:42.320 twenty five percent at a time when our major competitors 0:20:42.320 --> 0:20:46.040 in Europe, notably France and Germany, are actually looking to 0:20:46.040 --> 0:20:49.320 lower the burden of taxation on their companies. I think 0:20:49.359 --> 0:20:53.200 that's one obvious problem. Productivity is clearly a big problem 0:20:53.200 --> 0:20:55.959 in the UK, not least in the public sector, not 0:20:56.040 --> 0:20:59.359 talked about enough. We've had very little growth in public 0:20:59.359 --> 0:21:03.240 sector productivity for decades. In the private sector productivity has 0:21:03.280 --> 0:21:05.880 only really been a problem since the global financial crisis, 0:21:05.920 --> 0:21:09.920 but going back over decades, public sector productivity has been 0:21:09.920 --> 0:21:12.760 pretty much flat. 0:21:13.320 --> 0:21:15.639 Why is it the public sector of productivity is so 0:21:15.680 --> 0:21:17.679 far we might as well have our own answers, But 0:21:17.720 --> 0:21:18.840 what's your answer? 0:21:20.440 --> 0:21:22.560 I hate to pick on the NHS. Sounds like a 0:21:22.600 --> 0:21:25.080 broken record, but I mean, the NHS is the biggest 0:21:25.080 --> 0:21:28.040 single part of our public sector, one of the biggest 0:21:28.040 --> 0:21:31.720 parts of the economy overall, and very hard for state 0:21:31.760 --> 0:21:36.840 monopoly to improve productivity because there isn't enough internal competition 0:21:36.920 --> 0:21:40.240 that'll learn competition with the private sector. So I think 0:21:40.240 --> 0:21:42.800 you need to look at the NHS, and myself and others, 0:21:42.840 --> 0:21:45.919 of course, have been advocating looking at best practice in 0:21:45.960 --> 0:21:48.840 the rest of Europe and in Asia, which typically involves 0:21:49.359 --> 0:21:53.280 more private sector involvement, both in terms of finance and provisions. 0:21:53.320 --> 0:21:56.680 So the NHS would be an obvious place to start. 0:21:56.720 --> 0:22:00.439 But inevitably, the public sector is not subject to the 0:22:00.440 --> 0:22:03.879 same sort of competitive and market pressure as the private 0:22:03.960 --> 0:22:07.280 sector is, so there's a problem there. I think partly also, 0:22:07.720 --> 0:22:09.840 you could make a reasonable agment that we haven't been 0:22:09.880 --> 0:22:13.879 investing enough in infrastructure, some of which I think always 0:22:13.880 --> 0:22:16.400 has been provided by the government in general. Of course, 0:22:16.560 --> 0:22:18.760 I think the private sector can do these things better. 0:22:18.840 --> 0:22:21.520 But even as a free market here, I recognize there 0:22:21.560 --> 0:22:24.199 are some sort of public good aspects here, or some 0:22:24.359 --> 0:22:27.679 very large projects that only really the private the public 0:22:27.720 --> 0:22:30.679 sector can afford to do a reasonable cost. So I 0:22:30.680 --> 0:22:32.560 think under investment is a factor. 0:22:32.600 --> 0:22:34.560 And that's true at the corporate level as well, right, 0:22:34.560 --> 0:22:37.280 And it's not just the public sector that has underinvested. 0:22:37.560 --> 0:22:39.560 Companies have massively underinvested too. 0:22:40.600 --> 0:22:45.919 Yeah, in the private sector, it's because you know, the 0:22:45.920 --> 0:22:48.439 framework hasn't been there. So that's a government problem of 0:22:48.520 --> 0:22:52.280 taxes and regulations being too high and also inconsistent and 0:22:52.480 --> 0:22:56.359 constant chopping and changing in the tax regime is not helpful. 0:22:56.400 --> 0:22:59.240 So not just a question of luring taxes, it's also 0:22:59.280 --> 0:23:03.160 about simplify buying them and a bit more predictability. In contrast, 0:23:03.160 --> 0:23:06.760 for example, to the windfall tax on energy companies constantly 0:23:06.800 --> 0:23:11.040 being tweaked and increased is devastating investment in the North 0:23:11.080 --> 0:23:14.439 sol and gas sector. So it's partly about getting the 0:23:14.520 --> 0:23:17.480 right framework, which is a problem of government and in 0:23:17.520 --> 0:23:19.879 the public sector of course, by definition that's a problem 0:23:19.920 --> 0:23:21.880 of government, and there are lots of things I could 0:23:21.920 --> 0:23:25.800 point to. For example, we've got fiscal rules that deter 0:23:26.320 --> 0:23:30.159 investment by the public sector, even investment that could be 0:23:30.200 --> 0:23:33.040 a good thing is sometimes hard to get past the treasury, 0:23:33.320 --> 0:23:36.480 and we're seeing that with the roofs in schools and 0:23:36.680 --> 0:23:39.119 other public sector buildings being a good example of something 0:23:39.119 --> 0:23:40.760 where maybe something should have be done. 0:23:40.800 --> 0:23:43.639 Earlier, you mentioned tax and tax work's going in the 0:23:43.680 --> 0:23:46.439 wrong direction, which they obviously are, and they're heading to 0:23:46.640 --> 0:23:48.959 levels that the UK's find very hard to sustain as 0:23:49.000 --> 0:23:52.240 a percentage of GDP in the past. But it's hard 0:23:52.280 --> 0:23:55.959 to see what the choice is within aging population and 0:23:56.240 --> 0:23:59.560 new zero and all the other various obligations that fall 0:23:59.640 --> 0:24:02.600 upon state and the things people expect from the state now, 0:24:02.600 --> 0:24:04.640 which seems to be more and more and more they 0:24:04.640 --> 0:24:07.320 expect the state to be involved in almost everything. With 0:24:07.440 --> 0:24:09.639 that dynamic, it's sort of hard to see how the 0:24:09.680 --> 0:24:12.000 tax regime could go in the other direction, however much 0:24:12.040 --> 0:24:14.239 the Lakes of US may think it should now. 0:24:14.680 --> 0:24:17.040 I'm sympathetic to that point, and I certainly think tax 0:24:17.160 --> 0:24:21.760 revenues need to rise in order to fund the public services. 0:24:21.800 --> 0:24:25.199 That we want, particularly as you say, with an aging 0:24:25.240 --> 0:24:29.320 population and other increasing demands. But that's not the same 0:24:29.359 --> 0:24:31.760 as saying that tax rates need to go up. And 0:24:31.800 --> 0:24:34.160 that's a mistake that I think a lot of other 0:24:34.200 --> 0:24:38.359 commentators of the orthodox commentators tend to make, is the 0:24:38.359 --> 0:24:42.520 only way to increase tax revenues is to raise tax rates, Whereas, 0:24:42.560 --> 0:24:45.160 of course, if you can get a bigger economy through 0:24:45.600 --> 0:24:49.280 a combination of mainly supply side reforms but also a 0:24:49.320 --> 0:24:53.159 few judicious tax cuts that improve the supply side performs, 0:24:53.160 --> 0:24:56.000 the economy can actually end up with a bigger economy, 0:24:56.560 --> 0:24:59.720 a bigger pie to tax if you like, bigger tax base, 0:25:00.160 --> 0:25:02.800 and therefore end up with more revenues. So I think 0:25:02.800 --> 0:25:04.960 the mistake a lot of people make is to assume 0:25:04.960 --> 0:25:07.639 that the only way to increase tax revenues is to 0:25:08.080 --> 0:25:11.159 raise the tax rates on individuals or companies. And we 0:25:11.240 --> 0:25:12.320 know that often doesn't. 0:25:12.119 --> 0:25:14.439 Actually we know it doesn't work. We only have to 0:25:14.440 --> 0:25:17.680 look at the Scottish revenues from income tax. So which 0:25:17.720 --> 0:25:20.520 taxes would you cut you in to improve the supply side. 0:25:21.840 --> 0:25:24.479 Well, again, that's a very good question. I think one 0:25:24.520 --> 0:25:26.119 of the problems over the last few years, and I 0:25:26.119 --> 0:25:28.640 think maybe this was particularly a problem in the Tory 0:25:28.760 --> 0:25:32.200 leadership campaign last year, was that there was a competition 0:25:32.320 --> 0:25:35.640 to announce that the biggest cuts in taxes without particularly 0:25:35.720 --> 0:25:39.359 thinking about which taxes the cut and why. And I 0:25:39.400 --> 0:25:41.560 certainly think at the moment we should focus on tax 0:25:41.600 --> 0:25:44.320 cuts that would boost the supply side performance the economy 0:25:44.400 --> 0:25:47.760 rather than just stimulating demand. But it's not difficult to 0:25:47.800 --> 0:25:51.880 think of examples there. I mean, corporation taxes is one. 0:25:52.080 --> 0:25:55.600 Sorting out investment allowances and getting rid of the windfall 0:25:55.640 --> 0:25:58.400 tax on the energy sector would be another, as far 0:25:58.480 --> 0:26:00.959 as personal taxes that conserve and I think the focus 0:26:00.960 --> 0:26:04.040 should be on tackling some of the distortions caused by 0:26:04.160 --> 0:26:07.080 very high marginal rates of tax So not so much 0:26:07.119 --> 0:26:09.639 the average tax rate, but the fact that as some 0:26:09.680 --> 0:26:12.359 people move up just a little bit in the income scale, 0:26:12.359 --> 0:26:15.879 they suddenly get hit with punitive taxes, which must be 0:26:16.000 --> 0:26:19.520 bad for the incentive to work or to set up 0:26:19.920 --> 0:26:24.760 a company, so discouraging labor supply, it's deterring entrepreneurship. I'm 0:26:24.760 --> 0:26:26.560 sure there are the smarter things you could do within 0:26:26.600 --> 0:26:29.840 the income tax system, in particular to make sure that 0:26:30.200 --> 0:26:33.280 work does pay and that entrepreneurs get more of the 0:26:33.320 --> 0:26:34.400 reward for what they're. 0:26:34.200 --> 0:26:37.639 Doing, Robert, when you look at the UK economy and 0:26:37.800 --> 0:26:40.000 you think about the things that could have been done 0:26:40.359 --> 0:26:43.200 since Brexit to give us more of a chance of growth, 0:26:43.240 --> 0:26:45.639 is there anything that you think we've really missed a 0:26:45.680 --> 0:26:47.800 few big things we could have done that we haven't done, 0:26:47.960 --> 0:26:48.639 so I might still do. 0:26:49.440 --> 0:26:52.359 Yeah, So obviously I agree with them Julian on marginal 0:26:52.440 --> 0:26:54.920 tax rates. And when we've done a lot of work 0:26:54.960 --> 0:26:58.440 on this stamp duty in both its forms is just 0:26:58.480 --> 0:27:01.280 a classic transaction tax which is up the economy, both 0:27:01.280 --> 0:27:04.320 on houses and shares. There are loads of points within 0:27:04.359 --> 0:27:06.240 the tax and benefits system. 0:27:06.800 --> 0:27:07.000 I mean. 0:27:07.000 --> 0:27:09.640 The big thing, which will not surprise anyone who's ever 0:27:09.640 --> 0:27:12.680 read anything I've writtenently is housing. We have underbuilt by 0:27:13.080 --> 0:27:15.400 more than four million houses since the Second World War 0:27:15.400 --> 0:27:18.080 compared to our European competitors. And this is awful for 0:27:18.119 --> 0:27:20.600 people's life chances, but it's also awful for the economy 0:27:20.640 --> 0:27:23.520 because we find it increasingly hard to match the most 0:27:23.560 --> 0:27:25.840 talented people to the most productive jobs because they can't 0:27:25.840 --> 0:27:28.720 afford to move to where those jobs are. And the 0:27:28.720 --> 0:27:31.320 in fact we've moved rather than to the accelerating house building, 0:27:31.320 --> 0:27:34.720 we've moved in the opposite direction because of resistance from 0:27:35.160 --> 0:27:38.840 effectively toy grass roots. The other big thing is regulation, 0:27:38.920 --> 0:27:40.679 and again this is an area where the sort of 0:27:40.680 --> 0:27:45.640 Brexit focus is actually slightly distracting. So we've been doing 0:27:45.640 --> 0:27:48.000 an exercise at the CPS to look at the burden 0:27:48.040 --> 0:27:51.679 of regulation, but in particular how regulation is made, and 0:27:51.760 --> 0:27:54.400 what you find is that a decreasing amount of our 0:27:54.400 --> 0:27:58.160 regulation untilards the end of OU membership came directly from Brussels. 0:27:58.160 --> 0:28:01.320 Now that may be a statistical trick, because Brussels stopped 0:28:01.520 --> 0:28:04.600 relying on directives which you need to do domestic impact 0:28:04.600 --> 0:28:07.520 assessments for, and started relying more on regulations which we're 0:28:07.560 --> 0:28:10.480 sort of transposed directly into Member States law without anyone 0:28:10.520 --> 0:28:12.800 needing to do any any numbers. But broadly speaking, this 0:28:12.840 --> 0:28:15.520 focus on retained EU law, I mean actually there's only 0:28:15.520 --> 0:28:18.280 one government department which has a full list of all 0:28:18.280 --> 0:28:21.280 of the regulations it imposes on the economy and on 0:28:21.359 --> 0:28:24.880 businesses and on consumers. There is no attention paid within 0:28:24.960 --> 0:28:28.560 Whitehall comparative to the attention paid to spending within Whitehall 0:28:28.680 --> 0:28:31.480 is astronomically more significant than the attention to pay to 0:28:31.520 --> 0:28:34.119 the impact of regulation. There are regulatory impact assessments, but 0:28:34.119 --> 0:28:36.160 they are basically filled out by the most junior person 0:28:36.160 --> 0:28:38.520 in the office and what the decision has already been made. 0:28:38.600 --> 0:28:40.920 And there's none of the sort of institutional resistance to 0:28:41.000 --> 0:28:43.920 regulating that there is to spending. There's no equivalent of 0:28:43.960 --> 0:28:46.680 the treasury putting its foot down, and indeed, both politicians 0:28:46.720 --> 0:28:49.560 and the public seem to constantly demand extra regulations. The 0:28:49.600 --> 0:28:52.400 cry is always something must be done. So I think 0:28:53.720 --> 0:28:57.600 in a Brexit is really a wonderful opportunity to take 0:28:57.640 --> 0:28:59.840 stop and try and do something things differently, not in 0:28:59.840 --> 0:29:01.880 a born parre of the regulation is kind of way, 0:29:01.880 --> 0:29:04.120 but just in it like being a lot more strategic 0:29:04.200 --> 0:29:08.320 and surgical and analytical about the impact the decisions government 0:29:08.360 --> 0:29:11.240 is making and the impacts they have on businesses and consumers. 0:29:11.480 --> 0:29:14.480 And that's something we really are only in the pitthills. 0:29:14.080 --> 0:29:14.560 Of I think. 0:29:15.320 --> 0:29:16.480 And how would that happen? 0:29:16.680 --> 0:29:20.120 That sounds expensive, boring, the kind of thing people aren't 0:29:20.120 --> 0:29:21.200 going to notice. 0:29:21.480 --> 0:29:24.680 I mean, I think you sound absolutely I just cannot 0:29:24.720 --> 0:29:25.760 see how that would happen. 0:29:26.320 --> 0:29:28.480 Well, broadly, there is a problem, and this ties in 0:29:28.480 --> 0:29:30.600 with what Julian was saying the problem is the most 0:29:30.720 --> 0:29:32.600 pro growth things you can do in this country are 0:29:32.760 --> 0:29:35.520 often among the least popular, and vice versa. So if 0:29:35.520 --> 0:29:36.880 you look at that, if you look at the tax regime, 0:29:37.400 --> 0:29:40.480 taxes on investment and on business are the worst for growth, 0:29:40.480 --> 0:29:42.480 according to quite a lot of modeling that's been done 0:29:42.560 --> 0:29:45.280 in which we've cited in miss papers. But they're enormously popular. 0:29:45.360 --> 0:29:47.280 That's why corporation tax went up, because it was the 0:29:47.320 --> 0:29:51.040 easiest way of getting money rather than hitting people directly. 0:29:51.120 --> 0:29:54.280 The most economically progressive tax his country would be basically 0:29:54.320 --> 0:29:57.320 to have a very very well, not even just an 0:29:57.360 --> 0:30:00.560 increased THEOTY, to have a much more broadly based sales 0:30:00.600 --> 0:30:03.480 tax a VAT with all the exemptions stripped out, and 0:30:03.520 --> 0:30:06.120 then to compensate people for the losses in other ways. 0:30:06.160 --> 0:30:07.840 But you know, the politician who stands up and says, hey, 0:30:07.880 --> 0:30:10.040 I'm going to put VT on children's clothes and your 0:30:10.040 --> 0:30:12.320 heating bills is not going to have a job for 0:30:12.960 --> 0:30:16.600 very long. And house building would be another example of that. 0:30:16.640 --> 0:30:18.000 I think, you know, a large part of the problem 0:30:18.080 --> 0:30:19.560 is that we just don't want it enough. 0:30:20.600 --> 0:30:22.880 We just don't want what enough growth. 0:30:22.960 --> 0:30:24.920 And this is this ties in with the aging population, 0:30:25.080 --> 0:30:28.440 the number of people over sixties and who own their 0:30:28.480 --> 0:30:31.960 own homes outright, it's extraordinary home absolutely, and. 0:30:31.920 --> 0:30:34.560 That the cohorts own their houses outright and have a 0:30:34.600 --> 0:30:37.240 defined benefit pension to pay the cost on those houses 0:30:37.560 --> 0:30:40.080 is a really interesting dynamic because it's an experience that 0:30:40.120 --> 0:30:42.320 young generations don't have and never will hurt. 0:30:42.840 --> 0:30:45.480 There is a huge and enormously electricly powerful cohort because 0:30:45.480 --> 0:30:48.520 of the rates at which they vote, who are essentially 0:30:48.520 --> 0:30:51.040 immune from economic pressure. Like a lot of these people 0:30:51.080 --> 0:30:52.880 are people who delivered Brexit in the first place, because 0:30:53.000 --> 0:30:54.560 contrary to the quote you gave earlier, it's not they 0:30:54.600 --> 0:30:57.080 didn't read the warnings about how this would devastate the economy. 0:30:57.080 --> 0:30:59.880 It's just they were going to be fine basically whatever happened, 0:31:00.120 --> 0:31:01.120 so they could afford to take the. 0:31:01.160 --> 0:31:04.440 Risk, which is why their wealth tax is so popular 0:31:04.480 --> 0:31:05.680 among younger voters. 0:31:05.840 --> 0:31:09.600 Yes, yes, and so very unpopular about the ones, although, of. 0:31:09.640 --> 0:31:11.560 Course, as you said earlier, there are so many wealth 0:31:11.560 --> 0:31:14.200 tax already. Both of those stamp duties are wealth taxes, 0:31:14.200 --> 0:31:15.480 but unrecognized as. 0:31:15.920 --> 0:31:18.680 I actually we actually take more taxes from property than 0:31:18.680 --> 0:31:20.680 the most other other countries. It's just we do it 0:31:20.680 --> 0:31:22.600 in a very very ineffective and inefficient way. I mean, 0:31:22.680 --> 0:31:25.560 council tax is you know, I think nineteen ninety one 0:31:25.720 --> 0:31:28.959 was based on this weird extrapolation of values back then. 0:31:29.000 --> 0:31:31.400 It's I mean, yeah, it is really right for an upgrade. 0:31:31.440 --> 0:31:33.880 But again, if you wanted to go near it, you'd 0:31:33.880 --> 0:31:35.560 be a very brave man or women. 0:31:35.880 --> 0:31:37.760 Yeah, I've taken us off on a tangent, haven't the 0:31:37.920 --> 0:31:39.960 Sorry Robert. 0:31:39.720 --> 0:31:41.280 Dum always happy to talk about housing. 0:31:42.200 --> 0:31:43.680 I'm going to ask you about housing again. 0:31:43.760 --> 0:31:45.520 What's the simplest thing that we could do, Because we 0:31:45.640 --> 0:31:47.840 like to keep being very simple on this podcast, what's 0:31:47.880 --> 0:31:50.400 the simplest thing that we could do to transform our 0:31:50.440 --> 0:31:51.560 problem with house building? 0:31:51.960 --> 0:31:54.479 In the short term. Reinstate the housing targets. I mean 0:31:54.480 --> 0:31:57.080 we were actually building it a fairly decent clip before that. 0:31:57.480 --> 0:31:59.880 In the medium term, find the better way to come 0:32:00.040 --> 0:32:02.760 to take communities housing and to get their consent to 0:32:02.760 --> 0:32:08.239 deliver infrastructure more quickly. How would that work well at 0:32:08.240 --> 0:32:10.400 the moment. So again it's going off a bit of tangent, 0:32:10.440 --> 0:32:14.320 but this is a good time if you as If 0:32:14.320 --> 0:32:18.160 you as a community housing it generally means that your 0:32:18.160 --> 0:32:21.680 local council will get a payment at some point which 0:32:21.720 --> 0:32:24.000 it will theoretically use to deliver all the goodies that 0:32:24.040 --> 0:32:26.200 were promised, but in practice it may not, and so 0:32:26.280 --> 0:32:29.880 the houses will appear before the roundabout, before the GP surgery. 0:32:30.000 --> 0:32:31.880 If you can flip that on its head and actually 0:32:31.920 --> 0:32:34.440 put the infrastructure in first and give people the goodies, 0:32:34.480 --> 0:32:36.440 then the resistance does go away. I mean it's striking 0:32:36.480 --> 0:32:38.160 at the local elections. One of the areas where the 0:32:38.160 --> 0:32:40.680 Tories did best is the West Midlands, which they basically 0:32:40.680 --> 0:32:42.680 turned into a building site. But because it's you know, 0:32:42.720 --> 0:32:44.440 that building site is for HS two and because they're 0:32:44.440 --> 0:32:46.240 going to get a high speed railway and they can 0:32:46.280 --> 0:32:48.200 sort of see the progress being made. They can see 0:32:48.240 --> 0:32:50.760 housing going up, they can see their communities getting better, 0:32:50.800 --> 0:32:52.760 in their economy getting more dynamic. There, you know, they're 0:32:52.760 --> 0:32:54.000 actually quite happy with that idea. 0:32:55.040 --> 0:32:56.520 I didn't feel like that when I was watching the 0:32:56.680 --> 0:32:57.720 Edinburgh trams go up. 0:32:58.360 --> 0:33:03.239 Not sure. Is there anything else that either of you 0:33:03.240 --> 0:33:04.560 would like to add to. 0:33:04.560 --> 0:33:08.080 The Brexit conversation about things that have gone well or 0:33:08.120 --> 0:33:10.880 have gone badly that we've missed out, Anything we've missed Julian, 0:33:10.920 --> 0:33:12.320 that's important to this conversation. 0:33:12.920 --> 0:33:16.080 Well, An interest of balance. I think one thing that 0:33:16.080 --> 0:33:19.920 has gone badly is it's clearly contributed to the politically 0:33:20.000 --> 0:33:22.480 uncertainty in the country over the last few years, both 0:33:22.520 --> 0:33:27.760 by distracting politicians and the wider Whitehall and Westminster establishment 0:33:27.800 --> 0:33:32.560 from other problems, but also the way that we've had 0:33:32.560 --> 0:33:36.080 this sort of churn of prime ministers and other senior 0:33:36.120 --> 0:33:40.560 figures partly related to the fallout of Brexit, is yet 0:33:40.600 --> 0:33:44.040 another fact of preventing us from making big, long term decisions, 0:33:44.080 --> 0:33:47.720 that the difficult decisions that might be politically unpopular but 0:33:47.760 --> 0:33:50.200 are the right thing to do so. I think one 0:33:50.200 --> 0:33:53.320 additional headwind to the economy from Brexit is simply that 0:33:53.400 --> 0:33:56.440 sort of general climate of a political uncertainty that it's 0:33:56.520 --> 0:33:59.200 undoubtedly fostered. I don't think it needed to have been 0:33:59.320 --> 0:34:02.400 like this. Had a proper plan for Brexit and people 0:34:02.440 --> 0:34:04.800 are more committed to deliver it from day one, then 0:34:04.840 --> 0:34:08.040 we could have avoided this. But that uncertainty has undoubtedly 0:34:08.040 --> 0:34:11.160 held back some business investment and also made policy making 0:34:11.200 --> 0:34:12.880 in Whitehall more difficult than otherwise. 0:34:13.280 --> 0:34:15.279 I might also have done as something with John and I, 0:34:15.480 --> 0:34:17.680 John Steppeck and I write about all the time, which 0:34:17.719 --> 0:34:20.799 has made UK assets and particularly UK listed equities for 0:34:20.960 --> 0:34:23.879 nominally cheap in the rising of the risk premium, there 0:34:23.920 --> 0:34:26.800 is something that global investors are now beginning to notice. 0:34:27.040 --> 0:34:29.440 So that may be something that turns around over the 0:34:29.520 --> 0:34:30.480 next few years. 0:34:31.040 --> 0:34:33.400 Oh, I'd certainly agree with that. I mean, particularly now 0:34:33.440 --> 0:34:36.759 we've got data showing that Brexit Britain wasn't in fact 0:34:36.800 --> 0:34:39.920 the outlier that people assumed it was. Then we're already 0:34:39.920 --> 0:34:42.279 starting to see a turn in investment sentiment I think 0:34:42.280 --> 0:34:45.840 towards the UK, which should be very positive over the 0:34:45.880 --> 0:34:47.360 next few argument. 0:34:48.120 --> 0:34:51.960 So I've been making argument, Actually the UK is arguably 0:34:51.960 --> 0:34:54.280 one of the most stable of the G seven countries. 0:34:54.280 --> 0:34:56.160 It's not going to be the fastest growing. But when 0:34:56.160 --> 0:34:58.440 you look at what could happen in the US elections, 0:34:58.480 --> 0:35:00.320 when you look at the rise of the AFT Germany, 0:35:00.360 --> 0:35:03.320 when you look at what happened when Macron goes in France, 0:35:03.800 --> 0:35:06.160 you know there are clearly a lot of other places 0:35:06.239 --> 0:35:08.520 that are a lot more politically risky now than a 0:35:08.600 --> 0:35:11.960 country run by Richie Sunac and potentially about to be 0:35:12.040 --> 0:35:12.880 run by Kirstaber. 0:35:14.000 --> 0:35:17.439 So here we are stable, reasonable growth doesn't seem so bad, 0:35:17.960 --> 0:35:21.720 do you think, Julian and Robert that in ten years, 0:35:21.840 --> 0:35:25.920 maybe even twenty years, people will think about Brexit positively, negatively, 0:35:26.040 --> 0:35:27.279 or have forgotten all about it. 0:35:28.200 --> 0:35:30.319 Well, I think there must be some diehards at both 0:35:30.360 --> 0:35:33.000 extremes who either think it's been the best thing ever 0:35:33.360 --> 0:35:36.080 or a completely not a disaster. But unless that really 0:35:36.120 --> 0:35:38.440 shows through in the lives of ordinary people, and I 0:35:38.520 --> 0:35:43.080 think it may well be forgotten to some degree. What 0:35:43.080 --> 0:35:45.799 w'd be interesting is if there's ever anybody you know 0:35:45.800 --> 0:35:48.120 in a serious position of power who would want to 0:35:48.160 --> 0:35:50.480 hold another referendum on this. I know there are lots 0:35:50.480 --> 0:35:53.719 of calls for another referendum sooner rather than later, but 0:35:54.360 --> 0:35:56.080 I think we were sold this on the basis that 0:35:56.120 --> 0:35:58.520 it was a once in a generation vote, and I 0:35:58.560 --> 0:36:01.480 also think it's only fair to give the pro Brexit 0:36:01.600 --> 0:36:04.520 side more time to deliver on the potential benefits. But 0:36:05.000 --> 0:36:07.719 assuming there isn't another referendum, then I think you're You're 0:36:07.760 --> 0:36:11.480 probably right. Some of us will continue to be obsessed 0:36:11.480 --> 0:36:13.399 about it, but for most people that won't have much 0:36:13.440 --> 0:36:14.759 impact on their day to day lives. 0:36:14.760 --> 0:36:16.800 Anymore of it entirely forgotten. 0:36:17.400 --> 0:36:18.080 I don't think so. 0:36:18.280 --> 0:36:20.480 I mean, Mervin King has said that if you look 0:36:20.520 --> 0:36:23.440 at the sort of fifty years chart of British GDP growth. 0:36:24.000 --> 0:36:26.279 You know, the inflection points are nineteen seventy nine and 0:36:26.320 --> 0:36:28.879 two thousand and eight, and this was a few years ago. 0:36:28.920 --> 0:36:30.239 But his view was that two thousand. 0:36:29.960 --> 0:36:32.200 And eight would remain the inflection point rather than twenty 0:36:32.239 --> 0:36:35.480 sixteen or twenty nineteen if you take a bo went 0:36:35.640 --> 0:36:37.960 And I think he's probably right on that. So I 0:36:38.000 --> 0:36:39.680 was looking at some of the publing data were in 0:36:39.680 --> 0:36:42.440 talking to some people who do this stuff. Party affiliation 0:36:42.520 --> 0:36:45.240 has now recovered, so in the years from twenty sixteen 0:36:45.360 --> 0:36:50.560 till essentially twenty nineteen twenty twenty, people identified more as 0:36:50.640 --> 0:36:53.839 a lever or Remainer than as Tory or Labor and 0:36:53.920 --> 0:36:57.080 that has changed. But it hasn't so much changed on 0:36:57.120 --> 0:36:59.640 the remain side, because I mean Brexit is a they 0:36:59.719 --> 0:37:01.560 got what wanted and be Some of them are slightly 0:37:01.680 --> 0:37:03.719 embarrassed about that now because it's not perceived to have 0:37:03.800 --> 0:37:05.960 gone that well, whereas there are still quite a lot 0:37:05.960 --> 0:37:07.560 of people on the Leave side for whom remain. As 0:37:07.760 --> 0:37:09.520 you know, the people wearing waving EU flags at the 0:37:09.560 --> 0:37:11.400 last night of the problems the other night, they are 0:37:11.440 --> 0:37:13.200 like the breakageers. They're the guys who care about this, 0:37:13.280 --> 0:37:14.719 and they're going to try and keep it alive. So 0:37:14.800 --> 0:37:17.399 I don't think it will be entirely forgotten. I think 0:37:17.440 --> 0:37:20.239 it will still be quite contentious, but I think as 0:37:20.280 --> 0:37:22.160 a live issue, as we drift further apart, it will 0:37:22.200 --> 0:37:24.840 become harder to knit the two back together. 0:37:25.560 --> 0:37:27.399 Robert Julian, thank you very much. 0:37:32.160 --> 0:37:36.319 John, ma'am. Do you think you'll have forgotten Braxit in 0:37:36.360 --> 0:37:37.160 twenty years? 0:37:37.400 --> 0:37:41.120 I mean, not after the foster everyone made, But other 0:37:41.200 --> 0:37:44.640 than that, I don't think. I'm not sure that it 0:37:44.719 --> 0:37:55.200 all matter that much economically, And I mean, that's good, 0:37:55.239 --> 0:37:57.560 that's a good question. And actually I do sort of 0:37:57.600 --> 0:37:59.520 think it comes back to that, like after the fuss 0:37:59.520 --> 0:38:01.319 and everyone. 0:38:03.040 --> 0:38:05.040 Yeah, And when I think about it, I think that 0:38:05.120 --> 0:38:09.239 the major downside to Brexit so far, and obviously, as 0:38:09.239 --> 0:38:13.200 we discussed in that conversation, of course there's impacts. Of course, 0:38:13.200 --> 0:38:15.920 there's downsides. There's all the frictions, there's the loss of 0:38:15.960 --> 0:38:17.680 trade with the EU, there's a lot of pain for 0:38:17.719 --> 0:38:20.759 individual businesses, et cetera. But when I think about it 0:38:20.800 --> 0:38:23.120 that the main thing is, again something we've picked up 0:38:23.400 --> 0:38:25.960 in the conversation is stability. You know, one of the 0:38:26.000 --> 0:38:28.439 things you really need if you want to go for growth, 0:38:28.480 --> 0:38:30.000 which everyone seems to want to do at the moment, 0:38:30.360 --> 0:38:34.120 is a sense that you have a political stability, in particular, 0:38:34.200 --> 0:38:38.960 that your institutions are strong, that your political environment is strong. 0:38:39.200 --> 0:38:42.759 You remember the great Adam Smith quote about there being 0:38:42.760 --> 0:38:44.600 a lot of ruin in a nation, the point being 0:38:44.600 --> 0:38:46.480 that you can do an awful lot to a country 0:38:46.760 --> 0:38:50.080 and it can be fine as long as your institutions 0:38:50.080 --> 0:38:52.520 are strong and your politics are stable. And of course 0:38:52.560 --> 0:38:54.279 what we've now done is run through I can't even 0:38:54.360 --> 0:38:57.040 remember how many prime ministers in a very short period 0:38:57.040 --> 0:39:00.279 as a direct result of constantly ongoing John thinks is 0:39:00.280 --> 0:39:04.480 fall by the way for fingers of me as a 0:39:04.480 --> 0:39:07.160 result of constant rouse about Brexit, and that to me 0:39:07.400 --> 0:39:10.600 so far has been the thing that has caused some 0:39:10.680 --> 0:39:12.760 of our problems. And that's possibly why I think Julian 0:39:12.760 --> 0:39:15.319 says in the conversation, why there's this discount on UK 0:39:15.480 --> 0:39:18.439 assets and a lack of investment into the UK, et cetera. 0:39:18.800 --> 0:39:21.520 But you know, this is very short term and it's 0:39:21.520 --> 0:39:24.880 not just us. There's political instability everywhere, and you know 0:39:24.920 --> 0:39:28.560 you can't blame political instability in European countries on Brexit 0:39:28.680 --> 0:39:29.960 or maybe you can. I don't know about it, but 0:39:30.040 --> 0:39:33.680 let's not so we can pull that stability back. 0:39:34.680 --> 0:39:37.319 Yeah, I mean so, I don't. I think that part 0:39:37.320 --> 0:39:40.799 of the problem is that people are were very impatient. 0:39:40.960 --> 0:39:45.440 We kind of expect stuff to happen over night, and 0:39:45.680 --> 0:39:49.440 obviously one of the breaksit was always going to be 0:39:49.920 --> 0:39:53.640 a tricky process. And then amplify that by the fact 0:39:53.640 --> 0:39:55.920 that the people who actually suggested the referendum in the 0:39:55.960 --> 0:39:58.320 first place, and the people who were running the country 0:39:58.320 --> 0:40:01.040 throughout the process didn't want to do it, you know, 0:40:01.239 --> 0:40:03.279 kind of made it trickier as well. And I think 0:40:03.320 --> 0:40:07.080 the fact that actually the British institutions actually stood up 0:40:07.600 --> 0:40:12.040 really surprisingly well and came out of it quite impressively. 0:40:12.040 --> 0:40:16.719 You know, we didn't actually end up reversing the referendum, 0:40:16.719 --> 0:40:19.680 which has happened in other countries and certain occasions and 0:40:19.800 --> 0:40:24.239 also could have happened here. I think everyone got a 0:40:24.320 --> 0:40:28.760 much better sense of where kind of you know, responsibility 0:40:28.760 --> 0:40:31.439 and sovereignty actually lies in the country, and it wasn't 0:40:31.480 --> 0:40:34.600 actually that far away from where most people thought it was. 0:40:36.080 --> 0:40:43.520 And I think that I don't I struggle to view 0:40:43.520 --> 0:40:46.680 it as being a failure from that point of view. 0:40:46.680 --> 0:40:49.319 You know, we've come through it. It got down, it 0:40:49.360 --> 0:40:53.319 was messy, it was bumpy. There hasn't been an epic depression. 0:40:53.840 --> 0:40:57.480 There hasn't been anything other than a lot of embarrassment, 0:40:58.040 --> 0:41:00.719 you know, kind of embarrassment because I've and standing up 0:41:00.760 --> 0:41:03.520 in front of our pals kind of high level kind 0:41:03.560 --> 0:41:06.040 of conferences and so it's not in my country voted 0:41:06.080 --> 0:41:07.800 the wrong way. But other than that, that's it. 0:41:08.160 --> 0:41:10.719 Yeah, we can recover from that too, And maybe if 0:41:10.719 --> 0:41:14.080 everyone would just accept the results and stop going on 0:41:14.080 --> 0:41:15.880 a better Remember how everyone kept telling the Scotts to 0:41:15.920 --> 0:41:18.120 just accept the results of the referendum and just shut 0:41:18.200 --> 0:41:19.319 up and get on with the day job. 0:41:19.400 --> 0:41:22.719 Hi say that to politicians here? Shut up, get on 0:41:22.800 --> 0:41:23.480 with the day job. 0:41:23.600 --> 0:41:23.759 Hi. 0:41:23.960 --> 0:41:24.160 Right? 0:41:24.280 --> 0:41:26.040 You know we can say that to Nicola Sturgeon. I 0:41:26.040 --> 0:41:28.920 think we can say that to our Westminster politicians to 0:41:29.120 --> 0:41:30.319 just get on with the day job. And the thing 0:41:30.400 --> 0:41:32.399 is they know what the day job is, right, they 0:41:32.400 --> 0:41:34.080 want to go for growth. We talked about this a 0:41:34.080 --> 0:41:37.239 little with robertam and with Julian about what is it 0:41:37.320 --> 0:41:39.040 that we need to do. Well, we know what we 0:41:39.080 --> 0:41:40.960 need to do. We know we need to have a 0:41:41.080 --> 0:41:44.040 less complicated and lower tax regime. We know we need 0:41:44.080 --> 0:41:47.440 to change the incentives inside our tax system. We know 0:41:47.640 --> 0:41:50.680 we need to deal with the regulation problems, as Robert said. 0:41:50.719 --> 0:41:53.319 We know we need to stop faffing around with infrastructure 0:41:53.360 --> 0:41:56.120 and do it properly. We know we need better transport links. 0:41:56.120 --> 0:41:58.480 We know we need better Wi Fi. Know we need 0:41:58.520 --> 0:42:02.200 to short out our edge problem and stop overproducing elites 0:42:02.239 --> 0:42:05.400 and start producing people who can actually do something. You know, 0:42:05.480 --> 0:42:08.319 we know all this stuff. It's not new news. And 0:42:08.360 --> 0:42:10.359 now we don't have russels to blame and we've got 0:42:10.360 --> 0:42:13.799 to stop breaking it, breaksit, bles it, breaxit. We just 0:42:13.880 --> 0:42:18.000 need to get get on with it. And that seems 0:42:18.040 --> 0:42:19.879 to be me to be the way we have to go. 0:42:19.920 --> 0:42:22.480 And one of the really depressing things that I can't 0:42:22.480 --> 0:42:25.000 remember who was seven in the conversation that our problem 0:42:25.000 --> 0:42:28.319 here is we just don't want it enough and we 0:42:28.400 --> 0:42:31.360 have a large part of the population that isn't interested 0:42:31.840 --> 0:42:33.880 in the kind of policies that we need to go 0:42:34.000 --> 0:42:37.000 for growth. And my fear, because you know, I like 0:42:37.040 --> 0:42:39.760 to be optimistic and I'm definitely a half glass fall person, 0:42:39.840 --> 0:42:44.520 everyone knows that my fear is that it may be 0:42:45.120 --> 0:42:49.080 that the long term dynamic of an aging population is 0:42:49.280 --> 0:42:52.920 non stop risk aversion, because we have too large a 0:42:52.920 --> 0:42:56.560 group of the population who have a full incentive to 0:42:56.640 --> 0:42:59.360 protect the status quo kind of. I mean almost you 0:42:59.440 --> 0:43:01.480 and I are the point. You know, Please don't make 0:43:01.520 --> 0:43:03.440 my health value go down. I want to retire, and 0:43:03.520 --> 0:43:06.040 please please don't make the value of my pension go down. 0:43:06.080 --> 0:43:08.319 I really want to retire. Please let me hang on 0:43:08.360 --> 0:43:11.120 to my status quote. And then there's the generation above 0:43:11.160 --> 0:43:13.320 you and me. Of course you feel that way more strongly. 0:43:13.640 --> 0:43:16.680 You're an increasingly large part of the population, and crucially 0:43:16.760 --> 0:43:20.640 increasing large part of the voting population, and that might 0:43:20.760 --> 0:43:24.440 mean that economies such as US and all European economies 0:43:25.000 --> 0:43:29.680 are automatically risk averse and therefore unable to go for growth. 0:43:29.840 --> 0:43:32.960 That's my big worry. Tell me it's okay. 0:43:33.760 --> 0:43:38.160 I think that's a really good point. The problem is 0:43:38.360 --> 0:43:41.360 quite a tricky one measure. I mean, I'd be interested 0:43:41.360 --> 0:43:43.960 to see because if you know, for all the you know 0:43:44.080 --> 0:43:46.839 we talked about older people being more you know, conservative 0:43:47.000 --> 0:43:50.680 or you know, kind of want to keep that house place, 0:43:50.760 --> 0:43:54.400 whatever it is, I also get the sense that the 0:43:54.560 --> 0:43:59.160 younger generation certainly comes across as being highly risk averse 0:44:00.080 --> 0:44:03.799 and sort of you know, for what a better bird 0:44:03.800 --> 0:44:06.759 socialists rather than entrepreneurial minded. But I just wonder how 0:44:06.800 --> 0:44:11.440 much of this is really just perceptions where we are 0:44:11.560 --> 0:44:17.000 in the current scale kind of age whites. I don't 0:44:17.040 --> 0:44:22.239 I don't know that it's about demographics as such. I 0:44:22.280 --> 0:44:25.120 think possibly it's more about the fact that we've gone 0:44:25.120 --> 0:44:29.399 through a long period. Again. Actually, I tend to bring 0:44:29.400 --> 0:44:31.400 everything back to two thousand and eight. What happened in 0:44:31.440 --> 0:44:34.000 two thousand and eight is that we didn't let the 0:44:34.080 --> 0:44:36.239 banking system collapse. 0:44:36.440 --> 0:44:39.040 And a low the way that we wanted the banking 0:44:39.120 --> 0:44:41.839 system to collapse, just to be clearly wanted you lose, 0:44:42.280 --> 0:44:42.840 that's John. 0:44:44.400 --> 0:44:47.000 And you know, rise from the ravages of the apocalypse 0:44:47.120 --> 0:44:51.799 to lead my people to salvation. Not more there's but 0:44:51.880 --> 0:44:53.879 the way we can have dealt with it seemed very 0:44:54.560 --> 0:44:57.319 wishy washy, even though you know, yeah, I mean most 0:44:57.480 --> 0:45:01.680 bank shareholders would not think that they were treated with 0:45:01.800 --> 0:45:03.640 kid gloves, you know, most of them kind of lost 0:45:03.680 --> 0:45:06.359 all of their money. But I think it's that thing 0:45:06.400 --> 0:45:08.960 that comes down here that they build out the banks 0:45:09.320 --> 0:45:13.759 and then suddenly everyone thought, well, where I need to 0:45:13.760 --> 0:45:16.000 get bailed out as well, and then you know where 0:45:16.239 --> 0:45:18.800 various crises come along where the government got bigger and 0:45:18.840 --> 0:45:22.080 bigger and bigger, and then obviously the kind of you know, 0:45:22.160 --> 0:45:24.560 ps to resistance, so like COVID coming along, and then 0:45:24.600 --> 0:45:29.040 we get locked down and suddenly government's into absolutely everything, 0:45:29.640 --> 0:45:37.280 and it's sort of seen as the cushion of last resort. 0:45:37.719 --> 0:45:39.920 So I think it's much more to do with that 0:45:40.000 --> 0:45:42.120 than they do be an aging population, because it's a 0:45:42.200 --> 0:45:44.640 long period of time where the role of the kind 0:45:44.640 --> 0:45:49.640 of state has been unquestionably increasing, and and I think 0:45:50.480 --> 0:45:51.239 it was supposed. 0:45:50.920 --> 0:45:52.319 To be a small state guy. 0:45:52.560 --> 0:45:55.759 Yes, I mean, and the thing is, in relative terms, 0:45:55.760 --> 0:45:59.560 he probably his small stay guy compared to where the 0:45:59.600 --> 0:46:02.080 rest of the or the majority of the kind of 0:46:02.880 --> 0:46:04.520 politicians are at the moment. 0:46:04.360 --> 0:46:10.440 No one's just John. You know what, We're doomed. Thanks 0:46:10.440 --> 0:46:12.560 for listening to this week's Maren Talks Money. We'll be 0:46:12.600 --> 0:46:15.440 back next week in the meantime. If you like us, show, rate, review, 0:46:15.480 --> 0:46:18.239 and subscribe wherever you listen to podcasts. This episode was 0:46:18.239 --> 0:46:20.960 hosted by me Maren Somerset Web. It was produced by 0:46:20.960 --> 0:46:24.399 Someersidi Additional editing by Blake Maple special thanks, of course, 0:46:24.440 --> 0:46:27.840 to Robert Colville, Julian Jessup, and to John Steppe. Be 0:46:27.920 --> 0:46:30.400 sure to sign up for John's daily newsletter, Money Distilled 0:46:30.560 --> 0:46:33.200 link in the show notes. You won't regret it because 0:46:33.239 --> 0:46:33.879 he's always right.