WEBVTT - How Brexit can still boost the City (but maybe not your portfolio) 0:00:01.040 --> 0:00:03.559 Dave. That's so threw me off. I've been saying correct. 0:00:03.560 --> 0:00:06.840 I mean, I'm sure I've interviewed him with I mean 0:00:06.880 --> 0:00:14.920 I've been garage on Bouquet and there was like, see 0:00:15.040 --> 0:00:19.840 am I saying, I'm on YouTube? Nothing is straightforward about 0:00:20.079 --> 0:00:26.120 age Farage, Farage, Magel Farage. Are you sure leg I 0:00:26.160 --> 0:00:29.080 said that? Wow, that's what he told the labor person. 0:00:29.200 --> 0:00:32.320 He said it rhymes with garage. Yeah, but if you're American, 0:00:32.560 --> 0:00:47.720 it's garage garage. It's a minefield. I'm David Merritt and 0:00:47.720 --> 0:00:50.640 I'm Franci Laqua and this is in the City, Bloomberg's podcast, 0:00:50.680 --> 0:00:52.680 connecting you to the stories and the voices at the 0:00:52.680 --> 0:00:54.960 heart of the City of London. Dave, this week you 0:00:54.960 --> 0:00:57.240 were trying to make me pronounce Nigel Farage in a 0:00:57.240 --> 0:00:59.200 different way. Well, now in the correct way. Look, fran 0:00:59.360 --> 0:01:02.520 I know we don't disagree very often on this. I'm 0:01:02.880 --> 0:01:05.520 I'm afraid you're playing wrong. It is apparently it rhymes 0:01:05.520 --> 0:01:09.560 with garage, which has pronounced garage and not garage like 0:01:09.640 --> 0:01:12.680 I do, I pronounce it garage. That we're going to 0:01:12.720 --> 0:01:14.920 have to agree to disagree on this one. But Nigel 0:01:14.959 --> 0:01:18.080 has been on our minds, hasn't he because you know, 0:01:18.200 --> 0:01:22.280 he turns out he is producing We mustn't call it 0:01:22.319 --> 0:01:25.520 investment advice, but investment insights. To our very own Harry 0:01:25.520 --> 0:01:29.720 Wilson tracked the numbers, crunched the data in true Bloomberg 0:01:29.760 --> 0:01:32.600 fashion over the summer, and he's going to join us 0:01:32.840 --> 0:01:39.360 to talk through the rather unfavorable results. And you know, 0:01:39.400 --> 0:01:43.000 Brexit has been I'm afraid on my mind again this week, Francine. 0:01:43.160 --> 0:01:45.120 There was a poll that really caught my eye that 0:01:45.240 --> 0:01:49.240 showed that the public really are moving away from that 0:01:49.280 --> 0:01:51.480 decision to any sixteen. It seems like many more people 0:01:51.520 --> 0:01:54.680 now regret that vote. But what's really struck me is 0:01:54.720 --> 0:01:57.080 that the politicians are kind of behind the public on 0:01:57.120 --> 0:01:59.840 this one. No one is coming out and saying the 0:02:00.040 --> 0:02:02.160 Brexit has been a bad idea, at least no one 0:02:02.160 --> 0:02:05.200 from the main parties. So this week we revisit Brexit 0:02:05.240 --> 0:02:07.600 in our conversation with Jared Lyons. He's a senior fellow 0:02:07.600 --> 0:02:09.960 at Policy Exchange and he's been one of the most 0:02:10.160 --> 0:02:13.440 prominent pro Brexit voices right from the beginning. Right he 0:02:13.480 --> 0:02:15.560 has had a ring side set. I think it's fair 0:02:15.600 --> 0:02:19.160 to say, since you know that that sizemic voting into sixteen, 0:02:19.280 --> 0:02:21.160 both with Boris Johnson, but then of course over the 0:02:21.160 --> 0:02:26.360 summer with the dramatic implosion of the Trust administration and 0:02:26.440 --> 0:02:29.880 now of course pivoting to the new administration under Rishie Sunac. 0:02:32.600 --> 0:02:35.200 We have a pro dave a pro with us here 0:02:35.200 --> 0:02:39.880 in the podcast studio, A podcast pro right. I've never 0:02:39.919 --> 0:02:42.160 been described as before. There you go. This is the 0:02:42.200 --> 0:02:46.760 first time quote podcast pro where we're here with Jared Lyons, 0:02:47.120 --> 0:02:49.440 very well known economists. But you have a podcast you 0:02:49.480 --> 0:02:51.640 do with your daughter who's a comedian. So we have 0:02:51.880 --> 0:02:55.160 started a podcast called What They Have Is Economics. We've 0:02:55.160 --> 0:02:58.800 recorded three so far the third one. But it's comedy. 0:02:59.000 --> 0:03:02.120 Is it comedy or economic or both? It's basically listenable 0:03:02.160 --> 0:03:07.560 to you can listen that's accessible relat So it's economics 0:03:07.560 --> 0:03:10.640 and comedy with subjects. So yes, yeah, what the hell 0:03:10.720 --> 0:03:12.480 is economics? Right down in the UK? I mean, I 0:03:12.520 --> 0:03:14.920 feel like we've been you know, slapped around a bit 0:03:14.919 --> 0:03:17.600 in the last six months, just the last six months 0:03:17.600 --> 0:03:20.600 that it's been right, We've had a political crisis probably 0:03:20.600 --> 0:03:24.040 since two thousand and sixteen. But yes, the UK actually 0:03:24.080 --> 0:03:27.880 the last few months. It's a classic case of identifying 0:03:27.880 --> 0:03:30.840 the right problem, but not necessarily coming out with the 0:03:30.919 --> 0:03:33.919 right solution. So the problem has been since two thousand 0:03:33.919 --> 0:03:36.280 and eight a lack of economic growth, not a UK 0:03:36.400 --> 0:03:40.880 specific problem, was Western European problem. So at least people now, 0:03:41.000 --> 0:03:43.880 I think, recognize the problem, but there's clearly a long 0:03:43.920 --> 0:03:46.120 way to go to address it. And so yes, so 0:03:46.280 --> 0:03:51.520 the rights diagnosis structural slow growth. And you're an advocate 0:03:51.560 --> 0:03:55.000 over the summer for for the radical solution, right to 0:03:54.640 --> 0:03:57.560 to supercharge the economy a little bit, you know, to 0:03:58.040 --> 0:04:00.000 maybe to cut that. But it all went horribly wrong. 0:04:00.080 --> 0:04:02.000 You can describe why it went wrong and what your 0:04:02.040 --> 0:04:05.560 position is. Yeah, well I was Penny Mordans economic advisor 0:04:05.960 --> 0:04:09.040 and so shea unfortunately didn't make the final two um 0:04:09.400 --> 0:04:13.080 in terms of the Conservative leadership race. But my policy 0:04:13.120 --> 0:04:17.159 proposal was that we needed a three arrow approach, indeed, 0:04:17.160 --> 0:04:20.440 regardless of whose in power. One arrow is monetary and 0:04:20.480 --> 0:04:26.280 financial stability, reducing inflation and making the city competitive competitive 0:04:26.320 --> 0:04:27.719 not only for its own sake but to help the 0:04:27.720 --> 0:04:31.000 rest of the UK economy. Second arrow is using fiscal 0:04:31.040 --> 0:04:34.039 policy in a very proactive way, Canadian like, but at 0:04:34.040 --> 0:04:36.760 the same time reducing debt to GDP over time. And 0:04:36.800 --> 0:04:39.400 the third arrow was a whole supply side agenda, all 0:04:39.440 --> 0:04:45.000 the eyes as I called it, investment, innovation, infrastructure incentives, 0:04:45.240 --> 0:04:48.120 and if you get all those right then inequality is reduced. 0:04:48.320 --> 0:04:52.600 So basically three arrows comprehensive, avoiding a dash for growth, 0:04:52.680 --> 0:04:56.640 very much longer term supply side investment driven, but using 0:04:56.680 --> 0:05:00.000 fiscal policy and not as we've done since two thousand eight, 0:05:00.200 --> 0:05:03.200 rely on monetary policies the only shock absorber for the economy. 0:05:03.279 --> 0:05:05.840 So you're one of the Osso City grandees that was 0:05:05.920 --> 0:05:08.720 for a Brexit right from the very beginning. Have we 0:05:08.839 --> 0:05:12.479 gone anything out of Brexit? Yeah, well, the UK has 0:05:12.640 --> 0:05:18.080 very much positioned itself outside EU. Brexit is a political process. 0:05:18.120 --> 0:05:21.520 I think it's important to differentiate between an event and 0:05:21.600 --> 0:05:24.880 a process in the sense that the event happened. But 0:05:25.000 --> 0:05:29.400 to actually make Brexit work both economically and financially, is 0:05:29.440 --> 0:05:32.640 not just leaving the EU. It's what you do when 0:05:32.680 --> 0:05:37.400 you have left. And so in terms of looking at that, well, 0:05:37.440 --> 0:05:40.440 I would say partly because from two thousand six nineteen 0:05:40.480 --> 0:05:44.000 we had a political crisis and since then attention has 0:05:44.040 --> 0:05:46.120 not really focused on addressing the issue. And it comes 0:05:46.120 --> 0:05:48.600 back to David's original question as well about what we 0:05:48.640 --> 0:05:50.640 need to do to actually get growth up in the UK. 0:05:50.720 --> 0:05:53.480 In fact, both of these issues should come together. It's 0:05:53.480 --> 0:05:56.680 about what's the challenge, what do we need to do 0:05:57.200 --> 0:06:00.279 and what do we have at our disposal now host 0:06:00.560 --> 0:06:03.640 leaving the EU to actually make that work achievable. So 0:06:03.720 --> 0:06:05.120 do you do you still think it's a little bit 0:06:05.120 --> 0:06:07.920 too soon then to kind of pass judgment on brexitt. 0:06:07.920 --> 0:06:10.680 I mean there is a narrative now that well, some 0:06:10.720 --> 0:06:12.720 of the effects were you know, there was clouded by cope. 0:06:12.760 --> 0:06:15.120 We've had a pandemic. You know, it wasn't really clear 0:06:15.120 --> 0:06:17.240 to see. There is a bit more of a consensusive 0:06:17.279 --> 0:06:21.520 feels to me anyway amongst economist commentators, the ms of 0:06:21.560 --> 0:06:25.520 clearing the numbers are in Brexit's been bad for the 0:06:25.560 --> 0:06:28.120 British economy. Do you think it's too soon to say that, Well, 0:06:28.120 --> 0:06:30.560 Brexit should be a big positive for the UK economy 0:06:30.600 --> 0:06:34.080 and it's about using the ability to actually make the 0:06:34.120 --> 0:06:37.320 most of reposition in the UK in the changing and 0:06:37.320 --> 0:06:40.359 growing global economy. But it coming back to your question, David, 0:06:40.400 --> 0:06:42.920 if you actually look at the comparison between Save Britain 0:06:43.360 --> 0:06:45.599 and the three major economies on the continent who like 0:06:45.680 --> 0:06:48.920 the UK in the G seven so Germany, France and Italy. 0:06:49.320 --> 0:06:56.120 Since June two thousand sixteen, on the major economic indicators growth, unemployment, 0:06:56.400 --> 0:06:59.200 even inflation, the UK is very much in the middle 0:06:59.200 --> 0:07:01.800 of the pack. Can we take growth since two thousand sixteen, 0:07:01.960 --> 0:07:05.120 the UK has grown at a faster rate than Italy. Cumulatively, 0:07:05.279 --> 0:07:07.680 grown at a faster rate than Germany since two thousand 0:07:07.640 --> 0:07:11.560 and sixteen, not as fast as France. Unemployment are unemployment 0:07:11.640 --> 0:07:14.600 rate is half the year in Fresh Secretory, right, I 0:07:14.600 --> 0:07:16.160 mean it was in different If you look into the 0:07:16.240 --> 0:07:18.280 five years ago and the UK five years ago, it's 0:07:18.360 --> 0:07:21.720 it's it's difficult to compare because it's the was doing 0:07:21.840 --> 0:07:23.920 much worse and it ends and the UK at the 0:07:24.000 --> 0:07:27.720 time was doing so much better. So comparatively the UK 0:07:27.880 --> 0:07:30.280 is losing more, not really well since two thousand eight. 0:07:30.280 --> 0:07:33.800 Western Europe, but basically regardless which country you really look at, 0:07:33.840 --> 0:07:36.760 has been in pretty much the same boats, same position. 0:07:37.160 --> 0:07:38.840 When we look at the world of but say when 0:07:38.880 --> 0:07:41.600 we joined the EU back in nineteen seventy three, then 0:07:41.640 --> 0:07:44.520 we're there nine countries in it. At that time, the 0:07:44.520 --> 0:07:47.920 EU accounted for about six of the world when we 0:07:48.040 --> 0:07:51.240 left just after we left in two sixteen. Indeed, if 0:07:51.240 --> 0:07:54.080 you took two thousand nineteen, if you wanted the remaining 0:07:54.120 --> 0:07:58.200 twenty seven countries accounted for roughly world economy. If you 0:07:58.320 --> 0:08:01.720 take even the most level projections for the world economy 0:08:04.000 --> 0:08:06.560 five years time, EU then will be less than one 0:08:06.560 --> 0:08:09.240 tenth less than the size of India. So the issue 0:08:09.480 --> 0:08:11.840 is that clearly the UK needs to have a sensible 0:08:11.880 --> 0:08:15.240 relationship with the EU, but we need to reposition ourselves 0:08:15.240 --> 0:08:17.760 globally and at the same time make sure that we 0:08:17.840 --> 0:08:20.920 address the domestic challenges that are clearly very apparent. In 0:08:20.960 --> 0:08:24.360 coming back to David's point, when I advocated leaving the EU, 0:08:24.560 --> 0:08:26.960 my point was looked quite frankly, this cannot be the 0:08:26.960 --> 0:08:29.600 only economic issue of the day where all the arguments 0:08:29.640 --> 0:08:32.200 on one side, and as I actually I would say 0:08:32.280 --> 0:08:34.920 correctly pointing out at the time, there are arguments both 0:08:35.040 --> 0:08:38.640 for and against in terms of the whole basis wants 0:08:38.640 --> 0:08:42.000 to be decided politically to leave. The issue about leaving 0:08:42.080 --> 0:08:43.640 was that, as I said at the time, you can't 0:08:43.720 --> 0:08:46.040 leave something that you've been in for over forty years 0:08:46.040 --> 0:08:49.600 and expected to be easy easy to leave. M So 0:08:49.640 --> 0:08:52.120 I called it a Nike shrush in terms of its impact. 0:08:52.200 --> 0:08:54.880 The immediate impact in terms of the negative side, will 0:08:54.920 --> 0:08:57.960 be veryly apparent. But coming back to the early question 0:08:58.000 --> 0:09:02.080 from Francine, it's not just the political event, is actually 0:09:02.120 --> 0:09:04.920 what you two when you've left, and so the whole 0:09:04.960 --> 0:09:07.600 issue is how we reposition ourselves And that's very much. 0:09:08.800 --> 0:09:12.120 I mean, what happened that it was so difficult to 0:09:12.720 --> 0:09:15.280 you know, to find something else would kickstart this economy? 0:09:15.360 --> 0:09:17.920 Was it timing? Was it just issues that were badly 0:09:17.960 --> 0:09:20.520 thought out? Why it went wrong? Was I don't think 0:09:20.600 --> 0:09:23.920 they took on board the febrile states of the markets, 0:09:24.000 --> 0:09:27.160 how to handle the markets, and what they seemed to 0:09:27.200 --> 0:09:30.280 advocate at the end was interpreted as a dash for 0:09:30.360 --> 0:09:34.040 growth rather than what was needed, which was a sustained 0:09:34.160 --> 0:09:38.720 supply side driven sort of investment driven growth agenda. But like, 0:09:38.880 --> 0:09:42.880 why why were we not able under conservative governments all 0:09:42.920 --> 0:09:46.880 pro brexit to really capture what was needed? And you know, 0:09:47.240 --> 0:09:49.840 why has it been so difficult? And if you're an 0:09:49.840 --> 0:09:52.760 outside investor, how would you look into the UK right now? Yeah? Well, 0:09:52.800 --> 0:09:55.320 I'm I don't sit inside the tent. So I've not 0:09:55.440 --> 0:10:00.960 been advising the governments since twenty sixteen. But the political 0:10:01.000 --> 0:10:04.120 crisis from twenty sixteen to the end of twenty nineteen 0:10:04.160 --> 0:10:07.960 really did not help. It didn't help anyone. Also, we've 0:10:08.120 --> 0:10:10.800 then had COVID since but we were now sell the 0:10:10.840 --> 0:10:14.280 election of Boris Johnson, I've until his landslide, when then 0:10:14.440 --> 0:10:18.880 when he got Brexit done? So did things improve at 0:10:18.880 --> 0:10:20.680 that point, because it's we've still been We've been in 0:10:20.840 --> 0:10:23.360 just a different political crisis ever since, haven't we. I 0:10:23.360 --> 0:10:25.520 mean it's kind of that which which are all still 0:10:25.600 --> 0:10:27.880 really can be dated back to Brexits now. I mean 0:10:27.880 --> 0:10:32.160 it's never really ended. The Brexit referendum was a political process, 0:10:32.200 --> 0:10:35.120 but it's a political process that actually allows you to 0:10:35.200 --> 0:10:37.920 then start to drive the economic and financial agenda. You 0:10:37.920 --> 0:10:40.000 can't leave something you've been in for forty odd years 0:10:40.160 --> 0:10:43.480 and expect it to be easy. The Transition Agreement or 0:10:43.480 --> 0:10:46.120 whatever you want to call the different aspects of it. 0:10:46.200 --> 0:10:49.040 We have the relationship with Northern Ireland, but with the 0:10:49.559 --> 0:10:52.480 new trade arrangement with the EU, clearly that could have 0:10:52.520 --> 0:10:55.520 gone in a different directions. So it's possible to construct 0:10:55.520 --> 0:10:59.200 different scenarios. But the point is it's about repositioning the 0:10:59.320 --> 0:11:02.599 UK and as I was mentioned earlier. We've done relatively 0:11:02.600 --> 0:11:04.439 well on the whole host of the measures, but I 0:11:04.520 --> 0:11:07.520 would actually say I didn't. I don't think the opportunity 0:11:07.559 --> 0:11:09.680 has being seized because I think the city is probably 0:11:09.720 --> 0:11:13.040 the most interesting area that we can focus on. From here, 0:11:13.080 --> 0:11:15.040 How would you kick start the city of London today? 0:11:15.240 --> 0:11:18.400 For a financial center to be competitive, it really needs 0:11:18.480 --> 0:11:22.480 three key characteristics, or three key factors all coming together. 0:11:22.600 --> 0:11:27.400 One is it's inherent characteristics, second is the regulatory environment, 0:11:27.760 --> 0:11:29.760 and the third it needs to be the place that 0:11:29.880 --> 0:11:32.440 customers want to do business. And that's a function of 0:11:32.480 --> 0:11:35.520 many things, including the depth and breadth of markets. So 0:11:36.040 --> 0:11:41.280 ensure that you're inherent characteristics are secure control of the 0:11:41.280 --> 0:11:45.319 controllables in some respects. Second, ensure that your regulatory agenda 0:11:45.800 --> 0:11:49.520 fits what you're trying to do. And third, it's about 0:11:49.600 --> 0:11:53.560 bringing that together alongside the need for customers to see 0:11:53.559 --> 0:11:56.760 you as an attractive place to do business in the 0:11:56.800 --> 0:11:59.920 city is still pretty well placed there. Z Gen serve 0:12:00.040 --> 0:12:03.199 they shows with the second most competitive globally, but we 0:12:03.240 --> 0:12:07.320 shouldn't underestimate the continued challenge from New York and fromation economies. 0:12:07.640 --> 0:12:11.040 But we've seen other data since two thousand and sixty 0:12:11.160 --> 0:12:13.680 or two thousand nineteen, which very much are in line 0:12:13.720 --> 0:12:16.320 with what one would have expected in terms of jobs, 0:12:16.360 --> 0:12:19.119 in terms of trading and in terms of other activity. 0:12:19.520 --> 0:12:22.520 Some firms, depending on their business model, have had to adjust, 0:12:22.920 --> 0:12:26.160 but that's moving some things from London to Dublin, London 0:12:26.240 --> 0:12:30.079 to Luxembourg or wherever. That's also related in the jobs. 0:12:30.080 --> 0:12:32.720 But at the same time, the UK has remained pretty 0:12:32.720 --> 0:12:36.200 competitive in the number of areas, so it's very much 0:12:36.320 --> 0:12:38.199 up for grabs what we do from here. The important 0:12:38.200 --> 0:12:40.720 thing is not to be complacent. I am interested by 0:12:40.760 --> 0:12:42.360 what you say about this serving of the rest of 0:12:42.360 --> 0:12:44.640 the country. We don't hear that very much when it 0:12:44.679 --> 0:12:48.600 comes to discussion about the city as a financial powerhouse, 0:12:48.960 --> 0:12:50.440 you know, like it's all about the you know, how 0:12:50.520 --> 0:12:53.760 much money can be generated here for the banks, not 0:12:53.920 --> 0:12:57.000 how is the city the financing engine for businesses across 0:12:57.040 --> 0:12:59.480 the country. That's a different sort of agenda. But how 0:12:59.480 --> 0:13:02.120 can the city he really served that function? What needs 0:13:02.160 --> 0:13:05.920 to change? Okay, there's a whole host of different aspects here, 0:13:06.280 --> 0:13:10.600 but the domestic agenda can be seen coming back to 0:13:10.640 --> 0:13:13.559 early point I mentioned about trying to address or filling 0:13:13.600 --> 0:13:16.640 those gaps in terms of patient capital and the funding 0:13:16.640 --> 0:13:20.240 gap facing small firms is that a bank is I 0:13:20.240 --> 0:13:23.679 mean a bank fills in usually you know, funding too 0:13:23.720 --> 0:13:25.760 small and medium sized enterprise. It does it have to 0:13:25.760 --> 0:13:28.400 be the whole city of London. Yeah, I thought I 0:13:28.520 --> 0:13:31.280 was trying to avoid mentioning the McMillan gap today because 0:13:31.320 --> 0:13:35.679 I mentioned it too much recently. Then this podcast more 0:13:35.720 --> 0:13:39.040 fun than yours because the McMillan gap was first in 0:13:39.720 --> 0:13:42.760 identified in one which was that banks were not servicing 0:13:42.800 --> 0:13:45.920 the needs of small firms. But coming back to your question, Frantic, 0:13:46.000 --> 0:13:49.280 we've moved on from banks, but banks player passing that. 0:13:49.440 --> 0:13:52.599 If you actually look at the bars or capital requirements, 0:13:52.640 --> 0:13:56.320 it's quite remarkable how banks, and it's true not just 0:13:56.360 --> 0:14:00.000 in Britain, offices international are incentivized to do to say 0:14:00.200 --> 0:14:04.160 really to buy government debt, zerio capital or to lend 0:14:04.160 --> 0:14:06.920 to the property sector, and they do that, particularly in 0:14:06.920 --> 0:14:10.560 the UK where property prices unfortunately have moved so high 0:14:10.640 --> 0:14:14.920 relative to people's earnings and incomes. But the real issue 0:14:15.200 --> 0:14:18.080 is not just with banks, it's with the whole financial 0:14:18.120 --> 0:14:22.080 sector about how it provides finance to small firms post 0:14:22.760 --> 0:14:25.640 Brexit so to speak. When Richie soon it was chancellor. 0:14:25.840 --> 0:14:29.240 He very much was aligned with the idea of regional 0:14:29.320 --> 0:14:33.440 centers become attractive to onshore, back office and other services, 0:14:33.480 --> 0:14:35.120 and City UK, where I used to be on the 0:14:35.120 --> 0:14:38.240 board many years ago, has been very big on pushing 0:14:38.240 --> 0:14:41.160 the fact that the city, come back to your point, David, 0:14:41.400 --> 0:14:44.840 is a whole of UK success story, and indeed Center 0:14:44.920 --> 0:14:47.240 for Policy Studies has written about this as well, that 0:14:47.360 --> 0:14:49.600 we often overlook the fact that two thirds of jobs 0:14:49.600 --> 0:14:53.400 in the financial center sector are outside of London. London 0:14:53.640 --> 0:14:56.480 is really at the forefront internationally, but there are many 0:14:56.520 --> 0:15:00.880 different aspects and also the financial inclusion as But I 0:15:00.880 --> 0:15:03.920 remember presenting the paper to the Commonwealth Finance and this 0:15:04.240 --> 0:15:07.800 conference on this back in the day about financial inclusion, 0:15:08.280 --> 0:15:11.560 and in that respect then the focus was very much 0:15:12.080 --> 0:15:15.760 on so called emerging economies. But the fact of the 0:15:15.800 --> 0:15:18.680 matter is that banking the unbanked is a bigger shoot 0:15:18.680 --> 0:15:22.240 here in the UK, and financial exclusion is very much 0:15:22.800 --> 0:15:27.520 related to poverty, inequality and social exclusion. So there are 0:15:27.560 --> 0:15:30.440 many different facets that we can see the city playing 0:15:30.480 --> 0:15:33.840 a bigger role domestically in and indeed this should be 0:15:33.880 --> 0:15:36.840 not a political issue, it should be central to making 0:15:36.880 --> 0:15:40.200 the city sort of serve the needs domestically as well 0:15:40.240 --> 0:15:44.640 as at the same time remaining at the forefront competitively internationally. 0:15:45.160 --> 0:15:48.040 Just thinking about that competitive position now internationally again, I mean, 0:15:48.080 --> 0:15:50.320 we've been talking a lot, and we've had guests in 0:15:50.320 --> 0:15:53.080 this podcast in recent weeks looking at the growth in Paris, 0:15:53.360 --> 0:15:55.800 say of the stock markets overtaken London in terms of 0:15:55.840 --> 0:15:58.880 market capitalization, and there is this drip drip of jobs 0:15:58.920 --> 0:16:01.000 that are cropping up in other battles around you, and 0:16:01.080 --> 0:16:03.000 a lot of business going to New York as well. 0:16:03.120 --> 0:16:05.640 So you mentioned London is still coming out pretty well 0:16:05.640 --> 0:16:10.040 in those rankings. How optimistic are you that London can 0:16:10.080 --> 0:16:12.800 maintain its position in the coming years. The city, generally, 0:16:12.840 --> 0:16:15.160 if we take it away from the politics, is about 0:16:15.200 --> 0:16:19.600 what you do, not just sort of resting on your laurels, 0:16:20.000 --> 0:16:22.880 and so it's about how you can play to those 0:16:22.960 --> 0:16:25.680 three key areas that you need to play to for 0:16:25.720 --> 0:16:30.840 an international competitive financial center. One, you're inherent characteristics. People 0:16:30.920 --> 0:16:33.160 usually quote things like the rule of law, which is 0:16:33.240 --> 0:16:37.640 vital important English language, but obviously a I might challenge her. 0:16:37.880 --> 0:16:42.040 But data centers and the ecosystem is really important here, 0:16:42.120 --> 0:16:44.480 and you need to play to your strengths on those 0:16:44.840 --> 0:16:47.720 so you do need to take action to make sure 0:16:47.800 --> 0:16:52.320 your inherent characteristics are really supportive. Second, the regulatory agenda 0:16:52.480 --> 0:16:55.520 is really very important here. The UK can be at 0:16:55.520 --> 0:16:59.520 the forefront of subtech and red tech the whole that's 0:16:59.600 --> 0:17:01.640 very much play right now, right, this is all to 0:17:01.720 --> 0:17:05.040 play for. Yeah. But the interesting aspect here is that 0:17:05.359 --> 0:17:08.480 often the debate in the media can talk about regulation 0:17:08.520 --> 0:17:13.639 for regulations sake. But regulation, yeah, Well, in two thousand 0:17:13.680 --> 0:17:16.480 and eight, when we have the global financial crisis, one 0:17:16.480 --> 0:17:18.920 way to think about it is a pendulum which was 0:17:18.960 --> 0:17:23.040 at one extreme self regulation and that had all the 0:17:23.119 --> 0:17:25.840 sorts of problems that we saw. Unfortunately, the pendulum in 0:17:25.880 --> 0:17:29.200 many respects has swung straight very much to the other extreme. 0:17:29.440 --> 0:17:32.000 Unlike a pendulum, it needs to settle in the middle 0:17:32.920 --> 0:17:37.400 because while you need a stable and predictable prudential regulatory environment, 0:17:37.880 --> 0:17:43.879 regulation is stepping stone to economic growth, cities, competitiveness, and 0:17:43.920 --> 0:17:48.639 also financial stabilit ring fencing rules brought in after the 0:17:48.680 --> 0:17:50.679 financial crime while it took a while to event right 0:17:50.680 --> 0:17:53.520 and now being peddled back, is that the pendulum swinging back. 0:17:54.440 --> 0:17:57.240 In terms of the whole bank area, there are a 0:17:57.280 --> 0:18:01.520 whole host of issues, but banks um about them being 0:18:01.560 --> 0:18:05.800 internationally competitive. The ring fencing is one aspect. It's also 0:18:06.040 --> 0:18:09.119 interest paid on their reserves. At the Bank of England. 0:18:09.400 --> 0:18:11.760 A lot of the debate there is about financial stability. 0:18:11.840 --> 0:18:14.320 Maybe we need to move to a tiered system on 0:18:14.359 --> 0:18:17.840 that because the taxpayer through the treasury and deemnifies the 0:18:17.880 --> 0:18:21.040 asset purchase facility. But coming back to your point is 0:18:21.040 --> 0:18:25.000 about um that pendulum moving back to the middle. So 0:18:25.119 --> 0:18:27.640 you don't want to penalize the banks, but you don't 0:18:27.680 --> 0:18:30.240 want to go back to where we were pre two 0:18:30.280 --> 0:18:34.520 thousand or and theate, where financial instability was very much 0:18:34.560 --> 0:18:39.159 building up beneath the surface. So it is about adjusting things. 0:18:39.200 --> 0:18:42.880 So regulation does need to reflect that. Do you think 0:18:42.920 --> 0:18:45.160 therefore the bank needs a major overhaul you talk about 0:18:45.160 --> 0:18:47.399 its processes and how it's analyzing the markets and how 0:18:47.400 --> 0:18:49.520 it's forecasting. Do you think there needs to be a 0:18:49.560 --> 0:18:52.600 shake up of the Bank of England. Well, yeah, absolutely 0:18:53.960 --> 0:18:58.840 that this shouldn't be seen as a challenge to its 0:18:59.040 --> 0:19:03.320 integrity or it's independence. This should be seen as part 0:19:03.480 --> 0:19:06.080 of a necessary process. What one needs, coming back to 0:19:06.119 --> 0:19:08.080 your question, is not just an attack on the Bank 0:19:08.119 --> 0:19:10.520 of England, as you called it. It's a fact to 0:19:10.520 --> 0:19:14.080 make sure that our institutions are fit for purpose. Jared, 0:19:14.160 --> 0:19:28.040 thank you so much. Jared Lyons neverlags a gray self 0:19:28.520 --> 0:19:32.359 maybe the best and so you know, frankly, I wouldn't 0:19:32.359 --> 0:19:34.760 mind having him on my team when I was a manager, 0:19:37.440 --> 0:19:39.399 as long as he believes that everything I said. But 0:19:39.440 --> 0:19:42.200 then he would have his own ideas with me. That 0:19:42.280 --> 0:19:45.320 was the voice of Tim Steer. He once managed hundreds 0:19:45.320 --> 0:19:48.679 of millions of pounds for clients of Artimist Investment Management, 0:19:49.320 --> 0:19:53.080 and whose senior reporter Harry Wilson approached for help in 0:19:53.240 --> 0:19:58.040 deciphering how successful these investment tips by Noigel Farage performed. 0:19:58.600 --> 0:20:00.720 So Harry set out the summer to try to understand 0:20:00.720 --> 0:20:06.040 whether the investment insights of a newsletter that Ferrage promotes 0:20:06.119 --> 0:20:07.919 could pay off. And the answer, it seems not so 0:20:08.000 --> 0:20:10.200 much that you're getting it Franston, and you're getting it right, Okay. 0:20:10.240 --> 0:20:11.960 So we caught up with Harry for more of his 0:20:12.080 --> 0:20:15.439 investment journey and what he learned when he asked the question, 0:20:15.840 --> 0:20:20.959 can Nigel make you rich? So Harry, welcome to the podcast. 0:20:21.160 --> 0:20:24.240 People cannot get enough of the story. Take us back 0:20:24.240 --> 0:20:27.080 to when it all began. It began over the summer 0:20:27.119 --> 0:20:30.320 when we started having a conversation about a few people 0:20:30.320 --> 0:20:33.520 on the desk have been noticing these these emails that 0:20:33.840 --> 0:20:37.160 Nigel Ferrage had been sending out. I'm Tim Culture, I'm 0:20:37.280 --> 0:20:40.040 the head of digital for Bloomers Operations in London. I 0:20:40.119 --> 0:20:43.600 saw an advertisement for Fortune and Freedom and it really 0:20:43.640 --> 0:20:48.240 made me wonder if Nigel Farage was indeed making specific 0:20:48.280 --> 0:20:53.679 investment insights that that that we could actually track. What 0:20:53.720 --> 0:20:58.720 happened was about November December, he Nigel Ferrags joined up 0:20:58.760 --> 0:21:01.879 with this company called south Bank Research in London and 0:21:02.280 --> 0:21:05.960 there he launched a podcast and newsletter called Freedom and Fortune. 0:21:06.640 --> 0:21:09.640 Hello and welcome to Fortunate in Freedom with Nigel Frage. Yeah, 0:21:09.640 --> 0:21:11.159 the idea is that Fortunate and Freedom will be a 0:21:11.240 --> 0:21:14.720 daily email and in Freedom and Fortune, Nigel Frage essentially 0:21:14.760 --> 0:21:19.520 gives you his views on the world, geopolitics, economics, everything 0:21:19.560 --> 0:21:22.800 with his sort of indomitable Nigel Ferrage twist twip because 0:21:22.920 --> 0:21:25.680 because they go together, right, freedom and Fortune right there exactly. 0:21:25.720 --> 0:21:28.040 It's it's it's a pretty obvious allusion to to Brexit. 0:21:28.160 --> 0:21:29.720 It there was all sorts of things. You know, it's 0:21:29.720 --> 0:21:31.920 about taking back control of your money. You know, a 0:21:31.960 --> 0:21:34.120 phrase that many of us in Britain have heard many 0:21:34.119 --> 0:21:36.199 times before in a different context, but this time it 0:21:36.240 --> 0:21:39.000 was freedom and fortune to go and find your fortune 0:21:39.080 --> 0:21:42.920 in the financial markets. So what we first started thinking 0:21:42.920 --> 0:21:44.879 about was, well, is there any kind of way of 0:21:44.920 --> 0:21:48.280 tracking his advice here? And when you go onto the 0:21:48.280 --> 0:21:50.800 free site the freedom and Fortune thing, there are a 0:21:50.840 --> 0:21:53.119 couple of stock recommendations, but there wasn't really much to 0:21:53.160 --> 0:21:55.960 get our teeth into, which is when I started having 0:21:55.960 --> 0:21:57.800 a closer look at it. And actually it turned out 0:21:57.840 --> 0:22:01.440 there was a subscriber newsletter called UK Independent Wealth which 0:22:01.520 --> 0:22:04.720 was created by Nigel Farage and which has a stock 0:22:04.720 --> 0:22:08.520 portfolio which was put together by a former UBS banker 0:22:08.600 --> 0:22:11.800 based in Buenos Aires called rob My Strand. And that's 0:22:11.800 --> 0:22:15.800 what we started tracking. So, um, we we're looking at 0:22:15.880 --> 0:22:19.600 creating this portfolio that we're going to try to match 0:22:20.080 --> 0:22:25.640