1 00:00:00,120 --> 00:00:02,920 Speaker 1: Chancellor, Jeremy Hunt, thank you for making time for me, Chancellor, 2 00:00:03,000 --> 00:00:05,120 Speaker 1: and you've got a busy day ahead of you. So 3 00:00:05,160 --> 00:00:09,000 Speaker 1: we've got inflation falling. Growth is actually better than expected. 4 00:00:09,520 --> 00:00:12,600 Speaker 1: But in a recent Bloomberg survey, the majority of finance 5 00:00:12,640 --> 00:00:16,520 Speaker 1: professionals said that they see kir Starmer as more market 6 00:00:16,560 --> 00:00:19,440 Speaker 1: friendly than Rishie Sunac. I wonder why you think that's 7 00:00:19,480 --> 00:00:20,759 Speaker 1: still the case a year. 8 00:00:20,560 --> 00:00:23,920 Speaker 2: On from this trust Well, good morning, Lizzie. I think 9 00:00:23,960 --> 00:00:26,360 Speaker 2: the answer is that we've been through a very challenging 10 00:00:26,400 --> 00:00:31,040 Speaker 2: period in the British economy and as people see Rishi 11 00:00:31,120 --> 00:00:35,240 Speaker 2: Sunac and my plan working, we will start to see 12 00:00:35,280 --> 00:00:38,800 Speaker 2: those numbers change. And when I became Chancellor and when 13 00:00:38,840 --> 00:00:42,360 Speaker 2: he became Prime Minister, inflation was over eleven percent. Now 14 00:00:42,360 --> 00:00:45,200 Speaker 2: it's down to six point seven percent. That's a fall 15 00:00:45,240 --> 00:00:50,280 Speaker 2: of forty percent. We just heard last week that our 16 00:00:50,560 --> 00:00:54,640 Speaker 2: economy has recovered better than France or Germany since the pandemic, 17 00:00:54,680 --> 00:00:57,240 Speaker 2: and that's because of the decision that Rishi Sunac took 18 00:00:57,240 --> 00:01:01,000 Speaker 2: as Chancellor to introduce the furloughs be one of the 19 00:01:01,000 --> 00:01:03,880 Speaker 2: most generous schemes in Europe. And so I think as 20 00:01:03,920 --> 00:01:06,480 Speaker 2: people start to see that this is a government that 21 00:01:06,600 --> 00:01:11,080 Speaker 2: is prepared to take difficult long term decisions to make 22 00:01:11,120 --> 00:01:15,240 Speaker 2: our country more prosperous. They will understand that the Conservative 23 00:01:15,240 --> 00:01:17,759 Speaker 2: Party is the party of wealth creation. That will mean 24 00:01:17,760 --> 00:01:19,600 Speaker 2: in the end we have more money for our precious 25 00:01:19,600 --> 00:01:20,360 Speaker 2: public services. 26 00:01:20,440 --> 00:01:23,400 Speaker 1: Well, speaking of the long term, let's talk about HS two. 27 00:01:23,440 --> 00:01:27,600 Speaker 1: Because we are in Manchester. Your predecessor, one of George Osborne, 28 00:01:27,680 --> 00:01:32,080 Speaker 1: Conservative Chancellor, raises the question, how can any foreign investor 29 00:01:32,280 --> 00:01:36,760 Speaker 1: trust a Conservative promise if you can't make certainty. 30 00:01:36,240 --> 00:01:39,039 Speaker 2: On HS two. Well, I'm really sorry to disappoint you, 31 00:01:39,080 --> 00:01:42,120 Speaker 2: but I'm not going to be able to talk extensively 32 00:01:42,120 --> 00:01:46,520 Speaker 2: about that because we haven't made a formal decision and 33 00:01:46,560 --> 00:01:50,480 Speaker 2: at the appropriate time and announcement will be made. But 34 00:01:51,000 --> 00:01:53,559 Speaker 2: what I will say is that we would always want 35 00:01:53,600 --> 00:01:57,000 Speaker 2: to invest in our economic infrastructure. But you would expect 36 00:01:57,040 --> 00:02:00,880 Speaker 2: any chancellor to want to understand it is that it 37 00:02:00,920 --> 00:02:03,840 Speaker 2: costs ten times more to build high speed rail in 38 00:02:03,880 --> 00:02:06,120 Speaker 2: this country than it does in France. And so those 39 00:02:06,160 --> 00:02:08,040 Speaker 2: are the discussions that we're having inside government. 40 00:02:08,160 --> 00:02:09,600 Speaker 1: Well, how could the money be better spent? 41 00:02:10,080 --> 00:02:13,560 Speaker 2: Well, I think you're presuming that we're going to decide 42 00:02:13,680 --> 00:02:16,560 Speaker 2: in one particular way that decision has not yet been 43 00:02:16,639 --> 00:02:19,040 Speaker 2: made formally, so I'm afraid you'll have to wait for 44 00:02:19,040 --> 00:02:21,200 Speaker 2: all those discussions. But you have plenty of chance to 45 00:02:21,240 --> 00:02:24,160 Speaker 2: ask those questions when that decision has been announced. 46 00:02:24,160 --> 00:02:27,040 Speaker 1: Okay, the other big controversy that's looming over this conference 47 00:02:27,120 --> 00:02:29,280 Speaker 1: is tax cuts. Many of your colleagues say you can't 48 00:02:29,280 --> 00:02:32,560 Speaker 1: win an election without them. Michael Gove, one's tax cuts 49 00:02:32,560 --> 00:02:35,440 Speaker 1: for workers. But in January you told Bloomberg your priority 50 00:02:35,480 --> 00:02:38,120 Speaker 1: when it's affordable, are tax cuts for business. Is that 51 00:02:38,160 --> 00:02:38,800 Speaker 1: still the case. 52 00:02:39,320 --> 00:02:42,720 Speaker 2: Well, I'd like to have lots of tax cuts, and 53 00:02:43,440 --> 00:02:46,960 Speaker 2: I think that we have already cut business taxes when 54 00:02:47,000 --> 00:02:51,000 Speaker 2: it comes to, for example, business rates. The thirteen and 55 00:02:51,000 --> 00:02:53,120 Speaker 2: a half billion pound package on outs at the autumn 56 00:02:53,120 --> 00:02:55,560 Speaker 2: statements about an average of a ten percent cut. We've 57 00:02:55,600 --> 00:03:00,560 Speaker 2: introduced election. We've introduced capital allowances for three years, most 58 00:03:00,560 --> 00:03:04,080 Speaker 2: generous capital allowances in the world, introduced in the spring budget. 59 00:03:04,360 --> 00:03:09,600 Speaker 2: But to answer your question very directly, if we want 60 00:03:09,760 --> 00:03:15,880 Speaker 2: faster growth and also an end to taxes ever ratcheting higher, 61 00:03:16,720 --> 00:03:19,880 Speaker 2: that is possible, but there are no shortcuts. And what 62 00:03:19,919 --> 00:03:21,960 Speaker 2: I'll be saying this afternoon is if we're going to 63 00:03:21,960 --> 00:03:24,000 Speaker 2: do that, we have to make it easier for businesses 64 00:03:24,320 --> 00:03:29,399 Speaker 2: to grow, We have to spend taxpayers money more efficiently. 65 00:03:29,520 --> 00:03:33,799 Speaker 2: We need to reform the welfare state. Those are difficult decisions, 66 00:03:33,919 --> 00:03:36,080 Speaker 2: but they are decisions that Rishi Sunak and I are 67 00:03:36,120 --> 00:03:39,360 Speaker 2: willing to take because the choice in British politics is 68 00:03:39,360 --> 00:03:41,440 Speaker 2: between a party that does want to bring down the 69 00:03:41,480 --> 00:03:44,200 Speaker 2: tax burden and the labor party that doesn't. 70 00:03:44,360 --> 00:03:46,120 Speaker 1: So you want to bring down the tax burden, how 71 00:03:46,200 --> 00:03:48,680 Speaker 1: much hedroom do you need to deem that it's affordable 72 00:03:48,720 --> 00:03:49,520 Speaker 1: to cut taxes. 73 00:03:49,960 --> 00:03:51,840 Speaker 2: Well, at the moment, we don't have that headroom at all. 74 00:03:52,440 --> 00:03:55,280 Speaker 2: What do you need, well, whatever the cost of a 75 00:03:55,360 --> 00:03:57,320 Speaker 2: tax cut is. But we don't have that headroom because 76 00:03:57,320 --> 00:04:00,880 Speaker 2: in fact, since the Spring budget, our debt interest payments 77 00:04:01,400 --> 00:04:04,400 Speaker 2: have gone up because the markets are pricing long term 78 00:04:04,440 --> 00:04:08,760 Speaker 2: debt more expensively than they did. But there's another reason 79 00:04:08,960 --> 00:04:11,920 Speaker 2: why this isn't the right time for big tax cuts, 80 00:04:11,960 --> 00:04:14,960 Speaker 2: which is even more significant, which is that they would 81 00:04:14,960 --> 00:04:18,240 Speaker 2: be inflationary. If we put money in people's pockets, they 82 00:04:18,240 --> 00:04:20,800 Speaker 2: would spend that money and then prices would go up. 83 00:04:21,080 --> 00:04:23,600 Speaker 2: And just at the moment that we're turning the tide 84 00:04:23,600 --> 00:04:26,560 Speaker 2: on inflation, we wouldn't want to go in the opposite direction. 85 00:04:26,680 --> 00:04:29,040 Speaker 1: So in your speech later, we're expecting you to make 86 00:04:29,080 --> 00:04:32,599 Speaker 1: an announcement on raising the living wage. Are you worried 87 00:04:32,640 --> 00:04:34,919 Speaker 1: that that could be inflationary and are you going to 88 00:04:35,000 --> 00:04:38,400 Speaker 1: offset the cost of business, for example, by a national insurance. 89 00:04:39,200 --> 00:04:44,200 Speaker 2: The rising of the national living wage won't affect the 90 00:04:44,240 --> 00:04:49,560 Speaker 2: obi's forecast for inflation going forward. It is very significant 91 00:04:49,720 --> 00:04:52,640 Speaker 2: because it's a pay rise for two million of the 92 00:04:52,680 --> 00:04:55,440 Speaker 2: lowest paid people. That's because we're a government that wants 93 00:04:55,480 --> 00:04:59,960 Speaker 2: to make work pay. Since twenty ten, we've in created 94 00:05:00,120 --> 00:05:05,880 Speaker 2: increase the minimum legal pay rate by nine thousand pounds 95 00:05:06,839 --> 00:05:08,680 Speaker 2: and that is one of the reasons why you've seen 96 00:05:08,760 --> 00:05:11,320 Speaker 2: unemployment come down by a million since then. So it's 97 00:05:11,360 --> 00:05:14,080 Speaker 2: part of a bigger strategy that says we need to 98 00:05:14,120 --> 00:05:14,719 Speaker 2: make work pay. 99 00:05:15,000 --> 00:05:18,720 Speaker 1: Just finally, on the long term decisions, we hear that 100 00:05:18,839 --> 00:05:21,760 Speaker 1: you're planning to copy Canada's Growth Fund to try and 101 00:05:21,800 --> 00:05:24,640 Speaker 1: boost growth. How much is the government going to pump 102 00:05:24,680 --> 00:05:25,040 Speaker 1: into that? 103 00:05:25,880 --> 00:05:29,680 Speaker 2: Well, I don't know what Canada's Growth Fund is, but 104 00:05:29,800 --> 00:05:32,040 Speaker 2: I'll tell you where we have been saying that we 105 00:05:32,080 --> 00:05:35,760 Speaker 2: want to copy Canada and Australia is that we want 106 00:05:35,800 --> 00:05:39,279 Speaker 2: to make it easier for big pension funds to invest 107 00:05:39,400 --> 00:05:43,520 Speaker 2: in growth companies. And in Canada they will be investing 108 00:05:43,600 --> 00:05:46,360 Speaker 2: up to fifteen percent of their portfolio in growth companies. 109 00:05:46,920 --> 00:05:49,720 Speaker 2: Here it's less than four percent. And that's what my 110 00:05:49,839 --> 00:05:52,240 Speaker 2: mention House reforms are trying to do. Now we have 111 00:05:52,320 --> 00:05:56,640 Speaker 2: got the largest technology sector outside China and the United States. 112 00:05:56,760 --> 00:05:59,960 Speaker 2: Is a great British success story. But we don't just 113 00:06:00,040 --> 00:06:02,400 Speaker 2: want these companies to start in Britain. We want them 114 00:06:02,440 --> 00:06:04,640 Speaker 2: to stay here and this is part of the way 115 00:06:04,680 --> 00:06:05,039 Speaker 2: we do that.