Speaker 1: Welcome to in the City, Bloomberg's podcast, connecting you to
Speaker 1: the conversations and the stories shaping the world of finance.
Speaker 1: I'm Francine Laqua. Here's my conversation with the Prime Minister,
Speaker 1: Rishie Sunek. Prime Minister, thank you so much for speaking
Speaker 1: to Bloomberg. Now, you've announced some twenty nine billion pounds
Speaker 1: of new investments. Investors of course see opportunities, partly because
Speaker 1: they think that it's actually cheap and has further to grow.
Speaker 1: But then there's also things that they worry about, the
Speaker 1: reversal of AHAs two, your stance on the European Court.
Speaker 1: How do you address some of those questions they have
Speaker 1: for you.
Speaker 2: Well, first of all, we're excited to be hosting our
Speaker 2: Global Investment Summit and it's our welcome to business event.
Speaker 2: I'm also very pleased, as you mentioned, we have secure
Speaker 2: commitments of almost thirty billion pounds of investment. That's more
Speaker 2: than double, if not triple, what we had when we
Speaker 2: last held this summit. So I think that's an enormous
Speaker 2: vote of confidence in the UK and it comes on
Speaker 2: the back of a very positive autumn statement that we
Speaker 2: just delivered with Signify can support for business. I think
Speaker 2: there's real momentum in the UK economy. You're seeing that
Speaker 2: we're tangible commitments from investors at a scale we haven't
Speaker 2: seen before. So looking we're poys to have a very
Speaker 2: positive day.
Speaker 1: So premnise to Jeremy Hunt framed the item statement as
Speaker 1: a pathway to growth, and yet the OBR from their
Speaker 1: forecast for next year in twenty twenty five, do you think.
Speaker 3: The OBR is being too conservative?
Speaker 2: Look, the story of the UK is an economy that
Speaker 2: has got real momentum. So I've been Prime Minister for
Speaker 2: just over a year. During that time, we've halved inflation
Speaker 2: as I said we would do. We've known now that
Speaker 2: the UK economy has recovered faster from the pandemic than
Speaker 2: pretty much any other major European economy, and over the
Speaker 2: long term we're still forecast to outperform major European economies.
Speaker 2: But crucially, business investment has grown faster than any other
Speaker 2: G seven economy over the last few years. And I
Speaker 2: think ultimately, if you want to drive growth and productivity
Speaker 2: and an economy, you need businesses to be investing. We
Speaker 2: have more momentum for business investment here than anywhere else.
Speaker 2: So look I feel actually very positive about the long
Speaker 2: term growth outlook for the UK.
Speaker 1: So do you think the OBR is actually going to
Speaker 1: have to revise them up words? Are you confident that
Speaker 1: the numbers will come in so that you can continue
Speaker 1: cutting tax?
Speaker 2: What I can tell you is that when I became
Speaker 2: Prime Minister just over a year ago, not just the OBER,
Speaker 2: but also the Bank of England, the OECD and the IMF,
Speaker 2: all of them predicted that the UK would be in
Speaker 2: recession this year. That hasn't happened. We put in place
Speaker 2: a set of policies to ensure that it didn't and
Speaker 2: I'm delighted the UK economy has outperformed all of those
Speaker 2: and has grown this year better than anybody thoughts. So look,
Speaker 2: I've got a track record in outperforming what people think,
Speaker 2: and they, as I said, the UK economy has real
Speaker 2: momentum now, inflation has been halved, business investment is growing
Speaker 2: faster than elsewhere, and has said We've got commitments totally
Speaker 2: almost thirty billion pounds for our summit. It's significantly more
Speaker 2: than we've had in the past. So I think that
Speaker 2: shows that investors and companies are voting with their pounds
Speaker 2: and their dollars, and that shows that there is confidence
Speaker 2: in the economy, and that's what makes me think we're
Speaker 2: poised for strong growth.
Speaker 1: But pretty much if you look at inflation, if you
Speaker 1: actually exclude energy, it's about you been down by like
Speaker 1: a fifth. So I don't know how much credit the
Speaker 1: government can actually take on.
Speaker 2: Well, actually, if you look at core inflation, it's pretty
Speaker 2: much middle of a pack for European economies. Forecast next
Speaker 2: year to be lower than the Eurozone, and I think
Speaker 2: in the US the last numbers I checked, So actually
Speaker 2: the momentum on inflation is downwards and coming down faster
Speaker 2: than peers over the course of the next twelve months.
Speaker 2: If you look at the forecast, and we're making sure
Speaker 2: that we are disciplined with borrowing, ultimately what investors are
Speaker 2: looking at to make sure that fiscal policy is sensible.
Speaker 2: We're not fueling the inflationary fire. We're being sensible on
Speaker 2: public sector wage settlements. And actually you're seeing that feed
Speaker 2: through to the economy. And I said, we're also improving
Speaker 2: labor supply. If I talk to businesses, you know what
Speaker 2: they're keen to see is access to labor. We're making
Speaker 2: sure that our labor market remains flexible, that we're moving
Speaker 2: people off welfare and into work. All of those things
Speaker 2: are contributing to I think downward momentum on inflation premiercure.
Speaker 1: If the OBR is actually right in the forecast, what
Speaker 1: does it mean where you can actually find some spending
Speaker 1: freeze or actually cuts.
Speaker 2: Well, what we've just delivered are significant tax cuts, significant
Speaker 2: tax cuts for business, significant tax cuts for everybody in work.
Speaker 2: That's what our autumn statement last week did. I the
Speaker 2: biggest tax cuts in one event since the nineteen eighties.
Speaker 2: Just to give people a sense of scale. For business,
Speaker 2: what we're doing is making full expensing permanent, so we
Speaker 2: will be the only major at G seven economy certainly
Speaker 2: and even broader than that, where you get a total
Speaker 2: rite off against your taxes for capital investment. That's an
Speaker 2: incredibly generous regime to attract business investment. And it comes
Speaker 2: on top of the fact that our corporation tax right
Speaker 2: here is lower than any other G seven economy. And
Speaker 2: when it comes to individuals in work, we've just delivered
Speaker 2: a very significant personal tax cut that will put four
Speaker 2: hundred and fifty pounds extra in the bank accounts of
Speaker 2: a typical person in work over the next twelve months,
Speaker 2: which will also be good for consumption as well.
Speaker 1: That you have to find money in, for example, departments
Speaker 1: where you know that voters actually want you to spend
Speaker 1: more in certain departments. So are you comfortable as possibly
Speaker 1: being Prime Minister of austerity.
Speaker 2: No, that's simply not the case. Actually, government spending in
Speaker 2: the UK right now is at very high levels historically
Speaker 2: over this parliament, it's grown at very high levels even
Speaker 2: in real terms after the impact of inflation. So I
Speaker 2: think any commentary or accusation that's what's happening is just
Speaker 2: simply unfounded. And we're at a point now, given how
Speaker 2: people are feeling, given the amount that's being spent, where
Speaker 2: I think the priority has got to be luring the
Speaker 2: tax burden. Government's already spending a lot of people's money,
Speaker 2: and what we need to see going forward is more
Speaker 2: productivity out of the public sector needs to match what
Speaker 2: we've seen in the private sector post COVID, and I'd
Speaker 2: rather focus on efficiency in the public sector and prioritize
Speaker 2: cutting people's taxes rather than the government spending ever more
Speaker 2: of their money. That's the point I think, and I'm
Speaker 2: very clear that that is the choice that we are making.
Speaker 1: But even if the voter doesn't necessarily feel that tax
Speaker 1: cuts because of inflation going up, So how much more
Speaker 1: can you cut taxes in April and beyond, Well.
Speaker 2: It wouldn't be right to speculate on future events. We're
Speaker 2: just still digesting the one we've had, which, as I said,
Speaker 2: delivered the biggest tax cuts since any event since the
Speaker 2: nineteen eighties. But what I have said is that this
Speaker 2: is the start of a journey. And you know I
Speaker 2: meant that when I said after we got inflation down,
Speaker 2: I wanted to focus on making sure that we reward
Speaker 2: people's hard work, making sure that we grow the economy
Speaker 2: and responsibly cutting taxes. And you know, when we can
Speaker 2: do more, we will, because that's the direction of travel
Speaker 2: here now.
Speaker 1: Premier, is a r Wonda flight taking off before the
Speaker 1: election actually critical to your message to voters or will
Speaker 1: bringing down the immigration numbers be enough?
Speaker 3: Well?
Speaker 2: I think the British people's priority is to stop the
Speaker 2: votes to stop illegal migration. That's why at the beginning
Speaker 2: of this year, when I set out five key priorities
Speaker 2: I had, one of them was to deliver on that.
Speaker 2: And I'm really pleased that since I said that, we've
Speaker 2: managed to cut the numbers by a third. Now, you know,
Speaker 2: when I got this job, they had gone up and
Speaker 2: up and up. They'd actually quadrupled in the past few years.
Speaker 2: But for the first time, they're now coming down, and
Speaker 2: not down by little, down by a lot, down by third,
Speaker 2: when in the rest of Europe they're going up. So
Speaker 2: we're making progress. But I do want to deliver on
Speaker 2: our Rwanda plan because that's how we will finish the job.
Speaker 2: And we're going to do everything that I deem necessary
Speaker 2: to make that happen.
Speaker 1: Prime Minister, will you publish a treaty and bill and Rwanda,
Speaker 1: and will the bill actually contain this notwithstanding class so
Speaker 1: you can ignore future legal judgments.
Speaker 2: You know, what I've been very clear on is that
Speaker 2: we will address all the concerns that the courts have
Speaker 2: raised about Rwanda. Would gently point out that the United
Speaker 2: Nations themselves have used Rwanda for migrant resettlement schemes in
Speaker 2: the past, and we've worked with the Rwandan government to
Speaker 2: put in place a treaty which will reassure everyone and
Speaker 2: address all the concerns that have been raised. And then
Speaker 2: Parliament will be given the opportunity to scrutinize that and
Speaker 2: also demonstrate that it believes that Rwanda is safe for
Speaker 2: this time.
Speaker 1: Well, what does that mean, Prime Minister, that you will
Speaker 1: push it even if it means going against the European courts.
Speaker 2: I think we can act completely in compliance with our obligations,
Speaker 2: and that's very much the approach we've taken so far.
Speaker 2: Some objections and concerns have been raised by our court.
Speaker 2: We will address all of those and then make it
Speaker 2: crystal clear that our Parliament, which of course is sovereign
Speaker 2: in these matters, will be able to scrutinize that and
Speaker 2: then actually determine that Rwanda is safe.
Speaker 3: How will you decide when you call an election?
Speaker 2: Again, that's something that we announce in.
Speaker 3: The normal way. But is there a trigger point? Are
Speaker 3: you looking at a certain.
Speaker 2: I mean, I really am not focused on elections. I'm
Speaker 2: really just focused on delivering on the things that I
Speaker 2: said I would do for the British people, and that is,
Speaker 2: now that we've harved inflation, we can turn onto cutting taxes,
Speaker 2: rewarding hard work. It's also about growing the economy. That's
Speaker 2: what our support and tax cuts for business were about
Speaker 2: last week. Also tackling a legal migration, stopping the votes
Speaker 2: where we've made good progress already with more to come.
Speaker 2: These are all the things I'm focused on. And also,
Speaker 2: you know, we've taken some big decisions here about a
Speaker 2: more pragmatic approach to net zero, for example, which is
Speaker 2: something that I think is right that we've got to
Speaker 2: bring people with us on that journey. We've got to
Speaker 2: save working families money as we do it. So you know,
Speaker 2: we're doing some big things that are making a big
Speaker 2: difference to people, and I want to make sure that
Speaker 2: we deliver on the premier.
Speaker 1: You've also taken a hard line, of course on rising
Speaker 1: anti semitism in the UK. The White House has denounced
Speaker 1: Elon Musk for what happened and on exit in the
Speaker 1: last couple of days.
Speaker 3: Do you do the same?
Speaker 2: Yeah, Look, I don't tend to get in the business
Speaker 2: of scrutinizing what every single person says who I've interacted with.
Speaker 2: Of Course, I bore anti Semitism, and as you said,
Speaker 2: we've been unequivocal from the start of this situation that
Speaker 2: that is not acceptable in our society, and we've been
Speaker 2: very firm about that. I've personally been very firm about
Speaker 2: that it's very sad what is happening, but are as
Speaker 2: I said, I condemn all anti semitism right, it's not
Speaker 2: about any one particular personality. I condemn anti semitism in
Speaker 2: a prime minister well, and as I said, I condemn
Speaker 2: anti semitism in all its forms. It doesn't matter whether
Speaker 2: you're Elon Musk or you're someone on the street who's
Speaker 2: shouting abuse at someone who happens to be walking past you.
Speaker 2: That's wrong in all its forms. Anti Semitism in all
Speaker 2: its forms is completely and utterly wrong, and we have
Speaker 2: strong laws in place here to tackle racial hatred. People
Speaker 2: are inciting it. Some of the scenes we've seen have
Speaker 2: been unacceptable and the police know that they should be
Speaker 2: using the full force of their powers to bring those
Speaker 2: people to justice. That's what we've been very clear about
Speaker 2: and that's what we will continue to do. And we've
Speaker 2: made sure that the Jewish community gets extra funding here
Speaker 2: to ensure their safety and security, and we will continue
Speaker 2: to do that.
Speaker 1: Preming sure, what kind of plan do you have for Gaza,
Speaker 1: When do you think the fighting will start? And can
Speaker 1: the UK actually be involved in the peacekeeping role afterwards?
Speaker 2: You know, we've been consistently clear during this awful tragedy
Speaker 2: that Israel does have a right to defend itself, it
Speaker 2: should do that in accordance with humanitarian law. And we've
Speaker 2: also consistently called for sustained humanitarian pauses where aid can
Speaker 2: get in, but also hostages can come out. And I'm
Speaker 2: glad that that is now happening, and I think all
Speaker 2: of us will have seen some of the scenes over
Speaker 2: the past day or two and found that very heartening.
Speaker 2: It's important that everyone honors the agreement and we can
Speaker 2: continue to see more progress, and we will be continuing
Speaker 2: to taught to all our partners in the region, whether
Speaker 2: that's the Americans, is really easy Egyptians, the Katari Is
Speaker 2: to make sure that we can see this through.
Speaker 3: Is the UK still for a two state solution.
Speaker 2: Always has been and can will continue to be, and
Speaker 2: we need to redouble our efforts towards that, and that's
Speaker 2: something we've been very clear about and I spoke to
Speaker 2: the Palestinian president when I visited the region specifically about this.
Speaker 2: The UK will do everything it can to help the
Speaker 2: Palestinian authority. We do need to look to the future
Speaker 2: of Gaza post to mass and actually make sure that
Speaker 2: everyone in the region can look forward to a future
Speaker 2: where they can live lives of dignity and security and opportunity.
Speaker 2: That's the vision that I think all of us share,
Speaker 2: but we've got to redouble our efforts to bring that about.
Speaker 3: Prime Minister, Thank you so much for your time.
Speaker 1: Thank you very much, thanks for listening to this bonus
Speaker 1: edition of In the City. This episode was hosted by
Speaker 1: me Francin Laquin. It was produced by Summersati, additional editing
Speaker 1: by Blake Maples and special thanks to the Bloomberg team
Speaker 1: for putting this interview together, and of course a Prime
Speaker 1: Minister for his time.