Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Let's maybe start with
Speaker 1: the news of the week.
Speaker 2: You know, the Prime Minister Stromer and others are rebuking
Speaker 2: Donald Trump and saying he's wrong, and yet they're still
Speaker 2: trying to stop him escalating. I mean, can you really
Speaker 2: have it both ways or is.
Speaker 1: Now the time to go strong against him?
Speaker 3: We absolutely want to de escalate. The future of Greenland
Speaker 3: is for the people of Greenland. But the message that
Speaker 3: I've come here with this week in Davos is that
Speaker 3: I missed all the uncertainty and instability in the world.
Speaker 3: Britain's plan for economic growth, built on the platform stability,
Speaker 3: investment and trade, is actually going very well. We've had
Speaker 3: six intra straight cuts since I became Chancellor of the Exchequer.
Speaker 3: Inflation is coming down, the Bank of England expected to
Speaker 3: get back to target in the next couple of months.
Speaker 3: And we've done trade deals with India with Career, which
Speaker 3: improving our trading relations with Europe. And despite challenges at
Speaker 3: the moment, we've secured a trade deal with the US
Speaker 3: as well, which means we've got lower tariffs than pretty
Speaker 3: much anywhere in the world.
Speaker 2: I mean, you know, President Trump has gone after your
Speaker 2: starmer also on the sale of an island, which he
Speaker 2: previously approved. So how do you characterize relationships between the
Speaker 2: two right now?
Speaker 3: They're very good. I mean, look, no one wants to
Speaker 3: see what's happening at the moment in terms of Greenland.
Speaker 3: You know, recognize what the President said last night, you know,
Speaker 3: criticizing decisions of a number of leaders, but previously the
Speaker 3: US administration, including Centre of State Rubio, have supported what
Speaker 3: is happening in Diego Garcia because it's enabling the UK
Speaker 3: US military basis to stay open and to continue the
Speaker 3: vital work they do there for decades to come. And
Speaker 3: so you know, we're confident that that is the right
Speaker 3: decision and has had the support of the US administration.
Speaker 2: But Jesse, if we had a level of anxiousness in
Speaker 2: Davos right now would be like through the roof. And
Speaker 2: there's a lot of opinions saying, look are the UK
Speaker 2: and you sleep walking into disaster right now because they
Speaker 2: were blind sided about what to do with Greenland.
Speaker 1: Like what's your response to those criticisms.
Speaker 3: Well, Denmark is a member of NATO, very close ally
Speaker 3: of the UK and has been a very close ally
Speaker 3: of the United States. Everybody recognizes the importance of the
Speaker 3: Arctic and the High North, and also the challenges that
Speaker 3: we face the Western world, NATO faces in that part
Speaker 3: of the world. We've just done a big deal with
Speaker 3: Norway to sell frigates to them, reflecting those sorts of threats.
Speaker 3: So no one is naive around the threats in the
Speaker 3: Arctic and the High North. The question is how to
Speaker 3: face into those challenges, and we firmly believe in the
Speaker 3: UK and across Europe that we do that by NATO allies,
Speaker 3: by friends, working together to secure the best outcomes, not
Speaker 3: unilaterally making decisions about another country.
Speaker 1: What are the risks if this escalates?
Speaker 2: Is it to the economy or does the UK? And
Speaker 2: you're worriy about intelligence sharing with the US and Ukraine.
Speaker 3: But all of our focus is on de escalation, not
Speaker 3: in worst case scenarios. We have worked incredibly closely with
Speaker 3: President Trump the last year because we believe it's in
Speaker 3: our UK national interest to do so. The strategic relationship
Speaker 3: between the US and the UK, the military and strategic
Speaker 3: partnership between our countries is more important than the partnership
Speaker 3: between any two countries in the world. And it's very
Speaker 3: important for safety and security of the Western world. That
Speaker 3: continues and we're determined that it will will do so. Similarly,
Speaker 3: the fact that we were able last year to secure
Speaker 3: the Economic Partnership deal with the US and we continue
Speaker 3: work on the Transatlantic markets, work that we're doing at
Speaker 3: the moment to make it easier for our capital markets
Speaker 3: to be better integrated and firms listed in the UK
Speaker 3: and the US raising finance in each other's jurisdictions, greater
Speaker 3: collaboration when it comes to digital assets. All of that
Speaker 3: is in the UK's national interest and will continue to
Speaker 3: pursue our national interest vigorously. But I don't think it
Speaker 3: is anyone's in anyone's interests to escalate tensions or to
Speaker 3: allow rhetoric to be a substitute for hard work and diplomacy.
Speaker 2: But you think to trade deal stands because at the
Speaker 2: moment there is you know, wild speculation about whether everything
Speaker 2: needs negotiating, whether you know President Trump goes really hard.
Speaker 1: I mean, how do you model this.
Speaker 3: Or was just urge people to keep call heads Okay,
Speaker 3: I mean that's what we did all through last year
Speaker 3: and it actually served us pretty well. And whilst trade
Speaker 3: barriers are going up around the world at the moment.
Speaker 3: We can all see that in the last year barriers
Speaker 3: to trade with the UK have fallen. We've secured a
Speaker 3: comprehensive trade deal with India which will come into force
Speaker 3: in the next few months, just taking legislation through both
Speaker 3: of our parliaments to secure that includes trade in services,
Speaker 3: support for exports and also around government procurement. That's a
Speaker 3: huge deal. The deal with Career, one of the fastest
Speaker 3: growing economies as well in the G twenty is very
Speaker 3: important for the UK. But most important probably is the
Speaker 3: trade with our nearest neighbors and trading partners in the EU,
Speaker 3: which was damaged after leaving the EU voting to leave
Speaker 3: the EU in twenty sixteen. We are now fixing that
Speaker 3: by improving trade relations and corporation with our closest allies
Speaker 3: and neighbors.
Speaker 1: And I want to get back to the UNI. Second.
Speaker 2: Governor Bailey though, said that you know, he worries about
Speaker 2: also a President Trump's attax on the FED and that
Speaker 2: could create shark waves for the UK. Do you agree
Speaker 2: with that.
Speaker 3: I think that people recognize that certainly with this government
Speaker 3: and with me as Chancellor, there's huge respect for independent
Speaker 3: economic institutions, whether that is the Bank of England or
Speaker 3: the Office of Budget Responsibility. One of the reasons why
Speaker 3: the UK has been you know, so has had challenging
Speaker 3: economic times the last few years is because the previous
Speaker 3: Conservative government, particularly under Liz Tras, both played fast and
Speaker 3: loose with the public finances but also undermine the economic
Speaker 3: institutions that make Britain have made Britain a safe and
Speaker 3: secure place to invest. We're undoing that damage, working closely
Speaker 3: with the independent Economic institution, but respecting their independence, and
Speaker 3: that collaboration and fiscal policy supporting monetary policy has enabled
Speaker 3: those six cuts in interest rates, taking rates down to
Speaker 3: three point seventy five percent. It's the fastest speed of
Speaker 3: rate reduction in the UK in seventeen years, and that's
Speaker 3: only possible because of the stability that we've returned to
Speaker 3: the economy and the decisions they've made on fiscal consolidation,
Speaker 3: and the IMF say that amongst developed economies we have
Speaker 3: got the fastest pace of fiscal consolidation over the next
Speaker 3: few years. That gives investors confidence around the stability in
Speaker 3: the UK, our grip on the public finances and our
Speaker 3: group on inflation.
Speaker 1: So there's no worry about central banking dependence.
Speaker 2: That could also impact or inspire maybe some of the
Speaker 2: opposition in the UK were they to come to power.
Speaker 3: Well, look, we won a massive majority just a year
Speaker 3: and a half ago. We have three and a half
Speaker 3: years remaining in our term in office, and that our
Speaker 3: economic plan to grow the economy with the stability return
Speaker 3: to the economy, bringing investment in global investment as well
Speaker 3: as unlocking domestic investment is the right plan. And in
Speaker 3: the next few months, as inflation returns to target with
Speaker 3: lower interest rates which are benefiting both households and businesses,
Speaker 3: that we will see the fruits of that in growth
Speaker 3: and higher living standards.
Speaker 2: Chance, I don't know whether you're a meeting with Scott
Speaker 2: Besson's the Treasury secretary here, whether or if you bump
Speaker 2: into him and promenade.
Speaker 3: Well ill with Scott last week in Washington. I'm seeing
Speaker 3: Secretary Lotnik later today. Our Prime minister spoke to President
Speaker 3: Trump just over the weekend. You know, as you would expect,
Speaker 3: there are very close relations between our country at all levels.
Speaker 2: See here and Davis yours have an announcement which is
Speaker 2: basically helping out with visas tell Us a little bit
Speaker 2: about that, and do you worry that it's going to
Speaker 2: be drowned in everything.
Speaker 1: Else that's going on. Just a little bit of news
Speaker 1: that we have out there.
Speaker 3: So I believe in free and fair trade. I believe
Speaker 3: in the benefits to businesses and also consumers of open economies.
Speaker 3: Economies that are open to trade, open to investment, and
Speaker 3: open to talent have always been the most successful economies.
Speaker 3: And I want Britain, even in a world where others
Speaker 3: are putting up barriers to trade and investment and talent,
Speaker 3: for Britain to be breaking down those barriers. And we
Speaker 3: are announcing today further changes in our global talent routes
Speaker 3: into the UK for three particular types of visa. The
Speaker 3: first is for foreign businesses looking to expand their footprint
Speaker 3: in the UK, working with them so that they can
Speaker 3: bring in talent as they expand their footprint. Second for
Speaker 3: UK businesses in our industrial strategy sectors, which includes financial services,
Speaker 3: business services, creative industries, clean energy, advanced manufacturing, defense, et cetera.
Speaker 3: For those businesses, if they are bringing in talent from
Speaker 3: overseas into the UK, their visas will be The fees
Speaker 3: for those visas will be waived. And then the third
Speaker 3: announcement today is that for really great talent looking to
Speaker 3: come to UK universities again, we'll waive those visas as
Speaker 3: well as a specific scheme for people gold medalists in
Speaker 3: the maths olympiad offering a number of scholarships to UK
Speaker 3: universities for those people, because we want Britain to be
Speaker 3: a magnet for global talent in the same way we
Speaker 3: want it to be the best place in the world
Speaker 3: to trade from and to invest.
Speaker 2: In chandswer there's a growing clamor and labor circles, even
Speaker 2: from some of your own Cabinet, for the UK to
Speaker 2: join a customs union with the US that on the.
Speaker 3: Cord No, it was very clear in our manifesto that
Speaker 3: we wouldn't be rejoining the Single Market, the Customers Union,
Speaker 3: or bringing back free movement of labor. But what we
Speaker 3: have done already is brought back the Erasmus scheme which
Speaker 3: enables young people both from the UK to go and
Speaker 3: study at European universities and young people from Europe to
Speaker 3: come and study at our brilliant universities in the UK.
Speaker 3: We also have agreements in principle from last May around
Speaker 3: the UK doing a food and farming deal, to reduce
Speaker 3: barriers to trade at the border around electricity trading and
Speaker 3: energy trading, as well as some form of youth mobility
Speaker 3: within the European Union and the United Kingdom. So we're
Speaker 3: making progress and all of that, looking to have another
Speaker 3: summit this year where we can mark ourselves on progress
Speaker 3: against those ambitions and set new ambitions, because that summit
Speaker 3: last year was just the start of improving relations between
Speaker 3: the UK and the U and the EU. And I
Speaker 3: would just say that, you know, these sort of times
Speaker 3: when others are putting up barriers to trade, what Britain
Speaker 3: is arguing for and what I believe in strongly is
Speaker 3: that those of us who believe in free and fair
Speaker 3: trade should practice what we preach and reduce barriers between ourselves.
Speaker 3: That goes to the UK, the EU, Canada and other
Speaker 3: allies around the world. And we are determined to lead
Speaker 3: from the front in that we've already secured trade deals
Speaker 3: with countries around the world. We want to do more
Speaker 3: in the months to come.
Speaker 2: But I mean mathematically, just you know, if you leave
Speaker 2: partics to unsaide again, rejoining the Customer Union could be
Speaker 2: more beneficial so do you see future at any point
Speaker 2: where the UK goes back again that we can't.
Speaker 3: Go back in time. And since we left the EU,
Speaker 3: we have done trade deals with India, with the US
Speaker 3: with career and obviously you would lose some of the
Speaker 3: benefits of those trade deals if you were to re
Speaker 3: enter a customs union, and things like the benefits of
Speaker 3: the deal we did with the US for our automotive sector.
Speaker 3: The deal that we have with India is better than
Speaker 3: the deal that any other country has with India. So
Speaker 3: I think you have to consider all of these things
Speaker 3: in the round. I don't think we need to return
Speaker 3: to the Customs Union to seize greater benefits of free
Speaker 3: and fair trade. And we are working peace by piece,
Speaker 3: but with a strategic goal in mind, which is to
Speaker 3: make it easier for British businesses to sell into European
Speaker 3: markets and for European businesses to sell in into British markets.
Speaker 3: And when the barriers to trade in other markets are
Speaker 3: going up, we want to create more opportunities for our
Speaker 3: businesses to trade with other countries around the world.
Speaker 2: There is of course big news about a new embassy
Speaker 2: Chinese embassy in London today. How do you see actually
Speaker 2: relationship with the UK and China evolving.
Speaker 3: Yeah, so we've given planning permission today for a new embassy.
Speaker 3: Obviously China already has an embassy in London. This will
Speaker 3: be a new embassy and move. But you know, if
Speaker 3: you just sort of take a step back, Britain has
Speaker 3: embassies in almost every country around the world, and almost
Speaker 3: every country in the world has an embassy in London.
Speaker 3: They are absolutely vital for diplomatic relations and also for
Speaker 3: resolving tensions. And so it is right that China has
Speaker 3: an embassy in London in the same way that it's
Speaker 3: important and right that the UK has an embassy in Beijing.
Speaker 3: And I was at our embassy in Beijing just last
Speaker 3: January when we restarted the economic and financial dialogue with China.
Speaker 3: It was the first time that we'd had an economic
Speaker 3: and financial dialogue between our countries for six years. And
Speaker 3: whilst other countries had been securing benefits for their financial
Speaker 3: services sectors in growing markets, in China, we refused to engage.
Speaker 3: And that was the wrong thing to do. It was
Speaker 3: not in Britain's interest and that's why we changed that approach.
Speaker 3: They hosted the Chinese hosted the Economic and Financial diagalog
Speaker 3: Dialogue last year. We secured significant benefits for UK businesses
Speaker 3: and we'll be hosting the next Economic and Financial Dialogue
Speaker 3: with our Chinese counterparts in the UK this year.
Speaker 2: If the US continues being a little bit, you know,
Speaker 2: not a little bit actually belligerent with Europe, do you
Speaker 2: see the UK being getting.
Speaker 1: Much much closer to China.
Speaker 3: Well, let's just look at the numbers. The US trades
Speaker 3: more as a share of GDP with China than the
Speaker 3: UK does. Almost every big country in Europe trades more
Speaker 3: with China than the UK does, and that's because the
Speaker 3: UK under successive conservative governments retreated from the global sphere
Speaker 3: for a number of years and that was a mistake
Speaker 3: and we lost out on growth and trade as a
Speaker 3: result of it. We are pursuing a very different approach,
Speaker 3: which is to relentlessly focus on our national interest, and
Speaker 3: our national interest means tackling the cost of living and
Speaker 3: growing our economy with more good jobs paying decent wages
Speaker 3: in all parts of our country. And we only achieve
Speaker 3: that if we bring more investment in international and domestic
Speaker 3: and if we achieve more opportunities for firms in Britain,
Speaker 3: employing people in Britain to then sell the excellent goods
Speaker 3: and services that we produce in the UK all around
Speaker 3: the world. And that's exactly what we're doing.
Speaker 1: Chansfer.
Speaker 2: Back in Westminster, a lot of people in Labor are
Speaker 2: thinking about a challenge to your leadership and to your
Speaker 2: Starmer's leadership in the coming months, especially if the local
Speaker 2: elections are very bad. What will you tell investors here
Speaker 2: in Davos who might be worried about are more left
Speaker 2: wing a PM and Chancellor getting in.
Speaker 3: I really don't think that people need to worry about that.
Speaker 3: Kere one and massive majority in Parliament and the Parliamentary
Speaker 3: Labor Party, the cabinet want the Prime Minister to succeed.
Speaker 3: Even if someone did have the stupid idea of challenging
Speaker 3: the prime minister is incredibly difficult to do so. And
Speaker 3: I have every confidence that Kiir will continue to be
Speaker 3: Prime Minister all through this term. I will continue to
Speaker 3: be Chancellor and hopefully into the second term as well.
Speaker 1: Nigel Faraj is arriving here in Davas.
Speaker 2: What would Prime Minister Viros She's doing very well in
Speaker 2: the polls mean for the UK economy?
Speaker 3: Well I think it would be very bad loose for
Speaker 3: the UK economy. Nigel Faraj believes in closed economies. He
Speaker 3: does not believe in the UK being open for trade.
Speaker 3: He sides with our adversaries rather than our friends, including
Speaker 3: with Russia, and they're more in Ukraine. And in terms
Speaker 3: of business, he was the cheerleader in chief of leading
Speaker 3: the European Union. He's opposed every trade deal that this
Speaker 3: government has done, including the deal with the US and
Speaker 3: including the deal with India. He doesn't believe in an
Speaker 3: independent central bank or those independent economic institutions which give
Speaker 3: stability to the UK economy. And I do think that,
Speaker 3: you know, businesses should without getting worried, should you know,
Speaker 3: think about the consequences of that and not just sit
Speaker 3: on the sidelines.
Speaker 2: I mean, does having him here in Davos taking meetings,
Speaker 2: I think ars meeting with possibly we don't have confirmation
Speaker 2: the US delegation, does that overshadow some of the work
Speaker 2: that you're trying to do with your delegation.
Speaker 1: No, not at all. There's no and there's no plans.
Speaker 3: He's got seven MP's in parliament France, and I know
Speaker 3: that people want to get excited or maybe a couple more.
Speaker 3: Who knows how many Tories have defected today. But you
Speaker 3: know he's got a small number of MPs. He's lost
Speaker 3: almost as many MPs as he's gained in this parliament
Speaker 3: because he's incapable of working with others. I'm not worried
Speaker 3: about Nigel Farrage. I believe that our plan is the
Speaker 3: right one. We are improving the cost of living for
Speaker 3: working people in Britain. We're bringing investment to Britain, inflation
Speaker 3: and interest rates that are coming down this year. Last
Speaker 3: year we had the second fastest growing economy in the
Speaker 3: g seven. Our plan is the right one. It will
Speaker 3: begin to reap dividends this year, especially as inflation gets
Speaker 3: back to target and the benefits of those trade deals
Speaker 3: begin to flow.
Speaker 2: But there is a perception that he's gaining momentum because
Speaker 2: of the defections.
Speaker 3: So I mean, you know, you've got these people who
Speaker 3: were defeated a year and a half ago in a
Speaker 3: general election, Robert Jeneric Andrew Rossendale, the other people whose
Speaker 3: names no one remembers, who lost the support of the
Speaker 3: British public a year ago, who are now changing the
Speaker 3: rests and think that that will change their fortunes it owns,
Speaker 3: and I do believe that the British public will see
Speaker 3: through that they kicked the Tories out for a reason.
Speaker 3: They're not going to just re elect them because they're
Speaker 3: now wearing a teal rosette rather than a blue one er.
Speaker 2: There are a lot of questions people want to know
Speaker 2: about taxes. I know you can't tell us about the
Speaker 2: next budget. I don't know whether you think that this
Speaker 2: new trade tensions could have an impact of the budget.
Speaker 2: But holistically speaking, if you were to raise taxes again,
Speaker 2: would you do it for wealth taxes or a general taxation.
Speaker 3: We've just had a budget and what I was able
Speaker 3: to do in that budget was to build a headroom
Speaker 3: of twenty one points seven billion pounds, more than doubling
Speaker 3: the headroom against our fiscal rules. I think that now
Speaker 3: puts us in a very strong position that we will
Speaker 3: not need to do more on that front. I'm not
Speaker 3: going to be able to write future budgets today. The
Speaker 3: world is a very uncertain place. But that increase in
Speaker 3: the headroom was very much I think welcome by markets
Speaker 3: and has given greater confidence to people that we can
Speaker 3: have stability on a fiscal front. As well. In addition,
Speaker 3: we've been really clear that the spring forecast from the
Speaker 3: OBR will not be a fiscal event in the same
Speaker 3: way that it has been in the past, and reform
Speaker 3: of the Office of Budget Responsibility means that we can
Speaker 3: now move to one major fiscal event a year, so
Speaker 3: that you, Francine and others don't ask me every week
Speaker 3: for a year what tax changes are planned. We don't
Speaker 3: plan any tax changes in the spring, and a very
Speaker 3: much hope after the headroom that we have built in
Speaker 3: through difficult decisions on tax and spending that provides the
Speaker 3: stability that we need.
Speaker 1: Every week chanswer. I thought we were more tenacious.
Speaker 2: I thought it was every day that we were asking
Speaker 2: you what are.
Speaker 1: You most looking forward to? In Davas we have one
Speaker 1: more minute.
Speaker 2: I mean, you know, we talk about disruption, sharks, there's
Speaker 2: a lot about AI, but is there something what have
Speaker 2: you come here to do?
Speaker 1: Well?
Speaker 3: This is my fourth time in Davos. I came twice
Speaker 3: as Shadow Chancellor to set out the the opposition approach
Speaker 3: to the economy. I learned a lot during those two
Speaker 3: visits about what international investors were looking for in the UK.
Speaker 3: I knew they wanted stability. I knew they wanted better
Speaker 3: support to leverage in the private sector investment the cash
Speaker 3: that was sitting there but wasn't coming to the UK
Speaker 3: because of that uncertainty. And I know that they wanted
Speaker 3: reform to how our economy works, planning reform, regulatory burdens, lifted,
Speaker 3: better trade opportunities with countries around the world. That is
Speaker 3: what we are delivering as a government now. I'm certainly
Speaker 3: not claiming that the first year and a half in
Speaker 3: office has been easy, or that every decision that we've
Speaker 3: made has been one that's welcomed by business. But when
Speaker 3: you look around the world, when you look at the
Speaker 3: delegations from around the world this week, I hope people
Speaker 3: see in Britain. I hope that businesses see in Britain
Speaker 3: a country that has returned to the stability, that is
Speaker 3: bringing investment, is changing how the economy works and is open,
Speaker 3: open to business, open to trade, open to investment, and
Speaker 3: as I set out today, open to talent as well.