Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: Well, quite a lot of speculation is getting pretty wide
Speaker 2: of the mark. But yeah, let's getting to the area
Speaker 2: which is wide of the mark.
Speaker 3: Welcome back to voter Nomics, where politics and markets collide.
Speaker 3: This year, voters around the world have the ability to
Speaker 3: move markets, countries and economies like never before, so we
Speaker 3: created this series to help you make sense of it all.
Speaker 3: I'm Stephanie Flanders.
Speaker 4: I'm Adrian Woodridge, and I'm alegra Stratton.
Speaker 3: Well, we started today's show with a bit from my
Speaker 3: interview with the UK Prime Ministers Keirs Starmer. We got
Speaker 3: a bit of news out of him, which we will
Speaker 3: discuss in a minute, But we were speaking at the
Speaker 3: International Investment Summit in London exclusively and you heard he
Speaker 3: pushed back against the capital gains tax speculation. But we
Speaker 3: also talked about the government's plans for regulation, the relationship
Speaker 3: with China, and his attitudes towards listing companies like Shean,
Speaker 3: which has been quite controversial. So we're going to play
Speaker 3: some highlights from that talk through perhaps the sort of
Speaker 3: the highs and lows of doing these interviews, the expectations
Speaker 3: not always fulfilled, and I think as part of this conversation,
Speaker 3: we wanted to bring in Alvarey, who's a reporter and
Speaker 3: the Readout newsletter contributor, to get her read on the
Speaker 3: whole summit really how the government's performed there and in
Speaker 3: the previous one hundred days. So Alva, I hesitate to ask,
Speaker 3: but what would you have tried to get out of
Speaker 3: the Prime minister if you had been talking to him yesterday?
Speaker 3: And do you think you would have been any more
Speaker 3: successful than I will?
Speaker 5: Oh?
Speaker 3: I think you.
Speaker 5: I think you made a valiant effort and as you say,
Speaker 5: you did get a news line out of him. It's
Speaker 5: a good waite, which doesn't always happen when people interview
Speaker 5: kre stars.
Speaker 3: I'm always reminded there is this great moment of kind
Speaker 3: of optimism about any of these kind of interviews, and
Speaker 3: Elegre will appreciate this, where you've done the brilliant questions,
Speaker 3: but you've not heard the sort of wordy answers. Yet
Speaker 3: you think you're going to get this fantastic interview where
Speaker 3: he answers all these amazing things. And of course, being
Speaker 3: a politician, particularly prime ministers, you never quite get what
Speaker 3: you were hoping to get. But we did hear quite
Speaker 3: a lot from him.
Speaker 1: He did commit new. We have this phrase commit news.
Speaker 1: He did commit news because I think what he said
Speaker 1: about CGT was interesting. You know, with what sixteen days
Speaker 1: before a budget or two weeks before a budget and
Speaker 1: to sort of give any kind of concrete shape, I
Speaker 1: mean for me, he seemed to be saying, you know
Speaker 1: what was wider the mark was the number, but that
Speaker 1: it did feel like CGT will go up.
Speaker 3: Yeah, And it came on a day where actually the
Speaker 3: Chancellor Rachel we've heard quite a lot about her loosening
Speaker 3: the fiscal rules, or at least changing the fiscal rules
Speaker 3: to allow more investment. What we heard from her was
Speaker 3: that she seemed to not think raising the National insurance
Speaker 3: employer's contribution in some way would be a breach of
Speaker 3: the Manifesto pledge. I did ask the Prime Minister about that.
Speaker 3: I wasn't able to get him on that, but I
Speaker 3: think it's interesting because obviously economists would not see much
Speaker 3: difference between those two and I think a lot of
Speaker 3: people reading the manifesto would not see much difference. But
Speaker 3: they seem to be making space for that kind of
Speaker 3: tax increase.
Speaker 1: Yes, to me, strategically really odd because you've got this
Speaker 1: day which is many huge, big bosses coming to the
Speaker 1: Guildhall and then supports cathedral last night to be serenaded
Speaker 1: by Elton John to talk about investing into the UK,
Speaker 1: and then Rachel reads the Chancellor goes out and as
Speaker 1: you said, say stuff. You know, she crosses the road
Speaker 1: to have the proverbial fight to say no, we think
Speaker 1: it's not going to be in breach of the manifesto.
Speaker 1: That's not the narrative that they should have wanted out
Speaker 1: of yesterday. They should have wanted out of yesterday exactly
Speaker 1: what Kistarma was saying to you, which is a decent line.
Speaker 1: It shouldn't have been thought of as a top line.
Speaker 1: But you know, no, Stephanie, everyone I talked to is
Speaker 1: asking me about planning reform, not about tax I think
Speaker 1: you know that was never going to be the sort
Speaker 1: of you know, front page splash. But nonetheless, you know
Speaker 1: it's a fair point and it probably does reflect some
Speaker 1: of the conversations in the room. But instead you then
Speaker 1: had language from the Chancellor that is more significant.
Speaker 3: We probably ought to actually allow people to hear a
Speaker 3: few minutes of our conversation and This is the first
Speaker 3: half of the interview. I began just talking about the
Speaker 3: rather challenging environment in which he was having the summit.
Speaker 2: There's been a drum beat of inward investment over recent weeks,
Speaker 2: which I think demonstrates that although yes, of course we've
Speaker 2: had to signal that there are tough decisions to make
Speaker 2: because of the damage that's been done to our economy,
Speaker 2: we've just got to be straight with people about that.
Speaker 2: We do have amazing assets in this country in terms
Speaker 2: of our skills, our people, our universities, our cutting edge
Speaker 2: when it comes to technologies like AI, for example, and
Speaker 2: that's why making that really clear statement of inten today
Speaker 2: was very important. And I think quite a lot of
Speaker 2: the inward investment decisions we've seen, running into tens of billions,
Speaker 2: are of indication, if you like, of the approach that
Speaker 2: we're taking in partnership with the investors and the businesses,
Speaker 2: many many of whom are here today.
Speaker 3: I mean, one of the things that you've been clear
Speaker 3: about was that tax and the chances has been clear
Speaker 3: about is that difficult decisions will be needed. Tax increases
Speaker 3: will be needed to pay for that investment in public
Speaker 3: services that people are expecting and given all the taxes
Speaker 3: that you've ruled out, there's a lot of concern here
Speaker 3: in the business community about increases in capital gains tax
Speaker 3: and in wealth tax. Now, I know you're not going
Speaker 3: to want to go into the details of the budget,
Speaker 3: but are you reassuring the investors here that they have
Speaker 3: nothing to worry about on that score.
Speaker 2: Well, I'm not going to get into the details of
Speaker 2: the budget. You wouldn't expect me to, but neither are
Speaker 2: I'm going to shy away from the fact that we've
Speaker 2: got difficult decisions to make. The last government left a
Speaker 2: twenty two billion pound black hole and we're not going
Speaker 2: to walk past that. We're going to have to deal
Speaker 2: with it. So that'll be tough. But what have been
Speaker 2: able to be very clear with investors and businesses is
Speaker 2: because growth is the number one mission, then decisions, whether
Speaker 2: it's on the budget or anything else, will be determined
Speaker 2: by whether they help growth or not. So that's the
Speaker 2: lens through which we're seeing this. But I have to
Speaker 2: say the discussion here, we've had intense discussions all day
Speaker 2: long last night as well with a number of people
Speaker 2: in the room that we've got to know over the
Speaker 2: last two years, so this is the first time we
Speaker 2: meet it. All of the discussion today has not actually
Speaker 2: been about tax. It's been about planning. It's been about
Speaker 2: the regulatory environment. It's been about getting infrastructure moving much
Speaker 2: more quickly and the sort of apparatus of government working
Speaker 2: to that common end. That's the real discussion that's going
Speaker 2: on here. That's the real focus. And actually, contrary to
Speaker 2: perhaps what people might think, tax is not the first
Speaker 2: thing that businesses and investors are raising with me. First
Speaker 2: thing they're raising with me is is it really your
Speaker 2: number one mission? Is it going to be stable and
Speaker 2: strategic and for the long term, to which the answer
Speaker 2: is yes, And are you prepared to do the tough
Speaker 2: things on execution and the deliverables, which is about, you know,
Speaker 2: the length of time it takes from investment decision to
Speaker 2: actually seeing a project materialize. That's where I think we've
Speaker 2: been able to do a lot of reassurance that yes,
Speaker 2: we understand that and we're determined to do the follow
Speaker 2: through on growth that is desperately needed for investors, for
Speaker 2: our country and for the jobs of the future.
Speaker 3: Forgive me, Prime Minister, but I think a lot of
Speaker 3: people they may not be talking about it to you.
Speaker 3: But a lot of people are worried. In this sort
Speaker 3: of vacuum that we've had quite a long wait for
Speaker 3: the budget. There's quite a lot of what might be
Speaker 3: might be just crazy speculation around where capital gains tax
Speaker 3: might go, for example, so something like a thirty nine
Speaker 3: percent rate. Can you reassure people that whatever the change is,
Speaker 3: it won't be anything that signifant.
Speaker 2: Well, quite a lot of speculation is getting pretty wide
Speaker 2: of the mark. But is the market there is. Yeah,
Speaker 2: it's get into the area which is wide of the mark.
Speaker 2: But I'm not going to fuel the speculation because we
Speaker 2: can go on like this for a very long time
Speaker 2: until budget day. Everybody knows until budget day none of
Speaker 2: that is going to be revealed. It was important that
Speaker 2: when we came into office, into government, we looked at
Speaker 2: the books, we assess the state of the economy. We
Speaker 2: needed to understand the damage that's been done and that
Speaker 2: twenty two billion pound black hole is a real problem
Speaker 2: that we've got to deal with and make sure that
Speaker 2: we go through all the processes necessary for a properly
Speaker 2: thought through budget. So that's why we put the timing
Speaker 2: as it is. It's the right timing. But equally, it's
Speaker 2: been really fantastic to have this investment summit just a
Speaker 2: few weeks before the budget, where the mood music here
Speaker 2: is very upbeat. People are talking about a real opportunity
Speaker 2: now to invest in the UK, comparing it as a
Speaker 2: relative advantage across the world. We want to seize that
Speaker 2: opportunity and take it boward with many of the investors
Speaker 2: that are here.
Speaker 3: You're looking at books, but obviously people are also just
Speaker 3: sort of checking when they think about I know you're
Speaker 3: not going to reveal what's on the budget, but when
Speaker 3: they're thinking about what you've committed to and what you've
Speaker 3: not committed to. For example, the pledge not to increase
Speaker 3: natural insurance contributions. Most people I talk to think that
Speaker 3: if you increase the employer side of that, the employer contribution,
Speaker 3: that would be breaking that pledge. Can we without getting
Speaker 3: into the budget, can I just check that is your
Speaker 3: understanding that that would be breaking that pledge.
Speaker 2: Well, you're saying, without getting against.
Speaker 3: The publict it's your pledge.
Speaker 2: We made commitments in our manifesto and we intend to
Speaker 2: deliver on those commitments. Beyond that, I'm afraid you'll have
Speaker 2: to wait for the budget for the details. For very
Speaker 2: obvious reasons, we're still weeks away from the final assessment
Speaker 2: in the budget.
Speaker 3: I guess that what feel you said, it's the right
Speaker 3: timing for this summit. It does feel a bit odd
Speaker 3: that for those people in the room, people who are
Speaker 3: doing deals today, you can't promise them that the basic
Speaker 3: tax environment for entrepreneurs, for business, for wealth in a
Speaker 3: couple of weeks time won't be completely different.
Speaker 2: Well, they're very interested that corporation tax is capped. They
Speaker 2: know exactly where that is in the long term. They're
Speaker 2: very interested in the fact that we're able to say
Speaker 2: that because we've got a good, strong majority in government,
Speaker 2: we're able to make decisions based on years, not months,
Speaker 2: with a clear strategy. They're very very interesting when I
Speaker 2: talk them about being a mission driven government, a government
Speaker 2: with a real sense of purpose measured over years, with
Speaker 2: one central purpose, which is wealth creation translated into jobs
Speaker 2: in different parts of the United Kingdom. That's the sort
Speaker 2: of stability that they're looking for, and that's the conversations
Speaker 2: we're having. They're very pleased to hear that from a government.
Speaker 2: I'm very pleased about the clarity. There's no end of
Speaker 2: people here today have said the clarity of the message
Speaker 2: is really welcome. It's now the follow through, which is
Speaker 2: actually the execution of it. What are you prepared to
Speaker 2: do when it came to planning, what you're prepared to
Speaker 2: do when it comes to regulation. It's not just the
Speaker 2: number of regulations, it's the inconsistency of regulation that we
Speaker 2: need to deal with. And when I'm able to say
Speaker 2: with real confidence and certainty and clarity, yes, we're going
Speaker 2: to deal with that, that leads the decisions, in my view,
Speaker 2: to make the sort of investment that we've seen in
Speaker 2: recent weeks, which is very welcome. These are not just
Speaker 2: big numbers, although they are big numbers, they translate into
Speaker 2: jobs around the United Kingdom, good, well paid, secure jobs.
Speaker 2: And that's the change we promised at the election and
Speaker 2: the change that I'm determined to deliver on.
Speaker 3: Just looking at the summit, do you think they did
Speaker 3: what they wanted to do and what do you make
Speaker 3: of this tax speculation?
Speaker 5: I think that they are pretty happy with how it
Speaker 5: went yesterday, All things considered. They feel like they hit
Speaker 5: the lines that they wanted to. I mean the line
Speaker 5: that you've got our d of care Starmer. Clearly they
Speaker 5: wanted to send that thing, or they show that they
Speaker 5: do make exceptions when they think budget speculation is too
Speaker 5: of the mark, And clearly they wanted to shoot that
Speaker 5: dining ratio.
Speaker 1: So was licensed to go and say that.
Speaker 5: I think so. I think probably yeah, And in the notes,
Speaker 5: if pushed, you can say this, you definitely don't want
Speaker 5: to give the opposite impression. I would imagine that's how
Speaker 5: it went, even though probably ideally he would have stuck
Speaker 5: to the line that you mentioned Allegra and then on
Speaker 5: the employer nix. I think, and we've had a little
Speaker 5: bit more from Keir Starmer as well, and not saying
Speaker 5: the same as Rachel reeves, This seems like something that
Speaker 5: they do clearly intend to do, unless it's all kind
Speaker 5: of mind games. But I think I think that they
Speaker 5: feel like they have just enough space or plausible deniability
Speaker 5: to say that this wasn't a manifesto Pleasure wants fluttering.
Speaker 4: They've given a very positive assessment of what's going on,
Speaker 4: but let me be a little bit more negative. First
Speaker 4: of all, they're very incredibly confused with their messaging. They've
Speaker 4: spent the last few weeks telling us that Britain is
Speaker 4: a basket case in all sorts of ways. Its infrastructure
Speaker 4: is crumbling. It made this dramatically stupid mistake of leaving
Speaker 4: the EU, and now they're saying to all these people
Speaker 4: invest here. That's a very odd way of going about government.
Speaker 4: And secondly, about the Starmer speech, this is sort of
Speaker 4: we tend to think of this in terms of cat
Speaker 4: and mouse. We try and get him to say things
Speaker 4: that tell us what's going to be in the budget,
Speaker 4: and he tries to stop himself from doing that and
Speaker 4: keep the surprise there. But I just wonder if that's
Speaker 4: not the right game to be playing. A better game
Speaker 4: would be providing a sort of intellectual framework that justifies
Speaker 4: what you're doing. Of course he can't give away what's
Speaker 4: in the budget, but what he must do is set
Speaker 4: up a set of visions of tactics and all of
Speaker 4: that sort of thing, and he just doesn't do that
Speaker 4: in this interview.
Speaker 5: Yeah, well, you were all smiling when I mentioned the
Speaker 5: employer nix and the government rolling the pitch for that.
Speaker 5: I wonder what you make of that. It does look
Speaker 5: like that is what the government intends to do as
Speaker 5: one of its main revenue raisers. In budget No. I
Speaker 5: think that they feel like they can just about make
Speaker 5: the case that this isn't breaking a manifesto commitment, that
Speaker 5: it's sufficiently ambiguous, because the Tories were pushing them to
Speaker 5: rule it out during the election campaign, so you could
Speaker 5: plausibly make an argument that it wasn't in the manifesto itself.
Speaker 5: I think they feel like they've got enough space there
Speaker 5: and then this raises enough money in one way.
Speaker 4: But reinforced the sense on the part of the electorate
Speaker 4: that even if they were not lying directly, they were
Speaker 4: really trying to pull the wall over people's eyes and
Speaker 4: undermine trust in the electorate. We know, really that they
Speaker 4: made a lot of us about not raising these big taxes,
Speaker 4: and now they seem to be squirming around in order
Speaker 4: to be able to do it. They may be able
Speaker 4: to get away with they've got a vast majority, they
Speaker 4: may have left themselves wiggle room, but we don't want
Speaker 4: to be governed by people who are looking for wiggle and.
Speaker 1: That kind of great independent judge of these things. Paul Johnson,
Speaker 1: who's the head of the Institute for Fiscal Studies, came
Speaker 1: out yesterday and said it would be a straightforward breach
Speaker 1: of the manifesto, and I think Adrian is right. You
Speaker 1: play with fire when you have an apathetic electurate that
Speaker 1: thinks they're all the same and don't talk to you straight.
Speaker 4: But the impression I get from all of this is
Speaker 4: that we're going to tax labor more heavily, increase the
Speaker 4: cost of employing people, and we're going to tell employers
Speaker 4: how to employ people. I mean, we're going to make
Speaker 4: lots and lots of rules about workers' rights, which you
Speaker 4: contributes to the extent of regulation and which diminishes your
Speaker 4: power as a manager to manage. I think both of
Speaker 4: those are very dubious moves for a government that believes
Speaker 4: in wealth, supposedly believes in wealth creation.
Speaker 3: But this is one of those times where I think
Speaker 3: the politics versus the economics, if you just look at
Speaker 3: the economics, you know the reason they are in this
Speaker 3: hole talking about wealth taxation, talking about capital gains tax,
Speaker 3: which they don't really want to be talking about when
Speaker 3: they're trying to attract investment and support growth, is because
Speaker 3: they've ruled out reversing these most recent nationals surance cuts,
Speaker 3: which the country really couldn't afford. They cost twenty billion pounds,
Speaker 3: and I think there's a world in which they could
Speaker 3: have said, you know, we're not raising ASTRA insurance beyond
Speaker 3: what they were a year ago, but we don't think
Speaker 3: these recent cuts, which by the way, you've barely noticed,
Speaker 3: are affordable, and we are going to reverse those now.
Speaker 3: Who knows whether they could have done that, but if
Speaker 3: they effectively do that via the employer contribution, it doesn't
Speaker 3: actually make a bit. It doesn't affect employment anymore or less.
Speaker 3: To do it on the employer side. On the employee side,
Speaker 3: they'll be doing it in a politically cack handed way.
Speaker 3: But a lot of economists would say, yeah, that makes
Speaker 3: sense because we couldn't afford those recent cuts anyway. One
Speaker 3: thing I wanted to get onto after that part of
Speaker 3: the interview was this tension between the focus on ethics
Speaker 3: and the focus on attracting investment. I think comes up
Speaker 3: big time, particularly in relation to Chinese companies, but also Sheen,
Speaker 3: the online retailer so controversial that it has not been
Speaker 3: able to list in the US because of accusations around
Speaker 3: forced labor of Weiga workers in Shinjang. And I was
Speaker 3: quite interested. I mean, Alva, do you think this is
Speaker 3: going to be an issue for them because the previous government.
Speaker 3: We're trying desperately to get Sheen because a lot of
Speaker 3: other people don't want to list in the UK anymore.
Speaker 3: But this is quite controversial.
Speaker 5: Well yeah, I think that privately the government says that
Speaker 5: they're open to this. I read that as they are
Speaker 5: pretty keen really like they do want more listings in
Speaker 5: London and this would be a record size of listing.
Speaker 5: They've had meetings with Shean quite a bit privately, even
Speaker 5: in opposition. This is something that they do want to
Speaker 5: see happen, but they're careful about the language around it because,
Speaker 5: as you say, there's a lot of concern on the
Speaker 5: labor backbenches and just in Parliament in general about the
Speaker 5: employment practices of Shean, and they've managed to avoid too
Speaker 5: much scrutiny on it. But I think it will come
Speaker 5: to a head. There are some people who are clarly
Speaker 5: keen to raise this in Parliament in the coming week.
Speaker 5: So I think it was good that you pressed him
Speaker 5: on that. The way that the government always gets around
Speaker 5: this when they're asked about it is they say, well,
Speaker 5: if they're listed in London, they would be subject to
Speaker 5: UK employment regulation. And so I think it was good
Speaker 5: that you said, what does that actually mean? Does that
Speaker 5: mean that they have to stop using workers in Shinjang?
Speaker 5: What kind of reassurances will you need? And it was
Speaker 5: the first indication from Kure Starmer that actually they will
Speaker 5: need to do that. My understanding is that they've given
Speaker 5: she In reassurance is that they won't block any attempt
Speaker 5: to list. But if they need, actually she And to
Speaker 5: change a big part of their employment model, then I
Speaker 5: think that that's pretty interesting. I mean, she and I
Speaker 5: think has always rejected the suggestion that they use slave labor.
Speaker 4: I think Britain's in a very difficult position in the
Speaker 4: relationship with China because we can't trade as much as
Speaker 4: we'd like to on the tech side, so we have
Speaker 4: to redefine what our trading relationship is. And you know,
Speaker 4: a fast fashion company doesn't pose national security problems, so
Speaker 4: that's the sort of area where we ought to be
Speaker 4: doing that. But you know, again there's this tension between
Speaker 4: on the world one hand, the focus on investment at
Speaker 4: any cost or and on the other worker's rights at
Speaker 4: any cost. And you know, saying we're going to we're
Speaker 4: going to be much more concerned about workers' rights. But
Speaker 4: on the other hand, we're going to trade with somebody
Speaker 4: who uses very dubious sources of labor.
Speaker 3: In But do you think it actually should be disqualifying
Speaker 3: for the UK Stock Exchange to have if it turned
Speaker 3: out they had forced that. It was, of course the
Speaker 3: question you always have one question, you wish you'd ask
Speaker 3: three more twice.
Speaker 4: If they use force labor, absolutely they shouldn't be they
Speaker 4: should not be allowed to listen on the UK Stock Exchange. Again,
Speaker 4: as I was saying earlier, these are very mixed messages.
Speaker 3: So maybe we should listen to that bit of the
Speaker 3: interview and then see whether he's come out with a
Speaker 3: coherent policy. So you talked about mission led government and
Speaker 3: ethics led governments obviously in a feature. But there is
Speaker 3: another company, Sheen, which was considered to be such a
Speaker 3: rogue operator in the U s that it hasn't been
Speaker 3: able to list on the US stock market. It was
Speaker 3: too controversial as working practices. But it seems that your
Speaker 3: government is continuing their sort of open arms policy for
Speaker 3: she wanting Sheen to list here. Is that right?
Speaker 2: Well, I think we've got to get the balance right,
Speaker 2: and clearly we've got to have standards, high standards. We
Speaker 2: do have high standards, not least for example in rights
Speaker 2: at work, and I addressed that in my speech here
Speaker 2: today to say look better rights and protection for people
Speaker 2: in their workplace are good for growth. So we're clear
Speaker 2: where we stand on standards, but we're future looking, we're
Speaker 2: pragmatic and subject to those standards. Then, yes, we do
Speaker 2: want investment into the United Kingdom because we desperately need
Speaker 2: growth in this time. We have had meaningful growth in
Speaker 2: the economy in the United Kingdom for fourteen long years.
Speaker 2: We're determined to turn that around.
Speaker 3: But just to be clear on that, so the government
Speaker 3: would need to be sure that she's not using forced
Speaker 3: labor in Hinjang before it could list in the UK.
Speaker 2: I'm not going to get into individual businesses. What I
Speaker 2: will say would be very about it. Standards and high
Speaker 2: standards do matter to us, so of course we'll be
Speaker 2: looking at any issue that goes to high standards, with
Speaker 2: a particular feature on the rights of the workforce. We've
Speaker 2: been really clear that we see that as two sides
Speaker 2: of the same coin when it comes to growth, good
Speaker 2: employment rights and protections and a lot of drag on
Speaker 2: growth they're fundamental for growth, and I think pretty well
Speaker 2: all good businesses understand that, which is why in many
Speaker 2: cases they've already put in place some of the rights
Speaker 2: and protections that we are bringing forward in legislation on China.
Speaker 3: And you had an interesting conversation with there it shmitt
Speaker 3: that this morning that touched on China. I'm interested. You know,
Speaker 3: right now we have the Chinese Army holding drills around
Speaker 3: democratically governed Taiwan, which they admit are a rehearsal or
Speaker 3: a practice for a full naval blockade of this place
Speaker 3: that produces most of the high quality advanced chips in
Speaker 3: the world. I'm just wondering. I mean, we have the
Speaker 3: Foreign Secretary on his way to Beijing later in the week.
Speaker 3: Do you worry about the timing? Do you worry about
Speaker 3: the signal that sends on a week that the army
Speaker 3: is literally practicing potentially an invasion or a blockade of Taiwan.
Speaker 2: Well, the approach i'd take is this that national security
Speaker 2: has to come first, so that's the number one priority,
Speaker 2: and therefore, of course we challenge where it's necessary to
Speaker 2: do so. But we're also pragmatic and we want our
Speaker 2: country to move forward and to succeed. So challenge where
Speaker 2: it's necessary, but there are areas not.
Speaker 3: Necessary when they're really well, we have kind of practice challenged.
Speaker 2: We do challenge, I myself spoke to the President. We
Speaker 2: do challenge where it's necessary to do so. But you know,
Speaker 2: we are pragmatic as well, and we need to make
Speaker 2: sure that we get that balance right when it comes
Speaker 2: to our relation with China.
Speaker 3: I mean, just to follow up on that, when you
Speaker 3: say pragmatic, it feels like you're going to be more
Speaker 3: pragmatic than the previous government. They ceased inter that sort
Speaker 3: of major nomic cooperation, the dialogues, other things. When China
Speaker 3: imposed the National Security Law on Hong Kong. Are we
Speaker 3: sort of officially saying we're over that now.
Speaker 5: Well.
Speaker 2: I think the problem with the last government is they
Speaker 2: veered from one side of the road to the other
Speaker 2: side of the road and then back again, and that
Speaker 2: just led to a pretty chaotic approach. I think everybody
Speaker 2: understands the national security first approach that we must take
Speaker 2: and will take. Everybody understands that we do challenge where
Speaker 2: it's necessary to do so, but equally when it comes
Speaker 2: to I don't know, for example, climate change. We're going
Speaker 2: to have to work with countries like China because it's
Speaker 2: the only way that we can all go forward.
Speaker 3: I mean, of course, some of this is problems with
Speaker 3: their own making, and then there are challenges, as you hint, Madrian,
Speaker 3: that are about the world and Britain in the world.
Speaker 3: You know, Britain having been We've talked about this for Germany,
Speaker 3: but Britain also has a lot vested in a model
Speaker 3: of globalization which no longer exists. Is not it financially
Speaker 3: in a position to do what the US has done,
Speaker 3: And that comes up very much what I was trying
Speaker 3: to get to in the interview with regard to China
Speaker 3: more generally, you know, And in fact he had done
Speaker 3: the Prime Minister had done an on stage session with
Speaker 3: the former head of Google, Eric Schmidt, where Eric Schmitt
Speaker 3: was actually at some point actually seemed to be almost
Speaker 3: sort of not lecturing, but sort of explaining to the
Speaker 3: Prime Minister how the world was these days, that he
Speaker 3: was actually going to have to choose, and Britain wouldn't
Speaker 3: be able to choose China, it would have to choose
Speaker 3: the US, and it couldn't be confused about that. And
Speaker 3: I thought That was quite telling, because this is a
Speaker 3: government that is struggling with being open to China, wanting
Speaker 3: to have that relationship in a world where that's becoming
Speaker 3: harder and harder. So he talked there about they always
Speaker 3: fall back on pragmatism when they haven't got anywhere else
Speaker 3: to go. But Adrian, do you think it's practical to
Speaker 3: have for them to reopen some of these channels for
Speaker 3: economic dialogue and all these things that even the conservatives
Speaker 3: thought they couldn't sustain after the Hong Kong National Security Law.
Speaker 4: First of all, it's very difficult to do that, but secondly,
Speaker 4: the United States is really confronting written with the choice
Speaker 4: you either side with us or who side with China?
Speaker 4: And now we're no longer part of the EU, that's
Speaker 4: an even more pressing, pressing choice and we will have
Speaker 4: to side with the EU. And just saying well, let's
Speaker 4: go for fast fashion is not a way forward. So
Speaker 4: David Lamon is going to have a very difficult time
Speaker 4: in China making sense of me in.
Speaker 3: The week where they're practicing having a blockade of Taiwan.
Speaker 3: Absolutely absolutely, I mean, Alva, what's the on the labour side,
Speaker 3: how much nervousness is around China or they've just got
Speaker 3: too long a list of other things to worry about.
Speaker 5: I don't hear it come up very much. I think
Speaker 5: probably it will more. I think it doesn't in the
Speaker 5: context of what you do. Aren't sanctions on Chinese goods?
Speaker 5: Definitely there are labor MPs even when they were candidates.
Speaker 5: People thinking about Britain's industrial strategy and how you manage that,
Speaker 5: whether you put tariffs on Chinese evs and things like that.
Speaker 1: How much do you think that this is a government
Speaker 1: that is slightly split and conflicted on some of these
Speaker 1: big questions, and just because huge majority in such an
Speaker 1: early stage, we're not seeing it yet.
Speaker 5: I think that it's interesting. Also, as Adrian was talking
Speaker 5: about with the Workers' Rights Package and then trying to
Speaker 5: attract investment, I guess labor has been in opposition for
Speaker 5: so long and had in some ways. You know, they're
Speaker 5: accused of not being well prepared in some ways, they've
Speaker 5: had too long to think about what they would do
Speaker 5: in government. And some promises are very very old, and
Speaker 5: some things are newer and a response to challenges today,
Speaker 5: and something like the workers Rights Package is very old
Speaker 5: that these aren't very old commitments that they have made.
Speaker 5: This is the sort of thing that they feel like
Speaker 5: a labor government should do, Like there's no point in
Speaker 5: being in power if you can't do something like that.
Speaker 5: And then so then they find themselves in this situation
Speaker 5: where they've got their old promises and their new promises
Speaker 5: and they're facing a different directions. Different people in the
Speaker 5: cabinet prioritize different values, and then it doesn't come coherent
Speaker 5: too one overarching domestic narrative. That's been the big criticism
Speaker 5: even from people within government of their the past one
Speaker 5: hundred days, that they don't have leadership from the front.
Speaker 5: Keir Stammer saying, this is the overall thing.
Speaker 3: I think we're going to come back to this quite
Speaker 3: a lot. And there's this I think, Alva, what you
Speaker 3: were bringing us back to is that sort of hole
Speaker 3: at the center, you know, when people go back to
Speaker 3: it's an unfair comparison because there haven't been many more
Speaker 3: effective Number ten operations than the ninety seven Tony Blair operation.
Speaker 3: Just the depth of talent there, the seniority of the
Speaker 3: people there, the David millerbands that ever butt, Jonathan Powell's
Speaker 3: all those people that is clearly lacking in this government.
Speaker 4: And well people weren't senior, were they They were quite
Speaker 4: most of them.
Speaker 3: Well this is where they not, but they were. But
Speaker 3: they were people who had been with the Prime Minister
Speaker 3: for a very Tony Blair for a long time. They
Speaker 3: had all been together for four or five years. And
Speaker 3: I think that's one of the key things. There's not
Speaker 3: of that kind of text is so important though you
Speaker 3: and the social media.
Speaker 1: Social media has fast forwarded the demand for people to
Speaker 1: react to negative news. The scrutiny is so intense and
Speaker 1: so you know, you can have three news stories within
Speaker 1: a day. And it's also we've now got this kind
Speaker 1: of sense of real voter discontent, which that government was
Speaker 1: you know, you know, either at the start of orhad.
Speaker 4: Everything that everything is also of raw talent, and I
Speaker 4: just don't think there's the raw talent here that there
Speaker 4: was in in in ninety seven.
Speaker 3: But I think this goes back to the unfair comparsion.
Speaker 3: There isn't that raal talent on the other side either them.
Speaker 3: This is the best government that we couldn't have.
Speaker 4: I think that's true. That's true, all right.
Speaker 3: On that happy note, Albert Adrian let Thank you very much,
Speaker 3: and I'm sure we will return these topics. Thanks for
Speaker 3: listening to this week's photon Nomics from Bloomberg. This episode
Speaker 3: was hosted by Me Stephanie Flanders with Allegra Stratton and
Speaker 3: Adrian Waldridge. It was produced by Summer Sadie, with production
Speaker 3: support from Chris Martinlou and Isabella Ward and sound design
Speaker 3: by Moses and dam Brendan Francis Newnham is our executive
Speaker 3: producer and Sage Bowman is Head of Podcasts, with special
Speaker 3: thanks to Secure Starmer and Harris Broad and Alviray. Please subscribe, rate,
Speaker 3: and review this podcast highly wherever you get your fix
Speaker 3: of podcasts