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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Bloomberg's editor in chief John Mickelthwaite is in conversation with

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Speaker 2: the UK Chancellor Rachel Reeves.

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Speaker 3: Let's take a listen. Three bits of news maybe to

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Speaker 3: deal with. First, and the biggest and most obvious is

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Speaker 3: Donald Trump's inauguration. He's already kicked off with tariffs on

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Speaker 3: Canada and Mexico. Now he's talking about China. Now. Britain

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Speaker 3: is an unusually open economy. I think we will argue

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Speaker 3: about the numbers downstairs, but by some counts, and if

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Speaker 3: sixty percent of trade equipment to sixty percent of GDP,

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Speaker 3: I suppose. My question is, you know how vulnerable are

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Speaker 3: we to this, especially given the fact that we've already

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Speaker 3: come out of the European Union. One of you your

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Speaker 3: trade Good morning everyone, it's a yeah.

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Speaker 1: I mean going around Davos, seeing making eye contact with

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Speaker 1: all your trade ministerial counterparts, you can.

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Speaker 4: Imagine what is on our mind, right and no conversation,

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Speaker 4: but I think it was a few things on this.

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Speaker 4: First of all, yes, the UK is a.

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Speaker 1: Very globally orientated, trade intensive economy. That is a good thing.

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Speaker 1: That openness to the rest of the world will be

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Speaker 1: championed by this government and actually there are opportunities to

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Speaker 1: expand on that. I think at a unique selling point

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Speaker 1: in terms of our relationship with the Gulf and the

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Speaker 1: trade deal, negotiating our aspirations with India, the EU reset,

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Speaker 1: hopefully maybe some things with the US that come out

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Speaker 1: of this, the China engagement that you have kicked off, Chancellors.

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Speaker 1: So you know, yes, there's a vulnerability, that there's a

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Speaker 1: strength that comes from that openness to the world as well.

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Speaker 4: So let's recognize that.

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Speaker 1: The second thing is, look, we understand there is a genuine,

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Speaker 1: you know, analysis in the US that feels that the

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Speaker 1: very big trade deficits in goods that the US has

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Speaker 1: bok with the EU and with China, you know, the

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Speaker 1: sense of unfairness that that is the proof point of

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Speaker 1: we understand that we might disagree, but we know we'll

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Speaker 1: engage with that. Now you're right to say we are

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Speaker 1: an incredibly globally orientated economy, but also we obviously don't

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Speaker 1: have that trade.

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Speaker 4: US does not have that trade deficit on manufactured goods

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Speaker 4: with the UK.

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Speaker 1: Musing we have said this to the Cabinet last week,

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Speaker 1: but the UK and the us actually believe we have

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Speaker 1: a surplus rate to other own goods because of asymmetric

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Speaker 1: statistical quirk. So there's the basis for a conversation there

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Speaker 1: as to the future. But you know it will be

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Speaker 1: a truppy time to be a trade minister, there's no

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Speaker 1: doubt about that. But our job is to navigate through that.

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Speaker 1: You don't get to pick the world as you want

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Speaker 1: it to be. You get the world as it is.

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Speaker 1: And I do believe you know, the unique pitch from

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Speaker 1: the United Kingdom can be first of all, a return

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Speaker 1: to political stability, which we appreciate after their Brexit referendum

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Speaker 1: has been challenging in the UK, but that's also relative

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Speaker 1: to some other European countries as well.

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Speaker 4: That pitch to openness.

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Speaker 1: And then I know something you'll want to get into,

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Speaker 1: which is the willingness of this new government to use

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Speaker 1: its mandate to use the opportunity we have to fundamentally

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Speaker 1: improve the business and investor environment in the UK.

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Speaker 3: So can I come on to that straight away because

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Speaker 3: another piece of news is overnight you got rid of

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Speaker 3: the Chairman of the Competition of Markets Authority, and people

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Speaker 3: conceive that as being a pro growth, pro deregulation because

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Speaker 3: one of the things about Trump is yes business people

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Speaker 3: people at Davos are scared of his trade wars, but

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Speaker 3: they do like the pro growth deregulatory side of Trump.

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Speaker 3: Is this a sign of more things to come in

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Speaker 3: terms of regulation?

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Speaker 5: Growth is the number one mission of this new labor government.

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Speaker 6: Six months in.

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Speaker 5: We are building the foundations to deliver that strong growth

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Speaker 5: that has eluded the UK for far too long, more

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Speaker 5: than a decade of very slow, sluggish economic growth, and

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Speaker 5: we want our regulators to be part of that growth mission.

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Speaker 6: Now.

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Speaker 5: Of course, the regulators are independent and the chair of

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Speaker 5: the CMA decided to step down, but he recognized that

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Speaker 5: this government have got different strategic approach when it comes

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Speaker 5: to regulation, and he recognized that there was time for

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Speaker 5: him to move on and make way for somebody who

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Speaker 5: does share the mission and the strategic direction that this.

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Speaker 6: Government are taking.

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Speaker 5: So we wrote myself, Johnny the Prime Minister, to all

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Speaker 5: of the regulators, as more than one hundred regulators in

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Speaker 5: the UK were written to all of them and said,

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Speaker 5: what can you do to reorientate your organization to regulate

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Speaker 5: not just for risk And of course regulating for risk

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Speaker 5: is important, but regulating for growth. I've done it with

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Speaker 5: the financial services regulators. We've now done it with all

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Speaker 5: of the regulators. I've got to say the responsors we've

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Speaker 5: had a lot of them have been incredibly positive about

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Speaker 5: things that they can do.

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Speaker 3: Would you want financial services? You just mentioned that. Would

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Speaker 3: you ever consider ring fencing? You know we are unusual

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Speaker 3: in Britain in since we've ring fence banks, we've said, look,

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Speaker 3: you have to put your retail bank separate. In an

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Speaker 3: era where Trump and other people are pushing out with

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Speaker 3: regulation lots of fronts, is that an area you would also? Look?

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Speaker 3: You just mentioned financial services.

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Speaker 5: We'll always keep an open mind about things. Already, since

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Speaker 5: the election of President Trump, the pra Prudential Regulator has

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Speaker 5: pushed back the implementation for Barzil three. So that was

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Speaker 5: going to be January twenty twenty six. We've pushed that

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Speaker 5: back for a year. We're ahead of the European Union

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Speaker 5: in recognizing that the world has changed, so we've put

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Speaker 5: back that day. I think that shows that our regulators

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Speaker 5: are willing to be pragmatic, recognize the importance of attracting

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Speaker 5: investment into the UK and not being out of kilter

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Speaker 5: with our major trading partners and our major competitors.

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Speaker 6: So I think you've already seen that.

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Speaker 5: We saw the letter from the Financial Conduct Authority to

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Speaker 5: the Government just last week about what they might be

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Speaker 5: able to do to drive investment driving growth in the

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Speaker 5: UK with a number of practical propose That's what this

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Speaker 5: government wants to implement, practical things to make it easier

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Speaker 5: more in Britain, make it easier to get things done

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Speaker 5: in Britain, because that's how we drive growth.

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Speaker 3: Is another that's a very good example of that. Which

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Speaker 3: is my third piece of news which people are talking about,

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Speaker 3: is the idea that next week, there's been the leak

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Speaker 3: ahead of it, that you would say go ahead with

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Speaker 3: the third runway, he throw go ahead with the expansion

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Speaker 3: of gap, maybe the bridge over the Thames as well.

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Speaker 3: You know, that would be a sign you're prepared to

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Speaker 3: take tough decisions that help growth.

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Speaker 5: We've already taken a number of big decisions on City Airport,

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Speaker 5: on Stansted Airport, on a number of planning decisions that

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Speaker 5: this government have called in that we're on the desks

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Speaker 5: of ministers in the previous on housing, on data centers

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Speaker 5: in the creative industries, not going to sort of comment

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Speaker 5: on speculation about what I may or may not say

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Speaker 5: next week. But Johnny started with a sort of pitch

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Speaker 5: that Britain is an open, trading, vibrant economy.

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Speaker 6: We want to remain as such.

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Speaker 3: Use your example of taking tough decisions. If you push

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Speaker 3: you ahead with you throw that might cause problems with Sikon,

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Speaker 3: might cause problems with your colleague Ed Milliman, Like.

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Speaker 5: This is the problem with the last government. There was

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Speaker 5: always somebody that said, oh, yes, of course we want

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Speaker 5: to grow the economy, but we don't like that investment,

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Speaker 5: or we don't like that wind farm, we don't like

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Speaker 5: those pylons, we don't like that airport, we don't want

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Speaker 5: that housing near us. The answer can't always be no,

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Speaker 5: and that's been the problem in Britain for a long time,

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Speaker 5: that when there was a choice between something that would

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Speaker 5: grow the economy and sort of anything else, anything else

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Speaker 5: always one. Now, of course there are other things that matter,

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Speaker 5: but when we say that growth is the number one

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Speaker 5: mission of this government, we mean it, and that means

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Speaker 5: that trumps other things, and so we're making pro growth

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Speaker 5: decisions in the national interest.

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Speaker 1: I feel like John Well, I genuinely feel there is

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Speaker 1: in the UK and perceptions of the UK at the minute.

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Speaker 1: People haven't quite recognized how resolved this group of people

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Speaker 1: in the new cabinet in the UK are to make

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Speaker 1: these decisions to make a difference, right, And I know

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Speaker 1: that the proof points of that are not what we

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Speaker 1: say or what strategies we published, but the kind of

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Speaker 1: decisions that we seek to make. When Rachel says gross

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Speaker 1: the number one mission, you know, that's about attracting product

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Speaker 1: capital to the UK.

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Speaker 4: That's why I've getting things done more quickly. There are

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Speaker 4: things we know the UK needs. I mean, look, we

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Speaker 4: could all tell.

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Speaker 1: Stories of UK infrastructure that you know, there's a famous

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Speaker 1: example of the M six tool was sort of initiated

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Speaker 1: under the Kalahan government, delivered by the Blair Labor government.

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Speaker 7: You know.

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Speaker 1: I mean it's we've got to do things quicker and better,

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Speaker 1: and I think people don't yet quite appreciate.

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Speaker 3: How resolved we are to do that. Isn't isn't that

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Speaker 3: I mean to come to the point, Isn't that? Isn't

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Speaker 3: that to do with in some ways the budget? I mean,

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Speaker 3: if you talk to people here, they will come up

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Speaker 3: with a variety of complaints. They'll talk about fiscal headroom,

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Speaker 3: which work we'll come back to. But their basic point

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Speaker 3: with the budget was they thought that came across as

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Speaker 3: something that was not in favor of wealth creation. You know,

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Speaker 3: at the heart of it, it had big pay rises

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Speaker 3: for public sector workers, paid for big taxes on business.

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Speaker 3: And that is the main thing when you wander around

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Speaker 3: the halls of Davos, you've just come back for New

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Speaker 3: York that you seem to have started on the foot

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Speaker 3: of being people who are not pro business. So it's

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Speaker 3: not just to do with these past decisions, stupid Conservatives.

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Speaker 3: It's to do with that particular thing with the budget,

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Speaker 3: and do you wish you'd done things differently that When I.

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Speaker 5: Became chancellor there was this twenty two billion pound gap

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Speaker 5: between what the previous government were bringing in in revenues

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Speaker 5: this year and what they were spending.

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Speaker 6: It wasn't some years in the future.

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Speaker 5: It was an in year gap that hadn't been disclosed

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Speaker 5: to the independent forecasters, hadn't been disclosed to Parliament. You

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Speaker 5: had an idea of it because if you looked at

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Speaker 5: the monthly borrowing numbers every month it was coming in

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Speaker 5: a billion or two above what the Independent Forecaster had

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Speaker 5: suggested the government would be borrowing on a monthly basis,

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Speaker 5: but until we were elected, we did not know the

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Speaker 5: scale of that inheritance. Now, I said during the election

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Speaker 5: campaign that I would never play fast and loose with

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Speaker 5: the public finances. Liz trusted that the previous government did

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Speaker 5: that and it caused untold damage in terms of borrowing

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Speaker 5: costs and confidence in the UK.

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Speaker 6: So I had to.

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Speaker 5: Get a grip of the public finances, and that did

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Speaker 5: mean difficult decisions actually on welfare, on spending, and on

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Speaker 5: taxation to get the public finances in under control. And

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Speaker 5: I strongly believe, and I think businesses instinctively know this too,

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Speaker 5: that stability is the prerequisite for economic growth. You can't

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Speaker 5: grow an economy unless you have that stability. So we've

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Speaker 5: now wiped the slate clean under the economic and fiscal

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Speaker 5: mismanagement of the previous government. It did require difficult decisions

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Speaker 5: and not immune to the challenges posed by the increases

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Speaker 5: in tax But let's look at the alternative. The alternative

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Speaker 5: was that I did half measures and then everyone would

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Speaker 5: know that I'd have to come back for more next year.

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Speaker 5: Or I swept things under the carpet and pretend those

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Speaker 5: problems didn't exist, but they would reassert themselves at some stage.

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Speaker 5: What businesses can know is that our public finances are

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Speaker 5: now in order. We're never going to have to come

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Speaker 5: back again and do a budget like that, so we

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Speaker 5: have the stability.

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Speaker 6: Upon which we can now build as a government.

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Speaker 3: There's a limit, though, how much you can blame back

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Speaker 3: on the Tories. I don't think anyone here regrets the

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Speaker 3: Tories going that you look at the numbers. The British

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Speaker 3: Chambers of Commerce said that British business confidence is its

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Speaker 3: lowest EBB since liz Trust's mini budget. Two thirds are

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Speaker 3: worried about tax, half say they have to raise prices,

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Speaker 3: firms already cutting back on investment, employment, that British economy

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Speaker 3: is actually smaller now than when the Tory's left.

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Speaker 5: You've given the bad news. Let me tell you two

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Speaker 5: pieces of good news. PwC survey that came out on

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Speaker 5: Monday whilst you were here in Davos showed that we

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Speaker 5: are second to the UK as the place to invest.

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Speaker 6: For global seers.

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Speaker 5: That is the first time in twenty US to the US.

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Speaker 5: It's the first time in twenty eight years that Britain

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Speaker 5: has been in that position.

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Speaker 6: That is good news and there's a vote of confidence

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Speaker 6: in the UK.

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Speaker 5: The IMF forecast that came out last Friday revised up

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Speaker 5: growth for the UK this year and puts us top

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Speaker 5: of the pack of the major European economies. So we

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Speaker 5: can trade surveys and data. But you know, I'm here

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Speaker 5: to sell Britain, to talk about the strengths and what

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Speaker 5: we are doing. We're reforming the planning system, we're reforming

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Speaker 5: our regulatory system, reforming pensions and also this year we're

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Speaker 5: going to be publishing an immigration white paper. And although

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Speaker 5: we know that we need to bring immigration down, particularly

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Speaker 5: illegal immigration into the UK, we are going to look

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Speaker 5: again at route for the highest skilled people visas, particularly

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Speaker 5: in areas like AI.

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Speaker 6: And life sciences.

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Speaker 5: Because Britain is open for business, we are open for talent.

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Speaker 6: We've got some of.

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Speaker 5: The best universities, some of the best entrepreneurs in the world,

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Speaker 5: but we also want to bring in global talent into Britain.

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Speaker 4: There's no complacency by any of use.

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Speaker 1: I would say the challenge of our inhuritance has made

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Speaker 1: us even more resolved to do those things that.

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Speaker 4: Rachel has described, because we wanted to do them. We

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Speaker 4: thought they were essential.

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Speaker 1: I think that that case is even more compelling as

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Speaker 1: a result of what we have in Hurt.

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Speaker 4: And it comes back to this, people.

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Speaker 1: Should not doubt how resolved we are to make a difference.

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Speaker 1: It's not just about the economic performance and what it

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Speaker 1: means for our constituents.

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Speaker 4: Of course that's important. It's also about to be honest

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Speaker 4: with the.

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Speaker 1: Legitimacy of the political system, showing people that you know,

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Speaker 1: government can make a difference to their lives, avoiding some

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Speaker 1: of the populist pressures which are evident and discussed quite widely.

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Speaker 1: An event like this, we know what's at.

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Speaker 3: Stake, and that's why we're going to deliver to you

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Speaker 3: on this issue as you here again and again from

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Speaker 3: people here, this issue of wealth creation. I just thought,

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Speaker 3: as I said, I just saw Tony Blair walking on

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Speaker 3: the street. He was famously relaxed about wealth creators getting wealthier.

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Speaker 3: Listening to people here, they'll say taxes. We've got taxes

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Speaker 3: on business, taxes on wealth, taxes on school fees. You've

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Speaker 3: got small businesses spending all their time now worrying about

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Speaker 3: inheritance tax. Non doms complain and say you're Rachel Leaves,

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Speaker 3: not Rachel reeves because they were heading abroad. The record

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Speaker 3: of left of center governments that are unpopular with business

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Speaker 3: or start on the wrong terms with business, it's not

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Speaker 3: a good one. You think of francois Land in France,

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Speaker 3: there is a problem there. And beyond sort of announcing

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Speaker 3: some things around the edge, what are you going to

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Speaker 3: do to change that idea that is out there at

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Speaker 3: the moment that you're not in favor of wealth creation.

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Speaker 3: Maybe you can correct that. Now you relaxed about wealth.

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Speaker 5: Creation, absolutely and we want that. I just said, the

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Speaker 5: best talent, the best people to come to Britain, create

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Speaker 5: jobs in Britain, to grow our economy. We had an

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Speaker 5: international investment summit two months into the Labor government sixty

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Speaker 5: three billion pounds of inward investment into the UK, primarily

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Speaker 5: in AI and in clean energy. That is incredibly exciting

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Speaker 5: and shows the strength that we have as an economy.

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Speaker 5: I'm not going to apologize for the budget because although

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Speaker 5: I hear criticism, what I don't hear.

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Speaker 6: Is any real alternatives.

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Speaker 5: If you're a CEO or a CFO and you're coming

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Speaker 5: into a new business and you've got these massive problems

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Speaker 5: with your finances, you have to stabilize them, and that

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Speaker 5: requires difficult decisions. But if you don't make those decisions,

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Speaker 5: you're going to be plagued by them for years to come.

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Speaker 5: So we have now wipe the slate clean. Businesses can

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Speaker 5: be confident that my instinct is to have a lower taxes,

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Speaker 5: less regulation, make it easier for businesses to do business.

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Speaker 5: But unless you can have that economic and fiscal stability,

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Speaker 5: then to be honest, I think that you're not going

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Speaker 5: to have any serious plan for economic growth.

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Speaker 6: We saw that under the previous government.

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Speaker 5: We've seen that government around the world that get into

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Speaker 5: financial difficulty.

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Speaker 6: We have avoided that through.

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Speaker 5: The difficult decisions that we've made. But on every other area,

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Speaker 5: I think businesses will say on regulation, on planning, on pensions,

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Speaker 5: on capitol markets reform, that we are doing the things

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Speaker 5: that are needed to unlock economic growth.

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Speaker 3: And come back to the issues of other things you

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Speaker 3: could do in a second with with Johnny, but first

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Speaker 3: with you this particular issue of stability, and the issue

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Speaker 3: is you know about fiscal headroom. You know you left

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Speaker 3: yourself a very small kind of buffer. I looked at

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Speaker 3: zero point three percent of GDP, or to put it

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Speaker 3: in another way, it's that's nine point nine billion dollars

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Speaker 3: nine point nine billion pounds against total public spending a

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Speaker 3: more than one point three trillion, so very little margin. Verio.

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Speaker 3: You've seen all those moves in the bond markets, which

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Speaker 3: you'll point out have been corrected. But each time that happens,

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Speaker 3: it kind of pushes through the buffer. You know, are

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Speaker 3: you at some point going to have to make a

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Speaker 3: bigger a bigger buffer at some time?

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Speaker 5: I see the two fiscal rules that this government will meet.

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Speaker 5: The first is that we will pay for day to

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Speaker 5: day spending through tax receipts previous government didn't achieve that

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Speaker 5: in fourteen years, and that we would bring down as

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Speaker 5: a share of GDP. We meet those rules two years early.

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Speaker 5: We meet those both of those in year three of

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Speaker 5: the forecast at the moment, and in the final year

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Speaker 5: of the forecast as a nine point bill pound amount

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Speaker 5: of headroom. That is more headroom than we inherited from

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Speaker 5: the previous government. We actually put more money into increasing.

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Speaker 3: This was a famously small amount as well.

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Speaker 5: Yeah, it's so it's tight, and those fiscal rules are

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Speaker 5: important to us because they are the sort of bedrock

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Speaker 5: and foundation of that stability that I've spoken about, so

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Speaker 5: we will we will continue to make decisions to ensure

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Speaker 5: that we meet those fiscals. I just say another thing

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Speaker 5: about the fiscal rules and why we chose to pay

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Speaker 5: for day to days sending.

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Speaker 6: Through tax receeats.

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Speaker 5: That is so important for this government to get a

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Speaker 5: grip of day to day spending because that allows us

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Speaker 5: to free up money to invest in capital infrastructure projects,

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Speaker 5: whether that is energy or transport, or in tech compute

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Speaker 5: capability for example. And we're only able to unlock one

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Speaker 5: hundred billion pounds during the course of this parliament.

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Speaker 6: For those capital projects.

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Speaker 5: Additional one hundred billion because this government are getting a

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Speaker 5: group of day to day spending. And some of you

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Speaker 5: would have heard our Chief Secretary to the Treasury, Darren Jones,

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Speaker 5: and our Science and Innovation Secretary Peter Kyle yesterday speak

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Speaker 5: about the possibilities that.

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Speaker 6: Tech have to transform our public.

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Speaker 5: Services to get better value for the money that we

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Speaker 5: put into them by using tech better the creation of

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Speaker 5: a government a digital app that will have our driving

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Speaker 5: licenses on and other things by the end of this year,

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Speaker 5: using tech to cut out some of the costs in

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Speaker 5: the back office functions of government. The more costs we

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Speaker 5: can take out. The less we have to do on

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Speaker 5: the tax side, the better services we will deliver for citizens,

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Speaker 5: and the more we can free up to invest in

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Speaker 5: that capital the projects that can help transform our economy.

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Speaker 3: Sounds as if you're going down the same route as

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Speaker 3: Elon Musk with his Department of Government Efficiency.

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Speaker 5: Well, look, we want to route out waste in governments.

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Speaker 7: Then to I think maybe the fiscal headroom you've got

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Speaker 7: the Officer Budget Responsibility is forecast updates at the end

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Speaker 7: of March March twenty sixth, and that says my question

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Speaker 7: is can you leave it that long?

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Speaker 3: If you're riding a bicycle and you hit the curb twice,

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Speaker 3: you tend to move a bit closer to the center

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Speaker 3: of the road. If you've you've already had two incidents

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Speaker 3: where those the sheer rise in borrowing costs, which occasionally happens,

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Speaker 3: could have wiped out that buffer. Isn't that something you're

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Speaker 3: going to have to deal with eventually?

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Speaker 5: Well, there's been no undoubtedly global movements in financial markets

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Speaker 5: this year, mainly driven by the US, but of course

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Speaker 5: the UK gets caught in those headwinds. The Officer Budget

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Speaker 5: Responsibility are just starting their forecast process, and that don't

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Speaker 5: take into account just one week's moves. In financial markets,

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Speaker 5: they look at a period of time. But I don't

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Speaker 5: think we should get ahead of ourselves. There's a couple

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Speaker 5: of months before that OBR forecast is published.

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Speaker 6: I will respond to that in a.

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Speaker 5: Proper way and make sure that we continue to meet

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Speaker 5: those fiscal rules.

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Speaker 3: To kind of come to you on the issue of

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Speaker 3: growth again, it strikes me you look at a lot

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Speaker 3: of the things you've been talking about. The chances has

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Speaker 3: been talking about planning reform, infrastructure strategy, pensions reform, making

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Speaker 3: regulators more friendly. Those are quite kind of long term things,

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Speaker 3: whilst what business is looking for desperately is something short

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Speaker 3: term to make up for the tax rises. Is there

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Speaker 3: anything you particularly can sort of focus on there.

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Speaker 4: I would I would come back a little bit on.

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Speaker 1: That, John, because I think what business wants to fundamentally

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Speaker 1: see from us.

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Speaker 4: Is are we good for our word? You know when

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Speaker 4: we say gross of.

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Speaker 1: The mission, How we're going to prove that, How we're

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Speaker 1: going to convince people that that is absolutely where.

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Speaker 4: Our political priorities will lie. Exactly as Rachel has said.

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Speaker 1: They've heard from other people or the governments in the past.

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Speaker 1: They want to know when you get that countervailing pressure,

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Speaker 1: but what about this? What about that? What about that

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Speaker 1: person not liking it? Are we going to say.

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Speaker 4: No, this is the mission and this is the imperative

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Speaker 4: and we are.

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Speaker 1: So I don't think it's about people just banking the

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Speaker 1: long term, because the one thing the UK has needed

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Speaker 1: in the last few years is more of a long term,

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Speaker 1: serious focus.

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Speaker 4: Let's be frank, we've been bobbing along from one prime.

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Speaker 1: Minister to the next, sometimes month to month, right, So

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Speaker 1: they want that long term focus and I think that's

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Speaker 1: where you get the confidence. If people do not look

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Speaker 1: at the UK, they riskmissing out right. That's genuinely the case,

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Speaker 1: because this is a government so resolved to make the

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Speaker 1: difference because we know that is what we have to do.

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Speaker 4: So I don't think it's a.

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Speaker 1: It's a it's a question of you know, okay, people

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Speaker 1: think the long term is great, they want the short term.

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Speaker 1: They want to see that long term following through and

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Speaker 1: the commitment that comes with that, and then they will

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Speaker 1: see when you know, some of the pressures, some of

443
00:22:21,480 --> 00:22:25,360
Speaker 1: the conversations about the global trading position, the leadership rule

444
00:22:25,359 --> 00:22:27,639
Speaker 1: the UK will take in terms of open markets being

445
00:22:27,680 --> 00:22:30,840
Speaker 1: a key part of that. I mean, as we both said,

446
00:22:30,880 --> 00:22:33,439
Speaker 1: we want to stress we recognize the challenge of our

447
00:22:33,520 --> 00:22:35,879
Speaker 1: inheritance and how we've got to provide people with the

448
00:22:35,920 --> 00:22:39,199
Speaker 1: confidence and the certainty for the future. It is important

449
00:22:39,200 --> 00:22:42,199
Speaker 1: to say we're still you know, you benchmark, you know,

450
00:22:42,200 --> 00:22:45,879
Speaker 1: payroll taxation in the in the UK still very internationally competitive,

451
00:22:46,160 --> 00:22:48,960
Speaker 1: capital gains tax, corporation tax lost in the in the

452
00:22:48,960 --> 00:22:52,080
Speaker 1: G seven with the best allowances available. So there's there's

453
00:22:52,080 --> 00:22:54,960
Speaker 1: a compelling competitive offer there. But what you need, I think,

454
00:22:54,960 --> 00:22:57,920
Speaker 1: to generate that confidence is people recognizing this is a

455
00:22:57,960 --> 00:22:59,160
Speaker 1: government serius about your building.

456
00:22:59,200 --> 00:23:01,159
Speaker 3: Is surely the most to the single thing that you

457
00:23:01,200 --> 00:23:03,800
Speaker 3: could do that would change give the most amount of

458
00:23:03,840 --> 00:23:06,840
Speaker 3: growth is to do a fresh deal with Europe, to

459
00:23:06,880 --> 00:23:10,280
Speaker 3: do something like a customers union. That's what most Actually

460
00:23:10,280 --> 00:23:12,560
Speaker 3: every number that people have run on that that shows

461
00:23:12,600 --> 00:23:15,800
Speaker 3: the biggest increase in GDP compared with all the other

462
00:23:15,840 --> 00:23:16,560
Speaker 3: things you're talking.

463
00:23:16,560 --> 00:23:21,399
Speaker 4: It's it's first of all, you will just about ever ever, I.

464
00:23:21,440 --> 00:23:25,800
Speaker 1: Mean, I think I think about rejoining the European something

465
00:23:25,800 --> 00:23:28,320
Speaker 1: akin I would I would say something that first of

466
00:23:28,320 --> 00:23:31,840
Speaker 1: all we want and again there's a high degree of

467
00:23:31,920 --> 00:23:35,760
Speaker 1: ambition on our side, a reset of that relationship with Europe.

468
00:23:35,760 --> 00:23:37,480
Speaker 4: And there's a whole range of specific elements to that.

469
00:23:37,600 --> 00:23:41,760
Speaker 1: The SPS proposals, the recognition of mutual qualif visual recognition

470
00:23:41,800 --> 00:23:45,840
Speaker 1: of qualifications, the regulation of goods in particular, we're from

471
00:23:45,880 --> 00:23:50,400
Speaker 1: ambitious conversation about that. I do think again people someone

472
00:23:50,480 --> 00:23:54,359
Speaker 1: s failed to recognize that. You know, the problems, the

473
00:23:54,400 --> 00:23:57,120
Speaker 1: evident problems that the challenges of leaving the European Union

474
00:23:57,160 --> 00:24:00,080
Speaker 1: for the UK were obviously about a significant change in

475
00:24:00,119 --> 00:24:03,360
Speaker 1: our terms of trade, but the political uncertainty that came

476
00:24:03,400 --> 00:24:07,080
Speaker 1: with that was also a real problem. So our decision

477
00:24:07,080 --> 00:24:09,119
Speaker 1: to not relive, not to refight those arguments, but to

478
00:24:09,119 --> 00:24:12,320
Speaker 1: focus on improving that relationship practical things as well as

479
00:24:12,359 --> 00:24:15,159
Speaker 1: build those relationships with the Gulf, with India. Maybe the

480
00:24:15,280 --> 00:24:17,480
Speaker 1: US look at how we've been an outlier in terms

481
00:24:17,480 --> 00:24:19,719
Speaker 1: of our lack of engagement with China. How can we

482
00:24:20,000 --> 00:24:22,480
Speaker 1: turn some of that around? Difficult but important to do.

483
00:24:22,880 --> 00:24:25,679
Speaker 1: I think that is a much more comprehensive approach. And

484
00:24:25,800 --> 00:24:28,000
Speaker 1: I think you've got to recognize if you're, as we

485
00:24:28,080 --> 00:24:32,280
Speaker 1: have done, leaving something about the Single market, there's a

486
00:24:32,320 --> 00:24:34,800
Speaker 1: cost there you have to mitigate that. But I think

487
00:24:35,040 --> 00:24:38,359
Speaker 1: a conversation just about Europe. Honestly, it's not enough, and

488
00:24:38,400 --> 00:24:40,280
Speaker 1: it's all right to give the UK the platform.

489
00:24:40,359 --> 00:24:43,399
Speaker 3: And you see yourself, Chancellor, in competition with Europe to

490
00:24:43,440 --> 00:24:45,800
Speaker 3: some extent. You have a lot of international business people here.

491
00:24:45,880 --> 00:24:49,520
Speaker 3: Somebody yesterday said that Britain's claim to fame is we

492
00:24:49,560 --> 00:24:51,919
Speaker 3: could be the tallest tree in a not very tall forest,

493
00:24:52,040 --> 00:24:55,359
Speaker 3: which was Europe. You look and see what's happened to Germany,

494
00:24:55,400 --> 00:24:57,320
Speaker 3: you look and see what's happening in France at the moment.

495
00:24:57,920 --> 00:25:00,679
Speaker 3: Do you see yourself in competition with Europe International?

496
00:25:01,400 --> 00:25:04,320
Speaker 6: Of course, of course we want the jobs investments to

497
00:25:04,440 --> 00:25:04,760
Speaker 6: come to.

498
00:25:06,440 --> 00:25:06,800
Speaker 3: Britain.

499
00:25:07,320 --> 00:25:10,960
Speaker 5: We're here to represent the UK and all of our strengths.

500
00:25:10,960 --> 00:25:13,439
Speaker 5: And look, you know, Johnny and I both voted to

501
00:25:13,440 --> 00:25:16,600
Speaker 5: remain in the European Union. But we're outside the European Union.

502
00:25:16,640 --> 00:25:20,200
Speaker 5: We have been for there'll be nine years this summer.

503
00:25:20,640 --> 00:25:24,199
Speaker 5: We've got to move on if there are opportunities outside

504
00:25:24,200 --> 00:25:28,040
Speaker 5: of the European Union, opportunities for example in AI, where

505
00:25:28,040 --> 00:25:31,080
Speaker 5: we have a very different regulatory approach to AI compared

506
00:25:31,680 --> 00:25:34,640
Speaker 5: to the European Union's approach. That makes Britain a more

507
00:25:34,680 --> 00:25:38,240
Speaker 5: attractive place for AI and tech companies to invest than

508
00:25:38,280 --> 00:25:39,760
Speaker 5: in other European countries.

509
00:25:39,800 --> 00:25:41,080
Speaker 6: We could take advantage of that.

510
00:25:41,240 --> 00:25:44,000
Speaker 5: We just should shout about it and we should get

511
00:25:44,000 --> 00:25:48,000
Speaker 5: that investment in. Just in the six months that we've

512
00:25:48,000 --> 00:25:52,480
Speaker 5: been in office, forty billion pounds of private investment into

513
00:25:52,520 --> 00:25:55,600
Speaker 5: AI and tech into the UK. That's really exciting. I

514
00:25:55,600 --> 00:25:57,840
Speaker 5: think some of that has come to the UK because

515
00:25:57,840 --> 00:26:00,280
Speaker 5: you look at the UK compared to other jurisdictions and

516
00:26:00,320 --> 00:26:03,520
Speaker 5: we are a better place to invest. Take for example,

517
00:26:03,840 --> 00:26:06,760
Speaker 5: the Barsel reforms. As I said, we've gone ahead of

518
00:26:06,880 --> 00:26:10,159
Speaker 5: other European countries. We have that flexibility, we can be

519
00:26:10,240 --> 00:26:13,280
Speaker 5: more nimble. We are taking advantage of that.

520
00:26:13,280 --> 00:26:14,720
Speaker 6: That said, I was.

521
00:26:14,680 --> 00:26:18,560
Speaker 5: The first British chancellor to go to the Eurogroup meeting

522
00:26:18,600 --> 00:26:22,440
Speaker 5: of finance ministers in December in Brussels. We do want

523
00:26:22,440 --> 00:26:24,920
Speaker 5: a reset of our relations. We don't want the antagonism

524
00:26:25,000 --> 00:26:31,160
Speaker 5: and the battles that the previous government seemed to quite relish.

525
00:26:31,600 --> 00:26:35,720
Speaker 5: It's why also I went to Beijing and Shanghai last

526
00:26:35,760 --> 00:26:36,640
Speaker 5: weekend to.

527
00:26:36,680 --> 00:26:37,520
Speaker 6: Re engage there.

528
00:26:37,560 --> 00:26:40,600
Speaker 5: The first economic and financial dialogue between our two countries

529
00:26:40,720 --> 00:26:46,159
Speaker 5: for nearly six years got tangible benefits, particularly for financial services,

530
00:26:46,480 --> 00:26:52,119
Speaker 5: quotas and licenses for British businesses doing business in China.

531
00:26:52,240 --> 00:26:56,880
Speaker 5: So we are re establishing ourselves in the global space,

532
00:26:57,480 --> 00:27:01,399
Speaker 5: getting good deals for Britain and that's what our jobs

533
00:27:01,440 --> 00:27:02,520
Speaker 5: are and that's what we're doing.

534
00:27:02,680 --> 00:27:05,800
Speaker 3: I've talked earlier about making government more efficient. We made

535
00:27:05,800 --> 00:27:08,920
Speaker 3: the joke about Elon Musk, but there was a point

536
00:27:08,960 --> 00:27:11,720
Speaker 3: behind that. One of the complaints that business people had

537
00:27:11,760 --> 00:27:14,439
Speaker 3: about your budget. There was this very large pay rises

538
00:27:14,520 --> 00:27:17,080
Speaker 3: going out to the health and things like that, but

539
00:27:17,160 --> 00:27:21,400
Speaker 3: without a kind of bits of reform with that. When

540
00:27:22,000 --> 00:27:24,560
Speaker 3: if you're going to make government more efficient, you'd like

541
00:27:24,640 --> 00:27:27,560
Speaker 3: to see more evidence that that's actually beginning to happen.

542
00:27:27,960 --> 00:27:30,240
Speaker 5: Let's just remember where we were on the NHS when

543
00:27:30,280 --> 00:27:33,680
Speaker 5: we came into government. There have been so many strikes

544
00:27:34,640 --> 00:27:38,640
Speaker 5: that was having a detrimental impact on business as well

545
00:27:38,680 --> 00:27:42,879
Speaker 5: as individuals because when people are waiting months and months,

546
00:27:42,960 --> 00:27:46,800
Speaker 5: sometimes years to get the appointments and the procedures and

547
00:27:46,840 --> 00:27:49,160
Speaker 5: the operations that they need, they're not available to work.

548
00:27:49,280 --> 00:27:53,119
Speaker 5: We've got problem in Britain that participation in the labor

549
00:27:53,160 --> 00:27:55,200
Speaker 5: market is lower than it was going into the pandemic

550
00:27:55,359 --> 00:27:57,280
Speaker 5: we've got to sort that out. Some of that is

551
00:27:57,320 --> 00:27:58,959
Speaker 5: about reforming the benefits system.

552
00:27:59,040 --> 00:27:59,800
Speaker 6: We're going to do that.

553
00:28:00,119 --> 00:28:02,200
Speaker 5: Some of it it's about making our National Health Service

554
00:28:02,240 --> 00:28:05,720
Speaker 5: work better. I think there's a business person that would

555
00:28:05,720 --> 00:28:09,720
Speaker 5: have said seven months ago before we came into office,

556
00:28:09,880 --> 00:28:12,840
Speaker 5: you know, everything's fine with the National Health Service and

557
00:28:13,119 --> 00:28:18,840
Speaker 5: making sure we've got a healthy labor market. That was

558
00:28:18,880 --> 00:28:22,840
Speaker 5: a problem and we fixed it by resolving that industrial

559
00:28:22,960 --> 00:28:26,480
Speaker 5: action that had played our National Health Service for a long.

560
00:28:26,320 --> 00:28:29,120
Speaker 6: Period of time. But you know we're streeting.

561
00:28:29,320 --> 00:28:34,600
Speaker 5: Our Health Secretary is absolutely reforming the National Health Service,

562
00:28:34,840 --> 00:28:38,920
Speaker 5: making more use of the private sector, for example, more

563
00:28:39,000 --> 00:28:43,160
Speaker 5: dropping clinics local to where people live, using technology better

564
00:28:43,200 --> 00:28:46,840
Speaker 5: so that people can choose when and where they.

565
00:28:46,680 --> 00:28:48,280
Speaker 6: Have their appointments.

566
00:28:48,520 --> 00:28:55,080
Speaker 5: So we are absolutely using reform alongside making sure that

567
00:28:55,120 --> 00:28:57,520
Speaker 5: we resolved that industrial action.

568
00:28:58,280 --> 00:28:59,560
Speaker 6: Another area where there's.

569
00:28:59,440 --> 00:29:01,800
Speaker 5: Massive open tunity in the NHS, going back to this

570
00:29:01,800 --> 00:29:06,640
Speaker 5: issue around tech and data, is using data in the

571
00:29:07,240 --> 00:29:11,200
Speaker 5: NHS to bring in money but also to make Britain

572
00:29:11,240 --> 00:29:13,320
Speaker 5: the best place in the world to do clinical trials.

573
00:29:13,840 --> 00:29:16,920
Speaker 5: Massive opportunities there because of our integrated health service.

574
00:29:17,000 --> 00:29:19,560
Speaker 3: I think something you said earlier, I think the message

575
00:29:19,600 --> 00:29:21,520
Speaker 3: you were trying to put across, is that your first

576
00:29:21,560 --> 00:29:23,880
Speaker 3: priority is going to be to sort out spending. Now

577
00:29:24,080 --> 00:29:27,320
Speaker 3: now you've got everything, hopefully on a firm thing, You're

578
00:29:27,320 --> 00:29:30,440
Speaker 3: going to sort out spending before remotely thinking about the

579
00:29:30,560 --> 00:29:32,920
Speaker 3: chance of more taxes or anything at that And if

580
00:29:33,160 --> 00:29:36,320
Speaker 3: you would actually also like to cut taxes in the future.

581
00:29:37,000 --> 00:29:39,920
Speaker 5: I would like taxes to be lower on people and

582
00:29:40,040 --> 00:29:42,680
Speaker 5: on businesses, but I'm not going to play fast and

583
00:29:42,680 --> 00:29:45,520
Speaker 5: lose to the public finances because in the end you

584
00:29:45,600 --> 00:29:48,760
Speaker 5: actually don't result in anyone being better off because it

585
00:29:48,840 --> 00:29:52,000
Speaker 5: sends interest rates soaring if you lose control of the

586
00:29:52,000 --> 00:29:55,200
Speaker 5: public finances. So I'm not going down that route. But

587
00:29:55,400 --> 00:29:57,480
Speaker 5: if we can run the state better, we can run

588
00:29:57,520 --> 00:30:00,560
Speaker 5: public services better, we can bring investment into the UK

589
00:30:00,640 --> 00:30:03,280
Speaker 5: and grow the economy. We don't have to keep ratcheting

590
00:30:03,360 --> 00:30:06,560
Speaker 5: up taxes to make the sums add up. That's where

591
00:30:06,600 --> 00:30:08,520
Speaker 5: I would like to be, But not in that place yet.

592
00:30:08,600 --> 00:30:10,560
Speaker 3: So is there a certain level of growth, a certain

593
00:30:10,600 --> 00:30:12,920
Speaker 3: level of something where you think you would then feel

594
00:30:12,920 --> 00:30:16,640
Speaker 3: happier about reducing taxes Again, well.

595
00:30:16,880 --> 00:30:20,320
Speaker 5: I would like to reduce the burden of taxes, but

596
00:30:20,360 --> 00:30:23,480
Speaker 5: I'm not going to make promises that I can't keep.

597
00:30:23,800 --> 00:30:26,400
Speaker 5: Previous governments here and around in the UK and around

598
00:30:26,440 --> 00:30:29,440
Speaker 5: the world make promises they can't keep. But I'm not

599
00:30:29,480 --> 00:30:31,160
Speaker 5: going to be that sort of chancellor. We're not going

600
00:30:31,160 --> 00:30:33,840
Speaker 5: to be that sort of government. But I think you

601
00:30:33,880 --> 00:30:37,120
Speaker 5: can see my instincts is to do everything I can

602
00:30:37,240 --> 00:30:41,720
Speaker 5: to make Britain great players, to do business and to invest.

603
00:30:42,080 --> 00:30:44,240
Speaker 5: As then Kat from Barclay's, I think we're saying yesterday

604
00:30:44,240 --> 00:30:48,560
Speaker 5: it's huge potential in the UK. We're just six months

605
00:30:48,600 --> 00:30:51,360
Speaker 5: in as the government. We are taking the steps that

606
00:30:51,400 --> 00:30:55,880
Speaker 5: are necessary to grow the economy. Can't turn everything around overnight,

607
00:30:56,240 --> 00:30:58,640
Speaker 5: but I think people can see in all of the

608
00:30:58,680 --> 00:31:02,000
Speaker 5: reform that we're driving forward that we are determined to

609
00:31:02,160 --> 00:31:05,840
Speaker 5: turn around the low growth performance that is dog Britain

610
00:31:05,920 --> 00:31:06,680
Speaker 5: for too long now.

611
00:31:07,320 --> 00:31:09,520
Speaker 1: And I would just say on that, I mean, from

612
00:31:09,520 --> 00:31:13,240
Speaker 1: my perspective as as a government department, I'm absolutely convinced

613
00:31:13,720 --> 00:31:16,160
Speaker 1: we could spend money as a country in a better way.

614
00:31:16,520 --> 00:31:17,880
Speaker 4: You know, our industrial strategy is.

615
00:31:17,800 --> 00:31:21,360
Speaker 1: Partly about coordinating government policy across a whole range of departments.

616
00:31:21,520 --> 00:31:23,200
Speaker 1: I look at how we've done that as a country

617
00:31:23,520 --> 00:31:24,560
Speaker 1: in the past and we get.

618
00:31:24,480 --> 00:31:25,880
Speaker 4: The effectiveness of that.

619
00:31:26,040 --> 00:31:28,120
Speaker 1: You know, when we look at the different regulatory burdens

620
00:31:28,120 --> 00:31:31,240
Speaker 1: and different departments. Who considers the aggregate burden on business.

621
00:31:31,360 --> 00:31:34,040
Speaker 1: I'm convinced we could do that, and we know the

622
00:31:34,080 --> 00:31:35,400
Speaker 1: media always want to know you're going to spend more

623
00:31:35,480 --> 00:31:38,600
Speaker 1: or less on something, or regulation more or less of it.

624
00:31:38,120 --> 00:31:39,240
Speaker 4: It's not that.

625
00:31:39,160 --> 00:31:41,160
Speaker 1: You know, it's about the proportionality of those things, the

626
00:31:41,160 --> 00:31:44,080
Speaker 1: effectiveness of that. And we're up for that conversation because

627
00:31:44,120 --> 00:31:45,440
Speaker 1: that's how we'll make the business difference.

628
00:31:46,200 --> 00:31:48,560
Speaker 3: Rachel Reeves and Jonathan Else, I'm very sorry we're out

629
00:31:48,600 --> 00:31:51,240
Speaker 3: of time, but thank you for very robust defense of

630
00:31:51,320 --> 00:32:00,720
Speaker 3: your policies than bloombirds if John mickethways.

631
00:32:00,720 --> 00:32:03,000
Speaker 2: Of course they're speaking to the UK Chancellor Rachel Reeves

632
00:32:03,000 --> 00:32:06,120
Speaker 2: and Business Secretary and Trade Secretary Jonathan Reynolds