Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: Earlier this year, before the election, the Labor Party seemed
Speaker 2: to be all in on its mission to be party
Speaker 2: of business. We've covered in a lot on this podcast
Speaker 2: the amount of courting of business people, investors, time spent
Speaker 2: by the new Chancellor or the shadow Chancellor, their ritro routes.
Speaker 2: Here in the City of London, everyone seemed to be
Speaker 2: convinced that Labor was different than it was going to
Speaker 2: be a pro business administration. But now cut to just
Speaker 2: three months after the party's landslide victory, questions are emerging
Speaker 2: about how committed the party is to its pro growth pledge.
Speaker 2: This week, We're going to take stock of Labour's progress
Speaker 2: to win back the support of corporate Britain and ask
Speaker 2: what's at stake if the city's leaders are losing faith
Speaker 2: in Labour's commitment. Welcome to the City of London, The
Speaker 2: City of London, mind gad between the financial hearts of
Speaker 2: the country.
Speaker 3: The City, the City.
Speaker 1: Welcome to In the City, Clear of the Doors, Pea.
Speaker 2: Welcome to another episode of In the City. I'm David Merritt,
Speaker 2: I'm Alegri Stratton and I'm Francine Lackwall. Later in the show,
Speaker 2: we're going to hear from Richard Harrington. He's the former
Speaker 2: government minister who published a review into foreign direct investment
Speaker 2: in November of last year. His review made recommendations about
Speaker 2: how the UK could attract more cross border investment, and
Speaker 2: we're going to get his thoughts on whether the Labor
Speaker 2: government is taking his suggestions on board and what more
Speaker 2: could be done to tackle the barriers to investment. But
Speaker 2: before that, with us in the studio is Bloomberg Radio
Speaker 2: host Karen Hepka, who has authored a piece on how
Speaker 2: how the city is now viewing the Labor Party's first
Speaker 2: one hundred days.
Speaker 3: Welcome to the.
Speaker 1: Podcast, Karen, Thanks for having me.
Speaker 2: So you spend your days talking to business people, interviewing
Speaker 2: them modern radio. How has the mood shifted from you know,
Speaker 2: before this year when everyone was thinking, hey, Labor is
Speaker 2: really making efforts to be seen as a pro business party,
Speaker 2: to what they've actually done and what's happened since they
Speaker 2: won power.
Speaker 1: Yeah, well I spent the last few weeks sort of
Speaker 1: trying to ascertain that with a few key players. So
Speaker 1: people like Anne Glover from Amadeus Capital Management. She's key
Speaker 1: in that investment scene in the UK. People like Lloyd
Speaker 1: Lee from you Capital working on one of the biggest
Speaker 1: regeneration projects in London. Phoenix Group their CIO. You know
Speaker 1: they if you recall, at their heart of the mansion
Speaker 1: House Accord trying to get pension funds to invest more
Speaker 1: in the city. Spent a few weeks talking to them.
Speaker 1: I think surface level there is trepidation, there is anticipation
Speaker 1: about the budget. Mostly everybody agrees that in the first
Speaker 1: one hundred days, which is what I was looking at,
Speaker 1: actually nothing much has happened on the economic front. I
Speaker 1: think quite a lot of other things have happened.
Speaker 2: I think one of the things that labourhood trumpeted a
Speaker 2: lot to business was we're going to bring back stability
Speaker 2: to Britain. We've had weeks of headlines of freebies for
Speaker 2: government termoil reports of all those inviting. Do business people
Speaker 2: feel frustrated by that ongoing sense of chales.
Speaker 1: I think there was such huge desperation for some new
Speaker 1: direction in the UK after fourteen years of increasingly erratic
Speaker 1: government that yes, I think there was a huge moment
Speaker 1: of relief. The fact that Labour has this huge mandate
Speaker 1: and a five year term I was talking about a
Speaker 1: ten year term. That's why I think there's a lot
Speaker 1: of anxiety. There is not just a huge amount going
Speaker 1: on geopolitically, but also domestically. And I think that the
Speaker 1: people that I spoke to talked about the government having
Speaker 1: to learn on the job and how it's very difficult
Speaker 1: to do that in just the space of three months,
Speaker 1: and that's immensely difficult. I think it's put even more
Speaker 1: emphasis on the tone and the content of the budget.
Speaker 1: Basically that there have been all of these strands that
Speaker 1: they've talked about, infrastructure spending, the National Wealth Fund, gb Energy,
Speaker 1: all that is a good damn payment, but nothing's actually
Speaker 1: been done. That's kind of top level.
Speaker 4: I wonder rather when you speak to you know, Blackstone,
Speaker 4: black Rock, Golden Sex, I'm not sure they're aware of
Speaker 4: who the chief of staff of Kerestarmer is. I mean,
Speaker 4: it's been a hundred days, but I wonder whether it
Speaker 4: really impacts you know, you know, someone saying, look, I
Speaker 4: want to put one hundred million, I want to put
Speaker 4: two hundred million in this country. I think they're probably
Speaker 4: waiting more for the budget, to see the non arm,
Speaker 4: to see the taxes and where they land on this.
Speaker 1: The issue though, also is that the timing of the
Speaker 1: Business Summit has been has been mistimed. Right. Everybody pretty
Speaker 1: much was in unanimity that the Investment Summit should come
Speaker 1: after the budget, and that's happening.
Speaker 2: That's just because that's happening next week, this big summit
Speaker 2: where the government is trying to pull in huge names
Speaker 2: from business all around the world to come and sort
Speaker 2: of celebrate habritains over the business. But it's happening in
Speaker 2: this sort of gray zone before we know what the policies.
Speaker 3: Are going to be.
Speaker 1: And weirdly, of course, it was a success from the
Speaker 1: conservative era right that the Toys did that two years
Speaker 1: in a row. It did bring in big announcements and
Speaker 1: also big global investors at least to have the conversation
Speaker 1: without the UK.
Speaker 4: Yeah, yeah, and we had everyone at the time. You
Speaker 4: had a number of sovereign wealth funds also from the
Speaker 4: Middle East that showed up last year. It was very
Speaker 4: well done. It was well prepared.
Speaker 5: This year.
Speaker 4: When we speak to a lot of Wall Street titans,
Speaker 4: a lot of them can't be there because of boards,
Speaker 4: so they won't say it's because the budget is two
Speaker 4: weeks afterwards. But timing makes a little sense if you're
Speaker 4: going to put a lot of money in this country.
Speaker 1: And we've talked quite pessimistically about the UK.
Speaker 2: But the other weird.
Speaker 1: Dichotomy the numbers are not that bad, and that there
Speaker 1: should be more kind of optimism. We understand what the
Speaker 1: issue for Britain is, right growth and the lack of investment.
Speaker 1: Nobody knows the exact recipe for how to boost economic
Speaker 1: growth in Britain, but we know that you know what
Speaker 1: the various levers are. It is the difficulty what do
Speaker 1: you do on day one a one?
Speaker 5: You know, in the first few days their emphasis on
Speaker 5: planning reform was manner from heaven. That was what the
Speaker 5: city wanted to hear, wasn't it. And we should remember
Speaker 5: that that they made a lot of kind of the
Speaker 5: right noises early on.
Speaker 4: But also they just need to make sure that they
Speaker 4: have growth right. So I imagine that every lens they're looking
Speaker 4: at is like, okay, I can get twenty millis you know,
Speaker 4: private equity carried interest? Does that lead if you make
Speaker 4: that higher, does it lead to extra growth or does
Speaker 4: it lower growth? I don't really know the answer to that.
Speaker 4: Like what you were saying is that this budget is
Speaker 4: tricky because they need to show the world that they're
Speaker 4: open for business, get money in, but actually it's understanding
Speaker 4: what can be taxed and not hurting growth because at
Speaker 4: the end of the day, it's not the time. I mean,
Speaker 4: they can get money in, but they really need to
Speaker 4: grow the GDP of this country.
Speaker 5: The thing that has emerged in the last week ten days,
Speaker 5: which I think she's they've let emerge because they realized
Speaker 5: that they were in a massive hole of kind of
Speaker 5: you know, you've been too pessimistic, which is this borrowing
Speaker 5: to invest? Yes, I don't know, but I suspect that
Speaker 5: was a kind of pull down from shelf, not in
Speaker 5: case of emergency, but in case everybody's grumpy and you
Speaker 5: need something to kind of shift the narrative.
Speaker 1: Yeah, And I think the people that I speak to,
Speaker 1: you know, they are all saying, we are standing ready
Speaker 1: like females, we are standing ready to put the money
Speaker 1: in there, but we've got to understand the direction. I
Speaker 1: think there's even more emphasis on the budget and on
Speaker 1: getting that right. And also I kind of just wonder
Speaker 1: when she does stand up. You were saying, as the
Speaker 1: first female chancellor in like eight hundred years in the UK.
Speaker 1: Can she actually deliver tonally that shift you know that
Speaker 1: we are hope of a business that we're going for great,
Speaker 1: She's got to come up with some great phrases, you know,
Speaker 1: to galvanize the nation.
Speaker 4: Right, Thanks so much, Carolina. Thanks now, as promised, Richard
Speaker 4: Harrington joins us. Lord Harrington is a former government minister
Speaker 4: who published a review into foreign direct investment in November
Speaker 4: of last year. We're happy to have them with us
Speaker 4: to check in on the recommendation he laid out nearly
Speaker 4: a year ago and whether the Labor government has taken
Speaker 4: any on board. Richard, welcome back to in the city.
Speaker 3: Thank you. It's a pleasure to be here. And of
Speaker 3: course the review itself was launched here at Bloomberg. I
Speaker 3: felt very optimistic about it. Jeremy Hunt was very much
Speaker 3: behind it and they're opposition now. The government were so
Speaker 3: although a.
Speaker 4: Year's gone by, Richard behind it well.
Speaker 3: The new government was behind it in opposition and very
Speaker 3: much in favor of it now. And we're expecting an
Speaker 3: announcement on the subject because it's all about stuff which
Speaker 3: a lot of people think is quite boring because it's
Speaker 3: not the most glamorous sun headline stuff. But it's reorganizing
Speaker 3: the government in a much more favorable modern way for
Speaker 3: inward investment.
Speaker 2: And we've got the Investment Summit happening next week and
Speaker 2: some people are saying, well, the timing of that's a
Speaker 2: bit strange. You know, everyone's really just waiting for the budget.
Speaker 2: You know, there's a lot of nervousness about what sort
Speaker 2: of measures might be there in terms of wealth, you know,
Speaker 2: coupital gains, all these things. But what is your outlook
Speaker 2: for the investments on me? Are you saying we're going
Speaker 2: to actually get some substantive announcements ahead of it that
Speaker 2: are going to really attract investment.
Speaker 3: Well, first of all, you know, everyone that's not involved
Speaker 3: in something is always slacking it off. I mean, it's
Speaker 3: normal in polity. But actually I think it's a very
Speaker 3: good time to have the summit. Yes, there will be
Speaker 3: some tax questions and things like that because people are
Speaker 3: waiting to see what changes are, but decisions are not
Speaker 3: made on the day. This is not something where someone
Speaker 3: will arrive in the morning not thinking they're going to invest,
Speaker 3: and leave in the afternoon and think, oh, I'm going
Speaker 3: to invest now, or I'm not. It isn't that so
Speaker 3: I think the fact it's before the budget is not relevant.
Speaker 3: But the government with a lot of effort of put
Speaker 3: together a large group of very senior investment people from
Speaker 3: all over the world. I'm assuming so because these are
Speaker 3: the people that were there last year. They were the
Speaker 3: top people from banks, from multinationals, from sovereign wealth funds,
Speaker 3: et cetera. And it's a big show piece for the country.
Speaker 3: So don't criticize them for the timing at all. I'm
Speaker 3: sure it will be a success because these things have
Speaker 3: the right kind of people in the room. But it's
Speaker 3: not a question of yes or no, because a lot
Speaker 3: of it just helps create the environment that we need,
Speaker 3: and I do feel an announcement on that day will
Speaker 3: be very important towards investment.
Speaker 4: What is the environment that you know global investors need? So,
Speaker 4: is it again on paper cutting out the red tape
Speaker 4: so that if a blackstoner of black Rock wants to
Speaker 4: put two million pounds on where they can do it
Speaker 4: in twenty four hours, or is it actually just making
Speaker 4: sure that the new government, then a lot of people
Speaker 4: are still getting to know, are really pro business.
Speaker 3: Well, the answer is both. That's a classic politicians answer
Speaker 3: isn't it. But very briefly, the former I found in
Speaker 3: the and we interviewed about two hundred companies, sovereign wealth funds,
Speaker 3: pension funds, et cetera. And the course of review, and
Speaker 3: if I just go through what the obstacles were, and
Speaker 3: then we can decide whether investments some it's going to help.
Speaker 3: First of all, lack of consistency in policy investors, be
Speaker 3: their sovereign wealth funds or indeed companies, they want stability
Speaker 3: of policy and a very reason to believe that a
Speaker 3: new government, hopefully there for four or five years, irrespect
Speaker 3: to what parts of the art, will bring some stability.
Speaker 3: But beyond that, we've got a series of obstacles which
Speaker 3: were first of all money. There were pots and challenges
Speaker 3: and funds all over the place. Companies get very frustrated
Speaker 3: by this. What they really want to know is if
Speaker 3: the government's partnering up with me in any way, this
Speaker 3: is what we need, You've done all the due diligence,
Speaker 3: have either got it or I haven't. Then there's a
Speaker 3: whole series of other obstacles, such as connections to the grid,
Speaker 3: planning skills. There's a lot of things like visas, etc.
Speaker 3: So by having a new organization which has been rumored
Speaker 3: to be called invest UK and what it would be called,
Speaker 3: it doesn't really matter. Bringing together all of the different
Speaker 3: groups in government that do this into one unit I
Speaker 3: think would help a lot, providing it has the power
Speaker 3: and the power of the Prime Minister to make sure
Speaker 3: that the whoever runs this as Investment Minister and the
Speaker 3: OFIB behind it has real clout to give an offer
Speaker 3: to a company saying yes, here's a site we've found
Speaker 3: with planning permission for you. It will be connected to
Speaker 3: the grid. If you want visas, you'll get them within
Speaker 3: fourteen days because you're investing so much money. And we're
Speaker 3: going to actually have a skills academy near you because
Speaker 3: we know you'll need thousands of new engineers or whatever
Speaker 3: it is.
Speaker 4: Richard, this doesn't sound revolutionary. I mean it's just common sense.
Speaker 3: I'm not a revolutionary person. Well, thank you very much.
Speaker 3: It is common sense. I think the Investment Summit itself
Speaker 3: is it's a different matter. You know, that is a
Speaker 3: great summit, and it's just a good opportuittunity for the
Speaker 3: government to say, actually we accepted the Harrington Review. The
Speaker 3: previous government did it wasn't fully implemented because there was
Speaker 3: a general election. So to give you an example, Jeremy
Speaker 3: Hunt convened a Government Investment Committee, which is all the
Speaker 3: main sectors of states. The first meeting had to be
Speaker 3: canceled because the election was called. I mean, but I
Speaker 3: hope they will say, yes, we accepted in opposition the review.
Speaker 3: We're now formally accepting it, and here's our plans and
Speaker 3: that for example, we're going to have a greatly enhanced
Speaker 3: Office for Investment, which will have instead of reactive powers,
Speaker 3: that is, someone comes to us with a possible investment
Speaker 3: and we scurry around, We're going to spread through our
Speaker 3: trade commissioners all over the world. We're going to identify
Speaker 3: what sectors we want to entice people and companies to
Speaker 3: come here, what we're going to do to help them
Speaker 3: and sort out all of these obstacles for them. Other
Speaker 3: countries do, Other countries do.
Speaker 4: But so what the UK is very good at, is
Speaker 4: it at least meeting number ten is very good at
Speaker 4: meeting with a lot of these chief executives that want
Speaker 4: to invest. I would say people are still trying to
Speaker 4: get to know this government. They don't really one hundred
Speaker 4: percent know what they stand for.
Speaker 2: In this long wait, in what we hear and what
Speaker 2: we've been talking to. Karen Hepca from Bloomboth Radiation's interviewing investors'
Speaker 2: private eputy companies. Everyone is really nervous.
Speaker 3: You know.
Speaker 2: There was a lot of talk before the election, Rachel
Speaker 2: reospend a lot of time in the city saying we
Speaker 2: are pro business. Now there's been this long period for
Speaker 2: the budget, reading headlines about changes to capital gains, carried interest.
Speaker 2: What was this week was about a potential exit tax
Speaker 2: if you wanted to leave. All of this stuff is
Speaker 2: creating a lot of uncertainty in nerves and people saying
Speaker 2: do we really want to invest in Britain? So the
Speaker 2: Coman seemed to be creating that uncertainty rather than dealing
Speaker 2: with it.
Speaker 3: Aren't. Well, yes, you're right, and the investment summit is
Speaker 3: a good, very good opportunity that have the right people
Speaker 3: in the room and the right people listening externally to
Speaker 3: say very clear and I'm sure in the ChIL A's speech,
Speaker 3: not that I've seen it, but I'm sure she'll be
Speaker 3: reassuring companies and perspective investors precisely to get over those
Speaker 3: hurdles and it's time that from the investment point of view,
Speaker 3: the government controlled the narrative instead of allowing all these
Speaker 3: rumors to come out. Having said that, you know, investors
Speaker 3: are nervous. Generally, the world's in a difficult position. I'm
Speaker 3: sure other countries. It's not that other countries are brilliant.
Speaker 3: You know, if I if I had five quid for
Speaker 3: everyone that told me that they had Macron's mobile on
Speaker 3: speed dial because he'd given it to them at some investment, yeah,
Speaker 3: I don't.
Speaker 4: Actually I'm a little bit disappointed.
Speaker 3: But the truth is, I'm being sarcastic about President Macron,
Speaker 3: but I'm sure he networks very well, but it's the
Speaker 3: delivery that matters. Delivery sounds boring all this organizational stuff,
Speaker 3: but what has happened in the past, We've had it
Speaker 3: very good investment ministers. Take Dominic Johnson, who had the
Speaker 3: job for the last government, who's a very talented salesman.
Speaker 3: That was his professional life as well. They raise expectations
Speaker 3: by doing a really good pitch, but the actual delivery
Speaker 3: behind it was disappointed, disappointing, and that's why the government's
Speaker 3: really trying to get to grips with this.
Speaker 4: I mean you can't be all things to all people.
Speaker 4: So what kind of investors would you want to attract?
Speaker 4: Is it sovereign wealth fund? Is it for private public partnerships?
Speaker 4: Is it infrastructure?
Speaker 3: Like?
Speaker 4: What is this? What is the industrial plan for this country?
Speaker 3: Well, the government, I hope, will also be announcing that
Speaker 3: the third, so one string, is the new National Wealth Fund,
Speaker 3: The second is reorganizing the investment part of government, and
Speaker 3: the third is Industrial strategy. And I believe the government
Speaker 3: will be announcing the chairman of the Industrial Strategy Council,
Speaker 3: something which Greg Clark and I set up under Andy Haldane.
Speaker 3: I think it was in twenty sixteen. Unfortunately, for some reason,
Speaker 3: Boris decided to abandon it. But I'm sure they will
Speaker 3: bring this back. They're pledged to do it. And what
Speaker 3: that will do because it's people think oh industrial, that
Speaker 3: means it's sort of banging pots and pans and factories,
Speaker 3: But it's a business investment strategy. It's saying, look, we
Speaker 3: are we can't do everything exactly is the point you made,
Speaker 3: because you know we're too small, don't have the money.
Speaker 3: But what we can do is identify as a strategy
Speaker 3: where we think we've got a competitive advantage. For example,
Speaker 3: it might be in in I don't know, wing manufacturer
Speaker 3: for aircraft. We good at that. What do we need
Speaker 3: to do to attract other companies in that field, suppliers
Speaker 3: for the supply chain and everything else. So it sets
Speaker 3: out a strategy for where we can succeed and with
Speaker 3: what resources we have got, what we're going to put
Speaker 3: into it. And then the machinery, which I hope will
Speaker 3: be the beefed up Office for Investment, which I hope
Speaker 3: will be announced, then provides the implementation of that. So
Speaker 3: I think I think the industrial strategy or government investment strategy,
Speaker 3: doesn't matter what it's called, is very important.
Speaker 2: I mean, just in general, I'm sensing a lot of
Speaker 2: timism here that we are going to make progress with
Speaker 2: this government on a lot of the things that you
Speaker 2: put in your report that you've recommended, and a sense
Speaker 2: of continuity on the business environment, and that is, you know,
Speaker 2: that's odds with some of some of the nerves that
Speaker 2: we're hearing around the city, like what does the company
Speaker 2: need to do next week to really put to rest
Speaker 2: all of those concerns.
Speaker 3: Growth is the big thing for the government. It's the
Speaker 3: only way for the government to be able to invest
Speaker 3: spend the kind of money they want on public services.
Speaker 3: No secret there. They can't put up taxes much because
Speaker 3: they're very high. It's got to be growth and a
Speaker 3: combination of Jonathan Reynold's the Business Secretary and Rachel Reaves
Speaker 3: the chance too. I've got a lot of time for
Speaker 3: both of them. Makes me optimistic, but they have to
Speaker 3: reset the agenda and just a press release say are great,
Speaker 3: we want growth, etc. Investors are sophisticated people.
Speaker 2: You know, they overdid the doom mungering a bit, didn't they.
Speaker 2: They did I've crushed a bit of confidence or yeah.
Speaker 3: I didn't approve of that, but it's exactly what the
Speaker 3: coalition did in twenty ten. It's blaming everything on your predecessor,
Speaker 3: isn't it like that? But the reality is now people
Speaker 3: are looking for more than just the superficial messaging. And
Speaker 3: if there are detailed plans for the Wealth Fund, for
Speaker 3: an industrial strategy, and for reorganizing the whole investment area,
Speaker 3: then I think investors will really come back into this country.
Speaker 4: Richard, what about pensions? What would you do with pensions
Speaker 4: and pension reforms? I mean, you know, there's an issue
Speaker 4: that not enough investors, retail investors, but even pensions take
Speaker 4: enough risk.
Speaker 3: You know. I think what Jeremy Hunt started was a
Speaker 3: good thing in the mansion House compact. But in the end,
Speaker 3: the only way pension funds are going to invest here
Speaker 3: more of their money is by having tax breaks on
Speaker 3: investing in UK companies. And I think that's quite a
Speaker 3: legitimate tool for countries to do. Other countries do it.
Speaker 2: There's slightly more carrot than stick in a way, is it.
Speaker 3: Well, you can try the stick, but in the end
Speaker 3: they look at the numbers and if there's a big
Speaker 3: advantage for them for investing in UK companies, they won't
Speaker 3: do it out of philanthropy or charity because they've got
Speaker 3: the fiduciary duty to their beneficiaries that people that have
Speaker 3: the pensions. So I would strongly incent them to do that.
Speaker 3: But I also think I again I have a bit
Speaker 3: of a plug for myself. But when I was Pensions Minister,
Speaker 3: we did the auto enrollment scheme, which is bringing more
Speaker 3: money in and I think if they increase the amount
Speaker 3: that employers have to put into that and the employees
Speaker 3: have to put into that, that will have a lot
Speaker 3: more funds. But they do need more incentive to get
Speaker 3: them to invest in the UK.
Speaker 2: Talking about the climate, though again broadly, I mean the
Speaker 2: bond market is starting to twitch a little bit about
Speaker 2: some of the messaging from the government. We've seen the
Speaker 2: spreads for UK debt widening over Europe, interest rates creeping up.
Speaker 2: That has all sorts of consequences. Of of course, we've been
Speaker 2: here before when they were talks about big fiscal expansion
Speaker 2: under list trust. I don't think anyone's predicting that sort
Speaker 2: of crush again. But do you think we should be
Speaker 2: a little bit nervous or that the markets are starting
Speaker 2: to take note of things like the suggestion that Reeves
Speaker 2: will change the accounting rules so that she can borrow
Speaker 2: a lot more money.
Speaker 3: I think it may well frighten Rachel Reeves off from
Speaker 3: doing some more of the more radical.
Speaker 2: Thing fifty six billion because of fears.
Speaker 3: Of what happened with quality quality. And I'm sure she
Speaker 3: and her advisors we're doing everything they can to calm
Speaker 3: the markets. But the reality is that you know, a
Speaker 3: lot of stuff like investment in infrastructure is excluded. You know,
Speaker 3: it's treated as capital expensure, but a lot of things aren't.
Speaker 3: For example, housing, which is very important part of growth.
Speaker 3: Money to housing associations is treated as basically it's a
Speaker 3: current expenditure. The asset side of it's not taken into
Speaker 3: consideration in public sector financing. So I don't think changing those.
Speaker 2: Rules that sensible to change.
Speaker 3: Yeah, and I don't why didn't she see that?
Speaker 2: Do it when he was chancellor or.
Speaker 3: Next time is here. You'll have to ask him.
Speaker 4: I have no idea, and that's a promise. We will
Speaker 4: definitely ask him.
Speaker 3: You should. I don't know the answer to that question, seriously,
Speaker 3: but this has been mooted as part of the government's
Speaker 3: housing strategy, and I don't I can't believe that will
Speaker 3: spook the markets because really, quite clearly real estate is
Speaker 3: an asset. So if it's sensible like that, if it's
Speaker 3: just an excuse for more public expenditure, then it would
Speaker 3: spook the markets experts of it. But you've seen it
Speaker 3: in front of it, the infrastructure investment for us that
Speaker 3: would have your support, says that's a good use of
Speaker 3: changing the count was giving you some headroom borrow more
Speaker 3: investing infrastructure. The more that public accounting rules are like
Speaker 3: corporate accounting rules, where an asset is an asset. A
Speaker 3: liability is a liability, and they're not all on the
Speaker 3: P and L. To me, not an accountant, I was
Speaker 3: in business for thirty years. However, it's a very sensible
Speaker 3: thing to do.
Speaker 4: What about the PFI, I mean, for those listening, this
Speaker 4: is a private finance initiatives which are these basically long
Speaker 4: term contracts.
Speaker 3: They are, and I'm sure the government is looking on
Speaker 3: ways to bring them back a new modern version of it.
Speaker 3: Of course, like so many things in politics, in the end,
Speaker 3: the media, the populist media, brought down the last loot
Speaker 3: of PFIs because it picked out things where light bulbs
Speaker 3: had to be paid for for thirty years at ten
Speaker 3: times the price on Amazon. But I'm sure there'll be
Speaker 3: a big adjustment. But the reality of doing off balance
Speaker 3: sheet accounting and bringing in private funds, I don't know
Speaker 3: why anyone could think there's a better way, and to me,
Speaker 3: that is the ideal way to expand the infrastructure in
Speaker 3: the country. The tweaking and the rules of course have
Speaker 3: to be worked out in detail, and that's really beyond
Speaker 3: my scope to do so.
Speaker 2: I mean, it's got to be appealing to the private
Speaker 2: sector as well. Hasn't that mean, if you look at
Speaker 2: like the Thameswater situation, investors are very cautious about somehow
Speaker 2: parting into that that mess, I suppose you can call it.
Speaker 2: Does Britain have the right conditions to set these public
Speaker 2: private partships up.
Speaker 3: As long as they learn from their mistakes. I mean,
Speaker 3: you know, the whole Thames Water thing came about because
Speaker 3: of an ill thought out phony privatization in the past,
Speaker 3: where I think Investment Bank has probably amboozled ministers and
Speaker 3: civil servants into doing stuff they didn't quite understand. If
Speaker 3: anyone's listening to this that was involved in that, it's
Speaker 3: not personal. That's what I'd have done if I was
Speaker 3: on millions of pounds worth of bonuses.
Speaker 4: You would have done that.
Speaker 3: I would if I was the head of Gold and
Speaker 3: Sachs or JP Morgan or something. But I wasn't, so
Speaker 3: don't worry about that. But I'm sure a modern version
Speaker 3: of a way of working out partnerships quite seriously, just
Speaker 3: as the industrial strategy, the sector deals wed with aerospace,
Speaker 3: automotives etc. Have brought in a lot of investment. You know,
Speaker 3: it's not an option. Some people on the right wing
Speaker 3: of the Conservative Party think that it's if you just
Speaker 3: reduced taxes, that's enough. Government shouldn't get involved in in help.
Speaker 3: But the world is not like that. We have to
Speaker 3: have partnerships been government business and quite what the mechanism
Speaker 3: is has to be worked out.
Speaker 4: Richard, thank you so much for joining us.
Speaker 3: Great pleasure, anytime.
Speaker 2: Love That was great, awesome, Thanks for listening to this
Speaker 2: week's In the City from Bloomberg. This episode was hosted
Speaker 2: by me, David Merritt, Francin Laqua, and Allegra Stratton. It
Speaker 2: was produced by Somersadi, with production support and sound design
Speaker 2: by Moses Adam Brendan Francis Nenham is our executive producer
Speaker 2: and Saide Bauman is Head of Podcasts. Special thanks to
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