Speaker 1: You're listening to Bloomberg Opinion. I'm Vanniy Quinn. UK markets
Speaker 1: stabilized this week after Richie Soon I moved into Number
Speaker 1: ten Downing Street and appointed a cabinet. I will place
Speaker 1: economic stability and confidence at the heart of this government's agenda.
Speaker 1: This will mean difficult decisions to come. I spoke with
Speaker 1: Bloomberg Opinions Adrian Waldridge on what to expect. So, Adrian,
Speaker 1: the f t S opinion page is questioning so next competence,
Speaker 1: and I wonder what you think about that he was
Speaker 1: chancellor under Morris Johnson and maybe embrace policies he didn't
Speaker 1: particularly believe in. Does he do a you turn now
Speaker 1: and go back to things like small state policies for example.
Speaker 1: I think that the question is competence is very questionable.
Speaker 1: I think he's been extremely competent in every single job
Speaker 1: that he's done. And even when he was working for Boris,
Speaker 1: he may have overspent a little bit and he may
Speaker 1: have undertaxed a little bit. Actually, I mean there is
Speaker 1: a problem with the balancing of the books, but that's
Speaker 1: more because Boris was edging him in or pushing him
Speaker 1: in that direction, and he ultimately resigned from his job
Speaker 1: preside it because he disagreed with Boris on questions of spending.
Speaker 1: So I think he's a competent person, and he has
Speaker 1: a very competent person next door in number eleven as
Speaker 1: his chance to the form of Jeremy Hunt. So I
Speaker 1: think my presumption would be competent rather than incompetence. Well,
Speaker 1: are we looking at austerity for written now? Though, as
Speaker 1: a way of getting inflation under control? I think we're
Speaker 1: moving towards a position of austerity, not out of choice
Speaker 1: but out of necessity party because we have to get
Speaker 1: inflation under control, and partly because we have this enormous
Speaker 1: black hole at the heart of the economy which we
Speaker 1: need to deal with. So we have a period of
Speaker 1: writing taxes and squeezed expenditure which will produce a bit
Speaker 1: of austerity. But this is not elective austerity in the
Speaker 1: way that we had under David Cameron and Osborne, when
Speaker 1: we could have had a more expansionary policy. I think
Speaker 1: it's absolutely necessary austerity because without it we will lose
Speaker 1: the confidence of the markets, you know, restore the confidence
Speaker 1: of the markets. We have to try very hard to
Speaker 1: live within our means well exactly now, So far guilty.
Speaker 1: Heels are back at pre mini budget levels. The pounders
Speaker 1: around one is all calm or is the market just
Speaker 1: waiting to see what he unveils. I think the presumption
Speaker 1: is that the market will be pretty calm. I think
Speaker 1: they have a lot of confidence in Sunac, they have
Speaker 1: a lot of confidence in Jeremy Hunts, and beneath that,
Speaker 1: I think they will tend to be confident rather than
Speaker 1: lacking in confidence. In the British economy. It took a
Speaker 1: lot to shape the markets. You know, in the British
Speaker 1: Coldom we had Boris with his very chaotic leadership and
Speaker 1: people the markets basically accepted that. Then we had, you know,
Speaker 1: this extraordinary event with Liz Trust and quasi quatly camacasi budgets,
Speaker 1: and that did shape the markets. But I think they
Speaker 1: will be happy with this mixture. And it's not just
Speaker 1: the matter that he's pursuing broadly sensible economic policy when
Speaker 1: it comes to taxing and spending, but he has a
Speaker 1: very calm, sensible, well organized manner down in the streets.
Speaker 1: Has not been you know, the hearts of British government
Speaker 1: has not been well run for a very long time.
Speaker 1: And you know, you now have somebody who you know,
Speaker 1: to go on. His record in the Treasury runs things
Speaker 1: very well. You know, there won't be partying in in
Speaker 1: Downing Street as there was in the partment. He's you know,
Speaker 1: he's a teacher, he's a teetoe player. It would be
Speaker 1: a very sober atmosphere. And if there are parties I'm
Speaker 1: sure he'll own up to them as well. He won't
Speaker 1: pretended and that I don't think he would. No, No,
Speaker 1: I think the markets managed to tolerate you know, Boris
Speaker 1: Johnson for a while now. But this is the first
Speaker 1: time we've had good administration in Britain for a long time,
Speaker 1: because before we had Boris Johnson we had Theresa a
Speaker 1: who is tormented to an extraordinary degree by the Brexit uncertainty.
Speaker 1: Now brexits done, we have a stable prime minister. I
Speaker 1: think we'll get back to being one of the good
Speaker 1: boys rather than one of the naughty children of Europe. Well,
Speaker 1: that's certainly the hope. Now. Snek was a Leave proponent.
Speaker 1: He's actually the first real believer given the trust was
Speaker 1: at a commeron and Johnson even too. What will his
Speaker 1: pro growth policy be. I think at the moment we
Speaker 1: won't be thinking about pro growth policies at the moment.
Speaker 1: The most important thing to do is to stabilize the
Speaker 1: economy reassure the market, because without a stable economy, without stability,
Speaker 1: without a reassured set of markets, you can't have any
Speaker 1: growth whatsoever. Absolutely, what's interesting about all of this that
Speaker 1: in the long term he is a person who believes
Speaker 1: in lower taxes and the state as a smaller share
Speaker 1: of GDP. You know, he has mentioned the figure of
Speaker 1: about of g d P as being about the right amount.
Speaker 1: His quarrel with this trust was not about where they
Speaker 1: wanted to go, whether the growth was a good thing,
Speaker 1: whether shrinking the state was a necessary way of leading
Speaker 1: to hire growth in the long term. It was about timing,
Speaker 1: and it was about whether you can actually cut taxes
Speaker 1: and raised spending is exactly at the same time. So
Speaker 1: I think as we move towards an election, he will
Speaker 1: start cutting taxes again, which is always what he wanted
Speaker 1: to do as chance to the chancell These argu with
Speaker 1: policy games about speed and taste and timing right exactly.
Speaker 1: I do want to ask you about the next election.
Speaker 1: But before we leave this topic, Narrianna Cautlacola says also
Speaker 1: in Bloomberg Opinion that markets didn't always trust the Bank
Speaker 1: of England did, and that's in a way the case.
Speaker 1: Right there was a standoff between Quasi Quarting and Andrew Bailey.
Speaker 1: What will the relationship between SUNAC and Bailey be. We
Speaker 1: haven't heard from Bailey yet. Um I think I don't
Speaker 1: actually agree with that. I mean I I do think
Speaker 1: that this sudden financial event, sudden budget which basically said
Speaker 1: let's spend more money on energy and cut the top
Speaker 1: rate of taxes and lots of other taxes, did suddenly
Speaker 1: send a shock. And it was the combination of the
Speaker 1: government saying let's putting the foot on the accelerator and
Speaker 1: the Bank of England putting the foot on the brake.
Speaker 1: It was this stopped me starting sort of thing that
Speaker 1: really was the two things that really messed things up.
Speaker 1: I think that the relationship between the treasure in the
Speaker 1: Bank of England will be good. I think, but soon
Speaker 1: act knows Bailey he will with him, you know closely
Speaker 1: when he was at the Treasury, and he's a technocrat.
Speaker 1: He's a person who loves the language of economics, the
Speaker 1: language of macro financial management. In the long term economic policy.
Speaker 1: He loves talking about all of that, as Bailey does.
Speaker 1: You know, so they're both professionals, they're both technocrats and
Speaker 1: are both sort of not political German. So I think
Speaker 1: that we have we established I hate the fans are optimistic,
Speaker 1: but we've re established sensible people at the heart of
Speaker 1: the British government that we have. As he said, we
Speaker 1: have got lots of problems ahead, but I don't see
Speaker 1: the Bank of England and the Treasury moving in in
Speaker 1: in in different directions. It will be difficulties ahead, but
Speaker 1: there won't be chaos at the heart of government. More
Speaker 1: next on Boomberg opinion. I'm Vanney Quinn. Well, in terms
Speaker 1: of whosonic appointed and fired, it was a little bit
Speaker 1: of a purge. You got rid of anyone who wasn't
Speaker 1: a supporter all along and appointed or reappointed supporters, for
Speaker 1: example sell a Braverman. Now slightly off topic, Tomorro gets
Speaker 1: but how should we think about the fact that he
Speaker 1: reappointed someone accused of a security breach which had called
Speaker 1: her to resign. Well, you know, I was very disappointed
Speaker 1: by the appointment of Raveman, partly because of the security breach,
Speaker 1: partly because I don't think she's a very distinguished or
Speaker 1: successful government figure. I don't think it's got a very
Speaker 1: good career. I think a lot of her rhetoric is
Speaker 1: is rather reporting. Also, you know, she's been making a
Speaker 1: huge amount of from about Indians overstaying their visas, which
Speaker 1: has enormously annoyed the Indian government because it seems to
Speaker 1: she's she's stinging them them out. And as a time
Speaker 1: when Anglo Indian relations, as the first Hindu prime minister
Speaker 1: in the origin prime minister retor, it couldn't be better.
Speaker 1: It seemed unnecessary. So it wasn't as though she's such
Speaker 1: a towering talent or towering figure within the party that
Speaker 1: he had to appoint her. So, you know, I don't
Speaker 1: know what deal was concocted between the two of them.
Speaker 1: It may be the price, but he had to pay
Speaker 1: for the right of the party, the Brexit rights of
Speaker 1: the party being queercent or acquiescing. But it's it's it's
Speaker 1: not the best start. I mean, I think, you know,
Speaker 1: he's got rid of people who need to be got
Speaker 1: rid of, either because they're they're weird or because they're
Speaker 1: not all that good. I mean, Chloe Smith, I think
Speaker 1: it was all that good. She's been got rid of.
Speaker 1: I think be Small was eccentric and toxifying. He's got
Speaker 1: rid of. I think all of that is good. It's
Speaker 1: not the perfect administration, but it's better than it was.
Speaker 1: Well to segue from there, Michael Gove, Secretary of Stage
Speaker 1: for leveling up housing and communities. I mean which communities
Speaker 1: are doing um, I think that I don't reach it soon.
Speaker 1: Neck has a different, slightly different set of beliefs about
Speaker 1: leveling up from his predecessor. He thinks that, you know,
Speaker 1: the North of England is a sort of a nascent
Speaker 1: patch right country, that what it needs is not an
Speaker 1: enormous amount of money being spent on it, but a
Speaker 1: removal of some of the restrictions to each on the growth.
Speaker 1: And he's always said that the North of England has
Speaker 1: coming to Patcherism a bit late, but it's coming to trism.
Speaker 1: It was really people who would have voted for Mrs
Speaker 1: SATs in the who came to Tacherism more recently because
Speaker 1: of a legacy of cultural dislike for the Conservative Party.
Speaker 1: So he I think he won't be as much leveling
Speaker 1: up about spending. He'd be more leveling up about creating
Speaker 1: enterprise and encouraging enterprise and encouraging entrepreneurial classes in the
Speaker 1: North of England. But I think that that is a
Speaker 1: policy which leveling up as Boris Johnson conceived of it
Speaker 1: was a policy that required a lot of public spending
Speaker 1: and we just don't have that much public money to
Speaker 1: spend at the moment. Well, that's the other thing. He
Speaker 1: doesn't have a war chest. So for how long do
Speaker 1: you think Adrian is the UK now politically stable? Is
Speaker 1: just more than two years enough time for sunach assuming
Speaker 1: he stays to engineer a popular Conservative Party. Again, um,
Speaker 1: there are two different questions there, whether we have stability.
Speaker 1: I think that, um, I think that we have a
Speaker 1: stable person in chart whereas we've we've had stable people
Speaker 1: in charge. We have somebody who has supporters right across
Speaker 1: the party on the left and the right party, which
Speaker 1: we didn't have before. We have something who was actually
Speaker 1: a prexiteer, you know, as you said, he's supported Brexit
Speaker 1: long before his trust came around to the idea. So
Speaker 1: I and we do have a general election coming up,
Speaker 1: so I think that, you know, he is well positioned
Speaker 1: to stabilize the Conservative Party. Whether that's enough to get
Speaker 1: rid of the memories of the absolute absurdities of you know,
Speaker 1: the Tory Party destroyed its reputation for economic competence. It
Speaker 1: looked like, you know, it was turning the country into
Speaker 1: a completely laughing stock um and you know it's been
Speaker 1: changing its leaders without having a general election. So I
Speaker 1: think all of that, I would presume that we'll have
Speaker 1: a Labor party, you know, a labor government next time,
Speaker 1: even if he can stabilize things. And the other question
Speaker 1: is who will emerge as the anti Sunak Conservative leader
Speaker 1: in parliament, Mingle Boris Johnson or Lis Trust or any
Speaker 1: of the previous ersiers play a significant roles from here.
Speaker 1: That's a very good question. But I think that people
Speaker 1: are really sick of these um people, you know, grandstanding.
Speaker 1: They recognized that the country is in direstration that needs
Speaker 1: a period of stability, and a lot of Tory MPs
Speaker 1: realize that if you've got some rebellious faction and that
Speaker 1: rebellious faction shakes the government tries to bring it down,
Speaker 1: it might mean that the party is completely wiped out
Speaker 1: in the next election. So even if it's just a
Speaker 1: case of limiting the losses of the Conservative parts in
Speaker 1: the next election. I think that's a powerful way in
Speaker 1: which MPs will be disciplined and will discipline each other.
Speaker 1: So I don't think anybody would be very popular if
Speaker 1: they decide to cause yet more trouble over the next
Speaker 1: two years, although it must be said that the Conservative
Speaker 1: Party's appetite for trouble has been quite extraordinary. Nuomberg Opinions,
Speaker 1: Adrian Wildridge. There catch Bloomberg Opinion with me Vonnie Quinn
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Speaker 1: join in comments and opinions always welcome. I'm at Bonny
Speaker 1: Quinn on Twitter or email v Quinn at Blomberg dot net.
Speaker 1: Until next time on Bloomberg Opinion.