Latest / Stephanomics / Winning Was the 'Easy Part' for Starmer: Now What?

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Winning Was the 'Easy Part' for Starmer: Now What? · Stephanomics

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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
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Speaker 2: You campaign for it, you've fought for it, you've voted
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Speaker 2: for it, and now it has arrived.
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Speaker 3: Change begins.
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Speaker 4: Now welcome to another special edition of the voter Nomics podcast,
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Speaker 4: where politics and markets collide. I'm Stephanie Flanders, head of
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Speaker 4: Economics and Government at Bloomberg, and I'm in Whitehall in
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Speaker 4: the Old War Office, just a stone's throw from ten
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Speaker 4: Downing Street. If you're much better at throwing stones than
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Speaker 4: i am. The Conservatives just a review have been turfed
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Speaker 4: out in a seismic changing of the guard in Westminster
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Speaker 4: and across constituencies up and down the land, with Prime
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Speaker 4: Minister of Is She's Sunak presiding over a record loss
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Speaker 4: of around two hundred and fifty Conservative seats, Labor with
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Speaker 4: a majority just shy of Tony Blair's landslide victory of
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Speaker 4: nineteen ninety seven, and there will be a lot of
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Speaker 4: other new faces joining him in Parliament, including many more
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Speaker 4: Liberal Democrats, a clutch of reform and Green MPs will
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Speaker 4: be very interested in five years time to see what
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Speaker 4: the opposition, what kind of opposition the Labor Party is facing.
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Speaker 4: But I think it's fair to say, for the first
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Speaker 4: time in a long time, the world here in that
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Speaker 4: the financial markets and in London but also around the
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Speaker 4: world doesn't have to pay that much attention to the
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Speaker 4: Conservative Party's travails, at least for a while, any more
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Speaker 4: than they ever care about a weak opposition party at
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Speaker 4: the start of a new government with a massive majority.
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Speaker 4: So instead we'll be focusing here on Labor and markets
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Speaker 4: haven't reacted this morning. You'll probably have seen, and I
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Speaker 4: think con mentioned there's been no big change in the
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Speaker 4: pound foot seats up slightly when it opened a few
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Speaker 4: minutes ago, and that's obviously because it wasn't a surprise
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Speaker 4: that the Labor Party had won. But I think you
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Speaker 4: know they've been so cagey and so careful in the
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Speaker 4: lead up to this, with their huge lead in the
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Speaker 4: polls that they didn't want to lose. Then I think
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Speaker 4: there will be plenty in the months to come that
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Speaker 4: will be a surprise for investors and for the business
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Speaker 4: community and for all of.
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Speaker 5: Us here up on the stage.
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Speaker 4: I have to help me thinking about this, think about
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Speaker 4: this for the next few minutes. Bloomberg's editor in chief
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Speaker 4: John Mikolfwaite and Sir Nigel Wilson, who was the chief
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Speaker 4: executive of the insurer Legal in General for a decade
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Speaker 4: before standing down last year, and has recently been appointed
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Speaker 4: group chairman of Canary Wharf Group. So Nigel, let me
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Speaker 4: come to you, because along with your business career, you've
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Speaker 4: been quite public over the years about the factors holding
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Speaker 4: back the UK economy and the shortcomings in government policy
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Speaker 4: over this period. Do you seriously expect now that lay
3:00
Speaker 4: But will change things and what kind of advice would
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Speaker 4: you give them.
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Speaker 6: I'm very excited because I think Kids done an amazing
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Speaker 6: job to transform the party and win the election, and
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Speaker 6: he's now got a wonderful opportunity because as I've always said,
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Speaker 6: we've got an amazing amount of capital in the UK.
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Speaker 6: We've got six trillion pounds of long term capital which
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Speaker 6: has been hopelessly misallocated for the last twenty or thirty years.
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Speaker 6: So they've got the capital already sitting in the UK
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Speaker 6: to do all the necessary changes. Because we're always bottom
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Speaker 6: of the G seven table in terms of the percentage
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Speaker 6: of investment as a proportion of GDP, we could now
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Speaker 6: move to near the top of it if we want
3:38
Speaker 6: to do that, And they put the policy and regulation
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Speaker 6: in place, to drive growth in housing, to drive growth
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Speaker 6: in sort out the water industry, their massive transformation on energy,
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Speaker 6: and to build a world class venture capital and scale
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Speaker 6: up businesses in the UK. So I'm very excited about
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Speaker 6: the prospects because kids done a great job in Phase one,
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Speaker 6: which I think is the easiest.
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Speaker 1: One, is winning the election.
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Speaker 6: Verse two is actually coming forward with some not KG policies,
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Speaker 6: but some real credible policies about how we're really going
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Speaker 6: to grow the economy and use.
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Speaker 1: All the private capital and all the.
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Speaker 6: Private expertise to drive that growth, and then be very
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Speaker 6: supportive next year in actually making sure that capital gets
4:20
Speaker 6: spent and the government acts in a very bald and
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Speaker 6: aggressive way that they haven't done for a very long
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Speaker 6: period of time to really drive change. Don't just talk
4:30
Speaker 6: about change, You've got to make change happen. So I
4:34
Speaker 6: think they are listening. I've had lots of indeed some
4:38
Speaker 6: private sessions with kir on this, and I think they're
4:42
Speaker 6: up for doing this. This could be nineteen forty five,
4:45
Speaker 6: a transformation of the economy going forward, a modernization of
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Speaker 6: the economy going forward, and really really delivering and making
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Speaker 6: people happy again about the terrible lack of growth that
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Speaker 6: we've seen since two thousand and seven. How far behind
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Speaker 6: we've fallen against the best amount of competitors.
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Speaker 4: Well, just to follow up on that, I mean, I
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Speaker 4: think you know people would often people outside the world
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Speaker 4: are surprised that we have a world leading financial sector,
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Speaker 4: that it's so good at deploying capital, But historically, for
5:18
Speaker 4: more than a century it has been bad deploying it
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Speaker 4: in its own country. We just haven't we haven't seen
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Speaker 4: it go into the kind of private investment. And as
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Speaker 4: you mentioned, twenty four of the last thirty years we've
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Speaker 4: had the lowest rate of investment in the Group of Seven,
5:28
Speaker 4: and we're about twenty eighth out of thirty one countries
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Speaker 4: in the OECD.
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Speaker 5: So when you talk.
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Speaker 4: About Takirstama, the incoming prime minister knows what's at stake
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Speaker 4: and knows some of the key leavers to pull.
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Speaker 5: What are you.
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Speaker 4: Focused on on planning restrictions on house building? Where would
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Speaker 4: you see it?
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Speaker 6: I think all of these things are integrated together, because
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Speaker 6: I think once you start delivering change and people seeing
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Speaker 6: things happen, then you create that immersing positive momentum. They've
5:54
Speaker 6: done it in the election. I think they can do
5:56
Speaker 6: it in the economy as well, because the numbers that
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Speaker 6: you caught are often the ones that I qued as well.
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Speaker 6: We have this massive potential. There's six trillion pounds of
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Speaker 6: long term capital. There's three trillion in the pension fund industry,
6:07
Speaker 6: there's one and a half trillion in the insurance industry,
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Speaker 6: seven and fifty billion sitting in various serving schemes, and
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Speaker 6: isis have seven and fifty billion as well. That's six
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Speaker 6: trillion hopelessly deployed. And we got some of the cleverest,
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Speaker 6: best bankers in the world, and as you said, they're
6:24
Speaker 6: world leading. We now have to get them working with
6:27
Speaker 6: industry and actually under the sponsorship and leadership of the
6:30
Speaker 6: government to really make a difference and planning. Initially, they've
6:34
Speaker 6: got to use the powers they already have, compulsory purchase orders,
6:38
Speaker 6: call in rights, and then put in place legislation which
6:41
Speaker 6: allows them to really drive growth in the energy industry
6:44
Speaker 6: and the housing industry, in the water industry, but also
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Speaker 6: in all these amazing scale up businesses that we have
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Speaker 6: across the UK. So they actually do scale up. They
6:53
Speaker 6: do ip R here in the UK, and we look
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Speaker 6: in two or three years time and say, wow, all
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Speaker 6: these amazing things have happened here in the UK.
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Speaker 2: I think is that we all know planning is one
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Speaker 2: huge area where things could change dramatically. The other gigantic
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Speaker 2: one is Europe, which you didn't mention that bit like
7:14
Speaker 2: Karma is not mentioned or he's tried not to mention it.
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Speaker 2: But if you were looking just from a straightforward economists
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Speaker 2: point of view about how to grow the British economy,
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Speaker 2: a new deal with Europe and one which went perhaps
7:27
Speaker 2: quite close to a customs union, perhaps is that the
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Speaker 2: other the other lever he.
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Speaker 3: Could pull in order to get these things happening.
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Speaker 6: Yes, I think that's an excellent question, and I would
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Speaker 6: agree with everything you said that John, that it's something
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Speaker 6: we should be doing. There's a bit of chills in
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Speaker 6: Europe at the moment, and we've got these domestic priorities
7:46
Speaker 6: where we can actually deliver on them without wasting too
7:49
Speaker 6: much time literally next week they.
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Speaker 2: In order to get the most growth out of Europe
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Speaker 2: to start.
7:55
Speaker 6: I mean, I would be in favor of a customs union,
7:57
Speaker 6: but clearly that's not the position that here and the
7:59
Speaker 6: rest of the team have right now. But actually the
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Speaker 6: get momentum in the domestic economy that will create confidence
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Speaker 6: and actually going forward and developing a much firmer and
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Speaker 6: better relationship with Europe, which I think we would all
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Speaker 6: cheer for.
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Speaker 4: I guess the pushback to some of this optimism, although
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Speaker 4: obviously it is exciting and it's great to hear the
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Speaker 4: kind of confidence and the optimism in your voice, Nigel.
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Speaker 4: The just two things that we've identified that could make
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Speaker 4: a difference. Are there just two things that have caused
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Speaker 4: the most problem for you successive UK governments? Pushing through
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Speaker 4: difficult investment projects or big infrastructure investment. Redeploying capital in
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Speaker 4: the in the savings industry. I mean, people have been
8:42
Speaker 4: trying to do this for many years, many including Jeremy Hunt,
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Speaker 4: have talked about it, and equally Europe has has just
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Speaker 4: sucked so much time and political capital over the years
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Speaker 4: without necessarily you know, it's going to would take quite
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Speaker 4: a lot for this incoming government decide to deploy it there.
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Speaker 4: So isn't that the chat. The two things that we've
9:02
Speaker 4: talked about are actually incredibly hard and they could look
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Speaker 4: very bogged down very quickly.
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Speaker 6: I think that's not going to be the case, because
9:09
Speaker 6: certainly I'm I'm very pleased by the way that Jeremy
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Speaker 6: kept his seat because he did a lot of work
9:13
Speaker 6: on pension reform. He's a really good person and he
9:16
Speaker 6: stood up when we really needed somebody to stand up.
9:18
Speaker 6: And I think Rachel's going to be the same is
9:20
Speaker 6: that she's going to try to make things happen and
9:23
Speaker 6: at pace. And so we know what the past look like,
9:27
Speaker 6: we don't want to repeat of that. Therefore, we've got
9:30
Speaker 6: to really drive change through very very quickly. And there
9:33
Speaker 6: are so many easy wins. You know, there's a stock
9:36
Speaker 6: of housing projects just stuck in planning, and you can
9:40
Speaker 6: accelerate that. It's a choice you can select whether do
9:43
Speaker 6: we go faster U s law. We all want to
9:45
Speaker 6: go faster on things like that. And once that starts happening,
9:49
Speaker 6: doors lead to doors, and we'll see more good things
9:52
Speaker 6: happening right now because there's there's a good will towards
9:55
Speaker 6: the party.
9:57
Speaker 4: Are you so confident these things are going to happen
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Speaker 4: because you're going to be in charge of doing them.
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Speaker 5: You have been talked about as.
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Speaker 6: I'm certainly very close to lots of the mayors across
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Speaker 6: the Believer and Devolution, and indeed I'd already set up
10:12
Speaker 6: some meetings post the election to talk to them about
10:16
Speaker 6: what else we can do to accelerate the growth, be
10:18
Speaker 6: that in Newcastle or Sunderland.
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Speaker 4: But if Takia calls up in a few hours, I said,
10:22
Speaker 4: you know what, I.
10:24
Speaker 6: Think he's got bigger issues to worry about than what
10:26
Speaker 6: I'm going to do for the next few months. But
10:29
Speaker 6: he's going to He's got a good team around him,
10:31
Speaker 6: and that team's talked up their capability. Now they have
10:34
Speaker 6: to deliver on that capability. And they've got the money.
10:37
Speaker 6: And as you're right you said, we've got a brilliant
10:39
Speaker 6: financial services sector, almost the envy of the world. We're
10:42
Speaker 6: brilliant in Pe, We're brilliant in VC. We've got tons
10:45
Speaker 6: of savings, We've got masses of great banks here in
10:48
Speaker 6: the City of London. We've got huge underinvestment. As you
10:52
Speaker 6: pointed out, for the last thirty years, there's so many
10:55
Speaker 6: easy wins make them happen.
10:57
Speaker 2: If I was you imagine you did get that job,
10:59
Speaker 2: I would be rather worried by some of the seats.
11:02
Speaker 3: That labor is just one.
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Speaker 2: You know, all these things like Uldershot, These are all
11:06
Speaker 2: the places where the Tories have faced endless problems over
11:10
Speaker 2: planning because people object to it.
11:12
Speaker 3: They don't like it.
11:13
Speaker 2: There's that film studio in Theiamalow which even people like
11:16
Speaker 2: Georgie Osporan say it's insane not to build it, the
11:19
Speaker 2: three thousand jobs, two hundred acres, but because it's just
11:22
Speaker 2: on the edge of the green belt, people don't want it.
11:25
Speaker 2: You are now going to have in Labor a group
11:28
Speaker 2: of MPs which never had before, who, after a few
11:32
Speaker 2: hours of self congratulation, they're stunning and face to the prospect.
11:35
Speaker 2: They've got constituents who don't like new houses. There could
11:38
Speaker 2: be another wing of the Labor Party which actually makes
11:40
Speaker 2: life more difficult than easy for all the things you
11:43
Speaker 2: want to do.
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Speaker 1: I think that's a possibility.
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Speaker 6: But you know, when I was at Legal in General,
11:46
Speaker 6: we did the sky studios at Elstree, which is in
11:49
Speaker 6: a not quite the green belt, but in an area
11:53
Speaker 6: that was difficult to achieve planning on. But once people
11:56
Speaker 6: see these things and they become up and running, and
11:58
Speaker 6: you can take people across the country and say, look,
12:01
Speaker 6: this is what happened here. This is the outcome. Don't
12:04
Speaker 6: be fearful about it. This is the rights of our
12:07
Speaker 6: children to have housing. You know, our generations stolen from
12:11
Speaker 6: our children by not giving them their housing, by charging
12:14
Speaker 6: for god to universities, by not giving them good pensions,
12:17
Speaker 6: all the things that we took for granted. We have
12:19
Speaker 6: to replace them by doing a better job for them
12:21
Speaker 6: going forward in educations on that list as well, which
12:24
Speaker 6: I know you feel very strong.
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Speaker 4: In a minute, I want to get onto sort of
12:27
Speaker 4: pulling back of the lens in terms of where this victory,
12:31
Speaker 4: what it looks like in a global context, and what
12:33
Speaker 4: that means for kirs Arma as a new prime minister.
12:38
Speaker 4: But I guess you know, for the audience that is
12:40
Speaker 4: the business community, for investors around the world, very important
12:43
Speaker 4: to get stability, and I think that is why there
12:46
Speaker 4: was confidence around this. There was a positive reaction to this,
12:51
Speaker 4: just the prospect of a five years stable majority government,
12:55
Speaker 4: the good things that they might do that we've talked
12:57
Speaker 4: about to unlock investment and growth. But of course with
13:01
Speaker 4: any labor government, you also have the question of what bad.
13:04
Speaker 5: Things are we hoping they don't do?
13:06
Speaker 4: And you know, one query has been given that they're
13:11
Speaker 4: not going to have very much money to play with.
13:13
Speaker 4: What often then happens is that you change laws instead
13:16
Speaker 4: of spending money, because you can do sweeping things by changing,
13:19
Speaker 4: for example, employment law, maybe eating away a bit at
13:24
Speaker 4: the sort of flexible hire and fire structure of the
13:27
Speaker 4: UK in ways that have unexpectedly quite negative effects for
13:32
Speaker 4: growth and for business confidence. So how worried should people
13:35
Speaker 4: be about that? Because that was where there was a
13:37
Speaker 4: bit of detail in the manifesto.
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Speaker 6: Yeah, I agree with that, and I think that's what's
13:41
Speaker 6: happened over the last thirty years. We made all these
13:43
Speaker 6: marginal decisions which look when you're making them as though
13:47
Speaker 6: they're positive, but actually when you look at the second
13:49
Speaker 6: order effects and the unintended consequences have been very negative
13:53
Speaker 6: for the overall economy and people's thinking about what a
13:56
Speaker 6: great place the UK is to invest.
13:58
Speaker 1: That's why they have to have some wins on the
14:00
Speaker 1: positive growth story.
14:01
Speaker 6: So they're definitely changing the narrative, but not spending all
14:04
Speaker 6: of their time causing things which are a problem for business.
14:08
Speaker 4: Is there anything in that manifesto on that front that
14:10
Speaker 4: you would worry about?
14:11
Speaker 1: Well?
14:11
Speaker 4: I think everyone, Yeah, I forget.
14:13
Speaker 6: The worker's rights issues are going to are going to
14:16
Speaker 6: be an issue that people are going to have to
14:18
Speaker 6: be concerned concerned about, you know, and it's not going
14:21
Speaker 6: to be plain sailing giving the composition of the of
14:24
Speaker 6: the Labor Party, and that is a risk, that is
14:26
Speaker 6: definitely a risk. So you're right to highlight that as
14:28
Speaker 6: a as a risk. And I've been on the other
14:30
Speaker 6: side of that where I've been overly optimistic about things
14:32
Speaker 6: and then got just really let me down again.
14:36
Speaker 1: And that's happened so much in the so much in
14:38
Speaker 1: the past.
14:39
Speaker 6: But I think the towns and the cities across the
14:43
Speaker 6: UK have very capable people.
14:45
Speaker 1: In them now as well.
14:46
Speaker 6: The banks themselves have moved to Birmingham, to Leeds, to Manchester,
14:49
Speaker 6: to Newcastle, and that's having a difference because suddenly capital
14:52
Speaker 6: is on tap, ambitions on tap. The mayors themselves are
14:56
Speaker 6: very ambitious people and very capable people.
14:58
Speaker 5: That is clearly going to be the ultimate test.
15:00
Speaker 4: They've talked a lot about decentralizing, and I certainly with
15:03
Speaker 4: someone who thinks, I agree with you that it's the
15:05
Speaker 4: best way now given where we are to make things happen,
15:09
Speaker 4: is to be devolving more power to regions and to
15:12
Speaker 4: cities in particular. But whether you know, so many governments
15:15
Speaker 4: say that and then they get power they don't want
15:17
Speaker 4: to relinquish it, so we'll see what happens. John, I think,
15:21
Speaker 4: you know, you're someone who is flitting around the world
15:24
Speaker 4: quite a lot while we do all the work, she says,
15:29
Speaker 4: And I flicked It was not a surprise in the
15:35
Speaker 4: UK context at all, and it comes after fourteen years
15:38
Speaker 4: of conservative rule. But in a global context this is
15:42
Speaker 4: completely out of step.
15:43
Speaker 2: I think this is a big deal globally. I think
15:45
Speaker 2: that if you step back spect those of us who
15:49
Speaker 2: deal with America a lot, we'll get a lot of calls.
15:51
Speaker 2: Later next week, You've got the summit where star War
15:54
Speaker 2: will go there, and suddenly this man who is describing
15:59
Speaker 2: was was you know, rather it seemed like a rather
16:01
Speaker 2: marginal figure in world politics, will suddenly be one of
16:05
Speaker 2: the most powerful people, notwithstanding the fact the kind of
16:08
Speaker 2: basket case nature of Britain in many ways. He will
16:12
Speaker 2: appear and he is the one person next week who
16:16
Speaker 2: will be able to say, look, I'm here for the
16:17
Speaker 2: next five years. You look around the rest of the world.
16:20
Speaker 2: You've got Joe Biden, for whom the weekend maybe a
16:22
Speaker 2: long time.
16:23
Speaker 3: You have.
16:26
Speaker 2: Macron, who is in severe trouble. I love Schultz has
16:30
Speaker 2: also got issues. And from that perspective, you've got Keir Starmer,
16:34
Speaker 2: a very good Greek prime minister, good Italian primi or
16:37
Speaker 2: Italian prime minis who's doing quite well. That Starmo is
16:40
Speaker 2: going to be right at the very center of things
16:42
Speaker 2: with a degree of longevity, and I think that is
16:46
Speaker 2: actually really quite a big thing, and especially in the
16:49
Speaker 2: context of what's happening in other countries, and that degree
16:52
Speaker 2: of permanence is a very strange thing. And then secondly,
16:56
Speaker 2: he will be able to say, look, I'm the person
16:58
Speaker 2: who's managed to resist or at least in theory, I've
17:02
Speaker 2: managed to resist these sort of nationalist currents which are
17:05
Speaker 2: happening elsewhere. And yes, people will come back at him
17:08
Speaker 2: and say we'll reform did well that that is not
17:11
Speaker 2: the same as what's happening in Paris. It's not the
17:13
Speaker 2: same as what's happening in Germany. And if you factor
17:17
Speaker 2: Donald Trump, and it's not not the same as what's
17:19
Speaker 2: happening in America. So there will be I think, amongst
17:22
Speaker 2: what might have describe the center ground of politics, there
17:24
Speaker 2: will also be a degree of Starmerism. So I completely
17:28
Speaker 2: agree as I indicated, but that with the massive problems.
17:31
Speaker 2: Starmer's got here, but actually in a weird way, you know,
17:35
Speaker 2: he's on the international stage. I think he is the
17:37
Speaker 2: first person since kind of Cameron or possibly Blair to
17:41
Speaker 2: have that degree of clout when it comes to the
17:46
Speaker 2: it comes to the world politics.
17:47
Speaker 4: I mean, I guess we don't know what's going to
17:49
Speaker 4: happen in France, will find out on Sunday night. But
17:54
Speaker 4: to the extent as you say, we have the German Chancellor,
17:57
Speaker 4: French President Macron very much on the back foot, potentially
18:03
Speaker 4: President Biden as well. I guess there is danger though
18:06
Speaker 4: that they've invested all this time in roose relationships that
18:09
Speaker 4: are not really going to be worth very much and
18:11
Speaker 4: they're not going to be able to provide things that
18:13
Speaker 4: labor or that the UK needs. So is that that
18:15
Speaker 4: that's the downside?
18:17
Speaker 3: I think there is.
18:17
Speaker 2: I think one of the problems which Nigel alluded to
18:20
Speaker 2: is that the obvious thing. I think if all three
18:23
Speaker 2: of us, to make a terrible presumption, were put into
18:26
Speaker 2: Downing Street, I think redoing the relationship with Europe would
18:29
Speaker 2: be that is the simple, easiest way to get the
18:33
Speaker 2: growth that Britain needs, and that nothing none of the
18:37
Speaker 2: wonderful things that you may not be wonderful to everybody.
18:41
Speaker 3: The things that labor wants to do are going to be.
18:44
Speaker 2: Really possible without growth because you have the guilts market
18:46
Speaker 2: sitting there looking at government spending. But the problem is
18:51
Speaker 2: you go to Europe and it's a mess, and so
18:54
Speaker 2: the idea that you know, Starma can immediately get some.
18:58
Speaker 3: Degree of deal there.
18:59
Speaker 2: I think, you know, if I was Starmer, I would
19:01
Speaker 2: still try and do that rapidly because I think it
19:03
Speaker 2: has two amazing effects for Starmer.
19:06
Speaker 3: Number one is it increases British growth.
19:11
Speaker 2: Secondly, it really skewers the Tories because it probably pushes
19:15
Speaker 2: the Tories into a position where they oppose no matter
19:18
Speaker 2: what happens, whatever deal he does come up with, And
19:21
Speaker 2: I think when he does, if they do that, I
19:23
Speaker 2: think I'll make a terrible presumption again about the nature
19:26
Speaker 2: of the people in this room. But I think the
19:28
Speaker 2: commercial classes in Britain, if the Tories again push themselves
19:32
Speaker 2: into a thing where they really limit growth, I think
19:35
Speaker 2: that would be a very serious thing for the future
19:37
Speaker 2: of the Conservative Party.
19:38
Speaker 5: I mean, if you look sorry, and I.
19:40
Speaker 1: Think we can change investor perception.
19:42
Speaker 6: That's the other thing One of the points that John's
19:44
Speaker 6: just made is that because this will have financial and
19:47
Speaker 6: political stability for the next five years, this is a.
19:50
Speaker 1: You know, I've got a conscious buiers.
19:52
Speaker 6: I think London's the best city in the world in
19:54
Speaker 6: the UK is an amazing class to invest and we've
19:57
Speaker 6: just underinvested it in it for such a long time.
20:00
Speaker 6: Investor perception is going to change. The Conservatives did a
20:02
Speaker 6: really poor job of country management across the across the world.
20:07
Speaker 6: We have an opportunity to put a lot of that
20:09
Speaker 6: ride right now, and there's tons of money elsewhere looking
20:13
Speaker 6: for homes the world to wash with cash and capital
20:15
Speaker 6: at the moment, and we should be telling people this
20:17
Speaker 6: is a great place to come and invest that money
20:19
Speaker 6: because you're going to have the political stability and economic
20:22
Speaker 6: growth agenda here very poor business and these are great
20:28
Speaker 6: cities and towns to live in.
20:29
Speaker 4: We're going to run out of time in a minute,
20:31
Speaker 4: but I guess I had had two more words to
20:32
Speaker 4: ask you what your feelings were. Industrial policy, you know,
20:37
Speaker 4: we've had that's one of the ways in which the
20:38
Speaker 4: world has actually moved left in recent years in terms
20:41
Speaker 4: of economic policy, much more interventionism. Rachel Reeves has talked
20:45
Speaker 4: about Bidenomics without the money, or I guess she's not
20:47
Speaker 4: talked about it, but what she said has implied Bidenomics
20:50
Speaker 4: without the money because we don't have the kind of
20:52
Speaker 4: scale of trillions that the Biden administration has been able
20:55
Speaker 4: to put into things like the Inflation Reduction Act and
20:58
Speaker 4: Infrastructure program. But we may have bidnomics without President Biden
21:03
Speaker 4: as well. But that's a whole other issue. But do
21:06
Speaker 4: you kind of have a natural kind of watch your
21:09
Speaker 4: wallet response when you start hearing about industrial policy? Do
21:12
Speaker 4: you worry about competition in that context?
21:14
Speaker 5: How do you? How should one should one welcome that?
21:17
Speaker 6: I think we should welcome it because that's I think
21:20
Speaker 6: there's going to be an engagement around what the industrial
21:22
Speaker 6: policy should be because they've been actively listening for us
21:25
Speaker 6: for a very long time time and that's been very,
21:27
Speaker 6: very positive.
21:28
Speaker 1: And there is just just this huge gap and we
21:31
Speaker 1: have the capital.
21:32
Speaker 6: You know, as John mentioned, public finances are very constrained
21:35
Speaker 6: and will find out just how constrained there is when
21:37
Speaker 6: they do their due diligence starting next week.
21:40
Speaker 1: Private sector capital is huge.
21:42
Speaker 6: The personal financial sector in the UK has a very strong,
21:45
Speaker 6: massive excess service, really good shape. The SME is in
21:48
Speaker 6: Britain one hundred and ninety billion of borrowings two hundred
21:51
Speaker 6: and fifty billion of deposits right now. So there's huge
21:54
Speaker 6: headroom for growth in the UK, but you have to
21:57
Speaker 6: have that confidence to invest, and I don't. We've had
22:00
Speaker 6: either the planning, the regulation, the policy, the tax situation
22:04
Speaker 6: which is really encouraged investment. I was talking to the
22:07
Speaker 6: Tartar Group about their investment in their the battery factory
22:12
Speaker 6: yesterday and Chandra is one of the most visionary leaders
22:15
Speaker 6: in the in the world and they're going to make
22:18
Speaker 6: that happen and seeing is believing. The envision one up
22:21
Speaker 6: in Sunderland is absolutely fantastic and if people get out
22:24
Speaker 6: and see what's happening.
22:26
Speaker 1: And that, you know, the early green shoes.
22:29
Speaker 5: Per job is extraordinarily high.
22:31
Speaker 6: Though I think that's a short term view and I
22:33
Speaker 6: think the doors lead to doors, and we filled when
22:37
Speaker 6: we built the original nissunfactory. We haven't really done very
22:40
Speaker 6: much since to build the supply chain. We have to
22:44
Speaker 6: build supply chains in the in the UK in part
22:46
Speaker 6: to trade bede.
22:47
Speaker 2: Here we face this fundamental problem is that we decided
22:50
Speaker 2: I'm not exit is not the main issue, but the
22:53
Speaker 2: basic factor is just at the moment when the world
22:55
Speaker 2: stopped being global, when it went to regional trade blocks,
22:59
Speaker 2: we are the people outside. And when you talk about
23:01
Speaker 2: industrial policy that the comment about you know, Bidenomics without
23:04
Speaker 2: without the money is you sit in anything and you
23:07
Speaker 2: look at Biden spends a trillion on green industry, and
23:10
Speaker 2: if we get twenty million, we think we're doing really well.
23:13
Speaker 6: It's we could do over one hundred billion pounds of
23:17
Speaker 6: investment per year for the next ten years just with
23:20
Speaker 6: the private sector money and now absolute confidence that all
23:23
Speaker 6: the projects are there, absolute confidence in the financial services
23:26
Speaker 6: sector to actually deliver, deliver, deliver that capital, and the
23:29
Speaker 6: economic growth that we'd get out of that would actually
23:33
Speaker 6: in five years sort out the public finance problem.
23:35
Speaker 2: Isn't that interesting though, that your version of labor, which
23:37
Speaker 2: I think most people in this room would definitely support,
23:39
Speaker 2: that could end up being a more free market version
23:43
Speaker 2: of the left broadly than what's happening in America, what's
23:46
Speaker 2: happening in other places.
23:47
Speaker 4: We're going to end, but I want to just grasp
23:48
Speaker 4: both of you just one sort of simple question that
23:51
Speaker 4: comes out of the way. This majority was one and
23:55
Speaker 4: actually it's a historically very small share of the vote
23:59
Speaker 4: for an extraordinary majority. I think it's the lowest ever
24:01
Speaker 4: share of the vote for the highest ever majority. So
24:07
Speaker 4: there's been a very sort of softly softly approach leading
24:09
Speaker 4: up to this, and even with this symphatic win, maybe
24:12
Speaker 4: some nervousness about how solid some of these seats are.
24:15
Speaker 4: Do you think Kirs Starmer both of you, do you
24:17
Speaker 4: think Kirs Starmer is brave enough to really move the
24:21
Speaker 4: dar over the next few years and then the next
24:23
Speaker 4: few months.
24:24
Speaker 1: I think he is definitely brave enough to do it.
24:26
Speaker 6: He needs his other members of the cabinet to be
24:29
Speaker 6: bald and brave and he actually use the powers that
24:32
Speaker 6: they have to really start to build momentum around economic growth,
24:36
Speaker 6: because whilst public finances appear, as John mentioned, the rest
24:40
Speaker 6: of the economy is in pretty good share, and we.
24:42
Speaker 1: Have a lot of a lot of really good capable
24:44
Speaker 1: people who are now in positions rather like you.
24:46
Speaker 6: I think devolution is a great idea and we should
24:49
Speaker 6: be doing more of it rather than let less of it,
24:51
Speaker 6: and really really build up that our great cities outside
24:54
Speaker 6: of London as well.
24:55
Speaker 2: I think intellectually Starmer is in the right place in
24:58
Speaker 2: terms of the things you're talking. I think the emotional
25:02
Speaker 2: side of it. The bit I worry about is that
25:04
Speaker 2: his whole record is one of on the whole is gradualism.
25:07
Speaker 2: You know, he comes in, he changes things. Look at
25:10
Speaker 2: what he's done to labor. It's an amazing feat. But
25:13
Speaker 2: he didn't do it all on day one. And the
25:15
Speaker 2: slight problem is when you when you go into government,
25:17
Speaker 2: that is, as you know, it's a different challenge. You
25:20
Speaker 2: suddenly get thrown things. So you have to make big
25:22
Speaker 2: decisions and you have to try to do them as
25:24
Speaker 2: early as possible because political capital.
25:27
Speaker 3: Is a bit as George W. Bush what said, it
25:29
Speaker 3: is like an iceberg in the desert. It it evaporates.
25:34
Speaker 2: And I think the more stuff that Starma does early,
25:37
Speaker 2: you know, Blair tragic, lamb old enough to remember that
25:40
Speaker 2: Blair came in and he did a lot of things
25:42
Speaker 2: straight away. And that's where we're getting very good indication
25:46
Speaker 2: of how bold Starma really is.
25:49
Speaker 3: I think quite soon watch this space.
25:51
Speaker 4: Well, we have managed to talk all this time without
25:54
Speaker 4: talking about really talking about the public finances or where
25:57
Speaker 4: the money is going to come from. But we spent
25:59
Speaker 4: so much time talking about that over the last few weeks,
26:01
Speaker 4: and I know there'll be plenty more discussions around that,
26:03
Speaker 4: so I'm very happy to have had this quite optimistic
26:07
Speaker 4: and quite detailed micro look at the challenges ahead for
26:12
Speaker 4: this government and whether they're.
26:14
Speaker 2: Up to them.
26:14
Speaker 4: Thank you for being here for our recording of Voter
26:17
Speaker 4: Nomics from the Old War Office in Whitehall as part
26:21
Speaker 4: of this bloomberg UK election of twenty twenty four.
26:24
Speaker 5: The debrief.
26:25
Speaker 4: Thank you to our guest John Miiklfwaite and Sir Nigel Wilson,
26:29
Speaker 4: and all of you listening and sitting here. Please do
26:32
Speaker 4: subscribe to voter Nomics wherever you listen to podcasts or
26:36
Speaker 4: indeed listening to panels like this one.
26:38
Speaker 5: Thank you very much