Latest / The Fourcast / Polanski v Farage: Is the political centre in Britain dead?

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Polanski v Farage: Is the political centre in Britain dead? · The Fourcast

0:00
The Chancellor keeps talking about tough choices, but they
0:02
always seem to be tough choices for children in poverty, for
0:05
migrants, for disabled people. Never tough choices for
0:08
multimillionaires and billionaires.
0:09
You say if you tax the wealth it'll make everyone's life
0:12
better and it's not true. It's offering people false hope.
0:15
Nigel Farage says jump, Starmer says how high and you are
0:18
handing this country on a plate to Nigel Farage.
0:20
So I won't take the idea that's me on social media offering
0:23
people hope and saying that if we.
0:25
Redistributed wealth and false hope.
0:26
It's not false hope. If we redispute wealth and power
0:28
around this country, everyone will be better.
0:34
Hello and welcome to the forecast.
0:36
As Rachel Reeves prepares to deliver the budgets on
0:38
Wednesday, she is facing the political nightmare of having to
0:41
come back for more tax having said she wouldn't.
0:44
And she's already made it clear that whatever she does, the
0:46
burden will fall on all of us, not just the rich minority.
0:50
But the left and the Greens are demanding A wealth tax and the
0:53
right and reform are demanding welfare cuts and tax cuts.
0:57
Voters are disillusioned, inflation is stubborn, services
1:00
are still struggling and faith in the political centre is
1:02
evaporating. So how does the Chancellor land
1:05
her budget without causing a political crisis for Labour or a
1:08
financial crisis? On the bond markets with me
1:11
today, Green Party leader Zach Polanski, Labour MP Rosie
1:14
writing one of the new intake last year and Rupert Harrison, a
1:18
former adviser to George Osborne in the Treasury and now at the
1:21
US investment managers PIMCO. Thank you all very much for
1:24
joining us, Zach. Let's begin with the politics of
1:27
inequality. You, you have been making the
1:29
case for a wealth tax. What is it?
1:32
Well, ultimately the Chancellor keeps talking about tough
1:34
choices, but they always seem to be tough choices for children in
1:37
poverty, for migrants, for disabled people, never tough
1:41
choices for multi millionaires and billionaires.
1:43
Since the pandemic, billionaire wealth in this country has
1:46
doubled. Meanwhile, our assets, our
1:48
power, our wealth has been stripped away.
1:51
Ultimately, I'm saying let's take it back.
1:53
And the way we do that is partly through a tax on assets.
1:56
A 1% tax on assets of £10 million or more or a 2% tax on
2:00
assets of a billion pounds or more could raise between 12 and
2:03
£15 billion. Now, it's important to say this
2:06
isn't just about revenue raising.
2:07
There's lots of other ways to make sure that we're spending on
2:10
our capital, infrastructure and investment.
2:12
But ultimately, making sure we're getting a grip on the huge
2:15
inequality around assets has to be the principal thing that the
2:18
Chancellor does this Wednesday. So you don't want to cut
2:20
spending at all. I mean, in terms of the the
2:23
numbers you put on it, 12 to 15 billion, you know, there's a lot
2:26
of scepticism around that, don't you?
2:27
Well, I think that scepticism is often from multi millionaires
2:30
and billionaires and the media that they own some of the media.
2:33
So I think a lot of these narratives are pushed.
2:34
I think it's quite obvious that if you tax very, very wealthy
2:37
people a small amount, that will bring in a relatively large
2:41
amount of money. It's always important to talk
2:42
about the difference between millionaires and billionaires.
2:45
I've said a few Times Now, but if you go back 1,000,000
2:47
minutes, you're at the beginning of 2024.
2:50
If you go back a billion minutes, you're at the Roman
2:52
Empire. That's how deep this inequality
2:55
is. And actually, we're not talking
2:56
about taxing plumbers or hairdressers or small businesses
2:59
at the moment, although certainly down the road we need
3:01
to have a conversation about fairer taxation system for
3:03
everyone. It seems obvious right now that
3:06
the people who should pay up are the people who are doing
3:08
extraordinarily well, who wouldn't even really notice this
3:12
small amount of taxation and who are making money in their sleep.
3:15
And the reason why that matters is they're not earning it with
3:17
their hands or their mouths or doing work every single day.
3:20
These are people who are accruing that money on their
3:22
assets. And that is totally unfair.
3:24
It doesn't have to be that way. And we can make different
3:27
political choices. Rupert, why is she wrong?
3:30
Well, look, I, I don't think he's wrong in the sense that I
3:31
think we will have a wealth tax of some kind in the budget.
3:34
It looks very likely that the government are going to
3:35
introduce, for example, higher taxes on expensive properties.
3:39
I think it's quite likely there's going to be reforms to
3:41
capital gains tax. There's probably going to
3:43
reforms to pensions taxation. So I think the government,
3:45
partly because they've ruled out a lot of the other options, they
3:47
are going to be going for these capital taxes and.
3:50
Taxes on wealthy and properties, not a wealth.
3:52
Actual wealth tax. So the the issue is that in this
3:55
situation you want to bring in, particularly when you've got
3:57
very nervous markets and you're at risk of sort of losing using
4:00
confidence there and therefore damaging the economy.
4:02
You want to have tax rises if you're going to raise taxes that
4:05
are predictable, bring in predictable revenue.
4:08
And the problem is on a pure wealth tax like this, there are
4:10
very few international examples where anyone's actually managed
4:12
to make it work to raise anything that like that kind of
4:15
money. So you have actually seen the
4:16
Spanish government bring in a form of wealth taxes being
4:18
debated in France. But when the Spanish example for
4:22
example has so many loopholes to make it work, it doesn't
4:24
actually raise very much money and is.
4:25
It really just beyond the Treasury to devise a tax that
4:28
works. The fundamental problem is
4:29
there, you know, it's not like no one's ever tried this.
4:31
It has been tried. In fact, the UK tried a wealth
4:33
tax about 100 years ago and then the Treasury ended up having to
4:36
pay most of the money back. The problem is that when you get
4:38
to these billionaires in particular, they're very mobile
4:41
internationally. They have a choice about where
4:43
to be based. And so unless you're going to do
4:45
this as a part of a kind of huge international agreement, you're
4:48
very vulnerable to losing the revenue and perhaps actually
4:51
losing revenue rather than raising revenue if you drive
4:53
those people somewhere else. Well, we've had wealth taxes
4:55
since the Doomsday Book, so these have been a principal
4:58
tradition of British politics and ultimately be saying we
5:00
shouldn't have this deep inequality.
5:02
I'm talking about assets. Those aren't particularly
5:04
mobile. And I think the really important
5:05
point here is if you don't have a lot of money, if you live in
5:08
poverty, you have to make decisions based on the lack of
5:11
money you have. If you're very, very wealthy,
5:14
then you're not just going to move because someone's asking
5:16
you to pay a bit more money. That's the point of being
5:18
wealthy. And I think we should be more
5:20
patriotic about our country than that.
5:22
People invest here because they love our country, they love the
5:24
culture, they love the neighbors, they want to stay
5:26
living where they're living. The idea that you ask them for
5:29
1% or 2% on their assets and they're gonna move, I think has
5:32
pretty been debunked. Also, I should say Spain.
5:34
The solidarity tax is working pretty well.
5:37
Norway, Switzerland. Switzerland.
5:38
The place that famously has lots of wealthy.
5:40
People, they're not good. For the Spanish tax is raising a
5:42
fraction of the 600 million. So, well, let's.
5:45
Yeah, it might. Be problem but it's not gonna
5:47
but 6. 100 million is not gonna do the things that we need to do
5:50
to fundamentally change our country.
5:52
And make things. Better off, but make things
5:54
better off, make things better off for families, families who I
5:57
think about in my constituency every single day.
5:59
So I think to be honest that it is dangerous that you go on
6:02
social media, you say if you tax the wealth, if you have this tax
6:06
on assets, it'll make everyone's life better.
6:08
And it's not true. It's offering people false hope.
6:10
It's leading them down a garden path that you cannot deliver on.
6:14
And what we're doing as a Labour government is putting the
6:16
policies in place so actually changing can change people's
6:19
day-to-day lives. A breakfast club that a single
6:22
mum, like a family that I grew up in, can drop their child off
6:25
so they can get to work on time raising the minimum wage.
6:28
This is how you change people's lives, right?
6:30
Not by going on social media and just giving people false hope.
6:33
You seem lovely Rosie, but you're defending a government
6:34
that you're part of the government that is keeping A2
6:37
child benefit cap, which is keeping 300,000 children in
6:39
poverty, cut benefits for disabled people.
6:42
Some of the most vulnerable people in this country is arming
6:44
a genocide in Gaza seems every single week to move further and
6:47
further towards Nigel Farage, including with migrants and
6:50
refugees. Nigel Farage says jump, Starmer
6:52
says how high and you are handing this country on a plate
6:55
to Nigel Farage. So I won't take the idea that's
6:57
me on social media offering people hope and saying that if
7:00
we redisputed. Wealth.
7:01
It's. False hope.
7:02
It's not false hope. If we redispute wealth and power
7:04
around this country, everyone will be better if you sell.
7:06
People of policy that in that can't believe implement and it
7:09
isn't going to bring in the revenue that you say that we
7:13
need to fix our country, then that is false hope.
7:15
Why are you so sure it wouldn't bring in the revenue that's
7:17
actually? Because of the reasons that
7:19
Rupert said, when this has been tried in countries like Spain,
7:21
it hasn't driven in the revenue that that we need to to
7:24
fundamentally change. But we do compare ourselves to
7:27
Spain and Switzerland in any other respect.
7:29
Also, I mean, like I, you know, I'm a Labour politician.
7:33
I agree with the fact that those who are wealthiest in our
7:35
society should be paying into our system, should be
7:39
contributing to fund our NHS. And that is why I was pleased to
7:42
see in the previous budget us make decisions like closing the
7:45
non Dom tax loop, putting a a tax on private schools, capital
7:50
gains tax. This is taxing wealth.
7:52
It may not be the the same clip that you can put on on TikTok,
7:57
but it is taxing wealth. On the capital gains, so Rachel
8:01
Reeves tinkered with it last year and it was welcome, but we
8:03
still have the lowest capital gains in the G7 if we brought
8:06
capital gains tax in line with income tax.
8:08
The reason why that matters is right now you could be the
8:11
cleaner of this building, you could be paying less, you could
8:14
be paying more tax as the cleaner than the person who owns
8:16
the building. That doesn't as as a proportion
8:19
of your wealth, right? Yeah, that's not natural order,
8:21
that's a result of political choices.
8:23
And this Labour government, a Labour government should be
8:25
making different political choices, but in every single
8:27
opportunity they protect the wealth and power of a super
8:30
rich. Meanwhile, working class
8:31
communities in this country are struggling badly and it doesn't
8:34
seem like in this budget they have any plans to.
8:36
Turn this country around. I mean we, we asked a lot of
8:39
businesses, we asked a lot of the wealthiest in our society,
8:42
the wealthiest in our society are paying more tax since the
8:45
Second World War in order to fund our NHS, in order to put
8:49
our public finances back on a sustainable footing.
8:51
These were labour choices, they were fair choices.
8:54
So what the public elected us to do, and I think that we will
8:57
continue to make them this week. I mean, Rupert, the argument
8:59
that's often made is that the wealthiest 1% already pay about
9:02
what, 30% of the tax raised in income tax.
9:06
Yeah, in income tax. I mean, is there a sort of a?
9:10
Is there a limit to that, you know, and and where, where do
9:13
you get the idea of that limit from?
9:15
I mean you. Sadly there is a limit I.
9:16
Mean, you know, because the point, The point being that what
9:19
we've seen is that the wealthier are relatively comfortable,
9:22
yeah, compared to the rest of the country, and most people
9:25
can't move. I mean, I'm.
9:27
Super rich. I have the great advantage of
9:28
like unlike these two, not being a politician.
9:30
So it's a bit bit easier for me to say, look, you try, it's
9:32
really complicated. So it look, the truth is, it is,
9:34
it is really complicated, the truth.
9:37
So if you look in some ways that the UK tax system, it's the most
9:39
already the most progressive tax system of any developed economy
9:42
in terms of the ratio of tax paid by the highest earners, in
9:46
terms of rates of the tax paid by the lowest earners.
9:48
And that's because this government and also previous
9:51
governments have done things like increase the personal
9:53
allowance and we have a very high top rate of tax, 45 P.
9:55
And that means that we're now very, very dependent on that top
9:58
1% of earners to pay a very high, as you said, very high
10:01
proportion of tax. That means, therefore, that you
10:04
really need to work hard to keep attracting those top earners,
10:06
make it an attractive place to, to, to build and grow a
10:09
business. When it comes to capital gains
10:10
tax, all the evidence and the international evidence, that
10:13
certainly would be the evidence taken on board, for example, by
10:16
the independent OBR. That's not a political body.
10:18
They're a bunch of economists. Looking at the data, they would
10:21
say that the current top rate of capital gains tax is probably
10:23
about actually the revenue maximizing rate of corporate
10:26
capital gains tax. Because if you start raising it
10:28
higher, you'll have people moving away.
10:30
And you also have people choosing not to sell assets
10:32
because you're only pay capital gains tax when you sell an
10:35
asset. So unfortunately we are pushing
10:36
up against the limits. There are definitely things you
10:38
can do and I expect that they we will see that in the in the
10:40
budget, things like additional council tax bands.
10:43
Council tax is an absolute mess. All economists would agree it's
10:47
absolutely not progressive because it's based on very
10:49
outdated valuations. So I think we will see action
10:52
there. But unfortunately, the
10:52
government is limited by the reality of what you can raise.
10:55
See, I don't think it's that complicated.
10:56
We still have the lowest capital gains in the G7.
10:59
Now look for 50 wealthiest families in this country owe
11:02
more wealth than the bottom 50% of the entire population.
11:06
That's fifty families versus 35 million people.
11:10
And the collective wealth of those multi millionaires and
11:12
billionaires, they're earning 35,000,000 lbs every single day.
11:17
Not every week or every year, every single day.
11:19
And so to hear people say there's no wealth in this
11:21
country or it's not, it's too complicated or it's too nuanced.
11:24
I don't think we said that wealth is too complicated.
11:25
But what about that argument? Because these, these referees,
11:28
as you say, they're going around social media a lot, the top 50
11:31
families being so absurdly wealthy and the top 20,000
11:36
people also, you know, having more than £10,000,000 in the
11:40
bank. What?
11:41
Why is the Labour government not saying there's something wrong
11:45
with that? I, I want to see the economy
11:47
rebalanced. I want to see constituents in,
11:50
in my constituency who work hard work difficult jobs, are coming
11:55
home, still worried about the weekly shops, still worried
11:58
about how they're going to pay the energy bills.
12:00
I don't think that by a simply a tax on assets.
12:04
I don't think that's a silver bullet that the Green Party are
12:07
going out on social media and selling that's actually going to
12:09
solve those problems. What I want to see is people
12:12
bought out of poverty and and the only way we're going to do
12:15
that is real policies that change the way this economy.
12:18
Works take on tax argument about about property.
12:21
I mean, we're very likely in this budget to see a new regime
12:24
in which, you know, houses over £2,000,000 or whatever the
12:27
threshold ends up being end up paying a higher tax every year.
12:33
You could raise a lot more, couldn't you, from the Super
12:36
rich. You've got billions in property.
12:39
I'm not going to speculate. I don't know what's going to be
12:41
in. I'm not going to say so I'm not
12:42
going to speculate on this. The the principle of taking more
12:46
from that 50 people you know, 50 families doesn't seem to come.
12:51
Up yeah, I and I, I think the wealthiest should be
12:55
contributing to our economy in order to fund our public
12:58
services. I think that's a principle that
13:00
is deep rooted in Labour values and in this Labour government.
13:04
I just don't think what Zach is selling people will actually do
13:09
that. I think what we need to do is
13:10
things that we've all already announced in the previous cover,
13:14
in the previous budget, things like tax, seeing private jets
13:18
like I spoke about the non domed absolute capital gains tax,
13:21
private schools. This is taxing the most
13:24
wealthiest in our in our country.
13:25
And in the previous budget we raise taxes in all and we ask
13:29
the wealthiest in our society to hold the biggest burden so that
13:32
we could fund the NHS and make people's day-to-day lives
13:35
better. Annoyed with with that sort of
13:37
social media promises and I wonder whether you think is that
13:41
because it's pulling Labour to the left, no, into a position
13:43
that is politically unsustainable.
13:45
No, I, I am an annoyed by it honestly, because I think that
13:49
it is, it is the exact same technique that Nigel Farage has.
13:54
It's people, it have quite people have very, very difficult
13:58
lives at the moment. And I, I know that I hear it
14:00
from my constituents, I hear it from my friends.
14:02
I'm in my 20s. Like I know that life is
14:05
difficult at the moment. And whether it's Nigel Farage or
14:08
Zach Polanski going out and telling people if we just do
14:11
this one thing, your lives are going to get better when they I
14:15
think you know that that's not true.
14:16
I think it's dangerous, I think it's divisive and I think it's
14:19
offensive to the electorate. I'm really honoured to be living
14:22
rent free in Labour MPs heads because they obsess about my
14:25
social media and I'm not surprised because.
14:27
We're seeing the electorate. Thousands and thousands of
14:29
people join the Green Party literally every single day.
14:31
We've just hit 175,000 members, including 40,000 young people
14:34
with the largest youth movement. The, the main thing I wanna say
14:37
though is, you know, I just spent time with 2006 formers at
14:41
Westminster Hall and just spoke to them for a long time about
14:44
their futures. And they're very clear that the
14:46
Labour Party are not offering what they need for the future.
14:49
And I've never said that a wealth tax is for one thing that
14:52
will deal with their future. You talked about bills.
14:54
Let's lower people's bills, let's nationalise for water
14:56
companies. We have water companies right
14:58
now pumping, I'll tell you, pumping sewage into our water
15:01
and charging us extra for their privilege for water companies
15:03
and making more profit in the terms of the margins than Shell
15:07
and Sainsbury's. Now it's not going to cost any
15:09
money to nationalise the water companies.
15:10
I don't say that the shareholders say that.
15:12
They say our assets aren't worth anything and we have a Labour
15:15
government. If this Labour government was
15:17
around after the world wars, we wouldn't have got the NHS.
15:20
People would have said it's time to invest, You would have gone.
15:22
It's too difficult. You're offering people false
15:23
hope. We could never do a project as
15:25
big as that. There is no imagination, no
15:27
vision. You only protect your vested
15:29
interests. Oil and gas companies, gambling
15:31
companies, arms trade companies, and it's pretty much time I.
15:35
Have no vested interests. I am someone who came into
15:37
politics from a working class background.
15:40
I sit here as with Labour values.
15:42
As a Labour, MPI do not have vested interests.
15:44
I'm talking about your party. I have no idea about your
15:46
donations. I'm not.
15:47
Accusing you. I'm talking about your party.
15:49
I don't. Think that's you know, I know
15:51
you're not a politician, but are politicians on the right and
15:54
Conservative Party and reform you think looking at this
15:57
argument on the left and rubbing their hands.
16:00
Obviously the Conservative Party are just as worried about reform
16:02
as all the other parties are, I suspect.
16:04
But I think that this argument is from us from a center right
16:07
perspective. It's a slightly depressing
16:09
argument because we're sort of dancing on the head of a pin
16:11
about who can tax the rich more or who can provide sort of easy
16:14
solutions. When you think about sort of
16:16
businesses and investors looking at the UK, we really need to be
16:20
having to conversation about stability, growth, encouraging
16:24
investment and and that's sort of this huge territory which the
16:27
budget hopefully will address that is slightly being missed by
16:30
this, but kind of I think very narrow.
16:32
And that's as little measures, is it?
16:34
Well, no, I think that look clearly.
16:35
To a lot of people that that is like, well, that's just business
16:37
as usual and business that usually isn't working for most
16:40
people, is it? Well, it has been, it's been a
16:41
very difficult few years for growth.
16:42
We've had, you know, we had the COVID pandemic, we've had
16:45
certainly the ongoing impact of Brexit.
16:48
We have had, you know, the energy shock.
16:50
Like clearly it's been a very difficult period and governments
16:52
have struggled with that, governments of both colours.
16:54
But we actually face quite a dangerous moment in this
16:57
country. And I think we there's a kind of
16:58
bigger conversation. You know, we've got a budget
17:00
that really needs to restore confidence in the UK that has
17:03
certainly been shaken a little bit by events every some months,
17:07
sort of how restore. Well, I think I actually think
17:10
the government will probably manage to achieve this in the
17:12
budget because in the end, the Treasury is quite good at
17:15
putting together budgets and I think that they will deliver a
17:17
budget that delivers more headroom against the fiscal
17:19
rules that can reassure international investors that
17:22
sadly, we rely on that there's a plan to get the deficit down.
17:25
And then I think that can be a bit of a clearing moment because
17:28
I almost the most damaging thing that we've had over the last
17:30
couple of months has been just the endless speculation this
17:33
cycle. Every six months of speculation,
17:35
driven really by the decision to have such a small amount of
17:37
headroom against the fiscal rules, means that every six
17:40
months we're back in a situation where families don't know what
17:43
tax they're going to be paying, businesses don't know what tax
17:45
they're going to be paying in a few months time.
17:47
People saving for pensions or investments for the future don't
17:49
know. And that has a freezing effect
17:51
on investment. So I, I think it's, you know,
17:54
certainly international investors will be hoping that
17:56
this budget sort of slightly draws a line in the sand,
17:58
establishes a clear plan to get the deficit down and puts to bed
18:01
a lot of the speculation. So you can just have some basic
18:03
stability, which is the kind of first basic ingredient for
18:07
getting, you know, decent growth back in the economy.
18:09
I mean that, that sort of opens up the other big argument, I
18:11
suppose that would be between the two of you about
18:13
international investors in the bond markets.
18:17
I mean, Zach, you, you seem to be saying we we shouldn't worry
18:20
about the bond markets in the last couple of days.
18:23
I don't think. I'm saying that that that debt
18:25
to the Bank of England isn't real debt.
18:27
I think we should be worrying about people in this country who
18:29
elected the politicians. So I'm talking about cleaners,
18:31
teachers, nurses, the people who are actually generating their
18:35
income in this country and the well-being of this country.
18:37
I'd object to the characterisation of the Labour
18:39
government as on the left they're giving fossil fuel
18:41
subsidies, £3.2 billion. That is destroying this planet.
18:45
We have one of the most nature depleted countries on Earth.
18:47
All right, but let's talk about the bond markets.
18:49
Well, absolutely. Well, this all links in because
18:51
ultimately it's about selling out our nature, selling out our
18:54
communities to the bond markets as opposed to going a
18:57
politician's principal job should be about protecting
19:00
people and planet. Now on the debt and the deficit.
19:02
It's not that it's, it's completely irrelevant.
19:04
It's just that ultimately the question always is, we talk
19:06
about borrowing and borrowing to invest, but who are you
19:08
borrowing from? A lot of that money is from the
19:11
Bank of England. We literally owe it to
19:12
ourselves. A lot more of the money is from
19:14
foreign countries. It's stored as assets because.
19:17
But when you say we owe it to ourselves, what are you
19:19
suggesting? Are you saying we can write it
19:20
off? Although we can just print more
19:22
and it's fine. Well, you don't print money in
19:24
that same way anymore. We know it all happens on
19:26
computers and it's digital and effectively it's basically
19:29
simple. Keens.
19:30
Really what I'm saying is anything we can do, we can
19:33
afford. The limitations because there
19:35
are rules are inflation based on the amount of resources.
19:38
So we can. Just keep making more money and
19:40
spending it. Up until the point that we have
19:41
inflation or we run out of resources.
19:43
But by the way, we have much more important boundaries and
19:46
the boundaries are ecological boundaries and climate
19:48
boundaries. So we both have to watch
19:50
inflation in terms of making sure that everyone is employed
19:53
properly, we have enough resources to do the things we
19:55
want to do. But investing in hospitals,
19:57
investing in schools, investing in infrastructure, that's
20:00
exactly what our country should be doing.
20:01
And I think decades of austerity has programmed people's minds
20:04
with we don't deserve better or we can't have alternatives, but
20:07
actually making sure we're investing in our communities is
20:10
the exact way to keep the economy moving.
20:12
What we're getting from both these panellists, I would say,
20:14
is different forms of trickle down economics.
20:16
Which has been demonstrated over and over again to fail, and
20:19
crucially, people die as a result.
20:21
That's how serious these consequences are.
20:22
If if Zach was delivering the budget on Wednesday, how would
20:25
the bond markets? Zach has just set out something
20:28
called modern monetary theory, which is a sort of idea that you
20:31
don't need to worry about bond markets or deficit.
20:33
And it's it's a little bit like the last five years with
20:36
inflation and high yields never happened.
20:38
This was an argument that we had during the previous decades of
20:41
the sort of after the financial crisis up until 2020 when
20:45
central banks were doing QE i.e., they were buying up
20:48
government debt, interest rates were zero.
20:50
And then there was an argument about whether governments could
20:52
boost economies by spending and borrowing.
20:54
But the, the difference is that as Zach said, we have had the
20:58
last five years, we've now had, we've had a big inflationary
21:00
surge. We've now got interest rates
21:02
quite high. And in this country, in the UK,
21:04
we still have inflation stubbornly above target.
21:06
So if you tried that approach now, we actually saw the risks
21:09
of that with the Liz Trust budget.
21:10
If you tried that approach now of deliberately going out to
21:13
deliberately, if Rachel Reeves said I'm going to junk my fiscal
21:16
rules, I'm going to spend and borrow more.
21:18
Actually that would result in the Bank of England having to
21:20
raise rates further. That would basically undo any
21:23
positive economic impact, because they have and just lay.
21:25
Out It's not everyone. As an economist, what does that
21:27
actually mean? It means the government paying a
21:29
lot more for its debt. It would mean the government,
21:32
not only the government paying a lot more for it debt, but
21:34
actually the the rate that the government pays for its debt
21:36
sits underneath every other interest rate in the economy.
21:39
So every interest rate that a business pays to borrow to
21:42
invest or that someone pays on their mortgage sits on top of
21:45
the interest rate that the government pays.
21:46
So if you go out and borrow and spend in an inflationary high
21:49
rate environment, you will see higher interest rates, not just
21:52
for the government. That matters because we all pay
21:54
that debt interest through our taxes.
21:56
And we would see the graph. Pay more on debt, interest for
21:58
education, it would go through the same.
22:00
So we know these risks. So I think we've got to confront
22:02
these risks understanding that the last five years have
22:04
happened. This is a different world now.
22:05
And that's why, you know, this market constraint is something
22:08
that that we as a country have created by choosing to borrow
22:11
billions of pounds from markets. So, Zach, how do you escape that
22:14
market? We.
22:14
Need to be clear if we're talking about primary bond
22:15
markets or secondary bond markets.
22:17
But more importantly, the Liz Trust example is the opposite
22:20
example. Liz, Trust borrowed money under
22:23
your frame to fund unfunded tax cuts.
22:25
I'm absolutely not saying that's what we should do.
22:27
Actually. Opposite what?
22:28
Markets were, if anything, more worried about the massive
22:30
borrowing she was doing to fund spending on the energy subsidy
22:33
scheme. So it was a mix of very, very
22:35
large. Spending plans together Just a
22:36
couple of days after Liz Truss and everything settled down, the
22:40
Bank of England could have adjusted to.
22:41
Fire her chancellor and reverse all the policies.
22:43
But you're making it. It's the problem around the Bank
22:45
of England independence. And actually, I think the
22:47
conversation we know the. Sorry, no, no, I mean I'm just
22:49
trying to work. Are you saying that interest
22:51
rates wouldn't go up or are you saying saying it doesn't matter
22:53
if they go up? I'm saying it matters in terms
22:55
of making sure we're relating it to resources.
22:58
We've had years of trickle down economics and we're in the exact
23:01
situation we were just I know. That's the argument.
23:03
But if you've got all the the, the people in Marcus and people
23:06
like Rupert saying the interest rate would go up if you did
23:09
that. But of course, for people in the
23:10
what is that? How do you escape that?
23:12
I mean, map, The question you're really asking me is, are very
23:15
wealthy individuals worried that what I'm talking about is not
23:18
moving our public wealth to private capital, which has been
23:21
happening for decades now, but keeping it as our public wealth
23:23
and spending it on our communities.
23:25
When we talk about deficit, what we're really talking about in
23:28
deficit is money that has gone to our communities.
23:31
If we talked about surplus, what we're really talking about is
23:33
where we're not spending money on our communities.
23:35
So we need to completely change this economic paradigm.
23:38
Now, I know that's going to be difficult for people because
23:40
that's a completely different way of looking at the economy.
23:42
So let's keep it very simple. What I'm talking about is
23:45
spending multipliers, which have existed in our economics for a
23:48
long time. For every pound you spend, the
23:50
economy gets money back on this. Is not a new invention.
23:53
Can I just say environmental spending?
23:55
For every pound you spend, you get £1.88 back into the economy.
23:59
So it doesn't. Make sense?
24:00
The economic. Sagity never makes sense.
24:02
This multipliers issue. So again, this this is an
24:04
argument that we had pre 2000. When you have low inflation and
24:08
low rates, there's an argument about whether multipliers are
24:10
high. The problem is when you've got
24:12
inflation above target, the multipliers are basically zero
24:14
in the in the Keynesian sense, which is any money the
24:17
government borrows to spend is going to be more than offset by
24:19
the Bank of England having to raise interest rates because
24:21
it's got to get inflation back to target.
24:24
So this really feels like an argument that's sort of out of
24:26
date. Like I didn't realize that the
24:28
inflation happened and that rates are high.
24:30
You know, we live in a different world.
24:31
And sometimes this gets framed in terms of democratic choices,
24:34
like the the bond market sort of undemocratic.
24:36
It is like, you know, there is a legitimate democratic choice,
24:39
which maybe, you know, the politicians on the left might
24:42
want to take, which is you could raise taxes to raise spending.
24:46
That's a very deliberate democratic choice.
24:48
And, and if you get people to vote for that, it's absolutely
24:50
fine. Unfortunately, you don't have a
24:51
Democratic right to borrow 100 of billions of pounds from
24:54
overseas investors. To do that, you have to be
24:56
credible and you have to persuade them that you're going
24:58
to pay them back. But notice for credibility and
25:01
persuasion, because really what we're talking about here is
25:02
trust. And what politicians need to be
25:04
doing is telling different stories and making sure that the
25:07
markets understand the stories they're telling.
25:09
A big problem we've had, and we've really got it with Rachel
25:11
Reeves right now. And I do agree with what you
25:13
said a few moments ago, that part of a huge problem here is
25:15
the uncertainty that we seem to be swinging all over the place
25:18
and there doesn't seem to be a vision and a plan.
25:20
Now, look, I'm not an economist. I'm not going to pretend to be
25:22
an economist. But I talk to economists
25:24
regularly. And what they're saying more
25:26
than anything is there needs to be clarity about what all of
25:29
these terms mean. And the fundamental problem in
25:31
all of our conversations about economics is the constant
25:34
fixation of comparing a household budget to the national
25:37
economy. It doesn't work like that.
25:39
And a few years ago, it felt, particularly in journalism, we
25:41
were having different conversations about how the
25:43
economy works. It just feels like that's rolled
25:45
back and over and over again. We hear this now it.
25:47
Also feels sometimes though though that's some sort of magic
25:49
political message and actually there is such a thing as money
25:53
in and money out on debt that needs to be repaid.
25:56
To a point, let's give an example.
25:57
We had a pandemic in this country and we created the money
26:01
to respond to the crisis, and that was the right thing to do.
26:04
We are in a crisis right now. We're in a crisis of inequality.
26:06
We're in a crisis of climate. Ultimately, we need to be
26:08
spending money to make sure that we're borrowing to invest, if
26:11
that's the phrase we're using, or we're spending to invest
26:14
because ultimately austerity is the one proven thing to
26:17
absolutely not work and to ultimately end people.
26:19
'S we're going to come to austerity soon and, and the
26:21
whole question of welfare cuts. And obviously Rupert's got an
26:24
interesting perspective on that about having been around George
26:26
Osborne during austerity. But Rosie, is this, is this the,
26:30
is this sort of more snake oil from your point of view?
26:33
Yes. And I think that we need to be
26:35
clear what will actually happen to people.
26:37
There's been a lot of technical talk, but what will happen if we
26:41
go to the markets? If, if Zach was delivering this
26:46
budget and we went to the markets and we massively
26:48
increased borrowing, it would mean families in my constituency
26:51
would pay more on their mortgages.
26:53
We saw that under Liz Trust. There is a real human impact of
26:58
just going to the markets going and just borrowing.
27:00
We sit. We saw it under Liz Trust.
27:02
Yes, that was for partly for tax cuts rather than spending, but
27:05
still it would have the same impacts.
27:07
And when I knocked on doors, to be honest, when I still knock on
27:10
doors at my constituency, the devastation caused by Liz Trust
27:15
is frankly, but her trickle down economics, which we will not
27:21
return to, is still felt in families day-to-day.
27:24
Lives but long term interest rates went back up to beyond
27:27
this trust levels yeah, but not after that yeah I mean.
27:30
Damage caused sets in Pi have friends who got on the housing
27:34
ladder and then had to sell their houses to go back into
27:36
rented accommodation because of the impact of Liz Trust's mini
27:40
budget on their mortgages. That that impact is still felt
27:43
day-to-day in people's lives and we would see the same thing
27:46
under Zac's economics. I mean what raises worrying
27:48
about here is essentially debt to GDP ratio which is about 100%
27:52
in our country. In Japan it's 270%.
27:55
Japan has a much more equal economy than we do, and it has.
27:58
Massive problems with their economy.
28:00
Of living they have other problems too but in terms of
28:02
making sure we're tackling inequality and getting a better
28:04
standard of living these scare stories of both the men.
28:07
I think the other real issue we have from the labour government
28:10
is this constant focus on GDP. Simon Kuznetz, the idea, the
28:13
person who designed the idea of GDP, says this is a terrible way
28:16
to measure the health and well-being of the country.
28:18
We should actually be talking about mental health.
28:20
We should be talking about equality.
28:22
We should be talking about communities that feel like
28:24
they're cohesive and they live with purpose.
28:25
There's constant focus on economic growth as the priority,
28:28
and the only measure is destroying, destroying our
28:31
country. I.
28:32
Don't want to come back and be the economist here, but Japan is
28:35
in a very first of all, a very dangerous situation.
28:38
So Japan is now seeing its interest rates rise and pressure
28:41
on its currency because international investors are
28:43
starting to say, well, this 200 plus percent of GDP debt maybe
28:47
was sustainable when your interest rates were zero, but
28:49
what does it look like now that your interest rates are
28:51
normalizing? So it's still running a risk for
28:52
the future. Japan is also, again, this bit
28:55
complicated, but Japan is in a very different situation because
28:58
it is a current account surplus country.
29:00
So Japan exports far more than it imports and therefore it
29:04
doesn't need any kind of national sense to be sucking in
29:08
capital just to live on a, on a year by year basis.
29:11
The UK is structurally A deficit country and so markets are going
29:15
to be much, much less tolerant of high debt to GDP in countries
29:18
like the UK, which is what you can see in the market reaction
29:21
to the trust episode or more recently to some of the wobbles
29:24
and what you're seeing in countries like France where
29:26
again, concerns over fiscal sustainability are having real
29:29
impacts on interest rates. So, so can I move us on to
29:33
spending then? Because obviously from from the
29:35
right, the demand is you need to cut spending.
29:39
You helped guide Britain through austerity or partly the
29:43
architect of austerity. I mean, do we need another
29:46
period now of massive cuts? I mean, look, I think that's
29:50
the, the immediate challenge is one of confidence.
29:52
And like can this budget, as you know, we've all talked about the
29:55
uncertainty of this period. Like can you get a budget that
29:58
in a sense is a kind of clearing moment that provides certainty
30:02
for markets, certainty for business.
30:03
And then the, you know, the government can focus on its
30:05
priorities, people can focus on investing for the future.
30:08
I think that from the point of view of international investors
30:10
coming back to the markets who we do borrow the money from,
30:13
they would want to see anything that's predictable and reliable
30:17
and sustainable. And that's why, you know, if
30:19
there were credible reductions in spending, particularly on the
30:23
welfare side where people can see the welfare bill, especially
30:25
for health and disability benefits rising very rapidly, if
30:29
there were a credible way to even limit the rise there, we're
30:32
not necessarily talking about reducing the scale.
30:33
I think that would be seen as credible and permanent.
30:36
That's another reason why markets, when it came to tax
30:38
rises, I think took the view and most economists took the view
30:40
that well, if you're going to raise tax, probably raising
30:42
income tax. No one likes paying more tax,
30:45
but it's predictable, it's less distortionary.
30:47
The revenues are going to be reliable.
30:49
The government's now ruled that out.
30:50
The challenge for the government is to put together a package and
30:53
challenge for Rachel Reeves put together a package, which I
30:55
think maybe it will include something on the spending side.
30:58
But also if it's going to be tax rises, tax rises that are
31:01
predictable, reliable and going to bring in the revenues.
31:04
Because again, if you if you're just dealing with novel tax
31:07
rises where you don't necessarily know they're going
31:09
to deliver the revenues, that's where some of that uncertainty
31:11
might. But when?
31:12
When you look back at what what happened, I mean, you know,
31:14
obviously a lot of people think we are still living with the
31:16
consequences of austerity, that the impact on public services,
31:20
on the wealth gap, on poverty, on child poverty is partly as a
31:25
result of austerity. I mean, do you accept that?
31:29
Now, well, austerity means different things to different
31:31
people. So, you know, the period I was
31:32
in government 2000 and ten 2015, that was really dealing with an
31:36
economic crisis in 2010. So this was not, you know, we,
31:40
we were borrowing, the government was borrowing 1 LB in
31:43
every four that it spent was borrowed from international
31:46
markets. The UK had a budget deficit of
31:47
more than 10% of GDP, worse than the fiscal situation we're in
31:50
now. And and there was a moment of
31:52
genuine crisis for the UK and that's why you had a coalition
31:55
government. It wasn't an ideological
31:57
approach. You had Liberal Democrats and
31:59
Conservatives in coalition saying, well, we're going to do
32:01
a combination of tax rises. Remember that government raised
32:04
VAT, raised more than £10 billion of raising VAT.
32:06
But do. You think you envisioned the
32:07
long term impact? Well, I think that, you know,
32:10
there's a, there's a Democratic argument about what's the right
32:12
level of tax and spending on public services.
32:14
And certainly, you know, like, as you said, I was AI was a
32:17
conservative candidate at the last election.
32:19
I certainly heard on the doorstep people saying, well,
32:21
look, we, we, we didn't look at public services and they're,
32:23
they're not good enough. And I think that a lot of the
32:25
impact of that was maybe related to the pandemic.
32:27
But certainly there was a democratic choice, I think at
32:29
the election, which is like, actually, we're we're willing to
32:31
pay more taxes. Even though the Labour Party
32:33
said it wouldn't raise taxes. In my experience, all the voters
32:36
expected that they would. And I think there was a decision
32:39
by the voters to to elect a Labour majority, a very large
32:42
majority, to have a bit higher taxes and more investment in
32:44
public services. So Rosie, I mean you've placed
32:46
great store in what the markets think and and what Rupert's
32:49
saying is being said by all the investment managers that you
32:52
know there has to be some credible cuts in spending as
32:56
well. I mean, do you agree with them
32:57
on that as well? No, I mean, I think that the
33:00
years and years of cuts that we had to our public services is
33:03
why we see the inequality, that we see why the country is in the
33:07
place it's in. I think that if you don't fund
33:10
our NHS you will have people on welfare because they're waiting
33:13
to get a hip replacement. I think if you don't fund
33:15
education properly, you're not giving young people the
33:18
opportunity they need to go into the work and then contribute to
33:21
our economy. I think getting the welfare bill
33:24
down is a separate conversation because of personally I think
33:26
there's a moral case for it. I think that one in eight young
33:29
people not in education or work is an absolute damning legacy of
33:33
the previous Conservative government and needs to be
33:35
something that we address. Work can be a really, really
33:38
good thing and we need to talk about that more.
33:40
But I do not think, and I don't think under this Labour
33:43
government we should go back to seeing cuts to our public
33:46
spending. So any any reduction in spending
33:48
has to be couched as as as not a cut is what you're saying.
33:52
Well, I like I said, I think welfare, there's a, there's a
33:55
moral case for it and I really do.
33:57
I think that there are people that we've let be out of work
34:01
who would want, who want to get back into work, who want the
34:03
opposite. Does that mean compulsion?
34:05
Work. You know, forcing, forcing
34:06
people off benefits. No, I think it's by like with
34:09
the Tim's review, making sure that we can create an
34:11
environment that people feel as though they can try work and not
34:14
fear losing their benefits or they feel like there's a work
34:17
that will work for them around their life.
34:18
I think there's a lot to it. I think it's complicated, but
34:21
there's a moral case to get this welfare bill down.
34:24
Why do you? Think so many young people are
34:26
going onto health and disability benefits at the moment?
34:29
I mean, do you, do you think they all are?
34:32
I think there's disabled and unwell.
34:34
I think there's, I think there's a range of issues, to be honest.
34:36
I think that once if you leave education and you go on to
34:41
welfare, welfare I, I, and you're on welfare for quite a
34:44
long time. I didn't think there's, there's
34:45
challenges of getting back in to the workplace.
34:48
And we've seen that. I think that it partly because
34:52
of cuts we saw under the previous government to
34:54
education, people have left school not feeling necessarily
34:57
ready for a modern workforce. And they struggled, of course,
35:00
of course, the rise of, of mental health problems.
35:03
And again, this could be a whole separate broadcast, I think
35:05
talking about that, but also cuts that we saw under the
35:08
previous government to our NHS that meant people haven't been
35:11
able to get access to health care in their communities.
35:15
They haven't been able to look at prevention instead of cure.
35:18
And, and you can't see that more clearly than with mental health.
35:21
But I mean, you know, we there are plenty of people, you know,
35:24
on the reform side of politics who, who are essentially saying
35:27
not as bluntly as this, but that they're skivers.
35:30
I I don't and scrap, you know I would.
35:31
I would never use that language. Obviously you wouldn't, but I
35:34
mean, that's the argument you're up against.
35:35
As well, I, I think that there are people that could be in work
35:39
that aren't and then maybe they aren't in work because they're
35:41
scared of losing their benefits, which by the way, is, is, you
35:44
know, a valid reason they're scared of losing their benefits.
35:47
They're scared that work isn't gonna be economically viable for
35:49
them or they're just scared that that work isn't gonna be good
35:52
for their mental health or they're not able to find a job
35:55
that works around what they're facing day-to-day.
35:57
I think how? How damaging was it for, you
36:00
know, the credibility of the government to deliver any of
36:02
these changes, given they've already had to row back on the
36:06
welfare cuts they attempted? Well, I, I personally was, was
36:09
for the, the government reforming welfare.
36:12
Like I said, I, I think there's a moral case for it.
36:14
And I hear that from my constituents, by the way, quite
36:16
a lot people saying, look, I work hard and that I I feel like
36:21
I want the person. What?
36:22
Were your colleagues saying, you know in in opposition?
36:24
There was, I mean, the public could see this, right?
36:26
There was there was mixed mixed views in the back backbenches
36:30
and do. You think they've got to kind of
36:32
get real now. I think the Tim's review is a
36:35
good forum for backbenchers who have concerns and everyone
36:38
represents different constituencies and sees
36:40
different and may may want to feed in different information so
36:43
that we have the time to have that review to then come at.
36:45
This properly reflects the concerns of the backbenchers.
36:49
But as I said, I was someone who was for reforming welfare.
36:52
I don't think we can continue how it is.
36:54
Zach. Up is down, left is right.
36:56
Poverty is not a lack of character.
36:59
That's not what I said, money. And to have someone who's
37:02
working in a department that's privatising the National Health
37:04
Service, who is cutting spending in real terms and go we should
37:07
not be cutting spending is very much the definition of saying
37:10
one thing and doing another. What do you mean they're
37:12
privatising the? Health service, well, you know,
37:14
during the general election I had a debate with W Streeting
37:16
and I talked about that they have a plan to privatise it.
37:19
He put his arm up at me and said the left the bleating on again.
37:22
But we've seen that over and over again.
37:24
Not only are they accepting money from private healthcare,
37:26
companies are looking at more and more ways of reducing.
37:28
The spending that we want, it's not free at the point of use.
37:31
Yes, I do believe that. I think it's, I think.
37:33
It's a shocking narrative to. Tell people, I think we're
37:36
seeing over and over again the reduction in real term spending
37:38
on the National Health Service, the allowance of corporate
37:40
companies and more private healthcare companies to take
37:43
contracts. This has happened both with the
37:45
previous Conservative government, but we've seen.
37:47
It you see, Labour used to say this about the Conservatives and
37:49
the answer was always sure that it would be political suicide
37:52
to. Which is part of our.
37:54
Country so. It's kind of a mad accusation,
37:56
isn't it, To say Labour accusation to make people think.
37:59
What they're doing, when you look at the figures in terms of
38:02
real term spending and in terms of where that money is going to,
38:04
it's going to private healthcare.
38:06
And then also I, I didn't realise you'd been a
38:07
Conservative candidate, but I just think we can't take
38:10
lectures or moral lessons or not even moral lessons, but economic
38:14
lessons from a Conservative government that absolutely
38:17
devastated this country. I don't think it can be
38:20
overstated how brutal that Conservative government was
38:24
alongside the five prime ministers who increasingly
38:26
reduced spending. Increasingly we saw poverty on
38:29
the rise. We've seen people homeless,
38:30
we've seen people struggle to eat.
38:32
And then the fact that Labour government came in on a promise
38:34
of change, but any change we've seen has arguably made things
38:38
worse. I think that's why we're seeing
38:40
the so-called centre collapse because there is no vision,
38:43
there's no real offer. There's just saying one thing
38:45
and doing another and I think people are over it.
38:48
And actually that's why people want hope to feel normal again
38:50
because actually they're looking to a party in the Green Party
38:53
who are actually saying we will invest in your communities, we
38:56
won't accept corporate donations.
38:57
You know these big multi millionaire and billionaire
38:59
contracts for Rosie? I think what we're risking in
39:03
this country, because we are at 4 Kinder roads, there is a
39:06
party, Reform UK, that are waiting in the wings to come in
39:10
and they genuinely want to to move our NHS to an insurance
39:13
based system. They want to privatise our NHS.
39:15
It is a Labour government that invented the NHS.
39:18
It is. A They also say that they would
39:20
have free healthcare at the point of delivery, don't they?
39:23
I, I think they've been, they've gone back and forth.
39:25
I think they've said one thing one day, one thing the other.
39:26
I think it's uncertain what they would do to our NHS.
39:29
I think our NHS is at risk at the hands of Nigel Farage.
39:33
It's a Labour government that created the NHS.
39:35
It's a Labour government that's increased investment in the NHS.
39:37
It's a Labour government that's got our waiting times down.
39:41
We promised 3,000,000 appointment, we've delivered
39:43
five. I think it is dangerous when we
39:45
know the risks that are waiting in the wings in with Nigel
39:48
Farage and what he would do to our NHS.
39:49
That you say that our Labour government is privatising the
39:52
NHSI and doesn't want an NHS free at the point of view that
39:55
it's against our DNA. It's against what?
39:57
I'm getting more contracts to private healthcare or not?
39:59
I, I don't personally, I don't know the the the details and I
40:02
think you could look at all different aspects of healthcare
40:05
and talk about them all separately.
40:07
So do. You think we're reducing
40:08
contracts? For private healthcare that a
40:10
Labour government will always have an NHS that is free at the
40:13
point of view use. It can be free at the point of
40:15
use, and it can still. But that's not privatising the
40:17
NHS. Well, ultimately it is because
40:19
it means that we as the public are being ripped off because of
40:22
the money that is going to those private healthcare.
40:23
Companies. But that is not the same as what
40:24
you just said. You said Labour want to
40:26
privatise the NHS. That would be privatising.
40:28
You'd literally be giving it to private.
40:29
Labour don't want an NHS rate to point of views.
40:31
I just asked you, I said does Labour want an NHS rate to point
40:34
of views and you said no. I think that's where they want
40:36
to get to. But where we are right now is we
40:38
are seeing the privatisation in terms of the active verb.
40:41
You are privatising and that's what.
40:42
Helps. I think it's dangerous what
40:43
you're selling to the electorate.
40:45
Given what the? Government are doing, it's
40:47
waiting in the wings, I really do.
40:49
Rupert, I mean take on the criticism of the Conservatives
40:52
as well. Well, I think it's not really,
40:54
for me, austerity is not really for me to sort of defend the
40:56
government I wasn't part of. But I think that if I could take
40:59
a step back and sort of put my hat on as an investor in the UKI
41:04
think that this conversation is something that we should pay
41:06
very close attention to. Because while I do think that
41:09
most people would expect that in the short term, the budget will
41:12
be a bit of a hopefully a clearing moment, if there can be
41:14
a credible plan to deal with the deficit, restore a bit of
41:16
stability. Increasingly talking to
41:19
international investors in the UK, the thing that comes up as a
41:22
future risk is political stability in the future
41:24
politics. And certainly, you know,
41:26
investors have long time horizons and they certainly see
41:28
the polls and they're looking ahead to Nigel Farage, the
41:31
possibility of a Reform government.
41:33
I think it's very interesting actually that in just the last
41:35
couple of months, even Reform who had, you know, certainly a
41:39
very sort of fiscally irresponsible manifesto at the
41:41
last election, they've had to backtrack on that.
41:44
And you've got Nigel Farage saying, no, everything will be
41:47
paid for. You've got rich to Tice uses a
41:48
phrase like performance related tax cuts, which I think is him
41:52
deliberately trying to learn the lessons of the list trust
41:54
episode and say we won't cut taxes if we can't afford it.
41:57
And so I think that that the bond market and and
41:58
international investors have noticed that and said, OK, well,
42:00
maybe that's a risk. There's maybe so do.
42:03
You think they will currently see reform as more stable than
42:06
the green? Well, well, I think that the
42:07
issue now is that I think that the issue of leadership in the
42:10
Labour Party has been raised over the last couple of months
42:12
because of, you know, all these briefings and stories.
42:15
And I don't want to get into political title tattle.
42:17
That's not my role, but international investors have
42:19
certainly noticed that risk. And I think that the kind of
42:22
pressure on Labor from the left, from the Greens and the risk
42:25
that Keir Starmer and Rachel Reeves could be replaced within
42:28
Labor by a new leadership that might turn to the left, that
42:31
might be a little bit less fiscally responsible is
42:34
something that is already starting to raise a risk premium
42:37
for the UK. And you can see that a little
42:39
bit on the kind of longer part of the interest rates that we
42:41
pay. So soft Labour leader.
42:44
Well, I think the. Candy burner.
42:45
What I'm trying to make is that. Would ring alarm.
42:46
What I'm trying to make is we live in a dangerous world now.
42:48
We live in a dangerous world with high interest rates, you
42:51
know, volatile macro economy, hugely unpredictable
42:54
international policy from the Trump administration.
42:56
I think that, you know, be very careful the impact that these
42:59
political discussions have on real world consequences for
43:02
people's mortgages and businesses because, you know,
43:05
this kind of talk is not free. You know people are listening,
43:08
not just, you know, your, your listeners on, on Channel 4, but
43:12
actually the world is listening. Just to be clear on this yet,
43:15
but just to be clear on this, in terms of what the bond markets
43:17
like, are you saying they would like Keir Starmer and Rachel
43:20
Reeves to stay in place? Certainly I think that, that, I
43:24
mean, I think that uncertainty, markets don't like uncertainty.
43:27
They would like to see predictable revenues.
43:29
They'd like to see a strong government delivering a plan.
43:31
Absolutely. The, the, the risk of, you know,
43:34
as I say, I'm not raising this because this is something that
43:35
now gets raised very regularly in discussions, investment
43:38
discussions about the UK ever since really #10 put it on the
43:41
agenda themselves with all that briefing a couple of weeks ago.
43:44
So I think that, you know, we have to now, you know, think
43:46
that these, this kind of speculation has real
43:49
consequences given the world we live in and has real
43:51
consequences right now. How imperiled do you think
43:54
Rachel Reeves is on Wednesday and how it unravels and or not?
44:00
Well, first of all, to Reaper's point, I would agree, I think
44:03
political stability does have real implications to to our
44:07
markets and, and actually what who feels the brunt of that is
44:10
always families and, and the everyday person who I think of
44:15
in my constituency. I think, you know, I'm not going
44:18
to comment on Rachel Reese's specific position.
44:21
Why not? I mean #10 is literally, you
44:24
know, if they were literally briefing about Labour leadership
44:26
a few days ago, I mean. Yeah.
44:27
And I, I don't think briefing is is is helpful or and I think
44:31
like. But it's a real debate.
44:32
You can't deny that, you know, she gets this wrong.
44:34
She's. Yeah, I mean.
44:35
Yeah, and I think there's a lot of stake at, at this budget, but
44:38
I think there's a lot of stake not not, I'm not, you know, I'm
44:41
not thinking about the leadership of the Labour Party.
44:43
I'm thinking about the people in my constituency who want better
44:47
lives. And to be honest, like I said,
44:48
we're a fork in, in a, in our roads in for this country.
44:52
So I think there's a lot mistake to make people feel better off,
44:55
to make the cost of living crisis not feel so prevalent in
44:58
people's day-to-day lives. Families who I think of, like I
45:01
said, every single day, the mum who drops dropped her kid off at
45:05
school and now can drop their kid off a a free breakfast club
45:08
who can take the other kid to childcare, which they now have
45:12
30 hours free, can go and get a good job.
45:15
I think about those people every single day.
45:18
And it's it's that that I care about the leadership of the
45:20
Labour Party. We can talk about it over and
45:22
over again. Is delivering for people that
45:24
matters? It is very.
45:25
Likely that you come through this budget, you know, if
45:28
Rupert's right, that you know, things, things stay reasonably
45:30
stable. There's no panic on the bond
45:32
markets. You get through it, but you lose
45:35
political support because ordinary people's taxes go up.
45:39
They're already feeling squeezed.
45:41
There's no hope on the horizon for the from, you know, for them
45:43
and, and, and you are, you are plummeting in that scenario.
45:47
Labour MPs We'll start talking about getting rid of Keir
45:50
Starmer. Well, I think in this budget we
45:51
need to make labour decisions that make this country fairer.
45:55
And those people that you just spoke about, I think that we
45:57
need to think about them in the forefront of our minds.
45:59
When? Well, like I said, I'm not in
46:01
the Treasury. I'm not Rachel Reeves.
46:03
But they're all going to be worse off next week.
46:05
I don't, I don't think that's true.
46:07
I don't think that's true. This is a Labour government.
46:09
I don't think that's true. It's not migrants that
46:12
bankrupted this country. It's not the left that
46:14
bankrupted this country. It's not people who are claiming
46:17
Universal Credit, many of whom are in work.
46:19
They're just work is not paying enough.
46:21
And that's a really key point. That's why we increase.
46:23
People who bankrupted this country are the bankers.
46:25
For people who are bankrupted this country are decades of Tory
46:28
politicians and now Labour politicians and their austerity.
46:31
That hasn't worked and it's time to change course.
46:35
And, and do you see the political instability as a, as a
46:38
good thing for change? Well, I think we do need
46:40
political stability. I don't think anyone, I don't
46:42
think anyone's coming on this and saying political instability
46:44
is a good thing, but. It's helping you, isn't it?
46:46
Well, it's helping in terms of people are recognizing that what
46:48
is happening right now doesn't work.
46:49
The only thing that will maintain right now is the status
46:51
quo. So I think people watching this
46:53
have a decision to make. Are we going to allow that
46:55
status quo through the Labour government to gradually go
46:57
further and further to the right and end up with Nigel Farage or
47:00
something even worse as time goes on?
47:02
Or are we going to say time to change course?
47:04
The Green Party party are there. I'm not pretending we have all
47:06
the answers. Yeah, what I am saying is what
47:08
we are doing right now isn't isn't working.
47:10
And this is absolute madness. Are you keep saying let's double
47:12
down. And you keep talking about the
47:13
bond markets being scared and terrified.
47:16
But I think we've got to worry less about the bond markets and
47:18
more about the people in our working class.
47:19
Community, I'm talking about the system we are currently living
47:21
in. You want to change that world?
47:23
Fine, I get that. But are you also?
47:24
That can be. Dismissed.
47:25
But I do think the current system that we're in hasn't
47:28
always been this way since Thatcher neoliberalism came in,
47:31
and that's what we're suffering now.
47:32
So what I'm saying isn't some kind of fantasy or idea that
47:34
we've I've never had before. I'm talking about what happens
47:36
in most of Western Europe and also what we had before Thatcher
47:39
kind of destroyed any kind of sense of social.
47:42
Cohesion, but I wonder whether you're also slightly surprised
47:44
by your own popularity at the moment and whether it's making
47:47
you think about some of these economic issues, you know, more
47:51
seriously. I mean, you know, Rupert
47:52
mentioned, you know, reform of clearly tacked back from some of
47:56
the more eccentric ideas they were throwing out in their, you
47:59
know, in their contracts and the and the last election.
48:03
You know, are you also having a lot of meetings saying, well,
48:07
we've got to get our ducks in a row here and stop saying things
48:10
that spook people? Well, you know, you spooked
48:12
people yesterday a little bit, to be honest, on Laura
48:14
Kuenssberg's show. When you, when you talked about,
48:17
you know, you know, it's money we owe ourselves and people.
48:19
Thought this is important. Let's not not know, you know,
48:21
know how the system. Works well.
48:22
Who did I speak? I speak to establishment
48:24
figures, multimillionaires and billionaires and people who are
48:27
very wealthy, who surprisingly don't like the idea, many of
48:30
them, that I want to tax the wealthy.
48:32
And so they're finding ways to attack the Green Party like I'm
48:34
really privileged and honoured for.
48:36
The Green Party right now are shooting up in the polls.
48:38
I think in the last poll I have the highest net favourability
48:41
ratings of any party leader and I also accept that's a total
48:44
responsibility. The Green Party have gone from a
48:46
party where we were fighting to get some air time to say things
48:49
to a party where I can't stop doing interviews and being given
48:52
a platform. I always have more to learn.
48:54
I always have more to discover. So I'm not pretending.
48:56
I know everything. What I am absolutely certain of
48:59
and so certain of is that multimillionaires and
49:01
billionaires own many of our newspapers, own many of our TV
49:05
channels. And ultimately those people have
49:07
a very vested interest in trying to discredit any idea or story
49:11
that challenges the status quo. And the one thing I'm certain of
49:14
and people tell me every single day is the status quo is not
49:17
working. It is broken.
49:19
And Labour ultimately exists right now to protect power and
49:21
wealth in this country. And that's before we even get to
49:24
the tourism reform. We need a complete clear out of
49:26
that broken politics. We need something new, different
49:29
and hopeful. And that's what I'm offering.
49:31
I mean, I just say that it certainly wasn't billionaires
49:34
and millionaires who brought down the trust government, who
49:36
was cutting the top rate of tax. It was reality.
49:39
And so you've got to differentiate between, you know,
49:40
billionaires and millionaires and reality.
49:42
And unfortunately, you know, we, we, we, it would be great if we
49:46
could worry less about the bond markets, but to do that, we'd
49:48
have to run a budget surplus. So let's raise more taxes for
49:51
the spending that you want. Unfortunately, I think that the
49:54
reality is more important and that confronting reality and
49:57
providing a bit of confidence to the world that the UK takes
50:00
reality seriously. The reality is the status quo
50:03
and what I'm saying is your reality is not working.
50:06
And I think enough people in this this country, more and more
50:09
are going. Actually, I don't believe that.
50:10
We've been told this over and over again on TV channels and
50:13
the newspapers and the difference is happening.
50:15
Communities are coming together, people are organising and going.
50:18
Let's have a different political and economic system and that's
50:21
what's coming. I want to make sure Nigel Farage
50:23
isn't in charge of that. I want to make sure communities
50:25
are. Zach talks about, oh, we all on
50:29
this panel don't want political instability, but I think the
50:33
Green Party and the Reform UK have the exact same technique.
50:37
They are going online often, you know, TikTok.
50:40
They're speaking directly to people.
50:42
They're telling them. How awful is me to?
50:44
Talk. Directly to people.
50:45
I have, I have TikTok. No, but you're telling them lies
50:48
and that is awful. Can you name one lie I've said?
50:50
Yeah, the a wealth tax would change this country.
50:52
I've never said that. No, but that's what you're
50:54
telling people. I've said a wealth tax would
50:56
reduce inequality in this country.
50:58
Do you not believe a wealth tax would reduce inequality?
51:00
Because it seems fairly basic, I.
51:01
Think there's lots of policies that will reduce inequality?
51:04
With a wealth tax reduce. And a Labour government that
51:05
implemented you've? Accused me of a lie.
51:07
So with a wealth tax, I think that.
51:08
Let me just finally ask you, Rose, I mean, because a lot, a
51:10
lot of people will also be a bit alarmed because they, because of
51:13
the way politics is changing in Britain at the moment, that a
51:16
lot of people are wondering whether the the only future for
51:19
the centre and the centre left and the left is for you to work
51:23
together to stop reform of the next election.
51:26
And looking at this conversation, it's not looking
51:29
very likely at the moment. It is, I mean.
51:31
I, I want people's lives to get better.
51:34
I, I don't want the cost of living crisis to continue to
51:37
burden families. That's what I think of, you
51:39
know, we can come on on a panel like this and we can have the
51:42
political debate, but ultimately I want to see the policies
51:46
implemented, the choices made that make things better for the
51:49
ordinary family, the family that I was brought it up in, that
51:52
made my life. It has been good.
51:53
I've had opportunities because of what the last Labour
51:56
government did for my childhood, and I want this Labour
51:59
government to do the same for children growing up.
52:02
I don't think we're gonna be able to do that with this
52:04
divisive politics that we. The Progressive Alliance.
52:06
Is the only chance of the next right?
52:08
Are you up for it? I think the chance of the next
52:10
election is delivering for families and I think that's what
52:13
we'll do. Thank you all very much indeed
52:16
for joining us. That was fascinating.
52:17
I hope you enjoyed that. That's it for this episode of
52:19
The Forecast. Until next time, bye bye.