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UK Economy - How Bad Is It? The Spring Statement Explained | Fourcast Live · The Fourcast

0:00
Hello and welcome to this special live edition of The
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Forecast after Rachel Reid's spring statement.
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And it's painful medicine for an ailing economy.
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Growth this year is halved. Inflation will tick up.
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There's £5 billion of welfare cuts targeted at disability
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payments affecting over 3 million people.
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The impact assessment says 1/4 of a million people will be
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pushed into relative poverty, including 50,000 children.
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And it's almost as painful for Labour MPs who didn't come into
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politics to take money from poor people.
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But the world has changed, says the government, refusing to say
0:33
exactly why, even though it is Trump who has forced defense
0:36
spending to rise and started a global trade war.
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To analyze what's happened, I'm joined from Leeds by our
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economics correspondent Helia Ebrahimi and from Westminster by
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our senior political correspondent Paul McNamara,
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who's just come out of Rachel Reeves press conference.
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Helia, I mean, a whole world of pain in the cuts, but for what?
0:56
What? What has she done this for?
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Is it credibility? I mean, it's all about being the
1:02
Iron Chancellor. She's got her fiscal rules and
1:05
they are non negotiable. She wants to make sure that she
1:09
absolutely sticks to those rules.
1:12
Today was a fiscal patchwork. She, you know, they were, they
1:16
had 9.9 billion of headroom in autumn that disappeared, not
1:22
just disappeared, but they went 4 billion into deficit.
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And today she outlined that she would take the political pain in
1:30
order to make sure that she stays on course.
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But don't forget, Krish, that this is a tiny, tiny bit of
1:37
headroom for a huge amount of different risk, you know, and I
1:42
think that's worth remembering. So yes, the markets are calm.
1:46
There was a bit of a spike in the gilt market, but they seem
1:49
to have calmed down. But there is a lot of pain still
1:52
to come. Of the reports that go along
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this from the Office of Budget Responsibility say that it could
1:58
all be wiped out very quickly and very easily if Donald Trump
2:02
sparks his trade war, if the global tariffs kick in.
2:05
We'll, we'll analyze all of that in a moment.
2:07
But, but Paul, I mean this, the pain which is being felt in
2:12
welfare cuts is, I'm guessing, reflected in the pain at
2:17
Westminster amongst Labour MPs. Yeah, I think you can always
2:22
gauge just how miserable people are by how quickly they respond
2:25
to your text messages or how quickly your inbox is filling
2:28
up. They're responding very quickly
2:30
today. There are a lot of messages when
2:33
these welfare cuts get to a vote in front of the House.
2:36
This is not going to be a nice experience for the government.
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Now, look, truth is, they've got a whopping great big majority.
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They don't really, really need to worry about that.
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But red on red attacks are not going to be a great look for the
2:47
next couple of months, and that's what you can expect.
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I'm I'm guessing a lot of them are wondering if this is what
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they came into politics for. Oh my goodness.
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Look, so firstly, you know, you get lots of text messages from
2:58
people, backbenchers saying, yeah, this is what I think,
3:00
don't use it on the record. But actually now we're just
3:02
getting statements that come out posted to Twitter.
3:05
So this one, Kim Johnson, the first, she's an MP from
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Liverpool. The very first line, Austerity
3:12
2.0 is here. That is very definitely not the
3:16
line that number 11 wants to be selling.
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And then this one here who really caught me.
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This assault on disabled people and those in need of support is
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nothing short of sadistically cruel.
3:29
That's one of their own MPs. Right.
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Hell yeah. So to the question of whether
3:34
this is austerity or not, I mean, how how does this compare
3:39
to where we were in the Cameron, Osborne years of austerity?
3:45
And and can we say it is or it isn't?
3:48
Well, I think you have to separate all the protected
3:51
departments from the unprotected departments and overall I think
3:56
it's not the same as 2008. What we're talking about is
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cutting about 3 to £4 billion from department spending.
4:03
That's, you know, far cry from what happened in the Osborne
4:07
year in 2010, but it's less generous than we thought back in
4:13
autumn. And today the government said
4:16
look, we're, we're only cutting spending, you know, from 1.3%
4:20
for the overall envelope down to 1.2%.
4:23
Don't worry, don't worry, don't worry.
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And of course if you're in defence, if you're in the NHS,
4:28
sure you might not worry. But if you are in the court
4:31
system, if you are the Home Office where you have had
4:34
sustained kind of cutbacks and sustained problems with your
4:39
funding packages over a decade and a half, really then I think
4:44
anything less than the generosity that was promised,
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where they thought they're going to give this big fiscal boost,
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there's, you know, basically lots of cash in the first two
4:53
years. Inflation has eaten into a bit
4:56
of that and now it's going to be even less generous than they
5:00
thought. So in real terms, those
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unprotected departments, the IFS says face cuts of about, you
5:07
know, you know, real terms, it's only rises of 0.8%.
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So that's a real term cut. So it's not austerity as we knew
5:15
it, but I mean, the government has been sticking to this line
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since well before the election. I've grilled Rachel Rees and
5:21
Keir Starmer about this so many times.
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And, and the chief secretary to the Treasury, Darren Jones, that
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they, they keep saying, you know, overall spending is up and
5:32
it continues to rise, But that's because there are some
5:35
departments getting more than others.
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And in some departments, it's going to feel very much like a
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cut. Look, their whole shtick is we,
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we came into government and what we announced was a funding
5:46
package that was so much more generous than what the Tories
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had in mind. And, and that is true, they had,
5:54
they increased spending, you know, in the last year by £50
5:58
billion. So it is more generous.
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What's happening now is that they are whining, finding some
6:04
of that down. Now people like the Resolution
6:07
Foundation say, hang on a moment, You said you wanted to
6:10
rebuild public services. You say that you want to get
6:13
people back into work. And you've done all of these
6:17
cuts really just to make the maths work, just to fall back
6:22
into your fiscal headroom. And, you know, there's lots of
6:25
suspicion that she had fiscal headroom of, you know, £9.9
6:30
billion back in autumn and all of the policy measures equal,
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you know, give her that exact same number again.
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So or, you know, to Paul's point that, you know, all of these
6:42
welfare cuts have political ramifications, not to mention
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the real world ramifications. You know, the complaint is it's
6:51
being rushed through, and it's being rushed through only to
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meet the Treasury's kind of wonk desire to make the numbers work.
6:59
Yeah. I mean, Paul, that the argument
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is going to be that they they say that this is all about
7:03
getting people back into work and that this is a philosophical
7:06
change that they had been working on for months before the
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election. But but my goodness, isn't this
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an astonishing coincidence that the numbers end up the same in
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terms of sort of the headroom that the money that they got to
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play with at the end? And that quite that.
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That leaves a big question mark over whether this is really
7:24
driven by the numbers or some, you know, deep seated idea or
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philosophy around getting people back into work.
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No, I think Rachael has announced her her stringent
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fiscal rules, you know, ages ago come hell or high water.
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She is not moving away from them.
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Of course they want to get people back to work.
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Well they were given a little bit of cover actually on that
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whole thing of austerity. 2 point O Paul Johnson, the old
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boss of the IFS turn around last last yesterday, put out this.
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Not old boss. Yeah, Paul.
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Oh, not old boss. Yeah, so God, I've already.
8:00
I've already got him out the door.
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My sincerest apologies both Elliot and Paul Johnson, but
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like, you know, he puts out this graph saying look, it's not,
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there's nothing like austerity that gave Labour a good bit of
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cover. Darren Jones first sector to
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Treasury when he was in Downing St. yesterday, bringing all the
8:16
members of government saying look, this is what we've got
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planned. First of all, he didn't mention
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the extra half a billion pounds worth of cuts to welfare that
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came overnight. So quite a few people in the
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government payroll are annoyed about that.
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But he was making the point it's not austerity 2.0.
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The truth is though, you can bang on about that all you want.
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If local MPs are getting people turning up to their surgery
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saying wait a second, you've cut all of my benefits, I am now
8:39
significantly worse off and there will be vast amounts of
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people who are significantly worse off.
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It doesn't matter the messaging, it's what people really feel.
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Yeah, and what we got since the statements in the House of
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Commons, Paul, is the DWP impact assessment, which has some very
8:54
stark numbers. I mean, you look at the and you
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wonder how they managed to go ahead with a policy that results
9:00
in 250,000 more people being pushed into relative poverty,
9:04
50,000 of which will be children.
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So that is that is an increase in child poverty as a result of
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Labour policies that. Now Rachel Rees was just asked
9:12
about this in a press conference.
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Has she got an answer? Yeah, I'll, I'll, I'll, I'll do,
9:17
I'll do the bit of balance here. I'll play the role of labour.
9:20
They're lying. And you can expect to hear
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they've been trotted out time and time again over the next
9:25
couple of months. Those figures, they Labour turn
9:27
around and say actually look, but what we did do is we said
9:30
that we put in a billion pound of support to get people into it
9:34
and none of these are but. By the way, that that that, that
9:38
billion pounds that they're, they're basically adding a
9:41
billion pounds for coaches. They got a bit of a wrap on the
9:44
knuckles from the OBR this afternoon because the OBR, who
9:48
obviously Labour have lauded, much to their chagrin, because
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they now keep being told off by the OBR.
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But they were saying there's no evidence, there's no detail of
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all of these coaches. So yeah, they've they've said
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they're going to add these a billion pounds to bring coaches
10:04
into the world to, you know, job centres to bring people back
10:08
into employment. But actually that doesn't yet
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seem to be much detail about it. I love this.
10:15
It's all in the messaging earlier the OBR say that and
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then Labour use it in terror and say Oh no actually, but OBR
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haven't been able to assess the impact of that billion pounds.
10:24
So really people are probably going to be fine.
10:27
But actually on the stuff that we do have, the things that we
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do have numbers for, the things that they have been able to run
10:34
assessments for, we've got quarter of a million people,
10:37
additional people in in relative poverty, including 50,000 kids,
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3.2 million people will be worse off.
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Those are those are tough numbers to to swallow.
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So their messages of those 250,000 people, some may end up
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not being in relative poverty because they might go back to
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work. But this is all amorphous, you
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know, unworked out and a bit of a guess.
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And they are, they are quite clearly not saying that we'll
11:06
wipe it out. They are admitting that there
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will be people no matter how many we end up with being pushed
11:12
more into poverty. But.
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Which is exactly what is an ambiguity.
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There is a there is an economic problem that is going on that
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underpins this. I mean, forget about Rachel
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Reed's trying to make sure that she meets her kind of fiscal
11:27
rules. We have a problem with
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inactivity in this country. It was something that economies
11:33
around the world faced but have seemed to recover from after
11:38
COVID. We haven't in this country.
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And the numbers are quite stark. You know you've got 2.8 million
11:45
people who are long term sick. You know that's a third of all
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people who are inactive. And without people re entering
11:54
the labor market, all of our issues around growth, around
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productivity are not really going to be fixed.
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And in terms of the cost, if I just talk to you about that,
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back in 2010 it cost £28 billion.
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Before COVID it cost £37 billion.
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Currently for that health segment of Universal Credit,
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we're paying almost £50 billion. So you can see that there is a a
12:19
problem that needs to be solved. I think everyone is on board
12:23
with that. Everyone accepts that we need
12:26
reform in the welfare market. I mean it's simply not
12:29
sustainable long term because if the new claimant count continues
12:34
at the same pace then it's going to dwarf all of our departmental
12:39
spending and all of our budget will be eaten up by it.
12:42
But it's how the government want to go ahead ahead and get
12:46
across. And if you talk to people from,
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you know, Resolution Foundation for example, they say this is
12:51
all being rushed through. Look at the personal
12:53
independence payments. That's not even work dependent
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and you've got a whole lot of cuts that just mean that people
13:01
will not qualify. I think 800,000 people will now
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not qualify for those pit payments.
13:06
That's not anything to do with getting people back into the
13:10
labour market, but. It's it's just that rush.
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I think that has got a political impact that they, they haven't
13:15
perhaps foreseen because what you would normally do, I think
13:19
around, around quite a big reform such as this, because
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after all, what they've, what they've sort of done through the
13:24
back door is reintroduce this idea of deserving and
13:28
undeserving, you know, welfare recipients.
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They are basically suggesting there are a load of people who
13:34
are getting these welfare payments who shouldn't be
13:36
getting them. Now they're dressing that up as
13:38
saying we don't want to write people off.
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We don't, we know we don't want to, we don't want to sort of,
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you know, sort of push people onto a, a scrap heap under which
13:46
they will never work. But they but the sort of the
13:48
coded messages, they don't really deserve these payments.
13:51
And that's why we're stopping them to get the public to a
13:55
place where they will agree with that normally would take quite a
13:59
long time. And they haven't really Have you
14:00
done that job of work politically, have they, Paul?
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There so much of this has been rushed even in the last 48 hours
14:08
to try and get. So for those who who don't know.
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So last last week a holiday welfare reforms renounce was
14:15
meant to save £5 billion. Turns out they're not going to
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save £5 billion, they might save about 2.9 billion.
14:21
Well, now all of a sudden the Treasury had to find an extra 1
14:26
1/2, two £2 billion. So overnight we get 5500 million
14:31
more in cuts to the welfare bill.
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That's happened at lightspeed. Not even the welfare cuts the
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DWP has been working to for ages, The 500 million we've seen
14:42
just overnight. Then there were more cuts that
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were had to be found. So all the legwork that you
14:47
would need to do, bringing people on a journey with you,
14:50
bringing your backbenches on a journey with you, they haven't
14:53
been able to do whatsoever. Heavier.
14:55
Let's talk a little bit about why we're in this mess.
14:57
I mean, growth cut from 2% to 1%.
15:01
The Chancellor talking about the world is changing but not
15:03
spelling it out. Why nobody's actually nailing
15:06
Donald Trump for any of the changes that he's forced on
15:09
Britain, you know, which is increased defence spending.
15:12
That's a whole load of money away from the poorest people in
15:15
the world in the development budget into defence and the, you
15:20
know, the start of a global trade war, which could get
15:23
worse. So it's what Why are we in this
15:26
mess, for a start this year? And what does the uncertainty,
15:31
ongoing uncertainty, around Trump mean for the next few
15:35
months and next year? First of all, to Why are we in
15:39
this mess? Why did her headroom disappear?
15:42
Why did it vanish? Well, it disappeared because
15:45
borrowing costs went up and that is to a large degree outside of
15:50
the chances, outside of the government's control, driven by
15:53
what happened with the US, but also now latterly because of the
16:00
bond markets, understanding that Europe will need to spend so
16:04
much more on defence. Now today the Chancellor was
16:07
presenting defence as a kind of platform for industrial
16:12
renaissance. But when the bond market looks
16:15
at it, they think, hang on a moment, you are going to need to
16:18
borrow a hell of a lot more money Europe.
16:20
And therefore it adds to the cost of borrowing for European
16:25
countries, including the UK. But a lot of that is driven by
16:28
the USI think to your opening, to your opening remarks, Krish,
16:34
you know, this is all on a coin toss.
16:37
That's what the OBR said. This whole forecast is about 54%
16:42
chance of actually surviving contact with oxygen.
16:45
I mean, that is extraordinary. You know, you've got this, as I
16:49
was saying, this tiny incy wincy bit of headroom.
16:53
You know, it's really waffle thin and you've got huge amounts
16:57
of uncertainty and that huge amount of uncertainty is because
17:01
of trade. And that could all come to a
17:05
head next week. I mean, literally one week from
17:08
now, all of this might be completely irrelevant if we
17:11
have, yeah, tariffs day. You know, we'll, if, if, if
17:16
Donald Trump up ends the global economy, if we, the UK doesn't
17:21
necessarily get this deal that we think we're going to get by
17:24
giving, you know, tax relief to the likes of Meta and Google,
17:29
then then it's going to spell real problems for the UK economy
17:34
and the global economy. And, and the OBR are saying
17:37
there's a huge chance that will happen.
17:39
But it's not just that, it's also productivity.
17:43
We have an issue. It's a kind of nerdy thing to
17:46
talk about, but basically economists have struggled to
17:51
describe why the UK is no longer as productive.
17:55
And the OBR has been way more optimistic than other
17:59
economists. And now they're saying, look, if
18:01
productivity doesn't recover, if we don't get back, not just to,
18:05
you know, we're not talking about the, you know, house in
18:08
days of the last Labour government into 2007.
18:12
I'm talking about just a 2010. We don't get back to that.
18:16
Then we have another real problem.
18:18
And, and, and so in a way, yes, she's managed to get through
18:22
today. She, she, she's, you know, the
18:25
chancellor's great at fighting. She's great at saying I am
18:29
absolutely determined. I've made all the right
18:31
decisions. And she, she believes that
18:33
that's what she says. She says everything that
18:35
happened in autumn, despite what all these businesses say about
18:39
Nick's, everything I did was right.
18:41
But actually a lot of the hard work is only going to start now.
18:45
Yes. And.
18:46
We're going to spend the next six months speculating about
18:48
which taxes she's going to have to raise in the autumn or which
18:52
spending cuts are going to have to be made as well.
18:55
And, and, and that again, Paul seems to be an, I mean, quite
18:59
striking failure of today that it hasn't hasn't stopped or
19:02
scotched anything. It is actually, if anything
19:05
fired the starting gun on the next round of debates.
19:08
And that's not the press being troublemaking.
19:11
That's that's just looking at the economic reality.
19:14
Oh, yeah, Like I sat there in the chamber, which was going
19:17
through everything and you talk about the numbers, Helia
19:20
bringing up their excellent Monty Python reference for the
19:22
Waffa Thin head headroom. You know, there is there is no
19:28
way that we're not going to be spending the next six months
19:31
talking about what she's going to have to do when it comes to
19:34
an actual budget. And in fact, you know, there was
19:36
a briefing afterwards with, with Rachel Reeves officials where
19:40
we're all going through this quite hearty document and like
19:44
picking out all the things that the OBR that basically picks
19:47
apart her numbers and goes, OK, well, if there's trade war with
19:49
Donald Trump, your surplus has gone.
19:52
OK, well, productivity falls, everything goes.
19:55
And like just sort of nailed down everything because it's
19:57
very, very unlikely that we're going to get to her actual
20:00
budget. And, and all of this is, is
20:02
going to be intact. So you're sitting there
20:04
listening to all of this. My goodness, there is going to
20:07
have to be something that happens between now and then.
20:10
And the line that I keep hearing from Labour MPs, and this isn't
20:13
just from. And the ones on the left that
20:15
are kicking off about everything that number 10 does, it's a lot
20:18
of these are centrist ones. They're saying at the moment, my
20:21
God, if we're already having to cut the welfare budget by this
20:24
much and this quickly, what on earth are we going to have to do
20:26
when it turns out we've got no money in six months time?
20:29
Well, if the economic growth isn't delivered, what on earth
20:32
are you going to have to cut then?
20:34
Yes. And the other thing that came up
20:35
in the press conference was the whole question of this digital
20:37
services tax and whether there is some secret deal being done
20:41
to offer tax relief to the tech Bros in return for a deal on
20:47
tariffs. Now, again, I mean, is the
20:50
government really going to go to the country and say while
20:53
delivering these welfare cuts, it's going to give a tax cut to
20:58
the handful of richest people in the world?
20:59
It's only a handful of people who actually pay this tax.
21:02
The verbal gymnastics that go on whenever you're one of those
21:05
press conferences because no one wants to call out Donald Trump.
21:08
No one wants to pin their thing on him.
21:11
When when Rachel Reeves was asked a specific question about
21:13
Donald Trump, the answer, the answer, go back and fair play to
21:17
her researchers. They've done their work.
21:18
They've got a whole load of stats.
21:19
Here you go. Just just say this.
21:21
She was able to run. Look under the last Trump
21:23
presidency. He loves us.
21:24
Actually, the amount of trade that we did went up.
21:28
And they find every argument they can.
21:30
You can carry on doing that all you want, but in a week's time,
21:33
Donald Trump talking about Liberation Day.
21:35
If that comes, then all bets are off.
21:37
And yes, you're right on that tax for for tech Bros.
21:41
My goodness, that will go down badly.
21:43
Yeah, there's a risk crush that we're just allowing the US to
21:46
pick our pockets here. You know, we're we're bending
21:49
over backwards to make it happen.
21:52
I just wanted to go back to growth because I do think that
21:55
is a big deal because this year, don't forget, one of the big
22:00
pieces that came out from today is that, you know, when Labour
22:04
came into power, they said growth is their number one
22:07
mission. In fact, they said we're going
22:09
to grow faster than any other G7 country.
22:12
That quickly became the. Sort of ditch that, haven't
22:15
they? We're not really quite clear
22:16
whether they still pretend that to be the case or not.
22:19
Yeah, they just ditched that, but they replaced that with
22:22
living standards. They said, OK, well we're not
22:25
going to grow faster than everyone else.
22:26
Fair enough, fair cop, but we will improve living standards.
22:30
And there was a lot made I think today by Rachel Reeves that
22:36
living standards are going to go up by the end of this
22:39
Parliament. She made a big deal of the fact
22:42
that households at the end of Parliament would be 500 lbs
22:46
better off. And let's have a listen in on
22:49
how that that sounded. This isn't just about lines on a
22:53
graph, it's about improving people's lives.
22:57
Real household disposable income will now grow this year at
23:02
almost twice the rate expected in the autumn.
23:06
The OBR say today that people will be on average over £500 a
23:13
year better off under this Labour government.
23:18
It's so amazing, Lots of cheers, lots of cheers, lots of
23:21
applause. And it's all because of Labour.
23:23
Except is it really? Because when you look at the
23:26
numbers it, a lot of that is driven by the simple arithmetic
23:30
of pay going up faster than inflation.
23:34
And most of that actually happened not now, not in the
23:37
future under this Labour government, but last year.
23:41
So that big uptick in incomes happened.
23:46
Well, it's already happened. It's very.
23:48
Unclear whether she's misspoken there as well.
23:50
Isn't it because she said £500 a year better off and it's not
23:55
clear whether she means 500 lbs every year or £500 by the end of
23:59
this party? By the end of the Parliament, I
24:00
think by the end of this Parliament and you get this and
24:03
you I mean there is an improvement.
24:05
But as the point I wanted to make was that a lot of that
24:09
improvement is because it's from a much higher start.
24:13
The OBRS forecast today says that actually incomes last year
24:20
were much higher than they had accounted for even in October
24:24
2024. So a lot of the heavy lifting
24:28
has been done already and the problem you face then is that
24:31
going forwards or incomes going to be rising at a kind of rate
24:36
of not well, I'm afraid no, they're not Chris.
24:39
And if it's if. It's £500 / 200 weeks.
24:42
I don't think many people are going to be very impressed by
24:44
that. I also earlier how many times in
24:48
your reporting career have you listened to a chancellor or a or
24:51
a Prime Minister say you're going to be X amount £100 better
24:55
off in a few years time? Just just one other thing to
24:57
mention though, which is very awkward, I think, for the
24:59
government today, which is that the OBR have made clear that the
25:03
rise in National Insurance at the last budget was in fact a
25:06
tax on working people. Yeah, I think that's absolutely
25:11
right. I mean, this is one of the
25:13
things that there's a slight mismatch between how the
25:17
government described their interaction.
25:19
Whenever you talk to businesses, from all the surveys, from the
25:23
kind of sentiment amongst the business community, they
25:27
complain about that £40 billion tax hike that we had last
25:31
October, most of that driven by the increase in employer NICs.
25:37
Now Reg Reeves says I was absolutely right to do that,
25:42
there's no problem with that. That gave us the position to
25:45
continue to grow from. But the OBR again, as you said,
25:49
Chris said today that 76% of the cost of that would be passed on
25:56
to employees through lower incomes.
25:59
So going back to that household income thing, where are we going
26:02
to be richer? Well, going forward, companies
26:06
are going to feel squeezed because from next week these and
26:10
I increases come into effect and who's going to pay for that?
26:14
Well, you and me, the employees of the of the country.
26:18
Right, let's finally talk about Rachel Reeves.
26:22
There are still still whispers on there around whether she's
26:26
going to stay the course. Paul, do you think people in the
26:29
Labour Party are considering whether she should be swapped
26:33
out? I think name any chancellor and
26:37
I've heard rumors that they're going to be swapped out.
26:39
That's kind of an eternal thing that that happens around here.
26:44
I think the bigger worry that they've got is a mass rebellion
26:51
when it comes to a vote on on the welfare cuts.
26:55
But if it gets to, if you make a rule which you say, I'm going to
27:00
live and die by these these fiscal rules and I'm and I'm
27:03
going to pay for everything by growth.
27:05
If we get to six months from now and there isn't growth and
27:08
you're still with these fiscal rules.
27:09
So you're either going to have to raise taxes massively or
27:12
you're going to have to slash spending massively, a mixture of
27:17
the both massively. Then yeah, there are going to be
27:19
people who are going to be bang for your head.
27:21
Do the do the financiers and city people, Helia talk about
27:25
this? I mean, do they think she's
27:27
she's the one for the full term or do they want Pat McFadden or
27:30
somebody else? No, I listen.
27:33
I think, you know, department politicians, you know, secretary
27:39
of states will always be against Treasury because Treasury is the
27:43
one that holds the purse strings.
27:45
So I don't think chancellors necessarily have a popular ride.
27:48
I mean, particularly Rachel Reeves, but I think she likes
27:51
fighting. And I think despite the fact
27:54
that businesses are very upset because they feel like she let
27:58
them down when it came to the tax rises last year, there's a
28:02
lot of hope. When you talk to people within
28:05
the market and when you talk to, you know, companies about their
28:10
investment plans, don't forget, I mean, to give them the credit,
28:14
you know, they were talking about, you know, raising,
28:16
they've just had a bill, you know, of reforms for house
28:20
building. And you see that the OBR has
28:23
actually scored that today. So the, the government has said
28:27
we're going to build 1.5 million homes.
28:30
Most builders say that's not possible, but the OBR today say,
28:34
well, actually we think, yeah, you might, you might just under
28:37
that, you know, 1.3. But that's a lot of improvement
28:41
from the last government. And so there's a lot of hope, I
28:44
think, from companies that the kind of reforms to planning, the
28:47
kind of changes to infrastructure will start to
28:51
materialize, the kind of changes to the the national wealth fund,
28:55
all of these pieces of reform will add up to something.
29:00
But of course that's all all dependent on, you know, don't
29:05
come back in autumn and ask for more tax.
29:09
So she's safe for now, Paul. You reckon she's?
29:12
Safe for now, but six months from now, that's when.
29:15
That's when if they. Have to break their manifesto.
29:19
Yeah, you know, and it's not just going to be MPs are going
29:22
to talk about it, headline writers are going to be full of
29:25
it. If you get 6 months from now and
29:28
a certain section of the press thinks that she's doing an even
29:30
worse job than they already feel that she's doing.
29:32
Because a certain section of the press are always going to be
29:35
anti Labour government. But those headlines are going to
29:38
ratchet up and ratchet up and ratchet up.
29:40
And it's when the it's when the gossip on the WhatsApp group
29:44
started ratcheting up, ratcheting up and inevitably
29:46
starts to leak. And that's when you know, things
29:49
are in real trouble. We started getting leaks out of
29:51
cabinet or six months ago, we definitely weren't getting that.
29:54
They were rigid as hell. Now we started getting the odd
29:56
leak from what's happening in the WhatsApp groups.
29:59
Again, six months ago, that wasn't.
30:00
Happening, but that's because we've got a spending review
30:04
coming up. I think some of that is just the
30:06
normal, you know, class of yeah, exactly, exactly.
30:11
And I'm, I mean, I think a. Bit I think a bit of it is that,
30:13
but you know, you know, these are the guys that have been
30:17
fighting for years to turn everything around, turn the
30:20
perception of them around and talking to the special advisor,
30:25
to some, to a cabinet member. One of the one of the things
30:29
they said to me two weeks ago was first of all, we're talking
30:35
about the relationship. This is the special from from
30:37
the unprotected department. They were talking about the
30:39
relationship with the Treasury. They were saying that Rachel's
30:42
never been stronger. They're feeling really weak.
30:45
And the, and the line that kept that got me was I thought the
30:48
bonds of friendship would have extended further into government
30:51
than this. So it wasn't just about spending
30:53
review. You can start, you can really
30:55
start feeling the fractures between some of the people that
30:57
have been, you know, fighting for this for years together.
31:00
We better leave it there. This is great.
31:01
I like we should have correspondents arguing on
31:03
Channel 4 News more. It's like a sort of a peek into
31:06
our morning meeting. But I've got to get down to
31:09
Westminster for Channel 4 News at 7:00.
31:11
Can't. Wait to see.
31:12
Chris for this edition of the Forecast.
31:15
Until next time, bye bye.