Latest / Merryn Talks Money / Live from Fringe: How to Tax the UK’s Richest

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Live from Fringe: How to Tax the UK’s Richest · Merryn Talks Money

• 0:03
  Speaker 1: Bloomberg Audio Studios, podcasts, radio news, Hello, Bren Talks, Money, Listeners,
• 0:12
  Speaker 1: It's Mere and sumset Web. We are bringing you something
• 0:14
  Speaker 1: very special over the next week, recordings of the conversations
• 0:17
  Speaker 1: I had at Pamia House for the Edinburgh Fringe Festival. Now,
• 0:20
  Speaker 1: for those of you who don't know, and I'm sure
• 0:22
  Speaker 1: there aren't very many of you who don't know this,
• 0:24
  Speaker 1: The Fringe is a three week arts and culture festival
• 0:26
  Speaker 1: that began in nineteen forty seven. It takes place in
• 0:28
  Speaker 1: Edinburgh in Scotland every August. For the past few years,
• 0:31
  Speaker 1: I've been hosting conversations about markets, economics and investings from
• 0:35
  Speaker 1: one of the most special locations as part of this festival.
• 0:39
  Speaker 1: I do it from Pamia House, which is the last
• 0:41
  Speaker 1: home of Adam Smith, philosopher and father of modern economics.
• 0:44
  Speaker 1: It's where he completed the last editions of his best sellers,
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  Speaker 1: The Theory of Moral Sentiments and The Wealth of Nation's
• 0:50
  Speaker 1: top reads, both of them. This year we did a
• 0:52
  Speaker 1: four day run in mid August, and we are bringing
• 0:54
  Speaker 1: you the slightly edited conversations from three of those days
• 0:58
  Speaker 1: for this Paraelized boat with Bloomberg seniorport to John Steppick,
• 1:01
  Speaker 1: Simon Evans, who is a comedian and writer, and with
• 1:05
  Speaker 1: interactive investor CEO Richard Wilson. It's a very simple show.
• 1:17
  Speaker 1: We'll talk a little bit about Adam Smith, and then
• 1:20
  Speaker 1: we will ask each of our brilliant guests to tell
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  Speaker 1: us their favorite Adam Smith quote, and then we will
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  Speaker 1: talk a little bit about this quotes heather relevant today
• 1:29
  Speaker 1: and generally have a nice conversation, and then after about
• 1:32
  Speaker 1: forty five minutes, I will open it up to questions,
• 1:35
  Speaker 1: and very excitingly today, yes, they only had one book
• 1:38
  Speaker 1: to give away, so we had to choose a best question.
• 1:40
  Speaker 1: Today we have three books to give away, right, I
• 1:44
  Speaker 1: think you had a little bit about the house downstairs.
• 1:46
  Speaker 1: You had a little intro downstairs, so you know a
• 1:48
  Speaker 1: little bit about the house in Adam Smith and how
• 1:50
  Speaker 1: he lived here, in how he wrote their final editions
• 1:52
  Speaker 1: of Wealth of Nations and moral Sentiments in this very house,
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  Speaker 1: possibly in this very run. So who has read Wealth
• 1:59
  Speaker 1: of Me? Usually there is a liar in the audience.
• 2:05
  Speaker 1: We normally get when I say he's red Wealth of Nasance.
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  Speaker 1: Almost always one or two people put their hands up
• 2:09
  Speaker 1: and I say, gosh, now we found out who the
• 2:12
  Speaker 1: liars are before we get to questions, and then I
• 2:15
  Speaker 1: ask going one's read moral sentiments, and no one is
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  Speaker 1: brave enough to put their hands up, So you're all
• 2:19
  Speaker 1: clearly pre prepped.
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  Speaker 2: Right.
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  Speaker 1: We are going to move on now to our quotes,
• 2:23
  Speaker 1: and we're going to start with John Well.
• 2:26
  Speaker 3: This quote comes from the Serium Model Sentiments, which by
• 2:29
  Speaker 3: now you'll realize is because it's the only one Adam
• 2:31
  Speaker 3: Smiths books that I've actually have read. But I think
• 2:34
  Speaker 3: this is one of his most important quotes. And then
• 2:36
  Speaker 3: this is basically criticizing the revolutionary approach to managing social change.
• 2:41
  Speaker 3: So the quote goes, the man of system seems to
• 2:44
  Speaker 3: imagine that he can arrange the different members of a
• 2:47
  Speaker 3: great society with as much ease as the hand arranges
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  Speaker 3: the different pieces appoint a chessboard. He does not consider
• 2:54
  Speaker 3: that the pieces appointing the chessboard have no other principal
• 2:57
  Speaker 3: emotion besides that which the high and impresses upon them,
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  Speaker 3: but that in the great chess body of human society,
• 3:04
  Speaker 3: every single piece has a principle of motion of its own,
• 3:08
  Speaker 3: altogether different from that which the legislator might choose to
• 3:11
  Speaker 3: impress upon it. If those two principles coincide and act
• 3:15
  Speaker 3: in the same direction. The game of human society will
• 3:17
  Speaker 3: go on easily and harmoniously, and it's very likely to
• 3:20
  Speaker 3: be happy and successful. If their opposite are different, the
• 3:24
  Speaker 3: game will go on miserably, and the society must at
• 3:27
  Speaker 3: all times be in the highest degree of disorder.
• 3:29
  Speaker 1: And do you try and get them two snippy ones?
• 3:31
  Speaker 3: But ye I cut that one down.
• 3:34
  Speaker 4: That's their bridged version.
• 3:37
  Speaker 3: To me, this quote really nicely sums up like Smith's approach.
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  Speaker 3: It's a kind of bottom up approach. So it's a
• 3:43
  Speaker 3: human centered approach, and I think that's no coincidence because
• 3:46
  Speaker 3: the theory of moral sentiments is actually all about people.
• 3:50
  Speaker 3: It's about how people relate to each other. It's basically
• 3:52
  Speaker 3: the first self help book.
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  Speaker 4: I would say.
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  Speaker 3: It's maybe not quite as punchy as today's self help books,
• 3:58
  Speaker 3: and you're not going to find it in wh Smiths,
• 4:00
  Speaker 3: but it is talking about how people relate to each other.
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  Speaker 3: And so the wealthy Nations comes after that, and that
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  Speaker 3: builds on that. So the point is human beings are
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  Speaker 3: at the heart of Adam Smith's economics, and that is
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  Speaker 3: actually very different to the kind of the top down
• 4:15
  Speaker 3: systems that you get from most economists to be fair,
• 4:19
  Speaker 3: you know, with marks, it's like people are separated into
• 4:21
  Speaker 3: no masses and classes and weekenes. I would argue that
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  Speaker 3: an awful lot of the humanity is lost because people
• 4:28
  Speaker 3: are kind of treated as cogs that just you know,
• 4:30
  Speaker 3: convey financial floats. Was Smith recognizes that if you want
• 4:35
  Speaker 3: to have a functional society, then you have to go
• 4:37
  Speaker 3: with the grain of human nature, and the grain of
• 4:40
  Speaker 3: human nature is basically incentives. We don't know what we
• 4:46
  Speaker 3: don't know. I don't know what incentivizes all the people
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  Speaker 3: in this room, And what should be trying to do
• 4:51
  Speaker 3: if I want to somehow get everybody to work together,
• 4:54
  Speaker 3: is to allow as much freedom for you to pursue
• 4:57
  Speaker 3: your own incentives as opposed to say, night, well, everyone's
• 4:59
  Speaker 3: got to do this, and we've got to you know,
• 5:01
  Speaker 3: handle this from the center. So that's one reason I
• 5:05
  Speaker 3: think it's important. The other reason thing it's important, particularly
• 5:08
  Speaker 3: I don't know, particularly relevant today is because we have
• 5:12
  Speaker 3: this sort of ongoing and I actually think this is
• 5:16
  Speaker 3: one reason why we had the two thousand and eight
• 5:18
  Speaker 3: financial crisis, and nothing's been the same since then. We've
• 5:21
  Speaker 3: been trying to hand off parts of the democratic process
• 5:26
  Speaker 3: to technocrats and technocracies. So we handed over the control
• 5:30
  Speaker 3: of the money supplied to central banks because they are
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  Speaker 3: meant to do it than anyone else. Under the new government,
• 5:37
  Speaker 3: one of the kind of mechanisms that they seem to
• 5:39
  Speaker 3: want to use to run the country is to hand
• 5:42
  Speaker 3: over control of things like industrial policy or energy policy
• 5:47
  Speaker 3: to technocracies. Or the OBR, for example, which was only
• 5:51
  Speaker 3: invented fifteen years ago, now has the kind of world
• 5:54
  Speaker 3: of God say over how we managed the public finances.
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  Speaker 3: And none of that involves the human beings. It's all
• 6:00
  Speaker 3: about systems. So and I think that's a real risk
• 6:05
  Speaker 3: and a real danger, and it's not necessarily a danger
• 6:08
  Speaker 3: in the kind of totalitarian authoritarian sense. A that's not
• 6:12
  Speaker 3: great either. It's just because it doesn't work and it
• 6:15
  Speaker 3: doesn't accommodate people. And if we want to get out
• 6:18
  Speaker 3: of this, I suppose ditch that we sort of feel
• 6:22
  Speaker 3: that we're then as a society, then this is not
• 6:25
  Speaker 3: going to be the way to get out of it.
• 6:27
  Speaker 3: So I feel that we need to go back to
• 6:29
  Speaker 3: recognizing that you have to have the state pulled back
• 6:33
  Speaker 3: and give people more freedom to operate account of their
• 6:36
  Speaker 3: own in center.
• 6:36
  Speaker 1: So it as a matter of accepting that it has
• 6:38
  Speaker 1: to be messy. And one of the reasons that we
• 6:40
  Speaker 1: ended up with an independent Bank of England and we
• 6:42
  Speaker 1: end up with all these different quangos and organizations that
• 6:44
  Speaker 1: they're supposed to do things better is because it felt
• 6:46
  Speaker 1: like things were going very madly before I interest rate
• 6:49
  Speaker 1: setting was pretty rubbish. It didn't a be able to
• 6:50
  Speaker 1: work socially. Much better to take it out of the
• 6:53
  Speaker 1: hands of our utterly useless politicians and give it to
• 6:55
  Speaker 1: what we didn't then know, utterly useless central banks.
• 7:00
  Speaker 5: So this is the problem.
• 7:00
  Speaker 3: There is no system that accommodates everyone's needs and things
• 7:05
  Speaker 3: like I mean, obviously independent central banking is it's kind
• 7:09
  Speaker 3: of a misnomer anyway, because if your independence is contingent
• 7:12
  Speaker 3: on someone else, then you're not independent. So I mean,
• 7:16
  Speaker 3: people sort of keep talking about, oh, independent central banking
• 7:18
  Speaker 3: was the best things in slip slice bread, and it wasn't.
• 7:21
  Speaker 3: It's like they were granted their independence at the time
• 7:23
  Speaker 3: because it was convenient for politicians to make them independent.
• 7:27
  Speaker 3: Politicians would have done nothing different, and then as soon
• 7:30
  Speaker 3: as it becomes an issue, then you know, we've seen recently.
• 7:34
  Speaker 3: I mean, obviously Trump is talking about you know, how
• 7:37
  Speaker 3: he should have more saying what the Fed does. But equally,
• 7:41
  Speaker 3: you know, as soon as inflation took off in central
• 7:44
  Speaker 3: banks but I'm doing enough about it, politicians started saying, oh,
• 7:47
  Speaker 3: you know, you need to do something about this, and
• 7:49
  Speaker 3: they acted. I think the I do we have these
• 7:51
  Speaker 3: quangos as independent bodies is an illusion anyway, It's kind
• 7:57
  Speaker 3: of an interest you put.
• 7:57
  Speaker 1: There's a normous faith in them. I mean back to
• 7:59
  Speaker 1: centrod r bankers. We put this in almost faith in
• 8:01
  Speaker 1: central bankers green span in particularly at the beginning, and
• 8:03
  Speaker 1: then then to be able to change the way the
• 8:06
  Speaker 1: economy works, to be able to affect things. But in fact,
• 8:08
  Speaker 1: increasing we realize that they can't. Anyway, It's very wizard
• 8:12
  Speaker 1: of out.
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  Speaker 4: Yeah.
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  Speaker 3: And also, I mean central banks set the price and
• 8:16
  Speaker 3: the most important, the most important price in capitalism is
• 8:19
  Speaker 3: money and interest. And for some reason we've decided that
• 8:24
  Speaker 3: while every other price should be set by a market,
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  Speaker 3: this particular price should be set by nine men and
• 8:29
  Speaker 3: women sitting in a room and thinking what should.
• 8:33
  Speaker 5: The interest rate be today?
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  Speaker 3: I mean, I mean I'm voting for a half point
• 8:37
  Speaker 3: up a half point now, and that is that's really
• 8:39
  Speaker 3: stupid when you think about it, It's like how does
• 8:41
  Speaker 3: how does Alan Greenspan or how does Andrew Bailey know
• 8:45
  Speaker 3: what the price of money should be as opposed to
• 8:49
  Speaker 3: leaving it to the market, which is what we leave
• 8:52
  Speaker 3: well certainly every other functional price setting system too. I
• 8:55
  Speaker 3: do think another problem is that increasingly we are saying
• 8:58
  Speaker 3: on that markets go wrong all the team and they will,
• 9:01
  Speaker 3: you know, sure me assess them that what's and that isn't.
• 9:04
  Speaker 1: One And maybe one of the reasons that goes goes
• 9:06
  Speaker 1: wrong is because the interest rate is often wrong. Yeah,
• 9:09
  Speaker 1: because our central bank is don't know where it's like
• 9:10
  Speaker 1: feely wanting to do something about. This is the safe
• 9:13
  Speaker 1: space and being mean about central bankers, well.
• 9:15
  Speaker 6: Exactly a little bit safer here. But it's not to
• 9:18
  Speaker 6: say that the central bank sets the price of money
• 9:22
  Speaker 6: or not. They can influence the curve, but they can't
• 9:27
  Speaker 6: control the price of long term bonds. They control the
• 9:31
  Speaker 6: access to discount window. And there's a better question than that.
• 9:33
  Speaker 6: I mean, I think every system has it flows would
• 9:36
  Speaker 6: you rather the MPC did that or this trust I mean.
• 9:43
  Speaker 2: Gave me.
• 9:47
  Speaker 1: John won't accept that this trust. Christ the economy conversation,
• 9:50
  Speaker 1: you won't have it. Tell us why I don't want.
• 9:55
  Speaker 4: Trust.
• 9:55
  Speaker 1: I don't even know. You really, really really have no idea.
• 9:59
  Speaker 4: If you thought that quote went on for ages, they.
• 10:04
  Speaker 3: Said define benefit pensions, right, So all it was was
• 10:07
  Speaker 3: that because interest has been set so low for so long,
• 10:12
  Speaker 3: pension funds had to take out a load of leverage
• 10:15
  Speaker 3: to protect themselves from interest going down.
• 10:17
  Speaker 4: Because their liabilities.
• 10:19
  Speaker 3: In the future go up when interest rates go down,
• 10:22
  Speaker 3: because that's how future debts work. And so what harmed
• 10:25
  Speaker 3: is that they had built up a load of bets,
• 10:27
  Speaker 3: we borrowed money, the guilt prices would keep going up
• 10:31
  Speaker 3: and interest rates would keep going down. So what happened
• 10:34
  Speaker 3: whenever interest rates started to go up, which was because
• 10:37
  Speaker 3: of inflation rather than liz Trust, suddenly they started getting
• 10:40
  Speaker 3: what's known as a margin call, which is your bank
• 10:42
  Speaker 3: phone and up saying you need to put some more
• 10:44
  Speaker 3: money down because you're losing money on this massive bet
• 10:47
  Speaker 3: that you've taken. And of course when that happened on
• 10:50
  Speaker 3: mass they all had to start selling their guilts and
• 10:53
  Speaker 3: that then drove interest rates up higher. So what happened
• 10:56
  Speaker 3: was that liz Trust blundered along and did blunder along.
• 11:00
  Speaker 3: She blundered along like a week I say, we are
• 11:02
  Speaker 3: match wondering into a shed full of fireworks and this
• 11:06
  Speaker 3: is this is the slightly key difference. Exactly the fireworks
• 11:11
  Speaker 3: were us stacked up there, and to be fair, they
• 11:12
  Speaker 3: would have probably gone off anyway because the difference, this
• 11:16
  Speaker 3: is the dimstry noise. In the US and you know
• 11:19
  Speaker 3: the Eurozone, the US and Eurozone interest rates went up too,
• 11:23
  Speaker 3: as in long term bond duels went up because gaining
• 11:25
  Speaker 3: inflation went up. The difference is none. They didn't have
• 11:28
  Speaker 3: the same pension structure where the will low they defined benefit.
• 11:31
  Speaker 3: Corporate pension funds were trying to protect themselves from interest
• 11:36
  Speaker 3: rates staying low, and so basically what happened. They also
• 11:39
  Speaker 3: the ones in the Bank of England very very smartly
• 11:43
  Speaker 3: stepped in said look, we'll buy these gilts off you
• 11:46
  Speaker 3: for that reasonable price. You don't have to planic, you
• 11:49
  Speaker 3: can stop selling. And then that bought time for them
• 11:52
  Speaker 3: to unwind over a longer period of time, and so
• 11:55
  Speaker 3: that's what harms. So whenever they say that, Liz trust
• 11:58
  Speaker 3: kind of like you know, major mortgage go on.
• 12:00
  Speaker 5: I saw a curve recently which suggests she didn't crash
• 12:02
  Speaker 5: the economy anyway, as in the fly around, as if
• 12:07
  Speaker 5: it's a self accepted as a wide consensus. She did
• 12:09
  Speaker 5: not crash it. It did not really suffer. It was
• 12:11
  Speaker 5: a dramatic blip as blips go. But it was a blip.
• 12:15
  Speaker 5: It was a coup. Essentially.
• 12:19
  Speaker 3: He's pushing it just because cushing it is what I mean.
• 12:26
  Speaker 7: I don't think.
• 12:27
  Speaker 5: I mean people took advantage of the opportunity together.
• 12:29
  Speaker 4: Yeah, that's forsibly true.
• 12:31
  Speaker 1: And was that a bad thing?
• 12:33
  Speaker 5: I don't know, But it would have been a much
• 12:34
  Speaker 5: better economy from my personal point of view if we
• 12:36
  Speaker 5: pursued her policies and her attitude to growth and taxation
• 12:41
  Speaker 5: rather than what then came in and the idea that
• 12:43
  Speaker 5: was she soon did any good for the Tory Party
• 12:45
  Speaker 5: has been fairly profoundly trounced, is it, surely by the
• 12:49
  Speaker 5: events of the last two months.
• 12:50
  Speaker 3: So yeah, And the problem is we do have a
• 12:52
  Speaker 3: situation that we are labored, if you like, sort of
• 12:55
  Speaker 3: simultaneously complaining the austerity policies and by Osborne, but at
• 13:01
  Speaker 3: the same time pointing to the body that Osborne set
• 13:05
  Speaker 3: up to effectively shaft the previous labor government by saying
• 13:11
  Speaker 3: it was all their fault. And now the Tories and
• 13:14
  Speaker 3: Tunnel and shafted fight they will be our by label
• 13:16
  Speaker 3: saying it was all their fault. And in fact, neither
• 13:18
  Speaker 3: of those things with name's fault. It wasn't a label's
• 13:20
  Speaker 3: fault that two thousand and eight happened. I blame them
• 13:22
  Speaker 3: for lots of other things. It wasn't their fault in eight,
• 13:25
  Speaker 3: and the gouts crash was not the toy's fault, and
• 13:28
  Speaker 3: COVID certainly was near the toy's fault.
• 13:30
  Speaker 5: All all these things started in America.
• 13:32
  Speaker 6: Can I ask you a question? But they did?
• 13:34
  Speaker 5: They did. The sub prime mortgage crisis started in America,
• 13:36
  Speaker 5: and there's no question about that, and they started through
• 13:38
  Speaker 5: government intervention as well.
• 13:40
  Speaker 3: That COVID started in America, that's an interesting one.
• 13:44
  Speaker 5: Can I ask you a question about this? When you
• 13:45
  Speaker 5: talk about the chess pieces and Smith's idea there is
• 13:48
  Speaker 5: a mistake to treat people as chess pieces. I agree
• 13:51
  Speaker 5: with him, but I think I have a fear that
• 13:53
  Speaker 5: we have become government's technocrats have become vastly more subtle
• 13:57
  Speaker 5: at their ability to maneuver chess pieces without them realizing
• 14:00
  Speaker 5: they're being maneuvered the sort of nudge protocols and those
• 14:04
  Speaker 5: units and so on, And of course in China it's
• 14:06
  Speaker 5: vastly more effective because there's a greater tradition of people
• 14:10
  Speaker 5: not regarding themselves as tremendously individual. They think of themselves
• 14:13
  Speaker 5: in a much more societal sort.
• 14:15
  Speaker 3: Of Yeah, but that's the problem with the new technology
• 14:18
  Speaker 3: is that we have much more temptation for the other
• 14:22
  Speaker 3: problem is like, if you're in politics, you probably are
• 14:24
  Speaker 3: a man or woman of system. You believe that you
• 14:27
  Speaker 3: have a better way to run things than anyone else.
• 14:30
  Speaker 3: And then so rather than focusing on actually fixing problems,
• 14:34
  Speaker 3: now we've got this like really irritating focus on controlling
• 14:37
  Speaker 3: the narrative. So, you know, it's how we end up
• 14:40
  Speaker 3: getting all this obsession with misinformation, which is basic just
• 14:43
  Speaker 3: it is mostly information that they don't like. It's a
• 14:46
  Speaker 3: lot of it's true, you know, whole BBC's misinformation department
• 14:50
  Speaker 3: is just counter and views that other people have that
• 14:53
  Speaker 3: are opinions that are valid, but they just don't like them.
• 14:55
  Speaker 3: And Scott's even worse than the rest ang going for this.
• 14:58
  Speaker 3: It's like this is how you end up somebody spending
• 15:00
  Speaker 3: money in time and coming up with a hate more
• 15:02
  Speaker 3: and start at at team in Scotland's educational system is
• 15:05
  Speaker 3: going down the toilet.
• 15:06
  Speaker 5: You know.
• 15:06
  Speaker 3: It's like I mean, and it's obviously not the only thing.
• 15:09
  Speaker 3: You know, it's how ye dot we an income tax system.
• 15:13
  Speaker 3: That's what seven or eight different binds, just so that
• 15:16
  Speaker 3: you can micro manage that, you know, dvy we use
• 15:20
  Speaker 3: rules voice. Isn't he getting more post tax income than
• 15:23
  Speaker 3: you know? We bore babies?
• 15:26
  Speaker 1: Also so that you can say with those seven bands,
• 15:28
  Speaker 1: what you can do is you can say, well you
• 15:29
  Speaker 1: could until little while ago that the majority of taxpayers
• 15:32
  Speaker 1: in Scotland paid less than taxpayers in the UK. When
• 15:35
  Speaker 1: it turned out it was actually in one band and
• 15:36
  Speaker 1: by about forty per a year. Yeah, but it's still
• 15:39
  Speaker 1: it creates a narrative that you can use.
• 15:42
  Speaker 4: So yes, and you said.
• 15:43
  Speaker 5: The front page of this Sunday Telegraph today the main
• 15:46
  Speaker 5: headline misogyny now to be classified as terrorism.
• 15:50
  Speaker 8: I must start one.
• 15:50
  Speaker 5: Yeah, and I promise you I have not I've not exaggerated.
• 15:53
  Speaker 5: Misogyny is to be included under the Terrorism Act.
• 15:56
  Speaker 3: Right.
• 15:56
  Speaker 1: I think we'll move on to our next grade because
• 15:58
  Speaker 1: we're already beginning to slide around our next quote, Richard.
• 16:02
  Speaker 6: Any non doms in the audience. Okay, we're good, right.
• 16:09
  Speaker 6: So the mobility of wealth than where people taxes obviously
• 16:13
  Speaker 6: quite has been quite topical in the UK. So my
• 16:17
  Speaker 6: favorite quote for the day is as follows. The proprietary
• 16:22
  Speaker 6: of stock is necessarily a citizen of the world, and
• 16:25
  Speaker 6: it's not necessarily attached to any particular country. He would
• 16:29
  Speaker 6: be apt to abandon the country in which he was
• 16:31
  Speaker 6: exposed to a vexatious inquisition in order to be assessed
• 16:35
  Speaker 6: to a burden some tax, and would remove his stock
• 16:38
  Speaker 6: to some other country where he could carry on his
• 16:40
  Speaker 6: business or enjoy his fortune more at his ease. Now
• 16:45
  Speaker 6: there you've got this quandary where on the one hand,
• 16:49
  Speaker 6: Adams Smith is recognizing the ownership of capital will optimize
• 16:56
  Speaker 6: as existence to avoid being burdened unfairly, at the same
• 17:00
  Speaker 6: time as the basic principles of taxation that Adams Smith
• 17:04
  Speaker 6: advocates with the first word is fairness, and fairness being
• 17:09
  Speaker 6: both horizontal fairness where those with the same status and
• 17:13
  Speaker 6: means should pay the same and social equity were those
• 17:16
  Speaker 6: who are in a greater means should contribute proportionately giving
• 17:22
  Speaker 6: rise to progressive tax. And here we have this little
• 17:26
  Speaker 6: bit of a conflict here because we're living through this
• 17:30
  Speaker 6: this non dom conversation, which is getting towards the tail
• 17:37
  Speaker 6: end of a debate now where I think we have
• 17:41
  Speaker 6: seventy four thousand non doms in the UK pays something
• 17:43
  Speaker 6: like nine billion pounds of tax, about one percent of
• 17:45
  Speaker 6: the tax take. And unlike what Adam Smith was talking
• 17:49
  Speaker 6: about here where people will respond to being addressed vexatiously,
• 17:57
  Speaker 6: what we have is some jurisdictions now competing to attract
• 18:01
  Speaker 6: wealthy people by dropping the tax rate and making it
• 18:05
  Speaker 6: kind of cool to be there. If you want to
• 18:07
  Speaker 6: hang out in Miland with me, then I've got anyway.
• 18:11
  Speaker 6: So now you've got in Europe course, you've got this
• 18:13
  Speaker 6: question of social equity, where you see the Italians have
• 18:16
  Speaker 6: just doubled the minimum tax rate from one hundred to
• 18:19
  Speaker 6: two hundred thousand because there's a little bit of a
• 18:22
  Speaker 6: spirit of social unrest on the fact that it's not fair.
• 18:26
  Speaker 1: Well, it's about house prices, actually, isn't it. It's always
• 18:28
  Speaker 1: about house prices. The non us arrived, the global riches arrived,
• 18:32
  Speaker 1: they push up house prices. The locals get irritated, and
• 18:34
  Speaker 1: then the jurisdiction shoves them out again.
• 18:37
  Speaker 6: So the question is for us as a society and
• 18:40
  Speaker 6: the system, what ends up being fair? Recognizing that some
• 18:43
  Speaker 6: capital has to be mobile, but ultimately the notion of
• 18:48
  Speaker 6: fairness society has to protect it. Even Adam Smith had
• 18:52
  Speaker 6: a bit of a contradiction in how we position these
• 18:55
  Speaker 6: two things, which we haven't solved as a country or
• 18:59
  Speaker 6: as a as a global system yet.
• 19:01
  Speaker 5: Can I ask you what the sort of average tax
• 19:03
  Speaker 5: RAITs were in Adam Smith's time? Would you recognized the
• 19:05
  Speaker 5: sort of levels.
• 19:06
  Speaker 6: That That's a great question.
• 19:07
  Speaker 1: I don't know the idea anyone know. I mean very
• 19:11
  Speaker 1: very low, very very low. I mean exceptingly because you
• 19:14
  Speaker 1: didn't have much of a stake to support to extremely low.
• 19:16
  Speaker 1: Anyone thinks about.
• 19:17
  Speaker 5: Theational war with France.
• 19:19
  Speaker 6: Yeah, and because that tax was introduced to what in
• 19:23
  Speaker 6: seventeen ninety nine, wasn't it when William Pitt tried to
• 19:26
  Speaker 6: find a way to finance the war with that day,
• 19:28
  Speaker 6: everybody off? And because Adam Smith died in seventeen ninety
• 19:31
  Speaker 6: so you might so he played.
• 19:33
  Speaker 1: Verish levys and exercises and blood. But income tax wasn't
• 19:35
  Speaker 1: one of his problems. Inheritance tax wasn't one of his
• 19:37
  Speaker 1: problems Wiener. Of course, one of the main things that
• 19:40
  Speaker 1: the non dumbs are leaving for is it's in the
• 19:42
  Speaker 1: main about inheritance tax because you are liable and I
• 19:46
  Speaker 1: don't know how on earth they think they would collect this,
• 19:48
  Speaker 1: but you are to be liable for UK inheritance tax
• 19:51
  Speaker 1: for ten years after you have left the UK, even
• 19:54
  Speaker 1: if you're not a citizen of the UK. So I mean,
• 19:56
  Speaker 1: that's why everyone would like to leave in a hurry.
• 19:58
  Speaker 6: Well, also got a There's another problem for me, which is,
• 20:01
  Speaker 6: I mean, whilst we mayn't like or or not like
• 20:04
  Speaker 6: a certain set of agreements at the point in time,
• 20:06
  Speaker 6: changing the rules on people having had done a deal
• 20:11
  Speaker 6: is also doesn't help build trust in your overall system
• 20:14
  Speaker 6: of management. Professionally, in my world, you usually we use
• 20:18
  Speaker 6: the term grandfathering a lot, which is you have new rules,
• 20:21
  Speaker 6: but we're not going to reverse the car over the
• 20:24
  Speaker 6: house you do is built because that was.
• 20:26
  Speaker 8: The deal we did.
• 20:27
  Speaker 6: We may not like it now that there'll be no
• 20:30
  Speaker 6: I mean the end, I've got a bunch of I
• 20:33
  Speaker 6: was gonna call them friends.
• 20:34
  Speaker 1: Fine, you can be friends with these people, we're all a.
• 20:36
  Speaker 6: Bunch of people who are obviously gone absolutely ballistic about
• 20:41
  Speaker 6: these the unfairness of it all, and it's impossible to
• 20:45
  Speaker 6: be sympathetic financially, but the fact they have made life plans,
• 20:49
  Speaker 6: moved their families, put their kids in school. Then the
• 20:52
  Speaker 6: follow week someone says, actually, we're pulling the rug. That
• 20:55
  Speaker 6: was a fake that in terms of how you build
• 20:57
  Speaker 6: the future, everything is built on trust and confidence. Ultimately,
• 21:01
  Speaker 6: if you can't, what you can't do is play fast
• 21:03
  Speaker 6: and loose with your rules. So how should you tax.
• 21:06
  Speaker 1: The very rich?
• 21:06
  Speaker 6: For Richard, well, that's a I think for me, you've
• 21:12
  Speaker 6: got a question of a minimum level of tax. I'm
• 21:15
  Speaker 6: going to quite like the kind of the the biden
• 21:18
  Speaker 6: Esque approach, which says, everyone's very clever. The more money
• 21:21
  Speaker 6: you've got, the more lawyers you've got, the more you
• 21:23
  Speaker 6: can find ways out of it. So number one is
• 21:26
  Speaker 6: you've got to figure out what a minimum tax is,
• 21:28
  Speaker 6: which is you can't you can't innovate out of This
• 21:33
  Speaker 6: is one part of the thought process. And beyond that,
• 21:38
  Speaker 6: I'm going to keep thinking as someone else keeps talking
• 21:41
  Speaker 6: at another point where can't.
• 21:42
  Speaker 1: Remember I'll read you in adamswith quote, while you haven't
• 21:44
  Speaker 1: think and he was very clear on this, the tax
• 21:47
  Speaker 1: which each individual is bound to pay ought to be
• 21:49
  Speaker 1: certain and not arbitrary. The time of payment, the manner
• 21:52
  Speaker 1: of payment, the quantity to be paid ought to all
• 21:54
  Speaker 1: be clear and playing for the contributor and to every
• 21:57
  Speaker 1: other person. And he's got lots more on this, every
• 21:59
  Speaker 1: tax to be levied at the time or on the
• 22:01
  Speaker 1: manner which is most likely to be convenient for the
• 22:03
  Speaker 1: contributor to pay. So if you're looking for a good
• 22:05
  Speaker 1: way to tax people, it shouldn't be the way we
• 22:08
  Speaker 1: tax people, which if we have one of the longest
• 22:09
  Speaker 1: tax codes in the world, it's complicated, it's difficult, it's confusing,
• 22:14
  Speaker 1: and in many cases it's very easy for the very
• 22:16
  Speaker 1: well off to escape from so as inherited taxing. And
• 22:21
  Speaker 1: the second point is we've.
• 22:22
  Speaker 6: Been harping on about non domps. For me, the issue
• 22:26
  Speaker 6: we've never seemed to have the courage to face is
• 22:29
  Speaker 6: that the propensity for people who make a lot of
• 22:31
  Speaker 6: money in the UK to disappear to monarca but keep
• 22:35
  Speaker 6: the passport and the US don't do that. If you're
• 22:38
  Speaker 6: if you're a US citizen, a green card hold as
• 22:40
  Speaker 6: I was for number of years. You pay US tax
• 22:43
  Speaker 6: worldwide treaties, so you try and avoid paying twice, but
• 22:47
  Speaker 6: you don't have an escape patch, which says, haha, got you.
• 22:51
  Speaker 6: I'm wealthy enough now that I can bypass your rules.
• 22:53
  Speaker 1: Well, this is a very interesting one. I wrote about
• 22:55
  Speaker 1: this quite recently, six months ago so, and I wrote
• 22:57
  Speaker 1: about it, not quite in that sense, but about why
• 23:00
  Speaker 1: it is that we don't chose a minimum level of
• 23:02
  Speaker 1: tax to people who move abroad. And I was talking
• 23:04
  Speaker 1: about people who move abroad from the UK for maybe
• 23:07
  Speaker 1: ten years, fifteen years, twenty years ago to Dubai or
• 23:10
  Speaker 1: wherever it is, and earn very high untaxed incomes and
• 23:13
  Speaker 1: then come back to the UK twenty thirty years later
• 23:16
  Speaker 1: with vast amounts of money where they can then use
• 23:18
  Speaker 1: the UK as a wonderful retirement home and use I
• 23:22
  Speaker 1: know a lot of that's slightly wrong now hanging onto
• 23:26
  Speaker 1: this passport and the protection that possible gives you. John
• 23:28
  Speaker 1: Justice approves the protection that passport gives you should you
• 23:31
  Speaker 1: not pay for it all the way through. And I
• 23:33
  Speaker 1: also look at things like I would take Ireland as
• 23:35
  Speaker 1: the classic gives right Islanders one day going to find
• 23:37
  Speaker 1: itself in the most appalling financial trouble. But there are many,
• 23:40
  Speaker 1: many millions more people live living outside Ireland with aris
• 23:43
  Speaker 1: passports and living inside Ireland, and you think, well, why
• 23:46
  Speaker 1: not just charge everyone a couple hundred years a year
• 23:49
  Speaker 1: and then all of islands potential financial troubles would display
• 23:52
  Speaker 1: just like that. And would most people who have an
• 23:53
  Speaker 1: Irish passport as a second passport and use it for
• 23:57
  Speaker 1: easier travel inside Europe and for a diplomatic protect or
• 24:00
  Speaker 1: whatever it is, would they be happy to pay a
• 24:02
  Speaker 1: couple of hundred years year for sure?
• 24:04
  Speaker 6: Well, I mean the top one percent of wealth and
• 24:07
  Speaker 6: wealth owners are mobile, and I generally don't understand why
• 24:12
  Speaker 6: it is that the ninety nine percent of us who
• 24:15
  Speaker 6: who actually work in livery day, who pay their who
• 24:18
  Speaker 6: support the passport, give you the access to our health
• 24:21
  Speaker 6: service or education and the projection of our state well
• 24:25
  Speaker 6: exactly when we choose to exercise it.
• 24:27
  Speaker 5: Famous Smith quote as well about the it's one of
• 24:30
  Speaker 5: his invisible hands, isn't it about the wealthy and how
• 24:33
  Speaker 5: they tend to spend their money on ridiculous ball balls
• 24:36
  Speaker 5: and so aggrandizing nonsense. And that's great, because that is
• 24:39
  Speaker 5: like that.
• 24:40
  Speaker 6: I wasn't invited to the Umbammi wedding either, so let
• 24:42
  Speaker 6: it go.
• 24:44
  Speaker 5: But it's quite sort of quite benign. He regards that
• 24:47
  Speaker 5: with a certain indifference. The principal enjoyment of wealth is
• 24:51
  Speaker 5: in parading it around. But that's actually fine.
• 24:53
  Speaker 6: But I suspect that has social limits to it. If
• 24:56
  Speaker 6: you've got massive division of wealth, at some point we
• 25:00
  Speaker 6: we revolt because those He.
• 25:01
  Speaker 1: Has many quotes on that.
• 25:02
  Speaker 2: All.
• 25:02
  Speaker 6: Yeah, it's interesting.
• 25:03
  Speaker 5: You can't turn that clock back, though, can you. I
• 25:05
  Speaker 5: mean London, for instance, where places like Hampstead and Cheney
• 25:08
  Speaker 5: Wall and Chelsea were once quite bohemian and you might
• 25:12
  Speaker 5: bump into, you know, Peter Cook or something shopping in
• 25:15
  Speaker 5: his slippers, and now there's an awful lot. But then
• 25:18
  Speaker 5: in like immediately the post crash, there was a lot
• 25:20
  Speaker 5: of Russian money came in and there were lots of
• 25:22
  Speaker 5: beautiful terraced houses in Chelsea that were simply unoccupied, and
• 25:26
  Speaker 5: the atmosphere changed and it was a bit sad, you know,
• 25:28
  Speaker 5: regardless of whether it was stair or just he just
• 25:30
  Speaker 5: felt that the character God and then you ban the
• 25:33
  Speaker 5: non doms and so they go the bohemians aren't going
• 25:35
  Speaker 5: to move back in there. You know, it's never going
• 25:37
  Speaker 5: to be returned to a place which is wealthy but
• 25:39
  Speaker 5: also stylish. I don't know what comes next, but these
• 25:42
  Speaker 5: things ratchet in one.
• 25:43
  Speaker 3: Direction digmatism as well. Doesn't this that I mean? I think?
• 25:48
  Speaker 3: And actually it's interesting because not I think a couple
• 25:50
  Speaker 3: of partagraphs after that quote, Smith basically says, because you
• 25:55
  Speaker 3: can't tax and will bully wealthy the way that most
• 25:58
  Speaker 3: countries that have done it, I don't know which countries
• 26:00
  Speaker 3: it was referring to that had this wealth tax, but
• 26:02
  Speaker 3: basically said, it has to be quite sloppily down and
• 26:06
  Speaker 3: it has to be done at a level that you
• 26:08
  Speaker 3: know that all of these people will basically pay it
• 26:11
  Speaker 3: because they can't be bothered not paying it, and so
• 26:14
  Speaker 3: it's almost like an entry fee for living in the country.
• 26:16
  Speaker 3: And I think I think that approach is actually a
• 26:19
  Speaker 3: good idea, I think. And the problem I think with
• 26:21
  Speaker 3: the British approach that's just changed is exactly that thing
• 26:25
  Speaker 3: of it's no longer an entry fee. It's actually, if
• 26:28
  Speaker 3: you stay here for any length of time, we're going
• 26:30
  Speaker 3: to tax here.
• 26:31
  Speaker 4: You're an inheritable assets and.
• 26:33
  Speaker 6: What you've got now is you've got this state where
• 26:36
  Speaker 6: if you're wealthy enough, you don't penny tax at all
• 26:39
  Speaker 6: because you just avoid the entire system. And that has
• 26:42
  Speaker 6: to be right.
• 26:44
  Speaker 1: How would you tax it a flat tax, flat wealth tax? Yeah,
• 26:49
  Speaker 1: or not.
• 26:50
  Speaker 3: Unlike what we used to have. What we had, you know,
• 26:53
  Speaker 3: you have to pay one hundred grand a year to
• 26:55
  Speaker 3: stay here if you've got more than x amount of
• 26:58
  Speaker 3: money or to be a non dom or. And then
• 27:01
  Speaker 3: you know, countries can also you can make it bakes
• 27:03
  Speaker 3: a market price because one of the interesting things about
• 27:05
  Speaker 3: Milan is that on the one hand, yes there's social pressure,
• 27:09
  Speaker 3: but bet he's somebody smart in the government that's thought,
• 27:11
  Speaker 3: you know what, London's just canned their entry fee. We
• 27:15
  Speaker 3: can probably double letters now because you know, it's suddenly
• 27:19
  Speaker 3: we're much more appealing because you don't have access to
• 27:22
  Speaker 3: all these schools anymore if if you're actually have to
• 27:24
  Speaker 3: pay inheritance tax on your global wealth. So I think
• 27:28
  Speaker 3: basically always like the kind of Golden visa idea because
• 27:32
  Speaker 3: it's like like the Portugal in Greece and all the
• 27:34
  Speaker 3: southern Mediterranean countries maybe don't have the best infrastructure, but
• 27:39
  Speaker 3: they are lovely places to be, a lovely place to
• 27:42
  Speaker 3: have away house, and you get a kind of EU passport.
• 27:45
  Speaker 4: So they all did very well out of that.
• 27:47
  Speaker 3: And the whole thing about foreigners driving up house prices
• 27:49
  Speaker 3: is a complete red herring because house prices have gone
• 27:51
  Speaker 3: up everywhere, and that's just a populist thing to blame
• 27:54
  Speaker 3: wealthy people for, you know, pushing up prices in Lisbon
• 27:58
  Speaker 3: or whatever.
• 28:00
  Speaker 4: Yeah, basically entry fee.
• 28:02
  Speaker 1: Yesterday we talked about not about people who can leave,
• 28:06
  Speaker 1: people who don't leave, and we talked about a land
• 28:08
  Speaker 1: value tax as being the only kind of wealth tax
• 28:10
  Speaker 1: that might work.
• 28:12
  Speaker 6: That's been tried before, though hasn't it and went very wrong.
• 28:15
  Speaker 6: I thought the land tax.
• 28:18
  Speaker 3: I think it was definite that back then. I mean
• 28:21
  Speaker 3: the idea with wine value tax is that you tax
• 28:23
  Speaker 3: the essentially the locational value of.
• 28:25
  Speaker 6: As opposed to.
• 28:28
  Speaker 1: The land effectively ends up being taxed based on the
• 28:33
  Speaker 1: value given to it by the amenities surrounded, which have
• 28:36
  Speaker 1: been paid for by the tax payer.
• 28:37
  Speaker 5: The famous story about Monopoly, the board game, was originally
• 28:40
  Speaker 5: devised to prove just how inniicoaous the current system was.
• 28:43
  Speaker 5: There were two games, or two ways of playing one
• 28:45
  Speaker 5: with land value tax on one in the present system,
• 28:48
  Speaker 5: and the one we play is the present system one.
• 28:49
  Speaker 5: Everyone got bored with the land value.
• 28:57
  Speaker 1: Anyone who spends time with the land value tax gets
• 28:59
  Speaker 1: bored very quickly because because there's never get it's complicated
• 29:01
  Speaker 1: and it's never going to happen.
• 29:03
  Speaker 5: It's interesting, though, I think we talked about this the
• 29:04
  Speaker 5: other day, but whether or not you could institute a
• 29:07
  Speaker 5: land value tax, I don't know how many decades of
• 29:10
  Speaker 5: warning you'd have to give to people so they could
• 29:12
  Speaker 5: rearrange their affairs in order to be fair. And for
• 29:14
  Speaker 5: the people like myself who basically regard our houses as
• 29:18
  Speaker 5: our pension, because that's you know, that was the one
• 29:20
  Speaker 5: safe thing. But I do think it's extraordinary how squeamish,
• 29:24
  Speaker 5: even without a land value tax, the government is about
• 29:26
  Speaker 5: just allowing land values and house prices and so on
• 29:29
  Speaker 5: to tell them to provide information to people about where
• 29:33
  Speaker 5: to live. You know, they're constantly talking about leveling up,
• 29:36
  Speaker 5: and then when London rents go up, they try and
• 29:39
  Speaker 5: institute rent controls, and when London house prices go up
• 29:41
  Speaker 5: they try and mitigate that. Just let it happen and
• 29:44
  Speaker 5: let young people go. Well sod that I'll live in Manchester.
• 29:46
  Speaker 5: It looks like a lot more fun and I can
• 29:48
  Speaker 5: afford a house there, you know, and bang, you've leveled up.
• 29:51
  Speaker 5: That's all you need to do. Just let the market work.
• 29:53
  Speaker 1: Rent controls are something that so we might talk about
• 29:55
  Speaker 1: a little bit because they are. They're coming back everywhere.
• 29:58
  Speaker 1: There's and let's talk about rent control over there and
• 30:00
  Speaker 1: in the US. And if there is any one policy
• 30:03
  Speaker 1: globally that we know never works, because it's been tried
• 30:06
  Speaker 1: so many times and there's so much research into it,
• 30:09
  Speaker 1: we know for absolute certain that rent controls don't work.
• 30:12
  Speaker 1: That when you put rent controls in place, rent to
• 30:14
  Speaker 1: go up. But nonetheless, we still have governments saying, well,
• 30:17
  Speaker 1: this is what we're going to do.
• 30:19
  Speaker 5: People use the term populist usually to describe you know, Trumport.
• 30:24
  Speaker 1: I nearly picked him up on it, but I didn't.
• 30:25
  Speaker 5: Well, Kamina Harris is talking about rent controls, so nobody's
• 30:28
  Speaker 5: called her populist yet, But that is populism in a nutshell.
• 30:31
  Speaker 5: Because seventy five percent of Americans think it would be
• 30:34
  Speaker 5: a good idea to control rents and to stop price gouging.
• 30:38
  Speaker 5: Two percent of economists think it's a good idea two percent.
• 30:41
  Speaker 5: I mean it makes Brexit look like a consensus, you.
• 30:44
  Speaker 1: Know, but then to be a fair economists as a
• 30:47
  Speaker 1: group aren't really right. So maybe.
• 30:51
  Speaker 6: That right.
• 30:53
  Speaker 1: We're going to move on to because I want to
• 30:54
  Speaker 1: have time for questions, because I've got these three books
• 30:56
  Speaker 1: to get to give away. Do please think of good questions,
• 30:58
  Speaker 1: because I will only give the books away to good questions,
• 31:00
  Speaker 1: so you'll know if your question was back to wake
• 31:02
  Speaker 1: a book, Simon.
• 31:05
  Speaker 5: Okay, I have one which is also from the Wealth
• 31:10
  Speaker 5: of Nations, although it's a bit of a sort of
• 31:11
  Speaker 5: footnote or a bit of musing on the side. Smith
• 31:14
  Speaker 5: went to Glasgow University for the first three years of
• 31:17
  Speaker 5: his univer he was only fourteen. It was extraordinary how
• 31:19
  Speaker 5: quickly you could advance to university unincumbered by the comprehensive
• 31:23
  Speaker 5: school system. But he then went down to Oxford and
• 31:26
  Speaker 5: found it extraordinarily disappointing. He found it very stagnant, he
• 31:29
  Speaker 5: found it calcified. He thought that it was an extraordinarily
• 31:32
  Speaker 5: dysfunctional system which allowed professors to protect themselves from having
• 31:37
  Speaker 5: to learn or engage with new ideas. And he said
• 31:40
  Speaker 5: the quote an English university is generally speaking a sanctuary
• 31:45
  Speaker 5: in which exploded systems of thought and obsolete prejudices find
• 31:48
  Speaker 5: shelter and protection after they've been hunted out of every
• 31:52
  Speaker 5: other corner of the world, which sounds a bit like
• 31:55
  Speaker 5: Scottish chauvinism, possibly as he went back to Glasgow University,
• 31:58
  Speaker 5: but apparently was again a wide consensus. Obviously, we live
• 32:02
  Speaker 5: in a rather different system now and Oxford is often
• 32:04
  Speaker 5: ailed as the greatest university in the world and one
• 32:06
  Speaker 5: of the two or three great sort of shining beacons
• 32:10
  Speaker 5: of the you know, the absolute elite of the British
• 32:12
  Speaker 5: educational system. But there is definitely something bad going wrong
• 32:16
  Speaker 5: with our education system, with our tertiary education, with further education,
• 32:21
  Speaker 5: with universities, something very dysfunctional about it. And again it's
• 32:24
  Speaker 5: something which the market would be in a good position
• 32:27
  Speaker 5: to correct if it were allowed to do so. Smith
• 32:29
  Speaker 5: had the idea that Oxford will be a lot better
• 32:31
  Speaker 5: if professors had to essentially put a hat round after
• 32:34
  Speaker 5: every lecture, very much as they do on the free
• 32:36
  Speaker 5: from the Smith.
• 32:37
  Speaker 1: Did initially didn't heah were his first lectures at Glasgow.
• 32:41
  Speaker 1: He was paid with the buckets.
• 32:42
  Speaker 5: He tried to return the fees when he went off
• 32:44
  Speaker 5: on the Juka Butler's gap. Yeah, yeah, he did, and
• 32:47
  Speaker 5: they refused to have them. They said they'd had their
• 32:48
  Speaker 5: money's worth. But his idea was that professors should have
• 32:51
  Speaker 5: to basically charge for their own lectures, for their own
• 32:54
  Speaker 5: for engagement, you should basically be a small businessman. You
• 32:58
  Speaker 5: should be a sole trader. That would be probably impractical
• 33:01
  Speaker 5: in the modern world, but certainly you could allow the
• 33:03
  Speaker 5: market to determine the amount of fees that specific courses
• 33:06
  Speaker 5: could be charged, that it is proven that certain courses
• 33:11
  Speaker 5: have so much more of a beneficial effect on your
• 33:13
  Speaker 5: future earnings. Economics, computer science, maths, physics, stemmas is often said,
• 33:18
  Speaker 5: and one or two others. There are very very dispiriting tables,
• 33:22
  Speaker 5: certainly in America. I don't know that I've seen exact
• 33:24
  Speaker 5: same ones in England in which students who asked ten
• 33:27
  Speaker 5: years later whether or not they regretted their courses, and
• 33:30
  Speaker 5: certain courses are overwhelmingly regretted as having been just a
• 33:33
  Speaker 5: massive waste of money and effort and study that haven't
• 33:36
  Speaker 5: had any improvement in their earning potential. You know, there
• 33:39
  Speaker 5: are all sorts of means spirited jokes about what do
• 33:41
  Speaker 5: you say to a philosopher's graduate. No sugar, you know,
• 33:44
  Speaker 5: but it's you know, it's easy to laugh, but this,
• 33:49
  Speaker 5: you know, I have university aged children. Now, I have
• 33:51
  Speaker 5: one that's doing a god fingers crossed a worthwhile degree
• 33:55
  Speaker 5: at Kings. But when you get dug into it and
• 33:58
  Speaker 5: find out just what a racket is is, I mean,
• 34:00
  Speaker 5: it's extraordinary. It's obviously been for some time. It's been
• 34:03
  Speaker 5: a visa mill again, which is a source of great
• 34:06
  Speaker 5: dissent across the nation. And then there's the whole kind
• 34:11
  Speaker 5: of university landlord complex, you know, which is driving up
• 34:16
  Speaker 5: rents and again very very dysfunctional. So again it's been
• 34:21
  Speaker 5: extraordinarily well protected. They are now saying that I think
• 34:24
  Speaker 5: something like forty percent of university degree courses are economically
• 34:29
  Speaker 5: unviable and might have to be canceled. And there are
• 34:32
  Speaker 5: many I think quite wisehead saying good, that is a start.
• 34:35
  Speaker 5: Let them go and let young people recognize that, you know,
• 34:38
  Speaker 5: an extra three years of education is not necessarily the
• 34:41
  Speaker 5: best start in life if you're going to come out
• 34:43
  Speaker 5: of it fifty grand in debt.
• 34:44
  Speaker 1: So for you are blaming Tony Blair for us prisoningly.
• 34:46
  Speaker 5: Yeah, Blair, but also fourteen years of Tory rule. As
• 34:50
  Speaker 5: with so many other quango and the fourth sector and
• 34:55
  Speaker 5: third sector interference set up by Blair, fourteen years of
• 34:58
  Speaker 5: Tory rule did absolutely nothing to roll it back. It
• 35:00
  Speaker 5: may be slowed down a bit, but they did not
• 35:02
  Speaker 5: deal with it as adequately as they could have done.
• 35:04
  Speaker 5: They could have absolutely they make the case, make the argument,
• 35:07
  Speaker 5: and you know, we all know we hear about grade inflation,
• 35:10
  Speaker 5: and nobody wants to full scorn on a poor kid
• 35:12
  Speaker 5: who's worked hard to get there. But it used to
• 35:14
  Speaker 5: be like about between eight and ten percent of degrees
• 35:17
  Speaker 5: were first class. Thirty three percent of degrees now a
• 35:20
  Speaker 5: first class and nearly half are two ones, which I
• 35:25
  Speaker 5: mean you, I mean it's absurd. You've basically only really
• 35:27
  Speaker 5: got two grades and a fail now effectively if it
• 35:31
  Speaker 5: is absolutely because of protectionism.
• 35:35
  Speaker 1: But if you've paid your nine grand a year to
• 35:37
  Speaker 1: go to university, you're going to need a two one.
• 35:39
  Speaker 1: So the universities no longer have the ability to give
• 35:42
  Speaker 1: people we'll go to that university if they're not going
• 35:47
  Speaker 1: to get it.
• 35:47
  Speaker 5: If you know that, you can't that every other university
• 35:50
  Speaker 5: is going to give you a two to one for
• 35:51
  Speaker 5: a very mediocre performance, and of course you're not going
• 35:54
  Speaker 5: to go to the one university that maintains that. It's
• 35:56
  Speaker 5: unless you feel confident that you can come out with
• 35:58
  Speaker 5: a first and that it will be trusted as such,
• 36:00
  Speaker 5: you know, and that to some extent is what Oxford
• 36:03
  Speaker 5: still means for even there. I think it's it's starting
• 36:05
  Speaker 5: to happen.
• 36:06
  Speaker 1: And then the student learned system works back to taxes,
• 36:08
  Speaker 1: works as an additional tax. So when our children university.
• 36:12
  Speaker 5: Of course you also have, as you mentioned with the
• 36:14
  Speaker 5: taxation on the rich, the private education tax, which I
• 36:17
  Speaker 5: also think is iniquitous. But again people needed much more warning.
• 36:20
  Speaker 5: It's coming in in January. You know, the chances of
• 36:23
  Speaker 5: finding your child and alternative school place in that time
• 36:25
  Speaker 5: is absolutely Again it's hard to feel sorry, you might say, well,
• 36:29
  Speaker 5: I dispute that there are an awful lot of people
• 36:32
  Speaker 5: who've absolutely put themselves on the rack to put their
• 36:34
  Speaker 5: kids through private education because they do not trust the
• 36:36
  Speaker 5: socials that the public system, you know, and they're being
• 36:39
  Speaker 5: booted in the nuts. It's absolutely disgraceful.
• 36:44
  Speaker 1: If you were to reform the university system what they
• 36:46
  Speaker 1: look like.
• 36:47
  Speaker 5: I would. I mean, again, you've got to allow a
• 36:49
  Speaker 5: little bit of time for these things to bed in.
• 36:51
  Speaker 5: But first of all, let failing degree courses die, Let
• 36:54
  Speaker 5: those which are not able to attract the students just
• 36:58
  Speaker 5: go bust, and and then allow good courses, which are
• 37:03
  Speaker 5: able to attract lots of students, elevate their fees within
• 37:07
  Speaker 5: perhaps some degree of range initially, but so that you
• 37:11
  Speaker 5: can have some kind of pricing system. So you can say,
• 37:13
  Speaker 5: if I am going to come away with a degree
• 37:15
  Speaker 5: which was essentially a framing device for three years of
• 37:18
  Speaker 5: social life and learning to fry my own eggs in
• 37:20
  Speaker 5: the morning without Mum supervising me, Fine, if that's what
• 37:23
  Speaker 5: you feel you need in order to bridge the gap
• 37:25
  Speaker 5: between school and work, at least price it in accordingly
• 37:28
  Speaker 5: for the fact that you're getting some half whit no
• 37:30
  Speaker 5: mark lecturing you about something that's never going to be
• 37:33
  Speaker 5: of any value in the workplace. If you go to
• 37:35
  Speaker 5: a university degree course and you get access to laboratories
• 37:39
  Speaker 5: and to cutting his technology and the very finest minds
• 37:41
  Speaker 5: that are going to release you into a jobs market
• 37:43
  Speaker 5: where you'll walk into a fifty k year job, then
• 37:46
  Speaker 5: charge accordingly.
• 37:47
  Speaker 1: Can bring that means testing No, No, I wouldn't.
• 37:51
  Speaker 5: Bring that means testing. No, I think people should be
• 37:53
  Speaker 5: allowed to buy a product just as they are allowed
• 37:55
  Speaker 5: to buy a product in a shop. You don't get
• 37:57
  Speaker 5: means tested before you're allowed to buy some noise canceling headphones.
• 38:00
  Speaker 5: Just decide whether you want them or not. That that
• 38:02
  Speaker 5: is a different case altogether. Means testing you could supply
• 38:06
  Speaker 5: possibly granted. But you've got something like I don't know,
• 38:10
  Speaker 5: I don't know how many I should have done the research,
• 38:12
  Speaker 5: something like fifty of the population going to university.
• 38:16
  Speaker 1: No, it's like it's not quite there yet. But that's
• 38:18
  Speaker 1: what we're heading for.
• 38:20
  Speaker 6: I mean, if we silently I mean picking your point
• 38:23
  Speaker 6: on about teaching and the fact in ads Fith's day
• 38:26
  Speaker 6: there was actually they had a basic stippen, then you
• 38:29
  Speaker 6: I think you were these students paid for the class
• 38:32
  Speaker 6: the I mean what what appears to be a kind
• 38:36
  Speaker 6: of a completely misaligned in center system we have is
• 38:41
  Speaker 6: today from right, the average salary of a senior lecturer.
• 38:46
  Speaker 6: My father was a senior lecturer of philosophy. The average
• 38:49
  Speaker 6: salary is forty three thousand pounds. I pay as contacts
• 38:54
  Speaker 6: and to supervisor and magister. More than that. No one
• 38:58
  Speaker 6: is going to if they're looking to advance themselves in teaching.
• 39:03
  Speaker 6: Is ever going to rationally choose that path? It just doesn't.
• 39:07
  Speaker 1: Today's nice pension.
• 39:09
  Speaker 6: Well, the trouble is, but then you go to university
• 39:12
  Speaker 6: and then the lecturers there they're incentivized for research, not
• 39:17
  Speaker 6: to teach. And you have my one of my sons
• 39:20
  Speaker 6: and he says he goes one of my my sons
• 39:23
  Speaker 6: is they said that, And because the the one class
• 39:26
  Speaker 6: that he has where he's in Edinburgh they're supposed to attend,
• 39:31
  Speaker 6: the teacher has no teaching skills whatsoever. So you sit
• 39:35
  Speaker 6: there with some rambling person who's got no incentive and
• 39:41
  Speaker 6: no feedback loop. The other class that he's here to
• 39:44
  Speaker 6: do is online, even though he's resident here and he's
• 39:49
  Speaker 6: out there and there. I'm not sure how that's supposed
• 39:52
  Speaker 6: to work. Dad, that's all a bit broken. He's great
• 39:55
  Speaker 6: at golf.
• 39:55
  Speaker 1: Now do him a lot better than what it was great.
• 40:00
  Speaker 6: So there's a I mean, I look at a lot
• 40:01
  Speaker 6: of things you mentioned incentives earlier. A lot of things
• 40:04
  Speaker 6: in our system are about a learning incentives. Some you
• 40:08
  Speaker 6: can move faster than others, but if you don't reward
• 40:11
  Speaker 6: that part of society to want to and to be
• 40:15
  Speaker 6: recognized and to achieve and to achieve self worth. It's
• 40:19
  Speaker 6: all very well. People say, you know, it's for the
• 40:20
  Speaker 6: greater good that I do this. That may be true
• 40:23
  Speaker 6: for the independently wealthier, for those who've got. Everyone else
• 40:25
  Speaker 6: just doesn't work. Everyone else is trying to pay their bills.
• 40:27
  Speaker 6: Everyone else is looking to can I go a hole?
• 40:29
  Speaker 6: They're not going to do this as a living. It
• 40:31
  Speaker 6: doesn't make any sense.
• 40:32
  Speaker 5: The only two. I mean, the only thing that dampens
• 40:34
  Speaker 5: it to some extent is just convenience and laziness. People
• 40:37
  Speaker 5: might not consider all their options, and so incentive structures
• 40:41
  Speaker 5: have to be made quite clear. Yeah, I suppose, rather
• 40:43
  Speaker 5: than just traditional custom.
• 40:44
  Speaker 6: But if you get superstars who Adam Smith, who are
• 40:48
  Speaker 6: rewarded spectacularly, those things also can nudge people's behavior back to.
• 40:54
  Speaker 1: Our world of celebrity academics. Be wonderful celebrity lectures. Right,
• 40:57
  Speaker 1: we're going to move on two questions. I think we're
• 40:59
  Speaker 1: done with it pressing news on universities. We have got
• 41:03
  Speaker 1: ten minutes for quessions, So who has one? Are we
• 41:05
  Speaker 1: have a microphone? Coming? Hang on?
• 41:08
  Speaker 9: I was a cant revitable to school as such, I
• 41:12
  Speaker 9: tended one and less lessels. You go in and view
• 41:16
  Speaker 9: what the teachers teaching. They basically were incompetent to teach bouts.
• 41:24
  Speaker 9: And one of the reasons, of course, is the professionally
• 41:26
  Speaker 9: low salaries at teachers, and therefore you're getting the quality people.
• 41:32
  Speaker 9: We need quality teachers in order to improve our productivity.
• 41:36
  Speaker 9: How do we solve this problem?
• 41:38
  Speaker 1: Okay, how do we solve the problem of teaching being
• 41:40
  Speaker 1: poor because teachers are paid too little? And as lot
• 41:42
  Speaker 1: as one there paid teachers more, and that will obviously
• 41:46
  Speaker 1: mean that taxing and taxing somebody.
• 41:49
  Speaker 5: More's a It's a downward spiral, isn't it. They're both
• 41:52
  Speaker 5: up up or down with spirals. But it's interesting that
• 41:55
  Speaker 5: Tony blessed education was his main priority and and I
• 42:01
  Speaker 5: think it did put money into it. But I don't
• 42:03
  Speaker 5: think that that is not I mean, it is arguably
• 42:06
  Speaker 5: the silver bullet. Everything should stem from that, you know, ideally,
• 42:10
  Speaker 5: certainly if you have any sort of time to the
• 42:12
  Speaker 5: blank Sling view that human capital is essentially what you know,
• 42:15
  Speaker 5: the product or what it's exposed to in its formative years.
• 42:17
  Speaker 1: Well, it's obviously difficulty to remember Nicholas Sturgeon saying over
• 42:20
  Speaker 1: and over and over again. My legacy is education. Judge
• 42:22
  Speaker 1: me on education, and then being really upset when we did.
• 42:25
  Speaker 9: Yeah, I saw.
• 42:28
  Speaker 5: I don't know if this is a silver bullet at all. Obviously,
• 42:31
  Speaker 5: grammar schools remain a sort of some increasingly sort of
• 42:35
  Speaker 5: wistful nostalgic rather than actual viable propositions.
• 42:38
  Speaker 9: Was at the grammar school?
• 42:39
  Speaker 5: Oh right, But for what it's worth, I think the
• 42:43
  Speaker 5: thing with grammar schools is for most people primarily they
• 42:47
  Speaker 5: are concerned not so much with the quality of teaching,
• 42:49
  Speaker 5: although obviously it is significant as the degree of disruption
• 42:52
  Speaker 5: that you get, and that that's what they hope by
• 42:55
  Speaker 5: removing that. If they had a child who was clever
• 42:57
  Speaker 5: enough to go to a grammar school, you would want
• 42:58
  Speaker 5: them to go there so that they would not have
• 43:01
  Speaker 5: their classes disrupted by children who are sick and I
• 43:03
  Speaker 5: cannot keep up and get bored and so disrupt. It
• 43:06
  Speaker 5: might be more plausible to remove the worst ten percent
• 43:09
  Speaker 5: of children and to set up essentially something not far
• 43:12
  Speaker 5: off of a borstal for them, rather than set up
• 43:16
  Speaker 5: institutions where you cream off the top twenty five percent,
• 43:19
  Speaker 5: because the middle fifty percent in those situations benefit from
• 43:23
  Speaker 5: being alongside the brightest. So it's nice if the middle
• 43:27
  Speaker 5: fifty percent and the top quarter are all in one
• 43:30
  Speaker 5: place where they all benefit from one another, and you
• 43:33
  Speaker 5: get rid of the disruptive element. The Pareto principle probably applies,
• 43:38
  Speaker 5: but it's obviously not going to what that will then do. However,
• 43:41
  Speaker 5: there are intelligent people, I would I mean, and I'm
• 43:43
  Speaker 5: guessing I haven't seen stats, but I'm sure there are
• 43:45
  Speaker 5: intelligent people who consider teaching as one of their options
• 43:48
  Speaker 5: and decide they cannot face a lifetime of basically telling
• 43:52
  Speaker 5: a child to stop doing that rather than actually communicating
• 43:56
  Speaker 5: the information.
• 43:57
  Speaker 3: But the other thing I would say is if you
• 43:58
  Speaker 3: talk to teachers, then certainly the ones that we know,
• 44:01
  Speaker 3: one of the big problems as nothing they do with
• 44:03
  Speaker 3: the kids, even the disruptive kids. A lot more is
• 44:06
  Speaker 3: to do with the fact that every single new government
• 44:09
  Speaker 3: comes in and changes everything. And there's and I think
• 44:11
  Speaker 3: it's the same problem across the public sector. Is this
• 44:14
  Speaker 3: whole thing the system thinking some other bright person up
• 44:20
  Speaker 3: taught I mean a bit. Everyone in this room's had
• 44:22
  Speaker 3: a bad manager. A bad manager comes in, you've done
• 44:25
  Speaker 3: the job for twenty years. They come in first data like, oh,
• 44:28
  Speaker 3: we're going to do it this way, and you're like,
• 44:29
  Speaker 3: I will explain to you clearly why we can't do
• 44:31
  Speaker 3: it this way, and they say, oh no, but we're
• 44:32
  Speaker 3: still going to do it this way because you don't
• 44:33
  Speaker 3: know what you're talking about. Is that happens to you?
• 44:36
  Speaker 3: The public sector was because with every single new government
• 44:38
  Speaker 3: it comes in.
• 44:39
  Speaker 1: John and I have a lot of experience in that way.
• 44:41
  Speaker 7: Yeah we do.
• 44:42
  Speaker 4: Yeah, yeah, moving on.
• 44:46
  Speaker 1: We haven't read talked about finances all all markets or money.
• 44:48
  Speaker 1: So if you've got any financial questions now it's a
• 44:50
  Speaker 1: great time to usk them.
• 44:54
  Speaker 4: We're always to put the also style to what Mark
• 44:56
  Speaker 4: brow the punches.
• 44:58
  Speaker 8: Are there any changes to pension swatch? It's still confidence
• 45:02
  Speaker 8: and pension cider?
• 45:02
  Speaker 1: Is it?
• 45:02
  Speaker 8: Because for the punchers industry.
• 45:05
  Speaker 1: Okay, I mean I mean I think you know the
• 45:07
  Speaker 1: answer the answer is no. I mean, you know and
• 45:10
  Speaker 1: my other interested to know John thinks on this, but
• 45:13
  Speaker 1: basically we're we have a government that needs more money,
• 45:15
  Speaker 1: that would like to tax people more, that requires a
• 45:17
  Speaker 1: higher tax. Take the money is in the pension system.
• 45:20
  Speaker 1: That's where it is, and so they're going to come
• 45:22
  Speaker 1: to the pension systems to get it. So you can
• 45:25
  Speaker 1: expect I think all sorts of things, from changes to
• 45:27
  Speaker 1: the inheritance rules around pensions, to changes to the amount
• 45:30
  Speaker 1: you can contribute, possibly possibly flat contribution tax levels, although
• 45:35
  Speaker 1: I don't and I've discussed this before, very very hard
• 45:37
  Speaker 1: to do, and Richard will know this too, But I
• 45:40
  Speaker 1: think the main thing that you can expect going forward
• 45:43
  Speaker 1: is for your pension money to be used for government priorities.
• 45:46
  Speaker 1: So we've talked. We talked yesterday, sorry went to yes
• 45:49
  Speaker 1: about the National Wealth Fund, which of course is not
• 45:51
  Speaker 1: a national wealth fund but a national debt fund. We
• 45:53
  Speaker 1: borrow some money, we jug it in etc. But into
• 45:55
  Speaker 1: that fund is very likely to go five percent of
• 45:58
  Speaker 1: your pension or ten percent to your paer whether you
• 46:00
  Speaker 1: want it to or not, and your money will then
• 46:02
  Speaker 1: be used for government priorities, which is effectively in new
• 46:05
  Speaker 1: tax on pensions. So I think it's very very difficult
• 46:09
  Speaker 1: to say you can look forward to an era where
• 46:12
  Speaker 1: your pension will be treated more kindly by the government
• 46:15
  Speaker 1: or the tax authorities, because that's not how money is
• 46:18
  Speaker 1: going to be treated going forward. If you have money,
• 46:20
  Speaker 1: they will be coming for it, and that's where the
• 46:22
  Speaker 1: money is. Why did you rob the bank because that's
• 46:24
  Speaker 1: where the money is. Why did your tax a pensions
• 46:26
  Speaker 1: Because that's where the money is.
• 46:29
  Speaker 2: To say you take a part for agreeing with you,
• 46:37
  Speaker 2: is that there will also go after your casual case.
• 46:41
  Speaker 6: So I don't know, Yeah, nothing.
• 46:44
  Speaker 3: All really, I mean, yeah, that doesn't I mean, the
• 46:49
  Speaker 3: best thing you could do is leave it a loan.
• 46:50
  Speaker 3: But they wouldn't leave a loan because and I don't see,
• 46:56
  Speaker 3: because they keep talking about investing in Bretain as long
• 47:00
  Speaker 3: as there's law that it's going to be a good thing.
• 47:02
  Speaker 3: But if you can't attract capital to a project because
• 47:07
  Speaker 3: it's attract to vendin of itself, then if you're forcing
• 47:10
  Speaker 3: capital in it, that's because the the turns aren't as
• 47:12
  Speaker 3: high as they should be to attract normal capital.
• 47:14
  Speaker 4: So yeah, I hate to see.
• 47:15
  Speaker 3: It's hard to be optimistic. The only thing they could
• 47:18
  Speaker 3: do is scrap something like the triple lock, which is
• 47:20
  Speaker 3: not it's not our it's not good for the state
• 47:24
  Speaker 3: pension ofs. But it wouldn't be a bad thing because
• 47:26
  Speaker 3: the triple lock is is overly generous, and so the
• 47:30
  Speaker 3: one good things say.
• 47:30
  Speaker 1: Here's a good thing to say, is it's great that
• 47:32
  Speaker 1: the money is there to take right. The UK has
• 47:34
  Speaker 1: a very well funded pension system relative to a lot
• 47:37
  Speaker 1: of other countries. So the value of pension as it's
• 47:39
  Speaker 1: held inside the UK as well over a hundred per
• 47:41
  Speaker 1: central GDP and there are very few countries that hit
• 47:44
  Speaker 1: that kind of level. Most European countries are well under
• 47:46
  Speaker 1: ten percent. So we do at least live inside a
• 47:49
  Speaker 1: system where our pension system is very very well funded
• 47:52
  Speaker 1: and most people will receive a reasonable pension income on retirement,
• 47:55
  Speaker 1: and that's not something you can say across most of Europe.
• 47:58
  Speaker 1: So how's that for a silver lining me? Is there
• 48:00
  Speaker 1: an available for government to take? The thing to watch
• 48:03
  Speaker 1: out for, by the way, is, as I'm sure everybody
• 48:05
  Speaker 1: knows now in the aultoun statement is capital gains because
• 48:07
  Speaker 1: there is a very strong chance that will end up
• 48:09
  Speaker 1: being aligned with income tax and so you know, it's
• 48:11
  Speaker 1: a big conversation. And there is also a horrible, horrible
• 48:14
  Speaker 1: chance that it won't be indexed to inflation and so
• 48:17
  Speaker 1: it will then operate as really whopping wealth tax. So
• 48:21
  Speaker 1: there's something for you to worry about if you are
• 48:22
  Speaker 1: worry enough already. Sorry, went back just here, tech quist jumper,
• 48:29
  Speaker 1: Oh sorry, you should be doing this.
• 48:32
  Speaker 8: Betters on the wall of excess savings and how much
• 48:36
  Speaker 8: is keeping things and thoughts he who card your likely
• 48:39
  Speaker 8: to about arrives.
• 48:42
  Speaker 1: Don't you been looking at that him? This is about
• 48:43
  Speaker 1: excess savings, So how much money people have over over
• 48:46
  Speaker 1: and above the average in the savings count, and how
• 48:48
  Speaker 1: that's keeping consumption going to.
• 48:50
  Speaker 3: Be absolute honest that I'm not worried with any of that.
• 48:52
  Speaker 3: I'm not what's with the state of the consumer, not
• 48:55
  Speaker 3: what he is with the private sector. If you if
• 48:56
  Speaker 3: you look at again, and people are always supplied when
• 49:00
  Speaker 3: you say this in two thousand and eight, and I'm
• 49:03
  Speaker 3: always going on about two thousand and eight, but before then,
• 49:06
  Speaker 3: both the American private sector and households and the British
• 49:09
  Speaker 3: private sector and households were the most leveraged they've ever been,
• 49:13
  Speaker 3: so they were most overborrowed and over in debted. What
• 49:16
  Speaker 3: hammed in two thousand and eight is, broadly speaking, the
• 49:18
  Speaker 3: state stepped in and underwrote the bits that were collapsing
• 49:21
  Speaker 3: the banks mainly, and since then we've been de leveraging.
• 49:26
  Speaker 3: In other words, we've been getting rid of our debt
• 49:28
  Speaker 3: across the private sector. The countries, the western countries that
• 49:32
  Speaker 3: were not hit hard. By two thousand and eight, that
• 49:34
  Speaker 3: hasn't harmed. So that's why, for example, Australian house prices
• 49:37
  Speaker 3: are even more nutty than ours. The same for Canada,
• 49:41
  Speaker 3: and their banking systems are probably more vulnerable, but they're
• 49:44
  Speaker 3: kind of they are back waters financially, so it doesn't
• 49:46
  Speaker 3: matter at least not to us. So both ends.
• 49:52
  Speaker 4: So basically, long.
• 49:54
  Speaker 3: Story shot, not worried about consumers or households or private
• 49:58
  Speaker 3: sector at the moment is more the it is in
• 50:00
  Speaker 3: the public sector, and then you have to worry about
• 50:01
  Speaker 3: what the public sector is going to do because the
• 50:04
  Speaker 3: favor sector comes back when it's over inundated, because the
• 50:06
  Speaker 3: public sector just takes money fifth favorite sector when it's
• 50:09
  Speaker 3: all volundicerty I mean, I mean they ls get a
• 50:12
  Speaker 3: few in household.
• 50:13
  Speaker 1: Series Richard, Nope, Okay, great, let's say another question. I
• 50:17
  Speaker 1: think it was the one at the back. I think
• 50:18
  Speaker 1: we were quite early in.
• 50:21
  Speaker 8: I'm deciding to come back to the education that says
• 50:23
  Speaker 8: we improved focusing and improve competence in choosing university careers
• 50:29
  Speaker 8: by teaching economics. At thirteen forty there's a talk of
• 50:34
  Speaker 8: everyone should be being taught maths, but that's not quite it.
• 50:39
  Speaker 8: The practicality of income tax, the paxicularity of percentagures, the
• 50:43
  Speaker 8: practicality or how you've managed money. It's something that really
• 50:48
  Speaker 8: all children should understand over and about cosides and signs whatever.
• 50:56
  Speaker 1: The best question about basically about personal finance education in
• 50:59
  Speaker 1: schools as something Johnahan, I'd actually written about quite a
• 51:02
  Speaker 1: lot over the years, and I think you're right to degree,
• 51:05
  Speaker 1: But I think what we feel incorrectly if I'm wrong, John,
• 51:08
  Speaker 1: is that yes, and definitely everyone should have an overview
• 51:11
  Speaker 1: of how economies work, of how interest rates work, of
• 51:14
  Speaker 1: what tax is, how a government balance sheet works, etc.
• 51:17
  Speaker 1: But you want to be very very careful when you
• 51:20
  Speaker 1: move it into things like how a mortgage works and
• 51:24
  Speaker 1: how her credit cards work and all that kind of thing,
• 51:25
  Speaker 1: because children obviously forget stuff very quickly. I mean, anyone
• 51:29
  Speaker 1: remember anything from their chemistry O level right, Absolutely nothing.
• 51:33
  Speaker 1: So if you're taught the details of personal finance has
• 51:36
  Speaker 1: called there's lots of charities doing that and lots of
• 51:38
  Speaker 1: movement around it, and that feels to me like a
• 51:41
  Speaker 1: bit of a waste of money.
• 51:43
  Speaker 3: I mean, I'm mostly to fact that's all agree because
• 51:46
  Speaker 3: I think, well, for starting economics is very ideological. See
• 51:50
  Speaker 3: you'd have to take a very very light over of
• 51:53
  Speaker 3: view because as soon as you start getting a details,
• 51:55
  Speaker 3: none of them really agree. And it depends on whether
• 51:57
  Speaker 3: you're right or left wing. US home MAKEINGRMIC scores. I
• 52:02
  Speaker 3: think bringing backs. I'm like homemaking ormics would be good,
• 52:04
  Speaker 3: but that's not personal faines And the other is won't
• 52:07
  Speaker 3: see once you get a mortgage, you need a mortgage.
• 52:09
  Speaker 3: You've flupping mill fained doo fast? How our mortgage what?
• 52:12
  Speaker 3: So I'm not convinced. I think personal finance education can
• 52:15
  Speaker 3: be just in tame a lot of the time. But
• 52:19
  Speaker 3: something like managing the household is maybe eat you before we.
• 52:22
  Speaker 1: Take out a mortgage, everyone has to work a five
• 52:24
  Speaker 1: minute video about world mortgages and how it works and interestages,
• 52:27
  Speaker 1: and it.
• 52:29
  Speaker 5: Would be you know, and there are often like an
• 52:31
  Speaker 5: hour a week or whatever where you have civic responsibility lessons,
• 52:34
  Speaker 5: and in America they learn about a bit of rights
• 52:36
  Speaker 5: and all that sort of stuff. And as you say
• 52:38
  Speaker 5: it's forgotten, there would be I mean, maybe I'm going
• 52:41
  Speaker 5: against what I said earlier about nudge, but there would
• 52:43
  Speaker 5: be subtle ways of doing it as well. You could
• 52:45
  Speaker 5: include novels, you could include films, You could include aspects
• 52:51
  Speaker 5: of history where countries are gone bust. You could. You
• 52:53
  Speaker 5: could make it a much more emotive thing. I mean,
• 52:56
  Speaker 5: I still think one of the most sickening and terrifying
• 52:59
  Speaker 5: episodes I ever saw the Sopranos is where a chap
• 53:01
  Speaker 5: gets in over his head in a gambling ring and
• 53:03
  Speaker 5: ends up losing everything. Things like that stay with you
• 53:06
  Speaker 5: a lot more than looking at a balance sheet, you know.
• 53:08
  Speaker 1: Okay, turn school into Telly well you bothers.
• 53:14
  Speaker 5: You think narratives, Using striking and memorable narratives to drill
• 53:17
  Speaker 5: in messages is not new. I mean they've been doing
• 53:19
  Speaker 5: that for a long time. That's what religious education is.
• 53:21
  Speaker 1: Right.
• 53:23
  Speaker 5: The other thing I would say is just to increase
• 53:24
  Speaker 5: what you just to approval what you said. It's not
• 53:26
  Speaker 5: just economics, it's statistics. Understanding. Being able to read basic
• 53:30
  Speaker 5: statistics is such an illiteracy that is prevalent, not just
• 53:33
  Speaker 5: in this country, across the world. People are so statistically
• 53:36
  Speaker 5: easily swayed by you know, nonsense, really really problematic in
• 53:40
  Speaker 5: a democracy.
• 53:41
  Speaker 1: Okay, one more question, I think we had one here. Yeah,
• 53:44
  Speaker 1: coming my friend coming.
• 53:47
  Speaker 10: By myself sorry, hello, So would are relish be my
• 53:53
  Speaker 10: insure resident and I would gradually do the last few
• 53:55
  Speaker 10: years and we both rolling up services.
• 53:58
  Speaker 7: However, even with will be how at the moment I've
• 54:01
  Speaker 7: already to still married far I share? God, it is all
• 54:03
  Speaker 7: about of the yells up ford on the child hero
• 54:06
  Speaker 7: or even private education and it really wants have incentives.
• 54:10
  Speaker 1: So what do you.
• 54:11
  Speaker 7: Think our triologies so that people will deal with us
• 54:14
  Speaker 7: can have.
• 54:14
  Speaker 1: Hope in their futures. Wow, there's a miserable way to end.
• 54:18
  Speaker 1: I guys really hoping there's something a little uplifting here
• 54:21
  Speaker 1: at the end. And then that's that's not really it.
• 54:24
  Speaker 1: That's not really it. I did. I mean, I think
• 54:26
  Speaker 1: it's very difficult to be young at the moment to
• 54:28
  Speaker 1: graduate into an area where besides Edinburgh warehouse praises are
• 54:31
  Speaker 1: incredibly high. And of course they don't know whether you
• 54:34
  Speaker 1: came from Scotland or not go to university. But if
• 54:36
  Speaker 1: you're now settled with a huge student that, as we
• 54:38
  Speaker 1: talked about earlier, where you effectively they another nine percentage
• 54:41
  Speaker 1: points on top of your tax right from the get go,
• 54:43
  Speaker 1: I think possibly difficult to cope. I hope you have
• 54:45
  Speaker 1: for its parents.
• 54:47
  Speaker 5: Listen or AGI arrived in the next few years, and
• 54:52
  Speaker 5: you just everyone moves on to a universal basic income
• 54:54
  Speaker 5: and lets the computers take over as possible.
• 54:57
  Speaker 1: Yeah, that's really the only solutions we have here. And
• 55:00
  Speaker 1: it may have something better, that's nothing better as it Well, I.
• 55:02
  Speaker 6: Mean, all you can do is stay optimistic and focused
• 55:06
  Speaker 6: and be prepared to take some risk. I mean the
• 55:09
  Speaker 6: fact that more people are living longer at home than
• 55:13
  Speaker 6: they were and the house prices as a starker across
• 55:17
  Speaker 6: certainly across Europe are very very high, which is large
• 55:22
  Speaker 6: because of a loose money of the last few years.
• 55:24
  Speaker 6: You just need to crack on and believe in yourself
• 55:28
  Speaker 6: and take some risks. That's the only thing, because the
• 55:30
  Speaker 6: situation is not going to be magically solved for you.
• 55:33
  Speaker 5: Just was so one thing about living with your parents
• 55:35
  Speaker 5: at the moment. By the way, well, when I was
• 55:37
  Speaker 5: growing up, there was because I'm a comedian, so I
• 55:39
  Speaker 5: registered this fact that one of the major targets of
• 55:43
  Speaker 5: humor that was done away with by Alexis Sale and
• 55:45
  Speaker 5: Rick Malon and some one in the early eighties was
• 55:47
  Speaker 5: the mother in law joke. Mother in law jokes were
• 55:49
  Speaker 5: suddenly seen as like a fascist adjacent you know, misogyny.
• 55:52
  Speaker 5: The reason mother in law jokes were so prevalent was
• 55:54
  Speaker 5: because most people live with them. Most male comedians spent
• 55:57
  Speaker 5: their twenties and early thirties living with their wife's family
• 56:00
  Speaker 5: before they could afford to buy. So it's not brand new.
• 56:03
  Speaker 5: And then you will to now and days at least
• 56:05
  Speaker 5: your parents' generation will probably quite cool. They probably like
• 56:07
  Speaker 5: the same music as you. They probably understand if you
• 56:09
  Speaker 5: even want to get stoned in the kitchen. So you know,
• 56:12
  Speaker 5: I want to be your parents before we.
• 56:16
  Speaker 1: Get into other people's parents. We have to end up
• 56:18
  Speaker 1: their own. Fraid we're running a bit late, So let
• 56:21
  Speaker 1: me see books. I'm gonna have to give you one
• 56:23
  Speaker 1: because you know, maybe maybe this will maybe this will
• 56:25
  Speaker 1: help you out. Oh no, I come move, I come,
• 56:27
  Speaker 1: I come with you have company? And whoever asked the
• 56:36
  Speaker 1: question about about punches, because I feel I let you
• 56:38
  Speaker 1: down rather with the depressing answer and very sorry. There
• 56:40
  Speaker 1: you go, and I don't know who to give the
• 56:42
  Speaker 1: third one too, any views, gentlemen, Okay, yeah, first question excellent,
• 56:47
  Speaker 1: There you go, And thank you so much to my
• 56:50
  Speaker 1: wonderful guests. Thank you all for coming today and oh
• 56:52
  Speaker 1: before you go the QR codes. Please use the QR
• 56:56
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• 56:59
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• 57:04
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• 57:09
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• 57:11
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• 57:14
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• 57:19
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