00:00You're heading into a pretty tough budget season. There is the expectation that taxes are going to
00:04have to go up and that spending is going to have to cut. How much headroom are you looking to build
00:10for yourself so you don't have to do this again in terms of raising taxes again and going through
00:14another round of cuts? I think the British people recognise that the last year has been a challenging
00:20one. Whether it is conflict in the Middle East, Russia's continued aggression in Ukraine, the
00:27need for higher defence spending and also increasing trade barriers around the world have put countries
00:33under a lot of pressure and no country including the UK is immune from that. But I've also been
00:39really clear that we will continue to meet the fiscal rules that I set out in my budget last year
00:45and we will get debt down as a share of our economy. We will bring down the deficit and we will balance
00:50day to day spending with tax receipts. And when we get the full forecasts from the Independent
00:58Office for Budget Responsibility, we will make sure that we are continuing to achieve those things in terms
01:06specifically of the headroom. The headroom has been lower in the past. It was as low as six and a half
01:13billion pounds in the last parliamentary session. Obviously, more headroom would be good. But there is always
01:21trade-offs because of course to build more headroom, you would have to increase taxes further or cut spending
01:28further. But we will continue to manage that balancing act. But I recognise that in a world as volatile as it is today,
01:38having a bit more of a buffer can help absorb shocks. You've talked about raising the taxes. And in a previous
01:45interview, you were talking about particularly targeting wealthy residents of the United Kingdom. Is that really the
01:51focus right now? Is it broader based in terms of the tax raise you have in mind? In the budget last year, I did
01:58increase taxes on some of the wealthiest. And we also increased taxes on business. I'm very mindful again to get the
02:06balance right. We want to attract talent to the UK and keep talent in the UK. I also want to make it easier for
02:14businesses to grow and stay in Britain. So I'll set out the individual taxes on November the 26th. But I want this to
02:22be a pro-growth budget that maintains Britain as a great place to start and grow a business and to bring in investment. And
02:30obviously, over the last few months, we've secured huge amounts of foreign direct investment, including from the
02:36United States with those big technology companies investing in Britain. There's been a concern that if taxes go up too much on
02:42businesses, people start to leave and individuals will leave. And there's been some anecdotal evidence of that just
02:47personally when I meet people from London and New York. I'm just wondering, have you kind of got aware of that and tried to
02:53reduce how much you lean on that lever? Well, we made some further changes to the tax arrangements for non-domiciled
03:02people earlier this year, which I think have been welcomed. We'll continue to monitor the response to any tax. But I would also
03:14say there are many people choosing to make Britain their home. We've just doubled the number of visas available for
03:20high net worth individuals, for entrepreneurs and for academics in some of the growth sectors to build teams in the UK. And we've no
03:30doubt that people will apply for those visas and we will fill those places. So the UK remains an attractive place in part because we are
03:38securing investment from the world. We're reforming our capital markets to make it easier for businesses to raise finance in London. And we're
03:45reforming our regulatory and planning systems to make it easier to get things done in the UK.
03:52How much are you planning to cut some of the welfare spending in particular, not just sort of day to day spending of the government?
03:58Well, it is important to make sure that all budgets, including the welfare budget, are well managed. And we do need to see reform of our welfare system.
04:09And we will continue to make the case without reform. We've already brought in some changes to something called the universal credit system to reduce the incentives to get the health related elements of that. And just a couple of weeks ago, I announced a youth guarantee to help young people not in education, employment and training get back into work. Like many countries around the world, particularly since the pandemic, we have experienced challenges in terms of youth unemployment and youth
04:38in activity. And we're determined to turn that around with particular programs targeted at those young people.
04:47One big question for a lot of people is the Office for Budget Responsibility and what they'll come out with in terms of downgrading the growth forecast for the United Kingdom. Do you have any expectation or understanding of what that growth downgrade looks like?
05:01Well, the Office of Budget Responsibility, like other forecasters, use the past productivity performance to forecast the future.
05:08And it is true that under the previous government over the last 14 years, both growth and productivity were underwhelming. And the Office of Budget Responsibility will update their predictions for the future based on the past.
05:20And it's my job as Chancellor to try and beat those expectations. And that's why we're pursuing policies on trade, investment, on planning, on permitting, on regulation and capital market reform,
05:33as well as through the trade deals that we're securing to make sure that our economy is well suited to benefit from global investment, from business and wealth creation.
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