00:00There was a hope that maybe after the uncertainty of the budget was worked through that December would look better,
00:05that December would be more positive.
00:07But this data set doesn't seem to show that turning a corner story. What do you think is going wrong?
00:12Still going up. And the thing that I'm really interested in when I think about the pace of economic growth
00:19is what's happening to GDP per capita.
00:21That's what translates into rising living standards for people across the country.
00:24Last parliament had GDP per capita fall, worst on record.
00:28In terms of wages, you were talking about Napoleon, I heard.
00:32You were listening.
00:33We had the longest squeeze on wages since Napoleon was making his way around Europe under the last government.
00:39We're turning that around. We had the fastest wage growth in the first year than we had in the first
00:4510 years of the Tories.
00:46And GDP per capita is falling in the last parliament, minus one in 2023, zero in 2024, plus one this
00:52year.
00:53We can see that things are moving in the right direction. Of course, we want to go further. Of course,
00:58we want to go faster.
00:59There's definitely more to do. But we are seeing growth increase.
01:03And we're also seeing that the UK is the fastest growing economy of the European G7 economies.
01:08So your message is the comparisons with Napoleon, with the last government, with the other parts of the G7.
01:12No, that was nice. No, I liked it. I liked it, Dan. Thank you.
01:15The comparisons you say then are favourable. But what about the lack of confidence in the growth strategy?
01:20And I'm not even talking about the City of London here. I'm talking about within your own government, within the
01:25Cabinet.
01:26We saw those WhatsApp messages from Wes Streeting that suggested that he doesn't understand where the growth is going to
01:31come from.
01:31Now, if even members of the Cabinet don't buy into the growth story under Keir Starmer, then what hope for
01:37the rest of us?
01:38We have a really strong growth story and a Chancellor who's obsessed with getting our economic growth rate up and
01:43increasing our productivity and our economic potential.
01:47We've got to focus on economic stability.
01:49That's one of the things that has delivered the six cuts in interest rates that the Bank of England have
01:54implemented since we came to power in July last year.
01:58That also enables firms to do the investment, which is the second pillar of the growth strategy.
02:03We're seeing investment increase. The growth in investment in the UK economy was twice as high in 2025 than it
02:11was in 2024, from 1.7% to 3.4%.
02:14That investment will drive long-term growth. And that's from both public and private sector.
02:19Yes, we've increased public sector investment. We need to do that in the UK.
02:23We've been living off our paths for too long, our roads, our railways, our infrastructure.
02:27We need to invest in them, but alongside the private sector.
02:30And then we're implementing really significant reforms too, to our pension system so we can unlock that capital, to our
02:35planning system so we can get things built again.
02:39So you believe in it. Guy?
02:41Is the Chancellor slowing down deregulation because she wants to do a deal with the EU?
02:44The Chancellor is very focused on what we can do to make sure we can pull back those barriers that
02:49are standing in the way of economic growth.
02:50One of the big things we need to do is change our planning system and continue to change it.
02:54Why would she deregulate faster if we weren't thinking about getting a better relationship with the EU?
02:59Well, I think that one of the things that people often want to say is that it's not possible to
03:06both motor on domestically and focus on relationships both with the US and the EU.
03:12But what this government has shown is that we've been able to get the prosperity deal and we're working closely
03:16to deepen that with the United States and then to continue to make progress in deepening our relationship with the
03:21European Union too.
03:23Our objective is to, yes, deepen our relationship with the European Union, strengthen our ties with the US too, and
03:29then make sure we can motor on and get our own house in order when it comes to regulation and
03:33productivity.
03:33Do you think a different leader of the Parliamentary Labour Party would be able to manage that relationship, EU-US,
03:43in the same way that Keir Starmer has?
03:45I think Keir Starmer is managing it really, really well, and we aren't thinking about a different leader.
03:49What we're thinking about is working with Keir Starmer, Rachel Reeves.
03:52That's the top team that was elected in 2024.
03:55Yep.
03:56People, they have a strong mandate to deliver for the British people, and that's what they're focused on, that's what
04:00I'm focused on too.
04:01The fiscal rules were changed in 2024 to allow the Chancellor to spend more on things like infrastructure.
04:06Can this government be bolder on that?
04:08Can you use that more to generate the kind of growth that this economy needs?
04:13Is there more that you can do on that front this year?
04:16One of the really key things that this government wants to do, and this is one of the Chancellor's priorities,
04:21is to get borrowing falling.
04:22It's really important we do that.
04:24We are seeing borrowing, it's forecast to fall in every single year of this forecast, fastest reduction in borrowing in
04:30the G7.
04:31So it wouldn't be right, it isn't the government's position that we could do more by borrowing more to invest
04:36more.
04:37We think we've got the balance right.
04:38The key thing, though, which is incredibly important, is that the money that we are borrowing for investment, that we
04:45spend that well.
04:46So we've got the National Infrastructure Transformation Authority, NISTA.
04:49It goes and looks really carefully at our infrastructure projects.
04:52One of the problems we've had for decades in the UK is that when we build something, it always overruns,
04:57it always costs too much, and we don't get a good bang for buck for it.
04:59So we want to make sure that we can do that differently, make sure that when we do build things,
05:05we're not spending, like the last government did, this £120 million on the back tunnel on HS2 or whatever it
05:09was.
05:09We've got this big deal in the financial sector today, which is Schroders and Nuveen taking a bid, looking to
05:14take this over.
05:15For about £10 billion, about £10 billion, does the Treasury welcome that kind of takeover?
05:19We do want to see people coming to the UK and looking to invest in the UK.
05:25That is a good thing overall, both people domestically being able to choose to invest, individuals but big businesses too,
05:32and also we're a small, open economy, right?
05:36In the grand scheme of things, one of the things we need to do is make sure that we are
05:41open, we're working with businesses in other large economies to make sure we can get the investment into the UK.
05:47So it's not a sign that assets and companies are undervalued in the UK?
05:52I don't think so, no.
05:53OK, so welcoming it. Just a final comment on another story that pushed stocks up in the housing sector yesterday,
05:58so it's important to get some clarity.
06:00Are you working on, even behind the scenes, some kind of revised help-to-buy scheme?
06:04Because the market got excited about that possibility yesterday.
06:08So what the government is focused on is doing all we can to get to our £1.5 million new
06:13homes target.
06:14That is so important.
06:15Do you see merits in that kind of scheme?
06:17Well, I'm not going to comment on particular schemes or stories that may or may not have been made up
06:22or got into the press.
06:23I don't know. I'm the tax minister. You're asking me about something that isn't to do with tax.
06:28But we do need to make sure that we are doing all we can to get to that £1.5
06:34million new homes target.
06:35That's both about public sector investment, work alongside the private sector, and then these reforms.
06:40The planning system, which, by the way, the reforms to planning that we made in 2024, the OBR revised up
06:47long-term growth, revised up the revenues coming into the Exchequer because of those reforms, and they said that was
06:53the single biggest non-fiscal change that they had made.
06:57So it's good news doing those sorts of things for the fiscal position.
07:01So it's good news doing that.
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