00:00Andy Burnham seems happy to talk about pubs and shops, but what is his attitude to larger firms? Is he
00:07truly pro-business?
00:08Well, you haven't heard a lot of politicians take office and say, I'm going to be an anti-business prime
00:15minister.
00:16So I would say at this point, the words don't mean much.
00:22I do wonder, you know, some of the other catchphrases we've heard in recent days, the last couple of weeks
00:30have been, you know, we need to ask people, businesses for just a little bit more to make things a
00:35little bit fairer.
00:36I sort of wonder what that is code word for. I wonder what he means when he says he's going
00:41to be asking for a little bit more.
00:43And is he actually going to be asking businesses and some workers for what they would think is a lot
00:50more and then how that clashes or doesn't clash with him being seen as pro-business?
00:57OK, do you expect significant tax increases then in the budget? Do you expect land value tax, wealth taxes to
01:03come?
01:04It's obviously early days. Today is just the kind of transition day.
01:08But surely most people will be thinking about that first budget that he's going to deliver.
01:13I would expect some tinkerings on the margin on terms of tax come budget times.
01:18I wouldn't expect anything, anything major.
01:21So because he has said he's going to stick to the manifesto promises that precludes him, if he's going to
01:29actually stick to that, that precludes him from doing anything on the big taxes in the UK.
01:34So then the question is, how far is he going to go in terms of smaller taxes and trying to
01:41get more money that way?
01:43I think a big test in that will be, I'm sure the prime minister knows that if he tries having
01:49any unfunded increases in expenditures, that there will be a very negative market reaction to that.
01:55But what I think is a bigger question is, to what extent are markets going to tolerate tax rises on
02:02paper, which might sort of hypothetically fix the fiscal arithmetic and work?
02:08But in practice, are they going to be so damaging to growth that you're not actually going to see enough
02:13economic activity to see any of those tax rises?
02:16But from what we've seen, it seems like there will be some some sort of tinkering with some of the
02:20smaller taxes.
02:22How important is the choice of Chancellor going to be to perceptions of that policy as well?
02:27Shabana Mahmood, widely seen as a wise choice, reported as being in the lead for that position.
02:33But she has no experience in economics or running a business.
02:36Well, it is a little bit funny, isn't it, that somebody who we know nothing about her her stance on
02:42economics.
02:43And isn't it sort of funny that that's seen as the sort of the safe pair of hands, the, you
02:49know, pro stability market favorite choice.
02:52And I can I can see why it's because the other name that has been floated previously was and Miliband.
02:58And, you know, I think there are some questions there around would that have been a more ideologically driven Chancellor.
03:05So in terms of who is going to make the prime minister's life easier in the immediate aftermath between now
03:12and the budget, that definitely will be Shabana Mahmood, which is why I think it's almost a guarantee.
03:18Why a lot of people think it's almost a guarantee that that's the name we're going to hear imminently imminently
03:23today in a sense that otherwise markets would have been expecting more spending, more inflation, higher interest rates.
03:31And then that would have made that fiscal calculation, the fiscal headroom and the assumptions with which OBR would have
03:37been working with all the more challenging.
03:40So I think, you know, to your original question, how important are the optics?
03:44They're clearly incredibly important.
03:46I think that is the main reason that he's gone for this, that he's probably gone for this choice of
03:51Chancellor.
03:52It's optics and market perception.
03:54I think it's really interesting the way that you're speaking to me.
03:57This does not sound very positive or hopeful.
03:59You know, this is one of the has been Andy Burnham, one of the most popular politicians in the UK
04:05recently.
04:07And I know, for example, I was reading our opinion columnist, Rosa Prince, who's got great, interesting views a lot
04:14of times.
04:15She says that Andy Burnham has a shot at greatness.
04:18And it does feel like the UK, after these 10 years of, frankly, a lot of chaos politically and a
04:25huge economic issue with, you know, stagnant growth and stagnant wages and a cost of living crisis,
04:33that maybe we are at a tipping point where we do need somebody quite radical to come in and actually
04:38try to improve things.
04:40It doesn't sound like you're enormously optimistic that Burnham could be that figure.
04:45I think there are some, you know, if we were to think optimistically, some of what he has said, I
04:51think, in the longer term, a few years down the line, actually has real, real chances of improving the economic
04:58picture.
04:58So he has been talking a lot about devolution and he's not the first to talk about devolution.
05:04You've had levelling up, you've had the northern powerhouse.
05:07But what he is talking about, at least, suggests that he would go further.
05:11And I think if you give local areas the power not only to be in charge of their own spending,
05:18but to retain more of the locally generated revenues, that's what's going to make the difference in terms of evolution.
05:25Otherwise, if you just have one central pot and local politicians are always just pulling from that pot, that does
05:31not create the right incentives.
05:33If you have more power to actually make things happen in your local area, you're going to be naturally more
05:38inclined to say no to NIMBYism, to look for efficiencies.
05:42If you can make that happen, I think that's an area that has real, real potential.
05:48But that is a wind that's years down the line.
05:51And I think there has been this cycle in the UK of having immediate expectations from politicians to turn things
06:01around in what is a very difficult situation.
06:03You know, economic growth is sort of grazing, grazing 1%.
06:06There is demographic challenges.
06:09Inflation is proving difficult.
06:12It's a lot of challenges.
06:13People expect results on day one.
06:15That then creates very, very short-term incentives for politicians who try sort of pulling small pots of money, small
06:23strings, without really seeing the bigger picture.
06:25So, you know, in the new prime minister's words, let's look to the future with optimism.
06:30I, you know, I think optimism needs to be justified.
06:33So I would like to be as optimistic as I can.
06:36But, I mean, the country is in a difficult position.
Comments