Mel Stride | The Future of AI & The Tories

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0:39Step into a local Crocs store and step into your new look. Try it, style it, make it yours. Because the right pair doesn't just show up, it shows off. First day fits, handled. Walk out ready for whatever's next. Visit your nearest Crocs store today. Welcome back to Jimmy's Jobs of the Future. I hope you had a great summer. I always love September. It's one of my favourite months. It always feels like a month for kind of renewal. I think it's an academic year, being wired into our brains from an early age, fresh notebooks and all that side of things. It's also the month of my birthday when I got married and our first daughter arrived on our first wedding anniversary.

1:26So it's always a special month for me. I always enjoy it and it was great to get Mel Stride in the studio and talk about a few things and talk about the kind of Conservatives' path back to power. Lots of difficulties with that at the moment, with them being third in the polls etc. But Mel has had a really impressive career before politics, actually came into it a little bit later as well, similar to Gillian Keegan in some ways um but was an entrepreneur um by background and kind of been in the publishing industry as well and he also had a background as a tour guide before that as well which I've always thought is like one of the most amazing jobs that you can uh you can have actually sort of that mixture of entertainment and history I think I like uh and uh of course one of our favorite episodes from this year was um was Jules Guides which has just gone past 110 ,000 views on YouTube.

2:21I certainly didn't expect it to be our most viewed video ever but it's done incredibly well. So it was great to sit down with Mel, have a bit of a chat about the future of the Conservative Party and the future of our economy and what government should do for entrepreneurs. On to today's episode. Make sure you subscribe so we can continue to get bigger and bigger guests.

2:48Mel Stryke welcome to Jimmy's Jobs of the Future. Thank you Jimmy great to be here. What was your business? Exhibitions, conferences and publishing. And what did you call it? Well originally it was called CII then became Venture Marketing Group and this was back in the 80s and sort of mid-80s that I started the business. It's an interesting story actually because I was working for another business at the time and I took a day off work and I had this idea about getting young graduates bright graduates into industry and i knew i needed to get some of these industrial companies involved so i took this day off work and i got the top 100 uk industrial companies by size which then had shell and bp at the top and i just rang every single chairman down the list thinking it was a numbers game one of them would come up and sure enough the chairman of shell picked up the telephone because i found very early in the morning before his assistant came in and i sort of blathered on about my idea about getting industry together making it showcasing it for young people making and exciting and all the rest of it and he said i don't know whether you've got a good idea but what are you doing for lunch tomorrow so i said well well nothing so he sent his car around to where i was working and he met me and the rest as they say uh is history so it all started with a cold call really the whole business and then i grew it in the uk and took it to america i sold the american business and still have the uk company so where did you get the um the numbers from was it yellow pages back then you just i just phoned out the switchboard yeah so i just went through directory inquiries found out the main number got put through to the chairman's office and uh sure enough sir peter holmes was the man that i connected with but i just wanted to say because i think that sort of traditional way of making it in entrepreneurship and jobs is being lost a bit at the moment like we'll get onto ai in a bit in more detail but it's like it allows you to do so much but actually that old-fashioned sort of you know going and sort of knocking on the door yeah it's being lost a little bit from from people and actually i think the old school methods can can work quite well in the new age as well yeah but it's all about people in the end isn't it and it's often driving businesses forward is connection so in my case yeah talking to somebody and getting in front of somebody particularly somebody senior at that point was really important because of course spending time with Peter Holmes I did then um put me in touch with then the the chairman of lots of other big companies who got interested in my idea and then And I brought them together and it became our idea rather than just my idea.

5:08And that made it even more powerful. And before we knew it, we had what was then an exhibition, actually, that was launched in 1987. What was the job you were doing before? I was with the merchant bank in the city. So it was like a side hustle you were doing then. Well, I wouldn't describe it as that because I was working at the bank when I was working at the bank. But I had this idea and I'd always wanted to do it. I'd grown up in a family in which my father had a small business, totally unrelated to what I ended up doing. But I'd always wanted to do my own thing. I'd been there in my background.

5:40Yeah. And, yeah, when the time was right, off I went and never looked back, really. Yeah. No, it sounds – and so therefore you go into politics a little bit later, right? Age 48. Yes. Well, everybody says they want people that have had experience of the real world, ideally growing businesses and things, and going a bit later. so I did go in at 48. I think there are pros and cons to that. I think you do bring more outside experience, which is very helpful. But being in a bit younger is quite useful, I think, in terms of learning the ropes and doing more when you are younger. But I thought for me it was about the right age to have gone in, yeah.

6:18And you obviously got sort of quite well known at the beginning of this year. You basically became the minister for the Today programme, almost became a bit of a meme on Twitter that it was Mel Stride appearing again on the Today programme the next morning. But it does mean that people don't perhaps know your backstory as well and so on, because you come in in 2010, you're sort of, you know, you're straight into, not on the ministerial office, but you're straight into government, basically. What, the business that you were running was all about trying to get people into interesting jobs. Yeah.

6:47Like, and so on. So how, what's your perception of how the job market has changed over the sort of 30, 40 years you've been working? Gosh, I mean, it's changed enormously. Obviously, I think, well, certainly in terms of what employees expect of employers, I think has changed. So the idea of going into the office now is not as common as certainly it was back in that day. I think the big change that's coming is AI, is the big technological change that's coming down the line. And I think there are many people that will say, oh, this could be very deep and dark and difficult because it could destroy all the jobs.

7:20I'm not of that view. I mean, we've seen many technological waves and big changes coming through everything from the spinning jenny in the 18th century through to computers and so on. What tends to happen is that work actually gets more productive and more interesting and new sectors emerge. And I think that's the most likely outcome for the AI revolution. But interesting, it'll be a white collar effect. I think it will be the lawyers and the consultants and the accountants rather than perhaps the plumbers, the electricians, the construction workers who would like to be less impacted. But I think overall, I think it's a big opportunity for huge improvements in productivity, which is what we need to see in the economy if we're to face effectively into the challenges that we've got as a country.

8:02Geopolitical challenges internationally, demographic challenges within our own shores. And for us as a political party, how do we get young people more plugged into the benefits of our economy? How could we show the way as a political party on that front? But then it's interesting that we've had all this kind of technological advancement over the last 20 years and productivity hasn't gone up. Like it is a rather sort of like, you know, the famous kind of quote of the IC productivity everywhere, but the sorry, IC computers everywhere, but in the productivity statistics. Like, why is it that we aren't making as much of that as we could do?

8:39It's a very good question. I mean, some of it is the shift of being a service economy and to make productivity gains within services as opposed to manufacturing is typically more difficult. There's definitely been a very high level of underinvestment in the private sector, but also across the public sector in particular. Some of the latter driven by the fact that chancellors have often been under a lot of fiscal pressure. The budgets they've intended to squeeze have been the capital budgets. If you look at health where productivity has gone backwards since COVID, a lot of that is because money has gone into resource spending rather than capital spending.

9:20But there are many, many strands to it. Some of it's regional. You've got super high productivity in London and the southeast, very low productivity in other parts of the country. Some of it is we've got world leading larger businesses that are very productive. We've got a long tail of SMEs and other companies, some of which are not that productive. So it's quite a multifaceted challenge, I think. But I think AI can really move the dial. It is interesting. So I did this thing with it yesterday. It's my favourite thing to do. I was telling everyone what I used for it yesterday or this morning. And it was back of a conversation that I had with Greg Jackson, who did our 200th episode founder of Octopus Energy.

9:57I saw him earlier this week, and he said, he used a great stat in my interview. He said, we've created more jobs than anyone else in the last 10 years. Where did you get it from? can you source it etc and i was like well it's just me and me knowing that but i was like it is quite an interesting question actually like who else has sort of created a lot of jobs so i basically set ai off on one of its deep research things to go and find this out but yeah and it was it was very interesting like the stuff it kind of came back with um but i i spent a couple of hours on it and then reading it and sort of going down a bit of a rabbit hole with it and i did kind of come out at the end of it being like that's been interesting but not particularly productive what did it tell you about well i mean a lot of e-commerce jobs over the last 10 15 years right so it was sort of it highlighted ao asos gymshark uh huel and so on i mean it ends up it was interesting because it's also got a bias for the stuff that i've asked it for in the past so that was kind of an interesting lesson as well and a lot of logistics jobs that i hadn't heard of necessarily around the country as well.

11:01So quite a few firms in the north of England that I hadn't kind of come across and so on. So it was quite interesting on that side. All that, I mean, I was asking it to look at British companies, but it did also make the point that, you know, Amazon have created 75 ,000 jobs here in the last 10 years. So that's more. So what, but I mean, as an example of your white collar work, I thought if I'd commissioned that piece of work from an EY or someone, you know, I'd been looking at tens of thousands of pounds to get that. I mean, yeah, it's kind of two hours and it's there in front of me. Well, I went out for a drink a few months ago with a great friend of mine.

11:36He said, I've got this business idea. And I won't tell you what it is because he might not want me to tell you. But anyway, I didn't think it was that good, actually. And I told him so. And I said, I don't think that's going to work and all the rest of it. Anyway, we said, I said, about midnight or something. And when I got back, I woke up the next morning about six o 'clock. I said to AI, write me a business plan based on, and I plugged in all the things that he said. Anyway, it spat out this lengthy, highly detailed, brilliant business plan, which I then pinged over to him and said, by the way, I got up early this morning and wrote you a business plan.

12:07He came back and said, I don't believe it. What time did you get up to do that? You know, you're right. Things could be done in seconds that would have taken a huge amount of time. It's absolutely amazing. It is interesting because you gave this speech about the kind of rewiring of the economy and so on. And the fact that it's happened twice in the last sort of century, post-World War II with Attlee and the kind of Thansha revolution in the 70s and 80s. And I do think we're going to have that moment again, partly whether we like it or not, right? With this technological revolution. But what's your kind of...

12:39And I know also the big part of the speech was it's time to be more thoughtful, etc. And opposition does allow one of the benefits of it. It does give time to think. How do you think the economy will be rewired? So let's start with why it needs to be, I suppose. Because we've had sort of lagging growth and productivity, haven't we, particularly since the global financial crisis in 2008. To the extent that actually if we continued on the same growth trend up to 2008, the economy would be a quarter bigger, 25 % bigger today than it actually is. the reason why we need to get up to that kind of level of trend growth or better is because of the geopolitical challenges we're facing the world america decoupling from european security the threat of russia you know all the stuff that's kicking off that means we're going to step up to the plate when it comes to better funding of defense and one percent of gdp on defense is about 25 billion pounds huge amount of money if you went back to the 1960s in fact in 1960 We spent three times as much on defence as we did on health.

13:45Now it's the other way around. So there's a huge shift we're going to have to look at in public spending. We've got rising health costs. We've got an ageing population, which is being supported by an ever proportionally smaller, sort of younger population. And as a party, we've got the intergenerational challenges of the average Tory voter in the last election being 63 years old. So we've got to come up with a big, bold offer to young people. and get them plugged into a different kind of economy. So that's the why. How do you do it? Well, it's several fundamental things that need to change, and they're all big things.

14:19One is tax. How do you get the tax burden down? How do you simplify the tax system? You should ask a fundamental question of every tax. To what degree does it lean into growth rather than leaning away from growth? So a big piece of work there. Big bit around the size of the state and arm's length bodies and regulators and regulation. We've gone from 365 ,000 civil servants pre-COVID to 515 ,000 today. That just doesn't compute. It speaks to a bloated state. There's a lot around skills and higher education, I think. So too many young people going through universities without sufficient value added to justify the kind of loans that they're loaded up with and the cost that they incur.

15:03At the same time we're bringing net migration down, we need to look at the skills offer to make sure that we've got the right skills for those labour markets that are going to be under pressure as a consequence of that. Welfare, spiralling welfare bills, getting on top of that is vital. And then a lot of supply side things around building houses, roads, rail. Why is it that around Cambridge, which is an area that's a real hotspot for life sciences and tech and all the rest of it, they haven't got the laboratory space they need or the commercial space because they can't get the planning. Why can't they get the planning?

15:33Because there's not enough water. We haven't built a reservoir in this country for 30 years. So we're going to have to get more like the Chinese who will do Beijing to Shanghai fast rail in three years. We've got to be able to crack that building infrastructure bit of the puzzle. And the final thing I've mentioned is energy costs. So we are paying seven times what they do in China, four times Canada or the US, and 50 % more than France and Germany. You can't have an efficient and competitive economy with that lying at its heart, particularly getting back to AI, where data centers are consuming vast amounts of electricity.

16:12About 20 percent of the Republic of Ireland's output of energy of electricity goes solely into powering data centers. 20 percent is extraordinary. So we've got. So anyway, I paint a big picture of a lot of big things. And if we're to really shift the dial on our economy, there's no quick fix. You've got to try and address all of those things and more. And then the final thing I'll come back to, actually, is kind of where we started, which is entrepreneurship. We have got to reignite that flame of entrepreneurship, of young people in particular, feeling that it's good, the environment's right to go out, set up businesses, and the tax regime is there and the regulation is right.

16:53All the things that I encountered in the 80s when I was building my businesses, when Nigel Orson was cutting taxes and red tape and the environment, the zeitgeist was there for that kind of experience. And that's what we've got to get back to, a form of popular capitalism. And how do you get that? Because that is, as you say, it's kind of a cultural thing. It's difficult for governments to sort of create that zeitgeisty thing. Definitely part of it. I don't disagree with that. But like, what is it that kind of can allow that to kind of take hold more? So I think some of it is tax, actually. I think if you create an environment in which the government is absolutely throwing the door open to people that want to create, create jobs, build businesses, wealth, and add to the economy in that way, then I think you can reset relatively quickly if you're big and you're bold about it.

17:46We've seen the reverse happening with this government. So by loading up taxes, what's happened is we've lost about between 10 ,000 and 15 ,000 millionaires up to billionaires, right? Now, socialists might say, oh, good riddance to them who needs them. Well, it actually takes a third of a million people at average earnings to pay the tax to cover that 10 ,000 that have just walked out the door. So we need to reset as quickly as we can on the tax front and the regulation front such that that door is wide open and people are trying to do their very best to get into our economy to contribute to it.

18:22Okay, let's talk about one sort of specific thing on that. And that's the 100k kind of tax trap, right, which ended up coming in at the end of a kind of conservative government and so on. You mean the withdrawal of the personal allowance? Yeah, exactly. And also the childcare, right? It comes up in a nice sort of friendship group loads at the moment. And I think it's a real, you've got a lot of people that are deliberately sort of capping their earnings at that. And I do think it's a real problem in that. And you're seeing the Times writing about it more. They're calling them the Henrys, right?

18:56The high earners, not rich yet. yeah the henry's right but i think there's there's something in it and i often think you know we have 14 years of conservative government and it's a real kind of challenge i mean do you think that 100 grand is a high salary i i think it well it clearly is compared to average earnings which is mid-30s but do i think that we should have uh kind of complications within the tax regimes that disincentivise people from working? Absolutely not. So to take the two examples that you've given, the marginal tax rate you get beyond 100 until you reach about 125 when the personal allowance is fully tapered away is too high.

19:40And of course, unless you can get well beyond 125, you probably are going to hesitate to continue to increase your work. The child benefit, if you have three children, as you know, I think it's tapered away between 60 and 80. If you've got three children, and you're taping your rate between 60 and 80, across that range of income, you're paying over 70 % as the marginal rate, which is just not viable. The problem, Jimmy, with my treasury hat on, is, of course, de-wrinkling those things comes with a price. They are significant revenue raisers. But that is why you've got to tackle things like the size of the state and regulation and all skills and get the welfare bill down, billions of pounds out of welfare, which you can then use to fund exactly that kind of thing.

20:27The other thing I would say is you do want to look for these so-called Laffer taxes where you can reduce the rate and yet still increase the yield. And I think there are some prospects there. The higher rate of capital gains tax I'd probably put in that category. Stamp duty on property is an awful tax. Transaction-based tax slows down turnover of properties which means that people are not moving as readily to where the work is. means that the number of every time somebody moves, of course, they're bringing in the plumbers and the decorators and that drives economic activity. People, when children leave home are not downsizing, which is a problem in the housing market too.

21:05And there is evidence that it's set at a level, certainly for more valuable properties, where you would get more if you drop the rate. So I think we should certainly ruthlessly look for those. Okay, so this isn't your usual ad read. we've just partnered with hunch an ai job finding platform that i believe in so much i've actually invested in it if you've ever listened to jimmy's jobs and thought i'd love to work with those guests now you can whether it's the uk government google amazon or the bbc hunch makes it easy to discover and apply for roles at companies like those and here's the kicker we'll be hiring through hunch soon too.

21:43So if you download it, you might even end up working with us. Honestly, for our listeners, this feels like the perfect fit. Just visit askhunch.com to learn more. Back to the episode. It does strike me that stamp duty is one of these taxes that has been designed over the years. To be fair to him, George Osborne leveled out some of the cliff edge stuff early on in the government, which was one of the worst aspects of it. But what is your kind of thinking around that? Because it does stop quite a flexible labor market as well right it stops people from moving on a regular basis yeah absolutely so how would you i mean look i know you're not going to sort of come out and like announce policy here but what what how are you thinking about that because it's also a massive revenue raiser for the treasury so i i think i've sort of set out including the very important point you've just made about labor market mobility being stunted by this tax the reasons why you would want to change it.

22:38I would, and we are going to be looking at taxes generally in great detail, but I would certainly be looking for reductions that actually wouldn't affect the yield very much. You'd increase transactions, you might even get more money as a consequence of that. And I'd be looking at the second round effects, which I touched on. So somebody moves home, they, of course, then, you know, do redesign it and they go and buy new furniture and they do, There's a lot of economic activity that goes around moving home. And that needs to be factored in too. But it is one of, I mean, the IFS always says this, and they're absolutely right.

23:11It's probably the most unattractive of many of the taxes we have. Yeah, yeah, yeah, no, I agree with that. How, in this sort of rewiring of the economy, one of the things that strikes me as a real problem at the moment is the amount of non-working people there are, right? Like it's now in Birmingham, there's one in four people of working age that are not working, right? And this is not some kind of, you know, former industrial town. This is our second city, right? Like it should be an economic booming place. How do we change it? You know, you were in charge of work and pensions for the last couple of years, the Tory government.

23:50Like what's happening out there? So there's unemployment, which is people that are out of work and looking for work. And that is relatively low. We're down at 4.5 % or thereabouts. And then there's economic inactivity. Economic inactivity is people that are out of work and are not looking to work. And then if you break that down, I think you can generally focus on four cohorts. One is students. There's over 2 million of them. And I think most people wouldn't be expecting students to go out and get full-time jobs. They're there to study and so on. Then you've got those who have retired early, might be in their 50s, have done quite well.

24:26it's a lifestyle decision now it may or may not be the right decision in every case because some may be under um you know under you know they're not taking into account the fact they may live a bit longer than they're expecting not have enough money and all the rest of it another 30 years probably yeah absolutely yeah yeah absolutely so that that that's a group then you've got those have uh caring responsibilities particularly with children so that's where we rolled out when we office quite a lot of child care big child care offer and then you've got the really tough bit which is the long-term sick and disability cohort you've got three million people on those long-term benefits we know that about 20 % of them through surveys say that with sufficient support they would like to work a lot of them are frightened of working because they think if they try it it doesn't work out they won't really get back onto the benefits etc and you've got a flow going into that into those benefits of people being assessed and going on the benefit so what I did when I was Secretary of State was I look particularly at this at the flow and I looked at something called the work capability assessment which is a criteria by which you get on to those benefits and made changes in a very principled I think thoughtful way and the OBR said that would say five billion pounds across the scorecard and would see around 450 ,000 and fewer people going on to those benefits.

25:49So the answer to your question is, in part, you do have to look at the flow onto those benefits, what the gateway is going into that benefit, into those benefits, what support you give the people who could work with a bit of help. But the real tough nut to crack, I think, are those that are currently on those long-term sickness benefits is how you support them and get them into work. and that's something that we will be doing more work on over the coming months. Okay. How are you finding being in opposition as a job itself? Because you spent 14 years as an MP, as part of government too. How have you found the sort of skill transition?

26:30Because I imagine it's quite well suited to you as an entrepreneur of you've got to go out and make things happen in opposition. How have you found the sort of almost first year of it? Well, so the first big difference is, and it's an obvious thing to say, is you go from having the huge apparatus of government around you, the civil servants, DWP, there were 90 ,000 people working at DWP. So that's a big change. Somebody said to me once, you realise when you're no longer a minister is when you get into the back of the car and it doesn't go anywhere. So the support suddenly disappears. So that's the first thing.

27:07The second thing is the experience of the Chamber of the House of Commons itself. standing up as secretary of state at the dispatch box with 300 plus conservatives roaring behind you roaring on is a very different experience to being a shadow shadow chancellor and having a much smaller group and facing 300 plus roaring at you from the other side so it's sort of the the the texture of it all is is very different but you're right about the entrepreneurial bit it's like guerrilla warfare to a degree you've got to do the slow burn stuff which is about thinking about the future and coming up with the ideas and so but there is some there's a lot of cut and thrust and living by your wits I would say in terms of holding the government to account when you're a very small team without a lot of support yeah um and how have you been using AI then in the last year I mean you mentioned the friends business plan that you wrote yeah and so on but how have you been using that in opposition I just ask questions of it really so I might be reading some economic piece and I come across a term where I think yeah I think I know what that means but let me just check it out and I plug it in and sure enough it comes back.

28:12Sometimes it will you know you ask it I don't know what I might say you know what's happened to what's been the path of the deficit since you know in 1963 to the current day you know and off it scurries and he gets it to me now that's something I would otherwise have gone to a researcher to ask which would have taken and hours of mucking about to get some information. So that kind of thing, just general inquiries, I would say most of them economic. And one of my favourite questions to ask people is what sources of information that they are reading and consuming to kind of impart their world view and so on.

28:47But also I think it's great for younger people to be able to listen to what Mel Stride is reading, hearing and so on. Now, one of the things I've learned about asking government ministers is that's a really bad question because basically all it is is red box papers that they're reading that the civil service have kind of read. But what have you found in the last year that you've sort of been using to sort of influence your thinking and go through this kind of process of, okay, what is the slow burn stuff that we can do? So sometimes stuff that people recommend. So they might say there'd be a really good paper.