UK Budget Reaction 🇬🇧 (Livestream)

30:43So before we get the next guest on, do you want to tell us a little bit about what you've been doing with Scaling Europe over the last three to four months? because I find it really impressive the way that you're going about it and the way that you are becoming a champion for UK tech. Absolutely, yeah. I mean, the vision for Scaling Europe is to build the biggest tech media company across the continent. It came, I guess, over summer we saw some really bad news for tech media more broadly, a bunch of redundancies, a bunch of publications closing down. It was a real terrible time for journalists.

31:13But at the same time, we've had this breakout of amazing tech companies from the continent and nowhere more so than the uk companies like synthesa atio fixer uh fuse energy you know like amazing companies raising huge valuations scaling to millions and hundreds of millions of revenues so tech in general in europe and the uk is like this amazing high point but the media and the coverage is kind of at an all-time low and so i built scaling europe to kind of fill that gap and it's a new media approach first so newsletters podcasts live shows all underpinned by social. So LinkedIn, X, TikTok, Instagram.

31:50And the plan of the strategy is to just meet people wherever they are and to try and lift up the tech ecosystem. You know, one thing that I'm really passionate about is using tech as a driver of broader GDP growth and to lift everybody up. You know, the stat that I always refer to is the US economy has grown by 50 % over the last 15 years. I mean, it's like an astronomical rise in wealth, like 50 % of the 15 years, the UK is just under 15 % in that same timeframe. And when you look at the S &P 500 and you look at the tech stocks, the tech companies that are driving that growth, they're exclusively tech companies.

32:22If you strip out the tech companies, their growth is the same as that we've had in the UK and Western Europe. And so if we want a functioning economy, if we want an economy that really works and lifts everybody up, we have to build the next generation of tech companies here in the UK and here in Europe. You know, we've never built a trillion dollar company. You know, America's got one of their companies, NVIDIA, is worth more than, you know, every single listed company across Europe. And so we have to fill that gap. We have to be able to build tech giants here in Europe. And Scaling Europe is about bringing the ecosystem together and lifting up entrepreneurs and trying to inspire people to build their own.

32:58You know, we want to inspire the next generation of teenagers now, but who want to become the next Sam Altmans or Mark Zuckerbergs or whoever, and build the technologies and the companies that will kind of change the kind of the progression of our own societies. Totally. I'm smiling because I remember when we had Peter Kyle on the podcast earlier this year, who was the technology secretary at the time, now been moved to the business secretary. That's how politics works sometimes. But he was saying he wanted to see the first trillion dollar company as well from the UK. And I was like, yeah, at the moment, we don't even have 100 billion ones.

33:33So let's get that sort of like sort of first. Although Revolut this week valued at 75 billion, right? Which is like pretty good going on that. You know, this is, you do get, it does build momentum with these things, right? You know, we're on the sort of second or third kind of iteration of the technology ecosystem here in the UK. And I'd be interested though, out of those companies that you mentioned earlier, likes of 11 Labs, Synthesia, had rapid growth over the last few years and not just pandemic fueled evil, which I think is interesting that, right? You're almost on the, the slope of enlightenment of the kind of like pandemic and how it's impacting what what are they saying to you about you know going to the us and so on when you're doing these interviews like do they do they want to stay here there's like a real sense of it's almost like nationalism european specifically but it's like you know uh tom waymimer released the state of european tech report last week 11 years tracking the you know the wide european tech ecosystem 51 percent of founders surveyed and like all of the big founders across Europe get surveyed said that they would rather build in Europe than go to the US even if it was better for their business right and only like 15 % said that they would build wherever it was the easiest and we're seeing this from people that you know like the founders of Synthesia and Lovable and you know Atio and all these other ones are saying we're building in London to show that it can be done right and there's this real sense of pride where people people will sell to the US and more than happy to get customers there but headquartered in London, headquartered in Stockholm, Paris, Munich, because they really feel like it's important for the continent to show that it can be done and inspire people, which I think is really interesting.

35:11That did not exist two years ago. We didn't have that sort of pan-European nationalism sort of thing where people feel really strongly about, like, actually, I don't want to go to America. Like, I'm not interested in it. I want to stay in Europe and show that it can be done from here. Yeah, and I think it's interesting because there's, you know, you're getting into a very kind of like, geopolitical point with this but in terms of there's definitely sort of a moment around 2016 when actually the sort of end of kind of like globalization had you know i think we'll look back at that as a moment in terms of you know brexit and trump as well when you know actually a lot of people's populations were like we're not necessarily happy with this direction of travel we don't feel that we're kind of benefiting from it um and it is interesting to see that probably most of those companies have been founded post that era actually and i think there is a bit more sort of you know it's a bit of the old jfk line right about don't ask what your country can do for you but ask what you can do for your country or your continent maybe in this uh sense as well so i think it is really interesting in that what other sort of like common threads are you um picking up we should be being joined by alex in a moment by the way so i may may drop this off but What are the other common threads that you're kind of picking up on?

36:28Yeah, I think there's a lot of geopolitical, the implications are massive from the geopolitical kind of fallout of Europe and the US. A lot of emphasis on sovereignty, resilience. We're seeing defense tech. We're seeing the US increasingly weaponize their tech. So there was the thing with Elon Musk threatening to turn off Starlink in Ukraine. And so things like this have made European governments feel skeptical about trusting the US as a partner. and so and i think this is really interesting and relevant for uh the budget today in terms of the procurement piece that they're doing they no longer want to procure from u.s companies

37:07hello excellent

37:12you are here sorry i should i go on mute not quite done no no it's fine because we know we haven't got along with you as well um so because it's a very busy day so we're sort of happy to um check out the background the flag i like it i like dom as well we didn't get a chance to pick on this but dom had a unicorn uh in his in his back very impressive make me think of ours oh alex how's it all going so many questions um i want to start with obviously there's been lots of coverage of emi and so on what are some things that might not have been kind of picked up yet for entrepreneurs that are in the budget red book oh all right let me connect the dots for you because i think that um obviously the ones that'll be picked up are emi and um and uh what's the other one eis honestly so many acronyms so many limits i'm so confused um they're the ones that are going to get picked up because entrepreneurs can directly see how that's going to impact them in the day-to-day the things that won't i think get picked up um because they're smaller are um And I think the stuff that worked with the BBB, I mean, it's got a massively enhanced mandate that's been reformed.

38:26You know, we've essentially created a sovereign wealth fund and they're going to start cornerstoning. But they've also committed five billion into growth funds. But the thing that I'm particularly proud of that I was pretty adamant is, you know, I wanted to double the number of series B or growth funds that we have so that founders have got more choice and more availability of capital when they're raising those scale up funding rounds. so the fact that they've committed to creating 10 new funds growth funds they're not existing ones giving them money but new ones and i think the other thing as well is um for me the answer to all of this is unlocking pension capital but in order to unlock that pension capital you know i'd love it quicker than mansion house we have to create pathways to pathways to market and so because they're not used to dealing with this asset class like they don't really invest in vcs this is not canada having venture link where the bbb are showing these guys where they're investing their money and what they're looking at is is i think a really good signaling um platform that pension funds are not going to really have anywhere to hide so basically my mandate was to get more money into scale-ups and i think that i've started to tick that box oh i would just say i would just say that's a it's an amazing thing that's come through in the budget today like an amazing mission because you know what we don't talk about is that when companies reach that scale up or growth stage and they raise money it's often from us firms and so like revolut is a perfect example and this is something that really bugs me is that revolut is an amazing company 75 billion dollars valuation but all of the late stage capital came from us so like they get to get all the upside from there even the early stage investors who are uk european based have raised money from foreign lps so a lot of the lps then get the upside and now the fund the founder has moved to dubai you're looking at you know the upside that the founder has is going to be taken out this country most of the upside from the vcs who invested that goes to foreign lps and the growth stage goes to foreign vcs so so much of the upside of a company that has been born yeah kind of grown and scaled in london gets taken elsewhere so having the double number of growth funds i think is absolutely amazing it's something that when i speak to founders every day they say you have to go to the us to raise their growth round because there's so much more capital they can deploy so much more quickly.

40:37And you know what Seb, I think you raise a really interesting point because one of the things that I didn't really understand before I started doing this job is that we don't have a capital problem in the country. Like we've loads of money, it's just in the wrong place. And that started in the 1990s when we got rid of defined pension schemes. The amount of pension held money in UK equities and risk capital has gone from 60 % down to 6%. So the lack of investment that we attribute to the lack of productivity. The reason that we've been in this like slow decline started in the mid 90s and has continued.

41:11And unless we arrest it by opening up those pension funds and getting pensioners money to work harder and get better returns, like top decile, like top quadrant VCs in the UK are getting 23, 25%, which is exactly the same as the US. So we have all of the ingredients here. We just haven't put the pieces together. And that's what we've started to do with this budget and will continue to do. Because the other thing, Jimmy, that I really need to get in is there is a call for evidence in this budget. And what we want to look at is, are we doing enough for entrepreneurs to reward the risk that they take?

41:48And are the things that we're doing, the incentive structure that we put in place, are they delivering value for money? Do they need to be changed? Do different pools of capital behave in different ways and need different incentives? and we go further. Rachel's very committed to this sector of the economy because we see this as a huge growth lever. And so anyone listening to this, I really encourage you to check out the full prospectus, but equally, more importantly, check out the call for evidence because I do not want a series of the same old lobbyists coming through and telling us what we've always heard for the past 20 years.

42:19I want founders, this is your chance. This is your platform. What more can UK government do to support you? Please fill in the call for evidence. Done. And what's it going to expand on it a bit more for us? Because I agree with you, it's a massive moment. Founders have got till the end of February to get themselves organised to get things submitted. What are the type of questions that are going to be asked? What are you looking for from this review? I'm really excited by it. Like, I think it's a big moment for the kind of sector. Also, a point that Dom Hallis made just on before you. first time we think the chancellor has used the term founder rather than sort of SMEs or entrepreneurs which I think is a really kind of like important distinct and I could I could tell some fingerprints uh there where that may have come from but um so just what do you want from that kind of like call for evidence so I want people to be honest about what the things that work and the things that could work better when it comes to raising money fees that might be charged terms that might be issued.

43:22So you'll see if you look at the call for evidence where we are asking very specific questions around EIS, around VCTs, around different incentives and taxes that are already in existence. Are they value for money? Are they working hard enough? What more could we do? But the key at the heart of all of this for me is I didn't, I didn't, I did this because I wanted to write a love letter to entrepreneurs because I think over the last 10 or 15 years, you know, I'm showing my age now, but from like the 2010s when this thing really kicked off you know 15 years ago we were very very much loved like Rohan Silva loved us you had us in number 10 all the time and the whole point for me on this was to write that love letter to say you are still loved and we want to make it better but that love letter needed to be underpinned with action and we need to now build on that momentum and not lose it and so that's what we want to hear from the call for evidence and the and the other things that are going to run alongside that two things if i decide to stay i know and ultimately the people that decide whether i'm staying or not is this community it's not rachel it's not the civil servants because they want me to but i want to stay if people think that this is a good package and we need to build on it so you need to let me know but if i say the two things that we want to look at is procurement because we have a huge huge sack of money in in government that procures technologies all the time And I want to see more of that money going to innovative UK technologies.

44:46And so what can we do there to use government power to really fuel revenues? Because you ask a founder, they're going to tell you they want contracts and revenues over equity capital any day of the week. And the second piece is government is pretty shit at having a front door into it. So the amount of founders I've spoken to, I've been like, well, I've already spoken to DC. And then I've spoken to Office of Investment. And then I've spoken to number 10. And it's like, whoa, whoa, whoa, let's stop, guys. You go to Singapore and these guys are on it. Every time I speak to a founder, the NASDAQ's been on the phone because it's their bloody birthday.

45:18I'm like, we can do better. So that's what we plan to do in the next phase of the review. And the Americans are absolutely amazing at procuring. The U.S. government procures billions and billions and billions a year from U.S. startups. And it's like one of the biggest partners of the tech ecosystem in the U.S. is the U.S. government. And we just don't have that here. I mean, you know, even something that's like, it was good news, but also kind of frustrating was, you know, the UK government announced a partnership with OpenAI. And it's great to see those kind of tools get into UK government and use these innovative things.

45:51But, you know, for me, you know, it's like we have Mistral just like an hour in Paris, you know, and with all this talk of sovereignty and resilience, it kind of felt like that was a great opportunity to kind of buy European. And I want to see the UK government take that approach of backing and promoting UK and European tech companies. And Seb, I totally agree. And I think hopefully what you'll notice, not just the language about not talking about SMEs, because Jimmy, I totally agree with you. It drives me nuts. But I've just had to tell a journalist off today for referring to us as small companies.

46:23I was like, small? Honestly, piss off. so I think one of the things I think is really vital oh Gareth Davis is here are you sure yeah yeah stay two minutes yeah I've totally lost my point now because I was going to be an FT journalist but um it was something to do with um ah it's gone I'm getting old all right well look you've you've slightly preempted my final question anyway with will you be staying on to see the uh entrepreneurship review through till the end of February uh well It'd be longer than that. It'd probably be until the end of May, like round mansion house time. I don't know. I'm going to take a couple of days off, see what falls out, and then I'll make a decision as to whether I stay or go.

47:10But I'm going to hire Jimmy. I can imagine. Well, I hope you do get a bit of a break when you finish your media round. And thank you for doing it. It is great to hear from somebody who has been working and writing it over the last few weeks. So thank you, Alex. We will let you go. literally parents for parents on jimmy's jobs in the future see you later fantastic thanks alex and welcome to gareth davis as well who is the shadow treasury uh minister live from college green uh an incredibly busy day uh for you um and of course you got a bit of a heads up on what was happening? How did that sort of change your day, Gareth?

47:54It was incredible. I mean, I've never known anything like it. The chamber was kind of an unusual place at that time because every MP was essentially on their phone reading the budget and Rachel was sat there having not yet stood up. And so it was quite interesting for that to happen. And by the way, this is on the back of quite a lot being trailed before that. In fact, the deputy speaker of the House of Commons had to rebuke the Chancellor kind of awkwardly before the Chancellor spoke up, saying that it was unacceptable how many things had been briefed to the press beforehand. And so we had a pretty good idea what was coming anyway.

48:31And then we had it all confirmed by the official document being accidentally or on purpose, who knows, released to the world. And what's your sort of general reaction to it all, right? Like it's often hard for oppositions because normally they only get the papers when Rachel Reeves sits down at kind of half past one. But like we say, you've almost got an hour's extra time, but still not that much in the grand scheme of things. What have you noticed so far in there? So the headline, as far as I can see it, is essentially that tax is going up by about£26 billion extra. Welfare will be going up by about£9.5 billion.

49:12Obviously, a big part of that is the scrapping of the two-child benefit cap. And then, you know, more broadly, we've had a number of indicators and forecasts from the OBR, which essentially show that inflation is going to be higher for longer and that growth, while it's up slightly on their March 2025 forecast, is actually down from the 2024, 2023, 2022 forecast. So, growth is, unfortunately slightly slower than previously expected. So that's what we kind of know right now. We're saying as the official opposition, this is essentially a tax raising budget to pay for more spending on welfare. And I think that's a fair summary.

49:54Yeah. And of course, it's, you know, with the 40 billion raised at the last budget as well, right? It's a government 18 months in that said that overall, it was not going to raise taxes. And yeah, it's done it by 66 billion in in the first two. What do you also think about a lot of the tax rises are sort of being earmarked coming in 2028, which seems slightly surprising, because that will be the year of a general election or the following year? Yeah, it's I mean, on the threshold freezing, just in total disclaimer, we introduced that as a Conservative Party in government. We did that just to be very clear, before you ask me.

50:33We did that in 2021 and 2022 because of the fact that we raised, you know, borrowing so much to pay for the COVID support furlough, you'll remember that, and then the energy support we provided on the back of the war in Ukraine. So that needed paying down and we made the difficult decision to freeze the thresholds to 2028. But what's, I think, annoyed a lot of people today is that into the general election, ahead of the general election, Labour were saying that it was an unacceptable thing to do and that they were going to unfreeze the thresholds. And yet today we hear that they're not just going to keep that, they're going to extend it even further.

51:14And so that's why it goes well into sort of 2029 as well. And so it's a, it wasn't, I don't think it was officially in the manifesto, but it was a very clear promise to the electorate. And it's yet another example of more tax that people just did not expect. yeah yeah yeah no it's um it's a fair point uh seb do you want to come on on some of the tech and entrepreneurship side i mean gareth might not have seen all of that and been able to go through all of it because he's been doing media etc but i can say that having known him for a couple years he's quite attuned into the technology ecosystem and kind of understands it we've been talking with the previous guest that actually this is quite a pro entrepreneur budget You know, there are a number of policies here, whether it's EIS, EMI, British Bank, more growth funds.

52:02There's a lot here that kind of signals a lot of support for UK founders and entrepreneurs. Is that your take? You know, how did you feel that this budget treats young entrepreneurs, business people who are trying to build the next generational companies? I mean, look, the first thing to say, I'm a terrible politician because I will say when I think they've done a good thing. Right. I'm not going to just completely attack the budget. And you would hope that within such a big budget, there were things that I, you know, find that are acceptable or even a very good thing. And clearly, you know, I haven't seen the detail because, forgive me, I just literally ran out of the chamber.

52:36But if they've extended and offered support to entrepreneurs, particularly in the tech sector through VCT or EIS, that's something we did in government. I did it as a minister in terms of extending it and promoting it. that's a good thing and we do want people to set up a business in this country wanting to scale their business which doesn't always happen they often leave to go to the united states and so if there's mechanisms and tax reliefs and tax incentives specifically target towards towards you know entrepreneurs in the particularly in the tech space that's a good thing but they have i know also increased for example taxes on dividends and uh you know working people more generally and And the overall mood music, I would argue, is not conducive to aspiration.

53:22You know, just some of the language around wealth creation and, you know, the wealthy and success. I just fundamentally disagree with that when it comes to the Labour Party's narrative. And so, you know, on the one hand, some of the policies may be very good. Overall, though, I think the mood music is not conducive to a lot of investment in this country. what are you picking up more broadly on the on the mood music about britain and our kind of place in the world right like you are very well plugged in like i know you were seeing jamie diamond just a few months ago uh the ceo of jp morgan um at the house of commons like what are you picking up on the mood music about britain's place in the world at the moment look the first thing to say is that the UK fundamentals as a place to do business, as a place to, you know, set up a business are strong, are good.

54:13And we do see international businesses continue to have a presence here, sometimes expanding their presence. And JP Morgan, if you know, you mentioned Jamie Dimon, is a classic example, they've invested significant sums in this country, as have Goldman Sachs and Blackstone and other major investors. And that's a real positive. But we also have a situation where policies and choices being made in the Treasury, such as the non-DOM, the CGT changes, the overall, as I say, the anti-aspirational narrative of this government, I'm afraid isn't good for the investability of the country. But the worst thing about this government at the moment is the uncertainty that they have created around policy development, saying one thing before an election and then doing another thing, that creates a lot of uncertainty in markets and investors who don't know what's around the corner, don't know what might be coming next, and they can't rely on what's previously being said.

55:12And so I would argue the Treasury, Rachel Reeves, they need to get a grip of this. They need to appreciate that it's not just about policy development. It's about the certainty and clarity when it comes to what the future may look like. And at the moment, that's very unclear. We see a lot of entrepreneurs. We see a lot of very successful business people leaving to go to Milan and Dubai and other countries. That's not going to be good for tax revenues. It's not going to be good for employment. It's not good for the UK economy as a whole. Yeah, it's a super interesting point. I spoke to a lot of entrepreneurs who genuinely left after the exit tax rumours had come out.

55:50And they didn't need for it to be confirmed because when the rumours had come out, they'd already started packing their bags. And it didn't matter that it didn't go through in the end. What mattered was that people thought it was or that it was potentially on the table. And so they'd already left. And we're going to feel that impact. The trouble is, once they leave, it's very difficult to get them back. Brands actually experienced a similar thing, right? I think it was Francois Hollande, increased income tax, massive levels. They all came to London. All these successful financiers and entrepreneurs and tech leaders, a lot of them came to London and they're still here.

56:22The danger is that they now go back to Brands or they go somewhere else. And the Italians and, as I say, Dubai, even Americans, you know, Americans who have been here for many years, they tell me that, you know, they're seriously considering going back to America because of the uncertainty of policy direction, the narrative against success and wealth creation and the just day to day reality of rising crime in London, more taxation. And, you know, it's just harder and harder to do business because of more regulation like the employment rights bill. yeah exactly um well thanks to be too gloomy yeah no no no but part of the reason i wanted you on gaff was that i know you are a lot more balanced and we didn't wouldn't just get a load of lines read from cchq about it all so it's it's been good and we'd love to get you back on in the new year properly and have a much deeper chat about everything um but we'll let you go because i know you've got lots more broadcast uh rounds to do but thank you for joining us live from college green i feel like we've been really in the action now so yeah yeah you're really in the action good to see you jimmy thank you bye bye thanks thanks all right um well that was very professional that was like a proper tv uh interview there yeah what a backdrop yeah yeah exactly exactly uh i hope you've got some uh screen grabs of that so um so tell us more about we were we sort of we had uh double guests back to back there we're going to say as well if you are enjoying it and you take a screen grab or a picture of you and post it to linkedin and say how much you enjoyed it then we will pick a winner at random that Seb and I will take for lunch um where we'll talk to you about the future of technology media I mean you'll be lucky if you get a word in edgeways with two podcasters taking you for uh lunch but um yeah we are trialing this so we would love your feedback and thoughts on it because it might be something that we do more regularly now that we've got all the guests in and out I feel like we can sort of uh you know we we can be more confident with it but Seb you were telling us about your um what you're picking up from all the startups and scale-ups that you're kind of speaking to about what they're thinking what are the other sort of threads that are there I think you know talking about it with Gareth the exit tax was obviously a big one and there's definitely a theme of uh frustration at the uncertainty so irrespective of whether the policies end up being good whether it's a pro-growth chancellor and government.

58:49It's the sort of the back and forth and not knowing what's going to happen and whether or not you can trust the rumors and the leaks. I think that's really frustrating for a lot of founders and entrepreneurs who need certainty to run their business. And especially things like the exit tax. There are so, so many people who were talking on Twitter, interviews what I was doing. People were genuinely saying, I'll leave the country. I will pack up my bags and I will leave because it makes such a material difference. And I'll go to Milan, I'll go to Dubai, I'll go anywhere. And so just having that as a founder, having that stress as a founder to have to think about, okay, maybe I'm going to pack up and leave in the next three weeks on top of trying to build a meaningful business.

59:29It's just, it's such a bad environment to try and build from. So I think that it was a really good point around that uncertainty. And that is such a drain of attention of founders who need to be focused on building the best products that they can. So the clarity will be good now. but I think generally this government hasn't been particularly strong at communicating in a coherent and doing it in a one-off way right there's been a lot of rumors a lot of leaks a bit of like almost feels like a bit of scaremongering about what's going to happen um but these things have real consequences and you know we've seen entrepreneurs leave we've seen people be very frustrated about it I think it's a very good point that you make in terms of like days like today go well right and there's a lot of effort there's a lot of thought that are put in for months and months by people like Alex in terms of making it work getting the rhetoric sorted and so on but it is it's like the other sort of 99 days since you know the beginning of September that have been a real problem in terms of that mood music and I do I slightly feel for government in the sense of I think that government communications is harder than it has ever ever been i mean tony blair was talking about this towards the end of his premiership premiership in 2004 2005 saying just how difficult feeding the 24-hour news beast was i mean i don't know what stage of the kind of 24-hour cycle that we're on to now but like it is difficult because there are just so many journalists out there that are looking for so many angles um for different stories it's really challenging and so you get one advisor potentially brief about the exit tax and that becomes a sort of really big story like understandably in our world that doesn't even necessarily end up being flagged um by you know sort of in in the kind of main lobby uh side of journalism it just gets picked up on the business pages and it sort of leads to all these negative uh outcomes so i think it's a challenge on that of how they get the kind of like the drumbeat i suppose is what we're talking about here on a on a more kind of consistent basis but yeah and yeah and it's i think it must be really hard because you don't know how much how how much is being leaked intentionally versus how much is being leaked for sort of political motivations maybe people didn't want the exit tax and they were trying to create a lot of noise around it and and leak it so that people did rally against it so i think it must be really hard to navigate it but it gives this sense and this is why the the obr leak release is so unfortunate because it just gives the indication in the sense of a government who's not in control of their own narrative and i think that's really tough um and like yet overall it was actually like a very pro entrepreneur budget you know lots of things were in that was good the things that were bad weren't in um but it feels like because of the obr because the wealth tax and it feels like it's going to be hard to celebrate the good that has come out of it and that that's not really going to be the focus especially compared to the 26 billion in tax rises that it's coming alongside um but yeah i think this government definitely needs to get better at its cons and i know that's probably an easy thing to say but i don't think that we've had these problems with previous conservative or labor governments um in the sense that we have had it this the last two budgets and it almost feels like people are saying that maybe it's intentional they leak really bad things that nobody wants and then actually when the budget comes out it's not as bad um yes i mean that there is an element of that does take place to an element and i did wonder about that with the exit tax of whether that was almost being sort of like an expectation management tool but i also thought like it's so damaging on that and you've seen like herman herm and they're all come out since then and been like yeah well i'm off and it also gives people it gives people an excuse to kind of do that right yeah we were talking about the patriotic angle earlier and so on people do want to be that but they they also you know have to make sort of responsible financial decisions for themselves and shareholders etc and all these types of things i think that's just some of the stuff that we don't have as much here in britain is the kind of cultural understanding of entrepreneurship and business right like it's just not as much a part of our kind of daily life and our daily conversation etc which is why i love what you're doing so much with with scaling europe and it's what we're trying to do here with jimmy's jobs of the future as well it's just sort of bring these stories a bit more to life because i also think that people you know they one of the things that i think is we're just a bit more british about these things right is people don't want to go and sort of show off as much about like how they've grown a company and so on they just want to to do it more and obviously in america it's a much more kind of different sort of culture when it comes to that but i think it is important for businesses and founders to kind of get out there and explain all the different taxes that they have to pay and so on like you know i think you saw that with the sort of the nicks increase and so on like a lot of people didn't sort of necessarily know that this you know it was a tax that business even paid right because if you haven't run a business well you're not involved in the finance side you might not have seen it Yeah.

1:04:41And, you know, talking about the billionaires kind of like leaving the country and, you know, I feel like the UK has so few homegrown self-made billionaires. And so we're looking at a lot of billionaires that are leaving, you know, the Founder Revolution has now left Dubai. you mentioned another one you know we're seeing lots of billionaires leave the country and for a long time London had the pull and the allure to kind of bring exceptional talent and to bring these these kind of like incredibly wealthy people to London and we sort of lost that appeal and so if we can no longer attract billionaires to move here and live here permanently I think we need to do a better job at inspiring the next generation of young British people to build the future billion companies which is what we're definitely not good in that we're We're too humble.

1:05:27We're too awkward. And the Americans are so good at it. They're such amazing storytellers. And they're so proud of their own achievements. And they're so willing to get behind each other and support each other. We do have this culture in the UK of not celebrating our achievements, of entrepreneurs getting too big. And we feel like we need to pull them down a peg or two. And I think it's a real shame. We don't sell a good story of why the young people of today should be entrepreneurs. you know we tell our young people they should go to university become an accountant or lawyer or doctor we don't show them the part of entrepreneurship which i think america does so well it's like its whole american dream is anybody can be anything uh i feel like we're we're not as kind of inspirational as the americans are yeah i think that's true that we uh we don't have that now i have some breaking news just because i've always wanted to say that sort of live on it uh is that we may be joined by mel stride the shadow chancellor in a minute uh so that is uh we're just waiting for that and it's been uh it's been fantastic so we've had lots of engagement and we've had sort of a couple of thousand people i think tuning in across various uh parts uh quote here from tom wilson correct about the uncertainty and leaks the speculation causes more harm and doesn't strike me as worth the risk for expectation management um Well, I agree, Tom, with that entirely, but that is not necessarily what press teams in Whitehall are motivated by.

1:07:02And it is interesting understanding the incentives. And I do think that, to be fair, there is a challenge that people need to understand, the entrepreneurs as well and the business leaders need to understand that government does have lots of different incentives and it's not run like a business. Like sometimes I think that is too common of a kind of thing. I can guarantee there'll be people on Twitter saying it today. But actually they are, they do have different stakeholders. It's a lot more kind of like multifaceted and complicated on that side of things. But yeah, I mean, I'm totally in agreement with you, Tom.

1:07:40Jimmy, while we're waiting for Mel, I'm sure he'll be here any minute. You worked at number 10. What does today look like? What's going on right now on the ground? Well, it's funny because the morning is always quite calm and sort of eerie, really, because, you know, there's going to be this sort of awesome kind of like thunderclap that happens. But everything is kind of quite tightly controlled from market sensitive information. You know, not many people know and it will be kind of all in the treasury at that side of things. so I'm going to kind of come away with some of the I'm going to reveal behind the curtain and some of the things of spads aren't always that kind of powerful in that sense and then I would be watching the budget, you might have tried to help with some of the jokes and fed into that in terms of trying to think of something particularly topical, didn't really think that Rachel Reeves had anything amazing on the joke side but we'll come back to what the rest of my days look like in number 10 because we are currently just being joined by mel stride who was a guest earlier in the year on jimmy's jobs of the future one of those rare things for a politician has built a business um which was all about getting graduates jobs which feels remarkably similar to jimmy's jobs of the future and what we're all about but um mel welcome back to this collaboration we're doing with scaling europe as well um what are your kind of top lines on the budget what do you make of it well look jimmy great to be back on all our budgets of course of choices and the Chancellor took the wrong choices basically.

1:09:10What she's done is to whack up taxes again,£26 billion, that's on top of a£40 billion back in the last budget. That will be very bad for the economy and you can see that played out in some of the forecasts and the OBR numbers around growth, inflation and so on. And she had an alternative which was to grip spending, particularly welfare spending and we set out at our conference£46 billion worth of savings including 23 billion on welfare and if you do that you can actually start to get taxes down instead of having them go up and that becomes the way to start to unlock growth in the economy so I'm afraid some some really poor choices this time around and a lot of people are going to be really hit very hard by this I think.

1:09:54It does seem markable that a government that largely said that it wasn't going to increase tax and made that a rather central plank has increased it by 66 billion in its first two budgets i mean how do we make the case for for lower taxes and i worry mel that this is like something that's now just become part of the pandemic and so on is the government must always have the answers you know we must rely on government for everything and the state just creeps ever and ever further well the problem is jimmy i think that if you remember that u-turn that there was around the welfare reforms that they came forward with I think from that moment, the game changed for Labour.

1:10:31And I think they realised that they were not going to be able to get serious cuts in spending through their backbenchers. And that has left them where they are now, where the only things they reach for are tax increases. Incidentally, more borrowing, we've got on average£11 billion worth of more borrowing every year across the rest of this Parliament. That's how you get into that position. So what we've done, by contrast, is to do the hard work to really work out where you can make significant savings. All our numbers stack up. They've stood the test of time, renounced them at conference and people have not unpicked them.

1:11:07And that is the way that you both get the debt down, because you have to do some of that, of course, if you're going to be fiscally responsible, but equally get taxes down too. and can I ask on that you know we this is Labour have positioned itself as the the government of growth that was kind of a lot of their mantra before they were elected we've now seen taxes rise we've seen debt rise we've seen the growth forecast be kind of brought down I'm curious to hear you know as someone who's an entrepreneur what's the number one policy that you would like to see enacted that would change the growth trajectory of the UK if you could pick one that will be implemented tomorrow, what would that be?

1:11:45Okay, so I think I'd say two answers to that. One is controlled spending, and then with the capacity that you then have to cut taxes, I would just be looking very much at business. I'd be looking at what did I need to do with business to try and get those animal spirits going, to give them the encouragement they should be employing and investing and growing, and that is basically where I would put my firepower. it is one of these interesting things that we were just talking about of there is quite a lot of good stuff in there for entrepreneurs and technology but the mood music around is just sort of like you know you don't feel inspired to kind of go out and you know as a entrepreneur myself now five years in to sort of go out and make those kind of like risky decisions right because you've got all the challenges around sort of national minimum wage going up employment rights nicks going up um as well as the kind of all the geopolitical situation as well just when business leaders are looking at their 2026 plans you know it's it's just tough for anyone and you've got ai coming in and able to do a lot more as well and you you begin to think oh well you know maybe ai can take some of this growth that we're looking to do yeah i i think uh if you sort of unpack what has happened since the election so the government uh when in opposition said they weren't going to put taxes up left, right and centre.

1:13:05They then came forward with£40 billion of tax increases. £25 billion of that, of course, was national insurance increases, which was part of the story around anemic growth. They also talked down the economy, the£22 billion black hole. It was all doom and gloom and everything, and that extinguished the animal spirits. They also borrowed and spent vast amounts of money, about half a trillion extra in spending compared to our plans when we were in office. Of course, that stoked inflation. And when you've got sticky and high inflation, you've got interest rates higher than they would otherwise be.

1:13:39And that weighs down on consumer sentiment and also on investment and job creation and business investment and so on. So they've just taken a lot of bad choices. The final thing I would say, Jimmy, is, of course, we've just had finally the budget today. What a relief. We actually know what is in it. Because we spent weeks and months speculating, being told what was in it and then what wouldn't be in it and so on and as Andy Haldane the former chief economist at the Bank of England has said you know that is in itself extremely damaging yes if you create an environment in which business just doesn't know what's going to hit them next then they're not going to invest and that's part of the story here it's become known a little bit as the smorgasbord budget right and I think we should reterm it the picky bits budget right let's make it British it's not a smorgasbord it's a dog's breakfast, Jimmy.

1:14:29That's what it is. But is there anything that you've seen? Because obviously your team will be working hard now. You obviously got a bit more notice than you thought you were going to, but not that much. Is there anything in there at the moment that you've spotted that may become a bigger story over the next few days? I think back to George Osborne when he's sort of bringing in VAT on church roof repairs and things like that. Is there any nasties in there? Well, it's an interesting point you make because, of course, you should never judge a budget sort of immediately after it. It's probably about three days after that you can get a real sense of where it's landed.

1:15:01One interesting thing my eye has alighted on is I think I'm right, and I might be slightly wrong, but I need to look into it, that if you look at the final year, the 29-30 year, the fiscal target year, the Chancellor has said£26 billion of additional tax. But actually, the amount raised through tax will be considerably more than that. I think it's going to be about£38 billion. So where's the extra 12? Well, I think that is a story around higher forecast inflation in the forecast, which means more people being dragged through fiscal drag into paying higher amounts of tax as a consequence. So I suspect part of what might emerge, just a thought, is that, yes, she's put her hands up and says, I'm taxing by raising taxes next to 26 billion.

1:15:48But actually, because of what's happening to inflation, because of the mismanagement of the economy, I think the extra tax that's going to be taken will be considerably more. Very interesting. Mel, we will let you go. But thank you very much for making the time. I know you're one of the most in demand days. That's a great day like today. Brilliant. Thank you. very interesting seb what have you made of everything that we've heard so far from people uh i don't know you're not so much from the kind of political world so i was sort of intrigued i think it's um i think there's some key things like entrepreneur founder side i think it's positive it goes moving the right direction everybody else seems like they're getting shafted uh and i think that's kind of what we expected a little bit like tax rises how to arrive there is this big deficit um and i don't think it's as as dramatic as it was last year i would say like the national insurance rises for businesses last year that felt massive and there was huge backlash against that because so many business owners came out and said this is gonna you know i'm literally not gonna hire people this is gonna really cripple my business and so i think you know it hasn't been maybe it's because the ovr release slip up but it hasn't felt as dramatic as it did last year and i think that's really interesting um the taxes themselves are like you know they are spread out it feels like quite a lot and so there isn't anything that's really punchy which i think lots of people will get really angry about um although it is just a lot more taxes for pretty much everyone yeah that's true um to finish your question earlier about what i'd be doing if i was in downing street this afternoon now would be i would be ringing around lots of these businesses right And I would basically be trying to be an early warning indicator for problems.

1:17:31So I'd probably be asking similar questions to what I've just asked Mel there in terms of like, have you spotted anything? Is there something that may be that we haven't seen? What are you worried about? And so on. To try and sort of get ahead of this kind of side of things. And then also be trying to point out some of the things that might not have been picked up by various business people. but you basically have a call sheet of lots of people. And you'd be kind of going around the sort of influential kind of figures, the talkers. I mean, you'd be doing the business groups to a degree, but they would already be getting calls from this kind of chancellor, et cetera.

1:18:06And what I would also be doing is sort of the, the kind of influence influences within the kind of business world. I would be calling people that you knew that would be out there kind of, talking and chatting to people so there'd be like steve varley at ey in my day dame uh jane and gardia as well some of these sort of like you know really important people that would kind of value a call uh and to be given a kind of run through of it and so on um and then often we would try and do a reception in downing street sort of within the next couple of weeks and so on so i don't know whether that's some of this stuff sort of fell out of um pattern because of the pandemic and so on you couldn't do it and it hasn't sort of been restarted as much so it'll be interesting to see if that happens over the next couple of weeks as well and when you have a big budget like this is there you know are there specific bits of policy or specific things that everybody's like these are the hot ones these are the ones that we've got to be careful about these are the ones that are going to cause the most noise and like you know you talked about you know are there small things in here that people haven't picked up on yet is there a sense within downing street that actually like let's see if we can sort of brush this one under you know or like how does that work yes i mean there is an element of basically the treasury will never have not considered tax rises on something before if that makes sense so there will be a reason why any of these tax rises has not been brought in before like one of the few new things i can think of is sort of vaping right and they're talking about various vaping tax that is genuinely saying five years ago that you know wouldn't have been on and so on and now they're trying to sort of assess with that again the kind of like driverless vehicles side an extra three p a mile and so on those are genuinely sort of new innovations that you can kind of tax of course because that's what governments do with anything that's exciting that happens um and so you would you would be there with that i think one of the things that's kind of changed a lot in the last few years is and we talked about this on the episode with Katie Lamb this week who did my job in number 10 after me and is now a member of parliament is that there has been a sort of growing industry of people that are set up to lobby the government we picked on sort of wedding venues UK you know needed to be started during the pandemic to make the case for wedding venues to be allowed to be opened up again and so on and that still exists today and they still sort of have to have salary justification etc so still sort of going so you get these people now and if there was some sort of tax in there about wedding uh venues to um uh that have been brought in you will now have somebody running a campaign and getting people out there and so on so i think it's a real kind of like challenging uh thing on that side of things if you've got a lot more kind of self-interested parties that are able to kind of communicate and make the case for government so i think it's an interesting development but then also you've seen with that the through the pandemic and through what happened um with silicon valley bank etc you've seen startup coalition become a lot more of a serious player i mean for a long time it was it was it was dom and a dog really um and actually like he's grown it now to sort of um you know 10 dozen people and so it's able to have impact in a lot of areas which is uh which is great um and well done for the people that continue to support that So, yeah, that's some kind of observations on that side.

1:21:41Yeah, absolutely. And the work that Dom does is amazing. You know, he's sort of like the guardian angel for UK startups. And people love it. People love the work that they do. He will love that. I could see that on his LinkedIn banner. Well, look, as we said, if you've enjoyed this, we would love you to post about it to LinkedIn, tag Seb and I in it, maybe a picture of you watching it and so on. and we will pick a lucky prize winner for lunch. If anyone enters, that is. And if not, Seb and I will just go for a nice lunch, the two of us, to kind of reflect on it because it's really fun. And I think we should think about how we might replicate this for future events.

1:22:22Absolutely. Let's do it. All right. Sounds good. Brilliant. But I'll tell you what, next time, Sonny, we're having ad breaks because I really need to go to the loop and we didn't have that. All right. Thanks, guys. Cheers. Bye.

1:22:42Keep buying approval for some people from On a low level 360ricie and these who are investing Sciences