What Politicians Won't Tell You About the Economy

27:53Sorry, I wouldn't call them all incompetent. I'll call them it. I stand by that. Yeah, you don't have to call them all incompetent. But, you know, actions speak louder than words sometimes. Could you take us inside Cameron's government and those decisions and kind of what would people like you, have been saying to them about things like Brexit and austerity at the time? Well, I have to say that I was on the group of people going around the country, talking to audiences about why we should stay in the EU. But of course, I was using economic arguments and that... You needed a red bus. It looked like it worked for a bit and then it became impossible to sustain that.

28:38But I think what had happened and one of the reasons why why Brexit also was voted on, it is because of that austerity that people had experienced. You know, quite a lot of people lost their jobs. And of course, at the time, just thinking about the recent budget and how everyone was focusing on the headroom, the headroom that George Osborne was trying to get for himself was hugely greater than even what we've got now, that Rachel Reeves has managed to get by raising taxes, supposedly, although she may not raise them at the end if there's an early election. But that's the intention. So austerity really hit the economy very significantly by sort of affecting investment willingness to take a positive view of the UK economy by comparison to others.

29:30But the truth is, of course, that austerity was also happening in Europe at the same time. So yes, we can look at Cameron and Osborne, but we had the Eurozone crisis. Let's not forget that. And I am Greek born and I've written a book called Greekonomics on all this, which, you know, it was an appalling period where, you know, places like Greece lost 27 % of the GDP, at least in the UK, wasn't quite so bad. But we didn't need to do what we did at the time, because the economy was, you know, recovering after all the efforts that we put in after the financial crisis, the first few years after the financial crisis, and then everything sort of went downwards again.

30:09And that was, I think, mismanagement from that point of view, if you were looking at the long-term health of the economy, add Brexit, and that's really done the damage. And what you've seen right now is this big exodus of Brits who are just leaving the country. So if you look at the latest migration data for the year to last summer, 25 what do you find is that the the net migration figures which have gone down significantly had to be recalculated even further down because of so many people just exiting where exactly they're going they're not going to europe they're going to dubai they're going to dubai or it's because if you're an aspirational young person you don't feel like that this country is a place is a place where you can grow a business really i mean i speak as someone who's done that and you know as a semi-public figure, I feel a sense of responsibility to be in the place that I talk about.

31:04I don't like it when I see these guys sat in Dubai going, the UK's going to hell. I'm like, you're not even here. But I can see how lots of other young people will be like, I can go somewhere where the tax is lower and it's more energetic and more positive. And that's what's happening. And you're getting this brain drain or energy drain, maybe, not a brain drain. It's more like a youthful exuberance drain. But it matters a lot for the country that you leave. So again, if I mentioned that I come from Greece, the brain drain has been huge. So Greece has lost half a million young people with very strong skills who have gone elsewhere.

31:39And you can't replace them. Yes, there have been loads of immigrants coming in, particularly from former Eastern Europe. But it has not really made up for that loss. So T, tell me the riskiest thing you've ever done. Mate, the cameras are rolling. I can't do that. You're trying to get me cancelled. I mean, most of my risky things were probably my teenage years. But one thing I could say about finance risks, definitely invested in stocks with zero research, just because my friend told me to, his research was trust me. It didn't go well. Wow. So clearly risk affects you in both your personal and business life.

32:15And that's why we're really happy today to be partnering with Vanta. They automate a lot of risk processes and help you see the risks in a centralised platform. So you know what really needs your retention. Besides risk, the main thing Vanta does is automate compliance with security protocols that you need if you want to do business with larger companies or grow internationally. This is stuff like GDPR, HIPAA, ISO 27001 and SOC2. The beauty of Vanta is they make it easy to prove you're compliant with these standards, saving up to 90 % of the time it takes and on average half a million dollars.

32:47You can get started at vanta.com forward slash making money. There's a link in the description and a qr code on screen for you so what does what do we do to to stem that bleed and to improve the uk and kind of turn it around and i know you're not gonna you're not got one quick answer for us is the problem but it's very interesting because supporting entrepreneurs is is crucially important um there is a certain amount of of attention being put into that but There needs to be a lot more. But we've got to just watch it because what happened with the austerity period is that loads of people who lost their jobs, in government in particular, because they cut back very significantly, that then became self-employed and started their own businesses or whatever, a lot of that didn't survive.

33:36So the support needs to be substantive and continuous. so it can't just come into in a bit you know burst of activity burst of money and then withdrawn so it has to be consistent and and last a long time so you take the risk you encourage people the quite a lot of money is going into r &d and it makes a big difference but young firms need to be supported by more venture capitalists around support and guarantees from the government as well there is a certain amount of that that is happening with the national wealth fund which a certain percentage going to, and for British Business Bank, going to

34:20enterprise creation. But loads more needs to happen. So what we're suggesting in the book is that industrial strategy that we discussed before, and this type of support, of course, which is very much part of it, needs to be divorced in a way from politics and needs to You just have a much more long-term emphasis on how you do it. So you set up something that lasts a long time. So not the sort of thing that you just disband because, I don't know, you want to save some money tomorrow. But there has to be that guarantee, if you like, for people to then feel that, yes, they'll be supported. But, of course, you know, we see what goes on in the US.

35:02I don't think we're going to suddenly become, you know, the Silicon Valley of whatever it might be, maybe near Liverpool, where you are. But we can move a certain way to make it easier. And we know all the classic things that have been said so many times that we don't support firms that start growing and everyone gets bought up. But one of the things that we absolutely need to do is look at that regulation. Because what we have allowed is the creation of, or the emergence of all these big companies, which basically hoover up everything that's out there, partly to stop competition, but also because they need that for their own investments, which means that unless you sell very quickly, there is no way you can compete with the big giants that are emerging.

35:54And that's a serious, serious problem for the UK. Well, but on an individual level, if you're a founder of a company based out of Cambridge and Google comes along and goes, I'll give you a billion quid for your business. Exactly. You're going to take that money, you know, because you just look at it and go, well, that's a lot of cash for an idea, right? I know, but it's more than that. I mean, there have been periods, depending on what it is that they want to expand in those big firms. And of course, they have to invest an awful lot now, as we know, and there's a bit of a concern about whether we've seen an AI bubble or not.

36:24they also hoover up individuals so they can expand their recruitment, take away all the people that a firm like yours say would want to hire, offering them slightly more. And then after a while, they let them go, possibly, by which time you've given up. So that is a serious problem as well. They can afford to do it. The smaller firms cannot. So you can't just have someone and keep them and pay them a lot and prevent them from going to one of the big boys. But that's unfortunately what tends to happen. And we have allowed as regulators worldwide those big firms to develop. And I think it's time we look at what happened with the oil companies and just cut them into bits, which I think the Europeans had been thinking about that and fined quite a lot of firms a lot more than anyone else for anti-competitive behavior and abuse of monopoly or oligopoly power.

37:22And we need to be much stronger on that. Can we do that in the UK, just individually, without the backing of the EU? We don't need the backing of the EU, and we didn't need the backing of the EU in terms of what we do in our own country before. But of course, if it's done across the board, then it's easier. But the idea for us, then, all that would be left to do would be we can't have Google operate here. Which we can't do. How are you going to attack American businesses? Yes. We've got to do it. It's not that we have left the EU. We cannot. The EU will need to. If the EU does it, then it has a ripple effect on us as well.

38:04But if we do it, they're not going to follow us. Well, we can't. We can't really. We're going to disadvantage ourselves. Yes. By stopping Google or, for example, coming in. Yes, but we can say, no, you're not going to have a whatever data center, whatever it is. You're not going to come. I mean, we're now, I don't want to have nothing against Google. I mean, I use them all the time. But we have them in the public sector, you know, encouraging improvements in productivity in the public sector and efficiency and so on. so once you become quite uh tied to various providers then you find it also difficult to get them in any way disciplined or controlled in terms of what they're offering free help aren't they exactly that's exactly what i meant when they come in they go we'll fix your we'll fix your productivity for free you just got to install all our systems and give us all your data and then you know you ever go oh well we think you're too big they go well we think we'll turn you off it's it's uh it was really what i discovered when i went to work for the government because I was in the private sector before, that in a number of the parts of the Department of Trade and Industry as it was, which then of course changed its name a number of times, there were people from the sectors located there on Secondman or whatever.

39:21So whether it was the automotive bit or whether it was aerospace bit or whether it was something else, you know, engines. So like lobbying almost. They were actually working next to the officials. It wasn't terribly surprising, therefore, that when the poor economists would stand up and say, actually, this doesn't make sense. There isn't value for money. There's no additionality. Because basically, the way you decide if there is a market failure is if you want to intervene because something that should be happening normally is prevented because there's too much monopoly or whatever there may be.

39:57price mechanism doesn't work there are unintended consequences and all sorts of externalities all that sort of stuff that requires a government to intervene but but if you intervene you've got to make absolutely certain that what you are providing to a particular sector is is additional in in other words the additionality test is so important would they have done it anyway or you know without your help or are they relying on your help so they don't have to put the money themselves for this which they would have done anyway. So there's no point intervening if it was going to happen. You're just making their life easier and cheaper and they can make bigger profits if you help them yourself.

40:33So the economists in each of those bits of the department were not listened to when they would stand up and say, so I had to restructure it so that their assessment, they were also reporting centrally to me in each of those, so that we wouldn't have this situation where their evidence was just ignored that's really the basics uh the basic requirement if you like that we make in the book that decisions are evidence-based and the system needs to sort of listen to what what is if you like the best solution for various things and prevent quite a lot of the waste that exists at present in terms of spending so much waste well i mean the waste point is interesting because it's a 60 % of what we spend is on the big three categories of say welfare, state pension and debt interest.

41:24And if you want to make savings a nose, they're all kind of, they're AME, so annual managed expenditure, they're demand led expense, which means that we kind of have to just pay them out. If you qualify for state pension, we can't go, well, sorry, we've hit the budget this year, you don't get it. The other departments, they seem to have had massive real terms cuts like transport we spend 15 billion a year less on transport today than we did five years ago in real terms most people wonder why trains and roads are crap that's why but it seems like most of the spending is flowing into kind of these other big areas and this idea that there's waste that we could just trim do you think that that is that credible i found some some points where we're wasting some areas where we're wasting money i think uh hs2 obviously 38 billion don't quote me on the accuracy of these numbers they might be a little a couple billion off but yeah um 10 billion on defective ppe stuff but this is all this all happened okay 100 over 100 billion on national debt interest yeah but we're thinking about borrowing more it's not waste we can't just cut that you cut that and see what happens yeah but if we borrow more that's going to go up yeah but okay so if you don't want to borrow you want to either tax people more you want to cut spending and if we borrow 150 billion a year do you want to pay more tax or do you want to cut 150 do you want to just cancel state pension okay cool what about uh foreign aid we've got enough issues here how much what happened if you cut foreign aid then people leave those countries and try and come to yours we've cut foreign aid i mean just just we have cut foreign aid good list mate well done but of course we just moved it into defense uh so so that's the idea that you're going to use this for ukraine or whatever for for for for moving to the supposedly three or three and a half percent that we intend to spend at this percentage of GDP on that.

43:08So that's the idea. Whether it happens or not, of course, it's a different issue. Is there waste in the system at the minute that you think we could look at and we could go, that's an easy cut? No, it's incredibly difficult to do. It's always an easy thing to attack and say there's waste in government and having worked in the government, you can look at ways in which you can make things better and more efficient in terms of how you run them, not necessarily that you can just get rid of something. Because the moment you start getting rid of something, and you start reorganizing, it actually becomes worse.

43:36It takes up too much time. And, you know, rethinking, for example, during the just before the financial crisis, when we put all sorts of entities together to create the new FSA, the Financial Services Authority, we took the eye off the ball, which was a real, real problem in terms of what was happening around you in terms of deregulation and the impact, because you are trying to bring various things together. So for example, now that again, that we're getting rid of NHS England, the process of doing all this and unraveling what you had and creating something new is indeed an issue that all the reforms, the early reforms for the National Health Service that were done during the coalition government, they also took a long time and they possibly left some some legacy as well so the most important thing is just try and do the things that you're doing with a better outcome in mind which may require just you know not necessarily cutting the money but cutting the way or changing the way in which that money is spent net zero spend a lot of money on net zero i mean is it credible is net zero by is the target 2030 30 i think i think that like i don't know what net zero means but i think us getting energy independence and producing really cheap energy is should be a goal yeah but it's like the dominant theme of of wealth of the whole time i've been alive is whoever controls the energy controls is the wealth it's like oil it's you know it's coal so surely it makes sense for us as a nation to be like let's be energy independent and let's make it really cheap what about converting all cars to electric cars well i don't i don't know that's not feasible can we can what is net zero versus what is energy independence okay on energy dependence i mean the interesting thing is if you look at the u.s and why has the u.s been so resilient despite all this crisis that have been there um including okay financial financial crisis up to a point they did suffer there were some big banks which wouldn't bust um but if you look at how they survived with covid when nothing was moving in terms of transporting things across, including energy, oil and LNG and so on.

45:54And if you look also, the war in Ukraine and the increase in prices is because they are energy self-sufficient. Yes, of course, they import various bits, exports various bits, but in reality, they can be and are on paper energy self-sufficient. That has helped hugely. And I think I agree with you entirely. but the one problem we do have is that we can be self-sufficient because you know there's quite a lot of oil and gas which is being produced the problem with it is that an awful lot of that is just sold in international markets so you'd have to change the way in which the companies that operate it are behaving so instead of exporting it in there because basically it immediately goes into the global market and gets a price, which of course hits us if prices are high, would be to direct a certain amount.

46:47So we say you have to give some of us to us. So we were allowing you to do this. We're giving you the license to produce more, but you have to give it to us. And of course, we do know that we're going to be needing a certain amount of fossil fuel anyway as a backup for whatever else we do. The nuclear stuff, which we discussed, which takes forever to build in any case, will do a certain amount of that, but only a certain amount of that. So you do need also your faucet fuels as well. But if you can sell them to the UK rather than it being international, because we have tended to just import quite a lot of our needs because so much of what we produce actually gets exported as well.

47:26However, self-sufficiency doesn't mean that we need to necessarily, well, it doesn't come always with low price. and the way in which we have encouraged quite a lot of development in the energy sector to get that net zero is by offering quite a lot of high prices for the final output. So because otherwise they're not going to invest. But unfortunately, the investment that is done is bringing in turbines from China. And then we pay them for the final price when in fact, once the turbines are there, the marginal cost of producing a unit of renewable energy is zero. Zero. So you have to offer them that, otherwise they will be no energy.

48:09We'll pay your oil prices for wind energy. And it's our bloody wind. Yes. We live with it. We don't even import our wind. It's our wind. We can all have our own little wind. I would do that. Like, give me the option to buy one. I'll bang it on my roof. Well, I mean, again, in Greece, everyone has a solar unit. Solar panels are getting cheaper now. Yeah, up on the roof and so on. And that is very helpful. But of course, the sun shines quite a bit. But would it not be really advantageous for us to invest within having cheap energy? Would that not attract businesses here? And if we were to be able to say to a manufacturing business, which are very heavy energy intensive, you can come here and we will give you free energy, essentially.

48:49Would that not be a way to... Well, there is a little bit of that that is being tried now. So there's supposed to be this new beneficial electricity price calculation and charging for 7 ,000 firms, which are quite high energy users, the ones that are at the top, and then extend it to loads more. But it hasn't quite happened yet. We are still in a situation where electricity prices for businesses are the highest in the G7, I think. apart yeah uh so uh so certainly the highest in europe as we understand it so that that is a serious serious problem um so there's nothing to to to attract them unless you say like to the ai data center stuff um the googles of this world and others uh you can you know we'll build a nuclear plant for you and you can have that cheap energy which is going to be huge in terms of the amounts that they need as we know so they they consume energy like there's no tomorrow um and you can buy into it so what they do is they will buy into it and get it cheaply themselves that of course immediately creates a a gap between what others perhaps are paying and what this particularly privileged firms perhaps might get and they put you know it's like an ai data center that employs five people probably to run the whole thing and it just churns energy meanwhile the village down the road are paying 200 quid a month for the gas and electric That's absolutely true.

50:19How is that right? Well, it's not. But a lot of our discussion is now, you should say, it's our wind energy that comes out and we should benefit from it. There are lots of community schemes that could be developed and this is what happens in many countries so that you can get the benefit and the price within your community and share it in a way that perhaps wouldn't happen if you just let it all be a sort of national scheme. But of course, we also need the grid to improve. So there's some investment. So we're paying for improving the network itself. Because you can't, you know, because where the wind comes from, or sorry, the wind power comes from.

50:59It's our wind. Our wind. It's, you know, from... Don't touch my wind. From the offshore one from the sea up north usually, but it doesn't really come where the nice established grids. It doesn't go where we need it to. Pipelines, if you want to call them that, where we need them. So this is why there was this whole discussion of do we have differential, should we have differential pricing? So London, that depends now on everything coming down to it, and it needs quite a lot of investment, pays more in order to differentiate from the others where the wind is very close. We might as well, whatever it is, the wind energy that comes.

51:40So they can pay less and we pay more. And that was thrown out of the window. And then you create incentives to move to those areas because they're cheaper, right? It'd be funny because, you know, everyone in London is like, oh, Manchester, it's always raining. It'd be like, yeah, but now you've got to pay for our water energy. Absolutely. You don't pay anything. You want some of that water energy? you gotta pay Manchester for it. No, you're absolutely right. So, but it didn't happen. There was a lot of criticism of the idea because it would just mess up the market, supposedly. But why, so quickly, why do we have the most expensive energy in the G7?

52:10Well, it's a puzzle. It's because of the way in which the system, the pricing system works, where we seem to be looking at the last little bit of whatever goes into the pricing. The last little bit that is bid into the system is the thing that sets the price. And that price is usually gas. So we need to just change it completely. And there have been talks about redoing the whole pricing system and it hasn't happened. It's a story of our lives. It hasn't happened. It hasn't happened. Somehow that will get some votes, no? Who benefits from that system in the current form then? Oil and gas producers.

52:54Oil and gas producers. Okay, and are they lobbying to stop that pricing from changing? Well, the others who benefit, if I may say, are all those renewables because the price that they get is the higher price. So they get to sell their wind for gas prices. So their marginal cost is zero, but they charge it. Yes, they manage to get this. absolutely you know you can see a world where we we we move away completely from fossil fuels there's wind farms everywhere nuclear and then we're still it's still 200 quid a month do you know because they're like absolutely so so but but it's interesting there are other things so if you look at the latest increase from january in the electricity price gap cap which actually was one of the very good things that list trust did if i may say so so until then we had rishi soon again.

53:39Others did absolutely nothing when the war in Ukraine started and oil and gas prices just went through the roof. So there was a huge amount of insecurity in the population. Inflation expectations rose very significantly. Everyone started asking for higher wages. A lot of the reason why we had this very substantial increase in inflation in the UK, which is still set higher, by comparison to others, has been because nothing was done to adjust those inflation expectations. We were forecasting at the time 22 % inflation rates. And the first thing that Listera's did at least were saying that we're going to have an electricity price cap.

54:13And that would increase or decrease depending on what happens to wholesale prices, but there'd be a cap and above that, the government would subsidize it. Below that, there would be adjustments. So depending on what happened to international prices. And that was good because it immediately changed inflation expectations. But what's happening, what has been happening since is that they've been going up and down with wholesale price of gas. And that wholesale price has varied quite significantly. It's come down very, very significantly, but then various months went to go up. It was measured on that.

54:47And then we all heard that from whenever it is a few months hence, we were going to be paying for three months, a little bit more. This time in this latest round, it wasn't wholesale prices because they didn't increase. It was more because of the charges for the network charges and the charges for the grid and so on. In other words, the costs that we have to pay for ensuring the system at least worked and we were all connected, which has taken more of an emphasis in this, which individuals would pay. And it's one of the reasons why in the last budget, there was a look again at those, as we talked about net zero, about the green levies that were there as well should they been should the individuals perhaps don't use any electricity at all decide to freeze through the winter still have to pay these charges which are their network charges and green levies standing charges are these standing charges and the green levies standing a lot of the network charges are the things that we discussed before which is how do you know the cost of of getting things to your door if you like or to your system and then the green levies which have to do with encouraging renewables and the net zero goals and basically they're being put onto people's bills and they're saying well should we stop that well yes should we stop that but of course someone's going to have to pay it and and taxes and if you just look at taxes they will have to finance that uh so that's one of the things and you talked earlier about um the rail network and the you know how it's sort of in your view anyway it seems sort of deteriorated But in others, I mean, at least it's sort of functioning up to a point.

56:23People haven't taken the Avanti West Coast. Yeah. Very often if they call it functioning. Well, look, I mean, you know, just this morning, the sort of tube sort of stopped because of signalling failures. So we should be able to do something there. But the freezing of railfares that was announced around the budget of the autumn, which, you know, is good in England, which is good. It's going to save the regulated ones. It means the unregulated ones, first class and so on, might go up quite significantly. But the real worry is that a lot of the rail operators, of course, are coming into public ownership again.

57:04So they'd be run as a nationalized state sort of network. And during this whole period of privatization, we've still been subsidizing them hugely. So the taxpayers have been subsidizing, you know, your Avanti West Coast thing. And the fares have traditionally been about the same in terms of what's collected. If I remember correctly, last year there was something like$11 billion raised on railfares, on the regulated railfares, on railfares generally actually. And the subsidies were about the same, or$12 billion. So we as taxpayers are subsidising your journey. You're subsidising it yourself. And it still costs 100 odd quid.

57:51It still costs, absolutely. It's cheaper to fly to Dubai sometimes than it is to go down to... How is that the flying degree? It makes no sense. Have you been to Italy? Italy's got loads of issues with lots of things, but the trains are dirt cheap, run on time. How is it that a comparable economy like this, France as well? I was in Paris, I went miles for like 50p. They subsidise it heavily, and that's why in Italy, the debt to GDP ratio is considerably higher than it is here. So it's not that they're operating their systems for cheaper, They're just subsidising them more. They could be operating them for cheaper as well.

58:27I haven't looked at the exact reasons why that should be the case, but in fact they're subsidised. So you think that we might not see cheaper trains as a result of privatisation? They may even in fact go up or we just end up subsidising them more. Yes, yes. I mean, even if they are cheaper, we will subsidise them more. I mean, that's the inverse of... So we're paying in tax, yes. So all the people that don't take trains are paying for the people who do take trains to pay slightly less, even though you're still paying loads of money to take the train. But this is the honesty point, right? Politicians should come out and go, you think your training is expensive.

59:03Do you realise that we're putting 11 billion into that system every year just to keep the price down a little bit? And if we didn't, they would double in price. So it's exactly the same point with the green levies. So you take those out, you save whatever it is, a few hundred quid a year, possibly. but the taxpayer pays how else? so I'm afraid this is precisely that they don't tell you which is what the book is subtitled says it's what the politicians won't tell you and of course we've just seen last autumn taxes go up again a lot of that will be transferred to funding other things not just welfare but also all these things that they've announced they're going to be doing to reduce your cost of living.

59:49And by the only reason that one can understand for doing what they're doing, in other words, freezing railfares and prescription charges and also getting rid of the green levy so that your costs come down, that is reflected in inflation because that's quite an important part of the whole thing, is to encourage this slowdown in inflation to be faster so that the Bank of Income can reduce interest rates. And you mentioned before the cost of servicing the debt. If interest rates come down, the yields will come down too for bonds in the bond market, which is basically how the government borrows. It has to pay an interest rate.

1:00:28They've been very high. They are certainly considerably higher than Italy and France and even the US, which has also had quite high because, of course, it's borrowing rather a lot because it has a very expansive program of cuts in taxes in the US. They hope that tariffs maybe will make up for a little bit of that deficit. But overall, we seem to be paying a very high interest rate. If the correlation is the greatest between short-term rates and yields, so if short-term Bank of England rates come down faster because inflation will look better, then she can get some of the growth and spend a little bit less on servicing the debt.

1:01:14I mean, that's the rationale behind it. But it makes no sense in any other way. Because as taxpayers, we're going to be paying for all these things that she's reducing. It's like, we're going to reduce your cost of living by taxing you more and subsidising the areas that are costing you. So people can go in and go, oh, my prescription hasn't gone up, but they paid for that anyway. Of course. And the main reason why we had faster growth last year in 2025 than had been anticipated is partly because, of course, as we said earlier, everyone just tried to sell upfront to the US before the tariffs. So there was a bit of activity there.

1:01:48But it's mainly because of government spending. Government spending funded by this big increase in tax that took place last year of over 40 billion and a lot of borrowing that took place, of course, as well. and now it's the same thing a lot of government spending in this second budget funded by a big increase in taxation and that will keep the economy going as well i mean that's basically what's going on is it like is it just pointless because we're just we're taking with the left hand to give to the right in that sense and is it just just sloshing money around the economy for no reason possibly i think there is something to be said for improving public services for the National Health Service that are having, you know, better outcomes for fewer people, fewer kids to be in poverty, because it has quite a lot of long term, positive consequences.

1:02:39That's why, you know, again, we say long term, please, please think long term, please do even as a Treasury, your, your the Green Book calculations is a sort of Bible of, of what the return of particular spending might be as long term as you possibly can, which they do up to a point, but of course, the politicians only care about the short to medium term until the next elections. But they do all have possibly an influence on how you behave, how you think about the country, if your public services are better, if you can go from A to B more easily, then that helps the economy and so on. Maybe if your broadband works, you might be able to work more effectively from home and lots more women would be able to partake in the economy and so on.

1:03:29So there are some benefits in this transfer. If you reduce inequality, maybe, also with some of the policies, perhaps, that would be a positive thing because if you have social tension, it doesn't work. But there is a real problem with the UK economy, which we acknowledge. When you look at productivity, we talked about before, So growth that can sustain all these things. So you don't continuously just raise taxes with no great impact at the other end, unless you wait for a long period of time. And as we know, famous economists have said in the long run, we're all dead. As if you don't have to wait for all that time, we have to realise why there are all these differences in the UK by comparison to others when you're trying to do something.

1:04:12And this is that we are not a very cooperative economy. From region to region, from nation to nation, if we call it that, we are more a conflict type country. And the World Economic Forum did a report of just tracking productivity growth and the extent of social cooperation that exists in various countries and found that the Nordic countries are much more closely integrated, so they work better. We have it really bad. And the effort that needs to be made to get to that point, to get the impact of whatever policies there are to work, is considerably greater. And that's why we advocate in the book long-term thinking and look at how you can get those differences bridged as much as possible.

1:05:03But it can't be done overnight. And if you think that short-term measures that you don't even explain are going to do it and then people react negatively because whatever they've been promised doesn't happen then you're just stuck really and you don't get to the point where you should do which is you know huge strengths in the country real uh skills and and such a variety of of of people that really is what makes this country you know such an exciting place to be but it's just great shame that we don't get to the to the potential and do you think it's those nordic countries that we should be looking at then as like the benchmark?

1:05:41Well they're the most equal of course including with women if you just look at gender equality and but to to get that cooperation working I mean you've seen them already of course reacting to some of the migration which is affecting them and they they sort of put barriers up so they have been more integrated from that point of view But I don't think that's necessarily the issue. The issue is that we have these big divisions partly caused by the Industrial Revolution as being so much earlier in getting there, the regional impact that this has had in various areas when we moved out of it, and the legacies left when it was not really properly addressed, which makes it harder.

1:06:24And, you know, the decline of the union is up to a point, but of course we've seen, you know, the winters of strife and everything else, three-day week, I remember all that. So, but other countries, of course, have had similar issues in the continent, but we didn't address those issues. We just left loads of regions to decline. And that is what, in the end, has ended up with that division happening. And we are the most unequal country in the G7 after the US. I was about to say, do you think we're worse, we're more kind of argumentative and disharmonious than the US? With the Nordic countries, I know in like Sweden or Norway, they leave their babies in the pushchairs outside the restaurant so that they can like get the fresh air and no one steals the babies and they all feel safe.

1:07:10But in the UK, you said like the government, the departments don't even agree on which direction to go. And so is there any hope for us to like actually think long term if the government departments don't even agree? Because you can't run a business where like the marketing team say one thing, the sales team think another thing. And then the compliance team like that's illegal. We can't do that. And they're all working together with different ideas. So how do you see us in the long term getting through this? It's really interesting you're raising that because, I mean, obviously safety and security is quite important.

1:07:39But what seems to be going right now, even though Sukiyostama seems to want to have a united sort of group around him and maybe the changes he's made at various stages to the cabinet hasn't been there for very long, of course, are a reflection of him wanting to do that. is that after the budget of last autumn, what we've seen is that quite a lot of cabinet ministers briefing anonymously that they weren't told what the aim of the budget was. If that is the case, if that is true, it was in loads of papers, that this is indeed how it's all run and only a couple of departments at the centre run the show without telling the others what's what how can you possibly have this coherence in policy yeah how hopeful are you that we can that we can make those changes and that we can make those improvements and and that a system that has failed to think long term for decades now can suddenly start to i think people are becoming more aware of what's going on i think that's the important uh aspect of of everything has been happening over the last year and a bit in terms of the sort of good and the bad.

1:08:56And just look at what interest there is. If you look at opinion polls, how they are taking things in and possibly putting pressure on the politicians to do the right thing. And the fact that we've moved into a situation where loads of parties compete and loads of information is spread around, not all of it, of course, necessarily correct, has actually meant that there is a bit more scrutiny, so that people are not necessarily just sticking to the belief that, you know, that party will do it for me or the other party will do it for me. Whether it's going to end up with a system which leads to stability in the future as a question mark, but maybe we needed to go through this process.

1:09:36A lot of disillusionment with politics and therefore reaction may actually be the salvation. That was a pretty loaded chat with Vicky Price. What do you think? it's a it's always kind of worrying when someone confirms your fears and that someone on the inside of government has said yeah they they are taking short-term decisions they are lying or doing things that are misleading the public and stuff yeah it's kind of annoying isn't it do i mean you want to be wrong yeah and they're not even all in agreement they're not on the same page which is like a little bit worrying for our long-term future yeah but i do i do like that vicky's kind of says it's all of them it's a political problem it's not one party or another she she He was firing shots at all sorts of people.

1:10:18You look like the Artful Dodger, mate. Black Artful Dodger. That's what I'm calling you. You've got to pick a pocket or two. Consider yourself at home. Consider yourself. Is that in there? Consider yourself part of the family. One of the family. One of the furniture, yeah. Yeah, it's good. You're looking good, mate. Cheers, buddy.