Liz Truss jibe leaves shadow chancellor squirming

0:02The Telegraph.

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0:37I can just hear Labour now saying Liz Trust's budget. Everything that we have announced this week at conference, everything we've announced before that, we have set out forensically exactly the choices that we would make, how we would fund that and more because our golden economic rule says for every£2 that we cut and we will be cutting government spending and Labour won't like that. Andrew Griffith, Shadow Chancellor, lovely to see you. Now, some might say that cutting inheritance tax is cutting tax for the wealthy. What's your response to that? Well, they'd be wrong, really. Of course, it is on people who've got assets, but increasingly those are ordinary people who've done the right thing, who've worked hard, saved that human emotion of trying to pass on a better life to your family.

1:26And Labour has significantly expanded through things like fiscal drag, failing to uprate the limits, but also extending it to family farms and family businesses. They've brought many, many more people into the jeopardy of facing inheritance tax, that increase to people's pension pots as well. So the truly wealthy have always used trusts and tax planners to avoid this. This is those for whom have either had bad luck, they've had an early death, or they've been dragged into the net of inheritance tax. Conservatives have long said, look, this is a bad tax morally. It's often double or triple tax, tax on your income, tax again, perhaps on capital gains, and then finally tax on a death.

2:09So conservatives have articulated, I think, for a long time the case. It's not the first time the conservatives have promised to remove inheritance tax. but we will only be able to do so with what we can afford that doesn't necessarily mean we can do everything at once but it's in terms of the priorities for a future conservative government it is one of those bad taxes Camilla and a government that's truly on the side of working people who are trying to get on and make better lives this is a very strong candidate. But is it well-off working people because in kind of presenting an unashamedly wide brush appeal to the blue wall it sort of indicates that the conservatives might have given up on the red wall because you appreciate that with reform nipping at your heels there and without boris johnson the politician that could reach the parts other tories couldn't that actually that's gone and so you're absolutely laser focused now on winning back the middle classes and particularly those voters who might have flirted with the Lib Dems in the past?

3:10Look, I don't accept that. I mean, the tax system that I and Kemi want is one that is lower overall for everybody. It's a simpler tax system. So that sometimes that means removing taxes, reducing the rate, eliminating distortions. That's why we did what we did on the childcare tax cliff, where you pay, you earn one more pound in income, and you could face tens of thousands of pounds. That's very distortive. It's a very bad tax system. It's going to take time to clean that up. But we're very clear about the sort of tax system that we want to see. And values matter. No tax system is neutral as to the values.

3:47We're sitting in Birmingham. Birmingham is a heart of industry business. There'll be many businesses, family businesses and others in Birmingham, who would be caught within the realm of inheritance tax as they try and pass their business on to another generation. The reason Birmingham is such a prosperous city down the generations is because capital hasn't been taxed prohibitively and destroyed every time there's a change in a generation. Now, Andrew, I can just hear Labour now saying Liz trusts budget. The point being, there's an agreement across the country that we're in a financially perilous situation.

4:26And what Labour will say is this is not a time in which you can be making these sorts of promises on tax, which they will allege are unfunded. So how would you respond to the charge that you're repeating Liz Truss's mistake of promising something that the country is just not fiscally in a position to underwrite? Everything that we have announced this week at conference, everything we've announced before that, we have set out forensically exactly the choices that we would make, how we would fund that, and more, because our golden economic rule says for every two pounds that we cut and we will be cutting government spending and Labour won't like that.

5:04We will be addressing the out of control welfare bill and Labour won't like that. There is a clear divide again in British politics about the choices that we would make and the choices that the left would make. But we're setting out that forensically clearly. I spent over a decade as finance director of one of the UK's biggest companies balancing the books as it were, showing the source and application of funds, laying out your choices openly and honestly is in my DNA. It runs through me like a stick of rock. So we're not going to play fast and loose with the nation's finances. And that's a promise I can give to Telegraph listeners and readers that we will always discharge our fiscal duty.

5:43It's just in terms of what you've been trying to get attention for, this has felt like quite a big spending or tax cutting conference. Now, this is because Kemi's trying to lay out these red lines to say that if we get elected, here's what you know we will do. And because we promised it, unlike the last Tory administration, we won't go back on it. But if I think about some of the things that I have heard, an extra spending on an iron dome of about 10 billion pounds, you've made a pledge to cut a tax at every budget. Not cut a tax, but abolish a tax at every budget. That's quite big. And in your savings, every pound of saving 50 pence going towards the deficit.

6:20This is all sort of adding up. And I'm wondering, are you talking yourself into a corner where either when you enter government, you have to make so many cuts to keep up with yourself that you end up crashing the economy, or you're going to have to U-turn on some of this stuff because you just don't know what the fiscal situation will be in two or three years' time? Look, very fair. Let's unpick that bit by bit. First of all, it is my ambition to cut a tax in every budget, some of those as the... Was it cut or abolish? Forgive me. Abolish. Abolish. But it's an ambition. So I don't want to be too pedantic.

6:54But of course, our fiscal duty. It might not happen. It may not happen. Our fiscal duty, I want to be really clear, it's my ambition, like Nigel Lawson, to abolish a tax in every budget. But that is subordinate to our fiscal duty. We're not going to play fast and loose with the nation's finances. That's not who I am. Not every tax, as you well know, raises a very significant amount of money. Even inheritance tax raises less than 1 % of the overall receipts that the Treasury gets. So we're not talking about huge changes to the nation. There are bigger taxes. Sometimes there are simpler taxes as well that more people pay.

7:32So let's put all of this in context. And when we talk about spending cuts, remember, the UK government is now spending 45 pence in every pound. It spends over 1.6 trillion. So now those are huge numbers. I accept that listeners will find it hard to understand that. But when we're talking about the cuts, we really are talking about relatively small amounts of that. So, yes, we can do this. I won't say anything that we can't do. There is a different degree of preparedness in what we're doing. Yes, there's a lot this week because this is a conference. It's about ideas. It's about showing who we are.

8:09My favourite announcement, everyone will have their own. I'm a bit biased. My favourite announcement has been reducing the cost of a new home by£50 ,000. That doesn't cost the taxpayer anything. That's about removing net zero mandates, sustainability, accessibility, gold-plated building regulations. Some of the stuff the Tories introduced. Most of it the Conservatives introduced, Camilla. We're under new leadership. We are back to our core principles. And I was very clear in my speech earlier this week that we didn't get it right. In fact, one of the reasons why we've seen so much nonsense coming out of Liverpool is that we didn't even fight the battle of ideas.

8:48We didn't make the case for a smaller state for less regulation for lower taxes. But, you know, that's that's starting to disappear in the rearview mirror. You know, it's been a while since we were in government. We're now on our second socialist prime minister and the Conservative Party is united and is starting to talk about full throated conservative policies. How are you going to convince the public that actually austerity is efficiency? Because you mentioned the prime minister there. He's kind of Mr Eyelash's nice guy. By comparison, if you're going to massively cut government spending, you're going to look like the nasty party again.

9:23And what we have learned for right or for wrong since Covid is that the public does quite like Corbynomics. It quite likes free money, free stuff. That's not actually my experience. First of all, my job as Chancellor to be the one with the discipline. As finance director, you very quickly realise that every part of any organisation, whether it's the Daily Telegraph, Sky, its capacity to think of ideas, to spend money, will always outstrip its ability to do so. So I've made peace with the fact that you won't be necessarily popular, you might be respected, but you won't be popular. And that is something that any Chancellor, any Prime Minister, needs to be willing to do.

10:01We've seen too many people pleasers try and lead this country. That hasn't worked. It's got us into the mess that we are. But also, if I think about my own experience as a constituency member of parliament, I don't think a lot of these choices are that hard. People talk about welfare. The broad population is well to what people would regard as the right of centre on issues like welfare. It's only in SW1 and maybe the media that people get reticent about reforming welfare. ordinary people who are getting up doing two sometimes three jobs both parents working to try and make ends meet they fully understand that there are people out there with their new motability car and who are not putting in the hours and not even trying hard to look for a job

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11:24To go back to Camilla's question, though, about which voters you're targeting, I have felt this is a conference that could win you, say, Chelsea and Fulham. But I just want to check what you stand for for poorer voters. I mean, if I think about some of the things you're emphasizing, like inheritance tax or stamp duty, this is a very middle-class pitch. Go further outside the country. Go to a depressed seaside town. Tell me what you are offering to a young person in their 20s to help them get ahead in their life. A job, the prospect of a house, living in a country where economic growth just happens, where the public realm gets better because we're a country that's growing again, actually building things, the prospect of a better life.

12:13I said in my speech, you know, hope isn't something you can just print and hand out like a food stamp. But hope is important for young people. They've got to believe that they're going to have a better life by staying in our country than by leaving as too many young people are for overseas. And that's nuts and bolts. That's very practical stuff. If you can take, not every young person is going to buy a brand new home, I accept. But if you can take£50 ,000 off the cost of a new build home that on average is just under£400 ,000, that's a big difference. That's a couple of years worth of otherwise having to save up another couple of years of living with your parents.

12:47If you scrap, and there'll always be a little bit of a media fetish for novelty, so let's be clear. We've said a year ago we would scrap Labour's job-destroying unemployment bill. It's already put 200 ,000 people out of work in combination with Rachel Reeves' National Insurance Rises. The thing that young people want more than anything is a job. That's the pathway to independence. It's a pathway to having savings, a home, a family. And perhaps it hasn't been talked about enough at this conference because it's all about the announcements. But that would be a game changer. If we can get young people, the one in six young people that are not in work into a job, that's a pathway for a better life.

13:26If we don't fix that as a country, that is why young people leave. Young people end up in despair. Young people end up on a life of welfare. You have more business private experience than I believe the entire cabinet put together, which is admirable and exactly the kind of thing that people want to see from a chancellor. So it actually understands how the economy and how the private sector works. Have you ever been on benefits? No. You say things like hand out like a food stamp, and it's just a little bit insulting because being on benefits is it's not. I didn't say that about benefits, to be fair, Tim.

14:01I said that about hope. I said, Labour think you can hand out hope. You can't manufacture hope. Hope is something that people find themselves. Yes, but you want to introduce something a little like the American style food stamps, because your plan on benefits is that you can be put onto a subsistence system where you get a card, which you can't pay for with fags and booze. And I get that. But all this language around this conference of kicking people off benefits, forcing the undergoer to work. I just want to check that the Tory party hasn't forgotten that it's not easy being on benefits. Most people are not making a choice.

14:33It's a horrific bureaucracy that's very difficult to work one's way through. And the spirit of the Cameron era was we want to help you get off them, not kick you off them, because we think you're just living off the rest of us. I want to make sure, I want to double check that, as Camilla put it, the Tories haven't turned nasty on us. I don't think, look, firm but fair, right? I wouldn't accept any other adjectives, firm but fair. But I don't think you were on the panel or came to the panel yesterday that I did with Laura Trott and Helen Waitley, which was always about which is all about helping young people.

15:03We had two young ladies from the north of England. They talk about their difficulties in getting Saturday jobs, seasonal work, summer jobs. You know, those things that actually are very predeterministic of whether you will become what they call a neat or not. Yes. I mean, Alan Milburn's review, 61 percent of neats. horrible term forgive me but i think we understand now what that means yeah yeah 61 percent of needs have never had an hour of paid work now i've not been on benefits but i've probably worked since i was 14 or 15 you know a saturday job you know working out helping the grocery my first uh proper proper real job i suppose uh was working in tesco's in-store bakery now now that experience is not akin to being on benefits and i don't think benefits for most is a life of luxury don't get me wrong.

15:50But those sort of experiences are very formative. And that's what we're about. You know, it is, if you like, compassionate conservatism, firm but fair, saying to young people, we're not going to take the easy path and say, compassion is just sending you off to the benefits office if after a few months of looking, you can't find a job. And then goodbye. It's now a life of benefits. What a terrible prospect for a young person. So don't put words in our mouths or mischaracterise where we are. It's tough love, not killing with kindness. I think that is the order of the conference. You can borrow that, Andrew.

16:26Thank you, Arthur. Final question. You've got to take Lawson out of this because it's like asking who's your favourite Tory prime minister and everyone says Thatcher. Taking Lawson out, who's your favourite Tory chancellor? I'm not one of those people that sort of collects past Tory chancellors like who the hell has a favourite Tory chancellor? That would be a bit sad, wouldn't it? It would be a bit sad. I was going to do the whole How much is a pint of milk? Here's an easy one, and it will sound like a politician's answer, so I apologise. I work very well with Jeremy Hunt. You can't say that.

16:56I can't say that, no. He came out with all of his best ideas in his book after he's left office. This is the guy who put up corporation tax. They all do that. And we rightly said to Jeremy Hunt, is there any chance you could have done any of this very Thatcher-like economic stuff while you were actually Chancellor? And he was like, well, no, because COVID happened and we couldn't do any of it. But you liked Hunt. We worked. Look, he's a nice chap. I come from business world. What's perhaps a little bit different is working well as a team is fundamental to getting results. And, you know, you asked a question, so I'm answering it honestly.

17:28Fair enough. I felt with Jeremy Hunt, we worked well as a team. My main role was financial reform in the city. We made some progress, not enough. But there you go. There's an answer. It's honest. Did you know that Jeremy Hunt once put something I told him in his budget speech? I said my favourite quote of all time was from Eddie Stobart, who you'll be familiar with Andrew, the haulage boss, now deceased. And I said he came out with this great quote, which was as follows. The only place that success comes before work is in the dictionary. And Jeremy Hunt loved it so much, he put it in a budget speech.

18:02Very good. Do you have to respond to John Healy on the 28th of October? Or is it Kemi's job? I think it'll be chemmy because it's a budget. It's a bit of pedantry. Will you be there like passing your notes going, that's wrong. Oh, he's got the sums wrong there. I mean, how bad could this thing be in your mind? It'll be bad for the productive side of the economy because Labour simply don't understand that. Now, you know, I don't think chancellors should, as a design principle, always rule out increasing taxes. Geoffrey Howe had to put up taxes because of his financial inheritance. But in this particular case, when taxes are already in nosebleed territory, when business confidence and families confidence is at rock bottom, I do think the Chancellor, you know, one of my key tests is he should be ruling out putting up taxes.

18:45There is abundant opportunity for him to set out public spending cuts to balance his books, hit the fiscal rules. And that would do more for the confidence of the country than anything else he could do. Andrew Griffith, thank you very much for joining us on The Daily Tea. Thank you.