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00:00So Andy Burnham has promised growth in every postcode.
00:03It's a big, attractive political line, the sort of thing that voters think, that sounds great.
00:07Good growth in every British postcode.
00:11What a sea change that would be in the way UK government thinks about our own country.
00:17It does also tell us quite a lot about Burnham's own politics, I think.
00:21He's long argued that Britain is too London-centric, that Whitehall is too slow,
00:26you evildoers in Whitehall,
00:27and that too many decisions about towns and cities are made by people who don't live in them.
00:32It's not necessarily causal that if the decisions are made somewhere else,
00:35the growth would come though, Cleo, which is partly what we're going to get into today.
00:39We certainly are.
00:40What we're going to be asking is, Andy Burnham,
00:43he's promised growth in every postcode, as we now know,
00:45but what does that look like and can it actually be done?
00:50Hello and welcome back to In The Room.
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01:16Right.
01:18This is how Cleo feels talking about the economy, just a big old sigh.
01:21I do.
01:22I look at a lot of scary numbers here.
01:23Well, I think they're scary.
01:25And at a certain point, these numbers for a lot of people don't mean anything.
01:30But there is one that is genuinely very scary.
01:33That is, public debt is 95% of GDP.
01:38So our debt is kind of everything that we make.
01:42We're servicing our debt all the time.
01:45And from a personal point of view, that really resonates.
01:49So it is true to say, of the many problems slash opportunities that Andy Burnham has,
01:54the economy in our country is resolutely not in a good state.
01:58So he's not quite walking into a burning building,
02:00but he's walking into a house where there's quite a large mortgage.
02:05The bills are really high.
02:07Repairs are overdue.
02:09Absolutely everybody wants more money for everything.
02:11It's all on credit.
02:12And also, I'd like a new kitchen, please, effectively.
02:16Yeah.
02:16Are we in a situation where, like, our sofa can get repossessed?
02:21Well, I don't think we're quite that bad.
02:25Yeah.
02:25But there is no kind of untapped fortune here.
02:29And unfortunately for Andy Burnham,
02:30some of the problems in our economy go back a really long way.
02:33So there's no easy fix.
02:34And one of his issues is that he's not got very long for the next election.
02:39And he's got to try and find ways of actually physically growing the economy
02:43that work in the next two years,
02:45as well as fit with all of his narrative about what he wants to do
02:49in terms of changing the country.
02:51And those two things, there's some tension and choice between them too.
02:54So, you know, you want to devolve all of the powers,
02:57but then you also want to be able to pull the levers
03:00and make the growth happen now.
03:02And those two things aren't compatible.
03:03And actually, you want people to feel like there's growth now.
03:07That's the really difficult thing.
03:08It's not just whether you can trot out some figures.
03:10Because as I just said, that often doesn't mean anything to people.
03:14The problem is, can you make Britain,
03:16the average Britain, feel better off?
03:18Because one of the slightly worrying things is that as a European bloc,
03:23we aren't doing that badly.
03:24We're just on a very sluggish continent.
03:27And amazingly, well, amazingly to me anyway,
03:30we're doing better than Germany,
03:31which is the country that Andy Burnham holds up
03:34as the kind of perfect, devolved federalist state
03:37for getting growth in every postcode.
03:39So that's a bit worried that his blueprint for growth
03:42is objectively failing.
03:45Yeah, and I think that it's fair to say
03:47that as much as we all like to think we're in control,
03:49not to keep on going back to some of our old Brexit friends,
03:52that actually the UK economy is particularly susceptible
03:54to what's happening in the world.
03:55So the reason that we have reeled more
03:58from the shocks from the Ukraine invasion,
04:00from the shock from COVID, from all of these things,
04:02is because we're so intrinsically tied
04:04to what is happening elsewhere.
04:06But there's a very good article in The Economist last week
04:08by my old boss, Mark Sedwell.
04:11Shout out to Sedders.
04:13Shout out to Mark Sedwell,
04:14which amongst other things that he's talking about
04:16is the kind of shape of our economy.
04:17So I'm going to shamelessly crib from that.
04:19So if it's wrong, it's not my fault, it's his.
04:21Just FYI, which I think is why I said quite a lot
04:23when we worked together.
04:24But basically, he said that three quarters of our demand
04:30is consumption, effectively.
04:32So that's just me buying stuff.
04:33That's you and me buying, well, me buying jelly cats,
04:35I think, basically.
04:36That's the jelly cat economy.
04:39That's three quarters of consumption.
04:41And then three quarters of our economy is supply.
04:44So we do three quarters of our spending is on buying stuff
04:48and three quarters of the supply side of it,
04:51that's the demand is the buying stuff.
04:52The supply side of it is providing services.
04:55So we don't make the stuff that we buy.
04:57We import it from overseas
04:59and we import large amounts of our food.
05:01We import large amounts of things that you'd sort of think,
05:03well, surely we make that here.
05:05We really don't.
05:06We are a global trading nation
05:07and we export services and we import goods
05:10and then we buy a lot of goods.
05:13I'm looking at you.
05:14So if you look back at times
05:15when our economy has been really productive
05:17and we're growing,
05:18it's not just the amount of GDP which matters.
05:20So we'd all be richer
05:21if our economy was producing more money
05:24and more wealth.
05:25But also we are collectively a bit poorer
05:27because we're taking so much of our economy
05:30is being spent on tax
05:31and so much of our tax
05:33is going to things which are,
05:35an economist would say,
05:36like unproductive.
05:37So the vast majority of our tax
05:39goes on welfare and pensions
05:41and of course it's important to look after people.
05:43I'm not sitting here advocating for like,
05:45well, let's not do,
05:46let's not bother with that.
05:47But the way in which we've got ourselves
05:48structurally to a position
05:49where an awful lot of the public subsidy
05:52is effectively going into things
05:54that don't produce economic growth.
05:56Right.
05:57So it's a kind of,
05:57it's a declining situation.
05:59Right.
06:00So just so I can really nail this in layman's terms,
06:03what you're saying is
06:03because we have no growth in the economy
06:05or enough really.
06:07Yeah.
06:08We are,
06:09we are raising that money through tax.
06:12So we're the highest tax threshold ever.
06:15And yet we are still so much in debt
06:18because we're having to raise so much through debt too.
06:20And even then people will say
06:21they don't think we're spending enough
06:24on various bits of our system,
06:26including health and everything else.
06:27So we are going to,
06:28having presented this,
06:30you know,
06:31slightly gleaming position,
06:32we're going to come back to
06:33actually what do we think this means
06:34for Andy in political terms,
06:37we're already calling him Andy and our kid.
06:41And then what we think might happen
06:43and what might need to happen.
06:44Just as a really good ready reckoner
06:46for you to have in your head
06:46about the tax side of this,
06:48which I think matters too,
06:49is that for every pound the government spends,
06:5128p goes to welfare and pensions,
06:5420p goes to health,
06:5611p goes to education,
06:588p goes to interest on the national debt.
07:01So that's our credit card.
07:02That's not paying down the debt,
07:03that's paying the interest.
07:04Just keeping our head above water.
07:06And the rest is then spread across defence,
07:08policing, transport, local government,
07:10everything else.
07:10So a vast proportion of our public spending
07:14is going to things which businesses would tell you,
07:18although they're absolutely important and essential,
07:20that a lot of it is towards
07:22the less productive side of the economy.
07:24So for those of us who feel completely tapped out
07:27by the end of the month,
07:28that's where the nation's economy is too, basically.
07:33We're all in it together.
07:34I think so.
07:36We're taking on water.
07:37Good news.
07:38Good news.
07:39We're all in it together.
07:40And we are literally all in it together
07:41because some of the problems,
07:43take housing for an example,
07:45that we are paying because we haven't been
07:47building enough housing for years.
07:49Everything is more expensive.
07:50So your housing cost is more expensive.
07:52My housing cost is more expensive.
07:53It's more expensive for the government to build.
07:55They need to build more council housing
07:57for people to get social rents
07:59because nobody can afford private housing
08:01because there isn't enough housing.
08:02So quick fix.
08:04Let's sort out housing, please.
08:05Thanks very much.
08:06Ah, yes.
08:06Well, we'll get on to that
08:07because there are a few little quick fixes
08:09that could help Andy Burnham
08:10with his growth in every postcode dream.
08:16So there's a big difference
08:17between what prime ministers say
08:18on the way into being prime minister
08:20and then what they're faced with
08:21in terms of their choices when you're with them.
08:24And I think on this growth in every postcode,
08:26this is a total classic
08:29because there is a huge difference
08:30between are you going to totally make
08:33the right long-term decisions,
08:35restructure the economy,
08:36take the pain in the short term,
08:38but then for long-term dividends,
08:40or are you going to end up
08:42just having to do what's politically expedient
08:44in exactly the same way
08:45that every inhabitant of number 10
08:47has done in the last period
08:49with perhaps the notable exception
08:51of Liz Truss.
08:52And like we've lived through
08:53some of that precise dynamic,
08:55the clash between
08:56this is the long-term right thing to do
08:58and then this is a short-term
09:01pragmatic answer.
09:02I mean, that was Johnson 2020, right?
09:04Yes.
09:05So, yeah, I do really feel like
09:07we've been here before,
09:08but in slightly different circumstances.
09:09So, pre-COVID,
09:11but post-2019 general election,
09:14we all kind of gathered
09:15after the Christmas break,
09:16January 2020,
09:18and, you know,
09:20there were very specific instructions
09:21for the civil service,
09:23which was we are going to have
09:2410 years of like real change here.
09:26And factored into that
09:27was obviously a political plan,
09:29which was we will have
09:29a general election in five years.
09:31To be clear, this is pre-COVID.
09:33So, we need to have enough evidence
09:35of growth and change
09:37that people will stick with us
09:39and that they'll feel it
09:40and they'll see it
09:41so that we can see
09:42a proper plan through.
09:44And we want to have
09:45a major rethink of planning.
09:47We want to have immigration reform
09:49so that we can bring in
09:51the best and brightest,
09:52people with PhDs
09:53and science backgrounds
09:54and, you know,
09:56some of the big growth areas
09:57like Oxford and Cambridge
09:59can feel the benefits
10:00of these brains coming in.
10:02We wanted to have
10:04a meaningful reshuffle,
10:07which is the only one
10:07I really remember being part of
10:09where we felt we actually had
10:10some round pegs in round holes.
10:13We wanted to move
10:15the House of Lords to York.
10:17We wanted, you know,
10:18science is a really important part
10:21of our thinking here,
10:23green jobs, planning reform,
10:25which is a huge one
10:27on both infrastructure,
10:28but actually on housing,
10:30using brownfield sites
10:30around stations,
10:31that kind of thing.
10:32That was a very kind of
10:33long-term plan
10:34with some short-term
10:36thoughts and feelings
10:37to keep everyone tied in.
10:39However, there were two
10:40sort of totemic issues
10:41that I think became indicative
10:44of problems ahead
10:46with that particular
10:46prime minister
10:47and those were HS2
10:48and Huawei,
10:50not Hawaii as you like to call it.
10:52I do like to misspell
10:53Huawei as Hawaii
10:54because even after all this time,
10:55I literally can't spell it.
10:58You're right,
10:59that period of time
10:59was this massive clash
11:01between this long-term
11:02aspirational,
11:03this is what we're going to do,
11:04we're going to do
11:04all these really big things,
11:05and then the short-term
11:07pragmatism of we're going
11:08to do this expedient stuff.
11:11We should come back
11:12to planning
11:12because planning is going
11:13to be the nightmare,
11:14I think.
11:15It's your bag, baby.
11:16It is my bag.
11:17I was at a party last week
11:19talking about the 1947
11:21planning reforms.
11:22That's how I like to roll
11:23at a party.
11:26Scintillating chit chat.
11:27Please invite me more.
11:29But we should come back
11:30to that because that's
11:31like a devolution headache.
11:32But my memory of that time
11:34as well on these two decisions,
11:35so that was do we scrap HS2
11:37or do we carry on with HS2,
11:40which is a decision
11:41that I think every Prime Minister,
11:43it's extraordinary
11:44that we keep on going
11:45around and about this thing.
11:46And were Huawei allowed
11:49to invest in some
11:50telecoms infrastructure?
11:52So you're absolutely right,
11:53and I'm sure you're going
11:53to give us the nitty-gritty
11:54on why these decisions
11:56went one way or the other.
11:57I do also remember it
11:59as a total point
11:59of breaking confidence
12:00between Dom Cummings
12:02and the Prime Minister
12:03because Dom was very strong
12:06on we need to do
12:07the right long-term thing,
12:08some of it's going to be hard,
12:10but it's going to be
12:10the right thing for the economy
12:11and the broader plan
12:12that we need.
12:13But you must do it now.
12:14Do it now when you've got this,
12:16you kind of use the capital
12:17of this massive amount
12:18of goodwill
12:19to do the hard but right thing,
12:21and then what happened
12:22in practice
12:22on both of these decisions
12:24was not the hard
12:25and right choice
12:26that was made.
12:27Yeah, and Johnson
12:27wanted to continue
12:28to ride the popularity wave,
12:30and then obviously COVID
12:31came along
12:32and the rest is history
12:33as we know.
12:34So just very quickly
12:35on HS2,
12:36I mean,
12:37this has hung around our necks
12:38like an albatross
12:39for years as a nation,
12:40and to put this
12:41in a bit of
12:42kind of cost perspective,
12:44we have now spent
12:45more on HS2,
12:47a train line
12:47we currently
12:48don't even use yet,
12:50than NASA spent
12:51on the recent trip
12:52around the moon.
12:54So that's quite sobering,
12:56isn't it?
12:57Well, I think it's
12:57embarrassing, actually.
12:58Yeah.
12:59And you're quite right,
13:01Cummings tried to kill it,
13:02Johnson loves
13:03big infrastructure projects,
13:05I suppose it was also
13:06a conservative legacy
13:07because it's actually
13:07from the Cameron
13:08and Osborne years,
13:10and we've had issues
13:11with newts and bats
13:13and all sorts,
13:14and it's so,
13:15I mean,
13:15I joke about it,
13:16but it's actually
13:16so aggravating
13:17to even think of it.
13:18There's something in that,
13:19though,
13:19which is why have we got here
13:20as an economy
13:21and why have we got here
13:22in terms of decisions
13:23that government make.
13:24So one of the things
13:25that I think
13:25is little understood
13:26is that the reason
13:27you end up
13:28with this unbelievably
13:29large regulatory burden,
13:31and everyone talks
13:32about the way,
13:33if we want to go back
13:33to having an economy
13:34that is firing
13:35on all cylinders,
13:37governments don't
13:38grow the economy,
13:39the thing that grows
13:39the economy
13:40is businesses
13:41being able to
13:42make money,
13:44employ people,
13:45everyone gets richer,
13:46hurrah.
13:46Like,
13:47it's very hard
13:47for governments to do that,
13:48you do need people
13:49to spend their own money
13:50and attract investment
13:51and all of those things,
13:52and everybody says
13:53about our country
13:54there's too much
13:54of a regulatory burden.
13:56I sometimes hear that
13:57and think,
13:58well,
13:58actually regulation
13:59is quite useful
13:59because that's why
14:00people don't die,
14:01so thanks very much
14:02to your anti-regulatory
14:03bonfire of red tape.
14:04Like,
14:04not all regulation is bad.
14:06However,
14:07what we've had
14:08over time in Whitehall
14:10because of the way
14:10that decisions are made
14:12is that if you're
14:13the department
14:13that cares about
14:14newts and bats
14:15and badgers,
14:16then you've got no,
14:17there's no downside
14:18to you
14:19for just constantly
14:20putting in
14:21more and more
14:22and more protections
14:23for whatever you want
14:24to care about
14:25because you are
14:26so strongly incentivised
14:28to kind of do your job,
14:29which is,
14:30my job is protecting nature,
14:31and then you have
14:32another bit of the Whitehall
14:34that's like,
14:34my job is protecting education
14:36and my job is protecting this,
14:37and it's like,
14:37whose job is making sure
14:38that the country functions
14:41and that it's possible
14:42to do business in a place,
14:44and that's one of the criticisms
14:45that really sticks
14:46for Andy Burnham's
14:47Whitehall is a bad place
14:48to make decisions,
14:49is because all of these
14:51separate organisations
14:52with very separate incentives
14:54who never have to make
14:55hard choices between,
14:57is this a good idea,
14:58would this affect house building,
14:59one of the reasons
15:00why this is the most expensive
15:01country in the world
15:02to build houses
15:04is because of the
15:05unbelievable slew
15:07of regulations
15:08that have been imposed
15:09on house builders
15:11with really good intent,
15:12right,
15:12they're all environmental
15:13protections or they're,
15:15you know,
15:16about trying to make sure
15:16that people can walk
15:17to transport modules
15:18or whatever,
15:19they're not,
15:20people don't start off
15:20with thinking,
15:21how can I make sure
15:22that this country
15:22doesn't grow,
15:23I can't wait,
15:24maybe they do,
15:25maybe this is an absolutely
15:27giant conspiracy.
15:29I am so much more
15:30on the cock up
15:31and not incentives aligned
15:33end of the spectrum,
15:34that's why we're here
15:35and it's pretty easy
15:36sitting in Whitehall
15:37to just say,
15:37oh yeah,
15:38okay,
15:38that seems a bit annoying
15:39but, you know,
15:40newts matter.
15:41But this is why
15:42his intent is so important.
15:43If he,
15:44if growth in every postcode
15:45is what matters
15:47to him the most,
15:47then those other things
15:48should fall to one side
15:49and he will have to
15:50arbitrate on these things
15:51and he will have to say,
15:52but I've said,
15:54my priority is growth
15:55and if that means
15:56house building
15:57or infrastructure
15:58or whatever,
15:59that is more important
16:00to me than bats.
16:02I'm just going to say it.
16:03It's crazy
16:04but I'm going to say it.
16:05The second,
16:06the second sort of
16:07totemic issue,
16:08of course,
16:08was Huawei
16:09and as you say,
16:10this is a Chinese company
16:11that wanted to
16:13essentially entwine itself
16:15into our,
16:17into our,
16:19would you say
16:19broadband infrastructure?
16:21You would say broadband.
16:22God,
16:22that's broadband.
16:24What is the,
16:24so nasty.
16:26What is the,
16:27the worldwide web.
16:29What is the width
16:29of the band?
16:31In the fibre topic.
16:34It's like the telegram
16:36but jazzier.
16:37Yes.
16:38Well,
16:38and as you can imagine,
16:40there were major
16:41security implications
16:42to this.
16:43This is also
16:44not British technology
16:46either.
16:46It really speaks
16:48to the other problem
16:48with our economy
16:49which is importing
16:51technology
16:52and expertise
16:53from elsewhere
16:53and not having
16:54homegrown science
16:56and technology
16:56doing it for ourselves.
16:57and like why,
16:58why would,
16:59you think how preciously
17:00we,
17:00we guard
17:02the undersea cables
17:03that are bringing
17:04information in
17:05out of the UK.
17:06Why would we invite
17:07a foreign state
17:09straight into the heart
17:10of it all?
17:11And there was a,
17:12as you can imagine,
17:13there was a huge
17:14rab out there.
17:15Should we be
17:15buying our own
17:16satellites instead
17:17and doing this
17:19ourselves
17:19and it was just
17:19another,
17:20it was a really,
17:21it was a really
17:22difficult time
17:23for thinking,
17:25oh my gosh,
17:26Boris Johnson
17:27and Dominic Cummings
17:28in January 2020,
17:29even then,
17:30they're going to
17:30part company.
17:31You know,
17:32this is my favourite
17:32thing to say
17:33but actually
17:34Dom was entirely
17:34right.
17:35But this is really
17:36two months
17:37before we had
17:38to start locking
17:39down in the UK
17:40and these arguments
17:42were happening
17:42therefore in a vacuum.
17:44So,
17:45you know,
17:45there was obviously
17:46a parallel universe
17:47where these decisions
17:49may or may not
17:50have been taken.
17:52The point is
17:52that Johnson
17:53already at that stage
17:54was not inclined
17:54to go with
17:55the Cummings approach
17:56but can you imagine
17:57the situation
17:58that Andy Burnham
17:59would be inheriting now
18:01even without
18:01what COVID has done
18:02to our economy
18:03if we'd been able
18:04to put those plans
18:04in place at the time?
18:05I know,
18:06but I can't quite cope
18:06with the multiverse
18:07of possibilities
18:08of all the different
18:09political things
18:10that might have happened
18:10if should have,
18:11would have.
18:11Everything,
18:12all at once.
18:13That's certainly
18:14what it felt like.
18:15Let's just go back
18:16to Andy Burnham
18:17and the choices
18:17ahead of him
18:18and this growth
18:19in every postcode thing
18:20and maybe we should
18:20just pick a couple
18:21of other issues.
18:22I do want to talk
18:23about planning.
18:23Planning is a really
18:24good example
18:24of how everybody
18:27thinks,
18:28everybody,
18:28everybody.
18:29You find anybody
18:30who thinks
18:31that you should
18:32keep planning
18:33the planning system
18:33as it is.
18:34It's like,
18:35it doesn't matter
18:35what political party
18:35you are,
18:37planning needs
18:37to be freed up.
18:38We want to build
18:38both infrastructure
18:39for the economy
18:40and also houses
18:42for people to live in
18:43which would be
18:43a tremendously good idea.
18:44then we have to
18:46free up the planning system.
18:47What that actually
18:48means in practice
18:49is at national level
18:50you are going to say
18:51very well done
18:52people in a local place
18:54who might not like
18:54this thing to happen.
18:55Tough luck.
18:56It's going to have to happen.
18:57So what you want
18:59it's sort of
19:00the anti-devolution
19:01is planning
19:01because you might
19:03in theory say
19:04well what we want
19:05is for every place
19:06to make their own decisions
19:07about what happens
19:09in their place.
19:10Which town is going to say
19:11what I'd really love
19:12is a small reactor
19:13nuclear plant
19:14just outside our town
19:15thanks very much.
19:16Yeah and an immigration
19:17detention centre
19:18while we're at it
19:18and 2,000 new homes
19:20and a massive new train line
19:21over this field
19:22and that's not how
19:23local,
19:23if local decision making
19:24worked like that
19:25we wouldn't be
19:26where we are today.
19:26So you are both saying
19:28with the one hand
19:29what I want to do
19:29is devolve decision making
19:30to these places
19:31and hope that the communities
19:33in these places
19:34will be so public minded
19:35that they will want
19:37to sacrifice something
19:38themselves
19:38and give up something
19:39that belongs to them
19:40whatever it is
19:40and in order that
19:42some unknown
19:44other people
19:44benefit from
19:46all of this infrastructure
19:47or all of this housing
19:48or all of this disruption.
19:49So it's a diametrically
19:51opposed
19:52set of decisions
19:53that
19:53and I think that's going
19:55to be pretty hard
19:55to unravel
19:57and you won't
19:58get growth
19:58without doing
19:58something on planning
19:59just, I mean
20:00she says very confidently
20:01but I'm very confident
20:03about that.
20:03Just on the domestic
20:03front of planning
20:04having lived
20:06in some rural villages
20:07and stuff like that
20:08in my experience
20:09people are not
20:10anti the houses coming
20:11but they want it
20:13to come with
20:13another school
20:14or a doctor's surgery
20:15it's the stretch
20:16on the other resources
20:18rather than the number
20:19of people coming in
20:20that seems to
20:21stress people out
20:22the most.
20:23Yeah and also
20:24is it houses
20:25that they can afford
20:26to buy
20:27or that their children
20:27can afford to live in
20:28because too often
20:29what you have
20:30is especially
20:30in affluent areas
20:31is what we get
20:32replicated
20:32is all the big houses
20:34and no one's
20:35incentivised to grow
20:36to build the smaller houses
20:37which is actually
20:38the thing that people
20:38could afford
20:39so housing is uniquely
20:40unaffordable
20:41in this country
20:42and it's one of those
20:42things which we have
20:43a really big problem
20:44with and needs to be fixed
20:46and Andy Burnham
20:47has said a lot
20:47quite rightly
20:48I should say
20:49as chair of shelter
20:50about building
20:51social housing
20:52we definitely need
20:53a massive increase
20:54in the number
20:54of social homes
20:55to be built
20:56we proportionally
20:57in this country
20:58have more social housing
20:59than most other economies
21:00and that's because
21:01we need to have
21:02kind of under market rent
21:04because market rent
21:05is so expensive
21:06yeah it is
21:07so we just need more
21:09we need more of everything
21:10more of everything
21:11when it comes to housing
21:11oh well that's step one
21:13then more of everything
21:13more of everything
21:14but it's not just
21:15cutting planning
21:16is it
21:16there's other red tape
21:17that Andy could perhaps
21:19free up
21:20or at least
21:21I would argue
21:22undo some of what
21:23Rachel Weaves and
21:24Keir Starmer have done
21:25on the economy
21:26I'm thinking of
21:27business
21:28business business
21:31it's undoubtedly true
21:32to again to go back
21:34to this really boring thing
21:35that you have to make
21:36reduce the cost
21:37of doing business
21:37if you want to get
21:38investment in
21:39if you want businesses
21:40to grow
21:40now I think the smartest
21:42way of doing that
21:43is to pick some sectors
21:45pick some places
21:46like back winners
21:47so actually we think
21:49the future of the British economy
21:50is in AI and tech
21:51it's in life sciences
21:53it's in high end
21:55manufacturing of artisan products
21:57it's whatever it is
21:58you need to pick some things
21:59and you need to pick some geographies
22:01and say you're going to
22:02subsidise those businesses
22:03you either can carry on
22:05paying people
22:06to not work
22:07because there isn't work
22:08for them
22:08or you can start
22:09subsidising the work
22:11I find the whole
22:12kind of framing
22:13of the labour debate
22:14a bit odd about this
22:15because they talk a lot
22:16about the cost of living
22:17and they don't talk
22:18very much about
22:18the reason cost of living
22:20is a problem
22:20isn't because
22:21things are expensive
22:22it's because people
22:23aren't paid enough
22:24and actually it should be
22:25about how can you get
22:26more higher wages
22:27that then you could afford
22:28to buy even more jelly cats
22:30but this is one of
22:32Andy Burnham's problems
22:33I think
22:33is that
22:34it's the political
22:36it's the political reality
22:38of the parliamentary party
22:39he has as well
22:40and a lot of the cabinet
22:42a lot of his MPs
22:44have not run a business
22:46before
22:46they've come from
22:47the charity sector
22:48and there's nothing wrong
22:49with that at all
22:50but you end up
22:53having people
22:53who are not necessarily
22:54that well versed
22:55on the economy
22:55there are group sessions
22:58in parliament
22:59at the moment
22:59for MPs to learn
23:00about what the bond market is
23:02and what the base rates
23:04of tax are
23:05and stuff like that
23:05and you know
23:07it's not a great
23:08it's not a great
23:09starting position
23:10for him to have MPs
23:12who will be
23:12who will be
23:13basing a lot of their reaction
23:15to his plans
23:16on how his constituents
23:17feel about it
23:18and therefore how he
23:19packages them up
23:20so a good example
23:21of this
23:22is the winter fuel
23:23duty
23:24and the welfare debate
23:26which obviously
23:27did not go very well
23:28for Keir Starmer
23:29and Rachel Reeves
23:30the government ended up
23:31backtracking
23:32on both of those
23:33and the idea was
23:34that the wealthiest
23:36pensioners
23:36would lose
23:37the winter fuel allowance
23:38which I think
23:39is totally fair enough
23:40but that wasn't
23:41how it was presented
23:42instead
23:43most of the public
23:44came away thinking
23:45winter fuel
23:46was being taken away
23:47from the poorest
23:49and same goes
23:50for welfare
23:50where people thought
23:52that disabled people
23:53were going to be
23:54without their payments
23:56and again
23:56that just wasn't
23:57explained very well
23:58but the reaction
23:59from Labour MPs
24:00was incredibly strong
24:01and there were rebellions
24:02on these
24:03and Andy Burnham
24:04has got a job
24:05on his hands
24:06to
24:07I don't want
24:08to sound too snooty
24:11about this
24:11but to sort of
24:11educate some of his MPs
24:13with the hard choices ahead
24:14and to say
24:16this is difficult
24:17when I'm proposing
24:18but it will work
24:19and you have to stick
24:20with me
24:21which I think is really
24:22what Keir Starmer
24:23was saying
24:23he just wasn't saying
24:25it with a nice accent
24:26no and actually
24:27we've made ourselves
24:29in a poorer position
24:30because one of the other
24:31reasons that we're
24:32paying these levels
24:33of debt interest
24:34so it has directly
24:36cost us all money
24:38that we've had
24:38so much political
24:39instability
24:40because when investors
24:42and you talked about
24:42the bond markets
24:43but this stuff
24:44is always much more
24:44simple and more human
24:46than people dress it up as
24:47that basically
24:49it is really
24:50really not a good place
24:51to invest
24:51if you think
24:52the government's
24:53going to change
24:53every half an hour
24:54the political direction
24:55is going to change
24:56really regularly
24:57and you know
24:58someone's going to
24:59stand up and say
25:00we're definitely
25:00going to invest
25:01in this market
25:01and then six months
25:03later there's another
25:03guy saying
25:04we're definitely
25:05not going to do
25:05that again
25:06and you can't
25:07even rely
25:07on the same
25:08political party
25:09following the same
25:10principles
25:10I mean look at
25:11the kind of
25:12amazing rainbow
25:13of policy choices
25:15there were
25:15in the conservative
25:16administrations
25:17from 2016
25:18to 2024
25:20and we pretty much
25:21covered the entirety
25:22of the political
25:22economy in those
25:24choices
25:24so the more
25:25that he can
25:25project political
25:26stability
25:26the more
25:26that he can
25:27genuinely
25:27build alliances
25:29and create
25:30cross-party
25:30consensus
25:31particularly in
25:31places
25:32the better
25:33I think the
25:33other thing
25:34if you think
25:34about what
25:35are the other
25:35things that
25:35Andy Benham
25:36could actually
25:36do
25:37do we align
25:38closer to the
25:39EU
25:39so in terms
25:40of exports
25:41obviously
25:42for a very
25:43very long time
25:44our economy
25:45has been tailored
25:45towards exporting
25:46to the EU
25:48that is much
25:49more complicated
25:49because of Brexit
25:50there are very
25:51very strong
25:52voices in the
25:52Labour Party
25:53that are saying
25:53what we need
25:54to do is align
25:54as close as
25:55possible
25:56to the EU
25:58now
25:59because we
26:00want to
26:00in the short
26:01term
26:01just build
26:02that economy
26:03back again
26:03and you know
26:04that will
26:04probably make
26:04a difference
26:05to some
26:05of the numbers
26:06the problem
26:06with that
26:07choice
26:07is we'll
26:08be aligning
26:08ourselves
26:09with a bit
26:09of the world
26:10economy
26:10that is
26:11definitely
26:11not growing
26:12correct
26:12so actually
26:13you know
26:14the US
26:14is seismically
26:15important
26:16to our
26:17economy
26:18in terms
26:18of exports
26:19it's seismically
26:19important
26:20in terms
26:20of digital
26:21all the new
26:22bits of the
26:22economy
26:23aren't facing
26:24back into
26:24the EU
26:25and there
26:26are some
26:26quite hard
26:27choices there
26:27about do you
26:28out of sentiment
26:30or kind of
26:31short term
26:31pragmatism
26:32think we'll
26:32just unwind
26:33some stuff
26:33and then we
26:34can maybe
26:34claw back to
26:3570% of where
26:36we were 10
26:37years ago
26:37on some
26:38services
26:38some exports
26:39or do we
26:41say actually
26:42we need to
26:42double down
26:43go further
26:43align more
26:45with the
26:45parts of
26:46the world
26:46economy
26:46that are
26:47really growing
26:48and likely
26:49to carry on
26:49growing over
26:50the next
26:5010 years
26:51and that is
26:51a that's a
26:52hard but
26:53very brutal
26:53choice
26:54well Andy
26:54Burnham's
26:54solution
26:56is devolution
26:57growth in
26:58every postcode
26:59number 10
27:00in the north
27:01is this the
27:02silver bullet
27:03that's going to
27:03solve our
27:04problem talent
27:04I don't think
27:05devolution
27:06therefore equals
27:07growth
27:07if you look at
27:08what has actually
27:09happened in
27:10places that have
27:10had a lot of
27:11devolution
27:12so take
27:13Wales for example
27:14it's hard to
27:15argue that
27:16the practical
27:17impact of that
27:17has been the
27:18Welsh economy
27:18has been better
27:19or in fact
27:20services have
27:21been better
27:21so the NHS
27:23is by every
27:24measure poorer
27:24in Wales than
27:25it is in
27:25England
27:26so you shouldn't
27:27draw a causality
27:28between you just
27:30devolve something
27:30so therefore it's
27:31going to be fine
27:32because the
27:32practical reality
27:33is that
27:34that isn't a
27:35given and
27:36it's also not
27:37actually that
27:38legendary an
27:39argument for
27:39people which
27:40is well don't
27:41worry you
27:41haven't had any
27:42growth but you
27:42have now got
27:4384 new
27:44bureaucrats
27:45working in the
27:46town hall who
27:47are now taking
27:47another set of
27:48decisions that
27:48you didn't really
27:49understand or
27:49care about in
27:50the first place
27:50wahoo we've
27:52given you that
27:52sort of growth
27:53the sitcom
27:53rights itself
27:55even I wouldn't
27:56watch a sitcom
27:57set in local
27:57government
27:59brutal
28:00that's my
28:01heart
28:02but what is
28:03options is
28:04there I
28:05don't know is
28:05there cause for
28:05optimism what
28:06can he do
28:08so I think
28:08there is I
28:09mean I've said
28:09all that in a
28:10slightly snide way
28:10about devolution
28:11it is also true
28:12that were you
28:13able to let
28:14places that
28:14really have the
28:15chance to go
28:16gangbusters on
28:17backing particular
28:17sectors for the
28:18economy to really
28:20make their
28:20universities totally
28:22pop and much more
28:23commercial to put
28:24investment around
28:24places there are
28:25things that you can
28:26definitely do in
28:27geographies of the
28:28country if you want
28:29to and they should
28:29definitely be doing
28:30that and that has to
28:31involve a bit of
28:32local decision
28:32making but it's
28:33not kind of one
28:34size fits all just
28:35devolve some powers
28:36and therefore equals
28:37growth everywhere I
28:38also think and this
28:39is easy for me to
28:39say because it's so
28:40far away from being
28:41my day job anymore
28:43so why not be as
28:44full fat annoying as
28:45I possibly can be I
28:47think one of the
28:47things that's easy to
28:48see from the outside
28:49is the framing of all
28:50of these conversations
28:51are very old money
28:53it's like we're
28:53basically effectively
28:54still having the
28:55same rows in White
28:56Hall around the
28:58structure of the
28:58economy that somebody
28:59who'd worked in the
28:59civil service in the
29:0080s or 90s or
29:0280s would recognise
29:03it's the same
29:03the triple look
29:04I always hear
29:05it's the same old
29:06but it's the same
29:06old stuff and I
29:08think that if you
29:08were to really
29:09imagine what does
29:10a properly 21st
29:11century economy look
29:12like it wouldn't be
29:13like this but good
29:15news it might be like
29:16some of the things
29:16that this country is
29:17really good at we
29:17have always been
29:18early adopters of
29:20tech and and both
29:21as consumers and as
29:23investors in business
29:24you can imagine that
29:25it's possible if we
29:26did sort out our
29:27sovereignty of our
29:29infrastructure our AI
29:30if we were able to
29:32monetise some of our
29:33data in a better way
29:34collectively this is
29:36going to sound
29:36slightly mad but bear
29:38with me so there's
29:40this extraordinary
29:40piece of research
29:41that was done about
29:42the NHS in Wales by
29:44an American
29:45university which
29:46taking the full
29:47complete data set of
29:48people who were given
29:49the shingles vaccine
29:49at ages of 80 in a
29:51long longitudinal way
29:53have been able to
29:53demonstrate that the
29:54shingles vaccine
29:55actually helps prevent
29:56dementia they don't know
29:58why but the the data
29:59set was so big because
30:01it was the whole of
30:02the population the
30:02relevant population in
30:04Wales and you could
30:05very you could do a
30:06very clear compare and
30:07contrast between people
30:08who'd had the vaccine
30:09because they were 80
30:10people who didn't have
30:11the vaccine because
30:11they were 81 and you
30:14could demonstrate over
30:14time that this had
30:15happened now it's
30:17perfectly possible we
30:18are the largest
30:19population cohort in
30:21the world who are all
30:22part of the same
30:23health system should you
30:25want to and it's our
30:27data but the NHS is
30:28ours so we
30:30collectively could own
30:31and utilise the data
30:33that belongs to us
30:34because it's public
30:34data and start to be a
30:37bit more sensible I
30:38remember seeing this
30:38mind-blowing presentation
30:39a mind-blowing
30:40presentation a few
30:43years ago about how
30:44you could effectively
30:45fund the whole of the
30:46NHS outside taxation if
30:48we were able to just
30:49use the data of our
30:51population to it's not
30:54just like so that
30:55pharmaceutical people
30:56can do their drugs
30:57trials
30:58careful
30:59there's also which
31:00does help you know
31:01it's quite useful for
31:02drugs to be tested and
31:03for people to check
31:03causality but you could
31:04you could map and
31:05understand so much more
31:06about your population
31:07and you could also
31:07monetise it so I am
31:09like a big fan of
31:11taking a big leap
31:12forward without sounding
31:13a bit like a
31:14communist I think that
31:15is and that might be
31:16Mao is it Mao
31:17anyway let's not do
31:19that but I think there
31:20are there are totally
31:22different framings you
31:22could apply to what is
31:23a 21st century economy
31:25how do we double down
31:26on the things that
31:27this country remains
31:28entirely excellent at
31:30education is one of
31:31those things
31:31innovation is one of
31:32those things like we've
31:33got loads and loads and
31:34loads of incredible AI
31:35businesses that are here
31:36and not just AI
31:37businesses in the world
31:38of AI some of the
31:40things that we've
31:40historically been
31:41fantastic at like
31:42craftsmanship and art and
31:44creativity and all of
31:45these other things like
31:47why not just back
31:48ourselves to be really
31:48good at the things
31:49we're good at but I
31:51think that these are
31:52perfect examples of
31:54what could stand in
31:55Andy Burnham's way
31:56strangely so your
31:59example of the NHS is
32:00such a good one which
32:01is essentially if we
32:03fully digitized it and
32:05that you know they're
32:06already straight away we
32:07lose a load of people
32:08who are very anxious
32:09about their data and
32:11and ID cards and all
32:13that kind of stuff but
32:13it would make sense to
32:14have our records in one
32:16place but to be able to
32:18use that information to
32:19not only fund it so it's
32:21not coming out of our
32:22tax money but also to
32:24actually improve care
32:26there we there are so
32:27many bogeys in that
32:29for particularly Labour
32:30MPs the Labour Party in
32:32fact large space of the
32:33population who think
32:34this is the first step
32:36towards privatizing our
32:37precious NHS even though
32:39it would still remain
32:40free at the point of
32:41care even though they
32:42would actually get seen
32:44quicker and seen
32:45better there's just like a
32:47strange there's like a
32:48first hurdle you would
32:49fall out which is just
32:50people saying pharmaceutical
32:52companies get getting
32:53involved in in how we run
32:55the NHS I don't like that
32:56the irony is is what I'm
32:57suggesting is that we
32:57collectively own something
32:59that at the moment is
32:59being monetized by a
33:01private industry so it's
33:02not and I think I think
33:04we've moved on from the
33:04data privacy conversations
33:06actually if you think
33:07about what all of us on a
33:08day-to-day basis merrily
33:10accept all click whatever
33:12like we but then you
33:13mention ID cards and
33:15people lose their minds
33:16yeah because that was
33:17really badly
33:18communicated all in the
33:21framing Andy all in the
33:22framing I've had a couple
33:24of other thoughts for
33:25Andy because it does it
33:27does seem to me that
33:28these are really really
33:30good practical things he
33:32can do and like let's not
33:33forget there are just
33:34quick things the government
33:35can do if they can
33:36suddenly change legislation
33:37so that pubs can stay
33:38open until four in the
33:40morning or whatever it is
33:41for the for the World
33:41Cup they can start do some
33:43serious thinking about
33:45cutting red tape and
33:46looking at what businesses
33:48need and how we can do
33:50this kind of stuff with our
33:51data without it turning
33:52into an appalling debate
33:54because you can actually
33:55frame it properly but I
33:57think he's got a couple of
33:59oh I don't know if it's
34:00problems exactly but it's
34:01got a couple of things
34:02think about there is
34:03devolving geographically and
34:05then there's exactly we've
34:06described already kind of
34:08devolving more
34:09atmospherically what do
34:10businesses actually need
34:12what is in the way do
34:14they have to backtrack on
34:16their tax for businesses
34:19and how they hire young
34:20people question there I
34:23think there will be though
34:24big problems with again his
34:27Labour MPs on particularly
34:30stuff like backtracking on
34:31the minimum wage which they
34:33hold so dear now even though
34:36in a strange way because we're
34:38not growing the minimum wage
34:39ends up costing us more and
34:41fewer young people are being
34:43hired because they are now
34:45so expensive relatively
34:47speaking for a business
34:48that's already so burdened
34:50and they will just need to
34:52think carefully in Andy
34:54Burnham's team about how they
34:56interact with the unions on
34:57this reformer are hot in
34:59their heels trying to get
35:00union support and union
35:02funding and the unions will
35:04hold some of this as you've
35:06put it like old money
35:07thinking quite carefully I think
35:10there is a bit of just old
35:11thinking in general so if you
35:13were to imagine that the
35:15primary purpose of the
35:16government is to make sure
35:17that the next generation have
35:18the greatest amount of
35:19opportunities you'd make a
35:21whole set of different
35:21decisions really differently
35:23that the burden the tax
35:25burden the the lack of choice
35:28all of these things are
35:29hitting our kind of on the
35:30under 30s compared to the
35:32over 70s we are wildly
35:34unequal and a government
35:36that put its center of
35:37gravity younger I think
35:39would really really help if
35:41you think about the mindset
35:42of what it really is like to
35:43be a young person in this
35:44country and sort of govern
35:45for them yeah rather than
35:47their grandparents that would
35:48make a massive difference
35:49and the mistake they're
35:50making is they're bringing
35:51the voting age down to 16 but
35:53without particularly
35:53benefiting young people so
35:56you're giving your next
35:57election away at this rate
35:58well I'm also like maybe
36:00maybe look after those
36:01kids possibly the thing
36:03that I do if I had it
36:04listen to you if I had a
36:05magic wand which I don't
36:07I would like this next
36:09government to govern as if
36:10they're the government so
36:12you made the point about
36:12they can change the law on
36:14what time the pubs are
36:16allowed to stay open for
36:17the football I really hope
36:19they've internalized that
36:20they are the man now and
36:22they can change the law and
36:23I don't want to hear a
36:24single government minister in
36:25this next period of time tell
36:27me that they can't do
36:28something because they
36:29definitely can they can
36:30choose not to but there is
36:31nothing that a government of
36:33this majority can't do they
36:35can just make choices
36:36differently so don't kind of
36:38give us this passive
36:38governing so where does this
36:40leave Andy Burnham as you
36:42pointed out Helen there is
36:43this hopeful version Britain
36:45does have enormous strengths
36:47in sciences world-class
36:49universities people do
36:50actually want to live here
36:51we've got financial services
36:52creative industries I mean
36:54people love our films and our
36:56actors and our arts and
36:58we've got advanced
36:59manufacturing AI defense lots
37:01of potential growth here if
37:04the right investment and the
37:05right thinking is there and
37:06frankly if the right red tape
37:07is removed but what we're
37:10basically saying is that's not
37:12enough he's got two maybe
37:14three years till the next
37:15general election so he has to
37:17both make people feel like
37:18there's change and growth
37:19happening around them now so
37:20that they have the confidence
37:21to go with him again and see
37:23the mission through that isn't
37:26easy but there are immediate
37:27things that he can do and I
37:29suppose our top advice to him
37:31today is there are some sunny
37:33uplands here potentially but
37:35you have to make some really
37:36difficult choices and you have
37:37to decide what matters to you
37:39most and then just cut through
37:40that straight away even if it
37:44makes you a bit unpopular with
37:46not only Labour MPs but the
37:48country at large for a while and
37:50you should expect that if anything
37:52yes and look we like to be
37:54optimistic but there is a
37:55harder version every prime
37:56minister promises growth every
37:58prime minister says they're
37:59going to reform Whitehall every
38:01prime minister believes they can
38:02move faster than the machine
38:04most discover very quickly that
38:06the machine moves pretty slowly
38:07that money is much tighter than
38:09they think and that political
38:10capital runs out let's hope for
38:13Andy that's a reckoning that
38:14takes quite a while lucky's got
38:16some new shorts to help him with
38:17that running thank you for
38:19listening to today's episode
38:20remember to follow us on your
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38:39dot pod this podcast is part of
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38:44next chapter studios the
38:46executive producer is Rod
38:47Adahali and the producer is Sam
38:49Durham a special mention to our
38:51content editor Maya Anushka our
38:53video editor Vali Raza and the
38:54videographer Dan Faber it is week
38:5625 and Cleo and I are still
38:58reading this from cards thanks for
39:01listening see you soon
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