Lessons for Future Economic Policy

This week we have a new Prime Minister on the way and it looks odds on to be football mad, cheeky chappy, Northern lad Andy Berer What should business expect from our likely new leader and crucially, who will be his chancellor Kirst Ammer was not interested in economics. He had no political economy. Andy Burnham does. We're not really sure what it is, but he does care. But the relationship between number ten and number eleven has always been the crux of how this country governs itself. It's going to be Burnham that is driving much more policy from number ten and his chancellor will just have to bend to his will because he's the most popular politician in the country Welcome to the Business. The podcast about doing business, making money, risk and reward. I'm Hannah Prevez and I'm Dominic O'Connell The big news of the week is the confirmation or all butts of Andy Burnham as our new PM. We're going to look at what this might mean for business and the economy, and we have two great guests to help us do this. Richard Fletcher, who is the business editor of the Times and Marine Khan Economics editor, both of whom have been looking at what the new Prime Minister might do First up though, Dom, for those who've come to this late, what do we know about Andy Burnham? He is a labour politician, did English at Cambridge, worked as a journalist for two fascinating trade publications, Tank World. passenger wheel transport, I must read those. Den into politics, spepecial advisor, MP in two thousand one had a few ministerial jobs in the Brown Gvernment, the most senior being health seecretary tried twice for the Labour leadership, unsuccessfully, twenty ten, twenty fifteen Win off to become Mor of Manchester won the Makerfield by election last week and now is all but the anointed successor to Sakkia Starmer. Wh as we know stood down on Monday? I can't believe you're not a subscriber to both of those trade titles already to be honest. But thank you for that. So Maureen, what do we know if anything, about Burnham's economic policies Well, there's lots of sloganeering about Manchesterism and Berhamism and they're used by lots of people on different parts of the political spectrum. and I've been trying to work out whether this is one a coherent economic ideology, or actually it's more of a way of thinking about governance reform. So basically a less London centric way of boosting economic growth. I think it's more on the latter side. If we're going to think about Manchesterism, the success of Manchester, it's something that Berham built on the predecessors of people who ran previous Greater Manchester cououncils, people like Howard Bernstein and Richard Leees, which is about making local government cooperate with big stakeholders, which is basically the private sector, higher education and trade unions to have a long term strategy for how to build the city up, attract population, attract wealth, attract investment from foreigners and domestic, and for the state to play a role in making sure that Manunians or people who live in the Greater Manchester area cess basic provision and services at a cheap affordable level. So these are things like housing and transport. And the bus network, which was taken back in state ownership under Burnham's Morship is one of the sort the poster child of what he thinks a good productive state can do. Whether any of this can be applied at a national level is difficult to ascertain. and actually fundamentally, when I'm often here talking to you about national UK fiscal policy, it's about choices and trade offs around tax and spending. And those are not really things that Manchester mayors have to deal with in such acute ways. So I would be wary of sort of saying there's a blueprint, which is Manchester and you apply it to a national level. and here's the economic strategy. Actually, the strategy is going to be about far less Westminster, far less London, but that also comes with different trade offffs, which is about control and what happens when big cities get in control of parties that aren't labour. So these are all the things that I think we still don't know about burnamism. So there isn't just a sort of pick it up know flat pack strategy of applyance to the country. It's going to be a host of compromises and trade offs and people will use terms like burnamism and magism but wt know what they mean for a long time, I think And the other thing he's been accused of is facing several ways at once, right? or making U turns on big kind of policy areas. Do you think that's a concern? It depends on you ask. So I spent most of this week talking to businesses that have dealt with Andthy Burnham and they would say that his ability to say I got something wrong and to change his mind was the best thing about him. I spoke to someone who knows him very well and said, lookook, if Rachel Reeves did her Nix increase, we'll talk about later and then realized it was a bad decision and went back on it, We' all be pretty happy. So the idea that politicians have to be stuck in certain ideological mindsets and stick to policies, even when actually maybe the lived realities of those policies is not what know the treasury analysis said that it would do, changing your mind is often a good thing. So I think we've got stuck into this it's a very media obsession of you turns and changing your mind. But if you're somebody who works in the private sector, the ability to change your mind is probably not the worst thing in the world. So from what you're saying Marin, because if you read the papers week, there's an awful lot of talk about sort of Burnham's ideology are moveved to the left and government. But from what you're saying from the people you've talked to who have actually dealt with them He's not much of an ideologue, he's much more of a pragmatic, canan I just get things working? Yes. And so you know you'll hear scary phrases like Andy Berham said, I think in his new state in an interview, which is last September that he wanted to end forty years of neoliberalism in Britain. And people like Tony Blair have been incredibly upset because he took that as a personal affront to his economic ideology, so called neoliberalism And so I put this to a lot of people in the private sector, Are you scared that he talks about ending neoliberalism? And they're like, No, of course not. What Andy means by neoliberalism is not just an economic policy, which is basically the supremacy of the market. He's talking about the social effects of neoliberalism, the hollowing out of the state, the hyper individualisation of what neoliberalism means. know Neoliberalism is an extreme for of market capitalism, right? It's not the middle world center So when they're less frightened of it than say people say on the right or in the centre who think this is the beginning of socialism in Britain If you dig down into and this is probably Any Burnham's fault.ike If you use word like ending neoliberalism, you should probably explain what they mean because then other people will then read into that what you think. Other politicians, I think famously, I remember I used to cover a lot of European politics. Emmanel Macarron was very famous for using slogans, never explaining them. And then every time somebody said, Well, do you mean this? he was like, you've misunderstood me. this is not what I meant. So it will be up to Burnham to actually tell us what he means by the end of the neoliberal experiment. But for now Very few people that I've spoken to who have dealt with him are worried that this is, you know he's the red peril that's coming to you know to take us down the socialist path. Richard, what does business think of Burdam? Does it I mean Marine has talked to some of the businesses who have dealt with him as Mor of Manchester? But in talking to people, are they worried about Burnham? Do they know much about him what it might mean? What's the reaction been over the past few days? I think he's very well known in the Northwest, and that's why we got Marina and Jack Barnett you should read their pieces. It's online to go and talk to businesses that had dealt with him. and actually that's a really interesting insight. I don't think he's particularly well known outside of the Northwest. you know, I'm sure lots of business people downloading the latest booky vote with, I think it was Steven Pollard, wasn't it? It's now on my Kindleway.ve R Steveother the Mirror of Liverpool. Yeahah. Yeahah, exactly. So I don't think business particular know him particularly well apart from in Manchester. I think business is quite encouraged by the speculation it's going to appoint Jim O'Neill or Lord O'Neill, as I should call him now to be an advisor. and now Andy Helddane, who the business world, or at least that sort of lobbying side of the business world know very well I think actually a lot of business leaders are sort of increasingly withdrawn from Westminster and politics. You know, I think after, you know, administration after administration in number ten and number eleven who haven't gripped the problems that they can see need to be fixed. I think actually you you speak to quite a few business leaders who probablyrobably a decade ago would have been engaged in Westminster and talking to politicians. You know, I think they've just actually just withdrawn. just I think they've just concluded that Westminster is broken and actually there's not a lot of point engaging anymore. And also does it feel like it could be a waste of time if you spend ages engaging and then somebody's out the door again within eighteen months Yeah, I think that's definitely the case on sort of minister, you know, at the ministerial level because, you know, if you're, you know, if you're a house builder, you know, there were periods where you you literally had different housing ministers, you know, every couple of months Bh Hannah, you can actually help us a bit here because you did a Tes event On Tuesday, three hundred entrepreneurs in a room, and I guess they were all talking about Burnham. What did they have to say? I think it's fair to say that the view was quite mixed. There were some people who were saying he wouldn't be in this position if he was going to be a total disaster for the economy. So as you said, the advisors that he's surrounding himself with will go a long way to addressing some of their concerns, perhaps that he hasn't got any kind of business experience per se There are others who point to the example of what he's achieved in the Northwest. and they look at Manchester and the nighttime economy and hospitality businesses I speak to. they're like they're heartened. they think, maybe he'll give us a break on business rates, for example, which is a massive concern for them But there are others. O texted me after that event saying he's a sheep he's a wolf in sheep's clothing. Others said he'll be a disaster. Lots of concern about whether or not he's going to appoint Ed Milliband as Chancellor. As one put it to me, either him or Angela Rayna, either of them, not that she appears to be in the running, both of them a pair of looonies and described and said you know, Miliban's kind of pursuit of Net zero at the cost of everything else is a real concern for her. And just lastly, Alex declared she was speaking at this Tes event earlier this week She's Rachel Reeves'srep entrepreneurial advisor. Yeah, entrepreneurship advisor. Yeahactly. Exactly that. And you know of course she can find herself out of a job very, very shortly. But what she was saying is that she's worried we're going to lose momentum. So there's been quite a lot of work in this government around kind of scale ups and technology businesses And she said that we are already losing kind of momentum. She said nothing's happened for the last six weeks in the Treasury, and that there could be another six months of inaction if we're not careful. and that in the race around AI, that that could be really harmful. So yeah, really mixed views. Canould we just go back sort this out between the two of you. but the people around Berham, people made a lot of this this week There seem to be two camps really, don't they One is the group, just explain who these people are that we're talking about Andy Hlddane. Richard Hughes, if people they won't know that name. so you might explain who he is, Richard. And also Jim O'Neill. So Jim O'Neill, just start with Jim Oeil C Jim O'Neill Jim O'Neill originally at Goldman Sachs, then became a treasury minister, very much on the sort of leveling up you know, a big advocate for for the North on myanchester United Sorry, wants to buy Manchester United? I think has wanted to buy Manchester United at various points over the last couple of decades, like lots of people. you know, so yeah, a really, you know, a really interesting voice but obviously quite a centrist voice in terms of the advice he's being given, which actually when you look at some of the MPs that have been because obviously he doesn't know many of the he doesn't know a lot of the labor MPs, but, you know such as Louis Hay who has been sort of bringing, you know, introducing him to to MP's, obviously to the left of the party. So there is this mix. I mean Marine probably knows Richard Hughes better than me. Richard Hughes used to run the OBR until very recently, the reason he's not running the OBR The OBR is government's independent fiscal watchdog, which was I was going to call it a witch doctor, but I'm thinking of that guy guy was trying urse Harrry Kane. He was set up by George Osbourne in twenty ten. He lost his job because there was an infamous leak just before the October budget, where they accidentally uploaded their very important fiscal forecas about an hour or so before the budget. But I think Richard Hughes, Andy Haldane, and Jim O'Neill are all incredibly incredible figures in the kind of macroeconomic policy world. Andy Heal then comes from the monetary policy world. He was the chief economist of the Bank of England. He's known as a reasonably be kind of heterodox thinker. He's someone that Dominic Cummings really wanted to be governor of the Bank of England. Richard Hughes, before his life at the OBR, where he was sort of presenting this quite austerian fiscal outlook every time Rachel Reeves produced a budget has done some interesting work around fiscal rules, and Jim O'eill' been sort of the figurehead of the Northern powerowerhouse. My one concern about all these three figures is that they are known mostly for being advocates of a world in which government does borrowing in the long run to boost the productive capacities of the state and says that that money can be paid back over time when you grow the economy. Now this was like the main fiscal mantra of people in the twenty ten s The key to this was that we were living in a period after the financial crisis where there were incredibly low interest rates and the government could borrow very cheaply at long rates, which meant that this trade off between borrowing in the long run cheaply and then making using it for infrastructure spending worked. We no longer live in that world. You only have to look at your average Bloomberg terminal to see that the government can no longer borrow at long rates one to two percent. It's close to to five percent. And what I'm intrigued by is that we're still hearing from the Jim O'Neills and the Andy Haldanes live who sound like they're living in the twenty ten still. And so actually the real crunch point of that fiscal dilemma is that we're not in a world where rates are ever probably going to go back one or two percent because the long term outlook for interest rates is much higher. Every government is paying more to borrow. And so where does this money come from? And that idea that Rachel Reeves has also you know been a huge advoc of. I will only borrow to invest and that pays off in the long run. It's harder to say that when actually the government is paying a lot to borrow. And if you're an investor, you can You know, before the government, you know, you could get returns of for to five percent, but now it's just not an offer anymore Please quick finish off this point on advisers because you have that group of three who are well known, established economs, et cetera But you also have in the papers this week the idea that Miata Fumbulla, who's the MP for Peckham resigned as a minister, but s very much to the left of the partarty and has very particular socialist kind of ideas on the economy, used to run the new Economics Foundation. and Ed Milliband. we werere also told that they're pulling the strings for Burnham So which one is it? But maybe given that he has to unite this party, that you know he has to get this piece that he does need to have advisers from both sides of the political spectrum because At the end of the day The Labour Party has this huge majority, which is actually in some ways a disadvantage, right? Because you've got MPs who know they're probably only here for one term. So they're going to go back Lots of them were former local councillors, you know the way that labour MPs get selected, they're local people, right? So they're going to go back lots of them they're going to go back that have done one term and then they're going to go back to doing whatever they were doing before or something else, but they're still going to be living among the same people. So they have to answer to lots of their friends who are probably to the left of the Labour Party You also can't bribe them with government jobs because you've got so many MPs, you know there's only certain number of PPSs that you need, right? So one of the difficulties, you know that I think there's been is managing this party and you trying to get them to vote for welfare reform, which clearly is needed, trying to get them to vote for the reform of the triple lock clearly need. That's one of his biggest challenges is going to be to get the Laboury, the Labour MPs, the parliamentary Labour partarty to vote for some of the measures that he's going to have to push through if he's actually going to deliver growth. And therefore, actually maybe that's quite sensible that he's got advisers from both sid of the party. Marin may disagree with me on that. I don't think there's an ideological tension between the Jim O'Nills of this world and people like me atafambola, because if you've seen already, they're taking stances on different issues So you've got people like like Jim and Andy who are there for the fiscal credibility and Miata's camp, and she's been very close to Ed Midaban for a long time. Andy Burnham is due to give a speech at the New Economics Foundation next week. But apparently the football might get in the way. I mean Hintint it's probably not the football that's going to get in the way. If he doesn't turn up, they can't blame England, but they probably might try. And they've been focused much more on Affordability, the role of the state and the role between the state and the private sector and bringing costs and inflation down. And actually, if you say that Andy Burnham is soft left, then I've argued that they need to do things that the soft left do which is actually reform the tax base in this country and actually argue for higher taxes. And to fix that fiscal problem that I think people like Jim and Andy have by saying that we need to have a massive overhaul on how we think about who pays income tax in this country at what rates. I think they need to look at the thresholds, they need to broaden the tax base in this country. And that is a classical left social democratic policy. And you need people like Miata and Ed who can probably sell that to the left of the party. So I think the problem is not on the left of the party, it's probably going to be on the right of the party for whom this idea about tax reform and borrowing is going to be much more sensitive. So I don't think the ideological tension is on the left A Andy, it's going to be on the right of So we've talked about the advisors, but obviously the appointment that everyone's got their eyes on is the Chancellor. And I feel like it shifted slightly this week. at the beginning of the week it felt like a dead cir that it was going to be milliband, but I'm not sure that it feels that way anymore. Do you agree, Richard? whoo are the kind of runners and riders? Well the markets seem the prediction markets seem completely detached from you know sort of the noise coming out of the lobby. So I think where' streeting is miles ahead in the prediction markets. But I've no idea whether it's going to be Wes, whether it's going to be Ed or maybe you know maybe it's going to be one of the other moted candidates. But I think if it is Ed, that sends a real message to business you know, the cost of energy has obviously been a huge issue and, you know, clearly E Ed believes that energy should be as expensive as it is. It's quite interesting that you know you had the Unite Union coming out of the weekend agreeing with Foty one hundred bosses on anyone but Ed. I mean, that's fair, isn't it Maar? I think there's been you could even call it a coordinated attempt for the anti miliban camp as many advocates of not milliband in number eleven over the last couple of days, It's been quite striking actually. People in the party and in government have also remarked on it to me how sort of incredible the onslaught has been. Even people, I would say, were not close to E ideologically think that it's pretty unfair actually. Why would you want to be Chancellor in this government, right I'm not in politics, but if I'm we streeting, I want to become Prime Minister, right? He's been very clear about it. Which role do you take that enhances your chances of becoming Prime Minister? There's one area where Andy Burnham has been clear that he doesn't want to have any visibility, really, and that's foreign policy. I would happily go and spend some few years in the FCDO being autonomous and having a big role in the UK's place in the world outside of I think the domestic sensitivities of labor policy and then use that as a platform. One of the reasons that I think is not spoken about why Ed Mediban should be chanceces is because he's never going to be prrime Minister. He can be uniquely unpopular in that role and do very tough things, like the things I've spoken about, like maybe raising the basic rate of income tax, because he knows that this is not going to be a platform for him to be Prime Minister There have been a few chanllces that have made it to Prime Minister. You could argue none of them have been very successful. I don't think it's a traditionally good route for someone to be in number eleven if they want to get into number ten. So if I was west, I would stay very far away from it. actually. What could we expect from Streeting as Chancellor? He's spoken So one of the things that he's been quite vocal on is the harmonization of capital gains tax with income tax In the last couple of months, he'sok a lot about his own phrase, which is progressive capitalism. I think he's done a lot to kind of court the left of the party or the soft left of the partarty in the last couple of months. know haaving been sort of seen as a sort of totem for the center right or the privatization version of labour, he's actually really changed himself ideologically. I think he's probably had a good couple of months with this part of the party My argument is always that there's going to be something different in this government because we are going to have a prime Minister, and I've said this before. Kest Aama was not interested in economics. He had no political economy. Andy Burnham does. We're not really sure what it is, but he does care. But the relationship between number ten and number eleven has always been the crux of how this country governs itself, this very centralized country thinks about how to govern itself And I would probably argue it probably doesn't matter so much if it's Ed Miliban or West Steting, I think the idea that there is this huge ideological gap between them is not going to be true because actually it's going to be Burnham that is driving much more policy from number ten and his chancellor will just have to bend to his will because he's the most popular politician in the country. But if the reports are correct and one of Andy's plans is to break up the treasury you know and separate the growth part of the treasury out, will the Chancellor You know, will that power base of the Chancellor? willill that diminish that power base of the Chancellor? I think it has to happen. It's completely not fit for purpose, having a treasury in the way that we do it. No developed economy in the world has such a ministry which basically which combines the fiscal things, so the budgets and making sure the numbers add up with the growth plan, right? This is what people like List Truss were frustrated about. This is what we call treasury blain or the blob, right becausecause the fiscal imperative will always override the need to do things that are going to be expensive and uncertain. It has to be, I think, something that Labour campaigns on for the next election. And in that world, say, know it's a long time ag it's a long time ago you can imagine Ed Billiband as a Minister for Growth and Development and a more kind of fiscally hawkish classic person on the right of the party who's the Chancellor But the centralization of power in the treasury, I think is just not fit for purpose. and they need to be serious about breaking it out because it keeps failing the country Is there any argument at all that perhaps then you would end up with silos? So you know what you're talking about the relationship, how important the relationship is between number ten and number eleven. Arguably then if you had number ten and you had what is now the treasury broken into two parts, then you'd have to have harmony across all three, wouldn't? It would be a massive change to the mindset and the culture of how fiscal policy is done in this country But you have to think about it in terms of horizons. Your Minister for Economic Growth is thinking about the long run stuff, the things that Jim O'Neill talks about, know setting up these bodies that exist in perpetuity. that means that every time there's a change in government, we don't have overhauls in policy, so things that can be done in the long run. And the relationship between Prime Minister and his finance minister or her finance minister is going to be more classically about what are the fiscal rules what are the message that we're sending out to markets in the short run, That relationship with the Bank of England is going to be much closer with the person whoever becomes the finance minister. This is just how most countries in the OECD govern themselves. Britain is a huge exception. know I might actually write a piece about why it is it's sort of a relic of our odd constitutional system, but it will be an overhaul in the culture of Whyhul But it's very hard to meet people who don't believe that this is something that just has to happen. The other thing is that you probably, if your labour, want to break up the very powerful treasury in advance of a potential reform government taking over the country because they also centralizes a huge amount of power in whoever's coming next or whatever the multi partarty coalition is stp politics that we're getting into. So there's lots of political and I think econom reasons why this has to be a real thing So we turn number eleven into a amazinginette and there's eleven eight and eleven.. They'll have to live upstairs downstairs. Yeah isten well the current resident in number eleven actually Rachel Reeves. It looks likely that or maybe it appears likely that her career as Chancellor is over We should just take a second to listen back to some of her more memorable moments. I want to lead the most pro growth, the most pro business treasury. our country has ever seen. With a laser focus on delivering for working people. It is not just the Conservative Party is not working for ordinary families, it is actively working against them. This is the first budget in more than fourteen years to be delivered by a Labour Chancellor. It is the first budget in our country's history to be delivered by a woman to working people I will not increase your national insurance. I will not increase your VAT and I will not increase your income tax. It became very clear pretty early on that Rachel Reeves was crying. She looks absolutely miserable. Labour MPs Autely misable Labour MPs The fact is Labour MPs are going on the record saying that the Chancellor is toast. And the reality the Chancellor wiped away tears as Sakir Stalmer was defending the government's welfare reforms following yesterday's U turn that' left a five billion pound hole in the public finances Kia Starmer has said tonight that her upset was caused by a personal matter. Is the job of Chancellor actually far more difficult than maybe you expected? And if you had advice to anyone who would love to be Chancellor one day, what would you tell them about what it's like to be the Chancellor of the British Government? Well, first of all, there's no vacancy U look, I think people can see Maureine, that last clip was actually you interviewing Rachel Reeves here at the Time CEO suummit just recently. How will Rachel Reeves be remembered? I can't imagine there's going to be too many tears sheds. Do you think it's fair to say that she's among the worst chancellors of post W warar years? That's a tough one. but I think chancellors are often met remembered for One policy, right? And it's often the policy that went wrong. I think George Alban is wrongly remembered for a passastity tax. He should be remembered for very stringent austerity, but the policy that is going to be attached to Rachel Reeves is the employee Ex increase It's just really difficult to see and for her to Let's see what happens with posterity, but it was a disastrous policy. We increased taxes on the lowest paid, lowest skilled, youngest workers in the economy. It hit the labour market, it was inflationary. It didn't really raise that much money. Some of It's very difficult to justify in the long run and I think that's what's going to be attached. We've had some pretty bad chances, I'll be honest Quasi quQuang in the most recent memory Be before him, we had Anthony Barber who sort of did quartang in the nineteen seventies with the dash for growrowth. I mentioned Osbourne, he's forever perennially attached to austerity and hollowing out state capacity. I was going to say Lemont. Lemont there are number one are What are you talking about because because of the RM There There are versions of history which actually recuse Norman Lamont from the responsibility of who actually decided to peg stterling or whatever it was. But yeah, there's been a litery of pretty bad chancell. And it's usually one policy and I think Nick is the one that's going to stick to race. And it should be said that she hasn't actually gone yet. So we're here kind of her library. Yeah. Richard, you could talk to us because the strange thing about it really was that if you remember back So we heard Marine interviewing Rachel Reeves at the time CEO somewhat, which was just last week. If you go back to the same event two years ago, which was just a month or two before the twenty twenty four election She came in on a tide of goodwill. I mean, she really did. Yeah. People were fed up with the chaotic conservative government. she'd been around, she'd met all the business people, probably met everybody in the room, I think. People were really looking forward to her becoming Chancellor. Yeah it wasn't just that People were you know were frustrated by, you know the final years of the Conservative administration. They were really excited by her. And as you say, she'd been on this incredible charm offensive. You know, I remember at that CO summit, she stayed at the end and she was talking to all the business leaders and they all knew her and she was making an effort. I think for me the biggest disappointment is that there was no reform uh, you know, our tax system needs huge reform. you know Reeves and those around her had had an awful long time to think about what they could do. They had this huge majority. you know, you think back to when Brown came in and the independence of the Bank of England and reform of what was then the FSA for memory. you know And that's for me was the disappointment that there wasn't reform of the, you know of the tax system, which does need huge reform. And, you know, and I think Maaren is absolutely right in that Ns will be that's what she'll be remembered for. And it wasn't just the rise in Ns, it was the changes you know, the technical changes to the thresholds that really hit that really hit employment of young people and really hit big employers, the big supermarkets, the big hospitality groups And I think that's what should be remembered for That perhaps also the tone of it because that in the clip that we heard, one of the clips that we heard, she said, I'm not going to increase taxes on working people And she maintained that line even after the next thing had been introduced when it was clearly disadvantageous to working people. And was that kind of say one thing, do another, but still insist you're doing another that really wm people up And the truth is is that how do you have a government which has promised not to raise any of the big three taxes? And then we still in the same breath will say that tax burden is at the highest level in the post war era. That's because people are paying huge amounts of tax through a process called fiscal drag. I've advocated, I think in my column last week that this government, whoever the new chancellor is, you to have an honest conversation with people what income tax is, a soft left labour government should not be in a position where teachers and nurses are paying the higher rate of income tax. But that has happened. And it's happened through this stealth measure, which is Bringing incredible amounts of revenue for HMT, but it also is just unfair because we've had five years of high inflation, which is dragging people into tax brackets that they should't be in and highest earners should be paying the highest tax. It's time for a very I think Richard is right, we need to have an honest conversation about reforming the tax system, who pays tax and crucially broadening the tax base in this country, right We always keep finding other people to pay tax, billionaires, wealth, you know mythical wealth. There are these sources of tax, but they're not actually going to generate that much money compared to the things that the leavers that the government have, which is VAT, national insurance and income tax. But isn't part of the problem that the Labour Party went into the election pledging not to ve.couraged encouraged by lots of people in quite a few journalists you know, to say we're not going to raise these taxes and actually given the state of the public finances and, you know and the lack of growth A that tied their hands and therefore, you know, you have to then play around with Nicks or you know, isn't that part of the? Exactly. she was forced into this kind of incrementalism, the smmogggers board, right? Because they couldn't touch the three precious protected taxes. So before the last budget, there was a conversation and there was a decision that was made to raise probably income tax, which then Kiistama at the eleventh hour, told Rachel Risa that he couldn't do. I remember getting to the treasury at seven o'clock in the morning on a very cold November Wednesday morning and having the chance to give a press conference where she basically said that she was going to break the promise And then within a week they had a U turn on that. And this is what this government is going to be remembered for. Every time there was an attempt to maybe be courageous and make a trade off and to create winners and losers, they backed off at the end. And in the end they made very few winners and everyone felt like a loser in the end. So the calculation just didn't pay off. And if you're Andy Burnham, you need to really study the record of the last two years and use it as a lesson to for the things that you shouldn't be doing. And just lastly then, because we can't end on an note where everyone's a loser. have you got any in the World Cup ler? Have we got any calls for optimism as a result of the new government and a potential new chancellor I am optimistic. mayaybe it's just the heat that's getting to me. But look Politicians should learn from the failures of their predecessors and actually stararism was an experiment in all the things that kind of you shouldn't be doing. on the short run. I think in the long run, some of the stuff around planning is all well and good and it probably will deliver fruit, not for this government, maybe not even for the next government. I think that's all well and good. we are getting in maybe not another general election until twenty twenty nine, that is actually quite a long time in politics. It's actually a really, really long time politics. If you think the Kistama didn't even last two years And if Burnham and his Chancellor and his cabinet can understand the pitfalls of what Stara did and take some bravery and courage on some of the thorniest parts of fiscal policy, they could set themselves up to be in a reasonably strong position before the next general election. Wh let's be honest, they're going to fight in opposition the Tories and reform who are going to be advocating for a much smaller state and far lower taxes, and then that puts the credibility question on your opposition not Well, we'll send a copy of this to Andy Berhner because you've still got a few days to go and a few football matches to watch. Maybe you'll listen to this and have some lessons for the future. But thank you very much, Richard Pletcher, businessusiness Eeditor of the Times and Marine Kharn, Economic Eeditor of the Times. Remember you can watch us on YouTube. We're back with you next week. See you then