290. Can Burnham’s ‘business friendly socialism’ grow the economy?

293. A Nobel Prize winning view on wealth inequality

Jul 5, 202638 minSummary

In this episode of The Rest Is Money, hosts Robert Peston and Steph McGovern are joined by Simon Johnson, a professor at MIT and a 2024 Nobel Prize recipient. The discussion centers on the historical and institutional factors that determine national prosperity and wealth inequality. Johnson explains his research into colonial history, illustrating how early institutional choices—largely driven by the environmental survival of European settlers—created long-lasting systems of either inclusion or extraction. He argues that these centuries-old foundations continue to shape modern economic performance, rule of law, and democratic stability. The conversation extends to contemporary challenges, including the rise of authoritarian tendencies in the United States and the importance of independent institutions like the Federal Reserve. Johnson emphasizes that while authoritarian regimes may occasionally produce short-term growth, they often lack the long-term stability and fairness required for sustainable, shared prosperity. The discussion also touches on the lessons learned from post-Soviet economic transitions and the role of the European Union as an institutional anchor. Ultimately, Johnson highlights the critical need for democratic frameworks that protect property rights and foster healthy competition to ensure future economic success.

292. The £6 trillion pot we should use to grow the economy

Jul 1, 202646 minSummary

In this episode of The Rest Is Money, the hosts explore the potential for unlocking six trillion pounds of long-term capital to drive economic growth across the United Kingdom. Nigel Wilson, former CEO of Legal and General, joins the discussion to argue that the UK possesses vast financial resources, but currently suffers from a capital allocation problem rather than a lack of funds. He contends that for too long, investment has been heavily concentrated in London and the golden triangle, leaving regional cities behind. Wilson advocates for shifting this focus toward regional regeneration, suggesting that cities outside of London offer viable, profitable investment opportunities rather than being charity cases. He highlights the success of private-led regeneration projects in cities like Manchester and Newcastle, emphasizing that effective growth requires collaboration between local leaders and private sector investors. Furthermore, the conversation covers the necessity of reforming how pension funds and individual savings accounts operate. Wilson proposes soft compulsion, where a portion of default pension funds would be channeled into UK-based growth initiatives, startups, and scale-ups, ensuring that British savers benefit from the long-term success of the nation’s science and technology sectors.

291. Does Burnham have any wiggle room?

Jun 28, 202621 minSummary

In this episode, the hosts are joined by Paul Johnson, former director of the Institute for Fiscal Studies, to analyze the economic landscape facing Andy Burnham should he become the next Prime Minister. The discussion centers on the strict fiscal constraints Burnham would inherit, specifically regarding borrowing rules and the pledge to adhere to the existing Labour manifesto. The conversation explores whether there is any flexibility within current fiscal frameworks to drive economic regeneration. Johnson highlights the tension between the need for public investment to stimulate growth and the reality of a debt-heavy economy where borrowing is increasingly expensive. They examine the potential for "financial engineering" within Treasury rules, such as reclassifying certain assets, and debate the viability of tax reforms, like equalizing capital gains and income tax rates. Additionally, the hosts discuss the critical importance of selecting a Chancellor who possesses both the institutional experience to manage the Treasury and the credibility to reassure bond markets. The episode concludes by reflecting on the necessity of balancing political goals with the harsh realities of the UK's current economic performance and market expectations.

289. Why we need fewer civil servants

Jun 21, 202647 minSummary

In this episode of The Rest Is Money, hosts Steph McGovern and Robert Peston interview Stephen Kelly, the former Chief Operating Officer for the UK government, to discuss the practicalities of reforming the civil service. Drawing on his extensive private sector background, Kelly outlines his mission during the 2010s to streamline government operations, improve productivity, and reduce waste. He explains how his team managed to reduce the number of civil servants by roughly 120,000 over five years, largely through natural attrition and careful restructuring, while simultaneously generating billions in annual savings. Kelly emphasizes that transforming the civil service requires a clear strategic vision, consistent ministerial support, and a shift away from reliance on expensive external consultants. He shares insights into the importance of insourcing expertise and leveraging government procurement to stimulate growth, particularly by directing more spending toward small and medium-sized British enterprises. The discussion provides a candid look at the challenges of navigating the complexities of Whitehall, the necessity of data-driven management, and the potential for applying private sector disciplines to deliver better public services for citizens.