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- [00:00]
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Public.com Announcer
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- [01:06]
Public.com Legal/Disclosure Voice
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- [01:13]
UK Chancellor of the Exchequer
Studios Podcasts Radio News let's maybe start.
- [01:18]
Interviewer/Host
With with the news of the week. You know, the Prime Minister Starmer and others are rebuking Donald Trump and saying he's wrong and yet they're still trying to stop him escalating. I mean, can you really have it both ways or is now the time to go strong against him?
- [01:32]
UK Chancellor of the Exchequer
We absolutely want to de escalate. The future of Greenland is for the people of Greenland. But the message that I've come here with this week in Davos is that amidst all the uncertainty and instability in the world, Britain's plan for economic growth, built on the platform, stability, investment and trade is actually going very well. We've had six interest rate cuts since I became Chancellor of the Exchequer. Inflation is coming down. The bank of England. Expect it to get back to target in the next couple of months. And we've done trade deals with India, with Korea, we're improving our trading relations with Europe and despite challenges at the moment, we've secured a trade deal with the US as well, which means we've got lower tariffs than pretty much anywhere in the world.
- [02:23]
Interviewer/Host
I mean, you know, President Trump has gone after Keir Starmer also on the sale of an island which he previously approved. So how would you characterize relationships between the two right now?
- [02:34]
UK Chancellor of the Exchequer
They're very good. I mean, look, no one wants to see what's happening at the moment in terms of Greenland. You know, recognize what the President said last Night, you know, criticizing decisions of a number of leaders. But previously the US administration, including Secretary of State Rubio, have supported what is happening in Diego Garcia because it's enabling the UK US military bases to stay open and to continue the vital work they do there for decades to come. And so, you know, we're confident that that is the right decision and has had the support of the US administration.
- [03:14]
Interviewer/Host
We had a level of anxiousness in, in Davos right now would be like through the roof. And there's, there's a lot of opinions saying, look, are the UK and EU sleepwalking into disaster right now because they were blindsided about what to do with Greenland? Like, what's your response to those criticisms?
- [03:33]
UK Chancellor of the Exchequer
Well, Denmark is a member of naito, very close ally of the UK and has been a very close ally of the United States States. Everybody recognizes the importance of the Arctic and the High north and also the challenges that we face, the Western world, NATO faces in that part of the world. We've just done a big deal with Norway to sell frigates to them reflecting those sorts of threats. So no one is naive around the threats in the Arctic and the High North. The question is how to, how to face into those challenges. And we firmly believe in the UK and across Europe that we do that by NATO allies, by friends working together to secure the best outcomes, not unilaterally making decisions about another country.
- [04:27]
Interviewer/Host
What are the risks if this escalates? Is it to the economy or does the UK and Europe worry about intelligence sharing with the US and Ukraine?
- [04:34]
UK Chancellor of the Exchequer
Ukraine, all of our focus is on de escalation, not in worst case scenarios. We have worked incredibly closely with President Trump the last year because we believe it's in our UK national interest to do so. The strategic relationship between the US and the uk, the military and strategic partnership between our countries is more important than the partnership between any two countries in the world. And it's very important for the safety and security of the Western world that that continues. And we're determined that it will do so. Similarly, the fact that we were able last year to secure the economic partnership deal with the US and we continue work on the transatlantic markets work that we're doing at the moment to make it easier for our capital markets to be better integrated and firms listed in the UK and the US raising finance in each other's jurisdictions, greater collaboration when it comes to digital assets, all of that is in the UK's National Interest and will continue to pursue our national interest vigorously. But I don't think it is anyone's in anyone's interest to escalate tensions or to allow rhetoric to be a substitute for hard work and diplomacy.
- [05:56]
Interviewer/Host
But you think the trade deal stands because at the moment, there is, you know, wild space speculation about whether everything needs negotiating, whether, you know, President Trump goes really hard. I mean, how do you model this?
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UK Chancellor of the Exchequer
I would just urge people to keep cool heads.
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Interviewer/Host
Okay?
- [06:09]
UK Chancellor of the Exchequer
I mean, that's what we did through last year and it actually served us pretty well. And whilst trade barriers are going up around the world at the moment, we can all see that in the last year, barriers to trade with the UK have fallen. We've secured a comprehensive trade deal with India, which will come into force in the next few months. Just taking legislation through both of our parliaments to secure that. That includes trade in services, support for exports and also around government procurement. That's a huge deal. The deal with Korea, one of the fastest growing economies as well in the G20, is very important for the UK, but most important probably is the trade with our nearest neighbors and trading partners in the EU, which was damaged after leaving the EU, voting to leave the EU in 2016. We are now fixing that mess by improving trade relations and cooperation with our closest allies and neighbors.
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Interviewer/Host
And I want to get back to the EU in a second. Governor Bailey, though, said that, you know, he worries about also President Trump's attacks on the Fed and that could create shock waves for the uk. Do you agree with that?
- [07:27]
UK Chancellor of the Exchequer
I think that people recognise that certainly with this government and with me as Chancellor, there's huge respect for independent economic institutions, whether that is the bank of England or the Office of Budget responsibility. One of the reasons why the UK has been, you know, so has had challenging economic times the last few years is because the previous Conservative government, particularly under Liz Truss, both played fast and loose with the public finances, but also undermined the economic institutions that make Britain, have made Britain a safe and secure place to invest. We're undoing that damage, working closely with the independent economic institutions, but respecting their independence. And that collaboration and fiscal policy, supporting monetary policy has enabled those six cuts in interest rates, taking rates down to 3.75% is the fastest speed of rate reduction in the UK in 17 years. And that's only possible because of the stability that we've returned to the economy and the decisions we've made on fiscal consolidation. And the IMF say that amongst developed economies, we have got the fastest pace of fiscal consolidation over the next few years. That gives investors confidence around the stability in the UK or grip on the public finances. And our grip on inflation.
- [08:50]
Interviewer/Host
So there's no worry about central bank independence. That could also impact or inspire maybe some of the opposition in the UK were they to come to power.
- [09:00]
UK Chancellor of the Exchequer
Well, look, we won a massive majority just a year and a half ago. We have three and a half years remaining of our in our term in office. And I'm confident that our economic plan to grow the economy, with the stability return to the economy, bringing investment in global investment, as well as unlocking domestic investment, is the right plan. And in the next few months, as inflation returns to target with lower interest rates, which are benefiting both households and businesses, that we will see the fruits of that in growth and higher living standards.
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Interviewer/Host
Chancellor, I don't know whether you're meeting with Scott Bessant, the Treasury Secretary, he. Whether or if you bump into him and promenade.
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UK Chancellor of the Exchequer
Well, I was with Scott last week in Washington. I'm seeing Secretary Lutnick later today. Our Prime Minister spoke to President Trump just over the weekend. You know, as you would expect, there are very close relations between our country at all levels.
- [09:58]
Interviewer/Host
So here in Davos, you also have an announcement which is basically helping out with, with visas. Tell us a little bit about that. And do you worry that it's going to be drowned in everything else that's going on? Just a little bit of news that we have out there.
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UK Chancellor of the Exchequer
So I believe in free and fair trade. I believe in the benefits to businesses and also consumers of open economies. Economies that are open to trade, open to investment and open to talent have always been the most successful economies. And I want Britain, even in a world where others are putting up barriers to trade and investment and talent for Britain to be breaking down those barriers. And we are announcing today further changes in our global talent routes into the UK for three particular types of visa. The first is for foreign businesses looking to expand their footprint in the uk, working with them so that they can bring in talent as they expand their footprint. Second, for UK businesses in our industrial strategy sectors, which includes financial services businesses, business services, creative industries, clean energy, advanced manufacturing, defence, etc. For those businesses, if they are bringing in talent from overseas into the uk, their visas will be. The fees for those visas will be waived. And then the third announcement today is that for really great talent looking to come to UK universities, again, we waive those visas as well as a specific scheme for people, gold medalists in the Maths Olympiad, offering a number of scholarships to UK universities for those people. Because we want Britain to be a magnet for global talent in the same way we want it to be the Best place in the world to trade from and to invest in.
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Interviewer/Host
There's a growing clamor in Labour circles, even from some of your own cabinets, for the UK to join a customs union with the eu. Is that on the cards?
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UK Chancellor of the Exchequer
No. It was very clear in our manifesto that we would wouldn't be rejoining the single market, the customs union, or bringing back free movement of, of labor. But what we have done already is brought back the Erasmus scheme, which enables young people both from the UK to go and study at European universities and young people from Europe to come and study at our brilliant universities in the uk. We also have agreements in principle from last May around the UK doing a food and farming deal to reduce barriers to trade at the border around electricity trading and energy trading, as well as some form of youth mobility within the European Union and the United Kingdom. So we're making progress in all of that, looking to have another summit this year where we can mark ourselves on progress against those ambitions and set new ambitions. Because that summit last year was just the start of improving relations between the UK and, and the eu. And I would just say that these sort of times when others are putting up barriers to trade. What Britain is arguing for and what I believe in strongly is that those of us who believe in free and fair trade should practice what we preach and reduce barriers between ourselves. That goes to the uk, the eu, Canada and other allies around the world. And we are determined to lead from the front in that. We've already secured trade deals with countries around the world. We want to do more in the months to come.
- [13:50]
Interviewer/Host
But Chancellor, I mean, mathematically, just, you know, if you leave politics to one side again, rejoining the custom union could be more beneficial. So do you see a future at any point where the UK goes back in?
- [14:00]
UK Chancellor of the Exchequer
We can't go back in time. And since we left the eu, we have done trade deals with India, with the US with career. And obviously you would lose some of the benefits of those trade deals if you were to re enter a customs union. Things like the benefits of the deal we did with the US for our automotive sector. The deal that we have with India is better than the deal that any other country has with India. So I think you have to consider all of these things in the round. I don't think we need to return to the customs union to seize greater benefits of free and fair trade. And we are working piece by piece, but with a strategic goal in mind, which is to make it easier for British businesses to sell into European markets and for European businesses to sell in, into British markets. And when the barriers to trade in other markets are going up, we want to create more opportunities for our businesses to trade with other countries around the world.
- [15:03]
Interviewer/Host
There is, of course, big news about a new embassy, Chinese embassy in, in London today. How do you see actually the relationship with the UK and China evolving?
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UK Chancellor of the Exchequer
Yeah, so we've given planning permission today for a new embassy. Obviously, China already has an embassy in London. This will be a new embassy and move. But, you know, if you just sort of take a step back, Britain has embassies in almost every country around the world and almost every country in the world has an embassy in London. They are absolutely vital for diplomatic relations and also for resolving tensions. And so it is right that China has an embassy in London in the same way that it's important and right that the UK has an embassy in Beijing. And I was at our embassy in Beijing just last January when we restarted the economic and financial dialogue with China. It was the first time that we'd had an economic and financial dialogue between our countries for six years. And whilst other countries had been securing benefits for their financial services sectors in growing markets in China, we refused to engage. And that was the wrong thing to do. It was not in Britain's interests. And that's why we changed that approach. Approach. They hosted, the Chinese hosted the economic and financial dialogue dialogue last year. We secured significant benefits for UK businesses and we'll be hosting the next economic and financial dialogue with our Chinese counterparts in, in the UK this year.
- [16:37]
Interviewer/Host
If the US continues being a little bit, you know, not a little bit actually belligerent with Europe, do you see the UK being getting much, much closer to China?
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UK Chancellor of the Exchequer
Well, let's just look at the numbers. The US trades more as a share of GDP with China than the UK does. Almost every big country in Europe trades more with China than the UK does. And that's because the uk, under successive Conservative governments, retreated from the global sphere for a number of years. And that was a mistake. And we lost out on growth and trade as a result of it. We are pursuing a very different approach, which is to relentlessly focus on our national interest. And our national interest means tackling the cost of living and growing our economy with more good jobs, paying decent wages in all of our. In all parts of our country. And we only achieve that if we bring more investment in international and domestic and if we achieve more opportunities for firms in Britain employing people in Britain to then sell the excellent goods and services that we produce in the UK and all around the world. And that's exactly what we're doing.
- [17:46]
Interviewer/Host
Chancellor. Back in Westminster, a lot of people in Labour are thinking about a challenge to your leadership and Keir Starmer's leadership in the coming months, especially if the local elections are very bad. What will you tell investors here in Davos who might be worried about a more left wing PM and Chancellor getting in?
- [18:03]
UK Chancellor of the Exchequer
I really don't think that people need to worry about that. Kia won a massive majority in Parliament. The parliamentary Labour Party, the Cabinet, want the Prime Minister to succeed. Even if someone did have the stupid idea of challenging the Prime Minister is incredibly difficult to do so. And I have every confidence that Kir will continue to be Prime Minister all through this term. I will continue to be Chancellor and hopefully into the second term as well.
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Interviewer/Host
Nigel Farage is arriving here in Davos. What would Prime Minister who's doing very well in the polls mean for the UK economy?
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UK Chancellor of the Exchequer
Well, I think it would be very bad news for the UK economy. Nigel Farage believes in closed economies. He does not believe in the UK being open for trade. He sides with our adversaries rather than our friends, including with Russia and their war in Ukraine. And in terms of business, he was the cheerleader in chief leaving the European Union. He's opposed every trade deal that this government has done, including the deal with the US and including the deal with India. He doesn't believe in an independent central bank or those independent economic institutions which give stability to the UK economy. And I do think that, you know, businesses should, without getting worried, should, you know, think about the consequences, consequences of that and not just sit on the sidelines.
- [19:39]
Interviewer/Host
I mean, just having him here in Davos taking meetings, I think also meeting with possibly we don't have confirmation, the US delegation. Does that overshadow some of the work that you're trying to do with your delegation? No, not at all. There's no. And there's no plans.
- [19:53]
UK Chancellor of the Exchequer
He's got seven MPs in Parliament, Francine. I know that people want to get excited or maybe a couple more. Who knows how many Tories have defected today. But, you know, he's got a small number of MPs. He's lost almost as many MPs as he's gained in this Parliament because he's incapable of working with others. I'm not worried about Nigel Farage. I believe that our plan is the right one. We are improving the cost of living for working people in Britain. We're bringing investment to Britain. Inflation and interest rates are coming down this year. Last year, we had the second fastest growing economy in the G7, our plan is the right one. It will begin to reap dividends this year, especially as inflation gets back to target and the benefits of those trade deals begin to flow.
- [20:39]
Interviewer/Host
But there is a perception that he's gaining momentum because of the defections.
- [20:43]
UK Chancellor of the Exchequer
So, I mean, you know, you've got these people who were defeated a year and a half ago in a general election, Robert Jenrick, Andrew Rosendale, the other people whose names no one remembers who lost the support of the British public a year ago, who are now changing their rosettes and think that that will change their fortunes. It won't. And I do believe that the British public will see through that. They kick the Tories out for a reason. They're not going to just re elect them because they're now wearing a teal rosette rather than a blue one.
- [21:17]
Interviewer/Host
Chancellor, there are a lot of questions people want to know about taxes. I know you can't tell us about the next budget. I don't know whether you think that this new trade tensions could have an impact of the budget, but holistically speaking, if you were to raise taxes again, would you do it for wealth taxes or general taxation?
- [21:34]
UK Chancellor of the Exchequer
We have just had a budget, and what I was able to do in that budget was to build a headroom of 21.7 billion pounds, more than doubling the headroom against our fiscal rules. I think that now puts us in a very strong position that we will not need to to do more on that front. I'm not going to be able to write future budgets today. The world is a very uncertain place. But that increase in the headroom was very much, I think, welcomed by markets and has given greater confidence to people that we can have stability on a fiscal front as well. In addition, we've been really clear that the spring forecast from the OBR will not be a fiscal event in the same way that it has been in the past. And reform of the Office of Budget Responsibility means that we can now move to one major fiscal event a year so that you, Francine and others don't ask me every week for a year what tax changes are planned. We don't plan any tax changes in the spring and very much hope after the headroom that we have built in through difficult decisions on tax and spending, that that provides the stability that we need every week.
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Interviewer/Host
Chancellor, I thought we were more tenacious. I thought it was every day that we were asking you what are you most looking forward to in Davos? We have one more minute. I mean, you know, we talk about disruption shocks. There's a lot about AI, but is there something. What have you come here to do?
- [23:03]
UK Chancellor of the Exchequer
Well, this is my fourth time in Davos. I came twice as Shadow Chancellor to set out the the opposition approach to the the economy. I learned a lot during those two visits about what international investors were looking for in the uk. I knew they wanted stability. I knew they wanted better support to leverage the private sector investment, the cash that was sitting there, but wasn't coming to the UK because of that uncertainty. And I know that they wanted reform to how our economy works, planning reform, regulatory burdens lifted, better trade opportunities with countries around the world. That is what we are delivering as a government. Now, I'm certainly not claiming that the first year and a half in office has been easy or that every decision that we've made has been one that's welcomed by business. But when you look around the world, when you look at the delegations from around the world this week, I hope people see in Britain, I hope that businesses see in Britain a country that has returned to stability, that is bringing investment, is changing how the economy works and is open. Open to business, open to trade, open to investment, and as I set out today, open to talent as well.
- [24:17]
Public.com Legal/Disclosure Voice
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