The Intelligence Squared Economic Outlook, with Robert Peston (Part One)

Summary

Podcast Summary: Intelligence Squared Economic Outlook with Robert Peston (Part One)
Date: July 22, 2026
Host: Johnny Diamond (Intelligence Squared)
Guest: Robert Peston (Journalist, Politics Editor for ITV, author, broadcaster)
Setting: Live event at Smith Square Hall, London
Theme: Examining Britain’s political and economic future as Andy Burnham becomes Prime Minister; the Labour party’s challenges, leadership, economic growth, and the state of public trust.

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Episode Overview

This episode marks the first of a two-part "Economic Outlook" with esteemed political journalist Robert Peston. With Andy Burnham poised to assume the role of Prime Minister following Keir Starmer’s departure, the conversation dives deep into Britain’s political transition, the performance and shortcomings of recent governments, and the herculean tasks facing Labour as it seeks to restore public confidence amid economic stagnation, fragile finances, and global instability. Peston also reflects—often critically—on the role of leadership, communication, and long-term policy vision in the nation’s current crossroads.

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Key Discussion Points and Insights

1. The Political Moment: Starmer’s Exit & Burnham’s Challenge

[04:41] – [07:06]

• Starmer’s Mistake:
  Peston argues that Starmer’s main failure was not grasping the gravity of Britain’s challenges nor taking bold early decisions, particularly on economic stagnation.

  "The big mistake that Keir Starmer made... was not to recognize the significant gravity of the challenges... and therefore not to take a whole series of very difficult but important decisions early in order to revive... the stagnation of the economy."
  (Robert Peston, 04:46)

• Starmer’s Popularity Problem:
  Widespread public mistrust and dislike for Starmer, surprising even to party insiders.

  "When MPs, his own MPs, would tell me... I just wouldn't believe them... staggering, the dislike and mistrust of him."
  (Robert Peston, 05:06)

• Labour’s Promise of 'Change':
  The electorate saw little substantive change, fueling disappointment and ousting.

2. Leadership: Comparing Thatcher, Starmer, and Burnham

[07:36] – [10:25]

• Thatcher’s Legacy:
  Peston highlights Thatcher’s clarity of vision and willingness to tell a “story”—regardless of controversy—as a missing trait in recent leaders.

  "She had a coherent program and she was intent on pushing it through, and she explained it to all of us... great leaders tell us a story about our country and where it’s going.”
  (Robert Peston, 08:41 & 16:28)

• Risks in Economic Upheaval:
  Concern that the UK might repeat 1980s mistakes—abandoning entire communities—especially as AI/economic transformation accelerates.
• Positive Reforms, But Lingering Stagnation:
  Recent Labour moves (Hillsborough Law, childcare/breakfast clubs) were praised, but not enough to instill generational hope.

3. Public Trust, Economic Malaise, and the Expectations Trap

[10:59] – [16:27]

• Short-Term Gains vs. Systemic Change:
  Peston sharply focuses on the lack of hope and upward mobility in the UK, broken since the 2008 financial crash:

  "When I was a kid... most of us assumed... our generation was going to be a bit richer... That is sadly no longer true." (Robert Peston, 11:48)

• Under-Investment Dilemma:
  Chronic public and private sector under-investment compared to peers is identified as the root of low productivity and stagnant growth.

  "We... have chronically underinvested compared to all our investor competitors over many, many years."
  (Robert Peston, 13:16)

4. The ‘Storytelling’ Required in Political Leadership

[16:28] – [17:04]

• Managerialism vs. Inspiration:
  Peston reflects on Starmer’s skepticism toward political spin, but points out that even honest leaders must “inspire and to give people a sense of where we're all going. And that word again, hope.” (Robert Peston, 16:28)

5. Poll & Political Contests: Burnham, Farage, and Reform UK

[20:04] – [23:17]

• Defining Clash – Burnham vs. Farage:
  While Farage’s appeal stemmed from smashing the "Westminster establishment," revelations of financial impropriety and familiar political behaviors have eroded his outsider allure.

  "There is a growing sense among Reform supporters that Nigel Farage may be just as bad as all the other politicians that they loathe."
  (Robert Peston, 21:31)

• “A Bit of Luck... and Great Timing” for Burnham:
  Burnham’s immediate advantage may be a moment of public disenchantment with Reform UK and Farage in particular. (Johnny Diamond & Robert Peston, 24:27)

6. Probing Burnham’s Prospects for Leadership and Economic Recovery

[24:27] – [28:04]

• Awaiting Cabinet Choices:
  The makeup of Burnham’s first cabinet will be telling as to whether he has a concrete, coherent plan or is driven by party management.

  "That will be the first really big test."
  (Robert Peston, 24:50)

• Economic Constraints & Vulnerabilities:
  Global instability—such as renewed US-Iran conflict—directly impacts the UK’s borrowing costs and fiscal room to maneuver.

  “UK shell[s] out so bloody much on interest, the last thing we need is for that interest bill to rise even more.”
  (Robert Peston, 26:16)

• Focus on ‘Numerator vs. Denominator’:
  Peston criticizes successive governments’ obsession with reducing debt (the “numerator”) without boosting GDP growth (the “denominator”).

  “If you had a credible growth plan and if investors believed that the British economy was going to grow even half a percentage point a year faster... That gives you so much more scope.”
  (Robert Peston, 28:11)

• Warning of an ‘Austerity Trap’:
  Without accelerated growth, Burnham may be forced into Osborne-era austerity as spending curbs intensify before the next election.

7. Devolution, Regional Inequality, and Economic Power

[31:37] – [35:05]

• Economic Devolution’s Promise and Pitfalls:
  Calls for true fiscal devolution to regions—giving them power and incentives to drive growth—while recognizing necessity of some central subsidies.

  "It would definitely be a good thing if that kind of devolution of actual tax raising took place."
  (Robert Peston, 34:54)

• Supporting Local Innovation:
  Examples from France, where local authorities benefit directly from development gains, act as a model for the UK to follow.

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Notable Quotes & Memorable Moments

• On Starmer’s Downfall:

  “What the Labour Party campaigned on... was change. And I think most people look around... and they broadly say, where is, you know, that big ambition, that big change that you promised us?”
  — Robert Peston, [05:39]

• On Leadership in Crisis:

  “Margaret Thatcher... told the country a story about what she thought was wrong and then how she was going to fix it... great leaders tell us a story about our country and where it’s going.”
  — Robert Peston, [08:41 & 16:28]

• On Economic Hope:

  “Millions of people on low income still don’t have any hope that their and their children’s lives are going to get better.”
  — Robert Peston, [11:59]

• On the Fiscal Constraints Facing Burnham:

  “Whenever you get the kind of uncertainty generated by something like a Trump war in Iran... the cost that this government pays to borrow always rises somewhat more than our competitors.”
  — Robert Peston, [25:37]

• On Growth vs. Debt Obsession:

  “Successive governments have been utterly obsessed with the numerator and done far too little about the denominator.”
  — Robert Peston, [28:04]

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Important Timestamps

• Main Conversation Opening: [02:13]
• Starmer’s Departure & Labour’s Political Moment: [04:41]
• Leadership Past and Present – Thatcher to Starmer: [07:36]
• Reflection on Economic Stagnation and Hope: [10:25]
• Political Storytelling and Public Trust: [16:28]
• Poll on Burnham’s Prospects and Farage/Reform UK Discussion: [20:04]
• Burnham’s Leadership & First Cabinet: [24:50]
• Fiscal Constraints/Warnings: [26:53]–[28:04]
• Devolution & Economic Inequality: [31:37]–[35:05]

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Tone and Style

The conversation is frank, analytical, and often critical, marked by Peston’s candor and Diamond’s probing. Peston balances policy and history with humour (“the defining battle will be Farage versus Binface” [20:53]), and frequently returns to the need for honest, ambitious leadership.

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Conclusion:
This episode provides a deep dive into the complex terrain confronting Britain’s new government. Peston’s central message is clear: without bold leadership, real investment, and a coherent narrative for the nation’s future, neither Labour nor any incoming Prime Minister will restore the confidence or growth Britain so desperately needs. The conversation sets the stage for further, more granular policy debates in the next part of the Economic Outlook series.

Transcript

[A]

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[B]

welcome to Intelligence Squared, where great minds meet. I'm senior producer Mia Sorrenti. Can Britain's next Prime Minister restore confidence in an increasingly uncertain world? Today's episode is part one of our recent live event with journalist, broadcaster and author Robert Peston. Paston joined us at Smith Square hall to discuss Britain's political and economic future under Andy Burnham. As Labour enters this new era under Burnham, Preston examines the challenges facing Britain's next government, from sluggish growth and fragile public finances to geopolitical instability and shifting global markets. He also reflects on the themes of his latest novel, the Kill Switch, and what the intersection of media, money and political power can tell us about the state of modern Britain. This episode is part of the Intelligence Squared Economic Outlook created in partnership with Guinness Global Investors. Guinness Global Investors applies the same spirit of inquiry behind Intelligence Squared to the search for investment success for your portfolio. With funds in the regions and themes driving future growth, Guinness Global Investors uses discipline and conviction to help you achieve your investment goals. To find out more, just head to guinnessgi.com or see the link in the episode description. But now let's join the conversation hosted by Johnny diamond live at Smith Square Hall.

[C]

Welcome to this Intelligence Squared event. It's part of the Intelligence Squared Economic Outlook, a series that explores the forces shaping global markets, politics and business. I'm Johnny diamond and it's great to be with you. It is particularly good to be here with Robert. I won't go into a huge introduction. You know who he is, otherwise you wouldn't be here. He is of course the politics editor for itn, the presenter of itv. I should say the presenter of the Politics Show Pest and the co host of the Rest Is Money podcast. He was a colleague of mine up until what, 2015 as economics and business editorial. In the 90s he was all over the place in very senior positions at the Financial Times. His shelves grown with awards, enviable awards, including Scoop of the Year, Journalist of the Year from the Royal Television Society. And he is also the author of a rather fine crime fiction series, the latest of which is the Kill Switch, which I hope we'll get time to do a little bit of chatting about at the end of this evening, a quick word on format. He and I will talk for about 40 minutes as he paces up and down. We want to get your questions and questions from those who are watching also online. I think considerable numbers have stayed in air conditioned offices to do exactly that. But your questions online, you can send them in. There's a mechanism you can see to use that. And I'll get them in front of me here and we'll plug those in. We'll talk to about 15 minutes. We have an audience poll we, which we will do about a third of the way through. But I want to start with politics because this is a hugely important moment. It feels like part of a regular carousel of Prime Ministers, but it remains very important. Keir Starmer is about to leave number 10. Andy Burnham is about to become Prime Minister. The questions mount up, of course. Can Labour restore confidence? And in a world shaped by war and fragile energy markets and nervous investors, what kind of leadership does Britain now need? Robert, can we discuss the political moment? Keir Starmer, as I know you know very well, is leaving, what, just under two years from a landslide victory. What does the fact, and I suppose to some degree the manner of his leaving tell us about British politics and the nation?

[D]

Gosh, nice easy one to start. We better get onto the matter in hand. I mean there are so many ways of unpicking, you know, this moment. I mean, I want to keep it relatively simple. I think the big mistake that Keir Starmer made, and it's a very interesting question whether and Dee Burnham is about to repeat that mistake, was not to recognize the significant gravity of the challenges that we as a nation face and therefore not to take a whole series of very difficult but important decisions early in order to revive in particular the stagnation of the economy. And I fear that, you know, one of the reasons, it's only one of the reasons he's, he's gone is because the British people were hoping for better. One of the things that's really Odd, I mean, really odd is how hated Keir Starmer. I mean, what. I mean, genuinely, I mean, when MPs, his own MPs, would tell me, you know, this after they were campaigning, I would. I just wouldn't believe them. And then when I went up to make a field and spoke to people there, and also we did a focus group, it was just staggering, the dislike and mistrust of him. I think it's got a number of causes. Everybody says they sort of don't trust him, and I suppose in the sort of biggest respect, and you can break this down in many different ways, but the Labour Party campaigned on a single word, which was change. And I think most people look around and they say not things might be a little bit better or a little bit worse, but they broadly say, where is, you know, that big ambition, that big change that you promised us? And I think that's a perfectly reasonable, I think that's a perfectly reasonable concern to have.

[C]

The extraordinary thing is, I suppose, the collapse of support in the parliamentary party in previous administrations. You might have a very unpopular Prime Minister, you might have an economy that frankly looks like it's cratering thinking 79 to 81, first two years of the Thatcher administration, but you wouldn't have that sort of failure of discipline and morale in the parliamentary party that has led to his defenestration.

[D]

So there are circumstantial conditions that are obviously very different. You know, didn't have social media then. You know, society was significantly less fractured. We were in many ways a much more tolerant place. Yes, there were serious and passionate arguments, but people were broadly respectful to each other in a way that is just not true, I'm afraid, to the extent that it was, and we might talk about some of that later, but this is one of the many very significant challenges that we face. But the big difference, you know, is one of leadership. You know, Margaret Thatcher, whether you liked her or loathed her, and people broadly were very few people were indifferent to her, told the country a story about what she thought was wrong and then how she was going to fix it, right? And whether or not you think that some of the things she did did enormous damage, and I view some of the things she did did cause damage. Nonetheless, she showed the virtue which we haven't seen from any prime minister in recent years, which is she had a coherent program and she was intent on pushing it through, and she explained it to all of us and even within her own party, you know, although there were obviously people who hated much of what they did. There were very few who didn't respect her, because what she had to say, as I say, frankly, if I were to rerun the 80s, some of what she did I would regard as being the right thing to do, and some of what she did was absolutely the wrong thing to do. And there's actually one particular bit which, you know, I'm particularly concerned about at the moment because we may be about to repeat this as a result of this artificial intelligence, you know, economic and social revolution we're going through. You know, she allowed a number of communities to effectively die when, you know, businesses of all sorts collapsed. You know, you know, all sorts of people of working age never got another job. And those communities, you know, some would say never properly recovered. And we just can't afford to repeat that kind of mistake. But there were other things that she did in terms of forming the tax system, making entrepreneurialism respectable again in a country that had become incredibly squeamish about, essentially, the private sector creating jobs. There was an enormous amount of stuff that she did which was enormously beneficial.

[C]

Let's talk, if we could, about. Well, about today. Prime Minister's questions today. Keir Starmer said, and I paraphrase, that he leaves Britain in a better place than when he came to office just under a couple of years ago. Can you think of a metric that you would use to justify that? I'm not criticizing the Prime Minister or what he's chosen. I'm just interested in what you think of the last two years in terms of growth, development, competence, that kind of thing.

[D]

Look, undoubtedly, I wouldn't remotely say that this is a government that hasn't done a number of, you know, good things, right, Whether it's the Hillsborough Law and which, you know, I think it's about time that, you know, powerful people who mislead us about the bad they've done are probably held to account. So, you know, that's a tremendous piece of legislation and there is something, I think, sort of slightly sort of it. There is a. It's rather appropriate that that is being passed into law as we've got the handover from Starmer to Burnham, partly because Burnham obviously has been a tremendous campaigner for the victims of Hillsborough. But. And then, you know, whether it's, obviously, breakfast clubs are a good thing, what they've done in childcare, it's a good thing. There's a whole bunch of stuff that they've done that one can argue have positively affected the lives of lots of people. But the biggest problem is millions and Millions and millions of people on low income still don't have enough. Well, any hope that their and their children's lives are going to get better. That is the. You know, when I was a kid, when you were a kid, most of us assumed, quite apart from what was going to happen to our own lives, that in general our generation was going to be a bit richer than the previous generation because that had been true of our history for decades. That is sadly no longer true and hasn't really been true since the global financial crisis. And the big challenge that any government coming in over the last few years faced was to restore that hope. A succession of Tory governments failed to do that. And it was not unreasonable to assume that a Labour government with the size of parliamentary majority that it had would take the bolder steps to essentially re energize the economy. But quite a lot of what you've got to do to re energize the economy is not necessarily popular with your core support. And so among the things that they did, as it happens, I would say there was a perfectly good case, if you look at the way that we've got a low wage economy, there was a perfectly good case for saying that you want to reform employment law, but you don't do it at the start of a parliament. When growth is in the doldrums. What you say to the British people is this is something we will do, but we will do it as a second step rather than introducing it in a way that makes it a drag on the very, on the most important thing that you've got to achieve, which is to encourage much more investment. We, you know, as a private sector and public sector, chronically underinvested compared to pretty much all our investor competitors over many, many years. I mean, there are only a limited number of levers a government can pull. One of them is investment. Another one is encouraging innovation. Another one is investing in the right kind of infrastructure. Again, you know, they had this big infrastructure program funded by a change in the fiscal rules, but they were not hard headed enough in terms of basically concentrating what will always be limited sums on those projects which are, you know, much more likely to produce growth and productivity enhancement. So, for example, transport projects are much more associated with productivity enhancements than pretty much any other kind of government investment you can think of. But actually, weirdly, when the push came to shove, many of those have been either cancelled or not funded properly. So there was just a lack of focus and ruthlessness when it came to the growth agenda, coupled with something else that you know, I don't want it to sound as though I'm sort of, you know, I think he's sort of relentlessly negative about Keir Starmer, if I'm honest with you. My personal experience of him is extremely, extremely decent man and with pretty good intentions. My sort of puzzle about him, which one day I will just ask him directly, is why on earth did he want to go into politics? Because he's sort of contemptuous of what politics has to be about. So the thing you expect, and I'm going to go back to Thatcher, you know, great leaders tell us a story about our country and where it's going. He sort of thinks that approach is for charlatans, you know, but politicians are basically by nature charlatans. That is the job, right? And I don't mean by that crooks. We'd rather we didn't have crooks.

[A]

Right.

[D]

But you do have to have that ability to inspire and to give people a sense of where we're all going. And that word again, hope. And he, I mean, more recently he's tried to do it because he recognized that the more sort of rather tedious managerial approach wasn't cutting through. But he genuinely used to believe that, you know, literally only scoundrels did that stuff. And, you know, on that basis, pretty much every successful prime minister in history has been a scoundrel.

[A]

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[C]

Let us go to our poll if we could. I want to hear from our audience. It should come up. Here it is. Here's your QR code. Point your phones at that. It's about Andy Burnham and confidence in Britain's economy. You should be able to get some options up on your phone asking you whether Andy has what it takes, Andy Burnham has what it takes to restore confidence and a various range of options? I won't read them out to you because you can read them yourselves. While we wait for the votes to come in, can we talk about the sort of defining political clash, the one that we thought was going to be the defining clash, which is Burnham versus Farage. Do you believe that Andy Burnham leaving Makerfield and the by election to one side has what it takes to take on reform uk?

[D]

Well actually I now think the defining battle will be Farage versus Binface. I do think that is Broadly, for us of this moment, the most sort of interesting, immediate contest. And actually, to that extent, I do feel slightly sorry for Keir Starmer, because I think there is a fair amount of evidence that Reformer are just intrinsically in some trouble. And again, just talking to, going up to Makerfield and talking to voters and then just looking at opinion polls, there is no question that there is a growing sense among Reform supporters that Nigel Farage may be just as bad as all the other politicians that they loathe. I mean, you have to. I'm sure you do understand that the big appeal of Reform and Farage was the idea that they would smash what people think of as being the Westminster establishment. And the reason they wanted it smashed is partly because they felt that people in this neck of the woods simply weren't interested in their lives and their prospects and ignored them and didn't care that they were getting, you know, poorer year after year. It's one of the things that obviously drove the vote to lead the European Union and it has been driving the success of Reform. But when the leader of reform, you know, receives a 5 million pound gift and then is sort of, seems to sort of change his mind about what the money was for and is not very forthcoming about it, and, you know, he's being investigated by the parliamentary authorities about whether he should have told Parliament about it. And then there's a whole sort of bunch of other sort of stuff around all of that. I think what's happened in many voters minds is, well, Farage is just like all those other politicians who we don't like, who we don't think are in it for the right reasons. And so, you know, it does feel. We'll see. I mean, you know, Farage may be

[A]

more.

[D]

Well, he may turn out to be as resilient as Trump, it's possible. But, you know, I'm not sure, to be perfectly honest, because we are, as of this moment, still not quite as divided a nation as America. And the sort of hate within the population for people who don't have our views is not yet. There's too much hate. It's one of the things I was talking about earlier, but it's not as intense as we've got in America. And also the other thing is, to be honest, I think most people look at this by election and they look at the fact that it's Farage against, you know, a man with a dustbin on his head, and I think they just think Farage looks a bit of a fool. Why, you know, why on earth Would you do this to yourself? It doesn't look like brilliant judgment, so we'll see. But it's possible that the one thing that Burnham has got going for him is that he is one of those rare but important politicians. A really lucky politician.

[C]

A bit of luck and some great timing. Do you have any idea, any sense yet of the kind of Prime Minister Andy Burnham would be? We've discussed Margaret Thatcher, Keir Starmer. I'm not saying that's a spectrum between the two and asking you to place, but do you have any sense of the man and his leadership skills in particular? I suppose.

[D]

Well, look, he hasn't been properly tested and we will know much more about this when we see his Cabinet on Monday, because that is always a moment where you get a sense of whether a Prime Minister has a real. Go back to this point I was making earlier, plan thought through, coherent destination, or whether in the end he's making appointments because he's got to keep his party happy and he doesn't want too many, you know, annoying people on the backbenches who resent the fact they weren't given proper jobs. And so, as I say that, that will be the first really big test. They are sort of understandably anxious, I think they were hoping to do, to come in and do some quite bold economic things. The fact that Trump's Iran war has flared up again and government bond markets are a bit jittery again. And as I'm sure most of you here will know, one of the biggest weaknesses of the UK is whenever you get the kind of uncertainty generated by something like a Trump war in Iran and the oil price rises and people think inflation's going to rise and therefore interest rates rise, the cost that this government pays to borrow always rises somewhat more than our competitors. And that is a huge constraint on any British government at the moment because we shell out so bloody much on interest, the last thing we need is for that interest bill to rise even more.

[C]

And

[D]

even worse than that, you obviously got to avoid the kind of quasi quoting Liz Truss fiscal shock, which was genuinely one of the most terrifying financial moments I've reported on, because there was a possible risk of lenders to the UK going on strike. They are nervous because we'd had a little bit of stability and then

[C]

the

[D]

hostilities between Iran and America flared up again and we look very vulnerable in a fiscal sense again. So I suspect, initially, at least in an economic sense, they will probably be quite cautious.

[C]

I mean, there is, and this is something we've discussed in a fair number of economic outlooks here. There is very little wiggle room. I mean, there's very little wiggle room on current financial plans. If you stick to all the fiscal rules and the fiscal promises, and if you're not, as he is not going to raise any of the big three taxes, there's very little extra money to be squeezed out of voters.

[D]

I mean, this is my problem with all recent governments, which is recent governments have all been obsessed. Debt is measured as the absolute number of government indebtedness against the size of the economy. There's a numerator and there's a denominator. And successive governments have been utterly obsessed with the numerator and done far too little about the denominator. And what I mean by that is if you had a credible growth plan and if investment investors believed that the British economy was going to grow even half percentage point a year faster than it's currently growing, right. That gives you so much more scope when it comes. Well, obviously it generates a lot of additional tax revenues anyway and you get into this virtuous circle, right. But equally, it just gives you so much more scope when it comes to borrowing because investors at that point have way more confidence in your prospects. Right. And therefore, again, the thing that they just got wrong when they got into office was to focus, I'm afraid to say, on the numerator, putting up, you know, employers, national insurance in the way that they did, you know, without having anything that looked like a credible plan to revive growth. And poor old Andy Burnham is inheriting that. And at the moment, I haven't got a clue whether he's got a slightly more credible growth plan. That was the next question than Starmer. We're just gonna have to wait and see. He's got some perfectly good people advising him, people who come on my show a lot like Andy Haldane and Jim, these are perfectly sensible, brainy economists with perfectly grand. Now, in the end, whether they're all going to get together and cook up something we regard as beneficial, One of the things he has said which I really approve of, is devolving a lot of economic power to mayors and to regions and to combined authorities. Because I do think when it comes to things like planning and what skills you need and all sorts of infrastructure investments, these decisions are far better taken at a sort of more local level than they are by the center. So that's a good thing, but it's not enough. There was something else I was going to say about all of this. Oh, yeah, but the other thing he's inherited is people focus a lot about the tightness of the fiscal rules. And that is a problem. Actually in some ways a slightly bigger problem for him is those meeting those fiscal targets are conditioned by spending plans which where basically quite a lot of cuts are baked into the figures for about two years time when we're running into a general election. And unless he can get the growth rate up, he will find himself having to do something that looks a lot like George Osborne's austerity just before the last possible date of a general election. So, you know, it's not a, let's be clear, it's not a golden economic inheritance.

[C]

You talk about devolution, you talk about it with some enthusiasm. The bit you don't mention when you talk about devolution is what you might call economic devolution. The reason that the key metric, to use that phrase again that people point to when they talk about central centralization is about where the money comes from in this country. Do you think there is any real chance of economic devolution, of allowing regional disparities to be maintained? Because that's what it would mean. And then.

[D]

Sorry, what do you mean?

[C]

Well, if you're not, if you're not smoothing out the numbers through redistribution via the treasury, then you have poorer regions that have to be, that will struggle and have to come up with innovative solutions is the theory, isn't it? If it's real devolution, it's about taxes and spending at a region or a local level. But we don't have that because nearly all of it comes via the Treasury.

[D]

Well, obviously there is, you know, there is this catch 22 which is on the one hand, the wealth and income gaps between London, the Southeast and the rest of the country are wider than in pretty much any other European country. And you know, the gap between the wealth and income of our big cities and London is just off the charts wide compared to almost any place you look at. And that means of course, that if you are going to, if you are going to make sure that public services in those parts of the world are adequate and okay, of course there's got to be massive subsidies from the center to these places. But on the other hand, it is also absolutely clear if you look at these other countries where economic performance is less unequal between different regions, it is because those different places have control, more control over tax raising. They have more control over things like planning. So one of the things that happens in France, which ought to happen in the UK is that in France, when a development is approved. A huge amount of the gain flows to the local authority, doesn't ever get back to the center of government. And it gives local areas a massive incentive to engage in the kind of development that at the moment gets shut down BY, you know, NIMBYs and opponents of those sorts of developments. So my broad view would be you can't just eliminate subsidies overnight. But if you don't, you know, if not now, when is the answer if you're going to do devolution? So you have have to combine it. You have to basically say, for example, you will have total control over, well, you're going to have much more control over things like business rates than you've currently got as a local area. Now obviously in a place like London, the flow of money from those sorts of rates will be higher than it is from the Northeast. So there will have to be top ups. But nonetheless, it would definitely, you know, it would definitely be a good thing if that kind of devolution of actual tax raising took place.

[B]

Thanks for listening to Intelligence Squared. This episode was created in partnership with Guinness Global Investors. It was produced by Margarita Volpatto and it was edited by Mark Roberts. For information on Guinness, just head to guinnessgi.com or see the link in the episode description. If you'd like ad free episodes and full length recordings, you can become a [e-mail] membership. And if you'd like to join us at future live events, you can find our full program or buy tickets [e-mail] attend. You've been listening to Intelligence Squared. Thanks for joining us.