Budget Day LIVE with City AM

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Hello and welcome to budget day live from city AM with me Christian May and me Alice Dembi. Now Christian I

don't think when we were making this front page yesterday we expected Obr and sorry to be the biggest item on our

budget bingo. It seems appropriate and it's quite an extraordinary uh day so far. We could have done this show a couple of hours

earlier given that the OPR extraordinary maneuver on their part accidentally

published pretty much the entire budget uh before the chancellor spoke. Um she was pretty furious about that.

Yeah, it's kind of extraordinary. It's a bit like Christmas, isn't it? You have all the speculation, all the buildup. It's sort of German Christmas where you

open your presents on Christmas Eve and then the day itself is just disappointment and it leaves you having fallen out with your entire family or

your backbenches in Rachel Re's case and a lot poorer. Yeah, I suppose the good news is it's given us a little bit more

time to digest and um solidify some punchy opinions. Absolutely. And we are very lucky to be

joined in that endeavor with our amazing panel um who are going to help uh us with all the best analysis that you need

for this budget across business, finance and politics. Yes, we are coming to you live from the

heart of the city, live streaming from the studios here at the London Stock Exchange. Our producer Martin, I can see

him behind the glass there, is putting the show together alongside a brilliant team from the LSE.

And that panel who I teased you about uh is uh Vicky Price, chief economist at

CBR and of course a member of Citym's shadow monetary policy committee. And Helen Thomas, better known to you as

Blonde Money, uh former adviser to George Osborne, writes a must-read newsletter on finance and politics, also

a city columnist. Now, just before we bring you into the conversation, which we're eager to do, um Alice, let's just

can through some of the headline figures, which I suppose starts with a 26 billion pound rise across taxes. Uh

the chancellor is quite pleased that ultimately that leaves her with what she calls a 22 billion pound headroom,

substantially up from where it is at the moment. Although, and we'll get into this, I'm sure, a lot of that is well, there's some quite heroic uh hope and

expectations about achieving that. But this was a tax raising budget. Yeah, it was absolutely a tax raising budget. biggest measure of course there

is that threes on fresh on thresholds which is a de facto increase in income tax. It's something she said she wasn't

going to do and it was also a manifesto commitment not to raise income tax. I mean let's bring you in Vicki. What did

you make of this? Well, it is breaking the manifesto commitments without any doubt because she had said a year ago that the freeze

on uh income tax thresholds was an attack on working people and she was going to unfreeze all that in 2028. Now

she's announced that they will stay frozen for another 3 years. That of course is the the easiest way for her to

raise some money because everything else that she's announced could have all sorts of repercussions in terms of the way people behave. Um and uh that's the

sums that she hopes to collect may simply not materialize. But another area where she has broken her manifesto

commitments is on adding uh an extra 2p to the taxes which you pay if you have

savings in the bank or if you have property and you have income coming from that. So that's going up uh all across

the various uh bands of income tax as well. And also of course she's taxing dividends. Now you could say that the

dividends may not be on working people but I would imagine now particularly that she's trying to encourage everyone

to invest in stocks and shares that could be something which is a cost to anyone who's involved in the future in

terms of uh putting the money through whatever you know stocks uh and um and

other sort of uh vehicles that there is ISIS of course don't have any tax

attached to it but other areas where they could be getting dividend payments so I'm afraid in all sorts of areas

Those commitments in the manifesto have now been thrown out of the window. Really, I want to come to Helen on the politics

of this because you can't separate the politics from the economics. But should we just touch uh in with Maritzio in

Westminster? Yeah, absolutely. Mitzio, uh has this landed in Westminster? Do you think Rachel Rus has done enough to satisfy

her backbenches? Hello. I mean the the the reaction in the House of Commons was slightly weird.

So 30 minutes before you saw you know Treasury ministers exchanging notes, partying notes as they realized that the

OB had leaked the report. Then when the income tax threshold extension was announced, you could see Labour MPs

quieten down and start to feel a little bit nervy as Vicky Price said there it could be a breach or read as a breach of

the Labor Manifesto. But obviously it ended with Raptures celebrating the

lifting of the two child benefit cap which will cost around3 billion pounds

more. That's adding to9 billion pounds more in welfare spending by the 2030 forecast end of the period because also

those 6 billion pound savings on winter fuel payments and on pips disability

payments were um you turned on. Mitzio tell us a little bit about the reaction

from leader of the opposition Kevin Bnock. Well, Chem Berno launched a pretty fiery

speech when she when she stood up. That 26 billion pounds of tax rises is in stark contrast to the Tories 47 billion

pound savings package which is mostly on cutting welfare spending but also on you

know benefits for housing on um the international aid bill as well. So you

know there were some tax-saving options there presented from the opposition benches. Rachel Ree chose to do another

option. Helen, this government's central promise is that they're not going to raise taxes

on working people when what they've actually done here by uprating benefits with inflation is is given pay rises to

people who are out of work and tax uh and tax rises for people who are in work, haven't they?

Yeah, I think I saw somebody on Twitter say, you know, the productive part of the economy is paying for the

unproductive part. Um, look, you you heard it there from Aritzio that we're getting a real dividing line now on

classic right-wing, leftwing way of looking at the economy. Um, I think this was a real classic Labor tax and spend

budget. I mean, it was um, yeah, trying to give the red meat if you like to to

her backbenches as we know how restive they are. But we've been talking for some time now, all of us, about um if

you do go in that direction, how can you please the market and then how are you going to please other interest groups? And I think she's made that decision

today, maybe she feels it saves her her short-term political future, but longer term huge ramifications on, as you say,

pensioners, uh uh landlords, um small businesses, there's some changes in there. So, you

know, she's drawn a line today, but um frankly, I don't think it's going to it's going to do very well for her longer term.

Okay. Well, speaking of which, Mauricio, final question to you. Um we can't forget the extraordinary drama in the

run-up to this budget about the vulnerability of the prime minister's position, the chancellor's position, what's going on the Labour party. This

isn't idle gossip. So, do you think today uh is going to secure them in the eyes of their own MPs?

Well, there's a quite difficulty here in the budget. So we've got it here in the the blueprint of the budget. The tax

rises are actually falling in the end of years of the forecast period. So actually the you know economists are

sort of raising questions over whether those policies will actually stick and you know whether they you know those

policies to fund more welfare spending will will follow through. Rachel Reeves' approval ratings are obviously at a

record low. I think by some estimates it's the lowest ever for any chancellor. Obviously, the prime minister is heading

into May elections, council elections, um with, you know, a sort of tag on his back. Lots of Labour MPs questioning his

position, but you know, we'll have to see how Labor MPs actually react, especially those on the soft left of the

party to the scrapping of the two child benefit cap. Thanks so much, Mauricio. Um, let's have

a look now at that extraordinary moment when Rachel Reese have to confess that her entire budget had been leaked in

advance of a really incredible moment in the House of Commons. This is deeply disappointing and a

serious error on their part. The office the office of budget responsibility have

already made a statement taking full responsibility for their breach.

I really was quite an extraordinary moment. Um where does it leave? Let's just have a little aside here before we

go back into the economics. Where does it leave the OBR? It's a contentious institution. Of course, the chancellor elevated them to sort of godlike status

of authority before the election, but there's going to have to be some heads rolling there surely. Helen, what do you

make of it? Can I say this? It gives me no pleasure to say this, but I fear it could be the beginning of the end of the OBR. Now,

some people may well welcome that there's been actually frustration amongst all parties and economists about

in some regards this, but you know, there is one of the other things this is, you

know, we've got that 200page document and we've been working our way through it. There are questions actually over some of um the narrative. This process

has been so torturous and we've heard various leaks and oh we're going to go

you up the hill towards this breaking this pledge but a new forecast from the OBR meant I couldn't. But then actually when you read about in this document

that doesn't really seem to be the case. They they they the timelines don't stack up. The original black hole isn't quite

as big as allegedly she'd looked at. There's just so much doesn't work. Then we get this this I mean this is actually

the story of today isn't it is that that the OBR has we need to know what exactly

happened and I as I say it gives me no pleasure to say this because I think it's good to have an arms length body

but don't treat them as the god as you said well you you can get those mistakes

happening I mean uh even from other government departments I used to work for the government occasionally these

things would happen but this is quite major uh in a way not that very much The interesting thing is that

it's not as if we didn't know what was going to be in it because it had all been leaked anyway beforehand. There

were a few surprises in there like the the extra tax on savings income and

property income and dividends. We sort of knew but we thought it might just be national insurance contributions that

would be extend to dividend payments rather than increasing the tax. But obviously she decided that it was simpler to do it on the on the tax

front. And and the reality is as we all always known that it would have been so much simpler to just have done uh an

income tax change and and collected the money and there wouldn't be an issue because it's you're absolutely right about the figures because nothing really

much seems to have changed. The productivity figures that we had heard which are now lower than had been

anticipated originally, they add something like 20 billion to what needs

to be raised. And if you actually look in more detail at how she's going to get

to her headroom that she wants, which is going to be bigger than before, half of it, half of it is due to expectations

that they're going to be efficiency gains, that they're going to be able to get more tax being paid by corporations

and others. Um, that HMRC is suddenly going to become incredibly efficient and and get

That'll be the day. That'll be the day. Well, no. I don't want to say anything against the Ojamasi. But you don't, but I might. I tell you what,

we'll we'll pause that. Alice, you're about to introduce our next guest, but I want to ask you because you have um been calling for about a year now for the

chancellor to resign. Do you um we'll come back to that. Um I suspect she's in a slightly strong position now, but

sticking with the OBR just for a moment. I mean, do you think the head of the OBR should resign? I think he probably has to. I don't

think you can get past something this seriously. I did want to mention that the last time something similar happened, it was courtesy of another

London free sheet. Um, the Evening Standard accidentally published its front page with some budget leaks, I

think, in 2014. And I think that put an end to any newspaper getting pre sight of the budget. So, um,

all right. Well, bring in our next guest. Yes, I will. Our next guest, uh, is Simon French, chief economist at Pan

Labarum and a former senior government adviser. Um, Simon, are you there?

Hello. I am here. Yeah. I wonder if you could give us a sort of macroeconomic perspective on this

budget. what do you think its impacts are going to be on inflation, on growth and on those things that people are really going to feel in their pockets?

So I think the most interesting perspective from macro standpoint is the

degree to this which this was a disinflationary budget. It wasn't in

aggregate a disinflationary budget in so far as inflation is still comfortably above the bank of England's 2% target

for next year and into 2027. But the measures, the specific measures the

chancellor outlined actually do take about 0.4 percentage points off consumer

price index for next year. And if you are looking, as I'm sure a lot of people are, and certainly the short end of the

guilt market is looking at this quite intensely, how much latitude the Bank of England has to cut interest rates ahead

of the budget. There was a there was one rate cut probably next month priced into the market. It just about moved out two

rate cuts. the idea that a second rate cut might be possible in the uh first

half of next year. Not a big rate cutting cycle, but some suggestion that

the mistakes of last year in terms of being in a very inflationary budget through the policy measures, that lesson

had been learned inside the Treasury. Um Simon, we seem to be saying more and more these days that something's hitting

a record high with the tax burden in particular. Um this wasn't Helen mentioned it earlier. This is

effectively, you know, a kind of an unsurprising labor budget. Spending is going up. Taxes are going up to fund

that. I mean, the main narrative of this is there will be higher taxes in order to fund higher welfare spending. Is it

that simple? It is that simple. It's uh much more pitily put than than I could. I mean,

put some numbers to that. The the tax take is going now from a 75 year highs

to a 77year high. 38p in the pound. um it's quite a considerable

uh draw and uh for those of us you know with relatively long memories of how

much the Treasury feel they can tax the UK economy before you start to get some really quite extreme distortionary

impacts. um the former permanent secretary of the treasury now Lick McFersonen now Lord McFersonen uh spoke

about more than a decade ago now about the Treasury view on this and the idea that if you move above a certain

threshold of taxation you start to get some quite distortionary impacts and I think we're seeing that already in terms

of the doicility of UK companies the doicility of UK high net worth individuals and I think the Treasury and

the Labor government are are treading a pretty dangerous path now in terms of How far can you squeeze the the the

taxable base before you get perverse reactions? Yeah. I mean, speaking of the taxable base, something we've kind of become

used to in the past uh few years is this concept of fiscal drag. But can you explain to us how many more people are

going to be paying uh draw drawn into paying higher rates of tax, how this is going to affect people's incomes um and

what sort of distortion effects we can see from that? Well, this is very much the story not so

much of this budget but for the last you know four or five budgets which is

inflation doing a lot of the heavy lifting here and actually one of the reasons why the uh if you like the

starting point for the chancellor wasn't as bad as some has feared and I think Vicki was absolutely spot on in her

previous comments about the moving parts of the productivity assumption but actually the big uh revenue raising here

is the impact of inflation pushing people into higher tax bands and that is

not you know not only is it not good for work incentives but also those tax bands

have some pretty perverse incentives particularly around the £100,000 level where the marginal withdrawal

rates are not 40p in the pound or 42p in the pound if you include national

insurance but actually more than 60 when you think about the withdrawal of the personal allowance in removal of child

benefit and in some extreme cases more than 100p in the pound. So some actual

actual actually actually negative incentives to do more economic activity that is the cost in terms of economic

growth of what is the easiest way politically of raising additional tax.

Simon, just sticking on um the trajectory then for for for households for individuals. We know from the OBR

now that they at least expect that household disposable income will grow by 0.5% uh 202526 followed by 0.25% in the

two years after that, averaging out at about 0.25% for the rest of their forecast period.

You're very good at stepping back from the day-to-day politics of this and looking at the sort of sweep of history if you like. This tells a story, doesn't

it? those those miserable figures tell a story about the challenges that we still face almost regardless of which

government and which budget these days. Yes. So again pick up on something Helen

said a few minutes ago is there's there's a real ideological divide now emerging between if you like the core of

the Labour party and the chancellor alluded to this in her speech that she puts a lot of the blame on this of the

both the implementation and the legacy of what was dubbed austerity through the coalition years and the conservative

years. But actually any objective assessment

actually looks much more at the impact of energy policy particularly over that

same period and also since 2015 the ratchet up in the national living wage and what that does to the the incentives

to uh to employ people further down the uh income distribution. I think those

are at least as relevant suspects as to why real household disposable income

growth has been so sluggish in the last five years and expected to be sluggish over the next five years as if you like

where Labor pinning the blame and pinning their hopes it has to be said from additional capital spending which

is on um a more austere government over the last decade.

Thanks so much Simon. Um that was really insightful. Um, let's have a look now at this moment when Rachel Reeves, you

know, announces these tax thresholds, which we all knew was coming, but it's worth having another look.

I am asking everyone to make a contribution, but I can keep that contribution as low as possible because

I will make further reforms to our tax system today to make it fairer and to

ensure that the wealthiest contribute the most. Helen, uh, you could almost sense there

the extent to which the chancellor wanted to make the most political capital out of this decision by saying this is me coming from the wealthy

whilst recognizing perhaps the angel on the other shoulder saying don't forget you said you weren't going to do this. So how does she walk that line? Because

she did say that you know this time last year that the the freeze and it is the most penicious tax on people. The

figures are absolutely shocking as to where these tax thresholds would be had they not been frozen by the previous

Tory government. Um it is the most penicious thing and this time last year the chancellor said it's attacks on

working people and I'm going to end it by the end of this parliament. Today she says she's going to extend it. Well exactly breaking another promise. I

mean we started at the top of this with Vicki talking about you know the promises broken. I mean

it's quite astonishing when you add up these three fiscal events. the the the the U-turns, the um it's awful really

because there's, you know, people say there's always a tweet. There's always something you can go back to where they said we're definitely not going to do

this. I mean, what that does in the end for everybody is it pollutes politics because people just turn the television

off, said I can't trust these people. Oh, why don't I go for that new guy, the Greens, who say, "Hey, um, let's get rid

of all debt and it'll all be great." Um, he actually says, "Don't let's not worry about that." Oh, no. Let's not worry about that. I do

apologize. Yes. Shouldn't misrepresent his position. Um but but look I mean actually we should take we should take

the Greens reform the other parties very seriously because they are uh appealing to voters when both the main parties are

polling below 20%. And uh frankly this is ex existential moments for them which

is why I think this was you know as as they said a labor budget by a labor chancellor because um they have to shore

up their core vote. They're not going to get anywhere if they can't um keep their core voters. Yeah. Yeah, I mean Vicki, on that trust in politics point, it does feel like

everyone was, as I say, marched up to the top of the hill for an intact in income tax rise and then marched back down again. Would it actually be more

honest and actually better for the public finances if Labour as they have proved incapable of cutting spending to

have just raised taxes in a broad-based way in an honest and transparent way and what would the impact of that be on the

public finances? Well, absolutely. I think if uh we had raised or she had raised um income tax by 2p in the pound uh along the all the

the tax um brackets then that would have meant 20 billion for um just the basic

rate. It would have meant about an extra four billion for the higher rate for the 40 uh% rate and then an extra half a

billion thereabouts for the 45% one. That would have been very easy. And the interesting thing for me on the political and trust issue is that she

had already got most people convinced that that she was going to do it. And what is more, she was prepared or

because she was talking about it uh or was considering breaking the manifesto commitment, the real one which was about

not raising the the rates um in order to meet her fiscal rules. And then when she

felt for whatever reason, you know, we have to really look at those figures in more detail, that she didn't need this any longer um

because the OBR said whatever, which we really need to understand a little bit better. Uh then she backed away from it. But of

course, she had already declared that she was prepared to do it, but she wasn't doing it simply because the figures she didn't need anymore. So

there isn't anything that that is there that says I'm going to stick to my man first whatever happens, you know, if I

need to, I will perhaps break it. next year. Yes, you could come and do this very easily. This is a really really good point now

because as I say, this is now three events in. So, you get a pattern of behavior, voters learn, uh suddenly this

dividend tax comes in and then okay, what's it going to be next time? Why am I bothering saving? It affects long-term behavior. One thing I want to mention

and I can mention to this audience because um you're all super smart markets people is actually they've

embedded into the system now a level where because guilt yields were measured here and apparently that meant you might

need an income tax hike but then if guilt yields dropped in the forecast window was different then she didn't

need to do it because it's too politically difficult if she has to come back later and actually do it she's

effectively saying well I don't have the authority to get this through my party so it's it's actually embeded heading

some political risk into the markets which I mean we knew some of the opposite what it was absolutely we knew from the from the

even from the spring statement and you know she's just got no authority to get welfare spending through and we haven't talked about welfare spending certainly

perhaps because there have been no um cuts to welfare in that budget just some increases but look um it is time now for

a little quick word from the headline sponsor of today's budget live show that's e Toro and they have launched a

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and shares. Iser promo T's and C's and ISA rules apply. Your capital is at

risk. With thanks to E Toro for their support for this broadcast. Well, joining me now um from the heart of the

city here from your very own office in fact, Julia Hoget, chief executive of the London Stock Exchange. Welcome.

Thank you for coming. Thank you very much for having me. and thanks so much for making the long commute to this fabulous studio. Um,

what stood out to you most from this budget today from a sort of capital markets perspective? Well, I have the privilege of chairing a

task force for the UK called the capital markets industry task force. And we have a vision statement that is we want to create the best possible environment in

the UK for great companies to start here, grow here, scale here, and stay here. And I think this is the first budget statement where I've ever heard

those words actually in some of the opening statements of the chancellor. So, and I think that that is important. Um from a capital markets point of view

obviously the um stamp duty holiday on IPOs um it's something that the ecosystem itself has been calling for uh

and I know the unicorn council of founders of of the next generation of great British companies have been calling for it as well and I think

that's welcome. We have to acknowledge that we actually haven't seen any change in stamp duty for a long time. It's the first government to actually uh address

that. Um and then we have been calling for the uh ISA piece um in terms of incentivizing more direct risk capital

deployment in the UK because aside from the other issues that have been raised by the speakers here um we have pivoted

away from having our investment in drivers of growth towards investment in stores of value as an economy. and the

more that we can do to pivot back um and recognize that we have tax incentives that at the moment are not necessarily

giving us the optimal quantum of risk capital we need as an economy, I think this is moving in the right direction.

So from that point of view, I think those are two things that we'd say uh the good good steps.

This is the government of course who promised to be the most pro business government this country has ever seen.

Um one of the many problems with that statement is that there are an awful lot of different types of business and business needs lots of different

things. businesses need and want and respond to and are affected by lots of different things. So one of the many

reasons why it was a ludicrous thing to say. Um but do you feel I mean very early on this government made a priority

to engage with the city with the square mile. Um you know right you you think right back to that big investment summit

that they held at the guild hall and I know they've been active on some of the capital markets reforms etc. And you've had the leads reforms and financial

services. So do you think you could say that today's confirmation of those quite welcome changes particularly to stamp

duty um after IPO are a sort of continuation um of a of a route that you

knew them to be on or was there something today that surprised you? I'd say it was a continuation of a

route. Um I mean I I have said very publicly that that there were an awful lot of our capital market reforms that were started by the last government and

and the previous chancellor Jeremy Hunt did an awful lot of sponsorship of those. Um and actually this government picked up all of those reforms without

missing a beat. and in some regards they pushed on further and faster. Um and so the announcement that we weren't going

to have stamp duty on the Pisces market for example is an illustration of that and the speed with which they got behind it. Um and so I think from that point of

view we've seen it. uh the chancellor actually had an event for uh the capital markets ecosystem and companies that

want to list in the UK recently and the combination of the chancellor's statement what Nikati from the FCA was

saying what I was saying was actually an illustration that as an ecosystem our vision for how the UK capital markets

should work is incredibly joined up between government regulator and the ecosystem now in a way that I haven't

seen in the 25 years that I've been in the industry well that was all very positive and lovely come on there must be something

bad we've got we've had the good what's the bad what did you roll your eyes at. What did you make of that OBR le? I mean, the

shadow chancellor Mel Stride said just before the budget on point of order that he considered the leak of the OBR to be

criminally negligent if not a criminal act. I mean, you know, quite a lot of pantomime today, but he said this is

market sensitive information. Something has gone catastrophically wrong. I don't think Star has sort of recognized the gravity of the situation in his initial

response. But, um, it hasn't been a terribly smooth process up to this point, has it? Well, I I think the first

thought I had was that I'm glad I'm no longer director of market oversight of the financial conduct authority. Um uh

because that would have been ex exactly that would have been my job to have the response from the FCA to that. Um look,

I've seen what the OB have said, I've seen what the FCA have said. I think we need to um understand exactly what

happened. Um I don't get the sense anybody intended to create this situation. Um and it isn't ideal. Um but

I think we need to let the authorities do what they need to do. Okay. Can I just ask finally very quickly a lot of debate about the

relative relative health of of UK public markets. Um we've covered 2025 story

quite closely. Um in a few words what do you think the prospects for public markets in the UK in 2026?

Well I think the future is actually bright. Um we have seen a a radical increase in the pipeline. Uh and that

pipeline is building not only from the UK but from Asia, the EU and indeed the US and North America. All right. Well that's a that's a

cheerful note to end things on. Uh Judy, thank you very much indeed for joining us. Um and we do have to say a farewell

to Helen at this point as well. I believe you're dashing off to speak to the BBC. I won't yet call them a rival broadcaster because we're only fledgling

here, but but they may well be one day. Um I'd like to bring up um we always keep an eye on what Paul Johnson um at

the formerly of the IFS um now um in the ivory towers of academia, his observations on some of the figures from

today. Um, so I thought we could have a quick look through this because it does tell the story. Um, freezing of tax

thresholds, Vicki, I know you keep banging on about it, but uh, I use the word penicious, and I don't use that lightly. Um, this was done obviously,

um, you know, by Jeremy Hunt. I think it's been done before. the chancellor made the point that they're going to um

recognize that this is such attacks on on working people as she put it and yet there we can see it um pretty plainly

that this is something that people will feel and it will be felt and noticed by people there will be an economic and a

political price to that won't there absolutely I mean what's happening anyways because uh they've been frozen for a while and as we're hearing earlier

from Simon French as well uh what has been going on is with the higher wages

that we've been seeing recently and of post minimum wage is going up very significantly even now for the younger

uh 18 to 20 year olds. Uh all that is bringing a number of people including with the the actual tuper lock um even

pensioners into now having to pay tax perhaps the ones who only rely on that

uh for the first time in some cases but others were moving into the higher ones and it can act as a disincentive but it

can also make them poorer and and you asked earlier uh how many more people would be coming into this as a result of

the extended freeze that uh has been announced and that's more than one million I think it's calculated between

1 and 1 1.4 million coming into uh the higher brackets of of paying tax which

is you know quite significant. So how that might change behavior um will you know remains to be seen but

people have been paying an awful lot more tax than perhaps had been assumed and one of the reasons probably why the

the figures have been looked at again in terms of how much it needs to Rachel even needs to raise is because that

revenue is coming in from individuals not so much from corporates because we had some data that suggests that profits

haven't been as good as had been anticipated in the in the expectations and therefore revenues from corporation tax are not as high as It would have

been from particular bits of the economy but certainly from from people at work. Now of course if that number of people

at work goes down as unemployment is going up that could change but um but yeah it's going to be a it's going to be a problem

for many. Yeah. Well very pleased to be joined now by Russ Mold investment director at AJ

Bell name that appears frequently in print uh and online at Citym and plenty of other places. Um, and by the way, I'm

just going to let the gallery know that I've changed my picture on the uh social media feed to look at taxes as a

percentage of GDP if anybody at any point wants to bring that up. It is something that I think tells the story because Vicki was just talking about

this Russ. She was talking about uh, you know, this is individual taxpayers now contributing to the bulk of this. And

it's Simon Hunt here, our city editor, has pulled this out of the OBR report.

You can see the time stamps there 10 minutes before it was meant to be published. Uh that is part of the story of the day. But you look at this um Russ

and and you've had time to digest some of the headline impact and consequences. Um what's your story of the day so far?

I can cheat and I can just let the financial markets tell me what to think and I can just look at how they've responded. So I can I can sit I can

digest I can do that going over the wobbly bridge when I was when I was running here. Bond yields very slightly down. Sterling very slightly up. Stock

market broadly unchanged albeit after a bit of a panic at the early release of the statement. So in that respect I

think the chancellor will probably take that as a win all round quite frankly. So I think you've written before that she had sort of three constituencies she

need to please which was her own backbenches the voters and the markets. It sounds like you think she's just

about threaded that needle. I think the bond vigilantes seem quite pleased. I'm not sure they'll be as Vicki I think was saying earlier I don't

think they'll be totally convinced by look the ch Treasury fanning 15 billion pounds worth of fraud and efficiencies

down the back of the seti. think that selfish things that they are the bond vigilances would rather have a penny income tax and have done with it if the

truth be told that would be good for them wouldn't necessarily be brilliant for the economy certainly wouldn't be very good for voters so again that's all

part of the balancing act there but I think bond vigilances do seem pleased backbenches they got their welfare

reforms that they were looking for so they'll be happy voters well I guess the bulk of the tax increases are backend

loaded and there are some clear benefits to those who perhaps you could say needed them the most so she may feel

that she's done a good enough job there as well but I'm sure the opinion polls and the bi-elections will tell um will be much more informative about that than

I ever will be. I suspect there was a risk, wasn't it? I think the risk remains that so much of the heavy lifting to get over the line and to get

that that that headroom restored that that appears as you say to have calmed market concerns today is very much an

IOU. It's it's a promise of future uh revenue is going to come in the door. I promise. Just give me time. Give me a

few years. There was quite a lot of thought that you know investors and others might not quite buy that argument. We note the OBR have said well

it's quite a good headroom forecast. We'll give you a 60% chance of actually hitting it. Um is that enough?

A 22 billion headroom figure is still tiny in the grand scale of the economy which is what 2.8 2.9 trillion sterling.

So there isn't much margin for error there at all as the chancellor found out last year. So in that respect she's still treading a very very fine line.

And the budget statement says you know I think is half a percent or a percent on the productivity calculations 40 billion pounds. We're talking about some very

very sensitive calculations to some numbers that are in some ways quite nebulous, quite hard to pin down and

that's before we again get back to that 15 billion efficiency number which is lovely if it can be delivered but you know I'm I'm looking forward to seeing

how it can be achieved. I also wonder if we're some to some extent underestimating political risk

here. We have a very fractured political uh scenario at the moment. The landscape is you know divided five ways instead of

three now. And I think that there's going to be a rising anger in the sense that this government doesn't stand for working people, not people who are

actually in work. It stands for people who are on welfare and they're paying more and more tax um to to go straight

into the pockets of people who are sitting at home or into those of pensioners. I think the biggest challenge the government has got is that we've just

discussed where the tax takes going and Simon's produced that fabulous chart. It's pretty much near Swedish levels.

Now I think if the population felt that they were getting value for money for that, I don't think there'd be much grunting about the contribution that we

were making. I think the sense that you've got, you know, whether it's a HS2 catastrophe still staining everybody's reputation or the sense that we just

don't necessarily get the services that we feel we demand or want, that's the government's biggest challenge in some ways. And if it can present that there's

value for money being come for those services, I don't think people will be too unhappy about the tax. But the fact that they don't feel they're getting

value is a major social problem. And therefore, to go to your point is clearly where there is pressure coming from parties which, you know, weren't

necessarily around, you know, in the same degree five or 10 years ago. Okay. Look, let's um have a look at some

of the numbers um that found their way into the public domain before they were meant to. Uh this is uh well, this was

shared um courtesy of Tory MP Neil O'Brien. Um and he makes the point by

highlighting certain um figures here that really what we can see here is is taxes going up uh in order to um fund

additional welfare expenditure. And and a number of our guests today, Alice, and they have made the point that that appears to be the main story here. But

there are plenty of others. So um we can dig into some of those now. That's part of politics just for a moment. Um and

let's speak to Lai Kona, global market strategist at Thank you very much for joining us. Thank you. Thank you for having me.

Lai, have we seen any notable market reactions to the budget so far? I mean obviously um we had a sort of fairly

early market reaction when it was leaked in advance, but now things have stabilized. What are the sort of trends? I think it has stabilized. I think the

market is taking it overall positively. the fact that she increased her uh fiscal buffer to 22 billion expected was

around 15 billion that is bringing down some of the volatility that we're seeing in the guilts before as as we've seen

that there was a leak which was unexpected and not all of the details were coming out at the time. So market

was panicking a little bit especially around the the the stamp duty on the new listings um and what it would mean for

property as well. So now it feels like the market is seeing that you know it's

it's a it's a fiscal tightening that's coming up obviously but it sounds it's credible as well because of that buffer

being increased right now. So it seems the markets have accepted the budget if if not fallen in love with it. Um, now the chancellor has talked a

lot and and she'll hate this comparison, but there was almost sort of Thatcherite bursts of rhetoric in the in the recent

past, but Russ is wincing at that on behalf of the chancellor, but they both what they have in common, they both talk

up the idea of a share owning democracy and and the chancellor has said she wants to encourage this retail investor

revolution. What from the announcements today do you think could could see her in a little bit closer to that vision?

Sure. Very positive that they are posing that three-year stamp duty on new

listings. I think we think that actually that will definitely increase capital market participation. Um obviously

increased liquidity, new shares being offered on on the London Stock Exchange and therefore positive for retail

activity from our side as well. the fact that they're limiting the the

cash um ISA allowance to 12,000 coming from 20,000. I think that's more mixed.

We don't know whether that 8,000 will necessarily go into um stock um ISAs. I

I think that there other things that needs to happen before we see that such

as the regulatory landscape being uh more, you know, favorable for investing

in the UK in general. Um and obviously for for UK income stocks I think the the

budget is more again mixed because of the fact that obviously um consumer spending will come under pressure. They

are now taxing uh property as well. Um so that that side of the equation is

more mixed. So it's a mixed picture overall for retail but we do uh welcome

the fact that they are um they are freezing that uh stamp duty for newly listed shares on the London stock

exchange. the there was a lot of expectation or certainly um a lot of people trying to get their head around

which kind of businesses listed businesses and which sectors might prove most um volatile after some of the

budget measures. Um we've seen the roller coaster of of of bank shares you know as every time there's a new twist

on will they won't they increase the bank levy etc. You wonder about house builders. um to what extent is it right

to look for those individual business or sector moves versus the the wider sense of do do we feel like there's further

clarity do we feel like we might become an economy on the up I think we do need further clarity but

in general when we look at just overall budget and what would mean for um UK

stocks is the fact that again disposable income going to come under pressure retailers will come under pressure in

terms of um UK listed retailers and and property as well in general will come

under pressure but for the listed shares I think we just need more more information. Okay, Laono from E Toro, thank you very

much for your uh insights and thoughts with us today. Thank you so much. Thanks La time now for a word from the

sponsor of today's show E Toro and they've just launched a cash iser powered by Money Farm. You can get a

market leading rate of 4.66% AER variable for 12 months. They're also giving up to 3% cash back on the stocks

and shares ISA promo TNC's and ISA rules apply. Your capital is at risk.

Uh let us check in on the Citym newsroom. Oh yeah, John Robinson, UK editor of

City AM is in our newsroom. Um there you can see I recognize I recognize that

backdrop. Um that is the City AM studio. Um John, when I left people were pouring

over the leaked budget. Um and then Alice and I were here um and then we watched the chance and regurgitate it.

Um what's going on in the newsroom now? Uh are we getting a sense as as to where our readers interest is being drawn?

Yes, the reaction has been coming into the newsroom thick and fast pretty much as soon as the chancellor got to her

feet in the House of Commons uh just after 12:30 this afternoon. You are

getting a sense that business leaders are not happy at all with this budget which is completely normal. The negative

reaction does tend to come first and the more positive reaction comes in a little bit later. Um, one reaction in

particular has caught my eye is the co-founder and co CEO of Castor, the

well-known sports brand, uh, Tom Behon has been talking about the freeze the

income tax threshold, uh, saying it is a way basically of delaying the inevitable

impact on entrepreneurs and wealth creators. He argues that you can't build

a growth economy by disincentivizing risk takingaking. And I've seen that reaction a few times come into my inbox

and colleagues inboxes as well. Um, do we have a sense and and I'm going to I'm going to stick my all into this

when we get back to the newsroom. We think about the front page tomorrow. John, uh, in addition to all our online coverage and the app coverage, etc. We

think about our front page. Uh, we had a bit of fun with the bingo page today. Did you play the bingo?

Well, I would of course be busy doing my job, Christine. Good, good. Just checking. Just checking was a trick question. Very good. Um, but

there is a sense that the chancellor has kind of she's just about threaded the needle on this. Um, and I think if I can

bear to look at my inbox when I get back to the office, um, as to the level of reaction coming in, it doesn't seem I

might regret this saying this on on air. Um, it doesn't seem that there's any great landmines that she's trod on at

the moment. I mean, I think there's a lot of things that are going to come out in the wash, but there's no sort of single moment here that people are going

to point to and think that that is a mistake. Yes, absolutely. The sense is that she

has held on. She's done just enough to maintain her position at least for the

next few months or so. There was no landmines as you said that she stepped on during the speech. I would say though

that Kerry Beno after uh the chancellor sat down and her rebuttal was very fiery

as Muritio said at the top of this program. It would be interesting to see if that rebuttal gains any traction in

the media in the next few hours or so. I think something that does have a chance of falling apart and it will

especially affect CityM readers is this idea of a mansion tax. is obviously going to have mad effects, especially in

London on properties that aren't remotely mansions, kind of normal family houses that just happen to have uh grown

a lot in value. Is is that something you can see for It's also very difficult to do, isn't it? Because council tax bans

are based on values from the '9s and the area I live has changed beyond recognition since then. So, I mean, what

sense do you have are you getting from the property sector or from sort of readers worried about this?

The reaction for that is still coming in. Absolutely. But this this was one of the policies that was touted before the

budget. It's one of those classic leaked policies to see what the reaction was going to be. They're going to raise about400 million pounds from this. It's

difficult to do. Is it is it actually going to make that much of a difference? It's just going to

cause concern um across the countries as particularly in London as you say.

Vicki, you had something to say about that. Uh yes, I was going to say I mean the the amount that will be raised is is so small about comparison to you know

the the size of the economy uh that you wonder why it was worth doing it apart from satisfying perhaps the backbenches

and so the Labour party generally to say that here we are we're taxing we're having some sort of wealth tax and the

way you see the wealth rather than doing lots of other things that they could have done we're going to be going on houses because they're there they can't

very easily move although of course it's not going to happen until 2028. Who knows? Who knows? Maybe everyone will

have gone. That is another theme of today, isn't it, Russ? That so much of what's coming um is a few years off.

Yeah. I mean, the bulk of the tax increases coming in 28, 29, 29,30. So, there's an awful lot of time for people

to they want to say plan accordingly if they can if they can find a way of doing so. So, there's always the risk that you

don't get the revenues that you're expecting. Well, that's leading into an election cycle as well, it's a very brave thing to do to put the

bulk of the tax increases through just when people are going to the ballot box. And brave is not a word that you know I think to Humphrey Apple being yes prime

minister obviously is a very brave decision prime minister and he'd always say that as a means of persuading the prime minister not to do it because he

wouldn't want to be described as brave. All right, let's say thank you very much to John Robinson. You can get back to

back to the newsroom and Alice and I will be back with you fairly shortly. Thank you very much. Uh right, I think we're going to have

another clip now. This uh so we know IPOs have been a particular uh sort of

horror story uh in London recently. I think this is what the chance has to say about how she's going to try and turn it around.

If you build here, Britain will back you.

Yeah. Um Yeah. Yeah. There you go. That was it. Um but but um it's an interesting

point. Um and we were discussing it briefly with Julia the extent to which Labour said we are a pro business government. And um they will point to a

number of things that they they think they've done and that they say they want to do to justify that boast. um when it

comes to public markets uh in this country um I mean it was interesting to have the conversation with with Julia

Hoget here of course on this um but it's it's not been a fantastic story 2025 um

and you know a lot of people point to a certain contradiction we keep hearing about Footsie being at a record high um

is that masking some some some some problems beneath the surface I guess the footsy 100 is a slightly

unusual index in that twothirds of his earnings don't come from the United Kingdom so that's one thing that we always have to bear in mind for starters

it's very heavily exposed to miners to oils to global banks global pharmaceutical companies so it isn't the

world's best indicator of what's going on on the streets here right now for all of that mood follows price and if the if

the market keeps on going up we've already seen two or three IPOs come out of the woodwork in the final quarter of the year they haven't flown yet but it's

Shaw Brook printed but it's early days but if the index keeps on trottting higher and sellers think they can get

value for their paper and buyers think they can still get a decent bargain then I can assure you that more more IPOs

will come out. Move follows price. It's it's a very very self-fulfilling thing. Should we talk about the global outlook

though because obviously London is competing with particularly with the US but uh with Europe and and with elsewhere as well. I mean you know what

do you see as the kind of global picture here for London's competitiveness? Well we have seen loads of firms actually yes okay there is a little bit

of interest that is shown relatively recently but loads are moving uh either to the US or to Europe actually. Um so

London in general has lost out. So perhaps some of these measures might change the mood a little bit and we

might see something something happening. But also of course let's not forget that it's not just the listing. It's where

you put your next investment that really matters and we've seen sectors lured by

President Trump sort of moving to the US and the big investments are there. So what we really need is not just the listings but we need the actual money to

be spent here and create jobs. Okay, Vicki. Um, if we bring up the current state of play with 10-year guilts,

perhap you can just talk us through what your your sense is here. Um, and I dare say if we if we zoom out a little more,

we might be able to put this into some more um interesting perspective. Um, we

have seen movements now so pegged to political discourse and leaks and

expectations and rumor etc. Um you quite often see on on social media um you know

unless reputable commentators will will take a screen grab of something there. If you zoom in

enough on that you can say oh look at this fall or look at this but let's keep it in context. Um what is the context

that you would put to this? Well, the context I would put there is first of all that the way you draw it matters hugely and it shows that there's been a

little bit of a of an improvement and falling the in the yields but from a quite a high point and the way that it's

drawn doesn't it's masks the fact that actually the drop isn't that big and it leaves us still with uh the the yields

10-year yields being considerably higher than is the case even in the US than is the case certainly in Europe and they're

higher than they are in France where they practically can't run the government and higher than they are in Italy. Now, of course, Italy seems to be

regenerating itself uh somehow. Um but uh we are still in a position where our

yields are rather high and I think that one of the reasons why they they are falling a little bit and perhaps the

market yes okay the bond vigilant is up to a point. It is that they do expect that some of the inflation cutting

measures in the budget are going to bring that inflation down faster than perhaps would otherwise have been the case and the OBR has got that in as well

and we discussed this. Some friends was talking about that as well. Um, and what that means is that perhaps interest rates are going to come down faster. And

I think she's she's certainly raised for for herself, for her for her survival

and also for the economy. Um, is is counting on those rates coming down and

making a difference. All these things we said about higher taxes for individuals, they may be partly offset by the fact

that perhaps interest rates are going to be coming down. It matters for businesses as well. It matters for the market if the corporations can also

borrow more cheaply. If you play the time frame game with that chart and take it right back to when Labour took power in summer 2024, the 10-year yield is

actually higher now than it was then, even though interest rates have come down by, you know, one and a quarter percentage points. So, there are still

plenty of skeptics out there who are waiting for further proof that inflation is back in its box and that the numbers do indeed add up. So, depending on your

time horizon, you can play with numbers. But, as Vicki said, it cost the UK more to borrow than Portugal, Ireland, Italy, Greece, or Spain. That's not a glowing

endorsement of our fiscal proposition at the moment. Well, speaking of time horizons, Alice, you could just I just put it up there on screen um was uh an

IFS chart of the day for me, I think, looking at taxes up and down over the

course of Parliament since 1974. It's not a terribly pretty picture for the current parliament. Um with, as they put

it, bigger tax rises announced this parliament than in any parliament since 1970. Well, with perfect timing, Labour

MP Chris Curtis, one of the more uh tigerish and enthusiastic yimi progrowth

members of the Labour Party. You're telling me that they all ticker. You tell me they all share tigerish.

Well, I mean, what I'm currently upset by is that all of you have backs to your chairs and I don't. This seems deeply unfair. And this is, you know, not the

fairness that Rachel Reeves was talking about in the keep you as to keep you uncomfortable. There was a cushion underneath the way.

It's not remotely a comment on whether or not you have a backbone. indeed. Very strong one.

Um well, my introduction was meant to tee you up in the um in the eyes of our viewers as somebody um and I know you're

not alone in this in the Labour party who who spent a lot of time thinking about growth and who um is is genuinely keen and enthusiastic um to explore the

conditions necessary to achieve it. Were those conditions set out in the budget today? Uh well, I think there were many things

that were set out in the budget today that were certainly progrowth. I mean some of the reforms that we can uh talk about to our tax system but ultimately

when it comes to a budget the most important thing for growth is economic stability is ensuring actually in terms

of what you can achieve in the budget but one side of the balance sheet adds up to the other side of the balance sheet that means there are often necessary decisions they're not always

going to be the most popular um in order to achieve that and what Rachel has done today is continued that uh principle of

economic stability and actually almost doubled the headroom so markets uh can be confident about the UK's economic

position going forward But what I would say actually is looking beyond the budget, we need to focus every single

day on ensuring we are implementing measures that are going to get uh the British economy growing. Today, one of

the things that Rachel mentioned in her speech was response to the nuclear regulatory task force. It may sound like

a kind of niche thing, but it's not really difficult for business that we've got some of the highest energy prices anywhere in the developed world. That is

because we haven't got enough energy generation. She's disappointed people. She's disappointed that a lot of people who were talking about fish discos and

bird hotels on social media yesterday um were hoping that the chancellor would say, "I've seen this report. I'm with

you. We're going to do everything it says." Well, let me say it. They're not quite able to do that. Let me let me say that then. Um I've

seen the report. I'm with them and I'm determined to ensure this government does everything in it to ensure that we

are not building ridiculously expensive nuclear power stations with fish discos in the future. I mean that is great to

hear but I think I would challenge you on saying that you know what matters most is stability and making sure your columns add up as we've been discussing

risk appetite matters a huge amount as well um and that's not something that we're really seeing being encouraged I

don't think in this budget and what also matters is as Russ was talking about the huge structural problem we have of an enormous amount of debt which means

we're so um responsive to what the bond markets do they have you know the whip hand over the chancellor at the moment

and you can't get out of that situation unless you reduce spending I mean we've seen borrowing coming down a bit at the end of this forecast, but no efforts at

all to reduce public spending. The point I was trying to make about the budget was the most important thing in a budget for economic growth, I would

argue, as well as some bits of tax reform, um, is to ensure that you have one side equaling the other. But you're

right that actually, but they don't they don't add it up when you've got Exactly. And the most important

thing is that we bring that down over the medium term which we're set to be doing faster than almost any other country uh because of some of the

decisions that have been made in this budget because we've been able to uh increase that headroom. But you know the

honest truth is there are necessary but difficult decisions in this budget. There were last year there have been at many budgets. We are projected I'm sure

you've shown the chart to have a reasonably high tax burden as a country. I don't want that. I don't anybody in

the country wants that. But the only way we get out of that is by getting the British economy growing again. Ultimately, you have to

that is one way to get out of it. Another way to get out of it is when we're in difficult financial situations. Yeah, but there is another way to get

out of it. You need to get you need to get you need to get the economy growing again in order to achieve that and that means going in every day changing our planning

system, making sure we're generating energy here in the UK, backing the builders, baking those who make,

supporting the tech businesses in the Oxford. Are all of those things happening because you know, well, they're not

because fiscal drag, which you know, I was as angry about it under the last government as I am about this government

is wicked. there are people will feel worse off and be worse off and that contributes to the OBR's projections

about pitiful increase in uh household disposable income and living standard. living standards is the thing that your

prime minister said you can mark me against this measure and they're not going in the right direction and that

there's only so much that you can expect kind of goodwill and and energy and planning reform to deliver in people's

pockets and I'm all in favor of those longerterm reforms this government uh is making but at the same time you are just

putting on the squeeze life gets a bit harder for more and more people there as with any budget you've got to

test the measures against the counterfactual so yes of course um we are asking people across this country to be a pay a bit more. I'm not going to

shy away from that. The alternative is that we have NHS waiting lists continuing to skyrocket if we're being honest. Um, and that is not good for

growth. It's not good for people in this country or we repeat what is trusted and don't add don't make one side add up to

the other. So the counterfactuals are worse than asking people in this country to pay a little bit more. Albeit that

that is not the ideal situation to end up in. But I think the sort of more fundamental point is this year on on

economic growth, which is obviously what I believe in more than anything else. We can winge about what the OB are

saying or we can prove them wrong. This year the OBR said that economic growth in this country was going to be 1%.

They've now revised that up, not least because of some of the measures uh that we put in place to increase economic growth. Yes, the economic growth uh

projections from the OBR for the next few years are not looking as rosy as I would like. partly because they've looked at what's happened over the last

14 years and said, "Well, it hasn't been looking rosy over the last 14 years." Well, I am determined to do what I can

to prove them wrong. And that means ensuring that day in day out, I along with other members of this government

are doing what we can to reform the British state. So, it's once against working uh to deliver economic growth. I

can talk about the trade deals. I can talk about the tax reform. I can talk about the planning reform, but it is a day in dayout job right across

government in order to get us back to the kind of economic growth figures that this country used to have. Yeah,

absolutely. And nobody can doubt your enthusiasm about growth. Enthusiasm. Um, but how do you explain to voters? I

mean, we can sit here and talk about growth in OB, but how how do you explain to voters, people who are going out to work and even if they're getting a wage

increasing more and more of it go to the tax man because of this fixed school drag that they should be paying all of that for people on welfare to get a pay

rise and and and while the government is also doing nothing to get the large amounts of people who are economically inactive or unemployed back into work

and also unemployment is going up. Explain. I would I would reject the premise uh that this government is doing

nothing to get economically to discover that he rejects the premise economically inactive people back into work. You

surveyed I used to work in survey research around the corner from here actually. Um two things that the surveys will tell you um are the biggest reason

why economically inactive people are particularly those with a disability. I think it's those with a disability specifically uh struggling to get back

into work. Firstly, they're on an NHS waiting list. Well, guess what? this government is getting those NHS waiting

lists down because of our investment. 5.2 million extra appointments this year. Secondly, because they don't feel

like the incentive is there to work. They're worried about being wor because we're reforming. We are still reforming

the welfare system to do that. We are also increasing the minimum wage. Another reason is because they are

worried that if they try work and it doesn't work out, lots of people with a disability or an illness, for example, might be good to work some of the time,

but then get sick and can't work some days of the week. and they're worried about the consequences of that. And what we're doing is we're giving everybody a

right to try so that they can go out to work. We're also ensuring that there's the protections for them in the workplace if they do end up in that

situation. So I think all of those talking about the employment rights bill, talking about some of the bits of the employment rights bill, but all of those

things are pushing in the direction of getting down that economically inactive pushing in the direction of increasing

unemployment, which has risen every month since the last election. And the OBR says it's not going to come down below 5% until at least 2027. Let's

prove them wrong because like we prove them wrong like we've proved them wrong on economic growth this year. Um

smashing their forecast out of the park, having the fastest economic growth in the G7 for the first half of this year.

Let's prove them wrong on unemployment. Let's prove them wrong on economic growth. And let's get this country back to where it used to be. We did under the

last Labor government and we will under this. Did we also have the fastest growth in the G7 under the last Conservative government?

Well, not really. Pick your pick your metric. I tell you what, we could bring this up because this is again I did show it earlier.

This is on the uh uh IFS account. And it just paints the picture of of where tax increases are coming in over this

parliament. And look, I know nobody wins here and there is a general trajectory from 2015, at least 2015 onwards, that

the state gets bigger. The the the pressures on the state get bigger. Of course they do with demographics. Um but

overall this tax burden just goes up and up and up. This is not a country with a spring in its step.

This is a country that has basically had medium wages that are about the same as they were going into the financial crash

and extra pressures on the state. I mean, we can talk about welfare and that's true, but we've also got Did you call for welfare cuts of about 20 billion?

Yeah, but that's how there weren't any in this budget. We'll come back to that in a minute. We don't have much time. Can we come to it now?

But but but we've got an aging population. The only way no welfare cuts ever. I've just talked

I've just told you about how we get the welfare bill down. It's ensuring we're getting people off NHS waiting lists so that they can get back into work. Well,

the extra money that we're putting into the NHS will do that. It's ensuring that we're putting the incentives in the right places. You can talk about little

bits of welfare changes here, little bits of changing thresholds there like we tried to do earlier in the year and admittedly struggled with, but that is

peanuts compared to what we actually need to do to reform the welfare system in this country, which means getting

those who are currently feel like they're in a really difficult situation to get back into work because the workplace isn't right for them or

because they're too sick to get back to work and getting them back into a place that they can. And this government is doing many things. All of those things

are also peanuts compared to pension spending, which is, as you know, the largest ticket, the largest item on the welfare bill. Um, I mean, it's obviously

very politically difficult to do. Uh, but would you be uh maybe behind closed doors telling the chancellor she needs

to do something about pensions? Um, the triple lock inevitably cannot last

forever. That is a mathematical fact. You heard it first. Um, well, I mean that that's just

mathematically true, right? you cannot have a uh pensions bill that on average rises uh faster than wages indefinitely.

That's just a mathematical truth. So the real question is eventually this country um is going to have to um start

grappling with that question. Now we made a manifesto commitment. We are sticking to that manifesto commitment uh to the triple lock over this parliament.

I think that is the right thing to do to ensure you know we've got lots of measures in the budget today to bring children out of poverty that is also

going to ensure that we keep um pensioners um out of poverty. But it's certainly true that at some point in the decades to come, we are going to have to

grapple with this question of how we put pensions on their more long medium long-term stable fitting. Russ, has he convinced you that there is

a plan? Listening to listening to that. No, definitely not. I mean, I think you can defin in the end what dictates is

productivity growth times working population growth and that is it. So ultimately all policies need to be

geared towards those two things because that's what drives growth. And I'm sure the chancellor will be able to say look there's more than enough in there to keep supporters happy and more than

enough to give them a fighting chance. Take it V Ricky. Well, the only thing about the statistics since we've been talking

about them is that of course a lot of the growth that we've seen in the UK this year has been to a very

considerable extent simply because the government spend more. So you spend a lot on the NHS, a lot on raising incomes

for people in the the public sector. So and that has filtered through the economy in various areas. Uh and that's

why it's happened. So but is one going to be relying on on that? Whereas what we've seen in terms of business

investment and also business confidence, it really has gone the other way. To respond to both those points.

I'm afraid you can't because we're out of time. But that's not the first time you've heard that. Although I will break my own rule by asking you one final

question. Um, do you think the head of the not fair Do you think the head of the ABR should resign? I think there's serious questions to

answer. I'm not the one for going around. One of those questions is should he resign? Oh, one of those I'm not I'm not We

don't know what happened, right? Um, so let's get to the bottom of what happened before we work out what the con Chancellor said it could be a criminal.

They've put again we don't know what's happened at this stage. Um, I can tell you a longer story if you like, but we

don't know what's happened at this stage. I'm not going to call around go calling for people to resign until we get to the bottom because you're trying to create jobs,

not not cut them. Well, and I'm sure I'm sure if I'm sure if the head of the OBR were to leave his post, which I'm not calling for, there'd

be many many more jobs for him to go to created by a Labor government uh that is supporting businesses right across this

country. Absolutely. Build all those data centers or something. Um well, look, that is it from the heart of the

Lock Exchange and City AM's uh first live budget show. Thank you very much

indeed. Uh Chris Curtis, thank you for coming in from Westminster. Vicky Price, Russ Mold, and indeed, well, all of our

contributors. We had a good time, Alice. I'm pretty sure we've had an excellent time. Yeah, let's do it again next year or maybe sooner. Who knows?

Absolutely. And a particular thanks to everybody here at Linosoft Exchange and of course E Toro, our sponsor for

getting behind this particular broadcast. And I would say on that note, thank you very much indeed to everybody who is watching across all the different

platforms and indeed to those of you who come around again for a second bite at this by watching on demand afterwards.

So from all of us here in the London Stock Exchange studios on an exciting day. That's it. Thank you and goodbye.

and and don't forget to subscribe to all our newsletters and download the city app. Well said.