Up next in 10
Are Londoners losing their jobs thanks to Rachel Reeves’ tax hikes?
6K views
Feb 23, 2025
City AM’s opinion and features editor, Alys Denby, talks through the best writing of the week on business, markets, innovation and freedom with former government advisor and senior fellow at the Adam Smith Institute James Price. In this episode, they discuss the ongoing negative impact of Rachel Reeves’ jobs tax, whether rumours of the death of DEI have been exaggerated and how the ongoing decimation of the hospitality industry is also affecting music. Read more opinion and features here 👇 https://www.cityam.com/opinion-2/ Get more of City AM 👇 🌐 http://www.cityam.com X(formerly Twitter): http://twitter.com/CityAM Facebook: http://www.facebook.com/cityam Instagram: http://www.instagram.com/city_am LinkedIn: www.linkedin.com/company/cityam Produced by: Alys Denby, Emmanuel Nwosu, Joe Lee, Joseph Curay Teneda #politics #politicalnews #business #tax #inflation #rachelreeves #trump #donaldtrump #markzuckerberg #elonmusk #musk #rachelreeves #keirstarmer #jobcuts #jobmarket #dei
View Video Transcript
0:00
why if you look what's happening in the
0:01
States now a lot of the what would you
0:03
call them Tech Bros rode in behind
0:05
Donald Trump people wouldn't have
0:06
assumed that a few years ago because he
0:08
promised this big deregulatory agenda
0:11
and and we've got that here no we
0:12
haven't there was that thing was it
0:14
Christmas Eve when starma and reev said
0:16
oh actually this economic growth thing
0:18
sounds like a good idea you mentioned
0:20
some of the sort of problems that she's
0:22
been having of some Mysteries over her
0:24
CV some funny expenses perhaps in a
0:26
previous job but actually really what's
0:28
properly putting her in trouble is this
0:30
it's the estate of the economy
0:31
University's 45 million quid on these in
0:34
salaries in the last few years and
0:36
taxpayers money has been going on what
0:38
was it in there Tik Tock dances and
0:40
queer robots and all this sort of just
0:43
complete
0:46
rot we
0:48
good hello I'm Alice Demby opinion and
0:51
features editor of cityam and this is
0:53
what's the context where we'll be
0:55
talking through the week's best writing
0:56
on business markets Innovation and
0:58
freedom all which can of course be found
1:01
online and in the pages of cityam with
1:04
me to take us through is James price a
1:06
former government special advisor senior
1:08
fellow at the Adam Smith Institute and
1:10
most importantly a CM columnist and
1:13
today we're going to be discussing
1:14
Rachel Reeves's Jobs Tax where the
1:16
rumors of the death of Dei are to be
1:18
believed and how Pub closures are also
1:20
affecting the music industry so James
1:22
thanks so much for joining me so um
1:24
first thing I want to talk about is uh
1:25
the ongoing effects of Rachel Reeves's
1:27
budget Matthew kilcoin who's an
1:29
economist rate for us this week we're
1:31
now seeing the effects of this in the
1:32
jog market and that it's proving the
1:34
laugher curve can you explain to us what
1:35
he means by that basically just says a
1:37
very simple truth which is that if you
1:40
for example uh have no taxes at all
1:42
obviously the state will bring in no
1:44
money but of course if you tax everybody
1:46
100% the state's not going to really
1:48
make any money because people are going
1:49
to stop working no one's going to bother
1:51
to do anything so at some point there is
1:53
an optimal tax take you know you can
1:54
imagine on the graph it kind of goes up
1:56
in a bell curve and goes down again and
1:58
laa never went any further than saying
2:00
exactly where that would be but that
2:02
lets you into a world that says well if
2:03
I raise taxes you would assume that I
2:05
would bring in some more money but
2:07
actually if there are other factors
2:09
there and people go on now that tax rate
2:10
is higher than it is in the UK and
2:12
France or in Germany or America I might
2:14
stop that kind of economic activity it's
2:16
not worth my time and so this idea that
2:18
if you do some sort of dynamic pricing
2:20
of taxes we have a better understanding
2:23
of the effect of those taxes over time
2:26
it's a very simple idea and if Rachel
2:28
Reeves really were the famed Economist
2:30
that her CV used to say that she was she
2:33
might know this yeah so I mean what he
2:35
says proves that this is happening is
2:36
some data that's out this week from the
2:38
cipd which says um that about a third of
2:41
British firms are planning to cut jobs
2:44
and about half are freezing prices so we
2:47
are now seeing the realtime effects of
2:48
how this tax rice is essentially eroding
2:51
the economic activity it's seeking to
2:53
tax yeah absolutely right and this is
2:55
something that we all were talking about
2:57
at the time and I'm afraid to say that a
2:59
lot of people in this city were were
3:00
fooled perhaps maybe willfully fooled
3:03
seeing the writing was on the wall and
3:04
the country was going to vote labor in I
3:07
would say as a as a very partisan figure
3:09
on default because my old party of the
3:10
conservatives lost rather than labor
3:12
winning but there was this idea of what
3:14
was it called the smoked salmon
3:15
offensive of Labor figures going around
3:18
hobnobbing in the city and saying don't
3:19
we were listening to you guys just like
3:21
Tony Blair's labor party were were
3:23
really Pro business what was the mandon
3:25
line were intensely relaxed about people
3:27
getting Filthy Rich and people in the
3:29
city went okay motivated reasoning here
3:30
I can choose to believe this
3:32
everything's going to be fine and now
3:34
the rubbers hit the road and reality hit
3:36
turns out if you tax people into
3:37
Oblivion you get a massive dampening of
3:39
economic activity we're all the poorer
3:41
for that absolutely I think what's
3:43
particularly troubling is where you look
3:45
what sectors are being hit hardest so
3:46
actually the city people are reading
3:48
City M are probably going to be fine big
3:50
businesses can absorb these costs it's
3:52
businesses like Hospitality like child
3:55
care there small businesses that employ
3:58
lots of people on quite low wages that
4:00
are being hit the hardest yeah yeah and
4:03
it's deeply upsetting this isn't it you
4:04
know that that those people are the
4:06
lifeblood of the economy right millions
4:08
and millions of people who are just
4:10
trying to earn a crust for whom the idea
4:12
of profit being a dirty word they profit
4:14
is how I end up you know going on my one
4:17
holiday a year it's how I put new I
4:19
don't know uh new films for my kids to
4:21
go and see at the cinema it's those
4:23
little treats left over after working
4:25
hard and these are the people that are
4:27
suffering these kinds of policies you
4:28
make a great point that these big
4:30
businesses can absorb it and
4:31
unfortunately big business does have a
4:33
tendency to do that look at compliance
4:36
right across the board you know once new
4:37
regulations come in big businesses May
4:40
fight against it but when it happens
4:41
they've got the legal teams they've got
4:42
the accountancy guys they've got all
4:44
those people they can gatekeep around
4:46
that and stop new entrance to the market
4:48
and it's those kinds of new disruptive
4:50
entrance that will help uh the kind of
4:52
economic growth we really really need
4:54
it's why if you look what's happening in
4:56
the States now a lot of the what would
4:57
you call them Tech Bros Road behind
5:00
Donald Trump people wouldn't have
5:01
assumed that a few years ago because he
5:02
promised this big deregulatory agenda
5:05
and and we've got that here no we
5:07
haven't there was that thing was it
5:08
Christmas Eve when starma and reev said
5:10
oh actually this economic growth thing
5:13
sounds like a good idea who should we
5:15
ask should it be the think tank should
5:16
it be businesses should it be Enterprise
5:18
no let's ask The Regulators how they can
5:20
go for growth it's a funny one isn't it
5:22
though she has this week I think called
5:23
in a bunch of Banks and so on to to sort
5:25
of you basically begging them for ideas
5:27
for growth and they say well you
5:28
shouldn't have done the n something um
5:32
um essentially yeah I mean what do we
5:34
think about Reeves's prospects moment
5:35
you mentioned some of the sort of
5:37
problems that she's been having a bit
5:38
ofit some Mysteries over her CV some
5:41
funny expenses perhaps in a previous job
5:43
but actually really what's proberly
5:45
putting her in trouble is this it's the
5:47
estate of the economy right and there's
5:49
rumors that K starm is going to overrule
5:51
her to try and increase defense spending
5:53
where's she going to get that money from
5:55
um there's possibly something a fiscal
5:58
event coming up in the spring um we're
6:00
gonna get some new OBO forecasts
6:01
possibly a spending review possibly
6:03
something more like a minor fiscal event
6:06
do you think she's going to survive this
6:07
what do you think she's going to do do
6:08
you know what paradoxically although it
6:10
would be it would be really embarrassing
6:12
for the labor government to lose a
6:13
Chancellor like this and that the budget
6:16
that Reeves was in charge of and
6:18
delivered in what was it October after
6:20
several months should have been very
6:21
good that was very bad actually weirdly
6:23
perversely think that she's the best
6:25
that labor have got right well if you
6:27
think about anybody else around that
6:28
cabinet table not sure there's a single
6:30
one of them with any actual private
6:32
sector experience at all Rees may have
6:35
you know let's just call her spade a
6:36
spade she lied about her levels of
6:38
experience she said that she worked at
6:40
the bank ofland what for a decade it was
6:42
five years she she said she worked as an
6:44
economist when in fact she was a
6:46
complaints Handler I think right and and
6:48
I think what actually happened is that
6:49
she saw there was a plum labor seat
6:51
coming up in leads so she moved from
6:53
London up to leads to Eng gratiate
6:54
herself with the local labor party the
6:56
local community I've got a real problem
6:58
with somebody doing that this the kind
6:59
of sacrifice that you want people to
7:01
make to serve in public office but when
7:03
she's fibbed about all these things it's
7:05
put her in a in big trouble but as I say
7:07
she's the onlyone has got any experience
7:08
there at all we've seen the business
7:09
secretary Jonathan Reynolds this week as
7:11
well who said that he was a solicitor
7:13
turns out nope no he wasn't I mean some
7:16
wom would say that's breaking the law
7:17
it's it's breaking the law to
7:18
impersonate being a solicitor for the
7:20
purposes of practicing law and there's
7:21
some controversy over whether Reynolds
7:23
May by saying this perhaps saying he was
7:25
a full solicor to get elected even there
7:27
may be some problems there too so those
7:30
are the two most Pro business
7:32
growth-minded people around that cabinet
7:34
table if they go goodness me are we
7:36
going to get someone who's more Pro
7:38
business than them I'm not sure there is
7:39
anybody in that party with it which
7:41
really really scares me okay so a vote
7:43
of confidence in the chancellor there
7:45
let's move on let's talk about your
7:46
column that you wrote this week you uh
7:49
wrote about the rumors of the death of
7:51
Dei have they been greatly exaggerated
7:54
take us through it well as a as a
7:55
moderate writer as ever picking the the
7:58
non-controversial topic so Dei for the
8:00
few people who haven't spotted this this
8:01
is diversity equity and inclusion this
8:05
sort of I would ca for us to call it a
8:06
fad uh or a trend that's kind of swept
8:09
through started in the United States of
8:11
America like so many of these things do
8:13
and it's swept over here and just as the
8:16
the the tide of Dei has been receding
8:19
over in the states with the vibe shift
8:21
that I've talked about in this piece
8:22
it's great phrase the vibe shift it will
8:24
happen here as well in in all kinds of
8:27
ways the big businesses are starting to
8:28
shed their Dei teams not just in this
8:31
stat the kind of Walmarts that you would
8:33
assume but again these big Tech Giants
8:35
who pushed so much of this kind of
8:37
radical progressivism the metas the
8:39
Amazons the Googles they're shedding all
8:41
of this stuff the big Banks the Goldman
8:43
the JP Morgan the city groups they're
8:45
shedding a lot of their Net Zero
8:46
practices which I think would come under
8:48
the kind of larger uh cultural war that
8:50
you think that we need to impoverish
8:52
ourselves in the UK in order to make
8:54
these targets that aren't actually going
8:55
to make any real dent in improving the
8:57
environment I would go so far as to say
9:00
the point of the piece though is that a
9:02
lot of these guys have dined so well I
9:03
think I go so far as to call them
9:05
grifters they've DED very well and terit
9:07
again very moderate inclusive language
9:09
for me passing on my Dei tests um but
9:12
these people have DED so well on the
9:13
taxpayer te in so many ways and that so
9:16
many of our institutions are still what
9:18
was Robert jenri call it spaffing money
9:20
against these things universities 45
9:22
million quid on these in salaries in the
9:24
last few years and taxpayers money has
9:27
been going on what was it in there uh
9:29
tick Tok dances and queer robots and all
9:33
this sort of just complete rot the sort
9:34
of stuff that Doge in America is finding
9:37
we're finding here we've got to stop all
9:38
of this and I think what I found really
9:40
interesting in your piece is this idea
9:41
that it's you know fine businesses are
9:43
quite responsive to what's going on in
9:45
government because you know that's the
9:47
market but the institutions this stuff
9:50
is so embedded and I think I see it so
9:52
much when I go to art galleries for
9:54
instance I remember going to the Walker
9:56
Art Gallery in Liverpool last year and
9:58
everywhere let you look there are sort
10:00
of posters hectoring you that the money
10:02
for this collection Came From Slavery
10:04
and that you shouldn't be just enjoying
10:06
these beautiful paintings and sculptures
10:08
the richness of this great City you
10:10
should be feeling ashamed and one thing
10:12
that particularly struck me there's this
10:13
beautiful sorry this is a bit of a
10:15
personal rant but there's this beautiful
10:17
funerary Monument beautiful marble
10:19
sculpture of two little girls who died
10:21
of tuberculosis when they were children
10:23
stunning piece of sculpture and there's
10:25
the label on it says um slaves didn't
10:28
get funerals this was a wealthy family
10:30
who could afford to pay for this funeral
10:32
it's like so you're not even allowed to
10:33
just think it's sad and beautiful that
10:35
these children died and that I think is
10:37
where you see the rot of Dei and the you
10:41
know that the kind of its worse
10:42
expression I think yeah I I think that's
10:44
a great point I think your first point
10:45
is great that businesses can do this
10:47
stuff quite quickly they can just shed
10:48
all this stuff it's just it's it's not
10:50
only is it a dead weight for them I
10:52
think actually it's it's really actively
10:54
negatively harmful to workplaces you you
10:57
get this I think the harbor business has
10:58
talked about this other areas that if
11:00
you've got um an employee who is a
11:02
member of an ethnic minority there are
11:04
middle managers who are so scared about
11:06
causing offense or tripping any of these
11:08
things that rather than have a quiet
11:09
word about performance the way they
11:11
might do with say another white
11:12
colleague that they go oh God I don't
11:14
want to make a problem here so they
11:15
immediately escalate it to the kind of
11:17
formal disciplinary channels and then
11:20
that makes everything much worse because
11:21
this P are being targeted I don't see
11:23
other people being targeted so it causes
11:25
all these different kind of um stresses
11:28
and strains amongst amongst races
11:30
amongst religions amongst Sexes all
11:32
these sorts of things and let's not
11:33
forget that the one of the few very good
11:34
people who working what we would may
11:36
maybe called de Martin Luther King said
11:38
we should judge people on the content of
11:40
their character rather than these things
11:41
so that you know that that kind of paity
11:43
of thinking that's really actively
11:45
negatively affecting it I think you're
11:46
dead right and I think you're also right
11:48
that this this institutional point is so
11:50
so problematic uh universities galleries
11:53
all these guys that get huge amounts of
11:54
taxpayer funding don't worry about the
11:56
bottom line they'll keep this going you
11:59
Rob Henderson might call the luxury
12:01
belief they can keep going for this
12:02
stuff because they're not having to pay
12:03
for it and as you say I just think it's
12:05
corrosive you can't mourn the death of
12:07
two little girls from tuberculosis right
12:10
those people of course are a standing
12:12
they're a sticy for all those who died
12:14
of tuberculosis at a tragically young
12:16
age and how wonderful it is there are
12:17
now cures for those kinds of things you
12:19
the idea of having basic human empathy
12:21
to understand how other people who don't
12:23
look like you or live where you live can
12:25
feel is all being eroded because of this
12:27
stuff and it's not a trade-off you can
12:29
MN those little girls and all of those
12:31
people who died anonymously from slavery
12:33
in terrible circumstances if I would say
12:35
if I would Min stick up for Dei I think
12:38
that there must be some places where
12:40
it's useful and necessary the one thing
12:41
I think about is how for example if
12:43
you're a black woman in the UK you're
12:45
four times more likely to die in child
12:47
birth and that's not explained by
12:49
socioeconomic circumstance alone that
12:51
just has to be racism so I feel like
12:53
there must be some organizations and
12:55
institutions where it is useful to look
12:57
at these things through
13:00
through a DI lens do do you think there
13:01
is any other examples that you might I'm
13:04
I'm I'm absolutely a for the healthcare
13:06
providers or anybody else looking what
13:08
the the data actually tell them and
13:10
acting on it the problem is that so much
13:11
of this stuff so quickly has become so
13:13
ascientific so unscientific that you
13:16
can't really tell these things and of
13:18
course the last thing in the piece is
13:19
that whilst we're wondering about how
13:21
many genders there are you've got Russia
13:23
and Ukraine and and the Americans
13:24
perhaps pulling out you've got the
13:25
threat of China you've got actual
13:27
environmental issues that were not
13:29
coming up with new technologies to be
13:30
able to to solve and if our universities
13:33
are fannying around with all this sort
13:34
of what I call it woke Tosh right then
13:36
they're not focusing on the really
13:38
existential problems yeah so the last
13:40
story I wanted to talk about was an
13:41
article we had in our Pages by Mick
13:43
Foster who's the CEO of uh something
13:45
called gig Pig and he's talking about um
13:48
the uh the poor state of the hospitality
13:50
industry but actually this has wider
13:52
Halo effects on other Industries as well
13:54
so the music industry saying lots of
13:56
bands like Oasis like bands that we're
13:57
going to be celebrating quite soon at
13:59
the upcoming Brit Awards had their start
14:02
in pubs greasy floors we're going to
14:04
lose out on many many of the next
14:07
generation of our creatives what what do
14:09
we think about that yeah well again this
14:10
is this is the the tragic thing about
14:12
bad governance right you you see again
14:14
the headline thing okay we're going to
14:16
put this tax up on this um we're going
14:17
to do this that and the other and it's
14:19
all going to be great for people but you
14:20
don't look at the negative effects there
14:22
right just take for example you know the
14:24
taxes on beer right uh I think taxes on
14:26
beer go up it's called what's known as a
14:28
pagui tax so you put a tax up on
14:30
something in order to disincentivize
14:32
people doing it that's why you put extra
14:34
taxes on smoking for example right of
14:36
course no one ever PR wonder what
14:38
happens when you put extra taxes on
14:39
income who know what happens there but
14:40
that's beside the point you tax beer
14:42
more fewer people can afford to go to
14:43
the pub for as long beer uh the pub
14:46
industry suffers few people start going
14:48
out as you say knockover effects taxis
14:50
suffer musicians suffer all these
14:52
negative effects and that's because the
14:54
the cost of doing these things is so
14:56
high that's one part of it I think
14:57
another part of it is just LIC ing laws
15:00
London has had what was her name Amy
15:02
lame who supposed to be exactly by name
15:05
by Nature right a great case of
15:06
nominative determinism paid an eyeing
15:09
salary to do about 5 minutes work a week
15:11
in order to boost London's nightlife and
15:13
of course under her Tage under her
15:15
watchful eye more live venues and more
15:18
places for nightclubs and all the rest
15:19
of it have shut it's not happening in
15:21
Manchester by the way a guy called Sasha
15:22
Lord there doing the same job Manchester
15:24
NTI thriving here in the capital it's
15:27
suffering enormously what does that do
15:29
to people it just means your quality of
15:30
life is much worse right you're so taxed
15:32
here sadik's done nothing about the kind
15:34
of knife crime epidemic and your phone
15:36
being snatched it's miserable all the
15:38
time and when you want to just go and
15:39
Escape you want to go down to the pub
15:40
with your mates you want to let your
15:42
hair down and go and Boogie like I used
15:43
to do a million years ago you can't do
15:45
it because it's too expensive and places
15:46
are shutting down and the last thing
15:48
about it is that you've got people who
15:49
will moving to somewhere like Soho for
15:51
hundreds of years has been this fun hip
15:53
happening place or whatever will move in
15:55
there move opposite a pub and then start
15:57
complaining about it no just move to
15:59
sorry move to somewhere quiet right and
16:01
let Soho be Soho let these places let
16:03
the inner bits of cities have fun and
16:05
not be subject to these kinds of
16:07
ridiculous nimas Licensing Laws yeah I
16:09
completely agree and and I think this
16:11
the fate of our pubs is such a sort of
16:14
what's syneptic syep is the word you
16:16
used earlier for the state of the
16:17
economy more broadly because it it's um
16:19
it's a result of the housing crisis it's
16:21
a result of the change in working habits
16:22
since the pandemic Licensing Laws as you
16:25
say and nimi culture it's all society's
16:27
problems all in one affecting pubs which
16:30
are the place where we're meant to go to
16:31
have fun right how much is the pint in
16:33
the city these days do you know it well
16:35
I mean I've paid upwards of 7even eight
16:37
quid for pints per and at that point you
16:39
know you're lucky that you've got the
16:40
pint in which you can cry right it's
16:42
that depressing the government can
16:44
change it can change its rules think
16:46
about that laugher curve we talked about
16:47
at the top and we can make things better
16:49
and we can all go to the pub and
16:50
celebrate well I think with that James
16:52
we're going to go and have a pint Cheers
16:55
Cheers thank you very much
17:01
[Music]
#Business & Industrial
#Business News
#Politics