Name: Britain's Economic Growth Mission
Uploaded: 2025-10-28
Duration: 19 min 33 s

The U.K.’s Chancellor of the Exchequer is pursuing Britain's economic revival with a focused agenda: attract foreign investment, boost productivity, and forge trade partnerships. Despite slow growth and inflation, she’s reshaping fiscal policy to position Britain as a compelling destination for global capital and a world-leading hub for innovation—from AI and fintech to advanced manufacturing and life sciences. In this conversation, she makes the case for Britain's economic future and its potential to become one of the world’s leading centers of innovation. 

Britain's Economic Growth Mission

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Hello Chancellor. Well, I have to say, as I was preparing for our conversation, I came across a BBC special called How to Be Chancellor of the Exchequer, and your predecessors described it as dangerous, Doctor No, like building sandcastles with inside the tide, the most powerful and the least popular role in cabinet. So how's it been for you? It's lucky I didn't watch that program, otherwise I might not be doing this job. Look, this job is a huge privilege for me in politics. It's the job I've always wanted to do, but most importantly, I've now got the chance to actually change things in the UK, and I'm really proud of what we've achieved this first year or so, really working as a Team working very closely with my Prime Minister Keir Starmer, the free trade deals that we've done, the deregulation, the planning reform. So you're an optimist. You would describe it as the best job, and it's a very powerful job, I think, certainly. And one thing that I think is you're the first woman and you were very in 800 years, I think the job actually predates the Prime Minister, but let me ask. About your prime minister, because I think he has been remarkably effective, especially you would think with a Labor Party politician in navigating the Trump administration, I would say Saudi Arabia has also been best in class in terms of understanding how to navigate the US administration right now. What do you think you've done right and what do you think Saudi Arabia is doing right on that front? Yes, well, I think that is um very well put, that those are the two governments that are navigating it very well. We were very pleased to get the first trade deal with the US. And what's the secret? What do you think it is that has made you effective versus other Western leaders, for example, taking them seriously, I think that is absolutely key, engaging with their concerns about the world as it is today. They've got concerns around global. We share a lot of those concerns, and I think building that personal relationship is something that Prime Minister Keir Starmer has done incredibly well with um with with Donald Trump, but also right through our government and their administration. Building up those relationships myself with Scott Besant, our business secretary with Howard Lutnick, but also the Prime Minister's business adviser Varun Chandra, the work that he's done both with Ambassador Greer and with Howard Lutnick, I think relationships are important whatever business. And whether it's business or politics, and it's really important on the international stage, you know, one of the things that strikes me here in Saudi Arabia, there's a lot of talk of Vision 2030. I often think, what's the equivalent for the UK? What would be the Vision 2030 for the UK? I think making it easier to get things done in Britain. So we know that there is huge amounts doesn't sound that aspirational to be honest, it's a big change. It takes too long for things to happen in the UK. If you're a business and you want to invest, you want to know that your capital is not going to be tied up for years, and there are huge investment opportunities, whether it is in the the Oxfam arc, whether it is the spinouts and startups coming out of our great university. In the UK, uh, whether it is backing companies that are choosing to list in London, frankly, for the first time in many years, there's big opportunities in the UK. Our big assets in Britain are our financial services sector and increasingly in fintech, our life sciences, and our brilliant universities and I'm very proud of all the great things in the UK. You know, we had Ray Dalio here. and he was saying the big question for the UK and possibly everybody else is where are they going to get the money and how are they going to increase productivity. So let's start with where's the money? You were a former, you were a champion chess player. People may not know that. You were 14. Yeah, that's a long time ago, but yeah, you're an excellent chess player. So tell us the various moves that you see to get to where you want to go. Yeah, so the number one ambition of my government of Keir Starmer's government, is to grow the economy, good jobs in every part of the country. But getting economic and fiscal stability is the absolute bedrock of that because you can't have any, any plan for growth that's not built on that basis of stability. So that's why we are embarking on a journey of fiscal consolidation. We're the only G7 economy that is seeing the price. primary deficit fall as a share of GDP over the next few years. That's very important for us because we are spending too much money on servicing government debt rather than investing in productive assets. We changed the fiscal rules in the UK so we can actually invest with confidence in things to boost our growth and productivity, whether that is energy infrastructure, data infrastructure, or transport infrastructure, whilst also making costs. Savings in the day to day running of government. So both economic growth and driving productivity with fiscal restraint in my view, go hand in hand, and in the budget next month we will be making further decisions to ensure that our public finances are on a firm footing in the very volatile world in which we live today. Well, I know you mean. Not give us if we're welcome we'd welcome a preview of the budget, of course, but let me go back to that um you know, you, you have options to raise taxes or cut spending. Let's start with the raising taxes part because you've said basically that you know you do need more money coming in. What are the what are you thinking about in terms of where you're going to possibly raise those taxes? Are you thinking about a broad-based tax, the rich? I mean, where do you see the greatest. Opportunities. First of all, there is another way to improve the fiscal position, growing the economy. So no, but that is absolutely essential because our independent forecaster is likely to downgrade the forecast for productivity in the UK based not on anything this government's done, but on our past productivity numbers, which, to be honest, since the financial crisis, Brexit have been very poor, and that just shows how essential growth is. I'm not. to do anything in the budget that reduces our opportunities to grow the economy. That's very important. And no taxes. Well, look, we have to, as I said before, the underpinning for economic growth is stability, and I'm not going to break the fiscal rules that we've set. We are going to reduce that primary deficit. We are going to see debt starting to fall as the share of GDP because we need. more sustainable public finances, especially in the uncertain world in which we live today. So growth will be a big part of that budget story in a way that, frankly, I think growth has been neglected as a tool of fiscal policy in the last two years. But we are looking, of course, at tax and spending to ensure that we both have resilience against future shocks by ensuring we've got sufficient headroom and And also just ensuring that those fiscal rules are adhered to because one of the reasons why we've had a lot of uncertainty in the UK economy these last few years is a fiscal policy which just wasn't believable, which raised our borrowing costs. I want to bring those borrowing costs down as well as bringing down the amount of debt we're servicing. Um, so you mentioned Brexit. Uh, how, just how I've seen, you know, 4 or 5% of GDP. How much is that the crux of the problem right there that Britain basically put up a wall with the rest of Europe? Well, I believe that countries are successful when they are open and trading. I think that's good for productivity because competition spurs productivity growth, and in a small open economy like Britain's. Ensuring that our great businesses, whether they are big businesses or particularly smaller businesses that struggle with regulatory burdens that we put in place after leaving the EU, we want our businesses to be able to access global markets and our biggest trading partner is the European Union. And so I'm pleased that in May this year we agreed with the EU changes to our, our trade relationship, which will make it easier both to bring imports into the UK but also crucially to export. We're also bringing back an ambitious youth mobility scheme so that businesses can access talent from around Europe and young people in Britain can access the jobs market of Europe. But it's also why we've used some of Our flexibilities outside the European Union to do deals with fast growing economies around the world, particularly India also, as I mentioned earlier on, the US deal, and one of the things that I'm doing whilst I'm in Riyadh this week is having meetings around our GCC deal. Are you optimistic you'll get that done this week? I've had really good meetings this morning. It's why I was a little bit late today, but I hope that people will agree that's worth it. We can get that GCC deal over the line. Huge opportunities for the UK and for Saudi Arabia and the other GCC countries to access UK capital markets, to have our services, businesses, whether it's insurance, financial services, or indeed education and health into the markets here and more market access as well for goods from the UK. So I think it's a very Much a two-way street, and I think there are big opportunities there and yes, I am confident that we can get that deal over the line. You know what's interesting is when I think about the Labor Party being pro-business, um, that, that's not how the Labor Party when, when I was growing up, I thought, is there, I mean, tell me a bit more about that. Is there, what's the difference between the Labours and the conservatives, the, the, you know. What, what it, it's weird to be pro-business, um, in terms of what my perception of labor is so define it for me. What does it mean for you? Yeah I get what you say, but if you think the Labour Party has traditionally being a pro-worker party, you can't be pro-worker without being pro-business because it's businesses that create the jobs and put in the investment to improve living standards and also you can't be pro public services. unless you're pro wealth creation because you're not going to have the money to be able to invest in those public services. So we very much see it as two sides of the same coin. And I would say about Labour today, we are an outward looking party. We don't think our best days are behind us. We think our best days are ahead of us and we're not scared of the world. We want to seize the opportunities in there, and we think there's every reason why in some of these races. For the jobs of the future, there's no reason Britain can't be at the forefront, particularly in those areas where we're particularly good AI and tech, financial services, and life sciences, and education. And so, you know, we are confident about these things and we don't want to put up a wall. We want to break down those. Well, I'm curious, I might ask to put on a hat of an investor, but first let me ask about the wealthy. Raise your hand if you're wealthy in here. No, but I'm just curious. There has been a lot when I speak to leaders who've been in the UK, there's been this sense of them wanting to get out, you know, because of some of the issues around, you know, few people are more fleet of foot than the global wealthy. Do you feel like you are doing enough to attract them as opposed to potentially turn them away? Well, we've built on what my predecessors, particularly Richardinni and Jeremy Hunt, did. In changing the rules around non-domicile in the UK, we have in a way that what in a way that makes it harder for people to want to stay or to ensure that people who make Britain their home pay their taxes there, everybody knows that countries around the world are having to spend more on defense, that we need to rebuild our public finances and our public services, and everyone who makes put in their homes should contribute to that. We did make some changes earlier this year to the the regimes about bringing in assets to the UK to make that more attractive, and we'll constantly evaluate and look at our policies to make sure they're doing what we intended to do, which is to bring in the money to pay, particularly for defense, but also other public services. So we don't want to drive anyone out of the UK, but we do want to make sure that we Tax people fairly, people who make Britain their home, whichever country they or their parents are originally from. But I would say this as well, just a couple of weeks ago when I was in DC for the IMF annual meetings, I announced a doubling of our three high talent visas in the UK, one for academics and research groups because we know some of the best startups come out of that. Universities, second for high net worth individuals, and second, uh, for talent from the best universities, best graduates from the top 100 universities around the world, and I have absolutely no worries about filling up those visas. Um, so talent does want to come to the UK and we are attracting it. Investment, was it's a beautiful place. Why wouldn't you, but let's let me put on my investor cap and ask why. Would I want to invest in the UK right now? You've said some of it, but let's take on a basic level, would you say you're, you're deregulating or re-regulating? We deregulating a number of people here from financial services. One of the first things I did as Chancellor was to change the remit of our financial services regulators, so they've now got a remit to regulate for growth and not just for risk. That's a big deal, and we already see with both the PRA and the a change in their approach, and we're now bringing that to other regulation regulators, including, for example, in our environmental and planning regulations to make it easier to build. Next month we should get royal assent for legislation on planning and infrastructure. That's probably going to be the biggest bill that we passed during the course of this parliament to reduce the time it takes to get stuff built, to reduce the time it takes to get consent for planning decisions, to. The number of judicial reviews to overturn those decisions. So when you invest in Britain, your capital won't be tied up for years and years as you go through a planning and the judicial process, but you can actually get space in the ground, whether that's at Heathrow or Gatwick or the new Oxfam train link or Northern Powerhouse in completely open for business because I always find, obviously there's sensitive industries. I remember the telegraph, you know, there was some pushback on, you know, when that that. Under a previous government and we've since changed the rules. The case for like what do you feel like nationalization of course more privatization, but give me some sense as to where do you see the pockets that are going to be most attractive that you're trying to make most attractive to investors like the ones here? Yes, I think there's sort of two routes, and we're encouraging investment both from domestic investors and we've changed how our pension system. Works to try and unlock more long term patient capital for businesses and for infrastructure and it's in both of those areas. So private capital needs private projects need more money, whether that is start up and scale up businesses. We're very good actually with access to finance for startups is that scale up journey. Our own pension funds can step in and fill some of that gap. Do you want them to be investing in sort of British. Yes, both through venture capital. We have some of the best universities in the world. There are great ideas coming out of Oxford, Cambridge, Imperial, but also some of our great northern universities Leeds, Manchester, and Sheffield. But those ideas need access to finance, both domestic finance through the British Business Bank and our pension funds, but also through things like sovereign wealth funds and and overseas pension funds and. We're getting increasingly good at attracting that, but also we are investing public money in big infrastructure projects from SISLC, the new nuclear power station in Suffolk in England, to Oxfam, and this week we're going to be setting out our perspectives to invest in that new corridor for growth and prosperity. So there are plenty of investable projects in the UK and we're trying to make it easier to get private finances. To those, do you have a theory as to why foreign direct investment has gone down? Well, look, Brexit obviously has an impact on this. I mean, how, how big a disaster is Brexit in your mind? Well, the Office for Budget Responsibility, who does the independent forecast, say that it's at 4% of the size of our economy, but we're undoing that damage. In May we did a deal with the EU around food and farming, around energy, around mobility reversing Brexit to the extent. That you can, well, we made a commitment that we wouldn't be returning to the single market or customs union in our manifesto, but subject to that, yes, we are improving our trading relationship, both for goods and services and around usability, but we're also using the flexibility that we've got outside the European Union to sign those trade deals with India and the US and also hopefully very soon with the GCC, and I see we have very little time, so I want to just sort of quickly ask. Two key questions. One is, why not just tax the rich? I just want to get a very quick thought. Is that something that you think is going to be sabotaging the long-term success? Well, we did increase taxes on the wealthy in the budget last year, but there are limits, and as Chancellor, I've got to get the balance right. Yes, we need to bring in that money, but of course there's a tipping point, after which you're not bringing in more money, you are repelling capital and that's not what I want to achieve. We have got to make sure our public finances are on. A firm footing, I do want to bring down the deficit and bring down debt as a share of our economy, but there's always a balance to be struck, and I want Britain to continue to be an attractive place for global investments. We're down to the haiku length statement, but you were very proud of being the first woman. You said that you came in. How do you feel you've been treated? Maybe one or two words. I think up to others to judge, but this position has existed for 800 years. I'm the first woman to do it. I was very pleased that Japan this week has just appointed their first female finance minister, so there's two of us now in the G7. Well, you need the company, so they're excellent. Thank you very much for joining us. Please join me in thanking Cancer and thank you again. Thank you very much.