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Joining us now is Jim O'Neil, former chief economist at Gold and Sachs and a former Treasury minister who's advised multiple governments on growth initiatives. Jim, welcome back to Bloomberg Radio. Thank you so much for your time. Just want to quote to you what you said in October. I'm sure you'll remember last year you were on BlueBag you said that Keir Starmer shouldn't go even if they do really
badly in the main local elections. This is you speaking what new thing would a new leader bring while the Labor Party did indeed do badly in those local elections. What is your view now? Should Starmer still stay?
I kind of.
Still think broadly the same. There's a number of issues that affect me, but at the core, And thanks for reminding me of what was said, because I actually do think pretty similar that the you know, the Tory Party effectively been semi destroyed by constantly bringing in new, supposed
great leaders without going to the British public. And I think if the Labor Party start doing that on top of what has already unfolded in nearly two years of them I think that could be structurally pretty damaging for them as well. That the idea that any of these candidates that are being mentioned as some kind of you know, Margaret Thatcher or Tony Blair type characters to give a whole new meaning to the future of the country is is not something that I think is going to necessarily
go down with the public. So for that reason alone, I think it would be very foolhardy of the Labor Party to do it. Second secondly, you know, link linked to the sort of madness that's gone over the country ever since the exit vote, whether the whole machine in many ways, the intellectual leadership of the country still hasn't
figured out how to deal with it. This sort of impatience that we as the public have got that, you know, if it hasn't been miraculous solutions delivered in five minutes, we have to have some dramatic change you and give
it a chance to somebody else. Itself is contradictory with what I've said before, because unless we can boost the labor force, unless we can boost trade with places that really matter, including Europe, then it's not obvious how we're going to get out of this sort of vicious circle that we're in. That there are a few other things that I think they could do to help boost things, but you know, those two things.
Have said quite a core problem.
Whoever happens to be sitting in number ten, Jim, let.
Me ask you about one of the candidates who could potentially replace kist Armory hasn't got a seat in Parliament right now. But I wonder whether you think the bond market will ever forgive Andy Burnham's comment that politicians shouldn't be in hoc to it.
Well, it doesn't look like the markets are in too great a mood to do that right now, given where the guilt markets opened up this morning, although I quickly had obviously some of that is also because of the rise in US eels and the renewed rising Brent crude prices.
But if you look at the way the spreads traded in the.
Past month as the renewed speculation about Andy coming back has grown, there's the market verdict, and it's not obvious to me how Andy can climb back down from that, and how markets believe in a in a hurry, And I quickly add, given how heavily involved I am in
the whole Greater Manchester story in Northern Powerhouse. You know, I'm in the camp that thinks it would be great if Andy stayed where he was, to be honest, because the momentum going on in Greater Manchester is fantastic and it's not obvious to me also following Thursday, if Andy stepped down and there was another election, that we'd get anything other than the reform character coming through, like we're getting all over the place, and I'm not sure that's
great for the whole devolution and sort of power of what places like great Manster especially have been doing the past decade.
Yeah, and Manchester being the second largest urban economy after London, you know, hugely important. I think that's an interesting part.
Outgrown London by three times in the past.
Exactly. Yes, this is yeah, absolutely Andy Burnham's line, isn't it clearly his his selling point? Look, what about Gordon Brown and Harriet Harmon bringing them back? What does that say? Does that help or hinder starm if you think that he should? I mean, can he really cling on? Realistically?
I mean, I feel how do I put it carefully? I mean I know all these people pretty well, and I like a lot of them. Especially Gordon and Andy. But I'm not sure bringing Gordon back is great for the Chancellor image wise because obviously what Gordon's main strength was in the past. And secondly, Gordon represents the old school and the old days, and I'm not sure he or Harriet really bring around this sort of seeming desire for some kind of new approach the last Thursday's implied
results seem to want and call for. So what the Prime Minister's going to do in the next couple of hours has come up with some what looks like not briefed thing in advance where it's really going to change people's belief about how we're going to get greater growth and greater belief that the Labor Party is delivering for all these confused and contradictory.
Factions, well, it was reformed that when a lot of the seats off Labor at the local elections. Jim, when you listen to them, they say they're all about growth. Do you believe any of the policy when it comes to economics from Nigel Farage, I.
Don't really believe that. I don't.
I think if you look at reform proposals, it's just it would scare the hell out of the guilt market even more, maybe that's partly why the guilt market is also struggling, because the markets may be coming to the inevitable conclusion that whoever appears, whether it's Kis Starmers staying on or somebody else, nothing's going to change and we're
going to get a reform government. But if you look at all the sort of good is that Farage and his close colleagues are promising, that implies much bigger budget deficits than we have now and the massive constraints of the labor force. So how are we going to get anything vaguely better than what we have now is pretty impossible for me to see at the moment.
And what about the triple lock. I mean, one of the key issues for the budget is the fact that it is massive spending on things like pensions, you know, the promise to keep pensions state pensions rising. That is that is very significant. It's one of the kind of main anchors for the for the budget thing weighing the budget down. They won't, they haven't, they've they've stuck to it. Reform and the Labor Party exactly.
I mean again, it's part of this sort of madness that's taken over the country. I mean, there are three or four things that seem very obvious to me that some leader at some point is going to be honest and bold about and we're going to have a different, better outlook, and that includes getting with the triple lock. It is completely bonkers. It is very unfair to younger generations, and everybody knows in private that it needs to go,
but nobody's bold enough to say it as a policy. Secondly, along with that, we have some crazy inconsistencies going on welfare payments, particularly with the so called pip payments, where probably from the data outlooks close to a million people who are claiming all three of them are earning more than you get on the minimum wage, which is completely insane. Also, thirdly, despy endless talk about doing something fundamental to the housing market.
We need to completely shift the incentive structure to make sure that it's the value of the land that's taxed, not the value of things that go on it, and so we can get a much more dynamic housing market
and much more flexibility of social flexibility. And then lastly we've got to be much more candid about the other things within government spending, and this notion that we just carry on spending more on health whatever goes on forever, is equally insane, and especially in this area of AI, we need to have a proper policy on trying to truly improve using modern technology.
The health service.
And if you did all these four things, I think you'd see a dramatically different, more positive mood from the financial markets. And with it you get a boost in financial conditions and probably a much greater lifting business and consumer confidence pretty quickly.
Yeah. And the I pointed this out ahead of the last general election and ahead of the local elections that actually the manifestos that people were not the politicians not telling the truth about this a word for the poor British voter. The madness that you say sweeping the UK. I want to put the point that Britain hasn't seen wages grow. We've got GDP data this week. I'm not sure we can even trust the data. GDP has been
week stagflation stalking the UK. I mean, is it not understandable that voters are trying to cast around for an actual solution.
I mean, of course it's not just unique to the UK.
This is happening in a lot of European countries and to some degree obviously is behind the chump strength. International liberal capitalism as is on the TIN hasn't effectively worked properly for the past thirty years, and so that justifies the voter as searching around in the way you described.
But what is bizarre is that they obviously don't really look at what the policies of these radical newcomers suggest, because as I said a few minutes ago, certainly from what I can see, they're even worse in terms of the incompatibility with getting growth and having stable financial markets.
And they would deliver more or worse of what we've got now. Now it might well be that we need to see one.
Of those radical parties actually having proper responsibility and they'd last five minutes as well, and then we can finally have a bit more honest and clear growth boosting policies coming through from something a bit more conventional. But at the moment it all seems completely crazy to me, and there's no two ways of saying it. That the voters appear to want reform, but it's not obvious to me why