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Rachel Reeves, the UK Chancellor of the ex Checker Chancellor, welcome. It's great to have you with us today Bloomberg TV and Radio. Just to start with this. You're in New York and Toronto for that matter, to help drum up investment in the UK. A lot of folks are looking at these images of riots over the past couple of days, and I wonder your thoughts as investors try to consider the impact of these riots as they consider the UK as a destination for investment.
Those responsible for the disorder that we've seen these last couple of days in the United Kingdom, they don't represent the vast, vast majority of people. They are a tiny minority, and as our Prime Minister, Keir Starmer says, they will be met with the full force of the law and
they will feel the consequences of their actions. But it's been great for me as Chancellor to be here in New York today with US investors to send the message lad and clear that Britain is back in business and we are open to business under this new government led by Keir Starmer. We won the election just over a
month ago with a mandate to grow the economy. Number one mission of this new government is to bring economic growth and jobs and productivity to all parts of the United Kingdom, and that's a message that I've been really pleased to share with investors here in New York today.
Well, Chancellor, of course, trade has a big impact on the economy, and we have an election of our own here in the US coming up just a few months from now. When it comes to a potential US UK trade agreement, do you think that's more likely to happen under a future Harris or second Trump administration.
Well, it's up to the people of the United States to choose who they want as their president. But the UK government, whether that's Labor or a conservative government in the UK, has always worked with whoever's the White House and whoever is in Congress, and that will continue to happen. The US doesn't have a greater friend than Great Britain.
We are the closest of friends and allies, and already Britain's largest trading partner is the United States, of course, who want to build on that and make it easier for Great British businesses to export to the United States and to make it easier for great American businesses to export to the United Kingdom, so we want to strengthen
and deepen those trade ties. Trade is good for countries, and especially when it's between countries that share each other's values in the way that the UK and the US do.
Well as long as Joe Biden is the president. There's a debate underway, and I suspect that will continue if Kamala Harris becomes the next president about what to do with the Trump era tax cuts from twenty seventeen. There's an effort by Republicans to extend them or make them permanent. Democrats here say we can't afford it because of the impact that we're we have on our debt and deficit. President Biden goes further to say the super rich need to pay their fair share when it comes to taxes.
Is that something you agree with?
I think people should pay their fair share of tax and one of the challenges we have in the UK is a gap between what should be collected by His Majesty's revenue and customs and what is actually collected. But we made a commitment in our manifesto that we'll be sticking to, which is that we don't want to increase taxes on working people, and we will be keeping income tax, National insurance and value added tax at the rates they
are for the duration of this parliament. I would like taxes on working people to be lower, but I believe that you can't make promises without being able to say where the money is going to come from. But the tax burden in the UK has got too high. The tax burden in the UK is a seventy year high. I want to bring that tax burden high down because I want to make Britain the best place to start and grow a business and I want working people to
keep more of their own money in their pockets. And that's what people will have with this new labor government. And it's why it's so important that we grow the economy because the last few years in the UK, there's been lots of debate about what level of taxation and what level of spending, but it's missed the bigger picture. Yeah,
and the bigger picture is growing the economy. And that's why I'm here in New York today and tomorrow and then in Toronto later in the week to drum the bang the drum for Britain and to say loud and clear that Britain with this new government, is open for business.
Well, as you mentioned income taxes there Channel story, I wonder, given the revenue it potentially could generate, if you're tempted to bring capital gains taxes in line with the income tax, is that something you're considering.
We've got a budget on the thirtieth of October and we'll set out our policy then. But it's always important when you're deciding tax policy to strike the right balance.
Of course, you need to bring in the revenue to fund vital public services, but we've also got to grow the economy, and I want do anything that makes it harder to achieve that economic growth and prosperity, because in the end, the only way we're going to lift living standards for working people and have the money that we need to invest in our public services, whether that is our health service or our schools, or indeed our police
and our armed forces, is by growing the economy. And so I am determined to ensure that when we set all of our policy, including tax policy, that we're not doing anything that will deter the investment and growth that we need to see in the UK economy. But we'll make decisions around tax and around spending at the budget and the spending review later this year.
As you consider those decisions, you've said that private equity firms that co invest on deals might receive more favorable tax treatment. What would those favorable rates look like.
Well, we've just announced a consultation at the end of July into the treatment of carried interest to make sure that the system works fair. Of course, if you put in your own capital, if you've got capital at risk, I think it is right that you benefit from a more generous form of tax relief. But if it's not your capital at risk, then that's not right that you
receive those tax breaks. So that's why we've launched this consultation, and we will in the budget later this year on the thirtieth of October, bringing forward the changes that we need to see to our tax system around the carried interest for private equity.
Well, and of course private equity I would imagine is inclusive. In some of the meetings that you're having while you're here in the US, we understand you've been meeting with the likes of Steve Schwartzman or Gene Fraser. What have you heard from them, Have they made any commitments in regard to the UK Investment Summit, for example, or are think looking for certain things from your government.
It's been great to meet some of the private equity and venture capital firms here today in New York, and I'll be doing more of that tomorrow. There's so much money that we think we can unlock for the UK economy and ensure then that British firms, startup firms, scale up firms, can grow and access that long term patient capital that private equity and venture can often bring to
the table. And what I've been hearing loud and clear from the private equity bosses that I've had a chance to meet with today is that they welcome the change of approach that they've seen from this new labor government, where a relentless focus on growing the economy, the reform to the planning system, reforms to our pension system to unlock the long term patient capital, the creation of a National Wealth Fund to leverage in private sector investment, as
well as building and resetting our relations with our nearest neighbors and trading partners in the European Union, which is really important for US businesses when they're deciding where in Europe to locate and headquarters. So it's been really useful having the frank exchange of views with private equity and
venture capital today. And as you say, we're going to be hosting an international investment summit in the UK on the fourteenth of October, and I hope that many of the businesses that I've had a chance to meet with here in the States will be over in London for that investment summit in October.
All right, Chancellor, thank you so much for spending some time with us this evening here at Bloomberg. That's Rachel Brieves, UK Chancellor of the Exchequer. We appreciate it.