Bloomberg Audio Studios, podcasts, radio news. President Trump is taking this economy in a different direction. He ran on that, he promised it, and now he's delivering. We're in the process of imposing reciprocal tariffs. This is going to hurt our economy before we get to any possible retaliation. Thank you for being such a pro business and pronavision President. We're very excited to see what you're doing to make all of our companies in our entire country so successful.
The big promise was that he was going to bring down prices and make America affordable again, and everything he's done is the opposite of that.
We have the greatest economy in history. This economy, in my opinion, is going to blow it away. Let's face it. The globalist idea that we should all do the same thing, have the same regulations, have the same targets, and the EU, of course, is the epicenter of all of this. For the life that's now for the birds, there's a change of debate. There is now something called national interest and that's the new politics that you're saying.
I'm Stephanie Flanders, head of Government and Economics at Bloomberg, and this is trump Anomics, the podcast that looks at the economic world of Donald Trump, how he's already shaped the global economy and what on earth is going to happen next. This week, wanted to play you a lively conversation I had with Nigel Farage, leader of Reform UK, on the sidelines of last week's World Economic Forum in Davos. Probably no single individual better embodies the conflicted and contradictory
mood in politics today than Nigel Farage. He's deeply associated with Britain's exit from the EU, something that a significant
majority of Brits now regret. He's also made a virtue of close ties with Donald Trump and the MAGA movement in the US, celebrating election night with mister Trump in Mara Lago at a time when barely twenty percent of the UK population have a favorable opinion of the US president, a number that's falling fast thanks to the row over Greenland and Trump's deeply insulting comments about the service of
non American soldiers in Afghanistan and Iraq. And yet, despite all this, Reform UK, a party which won only five seats in the UK Parliament in the election just eighteen months ago, is now more than ten points ahead of both of the main parties in the opinion polls, and the political betting sites give Faraj a much higher chance of being Britain's Prime minister after the next general election
than the current incumbent, secure Starmer. So it seemed like a good time to dig into what a reform version of Trump and Nomics would look like, whether the UK could get away with being quite a cavalier as Donald Trump has been about boring things like central bank independence or inflation target In a week when populists all over Europe have also been rushing to distance themselves from the Trump administration on many issues, I was interested to find
out what reforms foreign policy would look like and whether reforms voters would really want him to put quite so much trust in the US. I think our chat was revealing. It was also, I have to admit, rather fun a bit surprised to see you used to really slag off all the globalists at the wef oh.
I slagged off the European Parliament for twenty years, but I still went there once a month, and I think I genuinely upset them virtually every time I turned up, isn't it interesting. I mean, you know, five years ago here at Davos, the main topic of conversation was climate change, DEI or that baloney. And here we are five years on and the debates completely different. It's being dominated by AI tech energy and the one thing I've enjoyed over
the last couple of days, there is genuine debate. There are different opinions now, rather than the sort of consensus view that I certainly felt was coming out from the globalists. So yeah, no, no, I found it really interesting and worthwhile.
It is quite funny that there's so many honest conversations this week, and it sort of suggests, you know, what were the conversations like before.
Well, I think it's interesting. I mean, ten years ago, we had the Brexit referendum result, we had Trump winning the presidency, and I think everyone thought, well, these are just aberrations, these are short term Rembertonia Blair saying these are sort of short term fits of rage. Normal service will be resumed. And now everyone realizes that actually these were the first tremors of a very very major change in political conversation and debate, and that I think now is writ large.
I think a lot of people were interested in how you're seeing foreign policy, the UK's role in this new world that we've all been talking about this week. But just to get into sort of cool Bloomberg territory for a few minutes. One of the consensus views out there, if you ask economists, many people in the city, what would happen to UK borrowing rates if a reform government took power? They go up at least that's the consensus.
So why do you think investors would be seem to be quite nervous about reform?
Yeah? Well, as a as a former commodities trader, if there's a big consensual view, take the opposite trade position, I've always believed in that quite strongly. Look, obviously we're talking about supply side reform. One of the big frustrations is that since Brexit, businesses, particularly with small and medium sized businesses, are now more heavily regulated, more penalized by whichever regulator is relevant to their area they were before Brexit.
It's a massive frustration. So do we want to reduce the size of the administrative state? Yes, Do we want to attempt genuine supply side reform? Absolutely? Do we want rich taxpayers to flee the country and young entrepreneurs to flee the country every year or come back to the country, invest, employ people, spend money. So that's the agenda and people say, well, if you do all of that, you're kind of going to be following a little bit of the quasi qua
teng budget and the market's going to take fright. So that's where the view comes from. And I think the one big lesson from the Trust qua teng budget is they did not propose to cut spending. They basically said we won't increase spending in line with inflation. So for our program to work, what we absolutely have to do is to say that people we are going to reduce welfare spending, we are going to reduce excessive government waste, and I think if we do that the markets will applaud it.
You step back from some of the more sort of aggressive tax cut promises, said it's an aspiration, but one of the big savings in your plan currently is to save money that the Bank of England currently spends on paying interest on bank reserves. So as you know, there's a lot of concern about that from the Bank of England. They think they're going to lose control over interest rates, which is pretty core part of their monetary policy, and certainly bankers quite clearly see whether it's I mean, I
think you've said thirty billion, thirty five billion. Yeah, I think it's more like twenty billion. But that's a twenty billion tax on banks.
Yeah. Look, that's less relevant now than it was because we're not going through the Q programming quite the same way we were before, as you know. In fact, the opposite has been happening in some regards.
But that's where some of the savings come from. It is from the sales of the QT.
We were the only party to point out just how much this was costing. And I think that's what we're good at. What we're good at is introducing new debates, and it was it was very interesting when I went to meet Richard Tiz and I went to meet the Governor of the Marks of England, which was a very interesting clash of cultures, I would say, And I just said, it's really interesting that you're making massive decisions here that have a huge impact on public finances, and yet it's
being done with no debate in Parliament whatsoever. That's not true.
I mean, it's true that there's no reform MPs on the Select Committee, but they go all the time to give testimony to the House of Parliament.
The Government controls and these subjects.
Takes these policies actually because these agreements or agreements with the Treasury of what.
They've been doing, and these subjects don't get talked about properly. There's no proper open debate and frankly, the committee system in the UK doesn't get the coverage, doesn't get the publicity. We have not had any debate in the floor of the House of Commons on this subject at all.
But you say you're going to do it, it's a part of your plan, it's not just part of your plan to discuss it. Then we're going to do it at least twenty big We're going to do it and tax the banks.
And some of the banks won't like it. You're well right, they will. All I don't like consumers. Well, I don't like the banks very much because they debanked me, didn't They didn't I wouldn't give me, wouldn't give me an account, and trying to force me out of the country. Now, look, this will be tough for banks to accept. I get that, but how do you think they get I'm sorry but the drain on public finances is just too great.
But how do they make their money if they don't make it there? Don't you think it's pretty clear it's going to go on too interest margin. It's going to go on to the more mortgage costs and the interest rates they charge.
Your VOTs, or they become more efficient, or they cut costs, or they do whatever. This money. They should not have had this money. Over look. Frankly, the whole QE program has not achieved anything very much other than to make the rich richer and the poor poorer. And everything we've done on que since George Osball and co put it into place has been bad for most people in the country.
That's been really helpful because it's very clear you are happy to have a very hefty extra tax on banks more anti bank.
It's not a tax. They're just not going to get free money anymore.
It's taking twenty billion pounds from the banks. It doesn't really master.
They'll adapt what business does You.
Disagree with the Bank of England governor on that. If we have an election on schedule, there'll be a new Bank of England governor by the time you would become Prime Minister. They'd come in in early twenty eight. One of the other things that people are worried about is that you're actually questioning one of these key pillars of UK economic policy, one of the few stable pillars in the last fifteen years or so twenty years.
The independent Bank of England.
Will you will you let that new Bank of England governor continue in their term their full term?
Well, given what a catastrophe UK economic policy has been over the last fifteen years, I think we should challenge every single tenant of it. But one of the biggest mistakes I mean that we vote Brexit. Now, if you vote Brexit, use it as an opportunity to do things differently. And the trouble is from day one the Conservative government viewed it as a damage limitation exercise as opposed to
an opportunity. And Andrew Bays are perfectly plight nice man, but they should have picked somebody who was a Brexiteer to be in charge of the Bank of England and to think totally differently, especially around financial markets financial market regulation. We've ignored this.
Like every other central independent central bank, they think about their inflation targets. So you're suggesting that after Brexit. They shouldn't have been focused on inflation.
To take the whole world of cryptocurrencies and crypto trading, and we are just lagging so far behind many other parts of the world, and yet the Bank of England are one of them. I mean, there was even a proposal from Bailey just recently to restrict the number of stable coins any individual can hold. So you see, I'm talking about having people the government the Bank of England.
I'm not questioning the independence of it. What I am saying is that we need a new, more innovative approach to all of this.
Okay, but if you get rid of the one who's there, and there has been a tradition that reflects the independence of the central Bank that the terms don't necessarily coincide with election terms, you're saying you would suspend that because you want to have your own person in there.
If we don't do things differently, we're going to get poorer and poorer.
I want to know exactly how you're going to do things differently, not to say we're going to have a big debate and we're going to question.
We're going to pick different people with a different attitude towards everything. To do with including the inflation target or the inflation target. Fine, we're not We're not meeting it anyway with what we're doing. Of course, inflation needs to be controlled. Of course it needs to be controlled. And there are other debates too. I mean, you know the role of the OBR. I was going to ask you about that. I mean, when do they last get a
forecast right about anything? What useful purpose? That just means they're economists. What useful Well, I know they're nearly always wrong, Yeah, but what useful purpose does there that? Look, we are prepared to think openly and challenge everything, just as here at Davos, there is now open debate, honest conversations. As you said earlier, no longer a consensual view the way Britain's been run. Let's say since two thousand and eight.
We could go back earlier. The way it's been run isn't working, and we're having fresh thinking on all of it.
I'm sure a lot of people would think, great, who can be against fresh thinking? Good start, it's a good place to start in opposition. It's not a good place to start at number ten Downing Street, that you're going to put everything in the air.
It istually what it worked pretty well in the early nineteen eighties, didn't it where we had a radical government that changed everything about our tax structures, our laws, and yes, there were a couple of difficult years, But did it turn the economy around? Did it lead to a change of attitude?
And that's really interesting, Margaret, Thatatchall did not throw everything in the air. If you look at the nineteen seventy nine manifesto, it didn't have any of the big ambitious things that Patcha later did. And the first few years she's stuck to the plans that she'd had. There was actually a certainty that was offered to the markets.
And two, well, I would disagree with that. She she didn't just.
Question everything and didn't just suddenly surprise everybody.
I disagree with that completely. The first budget that Jeffrey Howe brought in brought top rate income tax down from eighties three to sixty percent. I'd call that pretty radical.
But there was still some of the core elements of her policy. Things like the really dramatic stuff all came afterwards, after she'd built up support and after they've got inflation out, which she did say she would stop.
She gave a very clear signal that the country was heading in a different direction. And did it take a long time to get all the trade union laws through and all the rest of it, Yes, it did. You know, you can't change things overnight, but you can signal that you want to go in a different direction. And look, I just think the most ignored section of the British economy, the one where we're failing in the biggest way, are the five point six million men and women out there
running their own businesses. And they now want them to do quarterly returns as opposed to annual returns. It's just one little example of how we punish small business again and again and again. And I do believe, I genuinely believe that if you look at what happened economically in America and in Britain in the eighties, you'll see a lot of that growth actually came from the bottom up in the economy, not from the top down. So I want to complete rethink over all that.
I think a lot of people would hear you on those sort of what we would say, you know, microeconomic things going wrong. You say, I'm going to change these micro things. But if you're putting the whole system of the way that macroeconomic policy has been run in the country,
particularly the independent fiscal Watchdog, independent Central Bank. If that is in question when you walk into number ten, you don't think there's going to be an enormous amount of concern in international markets that will affect your ability.
To maybe people what maybe people will think. Finally we've got a government that actually has within it people who've been in business. Because we haven't got that now, and we haven't had much of it for many, many years.
It doesn't sound like you're very worried about having a repeat of a sort of list trust type.
That's because we're going to cut spend it. For example, you can now go you can now get benefits if you suffer from mild anxiety. Well, I have mild anxiety every morning, you know. I mean, we've just reached a ridiculous level with all of this, and it can't go on. It just can't go on. We're looking at a benefits fill of three hundred billion by twenty thirty something like that, so it can't go on. And look, you know, of course I'm there to challenge all of these things. Bear
in mind, I've only been back in politics. Eighteen months. You know, I escaped, I got out over the wall, but I'm back again. I've had eighteen months to try and build a political party, a structure from nothing, so effectively, I'm the CEO of Reform and we build departments and they give their weekly or daily reports into me, and
we're growing. The next big stage of my development will be that this time next year, sitting here on the Bloomberg panel with you won't be me, because there will be a team of people appointed to take all of those jobs. And that's the next that is the next big stage of the development. So perhaps the criticism that could be leveled fairly against me, There were lots leveled unfairly against me, But the fairly against me is that I've never been in frontline government, true, and it's a
one man band. So at the minute I'm asked to talk about economic policy, foreign policy, you know, law and order, borders, everything, and so it's now about broadening the team, putting different people in position, and then formulating firmer policies than we have.
But we have laid out already some proposed bills, economic bills, the concept of the Britannia Card to try and bring high taxpayers back to Britain, the digital markets, the sorry digital Assets and crypto bill, so that we are showing a way forward.
You mentioned Brexit, mentioned that we should have made more of an opportunity.
Out of bricks. We should have done it immediately.
We've talked about we are seeing a new kind of global order. I haven't heard you say, what is Britain's role in this new global order? How do you think about your foreign policy number?
While we have amazing advantages, amazing advantages being outside of the European Union leaves us free in terms of trade policy. Ironically, you know, the super remainers Starmer boasts at the dispatch box now about the fact we've got an independent trade policy and we're able to do things. And I think in terms of being a bridge between Europe and America or in a powerful position, I just think we've underutilized the amazing advantages we have across the rest of the world.
You know, we turned our backs on India, we turned our backs on the Commonwealth countries in the seventies. We decided that Europe was our future. That became a sort of foreign office and political over decades, and we've turned our backs on large parts of the world where there is still a remarkable relationship between those former colonies and ourselves. So we need to think more globally in every way.
China's the obvious country that there's been a big debate about Prime Minister's going to visit. I think it's the first prime minister or visit for the UK in eight years. Would you go to China? How would you think about relationship with China?
Well, I don't believe our relationship with China is very good. I think this government is utterly craven in the way that it gives into China at every opportunity. It's a difficult problem because they've become so big, and to some extent we've become quite dependent upon them and not the other way around if you think it through. So it's a massive, massive problem, but it's not a relationship we should trust and we should be extremely cautious of them.
I mean, if you're a prime minister, what does that mean?
It means you don't allow them to build an embassy on the site of the storic royal mint, which could potentially threaten communications. I'm actually can't believe that Isaac Newton will be turning in his grave.
I like the fact that you know, Isaacton used to be the keeper of the role mint.
He'd be surprised. Why now, if.
You have that kind of assitude to China, and you certainly have your great relationship with President Trump, it does sound like you'd be sort of saying, if as you go into number ten, we are going to be absolutely inextricably tied with us.
Now, b I'm not saying that, but I do think about, Look, what's our growth rate going to be q for What's it going to be a zero point two percent? If it's zero point three percent, Rachel Reeves will be cheering, she might even smile. You never know. And what's America's growth rate going to be? Five percent? Five point two percent, five point four percent. There's a lot we can learn from america attitudes toward business and particularly embracing new technology.
We literally have front benches in Parliament, both sides, full of people who have no comprehension, no comprehension of what this world is. And that's why I've said one thing that I will do is I want to bring people into government from outside the political sphere who are genuine experts in their area, who will take on a job at personal cost to them for four or five years
to put something back. So for so much we can learn about American business, about tech, but of course we can't do any of it if we go on with our maronic energy policy, utterly moronic. Actually it was the Tories, of course, that wrote this net zero legislation into law, and we've turned our backs on gas production, we've turned our backs on oil production. This was a consensus of both parties, both with the same attitude, and here we are with industrial energy prices four times that of America.
It's insane.
Going back to the relationship with the US, I mean you said you talked about the dangers of being on China. We are utterly dependent on the US for many many things, including obviously very a deep level at our defense. Yes, and you're talking about closer economic ties. A lot of people this week have really questioned whether this president is a reliable partner.
Okay. I did not talk about closer economic ties. I talked about learning from what the Americans have done, because they're getting it right and we're getting it wrong in terms of economics.
So who are we going to have closer ties with under a reform government. Not China that would be worse, Not the US.
We've got to think more in terms of the English speaking world, and yes that does include America, of course it does. But to have a close relationship doesn't mean being beholden. You know, friends will disagree from time to time. I will disagree with things Trump says, of course, from time to time.
With this president, it seems that doing what you've just said, having a good relationship without being beholden.
Yeah.
I think we even learned from Mark Carley this week, or at least his argument was means actually working with a lot of other countries, and European countries have deduced from this week and from the change in the position on Greenland that ganging together was the only way to would be not beholden to Donald Trump.
You don't want to do that. Good old Mark Carney isn't need marvelous, But.
You don't think you should be working with other European countries.
These everything wrong. He's being promoted. It's remarkable. Look. Of course, we understand collective strength through NATO and organizations like that. All right, I get that, but let's face it, the globalist idea that we should all do the same thing, have the same regulations, have the same targets, and the EU, of course is the epicenter of all of this. For the globalists. That's now for the birds, there's a change of debate. There is now something called national interest and
that's the new politics that you're seeing. That's the new approach that you're saying.
I think a lot of people in this audience would say the conclusion from this week was not that was that countries cannot go alone, especially in their relationship with President Trump. They need to group together. And a lot of people in the UK will be thinking and right if we know from the polls that they want.
To be closer to Europe.
But you're saying the opposite, you don't want to work with other countries, and especially not with yours.
I'm very happy to work with other countries. I love Europe, I love Europeans. I just don't like Brussels and the terrible autocratic structures that it's built. I don't believe it's brought any benefits whatsoever. It may have been good for one or two big companies, but beyond that it's been a failure, not a success.
It's been a little bit hard from this conversation to see where the direction would be any foreign policy.
This is the point, actually do an independent United Kingdom chooses its own future, chooses its own relationships, makes its own decisions. We're doing it in trade policy. Trade policy is one example of what you can do if you're not part of a structure that tells you what you can and can't do. And that's what the EU was, and that's what the Brexit world's about. Making our own choices, making our own decisions. Yes, of course, in terms of defense,
NATO is crucial, America is crucial. But you ask yourself a question, you know, has Donald Trump made NATO weaker or stronger over the last ten years? And I would argue he's made NATO a lot lot stronger by waking Europeans up to the fat They couldn't go on having a free lunch. We're going to run out of time.
But given that this week has been so dominated by tech, I couldn't help noticing you. This week you had to apologize for breaching the Code of Contact, for failing to declare a load of income to the Parliamentary Committee. But your explanation was, I'm an odd ball and I don't do computers. Do you think that's going to have to change some Prime Minister.
I'm in a fortunate position. I get staffed to do it all for me.
But that is you're just going to stee clearing of computers if you go, if you go to number ten.
I spent my time meeting people. I could spend my time on a screen all day, I choose not to.
Well, that is an interesting view around here with everyone talking about what I do. Will you come back?
Don't forget I'm an old commodities trailer and I spend my life traveling, meeting people and having the honor a big on Bloomberg platforms with people like you.
That is such a sort of cheesy way. Thank you so much, Nigel Coruh, Thanks for listening to Trumpomics from Bloomberg. It was hosted by me Stephanie Flanders. I was joined by Reform UK leader Nigel Farage. Trumponomics was produced by Summer, Sadi and Moses and with help from Amy Keene and special thanks to all of the team at Bloomberg's Davos House. Sound design was by Blake Maples and Kelly Gary and to help others find us, Please review and rate us highly. Wherever you listen to podcasts,