Andrew Craig on What Britain’s Economic Decline Means for Your Money

This transcript is auto-generated and lightly edited for readability, it may contain errors.

[0:18] Sammie Ellard-King:

The way I’d love to steer this conversation is something that you’ve been talking about quite a lot recently, and that’s kind of very much on the UK.

[0:26] Andrew Craig:

The bad news. So our future is biologically. The world’s gonna be amazing, we’re all gonna be really wealthy and healthy and live for years. But the bad news is Britain is awful. Yeah, yeah.

[0:34] Sammie Ellard-King:

And how do you feel things have been going at the moment?

[0:37] Andrew Craig:

Well, it’s so uh uh sorry it sounds slightly pretentious thing to say, but I was honored to contribute my first guest article to the Telegraph last week.

[0:44] Sammie Ellard-King:

Nice, congrats.

[0:45] Andrew Craig:

Which is yeah, thank you. It was really cool, actually. It’s gone super viral, it’s had like 800 and something comments in three days. So it’s yeah, um, it it’s been a hit, and hopefully I’ll that means I’ll get to do a few more articles. But uh it was it was a pretty punchy um title to the article, which was something along the lines of Rachel Reeves’s economic um incompetence is mind-blowing, or something, which to be fair to me, the telegraph chose, um, and then they toned it down a bit. I can’t remember what it is now, but but on that point, I mean, I did a specific piece about you know, it just I find it absolutely bewildering that we have politicians, and to be clear, this isn’t party political. I mean, it kind of is de facto because they’re the Labour Party, but the Tories have been j awful as well, like just dreadful. The lack of economic literacy and the damage that’s wreaking in our country. But on that, specifically, because obviously catalyzed by the budget at the end of October, is like, how is it possible for anybody who’s been a student of economics in different countries and nation states for the last frankly century, but let’s just dwell on the last few decades, to think that what she’s just done with national insurance contributions is going to do anything. The only growth that that’s gonna engender will be in unemployment, insolvencies, and welfare costs. You know, higher unemployment, bigger welfare costs. And the proof’s already in the pudding in that, you know, like last month was the second highest borrowing month ever in history since record began from the government of 17.2 billion quid or whatever. September was not far below that. So, you know, already now the the the Labour Party is running, their borrowing levels are running way, way ahead of all the nonsense forecasts that they they spew out, or whoever, you know, whichever organization you’re talking about. And it’s just like, you know, in the 60s, JFK reduced income tax and tax receipts, like the amount of tax they got from people, went up massive. Yep. In the 80s, Ronald Reagan did the same thing. George Osborne um so Labour put the income tax rate up to 50% in the whenever it was, early noughties, late 90s. Tax revenues fell, and then George Osborne put it back from 50% to 45%, tax revenues went up. Corporation tax went from 28% to 19% over 10 years from sort of 2010 onwards. We made billions more tax. And this whole like it’s really nuts to me that you can have a chancellor of the exchequer who doesn’t understand the difference between tax rate and tax take. Because actually, what I always come back to with all of this stuff, genuinely, is what is the best possible outcome for the biggest number of people, right? When you’re making policy, what you want is is as many people as possible, live the best life possible. You know, you want your NHS, you want everything paid for. And if there’s like decades of evidence that what you’re doing is just completely wrong, and it’s going to engender a terrible outcome, like whatever your political persuasion, like don’t do it. And that’s actually I finished the article with saying um that the biggest irony about this, these, you know, what the government’s doing at the moment is that the people who will be harmed most without you know, factually, like you might look at me and think I’m a Tory, I’m not at all like I’ve I’ve taken, you know, I’m given up on all politicians in this country because they’re all so incompetent. But you know, it’s the it’s the least fortunate in society that bear the brunt of a cost of living crisis, right? Because if you know, if eggs and bread and milk and pasta and everything go through the roof and energy costs go through the roof, rich people, it’s annoying, but it’s not that big a deal. Exactly.

[4:08] Sammie Ellard-King:

They’re not going to stop shopping at Waitrose.

[4:09] Andrew Craig:

Yeah, exactly. Um, and or or or they can downsize to LD, you know, if it’s getting if it’s getting bad, exactly. You can do that in Fleet, where we both live. But um, but in all seriousness, it’s you know, that’s how I signed off that article. It’s like what I find so unbelievable is that the Labour Party was founded to represent working people and the least fortunate in our society. And it’s nuts that you’ve got a situation where anybody who’s vaguely economically literate will tell you that what they’ve just done is gonna be ruinous to millions of people. It’s gonna like 80% of pubs in Britain are now loss making. Yeah, I know. 80% of but like restaurant, every single hotel group in the country is coming out up in arms saying we’re screwed, you know, like the whole hospitality.

[4:50] Sammie Ellard-King:

But we raised beer tax by lost beer tax by one pence.

[4:53] Andrew Craig:

But how they can’t see that the net result of that is gonna be hundreds of thousands more people out of work. High streets, you know, tumbleweed high streets up and down the country, right? Of basically like because if you think about it, like in a really small uh high street, pubs are quite an important part of the community and the economy, right? You know, you’ve got a betting shop nowadays, you’ve got loads of charity shops and a betting shop and some hair hair barber shops or whatever, but the pub was the kind of epicentre of a lot of communities, particularly in rural communities. Definitely. So if a pub goes and your post office is gone and the bus route’s not going, you know, this this stuff, I mean, and yeah, I don’t want to go on. You’ve got me straight onto my high horse, but I just I find it so depressing at the moment because it’s like it’s just a no-brainer. All these decisions have been taken are so bad for Britain, and it’s just made, you know. I can’t remember if we talked about this last time, but you know, the the most and by the way, this is the Tories for because the Tories have been cocking it up for you know the previous 14 years anyway. But the but the for me, the most important metric that we you know, if you want to acknowledge there is a problem rather than this self-serving, am I allowed to swear on this one? Please do self-serving bullshit that no, it’s great and Britain’s really great, and we’re a tech superpower, it’s just complete bullshit, right? No, agreed. And the evidence, the the biggest evidentiary point is GDP per capita in Britain today is is about 45,000, 46,000 US dollars per capita, right? Sort of average incomes, which is roughly the same as what it was 30 years ago, yeah, right? We’ve been slowly creeping down that in real, and actually, if you take the richest 1% out, all the people who are leaving at the moment, by the way, which we can come back to perhaps, which does matter, no matter if you want to hate the rich and vilify the rich, you know, if if people who pay hundreds of billions of dollars and create all the the jobs leave to go to Dubai or whatever, that’s a serious problem for people who are left. But the point I wanted to make is that, you know, again, this is not I’m not like pulling these figures out of the um out of my proverbial, but like Ireland is twice as rich as us per capita now, depending on how how you account for purchasing power power parity. America’s just way wealthy, you know, like $75,000, $80,000 per capita instead of our 45.

[7:05] Sammie Ellard-King:

Yeah.

[7:05] Andrew Craig:

Singapore, Australia, South Korea, like Poland is going to be richer than us soon. The Czech Republic is going to be richer than us soon. It’s absolutely nuts, right? And Winston Churchill and the great founders of Empire must be turning their graves to see what we’re doing. And it’s and the real frustration to me is that it is and it’s funny because I’ve never held myself out as as a as somebody who speaks about politics. That’s not my that’s not my thing, right? But you speak about financial matters, which is and it does bleed over to politics because it’s sort of like like I guess my mission more than anything else, as I went back to, you know, the reason I’ve been so mission-driven about trying to improve the financial affairs and the financial literacy of as many people as possible is because I see it as a silver bullet for a better society. Absolutely. I mean, I yeah, we resonate with that, but like you know, you if you had a few million more people in Britain understand what’s in my book, you know, available on Amazon, etc. etc. nonsense. But you know, in all seriousness, if you have like there there’s there’s a stat um that was from a survey about a year ago that said something like 14.6 million British adults are really challenged economically, which is all part and part parcel of this, and it creates a long road back. And it’s and and we’re doing 180 degrees the wrong, the opposite of what we should be doing if we want to sort that out. Completely agree with that. And that number’s gonna get worse, but but and I and I the point I wanted to make is I think for a lot of those people, you know, there’s gonna have to be a really, really big sea change uh over 10 plus years to for for for that for them to be helped back into kind of being abundant and affluent and having a better life. Yeah. But that doesn’t change so my mission then is focused on let’s say there’s like five million fairly rich people in the country, you know, 50 million British adults, say 10% of them are actually pretty you know, not doing too badly and pretty well set up and fairly financially literate. And that corresponds roughly to the number of people who have stocks and shares ISA, which I always go back to. It’s actually a bit less than five million, but just call it that. My focus is the millions of people in the middle, because there are there are there are literally tens of millions of people in this country.

[9:00] Sammie Ellard-King:

Yeah, how do we slip start them slipping?

[9:02] Andrew Craig:

Well, no, but if they just have basic financial literacy and took a set of relatively simple steps that we have obviously talked about, and you’re an expert on, and you talk about and everything you do, stuff that’s kind of obvious to you, and it’s obvious to me, and I’ve written books about it and stuff, but it’s still not obvious to you, you know, it’s still information that most people aren’t conversant with. But but if if a few tens of millions more people understood this stuff and took it on board, the outcome for those people is life-changing. Yeah. And I and I can see it, it takes years. It does not you can’t just do something and the next year your life will be better. This is something that is a real slow burn, which is part of the problem, why it’s hard for people, you know, a lot of people can’t take that on board. But bigger picture, and I came looking at the wrong way around, but my broad point was going to be if you have many millions of people who do that, British society is much better. You know, why is Singapore so rich? Because they’ve all got massive pension funds. Why is Australia so rich? Why is Norway so rich? Because they’ve done an incredibly good job with their financial affairs and their capital markets for like since the 80s, and in Singapore’s case, since the 60s. The people in Singapore are more than twice as wealthy as we are. And by the way, Singapore was as poor as a sub-Saharan African country at the end of the Second World War. So was South Korea, so was Taiwan. Today they’re much, much richer than us. Now, is that some strange is that aliens from out of space just gifting them loads of no, it’s policy, yeah, it’s good policy, right? And that’s what makes me so angry, is we now have a political class going back to being political again. And as I say, I’m not party political. The Tories were an unmitigated disaster. I think Blair and Brown were an unmitigated disaster.

[10:34] Sammie Ellard-King:

I think probably John Major, I now sound like I’m a Tory, but well, he’s possibly the last stable prime minister, right?

[10:39] Andrew Craig:

The last true state I saw him present actually at an event in Wapping a few weeks ago, and he was unbelievably impressive.

[10:46] Sammie Ellard-King:

And just I still find him extremely impressive.

[10:49] Andrew Craig:

And I think he got about because I don’t know if you you might this sounds really patronising thing to say, but maybe you’re too young for spitting image. Do you remember spitting image? No. No, there you go. I was I was right. So it was this crazy comedy show with sort of rubber puppets. That was a huge hit in like the 80s, and they basically had a really, really they really had it in for um John Major and they made him into this that he was all painted grey and he’s like this.

[11:10] Sammie Ellard-King:

All right.

[11:10] Andrew Craig:

And so I think that kind of slightly torpedoed his screen. It’s a bit like um, do you ever watch Bo Selecta? Oh yeah. So um to what they’ve done to Craig David. Craig David, uh yeah, Craig David was not loving Bo Selecta, nor um Chris Martin, it’s a run-around running around with clocks going on, but yeah, go wow, it’s slightly going off piece there.

[11:28] Sammie Ellard-King:

But no, but it like I think what you’re trying to say is that like essentially they had a chance to in this budget, I think, to like rectify it, right? And that what they didn’t do is they went completely. I think for me it was like a PR-lauded win.

[11:44] Andrew Craig:

Yeah, yeah, yeah. There was a big so it everybody I know in the city, like senior city professionals are basically expecting what they thought was happening, which companies do a lot. So like when companies announce their results, that they kind of have all the financial analysts that write about them sort of bring their numbers down and so they can do a positive surprise, and then the share price reacts positively. And it’s this idea that you should always kind of underpromise and over-deliver, and then you get a disproportionately positive result from doing that, right? Um, because it’s all kind of you know, momentum and everything feel good and everything, and that sort of those animal spirits play into how the economy can function at the level of the economy rather than say a company. And and so the sense was that you know, there was all this nervousness about capital gains and inheritance tax, and blah, blah, blah. What was she gonna do? And it’s labor and it’s gonna be a disaster, it’s gonna destroy the economy. Yeah.

[12:34] Sammie Ellard-King:

Some of the WhatsApp chats were incredible.

[12:36] Andrew Craig:

100%. And but everybody kind of expected, now what’s actually gonna happen is she’s gonna stand up and it’s gonna be really quite sensible, and everyone’s going, okay, awesome. And there’ll be a big big relief rally, you know, the pound will go up, um, gilts will be steady, and like billions of pounds will flow into UK equities and off we go, and everything’s better again. And it wasn’t that, it was a complete catastrophe. And it’s like it’s just mind-blowing.

[13:04] Sammie Ellard-King:

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