UK Economy Explained: Why Everything Feels So Hard, According To Five Experts

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

**SPEAKER_03** [0:00]

This week I’m back with a very special podcast episode. Now, I’ve gathered together some of the UK’s top experts and economists to essentially unpack what the hell is going on in the UK right now. Because we have seen so much in the news lately about things going wrong in the UK, and not many of us actually understand why. So we’re gonna jump straight into it with Andrew Craig, who is a renowned author and economist in the UK. And we’re actually gonna unpack why the recent budgets from Rachel Reeves, even though they’ve said it’s not gonna impact working people, are actually impacting working people more than anyone. So let’s get into it with Andrew.

**SPEAKER_00** [0:37]

Britain is awful at the moment.

**SPEAKER_03** [0:39]

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

**SPEAKER_00** [0:42]

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

**SPEAKER_03** [0:49]

Nice, congrats.

**SPEAKER_00** [0:50]

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’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 and 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 put 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 chance 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 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 terrible outcome, like whatever your political persuasion, like don’t do it. And that’s actually, I finished the article with saying 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’ve 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.

**SPEAKER_03** [4:13]

They’re not going to stop shopping at weight trades.

**SPEAKER_00** [4:14]

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.

**SPEAKER_03** [4:46]

Yeah, I know.

**SPEAKER_00** [4:47]

80% of but like restaurants, every single hotel group in the country is coming out up in arms saying we’re screwed, you know, like the whole hospitality we’ve got to do.

**SPEAKER_03** [4:55]

We raised beer tax by by look lost beer tax by one pence.

**SPEAKER_00** [4:58]

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 uh 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 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.

**SPEAKER_03** [6:26]

We’ve been slowly creeping down that board.

**SPEAKER_00** [6:29]

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 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.

**SPEAKER_03** [7:10]

Yeah.

**SPEAKER_00** [7:10]

Singapore, Australia, South Korea, like Poland is going to be richer than us soon. The Czech Republic is gonna 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?

**SPEAKER_03** [7:34]

But you speak about financial matters, which is true.

**SPEAKER_00** [7:36]

And it does bleed over to politics because it’s sort of like like I guess my mission more than anything else, as I 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. 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 of 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.

**SPEAKER_03** [8:20]

I absolutely love that from Andrew. A really good insight into how these budgets are actually impacting you every single day. Now, next up, the mantra of tax the rich, and there is no one better to understand this than Grace Blakeley. Now, she is an economist, politics commentator, and we’re gonna dive into why it’s actually not actually gonna be beneficial for anyone to tax the rich simply because of the actual money and where it gets spent by the government. So let’s jump into it now with Grace Blakely.

**SPEAKER_06** [8:51]

It’s not enough just to say we need to tax the rich and that will inevitably make everyone better off.

**SPEAKER_03** [8:55]

Yeah, I’m very interested to hear your thoughts on this because we’re getting this whole like, you know, tax the rich mentality coming out uh of the UK, very strong movement, a lot of people talking about it. And we’re in this country right now where the 1% are increasing their wealth at rapid rates, unseen rates, obviously massively increased since since the pandemic. But I just want to know, like, from your own opinion, how this kind of argument would actually benefit someone that just needs to cover their energy costs, for example.

**SPEAKER_06** [9:26]

I think it’s a really good question. And we do need to tax wealth more for a lot of reasons. Partly just because, like, when you have large inequalities of wealth, it ends up translating into political corruption, right? It’s only so long. You can’t sustain an economy with a small number of just like extortionately powerful billionaires without that seeping into politics and undermining democracy. But it’s not enough just to say we need to tax the rich and that will inevitably make everyone better off, right?

**SPEAKER_03** [9:54]

Because you know it’s part of the problem.

**SPEAKER_06** [9:57]

Yeah. And like, you know, I’m on the left. I don’t trust most governments. Like, I don’t trust them to spend this money well. They will dish it out to, you know, corrupt corporations, they’ll use it to fund tax cuts or, you know, for other other sectors of the economy, they will uh use it to buy weapons or, you know, do things that are basically wasteful. Um, and what I want to see is more democracy. You know, yes, I want there to be more taxes on wealth. But again, you know, a big part of the reason for that is that I want a society in which everyone feels as though they are able to kind of input into the most important decisions that affect them, and that basically you can’t have a few billionaires who are able to do whatever they want all the time, and everyone else is basically extremely limited in their freedom because they’re just scraping pennies together to try and get by. That is, it’s anti-freedom, right? It creates a society in which some people are trapped and some people have vastly more than they need. And I think it’s the same thing when we’re talking about these issues around tax and spend. Um, it is important to reduce inequalities of wealth and power. But when we’re talking about how that money is spent and how that power is and wealth is used when it comes into public hands, I don’t want a few very powerful politicians who I quite frankly don’t trust, to be in the position of being able to spend that money however they want. Absolutely. I want to see a real democratization of our society and of the state. You mentioned already things like the House of Lords and the monarchy and all these absurd things, these anti-democratic things that still shape how decisions are made in our country. I want to see decentralization so that local people can have a say in how their money is spent locally. I want to see the economy being more democratic, so workers getting a say in, you know, how their companies are being run and how much they’re paid and all those sorts of things. Um, and I want to see like real opportunities for ordinary people to actually be able to influence what the government is doing. Because if you don’t have that accountability, you are just gonna get corporate and oligarch takeover, basically.

**SPEAKER_03** [12:06]

I’m so glad you said that because we get it now. I make this type of content and I’ve stopped, purposely stopped making this type of content because all I’ll get is 50 comments just saying tax the rich.

**SPEAKER_06** [12:17]

Yeah.

**SPEAKER_03** [12:17]

And like I get I get it, because you’ve got to feel again, it’s that I’ve got to feel angry about something, but I don’t know what yet. Um but my responses were to that almost exactly what you said is like you’re gonna get the money and you’re just gonna blow it. Let’s say you manage to raise 20 billion, maybe a billion will sleep, you know, maybe it will make its way down to you, but that’s really not gonna change your life. Yeah. Whereas if that full 20 billion was spent strategically overseen by the people and really put into the places it really needs to make a difference, then yes, absolutely, I’m all for tax the rich. My other point is this, and I obviously watched that Gary Stevenson and Daniel Priestley um conversation was that that money is mobile at the moment. Yeah. And that is a big problem. And we’re seeing that with the vast amounts of of the top 10%, shall we say, leaving the UK, and that is then going to have its own tax burden and its own, and unfortunately, the working people will have to bear the brunt of that. It’s something like nine and a half million working adults would cover the amount of millionaires’ taxation that’s left, which is obviously an estimation figure, and who knows what that actually looks like. But it it does sort of pose the argument that the only real way we can change this is to tax at the source and then have a plan for it, right? Do you think that that’s the only real way we can sort of sort this bit out?

**SPEAKER_06** [14:30]

So I think there are there are definitely ways we can make our tax system more efficient in capturing, particularly, you know, the all the taxes we already have, right? Which, you know, it it’s all very well saying we need to raise a wealth tax, but actually we have so much tax avoidance and evasion already. Just vast sums of money. I think the last time I checked, it was something like 30 billion lost to tax avoidance and evasion each year. Um, and there are clear ways that we could stop that from happening, right? Um, through to, you know, closing some of the just random loopholes that facilitate avoidance rather than evasion. So allowing you to move money and put it into different pots so that it’s taxed in different ways, in a way that isn’t efficient, through to really shutting down the UK’s network of tax havens and secrecy jurisdictions. And this is a huge thing, by the way. Um, I would encourage people to read. There’s a great book called Treasure Islands by Nicholas Shaxson, which looks at how the city of London is connected to this vast network of tax havens all around the world.

**SPEAKER_03** [15:34]

Oh, cool.

**SPEAKER_06** [15:34]

Yeah, and our banking system basically helping rich people to avoid and evade tax and knowing that they’re not going to get any sanctions for that. There’s a huge amount that we can do to uh to stop that from happening, just to basically enforce the rules that we already have. Equally, things like um, you know, fines for people who have found to have facilitated evasion and that sort of thing. Um, and there’s lots of really interesting work on this done by experts as to as to how you could close some of these loopholes. So that’s one thing. The other thing is then, okay, even if you were able to do that, money would still leave. But we need to think about what the wealth of our economy actually is. Because there is, you know, I would say the wealth of this country is produced by its people, right? And so the kind of big businesses and entrepreneurs want you to think that if they were to leave, if all the landlords were to leave, then all the housing would disappear, right? Um, if all the business leaders were to leave, then all the ideas would go too. You know, there would be no way of creating a business anymore because the entrepreneurs who are a special class of people separate from everyone else will have gone. And what I would say actually is that there’s a lot of wealth here in this country that we don’t make enough use of.

**SPEAKER_03** [16:47]

Absolutely. Yeah.

**SPEAKER_06** [16:48]

So, you know, if we were like how you can you can sell a house and leave, but you can’t take the house with you. So let’s think about how we’re, you know, taxing like property and assets that are actually fixed. Um, the public sector owns a lot of um, a lot of wealth in the form of, you know, a lot of the wealth in this country is in the form of land that isn’t being used very effectively. Um, and then, you know, we have our people, right? Which is really the source of all of our wealth. And this is again why I think these are issues around democracy are really important. If we’re thinking about how we run the NHS, right? This is such a political hot button issue. Everyone has an idea, you know, every government comes in and says, we’re going to reform the NHS. Generally, that looks like putting in layers and layers of expensive management, whose role it is to kind of organise everyone and tell everyone what to do and create this top-down system that’s actually very inefficient. I want an NHS in which doctors, nurses, patients, communities have more of a say in how things work. I personally believe, and I think there’s good evidence for this from lots of different cases, that that would create a system that is more efficient, more linked to the needs of ordinary people, um, and in which you were much better able to kind of identify and solve issues as they arose. This seems like it’s far away from the tax question, but I don’t think it is, right?

**SPEAKER_03** [18:06]

I see how you get it.

**SPEAKER_06** [18:07]

Yeah, like, you know, I think we need to think about our wealth as a country differently, not as just like a pile of money that a bunch of people in the city own and they could just leave and take everything we have with them. Firstly, you know, we can get to that pile of money where it exists and, you know, tax them on the way out. But also, we need to start thinking about our wealth as something that we produce. Um, and that actually most people don’t get paid enough for the wealth that they produce for other people. So if you start thinking about things in those terms, then it’s like, okay, well, maybe some millionaires will leave. But to be honest, we’ll probably be better off because they’ll stop bribing our politicians and like creating all of these kind of unfair systems.

**SPEAKER_03** [18:48]

So interesting from Grace whether or not you actually agree with everything she said. It can be a dividing subject, taxing the rich right now. And I’m sure that there are lots of you that want to see it in place, but whether or not it’s going to have a benefit to our economy is debatable. Now, next up we have Joe Bryan and how printing money and the government constantly printing money is having a drastic effect on the UK economy, but the world as well. Now, Joe is a brilliant, brilliant person, and I love the full episode that we did here. But this clip is a very impactful clip about how printing money really has an impact on your life. So let’s jump into it with Joe Bryan.

**SPEAKER_02** [19:27]

You do not solve the crisis we are in through pitching one set of the public versus another set of the public. Yeah. So if you think about like for example, a game of Monopoly, most people have played Monopoly, right? Imagine all the houses are bought on the board and there’s a certain amount of money in the game. If the person who’s the banker takes the same amount of money again out of the box and puts it on the table, the prices at which the houses would change hands on the table would be double. Nobody is gonna sell the house for the same price they would have sold it before he took that extra money out of the box. Because that money is in the game. Everyone can see it’s in the game. Asset prices go up. So houses. Houses go up, the stock market goes up.

**SPEAKER_03** [20:19]

Yeah.

**SPEAKER_02** [20:20]

Speculative assets go up. And they go up for a number of reasons. One, there’s extra money flowing around the system since it’s been printed. People have earned money and then they invest. And this is why you get a lot of very rich people who work in American politics. Yeah, only get rich after they start working in American politics. So the money comes directly. The greatest investor of all time. Um those find their way into assets because they get the money first, right? And there’s other reasons that they can manipulate policy and all of those things. But if we just think about pure money, they get the money first, they buy the assets, the assets start going up in price. As people realise more and more money is coming into existence, they don’t sell the assets, they try and buy more assets. And when the assets start going up, people begin to speculate as well because they never go down. So they never go down, you should be buying them, is the mentality. It’s like if I’m not buying them, I’m missing out. Yeah. And so you get more and more leverage coming in as well. And then people go further and further out on the quality curve to you know really speculative assets like nonsense crypto stuff. But there’s a there’s a another core driver there is the decision making of the everyday person. Because if you’re if you’re getting hit in the shops with the consumer inflation, yeah, and you’re earning an amount each day, week, month, year which is under which is underperforming the rate of inflation, or the rate of visible uh the rate of actual inflation as opposed to what the nonsense figures the government tell you, then you realise you are getting poorer.

**SPEAKER_03** [22:06]

That starts to manifest in many different ways.

**SPEAKER_02** [22:09]

It does. It does. But you realise that you can’t leave the money in the bank because the money is melting. So what does that mean about your decision-making process? You can’t save. So you try and spend it. You don’t keep money in the bank because you know it’s not going to be there. So you try and buy the assets because they’re a better store of value than the money. And so you start to see the monetisation of assets as a proxy store of value because the money’s broken.

**SPEAKER_03** [22:41]

Yeah.

**SPEAKER_02** [22:41]

So people buy a house, they take out more debt to. Try and buy a bigger house or buy a second house because they never go down and they go up over time, but they only go up in the thing that when you’re measured in the thing that they’re printing, and you get more and more debt then coming in from the banking sector because they make fees and more loans and these sorts of things to drive this to drive this speculation. But what happens if you’re an everyday person? You can’t buy a house. You can’t buy a house on one salary anymore. There’s a gap that starts to happen, right? But then you get massive wealth inequality happening.

**SPEAKER_04** [23:19]

Yeah.

**SPEAKER_02** [23:19]

Because those who own the assets see the assets going up when measured in the fiat currency. So when measured in pounds, they’re going up. They’re not going up in real terms. They’re going up because they’re printing more money. So if you buy you buy a house, you see that price of that house go up, you feel wealthier. You are not actually wealthier. Your share of the total pie has gone down. So the rate of the rate at which they’re printing money exceeds the rate at which the assets are going up in price. So you feel like if you look at your wealth as a number on a piece of paper, you think I’m richer. Happy days. You’re not. Your slice of the pie is shrinking because you’re still being stolen from. You’re just not being stolen from at the same rate as if somebody had kept their money in the bank. Because the asset is appreciated in value when measured in the thing they’re printing. Plus, you paid the taxes, the administration, the headaches, all of these things. So you probably you’re just losing at a smaller rate. But you have then um an acceleration of the wealth gap between the asset holders and the non-asset holders. But that’s not that’s not uh that’s not the battle to fight, Gary. The battle to fight is the money printer. It’s because of the money printer. That is a symptom, not a cause. So when we we see in the press and all over, you know, given Labour and now in um about wealth, wealth taxes, all of these things, yeah. That is that is the worst possible thing to do. It’s just the worst possible thing to do for many, many reasons. And I would encourage anybody who thinks it is the right thing to do to watch the video and zoom out. You do not solve the price the crisis we are in through through pitching one set of the public versus another set of the public. You solve the problem we are in by taking away the big red button. It’s the fact that government can print money for free and the central bank can print money for free that is driving wealth inequality.

**SPEAKER_03** [25:44]

Yeah. I absolutely love Joe and just his insights into how printing money has such a drastic effect on all of us. But next up, we have a good friend of mine, Mr. Rich McDonald. He’s ex-Credit Suisse trader, and he is such a great person to understand how things like interest rates and economy growth really play into things like your mortgages and your savings rates. So let’s jump into it with Rich. How do you feel about the UK at the moment? Because it’s it’s it has had a lot of issues, and there has been, you know, kind of a good 10, 15 year beatdown Brexit. It’s Liz. We’ve just been slapped 24 ways of carrot. You can yeah, it’s just been pretty rough. And we’ve now had this budget from Rachel Reeves, uh business isn’t looking good, hiring’s freezing. It’s all we’ve got to this point. Do you feel like it’s like uh it can’t get much worse or could it?

**SPEAKER_01** [26:44]

I I I think I tell my mum to stop watching the news, stop reading the newspapers. The the the media cause recessions, right? Watch people spending, watch how busy the restaurants are, see if you can get theatre tickets, right? There is no recession out there. Consumer spending just hit a record, house prices just hit an all-time high, the FTSE 100 just hit an all-time high. You can sit around moaning or you can you know worry at what you read. Just go out there on the street and have a look. It’s there’s no recession.

**SPEAKER_03** [27:18]

There’s no recession in your eyes. So why are we seeing the 0.1% GDP growth then?

**SPEAKER_01** [27:25]

Well okay, so interest rates now have been um high, right? And I get people coming to me all the time saying, right, when when do we um uh refinance, right? My sister’s got to refinance, she might have to sell her house, right? So I I kinda I get the the pain that can be out there, but at the same time, you’ve also had the vast majority of the country receive significant wage increases. Right? Now, if there was a problem in actual spending, then you would see you know much more of the likes of a BHS going down or um Debenhams, that kind of thing, right? Rest in peace. Yeah. I mean, well that’s good businesses are are still out there. Yeah. Right. Yeah. Um cycles. Cycles. And thankfully now it’s the luxury that’s getting hit. Right? Luxury, because why on earth are people buying 30,000 pound watches or 10,000 pound handbags, right? So if you go to Westfields now, Shepherd’s Bush, then that luxury area of of Westfields is has pretty much shut down. There’s a whole floor that’s empty now. So, you know, I think people are coming back to, you know, the realization, and especially with the younger generation, spend on the important things rather than um, you know, going out and yeah, and debt’s more expensive.

**SPEAKER_03** [28:57]

And when I saw the stats the other day about luxury goods is the people that are earning under £125,000, which are the largest purchasers of luxury goods, so they can’t fund it with debt to pay for it. Love that from Rich. Now, next up we have Michael Taylor from Shifting Shares. Now, Michael has such great insights into how these big corporations are dodging paying tax in the UK and what you can actually do about it. And essentially, it really is about supporting your local economy by small businesses and investing into them and giving those guys your money instead of those big corporations. But we’re going to understand why with Michael Taylor next up.

**SPEAKER_05** [29:39]

Everyone should be mindful of where they spend the money, right? Because let’s say you go to Starbucks, uh, Starbucks pays five times more in tax to Starbucks EMEA in a low tax jurisdiction, which collects royalties on 42 countries in Europe. Five times more tax to HMRC. So last year I think it paid five million. Uh sorry, 7.2 million in tax on 149 million of gross profits. Now, obviously, that’s gross profits, but it’s a 5% gross profit tax rate. Now, the independent coffee shop owner will have pay higher tax in proportion to that. Court tax, yeah. Yeah. So you go to Starbucks, that money’s funneled out of the country and it goes to Seattle, the holding company in the US. So it comes down to it: do you want your money to stay in the UK? Um, because you go to an independent, that money is probably going on family, it might stay in the local economy. You know, it’s paying for actual things and gets recirculated rather than funneled to shareholders and Starbucks in the US. So you you can make a decision. Um, and yeah, everyone’s guilty of going to chains, you know. I like Nando’s, uh, it’s good fun, but that gets funneled out of the country as well. Um, so everyday people, you know, if you want to have a vibrant economy, you’ve got to start by backing smaller businesses. And the UK government, which has been, you know, I think UK small business has been filled by several governments, um, and that needs to change. So I think people should care because things aren’t exactly great now, but they could get a lot worse.

**SPEAKER_03** [31:17]

Yeah. Yeah. There was that whole Diary of a CEO, Gary Stevenson and uh Daniel Priestley about it. Now, the rhetoric and the way it’s being done, I’m not sure I’m on board with personally, but um one of the things which was interesting was like making sure these larger multinational corporations are taxed at point of sale. Yeah. And I think that is actually something that should be done almost immediately. Because you’ve got Amazon, Luxembourg, yeah, you’ve got Facebook Meta, you know, uh Ireland, and God knows what other other companies in the UK. And these are companies making billions of pounds a year from the British consumer. Um, so yeah, buy local. Yeah, absolutely. Buy local. We’ve been hearing it for years, and we’re like, oh yeah, you know, it’s nice to support your local.

**SPEAKER_05** [33:14]

It is nice, and then you see Starbucks the queues out the door.

**SPEAKER_03** [33:17]

Yeah, exactly.

**SPEAKER_05** [33:18]

But coffee that tastes like burnt cigarettes. I have no idea why people go there, it’s disgusting. Um, but it’s done by design, so it all you know, it’s consistent, so it’s deliberately overburnt. Well, they have like different Yeah, so so it tastes the same everywhere you go. Yeah, yeah, yeah.

**SPEAKER_03** [33:36]

But they but they have massive marketing budgets to like me. So it’s birds agree. The um but they like their budget is massive, right? They can just pump into a local town, flood the market with leaflets, digital billboards, etc. Starbucks is opening, you know, social media ads, etc., all target in that area. The local coffee shop opens down the road. Yeah, he can just about afford a machine to get himself up and it’s horrible, isn’t it?

**SPEAKER_05** [34:06]

You’ve got no chance.

**SPEAKER_03** [34:07]

You’ve got no chance, and but unless you like they, you know, the ones that do well, that’s why I like seeing companies like um Black Sheep and these types of companies that like started with a little tiny unit and they built community and a vibe around them, and they came up and they they they’ve grown, you know, into a large business.

**SPEAKER_04** [34:27]

Yeah.

**SPEAKER_03** [34:28]

Um that’s awesome to see, but that’s what it takes. That’s the journey that a company can go on, yeah. Just by supporting that one little truck down the road, who knows where that guy could take it.

**SPEAKER_05** [34:40]

Yeah, and they they could even franchise as well. Uh so there’s a company uh called Cake Box. I saw they just opened one on Parkway in Camden. Uh, that is a franchise model um in the UK, and yeah, they’re all independent small businesses. So even though it’s a chain, you know, it’s still paying tax in the UK. To my knowledge, it’s not funneling it out of the country. But I mean, you’d be able to see in the UK accounts. I’m pretty sure it is UK only. Um, but yeah, it doesn’t have to be like a tiny coffee shop, it can be a chain. Um, but be mindful of where you’re spending your money.

**SPEAKER_03** [35:17]

Yeah, yeah. No, I love that you said that, mate, because it is so important. You know, I always am like I walk up now and I do I even check myself.

**SPEAKER_05** [35:26]

Yeah.

**SPEAKER_03** [35:26]

And I’m like, no, no, no, no, no, don’t go there. Like, go walk five minutes down the road and just go in that little shop. And you know, even there, you what you go in and the level of service is lovely because it’s just so much friendlier, right?

**SPEAKER_05** [35:38]

Because they own the shop, yeah. And Starbucks, you know, maybe maybe they’re not hungover, maybe they are. Like, you just don’t don’t really care, do they? I mean, it’s not their business. They’re having a burnt cigarette and then drinking a burnt cigarette.

**SPEAKER_03** [35:49]

Yeah, no, I I agree. You know, they they they’re they’re just doing a job, right? Whereas this like job in the hello morning, how are you? Like it does you see the big difference there, and obviously, you know, you there’s bad actors in every situation, you’re of course moody business owning you’re somewhere. Uh uh, you know.

**SPEAKER_05** [36:04]

Yeah, I’m not saying that all small businesses owners are great. Yeah, they’re not it’s not always so equally if they’re not leave, you know. Maybe they deserve to go out with business. If you’re not gonna be polite to your staff and polite to customers, then what do you expect?

**SPEAKER_03** [36:16]

Yeah, you hit the nail on the head. So buy local guys, um, we’re both crapping this. Um, so I think what I’d love to talk about next, mate, is really a um you know, last on the subject of small businesses while we’re on it, because we’ve just had the spring statement, shall we say? Yeah. Not a budget, really, was it? It was just sort of her moving a few figures about to try and make herself look good, in my opinion. Yeah. Um but last October was a big slap in the face for British businesses.

**SPEAKER_05** [36:48]

Yeah.

**SPEAKER_03** [36:48]

And we have the NI rise increases happening in a couple of weeks’ time, um, which is gonna massively impact your GP, Sainsbury’s, your smaller businesses, etc. I was listening to um James Sinclair talking about it and Rossi’s ice cream, his bill alone is £120,000 more higher. So he’s had to put the ice creams up 50p. So there that like that directly where Labour’s come out and said we’re for the working person, yeah. But that’s going to directly impact the working person.

**SPEAKER_05** [37:22]

Yeah, it’s not a direct tax, but it is a tax. Yeah. And I’m not an economist, so I’m not gonna say whether it’s good or bad, but I guess we’ll see. You know, a lot of businesses uh seeing them say, Oh, well, can’t afford to run anymore. And when and again, when you think back to the risk to reward, is it even worth it? Um, so Greggs, they might be putting through price rises. I mean, they’re still really good value, right? I think you can get a sandwich and a drink for a fiver. Yeah. Um, so they’ve just got like a sausage roll, you know. We do love a bit of Greggs and then like uh the um or what what the tuna tuna crunch bag. Yeah, yeah, they’re pretty good. Yeah. Um, but you know, that that is a good company. I don’t own it, but they give staff bonuses, so they actually look after the staff, even though it’s a big, you know, PLC. Um, you know, it’s a it’s a real one, well-run business. Games Workshop as well gives the staff a a good bonus. Um, but yeah, they they might have to put prices up everywhere. Is it’s gonna be pass parcel with prices because of this. Um, I think Card Factory say they can mitigate it, um, but we’ll see. I think the prices of everything is gonna go up.

**SPEAKER_03** [38:35]

Just like everything else.

**SPEAKER_05** [38:37]

Yeah. And unfortunately, wages probably won’t.

**SPEAKER_03** [38:41]

Exactly. Yeah. And how can you put the wages up for people when you’re basically having to pay more for the current team than you already have? So you’ve got uh two options, right? You either cut the team or you put the price up. Yeah, it it’s dangerous, really dangerous, you know. And I think that people don’t really understand that that how much of an impact that’s gonna happen to them. And yeah, we’re already seeing everything else go through the roof. So yeah, it is an interesting one. I absolutely love Michael. Burnt cigarettes and Starbucks. You heard it here first. Now, next up, we’re gonna jump back into a clip with Andrew Craig. And it’s actually a very, very good idea how to stimulate the UK economy, but also the UK stock market by essentially investing into kids. Our kids when they’re born. Now, let’s jump back into it with Andrew.

**SPEAKER_00** [39:37]

For three billion quid, which is a drop in the ocean compared to the hundred billion of interest we’re paying or what we spend on the NHS or and and and right, for only three billion quid, the government could get every child in this country five grand the day they’re born in a tax-sheltered account. Now, if you think about this as a policy, it’s genius. Like, I think it really is genius. And uh it’s not my idea, it was suggested by one of the community, and I’ve forgotten his name, forgive me. Um, William Painter, perhaps. But anyway, brilliant idea. So if you then made that a tax-free account that is untouchable until the 55th birthday, so it’s kind of sits there, but you can top it up, so that’s the same as a pension. Like a Junior SIPP almost. Yeah, exactly. And then, but all of that money was earmarked for only UK smaller company equities, which have which for from 1955 to 2021 return 16% a year, more than 16% a year. Now let’s assume you return 12% a year. Well, 10 years later you’ll have 30 billion quid in those, which is a huge, that’s like half of the market cap of AIM right now. So, you know, but within a few years, you’re 3 billion, 6 billion, 9 billion plus performance, suddenly you’ve got tens of billions of pounds supporting UK smaller companies, supporting all this entrepreneurial stuff, and every single person has this 5,000 account, if they do return smaller company equity returns, on their 55th birthday, they get a million quid. So it would say the trouble is no political party will ever do it because it will take 30 years, or certainly take you know, many tens of years for that to really deliver. Oh, well, in the shorter term, it will deliver to uh UK smaller companies scene for sure. And again, it’s that thing. If you if if loads of global if people sitting in New York or Dubai controlling smaller company pots of money go, Britain’s got this new thing where they’re gonna put three billion quid a year into smaller companies, they’ll go, oh, there’s some momentum in smaller companies, maybe we should put some put some money into the yeah, exactly. So it’s like there’s a yeah, there’s a fantastic company in Oxford. I just think it’s really like it’s just such an easy win. The thing is, it will gift put politicians 20 years from now a massive win.

**SPEAKER_03** [41:48]

Yeah.

**SPEAKER_00** [41:49]

But you know, if you look at so Singapore basically has something like that, Australia has something like that, Norway has something like that, yeah. Which is they’ve had really enlightened pension systems for 30 years, which is why they all have amazing retirements and they’re all like like they call Australia the lucky country. Yeah, you know, I mean, people with normal blue-coloured jollers, blue blue-coloured jollers, blue-collar jobs. Crikey, um, it’s embarrassing. Um, and I haven’t been drinking, but you know Australia, yeah, exactly. It’s Friday. Um, but but can aspire to have a ri amazing retirement, you know, because they’ve had this really enlightened pension policy. And I think that I think that’s a really good pol truly a really good policy idea.

**SPEAKER_03** [42:29]

I think it’s a good idea because it gets money into the businesses now, so there could be a stem of the tide flow, which is bad now, right? So you fix that on a short-term basis. And yes, there is probably a 15-20 year period in between there where no government in power really sees the benefit.

**SPEAKER_00** [42:45]

Yeah, correct. But then no, and the people don’t see the benefit either, because you’re gonna lock it up.

**SPEAKER_03** [42:48]

When you say it’s not a political win now, there is a political win now because it fixes it.

**SPEAKER_00** [42:52]

Well, if you sell it, yeah, that’s right. If you have if you have the courage of your convictions and you do a good enough PR job explaining why it’s such a good policy, exactly. But but so because people think like, well, three billion quid’s like peanuts, right? But think about it this way. That’s 30 a year. Yeah, three billion quid a year, correct. But but you know, in the context, AstraZeneca’s currently at 200 billion quid, like the biggest UK company or Shell, whatever it is, right? So it sounds like peanuts, but the what people are fail to understand is if you small support smaller companies. So actually, in the in the world of smaller companies, three billion quid’s a hell of a lot of money. Think about it this way it’s 30 IPOs that are 100 million quid each. Like that’s that’s like th that’s like 30 tech companies or 30 software or 30.

**SPEAKER_03** [43:34]

It’s it’s hundreds of thousands of jobs.

**SPEAKER_00** [43:36]

Yeah, probably in the forest. It’s hundreds of thousands of taxes. Tax revenues, exactly. And well, and that’s it. And we’re doing it like it all it’s all it’s not, I mean, it’s it would be funny if it wasn’t so.

**SPEAKER_03** [43:48]

So almost almost they would put that investment back in, and large swathes of that £3 billion would be taken back in income tax, and and that’s the same. But in the former, yeah, exactly.

**SPEAKER_00** [43:57]

But that’s how they call it But that’s what I was gonna say. It’s like speaking to quite an old system.

**SPEAKER_03** [44:02]

So technically, it’s like a £1.2 billion investment, a £1.5 billion investment with all the tax they would make back off it on VAT and fuel chain.

**SPEAKER_00** [44:10]

Yeah, well, yeah, exactly right. It’s it’s it’s yeah But we’re doing but what we’re doing at the moment, generally, is 180 degrees the opposite of what we should be doing if we want this coun country to thrive and for people to have uh higher incomes, better retirements, better healthcare, better everything. Like genuinely. And I think I’m saying it’s like I’m I’m really as I keep keep trying to think, I don’t really want to get into political stuff, but it’s just so obvious to anybody who’s vaguely economically literate and it just is maddening.

**SPEAKER_03** [44:35]

But I think what are we doing? I think I think you’ve I think you’ve crossed that barrier now, Andrew.

**SPEAKER_00** [44:40]

It’s become so political.

**SPEAKER_03** [44:42]

Well, but let me be clear, I don’t I don’t see any you’re you’re looking at this from a capital markets perspective, and their their policies re massively reflect that.

**SPEAKER_00** [44:51]

So yeah, but but but and I get but to the you know capital markets are really important for people’s lives. That’s the bit that because we teach people so badly about this stuff, nobody in this country really understands that in any kind of powerful visceral way. They think it’s just a bunch of blokes in the city running or blokes and and ladies too running around in the city just shuffling the decks with you know money flowing around, and it’s it’s that’s it’s about the real economy, and that’s what frustrates me.

**SPEAKER_03** [45:17]

So, guys, I hope you’ve enjoyed that episode. I’ve enjoyed my little walk on the Kent Coastline with Archie the Bulldog, and we are gonna be back next week with a full interview. But this has been a real deep dive into the UK economy. Make sure you’re subscribed to the channel, and I will catch you guys on the next one.