November 22, 2024 • 45 mins
Sam Bowman, founding editor of the online magazine Works in Progress, now part of payment processing platform Stripe, joins to discuss why he thinks Britain has stagnated and the main problems hindering growth. He also offers what he considers simple solutions for tackling those problems.
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Episode Transcript
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Speaker 1 (00:03):
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:16):
Welcome to Meren Talks Money, the podcast in which people
who know the markets explain the markets. I'm Meren zum
zat Web. This week we're looking at why Britain has stagnated.
I don't think anyone's going to argue that Britain has
not stagnated. It has definitely been stagnating. But what can
we do to trigger or indeed to catalyze future growth
to change where we are. My guest this week is
Sam Bowman. Sam as the founding editor of the online
(00:39):
magazine Works in Progress, now part of payment processing platform Stripe.
He has been Director of Competition Policy at the International
Center for Law and Economics and an executive director of
the Adam Smith Institute. Now we have specifically asked Sam
on as a result of an essay that he co
authored called Foundations why Britain has Stagnated. There we go
(00:59):
that word again, which looks at the main problems that
are plaguing us, how we can fix them, whether it
is possible to fix those problems, and of course that
is the defining task of our generation and indeed of
this new government. So we are hoping that Sam will
be able to diagnose the UK's problems and tell us
how to fix them in a hurry. Welcome Sam, Thanks
(01:20):
for having me. Well, it's a great pleasure. You know,
we spend a lot of time on this podcast worrying
about productivity, worrying about infrastructure, worrying about housing, and in particular,
of course, worrying about the miserable real wages in the UK,
because we firmly believe on this podcast that money can
indeed buy you happiness. Now, I just wanted to set
(01:41):
the scene, which you do at the beginning of your essay,
and I imagine that an awful lot of our listeners
will have read this essay already, but for those that
have not, you've got a wonderful not necessarily diagnosis, but
description of the problem at the beginning. So I'm just
going to read a few bits of that so that
our listeners can get a sense of what it is
(02:02):
we're trying to talk about here. Okay, Ready, between twenty
twenty four and twenty twenty one, that's before Russa's invasion
of Ukraine, the industrial price of energy in the UK
tripled in nominal terms. We have significantly more expensive electricity
than many similar economies with almost identical population sizes. The
UK's under thirty million homes, France has thirty seven million.
(02:26):
And then there is this thing that I always find
really interesting. We complain a lot about second homes in
the UK ren but only eight hundred thousand British families
have second homes three point four million French families do.
If the world was a better place, our coastline would
be plastered, literally plastered with second homes. Then everybody would
have their own summer house. Back to Electricity pert Capital,
(02:47):
electricity generation in the UK is just two thirds of
what it is in France. Our electricity generation is closer
to developing companies such as Brazil and South Africa, home
of the regular blackouts. Britain's last nuclear power plant, and
this is really important and I want to talk about
this a lot of time. I'm a great fan of
the idea of let's go all in on the nukes.
Our last nuclear pad plant was built between nineteen eighty
(03:09):
seven and nineteen ninety five. The next one, Hinckley Point C,
is between four and six times more costly per megaworking
capacity than South Korean nuclear pals. We've talked about this
and that on this podcast before. It's ridiculous. Tramp projects
in the UK two and a half times more expensive
than French projects on a per mile basis. Now I
know all about this because I live next to the
(03:29):
tram line in Edinburgh. I have watched the cost of
building that kind of infrastructure in the UK in real time.
And by the way, trams to new Haven. If you
are listening, please, with the love of God, come and
pick up the rest of the rubbish. It's not finished yet.
I'm going to stop there because if I keep reading
for all these lists, I'm going to get myself terribly upset.
So here we are. We have this this problem, and
(03:52):
as you say, they're not disconnected observations. They highlight our
real problem. What you diagnos is our real problem. We
can't build anything. And now I'm going to hand in
for you. Is it really that simple? We can't build
anything and that's destroying our economy.
Speaker 3 (04:07):
Yeah, I think it is that simple. We point to
France as an example of a country that on first glance,
gets everything wrong. You know, we all know France has
incredibly high taxes, it has incredibly high regulation, to the
point where there's a cliff edge. If you look at
the size of French companies, French companies are lots with
(04:28):
forty nine employees, and then there's a huge collapse in
the number of French companies that have fifty employees, either
because companies just aren't refusing to grow because so many
regulations kick in at that point, or because they're effectively
committing fraud and under reporting the number of employees they have,
both of which are pretty bad. We know that the
French public hates any attempt to liberalize its economy. There
(04:51):
have been riots over raising the retirement age to sixty four.
I mean, imagine if we were talking about raising the
retirement age to sixty four in the UK. So, according
to all those kinds of metrics, and I think almost
anybody would agree, will hold back an economy, France should
be doing incredibly badly. But actually France is doing roughly
(05:12):
as well as we are. By some measures, they're doing
better than us. I think it's reasonable to say they're
doing about as well as we are. And the reason
we think that is is that even though they get
those things wrong tax regulation things like that, they get
the basics right. So the footprint of Paris has tripled
since the Second World War, whereas London has basically not
(05:32):
grown at all. As you mentioned, they build many, many
more homes. They have far more homes per person than
we do with about the same population size. They build
things like tramways much more cheaply than we do. They
build much much more high speed rail, much more cheaply
than we do, and all of those things are related.
There there's I think big, big misunderstanding or kind of
(05:53):
gap in the UK between costs and what you actually get.
So we always talk about, oh, well, you know, we
should build Hinckley Point C, which I agree with, we
should build HS two, which I don't agree with, we
should build crossrail, but never really recognize that the very
very high costs of those projects mean that we really
don't get to build more than one. If we get
(06:15):
that one at all, we should be in a situation
where we're able to build things like crossrail and other
metros much more cheaply at the price that for example,
Madrid built its metro which was less than a quarter
of the price of crossrail, so that we can have
more of them.
Speaker 2 (06:30):
So when we.
Speaker 3 (06:31):
Talk about the cost of nuclear power, we're not just
complaining that we have to pay high prices for it,
we're complaining that we don't get enough of it, and
so we don't have anything like the kind of energy
abundance that we want, and all of this adds up
to a massive shortfall investment. So the real origin of
writing this paper was a frustration in the run up
(06:53):
to and after the election that many commentators were kind
of finally beginning to catch up with people like new Marin,
people like me who've been talking about the UK under
investing for years. But the main conversation sort of thinks
of investment as this sort of abstract number, as investment
as measured by how many pounds we're putting into some
(07:13):
accounts somewhere or spending, when really what we care about
with investment is what we're getting out of it. How
many nuclear power plants are we getting, how many miles
of railway, how many miles of tramline, how many miles
of road, how many houses are we getting. And so
the fundamental point that we're making is that we underinvest
both in terms of costs are so high that it
wouldn't be economic to put much more money in than
(07:35):
we do and for the money we do put in,
we get much less out the stuff that we really
care about than we should and changing that is really
in our hands. Very very little of this is a
technological problem. It's almost all a political problem. And yes,
politics can be very difficult to fix, but politics should
be eminently fixable. And the fundamental argument that we make
(07:59):
is that the UK could be a much more prosperous
country without any change in technology, without any real change
in the constituency of the economy. We just need to
make it much easier to build the dances.
Speaker 2 (08:10):
Let's go back then and talk about the reasons why
everything costs so much more. Here I mean again, as
I say, watching the Edinburgh tram in real time and
watching the costs go up and up and up, and
comparing the cost per milder tramp projects elsewhere was a
genuine shoka. Genuine shoka. When you run through the list,
what of the reasons why the cost is so high?
(08:33):
What are the main ones?
Speaker 3 (08:34):
The three big things that I would point to are
number one the planning system. Some people have read the
paper as just being about the planning system, which isn't true,
but it's understandable that some people would interpret it that
way because the planning system that we have is a
relic of the Athlete government. You know, it's a relic
(08:55):
of post war socialism in the same way that the
NHS is, and I think it's similarly dysfunctional, dysfunctional in
a much more invisible way. So after the Second World War,
the Athleague government nationalized huge amounts of the economy, including
the way we use land, and it went from a
system where even the local council did have the power
(09:15):
to stop people from building things on their land. They
had to compensate you if they stopped you from building something,
so they had an incentive not to just block everything.
They could block things, but they would have to bear
some of the cost of blocking, and that meant that
pre the Second World War we had a much more
balanced system that allowed lots of things to be built.
(09:35):
And the nineteen thirties I think really should be famous
for being the most impressive decade of housebuilding that we
have ever had, almost entirely private house building.
Speaker 2 (09:46):
And nice houses too, crucially, really nice houses. Really anyone
would want to live in a thirty's house lovely.
Speaker 3 (09:53):
They're brilliant and much larger than houses that have been
built after the Second World War very affordable, often with
a lot of gardens. There was a huge, huge shift
in the British economy towards building nice, affordable family homes
in the nineteen thirties. It actually is one of the
reasons that we were able to avoid the worst effects
(10:15):
of the Great Depression, the global Great Depression, and one
of the reasons that we were able to rearm to
fight the Germans in the Second World War. It was
really as important as that. And if we were building
at the same rate today that we built in the
nineteen thirties, if you adjust for population, we'd be building
more than half a million homes a year. I mean,
we talk at the moment as if three hundred thousand
homes a year is really ambitious, and you know, if
(10:36):
we're really, really lucky, we might be able to get
three hundred thousand homes a year. I mean, that's chicken
feet compared to what we should be building and what
we have been building as a proportion of the economy
in the past. So shifting to the Atli government, what
I would argue is a socialist land use planning system
was really disastrous and you can see the number of
houses being built by the private sector collapse after that happens,
(11:00):
And what also happens is that where homes are built
becomes much less driven by market signals and prices and
much more driven by effectively central planning. And that's left
us with a situation where we don't build enough houses
every year, and the houses we do build are often
not anywhere near where people actually want them to be built,
and the consequence of that is that people can't move
(11:24):
to where good jobs are. So housing is not just
a problem of bills. It's not just a problem of
us having to spend more of our money on rents
and mortgages than we'd like to. It's also, and I
would say much more importantly, a problem of what jobs
people can do and where.
Speaker 2 (11:40):
And one of the things you say about that, let's
won't go back quickly. One of the things you say
about that is a major problem in London being the
lack of a middle income group. Only the very rich
and the very poor eleven social housing can afford to
live in London, which means that you know, if you're
a young or quite young person, you should, under normal circumstances,
be drawn to the city to enter productive work you want.
Speaker 3 (12:01):
Yeah, I mean during the during the Industrial Revolution, towns
of ten thousand people grew by more than ten times
in less than a century. I mean some towns, some
cities that we now think of as being great cities
like Sheffield went from being almost nothing at the beginning
of the Industrial Revolution to centers of world commerce and
(12:21):
world industry by the end of the nineteenth century. We
haven't had anything like that kind of ability to move
around and to migrate internally according to economic changes and
changes in economic reality, and I think that's one of
the really big reasons that we have been held back
in our ability to grow. And you're absolutely right. You know,
(12:41):
there are some places in London inner London boroughs that
have thirty to forty percent of the housing being assigned
to social housing, and that means that a lot of
the most valuable, most central housing stock is occupied by
people who are often not in work at all. If
they are in work, they're often in fairly low productivity jobs,
(13:04):
and they're occupying homes that could be occupied by people
who could be far more economically productive and grow and
drive economic growth much more. The result, as you've mentioned,
is this kind of missing middle where if you want
to live in kind of inner London, by which I
mean sort of zones three, two and one, you either
(13:27):
have to be very rich or very poor. Nobody in
the middle can really afford to live in central London
because they can't get into social housing and they cannot
afford private housing. I think that's a disaster. I think
socially and economically that's a disaster. And what's so frustrating
about it is that fixing that problem is really really simple.
(13:50):
London is one of the least dense major cities in
Western Europe. The nicest parts of London, places like Bloomsbury Belgravia,
are the densest part of London. You know, density doesn't
have to mean towers in the park. Density can mean
six story, eight story Jordan Edwardian terraces and building more
beautiful and livable housing like that would allow us to
(14:13):
allow many, many millions more people to move into London,
get better jobs, start more companies with each other, and
I think produce huge amounts of extra output and we're
just not doing it. And I think fixing that would
be a tremendously easy way to drive a lot of
economic growth, and to just get a lot of output
just building those homes would be a lot of economic
(14:33):
activity and a lot of economic outputs that we could
have tomorrow. We could begin working on that tomorrow if
we want such.
Speaker 2 (14:39):
Planning isn't just about houses. It's about transport and all
the other infrastructure that we need, and there we have
a major problem as well, don't we.
Speaker 3 (14:48):
Absolutely. I mean, the example that I find most frustrating
is this tunnel called the Lower Thames Crossing, which is
being built, or at least being proposed to be built
under the Thames to link up Kent and Essex. And
this will also link up England's two busiest seaports, so
there's a very obvious economic need for this. Now, the
(15:08):
planning application for this alone has run to three hundred
and sixty thousand pages and cost two hundred and ninety
seven million pounds, which for context, is twice what it
costs the Norwegians to actually build the world's longest tunnel.
Speaker 2 (15:22):
Okay, we now we need to reread that. The planning
documentation for the Lower Thames Crossing, which as you've just said,
is incredibly important, three hundred and sixty thousand pages going
on three hundred million so far. I'm going to repeat
this because it's so important. That is more than twice
as much as it costs Norway to actually build the
(15:43):
longest road tunnel in the world. We have spent more
on planning, double as much on planning alone than Norway
has spent on building something similar. That is off the scale. Shocking,
isn't it.
Speaker 3 (15:55):
It's astonishing And it's one of those figures that you
have to read it and you have to check it,
you know, you please. I encourage people who are sort
of rolling their eyes in this belief check the sources, please,
because it's so unbelievable and far fetched that it feels
like no reasonable person could possibly have allowed the system
(16:16):
to get this way. But it isn't just planning in
the case of infrastructure. It isn't just planning in the
case of housing either, but it's primarily planning for housing.
There are environmental assessments that slow down projects enormously cost
huge amount of money. To reopen a three mile train
trap between Bristol and Porto's Head, there is an eighteen
(16:37):
thousand page environmental assessment that cost thirty two million pounds
and to put that into context. The Jubilee Line extension
in the early nineteen nineties had a four hundred page
environmental assessment. So this is a recent phenomenon. This is
a new development that we are requiring environmental assessments like
this and of this cost and of this time, and
(16:57):
it's one of the really really major reasons we have
other Some people would call them checks. I would call
them hugead roadblocks to building things. Something called the Aarhus Convention,
which is an international convention that the UK as a
signatory to, which caps the cost of legal challenges to
infrastructure projects. So if you are a even if you lose,
(17:20):
so if you are a vexatious claimant you don't want
a tunnel being built near you, you can sue or
you can judicially review the project, and even if you lose,
the costs that you will have to pay to cover
the winners' costs are capped at between five and ten pounds,
so trivial, trivial amount of money. And this is something
(17:42):
that we have made stricter in the last seven or
eight years. But Theresa May government actually made this stricter
unbelievably and what we've created is a situation where legal
challenges to infrastructure are very easy and very cheap. There
are huge numbers of triggers for judicial reviews, there is
huge compliance cost with the planning system and the environmental
(18:04):
assessment system. And then on top of all of that,
the way that we pay for major infrastructure projects in
the UK has moved from being something that was devolved
and was either done by a private company as in
the case of most of our railroads, or by local
authority as in the case of many roads and tramways
during the era of the tram to a situation where
(18:26):
national government pays for things and oversees major projects, and
almost nobody in that project has an incentive to keep
costs down. And I think this is the real problem
that HS two had, where basically nobody in the decision
making pipeline had any incentive to keep costs down for
HS two and that includes the cost of appeasing objectives,
(18:48):
you know. I think there probably does need to be
some appeasement nim of Nimbi's in some cases for political reasons,
but there has to be a counter a counterweight to
that that says, if you appease these people too much,
and if you spend you know, billions of pounds on
unnecessarily tunneling loads and loads of miles of this line.
A quarter of HS two is supposed to be tunneled
(19:09):
to basically avoid NIMBIA complaints. Then you're going to go bankrupt,
you know, or the project is not going to happen,
or you will get fired, or your voters will vote
you out. And we have very few of those mechanisms
in place now for these projects. The only real mechanism
that we have is the Treasury coming in and saying, okay,
you know what, Actually, you spend too much money on this,
We're canceling this, or we're going to cancel some of this,
(19:31):
which is a very blunt to cancel.
Speaker 2 (19:34):
Are awful, that's not the correct incentive. Spend too much
and we don't do it. Not norful.
Speaker 3 (19:40):
Absolutely, we don't want a situation where the only two
options are extremely expensive infrastructure or canceled infrastructure. We want
there to be incentives. And you know, anybody who's worked
for any kind of on any kind of complex project
knows you need people at every step of the decision
making chain to be worried about costs. There is all
always going to be cost inflation, and you need people
(20:02):
with strong incentives to keep the costs down to make
decisions that say, you know, this isn't going to be
the fastest ty speed rail line in the world. This
is going to be the second fastest or of the
fifth fastest. You know, it's going to be a lot
better than what we've got, but it's going to be
not by it's not going to be gold plated. And unfortunately,
we just don't do that. So all of the problems
that we have with environmental assessments and with planning and
(20:25):
judicial reviews and stuff like that are compounded by the
fact that the incentives for the people who are actually
running the project don't factor costs in at all, really,
and I think that's the kind of underlying reason that
cost disease has grown so badly in infrastructure and things
like nuclear power as well, but infrastructure especially, And again,
we can change that. You know, we can evolve decision
(20:48):
making to people who are more accountable for the decisions
they make and who can go bankrupt, and we can
bring a more involved role for the private sector that
includes loss as well as profit. I think a huge,
huge problem that we've got is when we do these
sort of quasi private projects. There is still the kind
of government, a funder of last resorts that that insulates
(21:10):
the private sector from its cost increases. And we can
change that, but it will be challenging and it's not
straightforward to get there from where we are.
Speaker 2 (21:18):
Let's go back to nuclear energy that you just mentioned.
I mean, one of the really horrifying things happening in
the UK at the moment, in over the last decade
is this extremely fast rise in the cost and the
cost of electricity, and that you know, that's just a
destroyer of industry, isn't it, given that you know, like
economic activity is energy transformed one way or another. The
how you make the price of energy, the less likely
(21:39):
you are to get very much out of the other end.
Now we're supposed to be living in a world, we
keep being told with living in a world where our
huge investment into the renewable industry will make our electricity
cheaper and cheaper and everything's going to be absolutely marvelous.
That's not happening.
Speaker 3 (21:53):
Yeah. I have to say I actually went into this
paper feeling much more optimistic about intermittent renewables, wind and
solar than I do now, and in the process of
research and writing and speaking to people who are working
in this sector, I have come away with the sense
that really we are doomed if we think that wind
(22:16):
and solar are going to save us. And I think
part of this is because solar does seem very promising
in some parts of the world. You know, the cost
of photovoltaic solar cells is collapsing. You know, we're getting
to a point where solar cells, I mean, they're not
going to be quite free, but they're going to be
something approximating free. The problem is that you also need
storage in a place like the UK where we get very,
(22:40):
very overcast, whether as everybody knows, I mean possibly people
listening to this right now are listening to it in
a very overcast This is the this is the time,
the time of the year where solar is really not
very good. But you know, in south in the southwest
of the United States, in Spain, in North Africa, solar
may be very very problem. The trouble is it's just
(23:01):
not going to work here. It may have some role
to play, but we just cannot expect the base load
energy that we need, the base electricity production that we
need to come from solar and wind is just not
seeing anything like the kind of cost reductions that solar
is see.
Speaker 2 (23:16):
Well, you talked about there being a system level cost
that people don't really think of, and there are all
things actually that we've talked about on this pod before.
The need for transmission lines to connect generation to households
and industry. And in the old days, you had a
few large power stations, and the transmission network simply connected
those large power stations to the communities where the power
was needed. But now if you have the power being
developed in loads and loads of remote places all over
(23:38):
the country, you have a very very different setup. And
there's that cost, and then there's the costs of the
grid balancing where you have to match up this intermittent
energy with the needs. And then of course there's the
cost of backup capacity. These are the three things that
you list, and all these things are not necessarily always
included when we look at the cost of renewals, and
if you do include them, you get slightly differ pature.
(24:00):
Is that fair?
Speaker 3 (24:02):
Huge? Yeah, and completely, And I think the mistake that
some people make is looking at wholesale costs, which are
only about thirty percent of final bills. Incidentally, wholesale costs
are really a significant but not overwhelming fraction of what
we pay for when we pay for electricity. The rest
(24:24):
is these kinds of system level costs, and what we're
doing with renewables and really with nuclear as well, is
moving from a world where marginal wholesale costs are the
most important thing to worry about, which is the case
with gas, which is the case with coal, which is
the case with oil, to a world where fixed costs
are things that we really care about. You know, the
(24:45):
marginal cost of a wind turbine is very low, totally agree,
But the fixed cost of a wind turbine, once you
include all of the system level costs you're talking about,
isn't quite high. And once you include the need to
produce electricity when the wind isn't blowing, and produce electricity
and travel transport electricity from where the wind turbine is
to where people actually need it, then the costs become
(25:06):
quite significant. And I think that's the way that we
make sense of this apparent paradox where we've been moving
from a world where you know, where we've been building
lots and lots of renewables, which you know do indeed
have very very low the wholesale costs when they're producing energy,
but we have to pay for them to have been
(25:27):
set up in the first place. You know, we have
talked about the environmental levees, things like the renewables obligation
contracts for difference, these are the contracts and subsidies that
are explicit that we have set up to support renewables,
and they are important. You know. They now exceed ten
billion pounds a year, but they're not anywhere near the
(25:48):
whole story. And even if we weren't on the hook
for those, the cost of renewables I think would still
be prohibitive. At the beginning of November, the energy mix
for the first week was majority gas. And this is
in a context where we've already built decades. We've already
built more of a wind and solar for more than
a decade. We are supposed to be able to move
(26:10):
to a decarbonized electricity grid, or the government's aim is
to move to a decarbonized electricity grid by the end
of the decade. I just do not believe that that
is possible with wind and solar, and if I'm wrong,
please you know, I very much hope my role that
I just don't think that that's going to happen. Think
the thing that we point to, and that the event
(26:31):
that we point to that is a model that we
may be able to follow is France's nuclear roller in
the nineteen seventies and the nineteen eighties, which was state led.
Probably wasn't the way I would have favored it at
the time, and I would hope that we could do
a non state leaded version of it, but managed to
decarbonize the French economy far far earlier than or decarbonize
(26:52):
the French electricity grid at least far far earlier than
any other Western European country, and did so without really
having decarbonization in mind. And now that the rest of
Western Europe is I think trying to decarbonize the wrong
way with intermittent renewabals rather than nuclear. France has become
quite an important energy exporter. We are quite reliant on
(27:13):
French nuclear energy when the windows are blowing and when
the sun isn't shining. I think that it would be
a mistake to continue that state of affairs, and I
think nuclear is a clean form of electricity that we
should be looking to the problem is that it's so expensive.
The problem is that we are building nuclear power plants
for vastly more than even Winden solar cost us.
Speaker 2 (27:36):
And it doesn't have that expensive does it. I mean,
one of the numbers that I keep killing out is
that I saw somewhere and you can tell me if
this is correct or not, that we made seven thousand,
seven thousand design adjustments to the Hinkley plant against the
design that I think work perfetly well in France, and
each one of those adjustments comes with cost absolutely.
Speaker 3 (27:56):
I mean, my favorite cost is the underwater megaphone to
scare away fish from the kind of cooling system the
reactor at Hinkley Point C needs to draw in seawater
to cool itself down, and some fish would be killed
in the process, not in any way that would be
dangerous to the reactor, but just some fish should be
(28:18):
I think, sucked into a grid and killed. And some
of these fish, you know, a few hundred of these
fish would be from rare and protected species, and so
the reactor, the EDF was instructed to come up with
a way to stop these fish from being sucked in.
Their solution was to build an underwater megaphone. That would
(28:39):
play loud noises that would scare fish away. And amazingly,
doing this will actually increase the risk to human life
of the reactor because the megaphone has to be maintained
by divers who undertake some risk in doing this. So
in order to protect fish, we have not just increased
(29:00):
the cost to the project, we've actually increased the danger
to human life. And again this is really for a
few hundred fish.
Speaker 2 (29:07):
Of this we know what that costs per fish in
terms of protection.
Speaker 3 (29:13):
I don't know off the top of my head what
that costs. I'm not sure the number is actually public
for how much this particular adjustment costs.
Speaker 2 (29:21):
So I'm not sure if we don't anyone, If anyone
knows the value that the UK state places on the
life of every fish, please do right in and let
us know.
Speaker 3 (29:31):
But I mean, it is really extraordinary if you look
at what we built nuclear for in the eighties and
as late as the nineteen nineties, we built Size Well
B for about well less than half the price that
we're building Hintley points C for and about two thirds
of the price that we are estimated to build Size
Well SEE. Although I will confidently predict that size. Well, see,
(29:53):
will increase in costs once we start building it for things,
for the reasons that we're talking about that there is
no final decision on a project like nuclear. You keep
having to go back, you keep having to make adjustments,
you keep having to do compliance and kind of this
dance with the regulator and with the environmental the environmental regulator,
(30:13):
and it means that costs just drive up and up
and up and up. Now we know both from history
and from international examples that it doesn't have to be
this way. South Korea builds nuclear reactors for about a
quarter of the price that we build them in South Korea,
and it has committed to building new reactors in the
Czech Republic for about half the price that we're building.
(30:36):
So a very simple solution would be to contract with
the South Korean Energy Authority KEEPCO to do this for us.
I think a more exciting approach, you know, I think
we should probably do that. I think a more exciting approach,
but actually just fixing our regulation to rebuild the UK
nuclear industry, which could be world leading. You know, there's
(30:56):
no reason that we should have to resort to South
Career to build our nuclear reactors. We have built many,
many good nuclear reactors. We built the world's first nuclear
reactor and by the by as late as the nineteen sixties,
we had more nuclear reactors than the rest of the
world put together. Or you know, in existence in Sheffield
is a company that builds some of the effectively a
(31:16):
world leading nuclear reactor casing company that's still operating, still exporting.
It's you know, it's a company that not many people
know about, but is something that I think we should
be quite proud of. We should be reviving that kind
of industry by making it much easier to build, making
it much more certain to build, and ultimately making it
much cheaper to build. And it will have the double
(31:37):
benefit of yes, we'll be able to provide the nuclear industry.
Yes we'll be able to build the low carbon energy
that we need for an actually affordable price. And actually
a triple benefit is that in getting much cheaper electricity,
other English, other English industry, British industry will be able
to come back. So we know the industry is incredibly
(31:59):
sensitive to the price of electricity. It's obvious that it
will be and as we decarbonize, we're going to get
more and more dependent on the price of electricity being
low to have industry. I think it's quite important that
we do that. And I think that whatever discussions and
debates people want to have about industrial policy, and that's great,
but the best industrial policy in the world is not
going to work for you if you don't have electricity
(32:21):
costs that are competitive with South Korea, competitive with China,
competitive with India, and right now we are way way
way above them.
Speaker 2 (32:28):
Okay, let's talk about optimism. Should we try that? You
try that, Let's do it. And one of the things
that you stress in your importance I think is very
valuable is that the value of the UK's institutions are
you know, our legal system, our parliamentary system, all these
(32:49):
things that we have that are still reasonably solid that
we still believe in. And of course we have our
amazing financial industry. We have English which we can't dismiss,
and we have a a great time zone, we have
some wonderful advantages. We have very solid base right that
still exists, not going anywhere. What you're feeling about fixing
(33:10):
the rest, I mean our most recent budget. Flicking through
it and looking at it, I'm not entirely sure that
Rachel reeves had read your essay quite as carefully as
the rest of us.
Speaker 3 (33:23):
Well. I the reason that I am optimistic, I think
there are two main reasons. One is that things really
are getting very very bad things. Really every year that
goes by that we don't see not just normal growth.
I mean, we've had so much stagnation since the mid
(33:43):
two thousands that we should be seeing quite rapid catch
up growth, both catching up with the US the kind
of economic frontier, and just catching up with the trend,
catching up with what we look like we should have
been we should have been on for prior to the
late mid two thousands. So every year that goes by
that we experience stagnation, I think it becomes harder and
(34:06):
harder to deny that we have a really, really big problem.
And I think people do recognize, and the response to
this paper I think shows that people really do recognize
that the big problem is that we're just more building things.
We're not allowing things to be built. You know, the
price of a house in London is very very high.
There is a huge amount of demand to live in
somewhere like London, Oxford, Cambridge. It isn't that there isn't demand.
(34:27):
If if it was really cheap to live in London
and we would still stagnating, then I'd be worried because
I would think that we may have nothing going for us.
You know, we may be trying to jump start an
entire economy here. Really we're just trying to meet demand
that is already there. So that's one reason I think
people are becoming more and more aware of the problem.
(34:48):
The second reason is that a lot of the time,
the answer, I think is giving more control at a
much more local level and taking control away from national
level quangos and national level kind of independent agencies that
we've set up, I think in a quite a misguided
way to try to fix problems, in my opinion, are
(35:10):
not really the big problems that we've got. So I
think that, for example, if local councils could make decisions
about nuclear power permitting rather than the environmental agency, rather
than the rather than the amount of involvement that the
nuclear regulator has. We should be checking for safety. We
should be checking to make sure that the nuclear reactor
(35:31):
is safe, but we shouldn't be worried about whether the
nuclear reactor is going to kill a few.
Speaker 2 (35:36):
Fish or ruin someone's view, yeah, And.
Speaker 3 (35:39):
The reason that we should be optimistic is that local
councils should have a really strong incentive to allow things
like that to be built in their areas because they
bring jobs, they've bring built business rates, payments. There are
all sorts of reasons that you should want these things
to be built in your area. And historically it was
the case that you would want these things to be
(35:59):
built in these in your area. It's a fairly recent phenomenon.
It's a post war phenomenon that local councils do not
want prisons in their area. They don't want the kinds
of infrastructure that the country wants because we do not
allow them to retain the business rates that those projects
used to pay. Fixing that I think should be quite easy.
And once we fix that kind of incentive, and you know,
(36:21):
I mentioned earlier local councils used to have a really
strong incentive to not block development because they would have
to pay for it. I think that's what kind of
mechanism we want to go back to, and we want
to give them incentives to allow development. And I think
once we do that, combined with devolving decision making to
that kind of level, we will fix a lot of
the incentives problems that exists. I think it's quite striking
(36:44):
that during the era of the tram in the UK,
when you know, we had the first major tramways in
many cities, we had the first overhead tramway and lead
overhead powered tramway and leads. Many of these tramways were
not run by private companies. They were run by the
local authority for profit and they were used by the
local authority to generate money that they could then spend
on other projects. I think we have a pretty good
(37:06):
tradition here that local government can actually allow things to
be built and build things themselves if we give them
the right incentives to do so. So I'm quite optimistic
about that, I think kind of Secondly, the other thing
that we should be doing is giving Parliament much more
power over national level projects that get built. Again, historically,
when we built railways in the nineteenth century and right
(37:28):
up until the Second World War, I believe it wasn't
an independent quango that made the decision about what got built.
It would be a private operator would have a proposal.
They would say, you know, we want to build this
railway from here to there. They would bring it to
a select committee in Parliament. The select committee would make
a decision. They would then pass a build that would
protect the project from vexatious lawsuits and things like that,
(37:49):
and it would get built and you have a privately
owned operatives and managed railway. I think there is a
lot of infrastructure that could be built by that mechanism.
It would be it would bring power over these kinds
of projects back to democratic decision makers, away from I think,
(38:09):
very very badly incentivized kind of independent bureaucrats. And that's
the kind of underlying change we need to the country
that I think probably could happen. It certainly won't be easy,
and it certainly will be quite a significant change in
the way we do things, but it would be going
back to the way we did things when things worked
really well and when we build block things in this country.
(38:30):
So it's possible. I think there's a growing demand for it,
and I think what's really optimistic about it is that
it works with the grain of the history of British
democracy rather than against them.
Speaker 2 (38:40):
I agree with you. The only thing I'm concerned about
is that I'm not sure that I'm seeing in this
government and appetite for understanding that appetite for decentralizing and
appetite for moving away from x non democratic quang goes
back to parliament and appetite for sending power back to councils.
And I don't see that. I've fascinated to know that
(39:03):
you do.
Speaker 3 (39:04):
I don't see it in this government. I have to admit.
I think that it may be that this government fills
the need for growth such that it just does the
kind of nuclear option of calling in projects centrally approving
them and just making them happen. You know, they've done
this with a few renewables projects. I don't yet have
(39:27):
a sense that they're going to do this for things
like nuclear, but they might. I think that they have
nailed their colors to the mass of growth so much
that they need growth kind of politically they are they
are going to be kind of humiliated if they don't
get growth. And fiscally, you know, it's looking increasingly likely
that the tax the tax rises that were in the
(39:50):
budgets are not going to deliver the kinds of revenues
that were expected or were hoped for, which means that
they really really need growth. Both from a fiscal point
of view, and the political point of view. So you know,
stranger things will have happened than a government like this
realizing that it needs to be quite bold. I don't
think they're going to do the huge constitutional changes that
(40:11):
I would love, and you know, I think we have
to wait for a future government to do that. But
in the meantime I could see this government just saying, look,
we need houses to get built. We're going to upseone
parts of London, or we're going to do the Cambridge
Extension to build an extra quarter of a million homes
in Cambridge, whatever it might be. I'm not super optimistic
about that. But gravity is a powerful for us and
(40:33):
it's not one that this government can bum.
Speaker 2 (40:34):
When we talk about productivity, which you've done quite a
lot of the lat half an hour. So one of
the things that we haven't talked about is the public sector.
And again it's not something that's been addressed by this
government so far, although obviously we have hopes, not high hopes,
but hopes that it will be addressed. Is there anything
you haven't You didn't really write about this and this report,
but is there anything you feel we can really do there?
(40:55):
And one of the shocking things when you look at
the numbers, is productivity having literally barely budged in the
public sector of a multi decade period, despite the extraordinary
technological games the rest of us have made over that period.
Can you see I'm pulling here back to your optimism.
What can you see you happening there?
Speaker 3 (41:14):
I so the optimist in me says that the money
that has been assigned to the NHS is going to
be used to kind of grease the wheels of reform.
If I am, if I'm optimistic, then then that's what
they're doing. I don't think we have any reason to
think that that what you do, but you know, maybe
maybe they will do.
Speaker 2 (41:35):
Between optimism and delusion, you.
Speaker 3 (41:37):
Know, well, and I'm not saying that is what's going
to happen. I'm saying it's plausible that that's the plan.
I think the alternative, much less optimistic reading, is that
they're making the same mistake that the List Trust government
made of doing the kind of fun bit first. In
the Trust's case, it was tag cuts. In this government's case,
it's spending money on public services and talking about, oh,
(41:57):
we'll do the supply side reforms later, rather than I think,
you know, taking your medicine of the supply side reforms,
getting a bit of growth, getting some sign that they're working,
and then rewarding yourself or rewarding your clients with more
money or with task cuts or whatever you want to do.
That's my kind of pessimistic take on what they're going
to do. I don't have a huge amount of insight
(42:18):
into what they're planning, so I don't know what they're
doing there. I think that public services do not seem
as if they are a high priority for reform from
this government. The thing that really worries me is that
I think that labor came into power thinking that the
reason the Conservatives failed was that they didn't know how
(42:40):
to use the civil service quote unquote. This was a
thing that I just kept hearing of the Tories saying
that they just don't know how to use the civil service,
and we know how to use the civil service. And
they went in They seemingly didn't have particularly well developed
plans about what they actually wanted to do in government,
and I think they expected that the civil service would
tell them what they needed to do, which is a
really a civil services job. You know, a civil service
(43:02):
can advise you on various parameters that you that you
set for it, but they're not there to tell you, well,
you must build one point five million homes and this
is how you're going to do it, and that's your
job's that's why we elect a government. So I think
the initial signs are that they don't seem to be
aware of how much reform the civil service needs and
public services more broadly quite the opposite. But it may
(43:25):
be that their experience of this and you know, they
have five years, so I've got they've got quite a
bit of time sort of wakes them up to how
much needs to change in terms of the British state.
And again, would I bet on it, No, I probably wouldn't.
I think the main reason to be optimistic about the
UK economy over the next few years is that labor
(43:46):
may need to do supply cyber reforms just to get growth.
I don't think they're going to do very much on
public services. They certainly don't seem to at the moment
want to do a public service reform, except maybe in
the NH. Yes, But like I say, five years is
a long time and it's hard to buck gravity's if
(44:08):
they keep putting more money into public services. They keep
giving pay rises to public sector workers and they still
aren't delivering improvements in service and in results. Then they
may have no choice but to demand reform and to
do this. But I don't think I will put money
on it.
Speaker 2 (44:24):
Well, we'll worry about riding out the private sector on
another podcast perhaps, But as we always say when we
discuss these things, our favorite Adam Smith quote, there was
a lot of ruin in a nation. Hopefully everything will
be fine. Sam, Thank you so much for joining us today,
Thanks for having me, Thanks for listening to this week's
Merin Talks Money. If you like us, show, rate, review,
(44:46):
and subscribe wherever you listen to podcasts, and keep sending
questions or comments that Merin Money at Bloomberg dot net.
Remember you may know more about some of these things
than we do. Let us know. You can also follow
me and John on Twitter or x I'm at mariners
w and John is John Underscore s Epic. This episode
was hosted by Me marin Somerset Web. It was produced
by Someasadi, production support by Moses and and special thanks
(45:09):
to Sam Bowman.
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:16):
Welcome to Meren Talks Money, the podcast in which people
who know the markets explain the markets. I'm Meren zum
zat Web. This week we're looking at why Britain has stagnated.
I don't think anyone's going to argue that Britain has
not stagnated. It has definitely been stagnating. But what can
we do to trigger or indeed to catalyze future growth
to change where we are. My guest this week is
Sam Bowman. Sam as the founding editor of the online
(00:39):
magazine Works in Progress, now part of payment processing platform Stripe.
He has been Director of Competition Policy at the International
Center for Law and Economics and an executive director of
the Adam Smith Institute. Now we have specifically asked Sam
on as a result of an essay that he co
authored called Foundations why Britain has Stagnated. There we go
(00:59):
that word again, which looks at the main problems that
are plaguing us, how we can fix them, whether it
is possible to fix those problems, and of course that
is the defining task of our generation and indeed of
this new government. So we are hoping that Sam will
be able to diagnose the UK's problems and tell us
how to fix them in a hurry. Welcome Sam, Thanks
(01:20):
for having me. Well, it's a great pleasure. You know,
we spend a lot of time on this podcast worrying
about productivity, worrying about infrastructure, worrying about housing, and in particular,
of course, worrying about the miserable real wages in the UK,
because we firmly believe on this podcast that money can
indeed buy you happiness. Now, I just wanted to set
(01:41):
the scene, which you do at the beginning of your essay,
and I imagine that an awful lot of our listeners
will have read this essay already, but for those that
have not, you've got a wonderful not necessarily diagnosis, but
description of the problem at the beginning. So I'm just
going to read a few bits of that so that
our listeners can get a sense of what it is
(02:02):
we're trying to talk about here. Okay, Ready, between twenty
twenty four and twenty twenty one, that's before Russa's invasion
of Ukraine, the industrial price of energy in the UK
tripled in nominal terms. We have significantly more expensive electricity
than many similar economies with almost identical population sizes. The
UK's under thirty million homes, France has thirty seven million.
(02:26):
And then there is this thing that I always find
really interesting. We complain a lot about second homes in
the UK ren but only eight hundred thousand British families
have second homes three point four million French families do.
If the world was a better place, our coastline would
be plastered, literally plastered with second homes. Then everybody would
have their own summer house. Back to Electricity pert Capital,
(02:47):
electricity generation in the UK is just two thirds of
what it is in France. Our electricity generation is closer
to developing companies such as Brazil and South Africa, home
of the regular blackouts. Britain's last nuclear power plant, and
this is really important and I want to talk about
this a lot of time. I'm a great fan of
the idea of let's go all in on the nukes.
Our last nuclear pad plant was built between nineteen eighty
(03:09):
seven and nineteen ninety five. The next one, Hinckley Point C,
is between four and six times more costly per megaworking
capacity than South Korean nuclear pals. We've talked about this
and that on this podcast before. It's ridiculous. Tramp projects
in the UK two and a half times more expensive
than French projects on a per mile basis. Now I
know all about this because I live next to the
(03:29):
tram line in Edinburgh. I have watched the cost of
building that kind of infrastructure in the UK in real time.
And by the way, trams to new Haven. If you
are listening, please, with the love of God, come and
pick up the rest of the rubbish. It's not finished yet.
I'm going to stop there because if I keep reading
for all these lists, I'm going to get myself terribly upset.
So here we are. We have this this problem, and
(03:52):
as you say, they're not disconnected observations. They highlight our
real problem. What you diagnos is our real problem. We
can't build anything. And now I'm going to hand in
for you. Is it really that simple? We can't build
anything and that's destroying our economy.
Speaker 3 (04:07):
Yeah, I think it is that simple. We point to
France as an example of a country that on first glance,
gets everything wrong. You know, we all know France has
incredibly high taxes, it has incredibly high regulation, to the
point where there's a cliff edge. If you look at
the size of French companies, French companies are lots with
(04:28):
forty nine employees, and then there's a huge collapse in
the number of French companies that have fifty employees, either
because companies just aren't refusing to grow because so many
regulations kick in at that point, or because they're effectively
committing fraud and under reporting the number of employees they have,
both of which are pretty bad. We know that the
French public hates any attempt to liberalize its economy. There
(04:51):
have been riots over raising the retirement age to sixty four.
I mean, imagine if we were talking about raising the
retirement age to sixty four in the UK. So, according
to all those kinds of metrics, and I think almost
anybody would agree, will hold back an economy, France should
be doing incredibly badly. But actually France is doing roughly
(05:12):
as well as we are. By some measures, they're doing
better than us. I think it's reasonable to say they're
doing about as well as we are. And the reason
we think that is is that even though they get
those things wrong tax regulation things like that, they get
the basics right. So the footprint of Paris has tripled
since the Second World War, whereas London has basically not
(05:32):
grown at all. As you mentioned, they build many, many
more homes. They have far more homes per person than
we do with about the same population size. They build
things like tramways much more cheaply than we do. They
build much much more high speed rail, much more cheaply
than we do, and all of those things are related.
There there's I think big, big misunderstanding or kind of
(05:53):
gap in the UK between costs and what you actually get.
So we always talk about, oh, well, you know, we
should build Hinckley Point C, which I agree with, we
should build HS two, which I don't agree with, we
should build crossrail, but never really recognize that the very
very high costs of those projects mean that we really
don't get to build more than one. If we get
(06:15):
that one at all, we should be in a situation
where we're able to build things like crossrail and other
metros much more cheaply at the price that for example,
Madrid built its metro which was less than a quarter
of the price of crossrail, so that we can have
more of them.
Speaker 2 (06:30):
So when we.
Speaker 3 (06:31):
Talk about the cost of nuclear power, we're not just
complaining that we have to pay high prices for it,
we're complaining that we don't get enough of it, and
so we don't have anything like the kind of energy
abundance that we want, and all of this adds up
to a massive shortfall investment. So the real origin of
writing this paper was a frustration in the run up
(06:53):
to and after the election that many commentators were kind
of finally beginning to catch up with people like new Marin,
people like me who've been talking about the UK under
investing for years. But the main conversation sort of thinks
of investment as this sort of abstract number, as investment
as measured by how many pounds we're putting into some
(07:13):
accounts somewhere or spending, when really what we care about
with investment is what we're getting out of it. How
many nuclear power plants are we getting, how many miles
of railway, how many miles of tramline, how many miles
of road, how many houses are we getting. And so
the fundamental point that we're making is that we underinvest
both in terms of costs are so high that it
wouldn't be economic to put much more money in than
(07:35):
we do and for the money we do put in,
we get much less out the stuff that we really
care about than we should and changing that is really
in our hands. Very very little of this is a
technological problem. It's almost all a political problem. And yes,
politics can be very difficult to fix, but politics should
be eminently fixable. And the fundamental argument that we make
(07:59):
is that the UK could be a much more prosperous
country without any change in technology, without any real change
in the constituency of the economy. We just need to
make it much easier to build the dances.
Speaker 2 (08:10):
Let's go back then and talk about the reasons why
everything costs so much more. Here I mean again, as
I say, watching the Edinburgh tram in real time and
watching the costs go up and up and up, and
comparing the cost per milder tramp projects elsewhere was a
genuine shoka. Genuine shoka. When you run through the list,
what of the reasons why the cost is so high?
(08:33):
What are the main ones?
Speaker 3 (08:34):
The three big things that I would point to are
number one the planning system. Some people have read the
paper as just being about the planning system, which isn't true,
but it's understandable that some people would interpret it that
way because the planning system that we have is a
relic of the Athlete government. You know, it's a relic
(08:55):
of post war socialism in the same way that the
NHS is, and I think it's similarly dysfunctional, dysfunctional in
a much more invisible way. So after the Second World War,
the Athleague government nationalized huge amounts of the economy, including
the way we use land, and it went from a
system where even the local council did have the power
(09:15):
to stop people from building things on their land. They
had to compensate you if they stopped you from building something,
so they had an incentive not to just block everything.
They could block things, but they would have to bear
some of the cost of blocking, and that meant that
pre the Second World War we had a much more
balanced system that allowed lots of things to be built.
(09:35):
And the nineteen thirties I think really should be famous
for being the most impressive decade of housebuilding that we
have ever had, almost entirely private house building.
Speaker 2 (09:46):
And nice houses too, crucially, really nice houses. Really anyone
would want to live in a thirty's house lovely.
Speaker 3 (09:53):
They're brilliant and much larger than houses that have been
built after the Second World War very affordable, often with
a lot of gardens. There was a huge, huge shift
in the British economy towards building nice, affordable family homes
in the nineteen thirties. It actually is one of the
reasons that we were able to avoid the worst effects
(10:15):
of the Great Depression, the global Great Depression, and one
of the reasons that we were able to rearm to
fight the Germans in the Second World War. It was
really as important as that. And if we were building
at the same rate today that we built in the
nineteen thirties, if you adjust for population, we'd be building
more than half a million homes a year. I mean,
we talk at the moment as if three hundred thousand
homes a year is really ambitious, and you know, if
(10:36):
we're really, really lucky, we might be able to get
three hundred thousand homes a year. I mean, that's chicken
feet compared to what we should be building and what
we have been building as a proportion of the economy
in the past. So shifting to the Atli government, what
I would argue is a socialist land use planning system
was really disastrous and you can see the number of
houses being built by the private sector collapse after that happens,
(11:00):
And what also happens is that where homes are built
becomes much less driven by market signals and prices and
much more driven by effectively central planning. And that's left
us with a situation where we don't build enough houses
every year, and the houses we do build are often
not anywhere near where people actually want them to be built,
and the consequence of that is that people can't move
(11:24):
to where good jobs are. So housing is not just
a problem of bills. It's not just a problem of
us having to spend more of our money on rents
and mortgages than we'd like to. It's also, and I
would say much more importantly, a problem of what jobs
people can do and where.
Speaker 2 (11:40):
And one of the things you say about that, let's
won't go back quickly. One of the things you say
about that is a major problem in London being the
lack of a middle income group. Only the very rich
and the very poor eleven social housing can afford to
live in London, which means that you know, if you're
a young or quite young person, you should, under normal circumstances,
be drawn to the city to enter productive work you want.
Speaker 3 (12:01):
Yeah, I mean during the during the Industrial Revolution, towns
of ten thousand people grew by more than ten times
in less than a century. I mean some towns, some
cities that we now think of as being great cities
like Sheffield went from being almost nothing at the beginning
of the Industrial Revolution to centers of world commerce and
(12:21):
world industry by the end of the nineteenth century. We
haven't had anything like that kind of ability to move
around and to migrate internally according to economic changes and
changes in economic reality, and I think that's one of
the really big reasons that we have been held back
in our ability to grow. And you're absolutely right. You know,
(12:41):
there are some places in London inner London boroughs that
have thirty to forty percent of the housing being assigned
to social housing, and that means that a lot of
the most valuable, most central housing stock is occupied by
people who are often not in work at all. If
they are in work, they're often in fairly low productivity jobs,
(13:04):
and they're occupying homes that could be occupied by people
who could be far more economically productive and grow and
drive economic growth much more. The result, as you've mentioned,
is this kind of missing middle where if you want
to live in kind of inner London, by which I
mean sort of zones three, two and one, you either
(13:27):
have to be very rich or very poor. Nobody in
the middle can really afford to live in central London
because they can't get into social housing and they cannot
afford private housing. I think that's a disaster. I think
socially and economically that's a disaster. And what's so frustrating
about it is that fixing that problem is really really simple.
(13:50):
London is one of the least dense major cities in
Western Europe. The nicest parts of London, places like Bloomsbury Belgravia,
are the densest part of London. You know, density doesn't
have to mean towers in the park. Density can mean
six story, eight story Jordan Edwardian terraces and building more
beautiful and livable housing like that would allow us to
(14:13):
allow many, many millions more people to move into London,
get better jobs, start more companies with each other, and
I think produce huge amounts of extra output and we're
just not doing it. And I think fixing that would
be a tremendously easy way to drive a lot of
economic growth, and to just get a lot of output
just building those homes would be a lot of economic
(14:33):
activity and a lot of economic outputs that we could
have tomorrow. We could begin working on that tomorrow if
we want such.
Speaker 2 (14:39):
Planning isn't just about houses. It's about transport and all
the other infrastructure that we need, and there we have
a major problem as well, don't we.
Speaker 3 (14:48):
Absolutely. I mean, the example that I find most frustrating
is this tunnel called the Lower Thames Crossing, which is
being built, or at least being proposed to be built
under the Thames to link up Kent and Essex. And
this will also link up England's two busiest seaports, so
there's a very obvious economic need for this. Now, the
(15:08):
planning application for this alone has run to three hundred
and sixty thousand pages and cost two hundred and ninety
seven million pounds, which for context, is twice what it
costs the Norwegians to actually build the world's longest tunnel.
Speaker 2 (15:22):
Okay, we now we need to reread that. The planning
documentation for the Lower Thames Crossing, which as you've just said,
is incredibly important, three hundred and sixty thousand pages going
on three hundred million so far. I'm going to repeat
this because it's so important. That is more than twice
as much as it costs Norway to actually build the
(15:43):
longest road tunnel in the world. We have spent more
on planning, double as much on planning alone than Norway
has spent on building something similar. That is off the scale. Shocking,
isn't it.
Speaker 3 (15:55):
It's astonishing And it's one of those figures that you
have to read it and you have to check it,
you know, you please. I encourage people who are sort
of rolling their eyes in this belief check the sources, please,
because it's so unbelievable and far fetched that it feels
like no reasonable person could possibly have allowed the system
(16:16):
to get this way. But it isn't just planning in
the case of infrastructure. It isn't just planning in the
case of housing either, but it's primarily planning for housing.
There are environmental assessments that slow down projects enormously cost
huge amount of money. To reopen a three mile train
trap between Bristol and Porto's Head, there is an eighteen
(16:37):
thousand page environmental assessment that cost thirty two million pounds
and to put that into context. The Jubilee Line extension
in the early nineteen nineties had a four hundred page
environmental assessment. So this is a recent phenomenon. This is
a new development that we are requiring environmental assessments like
this and of this cost and of this time, and
(16:57):
it's one of the really really major reasons we have
other Some people would call them checks. I would call
them hugead roadblocks to building things. Something called the Aarhus Convention,
which is an international convention that the UK as a
signatory to, which caps the cost of legal challenges to
infrastructure projects. So if you are a even if you lose,
(17:20):
so if you are a vexatious claimant you don't want
a tunnel being built near you, you can sue or
you can judicially review the project, and even if you lose,
the costs that you will have to pay to cover
the winners' costs are capped at between five and ten pounds,
so trivial, trivial amount of money. And this is something
(17:42):
that we have made stricter in the last seven or
eight years. But Theresa May government actually made this stricter
unbelievably and what we've created is a situation where legal
challenges to infrastructure are very easy and very cheap. There
are huge numbers of triggers for judicial reviews, there is
huge compliance cost with the planning system and the environmental
(18:04):
assessment system. And then on top of all of that,
the way that we pay for major infrastructure projects in
the UK has moved from being something that was devolved
and was either done by a private company as in
the case of most of our railroads, or by local
authority as in the case of many roads and tramways
during the era of the tram to a situation where
(18:26):
national government pays for things and oversees major projects, and
almost nobody in that project has an incentive to keep
costs down. And I think this is the real problem
that HS two had, where basically nobody in the decision
making pipeline had any incentive to keep costs down for
HS two and that includes the cost of appeasing objectives,
(18:48):
you know. I think there probably does need to be
some appeasement nim of Nimbi's in some cases for political reasons,
but there has to be a counter a counterweight to
that that says, if you appease these people too much,
and if you spend you know, billions of pounds on
unnecessarily tunneling loads and loads of miles of this line.
A quarter of HS two is supposed to be tunneled
(19:09):
to basically avoid NIMBIA complaints. Then you're going to go bankrupt,
you know, or the project is not going to happen,
or you will get fired, or your voters will vote
you out. And we have very few of those mechanisms
in place now for these projects. The only real mechanism
that we have is the Treasury coming in and saying, okay,
you know what, Actually, you spend too much money on this,
We're canceling this, or we're going to cancel some of this,
(19:31):
which is a very blunt to cancel.
Speaker 2 (19:34):
Are awful, that's not the correct incentive. Spend too much
and we don't do it. Not norful.
Speaker 3 (19:40):
Absolutely, we don't want a situation where the only two
options are extremely expensive infrastructure or canceled infrastructure. We want
there to be incentives. And you know, anybody who's worked
for any kind of on any kind of complex project
knows you need people at every step of the decision
making chain to be worried about costs. There is all
always going to be cost inflation, and you need people
(20:02):
with strong incentives to keep the costs down to make
decisions that say, you know, this isn't going to be
the fastest ty speed rail line in the world. This
is going to be the second fastest or of the
fifth fastest. You know, it's going to be a lot
better than what we've got, but it's going to be
not by it's not going to be gold plated. And unfortunately,
we just don't do that. So all of the problems
that we have with environmental assessments and with planning and
(20:25):
judicial reviews and stuff like that are compounded by the
fact that the incentives for the people who are actually
running the project don't factor costs in at all, really,
and I think that's the kind of underlying reason that
cost disease has grown so badly in infrastructure and things
like nuclear power as well, but infrastructure especially, And again,
we can change that. You know, we can evolve decision
(20:48):
making to people who are more accountable for the decisions
they make and who can go bankrupt, and we can
bring a more involved role for the private sector that
includes loss as well as profit. I think a huge,
huge problem that we've got is when we do these
sort of quasi private projects. There is still the kind
of government, a funder of last resorts that that insulates
(21:10):
the private sector from its cost increases. And we can
change that, but it will be challenging and it's not
straightforward to get there from where we are.
Speaker 2 (21:18):
Let's go back to nuclear energy that you just mentioned.
I mean, one of the really horrifying things happening in
the UK at the moment, in over the last decade
is this extremely fast rise in the cost and the
cost of electricity, and that you know, that's just a
destroyer of industry, isn't it, given that you know, like
economic activity is energy transformed one way or another. The
how you make the price of energy, the less likely
(21:39):
you are to get very much out of the other end.
Now we're supposed to be living in a world, we
keep being told with living in a world where our
huge investment into the renewable industry will make our electricity
cheaper and cheaper and everything's going to be absolutely marvelous.
That's not happening.
Speaker 3 (21:53):
Yeah. I have to say I actually went into this
paper feeling much more optimistic about intermittent renewables, wind and
solar than I do now, and in the process of
research and writing and speaking to people who are working
in this sector, I have come away with the sense
that really we are doomed if we think that wind
(22:16):
and solar are going to save us. And I think
part of this is because solar does seem very promising
in some parts of the world. You know, the cost
of photovoltaic solar cells is collapsing. You know, we're getting
to a point where solar cells, I mean, they're not
going to be quite free, but they're going to be
something approximating free. The problem is that you also need
storage in a place like the UK where we get very,
(22:40):
very overcast, whether as everybody knows, I mean possibly people
listening to this right now are listening to it in
a very overcast This is the this is the time,
the time of the year where solar is really not
very good. But you know, in south in the southwest
of the United States, in Spain, in North Africa, solar
may be very very problem. The trouble is it's just
(23:01):
not going to work here. It may have some role
to play, but we just cannot expect the base load
energy that we need, the base electricity production that we
need to come from solar and wind is just not
seeing anything like the kind of cost reductions that solar
is see.
Speaker 2 (23:16):
Well, you talked about there being a system level cost
that people don't really think of, and there are all
things actually that we've talked about on this pod before.
The need for transmission lines to connect generation to households
and industry. And in the old days, you had a
few large power stations, and the transmission network simply connected
those large power stations to the communities where the power
was needed. But now if you have the power being
developed in loads and loads of remote places all over
(23:38):
the country, you have a very very different setup. And
there's that cost, and then there's the costs of the
grid balancing where you have to match up this intermittent
energy with the needs. And then of course there's the
cost of backup capacity. These are the three things that
you list, and all these things are not necessarily always
included when we look at the cost of renewals, and
if you do include them, you get slightly differ pature.
(24:00):
Is that fair?
Speaker 3 (24:02):
Huge? Yeah, and completely, And I think the mistake that
some people make is looking at wholesale costs, which are
only about thirty percent of final bills. Incidentally, wholesale costs
are really a significant but not overwhelming fraction of what
we pay for when we pay for electricity. The rest
(24:24):
is these kinds of system level costs, and what we're
doing with renewables and really with nuclear as well, is
moving from a world where marginal wholesale costs are the
most important thing to worry about, which is the case
with gas, which is the case with coal, which is
the case with oil, to a world where fixed costs
are things that we really care about. You know, the
(24:45):
marginal cost of a wind turbine is very low, totally agree,
But the fixed cost of a wind turbine, once you
include all of the system level costs you're talking about,
isn't quite high. And once you include the need to
produce electricity when the wind isn't blowing, and produce electricity
and travel transport electricity from where the wind turbine is
to where people actually need it, then the costs become
(25:06):
quite significant. And I think that's the way that we
make sense of this apparent paradox where we've been moving
from a world where you know, where we've been building
lots and lots of renewables, which you know do indeed
have very very low the wholesale costs when they're producing energy,
but we have to pay for them to have been
(25:27):
set up in the first place. You know, we have
talked about the environmental levees, things like the renewables obligation
contracts for difference, these are the contracts and subsidies that
are explicit that we have set up to support renewables,
and they are important. You know. They now exceed ten
billion pounds a year, but they're not anywhere near the
(25:48):
whole story. And even if we weren't on the hook
for those, the cost of renewables I think would still
be prohibitive. At the beginning of November, the energy mix
for the first week was majority gas. And this is
in a context where we've already built decades. We've already
built more of a wind and solar for more than
a decade. We are supposed to be able to move
(26:10):
to a decarbonized electricity grid, or the government's aim is
to move to a decarbonized electricity grid by the end
of the decade. I just do not believe that that
is possible with wind and solar, and if I'm wrong,
please you know, I very much hope my role that
I just don't think that that's going to happen. Think
the thing that we point to, and that the event
(26:31):
that we point to that is a model that we
may be able to follow is France's nuclear roller in
the nineteen seventies and the nineteen eighties, which was state led.
Probably wasn't the way I would have favored it at
the time, and I would hope that we could do
a non state leaded version of it, but managed to
decarbonize the French economy far far earlier than or decarbonize
(26:52):
the French electricity grid at least far far earlier than
any other Western European country, and did so without really
having decarbonization in mind. And now that the rest of
Western Europe is I think trying to decarbonize the wrong
way with intermittent renewabals rather than nuclear. France has become
quite an important energy exporter. We are quite reliant on
(27:13):
French nuclear energy when the windows are blowing and when
the sun isn't shining. I think that it would be
a mistake to continue that state of affairs, and I
think nuclear is a clean form of electricity that we
should be looking to the problem is that it's so expensive.
The problem is that we are building nuclear power plants
for vastly more than even Winden solar cost us.
Speaker 2 (27:36):
And it doesn't have that expensive does it. I mean,
one of the numbers that I keep killing out is
that I saw somewhere and you can tell me if
this is correct or not, that we made seven thousand,
seven thousand design adjustments to the Hinkley plant against the
design that I think work perfetly well in France, and
each one of those adjustments comes with cost absolutely.
Speaker 3 (27:56):
I mean, my favorite cost is the underwater megaphone to
scare away fish from the kind of cooling system the
reactor at Hinkley Point C needs to draw in seawater
to cool itself down, and some fish would be killed
in the process, not in any way that would be
dangerous to the reactor, but just some fish should be
(28:18):
I think, sucked into a grid and killed. And some
of these fish, you know, a few hundred of these
fish would be from rare and protected species, and so
the reactor, the EDF was instructed to come up with
a way to stop these fish from being sucked in.
Their solution was to build an underwater megaphone. That would
(28:39):
play loud noises that would scare fish away. And amazingly,
doing this will actually increase the risk to human life
of the reactor because the megaphone has to be maintained
by divers who undertake some risk in doing this. So
in order to protect fish, we have not just increased
(29:00):
the cost to the project, we've actually increased the danger
to human life. And again this is really for a
few hundred fish.
Speaker 2 (29:07):
Of this we know what that costs per fish in
terms of protection.
Speaker 3 (29:13):
I don't know off the top of my head what
that costs. I'm not sure the number is actually public
for how much this particular adjustment costs.
Speaker 2 (29:21):
So I'm not sure if we don't anyone, If anyone
knows the value that the UK state places on the
life of every fish, please do right in and let
us know.
Speaker 3 (29:31):
But I mean, it is really extraordinary if you look
at what we built nuclear for in the eighties and
as late as the nineteen nineties, we built Size Well
B for about well less than half the price that
we're building Hintley points C for and about two thirds
of the price that we are estimated to build Size
Well SEE. Although I will confidently predict that size. Well, see,
(29:53):
will increase in costs once we start building it for things,
for the reasons that we're talking about that there is
no final decision on a project like nuclear. You keep
having to go back, you keep having to make adjustments,
you keep having to do compliance and kind of this
dance with the regulator and with the environmental the environmental regulator,
(30:13):
and it means that costs just drive up and up
and up and up. Now we know both from history
and from international examples that it doesn't have to be
this way. South Korea builds nuclear reactors for about a
quarter of the price that we build them in South Korea,
and it has committed to building new reactors in the
Czech Republic for about half the price that we're building.
(30:36):
So a very simple solution would be to contract with
the South Korean Energy Authority KEEPCO to do this for us.
I think a more exciting approach, you know, I think
we should probably do that. I think a more exciting approach,
but actually just fixing our regulation to rebuild the UK
nuclear industry, which could be world leading. You know, there's
(30:56):
no reason that we should have to resort to South
Career to build our nuclear reactors. We have built many,
many good nuclear reactors. We built the world's first nuclear
reactor and by the by as late as the nineteen sixties,
we had more nuclear reactors than the rest of the
world put together. Or you know, in existence in Sheffield
is a company that builds some of the effectively a
(31:16):
world leading nuclear reactor casing company that's still operating, still exporting.
It's you know, it's a company that not many people
know about, but is something that I think we should
be quite proud of. We should be reviving that kind
of industry by making it much easier to build, making
it much more certain to build, and ultimately making it
much cheaper to build. And it will have the double
(31:37):
benefit of yes, we'll be able to provide the nuclear industry.
Yes we'll be able to build the low carbon energy
that we need for an actually affordable price. And actually
a triple benefit is that in getting much cheaper electricity,
other English, other English industry, British industry will be able
to come back. So we know the industry is incredibly
(31:59):
sensitive to the price of electricity. It's obvious that it
will be and as we decarbonize, we're going to get
more and more dependent on the price of electricity being
low to have industry. I think it's quite important that
we do that. And I think that whatever discussions and
debates people want to have about industrial policy, and that's great,
but the best industrial policy in the world is not
going to work for you if you don't have electricity
(32:21):
costs that are competitive with South Korea, competitive with China,
competitive with India, and right now we are way way
way above them.
Speaker 2 (32:28):
Okay, let's talk about optimism. Should we try that? You
try that, Let's do it. And one of the things
that you stress in your importance I think is very
valuable is that the value of the UK's institutions are
you know, our legal system, our parliamentary system, all these
(32:49):
things that we have that are still reasonably solid that
we still believe in. And of course we have our
amazing financial industry. We have English which we can't dismiss,
and we have a a great time zone, we have
some wonderful advantages. We have very solid base right that
still exists, not going anywhere. What you're feeling about fixing
(33:10):
the rest, I mean our most recent budget. Flicking through
it and looking at it, I'm not entirely sure that
Rachel reeves had read your essay quite as carefully as
the rest of us.
Speaker 3 (33:23):
Well. I the reason that I am optimistic, I think
there are two main reasons. One is that things really
are getting very very bad things. Really every year that
goes by that we don't see not just normal growth.
I mean, we've had so much stagnation since the mid
(33:43):
two thousands that we should be seeing quite rapid catch
up growth, both catching up with the US the kind
of economic frontier, and just catching up with the trend,
catching up with what we look like we should have
been we should have been on for prior to the
late mid two thousands. So every year that goes by
that we experience stagnation, I think it becomes harder and
(34:06):
harder to deny that we have a really, really big problem.
And I think people do recognize, and the response to
this paper I think shows that people really do recognize
that the big problem is that we're just more building things.
We're not allowing things to be built. You know, the
price of a house in London is very very high.
There is a huge amount of demand to live in
somewhere like London, Oxford, Cambridge. It isn't that there isn't demand.
(34:27):
If if it was really cheap to live in London
and we would still stagnating, then I'd be worried because
I would think that we may have nothing going for us.
You know, we may be trying to jump start an
entire economy here. Really we're just trying to meet demand
that is already there. So that's one reason I think
people are becoming more and more aware of the problem.
(34:48):
The second reason is that a lot of the time,
the answer, I think is giving more control at a
much more local level and taking control away from national
level quangos and national level kind of independent agencies that
we've set up, I think in a quite a misguided
way to try to fix problems, in my opinion, are
(35:10):
not really the big problems that we've got. So I
think that, for example, if local councils could make decisions
about nuclear power permitting rather than the environmental agency, rather
than the rather than the amount of involvement that the
nuclear regulator has. We should be checking for safety. We
should be checking to make sure that the nuclear reactor
(35:31):
is safe, but we shouldn't be worried about whether the
nuclear reactor is going to kill a few.
Speaker 2 (35:36):
Fish or ruin someone's view, yeah, And.
Speaker 3 (35:39):
The reason that we should be optimistic is that local
councils should have a really strong incentive to allow things
like that to be built in their areas because they
bring jobs, they've bring built business rates, payments. There are
all sorts of reasons that you should want these things
to be built in your area. And historically it was
the case that you would want these things to be
(35:59):
built in these in your area. It's a fairly recent phenomenon.
It's a post war phenomenon that local councils do not
want prisons in their area. They don't want the kinds
of infrastructure that the country wants because we do not
allow them to retain the business rates that those projects
used to pay. Fixing that I think should be quite easy.
And once we fix that kind of incentive, and you know,
(36:21):
I mentioned earlier local councils used to have a really
strong incentive to not block development because they would have
to pay for it. I think that's what kind of
mechanism we want to go back to, and we want
to give them incentives to allow development. And I think
once we do that, combined with devolving decision making to
that kind of level, we will fix a lot of
the incentives problems that exists. I think it's quite striking
(36:44):
that during the era of the tram in the UK,
when you know, we had the first major tramways in
many cities, we had the first overhead tramway and lead
overhead powered tramway and leads. Many of these tramways were
not run by private companies. They were run by the
local authority for profit and they were used by the
local authority to generate money that they could then spend
on other projects. I think we have a pretty good
(37:06):
tradition here that local government can actually allow things to
be built and build things themselves if we give them
the right incentives to do so. So I'm quite optimistic
about that, I think kind of Secondly, the other thing
that we should be doing is giving Parliament much more
power over national level projects that get built. Again, historically,
when we built railways in the nineteenth century and right
(37:28):
up until the Second World War, I believe it wasn't
an independent quango that made the decision about what got built.
It would be a private operator would have a proposal.
They would say, you know, we want to build this
railway from here to there. They would bring it to
a select committee in Parliament. The select committee would make
a decision. They would then pass a build that would
protect the project from vexatious lawsuits and things like that,
(37:49):
and it would get built and you have a privately
owned operatives and managed railway. I think there is a
lot of infrastructure that could be built by that mechanism.
It would be it would bring power over these kinds
of projects back to democratic decision makers, away from I think,
(38:09):
very very badly incentivized kind of independent bureaucrats. And that's
the kind of underlying change we need to the country
that I think probably could happen. It certainly won't be easy,
and it certainly will be quite a significant change in
the way we do things, but it would be going
back to the way we did things when things worked
really well and when we build block things in this country.
(38:30):
So it's possible. I think there's a growing demand for it,
and I think what's really optimistic about it is that
it works with the grain of the history of British
democracy rather than against them.
Speaker 2 (38:40):
I agree with you. The only thing I'm concerned about
is that I'm not sure that I'm seeing in this
government and appetite for understanding that appetite for decentralizing and
appetite for moving away from x non democratic quang goes
back to parliament and appetite for sending power back to councils.
And I don't see that. I've fascinated to know that
(39:03):
you do.
Speaker 3 (39:04):
I don't see it in this government. I have to admit.
I think that it may be that this government fills
the need for growth such that it just does the
kind of nuclear option of calling in projects centrally approving
them and just making them happen. You know, they've done
this with a few renewables projects. I don't yet have
(39:27):
a sense that they're going to do this for things
like nuclear, but they might. I think that they have
nailed their colors to the mass of growth so much
that they need growth kind of politically they are they
are going to be kind of humiliated if they don't
get growth. And fiscally, you know, it's looking increasingly likely
that the tax the tax rises that were in the
(39:50):
budgets are not going to deliver the kinds of revenues
that were expected or were hoped for, which means that
they really really need growth. Both from a fiscal point
of view, and the political point of view. So you know,
stranger things will have happened than a government like this
realizing that it needs to be quite bold. I don't
think they're going to do the huge constitutional changes that
(40:11):
I would love, and you know, I think we have
to wait for a future government to do that. But
in the meantime I could see this government just saying, look,
we need houses to get built. We're going to upseone
parts of London, or we're going to do the Cambridge
Extension to build an extra quarter of a million homes
in Cambridge, whatever it might be. I'm not super optimistic
about that. But gravity is a powerful for us and
(40:33):
it's not one that this government can bum.
Speaker 2 (40:34):
When we talk about productivity, which you've done quite a
lot of the lat half an hour. So one of
the things that we haven't talked about is the public sector.
And again it's not something that's been addressed by this
government so far, although obviously we have hopes, not high hopes,
but hopes that it will be addressed. Is there anything
you haven't You didn't really write about this and this report,
but is there anything you feel we can really do there?
(40:55):
And one of the shocking things when you look at
the numbers, is productivity having literally barely budged in the
public sector of a multi decade period, despite the extraordinary
technological games the rest of us have made over that period.
Can you see I'm pulling here back to your optimism.
What can you see you happening there?
Speaker 3 (41:14):
I so the optimist in me says that the money
that has been assigned to the NHS is going to
be used to kind of grease the wheels of reform.
If I am, if I'm optimistic, then then that's what
they're doing. I don't think we have any reason to
think that that what you do, but you know, maybe
maybe they will do.
Speaker 2 (41:35):
Between optimism and delusion, you.
Speaker 3 (41:37):
Know, well, and I'm not saying that is what's going
to happen. I'm saying it's plausible that that's the plan.
I think the alternative, much less optimistic reading, is that
they're making the same mistake that the List Trust government
made of doing the kind of fun bit first. In
the Trust's case, it was tag cuts. In this government's case,
it's spending money on public services and talking about, oh,
(41:57):
we'll do the supply side reforms later, rather than I think,
you know, taking your medicine of the supply side reforms,
getting a bit of growth, getting some sign that they're working,
and then rewarding yourself or rewarding your clients with more
money or with task cuts or whatever you want to do.
That's my kind of pessimistic take on what they're going
to do. I don't have a huge amount of insight
(42:18):
into what they're planning, so I don't know what they're
doing there. I think that public services do not seem
as if they are a high priority for reform from
this government. The thing that really worries me is that
I think that labor came into power thinking that the
reason the Conservatives failed was that they didn't know how
(42:40):
to use the civil service quote unquote. This was a
thing that I just kept hearing of the Tories saying
that they just don't know how to use the civil service,
and we know how to use the civil service. And
they went in They seemingly didn't have particularly well developed
plans about what they actually wanted to do in government,
and I think they expected that the civil service would
tell them what they needed to do, which is a
really a civil services job. You know, a civil service
(43:02):
can advise you on various parameters that you that you
set for it, but they're not there to tell you, well,
you must build one point five million homes and this
is how you're going to do it, and that's your
job's that's why we elect a government. So I think
the initial signs are that they don't seem to be
aware of how much reform the civil service needs and
public services more broadly quite the opposite. But it may
(43:25):
be that their experience of this and you know, they
have five years, so I've got they've got quite a
bit of time sort of wakes them up to how
much needs to change in terms of the British state.
And again, would I bet on it, No, I probably wouldn't.
I think the main reason to be optimistic about the
UK economy over the next few years is that labor
(43:46):
may need to do supply cyber reforms just to get growth.
I don't think they're going to do very much on
public services. They certainly don't seem to at the moment
want to do a public service reform, except maybe in
the NH. Yes, But like I say, five years is
a long time and it's hard to buck gravity's if
(44:08):
they keep putting more money into public services. They keep
giving pay rises to public sector workers and they still
aren't delivering improvements in service and in results. Then they
may have no choice but to demand reform and to
do this. But I don't think I will put money
on it.
Speaker 2 (44:24):
Well, we'll worry about riding out the private sector on
another podcast perhaps, But as we always say when we
discuss these things, our favorite Adam Smith quote, there was
a lot of ruin in a nation. Hopefully everything will
be fine. Sam, Thank you so much for joining us today,
Thanks for having me, Thanks for listening to this week's
Merin Talks Money. If you like us, show, rate, review,
(44:46):
and subscribe wherever you listen to podcasts, and keep sending
questions or comments that Merin Money at Bloomberg dot net.
Remember you may know more about some of these things
than we do. Let us know. You can also follow
me and John on Twitter or x I'm at mariners
w and John is John Underscore s Epic. This episode
was hosted by Me marin Somerset Web. It was produced
by Someasadi, production support by Moses and and special thanks
(45:09):
to Sam Bowman.
Host
Merryn Somerset Webb
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