March 26, 2025 • 14 mins
UK Chancellor of the Exchequer Rachel Reeves has delivered her Spring Statement, and Bloomberg Chief UK Economist Dan Hanson and senior reporter Phil Aldrick join host Allegra Stratton to share their assessment. Aldrick posits that it wasn't "quite the horror show that some people were fearing" because restoring Britain's fiscal headroom didn't require severe public service and welfare cuts. But Hanson notes that even so, she's left herself little room to manoeuvre for the unexpected.
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio News. Welcome to in the City.
Each week we unpack a story that's crucial to the
world's financial capitals. I'm Allegristratton. Chancellor Rachel Reeves has delivered
her Spring statement, and in Reeves's address to Parliament, she
said her task is to secure Britain's future in a
(00:24):
world that is changing before our eyes.
Speaker 2 (00:27):
Mister speaker, the job of a responsible government is not
simply to watch this change. This moment demands an active government,
a government not stepping back, but stepping up.
Speaker 1 (00:40):
So this week on the podcast, we are looking at
whether the government's effort to step up is enough to
secure the UK economy and whether Britain now has a
financial plan that factors in the unstable global outlook.
Speaker 3 (00:54):
Welcome to the City of London.
Speaker 2 (00:56):
The City of the City, The City of London.
Speaker 4 (01:01):
Again between and the financial heart of the country.
Speaker 3 (01:11):
The City, the City.
Speaker 1 (01:13):
Welcome to in the City, then clear of the doors.
I'm joined by Chief UK Economists with Bloomberg Economics Dan
Hansen and senior Economics reporter Phil Aldrich. And for those
that you can't see, which is everyone, They've both been
on their mobiles.
Speaker 4 (01:32):
Trying to work out what's going on.
Speaker 1 (01:36):
Swopping and sharing.
Speaker 3 (01:37):
Did you see this?
Speaker 1 (01:37):
Did you see that? Okay, I thought there was a
mini spring in the spring statement. I felt like Rachel
Reeves seemed quite chipper.
Speaker 3 (01:47):
Yeah, Phil, Yeah, I think it definitely was not the
sort of gloomy show that we thought it was going
to be. The growth forecast from the OBR was largely unchanged.
Right at the end of the forecast. In their tables
they suggest it's well, they say it's the economy is
slightly bigger. They did this dynamic scoring on the planning reforms,
(02:07):
which wasn't predicted. They say that by the end of
the parliament you'll be getting zero point two percent permanent
growth as a result of these deregulation early deregulations of
the planning system. They say that adds one hundred and
seventy thousand homes you get to one point three million,
which is not far off their one point five million
home target. So those are really positive things for the markets.
(02:28):
The big thing was her headroom had disappeared was actually
it was pretty nasty. They went from nine point nine
billion down to four point one billion deficit. The whole
lot she's made the whole lot back and it didn't
require quite such severe public service cuts and welfare cuts
as were expected. There's been a bit of jiggery pokery
around the changing from current spending that's the day to
(02:50):
day staff to casual spending. Yeah, so that's some largely
from aid to defense, which is relatively painless compared with.
Speaker 1 (02:58):
Nasty Tree when you wrote about didn't you.
Speaker 3 (03:00):
Yeah, yeah, trickery wizardry exactly. But ultimately it hasn't been
quite the horror show that some people were theory.
Speaker 1 (03:08):
I mean, we're all in Bloomberg HQ, not in the
Commons chamber, and I suspect we'll hear quite quickly from
our reporters who will be able to see the looks
on Labor MP's faces, because that was quite striking when
you see the doughnut around the Chancellor, you've got the
PM and then the cabinet Minster's either side, and obviously
their poker face. But it will be interesting to learn whether,
as you say, the mood from the back benches is
that could have been worse or goodness me, even though
(03:30):
it wasn't as bad as we thought, it's still going
to hurt in our mailboxes and in our constituents hearts
and minds. Dan, you're still are you writing? You texting?
Are you?
Speaker 4 (03:41):
I am looking at the OBR documentary, not texting my wife.
Speaker 1 (03:45):
I wasn't going to suggest that, but you would get
to grips with it.
Speaker 4 (03:48):
I think feel something up really nicely. I think when
I listen to it, it feels like the OBR hand
is her a bit of a gift. To be honest
with you, I think it's interesting your point about the
politics of it. If you look at where the cuts
of land is in terms of getting the headroom back,
it's really all welfare. There's a bit on departmental spending.
We thought there would be something there, we thought would
(04:09):
probably be a little bit more, but actually it's all
on welfare and that's really interesting. And I mean the
other thing, I'm not sure how to interpret it at
the moment, but just getting yourself back to the headroom
you had exactly to the decimal point that you had
in October. It feels very much like I'm just gonna
do the absolute minimum possible here to get myself down
to the autumn, which is the next staging post. That
(04:31):
was my takeaway and I think she would have initially thought,
I'm going to have to do a lot more here
on departmental spending. We're going to have the usual questions
about fiscal fiction. Actually there's been pretty much nothing done
on it. As a small amount of change in departmental spending,
but it's not very much. So I think the general
takeaway is that she has been given For me, at least,
(04:52):
she's been given a bit of a gift from the OBR.
I'm not going to sort of start we can get
into this if you want, but whether it's delayed the
tough choices, whether the OBR might come back in the
autumn and say, look, the economy isn't as strong as
we thought. There's a box in the OBR document about
tariffs and the impact that could have on the economy.
So all of those things taken together, I think she's
on the minimum she needed to get through the event.
Speaker 1 (05:12):
For me, the head room being exactly the same is
interesting because I think it was criticized that it was low,
and it was low back in November, and then to
go for the same low number. Is it she's got
away with the minimum she can do to lessen the
political pain, or is it she hasn't learned that lesson
and actually there'll be another physical event in six months
(05:33):
time that could be yet more painful, and we'll find
out in the days ahead, which you know, when we
get the briefing from the Chancellor's team on why they've
made that judgment. But before we sort of look look ahead,
you keep saying, the OBI has been very kind to her.
They've been kind in being dynamic about how they think
planning reforms will in the end deliver the growth that
the government wants.
Speaker 4 (05:51):
Yeah, I mean there are a couple of bits of it,
so that there's that bit of it which we weren't expecting.
And we spoke on the podcast previously about all of
these policies, said it in that speech. They take a
bit of time and you've got to be patient. And
sort of point two on the level of the economy
after five years is it's not very much. It's peanuts.
You know, it's a rounding error on growth and things
like that, so it's not very much. So she was
(06:12):
sort of given a bit of a boost there and
that actually because of that, it meant that the savings
she needed to fund and find in terms of spending
cups were smaller because if the economy is bigger, it
generates more tax receipts. That's a good news story for her.
And the other side of it is we've spoken about
this before as well, is that the Ober is at
the top end of the pack, if not at the
(06:33):
top of the pack, when it comes to growth forecasts,
and that stems from a view about productivity growth. And
they've sort of made a point in their document that
they think the level of productivity will be a bit
lower than they thought in October. But actually if you
look at the growth numbers, they're still pretty strong. You're
not shy of two percent in most years, and that
given recent.
Speaker 3 (06:54):
History, will take that absolutely.
Speaker 4 (06:57):
Absolutely, given recent history, we would definitely take that relative
to the consensus vieme, certainly relative to our view. So
I think when you go back to this point of
moving to the autumn, we'll see what the OBR says.
They'll have a briefing as well, but whether they're going
to have sort of look at this in more detail
over the next six months or so, that's going to
be something very important to watch as of course, is
(07:17):
what's going on globally, particularly with the tariffs.
Speaker 1 (07:20):
What is the tariff box saying.
Speaker 3 (07:21):
So it's basically I think I can't remember the specific
but it's basically saying, if we get if you get
twenty percent, that was, if you get twenty percent of
tariffs across the world, as Trump is threatening, that'll knock
one percent off GDP and all her headroom is gone,
just like that. So Trump will eliminate her headroom again.
But then there's other mechanisms as well. They say, should
our productivity forecast be changed and lowered, then you know
(07:44):
she loses her headroom and more. There's a couple of
other warnings in there. I think again there's a debt,
interest risk, et cetera. So they are pointing out again
that this is this is a tight margin for sort
of insurance that she's left herself.
Speaker 4 (07:57):
That's the point is it doesn't And of course it
matters to people's lives whether these things happen, but purely
in terms of setting fiscal policy, if you set yourself
or you set aside a big buffer, then whether the
OBR downgrades productivity forecast, whether the Trump hits US with tariffs,
you know you're safe. You're not having to go after
(08:17):
and constantly rebuilding and every physical event is just this
obsession with the headroom. If you have a broader fiscal
strategy where you set yourself some money aside, and of
course you'll come back to me and you'll say, well,
they can't. They haven't got the options for that. They
can't raise taxes, spending two time, they won't. They were welfare, welfare,
welfare cut. I'm just like heading over the past, but
(08:38):
welfare cuts. They've not gone too far, but they've already
done that.
Speaker 1 (08:41):
Uctually, she doesn't have.
Speaker 4 (08:43):
You're caught between the politics of it, which goes I
think is about the nine point nine where we sort
of started, and that there's just no political appetite to
go further than that because the choices it involves, and
you've caught on the other side of all these potential
economic shocks that could hit you. And I guess the
path that they think is the path of least resistance
is that they do increment. They take the government takes
(09:04):
incremental action at every fiscal event, which is not in
an ideal world, that's not how you'd set fiscal policy.
Speaker 1 (09:10):
I mean, you'd like to think she's got a hail Mary,
she's got something she can see that she can do
between now and the autumn in order to make that
not be the case. Phil's raising his eyebrows. The reason
I'm saying that is because we all know that, because
of the head round being so small, the story will
start up tomorrow or right now, what will she do?
What taxes will she increase? And that isn't just oh,
(09:32):
how annoying the British press is so annoying, though obviously
she will be starting to think that. But but it's
also about confidence, and it's also that people make businesses,
making families, making choices about the future, which she needs people,
you know, to be quite kind of bullish about.
Speaker 3 (09:46):
That's definitely the risk is that we get back into
that terrible cycle of like what is she going to
do next? Then you get up with the policy uncertainty.
The fact this time, though, the positive for her this
time is that the markets have actually responded positively and
actually imediately. After the budget in October there was a
big shift up in borrowing costs, which effectively had wiped
her whole headroom out within days. The reaction this time
(10:08):
has looks like it's going the other way. So you know,
if there is a hail Mary. It may be that
they that the markets are beginning to swing behind the
labor agenda and that could help her. Obviously, these the
other things out there in the world that you just
can't ever plan for this stuff, which is why you do.
You should have twenty five billion of headroom because it
(10:29):
gives you enough to absorb any shocks. But if they
haven't done that, so outside of you know, something external
which they'll blame on the world is changing as is
now the repeated mantra, this appears to have been received
a lot better than October.
Speaker 1 (10:43):
You mentioned that the labor agenda in the market swinging
behind it. You guys did this amazing piece of work
that was in one of our podcasts recently about that's
the schoolcard, we'll call it, you call it, and you
gave numbers out of ten for each area, and obviously
seven out of ten you gave to planning. And today
the OBR has kind of done the same.
Speaker 3 (11:02):
Yeah.
Speaker 4 (11:02):
Absolutely, I mean that was we've been saying for a while.
Of all the things that labor have they've announced, I personally,
I think they've announced a lot of positive things. So
investment spending, they've lifted that, so it's at least flatter
as a share of GDP. It was falling as a
share of the GDP before Planning reform. You know these
you obviously have to take it, as we said in
the scorecards, slightly with a pinch of salt. In the
(11:23):
getting up to three hundred thousand homes a year is
basically doubling the number of homes that are built every year.
So it's quite a big, big number and a big move. Nonetheless,
the economic benefit from it, which the OBR have recognized,
I mean, it's not huge. Point two percent on the
level of GDP isn't massive, but it's not nothing. And
I think the OBR, going back to your point your
(11:45):
questions fill about questions in Downing Street about the OBR.
Are they getting people's backs up? I think they are.
They have certainly lowered the bar for scoring policies like
this and putting it into the forecast, so things like
planning reform, things like labor supply.
Speaker 3 (11:59):
So that's new as well, it has.
Speaker 4 (12:00):
Been you over the past few years. So Jeremy Hunt's
Knicks cuts they scored positively. Obviously, the flip side of
the rise in employer national insurance in October was that
they scored that negatively for the economy, but capital expenses
they scored that positively, sort of in the medium term.
It's a long term and they hadn't been doing that.
So I think they're listening, certainly to the criticisms that
have been made. But as I said at the start,
(12:22):
these things do take time. But I think the planning
reform thing, yes, of all the things that have been announced,
that's if you're trying to get out of the sort
of malaise and thinking about that's the most exciting policy
for me that the labor have announced. They've come out
and they seem pretty serious about making in roads into
the planning system.
Speaker 1 (12:39):
As well phil other bits of the schoolcard. Would you
make any changes in the quite brutal numbers you go
some of the other bits of the agenda.
Speaker 3 (12:46):
I suppose we could raise the labor market. We had
score for their efforts to get employment up to eighty percent,
And you could say that some of the welfare changes
may deliver some change, some positive change. And I think
the OBR has one of the one of the generous
gifts that, as Dan put it, that they've given them
(13:06):
as a sort of better labor market outlook. So they're
just saying that the picture is generally a little bit
more positive there, so maybe we could go from one
to three.
Speaker 1 (13:17):
I suspect that's a pretty good place to leave it.
And you both have to write now, don't you try
to hear all right? Dan Hansen, Phil Aldric, thank you
very much, thanks for listening to this week's In the
City from Bloomberg. This episode was hosted by me alegra Stratton.
It was produced by Summersadi and Moses and Am Sand
(13:40):
designed by Blake Maples. Brendan frantzis Newnham is our executive producer.
Special thanks to Dan Hanson and Phil Aldric. Please subscribe, rate,
and review wherever you listen to podcasts.
Bloomberg Audio Studios, Podcasts, Radio News. Welcome to in the City.
Each week we unpack a story that's crucial to the
world's financial capitals. I'm Allegristratton. Chancellor Rachel Reeves has delivered
her Spring statement, and in Reeves's address to Parliament, she
said her task is to secure Britain's future in a
(00:24):
world that is changing before our eyes.
Speaker 2 (00:27):
Mister speaker, the job of a responsible government is not
simply to watch this change. This moment demands an active government,
a government not stepping back, but stepping up.
Speaker 1 (00:40):
So this week on the podcast, we are looking at
whether the government's effort to step up is enough to
secure the UK economy and whether Britain now has a
financial plan that factors in the unstable global outlook.
Speaker 3 (00:54):
Welcome to the City of London.
Speaker 2 (00:56):
The City of the City, The City of London.
Speaker 4 (01:01):
Again between and the financial heart of the country.
Speaker 3 (01:11):
The City, the City.
Speaker 1 (01:13):
Welcome to in the City, then clear of the doors.
I'm joined by Chief UK Economists with Bloomberg Economics Dan
Hansen and senior Economics reporter Phil Aldrich. And for those
that you can't see, which is everyone, They've both been
on their mobiles.
Speaker 4 (01:32):
Trying to work out what's going on.
Speaker 1 (01:36):
Swopping and sharing.
Speaker 3 (01:37):
Did you see this?
Speaker 1 (01:37):
Did you see that? Okay, I thought there was a
mini spring in the spring statement. I felt like Rachel
Reeves seemed quite chipper.
Speaker 3 (01:47):
Yeah, Phil, Yeah, I think it definitely was not the
sort of gloomy show that we thought it was going
to be. The growth forecast from the OBR was largely unchanged.
Right at the end of the forecast. In their tables
they suggest it's well, they say it's the economy is
slightly bigger. They did this dynamic scoring on the planning reforms,
(02:07):
which wasn't predicted. They say that by the end of
the parliament you'll be getting zero point two percent permanent
growth as a result of these deregulation early deregulations of
the planning system. They say that adds one hundred and
seventy thousand homes you get to one point three million,
which is not far off their one point five million
home target. So those are really positive things for the markets.
(02:28):
The big thing was her headroom had disappeared was actually
it was pretty nasty. They went from nine point nine
billion down to four point one billion deficit. The whole
lot she's made the whole lot back and it didn't
require quite such severe public service cuts and welfare cuts
as were expected. There's been a bit of jiggery pokery
around the changing from current spending that's the day to
(02:50):
day staff to casual spending. Yeah, so that's some largely
from aid to defense, which is relatively painless compared with.
Speaker 1 (02:58):
Nasty Tree when you wrote about didn't you.
Speaker 3 (03:00):
Yeah, yeah, trickery wizardry exactly. But ultimately it hasn't been
quite the horror show that some people were theory.
Speaker 1 (03:08):
I mean, we're all in Bloomberg HQ, not in the
Commons chamber, and I suspect we'll hear quite quickly from
our reporters who will be able to see the looks
on Labor MP's faces, because that was quite striking when
you see the doughnut around the Chancellor, you've got the
PM and then the cabinet Minster's either side, and obviously
their poker face. But it will be interesting to learn whether,
as you say, the mood from the back benches is
that could have been worse or goodness me, even though
(03:30):
it wasn't as bad as we thought, it's still going
to hurt in our mailboxes and in our constituents hearts
and minds. Dan, you're still are you writing? You texting?
Are you?
Speaker 4 (03:41):
I am looking at the OBR documentary, not texting my wife.
Speaker 1 (03:45):
I wasn't going to suggest that, but you would get
to grips with it.
Speaker 4 (03:48):
I think feel something up really nicely. I think when
I listen to it, it feels like the OBR hand
is her a bit of a gift. To be honest
with you, I think it's interesting your point about the
politics of it. If you look at where the cuts
of land is in terms of getting the headroom back,
it's really all welfare. There's a bit on departmental spending.
We thought there would be something there, we thought would
(04:09):
probably be a little bit more, but actually it's all
on welfare and that's really interesting. And I mean the
other thing, I'm not sure how to interpret it at
the moment, but just getting yourself back to the headroom
you had exactly to the decimal point that you had
in October. It feels very much like I'm just gonna
do the absolute minimum possible here to get myself down
to the autumn, which is the next staging post. That
(04:31):
was my takeaway and I think she would have initially thought,
I'm going to have to do a lot more here
on departmental spending. We're going to have the usual questions
about fiscal fiction. Actually there's been pretty much nothing done
on it. As a small amount of change in departmental spending,
but it's not very much. So I think the general
takeaway is that she has been given For me, at least,
(04:52):
she's been given a bit of a gift from the OBR.
I'm not going to sort of start we can get
into this if you want, but whether it's delayed the
tough choices, whether the OBR might come back in the
autumn and say, look, the economy isn't as strong as
we thought. There's a box in the OBR document about
tariffs and the impact that could have on the economy.
So all of those things taken together, I think she's
on the minimum she needed to get through the event.
Speaker 1 (05:12):
For me, the head room being exactly the same is
interesting because I think it was criticized that it was low,
and it was low back in November, and then to
go for the same low number. Is it she's got
away with the minimum she can do to lessen the
political pain, or is it she hasn't learned that lesson
and actually there'll be another physical event in six months
(05:33):
time that could be yet more painful, and we'll find
out in the days ahead, which you know, when we
get the briefing from the Chancellor's team on why they've
made that judgment. But before we sort of look look ahead,
you keep saying, the OBI has been very kind to her.
They've been kind in being dynamic about how they think
planning reforms will in the end deliver the growth that
the government wants.
Speaker 4 (05:51):
Yeah, I mean there are a couple of bits of it,
so that there's that bit of it which we weren't expecting.
And we spoke on the podcast previously about all of
these policies, said it in that speech. They take a
bit of time and you've got to be patient. And
sort of point two on the level of the economy
after five years is it's not very much. It's peanuts.
You know, it's a rounding error on growth and things
like that, so it's not very much. So she was
(06:12):
sort of given a bit of a boost there and
that actually because of that, it meant that the savings
she needed to fund and find in terms of spending
cups were smaller because if the economy is bigger, it
generates more tax receipts. That's a good news story for her.
And the other side of it is we've spoken about
this before as well, is that the Ober is at
the top end of the pack, if not at the
(06:33):
top of the pack, when it comes to growth forecasts,
and that stems from a view about productivity growth. And
they've sort of made a point in their document that
they think the level of productivity will be a bit
lower than they thought in October. But actually if you
look at the growth numbers, they're still pretty strong. You're
not shy of two percent in most years, and that
given recent.
Speaker 3 (06:54):
History, will take that absolutely.
Speaker 4 (06:57):
Absolutely, given recent history, we would definitely take that relative
to the consensus vieme, certainly relative to our view. So
I think when you go back to this point of
moving to the autumn, we'll see what the OBR says.
They'll have a briefing as well, but whether they're going
to have sort of look at this in more detail
over the next six months or so, that's going to
be something very important to watch as of course, is
(07:17):
what's going on globally, particularly with the tariffs.
Speaker 1 (07:20):
What is the tariff box saying.
Speaker 3 (07:21):
So it's basically I think I can't remember the specific
but it's basically saying, if we get if you get
twenty percent, that was, if you get twenty percent of
tariffs across the world, as Trump is threatening, that'll knock
one percent off GDP and all her headroom is gone,
just like that. So Trump will eliminate her headroom again.
But then there's other mechanisms as well. They say, should
our productivity forecast be changed and lowered, then you know
(07:44):
she loses her headroom and more. There's a couple of
other warnings in there. I think again there's a debt,
interest risk, et cetera. So they are pointing out again
that this is this is a tight margin for sort
of insurance that she's left herself.
Speaker 4 (07:57):
That's the point is it doesn't And of course it
matters to people's lives whether these things happen, but purely
in terms of setting fiscal policy, if you set yourself
or you set aside a big buffer, then whether the
OBR downgrades productivity forecast, whether the Trump hits US with tariffs,
you know you're safe. You're not having to go after
(08:17):
and constantly rebuilding and every physical event is just this
obsession with the headroom. If you have a broader fiscal
strategy where you set yourself some money aside, and of
course you'll come back to me and you'll say, well,
they can't. They haven't got the options for that. They
can't raise taxes, spending two time, they won't. They were welfare, welfare,
welfare cut. I'm just like heading over the past, but
(08:38):
welfare cuts. They've not gone too far, but they've already
done that.
Speaker 1 (08:41):
Uctually, she doesn't have.
Speaker 4 (08:43):
You're caught between the politics of it, which goes I
think is about the nine point nine where we sort
of started, and that there's just no political appetite to
go further than that because the choices it involves, and
you've caught on the other side of all these potential
economic shocks that could hit you. And I guess the
path that they think is the path of least resistance
is that they do increment. They take the government takes
(09:04):
incremental action at every fiscal event, which is not in
an ideal world, that's not how you'd set fiscal policy.
Speaker 1 (09:10):
I mean, you'd like to think she's got a hail Mary,
she's got something she can see that she can do
between now and the autumn in order to make that
not be the case. Phil's raising his eyebrows. The reason
I'm saying that is because we all know that, because
of the head round being so small, the story will
start up tomorrow or right now, what will she do?
What taxes will she increase? And that isn't just oh,
(09:32):
how annoying the British press is so annoying, though obviously
she will be starting to think that. But but it's
also about confidence, and it's also that people make businesses,
making families, making choices about the future, which she needs people,
you know, to be quite kind of bullish about.
Speaker 3 (09:46):
That's definitely the risk is that we get back into
that terrible cycle of like what is she going to
do next? Then you get up with the policy uncertainty.
The fact this time, though, the positive for her this
time is that the markets have actually responded positively and
actually imediately. After the budget in October there was a
big shift up in borrowing costs, which effectively had wiped
her whole headroom out within days. The reaction this time
(10:08):
has looks like it's going the other way. So you know,
if there is a hail Mary. It may be that
they that the markets are beginning to swing behind the
labor agenda and that could help her. Obviously, these the
other things out there in the world that you just
can't ever plan for this stuff, which is why you do.
You should have twenty five billion of headroom because it
(10:29):
gives you enough to absorb any shocks. But if they
haven't done that, so outside of you know, something external
which they'll blame on the world is changing as is
now the repeated mantra, this appears to have been received
a lot better than October.
Speaker 1 (10:43):
You mentioned that the labor agenda in the market swinging
behind it. You guys did this amazing piece of work
that was in one of our podcasts recently about that's
the schoolcard, we'll call it, you call it, and you
gave numbers out of ten for each area, and obviously
seven out of ten you gave to planning. And today
the OBR has kind of done the same.
Speaker 3 (11:02):
Yeah.
Speaker 4 (11:02):
Absolutely, I mean that was we've been saying for a while.
Of all the things that labor have they've announced, I personally,
I think they've announced a lot of positive things. So
investment spending, they've lifted that, so it's at least flatter
as a share of GDP. It was falling as a
share of the GDP before Planning reform. You know these
you obviously have to take it, as we said in
the scorecards, slightly with a pinch of salt. In the
(11:23):
getting up to three hundred thousand homes a year is
basically doubling the number of homes that are built every year.
So it's quite a big, big number and a big move. Nonetheless,
the economic benefit from it, which the OBR have recognized,
I mean, it's not huge. Point two percent on the
level of GDP isn't massive, but it's not nothing. And
I think the OBR, going back to your point your
(11:45):
questions fill about questions in Downing Street about the OBR.
Are they getting people's backs up? I think they are.
They have certainly lowered the bar for scoring policies like
this and putting it into the forecast, so things like
planning reform, things like labor supply.
Speaker 3 (11:59):
So that's new as well, it has.
Speaker 4 (12:00):
Been you over the past few years. So Jeremy Hunt's
Knicks cuts they scored positively. Obviously, the flip side of
the rise in employer national insurance in October was that
they scored that negatively for the economy, but capital expenses
they scored that positively, sort of in the medium term.
It's a long term and they hadn't been doing that.
So I think they're listening, certainly to the criticisms that
have been made. But as I said at the start,
(12:22):
these things do take time. But I think the planning
reform thing, yes, of all the things that have been announced,
that's if you're trying to get out of the sort
of malaise and thinking about that's the most exciting policy
for me that the labor have announced. They've come out
and they seem pretty serious about making in roads into
the planning system.
Speaker 1 (12:39):
As well phil other bits of the schoolcard. Would you
make any changes in the quite brutal numbers you go
some of the other bits of the agenda.
Speaker 3 (12:46):
I suppose we could raise the labor market. We had
score for their efforts to get employment up to eighty percent,
And you could say that some of the welfare changes
may deliver some change, some positive change. And I think
the OBR has one of the one of the generous
gifts that, as Dan put it, that they've given them
(13:06):
as a sort of better labor market outlook. So they're
just saying that the picture is generally a little bit
more positive there, so maybe we could go from one
to three.
Speaker 1 (13:17):
I suspect that's a pretty good place to leave it.
And you both have to write now, don't you try
to hear all right? Dan Hansen, Phil Aldric, thank you
very much, thanks for listening to this week's In the
City from Bloomberg. This episode was hosted by me alegra Stratton.
It was produced by Summersadi and Moses and Am Sand
(13:40):
designed by Blake Maples. Brendan frantzis Newnham is our executive producer.
Special thanks to Dan Hanson and Phil Aldric. Please subscribe, rate,
and review wherever you listen to podcasts.
Host
Francine Lacqua
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