UK Chancellor of the Exchequer Rishi Sunak Full Interview

By | May 13, 2022

UK Chancellor of the Exchequer Rishi Sunak discusses the Brexit settlement in Northern Ireland, the efficacy of his ”levelling up” agenda, and his wife’s tax affairs. He speaks to Bloomberg’s Stephanie Flanders.


Chancellor thanks very much For doing this we’ve had The gdp news Today There’s obviously a lot of factors Global factors creating uncertainty for The economy but we have also created Some of our own in the uk and the debate About the northern ireland protocol is Obviously casting casting a shadow have You analyzed the treasury what the Economic implications of tearing up the Protocol will be First of all on the protocol i think the Government’s position is that as it’s Currently operating it poses enormous Challenges to the stability of the Situation in Northern ireland you can see it’s Become a barrier to re-establishing Power sharing in northern ireland it Doesn’t have cross-community consent And that’s a very serious situation that Needs resolving and our preferences is To have and always has been to have a Negotiated Settlement with our european friends and Partners and no decision has been taken About you know what the future direction Might be And with regard to your second question Look of course that’s that’s my job you Know to provide the prime minister and The government with analysis on policy

Regarding the economy you’d expect me to Do that on everything and of course we Do and we’re constantly monitoring Everything that’s going on and and Analyzing that as we go but but we Understand that you could get Legislation next week uh to make it Possible to tear up the protocol and That seems to be what the foreign Secretary is supporting are you are you Lobbying hard on behalf of the economy To prevent that I think it’s important people know that No decision has been taken our Preference has always been to have a Negotiated settlement i know the foreign Secretary continues to engage with her Counterparts in In europe about how we can find Resolution to some of the very Real challenges that the protocol is is Causing not least you know being a Barrier to Resuming power sharing in in northern Ireland which is something that you know We all want to see well and you’ve said It’s the treasury’s job to analyze these Things when the protocol was signed it Was very clear that these checks were Going to happen that there would be this Kind of impediment uh to trade so that’s Something that’s that’s no surprise at All I think when it comes to the protocol we

Have to recognize that there’s a unique Situation in northern ireland and Everyone acknowledged that at the time And it required a degree of flexibility And a constructive attitude on all sides To recognize the particular Circumstances of northern ireland to Come up with a solution that would work Now you know the protocol well Exactly and and i think what we need to See is a as a degree of flexibility and A constructive attitude which can’t Resolve some practical problems on the Ground you know And i’m hopeful that continued dialogue And negotiation couldn’t resolve in um Or can resolve the situation result in a Negotiated but just when you we’ll get On a minute but when you’re weighing up Uh the the impact on the economy as a Chancellor I mean it seems clear that you would be Pushing for the continuation of the Protocol rather than throwing all of our Trade relationship into uncertainty well Listen it’s important to me as it is Important to the government that we also Protect the good friday agreement that We resume power sharing in northern Ireland that we make sure that north Island’s place in the union in the United kingdom is secure and it’s clear That the protocol as it’s currently Operating is

Is causing harm on all those things and That’s why we you know we remain Committed to trying to find resolution On that it’s a serious situation and That’s something that across government We all feel And on ukraine which is of course the Other thing which is uh Thrown thrown away it will cause you to Tear up a lot of plans in the last in The last few months the prime minister Has now committed us to defending sweden And finland in the event of a russian Attack we’re the first country to do That Surely at this point you should be Tearing up your future defense plans Just like most of the other economies in The world you’re going to have to spend More on you Well i think unlike most of those other Economies that you mentioned we are Already one of the leading Spenders on defence and we already took The decision to increase defense Spending i think a decision that looks Actually uh prescient in the invasion And you don’t think you’re going to have To revisit that hang on We also increase defense spending Alongside publishing something called The integrated review which happens Periodically which analyzes the threats To our security and then decides on the

Right approach going forward and Actually if you go and read that it’s Very clear that The biggest state threat to us was Russia so the strategy that we had Outlined already considered the notion That russia was a big threat and Alongside that strategy we announced a Historic uplift in defence spending the Biggest increase in defence spending Since the end of the cold war it’s worth 24 billion pounds over the period of the Settlement And it means that we are the second Largest defense spender in in nato Largest in europe one of the largest in The world and you can see the benefit of That as we Can make a difference in ukraine and Support our allies there so what i’m Delighted is that other economies and Other countries are also now fulfilling Or planning to fulfill their nato Obligations of spending two percent of Their gdp on defense that’s something That we’ve done for years when the vast Majority of other countries have not so Actually it’s a good thing for our Collective security that other countries Are catching up to where we have been And continue to lead and when the Defense secretary says It still doesn’t catch up to the new Threat that’s posed by russia your

Answer is no i did it all last year i Think i think the dependency on the and Indeed the prime minister have Been very clear that The significant uplift in funding that We’ve put into defence is historic and Ensures that we remain a a very Significant spender on defense Not just today but in the years to come And continue to play a leading role Supporting our allies and ensuring the Security Of our country now defence is one of the Many challenges that you know the Government has the defense was was Fortunate actually to get a settlement Before everyone else and a and a very Generous one you know whether it’s Funding the nhs to help with the Backlogs support people with the cost of Living now you know there’s many things Across government that we also need to Get on with and that’s why i’m pleased That we took care of defense early and They have the certainty of long-term Planning and are able to as i put that Into practice as we’re seeing to support Ukraine right now well of course one of The reasons why a big trade war with Europe would be the worst possible Timing is the cost of living crisis Which i know you’ve done Uh Been talking about uh

A lot over the last over the last few Weeks our economists estimate that the Cost of living squeeze all together is Going to cost the average family Well over 2100 pounds this year Um you’ve got As a result real disposable income Falling by four percent we’re also Expecting to see the economy shrink in The second and fourth quarter we’ve Already saw today it shrank started to Shrink um in march i mean You do you look back now and wish that You had got more ahead of this crisis in The spring statement rather than yet Again having to rush out some emergency Medicine under pressure from from the Rest of the government No i think it’s important that the Policy remains responsive to the Situation that we’re seeing and in the Spring and in february we had a sense of What was happening particularly we had Clarity on energy prices because the Price cap was increased in april uh by About 700 pounds And we announced in advance of that the Support that was going to accompany that Increase and it’s worth about 350 pounds For a typical household it’s about half The increase and then on top of that Overall i’ve just said it’s 2 000. so That doesn’t feel responsive well that’s Just one aspect of what we’re doing and

If you if you look what’s happening in a Few weeks time for example there’s a Very significant tax cut coming in for 30 million people in work that’s what Six billion well Well it means that most people in work The vast majority 70 of them will see a Net tax cut in fact it’s worth 330 Pounds the combination of our fuel duty Freeze and fuel duty tax cut the largest Ever Cut to fuel duty that’s worth another 100 pounds for a typical family In the autumn in advance we improve the Generosity of our universal credit System to help people as they move into Work from welfare that particularly Supports low-income families and again That’s worth a thousand pounds for a Typical person benefiting the national Living wage has just gone up a few weeks Ago again that’s worth about a thousand Pounds a year to someone working Full-time on the national living wage so You you put all these things together There’s quite a lot of support in place But i’ve always said i’d stand ready to Do more As the situation evolves particularly With energy prices where the price cap Will will most likely go up again in in The autumn and i’m focused now on i’m Out and about across the country Listening to people

Uh hearing what’s on their mind what They’re worried about to make sure that We can get our policy right uh and That’s the thing that i’m focused on now Doing there’s one thing uh and of course You’ve mentioned a lot of the measures Actually were to help working families But we had there’s a big hit for anyone Who’s reliant on on state benefits and That uh a very simple thing that could Have been done that actually would have Been cost neutral would have been to Spread the uprating across two years so Instead of getting a well below Inflation increase in benefits this year And what will probably be a well above Inflation increase next year you could Have spread it over two years and i know There may have been some technical Problems with that but have you worked Out how to do that yet because it Obviously could make it work There are quite the technical problems That sounds like a An excuse but the operation of our Welfare system is actually technically Complicated and it’s not necessarily Possible to do that for everybody And actually many other systems are Built in a way that that can only be Done once a year and the decision was Taken quite quite a while ago before you Managed to put the further you designed The furlough scheme for most of the

World of the uk popular work we did a Few weeks The welfare system works in a in a very Different way and we’re constrained Somewhat by the operation of the welfare System so it can’t be done for everybody In that way but but we are still Supporting people so for example We we’ve very much strengthened the Incentives to work the rewards for work Through the national living wage and the Universal credit taper rate for example Now The majority of people on those on Universal credit for example either are In work or are able to work and are Looking for work so the policies that we Put in place really help them and Sustainably that is the best way to help With the cost of living is to get people Into a job that pays well and support Them in doing so whether it’s with Skills or work support so we are focused On that but look i recognize there’s Always going to be families in a Particular circumstance that it’s you Know i can’t Particularly forecast sitting At a desk in the treasury and that’s why We’ve given councils Before and now up to a billion pounds of Discretionary funding because the local Council’s the best place to know those Very vulnerable families who for

Whatever reason aren’t quite getting the Help they need so those councils now Have the funding that they can provide Direct support to those families a Little bit extra as well and you talked About councils we’ve done a very careful Look At what’s happened on the leveling up Agenda across the country since 2019 Everything that we can get on the very Latest because obviously most of the Time you have got rather old data but The things that go right up mostly to The spring of this year the gap between London and southeast and everywhere else Is growing on every measure except life Expectancy and the number of people on Benefits and that’s only because london Has leveled down those things have got Worse in london Here salaries on our monthly salaries Have fallen behind the london and Southeast by another 300 pounds I mean this is it’s an impossible task That you’ve been landed with this Leveling up agenda and You’re not it doesn’t feel like the Government’s really putting the money And the effort in to make a difference On any of these measures So i haven’t seen your report yet so Forgive me for not uh having sight of Exactly the figures um they’re slightly Different to the figures i’d looked at

Previously where what you saw was A much stronger recovery in jobs and Wages outside of london and the south East so i’d be interested to have a look At your report yeah I think in general the period that You’re describing is obviously the Period of the pandemic And so It’s a challenge it’s been a challenging Time for for the economy uh but that Said we are very committed to leveling Up you know what does it mean to me it Means making sure people wherever they Happen to grow up and live in the uk Feel that they’ve got fantastic Opportunity ahead of them and that they Also have enormous pride in the place Where they get to call home you know We’re sitting here in stoke which has Received a huge amount of investment in The town Here or the cities here or the Collection of towns and also And also investment in the transport Infrastructure and i’ve been here Multiple times to visit local businesses In the community and actually there’s an Enormous sense of positivity and Optimism here about what’s happening and Similarly in in t side where really what We saw in the council at the local Recent elections yeah lots of optimism I mean i think

Mixed picture Across across the country depending on Where you were and remember a government That’s you know midterm and and things Of course are challenging so i i don’t i Don’t think it was a obvious answer one Way or another but let’s take a place Like t-side which i know well it’s it’s Near where my constituency is You know that’s that’s a place that you Know just five years or so ago thousands Of people lost their jobs when a steel Plant closed And look at That area now what does leveling up mean There well it means a new freeport which We’ve created after leaving the eu which Is attracting jobs and investment for You know And you’re seeing that in three ports Across the country whether it’s ge or Siemens investing in offshore wind You’re seeing new jobs in hydrogen Carbon capture and storage the Industries of the future vaccine Manufacturing you’ve got a new treasury Campus open in darlington which is Flourishing and has really cut through To the community about How seriously we take this project and You’ve got revitalized town centres and High streets in middlesbrough stockton And thornby darlington uh and new Transport infrastructure and the

Darlington train station is getting into Almost upgrading what we find that is The thing that you control the transport Spending the public service spending has All grown faster in london southeast i’m Not so i’m going to have to see your Numbers because i mean You know one thing this government is is Doing is is actually be being generous With the amount of investment in public Services and also in infrastructure uh So whether it’s the integrated rail plan Which will speed up journey times across The north east west whether it’s the Half a dozen cities around the uk which Are receiving london style Tfl style transport settlements To ensure that we can connect within the Cities really well we know that makes a Difference to economic productivity Whether it’s investing in safer streets And police officers all of that is Happening considerably more outside of London from where i’m sitting but inside I’ll have a look yeah we’re gonna run Out of time We’re bloomberg so we obviously were Very focused on the financial services On the city You had a fantastic career in the city You’ve also Been in high office for several years It’s it’s it’s very easy to lose track Of how

The rest of the world sees things and i Just i have to ask you it’s been a few Weeks since the story broke do you have A better understanding now of why even Your supporters found it extraordinary That your family was organizing its tax Affairs to to limit Uk tax that’s my my wife’s Her own person She’s an independent business woman She’s made a statement She’s my wife is i don’t think people Would find extraordinary if she was my Property i wouldn’t i wouldn’t presume To dictate to my wife to tell her what To do she’s an independent business Person and she’s always followed all the Rules she’s paid taxes in the uk on her Uk earnings and international taxes on Her international earnings very much Within the rules but she recognized that There was a call to go beyond the rules And she made that decision herself to Pay both uk and foreign you didn’t think It was extraordinary you didn’t think it Was right because i think i just wonder Whether you think you often talk about Being a good husband and being a good Citizen Do you think being a good citizen a good Husband a good leader is only about Sticking to the rules and doing what’s Legal yeah but i i do think about part Of being a good husband is is not

Presuming to dictate to my wife what What to do because she’s an independent Person and i support her decisions

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