Full transcript of ““DOESN’T Know What She’s Doing” | Rachel Reeves BLASTED For UK Spiralling Debts”. Click a timestamp to open the video at that moment. Need another video? Use the YouTube transcript generator.
0:00 Liam Hanigan's here though, columnist at the Telegraph, a man that knows a thing or two about the economy, more than I think Rachel Reeves does actually because he wrote a great piece in the Telegraph this week, uh, telling us all how dreadful things are going to get over the summer. Liam, very good morning to you. >> Morning, Mike. Good to be with you. >> Nice to see you. I see that I just retweeted actually just before I I speak to you about Rachel Reeves that you had something to say about Oussie Osborne and uh and Black Sabbath as well. You were obviously quite into it. >> Indeed. I was never a massive metal fan in my youth. I was more into Hrix, you know, posing with a bit of modern jazz as you do. >> Yeah. >> Um but some some some I mean, you know, Black Sabbath, four workingass boys from Soihole, they basically invented a whole genre along with Led Zepp and Deep Purple >> in the mid mid to late 70s before metal
0:48 became a sort of parody of itself in the 80s with all the glam rock bands. uh you know, paranoid that's going to be played, you know, forever and and deservedly so. But the album that I really liked of Black Sabbath uh without wishing to be sort of naturally contrarian was Never Say Die. And most Sabbath fans really dissed that as an as an aberration of an album, but there was one track on that album called Hard Road. That's a really beautiful song. It's really lyrical, fantastic uh words, really uplifting, brilliantly sung, a fantastic rocking guitar riff that sort of gets you off the sofa and makes you put one foot in front of the other when you're down. Try and drag yourself out of whatever hole you're in. It was important to me when I was a teenager
1:34 and in recent months, I've had a pretty hard time. Uh, and it's become important to me again. So, RIP Aussie Osborne, you know, a man of excess, but a man of genuine talent and significance. >> Yeah, totally. And I it's always nice to get to get people like yourself's views on that because people see you as, you know, this very serious economist man. Uh, and you talk about this the state of the economy, but >> how can I be serious? I've got How can I be serious? Behind me, I've got a squirrel on the on the frame of the picture behind me. I mean, how can I be serious? >> Well, as long as you haven't bitten its head off, I think that'll be fine. Um, but listen, I mean, I read your piece earlier with some alarm this week about how, you know, I've been warning about this for a while. I don't know the qualifications you have, but I just see um some terrible indicators and some terrible um numbers coming out of this
2:20 uh this this chancellor of the excheer. She doesn't one know what she's doing, and she doesn't seem to have an answer to to get us out of it. >> Well, I think that's true. I don't want to become like the sort of sandwich board man of of British public life, you know, the end die. On the other hand, when the when the economy went down in 2008, her majesty the queen rightly asked famously economists at the London School of Economics, one of my martyrs, you know, why did nobody see this coming? And the reality is people did see it coming. Just no one listened to us. I wrote endless columns in the up to 20 2008 saying that there was a major problem and that's why I'm not holding back now because we do face a major fiscal crisis. We found you know we were
3:07 just talking about the mid70s there weren't we Mike when we were young and sucked ice lollies and so on but we are heading for a 1976 situation. I'm not talking about the long hot summer. I'm talking about when the IMF the International Monetary Fund had to bail out this country because this country was bankrupt. We had a Greekstyle bailout and that is where we are now heading and I have to say both from the Chancellor Rachel Reeves and Bank of England Governor Andrew Bailey in their recent parliamentary appearances with all due respect to them they're out to lunch. they are showing no indication that they understand the significance of the situation. And you know the borrowing figures we had out yesterday in in in the last month in June um the
3:52 UK government borrowed 21 billion pounds roughly way above expectations but the clincher Mike is of that 21 billion we borrowed 17 billion to pay interest on previous debt. That is a Ponzi scheme. You know, that is not sustainable. Imagine if all the money you were borrowing in your business, three quarters of the money you were borrowing in your business wasn't to invest, wasn't to pay wages, wasn't to try and grow your business. It was actually to pay interest on your debts. >> Well, it's kind of what people do in companies before the company goes under, isn't it? It's their last sort of ditch thing and then suddenly it all goes horribly wrong. No investor would invest in a company like that without taking over the whole company and sacking half the staff and totally restructuring the
4:38 company. It's really not a very good situation. And again, I don't want to talk down the economy. We have loads of tremendous entrepreneurs in this country. We have millions of people, tens of millions, who get up every morning and go to work and do a good job. But guess what? We've got far too many people who aren't working but are getting benefits regardless, even though they can work. Of course, we need to help people who genuinely need help. We've got far too many people working in the public sector, getting on for one in four of our workers now, many of whom are doing non-job. Productivity in the public sector has fallen and we can't afford to do this anymore. And Reeves and Bailey, both of them have been trying to reassure us, you know, looking down on us plebs that it's all fine because these issues are happening in other countries. Yes, government
5:25 borrowing costs have gone up in other countries. The debt interest bill on national debts has gone up in other countries, but the UK is an outlier now, Mike. It's an outlier because our government's borrowing costs are higher than all the other major economies in the world because investors are less willing to lend us money. We look like less good a prospect for our credit. And most importantly, Mike, as I highlighted in many columns, but particularly last weekend in my Sunday Telegraph column, which you were kind enough to mention, we are an outlier because a very very high share of the government debt that we have issued, the the interest payments on those debts are linked to inflation. And as inflation goes up, our debt service bill goes up. That's
6:11 exactly what we saw in these last numbers. 21 billion pounds of borrowing, 17 billion pound on debt interest. And that means you get a ratchet because as inflation goes up, the more the government has to borrow to pay on debt service and that then pushes inflation up more and you get into an upward spiral of interest costs, an upward spiral of borrowing and a downward spiral in terms of economic stability. That is what we now face. And a lot of people I know in financial markets, I'm one of the very very very few journalists in this country who actually has real contacts with major financial investors because I used to be one. I used to work at a major asset management company. I talked to the guys who trade and girls mostly guys who trade the
6:59 bonds for these big insurance companies, pension funds, sovereign wealth funds who actually lend the British government serious money. They are not happy at all and they're fair. Mike, and it's a fear that's even being articulated now by the likes of the Office of Budget Responsibility is that the only lever Reeves has got left to pull is ever high higher tax rates. >> But those tax rates won't lead to more revenue. They'll lead to less revenue because they'll just slow down the economy even more and then that the downward spiral will get >> Well, that's it. Cuz every lever that she's pulled so far has had the complete opposite effect to the one that she wanted it to have. So, is there a tipping point then? And if so, what is that tipping point? >> Well, if I knew when the tipping point was and what it was going to be, I'd be
7:46 a very wealthy man. >> Shorting it, right? >> Yeah. But it it it it's you in the 2008 crisis, the tipping point for that was something completely unrelated to the banks. A lot of the banks were rotten because they were basically lying to the public. >> The investment banks though far few far too few white collar criminals uh were were bought to book as it were. But the tipping point in 2008 was because the oil price spiked. Yeah. And then suddenly investors thought criy that's going to slow down the economy. That's going to expose just how weak a lot of these banks are. It could be something completely unrelated. But the reality is that financial markets are now looking really closely at the UK and wondering how we are going to get out of this crisis. And the politics makes it much
8:32 worse because Labour tried to, you know, not I wouldn't say they didn't try to save55 billion pounds in welfare spending. They tried to slow down the increase in welfare spending by 5 billion. So welfare spending on health and invalidity benefit was going to go up from like 70 to 100 billion in the lifetime of this parliament. And Labour were trying to make that increase from 70 to 95 billion. right now it's going to be back it's going to be 102 billion because their welfare reforms have actually led to you know even more spending because the Labor left goes so mental when the Labor government tries to do anything that's remotely financially responsible slashrealistic markets are thinking you know Star's got
9:17 nowhere to go and you know Rachel Reeves crying on the front bench because she's so frustrated by her own party's economic illiteracy you know, government borrowing costs went up. You they spiked up cost the British taxpayer, you know, the best part of two billion pounds. Those tiers imputed interest rate increases. And this is the problem we face. And it's not like the Bank of England can just set interest rates so the government pays a lower rate of interest. No, that's not how it works. The Bank of England sets policy rates. But what the rate that the government pays and the rate that really counts and ripples across the entire economy are the interest rates set in financial markets. The Bank of England just sets a benchmark. Right? And financial markets
10:04 are now completely ignoring that benchmark and going in the opposite direction. The Bank of England's lowered interest rates four times since last summer. Reeves endlessly goes on about but she doesn't say that market interest rates have gone in the other direction defying the Bank of England and market interest rates what the government pays to borrow are now way higher than they were >> at the peak of the Liz Trust mini budget crisis and they have been way higher for the whole of this year and yet no one in the broadcast media or very few exceptions Mike certainly no one on the telly >> wants to talk about that >> I know it's extraordinary um but I It's coming. It's coming. I just know it is. I have a feeling in my bones and you know, thank you for pointing it out and we'll keep talking because uh the closer
10:49 it gets, the more worried people should really be. Liam, thanks very much indeed. Liam Higan, colonist at the Telegraph there telling us just how bad things are economically and Rachel Reeves literally hasn't got any answers and as you just heard him say, Karma's got nowhere to go. Maybe should call the Essex police and they could take him somewhere.
