Alexandra Agnew, Managing Associate, Mishcon Private
Welcome everyone, and thank you for joining this Mishcon Academy session, part of a series of online events, videos, and podcasts looking at the biggest issues faced by society today. Just to introduce myself, I'm Alexandra Agnew, a managing associate in our politics and law team at Mishcon and I will be hosting today's event. Before I introduce Jeremy, there are a couple of housekeeping points to mention. If you're online, you've joined the session automatically on mute and without video. If you have a question, you can use the Q&A function at the bottom of your screen, and I'll pick this up. If you have any technical issues during the event, please feel free to let us know via the chat, and one of the Mishcon team will help you. If you're in the room, please just raise your hand. So we're delighted to welcome Sir Jeremy Hunt today. Jeremy needs very little introduction but for anyone that doesn't know, Jeremy has had a number of the top jobs in cabinet, including acting as Secretary of State for Culture, the Olympics, Media and Sport under David Cameron from 2010 to 2012, and he then moved to being Minister of Health, also under David Cameron, from 2012 to 2018.
I think you hold the record for the longest-standing Minister for Health in history, uh, not much competition from your latest successor, but, um, and then you were Foreign Secretary under Theresa May between 2018 to 2019, and then a brief pause while you ran for leader, I think, against Boris, but sadly lost. And then most recently you were Chancellor under Liz Truss for 5 days and Rishi Sunak from 2022 to 2024. Jeremy is a sitting MP, one of very few Conservative MPs to weather the storms of the last few years, and continues to passionately represent his constituents in Godalming and Ash, and I know there are one or two in the audience and I actually had a very nice call from someone yesterday saying what a wonderful job you've done recently helping one of their family members, so that was good. So today we are here to talk about your most recent book, ‘Can We Be Rich Again?’, which was released last week. I think this is your third book following on from ‘Zero’ about your time as Minister for Health and ‘Can We Be Great Again?’, which was published last year and provides a positive outlook on why Britain's global street cred isn't a totally lost cause.
In ‘Can We Be Rich Again?’, you draw on your experience as Chancellor to assert that despite widespread pessimism, Britain still has a lot going for it. It's the third largest technology ecosystem in the world, and it has a huge financial services sector and globally admired universities and respected institutions. You say that there are solutions that our economic malaise are in, the solutions to our economic malaise are in plain sight and if we, if we're willing to learn from what works elsewhere. The book is really interesting and I'd strongly recommend it to anyone in the audience wanting to understand the potential impact that relatively small changes can have on our economic prosperity. Some of the statistics that you mention in the book are pretty shocking. The total cost of welfare, uh, in the country is currently over 10% of GDP, and if, you say that if we found a way to return it to the pre-2019 levels, even accounting for inflation, the savings would rise to £56 billion a year after 5 years. And if we used auto-enrolment to increase the proportion of people's salaries invested in their pension pots, Oxford Economics calculates that it would add 0.7% to GDP over a decade by unlocking £220 billion of investment. And I enjoyed this, the Lower Thames planning application was 359,000 pages long. Putting the plans together cost £267 million, which is more than Norway spent in total on building the world's longest tunnel. So despite these very real everyday issues, decision makers in Westminster seem to be hamstrung by red tape and newsreel politics. Matthew Syed observed in a Times column a couple of weeks ago that the world is being rewritten in steel, silicon, electricity, foundation models, and grand strategic challenges requiring a 10-year vision of the kind the Chinese Communist Party has mapped out in chilling detail, while our political psyche is thrashing around a vortex of 24-hour news. The challenge at the moment seems to be our political system and the fact that no matter how good an idea it it's impossible to implement the changes that are needed. So what can we do about this? And how do we get back to a system where parties and leaders are given the time and opportunity to bring about real change?
Sir Jeremy Hunt, Author
Well, thank you, um, hello, everyone. Can I just say that, um, I've done quite a few terrifying audience talks, um, but an audience of Mishcon lawyers is, uh, is one that I was slightly dreading and I've now discovered that I'm being interviewed by one of your top litigators. So, so thank you for that and it's really lovely to be here. Um, and look, the first thing I want to say is that I think we have become too gloomy about our own prospects in the UK. And look, you know as lawyers that we are the world's second largest services exporter, um, that, um, English common law is the basis of legal contracts all over the world. And, um, that’s, you know, we've been long very successful in business services and financial services, um, but I think in the century of AI, to have the third largest AI sector after the United States and China is pretty exciting and, um, you know, this is a hotly contested space, but, um, it basically it's quite a defensible space for us because, I mean, you know, if I take, I remember President Macron once said to Rishi Sunak, ‘we have the best AI in the EU and you have the best AI in Europe’. And when you get a compliment from a Frenchman, you know, I think you take it.
But the truth is that France and Germany and lots of other countries are trying to do well in AI. But there's two things that we have that give us a particular advantage. Outside the United States, the most respected universities in the world, including LSE just down the road, which I walked past on the way here today, and outside the United States, the biggest financial services sectors in the world, which means that you can get the financial backing. So that is a long answer to a very straightforward question. The way that we get our confidence back is to get our economy back growing. Because, um, in the end, I mean, Angela Merkel had a great saying. She said, ‘growth isn't everything, it's true, but without growth everything is nothing’. And, you know, if you are a passionate socialist who wants to do nothing more than, uh, spend more money on public services and on redistributing income from rich to poor, every 1% increase in GDP gives the Chancellor £10 to £12 billion to do that. If you are centre-right like me and you think we urgently need to spend more money on defence, and actually we should bring the tax burden down to incentivise work and get people off welfare, then you can have an argument and say, that's what we should spend our $10 to $12 billion on.
But if you don't have that 1%, 2%, 3% of GDP, you don't have anything and, um, I just want to explain the title because there's a paradox in the title. Um, so I'm being very naughty and talking here, so I'm going, I will stop after this but can we be rich again? You know, implication we're not rich. Actually, that isn't true. We have been growing richer even recently. Even over the period since 2010 when my party was in power, GDP per head has gone up by about 15%, which is not nothing. But when I was growing up in the 1980s, GDP was growing at about 2.5% a year. And if you do the maths, at 2.5% a year, basically it doubles every 28 years and that carried on till 2008. And for those of us growing up in that period, we knew one thing for sure. We were going to be wealthier than our parents and a lot wealthier than our grandparents. And for young people in their 20s today, they've never had that, and it actually takes 70 years for GDP to double at our current rate, which is so slow you hardly notice it. And that's why they've lost hope, and that's why this is so important to, to give people their hope back.
Alexandra Agnew, Managing Associate, Mishcon Private
Get it back. And so what if, so there's obviously, um, lots going on in politics at the moment, and, um, Josh Simons stepped down in Makersfield the other day to try and give Andy Burnham the opportunity to, um, take on the Prime Minister and so if that all goes to plan, um, well, when Josh stepped down, he wrote a column which talked about how the real issue is that we don't have this growth, that we have the growth agenda, but there's no plan for it and that we need this radical, I think he described it as a kind of radical change, radicalism, energy, and immense courage. Which sounds like things which he thinks that Andy Burnham has. If Andy Burnham appointed a chancellor, what would you say to them should be their plan for this radical growth and change?
Sir Jeremy Hunt, Author
Well, I think, um, the first thing is that I, I agree with what Josh says about growth, um, but you can't as prime minister or chancellor say, I've got lots of priorities, lots of missions, you know, one of them is economic growth, one of them is the NHS, uh, one of them is, I don't know, defence or health inequalities or whatever it is and basically what I'm going to do is I'll try and achieve all of them and I'll juggle them all. You have to understand that economic growth is foundational. Unless you get that bit right, nothing else is going to work and, you know, I would suggest that if the government had really sorted out economic growth over the last couple of years, uh, we'd be in a very different situation, we wouldn't have a by-election in, in Macclesfield. But what I think every chancellor should be told the day they walk into Number 11 Downing Street is that the things that we need to do are quite obvious in many cases, like reforming our planning laws, sorting out productivity in the NHS, but none of them will show through in the numbers for 4 to 5 years. So what you have to do as chancellor is you have to do the big things really quickly because your political capital, I mean, let's take, let’s take a big company like Mishcon's. If you take over as managing partner, like James, you can get your feet under the table, you can put the right people in the right jobs and come up with your plan to transform the company a year later and that's fine. But in politics, you don't have that time because your political capital is draining away from the moment you take office. It's like a, an egg timer so you have to do the big things really quickly, um, because if you wait a year or 2 years, you won't have any sand left in the egg timer and it'll be too late. And that's the crucial difference between business and politics.
Alexandra Agnew, Managing Associate, Mishcon Private
But then the unfortunate thing, I think, with current politics is that as the egg timer runs out almost immediately as you do those big things. So is it a system problem where we need to change the way, I was thinking about whether you need, whether rather than these policy ideas being led by politicians where there is so little trust at the moment, should there be, should Chris Whitty be across all departments? Should there be a Chris Whitty of the Treasury who comes in and like provides guidance from a kind of technocratic perspective, uh, to kind of reinstill confidence within politics? Or how do you get that back?
Sir Jeremy Hunt, Author
I think, uh, this is a mild version of what I call the Lee Kuan Yew fallacy, which is, you know, You didn't quite put it this way, but, you know, a version of what you said, a more extreme version, is, is the problem democracy? Because you're basically saying, let's take democratic leaders off.
Alexandra Agnew, Managing Associate, Mishcon Private
Get rid of the politicians.
Sir Jeremy Hunt, Author
Get rid of the politicians who happen to be the people who are elected, and let's put technocrats in charge. And the thing about autocracies is everyone always imagines that if we were an autocracy, it would be like Singapore, and we'd be led by someone like Lee Kuan Yew. But unfortunately, we could get Putin or Mao. And the point about autocracies is you don't get that choice, because you don't have a choice. And I actually think democracy is by far the best system. And actually, I think we all know that in our hearts. I mean, at the moment, we have a global migration crisis caused, actually, by something very positive, which is that we have made huge strides since the Second World War in eradicating extreme poverty. But there are many more people who say, ‘Have money, will travel’ and this is causing all sorts of challenges.
But which countries do those people want to go to? They're not banging on the door to become Russian citizens or, or trying to emigrate to China. They want to come to Europe and North America, Australia, Japan, um, because they know that open societies, liberal democracies, are not just places where, you know, you can be treated with dignity by the state, but they are also places where you can be, uh, you can build a prosperous future for your family. So I don't think the answer is to scrap democracy, but I do think, you know, I think what we have not really understood in Britain's case is that since the financial crisis, um, you know, for the first time in our lifetimes, we've had 3 major external shocks. We, you know, in the 1970s, we had a massive oil shock, which was a big, big shock, but we had the global financial crisis, COVID, and the Ukraine energy crisis. So every time we thought we were about to recover, we were hit by something else, and that has got our growth stuck in the slow lane. And then on top of that, we had Brexit, which, I'm not going to ruin a friendly session by reopening the Brexit debate, but basically, um, it was the biggest constitutional change in our lifetimes, and it paralysed our politics and polarised our politics.
And I think all the sort of the political chaos since 2016, um, until now really was caused by the country having to absorb this huge democratic challenge where the majority of the country voted to do something that nearly the entire political establishment didn't want to do and Parliament at one point was refusing to do and so that had some perverse effect. But I think that is now behind us. I mean, the debate will rumble on.
Alexandra Agnew, Managing Associate, Mishcon Private
Ish. For now.
Sir Jeremy Hunt, Author
Um, yeah, the debate will rumble on. But I think we, you know, there are some really quite straightforward things that we can do, um, to unlock our potential. And, um, I lay these out in the book and I quantify them all, you know, I actually asked the sort of Treasury economist question, what would this actually add to, to GDP? And I reckon if you take the 8 supply-side reforms in that book and you implemented, uh, them all, you would, you would triple our growth rate. But let's assume you don't manage to do all of them and they get a bit watered down, you would easily get us back to the 2.5% a year that we were getting before 2008, and that's what we need to do.
Alexandra Agnew, Managing Associate, Mishcon Private
Okay, so we'll give a copy of your book to the new Chancellor as well.
Sir Jeremy Hunt, Author
Whoever that might be, if it's a new Chancellor.
Alexandra Agnew, Managing Associate, Mishcon Private
One of the, uh, issues that you talk about in the book is that shortly after you became Chancellor, um, you had this great plan to get more people into work and to drive up GDP through that and then the OBR, the Office for Budget Responsibility, came in and had some croissants and some coffee and looked at you a bit sceptically about your plans and then went away. And you actually say that they come back and say that there is a surplus when you expected that they would say that you needed to find £12 billion, I think. But do you think that the OBR gives politicians enough credit for the kind of long-term plans. Is that something that we should be looking at, either to like bolster policy by providing that kind of technocratic, um, support, or…
Sir Jeremy Hunt, Author
Um, the OBR, look, I think there are ways that we can improve the way the OBR works with, with chancellors, but fundamentally it's a very good reform and the OBR only does one very simple thing, and constitutionally it is set up to do a very simple thing. The Chancellor decides what are called the fiscal rules, the public constraints on borrowing, which are really designed to reassure the markets that the country will, uh, pay back its debt and be good for the debt interest that it incurs on the debts we have. And so, you know, uh, Chancellors have rules like, you know, we will, we will not borrow, uh, for day-to-day spending but only to invest in things that will help growth, like nuclear power or whatever, and we'll make sure debt is falling after a certain number of years and so on. All the OBR does is assess independently whether a chancellor's budget is meeting the fiscal rules that that chancellor has themselves chosen.
Alexandra Agnew, Managing Associate, Mishcon Private
Okay.
Sir Jeremy Hunt, Author
So, um, I think that's pretty helpful for the public, and it's a good discipline on chancellors. It's basically just making sure that we're, we're true to our word. It was set up, by the way, by Conservative Chancellor George Osborne in 2010, because he was suspicious that in every budget that Gordon Brown produced for Parliament, he would magically unveil some new forecasts that said that he was after all meeting his own golden rule to do this or that. And so this was just a, so I think it's a good reform. I think there are ways that we can improve it. But, but on the whole, I think in a, in an open society, it's good to have independent structures that give people information so that they can understand. By the way, since we did the OBR here - it's a great British invention – uh, it has been copied in nearly every other advanced economy in the world. So it's a bit like the sort of way privatisation was copied all over the world. It's been adopted nearly everywhere in different ways, you know, but a similar kind of approach.
Alexandra Agnew, Managing Associate, Mishcon Private
Is, do you think one of the solutions then is possibly to try and make it more accessible, like how it's running, how it's doing, carrying out its analysis, and to try and build, because I think one of the biggest issues we obviously face is that people just don't have confidence or probably the understanding of exactly, like the book is great in setting out the kind of the number and the data behind each of your reforms, but I think that is not understood amongst the kind of general population, and maybe the OBR's role should in that case be expanded to provide kind of more context and greater depth to.
Sir Jeremy Hunt, Author
Yes, I mean, I think when, where it could work better is if, you know, I came up with a plan and I wanted to get 1 million people back to work and, um, you know, if the OBR had recognised that, and if they believed that plan, they would have changed their economic forecast. Because obviously, it has a huge impact on GDP if you have 1 million more people in the workforce. And they basically put red lines through the whole thing. And eventually, they said, I think we think it will get 110,000 people back to work and I thought that was pretty stingy and pretty mean and so although I had these big ambitions to, you know, in welfare reform, childcare, um, getting the over-50s back to work through pension reforms, um, because the OBR said it was only 110,000 people, the country didn't think it was as big a deal as I thought it was. I still did it, but what I felt was they should be more generous to chancellors who are doing pro-growth things. And then if the chancellors don't deliver on those policies, go back and change their forecast down. But they, they tend to say, unless you can prove to me that this is actually going to do A, B, and C, we won't do it. So I think there are times they could be more flexible, but, but overall I think it's a, it's a good discipline, a positive thing.
Alexandra Agnew, Managing Associate, Mishcon Private
A positive thing, okay. And one of the issues that you talk about in the book is in relation to the national debt and that every household pays a I think nearly £4,000 a year in debt interest, um, and £2,000 a year in public sector pensions. And I think you've talked recently, um, including this weekend, about the idea of sort of scrapping the triple lock, um, but what do you think is like the most effective way of tackling the national debt if you were Chancellor again? What's?
Sir Jeremy Hunt, Author
Well, to paraphrase the film, we need to talk about debt, um, and I think it is something that is not really understood. Um, you know, and the reason is because for a very long time we've had interest rates at near, nearly 0% and so it's been possible to build up debt, uh, to very, very high levels without really noticing it because the interest payments are so low. But we now pay, as you say, nearly £4,000 a household in tax just to pay for our debt interest. And then if you add on another £2,000 for the pensions of retired civil servants and doctors and nurses and other public servants, it adds up to about 19 pence on income tax, which is a huge amount, and that is a drag anchor on growth because that is money that isn't helping, uh, make the economy more prosperous. It's not building nuclear power stations that could give us cheaper energy. A lot of it is being paid to international investors who've lent Britain the money, uh, because we've got a budget deficit. And I think over time we have to find a way to bring down debt. I don't think it's fair to future generations to leave them with that debt overhang. And the simple rule that I suggest is that we should, we should be disciplined and say that we're not going to increase public spending by more than economic growth, because the root cause of the problem is that we have been increasing our spending faster than the economy has been growing, and that's of course been making our debt shoot up.
Alexandra Agnew, Managing Associate, Mishcon Private
Pretty catastrophic, yeah, I know, that's worrying. Um, on a kind of more positive front, you obviously started out as an entrepreneur, and the book talks lots about this kind of growth mindset and, um, having a different attitude towards risk. And you speak a bit about the Governor, Governor Reeves, of, which is an unfortunate namesake for Chancellor Reeves, um, in Mississippi, and what they have done to kind of turn around their economy and there are obviously lots of, um, things that we wouldn't necessarily want to match about Mississippi. But what is it that they, how is it that they have, um, managed to turn themselves around in such a…
Sir Jeremy Hunt, Author
Well, so one of the things that I spent a lot of, I spent a chapter looking at in the book is the link between high tax and low growth. And there's a lot of debate between economists as to whether it's cause or correlation. So people on the right tend to say that if you want an economy to grow, you've got to reduce the tax burden, you've got to increase incentives. People on the left say, no, no, no, Switzerland has lower taxes than us because it has more prosperous countries so they can afford to cut their taxes. And, um so, there’s, it's correlation, but it's not causation. And I take the example of Mississippi, which is run by this guy called Tate Reeves and at the same time as we have increased tax here to its highest ever level, as governor of Mississippi, he's reduced taxes to the lowest level in the state for many, many decades. And that has made Mississippi one of the fastest growing states in the US. It's one of the poorest states. It's one of the fastest growing. It's now overtaken the UK in GDP per head. And, um, I actually lay out the evidence that if you take all the OECD countries, the advanced economies, the ones with lower tax on the whole have been growing about 2% a year faster than the ones with the highest tax levels.
So then the question is, okay, but what about the NHS? What about public services? Because they're all paid for from tax. And the answer is you just have to get the sequencing right, um, you can, you know, if you grow the economy, that gives you money to play with. As interestingly is happening, I mean, I don't want to have the safety net for what it is that they have in the United States. I'd much prefer our system here. But, um, in Mississippi, that extraordinary economic growth means they are now able to increase spending on social programs, whereas here in the UK with the Labour government, they are actually struggling to find any extra money to spend on social programs. So you have to get the growth first before you start splurging on public services.
Alexandra Agnew, Managing Associate, Mishcon Private
Yeah, because I think you say that they are focusing on the productivity of the public sector, and that that has then led into people spending a lot more, like, well, the sales tax has, or the sales revenue has risen a lot, and that you've managed to, um, kind of turn it around by putting money into those, into things which are helping the kind of the general people, which is, yeah, feels like there are lots of things in our public services here which, um, are sorely lacking so, um, and people often kind of roll their eyes at lawyers for being sticklers for process and procedure. Um, but one of the proposals that you make, um, is that we should, judicial reviews for large infrastructure projects which have been approved by Parliament and kind of planning decisions should be streamlined and reduced to a kind of maximum of 2 years. And I'm interested in hearing how, when you were in government, to like what extent the risk of legal challenge was something that you took into account when you were making these kind of big decisions. You feel nervous about, looking a bit nervous about answering that.
Sir Jeremy Hunt, Author
Well, no, massively. I mean, we have to take account legal risk in every single decision that we take, and it makes ministers a lot more cautious. But I think, I think we should step back a bit. Um, you guys will know much better than me what would need to change in the law. But it seems to me that if a government decides they want to, if you want to build a nuclear power station, and we, you know, we desperately need clean, cheap energy, if EDF build the same power station in Britain and in France, the nuclear energy generated in Britain costs twice as much as the nuclear energy generated in France because of our regulatory environment and our planning requirement. Now, France has the same commitment to climate change, um, and high environmental standards as we have. Um, but it will take 15 to 20 years before we get a nuclear power station operational. And I think that is crazy. I think that if elected members of parliament decide they want to build a nuclear power station and the Treasury is prepared to fund it, we need to find a way where all the planning approvals can be done within a 2-year period. I don't think that is unreasonable, and, um, and I actually think that's democratic and, um, you know, I'm going to, I'm going to tread on very thin ice here, but, you know, I'm going to talk a little bit about, um, Rishi Sunak's efforts to stop small boat crossings. Because, um, basically he was stopped by the courts despite passing 3 acts of parliament, 3 acts of parliament. Now, I just think there's something wrong there. Whether you think the policy, the Rwanda policy, was right or wrong, um, I think you have to ask yourself whether people out there have confidence in our democracy if they feel the people they send to Westminster are not actually able to implement a policy that Parliament wants so badly it's prepared to pass 3 Acts of Parliament. And so I do think that we have made the mechanics of getting things done too difficult. And the result of that is that lots of people worry that the politicians they send to Westminster just can't solve the big problems we face and then we end up with the Lee Kuan Yew problem.
Alexandra Agnew, Managing Associate, Mishcon Private
Yeah, it's difficult. I had wondered whether I should mention the Rwanda policy, but I thought I'd steer clear of it because it was too controversial. But, um, I think the challenge then is, what is the practical step that needs to be taken to row back on all of these rights that we've taken so long and thought so carefully about implementing and about ensuring that people have these fundamental protections? There's obviously a lot of…
Sir Jeremy Hunt, Author
Well, I'm, you know, the ECHR was set up for the, the noblest of reasons after the Second World War. It was basically designed to make sure that if there was another Holocaust, Jews would be able to flee much more easily than they were actually able to in the run-up to and during the Second World War. So you couldn't get a more important reason to give people those rights, but it was also set up in an era where we didn't have global mobility in the way that we have now. And I think that people have another right as well, which is to believe that the people they send to Westminster actually have the ability to control who comes into the country. And, you know, let me make the liberal argument for reform. Um, I'm married to a foreigner. I passionately believe that one of the best things about this country is that for centuries we have welcomed the brightest and best from all over the world. We've won more Nobel Prizes than anywhere except America, and a quarter of our Nobel Prize winners have been won by people born abroad who've chosen to come to the UK to do their research.
But we will break the social contract that for centuries has said we benefit as a country by being open to the brightest and best from all over the world, unless we give confidence to people that the government actually has control of our borders. And, you know, we, we need to understand that they don't have that confidence at the moment and that's why, um, you know, I ideally I would like to reform the ECHR, but it requires unanimity unity. And if, if we can't get that unanimity and we can't control our borders, then if I have to choose between the ECHR and maintaining a social contract that allows us to continue welcoming the brightest and best from all over the world, I choose the latter.
Alexandra Agnew, Managing Associate, Mishcon Private
I think the, um, I guess the challenge is that on one side people don't have confidence that Westminster has control of, for example, our borders, but on the other side people don't have confidence that the decision makers will necessarily play fairly by the rules, uh, without things like the ECHR in place so.
Sir Jeremy Hunt, Author
I think there are perfectly reasonable ways to make sure that we treat people, everyone, humanely. But, um, and you know, that's fine but I think we also have to be honest that, um, at the moment, and actually we see this in the tragic issues that are happening today you know, um, that, um, you know, we are skating on very thin ice if people believe that the country doesn't have control of its borders.
Alexandra Agnew, Managing Associate, Mishcon Private
No, I'm sure you're right. In the sectors where we are doing things.
Sir Jeremy Hunt, Author
Moving rapidly on.
Alexandra Agnew, Managing Associate, Mishcon Private
Yeah, not sure we're going to reach consensus, but in the sectors where we are doing well, things like AI and tech, what is it that, um, that we have been doing which has worked to support those industries to grow?
Sir Jeremy Hunt, Author
It's actually, it is good because I think it's, you know, I, I think we should also look at the good things that we've got going for us as a country and this is a good, this is a really interesting example of a completely unsung revolution that's happened. It's a revolution, and it's happened in the UK in the last decade. Uh, we talked about AI, but I want to give you another example, which is life sciences, um, where in the pandemic, um, vaccines and treatments discovered in the UK saved more lives around the world, 7.5 million lives than those from any other country. And that is because Cambridge is Europe's life science capital in terms of the discovery of new medicines, and Oxford, Cambridge, Imperial and actually, what's been, what's the revolution that's been happening? Um, a decade ago, two decades ago, it was only, uh, Stanford and the Ivy Leagues who had these giant business parks and science parks which were incubating startups. Now all major British universities are doing that and it's not just, you know, the Oxford-Cambridge-London triangle. It's absolutely incredible, the work that's going on. And our academics have become, uh, you know, they’ve become entrepreneurs and they've started, you know, these amazing unicorns, of which we have more than France, Germany, and Sweden put together. And the reason we don't talk about it, the reason it's a silent revolution, um, because there's nowhere outside the United States that's doing this on this scale, um, is because we don't have any British tech giants because these unicorns, as soon as they get to, um, a valuation of $1 billion or more, they come to a company like Mishcon and they say, 'Can you help us do an IPO on NASDAQ?' Or, 'Can you help us do a trade sale?' And, um, they don't raise their capital for those final stages that would make them a global tech giant in the UK. So, you know, DeepMind, which is a British company based in King's Cross, which is where Google, Google owns it, does all its AI research, but it's owned by Google. It's set up by a Brit, Demis Hassabis, but it's foreign-owned. Arm, which makes the chips, uh, which, uh, the designs, does the designs for the chips in nearly all our phones, based in Cambridge, owned by SoftBank and so, um, that's the thing we need to get right. We need, that's why the pension fund reforms that I started with the Mansion House reforms, and Rachel Reeves, to her great credit, is continuing, are so important because the fundamental reason for the is the problem, is that British pension funds invest less than 4% of their capital in UK home grown companies. Uh, whereas if you were doing an IPO in, in America or Australia, you can depend on a wall of domestic pension fund money to support those IPOs.
Alexandra Agnew, Managing Associate, Mishcon Private
OK, so it's changing the, you think, changing the way the pension structure works would, um, would be one of the kind of foundations.
Sir Jeremy Hunt, Author
Well, our pension funds are hopelessly cautious and I think actually the best model is the Australian model. Um, you know, we have this crazy system where every employer that you work for during your life gives you a different pension pot and then somehow you have to bring them all together. Whereas what they have in Australia is one pension pot that moves with you from job to job. So you can go on your iPhone anytime you like, and you can see exactly how much is in your pension pot and how much it'll be worth, you know, at a predicted rate of expansion when you retire and that gives you an incentive to put more in if you come across some extra, you know, an inheritance or whatever it is during your lifetime. But it’s, but also, there's fierce competition between pension providers, which means they want to invest in fast-growing companies, of which we've got lots in the UK but if you're, if you're a British AI startup, you're far more likely to get investment from a Canadian pension fund than a British pension fund. And ultimately, that probably will drag you across the Atlantic when you get to a certain size.
Alexandra Agnew, Managing Associate, Mishcon Private
I've been trying to get my, uh, pension payment out of my Australian, brief Australian legal super and I can confirm that the Australian tax department is arguably worse than ours, so it's not all great. They may be building these wonderful pensions, but they may not be able to access them.
Sir Jeremy Hunt, Author
If you're moving abroad.
Alexandra Agnew, Managing Associate, Mishcon Private
Yeah, exactly. So maybe it's all intentional. Um, and you talk about the kind of the various sectors, and energy I think is one of the big ones that you focus on in the book. What are the other kind of sectors that you think we should be focusing on for, um, the next kind of round? What are our next opportunities for growth in the…
Sir Jeremy Hunt, Author
I mean, there are a lot, there are 8 different areas in the book, all of which would probably add half a percent or so to GDP. Um, energy is one, um, I think we do need to maintain our climate change responsibilities and, you know, do the right thing for the planet. But, and this is a mea culpa because this is something successive Conservative governments got wrong, you know, our entire focus on energy policy has been decarbonisation. And it's been spectacularly successful. We've decarbonised by more than any other major economy. We're ranked third in the world, um, behind, I think, the Netherlands and Denmark for our, um, decarbonisation efforts. Um, but we've done it at the price of giving ourselves the most expensive energy in the advanced world. I mean, you know, I'd go to G7 finance ministers meetings and I'd look at the German finance minister, and I know that German businesses pay 24% less for their energy. The French finance minister, I know France businesses pay 35% less. The US Treasury Secretary, I know that US businesses pay 75% less for their energy and, you know, AI depends on data centres. They consume a lot of energy and, you know, there are lots of things we, we need to put right. For example, we have the 4 largest offshore wind farms in the world, but half the electricity they produce has to be switched off because the national grid can't handle the capacity, but we still have to pay for it and this is the kind of thing that puts up our, our energy bills so that's, it's a good example of something that's totally fixable.
Alexandra Agnew, Managing Associate, Mishcon Private
I think you talked about the fact that also the, because it's still being done by the state, the transmitters haven't, they haven't yet caught up with these kind of offshore energy, or the, they're all, they're built by these kind of independents, and then they're still trying to battle with the kind of state infrastructure, which means that there, um, so much of that is going to waste, which just feels like something which could easily be fixed but yet hasn't been quite. Um, I wanted to ask a little bit about your kind of personal experience if we have time before questions. Yeah? Um, and you talk about like, there's obviously, you've been through quite a lot of periods of political turmoil, um, and you talk about the kind of fairly dire polls before you, um, came in as Chancellor and your kind of prospects of retaining your seat. And I wanted to know, like, how do you deal with the kind of highs and lows of, um, of politics generally, I guess?
Sir Jeremy Hunt, Author
Um, it's, you know, it's, uh, it is a tough profession, uh, for sure. Um, and my golden rule is that I never cared about criticism unless it came from someone who knew me.
Alexandra Agnew, Managing Associate, Mishcon Private
Okay.
Sir Jeremy Hunt, Author
Um, because it is just part of what happens in politics. You're permanently going to be criticised by everyone because of, you know, your party rosette. Um, so you, you probably develop some resilience but the paradox of politics, um, is that politicians need to be thick-skinned, but they're actually quite thin-skinned because, um, you know, nearly everyone who goes into politics for whichever party, they want to make the world a better place. They have got a big dose of altruism inside them, but they quite want to be on a stage being loudly applauded while they make the world a better place and, um, they have a desire for approbation.
Alexandra Agnew, Managing Associate, Mishcon Private
Yeah.
Sir Jeremy Hunt, Author
Um, and so that means that they do get hurt by, by some of the criticism. You can't help it.
Alexandra Agnew, Managing Associate, Mishcon Private
Yeah.
Sir Jeremy Hunt, Author
Um, and so you have to find a way of dealing with it and I think the biggest risk for, I would say to someone wanting to go into politics is the risk to your families and your family life. Um, there was a Netflix biopic of Ronald Reagan, um, which I saw recently, and in one scene Nancy Reagan describes being married to Ronald, and she says it's like there being a third person in the marriage. And, and public service is a bit like that. It's not a job you can leave at home, uh, and forget about over the weekends. It's with you 24/7, because the media is with you 24/7, and they're constantly reporting on everything you do. And, um, and it's very intrusive and I never used to work on Sundays but I used to try and keep it clear as a family day. But the truth is, you know, there's the Laura Kuenssberg show, there's the Sunday media, you're thinking about what's happening in the week ahead. You're quite preoccupied and the biggest virus of all is that you think, um, look, uh, and you sort of say to your family, look, this is the most important job I will ever do in my life, and I could be out of it tomorrow. So just bear with me while I concentrate on being a good Health Secretary, or whatever it is. And then, you know, 10 years later, you're still in the Cabinet.
Alexandra Agnew, Managing Associate, Mishcon Private
Yeah.
Sir Jeremy Hunt, Author
And they're saying, you know, we've grown up now, Dad. Um, and that is, I think that is why politics is very punishing for families.
Alexandra Agnew, Managing Associate, Mishcon Private
It's very tough. I was thinking, like, when you're living in Downing Street as well, presumably then there is literally no escape from when, if there, presumably there is staff there lots over the weekends and stuff, I'd imagine that box is wonderful but.
Sir Jeremy Hunt, Author
It’s, you know, when you arrive, you think this is an enormous privilege. And then when things go wrong, you know, you look out of the windows and you're surrounded by all these police officers with machine guns and it feels more like a prison, um, and you kind of, you can't just go out because you have…
Alexandra Agnew, Managing Associate, Mishcon Private
Is there a secret corridor to?
Sir Jeremy Hunt, Author
Uh, well, um, there’s, there is secret escapes, but, you know, you've got these personal protection officers who are supposed to come with you everywhere you go. So, so I think it can be very tough.
Alexandra Agnew, Managing Associate, Mishcon Private
It's a bit of a fishbowl.
Sir Jeremy Hunt, Author
Yeah.
Alexandra Agnew, Managing Associate, Mishcon Private
Okay. Um, Carrie, do we? Okay. Does anyone, um, Katie?
Audience
Hi there this has been really interesting. I'm very excited to read the book. But I wanted to ask about another position. I've heard you describe being Foreign Secretary as the job that you enjoyed the most, um, and I know that you met President Trump a number of times over that period. I was interested in your views on how you think the Iran war will play out, knowing a bit about the personality of Donald Trump.
Sir Jeremy Hunt, Author
Yes, um, it’s kind of a big topic, um, Katie, thank you for that one. Um, I think the key when you sit in a meeting with Donald Trump, um, I mean, I thought he would ignore me because I was always with Theresa May and I thought, I'm only the Foreign Secretary and Theresa May is the Prime Minister. Uh, but he's, he’s not like that at all. He's looking around the room with beady eyes, trying to size up every single person in the room. Where does the power lie? Who's on the way up? Who's on the way down? A bit like the New York property developer that he once was. Do I go in high? Do I go in low? What's this guy's weak spot? He's, he’s making those calculations the whole time and, um, I think in the end, the way to think of Donald Trump is that he is a businessman more than he's a statesman. And, uh, he really cares about markets and he really cares about money. And so when it comes to what he'll do in the Iran war, I've been predicting now for the last 6 weeks that in the end, he will do what it takes to calm things down.
He needs to get the Strait of Hormuz open. He does not want, uh, gas prices in the US to reach $5 a gallon and, um, you know, he's got no good choices, because he's going to eat humble pie with a deal for the Iranians, which is probably putting them in a better place than they were before the conflict opened. And he's going to have to find a way to spin his way out of that. Uh, but the alternative is global economic turmoil, which as a business this person, he just does not want. So I think that's what we're seeing at the moment. He's, he’s edging his way towards a ceasefire that will get longer and longer and longer and there's going to be a long tail of disruption. But I think that, um, he, let's put it this way, he is going to want to get out of this quicker than Putin's been able to get out of Ukraine.
Alexandra Agnew, Managing Associate, Mishcon Private
Got another.
Audience
Hi, I'd like to come back to the observations about AI. There's a huge amount of excitement around AI, but all of the companies that are generating huge valuations are all owned by the private equity, of which on average 96% of the investors in that private equity are non-UK. The danger is we're Johnny-come-lately. The next generation of AI financed by our pension funds, etcetera, may be just as this bubble is bursting. However, my main question is everyone's wrapped up in the excitement. No one is talking about what are the jobs that my grandchildren, saddled with 70, 90, 100 grand's worth of debt coming out of university, what is the impact on that generation? Nobody lists down those new list of careers jobs, etcetera, that AI is going to take away. And that potentially is the other side of the equation at the moment, being the flip side of the AI boom.
Sir Jeremy Hunt, Author
Yes, I think people are talking about that though, um, and, you know, my, I've got 3 teenage kids, and I'm thinking what's going to be happening, you know, in, in a decade when they all hit the jobs market and I think people are very worried about that. And, um, the truth is we don't know what's going to happen. I think the AI revolution is surprisingly advanced, but it's still in its very early stages. So I think the UK is not going to dominate the LLM market. I think that's kind of happened and, you know, ChatGPT and Claude and all these LLMs are absolutely brilliant, but there are many evolutions to go. I think two of the most interesting ones for the UK potentially are AI in public services, because somewhere like the NHS has got centralised structures that potentially mean if we were smart about it we could, uh, use it in healthcare much more quickly than, than would be the case in other countries. And also the interface between AI and science, because we've got a very, very strong science base in our universities. And, you know, we're still only scratching the surface of how AI is going to help us discover new medicines, for example. That, all those revolutions are yet to come. And I think, um, the only thing I would say, what I say in the book about that, the worry about the jobs we're going to lose, is that, uh, we, we have to be flexible and, you know, at the end of the 19th century, people could see huge amounts of wealth accumulating in the hands of a few people and lots of people with lousy jobs in factories and that led Karl Marx to say that capitalism is going to implode because the people won't accept that kind of inequality. And what we did was we developed a new model, which has sort of become the foundation of liberal democracy, that makes capitalism fairer and makes sure that everyone has a stake in its success, and it's not been 100% successful, but it's not done badly either. And that's what we will need to do with AI. We'll need to make sure that somehow the incredible productivity advances that we get from it are ones that everyone can benefit from.
Audience
Hi, hi, thanks for your really enlightening views about life sciences in particular, because I'm a fan of that. Can I just, your, your book, ‘Can We Be Rich Again’, and your last comment about the interface between medicine, life sciences, and AI. Um, is part of the answer the French answer, which is just to protect those core industries? I was thinking about that when you first talked about vaccines and, um, the way we, this country, led the vaccine initiative globally, and, you know, it is actually, you know, what we discovered is we didn't have the ability to make enough vaccines in this country. You know, is there a part about can we get rich again which is about a little bit more protectionism around some of these core things? I'm, I’m like you, married to a foreigner, you know, I believe very much in free borders and everything else, but I wonder whether that's part of the answer as well.
Sir Jeremy Hunt, Author
Um, I think it is one part of the answer, but I think with a big caveat. So, um, I do think we have to have our eyes open when it comes to economic security, you know, we have, the pandemic taught us that we do need to be able, for example, to manufacture our own vaccines, not just design our own vaccines. And I think we have to be realistic, for example, about China. We need to avoid technological dependency on China because, you know, we know the Chinese state has very porous borders between political leaders and business leaders. And so any dependency could be used against us. So we, you know, we do have to have our eyes open. But on the whole, protectionism tends to dent innovation and animal spirits and I think what's brilliant about our universities, what's made them the most respected in the world outside the US, is that they are open to talent and capital from all over the world. Um, I would just like to create structures that mean that all the capital that is in the City of London is a bit more interested in investing in the most exciting British startups, instead of which they tend to source their capital from overseas the whole time. I just think there's a bit of market failure going on there. Um, and I'm a bit nervous that protectionism, when it's happened in the UK, has basically, uh, dulled the competitive animal spirits of our top companies, um, whereas actually If you look at sectors like the one that you're in or the City of London, you know, we've got, we've opened the City of London to competition from all over the world and we have giant banks like HSBC and Barclays that are thriving in that openness and so I think on the whole, uh, it's a good thing.
Alexandra Agnew, Managing Associate, Mishcon Private
We've got time for one more question.
Mishcon
Yeah.
Alexandra Agnew, Managing Associate, Mishcon Private
So we'll go online just quickly for these ones for your online audience. Um, following on from that, given capital, talent, and entrepreneurs are increasingly mobile, what do you think the UK underest, oh, do you think the UK underestimated how quickly wealth creators can relocate? And what do we need to do to become the world's most attractive destination and for global capital and talent again?
Sir Jeremy Hunt, Author
Um, it's a really good question and, um, you know, to cut to the chase, I was the chancellor who introduced the first non-dom regime and then Rachel Reeves, uh, built on it and there has been some capital flight. And, um, I think that we need to learn from that. By the way, I think the UK is still a very attractive place, uh, for international capital. We have strong property rights, stable institutions in a very unstable and dangerous world. This is actually a good place to be. Um, I also think, though, that the taxation system needs to be fair and I could not defend to my own constituents the non-dom regime that we used to have, which meant that very wealthy people were paying much, much lower rates of tax than people on, you know, the median salary in this country, which is £39,000. So what I did, um, was I, before I announced the measures, I got two very senior lawyers, not from Mishcon's. Um, I got them to sign, both from different companies. One advised non-DOMs, you know, high net worth individuals and the other advised financial services companies and I got them both to sign NDAs and I said, look, this is what I'm thinking of doing, but I do not want any capital flight. Uh, is it the right thing to do? And to my surprise, they both said, actually, it is exactly the right thing to do, because the non-dom regime is anachronistic and indefensible. Um, but if you want to avoid capital flight, don't touch inheritance tax and don't touch family trusts. And unfortunately, uh, what I hadn't really thought would happen was that Rachel felt she had to go one up on whatever it was I announced so she made it Labour's plans to include inheritance tax and family trust. She's done a partial U-turn on the IHT element of it. Um, and I think that what both of us underestimated is actually it's not just non-doms who move their capital abroad. Actually, Brits are very willing to move their capital abroad if they think that taxation is too high and, um, that has been happening. So I think we have, you know, we have got to think very hard about what we need to do to make sure that wealthy people keep their capital here.
Mishcon
Thank you.
Alexandra Agnew, Managing Associate, Mishcon Private
Great, thank you very much. Thank you so much for coming in, it's been, um, it’s been great to have you here and, um, thank you as well for, yeah, I really enjoyed reading the book and I think Jeremy is around to sign some copies afterwards if anyone would like them signed. But thank you very much for coming in.
Sir Jeremy Hunt, Author
Thank you very much.