welcome back to state of the nation. maumelle. morgues have been coming in and you're very balanced as gb news viewers. as john says, kemi badenoch is an engineering graduate. therefore, by default, a trained problem solver and innovating thinker, we need a leader with those key attributes. robert jenrick is

just another lawyer. not sure he is a lawyer, but never mind. the country is overrun with lawyers and collectively they are a major reason why, as a nation, we are in such a bad place. did you know that in the 15th century we passed acts of parliament saying there were too many lawyers and we should have fewer of them? this is a recurring theme of british politics and says when kemi badenoch went on holiday, instead of touring the country at hustings with robert jenrick and the other four leadership hopefuls, she lost any chance of getting my vote. she has been missing in action too often in the last three months. very balanced views. keep them coming in. in good economic news, inflation has fallen below i.7%, well below the incompetent bank of england's forecast of 2.1%. but the chancellor is said to be trying to find 40 or even 50 billion of tax rises for the budget. will labour's tax and spend never end? well, i've got my formidable panel back with me, the former conservative mp sir john redwood, and the sirjohn redwood, and the historian and broadcaster doctor tessa dunlop. john mervyn king, lord king, a man i greatly

respect. i think the last competent governor of the bank of england. if i said that to him, it would make him blush. who said that labour should just put up national insurance and be done with it? it's got to raise money and it's better to bite the bullet. do you think he's right or that actually, they need an entirely different approach? >> no , they need a completely >> no, they need a completely different approach. and i was hoping for something radical and interesting, because i don't think the last government was nearly radical enough. and the truth is, we had a productivity collapse in the public sector. and that's at least a 20 billion cost. and we've then got a lot of people of working age who aren't returning to the workforce quickly enough. both main parties say they want to do something about it. well, get on with it. we know that there are plans in the department, but neither government has yet managed to do it. and we know that the bank of england is a wastrel bank, losing tens of billions of pounds on needless losses on selling bonds they shouldn't have bought in the first place, but they certainly shouldn't be selling them at big losses. no other central bank is doing that. if you controlled

all those massive costs, you wouldn't need these great tax rises and you would be able to afford the extra money you need in selective places within the pubuc in selective places within the public services in order to improve them. and you do need to change the control framework, i'm no doubt about that. we've had this obr control framework. it manages to bring us the worst of both worlds. it's tough on chancellors who want to grow the economy, but it doesn't control the debt. the debt has shot up from two thirds of gdp to 100% of gdp over the obe years. so the thing is a complete failure. it depresses growth . it puts the it depresses growth. it puts the country in a bad mood. and if we had more growth, we would have more tax revenue and things would be a lot better. >> and this great book by john moynihan, which i'm reviewing, shortly, points out that there is a maximum level of tax that the country is to prepared pay. it very rarely gets much above the mid 30s percent of gdp. so just putting up taxes won't axiomatically balance the budget

because you'll find that not enough tax comes in. >> oh, it definitely make it worse. and i think this is holding back some of the ideas that we've seen in the newspapers that the treasury have strangely allowed to circulate. and if you tax non—doms too much, they just go. so you then get less money from rich people. and if you tax employment too much with a national insurance hike, you'll have fewer jobs and you'll pay people less because the companies won't suddenly have all that extra money. so this book from john moynihan is very good. it makes the point that if you keep the tax rates down, you collect more revenue and you grow faster , and growth is the grow faster, and growth is the key to the whole thing. fortunately, the labour government understands that bit. but every single policy they announce, with the possible exception of planning, is going to make growth less likely. >> and so isn't that the problem? they had the great growth summit and they said things that john and i would agree with. but they then announced policies such as the employment reforms and the green agenda, the shutting down effectively of the north sea and

so on, that make growth much harder. and if there's a tax raising budget of 40 to £50 billion, that's going to be an enormous deadweight on the economy . economy. >> i feel desperate sympathy for rachel reeves. it's interesting listening to john speak with such authority and actually off air, both of you saying there hasn't been good economic growth for the last 15 years. and i just did my own little basic sums, and i worked out that you had both been in power for the last 14 of those 15. and then i listened earlier to the former chief secretary to the treasury, david laws, who spoke with great sympathy for the current labour administration because he admitted that while he came into the coalition government in 2010 and there was fat that could be pared off the bone, the were legitimate savings that could be made with george osborne's austerity. there are no savings that can be made at the moment because of the mess. forgive me that your administration left. part of the reason was this bonkers ideological , economic

bonkers ideological, economic wrecking brexit, where everybody lost their common national sense and we nosedived and incidentally, just very quickly last time i came on air here and i said to both of you, and there is an authority gap, you wear dark suits, you have an economic background. et cetera. et cetera. people are more likely to believe you , even sometimes to believe you, even sometimes me. i sat here and i said, ooh, look at dublin and the way in which it's flourished like a phoenix from the flames. in recovering since the 2008 crash in comparison with northern ireland and shrinking belfast. and immediately john said that is because of the low corporation tax. i go home. yes , corporation tax. i go home. yes, thatis corporation tax. i go home. yes, that is true. it was the initial reason why dublin sprung ahead. but then the second spike in the graph was when they claimed all the people leaving london. the exodus in the wake of brexit. >> so you don't always see that they massively cut public expenditure in response to the financial crisis. our growth stops in 2008 because of the bust. public sector productivity hasn't grown since 1997. this is not a tory created problem and there is huge fat. we had plans

to get rid of 100,000 civil servants, which the labour party has just abolished. >> that's honestly disingenuous and i think it's not completely true. >> i was responsible for it. >> i was responsible for it. >> not true. and i have to easy to work the path through just to go back to that point on, on on the republic of ireland versus north of ireland, there is actually a spike in the economic graph post 2016, kicking properly into the digital companies from america, making huge sums of money, putting it through ireland. >> it was great for ireland. >> it was great for ireland. >> we're going to have to move on. but following on from this economic discussion, the book club is back. i talked to lord moynihan of chelsea, the author of the eye opening book return to growth, which addresses the uk's economic crisis. if you haven't had enough of this discussion, we're going to be taking it

the book club is back, and this week i talked to lord moynihan of chelsea, the author of the eye opening book return to

growth, which addresses the uk's economic crisis. we discussed his solutions for addressing the decline, and he offers bold ways of making things better to reverse the decline, and discusses the long term implications for the uk's future. if action isn't taken soon. well, john moynihan lord moynihan of chelsea, thank you very much for joining moynihan of chelsea, thank you very much forjoining me moynihan of chelsea, thank you very much for joining me to talk about your book , return to about your book, return to growth in your view, what is the main problem that is stopping the uk economy growing? >> well in 1505