did, austerity mic to whetever— george osborne did, austerity mic to whatever it _ george osborne didmps and their leaders who created this economic— their leaders who created this economic mess.— their leaders who created this economic mess. geri, some would an ue the economic mess. geri, some would argue the economic _ economic mess. geri, some would argue the economic mess - economic mess. geri, some would argue the economic mess is - economic mess. geri, some would argue the economic mess is being | argue the economic mess is being felt around the world and that the uk is having to deal with it in the same way as other countries are. would you agree with that? i would. more to the point is when we look at pensions the vast majority of tory voters are pensioners. that is where they are, they have to be careful with that. i also think there has to be a recognition that it is younger people that have burnt the brains of the financial crises and over the last few decades. there is a difficult balancing act, is what i am trying to say, between clearance voters in future voters. there i

was , prime minister, osborne was, prime minister, prime minister george osborne was chancellor, werd repeatedly about the idea of those with the broadest bearing, their bearing most weight. and i'm really i think it would be an attempt to sell things in those terms as well. but you're right, there are similarities with labour and that then raises the question about if and i do stress if in eyes of the public labour and the conservative party are seen as relatively similar in terms of their specific economic and the broad narratives , it then it comes to narratives, it then it comes to which party the voters think it be best placed to introduce those policies and actually make sure their make sure they're effective. and so that goes to the arguments about these broad narratives and i imagine that in the wake of what we saw with liz truss, the government still some way to go in terms of regaining that reputation and economic competence. certainly those polling, almost recent polls we see the conservatives are still ten points behind on who would be the best party to deal with the eco

in 2010 but george osborne chose to fill the fiscal hole he faced at that point in time at about 80% some on the tax, about half and half. i think what is also interesting is the tax cuts are front—loaded and the spending cuts are back loaded, so, as many people have pointed out, most of the spending cuts are pencilled in for after the next election. i pencilled in for after the next election. ~ pencilled in for after the next election. ,, , ., ., , , election. i think you are suggesting that the resolution _ election. i think you are suggesting that the resolution foundation i election. i think you are suggesting i that the resolution foundation that some of those spending cuts are undeliverable. what do you mean by that? fit. undeliverable. what do you mean by that? �* ., ., ., undeliverable. what do you mean by that? ., ., ., ., , that? a lot of them are really challenging — that? a lot of them are really challenging spending - that? a lot of them are really challenging spending cuts. i that? a lot of them are really i challenging spending cuts. and that? a lot of them are really -

is been described as a political. is been described as a political trap with labour and we fed george osborneg, if you like and these are hallmarks here. but there is one thing that again, i'm surprised no papers of mention. especially the guardian, for example. and colleagues in the conservative party may fundamentally disagree with me but if the government wants a quick return to better growth and a quick boost to the economy, the best thing you can probably do is get closer to the eu, to give up the hard line fighting that we are involved in at the moment, markets or respond positively and businesses would benefit if we started to be more aligned with europe and get rid of the extreme heartbreaks of frederick. that would make an enormous difference. britain, we suffered notjust from the pandemic but notjust suffered notjust from the pandemic but not just from suffered notjust from the pandemic but notjust from what happened in russia but if we are honest, there is an element year of brexit is not the whole thing but it would really help to restore relations with the eu. ., ., ., ., eu. tha

we know that george osborne is been advising him, the poster boy for austerity and whether or not thisread, it's just been bad news upon bad news and it's just been bad just been bad news upon bad news and it'sjust been bad news just been bad news upon bad news and it's just been bad news upon just been bad news upon bad news and it'sjust been bad news upon bad news and it certainly paving the way. news and it certainly paving the wa . ,. news and it certainly paving the wa , , news and it certainly paving the wa . , ., . . way. preparing us for the idea that we're in the _ way. preparing us for the idea that we're in the second _ way. preparing us for the idea that we're in the second error- way. preparing us for the idea that we're in the second error of- we're in the second error of austerity and it's going to be for long haul. austerity and it's going to be for lona haul. ., ., ~' austerity and it's going to be for lona haul. ., ., ~ . austerity and it's going to be for lona haul. ., ., ~' . , austerity and it's going to be for lona haul. ., ., ~ . , , long haul. looking at this, t

and policies of george osborne and policies of gordon brown .e mirror claims , the prime minister rishi claims, the prime minister rishi sunak and his chancellor were greeting in the house of commons . they plunged millions into economic hell and. finally, the sun with yes, a tune of a new christmas themed version . the christmas themed version. the football anthem three lions. football's ho, ho, ho i i thought football's ho, ho, ho! i thought you were going to sing it, mark mark. now i've got music. music bad enough. yeah. musicians union. no, we can't do that, can we? what? you just heard his voice joining us to do the papers this morning is david mellor, former chief secretary to the treasury and broadcast list. so a very good morning to both of you . why don't we start both of you. why don't we start with you? and of course, we've just through all of the all of the papers are covering on the front, the telegraph's they're saying the welfare bill is rising. that's particularly by billion. the and i like that quote which they put on the front

it won't bring anywhere near doing the full leg that was originally envisaged to deliver by george osborne a number of conservative transport secretaries. i am disappointed that the government seems to be lacking ambition in this area but i welcome the fact that there is still going to be significant investment. we need to welcome the fact that there still seems to be a priority butjust not as much of a priority and previous governments, notjust liz truss but up governments, notjust liz truss but up until borisjohnson he was one of its biggest fans. we have had a lot of support from the labour party. the question is whether this government will deliver the full project or not. why make you a very clear that any scaling back would be a false economy? , it is a false economy. i compare it to the energy package, if you can't size well you can still do small reactors, the question of the treasury is does it do small and big reactors or does it just to the small ones, which i suppose is the fullback position they are probably considering. the issueis they are probably considering. the issue is

thinking of reducing that to around 20%, on one hand, this will cause a rich among the tory mps, george osborne look at the idea. 0n the other, you look at the black hole that somehowjeremy hunt is got to plug and dealing with pensions at all, i would rather deal with the triple lock stay and higher income earners pay a bit more. rather than if the triple lock goes, means the pensioners won't get the 10% of the promised and that was even half that. find 10% of the promised and that was even half that.— even half that. and breaking your conservative _ even half that. and breaking your conservative pledge? _ even half that. and breaking your conservative pledge? and - even half that. and breaking your conservative pledge? and also i conservative pledge? and also upsetting many conservative mps. indeed, what is already a very fractured _ indeed, what is already a very fractured divided and difficult party— fractured divided and difficult party to— fractured divided and difficult party to unite which rishi sunak is done _ party to unite which rishi sunak is done so _ party to unite which rishi sunak

actually drop from the 40p rate at the moment, down to 20p, and this is one of those areas that george osbornek at and decided 0sborne had a look at and decided against it because tory mps would rebel and obviously this is something that will hit middle income earners, earning over 50,000, 270 a year, and as far as the telegraph is concerned, they are splashing the story... inaudible sor , splashing the story... inaudible sorry. you _ splashing the story... inaudible sorry. youiust— splashing the story... inaudible sorry, you just froze _ splashing the story... inaudible sorry, you just froze for - splashing the story... inaudible sorry, you just froze for a - splashing the story... inaudible l sorry, you just froze for a moment, nigel. is it a sign of desperation that they will risk the raft of some conservatives with a policy like this if it does come to pass? —— wrath. this if it does come to pass? -- wrath. . , ., , ., wrath. the clue is in what you say it, if it comes _ wrath. the clue is in what you say it, if it comes to _ wrath. the clue is in what you say it, if it comes to pass, _ wr

well of course george osborne back in the i course george osborne back in the 20105 did 80% on spendings is. and of course it is easy to propose cuts two or three years down the line, after the next general election, ratherthan line, after the next general election, rather than introducing them immediately. so i think the thing we need to ask is, spending cuts when? as much as is it spending and is it tax? 50 cuts when? as much as is it spending and is it tax?— and is it tax? so when is key and where and _ and is it tax? so when is key and where and you — and is it tax? so when is key and where and you indicated - and is it tax? so when is key and where and you indicated there i and is it tax? so when is key and where and you indicated there is| and is it tax? so when is key and - where and you indicated there is not much scope for spending cuts and investment might be the area that is looked at. in terms of delivering, what is it 35 billion more? is that enough? we what is it 35 billion more? is that enouuh? ~ .�* what is it 35 billion more? is that enouuh? ., �* ~ ., what is it 35 bil

to the treasury, you worked with george osborne, the chancellor at the time as part of that coalitionrrent chancellor saying that there are are watering difficult decisions they will have to make in the u.k.. is austerity 2.0 unavoidable at this point in the u.k.? or are there other options, other paths that this nation could go down given the constraints of the market? danny: it is not for me to talk about current u.k. politics, tempting as they may seen -- seem, but we have made significant adjustments in response to the global financial crisis. the u.k. had good growth prospects in 2015 and we could see a more positive future ahead. unfortunately, the government is back in a position where it has to make these adjustments. i know jeremy hunt from being with him in the cabinet and i wish him every success in what is an extremely difficult task. to balance and do this in a way that is fair and supports growth is an incredibly difficult task. but it is clear when you listen to the bank of england and you see the figures that some tough choices are on the way by the government. how we

how much more austerity can there be after all of the former cuts that george osborne made, all of theof the government budgets? the fte is also reporting that jeremy hunt is planning to keep the bankers bonus cap as kwasi kwarteng was going to do, but that is controversial and even more so after the prime minister rishi sunak's comments yesterday to sizing nurses for demanding a double-digit pay rise. even more controversial after this big inflation print. dani: you will be reporting on that for us, the autumn fiscal statement. think forward to that coverage. lizzy burden, thank you. coming up, we have bloomberg surveillance for you. francine: -- this is bloomberg. ♪ >> this is "bloomberg surveillance: early edition" with francine lacqua. francine: good morning and welcome to "bloomberg surveillance: early edition."

george osborne, 80% spending cuts, that will not be the case here.od of voters has shifted. people feel like they need to be supported by the state, potentially, more than before. that is what you are hearing from some conservatives, not all. there are so many groups within the conservative party all wanting to protect what they care about. that will make their task incredibly difficult. by, about. that will make their task incredibly difficult.— incredibly difficult. a good point to no to incredibly difficult. a good point to go to an _ incredibly difficult. a good point to go to an indoor _ incredibly difficult. a good point to go to an indoor market - incredibly difficult. a good point to go to an indoor market in - to go to an indoor market in gloucester where our reporter is based, talking to people about the sort of support they would like to see and how they are hearing up like to see and how they are hearing up with the cost of living crisis and a higher rate of inflation. irate and a higher rate of inflation. we have 'ust and a higher rate o

not quite i stared a 2.0, but it's not far short of the revisiting some of the rhetoric that george osborneit. you loud "we are doing this, and this is why we are doing it.— why we are doing it. you and i can make that — why we are doing it. you and i can make that case, _ why we are doing it. you and i can make that case, but _ why we are doing it. you and i can make that case, but i _ why we are doing it. you and i can make that case, but i don't - why we are doing it. you and i can make that case, but i don't think. make that case, but i don't think it will have much effect on the choice of words _ will have much effect on the choice of words that he happens to use. you've _ of words that he happens to use. you've also— of words that he happens to use. you've also got to remember the message — you've also got to remember the message of this budget has two audiences, it's got the public but it's also— audiences, it's got the public but it's also got the international community, global investors, the markets, — community, global investors, the markets, the shadowy forces that will control

the daily telegraph basically is a bit confused, calling this the rhetoric of george osborne, who is a former conservative chancellor with the policies of gordon brown, who of course was a former labor chance let. then prime minister, you have the day the mail which says tories, so the strive is now if you're not fluent in british tabloid speak, that basically means the conservatives are hitting the middle classes. and there was me thinking we'd voted in the conservative, says one of the columnists, and then we have the son, which is like say on football and already reserving at talk about the budget up here saying tax, hell, thank god for 30. so you can see that the conservative press the right wing press are not to him. impressed by what jeremy hunt has just said that the middle class is basically all going to be using. squeezed by the tax rises that, that i'd be facing. when you look at the, the voting population at large, they have already in many ways written the concept is off because of the recent weeks of time was created by jeremy hunt's predecessors. now, this might fix thi

ten years later, many of george osborne's team are now advising jeremy hunt. uty chief of staff, is now head of policy at number ten. but austerity in 2010 left poor communities even poorer. between 2010 and 2020, the average household wealth in the affluent south east of england increased by 42%. in the north east, it rose just 3%. today, the labour party pointed out that the uk is the only g7 economy that is poorer now than before the pandemic. no—one was talking about cuts to public spending two months ago. and no other advanced economy is cutting spending, or increasing taxes on working people, as they head into recession. this government has forced our economy into a doom loop, where low growth leads to higher taxes, lower investments and squeezed wages, with the running down of public services. many interpret the government measures as a return to the policies of a decade ago. labour mp clive betts says, "this is austerity mark 2, and the prospect of financial collapse for many councils up and down the country". and gary smith, general secretary of the gm

when george osborne was conducting fiscal tightening he went for more than three quarters spending cutsservices, giving public sector workers below inflation pay rises, it is much harder to make savings to public spending than perhaps a decade ago so tax rises might have to do more of the work. the old cliche is efficiency cuts or efficiency savings, but how much is there left to be efficient about? talk of efficiency savings, i think, ignores that in the face of higher inflation, higherfood and energy bills, higher pay awards and departments expect, they are already having to make quite substantial efficiency savings just tuesday within their budgets, asking for further savings on top of that, you have to ask a reasonable and possible but is —— to stay within their budgets. the treasury recognises tax rises will have to be part of the answer because seeking to cut tens of billions of pounds from public services after a decade of squeeze is not possible without hitting the public services we rely on. , ., ., on. something else that so often seems to come _ on. something else that so oft

you were, and we can see the pictures, part of george osborne's team in 2010.how would you compare this moment? ~ ., ., , ., ~' budgets. how would you compare this moment? ~ ., ., ~ moment? what do you think the scale ofthe moment? what do you think the scale of the challenges? _ moment? what do you think the scale of the challenges? i _ moment? what do you think the scale of the challenges? i think _ moment? what do you think the scale of the challenges? i think it _ moment? what do you think the scale of the challenges? i think it is - of the challenges? i think it is another moment. we are in a moment. we have left the european union and we have had covid. it is about building for the future. the backdrop is very different me was a credit crunch, we fought an election on the government needed to get britain's finances into shape and live in its means. we got on to deliver that. we had a mandate to do that. interest rates were low and people had more money in their pockets. the challenge now is, it is a very different world. what the markets want to see is a

but george osborne, by the way, i want to go down that path because think it's so important that scotland if your share of the national debt now the parliamentarian of the spectator parliamentarian of the spectator parliamentarian of the year awards were held last night and it was a spectacle clearly tone deaf gathering westminster and westminster insiders and politicians. i hope you went . politicians. i hope you went. sean hosted crossfire star sean hosted the crossfire star rosewood hotel in covent garden. it was actually an orgy of self—congratulation . we're self—congratulation. we're throwing the country into was merely a punch line to selfish ministers , high hunt fisheries. ministers, high hunt fisheries. she who seem to think everything that's going on the past few months makes me really angry. actually, it's all some sort of game , you and the team for this game, you and the team for this unexpected honour, which i must say i need to dedicate to my fantastic my friends family. and of course the uk bond markets . of course the uk bond markets. and to those conservative mps who di

in 2010 but george osborne chose to fill the fiscal hole he faced at that point in time with about 80% a different tack, he has chosen to basically balance it out to put some on spending cuts and some on tax, about half and half. i think what is also interesting is the tax cuts are front—loaded and the spending cuts are back loaded, so, as many people have pointed out, most of the spending cuts are pencilled in for after the next election. i think you are suggesting at the resolution foundation that some of those spending cuts are undeliverable. what do you mean by that? a lot of them are really challenging spending cuts. and also, to be fair, a lot of them depend very crucially on how inflation rolls out. so if inflation comes down in the way the 0br projected yesterday, many of those spending cuts may not even be necessary. you mention the 0br, that's the office for budget responsibility. just a final question — figures from them say that average household incomes will fall by 7%. can you give us a sense what kind of impact that will have? that's an absolutely extraordinary figure. l

then we had the so—called golden era beginning in about 2013 with george osborne . osborne. we must make china our best friend . before china our best friend. before that, david had been meeting the dalai lama , and in fact, that dalai lama, and in fact, that was received very badly by beijing. so as ministers i was banned from meeting the dalai lama, as was tim lawton, the children's minister at the time, because they didn't want to upset chinese. now we've got situation should new trading again. the reality is we have to with china as you know the biggest power in the world the but actually we don't like deal with the beijing government because full of really nasty people who are carrying a poor appalling human rights abuses in tibet in xinjiang, which is very close to the usually with advisedly i use it legally very close to genocide. what's happening but also mean yes of the genocide as well. but on a normal human level the very strict lockdowns zero cope policy which we will proved in the west hasn't been with proper vaccination and which they haven't carried o

but george osborne, by the way, i want to go down that path because think it's so important that scotland if your share of the national debt now the parliamentarian of the spectator parliamentarian of the spectator parliamentarian of the year awards were held last night and it was a spectacle clearly tone deaf gathering westminster and westminster insiders and politicians. i hope you went . politicians. i hope you went. sean hosted crossfire star sean hosted the crossfire star rosewood hotel in covent garden. it was actually an orgy of self—congratulation . we're self—congratulation. we're throwing the country into was merely a punch line to selfish ministers , high hunt fisheries. ministers, high hunt fisheries. she who seem to think everything that's going on the past few months makes me really angry. actually, it's all some sort of game , you and the team for this game, you and the team for this unexpected honour, which i must say i need to dedicate to my fantastic my friends family. and of course the uk bond markets . of course the uk bond markets. and to those conservative mps who di

in terms of whether they would leave, there was a reform about five years ago when george osborne removed you were born in the uk to a uk father, because even those kind of people used to be able to claim non—dom status. we were therefore able to look at, there was this reform, we can look at how much it changed the number of people staying in the uk. it is important to say they are quite mobile and already in any given year, from one year to the next, about 10% of them leave anyway but when you compare the ones who are not affected by this reform to the ones who were affected by this reform, the difference was those who are not affected, about 10% of them left the next year, those who were affected, 10.02 of them left the next year. a tiny increase. it was really tiny, less than 100 people. you were formerly working in the treasury. do you think it is time, given the black hole in the treasury figures, do you think it is time to close the loophole? i figures, do you think it is time to close the loophole?— figures, do you think it is time to close the loophole? i think so. and i am sure

jeremy hunt sounded like george osborne with his talk of austerity and acted like gordon brown was stealthgleeful penalise ation of wealth creation and a tax on high earners and capital gains. the chancellor did mention the need for economic growth , but for economic growth, but apparently that meant to him. government spending on infrastructure not releasing the entrepreneurial zeal of the british people through incentives to earn one in five taxpayers. people earning just over taxpayers. people earning just ove r £50,000 will soon pay over £50,000 will soon pay income tax and national insurance of 42% on a chunk of their income that grows daily. thanks to inflation. on top of that , you thanks to inflation. on top of that, you could well be paying over 6% interest on your student loan . that's an extra quarter of loan. that's an extra quarter of a million people dragged into paying a million people dragged into paying super tax and national insurance of 47. kwasi kwarteng want you to scrap super tax , but want you to scrap super tax, but jeremy hunt has increased radically the number of

during the five years of the coalition government for 20202015, george osborne's enforcer during austeritygy? we are not yet delivering the finance at - technology? we are not yet| delivering the finance at the technology? we are not yet - delivering the finance at the volume and scale that is needed in order to ensure that we meet the 1.5 degrees goal that was the main focus of cop26 in glasgow last year. a multilateral development bank was sent up in 2016, we have 105 countries around the world. we are rapidly scaling finance with a focus on renewable and clean energy, particularly in countries in asia and beyond where of delivering the project up huge. i think multilateral development banks like the aib have a major role to play to ensure that we reach the scale that is needed to achieve the carbon dioxide mitigation to meet those goals. dioxide mitigation to meet those coals. ~ dioxide mitigation to meet those oals, ~' y., ., dioxide mitigation to meet those coals. ~ i., ., ., dioxide mitigation to meet those coals. ,, ., ., dioxide mitigation to meet those oals. ~ ., ., ., goals. the

was very strong on rhetoric about leaving the golden age him which was a clear sort of dig at george osborneking quite closely with china. he talks about a long term view of china understanding that china is an important of our international future , a bit of a fudge and future, a bit of a fudge and very very different from the rishi sunak that we saw over the summer leadership campaign. when he went all guns blazing. on how china was this huge systemic threat. so people like iain duncan smith and let's remember ian duncan smith still a lot of sway among conservative backbenchers. there was a big caucus of anti—china conservative mp led by iain duncan smith. and if he's making these sort of noises, it suggests that there's probably a lot of displeasure on the conservative about what seems to be a different sort of strategy on china than either liz truss or boris johnson. so this man, xi jinping, the president, not having to cope with all these protests across the chinese . the protests across the chinese. the particular problems in shanghai and, beijing, although they seem to have quietened

robust pragmatism sounds very much to me, not all that dissimilar from the kind of language that george osbornento the golden era or as it's now referred to in government, the golden era. look, china is a threat it's a strange vagaries of our current system . this of our current system. this government can't seem to admit that it's a threat. tory mps come out today and said, look, china , a threat is threatening china, a threat is threatening our values . china, a threat is threatening our values. it china, a threat is threatening our values . it tore china, a threat is threatening our values. it tore up our treaty in hong kong and it's done an awful lot more than that. yeah, there's this weird reality precisely because we are so on china, but imports so depend on china, but imports for investment and for many other things that we can't seem to call a spade a spade when . it to call a spade a spade when. it comes to this regime some alarm strong. thanks very much, indeed. and of course, we'll continue to monitor events as they spread across those chinese cities. thank you very much indeed. citi

it is pretty clear that that whole approach associated with george osborne and david cameron was pretty out ahead of europe in terms of cooperation with china across all areas, was a mistake. just how close are china and the uk intertwined? is it a simple to say we are going to be tougher and a bit more pragmatic about it? is it really as simple as that? it is definitely _ really as simple as that? it is definitely not _ really as simple as that? it is definitely not simple. - really as simple as that? it is definitely not simple. i i really as simple as that? it 3 definitely not simple. i think as the preceding segment was referring to, there is a litany of very serious tensions in the relationship. we saw this particularly from 2019 onwards, as the hong kong protests broke out and the hong kong protests broke out and the uk has obligations to hongkongers. we have seen it obviously in the arrests of ed lawrence just over the weekend. there is the ongoing issue of the manchester consul—general�*s conduct in october in trying to shut down protests outside the consulate. it is anything bu

yes you know lebedev and boris johnson's favourites owner of the evening stuff which george osborne alsoat. and to honest with you, i don't think that's such a bad thing. but if he thinks that's going to restore politic, he's got a performance of starmer on it. it's of a green starmer on it. it's not it's often that you hear not it's not often that you hear me say that. and in fact, claire and of my good friends, and i, one of my good friends, brexit policy now brexit policy is who's now a baroness. she's actually in baroness. she she's actually in the wants to abolish. the and she wants to abolish. yeah. often phrase yeah. because quite often phrase you lords is you know full well the lords is used a blocking he used as a blocking policy. he doesn't legislation through used as a blocking policy. he doesn'stands gislation through used as a blocking policy. he doesn'stands against] through used as a blocking policy. he doesn'stands against the ough and it stands against the electorate. you know oliver electorate. well you know oliver cromwell when he first abolished the lords said that it

last time under george osborne, inflation was relatively low and mortgage rates were ultra low, so peopleiving with _ and beyond. where the government is kind of giving with one _ and beyond. where the government is kind of giving with one hand, - and beyond. where the government is kind of giving with one hand, it - kind of giving with one hand, it gets taken away with another because of that combination. fine gets taken away with another because of that combination.— of that combination. one of the thins we of that combination. one of the things we are — of that combination. one of the things we are getting _ of that combination. one of the things we are getting at - of that combination. one of the things we are getting at the - of that combination. one of the - things we are getting at the moment a66 pounds towards energy bills and that. in march and we have got used to that now. if you are a pensioner, you will lose that £66 and the energy price cap has gone, so literally, the pension rise disappears and energy bill rises alone, which is why household living standards are going to fall