Boris Johnson Interviewed by Bloomberg News: Transcript
(Bloomberg) -- The following is a transcript of the conversation with Bloomberg Editor-in-Chief John Micklethwait in 10 Downing Street.
JM: Tomorrow you’ve got your global investment summit. You’ve got all the captains of industry and finance coming here. You’ve just announced you have 10 billion pounds worth in deals, 30,000 jobs… But these people are hard-headed realists. They look at Britain: Britain hasn’t got that much FDI proportionally over the last couple of years, you’ve got the queues at Felixstowe, they see the things to do with truckers, they know you still haven’t got a deal with the EU on services which is crucial to the City of London. You’ve got a very high tax take. All those things… How do you convince these hard-headed people to put more money into Britain?
BJ: First of all, thanks very much for having me on your show, John. First of all, the U.K. remains number one destination for FDI, we’re a colossally attractive place for people to come and invest and you’ve seen massive investments just in the last few weeks. So yes, the summit that we are having, the Global Investment Summit, is already a success in that there’s another 10 billion going in, a lot of it in green technology. And that’s on top of about 5.8 billion that was triggered by the ten-point plan that I set out for the green industrial revolution. But I think the long-term reasons why the U.K. remains attractive and, indeed the short- and medium-term reasons, are -- all the fundamentals remain the same. So the timezone, the language, the rule of law, the deep pools of liquidity in the City of London, the attractions of having some of the best universities in the world -- many of the best universities in the world. But this is also the moment, it is the moment because we’ve got a series of things coming together. The U.K is deciding to make a big bet on green technology so the government is going in, setting the regulatory framework to encourage the private sector to come in, in the way that they are (and I’ve quoted some of the numbers for the investment that we are seeing). So we are making a big bet on windpower, on hydrogen, on electric vehicles, on gigafactories, on carbon capture and storage, all those things. And that’s driving a lot of the investment. But you are also seeing a government that is creating the bedrock, as it were, for industry, for investment across the whole of the U.K., so we’re investing in huge quantities of new infrastructure which we’ve long needed in this country to address our productivity gap and so we’re putting about 640 billion pounds into transport infrastructure of all kinds, into technology and into skills. And that’s different and new, the approach that we are taking, the levelling-up agenda. And then the third thing that we’re doing that’s different and new is of course we’re taking advantage of our regulatory freedoms. So the U.K. will be even more attractive as a place to invest and do business because we are going to be making sure that when it comes to the growth areas of the 21st century, when it comes to cyber or AI or gene-editing or quantum or all these, or tech of all kinds, the U.K. is the place to put your dollar, your yen or your whatever it happens to be...
JM: You’ve made the case very strongly for all these things like green tech and things, so I thought -- we’ll come back to green tech and we’ll come back to this basic issue of regulation. But you look at regulation, many of the people coming here would say here’s Britain we’re in Margaret Thatcher’s old study, you’ve got “The Road to Serfdom” up here. You used to be an economic liberal, we now have the highest tax take in terms of national income since 1969 going to the government, you’ve got all these new regulations. People I think expected you to come in with a deregulatory..
BJ: There’s an elementary thing that I think our viewers will not have missed, John, which is that we’ve been through a colossal pandemic which has necessitated the -- sadly necessitated -- the expansion of state activity into all sorts of fields that neither you nor I would have wanted or previously have..
JM: Do you think these are temporary? I mean you’re putting up corporate taxes from 19% to 25%...will they..
BJ: They’ll remain amongst the lowest in the G-7
JM: But will you reduce them ever?
BJ: You can certainly -- I don’t want to anticipate any decisions that the Chancellor may make on the fiscal side -- but you can take it that Rishi Sunak is, as indeed am I, is a staunch low-tax conservative and that is he believes in an enterprise economy and that’s why we are doing all the things that we are doing, and one of the things that we are doing to make this country more attractive to invest in, is Rishi brought in a big - you talk about tax - a huge super-deduction for companies to invest in capital and plant and write that off against tax in order to deal with that productivity issue that we face. The U.K.’s an incredibly successful economy, given that we basically don’t exploit the potential of so much of it -- that’s what the whole levelling-up agenda is all about.
City of London
JM: Can we talk about what many people would see as the most successful part of the British economy -- you have the global captains of -- BlackRock, Goldman Sachs, JP Morgan -- they are all coming to this conference and they would all say the same thing that yes, they like the City of London. But they are also hedging their bets, they are putting some jobs in Paris and Amsterdam..
BJ: But far fewer than they said!
JM: But behind all of it they would say look, we are an industry, finance and insurance is an industry that brings in 160 billion pounds a year to the British economy, fishing brings in less than a billion and you’ve put most of your energy into..
BJ: Mais non, Nonsense.
JM: ...into arguing with the French about fishing rather than this big issue of finance.
BJ: No, on the contrary. Look in 2008-2009 there was literally only one politician who spoke up repeatedly for the City of London, for bankers and that was me. And I know that the City of London is crucial not just for our country but for the whole of Europe and for this hemisphere and that’s why -- for the world -- and that’s why I think it’s profoundly in the interests of our partners to ensure that we do have good relations, we do continue to see proper flow of capital and services between London and all the other parts of Europe, and I’m sure that that will continue. If you want to raise money around Europe, if you want to finance your merger or whatever it is, London is still the place to come and always, always will be. But I think the interesting thing about the way finance is going is that so much of it now is in fintech and it’s the tech side that is developing so fast and that, you’ve got to admit John, the U.K. has an extraordinary kind of mixture of things that make it propitious for that kind of development and I think I’m right in saying now that we’ve got 106 or more tech unicorns -- you know -- that have benefited, both the Bloomberg viewers who don’t yet know or any Bloomberg viewer that doesn’t yet know, a unicorn being not a mythical beast but a company --
JM: a company with a billion dollars in revenue.
Brexit and France
BJ: Billion dollars in revenue, thank you. There are 106 in this country. And another European Union nation that I will, modesty forbids me from mentioning, has a quarter of that number...
JM: I think that’s France, but just to use that point, and that is exactly what the hard-headed captains of industry will say, they will say look, you are stuck in these arguments with France about fishing...
BJ: You brought up France..
JM: about fishing, about finance. They are the people, as you well know, who are blocking the City of London’s ability to build trade with the rest of Europe or to get a deal on that. Is it time to sort of fix those squabbles?
BJ: I think that -- look, I’ve got great relations with the French government, with Emmanuel Macron, and will continue to ensure that the U.K. and France have a very close..
JM: You back on phone contact, on signal?
BJ: I wouldn’t dream of sharing the private conversations.
The U.K. and France have been “mains serrees”, or whatever the phrase, you know, for a long, long time and if you look at what we do together around the world, we’re very close partners and we’re friends, and it’s vital -- and it is the deep will of our populations that that should remain the case and we will continue to do great things together. Is there a problem with the Northern Irish protocol? Yes there is, but we’ll fix that, and I don’t think that’s going to be the end of the world.
JM: Can I ask you about another big country? You look around the world, the biggest source of investment at the moment, the biggest source of FDI is China, 130 billion dollars they’re investing overseas at the moment. You’ve come up with a strategy saying that you will let them invest in non-strategic assets, which seems to mean not Huawei, not technology and not nuclear power -- and I wondered what sort of things will they be allowed to invest in? You’ve talked about infrastructure, they’re the biggest infrastructure...
BJ: Si monumentum requiris, circumspice. Okay, so when I was running London, I went out several times to China and had fantastic trips there...
JM: But things have changed...
BJ: Well -- there’s no -- So investment in stuff that drives jobs and growth in this country whether it’s in development, look at what’s happening in Greenwich, Vauxhall Nine Elms, things have taken off there because of Chinese investment so I’m not going to tell you, John, that that the U.K. government is going to pitchfork away every overture from China, of course not. China is a gigantic part of our economic life and will be for a long time -- for our lifetimes -- but that does not mean that we should be naive in the way that we look at our critical national infrastructure, the way you look at -- you mentioned nuclear power -- you mentioned 5G technology, those are all legitimate concerns that any government, many, many other governments around the world have. But I’ve said this many times, it’s worth repeating, I am no Sinophobe very far from it, I think --
JM: Do you think you’re the last Sinophile in the cabinet?
BJ: No, I expect there’s a lot of -- look China is a great country..
JM: What about wind power? would you let them buy offshore wind power? Railways?
BJ: I think you’d have to look at -- you’d have to look at what was -- you’re defining as strategic or critical, but I certainly think that having -- our trading relationship with China if you look at it -- in spite of all the difficulties, in spite of all the sort of angry conversations about, all the difficult conversations about the Dalai Lama or Hong Kong or the Uyghurs where we will continue to stick to our points, right, we will continue to stick to our views, but actually trade with China has continued to expand for a very long time and I think probably will continue to expand as I say for the rest of our lives. That doesn’t mean that we should be – we should be cautious about we handle our CNI and about how we handle FDI from China into some of our sensitive industries -- and that’s why we’ve brought in some of the legislation that we have
COP-26 Climate Summit
JM: Can I ask you one thing which is about COP? I’ll ask quickly -- We were talking about China, obviously a huge deal in COP and Xi Jinping looks unlikely to come at the moment -- what do you think is a realistic goal, what’s your personal goal in terms of COP?
BJ: I think COP was always going to be extremely tough, we’re hoping that we’ll get a good turnout in spite of the pandemic. What we want people to focus on is their nationally determined contributions, in reducing their CO2, making those hard pledges. Plus we want commitments on coal, cars, cash and trees. So we want the world to move away from coal by 2040 (2030 for the developed nations). We want to make sure that everyone stops using hydrocarbon-fueled internal combustion engine cars and the U.K.’s in the lead there, we said that we would stop that by 2030. We want a big package for the developing world to help countries that haven’t been historic emitters to cut their carbon so we need that 100 billion dollars a year, we need that 100 billion dollars, and the last thing is we want to make sure we plant millions and millions of trees to help to fix the carbon and to restore the balance of nature so those are the -- we need the nationally determined contributions, we need to keep 1.5 alive, we need to restrict the growth in temperatures to 1.5 degrees by the end of the century. We think that with the commitments that we’re seeing we could, we could do it but we’re going to need to see some real action from the participants in Glasgow.
JM: Prime Minister, thank you for talking to Bloomberg.
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