Why do you think chancellors have ducked these sorts of reforms for as long as they have?

Well, if I knew the answer that I would try and persuade a backbench MP to pass a law that would identify the psychological frailties in prospective chancellors and ban anyone who is prone to making the tax system more complicated from being chancellor.

I always get a bit depressed when people say things that I would probably wouldn't take it like that. I think that's just really insulting, actually, to the public. The public aren't stupid. And of course they're not tax experts. They've got they're trying to get their tea on the table and stuff. I don't need to be tax expert, but I absolutely think that if politicians went out and made the case some of this stuff and explained it in clear language and said why we're doing it, I don't believe at all the story that the public wouldn't buy it.

So I've been reading the various compliments that you too have given the UK's tax system. They include irrational, a mess and a nightmare. So to kick things off, I'd like to ask you to put a bit of meat on the bones of those critiques.

How does our tax system hold us back, particularly if we want the economy to succeed? That's where I start.

So the tax system is not a complete disaster in the sense that we should remember that the tax system is first and foremost there to bring in revenue, and it is bringing in a lot of revenue. You know, it's due to bring in something like 1.3 trillion in the coming years. And in that sense, it's a success. It's sort of doing its main aim. And of course, people will differ in what they think about how high taxes are, and they'll differ in terms of who they think should pay taxes on people, which people pay more or less. But when we're talking about the tax system as being a mess, what I have in mind is that how much money you want to raise, whoever you want to raise it from. We are raising taxes in ways that are doing more damage than necessary.

And when I say that, what do I mean? I mean, taxes are distorting, how much people work, how much they save, where they go to work, which houses they buy, and so on and so on and so on. So it's doing all sorts of things that hold us back, whether that's in terms of how many hours are worked or, how much is spent or who moves around the country. And ultimately, when you're doing that, when you, affect small decisions, you're making us poorer because we weren't doing that. People would make six different decisions, and we and we'd be better off. So it's not about making, saying it's I, I'm not saying it's a mess because I think it's too high or too low or less redistributive. It really is saying the kind of underlying structure of the system, the way we design it is more damaging than it could that it needed to be, given whether gold is going to be Tim.

So to give some specific examples, if you look at the data, there were a lot of people who stop work when they get to 50,000 pounds. Because if you are a parent, you lose your child benefit, so you gain a pound and you lose all of the child benefit. So they go into their boss and they say, hey, can I work a few fewer hours a week or can I have a week of unpaid leave? And we find there's this vast number of people who love to work an extra week. We'd love them to work an extra week that has an extra week of GDP. And the only reason they're not doing it is because the tax system is penalizing them. There are so many things like that. So parking. So with this like scope for reform in which, as you say, the government wants certain things from the system, but it's shoving the wrong incentives in, in the way that the system is designed.

I know you're both economist, but there's sort of politics to this. Right. And, I think most people agree that the last big set of reforms were probably under Thatcher. Why do you think chancellors have ducked these sorts of reforms for as long as they have?

Well, if I knew the answer that I would try and persuade a backbench MP to pass a law that would identify the psychological frailties in prospective chancellors and ban anyone who is prone to making the tax system more complicated from being chancellor.

So you have no theories about what these frailties might be. I think it is a lot about guts. Yeah. Nigel Lawson, who was a great reforming chancellor in the technical sense, that he made the tax system simpler, was a politician. He had political beliefs, he had political interests, but he didn't see them as incompatible with a better tax system. But since then, we've had people who, frankly, are a bunch of meddlers who want to do things for one day headline, even if it makes us worse off in the long run. And that's a huge shame.

Well, I think it's I mean, I've, I've often cited the Lawson reforms as examples of reform. I think it's I think it's unfair to say there's been no reform since then. I mean, the tax system has changed hugely. And you can point to some areas of that where I think it would be in the bucket of what Tim and I would call the reforms. Without that, there were big changes to corporation tax structures in the 20 tens. The introduction of Ices. So tax free saving vehicles was a was a big change in the structure of the tax system. And there are other things like that, I think, and it's a few things that different is that one is when you look at what chancellors do that often do something that's in the right direction, but they'll do other things that are in the wrong direction, and therefore it's hard to see it as assisted a systematic move towards a better structure.

I think it's also something about the language and the motivation, so that the Lawson reforms were very much viewed. And I've read the budget speeches recent for different reason, and they're all couched in the language of kind of wanting to reform something. And making the case for kind of like, for that. I think when politicians since then have done big reforms, they haven't tended to use that language. And that's not necessarily a bad thing. You can find other ways to talk about it, and you shouldn't be doing reform for some technical reason. It's ultimately about living standards. But I think it's rarer now for politicians to grasp it as a kind of a this with this reform thing. This concept is not about redistribution. It's not about revenue raising or cutting. This thing could be the path.

It's also worth noting that, to be fair, that things are tougher when you're trying to do reform in a world where the public finances are tight, if you're in a world where there's money to give away, or maybe there's some scope to doing something, it's a bit easier to do reforms. You're doing it while you're trying to hold back. Public spending, I think is, a bit harder. But then there's all the politics about, you know, I think we have a tendency in this country where politicians want to do new things. New things are more exciting. You have it, you have a new labor, and you do something new and you bolt something on top as opposed to fixing what's already there. Now, what we need to reform is about ignore the new stuff, do something to the structure. And I think that's become less exciting for politicians, I think.

So I think Helen's being far too nice to recent politicians, because there's a whole bunch of tax reform that would raise revenue, getting rid of all the sort of VAT exemptions would raise revenue. And of course, right back in 79, Geoffrey Howe did harmonize VAT by moving from two rates to one much higher rate. That was a simplification. It raised a lot of money. So even if you need to raise a lot of money, you can still simplify the tax system.

And there's something I was when I was doing research for this, looking at what has changed in the last sort of ten, 15 years. And although, as you say, this sort of structure hasn't changed. Looking through some of the numbers of like the 40% higher rate threshold on income tax has fallen by about 18 K in real terms since 2010. The number of taxpayers paying the higher rate is double the number paying the additional rate is quadruple. So we've seen like quite a lot of actual change in who pays what. But the structures are there is that that's just because those are quiet changes that chancellors can make the budget that, as you say, don't come across as a big reform. They don't require loads of bravery, but they have changed the structure of the system in terms of who pays what at how much.

But it's also partly what I said right at the top. It's about what politicians are trying to do. Right? So, you know, Tim and I, we're not making policy political points when we say we want to improve the, the structure of the tax system. I think every party get on board in that, but there are going to be other things that politicians want to do with the structure, the tax system for which to be safe reasons, for example. So some of these things you're pointing to, you know, it's been a choice to get more people paying tax or more than paying the higher rate. And that's fine. That, that that's not against what we're saying. That's just that that's a different thing you do with the tax system.

So I think there are some things that fall into that bucket. I think there are other things that look more like they could be a reform. But either again, there's some things in different directions or they're partial or I mean, take a recent example. There's now a new a new surge charging council tax for higher value properties. I think Tim and I are both on record saying that council tax is absurd for lots of reasons, including that it's based on 1991 values, it's regressive and all that stuff. Now you could say, well, they've got this new charge step in the right direction. But is it, is it step two anyway, I don't know. They haven't said this. And actually in the meantime it's actually what it is a new bolt on and with lots lots complexity sets an example where if you were feeling really generous, you could say, well, they're trying to reform it, or you could say that they've, they've they've dodged the bullet. They're just going to they've just shoved something else on top of that. And a fix. That's the kind of thing. I mean, I think even even when they might be a might have a lighter on issue, they're not really grappling with the underlying structure.

Or another example, know we have a big maybe we'll come back to this draw huge differences in how we tax different forms of income, which I'll have a whole laundry list worth of problems and some chances. I've tried to chip away at that problem, but what this chance does also is put up employer National Insurance, which makes some of those problems worse. Even if you can point some other cases where some bits have got better, it's not that consistent. I've got a vision when we're we're moving systematically towards somewhere, this is better and this is worse. That's that's part of the problem.

So before we move on to the sort of solutions and where what the some of those visions could be and what some of the opportunities are, I want, to get your laundry list. How many hours do you have off like a podcast? What are the biggest horrors in the system? Where are there kind of, zombie taxes lurking or like, mad relics that you think just need to be dealt with?

Tim. So there are lots of funny little ones that are absurd and small, that if you have more than two dots of chocolate on a gingerbread man, the biscuit has vat on it. If you don't, it doesn't. It's absurd. It should obviously be changed. Am I going to clean? That's the biggest issue. No I'm not. The biggest issue is probably the fact that if you get income in column A, you pay a lot less tax in column B, so if you're self-employed, you pay less national insurance. You certainly don't pay employers national insurance. If you're employed, you pay rather more. If you can take your income as a dividend, your pay even less still. So if I had to name one really big problem in terms is economic effect, I would say it's the distortions in how people receive income as dividends, as self-employed, or as earnings. And that one I definitely think we should tackle, because if we did, fewer people will be self-employed, more people employed. And the evidence is that people who are employed earn more. They have higher benefits for society as a whole. They pay more in tax, the companies are more productive than small companies and so on and so forth.

If I had to say one, that's the one I'd go for. And actually for its worth, I'd pick that one too. I bet my career, we can pick some more as well. There are plenty of others, don't worry, but I think it's worth. That's a great case study of some of the points we talked about earlier, because there are these absurd differences. But the rate differences are very salient. So you can just see that some things are taxed at higher rates than others. And people sort of know intuitive. That's unfair usually. Why is it hard to get rid of? Well, one of the reasons it's hard to get rid of is because, and actually, Philip Hammond tried to do this. The minute you try and increase taxes on business owners, you have these calls. Oh my God, the entrepreneurs, the investment. We can't do that. It's bad for investment.

And the key to that whole debate is to understand that it's not just tax rates that matter, it's the tax base. So the definition of what's actually taxed in the first place without one to get to in the weeds, I mean, basically we should be thinking of income from work. Like I go to work everyday, I get an income that isn't from running a business, but why is it different? It's not about the extra pound of return on my labor. It's about I might put my own money into the business. I might have taken a risk. But the way to reflect that is through the tax base, through deductions for example. So but all the time that we ignore that tax base piece, then you put rates up, you make some problems better and some problems worse. And we get yo Europe by capital gains tax. An example of this. We show you around in the rates we pick higher rates good for fairness bad for investment. We pick lower rates. Good for investment, bad for fairness. Instead of just saying actually why are we doing things like taxing inflation? That's stupid. Fix the tax base. With the tax base fixed you could fix these problems.

So and so that's two point idea. But why don't we see these things. That's a case where because a bit more technical I can explain in 20s as Tim just did, why the rights side and problematic. It's much harder to explain quickly why the level of deductions for investment costs and interest is set at the wrong level. But unless that becomes a core part of the debate, we'll have to fix that problem, because all you're doing is moving the rate. So then that's a good example where it's right across the tax system.

It's just pervasive. It's like it's kind of at the heart if it's where personal taxes and corporate taxes all come together in the middle of the tax system. But we have to have the tax base, I think, be a core part of any debate about that and that tax basis. What underlines the problem with VAT?

Yeah, only about half of goods in Britain have VAT on an Ed. Some people think VAT is a tax on luxury goods and it really isn't. It's a tax on a fairly random and arbitrary set of goods. So from memory there is new VAT on chocolate flavored milkshake, but there is VAT on strawberry flavored milkshake. Now I cannot think of any circumstances and any rationality for that. There is VAT on muesli bars, but not on flapjacks. And the definition of a flapjack is that it's a posh muesli bar. Literally. That is the official legal definition. Because they went to court, a judge decided that a flapjack is something you would serve to a distinguished visitor with a cup of tea in the afternoon, and if your product passes that test, you don't have to pay VAT. So again, it's not about the rate of VAT, it's about the base. And that's why. And I will I will die on this hill. Everything should have VAT on it. Because any time you move away from that, you create some distortion at the margin. And New Zealand has that system. The only thing you don't pay VAT on in New Zealand from memory is buying or renting a house. Life insurance.

Well that's fine, I might disagree on a minute. My question is he? I completely agree. I think the VAT system is mad and but just on that again, as another example, if we I mean, I would take all the zero rights, the wild exemptions away, whack full right VAT and everything. But that would have big distributional consequences. And that's that's a political choice. But they want to do that. The what's a why would I put it in the bucket of reform as opposed to distributional choices. It's because you could do that. Take all that money you to something like it depends if you do exemptions or not. But 80 billion ish. Yeah. Use that to more directly help poor people. So if what you want to do is help poor people, which is a perfectly valid, obviously political goal doing it through the VAT system. But children's clothing, who spends tons money on children's clothing, not poor people. Oh, I spend some money, but not as much as the better off people.

So the point, the reason I have in my reform bucket is because, you know, I wouldn't say to a politician, just put the rates up, just change the base and put the rates up, because that would say there would be a big revenue raise of that, but you could redistribute and get a better or a same distributional outcome without all these ridiculous court cases where we have real human talent being wasted working out, like how much potato starch is in a particular kind of fried, you know, fried snack, it's absurd.

Okay, so you're both prepared to die on the Flapjack Hill. We will join Jack Hill and more down the Muesli Hill. And furthermore, we will agree there's no there. There is no difference between those hills. Two goods.

So we started to do it already, but I wanted to move us into the sort of solution space. And I guess, like you've talked about, some kind of big structural reforms that you can make. But if you were the Chancellor, what are the sort of like first, quite, almost quite tactical practical steps you would start taking in some of those areas to drive reform because it's sort of easy to paint nirvana. But then what would you do in the next 12 months, for example, to start trying to get there on some of those?

But I think but I think the step one, it really is important I've become to believe is more and more as I've worked on this more and more, I think step one has to be get a vision. Yeah, I think it's absolute. You have to know what you think a good tax system would look like and have an A. Not that you can get there in this Parliament necessarily, but without knowing like I call it north stop. I feel like, you know, stuff where you want to be. You're never going to be able to plot a path towards it. So I think you first have to know, what do you think a good system. And I have that vision. Team has a vision. Probably not quite until we have one. So the Chancellor I think you have to have a vision. Then you've got to make a decision about okay, politically, where will I burn some political caps or where I put some effort?

No one I don't think thinks that you're going to change the entire tax system in a parliament or in 12 months. You're not. That's a huge job. And some of the changes that we might advocate you, I'm saying we, I would advocate would be, technical. I need some work done that need some different administrative mechanisms. You couldn't do it all in 12 months. You could do lots of it, but not all of it. So I think you have to first get a clear vision and then sort of pick your battles and decide where to, where to put your, put your effort. And then there isn't sort of a one size fits all answer to your question. I don't think it depends on what you picked as to what you might chip away at.

But but like I said, let's just take housing because I think we might find something to disagree on. But, you know, the Chancellor, and what the reason I'm picking that one is partly because the Chancellor has already said that, building is a big part of what she wants to achieve. She wants to, you know, have less restrictive planning laws. They have done something on council tax. That's an area where actually. So first step don't make it worse. And she did increase stamp duty, which is an embarrassment as far as I'm concerned in our tax system. So at least that's made a system worse. So not make it worse be better. But you can imagine plotting something and I'll stop next time can jump in. But that says, you know, actually we're going to reduce a bit of stamp duty, do this to council as a step towards something else. I mean, I'd love to see a big bang. Actually, that just removes stamp duty, but at least you could start plotting a path to something given that you're already working in the housing area.

I think I think we do have a disagreement here. Not not on the ends, but on the means. Yes, I think I am more radical than you are. I think you could stand up in a budget and say, VAT is going to be levied on everything. That would be straightforward. We already have a VAT system. Everybody knows that whatever they do is encompassed within the words everything. Yeah. So there's no definition of issues. And then if there are no exemptions, you said earlier that's about 80 billion. So you could then stand up and say and we're going to knock £0.05 off the rate of income tax, and we're going to spend 20 billion improving welfare benefits, including the state pension. I agree with that. Yeah.

And at that point, what I think politicians have to do is not to get a dead cat. There's this talk of a dead cat bouncing, and I've never seen anybody drop a dead cat in reality. And I doubt they bounce very well. But even if a dead cat was dropped on this table and bounce once, it's not going to do anything after that. A dead cat is very soon. Very boring. And just a problem. What you need to do to win a battle is have a life cat bounce. So I do want to record my own cat falling off the roof of the house, shooting past my bedroom window upside down with a howl. And by the time I ran down my cats, it turned itself up the right way and was bounding up the garden path. Because a life cat is much more interesting. And what we need here is a life cat are saying, right, we're going to not sweep off income tax. We're going to add £50 to the pension, we're going to drop all these crazy rules on benefits, and then you've got a story to tell. And if you've moved the story away from VAT and tax reform, you've achieved the tax form. But you've got a positive story to tell what is being bought with the money.

That's you on that. Again, I really want to find a way to disagree because it's fun. But, I actually I'm told off that I've, I get to do these talks a lot now. People always ask me what's happening and like I hear reflected from a lot of, maybe special advisers or politicians or the, big is risky, all right. And therefore you want the small things, you want the small steps. And there are some cases, but if it's very technical, you think you need to do some consultation on the way. Well, you do, but if it's like a no very technical part of corporation tax, maybe you do want just make small and work out and collect some evidence along the way. So there are cases for that.

But I think often there's a have a political risk and I'm not a political person, but political miscalculation in thinking that smaller is easier. But think about another example I like to use. You know, George Osborne tried to put VAT on pasties. It was an omnichannel disaster. Yeah. The VAT rate went up from 17.5 to 20%, not a peep. And I think actually I think Tim's on summit here with the if it's bigger, I think there's a few things it's got in its favor. One is that you can make the case for like we're doing this for good reasons about living standards is about is about like a I'm doing the right thing and it's big enough that it actually moves the dial. You can then do a package of things that actually, it's not just about I picked on you for you winter fuel payments are picked on you farmers and I hear I picked on new pasta eaters where you feel like there's a group who feel like they're picked on. Actually it's everyone, we're all we're all in it together. We're all being. And it's part of, like, bigger. So I actually think that the political calculation that small is easier is wrong. Actually. Sometimes bigger reforms that encompass more people, that have more narrative around them that are done for a higher level reason. I, I guess that actually they would be less risky, not more risky. I'm presuming that you raise more money, which allows you to spend on other things, even for those groups that might be affected as a result of the tax change.

So you can sort of start to smooth over, rather than it feeling like indiscriminate punches, where in that case you do. But of course, the nature of reform is that was often the case where you want to give away money. Scrapping stamp duty will be a big giveaway. So often what you want to do if you're clever. Again, this is the the very nature of reform. My definition of reform is that it's not about revenue giving away or raising. So you find the what the combination of things you can do that don't have a big revenue effect. And the how can you offset the distributional consequences. Now, with that in hand, you might then want to have distributional costs which you might want to change. You pay as you want to raise more or less. But I don't think you the I think you should think of those things separately, because I think actually a lot of you could do that was actually just saying, like in Tim's example, you do the VAT base and you give it away or, you know, you scrap stamp duty, but you also increase council tax. It's a revenue neutral. But but you've you've got rid of a bad tax and increased it. And I made an okay tax better. So I think it's not you know, if you are going to give away revenue, you're going to distributional consequences or something else as well. And that should be seen, I think, with a separate choice to the kind of reforms that we're talking about. Property tax. Tim, you've got a pitch.

What's your pitch for how we should reform property taxes and stamp duty.

So all economists start from the idea that stamp duty is a terrible tax, because it's a tax on moving, and we don't want to stop people moving house. We want people to move for opportunity. We want them to move for better jobs. We want them to be able to move, to be nearer family members who might need support, whether that's older people looking after grandchildren or people looking after elderly relatives. There's so many reasons to stop penalizing people who move, and that means that stamp duty just has to go or it has to be reduced to the sort of tiny levels. It was back in 1996 when I bought my first house. I remember buying my first house, and I did pay a small amount of stamp duty, but it really wasn't meaningful. I mean, I'm stuck in a house. It's too small for my family because I the idea I'm to pay the stamp duty means the other to make the optimal move for my next house forever, because I can't afford to move again. So it's, it's. Yeah, it's. And at the level really matters, not just its existence.

And Helen here is in a very typical position. And actually we found with help to buy that the average house bought by a first time buyer had three bedrooms. And that's just absurd. And when we went out and did some work on this and we asked them why, they said, well, we don't want to pay stamp duty twice. So we got all these people under occupying houses, which we're rather short of. In order to reduce the tax, they have to pay. And that is the definition of a badly pay tax. So stamp duty so abolished. And I would replace them with anything or nothing. I'd be willing to put up income tax or VAT or reform, capital gains tax and take it back to the Lawson system where you don't pay on inflation, and then you pay at your marginal rate, which I think raises ten, 12 billion, would allow me to abolish stamp duty. So almost no matter what, I will abolish stamp duty.

But a more sensible tax would be to have an annual tax that you pay for as long as you live in a house, a sort of super version of council tax levied on the value. In my view, it should be the original value you paid for it because the indexed to inflation, because then you know the liability you're signing up for. I am worried about linking it to the current value, because some people's houses do shoot up in value and they could be walloped by costs. They they didn't understand when they did it. So I think people should know what the tax liability is when they buy a house. But yes, the basic point of a small annual tax rather than a big one off tax. Absolutely. Slam dunk. And I don't think you will find a single economist in the country who would disagree with us on that. And if they if they claim they disagree, they're just looking to get in the news, send them away.

But also but what you'll hear is that I get the policies too hard. A lot of Londoners will pay higher taxes and isn't that difficult. But again, I, you know, a politician, you could imagine making the case for it and actually saying, well, the current system is really unfair here. The list of people is this Tim, the currently penalized. And here are the people who would pay maybe lower if you had a reform Council, you can actually put lower at the bottom. Maybe here the people who benefit from this and make a case. It's not about these people over here. I want to tax because these are the people I don't like. That's a really difficult argument to make as opposed to this system is structurally unfair. And to remove that unfairness, it's going to make these people pay more, but these people are going to pay less because it's unfair. I think making that more principled stance about, it's not about targeting you. It's about saying the system's not fair sort of level playing for we're going to change the playing field. I think you can imagine a politician having a go at that.

And one argument I would use if I were them is to say this will help doctors, nurses and teachers. We all work in central London and we all have the sorts of jobs that if we went for another job, the other job would probably be in central London so we wouldn't have to move house. Whereas if you were a doctor or a teacher, the jobs are spread out over the place and you're much more likely to have to move, or there are much more to be opportunities, greater opportunities that come from moving. So doctors, teachers, nurses, these are groups the public like would be disproportionate winners from abolishing stamp duty. So you've got to look out for those sort of political winds.

I'm trying to thinking of other political winds and possible ways to make you disagree, but I'm not sure this is a good it'll be hard. And wealth taxes. What do you think? That's one of the other big ones raging in terms of the debate.

So I think wealth tax is a one of those bad zombie ideas that seem impossible to kill is, first of all, they don't raise much money. Anyway, I've had a look at these data. The best you're getting is about 10 billion, and that's in Norway, where they're living it on people with, wealth, including housing wealth of 140,000 pounds. And when you look at the advocates of wealth taxes in Britain, they're not saying, oh, if your house is worth 150, I'm going to tax you more. They're they're claiming that they can get this in people with one, five, 10 million. But those people will always me most is those people are internationally very mobile. I I'm an economist and economists are often very well off. So I have a couple of very well friends and they've almost all lived in more than one country in the course of their careers. They work for really big banks that will relocate them tomorrow to Frankfurt or New York or Singapore. And I really worry that if we go for those people, they can leave within a week, and when they go within a week, it's not just that we won't get the wealth tax from them, we won't get the income tax from them, we won't get the VAT, we won't get the charitable contributions.

Now, of course, not all of these people make big charitable contributions, but some of them really do. And when you look at the Sunday Times list of the richest ten, 20, 30 people in Britain, and then you look at the Sunday Times list of the biggest donors in Britain, there is some overlap there and that makes me nervous. You present me with a bill for 100 million to say in this country, as much as I love this country, but I don't know what I do because I don't have $100 million 000 to put myself in those positions. But can I say, hand on heart that I'm confident that everybody who would be facing a bill of that size would say, no, whatever you want for an annual tax, the many taxes that moment you want to fix and you want to tax people getting high returns to, well, so at least look here and do this as well.

If you still want a tax stock of wealth, don't underestimate the practical difficulties of doing that. I don't just mean the fact that the government doesn't currently collect any information on wealth, so you need a whole new apparatus to do that. But also some wealth is exceedingly difficult to value. So houses actually very easy. Obviously stocks comparatively, stocks and shares pretty easy. Private businesses can be nightmarish. You have a business where actually there's no there's no other comparator. Well, things like influencers, you have an influencer, they might have a claim on a big stream of income in the future. Is that their wealth? What's the value of that? Wealth can fluctuate madly for some people. What do you want to do with that? So actually, don't underestimate the practical difficulty of actually pulling one of these things off. And as Tim said, know that many most countries you've had one have got rid of it. Those that have them don't tend to have inheritance taxes or capital gains. They do it as alternatives rather than top.

And if you do want to have a one off wealth tax, I think there's two points about that. If you can do it such that everyone believes it's genuinely one off and I really believe you, it's never going to happen again, then it's economically efficient in the sense that it won't change behavior. The question, therefore, is purely is it fair or not? Is it fair that you're going to tax people who have wealth today and not the ones that had wealth yesterday and spent it, or will have wealth in the future? And that's a political question. And you can decide whether you want to have that distributional outcome. But I would definitely say, oh, stop. What would why do people want wealth taxes? Want wealth taxes? Then they start from somewhere understandable, which is to say wealth inequality is undesirable in some ways. We don't like the level of inequality. We don't like that some people get high returns and tax less than other people. We want to fix that. Great. If you do that, I think you want to fix tax we've currently got.

You also want to distinguish between different forms of wealth. I don't think many people really mind the amazingly successful getting rich now, whether that's, you know, Adele or Taylor Swift or someone like that or, or whether it's an entrepreneur like James Dyson. But if you're happy for those people to keep their wealth, then what you really dislike is inherited wealth. And you should sort out inheritance tax rather than all wealth. The other question is why we dislike people who save their money rather than spend it. The wealthy in a sense, other people who didn't spend their money. If we don't mind, people who earn a lot and spend it immediately, why would we mind them not spending it immediately? Why is it better for me to spend all my money on parties than to keep it in the bank, investing in government stock, lowering the cost of the government debt? I don't really get that.

So we talked about some of the difficult things and some of the big changes you would make. Are there any like quick wins that you think are just sitting there, ready to be made, or changes rather that are ready to be made? Well, Helen named an excellent change earlier which is the pasty tax.

The pasty tax was exactly the answer to your question because before the pasty tax came in, if you were a fish and chip shop, you had to levy VAT if you were a supermarket. And at this point, the supermarkets were beginning to have hot food counters and they were selling roast chicken that was kept hot for a while. You didn't have to pay VAT. And the government, the civil service, said, well, this is unfair. These small fish and chip shops are being penalized compared to these big supermarkets. We will level the playing field with this tiny no brainer change. And then it got caught by pasty tax. And it proved not to be a tiny no brainer change. So actually, I think the problem is that even when we come up with small changes, that level, the playing field support, small business, support businesses, people like they didn't always prove to be no brainers after all. And actually so I'm trying to give a nice easy win. I'm not sure there are many.

I mean, a few years ago I would have said pensions and inheritance tax were pension pots. What an inheritance tax. And now they are. I think that's again, that's not a statement about whether you inherited tax or not. You make them okay. But if you have one then I think you want to apply it to broadly to all assets. And therefore that was a I would have put farmers in the same bucket as us. I think again, conditional having an inheritance tax apply it to apply to all assets. So I'm sure I can think of a few other things that are in that spirit. But in some sense, the fact that they're small, small, things also means they can have small impacts in some sense. So I think what what I would be trying to do if I had a chance almost not might pick things that I didn't. The more about let's find the small things we'll get away with. And I want to notice when going notice it might be a big effect. So I don't think actually you need to be bold and work out all you willing to do something and pick an area, and actually do something that moves.

And we haven't the environmental tax. That's another example there. I mean, this government's said so to be fair to them, you know, I've spent my entire career, which is, you know, the best part of two decades now they need to do something about, road taxes or taxing vehicles because we know that, fuel prices are going to decline. They have now got a plan for introducing a tax on electric vehicles. I don't need a great plan. I think the reason to have a tax, is congestion. The tax I have hasn't got any to do with congestion. So it's a, you know, not a great plan, but it's a plan. Okay, let's run with that. Let's think about well, how can we modify that? How could that tax be bought out and then made to more linked to congestion or you know, the currently the set of taxes we don't piece of work. I first on different a different emissions depending on who emits them and how the source is all over the place. It's wild. Start thinking about, okay, how can we think about different levies and how they all add up and make them a bit more sensible and a bit more uniform? So that's not easy in the sense that it's not just one small thing, but you could take an area and say, okay, we're here, we want to be there. What are the things we could do to start to move towards it? I'll give you one clearer answer, though. Having had a moment to reflect, there's an exemption from capital gains tax. If you hold the asset until you die and you don't have to pay capital gains tax, that's pretty weird. So just as they put pensions, sorted out pensions at death, I think they should sort out capital gains at death as well. Get rid of uplift.

Yeah, I'm with you. I want to touch on the point that you made, there's so much agreement and sorry, you've got two Orthodox people who have thought a lot about the tax system. You can't really expect that much disagreement here. You and you in particular, Tim talked about guts and bravery from politicians. How much do you how fair is that?

Like how much do you think it is that politicians have got comparatively less brave over time? If you say that they used to be more bigger, bolder reforms, and how much is it that, like the sort of systems around the state have got more belligerent and therefore it's harder for them to make the change?

This is squarely with the politicians. Oh, absolutely. So I worked in government for 12 years. And when I went and I started in the Department for education, and we had Michael Gove, David Laws, Matt Hancock, Liz Truss and Edward Timpson as our Commons ministers. All five of those were brave and radical reformers. You may agree or disagree with what they did, but all of them got up in the morning and as Michael Gove used to say, thought like Lenin, how can I change the country I live in today? And when politicians think that and they think it every day and they think it with some reasonably consistent framework, they permeate the department. People in DfE, he knew that if they came up with a radical and bold idea, no matter which junior minister they were working for, they had a fair chance of getting support and a fair chance of getting support from the Secretary of State. And they knew that the Secretary of State had a lot of capital with the Prime minister. So having bold ministers is liberating for the civil service. Now, it takes them a while to get to grips with that. They don't believe it to begin with. They think the minister will capitulate the first time someone lies down outside the building, which they used to, sometimes outside of DC, to make it difficult to get in and out. But it doesn't take the civil service long to realize that when the minister says, I am a brave minister, they mean it or not.

Do you think our system of budgets and how we make an announced tax change makes it harder to be bolder? There's like if you listen to, as so bold, call it a competitive podcast, given that we're on episode one. But if you listen to Ed Balls and, George Osborne, they'll say having multiple budgets a year is brilliant. Having it all to the Chancellor is brilliant. Not interested in think single fiscal events a bad idea, but there is a sort of argument that if you, if you leave it to these sort of wrap it out of the hat nature of the budget and the briefing to the Sunday's the week before you just you intensify the heat around some of these changes. So do you think that makes it harder to be bolder? Just the nature and the cycle of how we make policy.

It's my take you so I'm not sure makes it has to be bolder. And in fact, you know, why do we have two fiscal events even when we have one? It's because chances like their moment in the sun is their day to stand up in Parliament, to have the spotlight on them and to announce something. In principle, there's no reason why that something couldn't be really bold, right? So you can imagine a Chancellor using the opportunity to do something that's really big and radical. So I don't think it's quite the lack of boldness I do have. I think that the multiple fiscal events is a problem. I think it's a problem interacted with kind of, the public finances in the last 15 or so years where basically, they've been tough and they've had the chancellors have had fiscal rules which are constraining, and therefore they are trying to get their buffeting up the top of it. They're getting to the point where they have to do something. So, you know, you do something. Next fiscal event comes along. The forecast has either changed in a good way and basically given you free money is seen as slightly more headroom, free money or to spend some money or the headroom is what I now need to tighten.

So part of the battle obviously is bad. Rushed policy is because the kind of volatility of economic forecasts is being made, lined into policy volatility, and because tax is a lever that you can change quickly, you get a lot of tax policy that's you know, I had to tweak this and tweak that. And I had to remove the personal allowance. 100,000 pounds was at a point in time I needed some money from the rich, and that was an easy way to do it. So I think that the yeah, the kind of the tight public finances and the multiple fiscal events have led to some much more volatility. Layered on top of which comes the well in every budget we need to make for this group aspect for that group. And businesses need something. And that sense of needing to give something to every group means you're always doing too much fiddling. And I think that's, that's as much there. And again, that could be bold, but once you have to try and have these, like your list of people you're trying to please and give it to everybody, that lends itself to lots of small things rather than a in this budget, I'm touching nothing except from this thing. This is the thing we're tackling now. And I don't care that not everyone's got something. So I think it's you. I think in the interest of all those things, actually.

And if you were going to go big, would you do other countries or something? Sort of. Australia and New Zealand have got a habit of doing big reviews that sort of lay the ground for big changes to the system.

Do you think that's the sort of cop out and you should just stand up as chancellor and do it? Or do you think there's merit in those, as was Sweden? Have expert committees that look into specific things. When you change, would you go for any of those models, or do you think, Tim, the chances to stand up and say the Chancellor should stand up and say it because and I'm not. This is not a comment on the common transfer. It's a comment on any chancellor. They cannot be sure if there will be Chancellor in three months, let alone a year or two when the expert committee reports. And I saw that in the Theresa may government, we were trying to do something in housing, and we managed to squeeze it in a bill at the last moment that was going through, and it did become law. But much of the advice was, oh, we'll have another bill in the next session. But then she called an election, which she lost, and the ministers were changed. And the minister who was committed to that was no longer the minister. And if they followed the advice to have a commission and think about it, it would never have happened. So I think that fierce urgency of now, you do not know how long you will be Chancellor, for you do not know, even if you are Chancellor, what the circumstances will be like next year. So if you can do it, go for it.

I think it's also important that, and I think we'll agree here again, Tim, that these are ultimately political decisions. And I say that as someone who's been, you know, who's got expertise, I've worked in tax for a long time. You know, I'm a technocrat in that sense. These are not and I think, you know, experts add a lot in terms of, like, what? Well, design struck me. We wrote this big Mirrlees review. We've written books, mean puns, and 100 and hundreds of reports we've written about how to design the tax system. I think there is use for that kind of work. But ultimately, I think a politician has to say, I'm going to do this, doing it for this reason, and I'm the one responsible for explaining it to the public, and I'm the one responsible for like, yeah, there going to be some losers. I take responsibility for that. Or like, I'm doing this rather than that. I don't think you can get an expert. You can't outsource that. So I think for Charles said, here's my vision for this bit of the tax system. You can absolutely then consult on how to do some of the technocratic stuff. You could have a, a review of some sort says, okay, here's the vision, here's how we're going to do it. Absolutely.

But to say, you know, an expert like how it is on the tax system, what I'm not sure you'd learn very much. I think a lot of it actually would have been written. But also I think it makes it but it was but I think it makes it sound, I mean, my predecessors, but I think it makes it sound like you kind outsource the decision. And again, I think politicians need to, you know, I always get a bit depressed when people say things that I would probably wouldn't take it like that. I think that's just really insulting, actually, to the public. The public aren't stupid. And of course they're not tax experts. They've got they're trying to get their tea on the table and stuff. I don't need to be tax expert, but I absolutely think that if politicians went out and made the case some of this stuff and explained it in clear language and said why we're doing it, I don't believe at all the story that the public wouldn't buy it. Of course, some people hate it. Some people hate everything you're going to do, you know, to govern is to choose, right? Yeah. So I think it absolutely has to be politicians that lead from the front and say, we're doing this for this reason, and I'm going to make the case for it. I'm going to put my reputation on the line for this thing, and then you can get the experts to help you do that.

If this is a point of politicians being brave, brave and grasping the nettle, why? Why should they do it now? Why not? They should do it now because they can do it now. There's never any benefit in delaying. Do it now. Get on with it. Seize the moment. You went into politics, surely to make a difference and make big decisions. If that isn't why you went into politics, well get out.

Okay, I had to add to that. I mean, look, I think yesterday was is always the right time to do tax reform. You know, today's the next best time. It's also worth remembering that the government raises a huge amount of money. And actually in the last, you know, 5 or 6 years, it's increased revenue a lot. It's going to go up to a lot, you know, a lot more. The government going to be dragging in, you know, not far 40 paid in every pound in the economy. You know, the more you raise, the more important it is that you raise in a way that is, that is as effective as possible. We talk a lot about efficient public services, get good value for money. We need good value for money, not in our tax system.

We should be making sure we're not taking more money to me to take from people, because to do so is to reduce living standards.

So last question is a code for one which is, taking a break from tax. If you were the Prime minister and you could only choose one policy from any area and you didn't care about being reelected, what would you push through?

Could we not have stamp duty? If that's a tax? Because it might always be the one thing I would do. The legacy I would like is to get rid of stamp duty, if I will give you that legacy. Right. Sorry, I stole it. We could have it, Tim. No. That's fine. In terms of economics, I do not think there is a better policy than rejoining the European Union. I mean, the estimates of that are 4 or 5 6% of GDP. Now, of course, the problem with that policy is it's not really in the gift of the British government. And if I were Prime Minister for the day and announced it, you will just laugh at me. But you didn't say I had to be a policy that could be implemented. So that's my policy. Fine. Hello, Miller. Tim running. Thank you very much. Thank you.

Why do you think chancellors have ducked these sorts of reforms for as long as they have?

Well, if I knew the answer that I would try and persuade a backbench MP to pass a law that would identify the psychological frailties in prospective chancellors and ban anyone who is prone to making the tax system more complicated from being chancellor.

I always get a bit depressed when people say things that I would probably wouldn't take it like that. I think that's just really insulting, actually, to the public. The public aren't stupid. And of course they're not tax experts. They've got they're trying to get their tea on the table and stuff. I don't need to be tax expert, but I absolutely think that if politicians went out and made the case some of this stuff and explained it in clear language and said why we're doing it, I don't believe at all the story that the public wouldn't buy it.

So I've been reading the various compliments that you too have given the UK's tax system. They include irrational, a mess and a nightmare. So to kick things off, I'd like to ask you to put a bit of meat on the bones of those critiques.

How does our tax system hold us back, particularly if we want the economy to succeed? That's where I start.

So the tax system is not a complete disaster in the sense that we should remember that the tax system is first and foremost there to bring in revenue, and it is bringing in a lot of revenue. You know, it's due to bring in something like 1.3 trillion in the coming years. And in that sense, it's a success. It's sort of doing its main aim. And of course, people will differ in what they think about how high taxes are, and they'll differ in terms of who they think should pay taxes on people, which people pay more or less. But when we're talking about the tax system as being a mess, what I have in mind is that how much money you want to raise, whoever you want to raise it from. We are raising taxes in ways that are doing more damage than necessary.

And when I say that, what do I mean? I mean, taxes are distorting, how much people work, how much they save, where they go to work, which houses they buy, and so on and so on and so on. So it's doing all sorts of things that hold us back, whether that's in terms of how many hours are worked or, how much is spent or who moves around the country. And ultimately, when you're doing that, when you, affect small decisions, you're making us poorer because we weren't doing that. People would make six different decisions, and we and we'd be better off. So it's not about making, saying it's I, I'm not saying it's a mess because I think it's too high or too low or less redistributive. It really is saying the kind of underlying structure of the system, the way we design it is more damaging than it could that it needed to be, given whether gold is going to be Tim.

So to give some specific examples, if you look at the data, there were a lot of people who stop work when they get to 50,000 pounds. Because if you are a parent, you lose your child benefit, so you gain a pound and you lose all of the child benefit. So they go into their boss and they say, hey, can I work a few fewer hours a week or can I have a week of unpaid leave? And we find there's this vast number of people who love to work an extra week. We'd love them to work an extra week that has an extra week of GDP. And the only reason they're not doing it is because the tax system is penalizing them. There are so many things like that. So parking. So with this like scope for reform in which, as you say, the government wants certain things from the system, but it's shoving the wrong incentives in, in the way that the system is designed.

I know you're both economist, but there's sort of politics to this. Right. And, I think most people agree that the last big set of reforms were probably under Thatcher. Why do you think chancellors have ducked these sorts of reforms for as long as they have?

Well, if I knew the answer that I would try and persuade a backbench MP to pass a law that would identify the psychological frailties in prospective chancellors and ban anyone who is prone to making the tax system more complicated from being chancellor.

So you have no theories about what these frailties might be. I think it is a lot about guts. Yeah. Nigel Lawson, who was a great reforming chancellor in the technical sense, that he made the tax system simpler, was a politician. He had political beliefs, he had political interests, but he didn't see them as incompatible with a better tax system. But since then, we've had people who, frankly, are a bunch of meddlers who want to do things for one day headline, even if it makes us worse off in the long run. And that's a huge shame.

Well, I think it's I mean, I've, I've often cited the Lawson reforms as examples of reform. I think it's I think it's unfair to say there's been no reform since then. I mean, the tax system has changed hugely. And you can point to some areas of that where I think it would be in the bucket of what Tim and I would call the reforms. Without that, there were big changes to corporation tax structures in the 20 tens. The introduction of Ices. So tax free saving vehicles was a was a big change in the structure of the tax system. And there are other things like that, I think, and it's a few things that different is that one is when you look at what chancellors do that often do something that's in the right direction, but they'll do other things that are in the wrong direction, and therefore it's hard to see it as assisted a systematic move towards a better structure.

I think it's also something about the language and the motivation, so that the Lawson reforms were very much viewed. And I've read the budget speeches recent for different reason, and they're all couched in the language of kind of wanting to reform something. And making the case for kind of like, for that. I think when politicians since then have done big reforms, they haven't tended to use that language. And that's not necessarily a bad thing. You can find other ways to talk about it, and you shouldn't be doing reform for some technical reason. It's ultimately about living standards. But I think it's rarer now for politicians to grasp it as a kind of a this with this reform thing. This concept is not about redistribution. It's not about revenue raising or cutting. This thing could be the path.

It's also worth noting that, to be fair, that things are tougher when you're trying to do reform in a world where the public finances are tight, if you're in a world where there's money to give away, or maybe there's some scope to doing something, it's a bit easier to do reforms. You're doing it while you're trying to hold back. Public spending, I think is, a bit harder. But then there's all the politics about, you know, I think we have a tendency in this country where politicians want to do new things. New things are more exciting. You have it, you have a new labor, and you do something new and you bolt something on top as opposed to fixing what's already there. Now, what we need to reform is about ignore the new stuff, do something to the structure. And I think that's become less exciting for politicians, I think.

So I think Helen's being far too nice to recent politicians, because there's a whole bunch of tax reform that would raise revenue, getting rid of all the sort of VAT exemptions would raise revenue. And of course, right back in 79, Geoffrey Howe did harmonize VAT by moving from two rates to one much higher rate. That was a simplification. It raised a lot of money. So even if you need to raise a lot of money, you can still simplify the tax system.

And there's something I was when I was doing research for this, looking at what has changed in the last sort of ten, 15 years. And although, as you say, this sort of structure hasn't changed. Looking through some of the numbers of like the 40% higher rate threshold on income tax has fallen by about 18 K in real terms since 2010. The number of taxpayers paying the higher rate is double the number paying the additional rate is quadruple. So we've seen like quite a lot of actual change in who pays what. But the structures are there is that that's just because those are quiet changes that chancellors can make the budget that, as you say, don't come across as a big reform. They don't require loads of bravery, but they have changed the structure of the system in terms of who pays what at how much.

But it's also partly what I said right at the top. It's about what politicians are trying to do. Right? So, you know, Tim and I, we're not making policy political points when we say we want to improve the, the structure of the tax system. I think every party get on board in that, but there are going to be other things that politicians want to do with the structure, the tax system for which to be safe reasons, for example. So some of these things you're pointing to, you know, it's been a choice to get more people paying tax or more than paying the higher rate. And that's fine. That, that that's not against what we're saying. That's just that that's a different thing you do with the tax system.

So I think there are some things that fall into that bucket. I think there are other things that look more like they could be a reform. But either again, there's some things in different directions or they're partial or I mean, take a recent example. There's now a new a new surge charging council tax for higher value properties. I think Tim and I are both on record saying that council tax is absurd for lots of reasons, including that it's based on 1991 values, it's regressive and all that stuff. Now you could say, well, they've got this new charge step in the right direction. But is it, is it step two anyway, I don't know. They haven't said this. And actually in the meantime it's actually what it is a new bolt on and with lots lots complexity sets an example where if you were feeling really generous, you could say, well, they're trying to reform it, or you could say that they've, they've they've dodged the bullet. They're just going to they've just shoved something else on top of that. And a fix. That's the kind of thing. I mean, I think even even when they might be a might have a lighter on issue, they're not really grappling with the underlying structure.

Or another example, know we have a big maybe we'll come back to this draw huge differences in how we tax different forms of income, which I'll have a whole laundry list worth of problems and some chances. I've tried to chip away at that problem, but what this chance does also is put up employer National Insurance, which makes some of those problems worse. Even if you can point some other cases where some bits have got better, it's not that consistent. I've got a vision when we're we're moving systematically towards somewhere, this is better and this is worse. That's that's part of the problem.

So before we move on to the sort of solutions and where what the some of those visions could be and what some of the opportunities are, I want, to get your laundry list. How many hours do you have off like a podcast? What are the biggest horrors in the system? Where are there kind of, zombie taxes lurking or like, mad relics that you think just need to be dealt with?

Tim. So there are lots of funny little ones that are absurd and small, that if you have more than two dots of chocolate on a gingerbread man, the biscuit has vat on it. If you don't, it doesn't. It's absurd. It should obviously be changed. Am I going to clean? That's the biggest issue. No I'm not. The biggest issue is probably the fact that if you get income in column A, you pay a lot less tax in column B, so if you're self-employed, you pay less national insurance. You certainly don't pay employers national insurance. If you're employed, you pay rather more. If you can take your income as a dividend, your pay even less still. So if I had to name one really big problem in terms is economic effect, I would say it's the distortions in how people receive income as dividends, as self-employed, or as earnings. And that one I definitely think we should tackle, because if we did, fewer people will be self-employed, more people employed. And the evidence is that people who are employed earn more. They have higher benefits for society as a whole. They pay more in tax, the companies are more productive than small companies and so on and so forth.

If I had to say one, that's the one I'd go for. And actually for its worth, I'd pick that one too. I bet my career, we can pick some more as well. There are plenty of others, don't worry, but I think it's worth. That's a great case study of some of the points we talked about earlier, because there are these absurd differences. But the rate differences are very salient. So you can just see that some things are taxed at higher rates than others. And people sort of know intuitive. That's unfair usually. Why is it hard to get rid of? Well, one of the reasons it's hard to get rid of is because, and actually, Philip Hammond tried to do this. The minute you try and increase taxes on business owners, you have these calls. Oh my God, the entrepreneurs, the investment. We can't do that. It's bad for investment.

And the key to that whole debate is to understand that it's not just tax rates that matter, it's the tax base. So the definition of what's actually taxed in the first place without one to get to in the weeds, I mean, basically we should be thinking of income from work. Like I go to work everyday, I get an income that isn't from running a business, but why is it different? It's not about the extra pound of return on my labor. It's about I might put my own money into the business. I might have taken a risk. But the way to reflect that is through the tax base, through deductions for example. So but all the time that we ignore that tax base piece, then you put rates up, you make some problems better and some problems worse. And we get yo Europe by capital gains tax. An example of this. We show you around in the rates we pick higher rates good for fairness bad for investment. We pick lower rates. Good for investment, bad for fairness. Instead of just saying actually why are we doing things like taxing inflation? That's stupid. Fix the tax base. With the tax base fixed you could fix these problems.

So and so that's two point idea. But why don't we see these things. That's a case where because a bit more technical I can explain in 20s as Tim just did, why the rights side and problematic. It's much harder to explain quickly why the level of deductions for investment costs and interest is set at the wrong level. But unless that becomes a core part of the debate, we'll have to fix that problem, because all you're doing is moving the rate. So then that's a good example where it's right across the tax system.

It's just pervasive. It's like it's kind of at the heart if it's where personal taxes and corporate taxes all come together in the middle of the tax system. But we have to have the tax base, I think, be a core part of any debate about that and that tax basis. What underlines the problem with VAT?

Yeah, only about half of goods in Britain have VAT on an Ed. Some people think VAT is a tax on luxury goods and it really isn't. It's a tax on a fairly random and arbitrary set of goods. So from memory there is new VAT on chocolate flavored milkshake, but there is VAT on strawberry flavored milkshake. Now I cannot think of any circumstances and any rationality for that. There is VAT on muesli bars, but not on flapjacks. And the definition of a flapjack is that it's a posh muesli bar. Literally. That is the official legal definition. Because they went to court, a judge decided that a flapjack is something you would serve to a distinguished visitor with a cup of tea in the afternoon, and if your product passes that test, you don't have to pay VAT. So again, it's not about the rate of VAT, it's about the base. And that's why. And I will I will die on this hill. Everything should have VAT on it. Because any time you move away from that, you create some distortion at the margin. And New Zealand has that system. The only thing you don't pay VAT on in New Zealand from memory is buying or renting a house. Life insurance.

Well that's fine, I might disagree on a minute. My question is he? I completely agree. I think the VAT system is mad and but just on that again, as another example, if we I mean, I would take all the zero rights, the wild exemptions away, whack full right VAT and everything. But that would have big distributional consequences. And that's that's a political choice. But they want to do that. The what's a why would I put it in the bucket of reform as opposed to distributional choices. It's because you could do that. Take all that money you to something like it depends if you do exemptions or not. But 80 billion ish. Yeah. Use that to more directly help poor people. So if what you want to do is help poor people, which is a perfectly valid, obviously political goal doing it through the VAT system. But children's clothing, who spends tons money on children's clothing, not poor people. Oh, I spend some money, but not as much as the better off people.

So the point, the reason I have in my reform bucket is because, you know, I wouldn't say to a politician, just put the rates up, just change the base and put the rates up, because that would say there would be a big revenue raise of that, but you could redistribute and get a better or a same distributional outcome without all these ridiculous court cases where we have real human talent being wasted working out, like how much potato starch is in a particular kind of fried, you know, fried snack, it's absurd.

Okay, so you're both prepared to die on the Flapjack Hill. We will join Jack Hill and more down the Muesli Hill. And furthermore, we will agree there's no there. There is no difference between those hills. Two goods.

So we started to do it already, but I wanted to move us into the sort of solution space. And I guess, like you've talked about, some kind of big structural reforms that you can make. But if you were the Chancellor, what are the sort of like first, quite, almost quite tactical practical steps you would start taking in some of those areas to drive reform because it's sort of easy to paint nirvana. But then what would you do in the next 12 months, for example, to start trying to get there on some of those?

But I think but I think the step one, it really is important I've become to believe is more and more as I've worked on this more and more, I think step one has to be get a vision. Yeah, I think it's absolute. You have to know what you think a good tax system would look like and have an A. Not that you can get there in this Parliament necessarily, but without knowing like I call it north stop. I feel like, you know, stuff where you want to be. You're never going to be able to plot a path towards it. So I think you first have to know, what do you think a good system. And I have that vision. Team has a vision. Probably not quite until we have one. So the Chancellor I think you have to have a vision. Then you've got to make a decision about okay, politically, where will I burn some political caps or where I put some effort?

No one I don't think thinks that you're going to change the entire tax system in a parliament or in 12 months. You're not. That's a huge job. And some of the changes that we might advocate you, I'm saying we, I would advocate would be, technical. I need some work done that need some different administrative mechanisms. You couldn't do it all in 12 months. You could do lots of it, but not all of it. So I think you have to first get a clear vision and then sort of pick your battles and decide where to, where to put your, put your effort. And then there isn't sort of a one size fits all answer to your question. I don't think it depends on what you picked as to what you might chip away at.

But but like I said, let's just take housing because I think we might find something to disagree on. But, you know, the Chancellor, and what the reason I'm picking that one is partly because the Chancellor has already said that, building is a big part of what she wants to achieve. She wants to, you know, have less restrictive planning laws. They have done something on council tax. That's an area where actually. So first step don't make it worse. And she did increase stamp duty, which is an embarrassment as far as I'm concerned in our tax system. So at least that's made a system worse. So not make it worse be better. But you can imagine plotting something and I'll stop next time can jump in. But that says, you know, actually we're going to reduce a bit of stamp duty, do this to council as a step towards something else. I mean, I'd love to see a big bang. Actually, that just removes stamp duty, but at least you could start plotting a path to something given that you're already working in the housing area.

I think I think we do have a disagreement here. Not not on the ends, but on the means. Yes, I think I am more radical than you are. I think you could stand up in a budget and say, VAT is going to be levied on everything. That would be straightforward. We already have a VAT system. Everybody knows that whatever they do is encompassed within the words everything. Yeah. So there's no definition of issues. And then if there are no exemptions, you said earlier that's about 80 billion. So you could then stand up and say and we're going to knock £0.05 off the rate of income tax, and we're going to spend 20 billion improving welfare benefits, including the state pension. I agree with that. Yeah.

And at that point, what I think politicians have to do is not to get a dead cat. There's this talk of a dead cat bouncing, and I've never seen anybody drop a dead cat in reality. And I doubt they bounce very well. But even if a dead cat was dropped on this table and bounce once, it's not going to do anything after that. A dead cat is very soon. Very boring. And just a problem. What you need to do to win a battle is have a life cat bounce. So I do want to record my own cat falling off the roof of the house, shooting past my bedroom window upside down with a howl. And by the time I ran down my cats, it turned itself up the right way and was bounding up the garden path. Because a life cat is much more interesting. And what we need here is a life cat are saying, right, we're going to not sweep off income tax. We're going to add £50 to the pension, we're going to drop all these crazy rules on benefits, and then you've got a story to tell. And if you've moved the story away from VAT and tax reform, you've achieved the tax form. But you've got a positive story to tell what is being bought with the money.

That's you on that. Again, I really want to find a way to disagree because it's fun. But, I actually I'm told off that I've, I get to do these talks a lot now. People always ask me what's happening and like I hear reflected from a lot of, maybe special advisers or politicians or the, big is risky, all right. And therefore you want the small things, you want the small steps. And there are some cases, but if it's very technical, you think you need to do some consultation on the way. Well, you do, but if it's like a no very technical part of corporation tax, maybe you do want just make small and work out and collect some evidence along the way. So there are cases for that.

But I think often there's a have a political risk and I'm not a political person, but political miscalculation in thinking that smaller is easier. But think about another example I like to use. You know, George Osborne tried to put VAT on pasties. It was an omnichannel disaster. Yeah. The VAT rate went up from 17.5 to 20%, not a peep. And I think actually I think Tim's on summit here with the if it's bigger, I think there's a few things it's got in its favor. One is that you can make the case for like we're doing this for good reasons about living standards is about is about like a I'm doing the right thing and it's big enough that it actually moves the dial. You can then do a package of things that actually, it's not just about I picked on you for you winter fuel payments are picked on you farmers and I hear I picked on new pasta eaters where you feel like there's a group who feel like they're picked on. Actually it's everyone, we're all we're all in it together. We're all being. And it's part of, like, bigger. So I actually think that the political calculation that small is easier is wrong. Actually. Sometimes bigger reforms that encompass more people, that have more narrative around them that are done for a higher level reason. I, I guess that actually they would be less risky, not more risky. I'm presuming that you raise more money, which allows you to spend on other things, even for those groups that might be affected as a result of the tax change.

So you can sort of start to smooth over, rather than it feeling like indiscriminate punches, where in that case you do. But of course, the nature of reform is that was often the case where you want to give away money. Scrapping stamp duty will be a big giveaway. So often what you want to do if you're clever. Again, this is the the very nature of reform. My definition of reform is that it's not about revenue giving away or raising. So you find the what the combination of things you can do that don't have a big revenue effect. And the how can you offset the distributional consequences. Now, with that in hand, you might then want to have distributional costs which you might want to change. You pay as you want to raise more or less. But I don't think you the I think you should think of those things separately, because I think actually a lot of you could do that was actually just saying, like in Tim's example, you do the VAT base and you give it away or, you know, you scrap stamp duty, but you also increase council tax. It's a revenue neutral. But but you've you've got rid of a bad tax and increased it. And I made an okay tax better. So I think it's not you know, if you are going to give away revenue, you're going to distributional consequences or something else as well. And that should be seen, I think, with a separate choice to the kind of reforms that we're talking about. Property tax. Tim, you've got a pitch.

What's your pitch for how we should reform property taxes and stamp duty.

So all economists start from the idea that stamp duty is a terrible tax, because it's a tax on moving, and we don't want to stop people moving house. We want people to move for opportunity. We want them to move for better jobs. We want them to be able to move, to be nearer family members who might need support, whether that's older people looking after grandchildren or people looking after elderly relatives. There's so many reasons to stop penalizing people who move, and that means that stamp duty just has to go or it has to be reduced to the sort of tiny levels. It was back in 1996 when I bought my first house. I remember buying my first house, and I did pay a small amount of stamp duty, but it really wasn't meaningful. I mean, I'm stuck in a house. It's too small for my family because I the idea I'm to pay the stamp duty means the other to make the optimal move for my next house forever, because I can't afford to move again. So it's, it's. Yeah, it's. And at the level really matters, not just its existence.

And Helen here is in a very typical position. And actually we found with help to buy that the average house bought by a first time buyer had three bedrooms. And that's just absurd. And when we went out and did some work on this and we asked them why, they said, well, we don't want to pay stamp duty twice. So we got all these people under occupying houses, which we're rather short of. In order to reduce the tax, they have to pay. And that is the definition of a badly pay tax. So stamp duty so abolished. And I would replace them with anything or nothing. I'd be willing to put up income tax or VAT or reform, capital gains tax and take it back to the Lawson system where you don't pay on inflation, and then you pay at your marginal rate, which I think raises ten, 12 billion, would allow me to abolish stamp duty. So almost no matter what, I will abolish stamp duty.

But a more sensible tax would be to have an annual tax that you pay for as long as you live in a house, a sort of super version of council tax levied on the value. In my view, it should be the original value you paid for it because the indexed to inflation, because then you know the liability you're signing up for. I am worried about linking it to the current value, because some people's houses do shoot up in value and they could be walloped by costs. They they didn't understand when they did it. So I think people should know what the tax liability is when they buy a house. But yes, the basic point of a small annual tax rather than a big one off tax. Absolutely. Slam dunk. And I don't think you will find a single economist in the country who would disagree with us on that. And if they if they claim they disagree, they're just looking to get in the news, send them away.

But also but what you'll hear is that I get the policies too hard. A lot of Londoners will pay higher taxes and isn't that difficult. But again, I, you know, a politician, you could imagine making the case for it and actually saying, well, the current system is really unfair here. The list of people is this Tim, the currently penalized. And here are the people who would pay maybe lower if you had a reform Council, you can actually put lower at the bottom. Maybe here the people who benefit from this and make a case. It's not about these people over here. I want to tax because these are the people I don't like. That's a really difficult argument to make as opposed to this system is structurally unfair. And to remove that unfairness, it's going to make these people pay more, but these people are going to pay less because it's unfair. I think making that more principled stance about, it's not about targeting you. It's about saying the system's not fair sort of level playing for we're going to change the playing field. I think you can imagine a politician having a go at that.

And one argument I would use if I were them is to say this will help doctors, nurses and teachers. We all work in central London and we all have the sorts of jobs that if we went for another job, the other job would probably be in central London so we wouldn't have to move house. Whereas if you were a doctor or a teacher, the jobs are spread out over the place and you're much more likely to have to move, or there are much more to be opportunities, greater opportunities that come from moving. So doctors, teachers, nurses, these are groups the public like would be disproportionate winners from abolishing stamp duty. So you've got to look out for those sort of political winds.

I'm trying to thinking of other political winds and possible ways to make you disagree, but I'm not sure this is a good it'll be hard. And wealth taxes. What do you think? That's one of the other big ones raging in terms of the debate.

So I think wealth tax is a one of those bad zombie ideas that seem impossible to kill is, first of all, they don't raise much money. Anyway, I've had a look at these data. The best you're getting is about 10 billion, and that's in Norway, where they're living it on people with, wealth, including housing wealth of 140,000 pounds. And when you look at the advocates of wealth taxes in Britain, they're not saying, oh, if your house is worth 150, I'm going to tax you more. They're they're claiming that they can get this in people with one, five, 10 million. But those people will always me most is those people are internationally very mobile. I I'm an economist and economists are often very well off. So I have a couple of very well friends and they've almost all lived in more than one country in the course of their careers. They work for really big banks that will relocate them tomorrow to Frankfurt or New York or Singapore. And I really worry that if we go for those people, they can leave within a week, and when they go within a week, it's not just that we won't get the wealth tax from them, we won't get the income tax from them, we won't get the VAT, we won't get the charitable contributions.

Now, of course, not all of these people make big charitable contributions, but some of them really do. And when you look at the Sunday Times list of the richest ten, 20, 30 people in Britain, and then you look at the Sunday Times list of the biggest donors in Britain, there is some overlap there and that makes me nervous. You present me with a bill for 100 million to say in this country, as much as I love this country, but I don't know what I do because I don't have $100 million 000 to put myself in those positions. But can I say, hand on heart that I'm confident that everybody who would be facing a bill of that size would say, no, whatever you want for an annual tax, the many taxes that moment you want to fix and you want to tax people getting high returns to, well, so at least look here and do this as well.

If you still want a tax stock of wealth, don't underestimate the practical difficulties of doing that. I don't just mean the fact that the government doesn't currently collect any information on wealth, so you need a whole new apparatus to do that. But also some wealth is exceedingly difficult to value. So houses actually very easy. Obviously stocks comparatively, stocks and shares pretty easy. Private businesses can be nightmarish. You have a business where actually there's no there's no other comparator. Well, things like influencers, you have an influencer, they might have a claim on a big stream of income in the future. Is that their wealth? What's the value of that? Wealth can fluctuate madly for some people. What do you want to do with that? So actually, don't underestimate the practical difficulty of actually pulling one of these things off. And as Tim said, know that many most countries you've had one have got rid of it. Those that have them don't tend to have inheritance taxes or capital gains. They do it as alternatives rather than top.

And if you do want to have a one off wealth tax, I think there's two points about that. If you can do it such that everyone believes it's genuinely one off and I really believe you, it's never going to happen again, then it's economically efficient in the sense that it won't change behavior. The question, therefore, is purely is it fair or not? Is it fair that you're going to tax people who have wealth today and not the ones that had wealth yesterday and spent it, or will have wealth in the future? And that's a political question. And you can decide whether you want to have that distributional outcome. But I would definitely say, oh, stop. What would why do people want wealth taxes? Want wealth taxes? Then they start from somewhere understandable, which is to say wealth inequality is undesirable in some ways. We don't like the level of inequality. We don't like that some people get high returns and tax less than other people. We want to fix that. Great. If you do that, I think you want to fix tax we've currently got.

You also want to distinguish between different forms of wealth. I don't think many people really mind the amazingly successful getting rich now, whether that's, you know, Adele or Taylor Swift or someone like that or, or whether it's an entrepreneur like James Dyson. But if you're happy for those people to keep their wealth, then what you really dislike is inherited wealth. And you should sort out inheritance tax rather than all wealth. The other question is why we dislike people who save their money rather than spend it. The wealthy in a sense, other people who didn't spend their money. If we don't mind, people who earn a lot and spend it immediately, why would we mind them not spending it immediately? Why is it better for me to spend all my money on parties than to keep it in the bank, investing in government stock, lowering the cost of the government debt? I don't really get that.

So we talked about some of the difficult things and some of the big changes you would make. Are there any like quick wins that you think are just sitting there, ready to be made, or changes rather that are ready to be made? Well, Helen named an excellent change earlier which is the pasty tax.

The pasty tax was exactly the answer to your question because before the pasty tax came in, if you were a fish and chip shop, you had to levy VAT if you were a supermarket. And at this point, the supermarkets were beginning to have hot food counters and they were selling roast chicken that was kept hot for a while. You didn't have to pay VAT. And the government, the civil service, said, well, this is unfair. These small fish and chip shops are being penalized compared to these big supermarkets. We will level the playing field with this tiny no brainer change. And then it got caught by pasty tax. And it proved not to be a tiny no brainer change. So actually, I think the problem is that even when we come up with small changes, that level, the playing field support, small business, support businesses, people like they didn't always prove to be no brainers after all. And actually so I'm trying to give a nice easy win. I'm not sure there are many.

I mean, a few years ago I would have said pensions and inheritance tax were pension pots. What an inheritance tax. And now they are. I think that's again, that's not a statement about whether you inherited tax or not. You make them okay. But if you have one then I think you want to apply it to broadly to all assets. And therefore that was a I would have put farmers in the same bucket as us. I think again, conditional having an inheritance tax apply it to apply to all assets. So I'm sure I can think of a few other things that are in that spirit. But in some sense, the fact that they're small, small, things also means they can have small impacts in some sense. So I think what what I would be trying to do if I had a chance almost not might pick things that I didn't. The more about let's find the small things we'll get away with. And I want to notice when going notice it might be a big effect. So I don't think actually you need to be bold and work out all you willing to do something and pick an area, and actually do something that moves.

And we haven't the environmental tax. That's another example there. I mean, this government's said so to be fair to them, you know, I've spent my entire career, which is, you know, the best part of two decades now they need to do something about, road taxes or taxing vehicles because we know that, fuel prices are going to decline. They have now got a plan for introducing a tax on electric vehicles. I don't need a great plan. I think the reason to have a tax, is congestion. The tax I have hasn't got any to do with congestion. So it's a, you know, not a great plan, but it's a plan. Okay, let's run with that. Let's think about well, how can we modify that? How could that tax be bought out and then made to more linked to congestion or you know, the currently the set of taxes we don't piece of work. I first on different a different emissions depending on who emits them and how the source is all over the place. It's wild. Start thinking about, okay, how can we think about different levies and how they all add up and make them a bit more sensible and a bit more uniform? So that's not easy in the sense that it's not just one small thing, but you could take an area and say, okay, we're here, we want to be there. What are the things we could do to start to move towards it? I'll give you one clearer answer, though. Having had a moment to reflect, there's an exemption from capital gains tax. If you hold the asset until you die and you don't have to pay capital gains tax, that's pretty weird. So just as they put pensions, sorted out pensions at death, I think they should sort out capital gains at death as well. Get rid of uplift.

Yeah, I'm with you. I want to touch on the point that you made, there's so much agreement and sorry, you've got two Orthodox people who have thought a lot about the tax system. You can't really expect that much disagreement here. You and you in particular, Tim talked about guts and bravery from politicians. How much do you how fair is that?

Like how much do you think it is that politicians have got comparatively less brave over time? If you say that they used to be more bigger, bolder reforms, and how much is it that, like the sort of systems around the state have got more belligerent and therefore it's harder for them to make the change?

This is squarely with the politicians. Oh, absolutely. So I worked in government for 12 years. And when I went and I started in the Department for education, and we had Michael Gove, David Laws, Matt Hancock, Liz Truss and Edward Timpson as our Commons ministers. All five of those were brave and radical reformers. You may agree or disagree with what they did, but all of them got up in the morning and as Michael Gove used to say, thought like Lenin, how can I change the country I live in today? And when politicians think that and they think it every day and they think it with some reasonably consistent framework, they permeate the department. People in DfE, he knew that if they came up with a radical and bold idea, no matter which junior minister they were working for, they had a fair chance of getting support and a fair chance of getting support from the Secretary of State. And they knew that the Secretary of State had a lot of capital with the Prime minister. So having bold ministers is liberating for the civil service. Now, it takes them a while to get to grips with that. They don't believe it to begin with. They think the minister will capitulate the first time someone lies down outside the building, which they used to, sometimes outside of DC, to make it difficult to get in and out. But it doesn't take the civil service long to realize that when the minister says, I am a brave minister, they mean it or not.

Do you think our system of budgets and how we make an announced tax change makes it harder to be bolder? There's like if you listen to, as so bold, call it a competitive podcast, given that we're on episode one. But if you listen to Ed Balls and, George Osborne, they'll say having multiple budgets a year is brilliant. Having it all to the Chancellor is brilliant. Not interested in think single fiscal events a bad idea, but there is a sort of argument that if you, if you leave it to these sort of wrap it out of the hat nature of the budget and the briefing to the Sunday's the week before you just you intensify the heat around some of these changes. So do you think that makes it harder to be bolder? Just the nature and the cycle of how we make policy.

It's my take you so I'm not sure makes it has to be bolder. And in fact, you know, why do we have two fiscal events even when we have one? It's because chances like their moment in the sun is their day to stand up in Parliament, to have the spotlight on them and to announce something. In principle, there's no reason why that something couldn't be really bold, right? So you can imagine a Chancellor using the opportunity to do something that's really big and radical. So I don't think it's quite the lack of boldness I do have. I think that the multiple fiscal events is a problem. I think it's a problem interacted with kind of, the public finances in the last 15 or so years where basically, they've been tough and they've had the chancellors have had fiscal rules which are constraining, and therefore they are trying to get their buffeting up the top of it. They're getting to the point where they have to do something. So, you know, you do something. Next fiscal event comes along. The forecast has either changed in a good way and basically given you free money is seen as slightly more headroom, free money or to spend some money or the headroom is what I now need to tighten.

So part of the battle obviously is bad. Rushed policy is because the kind of volatility of economic forecasts is being made, lined into policy volatility, and because tax is a lever that you can change quickly, you get a lot of tax policy that's you know, I had to tweak this and tweak that. And I had to remove the personal allowance. 100,000 pounds was at a point in time I needed some money from the rich, and that was an easy way to do it. So I think that the yeah, the kind of the tight public finances and the multiple fiscal events have led to some much more volatility. Layered on top of which comes the well in every budget we need to make for this group aspect for that group. And businesses need something. And that sense of needing to give something to every group means you're always doing too much fiddling. And I think that's, that's as much there. And again, that could be bold, but once you have to try and have these, like your list of people you're trying to please and give it to everybody, that lends itself to lots of small things rather than a in this budget, I'm touching nothing except from this thing. This is the thing we're tackling now. And I don't care that not everyone's got something. So I think it's you. I think in the interest of all those things, actually.

And if you were going to go big, would you do other countries or something? Sort of. Australia and New Zealand have got a habit of doing big reviews that sort of lay the ground for big changes to the system.

Do you think that's the sort of cop out and you should just stand up as chancellor and do it? Or do you think there's merit in those, as was Sweden? Have expert committees that look into specific things. When you change, would you go for any of those models, or do you think, Tim, the chances to stand up and say the Chancellor should stand up and say it because and I'm not. This is not a comment on the common transfer. It's a comment on any chancellor. They cannot be sure if there will be Chancellor in three months, let alone a year or two when the expert committee reports. And I saw that in the Theresa may government, we were trying to do something in housing, and we managed to squeeze it in a bill at the last moment that was going through, and it did become law. But much of the advice was, oh, we'll have another bill in the next session. But then she called an election, which she lost, and the ministers were changed. And the minister who was committed to that was no longer the minister. And if they followed the advice to have a commission and think about it, it would never have happened. So I think that fierce urgency of now, you do not know how long you will be Chancellor, for you do not know, even if you are Chancellor, what the circumstances will be like next year. So if you can do it, go for it.

I think it's also important that, and I think we'll agree here again, Tim, that these are ultimately political decisions. And I say that as someone who's been, you know, who's got expertise, I've worked in tax for a long time. You know, I'm a technocrat in that sense. These are not and I think, you know, experts add a lot in terms of, like, what? Well, design struck me. We wrote this big Mirrlees review. We've written books, mean puns, and 100 and hundreds of reports we've written about how to design the tax system. I think there is use for that kind of work. But ultimately, I think a politician has to say, I'm going to do this, doing it for this reason, and I'm the one responsible for explaining it to the public, and I'm the one responsible for like, yeah, there going to be some losers. I take responsibility for that. Or like, I'm doing this rather than that. I don't think you can get an expert. You can't outsource that. So I think for Charles said, here's my vision for this bit of the tax system. You can absolutely then consult on how to do some of the technocratic stuff. You could have a, a review of some sort says, okay, here's the vision, here's how we're going to do it. Absolutely.

But to say, you know, an expert like how it is on the tax system, what I'm not sure you'd learn very much. I think a lot of it actually would have been written. But also I think it makes it but it was but I think it makes it sound, I mean, my predecessors, but I think it makes it sound like you kind outsource the decision. And again, I think politicians need to, you know, I always get a bit depressed when people say things that I would probably wouldn't take it like that. I think that's just really insulting, actually, to the public. The public aren't stupid. And of course they're not tax experts. They've got they're trying to get their tea on the table and stuff. I don't need to be tax expert, but I absolutely think that if politicians went out and made the case some of this stuff and explained it in clear language and said why we're doing it, I don't believe at all the story that the public wouldn't buy it. Of course, some people hate it. Some people hate everything you're going to do, you know, to govern is to choose, right? Yeah. So I think it absolutely has to be politicians that lead from the front and say, we're doing this for this reason, and I'm going to make the case for it. I'm going to put my reputation on the line for this thing, and then you can get the experts to help you do that.

If this is a point of politicians being brave, brave and grasping the nettle, why? Why should they do it now? Why not? They should do it now because they can do it now. There's never any benefit in delaying. Do it now. Get on with it. Seize the moment. You went into politics, surely to make a difference and make big decisions. If that isn't why you went into politics, well get out.

Okay, I had to add to that. I mean, look, I think yesterday was is always the right time to do tax reform. You know, today's the next best time. It's also worth remembering that the government raises a huge amount of money. And actually in the last, you know, 5 or 6 years, it's increased revenue a lot. It's going to go up to a lot, you know, a lot more. The government going to be dragging in, you know, not far 40 paid in every pound in the economy. You know, the more you raise, the more important it is that you raise in a way that is, that is as effective as possible. We talk a lot about efficient public services, get good value for money. We need good value for money, not in our tax system.

We should be making sure we're not taking more money to me to take from people, because to do so is to reduce living standards.

So last question is a code for one which is, taking a break from tax. If you were the Prime minister and you could only choose one policy from any area and you didn't care about being reelected, what would you push through?

Could we not have stamp duty? If that's a tax? Because it might always be the one thing I would do. The legacy I would like is to get rid of stamp duty, if I will give you that legacy. Right. Sorry, I stole it. We could have it, Tim. No. That's fine. In terms of economics, I do not think there is a better policy than rejoining the European Union. I mean, the estimates of that are 4 or 5 6% of GDP. Now, of course, the problem with that policy is it's not really in the gift of the British government. And if I were Prime Minister for the day and announced it, you will just laugh at me. But you didn't say I had to be a policy that could be implemented. So that's my policy. Fine. Hello, Miller. Tim running. Thank you very much. Thank you.