Hello and welcome to the rest of his money with me, Steph McGovern. I'm with me, Robert Peston. Now, in the last episode, Robert, you were talking about how important you think 2025 is, and I stopped you from going into another kind of big
explanation and said let's save it for this and dedicate a podcast to it, an episode to it. I'm really interested in this because obviously there's loads going on isn't there? Obviously Trump's coming back, there'll be his inauguration, obviously Labour will be in full swing, there's things like the spending review, there's lots going on politically across Germany and France and the rest of Europe, there's the geopolitics of everything happening with Russia and Ukraine and Syria. All of this combined are saying you think this 2025
is one of the most important years, so tell me why. I do think it's the most important year of our lives, doesn't mean to say it's either going to be appalling or good, but there is so much in play of a significant nature.
I've used this phrase on this podcast a few times, high impact, low probability events, the kind of events like the COVID pandemic, like the financial crisis in 2007, eight, like the decision to vote for Brexit to leave the European Union. These are events that ahead of time, many people would say, well, the probability of that is not that
great if they materialize they change all our lives in a fundamental way. And my point about 2025 is there are a vast number of these so-called low probability but massively high impact
events. If we just run through them, the war in Ukraine, we're all expecting some kind of a ceasefire and a peace deal. If Putin, and this is what we expect, keeps vast amounts of Ukraine that he has illegally taken. That has massive ramifications for what he may feel empowered to do next. It has massive ramifications for the security of Europe.
If Israel, for example, were to take increased military action directly against Iran, that has massive implications. We actually heard on the podcast when we interviewed Bill Browder, just one of the ramifications for some of these events going badly wrong. He talked about if you effectively surrender to Putin, vast numbers of Ukrainians are going to become refugees and many of them are going to come and live
here, if what looks like a positive development, the overthrow of Assad actually ultimately leads to chronic instability in Syria, then again, we'll get waves of refugees coming to Europe and wanting to come to the UK. It seems a mad thing to say that these are relatively small examples, but they are relatively small examples. In terms of the whole world's economy,
artificial intelligence, the most powerful industrial revolution that any of us have lived through. We talk all the time about the responsibility of government to prepare workforces for potential compression of wages, some loss of jobs, impact on culture, impact on the media. We're just not getting a national debate about
any of this and the speed of change is not slowing down, except in one place, which is I don't see governments like ours gripping the risks and the great opportunities in the way that they should be. And Matt Britton was obviously from Google was talking about that. Wasn't he about governments being proactive rather than reactive and that is what we're not seeing. So it's worth probably listening to his episode as well on all of that.
I suppose the thing that I find personally most challenging, you and I have known each other a long time. And historically, I've never been shy in making forecasts about what I think is going to happen, particularly at the beginning of any particular year. And even when one has lived through a crisis like
the financial crisis of 2007-08, being at the front line reporting that banks would collapse, forecasting that this would be appalling for the economy and living standards. I was still relatively positive, believe it or not, because I could see how you would fix the problem.
I could see what you need to do to the financial system to shore it up again and get us back onto something that felt more stable. The problem with a world in which there are so many imponderables and many would say the biggest imponderable of all is what will Trump actually do. It's towards the end of January when he is president. So many uncertainties there. This is not a cop-out, but the problem I've got
in saying 2025 is going to be the biggest year of our lives is I also have to say, but I don't really know whether it's going to be good or bad for us because it could flip in a number of different directions. And that for me personally is particularly unnerving.
Yeah of course it is because as you say it's not often is it in life where you can't predict what the person in power is going to do because you normally know and yes okay we've heard Trump talk about mass deportation we've heard him talk about trade tariffs but then how is that going to manifest and is he actually going to be as hard as he said he's going to be and what's that going to look like or is he just going to flip and change his mind on the basis of
a conversation in a McDonald's with Elon Musk, he just don't know, do you? And that's the scary thing about this is that lack of predictability. But I think I am the optimist of our relationship. And I think businesses are so used to uncertainty. They hate it, but they are used to it. And they are really the ones that will always find a way
through when some don't obviously and we see problems for them, but there'll be lots of entrepreneurs who will use this kind of fertile ground of unpredictability for their success. I think we're good at that. So I've listened less to the politicians and more to what business people are saying. And don't get me wrong, business people are not optimistic at the moment. I work a lot with the make you care that represents the manufacturers because that's
where I started my career in manufacturing and, you know, they're pretty gloomy about what the next few years are going to bring. And also we keep talking about the people not listing on the London stock market. And we had, of course, that it was 2024 is on course for the worst year for departures since the global financial crisis.
despite everyone trying to make it more attractive so i i know there's a lot of negativity there but i still think we will pull through it and we'll find a way through it like we have with brexit like we did with covid and there'll be casualties along the way but we will innovate i guess as a word look i don't disagree.
The proper entrepreneurs always find a way of making money in uncertain conditions, but don't be under any illusion. More established businesses hate uncertainty and in a period of uncertainty,
they invest less. I think there's already evidence of them investing less. And that I'm afraid means both lower short term growth and much more damagingly lower productivity and lower long term growth. So we do need as early as possible to work out what 2025 means. But as I say, we're not going to do that until we've actually seen Trump in the White House
before a bit. I mean, one thing which I haven't mentioned on the podcast before, which is very much on my mind at the moment, is that if you look at his economic policies, I now think that they will be way worse for the rest of the world than for America. I originally talked about how his unfunded tax cuts would increase the deficit in America to an unsustainable
level. We've talked about the impact of tariffs in terms of pushing up US inflation and potentially leading to a squeeze on American consumers. But one of the things that is really interesting to me is there seems to be some evidence that money is now flowing into America because in times of uncertainty, one of the things that always happens is that people buy the dollar. Also, if they think
that essentially trading with the rest of the world is going to be harder. They will increasingly relocate production to the single most powerful economy in the world, which is America. And so you could get this really, I mean, many people say this completely unfair result of
the Trump policies, which is that the pain in terms of lower growth and higher inflation will be felt principally outside of America. These are bigger, my neighbour policies that will not necessarily undermine the strength of the American economy, particularly, but will do significant damage to the rest of us.
Because the money's got to go somewhere, that's the thing with all of this. The money doesn't just disappear, does it? It goes somewhere else. That's what I think is always fascinating about this. But probably historically, and it is sort of mad, right? It's one of the reasons why the stock market is booming in America. The knee-jerk reaction of investors at times of uncertainty is to buy the dollar by dollar assets, just what they've done forever. Even if the source of uncertainty is Donald Trump himself, the American president. And this is infuriating.
But what he's doing is massively exploiting the power of the world's most formidable economy. And it looks incredibly selfish. It is incredibly selfish.
but it may end up, as I say, doing more harm to us than it does to America. And that is awful, something we need to come to terms with. And then the worry of course is, as we've talked about in the run up to the American election, and the reason why lots of people think Trump won is because he played it on the economy and said, I'm gonna make the economy better. And then if he does do that in America, it's then gonna further the kind of, as it was, like the far right message of,
what is better for a country and then that will be again devastating across the world. So there's a real danger that actually Trump manages to deliver what he says he was going to deliver and then that helps the case of the people that I think would be very scary to have in power in other countries, including our own.
So, look, just to be clear, I still think net, if he does everything he says he's going to do, America will end up being poorer than it would have been otherwise. My point is just that it's the rest of the world which will suffer more relatively speaking and therefore the relative position of America will be strengthened. Doesn't mean to say that in absolute terms, American people and American businesses will be more successful than they would have been had he not imposed tariffs, had he not tried to round up and expel.
they won't know that comparison, though. They'll just see that rhetoric of, well, look, America's doing better than these other countries. No one will be going, oh yeah, but it would have done even better if he hadn't come in. It'll be very much the picture painted that, well, look, we're doing better than the other countries, which is scary. Can I ask you a bit about, because obviously there's a lot of talk about how everything that's happening in US politics is going to impact
what goes on with our future politics and parties and stuff. And, you know, obviously I'm referring to this money that's being talked about coming from Musk, possibly to reform. You know, we've seen recently this picture of Musk with Nigel Farage at Trump's Florida home with Nick Candy there as well as of course a reformed owner. So, I mean, how much influence do you think Musk is going to have on UK politics?
So one of the things i've been obsessed with actually for 15 years i read a book 15 years ago called how do we fix this mess and one of the things i said in that book was that one implication of the grotesque increase in wealth inequality that we were seeing and had been seen since the late 90s the great.
Original first phase of the digital industrial revolution created these fortunes, these dynastic fortunes on a scale we haven't seen since the late 19th century. I mean, Elon Musk is the most extreme example of this worth, you know, not far 400 billion dollars personally now. When you think about the 400 billion, what you recognize is if he would have given 100 million dollars to anybody,
That is the equivalent for you and me of giving 100 quid to a political party or a charity. One has to understand the significance. A million pound donation to the Tories to Labour, five million pounds. These are historically enormous sums. There has never been an individual who has donated tens of millions of pounds to any political party in the UK. This would be
holy new territory. In the case of Musk, when you control such a powerful social media platform, X, the scale of Musk's influence and power is absolutely extraordinary. I mean, it was quite interesting
that when we talked, as you say to Matt Britain, he was desperately keen to point out that Google is not as powerful as governments and it's up to governments to set regulations. He was trying to be respectful to the established
democratic structures. With somebody like Musk, Musk is definitely not respectful of established politicians like Kierstom or indeed of entire governments. He speaks his mind and he tries to influence in a really, I mean many would say, troubling way.
To what end? Why do you think he wants to be part of controlling what happens in our country? Like, is it just pure narcissism? Does he genuinely want to make a difference? Like, I don't get it. Like, he's got everything. Why does he want to get involved with us as well?
He is somebody who just believes he's right. And if he's right about something, he doesn't seem to have the sort of slightly self-deprecating view that most of us have. And even if we think we are right, you know, it's all right to sort of have a conversation about it. But his kind of intervention, let's be absolutely clear, if reform were to get
many tens of millions of donations from whatever source. That is transformative for their ability to shake up British politics, because at that point you can create both digital and on-the-ground structure in every single constituency of the country that would pose a formidable challenge
to labor, Tory, every party you can think of. Now, I'm not making a party political judgment here that it is wrong for reform to pose that challenge. What I am questioning is I am deeply troubled
when a single individual can determine essentially the life or death of a political party or the life or death of a particular political structure, somebody who cannot be held to account. That is the point. In a democracy, a cornerstone is if somebody is changing our way of life, we should have the ability to vote them out. You cannot vote Elon Musk out.
And also, it kind of feels an absolute contradiction of democracy because it's money, it's wealth, that's buying, it's win, isn't it? So that's not really giving power to individuals. It's actually taking it away by being the richest people that are on the country. Look, the convicts of interest are just off the charts for somebody like Musk. I mean, you know, he controls so many important and powerful
New Age businesses. We've talked about the chips that go into people's brains. He's got the rockets. He's got the satellite transmitters. He's now got an AI business. He's got X. He's got Tesla. And all of these businesses are businesses that actually for our safety need to be regulated by governments. But if governments are terrified of him and if on the margin there are politicians
who he can influence, I choose my words carefully, by offering them vast amounts of money for their campaigns, you no longer feel confident that the regulations that determine not only how much money he makes, but whether these businesses are in the national interest, the global interest, you no longer have confidence that the checks and balances we need as citizens
to, you know, essentially make sure that he doesn't end up exploiting us. One loses confidence in the ability for governments to make rational decisions. I mean, one of the things that I have been absolutely slightly horrified by, actually, is, you know, you've had Elon Musk saying the most extraordinarily damaging things about Starmer and the whole UK. I mean, on Twitter, he's been accusing the UK of somehow being a police state. I've given Kistama opportunities
on camera to challenge Musk. And he won't because he doesn't want to get into some kind of public spat with Musk. But if not now, when? Right. I think we should have a quick break now before we pick up on some of our other thoughts on 2025.
So hello and welcome back to The Rest Is Money with me, Robert Pastern. And me, Steph McGovern. So look, we've talked a lot about the evolving employment market, you know, legislation coming in. There's a lot of technological changes which are having a big impact on the way we work. What's exciting you for 2025?
I am obsessed like you are with the world of work. And we've talked about how AI might change it or will change it. We've talked a lot about the employment's right, Bill, coming in to give workers more rights.
essentially giving them rights from day one in a job. We've also talked about, of course, from the budget, the cost of employing people going up and what that might mean in terms of the employer and national insurance contribution. But in the biggest, I guess, change that was announced in the budget and a big pressure on businesses. And lots of businesses have been talking about that.
But what is going on, which I find fascinating, is how the world of work is changing now on a much subtler level with the younger generations in terms of how they're doing work. So, you know, we've talked a lot about the gig economy. Everyone knows what we're talking about when we say gig economy, and you can go and work for whoever it is, you know, and going to be an Uber driver or
You know, one day being Uber driver, one day go off and do other things. But in those cases, you work for a company when you do that. But there's now these new apps coming through. And I've come across them because obviously in TV land, it's been quite a tough year. So 2023, 24 has been really tough for the TV industry. So a lot of my kind of colleagues and things lost.
work, you know, I myself saw my show get axed this time last year. And similarly, other people that work within it, whether it's, you know, runners or makeup artists or whatever, have lost work too. And it hasn't really picked up again yet, especially out in the regions, which is where, you know, obviously my show is coming from Leeds. So they've been doing other works. So for example, my makeup artist has been working as a delivery driver.
and, you know, doing stuff in shops and things like that until things are picking up in Makeup Land. But the way that they're getting those jobs is fascinating. So, for example, now there are these apps called Young Ones and Temper, to name two, where it allows companies to hire someone for a shift, in say, a shop or a restaurant or whatever. So, the shop will advertise the shift available on the app.
people would then apply and you can set a threshold for how much you want to be paid so you know you can say don't show me any jobs under 15 quid and then you can go and just do a random shift in a shop or a restaurant and then what happens is like you get with TripAdvisor and other things like Uber or whatever else. You do a rating so the employer rates the employee and the employee rates the employer
And the thing for me is this sense that that is not a company employing someone. So for a start, they get around the employment rights bill. And, you know, we're talking obviously a lot of these jobs will be at the lower end of pay. So it invites the kind of the other issues around national insurance contributions and everything else, because essentially these people are free. Well, I'll ask you a question. Why is this not a zero hours contract?
Because I guess it's not a contract between the employer and the employee from what can work out. It's a freelance shift where that person is not working for the employer. Essentially, they're not working for anyone. So they're not on the books of the company. And actually it means that people, you know, from talking to some people I know who are using it.
They're getting really varied jobs, so you know, I know someone who was working in a shop one day and then they were working for like a studio another day, which is good in one sense. I mean, there's a big issue around training. We've all been there. We're going to a shop and it's someone's first day. And obviously you feel for them because it's their first day, but they tend to be not the best. But I guess what's really clever about this is the rating system because you'll be obsessed about getting a good rating in order to get other companies that'll give you the freelance shifts.
And we've seen that with the success of things like Airbnb and Uber and everything else. It's the the rating that really makes a difference to whether you then go with that particular company or even on vintage. You know, I've talked about vintage this year about how you can buy and sell goods on there and your rating can make a big difference on there to how well you do as a seller and everything else. So I think there's a there's really interesting trend behind the scenes going on, which will become more and more popular. We talk a lot about people wanting job security.
But maybe they don't want it as much as we think they do when actually this transient kind of life between jobs might be a lot more appealing to younger people. I don't know. So there's a lot to unpack that. I mean, I must say I'm surprised.
that these apps would not be, in a sense, within the purview of the new legislation. These sound to me like classic zero hour contracts, whether or not the employer is the retailer that's providing the few hours or whether it is the owner of the app that's acting as an agency. But either way, this feels
like a zero hours contract and I can't for the life of me see I mean part of the problem is at the moment although the government has set out in general terms what it plans to do I think it is still quite difficult to know which zero hours contracts will be allowed and which won't be but it seems to me you know they could well be a problem for these apps coming down the track once this
legislation is in law. So you make the point that not everybody wants job security. I think that is absolutely correct. But when you talk to people using these apps at the moment, what do they say to you about them? Do they think this is a fun way to work? Do they get any job satisfaction out of it? They taking these jobs out of desperation.
It's a mix. I mean, I think fundamentally it's probably the fact that they need work and what they had relied on in the past for the work is just not there in the same way at the moment and, you know, particularly in industry like ours. There's not many contracts given. They're very much on short term. So it is another reflection of the fact that the workforce, the power of the workforce, the power of individuals has been undermined.
Yeah, yeah, yeah. And I would say, you know, particularly one person who I've been talking to about this a lot, you know, I've really seen him struggle over the last few months. And now he's like much happier and feels much more in control of his life, because he knows he can just flip between industries now and can just jump into different ones on the basis of these kind of apps, which have enabled him to find work much more easily. Because what we would have happened in the past is people walk around with CVs going into shops and restaurants and bars and things like that. Whereas this
takes away that need and actually allows, well, as you say, I mean, it's zero, it is zero, I was contracts, but it does work for some people. So in my makeup, by this case, it means he can earn money when the TV makeup work isn't there. And you can decide the day before, if you're going to do the shift, it's as simple as that. It's like, you can literally say the night before,
Yes, I will or I won't take that shift the next day. And that works for him because very specific to his makeup industry. But you know, you often don't find out about work until a couple of days before, or you might be booked for something and it gets cancelled and you can do now about it, in which case he can then just pick up.
these shifts. If you're in a job that isn't particularly secure, this is a way of allowing you to do the job you want to do and that you love if it's in the creative world, for example, but still make sure you've got money coming in. And I'm not saying it's right or wrong. It's more that I just think that this is another thing bubbling along in the world of work that people are just overlooking. You know, you mentioned there about this, it's got to fall into the zero, I was contracting.
The government might not even know about it. The might not even like they might be hearing it from the first time for us for all we know. We've talked about it before about when things come out. It's often reactive rather than proactive in terms of the government's response to stuff and new technology and how things are changing. So maybe they haven't even gotten onto this yet. I mean, the only reason I'm perhaps slightly less enthused than I might be about it is
But what we need in this country is we certainly need people to be adaptable because the economy is changing faster than at any time in our lifetimes because of technology, because of AI and all of that. So you need people to be adaptable and resilient and all of that. But what worries me about these apps and that this bit of the economy is we're really talking about incredibly low skilled work. And the more that people become dependent on low skilled work,
The worst it is for them, because wages incomes inevitably lower, and the worst it is for the British economy. What we need at this particular juncture is for people to acquire the kind of skills that not only enable them,
to generate output that allows them then to have a decent income. We need to get away from an economy where way too many people are working way too hard, working ludicrous numbers of hours, but still struggling to put red on the table to pay their bills into an economy where people have
More training, higher skills, higher incomes, and the thing that worries me is the more people come dependent on jobbing around even via a high tech app, the less likely it is that we will essentially cure the cancer of this low wage economy.
Yeah, so I just want to come back on you on that point. I don't think any job is law skilled. I think that is such an insult to people in the working world to be told their job is law skilled. There's jobs I could just could not do that some people would say are law skilled. We talk about soft skills as well, but being able to communicate and being able to deal with an angry customer. You wouldn't be able to do it, Rob, but you'd be rubbish working in a shop. Hang on a second. I'm not making it. Listen, I'm not in any sense denigrating. Not all jobs need a skill that not everyone has.
I'll redefine what I mean, okay? And this is not supposed to be, you know, me insulting, completely accept that all sorts of retail jobs are challenging. I'm not making some moral case about them. I'm just making a very simple case, which is most of these people, many of these people are on minimum wage. And I want people to be earning two, three, four times minimum wage. That's all I'm saying about get the skills
that mean that your output is such that you will be earning a multiple of the minimum wage.
Or we pay those people more. We saw from the pandemic, the most important people were the law paid more often than not, weren't they? They were the people who kept the roads clean, kept everything going, made sure all those kind of frontline jobs that are often deemed law skilled. It's wrong to call them law skilled. They're law paid. So that's the biggest problem in our country is the pay system is how we value people and how we decide how much money people earn.
I think the bigger problem there is not about giving people more skills. Of course, we should constantly be helping people hone their skills to be able to do the things they want to do and provide the stuff we need and the economy to help it thrive. But the pair systems, the biggest you hear. Yeah, Steph, you basically, if you take that view, and I completely agree with you about it,
you then have to think about how you bring about that change. And historically, simply relying on the goodwill of shareholders, owners, managers to put up the pay of employees against a backdrop where there are too many people available via even the apps we've just been talking about to work for these relatively low pay,
you cannot unfortunately assume that somehow we'll get this great cultural shift and that owners and employers will suddenly, out of the goodness of their heart, decide to double the pay of shop workers. It ain't going to happen. And the only way it is going to happen is actually if you make shop workers more powerful, and that requires the sorts of changes that you've been very worried about in the form of this government's employer rights package, which is you give
you know essentially all employees more power relative to employers and you give unions more power relative to employers but you've historically on this program been saying you're really worried about all of that because it's bad for employees but you can't have it both ways.
You either want wages to go up for employees or you don't. And if you want their wages to go up, you have to give them more power. Yeah, but interestingly, right, if you go back to this and where I started with this with ratings, if you have got really high ratings for all the work you're doing on an app like this, you demand more money. And then the shop or the restaurant goes, who am I going to get? The person I know will do a good day's work on the cheapest. So then you kind of, does it have to be a union that negotiates everyone's pay all the time?
like i'm not going against unions by the way but i'm just saying there's other ways of doing it it doesn't have to just be a collective union could it not be just on the basis of individuals working hard getting rewarded for it rather than needing to be a collective thing where everyone benefits from something when they're not everyone's working as hard as each other.
There's a balance always. To be absolutely clear, I would always say that if somebody is a brilliant employee and gets high ratings, of course, you would hope that in those circumstances, those people get paid more and we should reward effort. But there are vast numbers of people who through no fault of their own provide a decent service. But there may be all sorts of reasons why some individuals are vulnerable. And the question is, how do you protect them?
And I just want to come back because on, you know, obviously I've talked about my slime business, goopopia before. We do that there where if an employee, and you know, the majority of our employees who work in the stores are minimum wage young people, but they can get
rewards if they get good ratings on TripAdvisor. So if they get a good review from a customer and TripAdvisor, they get a fiver. So, you know, across the day, you can build them up. And then we see that there's a really good incentive for them because they'll be determined then to get as many good reviews, which means you're getting a really good member of staff who's working really hard. And they're getting the extra money and being rewarded from it. I just think that it doesn't always have to be in the traditional way it's always being done.
Well, listen, I think that's probably a good moment to rap, as they say. So I think that's it from me. See you soon. Yeah, that's it from us. Thank you very much for listening. As ever, we love answering your questions, so please do send them to us. You can email restismoneyatgmail.com or send them to our social media pages.
Thank you very much. And Steph has told me that if you leave me personally a positive rating on the podcast, it's a five-hour ago. Hey, can I just say one other thing to look forward to in 2025? My book coming out, my thriller, Deadline, you can pre-order it now. Thank you very much. Goodbye. All the best, bye-bye.
