This is a City AM Studios production.
SPEAKER_03Hello and welcome back to Business as Usual with me, Martin Kimber, and me, Simon Hunt. Coming up on the podcast, has Tax Got Too Taxing in Scotland? A fall in receipts tasks the government's devolution agenda.
SPEAKER_04A stark warning about the possible impending AI jobs massacre. We'll hear from the experts about the scale of the potential fallout.
SPEAKER_03Plus, your waitros needs you. That's the message from the John Lewis partnership as the supermarket chain searches for suggestions for new stores. Welcome back everyone to the podcast. Simon, do you have a good weekend? I had a lovely weekend, thank you. I had my first ever driving lesson. So I finally I'm doing some adulting.
SPEAKER_04Look out West London. Did you uh hit anything or anyone?
SPEAKER_03Uh no, I had a near collision with uh a man on a mobility scooter who decided to go along the road on it. But uh we watched it.
SPEAKER_04Why was he going faster than you?
SPEAKER_03At one point, yes, it was quite embarrassing.
SPEAKER_04Yeah. Um right, I don't even know how we segue into this, but let's just jump straight into the first story for this morning. Let's drive in. Uh the Scottish Government's decision to hike the top rate of income tax may have backfired. That's according to analysis from the lawyer and all-round holy father of tax, Dan Needle, uh, who suggests raising rates north of the border actually led to lower receipts. Our top tax expert and chief reporter, Ali Lyon, joins us now. Ali, how are you? Very good. Good weekend. Uh not bad.
SPEAKER_00No driving lessons, but a bit of driving. Excellent.
SPEAKER_04Excellent. What do we make of uh Scottish tax?
SPEAKER_00Yeah, it could be called a car crash. Uh so these aren't the official figures. Uh, this is a bit of a clever analysis done by Dan Needle, as you say, uh, who uh set up this tax policy associates think tank. Um and he basically found that uh rather than raising money, the Scottish government's decision to hike the top rate of income tax to 48% ahead of the last local elections is on course to lose £20 million. Now, in the grand scheme of things, it's a drop in the ocean in the in in the sort of Treasury, Scottish Treasury's full uh government spending power. But uh it's a bit embarrassing uh to raise money, to raise tax and then lose money. Um, and it's all because of all sorts of behavioural decisions, Dan Needle is saying, either because Scottish lawyers or Scottish accountants or whoever are deciding to move south of the border, or because they are twiddling their earnings to ensure that they are minimizing the amount of income that they earn and instead putting it into putting those earnings into dividends or just paying themselves less and putting it into sort of putting their money into uh their pensions and things like that.
SPEAKER_04So this phenomenon is commonly referred to as the Laffer curve, um, which kind of says that if you raise taxes too much, uh people start to leave or they do things to try and get around it. Um, can you just explain that a little bit for the audience?
SPEAKER_00So, yeah, the Laffer curve founded by or first uh thought of by a guy called Arthur Laffer, an American economist. His big theory was that you get to a peak of taxation after which actual receipts from that tax or the overall tax picture in a country can fall as a result of behavioral changes and people doing all sorts of things or just leaving the country to avoid that higher rate of tax.
SPEAKER_03What's interesting about this is I suppose it's it's mildly embarrassing for the SNP who were behind this. It's also potentially embarrassing, though, for Andy Burnham because he's come in with this devolution agenda to try and devolve fiscal power away from the Treasury to the different regions of nations of the UK. And this actually shows it could be net negative for public finances if this happens.
SPEAKER_00It it could be. Or you could also get the race to the bottom, uh, like the sort of federal uh model in America, where you see kind of states like Texas not having income tax and therefore attracting loads of inward investment. Um, I think Scotland's got quite a sort of left-wing electorate, and so that sort of soaked the rich uh rhetoric does very well there. Um, it could also um upend some of the sort of um rumors that we heard that Andy Burnham was planning to reintroduce that 50% income tax rate um as a sort of whee to raise some more money while technically not raising rates of income tax and sticking to the sort of manifesto pledges that Rachel Reeves had. Of course, when Gordon Brown did that in the sort of dying days of um the last Labour government, they lost money then.
SPEAKER_02Yeah.
SPEAKER_00Um and George Osborne came in, slashed, removed that 50% rate of tax, reintroduced it to stop at 45%, and then exchequer receipts actually went up. So again, it's that just proving there is that laugh of a point after which uh tax receipts can tend to fall.
SPEAKER_03Now, Ali, it's a big week for British banks. We've got results this week from Barclays, Lloyd's, NatWest, and Standard Chartered. What will analysts be looking out for?
SPEAKER_00Uh so analysts will be looking out for sort of two main things, I think, split into the sort of those banks that focus on investment banking or have investment banking arms, um, and then the ones that are just sort of purely focused on retail, retail banking being that sort of traditional mortgage providing um and high street lending uh sort of practices. So in the investment banking division, as we saw in the sort of record-breaking Wall Street earnings that we had last week and sort of the week before, um, all the uncertainty over the Middle East added and the sort of SpaceX IPO and the real exuberance that we're seeing in capital markets at the moment, um, all of that meant that they had absolutely blockbuster trading numbers, blockbuster uh sort of deal-making numbers. And whereas in the UK, uh we don't quite have those set that same amount of exuberance, and we didn't have that SpaceX IPO that really helped those American banks. The likes of Barclays, HSBC, Standard Chartered, they're expected to have similarly record trading revenue. Um, and so we'll all see whether they beat analysts' already high expectations. On the retail side, they've also been set to benefit from the Middle East conflicts, but in a slightly different way. So as we all know, interest rates on track to stay higher for longer. Um and as a result of that, banks get this thing called net interest, where they basically, it's the profit they make on the money that they lend versus the money that they borrow. That is a those earnings are expected to stay a lot higher as a result of interest rates staying higher.
SPEAKER_04Just finally, Ali, uh the good folks at Waitros are asking the great British public for suggestions, not for names, thankfully, or they'll probably be renamed Botium at Boat Foats or something, but for the potential uh locations of future stores. This is all part of a £1 billion investment and expansion plan. Ali, is it common for supermarkets to ask us where we think they should open the next store?
SPEAKER_00Uh I I'm gonna take a stab at no. Uh I don't think that's coming from any sort of formal uh insider knowledge, but uh it is pretty rare. It is all being done in a context whereby weitros have been falling behind in that sort of mass market, mass affluent premium dra um space to Marks and Spencer's, who have just had the most incredible couple of years really uh improving that food uh division of theirs. Um they've got all these sort of small, very nice, in between that sort of off-license size, but smaller than the giant retail sort of park style supermarket um that have just proven the biggest hit. And this is, for all intents and purposes, just an attempt to replicate that in swanky suburbs, swanky uh commuter belt towns, um, and we'll see how to be. Well, soon to be gentrified areas, uh, and we'll see how successful that is.
SPEAKER_03It's interesting because I think Waitros and MS are the two stores that attract almost um unanimous support whenever there's news that they might be moving to a particular part of country. I actually I remember during the um local elections, there was actually one councillor in Kingston in southwest London who launched a petition to get MS to open a shop in Kingston. That was one of her big uh campaign platforms. So there you go. That's how that's how much people value that. Thank you very much, Annie. Now, just how big is the threat to the jobs market by AI? The founder of Anthropic has predicted that AI will eliminate as many as 50% of entry-level white-collar jobs within the next five years. But others have cautioned that, like with previous technologies, it won't just destroy jobs but create new ones too. Earlier, I spoke to Nicholas Fairfax and Max Rangeley, editors of a new book, The Artificial Intelligence Revolution. And they told me why AI won't just take existing jobs, it may also outcompete humans for the new ones.
SPEAKER_02Henry Vypond and the book, one of our contributors, made the point that, okay, it's often said that the people who are the doomsters about unemployment and so on, I think there's been mass unemployment. Like, for example, Elon Musk, who believes there's the in future there'll be no work, and any people who you know want to work will work. Then um, in fact, uh she uh posits a situation where the um so it is often said that uh uh there will be new jobs created that don't exist at the moment. But she put she then asks the question, well, what if AI outcompetes humans for those new jobs? So instead, you know, you can see well, you can see it's quite a neat quite it's quite a neat point. And the other point I want to make, which I was discussing with Max for um we came in in here this morning, was that um the s the situation where about uh companies and particularly large companies, so they have to compete with each other perhaps by um by automating many of their processes and getting getting rid of a lot of their headcount. And I I saw I think um you probably saw a month or two ago, Oracle got rid of ten thousand jobs or something. And so the there you have, you know, mass unemployment being started to be created. And the question the question is whether um that will r remain remain the case or because if companies don't compete in the same way against their competitors, then they're gonna they're g they they're not gonna be competitive. And so they're probably obliged to follow their competitors in in cr in letting people go. But if they do so, they will they'll also potentially be destroying economic demand. Because if you take that to the end, you know, you can see where we're getting. Yeah, yeah. Then you actually end up with no economic demand at all. Indeed. That may be considered absurd and and ridiculous and so on, it's actually absurdum. But in fact, I think it is potentially you know where where the world is going. So it is because as as Mass says, AI, you know, date and particularly when combined with robots, you have advanced robots, and we've got a chapter in the book on robotics combined with AI. You can imagine that is where really then it touches the physical world. But you have AI and advanced AI-enabled robots working in the physical world. You can see that in fact they never sleep, they never eat, they they can work 24 hours a day, they never have headaches and need to take their day off.
SPEAKER_04And finally, let no one say we never do anything cultural on this podcast. Um, we've got Steve Denine, our life and style editor in the studio to give us uh a little cultural uh recommendation, or or maybe not so much for the week ahead. Steve.
SPEAKER_01You can tell it's the middle of summer when you've got the lifestyle desk coming on the business podcast. Welcome to your is this your debut on Business as Usual? I think this is my Business as Usual cherry.
SPEAKER_04Um what have you been uh what have you been up to lately, Steve, that you can recommend or or not recommend to our listeners?
SPEAKER_01Well, I had quite a night at the theatre for the new train spotting The Musical uh made by none other than Irvin Welsh. Uh have either of you guys seen it?
SPEAKER_04I've seen the movie, I've not seen the musical.
SPEAKER_01Okay, so I've seen the movie, obviously, and the sequel, obviously, I reviewed and gave it five stars. Uh I've read most of the books, all of the books, maybe. Um I've even had a steak lunch with Irvin Welsh when I interviewed him for our magazine, City Hall. The magazine. Was he nice? Uh Irvin Welsh was lovely, yeah, really nice guy. He was going through his clean phase, so he was um living in LA, uh uh doing lots of yoga. Uh looked quite live. He was just really into Death Hall or something. Um so you would think that this music, if it was written for anyone, it's musical, would be written for me specifically. And let me tell you, it was not written for me specifically, but I cannot imagine who it might have been written for. Um, it is one of one of the worst things I've ever seen. One of the worst things of this scale that I've ever seen.
SPEAKER_04So uh people who do sort of restaurant reviews, theatre reviews, all these sorts of things. Obviously, you're normally there for free for a review, and so you normally don't really read bad reviews of these sorts of things because you know it's it's a bit awkward and whatever, but you are really going hell for leather on this one.
SPEAKER_01Yeah, I mean I think it depends on uh different uh sort of sectors as well. Like restaurants, you it's quite rare to see a one-star review. Theatre is a bit more the knives are out. I think there's a lot of seats in a in a theater. The steak knives are out in the street. Um but it is it is such a poorly written musical. There are there are no good new songs. It's a jukebox musical, mostly. So they're they're singing along to Lust for Life and Atomic and all the classics.
SPEAKER_04I saw one of those on a piano cruise once, which was excellent, by the way. I mean, it was the kind of thing you'd expect.
SPEAKER_01The cruise or the musical?
SPEAKER_04Both, both, actually, I have to say, but I I didn't know that there were more of these sorts of musicals out there without sort of original music that actually just sort of one scene leads to the next kind of floor-filler hit.
SPEAKER_01Yeah, well, it kind of recreates scenes from the film in excruciating detail, or even worse, it just sort of nods to them. Like you know, the scene where um Spud has an accident in the in the bed. Right. Well, they just sort of cut to Spud naked, holding a foul bundle of sheets, and then the sheets are wrested from him by a lady in and the the foul mess is uh is displayed, but there's no sort of context for it. It's just like remember this. This was cool, wasn't it?
SPEAKER_04So there's not a lot of sort of narrative leading from one thing to the other, it's just sort of lots of fan references shoehorned into the musical.
SPEAKER_01And they actually they use songs from other films from just about when Train Spotting came out as well. Oh, they have um My Ex-Boyfriend. Um, I'm not sure if that's the actual name, by Republica. Do you have that one?
SPEAKER_04No.
SPEAKER_01Uh my ex-boyfriend.
SPEAKER_04Don't sing any more than that, Steve. We'll get we'll get a copyright struck on YouTube.
SPEAKER_01Oh yeah. Uh and they there's a few of these, it's just no, it there's there is so little ambition to the whole project. Right. Um, I did quite like the fact that a lot of it was um the set was the Crosslands pub in Glasgow where the famous scene was um filmed where Begby throws his pint pot over his head and it hits a girl in the face and he goes down and says, No leaves there till we find out which's done this.
SPEAKER_04Steve, we've we've invited you in here for uh under sort of ulterior motives, really, because um, as a lot of our viewers and listeners might have noticed, City AM's hospitality awards, the toast awards are uh fully underway now as the general public vote for their favourite food, drink, uh, and experience spots in the city. Steve, uh, which of those sites A has caught your eye? And um B, can you already see which are kind of getting the most votes?
SPEAKER_03Which are buttering your toast, as it were.
SPEAKER_01Which are butter, I mean they're all buttering my toast. So we've gone from over two and a half thousand votes down to uh 500 on the long list, and now we have 180 different places from bars and restaurants and boozers and fun experiences, all the way down to like cultural experiences and the best coffee, the best sandwiches. So to say which ones are buttering my toast would would take a long time because it's a long list, but there are some. So I mean the old Dr. Butler's Head. Um yeah, that's a classic. A classic. When we have our other City M awards, that is the place that everyone meets for a drink beforehand, because it is right next to Guild Hall.
SPEAKER_04No one told me.
SPEAKER_01Yeah. Um the best coffee, uh, curator's coffee studio is my vote. Okay. Um, down near Fenchurch Street. Really great little Australian coffee place. No one does coffee like the Australians.
SPEAKER_04I was not expecting you to say that. I mean, I don't buy coffee. I think it's crazy to purchase coffee when there is a coffee machine in here, which is why my coffee nomination was for Pret. And I was very disappointed not to see it make the long list.
SPEAKER_01I cannot put into words what a bad take this is. But that's democracy. This is a democratic vote. And I'm afraid Pret didn't make the shortlist.
SPEAKER_04Steve even sent me an email saying we're not including. Um great. So how do people vote and how do people get involved?
SPEAKER_01So you go to our website, if you just type in Toast Awards 2026, first thing that comes up. It literally takes, as you uh proved, I think, it takes less time to vote in these awards than it takes to pour a pint of Guinness.
SPEAKER_04Yes, I did. I went to the Rising Sun, which were the winners of the best pub last year.
SPEAKER_01Yeah, log on to the awards uh website, vote for your favorite places. There's uh 15 categories, takes five seconds to do each one, you'll be done in no time. Uh, and you are supporting your favorite places.
SPEAKER_04Steve, thank you very much for coming in. Uh, we must get you back in soon to slag something else off.
SPEAKER_01Well, hopefully I'll have something nice to say next time.
SPEAKER_04No, it's better actually if you just come in. And ridicule something. Thank you very much. Well, that's just about all we have time for today. Thank you very much for listening to or watching Business as Usual.
SPEAKER_03And don't forget to subscribe to City AM's daily newsletter and of course to download our free app.
SPEAKER_04It's got everything those expensive news apps have except ours is free. We'll be back in your podcast feeds tomorrow at 6 a.m. But for now, goodbye. Goodbye.