It's good to see you this morning. Thank you for joining us. I heard you described this morning by somebody as I was coming in as a 21st century fagan, picking pockets where you went. What would you say in response?

Well, look, I don't deny for 1 second that we had to put taxes up. I think it was right to help families with the furlough scheme that protected 9 million jobs in the Pandemic. I think it was right to help families with the cost of living cris the hike in energy and food bills. But also, I've been very honest that when you do those things, you do have to pay for them. Now, the economy has done much better than anyone thought and that's what we should be very proud of in this country. We have a much stronger, more resilient economy than most commentators predicted. I also think it's right to make a start in bringing down taxes. But the taxes that I bought down are not the crowd pleasers that were on the tip of everyone's tongues. Inheritance tax or income tax. They're the taxes that are going to help businesses grow. And that is the way that we will increase our long term prosperity. Raise wages, raise living standards. And that was the choice that a Conservative government made yesterday.

Why didn't you increase personal allowances?

I could have done that, but what I chose to do was something that most people haven't heard of, which is to give us for businesses the most generous capital allowances of any major economy. I'm in the Airbus factory in North Wales, where they make the wings for all the Airbus planes around the world. One of the executives from Airbus said to me this morning, I had made her job easier in terms of attracting investment into the UK. So I chose the tax cuts that are going to make us competitive. That is the way that we will raise living standards for families up and down the country in the long term.

Yeah, long term. There we go. There's the rub, isn't it? I mean, she only has one vote, that lovely lady that you're talking about. There's many millions of other votes that you need to get onside if you're going to win the next election. And a more in common think tank saying, tax cuts less popular than improving public services. And it doesn't look from my untrained eye that's what you're planning to do. Nothing. Housing, education, public services particularly.

Well, first of all, you're right, we haven't chosen the most populist tax cuts. And that's why I think it's silly to think about this in terms of the timing of the next election. We're trying to make the right decisions for the long term growth of the British economy. But when it comes to funding public services like the NHS, which, as you know, Kay, I am deeply committed to the way that we can afford to put more money into the NHS over the longer term is to grow the size of our economy. That is a fundamental Conservative principle. I hope that by the time I'm in my sixty s and seventy s, we'll have a cure for Alzheimer's. That'll be a lot of extra money. You can only afford to do those things if you have a healthily, growing economy. And although we're growing better than countries like Germany and France, I want our growth rate to be much higher than the 1.6% annual growth rate that the OBR are saying at the moment. That's why I did these 110 measures yesterday that are going to increase investment in the economy by about 20 billion pounds a year.

You say you've not got an eye on the next election, but our business editor, Ian King, says it looks as though you're setting a trap for opponents by spending all the fiscal headroom that you have got now. Which means that an incoming government, if it's not yours, will be left with no choice but to raise taxes or squeeze public sector spending until further.

But what I will say about the next election, Kerry, is that there is going to be a very clear choice as a result of the decisions that I made yesterday, but also Labour's response. So what Conservatives say is the only way that we'll increase prosperity for families up and down the country is by making businesses more competitive. It's what economists call supply side measures. The labor approach is to boost demand in the economy by raising borrowing by 28 billion pounds a year. I agree that has a short term impact, but the longer term result of increasing borrowing is more debt, higher debt payments. That means that taxes have to go up to pay for them. That makes our economy less competitive. So there is a very big difference between the Conservative approach and the Labor approach. And why, in the end, do people vote Conservative elections? It's because they trust us to make decisions for the long term growth of the economy. That's what we did yesterday.

Sure. Not if they can't afford to pay their bills though, Chancellor, or get the services, the public services that they need. We've seen that energy bills are going to go up again this winter and as I said, it doesn't look as though there's much money that you've put aside for public services for those that need them most.

Well, I think the National Insurance Tax cut from 12% to 10% will be an extra 450 pounds for someone on the average wage. For people who are on less income than that, I increased benefits by double the rate of inflation. For pensioners, I increased the triple lock by eight and a half percent. That's nearly three times what next year's predicted inflation is. So taken in the round. I think we've done a lot of things to help people deal with cost of living pressures, but also with an eye to the long run. What are we going to do to make sure that we have that money for the NHS in the future? Here, I'm at the Airbus factory in North Wales. It's going to help them to get more investment in the UK. More than 200 businesses said this is what's going to help them expand and grow. And that's why I think yesterday's decision was a big statement by us as a country. We want to be one of the most dynamic, entrepreneurial, successful economies in the world. We're prepared to take the long term decisions to help us get there.

I hear you, Chancellor, but do you acknowledge that in the short term, there's the real term cuts in public services?

Well, no. In fact, public spending in terms of the decisions I took yesterday will still be 86 billion pounds higher in real terms in five years time than it was at the start of the Parliament. What I do acknowledge is that we're going to show discipline in public spending. It's not going to grow in real terms as fast as some people would like. That is happening because I'm choosing to cut taxes mainly for business.

It's the OBR saying it looks as if you've frozen a lot of departmental budgets and in other words, a real terms cut. That's what the OBR is saying. Are you disagreeing with them?

Well, across public spending as a whole, the OBR accept that it's going up in real terms over the Parliament. But, look, I accept that we are going to have to make difficult decisions, not do all the spending that everyone would want. But what I would say in the longer run is if you want to put more money into the NHS, you need a strong economy. And when I was Health Secretary in 2018, after years of taking difficult decisions on public spending because we'd grown the economy, I was able to negotiate with Philip Hammond as the Chancellor, then an extra 20 billion pound rise in the NHS budget because we had taken those difficult decisions with the economy. And that's what we have to do now.

Okay, final thought before I let you go. Your deputy chairman, Lee Anderson has been talking about Rwanda again. I know he says migrants, if they're not being sent to Rwanda, should be sent to the Orkney Islands. Do you think he knows where they?

You know, we're going to solve this problem. And Lee will always have colorful suggestions, as he always does, actually, in British politics, but the fact of the matter is, we will do what it takes to stop the votes. And I think we've had that clarity from Rishi Sunak.

Okay, we must leave it there. I know you've got lots of other people to talk talk to. Sorry about the gremlins. Again, thanks for joining us.

Cheers. Thank you.