AI on the sly?

27:22That summarises what the Bank of England is looking at when it makes its decision tomorrow on interest rates here in the UK. We're going to have a look now at what's going on, well, not just in the northeast of England, but more widely in the car market. It has a ripple effect, certainly, on Nissan's plant in Sunderland. So that car manufacturer has announced plans to launch a new model in Europe. And it says it's going to invest£170 million in the Sunderland plant. The Nissan Kicks is a hybrid electric vehicle. It will be made alongside the Qashqai, the Duke and the Leaf. Andy Palmer joins us now, was Chief Operating Officer at Nissan when he oversaw the launch of the Leaf back in 2010.

28:02Andy, good morning. Good morning. How do you read this latest announcement? Well, good news. Good news for protecting jobs. We'd already heard that Sunderland was struggling a little bit with production, was even considering or is considering collaboration with Cherry, the Chinese manufacturer, on one of its lines. This is obviously helping to fill the entire factory, which protects jobs in the Northeast. Very good news. I think the choice of model, interesting. I was responsible for the launch of the first generation of Kicks, actually. This is the second generation, but the key is that it's a hybrid.

28:39And I think it brings for Nissan the ability to fill that period of time between 2030 and 2035 as you start to see the phase out of pure internal combustion vehicles. You move in some parts to electric vehicles and some parts to hybrid vehicles until 2035 or if the government moves it until later. And this positions Nissan nicely with a product that fills that gap. So when you mentioned Nissan looking at building some of those Chinese company, Cherry, vehicles in that plant, and I remember discussing that a couple of months ago on the show about, you know, is this something that's going to play out?

29:24What does it actually mean for Nissan's future in Sunderland and what it wants to do there? How does this firm announcement tally with its investigations into whether it might bring some Chinese electric car companies into the mix in its plant? Well, it depends on what the replacement of Qashqai looks like, I think, and whether that comes to Sunderland. But certainly with Leaf, with Duke, with Kix, you're already getting towards a capacity that will fill one line. and if the second line is running Cherry vehicles and maybe some Nissan vehicles, then that's a good case for basically having a full line.

30:07At the moment, the Sunderland plant is running at about half capacity. So these are all good news in terms of filling that capacity. And in terms of the size and the impact of that plant in Sunderland, Andy, with Nissan employing thousands of people in the region there, how different does the future look if it's, as it will be, electric is the beating heart of what's going on, rather than what the plan would have been back in the day for traditional car manufacturing. Very clearly, everything that the plant is producing is, let's call it electrified. The hybrid system still has an internal combustion engine in, but if you look to the Duke and the Leaf, those are pure electric vehicles.

30:55and that gives you a sign of what the future looks like. Nissan has invested quite heavily with Envision in terms of creating a battery production plant in the North East and one would hope, therefore, that this secures the Nissan plant not just for the next five years but indeed for the next 50 years. Well, Andy, thanks for your reaction to that story that's breaking this morning. Andy Palmer there, former Chief Operating Officer at Nissan, talking about that new model that looks set to be made in Sunderland. If you work, you might be on your way to the plant now, finishing a shift there. Let us know what you make of that, what the mood has been like working for Nissan in the North East in recent years.

31:40As you see those headlines of other companies potentially building there, this latest announcement as well. 85058, do keep us up to date. Plenty more for us to be discussing on the show. So we're going to have a look at the triple lock, the state pension, the impact some of yesterday's official numbers will make on next year's state pension. We'll look at the role of mayors in the regions around England and what extent they should be given more powers, whether it is about getting more income tax, corporation tax money to spend or keeping an eye on the water companies and having more powers in that way.

32:15And the cheeky half pint, that midweek half pint, seems to be on the rise. is so we're told. We're going to speak to a boss of a sports bar to see how that's happening. Let me know if you are socialising a bit more midweek, as we're hearing Jane saying those in the city appear to be. Rowan's not quite doing it yet with his employees, but you never know, maybe just like those AI tools, maybe they're not telling him. Maybe you're not getting an invite, Rowan. We'll see. We've outed them anyway. Well, if that is what they're up to on a Wednesday night. Let me know.

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33:26Visit your online broker and get started. See what adding futures can do for you at cmegroup.com forward slash podcast. Derivatives are not suitable for all investors and involve the risk of losing more than the amount originally deposited and any profit you might have made. This is not a recommendation or offer to buy, sell, or attain any specific investment or service. Wake Up To Money with Sean Farrington Good morning, it is Wake Up To Money It's Wednesday morning, it's the 16th of September We've been chatting a bit about working from home As that topic has come up at the Trades Union Congress this week And a story in a few of the papers is that Labour, the Times and the Telegraph Has this Labour going to make it harder for As the Telegraph puts it, harder for employers to block working from home saying that businesses would be forced to demonstrate they had properly considered a workers' request before rejecting it.

34:20We've had a few people getting in touch about the topic of working from home. Kevin says, I'm an independent milkman delivering in central London all night from around 10 o 'clock at night to seven in the morning. He says, it's definitely Thursday night that all the pubs in the city are absolutely heaving with city workers. Please don't forget, some of us can't work from home, says Kevin. Thank you, Kevin, for delivering our milk to the nation. as you have been. And thank you for the insights on when people are going out socialising as well. He reckons it's Thursday. Are you having a midweek cheeky half pint somewhere?

34:50We're going to be talking about the growth of the half pint and sales of it at the very least a little bit later. Martin in Cheltenham says, I've been trying to work from home for years, but the boss keeps saying, I need to take this lorry to Manchester. Thank you, Martin. And Paul in South Croydon says, morning, great shows always. We need to realise working from home isn't the new normal. For operational jobs, you have to be where the job is. Working in a hospital, making a car or a car park, driving a train, teaching a class, delivering a parcel. These make up most jobs. And if you have to be at work, there's nothing worse than having a boss that's on the phone to you, stating the obvious from home about what you should be doing, stop you from finishing and going home yourself because they're out of touch with what's really going on in the workplace.

35:32Working from home is generally for people who talk or write for a living, says Paul in South Groydon. Thank you, Paul. 85058, keep your messages coming, please. We're going to have a bit of a debate now about to what extent England's metro mayors should be receiving a share of tax revenues and being able to make decisions about what they do with that cash. You know, their plan often is to reinvest them in their areas that they want to be investing in. The think tank, the Centre for Cities, suggests that Mayer should eventually keep a share of income and corporation tax that's generated locally, while richer areas would contribute to a system designed to redistribute money to places that raise less.

36:13So Scotland, Wales and Northern Ireland all have differing ways that taxes raised and redistributed. We know Andy Burnham is making devolution a key part of much of his speeches. We've got Andrew Carter here with us, who's chief executive of Centre for Cities. Morning to you, Andrew. Hello, Sean. I've got Jamie Roberts as well, who's a managing partner at YFM Equity Partners, which is headquartered in Leeds, got offices dotted around England. They invest in and work with businesses in their respective regions. Jamie, good morning to you. Morning, Sean. So, Andrew, just lay out what your proposals are here.

36:43Yeah, so their proposals to actually enact what the government, actually the Starmer government initially said it and Rachel Reeves, that they would essentially replace government grants that are currently going to the mayoral combined authorities. and they will replace it by giving them a share of their local income tax. We've suggested that in addition to the income tax sharing, they should also consider sharing some portion of the local corporation tax as well to give a very sharp and clear incentive that they want to support the business community to grow, support business investment. So, Jamie, what do you make of this idea?

37:19You know, your offices, London, Manchester, Birmingham, Reading as well, headquartered in Leeds, as I mentioned. So you might have a good sense of how something like this might well play out. Yeah, I think any, I like the idea of evolution. I think the idea of taking really big pots of capital and distributing them into smaller pots of capital to local mayors to distribute into their economy is a really positive soundbite. The question I have on it is how that money is actually going to find its way into smaller businesses in local economies. I don't think we have a great history of supporting smaller businesses like that as a country.

38:03What do your instincts tell you would happen with that money? I fear that, I mean, this is all due to happen, I think, in 2029, 2030. So it's not long. but as you know in my world that's a long time in government world that's not a long time uh i'd like to see how that's going to work in practice because i fear it could just turn into a lot of bureaucracy is the money actually going to end up in the right business where do you sort of find the the money when you say gets caught up in bureaucracy so what does the money get spent on in the scenario where it's not working to plan? Yeah, I guess the easiest thing for, if I'm a local authority or even the national government, I have to get good value for taxpayers and I understand that.

38:52So it is very easy to buy goods and services from big companies that on the face of it are easier to use. The bit that I think a lot of people miss is smaller companies in the UK drive economic growth. It's the largest provider of new jobs every year, and it has been for a long time. And yet those businesses find it the hardest to penetrate local government, local government, or contracts, or opportunities to sell goods and services, and to raise money, raise investment for them to grow and create the jobs in the local economy, which is what I think the evolution is trying to do, is to reward those local authorities that are growing by giving them more of those sectors.

39:32just really nervous about how it will actually translate into the money finding its way to similar businesses. Andrew how do you sort of respond to those concerns from somebody who would be investing around the country? Yeah so I think about mayors is actually creating the conditions for growth and investment so when you look at what the mayors are typically doing they do have some funds that are directly investing into firms particularly growth firms the fact that they can find them. But what they're really trying to do is to say, look, can we invest and create a transport system that allows workers to find jobs and firms to find workers?

40:08We know our transport systems don't work effectively outside of London. They're saying, can we build more homes at a quicker rate than we currently are? So more people can come and live in this area, more workers can come and live in this area, benefits firms. Can we invest in the skills system? Can we make sure that there is a flow of labor available to firms that are looking to expand and grow. So they're doing sort of what I would call sort of place-based conditions in order for places to grow and invest more. That's typically what they're doing. And the argument is that if you give them a share of the proceeds of growth, that sharpens the incentive, which means then that they are financially rewarded for actually supporting and growing the economy, which they're currently not.

40:52All of their money comes from national government. They have to have very complicated and prolonged negotiations with government almost on a, certainly on an annual basis to get hold of that money, giving them more freedom, gives them more certainty. They can make the investments actually expand and grow their economy. That means the tax base grows. That means there's more revenue to reinvest into growth. And we get this virtuous circle. Rowan Crows is with us this morning as well, chief executive of the metal stamping specialist Brandauer. Rowan, you're based pretty much in the heart of the West Midlands there, which has had a regional mayor for some time now.

41:28What do you make of the idea that the powers that be around you might get more of a share of the income tax, corporation tax that's generated locally to be able to spend that as they choose? I mean, you're right. Brandauer are based right in the city centre of Birmingham, UK's second biggest city. And, you know, over the past two administrations that have resided, I definitely have seen the positive benefits of having a combined authority mayor. The city doesn't look anything like it did. There's huge investment gone on. There's infrastructure that's gone in. We've got the metro now that connects up different parts of the West Midlands, which all has been positive on the ground, we now see a much wider sort of pool of people that can get to the factory and work for us.

42:22I think generally it's been positive, but I do share the concerns that your other guest mentioned about bureaucracy. I think if more funds can be on the table, it's got to be a positive thing for the region. If they're administered in a way that is not slick and doesn't find the right types of companies, and I agree they should be growth companies, then it could be disastrous if it's spent on the wrong things, or more likely it's going to be spent too slowly. And I think that's vital. One other point I wanted to raise as well, I think these things are very often measured on jobs. However, we started the conversation about productivity earlier on this morning.

43:15We're very much driven to be more productive, more efficient. That doesn't necessarily mean we're going to employ 10 people. So I think there should be a balanced view on what success looks like on investments that are made from money raised from this particular initiative. And I'm not saying we shouldn't create jobs, but I'm also thinking there should be a balanced element where it's actually on efficiency and output as well. And that's a good measure of success. Andrew, just finally on this topic, when you talk about richer areas contributing to a system designed to redistribute money to places that raise less, wouldn't there be a risk that those areas wouldn't be as motivated to increase their levels of income tax and corporation tax as others?

44:00Because they're not going to see the proportional benefits that other areas might. Yes, that is a good point. And it's always the tension, particularly because we have quite big differences between different parts of the country. Tax bases are much bigger in some places. But you do have to have this system where you're both trying to maximise the incentive and recognise rightly that we need some kind of redistribution and recirculation of some of the cash. So I think what we've tried to do in the paper today is try to find that balance where we retain the growth incentive, particularly if you include corporation tax, that really does sharpen the growth incentive, whilst recognising that we need that equalisation in order for places not to be punished because of their starting position.

44:44Andrew, just before you go, front page of the Daily Telegraph this morning, and it looks like it's going to be a bit of a story of the day, and something else to do with regional mayors. Mayors to be given powers to control water companies under Andy Burnham's plans to increase estate control of utilities. What do you make of that falling on the lap of mayors around England? Well, I haven't seen the detail of the announcement or the suggestions, But in some respects, it goes with the grain of what the government is proposing, and particularly the Burnham government, which is saying, actually, we think that the mayors are the primary vehicle for thinking about the economy of their places.

45:24So I'm not surprised that they're at least thinking about giving mayors a greater involvement and a great influence over one of the issues that we know really does drive and has a big issue for economic performance in different places. So I'm not surprised by the announcement. I haven't seen the detail of it. Andrew, thanks for your time this morning. Andrew Carter, their chief executive of Centre for Cities. Jamie, thank you as well. Jamie Roberts, managing partner at YFM Equity Partners there. 85058, your thoughts, please. DJ has been in touch in London, says I'm a founder of a tech scale up in London.

45:59Working from home reduces speed of communication. It's harder to build culture. individuals may be more productive working from home, but it's the productivity of the company that is the most important factor. 85058, your thoughts, please, as potentially there may be stronger rules being put in place to allow employees to request working from home where they can. Plenty of you have been getting in touch saying and highlighting the fact that you do a job that absolutely cannot be done working from home. Thank you for those thoughts as well. 85058, keep them coming. Jane Foley, head of FX Strategy at Rabobank.

46:39Jane, as we mentioned, another aspect of these numbers we got out yesterday on the jobs market is sort of a quirk of the statistical diary that only those of us that are really, really, the only entertainment in our lives is what the Office for National Statistics is going to be putting out day to day. I'll put my hands up being one of those. And when we get the jobs market figures for July, as we did yesterday morning, one of the things that's taken from that is the average earnings, including bonuses figures, how much effectively wages have gone up by. That contributes towards the calculation of how much the state pension goes up by next year.

47:23So we have this triple lock of the highest of that number or inflation or two and a half percent, whichever one is the highest number. And so state pension is protected by that amount. It came in at three point nine percent. What's the upshot? Well, that means that state pensions can rise above 13 ,000 pounds a year for the first time. And of course, the income tax threshold is 12 ,570, meaning that if your only income is the state pension, technically, you could be therefore due to pay tax next year. Now, it does seem that the Burnham government will try and find a way around that, because, you know, what we don't want to see is a lot of pensioners really stressed by having to fill out forms and working out how much tax they have to pay, etc.

48:12But it's not clear how they're going to find that work around. But of course, this comes back to the thresholds, the thresholds for income tax have been frozen since around about 2022. And they're due to keep stay at that level, you know, for some time as well. And this comes back to the amount of debt the government has, you know, its difficulty trying to find money to pay for new things, and therefore, the fact that we have to pay lots of tax. So this is a real issue and it comes back to, can we really afford the triple lock? And of course, a lot of politicians would actually say, no, we can't.

48:47But very few of them will stick their neck out there and propose that because, of course, we know that in this country, a lot of older people vote, younger people less so. So there is a bias here to do or have policies to keep older people happy. And it's not like, Jane, if there wasn't the triple lock, it's not like there wouldn't be expectations that the state pension might have to rise next year by 3 % or 4%, is there? That debate would still be being had. It may even be different types of rules that get to the same scenario. It's been more of a debate of how much more it's cost over many, many years rather than about this number yesterday or the state pension shouldn't be going up by 3.9%, it seems.

49:29That's right, because if we look at welfare spending as a whole, well, spending on the state pension alone is about 45 % of welfare spending, which is very, very significant. And of course, there is this whole debate about, well, you know, is the budget on welfare spending correct? Should we be reining that back in? And, you know, last year, of course, Starmer tried to reform welfare spending, you know, and he largely failed. He had a lot of rebellions from Labour MPs. I mean, you could put an argument together to say that that was, you know, the first step towards his downfall. Now, Burnham, again, is suggesting that He wants to try and look at welfare spending again.

50:06But we know it's going to be tough to get all factions of the Labour Party behind a plan. And it does seem unlikely that they're going to really risk the triple lot because a lot of people would be very unhappy if that were changed. But it does come back to the fact that you're getting more reports now that younger people, younger voters are pretty unhappy about this because it's contributing to their tax burden. and the chances are when they're that age, it will be gone. And so, you know, they won't get the benefits for that, but they're paying it in terms of their tax right now. 85058, your thoughts on that?

50:44That is definitely a debate that, well, may well hot up in the coming weeks before the budget, but in the coming years as well. Certainly one that's getting more prominence every time these numbers come out. Right, let's have a look at what you're up to on a Wednesday evening. We've had Kevin the Milkman say, actually, it's Thursday nights that people in the city are out at a party. And Jane was out for a meal on a Wednesday night. And the central London was bustling. Rowan in Birmingham is sort of saying maybe not quite so much of an approach. These after work drinks are taking place on a Wednesday.

51:18But new data does suggest that certain habits are changing. Smaller servings are becoming more popular in the week, according to the payments processor. square and it seems Wednesday seems to be the most popular day for the midweek half pint with sales up 27 most of those being bought between five and seven o 'clock in the evening as well we've got Taya Barrett with us who's general manager of Crampton Sports Bar in Broadstairs in Kent Taya good morning to you have you noticed a customer change yeah definitely the amount that they're spending is definitely down um half pints are up and also seeing a really interesting trend of lots of half and halves of non-alcoholic and alcoholic.

51:59So essentially only drinking a half of alcohol, but making it still up to a full pint with a non-alcoholic equivalent. Now, are you talking about Guinness and Guinness Zero there? Lots of Guinness Zero. It's by far the powerhouse, but also lagers as well. Right, so people are starting to mix their lagers up, are they? Yeah, I think it's a move away from a shandy. I've seen a reduction in shandy and more into half and halves of non-alcoholic or just halves of pints as a whole. We've seen an increase as well over the last year of half pints being sold, particularly on lagers. Less so actually on Guinness.

52:32Guinness is held strong as a pint drink and less so on cider, which tends to, again, hold strong as a pint. But lagers definitely had an increase. You know, I call it the halftime effect where it's half a pint at the first half of a football game, half a pint at the second half of a football game. Right. And so how is this impacting how you go about things running your bar? It's frustrating because if they're buying a half or they're buying a pint, I've still got to pay my team the same. I've still got to pay all the same utilities, et cetera. But I'm just conscious of the culture being the most important thing.

53:02So people are still choosing to come to pubs. Yes, they're spending less. I'm going to play the long game, still invest in them, still see them as good customers. And in the long run, you know, when the economy is better and people have got more disposable income again, which hopefully we'll see soon, then they'll still be coming to the pub. What I don't want to do is alienate people and say, you know, don't come to the pub if you can't afford to buy a pint. because in the long run that's just going to damage us even further. Is it not just a criteria that the cost of a pint has just reached a level that people are not happy with?

53:32Yeah, and you know, that's the problem. The campaign is massively important to us and that is going to help tackle that. The cost of a pint has gone up and up and up and it's not gone up in real terms either. If we were charging what we would have been years ago in the same rate, we would be charging£12 for a Guinness. No one's going to pay that. So the consumer's been passed a lot of the cost but the companies are being passed a huge amount as well. And I think, yes, it is getting to the stage where it's becoming impossible to sustain three, four pints on a Wednesday night, which would have been the norm a few years ago, is definitely not sustainable anymore.

54:03And just to clarify, Taya, are you calling the death of the shandy? I don't know if I have that much data behind me of my one bar, but definitely it's reduction. Yes, it's reducing. So what about a lager top? Is that ordered much these days? Just that spot of lemonade in the top? Yeah, normally people that are hung over from the night before will start with a lager top as like they're easing back into it. But again, I don't see it as much as I did when I first started. Lots more non-alcoholic equivalents though, I guess, to kind of lure people in, maybe have a non-alcoholic pint and then have an alcoholic one to ease themselves back into it.

54:36Really interesting. Or just use the non-alcoholic option as a whole. Super briefly, Tear, do you have lager, non-alcoholic lager on tap? Yes, I do. And it outsells its counterpart. Gotcha. So that explains a little bit of that as well, which we don't see right across the country quite so much at the moment. But Teo Barrett, fascinating stuff. Boss of Crampton Sports Bar in Broadstairs. Big thanks to Rowan, Jane and to everybody who has been in touch as well. That's it from Wake Up To Money. Wake Up To Money from BBC Five Live. That's it from Wake Up To Money. You can download the podcast every Monday to Friday.

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