Ancient Kings & Modern Coronations

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0:41Join Odoo today at odoo.com. That's O-D-O-O dot com. Wake Up To Money from BBC Five Live. Hello, morning. Welcome to Wake Up To Money. Andy Burnham is set to become the new Labour leader today, a special party conference in London. And we'll begin the process of installing the former mayor of Greater Manchester as the next prime minister. We will be digging into that and his economic agenda. Elsewhere, we'll find out what the government's plan to ban the sale of energy drinks to under-16s in England might mean for retailers. And we'll also hear from one of the companies involved in developing some of the UK's energy storage infrastructure as summer demand puts pressure on the grid.

1:22And we'll also be talking this. The guards told you. Then I defy the guards. Christopher Nolan's summer blockbuster, The Odyssey, released today. We'll take a look at what these flagship films mean for the cinema industry. Wake Up To Money with Will Bade. Morning, welcome to Wake Up To Money on Friday the 17th of July, just gone five o 'clock in the morning. Will with you this morning. Great to have your company as we round out another busy week on the programme. Yeah, high caffeine energy drinks we're going to be chatting about and the ban on those from under-16s in England coming in. We will talk about energy storage.

1:58and yeah the Odyssey I don't know whether you're excited well are you one of those people who's been queuing all night I think producer Josh reckons you might just be finishing off your late night screening so if you're on the way home this morning from one of those let us know what the film was like and why you wanted to be one of the first in there as well 85058 is going to be the way to get in touch about that or indeed anything else you fancy having your say on throughout the programme this morning the WhatsApp number is 08085 909693 as always we're going to do it in a company of a panel of guests as well.

2:29Louise McLean back with us on the programme. Louise, the director of Signature Group, more than 20 pubs, hospitality venues, right across Scotland, speaking to us from Edinburgh. Morning, how are you? Good morning, I'm fine, thank you very much. Thanks for having me on. Always great to have you back. How's the summer been so far? Ooh, well, May and June were a bit disappointing because we're so reliant on weather and we didn't really get the heat waves that England enjoyed. But July has been very, very promising. and when the sun comes out, so do the customers. And festival around the corner as well?

3:00Yes, and the city's already busying up, which is, as a local, you both love and love it. I'm in the love camp, but yeah, no, the city's starting to get busier and busier. And when the sun shines, it's just, it's a great place to be Edinburgh in the summer. I think everywhere's better when the sun shines, isn't it? But yeah, it's certainly a very nice place when the sun's out there. Paul Dales is going to be alongside Louise for the first half of the programme too. Paul, the Chief UK Economist at Capital Economics. Paul, always great to have you on the programme too. Thanks for being back with us.

3:30Thank you very much for having me. When the sun shines, it's good economics news as well, isn't it? Good news for economists. Well, there's certainly some evidence that you get of a bit of an economic boost, but I think most of the effect really is just a transfer of activity from one area to another. So instead of going down the high street, going clothes shopping, you go to the beach, you buy ice creams, paddling pools. The beer gardens. air fans, all that kind of stuff. So it's definitely about some lifts more parts of the economy than others. Well, someone hoping that there will be a bit of a lift, a bit of a wave to come in on is going to be Andy Burnham, isn't it?

4:07As we were saying right at the top there, and you probably heard it in the news headlines as well. He's going to officially become the new Labour leader a little bit later on today. Special party conference in central London before, of course, becoming prime minister on Monday. Mr Burnham given some clues as to what his premiership might look like in an interview with former footballer Gary Lineker on his podcast. He outlined some of his priorities for government. The key thing, of course, is helping people with the cost of living. You know, it's just got too hard. People are paying too much for the basic things in life.

4:37And we've got to find ways of taking that pressure off them. You know, I heard on the doorsteps in Makerfield, oh, you know what, Andy, I can't go out for a few pints anymore. I can't take the kids out. I can't go on holiday. You know, some of the things that just brought that bit of extra joy to people's lives have kind of disappeared. And we just need to work, I think, to try and bring a bit of a lift to people. Doing that, though, Paul, not going to be easy. You guys at Capital Economics, I'm just looking at the headline on a piece that you and your colleagues have done. The Burnham government, will policy ambition collide with economic reality?

5:12Sketch that out for people. well the problem is um well the key thing he needs to do is to boost the rate of economic growth not just temporarily but sustainably if you manage to do that then you essentially raise the incomes of everyone in the country and then that allows people to purchase the things they they want to purchase. The problem here though is just really hard to do to start with. Only two governments have managed to actually increase the economy's stable rate of economic growth and that's going right back to the 1955. It just doesn't happen often. The second problem is that Andy Byrne's not got that long to do it so most prime ministers have five years to try and put in place policies and reforms that will help boost the economy.

6:06But at the moment, at least, the next election is going to be in three years' time. So he's got a shorter time period to do it. And then perhaps most worrying, when I look at what Burnham's been saying, I don't think he's fully or adequately diagnosed the economic problem, which means the solutions he's talking about, such as devolution, more public control, are really tinkering at the edges and they're not getting to the nub of the issue and aren't solving it. And then finally, he's also going to be subject to the same constraints that recent prime ministers have been, not least the pretty tight fiscal position.

6:43So he can't just spend his way to a stronger economy. So the challenge is really, really big, actually, and it's really, really complex. and at the moment at least I'd be very doubtful that he would be able to make a huge difference to the economy's economic performance over a five-year period for example. Louise you sounded like you were going to come in. No sorry that was that that was a cough. I'm sorry I thought you were itching to get in on it. Paul the central problem then that you say he's skirting around what is it from your perspective? well there's a few different issues but from an economics point of view there's been years of underinvestment in all sectors of the economy across all stakeholders and that's led to productivity growth being slower than would we'd ideally like and that just means that the economy can't grow fast enough now what you really need then is you need a package of policies that are going to directly or indirectly raise investment in the economy.

7:51And the government can certainly do some of that. But more importantly, I think you need to embrace and champion the private sector to do it, because that's where you're going to make a real difference. And that sounds like tax policy then. Well, no, not necessarily. There's lots of different elements to it. I think there's a temptation for everyone particularly politicians to say oh here's my three-point plan or ten-point plan to solve the economy it's far more complex than that and far more challenging as everything's interrelated but one thing that i think would be really really useful really sensible is a combination of setting a very stable and political economic environment and champion the champion the private sector trying to generate and allow the private sector to be dynamic open and competitive and that just sets a environment in which businesses can go about their business and make the investments that they need to do and there's lots of different policies that can contribute to that but that's the overall arching theme of what i think the the new prime minister should be trying to achieve and presumably sticking the course with some of those things as well not chopping and changing the whole time yes that's certainly something that the politicians need to do and as i said burnham's until the next election you've got three years to do it i mean ideally what we would like is some kind of um some kind of group or organization within government that takes cross-party support to come up with long-term policies that will boost investment and implement them over a period of 10 years or more.

9:36So that means when there's an election, when there's a change of government or a change of prime minister, your policies don't change. Actually, you've decided these are the policies that all politicians should get behind and then it implements it over time. I'm not saying that's going to happen, but it's just an illustration of what policy, what the faults of politicians are at the moment because of the short-term political cycle. They're trying to put in place policies that work over a 10, 15 year period, but they've only got a few years to do it. And as you said yourself, it can just change.

10:12And that's the type of thing that doesn't actually cost any money either, I suppose as well, or not initially too. Louise, we heard Andy Burnham there in the little clip we played from the Lineker podcast, talking about people feeling like they couldn't go out and afford a few pints. I'm guessing trying to bring back a bit of confidence economically as well in the very short term, going to be kind of important too, right, for business owners like you? Yeah, I mean, sorry, I'm coughing again. Hearing about a policy that might champion the private sector is music to our ears, not just in hospitality, but, you know, across the country.

10:51It's that dynamic investment that we want to do as a sector. We want to see our sector thrive and flourish and grow, but without a policy change that cannot happen and the immediate policy that they could do is cut the vat and that would lean into growth for our sector and it would lean into the cost of living and going down the pub for a couple of pints and people not being able to afford that that would have a material shift overnight if that policy came through use your own company Louise as our kind of case study here if you would because you have kind of managed to continue investing haven't you we talked to you about it on the program over the last few years but how have you done that and has that meant trade-offs elsewhere I suppose and could you have grown quicker expanded more if you like had the environment been different?

11:44Undoubtedly we almost had a pause on growth and investment between 2019 then we had the bleak pandemic years and then we've had this position of stalemate. We have never seen in our business history of 20 plus years such a period where we were unable to grow and now yes we are expanding but that's been through external funding for the first time in our history. We've always funded expansion through profit and because there is no profit in the business we've now had to look at external funding to allow us to get back to growth because we have a desire to grow. We have a desire to create jobs, give something back to the public, give the public what they want in hospitality and in leisure.

12:29But because of the policies of the government, that's been unable to come through profit. And getting back to profit would allow much faster expansion. Is there any room, Paul, do you think, for any manoeuvre on tax? I know you said not all of this has got to be about tax policy but but evidently you know louise is far from alone on this program in terms of sectors saying that they're feeling they are carrying a lot of the burden at the moment and andy burnham has said hasn't he in the sort of brief bits that we've heard him try and sketch out his economic platform that he thinks britain needs a break businesses need a break high streets need a break is there wiggle room in the sort of big overarching country's finances as you can see it to do anything?

13:09Well, there's always choices, but it is a matter of trade-offs. So at the moment, the UK's fiscal position is pretty tight. We are running a pretty hefty budget deficit of over 4 % of GDP, and our debt-to-GDP ratio is about 100%. So we're not starting from a very strong position. And then when you look at the breakdown of tax and spending within that, both the tax takers, a share of the size of the economy is quite close to the highs not seen since the end of the Second World War. And government spending is very high as well. So if you want to cut taxes, then you have to either, well, you have to cut spending, essentially, because there's not much scope to fund tax cuts by borrowing more from the financial markets.

14:03So this is something that I think needs to be really acknowledged as well is that there gets a point where actually I agree I think taxation is really high as a share of the economy and there gets to a point where actually adding more to that really does hamper economic growth so if you want to lower taxes then you've got to probably cut government spending but I'm not getting the sense from Burnham and the Labour Party in general that there's much appetite for that at all so you can't have your cake and eat it eat it essentially there has to be some really tough choices and those choices need to be seen through and maybe that's something burnham can help with actually we saw that um reeves and starmer did try to cut um some welfare spending but they just didn't have the power and the support to push it through maybe burnham has got the charisma uh and the political heavyweight to and comes from the right bit of the party potentially as well right as well that some Some of those people who might have rebelled on that the first time around are people who are perhaps closer to him than they were to Keir Starmer.

15:08Yeah, that's exactly right. So, I mean, one thing that he's got going for him is he does at this moment in time have that support. So if you're going to make some tough decisions, which I think you need to, then it might be a good time to make them in the coming months. Quite. Right. Louise, beyond tax then, anything else that you'd like to hear that would just sort of, I don't know, doesn't need to transform everything overnight, but would at least signal to you that they're listening to businesses out there? I think it's quite reassuring that he has got the cost of living crisis front and centre.

15:44But I'd like to know how, because we're definitely seeing a slowdown in trips out. families are saying no that's you know you're talking about tough choices families are making tough choices every single day um and if people want to tackle the cost of living crisis and we've probably heard that now for what two three years but nobody's actually told us how how are you going to tackle the cost of living crisis what are you prepared to do and that i mean so that's not taxation i guess but it would be interesting to know what are you going what are you going to do that's going to enable this cost of living crisis to either be something that we don't speak about every single day and people that aren't having to make very very difficult choices that would be something that he could come out today and tell us how well i know a lot of you listening are people who perhaps run your own companies as well across a lot of sectors right around the country so get in touch with us 85058 what do you want to hear today when we hear from andy burnham sketching out what he will do as prime minister when he becomes prime minister on Monday 08085 909693, the WhatsApp, should you prefer to get in touch with us that way.

16:56Now, China's at the centre of quite a bit of news this week. In the last hour or so, President Xi has opened their flagship Artificial Intelligence Conference as he seeks to turn the country's rapidly advancing AI capabilities into wider geopolitical influence. He's presiding over the World Artificial Intelligence Conference in Shanghai. And Archana Shukla, our reporter, has been watching what the president's had to say. Hey, morning, Archana. Thanks for being with us. Hey, good morning. So what's he had to say then, President Xi? Well, you know, that artificial intelligence needs to be developed by all and it should be for all.

17:33That really was, you know, one of its biggest takeaways from his speech where, you know, he said that artificial intelligence should not be dominated by a single country. somewhere hinting at the United States and its leadership on the AI design and AI, you know, the new technologies that are coming in there. And he also spoke about how open source AI models, something which China has been developing and with their open source models, they're actually competing quite actively with the, you know, US based firms. He said that open source AI models are what can actually help developing nations, the global south and the overall wider world as well.

18:14So not one country has, you know, dominance over this sector. And also, you know, about governance, because that actually has been a key hot topic of debate. Who really governs artificial intelligence? There are conversations around use of AI in military combat or, you know, used by hackers or terrorists, etc. So then which country or, you know, what is the body? So where he also spoke about how there needs to be a growing, you know, countries need to come together on this governance. And also referring that not one country should use the national security concept to stop AI. And that somewhere was hinting at the United States and EU putting restrictions on Chinese tech imports, citing national security concerns.

19:02So some of the key bits, but most of what he said really hinted at how China wants to be at the center of AI leadership and how they see themselves as a big competitive force in that field. Yeah, really interesting. It comes also in a week, doesn't it, where we've had 30 odd countries, Russia, Brazil, Indonesia, others signing up to be kind of involved with this Chinese based sort of financial system, I guess, if you like, almost like a new ordering of sort of financial cooperation and talking about, I guess, how the global economy should work from those countries point of view, too. Oh, absolutely.

19:41And that is somewhere where the US-China growing rivalry, which is really on and off their relationship, also highlights China wanting to have a larger say and larger influence in global politics, in global economy and trade, and how they are raking up support. And some of it is really driven by the, you know, Trump's tariff policies as well, which have hurt other economies. And they are also looking at alternatives, you know, other forms of cooperation in the world. And you're seeing all that come together. And artificial intelligence and national security, you know, is somewhere that is and trade is somewhere that's binding all these countries together.

20:25Well, you mentioned President Trump there also in the last few hours, Archana. Donald Trump renewing his campaign to cast doubt on the 2020 election results, accusing China of interference. Here's what the president had to say. U.S. spy agencies began learning about the compromise of voter registration files in 2020 when they discovered that tens of millions of voter data, think of that, tens of millions of Voters' data in 18 states have been bought, stolen, or hacked by China. Yet those responsible for sounding the alarm instead kept the information secret and hidden. They did not disclose to me as president or to anyone else, and to the best of our knowledge, they did not inform Congress.

21:13In fact, all they kept saying is this is the most secure election in the history of our country. A reminder, no evidence so far been found of widespread election fraud in the United States. Another front opening up in those tensions, Archana, that you were talking about between the US and China. Absolutely. This certainly will complicate that relationship, which really has been on and off in the past several months. months. And, you know, the fact that there isn't really an evidence that, you know, connects Beijing, that Beijing altered the 2020 vote is something that will be picked up by China as well.

21:52But, you know, it's very interesting to note that this is coming up right before the midterm elections and clearly indicates that this is going to be the front and center political argument by the President Trump's administration. And they're using China. So from trade, from artificial intelligence, and now bringing in the political angle, it certainly complicates that, you know, the two countries have met recently, you know, President Trump and Xi, they spoke about cooperation, they spoke about doing things together. But that, you know, a thread of discomfort between the two has been evident over the past several months.

22:34And this really clearly comes up as President Trump brings in China on this political discussion. Really interesting. Thanks for bringing us up today. Archana Shukla there, our reporter on both that AI conference from President Xi and then those latest claims from President Trump overnight about potential Chinese interference as he sees it in the last US elections. Paul, it's interesting, China trying to take, particularly around who sets the rules, I was taken by what Archana was saying there in terms of the rules of the game going forward for AI, if you like. Yeah, this is fascinating, really.

23:08And I think it plays into a wider and long lasting development across the whole global economy, where you've got these two really big economies, China and the US. And essentially, it feels like the world is splitting into two blocks. a block led by the US and a block led by China and that's a split based on issues like security politics economy definitely but also feeding into that is a split on AI really and whose AI models and tools are you using and I think this is something that's going to play out over many many many years and increasingly we've got this um you know this this two-sided world essentially from an economic point of view um and i think that's going to be a feature of of all politics and all economies for many many years louise do you think we explain we as in as a country as a government i suppose explain that trade-off well enough to people i mean i don't know about you both but i see more and more chinese cars out on the roads around the uk for example do you think there's a lot of people I guess would say well if these things are cheaper and still as good why can't I have one of them?

24:26Yeah I think the Jayku is now the third biggest selling car in the UK so we're definitely open to the adoption of products from China and I agree I mean if the world is getting smaller in terms sort of metaphorically why not embrace different technologies if if it is cheaper to do so I'm all for it what do you think Paul do we explain that kind of trade-off well enough I suppose the security concerns versus you know the blunt fact is that China's doing a lot of this stuff as well as anybody else and a lot cheaper than most people well I think part of the implication of what I was saying about the split into two blocks is very much related to trade.

25:11So I think it makes absolute sense that the US block and the China block can continue to trade in many, many items, you know, clothing, toys, for example. But there is definitely going to be more thought put into trade in items that have security implications. So, you know, things like really sensitive, high-end economic semiconductor chips or anything to do with defence, for example. So I think there's going to be a carrying on of globalisation in terms of lots of products and items, but there'll be definitely a split in terms of what types of items as these two blocks become more sensitive about certain issues, particularly security.

25:58And do you think that the UK, again, will know more about, I guess, the global agenda as we go through the summer once we have a new prime minister, But do you think is that an area of focus looking for other trading partners kind of beyond the US, perhaps reaching back out to China again? Or do you think that's off the table? Well, I think a sensible approach would be to be willing to trade freely with all major economies, particularly those that are growing rapidly. But within that, to acknowledge that you need to be careful about what it is you are exactly trading in. and I think that's something that the UK government has struggled with a little bit it's not really sure where to where to put its attention really no never has that been kind of better outlined by the row over the China's new embassy in London for example yes exactly and you know we get back into the old debate about whether the UK should try and attach itself more to the US than Europe I think the answer really is it depends on what you're thinking about so with europe for example we trade huge amounts in terms of goods um so it makes absolute sense to be as close to europe when it comes to trading goods but we trade huge amounts with the us when it comes to services so it makes sense to align more with the us there so i don't think it's a one-size-fits-all situation i think you've got to acknowledge the economic realities and make the best of that situation.

27:34And here's another good example of that as well. Also this morning, China's hit out against the nationalisation of British steel, owned until yesterday, of course, by the Chinese company Jingye Group, Beijing, saying it firmly opposes and strongly dissatisfied with the British government's decision. There's a nice thorny one to land in Prime Minister Burnham's in-tray on Monday, isn't there? This is summer at its peak. Whole Foods Market Summer Fruit Fest is your invitation to eat the season. Fresh, organic and bursting with flavor. Start your day with peaches and organic blueberries and yogurt.

28:07Build a grazing board with fresh fruit, prosciutto and artisanal cheese. Then fire up the grill with no antibiotics ever proteins and fresh produce. Savor the season. Shop Summer Fruit Fest at Whole Foods Market. As well. Wake Up To Money with Will Bain. Morning, welcome back to Wake Up To Money on Friday the 17th of July. Louise McLean with us this morning. Louise, the director of Signature Group, more than 20 pubs and hospitality venues right across Scotland. Thanks for your texts coming in on 85058 and on the WhatsApp on 08085 909693. Anonymous WhatsApp kind of suggesting that we shouldn't really talk about the Trump election, Rao, because it's got nothing to do with finance.

28:49I kind of disagree. I would say that if you have increasing tensions, as we were just talking about with Archana, between the two largest economies in the world, we have seen where that's gone And we've lived it in the last 10 years through the global economy. And it's had massive ramifications that and the trade wars that have come from it. So I think whether those two countries can get on and their two leaders can get on pretty important to all of us economically and a lot of companies that we work for or buy from as well. Graham in Suffolk also been in touch on 85058. In my opinion, the only way to help the cost of living crisis and businesses is reduce the cost of energy.

29:24How can this be done? decouple electricity costs from gas, government to invest in storage to utilize store-free electric from wind farms, which at times are in excess. Well, that's exactly what we're going to talk about now, Graham, because people who were with us on the program a few weeks back might remember that Ofgem, the regulator, backed 16 such projects, really large, massive-scale energy storage projects to try and give them some sort of government backing to help get them off the ground. This is how energy analyst Adam Bell from the consultancy Stonehaven Explain what the government was trying to do.

29:57Essentially what storage allows you to do is smooth the cost of electricity over time. It starts tackling some of the big peaks, like when some of the old gas plants fell over and we couldn't import from the continent. And all of a sudden we saw short run prices spike to about 10 times their normal rate. If you can have lots of indigenous storage, you can essentially smooth the price curve much more efficiently. Well, one of those companies that has got three of these contracts with Ofgem or being backed by Ofgem is Statera. And we've been speaking to their chief executive and founder, Tom Vernon, told us that investment in infrastructure like this relies on policy certainty, something Paul Dales was talking about in the first half of the programme, wasn't he as well?