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0:00Wake Up To Money from BBC 5 Live. Hello, morning. Welcome to Wake Up To Money. Almost 7 million people in the UK were living in very deep poverty in 2023 to 2024. That's the highest on record, according to one charity. We'll be delving a little bit deeper into those figures a little bit later on in the programme. Also this morning, is this the way you like to watch the beautiful game? You know, we're one of the biggest providers in terms of showing football in pubs. And if you go in to watch football in a pub, the atmosphere is incredible. Yeah, we'll be hearing from a landlord worried. The changes to business rates, though, will also increase the cost of screening games at his pubs.

0:36And as the government mulls a social media ban for under-16s, we'll be speaking to a business that's trying to make life easier for schools who want to impose phone bans in the classroom. Wake Up To Money with Will Bain. Morning, welcome to Wake Up To Money on Tuesday, the 27th of January. Just gone five o 'clock in the morning. Will, with you this morning, great to have your company. Yes, lots has happened overnight as well that we're going to get to. potentially changes around leaseholds and the crap on ground rent that are being trailed, really, hasn't it, since the Labour Party manifesto. It sounds like there's going to be changes to that this morning.

1:13We'll be delving into that. Also, we've got some fresh data out from the British Retail Consortium about what's going on with price inflation in our stores as well. And, yeah, we'll be talking a little bit later on in the programme to a company that's making these phone pouches to try and put your phone away to not distract kids in the classroom. So is that a good idea? 85058 is going to be the text number to get in touch about. Anything you hear throughout the programme that you would like to have your say on or 08085 909693 is the WhatsApp number. As always, we're going to have a panel of guests with us for the next hour as well.

1:45And Tinika Freake is back in the studio with us this morning. Tinika, the Senior Fund Manager at W1M. Morning. Good morning. Nice to be here. That was quite a lot, wasn't it? That was the first thing you said when you opened the door. Quite a few things had happened overnight. Yes, just when you think earnings season hasn't quite started and there's so much happening. But it makes it interesting. Yes, and Ina was talking about this yesterday on the programme. So got the really big companies releasing their results later on in the week. Anybody you're looking out for in particular, that clutch of what they call the Magnificent Seven in particular?

2:14Well, I think all of them, and maybe we'll talk about that later because we're all concerned about the huge amounts of investments that they are making and what sort of returns, and this is all AI related, what sort of returns are they going to make on those billions of dollars? Yeah, and we're going to talk about a really interesting company called CoolWeave that I know you're fascinated in. You're going to explain a bit more why a little bit later on in the programme as well. Alongside Tinnika for the next hour, Sharon Lane is back with us as well. Sharon's the Managing Director of Tease Components, Cleveland-based manufacturing firm working in the energy defence and marine sectors.

2:49Sharon, morning. Great to have you back on the programme as well. Good morning. And how's business going at the moment? It's going well. We've got a cautious optimism for this year. We had a good year last year. We've got a strong order book, good pipeline, record pipeline, actually, for 2026 and beyond. So it's looking good at the moment. Nice, nice to hear some positivity at the top of the programme because we've had lots of, as you can imagine, guests in kind of hospitality and retail a little bit scratching their heads at what's going on at the moment. So what's going well? Can you put your finger on why?

3:20um i think that we had a bit of a pause last year um certainly after april with employer nick's announcements um and the general um uncertainty with the economy it felt like um clients were pausing on their investment plans they were um you know just delaying those decisions uh but we are starting to see some movement now in terms of the longer term work and people placing orders and a bit of an acceptance of where we are with our costs and we've managed to reassess and be able to make decisions again. Interesting. It's been more positive. So do you put that all down to kind of sort of that policy uncertainty in the run-up to the budget?

4:02I think that, yeah, that definitely seemed to pause a lot of investment last year. I mean, you know, it's by no means moving fast again, but we've definitely seen things being released that we've been waiting for. Yeah. Yeah. Well, let's kind of lead us into a bit of confidence there, because if Sharon's business, sounding like they're on the up to start the year, Tinica, overnight, one of those stories that we got after I certainly went to bed was the collapse of Revolution to Cuba and Peach Pubs, the wider group, talking about 2 ,000 jobs being at risk. The Revel Collective, the parent company, which has 62 pubs and bars across the UK, put itself up for sale in October after facing what it called a continued period of external challenges.

4:44Just at a quick glance, how much of this sort of similar question to Sharon, I put to Sharon, I suppose, how much of this do you sense is around policy? How much of it actually is about trends and other things, you know, drinking habits, younger people's drinking habits in particular? Well, it's probably a combination of all of it. And revolution is one of many pubs, unfortunately, that's struggling. We actually heard from J.D. Weatherspoon struggling as well. So it's clearly the cost of living is still an issue for people. People do like to go out and have drinks and have food. But it's just the costs to run these places that just keep going up and policies don't help.

5:32So I think the debate about business rates that were increased in the last budget in November, you know, hopefully they will be wound back. I think there's some talk of some rescue packages already. I mean, the Chancellor tried to save the pubs and it seemed to be that the devil is in details because they're actually struggling. And obviously the minimum wage goes up again. So, yeah, if your costs go up, you need to sell more to make that work. And it's a struggle. Yeah, we're going to hear from the pubs on those rates and whether that support package is coming because we keep being told it's days.

6:09And that seems to have been quite a few days at this point. But we're going to hear from a publican in the second half of the programme here. Sharon, what's your sense, again, just from the outside, just in terms of trends, I suppose, in terms of people's spending habits around you too as well, in terms of their ability and their willingness to spend on, I guess, what are luxuries, aren't they really, going to a pub or a bar in the evening? Yeah, they are. I mean, I think that we do get that feedback from our workforce, from our employees, that they are under that constant pressure in terms of having money in their pockets.

6:42And then obviously, as an SMA employer, you feel that pressure for increased wages every year to be able to meet their needs. And food inflation in particular seems to be still something that's really affecting people. And then we've got those decisions to make about wage inflation ourselves as a business and what we can withstand. And then what the impact is on factory gate prices from manufacturers if they continue to. the other thing about this story i thought i don't know what you guys think sharon perhaps first when i saw it when i woke up this morning i was reading about it in the taxi on the way in this is a bar i remember going to 20 odd years ago right and they don't look like they've changed very much in that time as well is there a little bit sharon do you think as well just you know times change particularly with things like bars and clothing retailers and things like that as well you know the tastes change fashions change

7:40or tinnika jump in yeah no i mean that's always the case and it is it is imperative that that that businesses move with with with what their target audience the younger people want um and the successful ones that adopt and you know they they they survive but nevertheless even for them there are cost pressures. But yes, it's absolutely important that what people want, that's what they get. Do you think there's a bit of taste and trends in this, Sharon? Oh, I think we've lost Sharon's line, actually, rather than Sharon not being able to hear us there. So we will press on a little bit, Tinnika, as well, because Sharon mentioned there as well, shop price inflation.

8:20That's going to feed in, I think, a little bit into a conversation we're going to have in a moment. We were talking about in the headlines, this new report from the Joseph Rowntree Foundation finding really high poverty levels, and we'll get them to kind of describe their description in a minute. But the British Retail Consortium, this was also embargoed till midnight last night, came out overnight. What was the kind of takeaways from what they were seeing in sort of inflation in stores? Yeah, no, so they look at about 500 types of food and non-food products. And the main thing that came out, that food price inflation is running at 3.9 % year on year.

8:53So this is higher than expected. And for low income households, food is the bulk of what you buy because it's essential. So this is really painful for households who are already struggling. Yeah. And I'm just looking down through it as well. It really is kind of right across all the food categories as well. It's not just sort of one area, which has sometimes been the case. Not just chocolate. Well, yeah, or coffee. And then at one point it was fresh food, wasn't it, when we were having problems with drought in Spain and things like that. It looks like it's kind of across the board just scanning down these numbers here.

9:26Yeah, that's right. So it's and it's a cool thing to sort of meet and fish from memory, you know, so it's across the board. So this is this is a tough one. And obviously, the expectations were that food, that inflation would gradually get less worse. And this is the most up to date number we have. And it's going the other way. Sharon, take those in turn for us. Perhaps just one anecdotally what you're seeing when you fill up the shopping, the shopping trolley, But also, are there things, components, for example, stuff that you guys use within the business that still raise your eyebrows in terms of their prices?

10:02Yeah, in terms of our spends on consumables, things like oils, lubricants, any sort of metallic products that we're using, they're continuing to increase, but they're really unpredictable as well in terms of what those costs are going to be. And all of the usual consumables that you would use in a household, we use obviously in a business as well. Yeah. Anything in particular? I think oils and lubricants are the main. I think that's the one that really impacts us and that it's difficult for us to budget for what that's going to be. Anything that involves transport that's got to be transported to us because transport costs are going up all the time as well.

10:45And, Tinika, from a kind of wider economic perspective, then, and an interest rate perspective, then, what does that kind of tell you? So the Bank of England will look at these numbers.

10:58There's more in the overall inflation number and the services number is really important, which, as a reminder, is closely linked to wage price inflation, just as Sharon said, so how much our wage is going up. That number was OK the last time, but the February inflation number will be very interesting because obviously the Bank of England want the trend to go down, not up. So this bit will push it up. We'll have to see what services inflation does to see if that can counterbalance. But it does mean that if inflation stays higher than they expected, they will be more cautious in reducing interest rates.

11:40And Sharon, what are you seeing with that kind of wage picture? You touched on the changes that had come in around minimum wage. What about in terms of retaining talent and things within the business as well? Because we heard lots about that over the past year that had kind of driven up that wage inflation, if you like. Yes. So I think you end up with this kind of two-tier labour market, really, because we're seeing unemployment rise again, particularly in Teesside and the North East. We are, you know, we've had quite a few losses, job losses in the area. But then those particularly highly skilled roles are still relatively difficult to fill.

12:20You know, there are still something like 50 ,000 vacancies in manufacturing in the UK. So we've still got that pressure to remain competitive, to retain people and recruit people. At the same time as we can see around us in the region, and increased unemployment in the less skilled workforce, I think. Interesting. Because you work with the trade body, Make UK as well, don't you, Sharon? What are you seeing kind of as a group then in terms of manufacturing, hiring? And is that all back to this debate we often have about skills? Yes, yeah. I mean, welders, play to welders, electricians and electrical engineers, particularly I think they are still very difficult to recruit and retain.

13:05Lots of employers wanting additional roles added to the shortage occupation list because the roles can't be filled within the UK and then still although it has improved still issues with apprenticeship reform and being able to access training resources to be able to develop the skills that you need longer term as well. The shortage occupation list, that's around visas, isn't it, to bring in foreign workers? Yes, that's right. Yeah. Yeah. So there have been various roles removed from that list recently. So it's more difficult to bring in skilled workers. But lots in the manufacturing sector would say that they are very scarce skills in the UK and they still need to be on that list.

13:46And do you see anything in terms of the tide turning on that, perhaps with the trade body hat on again? I mean, we talk about this an awful lot, don't we? There's shortages of skills in some of these areas. And yet, I don't know, are there schemes out there that you think are doing good work that are trying to address this? Is it just a matter of time or are we really not even actually beginning to try and address it? I think that some of the new initiatives we have with apprenticeship reform, with things like the trailblazers, for example, to get young unemployed people into work. I think there are actually some really good initiatives there, foundation apprenticeships that are just one year.

14:21That was another good initiative that's just come out. And I think that if they're given time to work, they will have positive outcomes. But they're all quite long term solutions, aren't they? And then we're fighting against demographics because we're now at a point where because of falling birth rates, we've got fewer young people all the time coming into the workplace and manufacturing wants them and everybody else wants them as well. and so then of course businesses look to digitization and AI to reduce their reliance on people and skills and because of increased employment costs I think the risk now is that businesses will just say well we'll just invest in digitization so we reduce our reliance on people and we won't create those roles for young people to train.

15:04It's become a straight choice that? Yeah I think so yeah. Interesting well let us know what you're seeing in your business as well. 85058 to get in touch with us on the text this morning. 08085 909693 on the WhatsApp. Wake up to money from BBC Radio 5 Live. Now, the number of people living in very deep poverty in the UK is at the highest level in more than 30 years. It's according to the Joseph Roundtree Foundation this morning. Peter Matajik, the Chief Analyst at the Joseph Roundtree Foundation joins us now. Peter, morning. Morning. I've kept that slightly short so that you can talk us through the rest of the details because on the face of it, these numbers look pretty stark.

15:44Yeah, so what we're doing is analysing government's official poverty data, looking at levels of poverty, which on the face of it look like they're sort of flatlining over the last 20 years or so. But if you go under the bonnet and look at the depths of poverty, the number of people who are very far from the poverty line, as you say, that's at a record of 6.8 million people in very deep poverty and that's almost half of people in poverty are in very deep poverty. and both of those statistics are at record levels in the in the latest data which covers 2022 20 2023 24 just before i get you to kind of explain perhaps some of the reasons why and what you're seeing just give listeners that definition peter of what you mean by very deep poverty just explain how you how you sort of characterize that yeah so basically the government has a poverty line and they use which is in the poverty strategy of 60 of average incomes adjusted for family size and this is 50 % below that line so 40 % of median income so it's you know you're you're very far away from the poverty line you'll be struggling to afford to to eat to buy essentials.

16:48What are we roughly talking about in terms of annual salary say headline salary? Yeah so we're looking at£7 ,000 a year for a single person about£11 ,000 a year for a couple with no children and so it's really really low levels of income that we're that we're seeing and as I say it's official data from the government what are you why are you seeing that do you think have you got um thoughts as to as to why we're seeing the increase yeah so we think it's partly down to um changes in the benefit system so we've had um obviously not not in recent years we've had some cuts in terms of benefits and freezes we've obviously got some forthcoming cuts in terms of some of the changes to universal credit in the health side of it and we think that's part of the part of the picture um and And obviously we will see, one of the things we are saying in the report, that we will see a positive fall in poverty going forward in April 2026 with the removal of the two-child limits in the benefit system.

17:42But that's sort of reversing our harm. It's still going to be, we think, more than 4 million children in poverty at the end of the Parliament. So we think the government needs to take further steps beyond that. Right. Two interesting things. Can we break them up? Can we take the health one first? So that's these sort of fitness-to-work tests, right, that come in around universal credit. Is that what you're talking about there? Yeah, well, there's also just a straight cut of people who are newly sick, complaining, claiming universal credit will get a lower level than somebody who's already on universal credit.

18:13So that is just a straight cut. And, yeah, so I think that's bad. And what we've seen through people we've spoken to who've got experience of poverty, some of those kind of costs, additional costs of disability, like having to charge your wheelchair and things like that, can be really expensive and really add to somebody's, yeah, like the cost that somebody has. And then in terms of the change to the two-child benefit cap, obviously there's a huge political row around the kind of U-turn and the decision on that. And I guess an argument about what it meant more broadly economically in the run-up to the budget.

18:48But you're saying you think that could have a difference, make a difference, significant difference, as soon as, what, a couple of years' time? yeah so basically in april um 2026 we think about 400 000 fewer children will be in poverty than march 2026 so it is a massive impact in terms of poverty um but obviously that's we think that's that's a brilliant first step but it can't be the only step um but yeah we very much welcome that that change well what do those other steps need to be then yeah so there's some other so there is some things in the work to help people get into the labour market and also to give some extra protections when people are in the labour market.

19:28But there's also other elements of the benefit system that mean that they break the link between what you get and what you need. So those two obvious ones are the benefit cap, which caps the amount of income, the amount of benefits people can get, and the freeze to the local housing allowance, meaning that rents can rise and your actual local housing allowance that's supposed to pay help to pay towards those rents that gap can grow quite quite severely rents are rising in your area right um saren i'm sure this is kind of an area that make uk look at in particular in terms of getting just as you were talking about before really getting more people into the workforce what do you think are there things you think would work could work that you've seen of good practice yeah i could say this recent this this um trailblazer which has just started sounds like a good idea where you give a placement to um i believe it's just a it's a young person it's age limited um who is out of work who is neat and that's the kind of scheme there's funding there critically i think there's funding there for employers to help them to do that to help them with some of the costs of supervising somebody on a work placement because historically there's been just this reliance on goodwill that employers will you know have the resource and give up their time to offer work placements with you know with no financial contribution so I think you know that is a really good initiative we have to be part of the solution here you know they you know coming out with poverty is about getting a good quality job and we've got to be able to accommodate needs particularly of this post-COVID generation and what that you know what if we need to be able to meet them halfway and work with schools work with colleges but for SMEs particularly that's difficult it's difficult when you have limited HR resource for example and you know pastoral support within your business it can be really tricky.

21:31Peter, do you see that need for kind of support for companies to help them? You know, there's plenty out there, I'm sure, who are willing to do this, would like to do this, but need a bit of help to do so. Yeah, and I think some of the investment that DWP are making in job centres to help people to work is really fundamental. And as you say, some of the support from firms, it is the fact that two thirds of working age adults in poverty do live in working households so there is that extra point about the quality and hours in jobs is really important so so you know somebody getting a job may not actually get them out of poverty it's then have they got enough hours and what's what's the what's the hourly wage that's also important and tinnika that's the kind of flip of what we were talking about in the in the wage inflation picture i guess yeah no i think that's right and it and and also what cheryn said that that certain certain jobs, there's just a shortage of people and therefore wages will go up to try and get the right people.

22:28And in other areas, there's too many. So therefore wages go down. So it's that balance. But on the whole, trying to lift households out of poverty, and I know we sort of don't mean to rant, but energy costs are just so high in the UK. So I think if anything can be done there too i think that will help i mean i really feel like i sort of visualize the person trying to charge their electric wheelchair i mean you know power prices in in the uk are one of the highest in the world and it's just you know be great if we can get those down sharon bet that's a big area for your businesses oh my goodness yeah i mean that energy for me is the number one thing I think since you know going back to kind of the last five years I think the electricity costs for us are the biggest factor for our bottom line our ability to invest and you know again we've seen some reforms proposed with the industrial strategy and some help you know from in a few years time and it's quite far down the line and I think manufacturing just needs something now um it's our it's our competitiveness it's our ability to price competitively to export as well um and to get that growth that we all keep talking about this economic growth and create these good quality jobs um for manufacturing it yeah electricity is just it's just a huge issue and Peter round us out on our report then sounds like for your report sorry from from what you are saying what you're seeing it seems to be that you're saying you know the government can make quite a significant difference quite quickly here it's it's just about targeting that support in the right places yeah that's exactly right and i think um to think about sort of the experience of the individuals so you know um people who have you know people can only take so much um you know food costs and energy costs have rapidly risen and that's what we're seeing in these statistics that we're seeing today.

24:35So the action needs to be taken and can be taken. Peter, thanks so much for your time this morning. Peter Magish here, the Chief Analyst at the Joseph Roundtree Foundation. Plenty more from Tinika and Sharon in the second half of the programme here on Wake Up To Money, where we're going to be talking, as Tithka mentioned, about pubs and this still continuing wait for what's going to happen with their business rates relief. And we're also going to be talking about phone pouches. Could they be the answer to helping stop kids getting distracted in the classroom if and when a social media ban for under 16 potentially comes in as well.

25:05Wake Up To Money from BBC Radio 5 Live. Morning, welcome back to Wake Up To Money on Tuesday the 27th of January. Our panel this morning, Sharon Lane, the Managing Director of Tease Components based in Cleveland and Tina Kafrika here in the studio with me, Senior Fund Manager at W1M. Thanks so much for your texts in this morning. Dave in Birmingham, been in touch talking about that food shop price inflation in particular, a slightly extreme response to it or a suggestion of a response to it from Dave, But he says there's so much complaining about the cost of food, but I bet we still create a huge amount of waste.

25:38As someone who experienced the severe war rationing in the 40s and 50s, this prevented any waste because you simply couldn't buy much. Perhaps a period of rationing might do us all good. Perhaps we could swerve the rationing a little bit. But the waste element, Tineke, actually, perhaps we could waste a bit less. He's absolutely right. And what we, you know, for households, it's bad. and for companies that we speak to that do catering, for example, in schools, you know, a third is wasted. And it's just that's not right. So if we can somehow, you know, waste less. And that could have an impact on prices, couldn't it, as well, potentially?

26:17It should. Ultimately, we import quite a bit as well. So there are some base costs avoided. But, you know, at the same time, Dave is absolutely right. We should, you know, there's no, you know, we should just waste less. Yeah. And Sharon, I wonder if your best place of the three of us to field this one from Brendan in Newark this morning. Brendan saying the government seriously needs to reduce employment costs and reduce benefits and help and encourage businesses and young people, 16 to 18 year olds, to get straight into work. Is the biggest challenge to hiring one of those younger people that you were chatting about in the first half of the programme simply the cost of doing so at the moment?

26:52Or is it some of the risks, perhaps, or the perceived risks around what we've talked about in the employment rights bill? Or is it sort of cocktail of it all? It's a cocktail, yeah. Just to say on food waste, we are now being charged into new legislation. So now we have to separate food waste and as a business, we have to pay for it to be taken away. So that actually, I think, will really work in reducing food waste. Yeah, so on employment, I think that employers, they've got this uncertainty. that we've got this global political uncertainty and those delays in investment that hesitation that we talked about earlier so in terms of creating new jobs your highest risk group are your younger people who don't know how to do anything yet they've not got the skills yet and they also don't even know how to be in the workplace yet and you know there may be from families that they don't have those examples of how to go to work so you know the idea of creating a job in the first place and then actually opening up employment to somebody in that high-risk group coupled with employment rights which were going to be day one rights so all of you know last year I think that kind of just put that pause on new employment for that for that high-risk group and we now know that we're going to have this rights from six months in six months still isn't it's not a long time in terms of again going back to SMEs with limited HR resources being able to to carry out reviews, being able to really make a decision on whether that role is right for somebody.

28:22So it is a cocktail, as you say, and the outcome of that is just that decision. If you're in two minds whether to create that training job or not, that decision is probably going to be not. And we are seeing that borne out in the numbers, Tinnaker, as well, aren't we now? We were chatting about this briefly yesterday, but well over 15 % now, the official unemployment rate for those youngest workers, 16 to 24-year-olds, have got something of a real crisis brewing. Yeah, and what we're hearing too, and we haven't touched on AI very much yet, but what you're reading is that it's sort of the entry level jobs that are being replaced by AI.

29:02So I'm not quite sure how you then, if you have no entry level people, how you can then become a medium level person because you've got to get your experience right. So not, you know, it probably can't be absolute. But nevertheless, there are a lot of changes happening. Clearly, AI is creating a lot of optionality as well in starting your own business or, you know, so it's not all bad. But the adjustment period is tough. Yeah. Well, one area where, as Sharon was saying, often younger people, certainly I did, get their first taste of working is in hospitality in particular. And you might remember, of course, we were talking a lot over Christmas about what, if any, business rates relief pubs might get.