Burnham's first day

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0:41Join Odoo today at odoo.com. That's O-D-O-O dot com. Wake Up To Money from BBC5 Live. Hello, morning, welcome to Wake Up To Money. New week, new Prime Minister. Make no mistake, everybody, I will be a pro-business leader of the Labour Party. Andy Burnham says he'll be pro-business. We'll be looking to get a flavour of what companies actually think that might look like in practice. Also on the programme today, what next for Thames Water? The government's threatened to take greater control in the country's biggest water provider. Investors say they'll take legal action. We'll have the very latest.

1:20And a warning from European airport bosses that the new border system, EES, is still not up to scratch right as we hit that key summer getaway period. Wake Up To Money with Will Bain. Morning, welcome back to Wake Up To Money on Monday the 20th of July. Just gone five o 'clock in the morning. Will with you this morning. Great to have your company, yes, on the morning that we get a new Prime Minister, Andy Burnham, set to become the latest to walk through number 10. can he tackle some of the challenges that perhaps others have not done so before not been able to do so before in terms of getting the economy in particular going again as we heard in the little clip in the headlines there he said it'll be pro-business we'll be digging into that throughout the program today about what that might look like with the various different businesses and we'll also hear from one of our top economic think tanks to give us a bit of a sense of the backdrop of the wider public finances so the kind of realm he'll be operating in but away from that too we'll be looking at as we say the future of Thames water as well and these border gate system around Europe with the boss of Ryanair warning at the back end of last week that it is going to cause greater delays for anybody jetting off in Europe this summer so we will have the latest with a couple of European airport bosses a little bit later on in wake up to money we'd love to know your thoughts obviously a day today in terms of getting a new prime minister where the politics meets business of what you'd like to see what you're hoping to hear what you'd like to see change I suppose as well.

2:4985058 is the text number to get in touch with us this morning. 08085 909693. The WhatsApp, if you'd prefer to get in touch with us that way. Our panel this morning, then Judith McKenzie back with us, partner and head of Downing Fund Managers. And David Keane is alongside Judith for the next hour. David is the chief exec of Arrigo, develops and makes a range of automated baggage handling systems and vehicles for use in airports alongside work for the defence and automotive sectors as well. Morning both, great to have you back, good to have you here on a day where we get a new Prime Minister Judith, what's your sort of top line thought around that?

3:24Oh I just want some certainty, that would be nice, yeah I mean obviously the biggest thing for markets is who is going to be Chancellor and that's the biggest thing I think that folk are looking out for and also over the weekend we had quite a bit of narrative about number 10 being bolstered up a little bit, whatever that means. And some hints that number 10 was going to oversee Treasury a little bit more than previously. So I think those two dynamics are going to play out during today and that's what I'll be looking at. Yeah, we will explore those through the programme as well. David, anything for you?

4:02Morning. Morning, Will. Good to be back. I totally agree with what Judith has just said. I think the problem we've got currently is another shaky starter of soundbites and not a lot of policy and I really think Andy Burnham has got to get a grip he's got to give something to the electorate that they understand and he hasn't got long to do that because I think probably by the end of the year people will lose faith again in another change and that's going to be a problem. Well we'll explore in more detail what the guys think that should look like what things are making life difficult for businesses at the moment what What could make it easier?

4:40What could boost that growth that we've been desperately seeking, it seems, in this country across a number of governments of different colours over the last 10 years or so? As I say, we'd love to know your thoughts on that as we move through the programme today. 85058 is the text number to get in touch. Why don't we start by hearing from the man himself, shall we? This was Andy Burnham on Friday as he took over the post of Labour leader around those pledges to be pro-business. We will take power back from Westminster and Whitehall and give it to the place where you live.

5:16More power to improve your high street, backing local businesses such as the pubs and the shops that bring them to life. and make no mistake, everybody, I will be a pro-business leader of the Labour Party as I was a pro-business mayor of Greater Manchester. We turn places round together. Well, as Judith mentioned, Mr Burnham is set to announce his cabinet over the rest of today, perhaps into tomorrow as well. We're being widely speculated that the Home Secretary, Shabana Mahmood, could be the new Chancellor, while the Financial Times reporting that Mr Burnham plans to reinstate Jonathan Reynolds as the business secretary and increase the department's power as well.

5:57We called up some of our regular friends here on Wake Up To Money, some of the businesses you hear on the programme right through the year, to find out what they thought should be right at the top of the new Prime Minister's intray.

6:13Thank you for calling Wake Up To Money. There's no one available to take your call, so please leave your message after the beep. Hi, Wake Up To Money. This is Peter Schiebersmann and I'm the co-chair of Liverpool Hospitality Association and also co-owner of several businesses, including Hotel Anfield on Anfield Road in Liverpool. Today, Andy Burnham becomes the second ever Scouse Prime Minister. We have lent Andy to Manchester for quite some time now and look at Manchester. It's absolutely buzzing. We can only hope that he brings that acumen and energy to number 10 and then spreads the love all over the country and hopefully revigorates some of that energy across Great Britain.

6:57For our industry, the hospitality industry specifically, I am hopeful that he is honouring some of the commitments that he made along the way and that his move into number 10 will be a good one for us. Hi, wake up to money. This is Jane Somerville here from Bowers and Jones in Bilston in the Black Country. We're a 70 year old manufacturing business, making tooling and precision engineering components for a multitude of customers around the world. I've got mixed feelings about Andy Burnham taking over today. I agree that devolving power to the regions is a good thing, but he hasn't mentioned anything that will support businesses to grow.

7:34Manufacturing businesses especially, and especially here in the Midlands, are facing higher taxes and steel tariffs that are doing the exact opposite. So rather than saying the government will support growth, actually do something that will help that happen. hello wake up to money this is john from bio and me the gut health food brand who makes granola kefir and overnight oats i'm optimistic about andy burnham he's bringing back hope he's bringing back an energy to get all the things done that need to get done and let's face it there's a lot of those the one note of caution i might sound because a lot of people talk about the importance of business growth and after all that pays for the plan but business has already done its fair share with the increases in national insurance and packaging tax etc so in a funny way if you can't help us grow then please just don't put more barriers in the way so that we can then focus on delivering the growth that pays for the plan if i was to give one example there's talk about the wealth tax at the moment great if you want to do that on property and assets that people are just hoarding but please don't put that on to entrepreneurs as well because that will just take away the incentives and then there will be less growth which means less money to deliver the plan thanks to some of our wake up to money regulars there there you go guys you both mentioned this as well david growth i think everybody talked about there and this i guess concern that no one has heard anything yet it seems that makes them think that that picture is going to shift massively even though we're going to change you know prime minister cabinet senior government positions etc from today yeah exactly and um your last uh caller there was was quite right um we're not we're not seeing well it's like it's like when actually labor actually came into power a couple of years ago and came in on a landslide lots of words if i heard the statement we're we're a party of growth growth growth once i heard it like 10 000 times and And actually, they looked very much like having had 14 years to prepare.

9:45They didn't really have a structure or a plan to how they would deal with that with business and get that growth going. And in fact, policies during that two years have caused us a problem, quite a lot of problems actually in business. And I think Andy Burnham has got to be very, very careful that he doesn't fall into that same trap because he will just lose the faith of the electorate very, very quickly. So really important. I always think give somebody a chance. You know, he's got energy. He's probably not probably, but he's definitely got more charisma than than Sir Keir Starmer. But charisma doesn't hold any water whatsoever for business if something isn't clear.

10:27and its growth strategy. So what to you then does shift that growth picture? Is it as much undoing things or not doing things as we heard John Walsh talking about there as it is doing things? Well, I also think that some of the words that have been used, like we're going to go back to how we used to be, you know, before structural changes that Margaret Thatcher put through and we're going to go back to the 70s or whatever, that is all rubbish in my view. You should never look back when you're trying to be a progressive government and you're trying to make changes. What you should do is you should look at all the good stuff.

11:07You should keep that. You should look at all the stuff that has potentially gone wrong and you should reverse those. And you should listen to commentary from people who know about business or taxation schemes or whatever it is and you should implement those. so talking about the good old days or some sort of thing that nobody wants to go back to they want to go forward everyone wants to go forward and wants to have hope of going forward so stop talking about backwards and put a forward plan in well what's stopping you going forward as quickly as you'd like or as quickly as you'd hope uh quite quite a number of things i mean it's quite wide ranging but let me give you something on on employment um the uh the taxation and national insurance that was put through all the issues basically of trying to employ someone these days is horrendous.

12:00It's very complicated, lots of red tape, everything from, you know, have they got right to work, is the health and safety, whatever it is, there's just so much. And what it means is that companies like ours are very careful now about whether they take a person on. And particularly in the younger people area of the employment, that is a problem because taking younger people on is now going to be less than it was just at the time where we've got the highest unemployment in that age category and we need to do something about it to stimulate it. So giving businesses a lot more ease to bring people in and not load the company up with tremendous costs.

12:47And if you bring people in, what do they do? They pay taxes. And so the tax receipts going into the government get higher. So taxing businesses so that they don't hire is complete ridiculous strategy. Judith, what about from an investor's perspective? What's been, I guess, holding up the growth picture from your perspective would be companies feeling more free to invest in some of these companies around the country, right? So what's been blocking that or challenging that I suppose. Yeah look we don't just need hope we need specifics here now this time and I think there's three things that the market looks for they're looking for appropriate regulation lower taxes and guess what low energy prices so these are big challenges for Burnham to to grapple but if you don't have those three things and this is not me saying this this is Adam Smith economist going back hundreds of years if you don't have these three elements then you're not going to get growth so it's just going back to what was being said there actually if you put barriers in the way of growth that things like national insurance people hiring then you're not going to get it so really just go back to the basic principles so a little bit like what we heard from some of our contributors there judas as well actually it'll be as much about what they don't do getting out the way a bit more rather than trying to put in place lots and lots of strategies or sort of actually sort of doing things, passing new policy, for example.

14:16It's actually stripping back, getting out of the way, removing some of that stuff. Yeah, absolutely. You know, if you do that, then companies do tend to get on with things like hiring. And we might come on and talk about it later, but there was a report out this morning from Deloitte looking at business confidence. And business confidence isn't bad in terms of things like AI, but the terrible bit that is being held back is employment and that is employment of graduates as we just talked about there yeah and you don't have employment graduates if you're putting barriers in the way well carry on that thought this is the chief financial officer survey that deloitte do isn't it so these are the sort of the top finance bods at all these companies around the the country so it's a good snapshot of what they're doing and basically look pretty bleak on hiring again yeah yeah yeah very bleak just for all the reasons that we just talked about so you know if burn wants to do something quickly and make a difference, then actually looking at some of the incentives around hiring or disincentives around hiring would just get that G-board back in the economy.

15:14We're going to go back to this, though, in the second half, Judith, because we're going to be joined by Jonathan Cribb, the Deputy Director of the IFS, Big Economic Think Tank, on just the kind of pickle that the public finances are in. I mean, how easy to row back some of that stuff when they're looking for extra streams of revenue, right, and that things like defence might need even more revenue raising for the type of spending that's needed. How to do that, how to tack back on some of this stuff? Yeah, but it's not impossible because actually if you look at some of the benefits that some of these apparently tax-raising mechanisms have put in, they've not really done what it should do or they thought might do for Treasury.

15:57And NI being one of them, if you're not hiring, then you're not going to get the growth and you're not actually going to get people paying NI either. So it's probably worth just a look on paper as to what some of these initiatives have achieved and what the payback has been because reversing on them would make such a difference. Anyway, well, you're more positive in what you've heard, David. Anything that sounds like a good idea to you from the bits and bobs that we've heard? Well, the bits and bobs I've heard from Andy Burnham, no, because I think currently they're all soundbites. But as I say, let's not be too negative.

16:32We can't get to a situation where we've already destroyed someone before they've even taken office. So it's really important to make sure we don't get ahead of ourselves. But I just think, you know, when someone makes a statement like, we're going to give more breathing room to people, what exactly does that mean? You know, so statements like that where they're not accompanied by something that's even two or three sentences that actually might give an idea of what that means is just irrelevant, to be honest with you. Nobody really gets that. And just as I was saying on employment, I always like to give sort of practical examples from my company as to, you know, for the listeners.

17:19We've got a situation where in the entertainment industry, so pubs and restaurants and things, hiring young people over the summer is just not possible for them anymore. They're under so much problems with hiring. So this year is the first year that I have been inundated by all my friends, people who work for me, and lots of acquaintances who have phoned me up and said, is there any way you can get my son or daughter employed over the holiday period to give them some sort of work experience? We employ in the UK just over 90 people, and I took the decision to take some of those people on, even though it was a cost to us.

18:02So we've taken eight people on over the summer to give them something on their CV and to give them some work experience. and I think that in a little nutshell shows you the problem with getting young people into work currently. It's almost impossible and actually it starts with pubs and restaurants. You can't, they don't want people to serve behind the bars or do pot washing because they can't afford it. So those people are just sitting at home and that's got to be bad for the future and the way we get young people into work. Yeah, and that is one area, isn't it, where we've heard Andy Burnham, or at least actually during the Make Appeal Buyer Collection campaign, talk about looking again at both business rates and the national insurance changes for pubs and restaurants in particular.

18:48Let us know what you think. 85058 is the text number. 08085 909693 is the WhatsApp. Wake up to money from BBC Radio 5 Live. Pressure then, as David was talking about in certain sectors, including pubs and restaurants, pressure been on our farmers, it feels like, over the past few months. the incredibly dry weather, of course, a massive challenge, but also now the oscillating oil price through the year because of the war in Iran. And with those attacks again by the US, retaliatory strikes as they saw them on Iran after Iran attacked US facilities in Jordan through the weekend, we've seen the benchmark oil price for Brent crude rising back above$90 a barrel for the first time since early June.

19:34Judith, just give us a quick sense of the direction of travel and how quickly that's kind of moved back up again, because we were talking about it tacking right back to pre-war levels, weren't we, a couple of weeks ago? Well, that's right. This seems to have cropped up on us a little bit. So this is the ninth consecutive night of strikes on Iran, US strikes on Iran. And so, yes, we've seen that oil price creep back up again. And I think what probably concerns me a little bit at the moment is that the narrative coming from the US is pretty militant, often is, but you had Trump last night saying we control the strait and that Iran doesn't control anything.

20:13And that obviously just gets the oil price and futures pretty nervous. So yeah, Brent up at$90 a barrel at the moment and if this continues you can only see it going in one direction. so we're not really seeing anything to do with resolution here sadly it feels as though we're back maybe about four or five months ago when things were at the heat of it and that's where you start seeing those input costs again into everything we use particularly obviously food Abbey Reader joins David and Judith now as well Abbey, a mixed farmer based just outside Cardiff but joining us from one of agriculture's big days of the year the Royal Welsh Show in Bilth Wells this morning Morning Good morning What's the mood at the show then this morning?

20:59Well, there's quite a bit of nervousness about with farmers. We've been struggling now with drought for quite a long time. In Wales, we're largely a livestock nation. So here people are concerned about running out of water for their livestock, running out of fodder for their livestock as well. For our farmers who are growing crops, which will be around the borders and on the coastlines, they are seeing unprecedented early harvests of particularly wheat and barley. to our cereal crops. Those crops have struggled with water availability and a lot of those grains haven't necessarily reached their full potential but they've been forced to ripen early.

21:39So what does that mean practically, just explain that for people, what are the downsides of having to harvest early I guess? So the overall yields that you're expecting on your farm is going to be or likely to be lower because you've got ripened grains that just aren't plump enough, basically. They won't have enough goodness in them to be able to maximise on your production per hectare of land. So it is going to be quite a challenge. Looking forward, we need to see how we're going to be able to fill that gap. How will farmers respond? Will they continue to plant in the way that they do or will they change their habits because input costs are high, they've lost confidence because of the adverse weather conditions?

22:22So there's all sorts of challenges out there that are piling up on one another. If we were dealing with any one of them in isolation, potentially we would be in a better place. But at the moment, they are facing a lot of difficulties. And from the livestock end then, how soon does that become, will you tell me what level of challenge it is right now? And how soon does it become more serious, so serious that you're sort of in a similar position? Yeah, we're already feeling that. So I'm a dairy farmer. my milk production is down about nine to ten percent at the moment because of the drought some of that as well is is influenced by the heat so cows will spend a long time standing as opposed to eating so it's really important that we make sure they can get enough nutrition into them but it is depressing their milk yields nonetheless if we look across the channel to the continent they're seeing the same problems so overall milk production in France is down seven percent.

23:16If we go to Germany, it's down about five percent. So lots of farms are starting to feel the hit from this weather. And it's really what happens going forward. Now, we're used to the yo-yo of the weather, the ups and downs. But again, there are just so many problems compiling on one another. And this renewed conflict that's going on might be spiking the price of diesel and the price of fertilizer again at a key time when farmers are thinking about planting for the autumn and crops for next year this is going to put a lot of pressure on right so actually the back half of this year we might start to see those price pressures again our listeners that we saw earlier on in the year that's right and this once again highlights how important it is that the government supports agriculture those farm support payments are there to make sure you can be resilient at times like this.

24:12And it will enable you to have that buffer, to go to the bank, to get the lending, whatever it is you're going to need to pay for those very expensive, if we're talking about arable, those very expensive input costs that you're going to need to establish your crop for next year. So whilst farmers are now taking off their harvest for this summer, we're actually thinking of next summer now. And the farm support payment is there to make sure farmers can survive in these times. We then need to think about innovation. We're an island and we don't produce our own fertiliser. So how do we guarantee that we're going to get fertiliser coming in?

24:48People may think it's the big bad wolf, but actually it feeds many millions of people across this planet. And we're not going to be able to innovate our way out of this in the short term. So we've got to shore up supply. We've got to make sure that those farmers get those inputs that they need. And we've been talking with the guys this morning, then you mentioned some of the things that government might be needed to do in the short term, longer term, then, Abby, on a on a morning where we're talking about another new prime minister and another new government, presumably another new DEFRA minister coming in as well.

25:19Are there things that you see as key things to tackle in the sector from a policy perspective? Well, the government just needs to take all of this very seriously and help to mitigate the growing burden of risk that farmers are facing. It's really difficult every time we have this constant churn of farming ministers and prime ministers. And back here in Wales, we've got a new Welsh government now. So it just causes a lot of delay in decision making while people get used to their new roles. They've got to learn about the industry. We need to make sure that food security is very much in their sights.

25:59It's a national obligation that we look after our ability to be able to grow this food in this country. Again, we're an island of 70 million people and we cannot guarantee where our food is going to come from if we can't grow it here. Whether we're looking at the shortages we saw last year in Spain because they were burning up in the heat. We've had the severe drought in Australia and New Zealand. All of those things upset that global supply chain and it can make it really challenging. I was speaking to someone from a supermarket over the weekend and they said to me, we just can't guarantee where we're going to get all the various foods that we normally keep in store.

26:37So we need to be able to try and shore up what we can in this country, because at least we've got some mediocre control over it over here. Abby, thanks as always for speaking to us and trying to enjoy the show this week as well. Many thanks. Abby Reeder there, a mixed farmer joining us normally based from outside Cardiff, joining us from the Royal Welsh Showground. In Belth Wales, do enjoy if you're heading there and perhaps if you are on your way there and you're in the passenger seat, drop us a text about what you make of what Abi was saying with some of the pressures of the sector and what she'd like to see from whoever the next farming minister is.

27:1185058 is the text number to do that. 08085 909693. The WhatsApp, should you prefer to get in touch with us that way? We're going to return to the kind of economic backdrop for the UK in the second half of the programme, but also going to look at the ongoing problems with the EES border system as many people get ready, of course, to head off for their summer. 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. Build a grazing board with fresh fruit, prosciutto and artisanal cheese.

27:49Then fire up the grill with no antibiotics ever proteins and fresh produce. Savour the season. Shop Summer Fruit Fest at Whole Foods Market. Holidays. Wake Up To Money with Will Bane. Morning, welcome back to Wake Up To Money on Monday the 20th of July. We're our panel this morning and Judith McKenzie, partner and head of Downing Fund Managers, and David Keane, the chief executive of Arrigo, developer of a range of automated baggage handling systems for vehicles for airport use alongside work for the defence and automotive sectors as well. Do keep your texts coming in on 85058. We'll weave them into the next conversation.

28:27A couple of conversations we're going to have around the incoming Prime Minister Andy Burnham but we thought it'd be useful having chatted with the guys a little bit about what businesses want and perhaps the pressures right now to zoom out a little bit if you like and look at the overall picture of the UK finances because that is, of course, what the new government, the new Prime Minister is going to be operating in to try and meet some of those challenges that guys were laying out for us in the first half of the programme. So alongside Judith and David, we're joined by Jonathan Cripp, the Deputy Director of the Institute for Fiscal Studies.

28:57Jonathan, morning. Great to have you on the programme. Good morning. Why don't you lay it out for us then, the sort of top line of where we are, I guess, as Andy Burnham becomes Prime Minister. well the key thing that's going to constrain what he can do is the public finances we have high debt high borrowing and very high debt interest and you know to try to control that the treasury has fiscal rules andy burnham has said he will stick to his fiscal rules And the big picture that means is that if he wants to do any significant additional spending, he's going to need to make other cuts to spending or tax rises.

29:43And so that's kind of the big set of difficult decisions that lie ahead of him, ahead of becoming prime minister and, of course, choosing a chancellor. The debt interest is becoming increasingly a problem in and all of itself, isn't it, Jonathan, too? I was listening to your colleagues on the IFS podcast, I think last week, 8 % were they saying it is now of the entire government's budget goes on debt interest payments? Absolutely. And that's the result of basically two things. One is the accumulated increase in the amount of debt we have, and then kind of multiply by the fact that we have these much higher interest rates than we've had before, and indeed higher than in many other countries.