Feeling the Heat

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1:40BBC Sounds. Music, radio, podcasts. Wake up to money from BBC Five Live. Hello, welcome to Wake Up To Money. Are you coping with the heatwave? Are you ready for ever higher temperatures? as red warnings in place from nine o 'clock this morning in certain parts of the UK. Train operators warning against travel, schools and businesses being forced to close. We'll speak to one shop doing just that. We'll also hear how the changes to the cash ISA might spill over to stocks and shares ones. And this morning, the BBC understands if Andy Burnham becomes Prime Minister, he's expected to replace Rachel Reeves as Chancellor.

2:19Wake up to money with Sean Farrington. Good morning. Welcome. It is Wake Up To Money on this Wednesday morning, the 24th of June. It's just after five o 'clock. You may well have been paying close attention to Colombia's victory just in those final minutes before Wake Up To Money kicked off here on BBC5 Live. We're going to be talking plenty more about the World Cup, whether it's reaction from England's victory. Blimey, don't get too carried away. We were talking about that yesterday morning. England's draw with Ghana last night. Could there be a victory for Scotland later tonight as well? We'll look at a few different aspects of the fallout of the World Cup, whether it's vintage shirts or how the spend is going over in the United States.

3:06Speaking to the person who runs Mickey Burns Irish Pub in Miami, see if Scotland fans have helped boost sales over recent days, hours. Are they planning to in the days ahead as well? What's the atmosphere like? It's been great checking in with these businesses around the United States as we go through the tournament. And, you know, a bit of breaking news for you this morning as well, that the Chancellor, Rachel Reeves, if Andy Burnham, so there's still ifs and buts on there, there's lots of expectations, but there's lots of ifs and buts of when the likes of Andy Burnham may well be the next Prime Minister.

3:46We know that there is going to be a new Prime Minister. And we know if Andy Burnham is that person, then it looks set to be the case that Rachel Reeves will not be the Chancellor and that he's likely to replace her. What could that mean for the future of the UK economy? How it's run? Rachel Watkin is with us this morning on the show, Managing Director of the Tiny Box Company, which is an online gift packaging e-commerce business. Rachel, good morning. Welcome to Wake Up To Money. Good morning. Good morning. We'll tuck into the nuances of running an online gift packaging business more over the course of the show.

4:27I just wonder, Rachel, as you are sort of watching what is going on at the top of government at the moment, and you're sort of thinking, OK, there might be somebody else in charge at the Treasury if Andy Burnham becomes Prime Minister. what direction, what changes, if any, need to be made from the person who would be in charge of overseeing that spending, the borrowing, the taxes, a lot of the growth policy for our country? I'm just shaking my head in disbelief at what I'm currently seeing. And I don't think I'm alone in that, in the sort of business world, because we know that small businesses especially have been hit really hard.

5:10and from what I've seen of Andy Burnham's planned policies, it's just hitting the so-called wealthy even harder and I just think we're just going to see mass migration and company directors just pulling the plug and just saying it's not worth it if it goes ahead as he's planning. So just explain how you might see that play out whether it's in your industry, Do you speak to colleagues who are thinking the same thing? Are you thinking that kind of thing at Tinybox? So I'm part of quite a big women's network of business owners. And we speak to sort of fellow business owners all the time. And we've had the perfect storm over the last few years.

6:00For example, our business rates have gone up by 53 % in the last three years. we never got exemptions during covid because we weren't small enough we weren't in the right industries that's just the going rate of of increases adds that to the minimum wage increases we're quite heavy on manual labor because of warehousing distribution and also we have a packaging uh manufacturing plant in in Cornwall and so the minimum wage adds that adds the employer a national insurance to that. The increases in corporation tax that we've seen from 19 % to 25%, there's no meat left. Businesses are being squeezed so tightly.

6:48And if the proposed wealth taxes, higher wealth tax of income tax going up to 50 % that Burnham's proposing, along with the 0.48 % wealth tax on property, it gets to the point, what is the point? What's the point of us working so hard to keep people employed if anything that's left over is being taken? It has been notable in the variety of comments that Andy Burnham has made about various different policies that a lot of them have involved some change in the tax setup, whatever that might be. And I guess we will wait and see any detail once there is a new Prime Minister and there is a new Chancellor about all of that.

7:37But he has talked about business rates and those employer's national insurance contributions that you mentioned there, Rachel. And he has said he'd consider cutting some employers' national insurance contributions. He proposed a cut to business rates for pubs and small family-run businesses. He says in an announcement when he made that, I'm just reading this from The Guardian a couple of weeks ago, he said Labour have got it wrong on small businesses. So there's some acknowledgement from Andy Burnham of exactly the issues you're saying you faced. I hear what he's saying. Business rates for pubs and restaurants, yes, disastrous and retail stores.

8:19But we're out in the sticks. We're in the middle of nowhere. Where are you? We don't even have any public transport. We have to pay for our own waste. Sorry, Rachel, the line broke up a bit there. Whereabouts are you? We're in Sussex and Cornwall. Right. And, yeah, we have no public services. There's no public transport near our main distribution centre. And we pay over£150 ,000 a year in business rates. It's interesting, Rachel. So far from it for me to make any case of whatever might be on the cards for policies that are on the way. But something that came up in the show yesterday when we were looking a little bit more about, you know, what would an Andy Burnham prime minister led government be looking like?

9:10We heard from a business in Manchester who talked a lot about his focus on transport around Greater Manchester. I don't know if that is something that potentially captures the imagination of what has been done in Greater Manchester and the devolution of those powers and the focus on transport as to something that actually, if there was a bit of welly put into that in your area, could make a difference. To be honest, I'm not quite sure how, unless I'm missing something, because the infrastructure around Sussex, you know, is fairly good. I don't need people to come to our premises. I just need the right market conditions for e-com products to be sold worldwide.

10:02Judith McKenzie, also with us this morning, partner and head of Downing Fund Managers. Judith, very good morning to you. Good morning. So is there much talk of the town in the investment world about who might be Chancellor next in the UK if these journeys followed, as many expect, that Andy Burnham will be the next Prime Minister? And as we are expecting this morning, he won't have Rachel Reeves as his Chancellor? Oh, yes. I think it's what everybody's been thinking about, actually. It's more important than Burnham actually landing and when he lands, to be honest, because clearly that's going to shape our economic policy over the next few years.

10:40So, yeah, we're all putting slightly dodgy bets on the contenders. So what are those sort of bets that are being put on the contenders? Who are the contenders? What are the different approaches that might be taken? So I think the city doesn't want Miliband. He's got a massive inflation risk round about him in terms of what he's talked about in policy. Now, just explain that one a little bit, because this is exactly the kind of debate that we're going to be getting into in the coming days if it plays out this way. So what is an inflation risk if you've got a certain Chancellor who might well be Ed Milliman?

11:22What is it about what he said or his approach? He probably prefers spending as opposed to looking at the debt of the country. He's got a big belief in the drive for net zero. He was obviously energy secretary and our UK energy prices, as we know, are pretty high compared to other countries. So maybe that's an unfair reputation, but certainly he doesn't seem to have his hand on the purse. And I think what the city is looking for is to be cognizant that the UK has got some of the highest cost of debt in the G7. So we're really looking for a treasurer that is very aware of inflation and also debt.

12:11Interesting. And are there any of the potential runners and riders, so many names that have been mentioned, that maybe land in the direction that you think the City of London, those investors around the City of London might be more satisfied with? You mean less bad, I suppose, as opposed to satisfied with. So I think the other contenders that are in the running are Wes Streeting. Obviously, he's been supportive of Burnham, and there might be a degree of Burnham wanting to make sure that he gets the top role. He is probably quite a market-friendly option, I think. Difficult to know just yet. The thing is, just going back to your previous point, Burnham doesn't have the post of Prime Minister yet.

13:00He doesn't really have that many policies. And at the moment, he doesn't have a Chancellor. So I think any Chancellor is going to be taking the direction from the policies that he starts to talk about over the next few weeks. Pat McFadgen is another runner as well. very well qualified in Treasury. He was the working pensions minister. So I think probably Wes and Pat McFadden are probably the least bad options. And why do you say least bad? I think we're still, just like Rachel was saying, we're still concerned about growth. And what we're not really seeing in terms of policy from Burnham is that he's really focused on growth.

13:49And I think for me, low growth means slightly lower regulation, lower tax, and I think that's the opposite that we're hearing, and lower... Judith's line just dropped out there. We'll get Judith back very shortly. 85058, your thoughts, if you have a view, in response to Rachel and Judith's thoughts there, if you've got your runners and riders for the next Prime Minister, the next Chancellor of the Exchequer, if there is indeed going to be another Chancellor of the Exchequer coming up. Rachel Reeves in post at the moment. But this morning we are understanding that if Andy Burnham becomes Prime Minister, he's expected to replace Rachel Reeves as Chancellor, offer a more junior Cabinet position as well.

14:34So who knows? A long way to go on a variety of things in that area. Rachel, can I ask you a little bit more then about Tiny Box, about how that economy is doing, that whoever is Chancellor in a few weeks' time or a few months' time, they're going to be looking at what's going on in the economy right now, how businesses like yours are getting on, where confidence is, where confidence isn't. Just tell us a little bit about what it is you do at Tiny Box and who you serve and how they're feeling at the moment. So our business model is actually really interesting as a national barometer of how the economy is doing.

15:17And the reason for that is because we have about 150 ,000 customers right across pretty much every sector. We don't sell to any particular sector. So our business model is unusual. We have tech customers, food business customers, hospitality, retail. We even sell boxes to things like Bionic Arms or Bionic Arms companies. And what we see on our website is as soon as there's a slight dip in the economy, our web sales will go down. And so we often know when there's a recession coming or a downturn in the economy, even before it's announced. And, um, and I'll often sort of sit there, you know, I might see a dip for a few days and I'll sit there thinking what's wrong with our website?

16:07Uh, are we doing everything correctly? Are our Google rankings okay? And then, uh, I'll sort of reach out to a few other businesses and see how they're doing. And then over the coming weeks, I'll, I'll become aware that it's actually the economy and, and not us. And so what, what's it all telling you at the moment? How are sales this week compared to a few months ago how's this year been oh so this is the bit that's interesting because come february uh where sales were bad uh on the website and and you could tell that everyone was spooked with iran about the uncertainty uh you know people just pull back on spending as soon as there's any kind of uncertainty and and we see companies just stocking less packaging, simple as that.

16:58But what's been interesting in June is there's been a sudden uplift. And I don't know if it's due to the World Cup. I don't know if it's people just bored of holding off and just waiting for things to happen. Yeah, there has been a sort of mini boom. Could it be that the oil price has actually, you know, come down to below$80 a barrel when And we've spent much of the time since the end of February talking about it being 80, 90, over$100 a barrel for a decent chunk of time as well. I'm sure that will have some impact, but that certainly won't necessarily help very small business or cottage industry, you know, where some of our revenue comes from.

17:44So I think it's just, you know, a bit of sun, a bit more buoyancy and just a bit of consumer confidence. Just of I think it's the kind of the British mentality, isn't it? Well, there's so much bad news. Let's just get on with it. That's what it feels like. And it's interesting, Rachel, for all you know, when we kicked off the show talking about latest developments in government and you were reflecting what we've heard from many businesses. over the last year or two about policy decisions that have been made by this government. Yet, there can be much, much bigger things going on worldwide. It could be something like the weather here in the UK that can actually override a lot of that.

18:31And is there a sense that if the government just kept things as they were for businesses and there was a confidence that you weren't going to necessarily have a major change to what you're doing, tax-wise, regulation-wise, that there might be a sustained period of some decent growth? I think that that's part of the problem, if I'm honest. There has been no stability time. You know, not only has it been the tax implications for businesses, the workers' rights bill has just added to the mayhem. and GDPR legislation, European legislation. There's just been so much thrown at the smaller businesses.

19:21And a lot of the changes, even the government doesn't know what's involved. We've seen that right back from Brexit where changes have happened rapidly. You go to the government for advice and they don't know themselves. It took us probably a couple of years to be able to get goods into Europe post-Brexit because the carriers didn't know what they were doing. The laws applying to each individual country in Europe varied and we just see the same each time there's legislation. It's just not joined together. Plenty more to come from Rachel and from Judith. We've got lots to talk about, a heatwave as well.

20:04How's the temperatures this morning, Rachel? It's lovely here. I love the heat. Right, that's one. I'll put you in the column of loving these temperatures. Is it still this time of the morning? Where exactly are you this morning yourself? Not just your business, but where are you? I'm in Crobra, but we live down a single track road and it's just beautiful. The garden's beautiful, the birds are singing. Yeah, I love it. Where's that, East Sussex, is it Crobra? It's East Sussex, yeah. OK, right. So delightful weather report from East Sussex this morning. What is on the cards for the rest of the nation?

20:44Here is Darren Betts with this crucial BBC weather forecast. Hello there. Good morning. No thunderstorms to start with this morning. Today is going to be dry and sunny with light winds just about everywhere. There's going to be a bit of cloud in the far northwest of Scotland and at times coming into Northern Ireland, which could bring the odd light shower towards the end of the day. temperatures in Scotland and Northern Ireland not quite as high as they were yesterday comfortable 24 or 25 degrees but it will be hotter more widely across England and Wales where we have this red extreme heat warning from the Met Office for today and Thursday for parts of southern England south east Wales and the south Midlands here temperatures will be 36 to 39 degrees over the next couple of days smashing the June temperature record but quite widely across England and Wales today temperatures will be into the low to mid-30s.

21:33Darren Bett, 5 Live Weather. So there we go, let us know how you are getting on with the weather last night, your plans for the next few days. Are you checking in with family members? Those might need a little more attention, a little more focus on what's going to be happening in the heat, kids, grandparents, whoever that might be. What plans are changing? Which plans are staying the same for the coming days? Have you had one of your schools near you closing? Is that impacting how the day ahead might look for you today, tomorrow with those red alerts in certain parts of the country? We're going to talk more later in the programme with the boss of a store in Essex, which is closed today due to the heat.

22:19So some having to make changes on the back of that. Just give us a bit of a weather forecast. How was the night? How are you feeling this morning? Are you enjoying the heat as much as as Rachel does in East Sussex at this time of day. 85058, do let us know how the weather is impacting you this morning. Let's check in with the very latest in the Middle East. I mentioned the oil prices have come down a fair bit. I've been talking about that a lot in the recent week or two. How a barrel of Brent crude now, this morning, I look at it, and it's around$76 a barrel. We spent so much time talking about it being much, much higher than that in recent months.

22:58Things have changed, of course, in the last few weeks around the Middle East. But we've been speaking a lot over the course of the war in Iran about the seafarers that have been stranded in that Strait of Hormuz since that waterway was largely blocked by Iran at the end of February. And yesterday, the International Maritime Organization announced an evacuation plan for the 11 ,000 people still stuck there. So although we're still awaiting details on that, it's hoped that operation will bring to an end months of distress for seafarers and their families. Something that we've heard about from Sasha Mayer, who's General Secretary of Nautilus International, the Seafarers Union.

23:35Sasha, good morning to you again. Thank you for joining us. Good morning, Son. Thank you very much for having us on the show again. So just firstly, Sasha, what do the changes, the agreements that have been made between Iran and the United States, It's the opening up slightly, largely, depending on your viewpoint of the Strait of Hormuz in recent days. What has that meant for those seafarers in the area? Yeah, that's a very good question. We really hope this situation is changing now for good. There is, as you just said, still a lot of things that are not clear yet. The agreement between the USA and Iran in itself is not something that we and our members already believe.

24:36it's the big change because so many times over the last months there have been talks of agreements, there have been talks of opening the straits and then within a few hours it could be all different. It has been all different. Has there been a change in recent days? There's an interesting piece by our colleagues online, BBC Verify, who said at least 172 vessels have crossed through the Strait of Hormuz since the US and Iran signed a deal aimed at ending the war, including 42 ships on Saturday alone. So are you hearing from your seafarers that things are moving more? Yes, we hear the same. Vessels are moving through the straits.

25:28But what we also see and hear is that vessels are moving towards the straits, even when they were stuck just outside of the strait itself. So things are definitely moving. what is the main change, but I'm saying it a bit carefully, at this moment is that the International Maritime Organization of the UN, the IMO, has now confirmed that they have an evacuation plan in place, which is starting up to evacuate the seafarers, which is basically to get the vessels through the straits. Is that what that means? So for many, an evacuation might, you know, sort of you might have this image of people, the individuals leaving the place where they are and being taken to another place.

26:25Is that what we talk about with this evacuation or is it just a focus on getting the people who are stuck there and their vessels out of the strait? Yeah, it's getting the vessels out of the straits. It's not individual evacuations of people, but the focus of the International Maritime Organization is very much on the people, on the seafarers who have been stuck there, including our members. But the plan, and as I said, a lot of details have not been confirmed yet, But the plan is that vessels are being contacted for an orderly transit through the straits. The government of Oman is playing a key role in that.

27:17We're a bit careful because the news that came out of Oman was also including that ship owners still have to do a risk assessment before transiting and they will still have to ask the local authorities whether indeed transit is possible. So there's a lot of... There are still a lot of details that we don't have information about yet. So, Sasha, what is the difference between the Strait of Hormuz opening up a bit and ships leaving as they can and what is being labelled an evacuation? Yeah, the difference is that the IMO is now confirming that it's safe. We, as international trade union movement, including Nautilus, my union, are part of the IMO.

28:16We believe in the multilateral organisation. in this multilateral organization, having done everything they could to make sure that transit for the people, for the seafarers, will be safe. So it's not anymore only parties being at war confirming things that the other party in a few hours may or may not contradict. and while in the meantime war actions were imminent the whole time, there were still drones, it was still a pretty stressful situation. It still is. I can imagine. But the IMO is the party that we've always said we want their guidance. Now, I'm pretty sure that the IMO in the next few hours and days will come up with all those necessary extra details.

29:16And one of the details that we really want to know more about is the mines. Because only days ago we heard about mines indeed still being active in the zone. So there needs to be a plan for the clearance of the mines. And also what's good about what we have heard is that it will be an orderly transit. Ships are being put in a queue in order to avoid collisions because there's quite a danger of chaos. Sacha Maher, thank you very much for that update this morning. It's one for us to keep checking in with you about as perhaps that moment comes for those 11 ,000 people who've been stuck in the Strait of Hormuz for so many months on board those vessels.

30:06will be able to get those vessels through and out. But, of course, it's a big process needed for that. Sasha's implying that particularly with the questions around the mines that may still well be at the bottom of the Strait of Hormuz causing issues for vessels leaving the region. So that was Sasha Meyer, General Secretary of Nautilus International, that union for those seafarers on board the vessels. The ultimate cookout starts with the ultimate ingredients. At Whole Foods Market, no antibiotics ever, burgers and kebabs are prepped and ready to throw on the grill. Fire up a juicy ribeye. Grab creamy potato salad and savory flatbreads from the prepared foods department and round it all out with 365 brand condiments, chips and dips at everyday low prices.