Fit for a king

27:49I mean, we're talking about between 30 % and 35 % of any UK invested money in a pension or long-only equity fund is in US stocks, and that's almost one and a half times what we invest in domestic UK equity. So we have a lot of exposure just as an institutional asset class. From the Carmignac perspective, we're always looking for where the growth opportunities are. And of course, the US is a sizable opportunity because there's the technology sector, there's AI, which is a big part of it. But also as an institution, we look towards the emerging markets as part of the growth story. So we have a fair amount of investments in the US, but also the emerging markets, which have some very interesting stories to tell as well.

28:31Simon, you mentioned that after Brexit, it needs to look more globally. What do you make of the state of play at the moment and the UK's relationship with the European Union? Is that one, does it make a difference to you if that becomes closer? Of course it does. Most of our stock of our advanced materials are based in the UK. So shipping to Europe has become much more of a challenge in the post-Brexit world. So the closer we can move to Europe, certainly the better for our business. We still do an awful lot of business in Europe. We have businesses in France and Germany that help us facilitate that.

29:15But we're still shipping from the UK. So I think it has improved, certainly under the current UK administration. Their aim seems to be to get closer to Europe. I think potentially the challenges that we've had with the US has hastened that a little bit. And from a business perspective, do you feel like, you know, when you're expanding in America, as you've described, does that make up for those barriers that were created with the trade with the European Union? Of course, our focus has been on the US. As I said, a lot of our big customers are there. I don't think it did make up for it. If you go back three or four years, certainly the initial kind of Brexit challenges were such that it did hamper business.

30:07But I think a lot of businesses like ours that are true export businesses, and 90 % of our business is export, I think that Europe is just so important that you overcome any hurdle. And we're competing with everyone else in the same way. Simon, thank you for your time this morning. Good talking to you, Simon Kenny, Chief Executive of Advanced Materials Manufacturer. Good fellow. 85058, want to get in touch with us, of course, to let us know your thoughts on all we are discussing. We're going to be getting into the business of running a little bit later. Are you tempted by those£450 shoes that won't quite guarantee you a world record in the marathon distance, but will put you on a par with those that have achieved that over the weekend because that was what they were wearing and the share price of Adidas was up a percent yesterday, They're seemingly on the back of it all.

31:07So we'll tap into what that means for the shops on our high street. The next time you go out for a jog, what might you be putting on your feet?

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32:19Wake Up to Money with Sean Farrington. Good morning to you. It is Wake Up To Money live on BBC5 Live. Thank you for being with us this morning. 85058, do keep your messages coming in to us. We are going to be getting into our latest political interview in the run-up to the elections next week. So millions of voters heading to the polls on Thursday the 7th of May. In the biggest sets of elections since the 2024 general election, voters in England will be electing local councillors and mayors. Those in Scotland and Wales will elect representatives to their national parliaments. The last decade has been dominated by economic uncertainty.

32:57We've had some unprecedented crises. Concerns about the cost of living still very apparent in many of the stories we're talking about today across all communities. Something brought into sharp focus in recent weeks, months, given the ongoing war in Iran. So here on Wake Up To Money, we've been very interested to hear what the major political parties are going to be. telling voters in the coming weeks about their plans for businesses, for households, what the economy will look like in the UK, what trade will look like as well. So this morning for the next 10 minutes, we're joined by Samel Stride, Shadow Chancellor of the Exchequer, Conservative MP for Central Devon.

33:32Samel, very good morning to you. Good morning, Sean. Thank you for your time this morning. Something is a constant topic of conversation on Wake Up To Money is the state of the nation's finances and what that means for big spending decisions. And the pension, the state pension comes up a lot. You said in 2023 when you were pension secretary. So you were right on top of that brief at the time that the triple lock, the idea that the state pension would go up by the highest of prices or wages or two and a half percent, whichever one of those was the biggest increase. You said that that policy, which is in place, was unsustainable in the very, very long term.

34:14Has anything changed in your thinking about that? well in the sense that in the very very very long term some of these things of course if you don't get growth in an economy do become unsustainable that is the case but the key to this and protecting the triple lot is to get the economy growing and if you do that then you can certainly afford the triple luck and it's important that we do i think sean because we too readily forget the fact that under the last labour government we had the fourth highest level of pension of poverty in Europe. And if you cast your mind back sort of 15 years or so, it was very common to read on front pages of our newspapers of pensioners, you know, suffering in deep poverty.

34:54The triple lock has been part of the reason why we've seen pensioner poverty reduce. Pensioners, of course, can't change their economic circumstances that easily, go out and get another job or work longer hours and so on. So they're rather stuck where they are. So I think it's very important that we do stand up for our apprentices but we mustn't forget younger people as well so you know if you look at the things that we're saying as a party reaching out to younger people who didn't benefit from the increase in property prices over the years got stuck with a low growth low real wage growth economy we're saying we can get those younger people's taxes down we've made important points about that we can help them get on the housing ladder we can increase the skills offer and apprenticeships for younger people we can also reduce the burden of student loans that a lot have.

35:42So things will go across the piece. Yeah, so that's a little bit of the pitch there. When you talk about, you know, having the triple lock, you can do that if you've got the growth. The problem you have, isn't it, is that when you were in charge with your party in government, the Conservatives leading the government for that sort of 14-year period, that growth was only averaging 1.5%. And you have this triple lock policy alongside all of that. And you almost show that you weren't able to achieve the growth needed to have a sustainable state pension at the increasing of the rates you want it to increase.

36:24Well, on the day of the general election, we had the fastest growing economy in the G7. We had near record levels of employment, near record low levels of unemployment. We had real wages growing very strongly for a period of over a year. It is true, of course, we went through a very difficult time. The Ukraine-Russia war saw a lot of inflation imported to our country. But isn't that exactly the point, though? You go through a very difficult time. These are externalities. Well, that's true, but these are external things. What you've got to do is get the fundamentals of the economy in a position that trend growth is much faster than it is today.

36:57And that is about firstly controlling public spending. So, for example, we've got to get the welfare bill down, get people off benefits and into work, we've got to make savings across, for example, the size of government. There are various policies that I announced at our last conference, £47 billion worth of savings. And then you can do two things. One is you can start to pay down the deficit and the debt, which is part of the growth challenge we have at the moment. But the second thing you can do is to start to reduce taxes. But at the same time, I mean, what you're describing, Sir Mel, your line is breaking up a tiny little bit here or there.

37:31So we may, we'll see how it goes. We may have to come back to this. It just broke up a little bit there. But just on that point about borrowing, we've seen UK government borrowing falling to a three-year low. We had the analysis from the International Monetary Fund that gave the impression it quite liked the outlook for the way, the path that the current government was on in terms of borrowing. That stuff is happening already. Well, no, I totally disagree with that. On borrowing, if you look at the plans that we had, the OBR's forecast at the time of the last general election, and compared to what's happening today, this government is borrowing a quarter of a trillion pounds more over this parliament than the plans that they inherited.

38:15But also investing a lot more. Well, where's the investment going into then? Where's the growth? We haven't seen the growth under this government. You know investment takes a long, you know, the point of massive investment. If you have a plant, invest in a big, whatever it might be, a nuclear power plant now, you know you're not going to see that within a year. Yeah, but this government came into power, if you recall, saying it was all about growth, growth, growth. And then they started to destroy growth by putting up taxes on businesses, particularly national insurance, by talking the economy down, all this nonsense about this black hole that they apparently inherited, by not focusing on productivity, but just simply giving in to the pay demands of trade unions and so on.

38:56None of that was about growth. It was about destroying growth. And they borrowed, to my point about the quarter of a trillion extra, vast amounts of money. They spent vast amounts of money that had pushed up inflation, kept interest rates higher than they would otherwise have been, and for longer. And those things destroyed growth. So what a conservative government would do is to bear down on public spending, get that under control, particularly the welfare bill, get people back into work. And then you can start to get taxes down on businesses, which drives growth, and you can start to get on top of the deficit and the debt that keeps your borrowing costs lower, which is very important.

39:29You mentioned that they're getting people back into work. What's the key issue with regards to artificial intelligence right now? Because that productivity question, we've heard for decades that it's been an issue in the UK, and we are starting to hear now of companies take advantage of the very latest in technology, and it might mean they're not recruiting, but they are investing in certain areas and becoming more productive because of that. What's the key issue there with regards to having the jobs available for people with artificial intelligence? Are you worried that those jobs might not be there?

40:08So it's a great question. We know that artificial intelligence is going to have a profound impact on the labour market, but we're not quite sure exactly how it's going to play out. And what that means, to answer your question, is we need a very nimble skills offer so that the labour market can adjust in terms of its skills to meet the shifting sands of that labour market. And that's why we announced, for example, a big pivot away from degrees at the higher education level where students are often studying things that they'd have been better off if they hadn't gone to those universities to study those schools, and doubling of the spending on apprenticeships so that we can have that more nimble skills offer.

40:47The other thing I would say is AI is going to be a big driver, potentially, of productivity gains. And getting back to our discussion about growth, that underpins growth. The big thing is, point here, I think, is that whilst in the private sector, I think the competitive dynamic will naturally drive the take up of AI. In the public sector, we've got to do a lot of thinking about how we drive productivity gains through the public sector, because there aren't quite the same economic dynamics there. And I think that's to do with leadership and how departments are run and these public bodies are run and we're doing a lot of work of that.

41:18Just one other policy that you've talked about is pledging to scrap business rates for thousands of high street businesses. I just wonder about the balance here, not just about business rates but the way high street businesses are taxed compared to online businesses. Do you think online businesses need to take more of the tax burden? Well there always has been this this debate between so-called bricks and clicks, as it's often said. Our view is that it's really important that we support high streets. And that's why I announced at our last autumn party conference that we would take about a quarter of a million high street businesses out of tax business rates altogether.

41:55We're able to do that because we're getting on top of the welfare bill and some of the other changes that I mentioned. But absolutely, we're always having to look at this balance between that and digital services and warehouses and fulfillment operations and so on, because high streets have a value over and above the purely economic. They are about the strength of local communities. We want to go into high streets and witness things that are alive and whole and where we can commune as human beings and all the wonderful things that happen when you have a thriving high street. And that's why we have made a priority.

42:26Do those big tech giants need to pay more tax? Well, we're reviewing the whole area of how business rates work and come the next general election, our manifesto, we will have a lot to say about that. But what I'm saying is, in principle, it is important that we get equity there and that high streets have a particularly important role in the lives of the social fabric of the nation as well as the economy. I mean, within that review, where do you sit? Do you look at it? You mentioned digital services. You know, there's been expected taxes for online companies that haven't materialized in recent times.

43:02Does that need correcting? well the tools that you would use would be absolutely so where you where you've got bricks and mortar you have uh businesses that are paying uh business rates when you have digital uh operations sometimes they don't have a very big uh footprint in that sense so there's this tax due uh on the uh business tax front and therefore you would be led into things like digital services taxes and uh or turnover taxes or different ways of doing it what i'm saying is that's certainly something that we recognise as a party and it's certainly something that's within our thinking and we will have more to say about that in time.

43:36So Mal Stride, Shadow Chancellor of the Exchequer, Conservative MP for Central Devon, thank you for your time this morning. You can see a full list of candidates in your area as well as what each of the parties are telling voters ahead of the 7th of May on the election pages on the BBC News website. Good morning, Wake Up To Money on BBC Fire and Fly. I've got Obi Edgikami with me, Global Equities Fund Manager at Carmignac. Like, Obi, just looking at the, you know, never mind, global equities going into the high street here on the UK and seeing that Claire's Accessories, you know, a name that has been on many a town centre for many a year.

44:15It said it's all its standalone stores in the UK and Ireland have stopped trading. And we've talked about financial issues that that company's had for a while now. It's fallen into administration a couple of times. What does it tell you when a company falls into administration like that a couple of times and still, you know, there hasn't been somebody coming in going, we'll take that, we'll keep it going? Yes, it's a bit of a pretty strong signal that investors and the appetite for that type of risk isn't really there. I think that's partly because the structural issues around the business are sort of unchanged.

44:49I mean, we all really know what's happening at the moment. The high street versus online is the big challenge. And that's not a news story. That's been going on for some time. But also just being innovative on the high street is quite a challenge when online retailers can respond to changing demands, whether that's young people buying different products and services, they can respond far, far more quickly. So this feels like it's another case of the wrong product, the wrong place at the wrong time, and not really sort of moving with the times. And I think we'll see more of this, especially in an environment where the consumer's a bit pinched and interest rates haven't come down as fast as they need to do to allow people to spend a bit more freely.

45:27Emily, we've got Emily McCorkle with us, owner of Low and Slow, barbecue food truck, food business, wider tours, cooking schools based in Derry. Emily, what's the Derry Town Centre High Street like these days? You know, comparing these things year on year, a few years on a few years can often help. Does it feel like it's suffering the way Claire's has? Have you seen different changes of growth? Oh, absolutely. Our High Street is really struggling. We have a great – in Derry, we've got a great council. We've got a great city center initiative. But still, it's tricky. And the hard thing here, I know what Mel Stride was talking about, you know, business rates and trying to lower things.

46:08We've got to devolve government here. So unless there's a lot more support for kind of how Stormont makes their decisions and there's more financial support toward that, like a block grant, there's not really much we can do here. You know, it's nice to hear those things happening, but it's not going to be affecting us here because of the devolved government. Obi, just a quick one on the world of oil. The Brent crude barrel is$109 a barrel this morning, sort of ever ticking up again. And making headlines on a lot of the business pages in the Times, Shell clinches$16 billion deal for the Canadian shale driller.

46:49So this is the energy firm ARC Resources. What's that sort of telling us a little bit about, I don't know, where the oil price is and where investment is going globally at the minute? Well, I think it's an interesting story because the energy, the oil and gas sector is an area of investment that we tend to stay away from, partly because of the opposite of this. For most of us in the UK, it's one of the biggest companies in the UK stock market, so it's important. But we often shy away from it because its choice to pay most of its profits back in dividends means that it's not investing as much as we would like for the future.

47:22So this is actually an interesting rotation, investing in where they think the growth opportunities are going to be. they obviously believe or they're taking a calculated bet that they think oil prices may stay higher for longer and they're trying to take advantage of that. So it's an interesting shift. Right. Given that on the Times business page, there's that picture of Sebastian Sawe, the Kenyan athlete, who ran that world record marathon on Sunday, holding his shoe. Adidas will be chuffed to bits with that. They'll be happy with the share price being up a percent or so yesterday. Front page of the Financial Times.

47:57added a speeds past Nike to marathon podium with 97 gram super shoes. It was a historic day in the world of running, in the world of business this weekend. Yeah, it's fascinating. Sorry, I'll be holding fire one second. History in the making. Under two hours. Nobody's ever done this. They said it couldn't be done. Sebastian Salway is going to break the two-hour mark and historic performance. It's 159.30. Absolutely incredible. So, Obi, not that you weren't as important as the world record marathon there, but just wanted to want to get that in. Move markets. I would have jumped the gun. It wouldn't have helped me get through the marathon.

48:42But, yeah, look, it's a very small move in markets relative to the Adidas share price over the last six months. They've obviously had their challenges with tariffs and global issues. but I mean it's obviously from a sentiments perspective it's a great story. Enough of that context exactly, people when they get through that marathon you know, not fussed about a few what's been happening in the last few months it's just what's happened in the last 12 hours so yeah, small share price move but it has had a big impact, so Sebastian Sarway there broke that record, first man to complete the marathon in under two hours he was wearing these new super shoes from Adidas got us thinking how much are we spending on all of this when I was at that start line not alongside Sebastian Sotterwey.

49:22A few waves back on Sunday, it was notable that there were big, big lumps of something on the bottom of most people's trainers and many of them very shiny and very clean. I hope they weren't wearing them for the first time on marathon day, but there was a lot being spent, I can tell you. I've got Jen Sweetlove with us, who's the co-owner of the independent running shop, Running Free, based in Poole. Jen, good morning. Good morning. Nice to speak to you this morning. How much more have people been spending on shoes in recent times? Well, there's been a really big trend in the growth of healthy and well-being lifestyles.

49:57And definitely people are looking to spend a bit more money on keeping fit and well. And certainly things like the marathon influence a lot of that people spend. Everyone wants to have the latest and keep up with those trends. What's the average spend on a pair of shoes in your shop? Certainly not£450 worth of the Adidas super shoe that we saw on Sunday. but there are similar lower grade shoes. We're probably looking at about£140,£150 average. I mean, that's still remarkable, isn't it, to spend on a pair of shoes that, you know, they do wear out and you're going to need to buy another pair in a year or two probably if you actually use them as much as you intend to.

50:41This is true, but I think what we're seeing is a lot of younger people are now coming into running, whereas it used to be sort of elite club runners, middle-aged men sort of trend these days we're seeing a lot more young people coming in who are perhaps not spending their money quite so much in the pubs and the clubs they're actually going out and taking part in some social run groups so there's a lot a lot of younger generation getting involved in the sport just tell us a bit about this 450 pound pair as as you see it because it is available to be bought by the layperson. It's an expensive pair.

51:21What difference does that make to shoe shopping and retail? Will it have an impact? Yeah, definitely. Like we said, you know, people are influenced a lot these days. You've got on social media, Instagram and TikTok, there's a lot more brand awareness. Obviously, with that comes a trend of also price matching. You know, we're a small, independent high street business competing with the likes of big online companies that can obviously offer those deals a lot more than we can. So we have to offer something a little bit different than those online companies can do. And we do that by offering a service to try and find a shoe that actually fits the individual and caters for what that individual's needs are, as opposed to people going and buying online this amazing shoe, which perhaps doesn't actually really suit their needs.

52:16They're not an elite, super trained, very light, very, very fast runner necessarily. Yeah, that sounds like you're describing me there. Emily McCorkle, who's been with us this morning. a bit of a dark horse herself Emily she's owner of Low and Slow food business in Northern Ireland but also Emily as you were describing you you know you're running even though you might not be fully into it right now Emily just that idea of trends you were talking about minimalist footwear earlier maybe for more like the 10k distance how does a shop persuade you Emily or has persuaded you in the past to to buy with them instead of doing your own research and going online Well, I mean, for me, I think a lot that's really helpful and a lot of the shops are really good this way.

53:02They do a gait analysis. They figure out it's not just about making the sale, but it's about helping a person achieve their goals. You know, what race do you want to run? What distance do you want to run? How does your foot strike? How do we make sure that you have the best possible run with the fewest amount of injuries? And how are you running efficiently? And so I think it's really when the shop is able to look at the consumer, assess their needs, and be able to actually make a match for it. And a gait analysis is a really great way of doing that. A lot of people don't know how their foot strikes and knowing that you can get a shoe that does help, you know, a little bit with the technology, making sure that your foot is landing well.

53:39So, like, I mean, these new shoes, those 450s, they had carbon rods in them that helped to propel, you know, the runner forward a little bit, which, you know, every little bit does help for sure. Interesting. I think it's knowing the shoe and knowing what the customer is looking for, not just going for the highest price tag and trying to persuade them. Jen, shoes apart, what's been the biggest growth for you along capitalising on this trend for spending ever more and younger people getting involved? We're looking at other things as well, like wearables, there's certainly the clothing brands, a lot of nutrition as well.

54:16There's been a big advance in science when you look at nutrition. we've got some great companies what about that I mean gels the sticky floor through the marathon has not been talked about enough there were times where you felt like you were trudging through mud because everybody had chucked their gel packets to the side yeah it's definitely a massive growth area and we've got some great companies down here that we promote as well that we use for that but yeah nutrition is a big thing not everyone likes the gel there's plenty of other different types of nutrition that you can take on board as well well thank you for your time this morning, Jen.

54:50Really interesting to speak to you there about what the consequences that might be. Are you going to be stocking the 450 quid yourself? Possibly not. I don't think we actually can even get hold of it. Interesting. We've got a few others that are slightly cheaper and more affordable. I'm sure. Jen, thank you. Jen, sweet love there. Runs running free in pool. Big thanks to Emily and Obi and to everybody who's been in touch. That's it from Wake Up To Money. Wake Up To Money from BBC Five Live. That's it from Wake Up To Money. You can download the podcast every Monday to Friday, so please make sure you subscribe.

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55:49coverage of the biggest competitions on the domestic and international circuits. It's a fourth week and it's the huge one. Jeez. Woo. Settle down. Sorry, man. Cricket on Five Live Sport. Oh, I've living every ball of this. Listen on BBC Sounds.

56:12Hey there, this is Thomas Jermaine, co-host of The Interface, the show that decodes how technology is rewiring your week and your world. On this week's episode, Apple's CEO is resigning, and we'll look at what that means for the future of smartphones. We'll talk about whether your latest favorite band is actually a secret marketing ploy and how the AI data center boom has finally met its match, public backlash. Listen on bbc.com or wherever you get your podcasts.

56:46Thank you.