Hit the brakes

26:58For example, we have 20 staff in all areas of the country. So to provide placements would be a logistical nightmare. And Simon says the government needs to give incentives for small businesses, particularly in the service as well as hospitality sectors to take placements in addition, regulation, health and safety, etc. mitigate against providing young people with short-term work. Thank you very much for that. Keep your thoughts coming. 85058. Before we go to the news, though, Judith, we've touched on that speech from the Chancellor that's going to happen later this morning. I imagine a lot of investors are going to be looking very, very closely, a lot of businesses, probably everybody, because this is going to be the first time we really see John Healy's plan for the economy.

27:41Yeah, I can't wait, actually. We've got to be realistic. The budget is on the 28th of October. So I'm hoping he's going to say some encouraging things and give us a little bit of detail. But I suspect most of it's going to come later in next month. But we want to hear the detail. We want to hear about the big E-word, energy prices, and what he's going to do about that. And we want to hear about some of the stuff we just talked about just now, about regulation and employment and how we actually loosen the tight grip that we've got at the moment where it's actually quite difficult to employ somebody.

28:15So, yeah, all those things, please. All those things, please, Chancellor. I genuinely, I know I've mentioned this before on Wake Up to Money, I once had an anxiety dream that I was the Chancellor and had to deliver the budget. So he has all my sympathy. Yes, but one of the things we know he's going to unveil is a£150 million fund for companies in the north of England. This is part of that plan to generate more economic growth around the UK, to unlock private investment, to support innovation, to create new jobs in areas outside of, as Sarah was saying, the Midlands and London. Is that something that you would welcome?

28:49I think we'll welcome investment into any area of the country, really, be it outside or inside of London or the Midlands or where else. I think what businesses need are just some stability, some flexibility. If there's investments into incentivizing businesses to invest, great. But let's also get some real stability so you can predict what you're actually investing into. September's always busy. Whole Foods Market can help. Their September Stock Up event makes it easy to load your pantry and freezer with flavorful, nourishing food. Even better, there are hundreds of sales. Get dinner going with canned soups and veggies.

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30:12Wake Up To Money with Felicity Hanna. Good morning. If you're just joining us, we are talking about first jobs on Wake Up To Money this morning. A new report suggests that the confidence, the skills you develop in your first job can have a direct impact on what you're earning by your mid-30s. I'm loving Wake Up To Money listeners' first jobs. So many of you sharing so many great, sometimes kind of exploitative roles that you did. Jackie says, morning, I worked in a cafe in 1976 and was paid three pounds for eight hours work. Slave labour and I moved on and found another. Let me see, somebody else says, I have a name, Michael in West Sussex says, my first job was in a factory taken simply to fund a year of backpacking, but it taught me lessons that shaped my entire career.

31:01I worked hard to get my own area running efficiently. And then I used the time I created to observe, ask questions and learn how other parts of the factory operated. That curiosity led to more responsibility, better pay, and an even greater hunger to progress. Keep your thoughts coming this morning. I am enjoying these. 85058. If you want to send me a text on WhatsApp, you can message me on 08085 909693. And you can use the hashtag WakeUpToMoney on social media. Get in touch. Join in the conversation. Share your first job. And not just what it was, But what, if anything, you learned from it? Now, let's talk about what has been probably one of the biggest news stories, business news stories, breaking over the weekend.

31:45The UK's biggest carmaker, Jaguar Land Rover, is expected to formally announce job cuts this morning, reportedly as many as 4 ,000 posts across its worldwide operations. In August, it reported a large drop in profits. That, of course, was almost 12 months after a cyber attack which halted production at its plants for more than a month. It's not just that, though. JLR's also got to deal with increased tariffs in the US and what it is calling evolving global market conditions. Now, it's not just a direct employer of more than 30 ,000 workers. The company's supply chain supports a further 100 ,000 jobs, many of those in the West Midlands.

32:26Let's talk to David Roberts, who's chairman of EvTech Group in Coventry, which is one of the UK car industry's bigger component and engineering suppliers and indeed a supplier to JLR. David, good morning. Good morning. I mean, this must be very, very worrying times for you. It's a very worrying time and particularly for the families involved in this because, you know, a lot of them have partners in automotive and they'll have got mortgages on the assumption these jobs were long term and some a second, even third generation. So that's what's at stake today. So, I mean, it's very significant. It sounds like it's a done deal that the company is going to have to pivot in response to that cyber attack and the impact that had, not to mention changing market conditions.

33:16What does that mean for a business like yours and for the many, many other businesses and that 100 ,000 jobs all feeding into this giant company? Well, just to correct you, Felicity, it's more than 100 ,000 jobs. It's approximately 180 ,000 jobs in the direct automotive chain. And we're all faced with the same headwinds, really. We've got Chinese vehicles taking an increasing share of markets all over the world, particularly China and now the UK. We've got all the tariffs and trade friction, of course. We've also got the highest electricity costs in the developed world, which is a real problem.

33:55And actually, there's another problem looming on January 1st, because we haven't yet got a resolution on what's called rules of origin with the EU, which will affect quite badly if we don't solve it, our trade with the EU in 2027 and beyond. So this is a real issue for the UK. Automotive manufacturing is really important. The wider automotive employment is over 800 ,000. That includes aftermarket and sales, of course. But it's a very large sector for the UK, particularly in the West Midlands and particularly in the northwest. So we really need some support and help from government. And what really matters is the timing of that support.

34:40Well, the business secretary, Jonathan Reynolds, has ruled out direct intervention. So what should, what can government do, especially a government that we know is facing its own rising borrowing costs? What can it do in response to these job losses? Well, I think nobody's really asking the government for a penny. What we're asking for is some help on converting the supply chain, particularly for British owned suppliers, into sectors where there is growth and order books. That's particularly in the aerospace sector. Airbus are doing incredibly well. And also in the defence sector, which obviously has been big news in terms of potential economic growth for small companies.

35:21That's industrial policy. That's not a bailout. And it's way, way cheaper than any benefits bill if we get it wrong. So I think we want the government to help companies transition on less dependency in the automotive sector, more into the aerospace and the defence sectors. And we know that that's part of what the Chancellor is sort of hoping will happen with that increased defence spending, that those SMEs, those smaller businesses, will get a greater slice of that pie. Are you seeing lots of pivoting and repositioning among the many companies that have previously been so dedicated to the automotive industry?

36:09We're definitely seeing movement towards it. The road to get transition and get aerospace qualified is quite of a challenging road. It typically takes anything from two years to three years to get the required accreditation, and it should do, by the way, because these are parts that go into aircraft that fly. However, there is a way to speed that up, And one of the challenges we're going to face, and the tier twos and tier threes, the much smaller suppliers face, is if this takes two, three years and we have a falling automotive demand in the UK, and we will have a falling automotive demand in the UK, there's no question about it.

36:49You know, how do we fund that period while we transition, particularly when banks may take a more negative view on the automotive sector? What should the Chancellor John Healy be outlining? He's going to talk later about what the government has planned for UK businesses. What can it do then to support, as you say, an industry that's facing so many different headwinds, many of which are global and our government has relatively little control over? I think there's some very specific things they can do. They can certainly accelerate help on electricity costs for industry. The British Industrial Competitive Scheme announced only kicks in next April, and it's limited to access.

37:36A lot of companies will not be able to access that source of funding. The government announced in July at Farnborough, 100 million aerospace supply chain. Not one supply has received a penny of that yet. It just sits in consultation every month. And that's a month lost for qualification time if we don't get it back. And so these need to be deployed this autumn by the government, these kind of measures. Have you had any conversations with government? Is there any way to feed your thoughts through to them? We have a small group of what I call key, large automotive suppliers. and we're just starting to consult with the government about actions they can take to help.

38:21Because remember, a lot of the jobs here, if they go, they go, people leave the sector. And these are jobs with real skills. They take years to build and it's easy to lose them. A qualified toolmaker, engineer, four or five years in the making, if that capability goes or retires or leaves the sector for good, then it's gone for good, I'm afraid. Do you feel like this industry is going for good, is changing, is succumbing to that huge number of influx of Chinese vehicles? Jaguar Land Rover has been a jewel in the crown of British business, particularly in the Midlands. Do you have concerns not just for JLR, but for the wider UK automotive sector's future?

39:11Oh, we have concerns for the European car industry, not just the UK. Contraction is coming, no question about it. When you see the next wave of Chinese vehicles in 2027, you'll see an even bigger jump in technology and design. So the only question left really is how do we manage that contraction? Can we transition to aerospace and defence? Or are we just going to watch it happen? And that Whitehall decision in the next few weeks is going to happen whether we realise it or not. David Roberts, chairman of EvTech Group in Coventry, thank you very much indeed for joining us. Thank you. Thank you. Well, JLR wouldn't confirm the number of posts which will go, but it said it has to adapt to evolving global market conditions while targeting approximately£1.7 billion of savings over the next two years.

40:02And to achieve that, it said it had to further simplify its organisation and improve efficiency. Listening to that, still with me, Jesper Woodfrostrop, Chief Executive of the customer service outsourcing company Moneypenny, and Judith McKenzie, Partner and Head of Downing Fund Managers. Yes, but I saw you nodding along, actually, when David was talking about things like energy costs and the pressures on businesses. I mean, it is undeniably an issue that there's a lot of headwinds directing themselves at a lot of British industry. The government surely can't fix everything, can't subsidise everything or provide the tax breaks that will help every single sector to thrive?

40:42I think the government can create a great platform for businesses to invest and grow. At the energy point, I came to the UK in 1995 and actually looking at that story yesterday, I remembered it was so inexpensive to use energy in the UK, even for residential use, let alone sort of industrial, And how that's just fundamentally changed over the last 20 or 30 years is crazy. We need energy that is affordable to make things in the UK and continue to have our industrial sort of sector grow. And I think it is just too costly, too inflexible. We need stability for business growth. That's what our clients tell us.

41:28They want to invest. They want to grow. They want to make commitments. but things like minimum wage going up, national insurance going up, more regulation in hiring people. To our point earlier, like what decision do you go through before you sort of hire somebody? It's just hard. And the point before, let's speed up the time it takes from making a decision to react to the sea action. Well, let's talk about energy bills a bit more, actually, because we have been thinking, haven't we, about Britain's energy supply and its security heading into winter. There's been a lot of conversation, particularly towards the end of last week, about whether the government will soon approve the Jackdaw gas field off the coast of Aberdeen.

42:08Its owners say that they could start supplying gas this winter if it gets the go ahead this month. And on Friday, I spoke to the chief executive of the energy firm Centrica, which is, of course, the British gas owner, Chris O'Shea. He told me Jackdaw wouldn't bring down bills, but argued that producing more gas here could make Britain less reliant on imports. The UK imports over 50 % of its gas, so any addition to domestic gas will reduce our reliance on imported fossil fuels. So it's got to be good. It wouldn't lower the cost materially, but basic economics would tell you that if you've got a fixed demand for a product and you increase the supply, the price should move.

42:46But it wouldn't be a material movement in price in the UK. But remember that the government taxes North Sea oil and gas production at 78%. So whilst it may not move the UK consumer bills materially, it does give the government a lot of revenue and it's up to the government to choose what it does with that revenue. A jurist says that it could provide 6 % of the UK's energy supply at its peak. Environmental groups like Greenpeace, like Uplift, they say it's more like 2%. Is this a significant environmental cost with a fairly minor outcome at best for our energy security? I think we all want to reduce our reliance on fossil fuels but to the extent you have to burn fossil fuels then it's cleaner to the gas that you produce domestically in the UK is cleaner than the gas that you import with LNG.

43:30Now we own the UK and Europe's largest LNG terminal but when you produce that gas in the US or in Africa or Australia whatever it is you incur carbon emissions to turn that gas into liquid and then you incur carbon emissions when you transport that gas on a ship and then you incur carbon emissions when you effectively heat the gas back up to turn it back into a gas. So whilst when you burn the gas ultimately it's the same carbon emissions. The UK has capacity to store less than 10 % of the gas that our friends in Europe has. So France, Germany, the Netherlands, they can each store around 100 days.

44:03The UK has capacity to store 12 days of average or around 9 days of peak winter demand. Ruff, the gas storage facility that we own in the North Sea, provides half of that UK gas storage. And Ruff, we haven't injected any gas into storage for that over the summer because the summer prices have been at the same level as the winter prices or even higher. And the way the model used to work is you would buy it in the summer when it was cheaper you would put the gas into storage you would take it out in the winter and that would cover your operating costs and hopefully give you a bit of a profit but but the the gas price split between winter and summer now has has disappeared that has actually inverted so so the uk has very limited gas and storage europe also has the lowest levels of gas and storage for at least 13 14 years so so we are quite exposed now the question is and will we see difficulties, supply difficulties over the winter?

44:55And I'm not sure, but given that we import over 50 % of our gas, people talk about getting off the rollercoaster of international fossil fuel prices, which sometimes sounds a bit like hyperbole to me, but if you do want to get off that rollercoaster, it makes more sense to have gas in storage. And if we had Ruff full of gas, it's guaranteed that the price would be lower for consumers over the winter. So what do you need to get Ruff full of gas? So the UK, so rough is like a big battery. So we should ignore whether we use gas to heat homes. Gas is what we use to produce power when the wind doesn't blow and the sun doesn't shine.

45:28And during the winter, there's definitely less sun in the UK and often there's less wind. And so we need gas to generate electricity. And the UK has chosen what they call a cap and floor method, which basically your returns are capped. So there's a floor in your return. So there's a minimum return you can make. There's a cap on your return and that's guaranteed through regulation. That's the UK's chosen structure for long-duration energy storage. And all we're asking for is RUF to be included within that existing framework. So you want government support then to allow you to store more gas in RUF?

46:01Well, we want the government's chosen framework to provide gas, to provide energy security through long-duration energy storage, to simply be extended to RUF. We don't want any government money. We stand ready to invest£2 billion, create several thousand jobs. But Ruff made a£57 million operating profit in the first half of the year. Why on earth do you need state support then to use it, to fill it? Yeah, that was very much unexpected. The reason that we made the profit was simply that we're taking out gas, that we, I mean, indigenous gas effectively. Ruff's effect was originally a gas production field.

46:33And as we blow it down, as we take the remaining gas out in order to be responsible operators, we sell that gas. We made a profit on that gas. Had that gas been injected as storage and then withdrawn the same quantity of gas, we would have made a loss. So the profit that we made in the first half was very much unexpected. But it's not sustainable. So that was Chris O'Shea, the chief executive of Centrica, a department for energy security and net zero spokesperson that said, look, gas is sold on the international market. The price is not connected to our storage capacity, which was only 5 % of our supply last winter.

47:07and they said we remain open to discussing proposals on all gas storage sites as long as it provides value for money for taxpayers. Judith, we've heard though from so many businesses on Wake Up To Money this morning, more than even we usually do. And clearly energy costs are a big factor in how they're feeling and how they're spending. Do you think energy security factors into decisions over whether the UK is an attractive place to invest? Massively, yes. I think this is the biggest thing that investors are focusing on at the moment. So, if we can solve this conundrum, then actually, I think markets would do a lot better.

47:43There are some good companies on the market that are beginning to get invested in and provide solutions, but we need more of it. OK. Well, things that we also need more of, potentially more tickets for the biggest event of the year. It's nearly a thousand years old. It's 70 metres long. It's already generating two and a half million pounds in ticket sales. It is the Bayer Tapestry, proving to be one of the biggest cultural draws London has seen in years. Some visitors have been fortunate enough to get a preview. It is really good seeing it because it's such an immaculate piece of art. So fascinating and for it to be alive for this long, it's just amazing.

48:26It's so good. I love that. That's a great review, isn't it? For the rest of us, it goes on public display at the British Museum later this week, so from Thursday, and will be there until July next year. King Charles has hailed the unprecedented loan as the best possible symbol of the closeness between the UK and France. And it's helping businesses not just in London, but potentially nationwide. Alan Aklum is the owner and director of Aklum Coaches, which is a coach tour operator based in East Yorkshire. Alan, good morning. Alan, are you there? Yes, I'm here. Good morning. Good to have you. Good morning, you're right.

49:02You are somebody who managed to get your hands on some tickets. Yeah, luckily enough, our tour team was hot off the mark and saw this coming and got in there pretty quick. So, I mean, what kind of ticket supply do you have and what kind of demand? Yeah, so obviously with everything, you don't want to take too many tickets. So we've got a few hundred tickets to start with and the demand straight away wasn't instant. But then as soon as the news was coming and everything then came out, then they built it, then they went very quickly. And we then ended up with about 200 on the waiting list. And we're now waiting for the next lot of tickets to be released.

49:42And that's, I mean, you're a fair stretch from London. So this is people who are willing to travel that distance just to see the tapestry. Yeah, well, we'll be in and out of London every weekend, really, with different events, either concerts at Wembley or Mamma Mia at the O2. So this isn't sort of a one-off. This is happening all the time. And it's not just, I mean, the Bayer Tapestry then, that's just sort of the latest event. You do coaches for all sorts of large events. Yeah, we cover a lot of different events. I think about 2018, the Terracotta Warriors ended up over in Liverpool and that was good for our industry.

50:22And Harry Styles has been great for us this year. And then obviously last year, we was lucky enough to have some tickets for the Oasis concerts and things like that, those events that are good for our industry. I'm still bitter about Oasis, but I haven't even tried for Bayer Tapestry tickets yet. Is this something that you think will be ongoing demand? Do you expect that for as long as it's open, it's on display, people will want to go and see it? Or is this just sort of the first rush? No, I think this will be busy for the full time that it's on display. We would take as many tickets as possible to cover.

50:59Obviously, it looks like the demand will be there. What do you think it is that has sparked so much interest? I just think because of obviously the history of it the length of time since it's obviously been in this country. I think we are, especially in this area where people will travel to events and they will travel to these sort of things. We've been talking a lot about confidence in the economy and wake up to money this morning. Businesses kind of perhaps feeling the pressure and whether they feel able to recruit and yet you also then, you get events like this where people are willing to spend money and It's never cheap, is it, to get to London, to stay in a hotel, to get tickets to see anything, whether it's, you know, Mamma Mia or a gig or something like the Bayer Tapestry.

51:48And people are clearly still willing to spend on those special events. Yeah, it is tough out there, isn't it? I think everyone would agree that it's difficult. We've obviously had the fuel hikes this year. And you just have to keep, I guess, as a business, trying to find different ways to keep going and change your business. But when these things do come along, when your big concerts come along, your Harry Styles or your Oasis or Bay Tapestry comes along, I agree, people do seem to have the money for those things. And what kind of, you talked about summer and the busyness of summer, do you think that when people are maybe feeling the pinch a bit more or lacking spending confidence, do they staycation more?

52:30Do you see a boom or do they cut back? Yeah again I think the same I think with the troubles in the Middle East I think a lot of people maybe have stayed a bit more a bit more local this year and with the good weather the summer that we've had has encouraged people we do a lot of day trips and our day trip numbers are as high as they've ever been and I'm sure that is down to probably people staying at home and this great summer we've had Are you expecting to get to see the tapestry yourself or will you be very much in the office? We'll see I tend to only get to it. And if we've got some spare tickets, then we'll go.

53:04But if we can sell them, then we get them sold. It's very true, isn't it? The pressure of running a business like yours. Alan, thank you so much for being with us on Wake Up To Money. Thank you. Alan Ackland there, owner and director of Ackland Coaches, which has a waiting list of 200 to go and see the Bayer Tapestry. Really briefly, yes, but we'll squeeze you in. Is it something you're going to try and go and see? I should, shouldn't I? I feel like we all should. Yeah, I will. I will. I haven't even looked at it yet, but I understand you have to sit in the long line, sort of really devote time to do it.

53:36So, yes, I'll try. Yes. And I mean, it's clearly wonderful. It's inspiring those kids. Thank you so much. Thanks to everybody who's been part of Wake Up To Money this morning. Thank you, Jesper Fostrop, who's chief executive of Moneypenny. Thank you to Judith McKenzie from Downing Fund Managers. Thank you to you for all your messages. One more from Martin. paper first jobs paper round at 12 obvs working for my mom's catering company waiting tables pot washing in the local pub these are all classics aren't they thank you for your company that is it for wake up to money there's nothing like the american express platinum card find out your welcome offer after you apply which could be as high as 175 000 points learn more and find out your offer at american express.com slash explorer dash platinum terms apply self-directed investing trading, full-service wealth management, automated investing, financial planning, thematic investing, retirement planning.

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