In short
BBC “Wake Up To Money” episode focused on the Makerfield by-election victory for Labour’s Andy Burnham, its implications for a Labour leadership challenge against Keir Starmer, and the wider economic backdrop (Bank of England rate hold, inflation, jobs/vacancies). It also covers Scotland’s World Cup match vs Morocco and related “Tartan Army” culture.
Guests (backgrounds)
George Godber, fund manager at Polar Capital; Douglas McNeill, former Treasury special advisor to Rishi Sunak and others (Theresa May, Boris Johnson); Joe DeSilva, director of McGregor’s Hospitality (Inverness) and hotel/bar in Oban; Catherine McLeod, Labour peer and former special advisor to Chancellor Alistair Darling.
Key claims
Burnham’s win signals momentum for a leadership bid; markets may price higher “UK risk premium” due to uncertainty and potentially more bond issuance. Bank of England held rates at 3.75% amid inflation around 2.8% and weak growth/job vacancies. Hospitality faces VAT and youth employment cost pressures; employing young workers is now 33% more expensive.
Notable examples
Aberdeen South by-election—Scottish Conservatives win on oil and gas policy; World Cup fan scenes (nuns singing, Scots in stadiums); hospitality pricing/job impacts; Rupert Lowe/“Restore Britain” noted as not decisive.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOBy-Election Results Discussion
0:00 to 1:02
Analysis of Andy Burnham's by-election win and its implications.
“This BBC podcast is supported by ads outside the UK.”
By-Election Results Discussion
2:52 to 6:15
Analysis of Andy Burnham's by-election win and its implications.
“Also, what on earth is going on in the job market with those vacancies falling to a five-year low?”
Political Landscape Overview
6:15 to 11:23
Examining the implications of recent political events in Scotland.
“And we'll dive into what happened in Scotland with Douglas and Catherine McLeod is going to join us in the second half of the programme as well to look at that in a bit more detail.”
Future of Labour Party Leadership
11:23 to 14:01
Discussion on the leadership challenge within the Labour Party.
“Yeah, and that's absolutely going to be something that the guys, I'm sure, will chew over those elements of it.”
Political Landscape After Harry's Insights
14:01 to 15:18
Discussing the implications of Harry's report on political leadership and future contests.
“I'm sure you've got a long morning ahead as well.”
Economic Reactions and Historical Parallels
15:19 to 17:49
Analyzing the bond market's response, drawing parallels to past leadership contests and their economic impacts.
“I mean, I'm looking at looking at the 10 year from yesterday with a tiny kind of tiny creep up.”
Business Perspectives on Economic Change
17:50 to 19:42
Business owners express their need for economic change and the potential impact of Labour policies.
“And Andy Burnham will want to try and avoid that sort of situation.”
Frustrations with Political Coverage
19:43 to 20:20
Listeners share frustrations about the representation of local political events in national discussions.
“We've heard others in hospitality, Tom Kerridge, the chef who we've had on the programme before, saying similar to Joe there as well.”
Bank of England's Interest Rate Decision
20:21 to 21:35
Discussing the recent decision by the Bank of England to hold interest rates steady amidst economic data.
“But George, have you ever started one of your sort of bits of analysis with a more crass pun than Simon French, friend of the programme, Wake Up To Money regular, has started his with today?”
Inflation Challenges and Economic Dilemmas
21:36 to 23:38
Exploring inflation rates and the Bank of England's challenges in balancing economic growth and inflation control.
“This was the governor of the Bank of England, Andrew Bailey, explaining that decision.”
Show all 20 chapters
Youth Employment and Hospitality Sector Struggles
23:39 to 27:48
Examining the struggles faced by the hospitality industry and the impact on youth employment.
“So the level of real wage growth is pretty low.”
Current Business Climate and Future Outlook
27:49 to 28:00
Business leaders discuss the current challenges and their hopes for improvement in the economic landscape.
“because this Labour government have just, I mean, we've had rates rises, We've had national insurance changes.”
Business Struggles and Economic Outlook
28:00 to 30:15
Discussion on the current challenges faced by businesses and the economic data affecting them.
“And I really do hope, I mean, that is pretty much all that most businesses are left with, is hope that things are going to improve.”
Shifting Focus: World Cup and Economic Discussion
30:15 to 31:35
Transitioning from economic discussions to the upcoming World Cup game for Scotland.
“All the guys staying with us, George, Joe and Douglas McNeil as well.”
Analysis of Makerfield By-Election Results
32:46 to 36:51
In-depth discussion on the implications of the by-election results and Andy Burnham's victory.
“This is what people said directly to me on the hundreds of doorsteps that I stood on.”
Challenges Ahead for the Labour Party
36:51 to 42:00
Exploration of the obstacles Andy Burnham may face as he steps into a leadership role.
“Otherwise, it's a different presentation of more of the same.”
Challenges Facing Political Leaders
42:00 to 46:00
Discussion on the difficulties new political leaders will face, especially regarding economic growth and public services.
“I don't think anyone is trying to say anything else.”
Impact of Business Confidence on Hospitality
46:00 to 48:00
Exploration of how business confidence and economic stability affect the hospitality sector.
“Well, I think it has to be smooth and dignified.”
Tartan Army Celebrations in the US
48:00 to 55:00
Overview of the Tartan Army's experience in the US, including community events and its impact on Scottish pride.
“So I think that's one thing I hope will come out of this, but who knows.”
Tartan Army Celebrations in the US
56:01 to 56:49
Overview of the Tartan Army's experience in the US, including community events and its impact on Scottish pride.
“We optimise for the numbers that look great, impressions, reach and reacts.”
Transcript
Automatic transcript. May contain errors.0:00This BBC podcast is supported by ads outside the UK.
0:29CFO. LinkedIn has a word for that. Bull spend. Now you can invest in what looks good to your CFO. LinkedIn ads generates the highest ROAS of all major ad networks. You'll reach the right buyers because you can target by company, industry, job title, and more. So cut the bull spend. Advertise on LinkedIn, the network that works for you. Spend$250 on your first campaign on LinkedIn ads and get a 250 credit for the next one. Just go to linkedin.com slash broadcast. That's linkedin.com slash broadcast. Terms and conditions apply. Host unforgettable backyard barbecues with savings from Whole Foods Market.
1:14Get the good times going with made-in-house chicken or pork sausages and ready to cook kebabs for hassle-free flavor. Grab tasty flatbreads and their new balsamic chicken salad in the prepared foods department. Keep things fresh with organic red cherries, strawberries and peaches at their peak. And stock up on bug sprays and sun care must-haves. Make your summer sizzle at Whole Foods Market.
1:41BBC Sounds. Music, radio, podcasts.
1:45Will Bain:Wake Up To Money from BBC Five Live. Hello, morning. Welcome to Wake Up To Money. Andy Burnham has won the make-a-feel by-election, paving the way for him to challenge Keir Starmer as both Labour leader and ultimately Prime Minister. We'll have the latest on a night that also saw the SNP and Scottish Conservatives win seats in Parliament. Our Friday panel will be here to look at that, but also a week that saw the Bank of England hold interest rates after some mixed economic data. We will unpack all of that through the programme. And after a week seemingly singing their way around Boston, the Tartan Army have some football to watch again tonight because Scotland faced Morocco in their second World Cup game.
2:22Will Bain:Wake Up To Money with Will Bain.
2:52Will Bain:Also, what on earth is going on in the job market with those vacancies falling to a five-year low? So there's going to be absolutely loads for our panel to get to this morning. Going to be loads for you to get your teeth into as well. We'd love to know your thoughts on whether it be Makerfield or what's going on out in the jobs market. 85058 is the text number to get in touch with us. 08085 909693 is the WhatsApp if you'd prefer to get in touch with us this morning. That way we would love to have some of your thoughts, particularly on the politics that has gone on overnight. Let's introduce you to our panel this morning.
3:25Will Bain:George Godber back with us. George, the fund manager at Polar Capital. Morning. How are you? Good morning. We'll get into it in a bit more detail, but have you got a sort of snap thought? Is there a market reaction to this? Do you think later on this morning what we've seen overnight in Makerfield? I said to you, the researcher yesterday called me, I think there'll be a modest sell off. The UK was noticeably weaker than the rest of the world in the equity markets yesterday and the bond markets. But I am just watching live the pound fall. I mean, it's not massive. But, yeah, it's gone sort of 132 to 131.85 on the news.
4:03Will Bain:So your sense on that is just because, is that just that there's, you know, the fact that there is likely to be a leadership battle full stop? Or is that anything about Andy Burnham's politics? It's two things. It's the uncertainty on the leadership. I think it may say there's nothing uncertain about it. It's going to happen, and it's pretty obvious what's going to happen. But that's just the rest of the world's view of you've had seven prime ministers in 10 years. You lot are a joke. You know, that does manifest itself in markets. But his policies are more market unfriendly than the current regime.
4:38So, therefore, you get a negative reaction as that sort of starts to be pricing. but ultimately markets aren't political the the big move if you like it only happens as and when you get an actual announcement of policy or a budget yeah but they'll just they'll just price in some of the greater risk what's called uk risk premium will go up as a result and the fact that
4:58Will Bain:if there is an actual challenge that you know that uncertainty might drag on for a bit and all that kind of stuff as well alongside george for the next hour douglas mcneil back with us as well former treasury special advisor advised the likes of the then chancellor rishi sunak former prime Ministers Theresa May and Boris Johnson as well. Douglas, morning. Good morning. Big win for the Scottish Conservatives overnight in a by-election as well. Yes, that's right. Very interesting in Aberdeen South. They gained pretty much 50 % of the vote, took the seat from the SNP. It's the Scottish Conservatives' first win at a Westminster by-election in something like half a century.
5:32And that was a by-election which was a sort of a mini-referendum on oil and gas policy. That's an issue which particularly resonates in Aberdeen, of course. And I think what the electorate is saying there is that they're not happy with the ban on new oil and gas developments. And they'd like to see that reversed. So that's food for thought for Andy Burnham as he considers what his government, if it is to be his government, looks like. But on the other hand, one of his big strategic objectives will be to win Labour voters back from the Green Party. So even though lifting that ban on new oil and gas development could realise some tax revenue for him to play with, I think when it comes to winning back voters from the Greens, it wouldn't be a policy that would make so much sense.
6:14Will Bain:Really interesting. And we'll dive into what happened in Scotland with Douglas and Catherine McLeod is going to join us in the second half of the programme as well to look at that in a bit more detail. Final member of our panel this morning, Joe De Silva with us for the next hour as well. Joe, the director at McGregor's Hospitality, bar and events venues in Inverness and hotel and bar in Oban as well. Joe, morning. Morning, Will. Lots of politics, lots of football for you guys to get excited about as well. Have you had a good start to the World Cup or has it been on too late yet? Oh, it's been amazing.
6:42The social media coverage for Scotland has been phenomenal. and the Tartan Army have held that Scotland flag high in terms of promoting up here. So it's been delightful to watch. There's been so many fabulous moments from nuns singing along to Scotland anthems to, you know, the Red Sox Stadium filled with Scots singing their hearts out. So, you know, it's great to see a lovely lift like that.
7:09Will Bain:Yeah, we're going to be in Rhode Island later on today, getting ready for more Scots leaving there as we were hearing earlier in the week and heading to that game in Gillette Stadium in Foxborough to play Morocco later on tonight. 8558, as I say, to get in touch with us this morning. Let's get into that big news of the morning then in more detail. Harry Farley standing by. Harry's been up in Makerfield overnight for that by-election, but let's hear from the winner first. Andy Burnham here speaking to the BBC. Turning away from the path that takes us to a divided, dark politics of the kind we see in the United States.
7:41We must now take this path and put this country back on the right path and bring people back together and get things working properly again.
7:54Will Bain:Harry, it was pretty decisive in the end. Morning. More than pretty decisive, very decisive. I mean, I don't think Andy Burnham in his wildest dreams could have imagined a victory so emphatic. defeating Reform UK by more than 9 ,000 votes, more than half of all the votes cast. And I think that adds a significant weight to his argument that he is now the person to take on Reform as the head of the Labour Party right around the country. What do you think we take away from that then? Because he made it very clear, didn't he? Sort of weighted a little bit into the campaign, but then made it very clear that this wasn't just a pitch to be the local MP, it was a pitch to be the Prime Minister.
8:39Yeah, absolutely. There's been no secret about that. You'd have to be hiding under a rock to not know about Andy Burnham's ambitions for Downing Street and to know that this was no ordinary by-election campaign. I mean, to be honest, that was obvious weeks ago, but it was obvious from the moment I arrived tonight. It wasn't just British broadcasters and press lined up waiting for this result. I saw CNN, ABC. I'm not sure how often American news networks pay that close attention to a by-election in the northwest of England. But I think that tells you about the gravity and the scale of what this means.
9:18because Andy Burnham, we're told, will now take the weekend. We're not expecting him to declare a leadership challenge immediately. But the message that we were hearing from his allies all night is that they want the Prime Minister now to set out a timetable for his departure. They want a sort of auxiliary transition. And they also want people like Wes Streeting, who have also said that they will contest a leadership challenge. They want them to fall in behind Andy Burnham. They see the scale of this victory now as an argument that there should be an orderly and quick transition.
9:52Will Bain:And we heard a little bit of him there, didn't we, Harry? And listeners may well have heard another clip of Andy Burnham in the news as well, talking about change and a last chance to change the Labour Party as he saw it. Do we have any better idea of what that change might look like? What the kind of key planks of that might be? Yeah, I mean, it's a really good question because Andy Burnham's made a series of what I think you could call policy pledges over the course of this campaign. He's talked about social care, you know, wanting to bring in a national care levy. He's talked about public control of water, energy and transport.
10:24He's talked about extending HS2, restarting the leg from Birmingham to Manchester, for example. He's talked about the biggest programme of council house buildings in the Second World War. So the scale of his ambition is clear, but at the same time, he's also promised to keep to the Labour Party's manifesto promises on tax, not to increase the main rates of income tax, VAT or national insurance, for example, keep to Rachel Reeve's fiscal rules. So there is I think there are a lot of questions to be asked, answered about what Andy Burnham's change looks like to for that to be grounded in some sort of policy reality and for how he will pay for that.
11:05Because at the moment, there are certainly plenty of people on Keir Starmer's side of the Labour Party who look at Andy Burnham's promises and think, well, if he's sticking to the fiscal rules and he's sticking to our promises on tax, how different will Andy Burnham really be? as Prime Minister to Keir Starmer.
11:23Will Bain:Yeah, and that's absolutely going to be something that the guys, I'm sure, will chew over those elements of it. Just round out then the rest of the logistics, I guess, if you like, Harry. So this now sparks, presumably, an election, a by-election, to replace Andy Burnham as the Mayor of Greater Manchester, too. It does, and that must happen now within 35 days. And one of the arguments that we were hearing from Keir Starmer over the last few days is, well, you know, that's an important by-election, and Andy Burnham should play a key role in helping Labour to win that. What I was hearing from people very close to Andy Burnham this evening was, yes, he will, but that doesn't mean that he cannot also be contesting to take over in Downing Street.
12:05They do not see that by-election as an obstacle to Andy Burnham's ambitions in Westminster. But that by-election will go ahead. In terms of further logistics, we're expecting to hear from the Prime Minister at some point today. It will be crucial what his response is. And then I think it will play out over the weekend and into early next week. What does Keir Starmer do in response if he maintains his insistence that he will not set out a timetable for him to go here? He wants to carry on and fight. I think we may well see cabinet pressure on him to say he may want to stay in fight, but that choice may well be taken out of his hands.
12:47Will Bain:And we should probably have a word on reform too. Have you heard from them yet tonight? We haven't, to be honest. I've been asking for a response to them, asking for their thoughts to what must be a bitterly disappointing result. I mean, around the time that polls were closing at sort of 10 o 'clock last night, I was hearing from senior people in reform who believed it was on a knife edge. They believed they had a really good shot. And in the end, it wasn't even close. The margin of victory is really quite staggering for Andy Burnham. And so they will be bitterly disappointed. There will be questions about how they ended up in this situation, whether their choice of candidate, for example.
13:27some of the things that he was found to have said on social media, whether that played a part. But I think one of the points of debate in the course of this by-election is would Rupert Lowe's Restore Britain party, the party to the right of reform, would they be the deciding factor between Labour and reform? And it's worth saying that Restore Britain got 7 % of the vote, which is sort of notable for a party starting from pretty much nowhere, but they were not the difference. and really so reform cannot look or blame Rupert Lowe for their defeat here.
14:00Will Bain:Really interesting. I know you've had a long night. I'm sure you've got a long morning ahead as well. So thanks for speaking to us this morning. Harry Farley there, our political correspondent speaking to us live from Makerfield. George, pick up then. What do you want to pull out from what Harry was telling us about what we know so far?
14:18Well, it's difficult to know the path forward. But I guess the first reaction will be, you know, what next? And therefore, the most interesting thing is, will Starmer say, listen, you know, I am the elected leader and Burnham is not. And therefore, you know, I'm going to stay around. And we have a Labour leadership contest, which sort of can be quite sort of drawn out, protracted. and that will then we'll have months and you know of that going on with all the people are standing in it making wild promises that they probably can't keep because ultimately you know they are hemmed in by the bomb market uh or is this a sort of swift coronation um uh for the king of the north where you know we get a sort of clear path for him sort of swinging to downing street and i'm i I don't think you need a political expert to understand which way that will go.
15:16And, you know, I don't know. Yeah.
15:18Will Bain:And just give us a quick look at what have bonds been doing in the run up to this, George? I mean, I'm looking at looking at the 10 year from yesterday with a tiny kind of tiny creep up. I mean, basically flat. Have they been sort of waiting and seeing? Yes. So I think probably the more interesting thing is to say that we had the Bank of England decision, which I'm sure we'll come on to talk about where they were sending a clear signal of saying, right Iran's over as far as we know we can't spend a lot of time talking about that uh therefore we've seen a big move down in energy prices so the inflationary pulse that the Iranian conflict is is giving to the economy uh and you know through petrol prices and diesel that should dissipate and we should look through uh that and that's why we're keeping rates whole holding and they were trying to give a sort of clear signal that yeah they would hold and then because of the underlying weakness in the economy the next move ultimately would be to cut the reason why the bond market is not or the 10-year is not the 10-year government bond is not pricing that in is because of the burn and risk you know his his as prime minister he will lead to more bond issuance so higher guilt yields higher mortgage yields etc.
16:27Will Bain:Douglas where did you sort of draw out of what Harry was was telling us there that sort of economic tightrope that Andy Burnham's got a walk that George was talking seems um seems very interesting it seems to be the thing that we will talk about in the next couple of months very much so the onus is now on Andy Burnham to add some definition uh to his promises of change to the to the rhetoric that he's deployed during the campaign um there's a kind of a parallel here with 2022 I would say it's almost four years uh almost exactly four years uh since Rishi Sunak and Sajid Javid resigned from Boris Johnson's government and triggered at the end of that government and a period of about two months over the summer where Rishi Sunak and Liz Truss contested the Conservative leadership.
17:10And it feels like we're in for probably a similar period this time around while Andy Burnham and perhaps Wes Streetling and others face off for the Labour leadership. Now back in 2022 during that leadership contest, the yield on government borrowing and government bonds drifted up by about a percentage point. That's quite a lot as investors reacted adversely to the uncertainty around the whole thing. And so that meant that Liz Truss was facing a less promising position, a more difficult position by the time she became prime minister than was the case at the start of the summer, which unfortunately she then made it worse, of course.
17:51And Andy Burnham will want to try and avoid that sort of situation. So I think he will want to try and add as much definition and clarity to his platform over the next few weeks as he can.
18:00Will Bain:Yeah, he has slightly tied himself in knots around the fiscal rule stuff. I mean, it was clear in the end with our economics editor, Faisal Islam, having seemingly suggested that he was not going to be in hock, as he put it, to the new statement of the bomb markets. Joe, just watching on of the politics as a business owner business leader do you sort of how do you view it well i mean when you when you have a real look in terms of how business has suffered over the past years um i mean keir starmer hasn't exactly set the world on fire has he you know and i think in terms of business we're desperate for change you know we're desperate to see rate reductions we're desperate to see you know some sort of greater parity in terms of the money lost with the increased taxes that Labour have brought forward.
18:49So, you know, businesses are finding it very, very difficult, especially hospitality. Every small business owner, you know, they're not making money the way they were, you know, five, six years ago. It is a really tough, tough landscape. So I'm quite pleased to hopefully see a change and obviously you know with Andy Burnham's promise of a reduction of VAT and hospitality you know that would make a huge difference to hospitality it would make a massive difference and it's something that hospitality have been banging on about for a long long time you know we we want to be seen as a great industry for people to work in we want a more level playing field with Europe where VAT is is reduced to you know round about 10-12 % So if he does bring policies like that forward, I'd be delighted to see him in power.
19:42Will Bain:Yeah, interesting, isn't it? We've heard others in hospitality, Tom Kerridge, the chef who we've had on the programme before, saying similar to Joe there as well. Text come in, do just give us a sense of where in the country you are. You can even just send in your first name and where in the UK you are. Just helps people kind of get a sense of where you're texting in from, because this text is obviously specific to geography too, saying it's quite frustrating hearing journalists talking about the Andy Burnham by-election as if 25 ,000 people in a red constituency in northern England is the opinion of the country.
20:10Will Bain:85058, if you want to get in touch with us, 08085 909693 is WhatsApp. We'll return to more of the politics in detail in the second half of the programme. Catherine McLeod going to join us as well. But George, have you ever started one of your sort of bits of analysis with a more crass pun than Simon French, friend of the programme, Wake Up To Money regular, has started his with today? he has gone for this is looking at what the economic reaction to a burn and win might be I am the resurrection so a Stone Roses reference there for people Simon's musical knowledge is somewhat better than mine I think in my time I basically bought two CDs so yeah and I always bow down to his greater wit.
21:02Will Bain:I was going to say your analysis though will not suffer from having to shoehorn in any Manchester music based puns which is great and probably good for your readers too. Do keep your texts coming in on the politics I'm going to bundle them together and do that when we get back to that in the second half so keep them coming in I'm seeing them appearing on the screen we'll use those when we get Catherine McLeod up after half past but it has been a big week beyond the politics of course in terms of data this week one of those weeks where we get all those snapshots of what's going on in the economy from inflation to to jobs and unemployment, but also a decision from the Bank of England, a decision that was to hold interest rates at 3.75%.
21:40Will Bain:This was the governor of the Bank of England, Andrew Bailey, explaining that decision. We have had encouraging news. I mean, I'm very encouraged. You know, we've obviously got now this understanding about what's going to happen in the Middle East. But, and energy prices have come down quite a lot, but they're still above where they were before this conflict started. Inflation is higher than we expected it to be. I really expected and I really believe we would have been back at the 2.2 % target by now. Douglas, the context for that was sort of in the same week that we saw job vacancies falling to their lowest level.
22:15Will Bain:In five years, it feels like they are in a very tricky position at the moment, the Bank of England. Most of the economic signals, Wright, seem to suggest it's an economy in need of a little shunt, And yet we've got that sort of wild card. I'm pleased that Andrew Bailey seems to know where the war in Iran is going, because I think the rest of us are still wondering. Yeah, no, that's exactly right. I mean, the economy does look like it needs a bit of a bit of a helping hand. Growth is low. The job vacancy numbers, as you mentioned earlier, were pretty poor. And yet when it comes to inflation control, which is the Bank of England's central policy objective, the picture leaves a little bit to be desired.
Read the full transcript
22:55It's true that the news flow lately has been good. The current level of 2.8 % is not as bad as we had thought. Inflation at 2.8%, not as bad as we had feared only a short while ago. But nevertheless, that's closer to 3 than 2. The target is 2. And the number has been closer to 3 than 2 for well over a year now, dating back to the very early part of last year. and inflation has been at or below target in only three of the past 50 months. So this is not a disaster. There's no cause for panic when it comes to our inflation control performance, but it's not quite as good as it should be, and that's the bank's dilemma.
23:37Will Bain:Which stresses you out more then, that or the job numbers? Certainly on our team we talk about this quite a bit, that the jobs figures, I think because of what's gone on with the war in Iran and what it's done to the global economy, right, would you agree has been almost less of a national story although we've tried to talk about it a lot on the program that perhaps it would have been otherwise i mean they feel pretty stark yeah that's right the unemployment rate has been drifting up and if you look at the wage growth level that has been drifting down so we learned this week that it is only just above the rate of inflation.
24:15So the level of real wage growth is pretty low. And in the private sector, in fact, which is the sector in which the majority of the workforce are employed, the rate of wage growth is currently almost exactly the same as the inflation rate. So hardly any real wage growth at all there. So this is perhaps an underappreciated aspect of the economy. I think you're right, that has been a little bit crowded out by all the news coming out of the Gulf in recent months.
24:40Will Bain:Joe, you're really very much on the front line of both of those things, right? a place, obviously, where lots of people get their first rung on the kind of employment ladder, but also, I imagine, an extremely price sensitive sector. So what have you been seeing in terms of inflation and prices? I mean, prices have shot up for us. It's a really difficult balancing act because you need to make sure that you have people who are happy to come in and spend money. But yet, at the same time, we have to raise our prices. And if people don't have as much money in their pockets, you know, hospitality is the first swathe of aspects of their life they'll cut back on.
25:17So it is a really, really difficult balancing act. I mean, as far as the jobs go, we've seen obviously with the raise in the minimum wage for the younger sector, that has had a huge impact. You know, normally, I mean, I've spoken to so many people in different sectors up here, and so many people have said that it doesn't make economic sense for us to employ a youngster. You know, it's a great idea that there's this parity, but the problem you have is when you bring a youngster in, they don't hit the ground running by any stretch of their imagination. There's a huge amount of investment for any business for a youngster.
25:55Now, hospitality is so important. It gives people skills that they wouldn't normally have. And especially these days, because so many youngsters have come through that COVID area, they're now at that point, they're 17, 18, normally a first job in hospitality, get some front facing, especially in COVID when those youngsters did not have that same social interaction. And we see across my own son is 18. And, you know, he's been working in hospitality on the back of what we do. And the difference in him that we've seen has been incredible. You know, he doesn't think anything about talking to people, talking to adults, people who are older, different generations.
26:35And what we're losing is not just the employment for these youngsters, but we're also losing that social element and the social connections and their ability to interact with people, which is valuable for any job they go into. So, I mean, it is really concerning that the way this youth unemployment at the moment is not stable. It doesn't have a clear trajectory and it's simply down to the fact that we the whole landscape has changed for hospitality employers when they are employing younger people i know this might sound a slightly
27:09Will Bain:silly question but does it ever sort of settle so where if you have to build in a bit of higher price your obviously customers are shocked by it in the first instance but then presumably you know what have we had now a year and a bit of these changes to to employee costs if you like the cost of employing younger people. Does that ever get baked in, I suppose, is what I'm saying? And do people, does it sort of settle and can you see a recovery from it? Or does the pressure just sort of ramp up and ramp up and ramp up? Well, I mean, I think over the past few years, it has literally felt as a business that you're being bombarded from every angle with another tax or another increase.
27:47So the confidence within business just now is not great because this Labour government have just, I mean, we've had rates rises, We've had national insurance changes. We've had tax rises. We've had everything thrown at us. And it was already fragile after the COVID era. And I really do hope, I mean, that is pretty much all that most businesses are left with, is hope that things are going to improve. But the bottom line is that most businesses, they are struggling and just trying to keep their head above water. And that's what a lot of hospitality at the moment is they're treading water in the hope that things are going to get better.
28:25Will Bain:George, was there any of the sort of three sets of data, I guess, if you like, that drew your eye more than the others, the inflation, the rate decision or those wages numbers?
28:38So I think the picture for inflation is, you know, I was pleased that that could have been worse. and you know in recent weeks my conversations with some of the sort of major supermarkets they have you know a few weeks ago when you know oil was north of 110 and we saw agricultural commodities it was likely that we were going to be looking into food inflation of six seven even higher percent in the second half of this year which is really you know bad news for households So the fact that as it stands, fingers crossed, things look considerably better on that front means that the outlook for inflation does feel better.
29:22But then just following on for what you've just been discussing, I think the unemployment picture is worse. And I think it's particularly bad for the youngsters. And I feel really, you know, that's a real tragedy. And if we put the numbers on it, I mean, to employ a young person now in the last two years is now 33 % more expensive. And because of the Employment Rights Act is more risky. Now, all of that stuff was well-intentioned and that policy was well-meaning. But the net result is, sadly, as it's just flagged up, that businesses are saying, if something's going to cost me a lot more and it's riskier, I'm going to demand less of it.
30:00And so that's why it's getting so tough to get Saturday jobs or a few shifts to the pub, which is how many of us, that was our first experience in the working world.
30:09Will Bain:Absolutely. Well, we'll roll some of that into the challenges that perhaps are ahead through the summer in our chat in the second half of the programme. All the guys staying with us, George, Joe and Douglas McNeil as well. We're also going to be joined by Catherine McLeod in the second half of the programme. We will shift away from the politics and the economic backdrop, if you like, as well, too, because we'll be talking about Scotland's second game in the World Cup. can they clinch qualification for the knockout phase of the World Cup when they play Morocco at Gillette Stadium later on tonight?
30:39Ever invest in something that seemed incredible at first, but didn't live up to the hype? Like those$5 roses at a gas station, or a second-hand piece of technology that breaks in the first 10 minutes? Marketers know that feeling. We optimise for the numbers that look great, impressions, reach and reacts, but when they don't show revenue, Well, that's a not-so-great conversation with the CFO. LinkedIn has a word for that. Bull spend. Now you can invest in what looks good to your CFO. LinkedIn ads generates the highest ROAS of all major ad networks. You'll reach the right buyers because you can target by company, industry, job title, and more.
31:22So cut the bull spend. Advertise on LinkedIn. The network that works for you. Spend$250 on your first campaign on LinkedIn ads and get a 250 credit for the next one. Just go to linkedin.com slash broadcast. That's linkedin.com slash broadcast. Terms and conditions apply. Host unforgettable backyard barbecues with savings from Whole Foods Market. Get the good times going with made-in-house chicken or pork sausages and ready-to-cook kebabs for hassle-free flavor. Grab tasty flatbreads and their new balsamic chicken salad in the prepared foods department. Keep things fresh with organic red cherries, strawberries and peaches at their peak.
32:04And stock up on bug sprays and sun care must-haves. Make your summer sizzle at Whole Foods Market.
32:13Will Bain:Wake Up To Money with Will Bain. Morning, welcome back to Wake Up To Money on Friday the 19th of June where our panel this morning are Joe DeSilva, the company director of McGregor's Hospitality, George Godber, the fund manager at Perler Capital and Douglas McNeill, former Treasury Special Advisor to the likes of the Chancellor, Rishi Sunak. We're also going to be joined by Catherine McLeod in just a moment as well. But if you are just getting up this morning, in the last couple of hours, Andy Burnham, as we were mentioning in the news, the Mayor of Greater Manchester, has won one of the most closely watched by-elections in years in the seat of Makerfield in the North West.
32:45This is a final chance to change. This is what people said directly to me on the hundreds of doorsteps that I stood on. We must hear it. We must act upon it and we must get it right. There will be no second chance. But it is a chance now, from this result tonight, to build a new politics based on unity and hope.
33:13Will Bain:And it paves the way, of course, for him to challenge Sakhir Starmer for the job of Labour leader even and, in turn, of course, Prime Minister. While voters went to the polls in Makerfield, there were also by-elections in Scotland, The first in Aberdeen South called to replace Stephen Flynn, the SNP's former Westminster leader, who was elected to the Scottish Parliament last month. The other in Arbroath and Broughty Ferry called after the SNP Stephen Gethin stepped down from his Westminster seat. Our Scotland editor James Cook has this report from Aberdeen. It's been a long time since the Conservatives gained a Westminster seat in a Scottish by-election.
33:49The last time that happened was 1967, and that was the year the Beatles released the Sergeant Pepper album. album. Douglas Lumsden brought the unlucky streak to an end here in Aberdeen South, securing a majority of 6 ,050, a thumping majority over the SNP. In a boost for the Tory leader, Kemi Beidnuch, she repeatedly campaigned here on a promise to support the UK's flagging oil and gas industry. And the other issue which cast a cloud over the SNP's campaign was the admission in court by the party's former chief executive Peter Murrell that he had embezzled more than£400 ,000 from the party. Despite that though, down the east coast, the SNP's Lara Bird comfortably held Arbroath and Broughty Ferry ahead of the Conservatives and Reform UK with Labour just behind that.
34:36Will Bain:So that's the sweep of those three by-elections overnight. As I say, a Labour peer and former special advisor to the Chancellor. Alistair Darning, Catherine McLeod joins us this morning. Catherine, morning. Thanks for being back with us. Good morning. What's your takeaway then first of all on Makerfield? Well there is absolutely no doubt that Andy Barnum swung his swept to victory. I think the majority was bigger than anybody anticipated although I think there was quite optimism in the Labour camp. I think it's very important that his majority was bigger than reform and restore combined. So I think that he will be absolutely delighted his supporters will be delighted and I think that it will now be very interesting to see what's going to unfold over the weekend and the next days.
35:27Will Bain:Well what would you like to see happen then and I don't just mean from sort of the leadership standpoint but also in terms of what we've heard him in a few of the clips that we've played throughout the morning talking about change and this being the last chance to change Are there things that you think are essential to change straight away? Well, what Andy Barnum, I think, has demonstrated is that empathy and likability in politics are very important. I think what Andy Barnum is going to have to do now is to be absolutely clear about what his plan is for government. I think that's been one of the criticisms of the present government with, I think, that lots of people in the Labour Party who will actually be looking forward to Andy Barnum being Prime Minister also credit with Keir Starmer and Rachel Leaves doing good things, but they have really failed to communicate with the public.
36:26So I think that the pressure on Andrew Burnham now will be to convince the country, to convince first his own colleagues and the country that he's got a plan for government.
36:38Will Bain:I'll get both you and Douglas's view on this, if I can, as the sort of two political beasts on the panel this morning. Because Charlie in South London has sent in a text that I think kind of gets to a bit of that saying, Morning Will, doesn't the Burnham win now require a general election to release the new incumbent from the straitjacket of the last King's speech, making eight prime ministers in 10 years? Otherwise, it's a different presentation of more of the same. Is that a danger here, Catherine, that he's kind of locked in by decisions that have already been made? Well, he'll be locked in to some extent, but he's been pretty clear during this campaign that he's got an agenda for change.
37:16I think he's done a very wise thing. He seems to have, I don't know if employed or certainly, taken the advice from three very credible economists, Robert Hughes, Jim O 'Neill and Andy Haldane. So he's thinking about the fiscal rules that we've heard a lot about. But he wants to do things within. I think Andy Barnum wants to change how politics is done. He is a people person, really. He wants to reach out and take people with him to help them understand more what the government's agenda is.
37:51Will Bain:Douglas, that sort of difficulty of being bound by people in before you's decisions, if you're a prime minister that doesn't come in after a general election. Yeah, that can be awkward. And so there will be calls for a general election if Andy Burnham takes the crown. On the other hand, there is plenty of precedent in the past for changes of prime minister occurring intra-parliament and not leading directly to a general election. And I'm sure Andy Burnham will point to those precedents. But yeah, he will be bound in by pledges that the Labour Party has already made and indeed by just the basic economic realities which the current government is grappling with and which will not change just because the Prime Minister changes.
38:31So economic growth is quite low. Change of Prime Minister won't make any automatic difference to that. Your rate of inflation is quite high, so people don't have enough money in their pockets, as Joe was saying earlier on. And that's a pretty difficult circle to square. Some of the things that we heard Harry talking about Andy Burnham wishing to do earlier in the programme would not necessarily help that. So, for example, the idea of a social care levy, which Harry tells us is under consideration by Andy Burnham, you know that might be good for social care but that will that will not serve to put money in people's pockets quite the opposite that sounds pretty much like a tax to me so he will have to grapple with all of these basic realities just as much as he will the the pledges that Labour has previously made.
39:17Will Bain:Well George build on that from the markets perspective as our markets watcher but also a couple of interesting names that Catherine mentioned in there supposedly in this Burnham team and the FT put this up it flashed up pretty much straight after midnight that Richard Hughes, the former head of the Office for Budget Responsibility, so the sort of independent watchdog that looks at government spending, one of those that Burnham seems to have been brought in. That's quite an interesting move and seems to be signalling something to the markets and you guys in the city, right? Yes, I think the one thing he's going to fear above all else is the Liz Truss moment, because, you know, if you're a politician, you stand up and you give all your policies and you get stretched out by the bond market there's nothing you can do about it you know there's no way you can do and then you ultimately have to start fulfilling a group of policies that you you hadn't signed up with because whatever happens whoever is running the country with three trillion pounds in debt i mean you know you can only make comments about the bond market if you're willing to run a budget surplus and i haven't seen anything that suggests that that either andy burnham or the labour party willing to do that so they are boxed in by that so he's therefore I presume taken that on board and decided that I will surround myself with people who actually understand how to cope with these issues and these guardrails and prevent myself ending up in a trust type moment.
40:45Ultimately as I said right at the start bond markets are not political, they will not judge they do not have a sway one way on the other, they care about four things really what will be economic growth what will be the inflation in the economy what's the direction of gdp and how many gilts are going to be issued those are the things that affect the prices on the basis of what we've just know you know and as douglas has just alluded to a lot of the and the burnham and the and the burnham policies that we've seen so far and he hasn't actually committed to anything are negative for each of those things and and and may lead to more taxation and as joe said you know this is our message i get all the time for businesses they feel absolutely battered you know rachel reeve's first budget raised 40 billion in tax her second one was i think 26 billion that tax revenue has either got to come out of consumers pockets or business pockets because there's no other you know route for the government to find money in the economy uh as my children would say it doesn't money doesn't just spawn in it's coming out of someone's pockets so if he's going to pursue a gender and social change and couple that with big tax rises it's coming it's going to hurt someone i just don't know who
42:02Will Bain:charl bringing in on that in a minute but catherine that's the that's the real challenge here isn't it i mean we've seen in the last few weeks the the row that saw john healy leave the government about where you find money to to to meet some of the defense commitments that they've got they're just i mean that's the sort of inconvenient truth whoever wins andy burnham West Streeting, Angela Rayner, whoever fancies having a crack, the sort of physical hole that they're in. It is. It's difficult. I don't think anyone is trying to say anything else. But I don't think that, I mean, I think we should not, should just think, you know, step back and think a bit and not need be too alarmed yet.
42:40Andy Barnum has been around a long time. He's surrounding himself by very credible people. I think he will have spoken to a lot of people, small business people, consumers who are feeling the cost of living. He knows what people think about raising more tax and who it's going to hurt. And Andy Burnham is nothing if not empathetic. He will understand that people are struggling and he will not be wanting to come in and sort of recklessly put up tax or increase borrowing. He's going to inherit a very tough hand. Keir Starmer and Rachel Reeves inherited a very tough hand and they will all be trying to do their best to reduce the cost of living and to help business because they know that's where there's economic growth.
43:32So I think he will be keen on concentrating on economic growth because that ultimately is what we need if we're going to have better social care or better education or better anything else.
43:43Will Bain:Yeah. Jo, that balance then from... You were chatting in the first half of the programme about obviously VAT in particular for hospitality having been a challenge. But is there something also in what Catherine's saying that actually the other thing that's been hitting hospitality hard is a lack of confidence from people about how their own finances are. And actually, if Andy Burnham or whoever it is, as we say, props up, you know, public services that haven't been doing very well, that you're not as delayed on your train, that you're not waiting months and months for your NHS appointment. Perhaps you're a bit more productive.
44:16Will Bain:Perhaps you're a bit more confident in your finances or in the sort of financial safety nets around you. Is there anything in that? Well, I mean, it does feel like it's a bit of a two-tier system, you know, that businesses are really struggling and are being hammered at every corner. and I'm not sure, I really don't know how that is going to play out if I'm perfectly honest because I mean as a business, talking from a purely personal perspective, the confidence that I have in the UK at the moment in terms of supporting business is incredibly low and our goal, our aim has always been to expand what we do.
44:57We promote the best that Scotland has to offer, that is what we are all about and our core message is And our plan has always been to expand across the UK and then further afield. But at the moment, the way things stand, the UK is not the first place that we would be looking to expand. And that is a real, I'd like to think if any politician is sitting listening and actually listens to what businesses have to say, they're going to find that that message is across the board. Businesses are so fearful at the moment of expanding at all because we just don't know what is happening. There has to be more continuity.
45:37You know, it has to, things, wage pressures have been so significant. Every bill we get when we open it is bigger and bigger and bigger. Until these things change, you're going to find that most businesses are going to be very reticent about investing more money.
45:55Will Bain:Well, let's get round everybody for a quick final thought then. Catherine, lead us off. Does this need to be, for the good of kind of the country, does this need to be quick now, whatever happens next? Well, I think it has to be smooth and dignified. We can have no chaos. And I think there'll be a lot of thought going in to how the next few weeks should play out. And I think that's the most important thing, to reassure people, whether they're in the markets or business or just going to work, that we're living in a country where things can happen smoothly. Jo? Well, I'd love to see that. I'd love to see that.
46:31And I mean, I would be delighted to have some stability to know that things are going to be on more of an even keel, that there are recognition that businesses contribute so much, more than just the economy, but they contribute so much to the UK as a whole. So I think that at the point when it's business first rather than the way we've seen across the whole sectors of a two-tier system where you've got wage rises for the public sector and the people who are financing those wage rises are the businesses who are really bleeding. George? i'm going to go back to actually something that i know all the focus will be on andy burnham uh today but douglas said right at the stop that there was a mini referendum today also happened on the north sea policy and again you'd say well of course these people are going to vote for it's their direct jobs but the uk energy policy is at the heart of a lot of what we talked about today 20 years ago we had the same average electricity price as everyone else in the g7 now we are three times higher than the rest of the G7 and it's hurting households and it's hurting consumers and we need to have a much more grown-up approach to the security of supply that the North Sea offers us because it is a route to one being able to guarantee that we've got the gas that 87 % of households heat themselves on but also that we can actually you know look at a lower electricity price for everybody going forward.
48:02So I think that's one thing I hope will come out of this, but who knows. Yeah, that was interesting from that result, wasn't it?
48:09Will Bain:Douglas? Well, a speedy resolution to the Labour leadership is definitely preferable, but it mustn't be too speedy. I think there needs to be enough time for Andy Burnham to be compelled to set out his stall and to gain some backing for his programme, if only from within the Labour Party. If he gets a mandate of that kind, then that will make him a much more effective Prime Minister, and that's in everybody's interest. Yeah, and Johnny in North Yorkshire absolutely agreeing with you on that. Douglas texting in on 85058 saying Andy Burnham needs scrutinising now on his decisions in the run-up to any Labour leadership election.
48:45Will Bain:85058, if you want to squeeze in your text in the last six or seven minutes or so here on the programme, got three Scots on the programme. Catherine, before you let you go, have you been swept up in any tartan army fever yet well of course it's in your dna to be swept up so they're going to get through tonight then in this morocco game well just let's hope so you're always an optimist brilliant well thanks so much for being on the program always appreciate your time okay katherine mcleod there labour peer former special advisor to the chancellor alistair darling how's it been joe in terms of um the world cup has it been you know we've talked about a lot of the challenges this morning has it been a kind of welcome boost for hospitality or have the games just been at the wrong time for that oh the games have definitely been at the wrong time it would have been wonderful had they been on more sociable hours but you know the one on we we've we've got uh against morocco that's a decent time so it's really exciting have you got people in tonight then for it we have we've actually got a great folk singer called davy who's coming in to sing all those traditional scottish favorites so our pub will be absolutely jumping with people singing along and then fingers crossed we'll be jumping at the result at the end but we'll see.
49:57Will Bain:Well Brad Livingston is going to be leading a few of those songs as well I think later on this afternoon his time because Brad has stayed up way into the night for us he's the drum sergeant and the Rhode Island Highlanders Pipe Band has been part of the celebrations this week as thousands of Scots as we were hearing earlier in the week have taken over Providence in Rhode Island because it's only a short trip up to Foxborough and Gillette stadium from there. Brad, morning from us, evening to you. Good morning. Well, it depends on how you want to look at it. I suppose you're in the morning there as well.
50:30How's it been this week? It's been absolutely fantastic. I could not have nicer things to say about the Tartan Army here in Providence. It's been absolutely magical for us. Just getting to new friends and meeting everybody here. Everybody's been so kind. The city of Providence has welcomed the Tartan Army with open arms, and I hope that all of the folks from the Tartan Army are having as much fun as we are. Everything has been so wonderful. So tell us about this parade last night. so uh today we we've uh the band here the Rhode Island Highlanders we've done a couple events now with the Tartan Army um our first event was uh prior to the match um earlier this week or at the end of last week uh and we kind of met up at a pub down here where there was a street party that happened with all the supporters.
51:46And then we marched them from the pub there to the iconic yellow school buses that we have here in the States so that everybody could climb on board and drive up to the stadium in Foxborough there. And then we all went back afterwards and the supporters that weren't able to get tickets to the match, we stayed in the pub with them and we were cheering just as loud as everybody else when Scotland won their game. And then earlier today, we marched the Tartan Army down to the Hasbro Children's Hospital where they made a very sizable donation to the Children's Cancer and just the Children's Hospital there, I guess.
52:38And that was really special. There were members of the band who have had their own children or families go to that hospital for treatment. And so it was very emotional on our end and for the Tartan Army supporters as well. So it was just a magical thing. And then after we finished with that, we marched the supporters of the Tartan Army down to a park here. And there were thousands of people there in the park. and we just had a blast playing music, singing songs, and just really enjoying the camaraderie of it all.
53:14Will Bain:Well, a couple of Scots on the programme with us here, Brad, this morning as well. Douglas, I don't want to sound too overly sentimental about it, but has it sort of made you proud of the sort of diplomatic effort that the Tartan Army seem to be making on behalf of Scotland in the US? It certainly has. They seem to be doing a great job. I just hope that they all have enough energy left to cheer the team on tonight because after this week-long series of festivities, they must all be feeling like a bit of a nightclub. I was going to say, it looks exhausting, Brad. I think I'm too old for the level of party England's going on.
53:48It's been an interesting experience. We'll put it that way. But, you know, like I said, everybody feeds off each other's energy. So that's not been in short supply. I'm sure once I finally get home this morning, I will just absolutely crash into my bed. But it's been, yeah, everything's been so fabulous and we could not be happier and more proud of the folks that have come over from Scotland because it's just been fantastic.
54:21Will Bain:What will you guys be playing today then as they set off? So we, of course, play a couple of traditional tunes, Scotland the Brave, Rowan Tree, Wings. All of those kinds of things. But then we try to jump in on on some of kind of the fan tunes, you know, John McGinn and, you know, as an Aston Villa fan, you can come and play that one over for us in Birmingham next year as well. Brad, thanks so much. We've already been talking about how we would love to come over and return the favour and come and visit you all over there. Well, if you do, come in and see us. Thanks a million for your time this morning.
55:01Will Bain:Brad Livingston there from the Rhode Island Highlanders Pipe Band. Big thanks, too, to Joe, Douglas and George. And for all of you for listening to Wake Up To Money this morning. Wake Up To Money with Will Bain. The 2023 Ballon d 'Or France footballer is Lionel Messi. The winner is Cristiano Ronaldo. This is the story of the greatest rivalry in the history of sport. A rivalry that split football into two fates for a generation. There could be no, oh, Messi and Ronaldo are both great players. There had to be one that was better. They 100 million percent pushed each other to the next level. You know, we were the lucky ones who got to see it.
55:43I'm Steve Crossman. This is Sporting Giants Messi v. Ronaldo. Listen first on BBC Sounds. Ever invest in something that seemed incredible at first, but didn't live up to the hype? Like those$5 roses at a gas station? Or a second-hand piece of technology that breaks in the first 10 minutes? Marketers know that feeling. We optimise for the numbers that look great, impressions, reach and reacts. But when they don't show revenue, well, that's a not-so-great conversation with the CFO. LinkedIn has a word for that. Bull spend. Now you can invest in what looks good to your CFO. LinkedIn ads generates the highest ROAS of all major ad networks.
56:29You'll reach the right buyers because you can target by company, industry, job title, and more. So cut the bull spend. Advertise on LinkedIn. The network that works for you. Spend$250 on your first campaign on LinkedIn ads and get a 250 credit for the next one. Just go to linkedin.com slash broadcast. That's linkedin.com slash broadcast. Terms and conditions apply. Shop the Sherwin-Williams sale and get 30 % off Super Paint, Super Deck, and Woodscapes products June 12th through the 22nd. Whether you're refreshing your interior or exterior, we've got the colors to bring your vision to life. And with delivery, getting everything to your door is easier than ever.
57:15Shop online to have it delivered or visit your neighborhood Sherwin-Williams store. Click the banner to learn more. Retail sales only. Some exclusions apply. See store for details. Delivery available on qualifying orders.
From the publisher
Will Bain gets business reaction to the Makerfield by-election with his expert panel of guests. They'll also round up the week's business and economic news, including the interest rates decisions of the US Fed and the Bank of England. And he'll check in with the Tartan Army pipe band based in the US state of Rhode Island.
