Sky's The Limit?

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0:48BBC Sounds. Music, radio, podcasts. Wake Up To Money from BBC Five Live. Hello, welcome. It is Wake Up To Money. And the deal has been done. £1.6 billion. That's how much Sky will be buying ITV for in a new deal. We're going to talk to a former Sky executive about what that means for the TV we watch, the streaming we do, the news we consume as well. Will regulators have an eye on it? What will change? What will we pay for? What won't we pay for? All of those answers to those questions coming up. ahead of a summit of NATO members. What could this mean for the health of start-ups in the UK defence sector?

1:32We'll see what they're talking about and the ripple effects. And... You may well be aware that is the sound of England's next opponents, Norway. A team whose success has been fuelled apparently by cheese. We're going to speak to a Norwegian dairy firm, Of course we are. They're shipping hundreds of kilos of cheese to their national football team in the United States. Wake Up To Money with Sean Farrington. Good morning to you. It is Wake Up To Money on this Tuesday morning, the 7th of July. Have you caught up on your sleep? How was the day at work yesterday? Did the day at work yesterday take place for you?

2:17A bit of commenting this morning from the Wake Up To Money team about how the world seemed a little bit quieter. Almost vibes of a Sunday morning, wasn't it? Throughout the start of yesterday, if you were in an area where many were backing England the night before. I'd love to hear your reflections on what that day ahead actually meant for the world of work. I know it was a hot topic of conversation in the run-up to the game and will have been throughout yesterday as well with your bosses, with your friends how did it all play out and are you fully back up to speed this morning uh 85058 i hope you are i know that uh our guests will be as ever i've got lil bremmerman richard with me chief executive of oxford instant international they place international students into universities right around the world into the uk the us india australia lil very good morning to you Good morning, Joan.

3:14Thank you for having me back. And how are you, Lil? Has the World Cup been dominating your viewing one way or another? Absolutely. I have three kids of all ages. So in my house, the World Cup is at full steam. And it's a great time. I think it's a great time for families. It's great that England is performing so well. but it's also really cheating everyone up at work and in the street which we are obviously all seeing in trading. Was there much of a ripple effect into the workplace yesterday, Lil? A little bit. I saw many red eyes, I would say, in the office but broadly, you know, everyone was so happy that, yeah, it was great.

4:07Good to hear. And the kids, were they up in the early hours and then into school, into college? Yes. So my youngest one didn't make it. He did try and watch, but he didn't make it. And my elder ones are teenagers, 18 and 13. So they are used to this. All kinds of hours. Indeed. Very good. Yes. Well, look forward. We've got plenty to chat to you about on the show today, Lil. I've got April LaRousse with us as well, Investor Head of Investment Specialists at Insight Investment. April, good morning. Good morning. I've got to ask you, you know, we're waking up to, I mean, people will have seen maybe as they went to bed that the front page is being dominated by Donald Trump and he's sticking his oar in and having a fair impact into, it seems, what goes on with red cards at the World Cup, particularly when it's the American team that is being impacted.

5:07And then, you know, we wake up this morning to the headline to see the US. It's not the headline you want, is it? The America limp out of World Cup. It did seem a bit of karma, didn't it? I mean, you know, I don't want to say I want to see the US lose, but you shouldn't be seen to be messing around with, you know, what is the normal rules of the game. So I think probably the world was OK with Belgium winning. There are many fascinating things. And, you know, again, the ripple effects of Donald Trump's press conference that he had yesterday where he laid out exactly his conversations with those at the top of FIFA.

5:46But it was interesting in the middle of it all to see Donald Trump talk, the president of the United States, talk about football, soccer, the way he was. And he sort of made the point a few times how it's nowhere near the biggest sport in America. But yet this is maybe how we would do things if it was America running the sport. What have you sort of made, April, with your American hat on of how the World Cup has gone in the US? Of course, it's been in Mexico and Canada as well. But from an American perspective. I mean, I didn't obviously go myself as I'm here working hard. But it does seem as though it's gone better than everyone expected.

6:30Because I think initially there was a bit of sort of will it go well because it isn't that much of a mainstream sport in the US, although it getting increasingly popular. And of course, there were complaints about ticket prices, but it does appear as though it actually was quite a successful tournament so far. So I think there is hope that it will become one of the more popular sports in the US. And obviously, that's a big money making opportunity. Thank you for the link back to Wake Up To Money before we get those texts from people and messages coming in saying, why aren't you talking about business and money?

7:03Well, look, let's get into the detail of some crucial financial decisions that people will have made in their lifetimes over recent decades. Family consequences as well. When you look at the cost of student loans and there's been a report done by MPs, the Treasury Select Committee, looking at how student loans work across the UK and what has gone wrong potentially as well with the way they've been given out, the way the repayment terms have been set as well. And this group of MPs saying that at one point the comparing of student loan repayments to phone contracts or cinema tickets, that amounted to mis-selling by the government, which, as we know on Wake Up To Money, is a strong term to use about any financial product, and there are consequences on the back of that, if that is ever found, to actually have been the case.

8:00So the Treasury Committee saying students were not told clearly enough that loans could be changed, loan terms could change retrospectively, as many have found. And the committee has called for a U-turn on the decision to freeze the income threshold at which some graduates start repaying their loans. Lil, how much does this have a ripple effect onto the setup of UK universities, the balance between international students, domestic students, the confidence in the student loan system here in the UK? It has a huge effect and it has been a topic for a while. I think it would be helpful for me maybe to draw the picture for all of us.

8:47I think, first of all, 23 % of universities' income is international students' income, which is a big chunk if we also consider also the financial state of universities at the moment, which we've all been reading for a while, where 40 % of them are in deficit. Why? Because the fees have been capped for the last 10 years for domestic students at around£9 ,250, but costs have been increasing, and hence why international student fees have become so important. Now, that's all very good in terms of the university's finances. For students, it's still£9 ,250 or£9 ,500. It's a lot of money when you're taking a student loan and you're taking the fees loan as well as maintenance.

9:46I think the key part here is the information that students receive ahead of taking this loan and how that plays out over the three years of their degree and then once they start paying it back. which is not a par with even taking a mortgage. You know, we are always worried about mortgage fees and the base interest rate as a nation. But students are paying double the base rate on their student fees and they don't see how they're going to pay back. So I think it is really important that we review how these student loans are being structured and actually giving students a clear view from starting to pay to completion of the payment.

10:43And I think to pair it, university applications are going up. So just to give you an idea, John, this year UCAS has released data that says there are 4.7 % more applications for university this year versus last year. Why? Because still 60 % of high-skilled roles require a degree-level qualification. Right. So if you're a kid and you want to do well for yourself, you want to go to university, you want to get a degree. And as we have seen in the news this morning, people have dreams. You know, they want to be architects and they want to be doctors. So they take these loans with hope and trust that the government is providing them with a loan that they can fairly pay back and have a good standard of living.

11:45So I think it is really important. I believe that we can fix this. I mean, this country's financial services is one of the strongest sectors. Surely we can have the best minds structuring a system that works for students that want to pay their loan back, as well as the government that is obviously funding this in advance. But we do want a society that is strong enough and that has the skills in a very competitive world environment. April, from a financial perspective for the UK government, hundreds of billions of pounds will have been lent out to students over the years. When you start to see terms used by MPs that are investigating this stuff, like it's amounted to mis-selling, could this be a real serious financial problem brewing even more than it has been for the UK government?

12:48Well, it does have, I mean, certainly financial markets, especially the gilt market is really focused on anything that's going to cost more because it's, you know, it could mean you need to actually issue a few more government bonds to fund any additional cost. But I think, rather cynically, if the government decides that it wants to change the rules and even historically has put in place Plan 1 and Plan 2 for student loans, they will just say, well, we're going to alter them again, but without kind of admitting culpability, i.e. trying to avoid paying any fines or any mis-selling type compensation claims.

13:29But I'm in complete agreement with the comment that why should student loans be twice the cost of taking out a mortgage? This is supposed to be a social good to educate people. So, yes, of course, you need to charge an interest rate if somebody's borrowing money, but maybe not, which is well above the cost of government borrowing to actually raise that money in financial markets. So it is a bit of a puzzle and changing the terms of a loan is really not OK. in in commercial circles why should it be okay well if it's a government loan all of this something something else that may well be on the um on the intray of the next prime minister who many are presuming is going to be andy burnham education is actually something we have heard a bit about from him uh we haven't heard his full idea for his program of government just yet but he did have this to say in the speech he gave last Monday.

14:26The days of a school system configured entirely around the university route will be brought to an end. University is great for those who want it but when are we going to focus on the life chances of those kids who want something different? When? The country hasn't done that for a long long time. People have argued over many years for an education system based on parity between academic and technical and that is what we will build so um lil what do you think here what do you make of the you know the the principle of shifting some of those priorities away from university towards more vocational training I think we have been in a period where the only thing that is right is going to university.

15:19However, we've always had further education colleges and we have been building apprenticeships over quite a few years. But it was not at the forefront of discussion and political agenda. I think it's quite right. technical education is not for everyone. University is not for everyone. I think it needs to be good that students have the choice. Good celebrated that students have choice. You go to university if you want to study certain things, but you gain a technical education if you want to study something more vocational skills-based. And I think that's absolutely fine. and should be celebrated.

16:10In fact, countries like Germany and Switzerland are renowned for having a good balance in that way. I think it's just these statements should not be perceived as negative, but more about celebrating all of these choices. Yeah, and change could well be on the way in that realm. So if you're interested in the world of student loans or what courses may well be offered going forward, that could be something if Andy Burnham, as expected, becomes prime minister, could well be quite high up his list of priorities of policies to talk about. So we will see, no doubt, in the coming days and weeks. The ultimate cookout starts with the ultimate ingredients.

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17:27Good morning to you. Wake Up To Money on BBC 5 Live. Now, NATO and its 36 summit gets underway today in Ankara, in Turkey. The NATO Secretary General had this message for the alliance's members. Here in Ankara, I expect nations to present clear, concrete and credible plans to reach that 5 % goal. So, April, April Lewis is with us this morning, investor from Insight Investment. One aspect of how countries might raise some cash for spending and investing in their defence sectors. He's making a few headlines in the Financial Times this morning. Berlin in borrowing spree. Germany plans to borrow more than 800 billion euros by 2030, breaking with decades of fiscal restraint to return its defence spending to Cold War levels.

18:23Is that shaking things up a bit? Given that Germany is changing, how it views borrowing so drastically? Well, you know, I read the story and I thought, actually, they've increased their defence spending really started from when Russia invaded Ukraine. So they have been gradually increasing the amount they spend on defense for quite some time. They're actually starting from a really good place, however, because Germany, if you look at their total government borrowing, really hasn't borrowed that much. It was, you know, when we compare it to the UK, their debt levels as a proportion of their GDP were really quite low.

19:00So, you know, if you have to go out and borrow, the best time to do it is when you're not already heavily indebted. So I think when we look at it, we're saying, OK, actually, there are lots of reasons why spending more money on defence makes sense, even if you didn't have the pressure from NATO or from the US encouraging this. But at least from Germany's perspective, they've got plenty of ability to borrow to do it. And actually, their economy could use a little bit of help. The economy's not doing well. So increasing government spending at a time like this makes some sense. Let's bring in Douglas Hanson-Luke on this, who's founder of the venture capital firm Future Planet Capital, which manages the Deep Tech Early Stage Fund, which, amongst other things, invests on behalf of the government.

19:48And Douglas, very good morning to you. Good morning. How are you? I'm well, thank you. Just explain the links your investment angle would have with the defence industry. Absolutely. So the government Deep Tech Fund includes funding from the Ministry of Defence, the Royal Navy, the Army and the Space Agency. They're looking to invest to create new capabilities that will make us safer and more secure in the future. And just when we're hearing what April's saying there about Germany's approach, what's the UK's approach to all of this then? The UK's approach, and it's partly driven by financial necessity, you know to the point of how much can you borrow and it's also driven by real sense hopefully is that we're aiming not to outspend anyone in defense but to outthink them out to think them you know it's the fastest way to do that is to back experts who spent decades uh on research and to commercialize that and make it actually work so it's it's about smart spending of limited amounts of money.

20:53That doesn't sound, it sounds like we talk about the German restraint of many decades. That sounds like a form of restraint. It sounds like a form of restraint, but it's quite quite a good discipline in a sense. We should be realistic about how much we're spending on defence already. And by 2030, it's going to be nearly£5 ,000 per family in the UK. That's a pretty big insurance policy and we need to be responsible about the way we spend it and the threats are real I'm not undermining those but Britain is spending a lot on defence and it's important we're spending on the right things not what we've just done traditionally we've got to look to the future as well.

21:37And given what we've heard in recent weeks about the defence investment plan where money might be going how much of it might be going into certain areas have do you noticed sort of a leg up in momentum in investment in businesses around the UK alongside the announcement of those plans? Absolutely. I mean, the money that we manage for the government funds about 150 million pounds, which is, it's moderate compared to a very modest, frankly, compared to the total defence budget. But it's been increasing significantly every year for the last five years. and it's going into the type of companies that are right at the fighting edge of the new economy and the new world, very often dual use as well.

22:24So I'm in Aberdeen right now. One of the companies we've invested in here is called Honu Works and it makes autonomous all-electric motherships, submarines that can deploy remote-operated vehicles without a surface vessel or crew. very important for the navy and the new world but also great for protecting offshore wind and energy infrastructure and just servicing it can that grow as those involved in it want it to grow is there anything holding it back at the moment um what's holding it back i think is is clear direction which they've now got from the defense investment plan um really clear direction in the case of the navy that this is the type of thing they want to do and if we want to be realistic about what we can grow or scale from the UK or not.

23:10We have to look at not just what the British people need, and it's our job as private sector investors to look at how all of this can be funded through profit, not through tax. Something like this actually has the ability to scale. Britain's just 1 % of the world's population, 2.5 % of the world's GDP, but there's an awful lot of navies out there that have seen the impact of drones on land, but also in the Black Sea. And this is an area where the UK and Aberdeen and Scotland leave the world. And it's interesting to see the front page of the Daily Telegraph this morning. It says Britain to lead European drive to build long-range NATO missiles.

23:50So Britain's going to lead this European project to develop long-range missiles and NATO's reliance on US weapons. So this is called the Deep Precision Strike Coalition. I can hear you're sort of reacting to that what are your thoughts when you hear that? I think there's a chance that we can actually make a real difference there and it's because Britain lies on the edge not just geographically from Europe but we're not a part of the EU we're not a part of the US we're very close strategically to both we're also very close to Commonwealth nations and people talk about the Five Eyes intelligence network They always think of America first, but of course Canada, Australia and New Zealand are in there as well.

24:38And if you actually then look at that, we're able to work with a lot of other nations. So we've done that for a long time. We're doing that with a new fighter aircraft. And even with us, one of our portfolio companies, the newest one, called Octerra, it's a joint venture with Australia, a company spun out of Western Sydney, and it's going to be working to provide space sensors which can track objects and threats in orbit, something that's directly relevant to sovereign capability and the type of missiles you're talking about. Douglas, thank you for your time this morning. Douglas Hanson-Luke there, founder of the venture capital firm Future Planet Capital, as you're hearing, has some interests in getting money to some of those businesses around the UK get investment into some of those businesses, investing on behalf of the government at the moment.

25:33April, just in terms of the UK defence sector, we'll often look at which sectors and industries in the UK are sort of in vogue for investors to put their money into. If people are working in the defence sector right now, does it feel like an area of growth? Well, yeah, absolutely. Not least because it's not only the government spending more money on defense, but it's other governments who may be also investing in UK companies' products. And the UK has a real expertise in all things defense. It's just not gotten a lot of, shall we say, focus in the last few years until, really, until the Russia-Ukraine war started.

26:16And then suddenly everyone was very, very interested. But I do think that it is an area of growth and with extra money going into that sector from this government, but also from the next, we're going to continue to see strong performance from that sector. 85058, we're always interested if you work in the defence sector have you noticed changes as well as you follow this story from afar when we see what's going on right around the world in terms of defence plans and plans for the defence sector and the Ministry of Defence, our armed forces here in the UK is that starting now to have a bit of a ripple effect employs so many people right around the country 85058, your thoughts please Lil, I'd like your thoughts on this one And, you know, making a few headlines again this morning, the Times had picked up on the story.

27:06And now the world tonight, our colleagues at BBC Radio 4 have been speaking to a woman who has had plans to go to a conference run by the online retailer Amazon or business course that was run by the online retailer Amazon. And Rachel Buse, this woman's name, had plans to breastfeed when she was there. And she'd let Amazon know a week ahead of the in-person event at this Amazon warehouse in Dunfermline that she'd need to take her 20-week-old baby with her as she was breastfeeding. But she was effectively barred from the course because it would not let her child onto the site. And, you know, Amazon say, you know, they say, we sincerely apologise to Ms.

27:54Buse. Our site access policy was not communicated clearly before she travelled. We do not permit children under the age of six on any of our fulfilment sites. Where do you view this story, Lil? Oh, John. Okay. So I am one of those mums that breastfed her babies for a year and I had to combine it with work, which I loved. and I have to confirm that my employers were extremely supportive. And yes, I had to give them plenty of notice. Saying that is a complex issue, and obviously I don't know all of the details. Unfortunately, I have not read that story. With health and safety, and there are certain places where unfortunately one cannot take children of a certain age.

28:56I suppose what I would like to see, and I'm sure this lady would have felt the same, where a dialogue had been reached and certain options provided rather than, you know, you cannot attend the conference. Yeah, she was told over the phone on the train to the event. that children under six were not allowed on site. Correct. But what are the alternatives?

29:28And certainly not on the train, on the way to the conference. It is important and there are solutions. I have done all sorts of things over the years. So I think the problem here is about it is important. Women want to be able to carry on with their lives and be able to do both. And it is possible if well planned and supported. I think it is a shame that Amazon wasn't able to make arrangements that supported her. And it still goes to show that when women give birth and start building a family, barriers start appearing that for people seem not important, but the impact not just on that event, but also on confidence and feeling like, you know, I'll be able to do and participate.

30:36It starts fading away. and then we wonder why women are not progressing in their careers post having children. Yeah, Rachel Buse said it's a challenging thing becoming a new mum and being in business is a big part of my identity. So having access to these same opportunities is really important for me and a lot of other working and professional mums out there. And Amazon saying we're reviewing our communications process to prevent this from happening again. Interesting topic. Your thoughts, 85058. Interesting that Amazon focusing on the communications aspects of this and actually saying they have a long-standing health and safety policy that applies to all visitors and employees.

31:19Your thoughts, 85058. Wake Up To Money with Sean Farrington. Good mornings. Wake Up To Money on BBC Five Live on this Tuesday morning, the 7th of July. We had it confirmed, pretty blockbuster news, in the business world, the media world, the TV world, the streaming world, the UK media world. This was announced yesterday. It brings together two iconic brands, you know, the 70-year history of ITV being a beloved brand and channel for many, many decades, combined with the innovation and the premium kind of position that Sky's been able to really create in this marketplace. So that's the elevator pitch effectively, isn't it?