Strait talking?

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1:24Could it be her last one? We'll have a look at what her legacy would be if Andy Burnham chooses to replace her. What would it look like if he continues to keep her in place as well? Donald Trump is claiming that the United States will reinstate its blockade on Iranian shipping in the Strait of Hormuz. We'll dig into how that might work as the oil price gets above$83 a barrel, up 10 % this week already. here in the UK as firefighters continue to tackle wildfires across England and Wales. We'll hear from a pub landlord doing his bit to help with the evacuee he's taken in. And...

2:03Just a day to go until that World Cup semi-final between England and Argentina. We'll find out what the tournament has meant for the big screen business. Wake Up To Money with Sean Farrington. Good morning to you. Wake Up To Money on BBC5 Live. It's Tuesday morning, the 14th of July. It's just after five o 'clock. The countdown is on if you have one. England against Argentina on 5 Live tomorrow evening. Plenty of World Cup coverage and analysis coming up before then. Of course, we're going to be tucking into another aspect of potential growth or a little bit of a boost that the economy might well see during a long run in a tournament, as we've seen.

2:48We'll talk about big screens a little later in the show. Before we get to that, plenty to discuss with Rachel Waring, Managing Director of Waring's Furniture, based just outside of Norwich, with us this morning. Rachel, good morning to you. Morning, Sean. How's the Norwich region this morning, Rachel? Warm, pumped for the England game? What have you got to tell us? Yes, very excited for the England game. Yes, no, it's very pleasant here. There's a little breeze I can see. Yeah, I think we've got a nice day ahead. I detected a little breeze around Salford this morning as well, something that might ease a few fears about the temperature.

3:26Rachel, how's business when you have the run of heat waves that we've had this year in the middle of another one now? Does that change furniture buying habits at all? Are people thinking differently or just not thinking at all about stuff? no our business isn't as reactive as that because you know there's we work to programs of refurbishments and orders are placed months in advance so no it doesn't really have any impact but it does have an impact on staff it's very uncomfortable for staff because we don't have air-conditioned factory um premises and it's it's not very nice for staff so we have to rely on them digging deep and working through it so you know that's a bit difficult but no it doesn't affect turnover.

4:14As the years go by does it sort of do you consider an investment into or some kind of change about your manufacturing processes because of that does it feel to you like there are more of these occasions you're having to manage for your staff and your staff having to dig deep through? Yes, they definitely are. I mean, I bought a strange thing this month. I bought a load of neck rings that you can put in the freezer. And then, you know, the staff in the factory, they only have to work two hour stints and then they have a break. So it's constant little breaks, which is nice. But yes, I bought these neck rings that you can put in the freezer and then they can put them on with a little scarf around them.

4:52And it just helps to bring that body temperature a little bit down. But it's very difficult. If we were to attempt air conditioning, we're under pressure from our big customers with regard to our net zero aims so that's not going to be very helpful is it so we're in a very difficult situation what because of using more electricity yes to do that um i mean are there are there ways around that we've had lots of people messaging in recent weeks whether it's a home that they're running or a business they're running are there if there was the investment opportunity for for solar panels I don't know how my work for a big manufacturing place like you would have for heat pumps and and the like are there actually efficient ways of being able to do that or like even if it was if you were starting from scratch on a on a on a new site that actually you could have a working environment that wouldn't necessarily be using a lot more energy?

5:52I think if we did that as a country, I think the lights would be out, don't you? If we suddenly all had air conditioned everywhere, we're on the sort of blink anyway sometimes with the grid. So we do have solar panels, so we do have that. But no, at the moment, there's no plan for us to do it because I don't know that the country can do that really. Those neck rings becoming all the rage, aren't they? after these hydration breaks in the World Cup as well. Everybody's thinking, what can we do to get through? Is the feedback on the net rings that they actually do a bit of a job for a short period of time?

6:28Yeah, they weren't very keen on them, I have to admit. On to the next one anyway. 85058, there'll be somebody somewhere with a tip about making these things work one way or another. If you work in a factory yourself, is there something, have you found yourself having to dig deep, as Rachel describes there, is there a way of getting through it a little more comfortably? Do let us know. Got George Godber with us this morning as well, fund manager at Polar Capital. George, very good morning to you. Good morning, Sean. Mansion House speech later today. I know it becomes a major part of the diary of the city, of the Chancellor.

7:07It's an opportunity for the Chancellor to give... Well, everybody had their thoughts on what is going on in the City of London, in financial services, the wider economy. Just explain, George, the importance, if that's the right word, of Mansion House, the event, the speech. What's it really all about? One of the roles of the Chancellor in the job remit is to be the head of financial services in the UK. they represent it as a sector and so historically it was a chance for the Chancellor to sort of talk to the heads of insurance and banking and foreign exchange and commodities and all of those different things that happen inside the City of London and sort of lay out what their policy objectives were and I guess so they'll probably get a chance to meet.

8:10I mean, I've obviously never been, not important enough. But in recent years, it's been used as a sort of way of trying to sort of indicate, you know, what sort of political change or messaging or, you know, taxation might be coming. I think today will obviously be a little bit of a damp squib because most people were thinking, well, we've got a new chancellor in a couple of days. So therefore, it won't get the attention that it usually does. And is that the feeling? You know, we don't know. There's been a lot of chat about who the next prime minister will be for quite some time. And there's, you know, the huge assumptions that it would be Andy Burnham have been playing out.

8:50But it hasn't quite been the same with who might be his chancellor. Would you say, is that how the city's viewing it, that it ain't going to be Rachel Reeves? I think the city basically places it quite a lot of attention on the prediction markets because there's not a lot else to go off. I haven't spent any time or met his inner circle. And those markets are suggesting that there will be a change. some of the underperformance of UK guilt, so the price at which the UK government borrows of late, is definitely because of that and the speculation and that they pick, you know, there's Miliband and that'll be market unfriendly.

9:38Now, of course, it's difficult to disaggregate that because also some of our underperformance of guilt in the most recent days is also because of Iran and the structure of our energy market and the fact we have done nothing to change that. So the market is positioning for a change, but it still doesn't know who or what it's going to be. So let's have a little listen to Rachel Reeves about how she was defending her record so far as Chancellor when, of course, she was speaking to the BBC to Laura Koonsberg at the weekend. Have I done everything right? No. But the big decisions I've made have enabled our economy to grow, interest rates to fall and inflation to be tamed.

10:18and those everyday choices about libraries, about breakfast clubs, about free school meals, around lifting kids out of poverty, about reducing NHS waiting lists, spending more on defence, investing in the infrastructure that our country needs. Those things have changed because of the decisions I've made and I'm proud of that. So, George, how, from that financial perspective as you laid out, do you reflect on what Rachel Reeves has done so far? It's, well, the facts are the facts. I mean, I think we've seen unemployment increase every single month. She's been a sort of throat, she's had her hands around the throat of, you know, the economy in terms of huge increases in taxation.

11:05You know, the two biggest tax rises for budgets ever. And, you know, taxes, you know, wherever they fall, they're hurting somebody. And so, therefore, there's been a lot of pain. if you want to give her dues, she was able to maintain an element of harm in the bond markets even when it was fractures. But over the period, we still had a much higher borrowing cost than many of our peers. We just didn't lose control of the bond market. So it wasn't as bad as trust quieting, but that's not really the benchmark we should be judging our chances on. You didn't manage to sort of trip over your own shoelaces and break your nose is not a great benchmark, but that's where we are.

11:50Rachel, how do you reflect? Rachel Waring, Managing Director of Waring's Furniture. How do you reflect on Rachel Reeves so far? Oh, well, I think today she will be a little bit like that list, that clip you just played. She's just going to be rattling out a bit like Keir Starmer did, rattling out sort of self-back-tapping of a list of things she feels has achieved. For me, I think it's been terrible. I just hope the next lot don't make the same mistake. Do you remember that original doom and gloom where they just talked everything down, everything was negative, and it just set the scene for this doom that spread across the country?

12:30And of course, we have to have positivity for people in business to feel confident in investing, in growing, in having a go. And I just hope we don't get all that doom and gloom again. No, I think she did some terrible things and just not focused enough on business. And of course, they came in saying it was all going to be about growth. And growth is all about GDP. that all comes from business and they really do need to be focused on giving businesses the tools in the levers that they pull to actually grow and we haven't had that. What does that mean Rachel when you're looking for the tone to be more positive and that's something we've definitely heard over the last couple of years about how Keir Starmer and Rachel Reeves started off that that tone wasn't there.

13:24How does that sound? Because we can talk about numbers all we like and make the case, either defending Rachel Reeves' legacy, and as George was alluding to some things there, criticising some of those decisions as she went along. But if there's a new Chancellor coming in, how does it sound to you? What kind of things are they saying that actually has a ripple effect of creating more confidence? Yeah, they do need these people. You know, they are, they're supposed to be our leaders. You know, they need to be, you know, man managers for the country. So we need to feel inspired. So we need to be focused on everything that's positive, but not in that horrible spin way where you listen to it and you think, no, you've just crunched those statistics badly.

14:10You know, we hear it all the time and they think they fool the people, but they don't fool anybody. But there is lots of positive things to talk about. But I think sometimes their ideology gets in the way and they don't like talking about those things. I mean, the thing that Rachel Rees needs to be very, very grateful for is that she isn't going to be here, I suspect, in a year's time when the tax receipts coming into her pot of funds is going to be significantly diminished because of the actions she's carried out. There won't be the corporation tax takes and the dividend takes and all the things that she raises her tax pot from.

14:49They will not be there within a year when the tax bills start getting paid in October and January, July and October. It will be so reduced because of her actions. And if I were her, I'd be quite pleased to just get out the door, quite honestly. Have you got a chancellor in mind, Rachel, when you see who the potential runners and riders may well be? No, no, I've got some that I'd be horrified at. And I don't want somebody that's just going to, well, do I want someone that's going to stagnate? You know when the traffic lights break on a busy road and suddenly you go through that junction faster than you normally go through that junction because actually we're all capable of working out and it all flows and everything's lovely.

15:35Maybe we do need somebody who just does nothing for two years and just lets us have a little bit of, you know, no more changes and let's just let things flow. Maybe that's what we should want. Who knows? Although the idea of just being a free-for-all on the roads with no traffic lights might not be the most calming idea for lots of people around the country. but you're sort of you're putting the case for a little bit of independence for business to allow them to crack on a bit more people like yourself running businesses around the country yeah everybody's frightened of what's coming down the track all the time so let's just have some visibility have some forward planning tell us what it is don't sneak in anything extra don't suddenly have a halfway mini budget this and that because everybody's just terrified of what else is coming.

16:27And that dawned on me the other day that there are lots of young people in this country who have no, have never witnessed or experienced the good times. You know, the boom times, loads of money, all that lovely boom time that we occasionally would come round. How long are we since we've had one of those? Are we talking 30 years since we've had anything like good times. And that is really, that is quite depressing. We are overdue some good times coming down the track, because otherwise people won't even realise that it's a thing. I don't think people believe that you can have good times and make money.

17:08There'll be no bottom line net profit in hardly any businesses for the next couple of years. So what's going to inspire these people to go into business or invest in businesses? We do need to have some good times occasionally. George, you speak to a lot of people looking for investment into their businesses as a fund manager yourself. Can those good times be just around the corner when you see the wider context of everything going on at the moment?

17:38Yes, I fundamentally believe that the UK is, Yeah, that Napoleonic sort of mantra when he sort of stared down his nose and said, we're a nation of shopkeepers. Well, I still think we are. We are a nation of small businesses where there's lots and lots of people who want to roll their sleeves and get up and get on with it and create. And through all different segments of the economy, there's lots of promise. but we have had a very, very long time, sadly, as Mitchell just said, where we haven't allowed the economy to, you know, to grow. It almost seems like the GFC, maybe the early bits, the 2010s were a bit better.

18:21And, you know, we've had policy after policy after policy and intervention that just none of it's worked. So I do believe we'll get there. As somebody said to me the other day, we're sort of stuck in the 70s at the moment. It's all very depressing. We've got our prime minister who wants to sort of double down on that. But after the 70s comes the 80s. So, you know, yeah, I'm a fundamental believer in the UK and the strength of it long term. But it's, yeah, we're not seeing it at the moment. 85058, your thoughts, what's needed to have those good times around the corner again? Let me know. It's definitely Rachel Teanus up there for a bit of a debate on what that looks like and what those good times look like in the past as well, perhaps for another Wake Up to Money, that GFC, of course, that global financial crisis.

19:05at the end of the 2000s, having a huge impact on a lot of what has gone on. Good morning to you. Wake Up To Money on BBC Five Live. Thanks for getting in touch on all we're chatting about. Kevin and Harlow says, don't forget the fall in tax receipts from the self-employed. There's a lot of self-employed people I know are giving up being self-employed or taking early retirement because they don't want the extra hassle that making tax digital causes. Let me know your thoughts on that, on all we're discussing about Rachel Reeves' legacy. She's not gone. She's still Chancellor. She's got a big speech later today where we may well be hearing a list of the things she's achieved.

19:45Do you still feel like she's making the case to stay in the job? Let me know. We've got Rachel Waring with us on the show this morning, boss of Waring's Furniture. Rachel, Jane in Oxford's been in touch saying, I went with a friend to a hospital in Oxford and was shocked that it was not air-conditioned. It made our visit very uncomfortable. You were talking earlier about your factories not having air conditioning, Rachel. Do you think expectations of people, whether it's your staff, people more widely, are actually changing? Where they have experienced more air conditioning in their lives in various places, whether it's abroad, in their car, in shopping centres, wherever that might be, a brand new hospital they've visited and then you go to an older one.

20:28that actually that might be a thing that sort of pushes businesses, perhaps like your own, is that the expectations of the staff change. Yes, absolutely. I think that is a lot of it. And it does genuinely make it all feel uncomfortable because we do move from our air-conditioned car into this space. So, yeah, I think that is a very, very big reason. And I've got a friend who works at the hospital in Norwich and she was moaning about the same thing, saying, I can't believe we don't have air conditioning. As we're getting hotter and hotter, I don't know. Is this something we do need to consider, but it's going to need a lot more electricity?

21:11Well, yeah, that'll be on the long list for the next Chancellor to be considering. Trevor in Bristol said, maybe we should have a change of Rachel's for Chancellor. Your guests would make a good one. I don't know if you fancy the gig, Rachel. Don't leave us stranded on Wake Up To Money if it ever comes your way. interested in your thoughts in the developments again on the cost of energy. So we're seeing this morning now the price of a barrel of Brent crude up above$84.50 a barrel. So you're starting the week to 10 % or so less than that or around 10 % lower. That sandwich has gone up anyway over the course of this week.

21:51The US, the latest, the US is going to reinstate its blockade on Iran's shipping in the Strait of Hormuz, according to a post from President Trump. He said for the cost of safety and security, he charged 20 % on all cargo shipped through the waterway. How does that work practically? Does it actually work? Lars Jensen is chief executive of Vespucci Maritime Shipping, former director at Maersk as well, the shipping giant. Lars, good morning. Can that work? Can the US charge a 20 % fee on all cargo shipped through the waterway? In short, no. I have a very hard time seeing that ever becoming a reality.

22:30How would they even collect the money? How might it actually work? The only way that could potentially work is if the US for some reason would say, fine, we will send you a bill, you will have to pay the money, or we will impound your ships, which would basically go against any international shipping rules. I do not see how this could work in practice. And that's before we even start to look at what is the financial impact of this. And similarly, when we hear Iran, as it has done quite a bit, talk about a long-term shipping fee that Iran would claim. Is it the same when you hear the case put by the Iranians?

23:18Not necessarily, because again, the Iranians de facto control the strait, despite all of the rhetoric we have heard in recent months, especially from the US in terms of whether the strait is open or closed or who controls it. The reality on the ground is either you abide by Iranians' rules right now or you run the risk of having your vessels shot at, as we have seen exemplified over the last 12 hours. So are some companies making payments to Iran at this moment in time? As far as I'm aware, during the conflict since it started in early March, there have been some payments made to Iran by some shipping lines.

23:56But it is very unclear what the level of payments are, who the payments are being made to, and how often this actually happens. I mean, that's quite a remarkable development, isn't it? That, you know, for those in charge at shipping companies around the world are in some way having those conversations with Iran, you know, a country at war with the United States at the moment. Well, you can say there are all sorts of shipping lines out there. The vast majority of them are definitely not paying Iran anything, which is also why traffic fell to almost zero for months. during the crisis. So whilst there will be some examples of some shipping lines who are paid, that is certainly not the norm.

24:42And just give us a latest, Lars, this morning. As again, you know, the conversations are feeling very much like the start of the war back right at the end of February, beginning of March, about looking at the impact on flow and the confidence of shipping companies. As you wake up this morning, And we again can glance at the price of oil this morning and see that going up, up, up, as it has done this week. What's the story on the ground, on the water for the ships? Basically, we're back to square one here. Overnight, there's been three oil tankers which were attacked. Two of these are reported by the Ministry of Defence in the United Arab Emirates.

25:26Two oil tankers were attacked. Both of them caught fire on one of the vessels. There was one seafarer who were killed and eight other injured. There's a report from the UK authorities also that another tanker has been hit down in the Gulf of Oman. So that makes for three attacks within just the last 12 hours, which most certainly is a dramatic escalation compared to what we have seen. And this is after an exchange of, let's just call them words, over the last date, where Iran declared the Strait for closed, which clearly they are trying to uphold, and where the Americans over the last couple of days in defiance have stated that the Strait of Hormuz is open and you can get US military protection.

26:09The events over the last 12 hours shows that the Strait is most certainly not open. What do you make of these reports on the front page of the Financial Times, the big splash on the front page of the Financial Times? Dubai's DP World planning new east coast port to bypass the Hormuz Strait. So for anybody who's sort of been familiar with the map of the Middle East and the Strait of Hormuz now, effectively having a port on the east side of all of that and of the United Arab Emirates, meaning that shipping would not need to pass through that narrow strait. If it was coming in, it would never get there and would never need to pass through if it was on its way out.

26:57Is that feasible? Is that something shipping companies will be pushing for? Well, you can say that is the bypass that's already been used today. You do already have port facilities, not from DP World, but from other port operators on the East Coast. And they are the ones that are being used for the bypass. You do have container cargo go through those ports and then move overland as we speak. The challenge with that setup is that extent, the overland movements quite sharply, which requires more inland infrastructure to also cope with. So, yes, it would help the bypass, but you're not going to build such a port overnight.

27:34This would, you can say, be feasible if there's an expectation the Hormuz crisis will last for years, which we cannot rule out. But if it doesn't and the Hormuz opens, nobody's going to use that bypass. everybody will start to go back, go through almost the way we've been used to. So how does something like that get done? We've heard, haven't we, about potential pipelines being built in different directions to be able to get this oil and gas out of the Gulf region. So if there's that waiting game of wondering, is this going to go on for years or not? I mean, that sounds to me like a situation where a decision never gets made.

28:15and something like this never gets built? You know, at the end of the day, this is again all about money. One has to realise that building these contingencies, these contingencies are great to have when you need them. But in times where you don't need them, nobody wants to pay for them. So all of this always boils down to who wants to pay to build this infrastructure where you may not actually ever recoup your investment. Lars, thank you for your time this morning. Lars Jensen there, Chief Executive of Vespucci Maritime, formerly of Maersk. George, just on that contingency planning, not so much on the scale of the ports and the infrastructure in the Middle East, but what you see, how businesses here in the UK are reacting now to another escalation after a brief period of some optimism about what's happening in the Middle East.