Trump and tariffs - one year on

0:00Wake Up To Money from BBC 5 Live Hello, morning. Welcome to Wake Up To Money. It's been a year since Donald Trump was sworn in for his second term as US President. I will very simply put America first. An awful lot has happened since then. We will be looking back at a year of tariffs and trade upheaval while asking what might happen next. Also on the programme today, we'll take a look at the government's plans for a new water regulator and find out what it might mean for the industry and our bills. and we've been speaking to Neil Clifford, the boss of The Shoe and Handbag Maker, Kurt Geiger, about, amongst other things, education.

0:38We should control, alt, delete the whole thing and create an education system that prepares our young people for work. All that to come on Wake Up To Money this morning. Wake Up To Money with Will Bain. Morning, welcome to Wake Up To Money on Tuesday the 20th of January. Just gone five o 'clock in the morning. We're with you this morning. Great to have your company again on the programme. Yes, we are going to pick through some more tariff news. President Trump saying he's 100 % going to go ahead with those extra tariffs on UK imports to the United States if he doesn't get a resolution that satisfies him around Greenland.

1:12But there is lots of domestic issues to chat about as well. The water white paper, a new regulator, potentially a year in the making, but MOTs for companies. Will it actually clamp down on the kind of poor performance that we've seen in terms of leaks and sewage leaks from our big water companies? We'll be chatting about that in the first half of the programme. And we'll also be hearing from Neil Clifford, I was mentioning there, the boss of Kurt Geiger, one of the British success stories, really, about how the company switched really from being one that I guess a lot of you would know it as, as just a shoe retailer, to now handbags being a big thing it sells and expanding rapidly, particularly in the United States as well.

1:49So, loads for you to get your teeth into this morning, should you wish to join the conversation, and you can do so in all the usual ways. 85058 is the text number. 08085 909693 is the WhatsApp. Panel of guests to steer us through it all as well for the next hour. And Ian McAllister is here in the studio with me this morning. Ian, Chief Executive Officer at Mann Commercial Limited Security Business with more than 1 ,500 employees. Morning. Great to have you back in the studio. Morning, Will. How are you? Yeah, not too bad. How were the roads on the way up from Birmingham this morning then? Not too bad, early enough.

2:20I was going to say you were out bright and early. Six o 'clock at night. How's business going at the moment? Very good, yeah, no, everything good, thanks. And just got to keep working hard. Yeah, remind people about what man does, because it's sort of big events, really, that you do security for. Yeah, so as a security company, we've been trading now 33 years. A lot of people talk about the events, and we do a lot, obviously, with the music and the sport, and well-known for the boxing. but that's less than 5 % of our turnover but it's what 85 % of people talk about. Including me. Yeah, yeah. So what's the big chunk of the turnover from?

2:58Commercial premises. So corporate, logistics, front of house, concierge, all different variations, many, many different sectors but as I said, because we're national, we're all the way up from Aberdeen all the way down to Paul on the south coast. Yeah, and we were chatting about this with you before about, I think the last time you and me certainly were in the studio together, there was that real spike in shoplifting, particularly at supermarkets and high street retailers as well. Are we seeing any of that kind of cool down or as people, as we get into the new year, as keen as ever for companies like you guys?

3:33Yeah, seems the same. And it's a lot to do with, seems like the laws and the courts and that seems to be a lot less stringent than they were many years ago. So it seems that it's quite tough out there really, certainly with High Street and what people are allowed to do these days. And the budgeting, even, you know, we've heard from lots of different sectors, sectors like pubs, for example, where I'm imagining you've got a lot of staff or nightclubs that have been in kind of financial squeeze recently. Are they still finding the money for security budget, I guess? Yeah, nighttime economy is very, very tough, whether it's security or whether it's waitresses or whether it's staff in general.

4:15But yeah, budgets are a massive thing at the moment, everyone. And that was why it was a big relief with the last budget where the national insurance wasn't a big hike like it was 12 months ago because it massively affects a lot to do with budgets. Yeah, has it affected you guys? Yeah, absolutely. Well, it's like everything else, isn't it? We, a lot of the time, are grudge purchases. So what it is, it's always about the spend and the cost and everything else. And it's conversations you're having on a daily basis. Yeah, really interesting. Well, there's the backdrop that Ian kind of, so interesting, isn't it?

4:48It's not just his own company, but it's all those other companies that he works with as well that he's going to be able to give us a perspective with, from, sorry, throughout the programme this morning. Alongside Ian for the next hour is Louise Kernaghan. Louise is the head of Global Equity Opportunities at BNY Investments Newton. Louise, morning. Great to have you on Wake Up to Money as well. Morning. Thank you for having me. How was the market then to kind of kick off the week? We were teeing this up yesterday with all the kind of noise, I think one of our guests put it as yesterday morning in the political sphere.

5:17How did markets sort of across the board react yesterday in the end? The European equities reacted negatively, which I think would have been broadly expected. However, I would say it was not too negative. Markets in Europe were down roughly 1.3 percent, the euro stocks 600. and bearing in mind that European equities were up 20 % last year, give or take. So we're coming from a very high level. 1 % is still within the realms of a normal daily move. The US market was shut yesterday for a bank holiday. Yeah, so it remains to be seen how that reacts, but the futures are suggesting it will be down about 1%.

5:57So, yeah, markets are negative, but not too bad. Yeah, well, let's hear a little bit from President Trump around the latest on all of that because he vowed to 100 % follow through on his threat to impose tariffs on European countries who oppose his demands to take control of Greenland. Yesterday, Norway's Prime Minister revealed that he'd had a text exchange during which the President said not being given the Nobel Peace Prize released him from being obliged to think purely of peace. Asked by NBC News in the United States if he would use force to seize Greenland, Mr Trump answered, no comment.

6:31Meanwhile, in the House of Commons here in the UK, Yvette Cooper said a trade war with the United States was in nobody's interest. This reflects the fundamental principles of sovereignty and territorial integrity to which this whole house is committed. Second, the use or the threat of tariffs against allies in this way is completely wrong. It is unwarranted and it is counterproductive.

6:59Louise, I guess we were talking about this on the programme as well yesterday. For those companies that you watch closely, it's almost not whether these tariffs come into force or not right. It's again, once again, the sort of the unknowing landscape that's the most difficult thing for them to navigate here. Yeah, absolutely. I mean, we saw last year where in April it was announced that the global tariffs were likely to come in and markets fell extremely sharply. And then even though tariffs did come into place, not as bad as they were initially feared, markets went on to recover and were up 40 % from their lows last year.

7:42So it's clearly the point of uncertainty, which was the worst part. So I think this is really what the market has to come to grips with over the following week or however long it takes really for more clarity to come. has to deal with not knowing, which is more difficult to price in than obviously having information. Yeah, Ian, it doesn't obviously directly affect your business, but as we were just having a cup of tea before we came in the studio there, you were just saying it's often all clients will talk about. Your customers all the time, anyone to do with manufacturing, anything to do with any type of export, import, it's always the not knowing, isn't it?

8:19And how does that kind of, because you see it with these companies, how does that manifest in terms of sort of budgeting and stuff? Well, massively, because a lot of the problems with budget is the not known and expecting always the worst and not knowing, especially with anything with these tariffs and how tight it's going to be or how in force it's going to be or how long it's going to last for. And we haven't heard, Louise, yet, have we any? I was just thinking, you know, last time when there was big tariff uncertainty, we heard the really big exporters, the likes of Jaguar Land Rover and JCB kind of telling the market that they were going to press pause a little bit on what they were doing to kind of get their idea of what was going on with the kind of tariff picture.

9:02Did we hear from any of the big companies yesterday or was it kind of pretty quiet on that front? It was pretty quiet on that front, which is what I would expect given that it's such early days. We may expect to hear something. But what I would say is that compared to last year, tariffs is now something that companies are more used to dealing with. So they do have mechanisms in place to be able to cope should they come in. Well, we'll talk a little bit more tariffs in the second half of the programme because we're going to be looking back at a year of President Trump in office and the economic backdrop of that and what might be to come in what is obviously an election year in the United States, so always pretty turbulent as well.

9:40So 85058 on the text. If, like, as Ian says, you're a business that is potentially impacted one way or another, trying to make decisions, trying to navigate through this, particularly a smaller company, and a lot of you run your own businesses, heard a couple of you on Five Live yesterday talking about decisions, you know, to stop on that smaller scale, stop exporting to the US because it's just too much of a headache now. Now, if that's you, 85058 on the text 08085 909693 on the WhatsApp. Wake up to money with Will Bain. Now, it's that time of the week again. Our latest episode of the Big Boss interview podcast is out.

10:12It's live on your stream. So if you don't subscribe to it already, please do. We're looking to add the numbers over there as well. This week, we've been speaking to Neil Clifford. Really interesting backstory. Chief exec of the shoe and accessories maker, Kurt Geiger. Two years ago, the company launched what it's called the Business by Design Academy to help young people from underrepresented backgrounds into the fashion industry. And Neil Clifford told us a little bit about his own education. School was very difficult for me because, you know, dyslexia didn't exist, did it really? Or certainly, well, obviously it did, but didn't really in Portsmouth.

10:46And all my mates, you know, got four or five O-levels and went on to their apprenticeships or jobs in the dockyard or the RAF or whatever. And I opened mine and it sort of said E-F-U. There was a few U's. I can't remember what they were for, but C, art. And I thought, oh, that's a challenge. I need a plan B here. And I sort of chucked a bit of paper away. Because what had been plan A? What did you want to do? My mum wanted me to be in the gas company as a fitter, unfortunately, because that's what my dad was. Unfortunately, I failed the entrance exam, so that was really good. I wanted to be a tornado pilot, but I had asthma.

11:29So in hindsight, flying over Iraq in 1991 in a tornado looking for your puffer wasn't probably ideal, was it? So there was 11 % or 12 % unemployment. 83 % was the worst bit of the 80s before it got a bit better. and therefore there were no jobs at the job centre. I remember going down there with my mate Simon and looking for actual real jobs as opposed to the YTS scheme. There was loads of this, the youth training scheme. Is that why you've opened this academy then as well, to kind of open up that opportunity? 100%. The story of the academy really came out of COVID and we were like, we've done an amazing load of good things for people in its in its simple sense rishi was not wrong talking about mathematics right but you can't really out mathematics india or china you know we've got other really great skills too as a country and if you think about film or music or fashion or architecture we're world champions or we'd be in the final probably if there was a world championship in creativity and linking that to the fact that young people are really up against it whatever the stats you know over a million young people not in work or unemployment at the moment and if you've unless you've got a you know my kids are going to be fine right because I've I've dragged myself up the pole and you know I've got a few bob and they've gone to posh universities if they wanted to do that and you know I can bring someone and get them a work experience because you've got the contacts it's all very easy isn't it for for me and my kids but most kids haven't got that you know they will live anywhere in the uk they want to they want to be a photographer they want to work in film they want to work in design they want to work in an area where the country is really good at but they don't have access and i think that's what we're basically providing i think the education system if i was going to be and i don't like being critical or negative but our education system is not really fit for purpose now.

13:44It's not really helping young people. The retail industry is the number one employer, private sector employer, let's say. Three million young people, three million people. It's an amazing vehicle for social mobility. Okay, universities are too. I'm not anti-universities, but it's also a bit of a challenge now coming out of university and finding a job, isn't it? unless you've got PPE from Oxford or whatever it is. There's hundreds of thousands of very brilliantly educated young people looking for work. So I think we wanted to try to, one at a time, we're now, we've written a curriculum, we've recruited an amazing group of teachers, we built a school actually in our office.

14:34You know, we're specialists in sales, finance, IT, marketing, digital, store design, merchandising, buying, negotiation, HR. We've got an amazing set of skillful people. The responsibility you can get very early on. You know, I was a store manager in Bromley, age 21. Found my skills and mathematics suddenly made sense when it came to budgets and money. And even though I was no good at algebra or fractions and all of that stuff or how many wives Edward the Eight had, I mean, how important is that anymore? I'm not sure it is unless you want to be a history teacher, right? So I think we have to, we should control, alt, delete the whole thing and try to create an education system that prepares our young people for work.

15:27Yeah, if you want something a little bit away from the politics, I know the timing of some of the Big Boss interviews means that we've got lots into kind of tax and things like that. It's just a really nice conversation about someone who's worked for 30 years in their same company there. So as I say, if you don't subscribe already, there's plenty more of Neil Clifford on there. And he's a wake-up-to-money listener. So if you're going to text in, make sure you're nice about Neil as well. Ian, I just wondered how much of that you kind of sort of related to a bit, listening there. I think 100 % all of it, to be fair.

15:56and what it is, I speak quite a lot with different interviews and podcasts and talk about school and academia, etc. And the crazy thing when I was at school, they taught you about Pythagoras, they taught you about Square Root, but they didn't tell you how to open a bank account or how to sell or how to conduct yourself in business. So from my point of view, everything he says is correct. And school for me weren't the best. As I said, I've been trading now 33 years. my favourite instrument at school was a dinner bell. So from my point of view, I was always waiting for three o 'clock to get out the door.

16:34But I'm not trying to make you blush. You've been an extremely successful, by most metrics, you've got to be Bob. Yeah, but work and discipline and working hard, etc., there's no real, I think in the last 28 years, I've had one day off sick because you've got to work really, really hard, etc. But as I said, I can relate to a lot what he says, and it's a great interview. And then big boss interviews are really good because you hear good perspectives, really. But I agree with school and everything else. There's a lot of challenges. But I just think... What is it then? How do we crack that? Because we go on to talk about that, actually, in the longer interview on the podcast.

17:13It's an attitude thing, isn't it, as a country. Where do you think it comes from and how do we break it? Well, I just think that people concentrate on people who go to universities. is and the amount of people I've dealt with over the years were very very successful either are dyslexic or didn't do great at school but it's that hard work and the discipline and making sure that you're up and at it every single day but there's so so many times if you're from a privileged background or you're from a background where you can take your foot off the gas a little bit different but from our point of view it's about working hard.

17:46Louise we're going to get numbers out on jobs and employment, aren't we, a little bit later on today. I know it's overly simplistic to sort of say, well, let's just focus on these other things as well. But do you think that there's something in that that actually we do need to push a little bit harder for the value of certain roles in the economy as well, that you can have a great career in working your way through retail as Neil Clifford has there or through security as Ian in the studio is here talking about as well? Absolutely. I mean, as an economy, we want to have success through a diverse number of industries.

18:27And when you're at school or when you're at university, you're not even aware of what the opportunities are out there. Often you are just funneled down an academic route. And so I think to be able to broaden out the career opportunities for younger people is beneficial. beneficial um and just for younger people you know it's well documented that unemployment for youth is higher sorry sorry the line just broke up there a second and i thought you would stop stop talking actually so apologies no um and just in terms of kurt geiger themselves it's interesting we talk a little bit more about what the company strategy is interesting that they're kind of they're booming outside the uk a kind of lesson potentially as well for for retailers there that British success stories don't necessarily have to be just in the UK, Louise?

19:21Definitely. We've seen the UK retailers have success outside of the UK over many a year. You know, if you go over to Europe or to the US, you often see the UK shop heads there. Success in the US has maybe been a bit more hit and miss for UK companies. it's a bit more challenging for UK retailers to penetrate that already very penetrated market. But absolutely, there's definitely scope for growing outside of the UK, which ultimately, you know, we are still a relatively small market on the global scale. And Ian, expanding outside the UK, very much kind of what your business is doing as well. How important is finding new opportunities outside of the UK as well as finding new clients in the UK?

20:06Yeah, absolutely. Over the last few years, we've been fortunate to work in Saudi. We've been fortunate to work abroad. So from our point of view, it's not just concentrating on the UK, but it's also getting out not only in Europe, but also further abroad. Let us know what you think on 85058 on the text or 08085 909693. Is the WhatsApp to get in touch as well? 25 minutes past five here on Wake Up To Money. And the biggest overhaul in a generation, that's what the government's calling the water reform white paper that's going to be published later on this morning. The document sets out what it's calling clear powers for a new regulator which will replace the current system.

20:44Peter Devery is from the Angling Trust, a campaign group about cleaner waterways, and says people want to see results. The proof will be in the river. Does the river improve? Do the rivers across the country improve? That's the end result. Doesn't matter what you call that regulator. Doesn't matter how many regulators there are. If the difference isn't made in the rivers, they will have failed. Dr Heather Smith joins Ian and Louise now. Dr Smith is the Senior Lecturer in Water Governance at Cranfield University. Morning. Good morning. Talk us through then what is proposed to change here because it seems a little bit of scepticism from groups like the Angling Trust already.

21:25Well what we're seeing this morning mainly is the culmination of a lot of things. So it's sort of reflecting on one of the main recommendations from the Independent Water Commission that took place last year. And that was the creation of a single regulator, which is combining Ofwat, the Drinking Water Inspectorate, and some of the water elements of the Environment Agency. So that's one of the focuses of the white paper this morning is about the powers of that new regulator and what it's going to do. So it's somewhat different from What we've seen before, it will have a lot of the same functions, but it will have new functions as well.

22:06There's a note about a chief engineer, for instance, that will sit within the regulator. That's not something we've had for quite a while. Ofwap in particular has been more of an economics organization. So one of the big criticisms is that they've not really had the technical understanding for some of the investments that are required. So having a chief engineer sit within the regulator will help with that sort of technical understanding and know-how and being able to really understand what asset upgrades are required and asset health and things like that. So we're seeing a few new measures that are coming in and new powers for that regulator that we've not really seen before.

22:46Another one of the kind of criticisms of what the current regulator, isn't it, Heather, has been that it hasn't had the teeth really to, I guess, keep these companies in line. Do we know in terms of powers for fining or control or how it's going to be allowed to regulate when things go wrong? Do we know anything about that? So there's kind of a shift in the way it's approaching that from what the press release says. We've had up to now kind of what's relied on benchmarks and performance measures that sit across the companies. But what this measure is proposing is something more of a supervisory approach where we'll have teams that are focused on individual companies and trying to understand the circumstances of those individual companies and what they need and what's going wrong.

23:39And the idea is that will be more of a preventative approach that with closer monitoring and closer working with those water companies, they'll be able to spot problems before they get too bad. So that is a difference from the current model we see. And the hope is that that will lead to more of a preventative approach with some of the long term planning problems. One of the other issues here, I suppose, is when all this is going to come into place, Heather, as well. Well, that's what we have to see. This is just a white paper at the moment, so we're waiting to see what comes out of that in terms of plans for changing the legislation, and all of that takes time.

24:18So it will depend on exactly how quickly that regulator is created, because these things are, again, not quick processes. The water companies are currently in what's called an AMP cycle, so a spending cycle. so we may not see much change happen until the the end of that cycle which was in 2029 but we'll see if we'll see if defer announces that there might be some change some more meaningful change before that louise come in here at this point always raises temperatures doesn't it this issue for obvious and pretty fair reasons given especially if you're a southeast customer in the last few weeks as we've been talking about on the program but just in terms of setting frameworks for these companies it's a sector that's just that's got to work hasn't it and we've got to find a way through together does it sort of make sense to you some of the changes that are being proposed yes definitely um i think some of the proposals that look interesting to me um is the fact that it's putting prevention first and the good thing about that is that you know We do have technologies that can be used to help spot problems before they arise, and they can actually be cheaper to solve.

25:31In fact, most cases, I'm sure, would be cheaper to solve from a prevention rather than fixing method and causes a lot less disruption for households as well. So I think these measures are definitely to be welcomed. I think, as your other guests have said, it's really all about execution now. And I think we really do need to move fast, given how important water is to all of us in our daily lives. It's a fairly basic thing that we need. Heather, I suppose at its backdrop, though, it doesn't solve some of the issues, which has been the kind of financial mismanagement over a long period of time in the past that these companies are really struggling to untangle themselves from now.

26:13Yes, it's not going to be a quick fix to some of the financial issues we've seen. So those will require probably different measures. But what this does do is hopefully bring a more integrated approach because what we've had in the past is perhaps with the three separate regulators and then DEFRA on top of that, we've not always had alignment between all of those bodies on what needs to happen. So hopefully with the creation of a new regulator that is merging those elements, then maybe we'll get a more integrated approach that will help move things on a bit more quickly and come to a more strategic view about those sorts of big questions about how ultimately the sector should be financed in a fair way and how we move these big things forward.

26:59Ian, what's your level of confidence on that as just a water user? Yeah, it's a concern, isn't it? As I said about the household, it's very important, but also in business with your clients and obviously your welfare and all your staff, et cetera. So with the water, it's always a concern because, as they quite rightly say, something you can't do without. Yeah. Heather, round us out here then. What's your kind of level of hope that this will begin to make a difference to some of those problems that you've sketched out as someone who watches this as closely as you do? Well, I'm quite hopeful that things will start to change.

27:33They've said at the top, and it's a government speak, but they say it's a once-in-a-generation opportunity. But I really do think that there is a real opportunity here to get something moving, particularly because there's some political will behind it. So I'm hoping we'll see some things happen fairly quickly. I've got a positive vibe about some of the changes that are being proposed. So we'll see what happens in the detail, but it's optimistic. Well, that's good news because we haven't had much of that around the water industry for some time here on the programme. So thanks so much for your time this morning, Heather.