16/05/2017 BBC Business Live


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This is business life. Brexit means what in the UK general election? The


Labour Party unveils its manifesto, we will be weighing up the


arguments. The leader of the UK's Labour Party


has prioritised access to the single market-


we'll speak to business leaders to get their view


on the upcoming negotiations. And reports suggest Ford could shed


10% of its workforce - Europe is open - big day


for data with UK inflation, and euro area GDP figures -


we'll keep and eye on the numbers. And we'll be getting


the Inside Track on the global It's faced some choppy


waters in recent times - we'll ask whether the Brexit


negotiations can make And what do you buy


from vending machines? Drinks, sweets, how


about a supercar?! A "vending machine" in Singapore


is offering luxury vehicles including Bentleys,


Ferraris and Lamborghinis. Today we want to know -


what's the most surprising thing you've ever seen


in a vending machine? Today, the UK's Labour party


will release its manifesto ahead Although the formal announcement


is expected in a few hours;time, Although the formal announcement


is expected in a few hours' time, last week a leaked copy


of the document revealed Labour's plans to scrap the government's


existing white paper The Conservative manifesto


is expected in the next few days. So where do the two


parties stand on Brexit? The Labour Party favours managed


migration, but will stop short of committing to specific


immigration targets, unlike the Conservatives, who have


pledged to limit net migration Jeremy Corbyn's Labour Party says it


wants to retain the benefits of the European Single Market


and will negotiate on that basis. By contrast, Theresa May's


Conservative paper has suggested it is prepared to take the UK out


of the single market if necessary. Labour has also rejected the idea


that Britain can leave the European Union without first


agreeing a formal trade agreement. Meanwhile, Theresa May's says "no


deal is better than a bad deal". John Mills is chairman of JML,


Labour donor and part John, thanks for being on the


programme. Just clarify your position a bit further for our


viewers come so that they are clear. viewers come so that they are clear.


We mentioned you are a Labour donor, have been for many years, but


actually, you are a bit of a hard Brexiteer, you were definitely in


the Leave camp? Yes, I think there is quite a wide consensus in this


country that the best outcome would be for us to come out of the single


market, come out of the European Economic Area, out of the customs


union, but then to negotiate a free trade deal, which in trading terms


would get us back pretty well to where we are at the moment, but


without all of the costs of the single market. If we could achieve


that, I think it would be a big results. Going on what you have just


said to me, we assume that you're not with the Labour Party stands


when it comes to its, which is of Brexit? I think that one I have just


said and suggested would give British exporters access to the


terms as they have at the moment. I terms as they have at the moment. I


think there is a risk that that deal will not be agreed within two years,


in which case it will be a more difficult situation. Either the


European Union will offer us membership of the European Economic


Area, and give us access to the market, but with cost involves. I


think it will depend on how high those costs are, as to weather it is


worth Britain saying, that is too expensive, we're going to go for the


WTO option. I think that is the Government's stands. Many people


from companies listening to you now might be thinking, that is not my


stance at all, actually, I want access to the single market, I want


every soft exit approach, just give them a sense of how your company


operates, you make goods in China which are then exported all over the


world. Yes. And you're not concerned about the chaos, the delay, that


could become part of the normal bottle at least for a foreseeable


time, as a consequence of the UK leaving the European Union? I don't


think there ought to be long views and big problems. I mean, there are


going to be changes in administrative arrangements. There


is a difference between having free movement of goods and a free-trade


area. The customs arrangements would be more complicated. Many would


argue that it would be much more complicated to get goods, lorries,


across borders, that kind of thing? There is no reason why it should. We


are very familiar with these customs procedures. You have got to get them


organised in advance, and that I think is what the Government should


be doing. There is a computer system which needs to be in place by the


time all of this happens, to make sure that you can clear containers


and lorries through customs quickly. These are not insurmountable


problems, just things which the Government needs to tackle. A lot of


the businesses we have spoken to have said that a tariff is something


they could potentially stomach, as long as they do not have the delays


and disruption - do you really feel there would be no period of


transition which will damage business in the UK? I don't think


there needs to be. Of course there will be problems. At why should the


Government take that stance? They have got briefly to do it, they need


to recruit the people, get the procedures in place, get the IT


systems organised, is what needs to be done. John, we appreciate your


time this morning, thank you for coming in and being on Business


Life. Later in the programme, we will be speaking to the chief


executive of the UK Chamber Of Shipping, who has a different take


on what this might mean for businesses.


of the other stories making the news.


The Wall Street Journal is reporting that Ford is planning to cut


about 10% of its 200,000-strong global workforce.


The firm had already announced plans to cut costs by 3-billion dollars -


The firm had already announced plans to cut costs by $3 billion


In a statement, Ford says it has not announced any new "efficiency


actions" and it does not comment on speculation.


A court has told Uber it must return thousands of "pilfered" files


from Google's self driving car division - Waymo.


from Google's self driving car division Waymo.


The judge has also banned a top Uber engineer


from involvement in the firms autonomous driving project.


Waymo sued Uber over claims that a former employee stole trade


secrets that were later used by its rival.


Although a blow to Uber, the ruling stopped short of shutting


Vodafone, the world's second biggest mobile operator,


reported a $6.71 billion loss for the 12 months to the end


of March, earnings dragged down by its troubled Indian unit.


The company has been hit by fierce competition in India,


one of the world's fastest mobile markets, and has been forced


to merge its operations there with the country's Idea


Asian stocks climbed to a fresh-two year high.


Asia was following Wall Street's lead,


where commodity-linked stocks and currencies got a lift


from rising crude oil prices after major producers Saudi Arabia


and Russia said they would extend oil supply cuts into 2018.


Busy day in Europe - markets will be waiting on UK


inflation data out - Germanys confidence gauge and GDP


about what's ahead on Wall Street Today.


In today's depressed retailing world, are there any companies which


can buck the trend? American shoppers' hunger for a bargain is


expected to help the retailer which is the owner of TK Maxx and


Marshalls. America's housing recovery is also expected to help


people avoid retailing blues. Rising house prices is putting more money


into the pockets of consumers. That boom is also showing up in the


latest data from the US commerce department - at least it is expected


to. Housing starts for April are forecast to have risen to 1.26


million units. Finally, something for football fan is, keep your eyes


peeled for the latest earnings from Manchester United.


Joining us is Richard Fletcher, the Business Editor


We were just commenting that there is so much going on at the moment,


it is almost like we can't touch on it all. Here in the UK we have got


inflation data and, later in the week employment numbers. It is a big


week for data in the UK. There is the election, and also we have seen


the pound push up, touching $1.3. And also some indications that


people are more positive about the pound, despite the fact that the


signs about the UK economy, there are some worrying signs. Consumer


confidence surveys showing a downturn and house prices showing a


bit of a downturn as well. It is an interesting time. Also, we are


getting inflation data today which will probably show a rise to


something like 2.7. What is interesting is that on Monday, we


heard that wage rises were likely to come in at about 1%. So for the


first time since 2013, people will see wages going down in real terms.


I wonder what the Bank of England will be thinking on that? Mark


Carney talked last week when he gave the inflation report about it being


a challenging time ahead for UK households. So, it's going to be a


squeeze on real wages which will affect consumer spending, and that


could push through into the real economy. We have had reports that


Ford are set to cut 10% of their workforce potentially. It is


interesting in the car industry, we had a headline that Tessa had


surpassed Ford and General Motors as the most valuable car company, yet


they make a fraction of the amount of cars, it is tough times for the


traditional producers? Absolutely. Ford making $3 billion of cost cuts,


and they will be on a bit of a collision course with Donald Trump.


There was this thing about opening a plant in Mexico, and they scrapped


that plan and instead promised to have more jobs in Michigan. This


report in the Wall Street Journal, talking about 10% of jobs in North


America and Asia. 200,000 people worldwide. That's a large number of


people. And Ford's response has been not clear one way or the other? No,


it looks as if this is quite a well sourced report, a bit of kite


flying. And a quick word on oil? We have seen Russia and Saudi Arabia


talk about cutting further their output channels 1.2 billion barrels


a day. That has sent oil higher. But oil is in this kind of Goldilocks


period at a trading price which is great for the world economy. And the


international energy agency will release its estimates of April Opec


production today, which will give us a sense about the Opec members and


how they are sticking to those production cuts which they agreed on


last year. Still to come, we will be getting the inside track on the


global shipping industry, which has faced some choppy waters in recent


times. You're with Business


Live from BBC News. Low-cost airline easyJet slumped


into a half-year loss despite boasting a record


number of passengers. EasyJet shares currently down about


4% in London. Theo Leggett is in


the Business newsroom with more. Shares have actually been down as


much as 6% in early trading this morning. Investors are not happy. In


one sense, EasyJet is not doing too much wrong. Passenger numbers are up


about 9%, revenues are up, but the problem is, the company isn't making


as much money, and a big factor is the fall in the value of sterling


since the Brexit referendum last June. EasyJet reckons that alone has


cost them ?180 million. It has also increased the companies costs


because its fuel bill is paid for in dollars. Also, Easter was later this


year, meaning it falls outside the six-month period come and Easter is


a very profitable time for the airlines generally. So, that was a


problem as well. Let's hear what the chief executive of EasyJet had to


say earlier today. Outlines ten to make losses, 19 out of 21 years,


EasyJet has lost money in the winter. The two years we made money,


all the stars aligned of foreign exchange and everything. So


actually, ?80 million of that was foreign exchange, the weakness of


the pound against the dollar. Because we buy our fuel in dollars.


And of course, the ?45 million is a hit in the first half but it is a


benefit in the second-half, because Easter moved into April effectively.


We also got some information in the earnings they today about what


EasyJet is planning to do in the post-Brexit world. It says as a


result of the UK referendum, it expects to establish an air


operator's certificate in another member state during the summer. This


will secure the flying rights of the 30% of routes which are within the


EU. It still has not said which country that will be in. But it


still leaves legal uncertainty over what happens with routes from


Britain to the European Union after Brexit.


You can tell me we're live when there are people sneezing in the


background! The Labour manifesto is due later


today. You're watching Business Live.


Our top story: The UK's Labour Party


will release its manifesto ahead Although the formal announcement


is expected in a few hours time, last week a leaked copy


of the document revealed Labour's plans to scrap the Government's


existing white paper The Conservative Party are expected


to release their manifesto The UK public will head


to the polls on 8th June. Now let's get the inside track


on the shipping industry which is under pressure


like never before. From a global perspective,


overcapacity has been squeezing profits, but in the UK


the impending departure from the European Union means even


more disruption for the industry. In 2015, more than 80%


of all the world's goods were moved It's also an important industry


for the British economy. Government figures suggest


the maritime sector is worth about $14 billion a year


to the country. But Brexit means there are questions


about Customs controls And also about the falling


number of seafarers, people who work at sea and will be


crucial as the UK seeks We're joined by Guy Platten,


Chief Executive of the UK Thank you very much for joining us


this morning. Thank you. Give us a bit of a background of who you are


and how you got into shipping? I finished my A-levels and runaway to


sea in romantic style. I became a master mariner and did time at sea


and came ashore and looked after lifeboat crews for a while and


salvaged ships and got into the management and this job here. That


is the normal process, isn't it, for those who go into that career?


Typically someone going away to sea will spend a period of their career


at sea serving on board ships and then they will come on board to fill


a variety of jobs, it could be technical superintendents, it could


be in Government, in our regulator, it could be as lawyers or ship


broking or any type of careers as well. In terms of recruitment that's


something you're concerned about. There is 800 people a year training?


Yes, we have got 800 young people who start their careers in the


Merchant Navy and we'd like to see the number increase by 50% and


hopefully double as well. We need those people to man the shipping


offices and to man the regulator and these things further down the line.


It takes ten years to get to that position so we need to start


training the people now to fulfil the jobs in the future. There is a


recruitment crisis because of the cost. It's the industry that's


bearing the cost of seeing the new young wannabes come through? That's


rightment at the moment two-thirds of the cost of training is borne by


the sponsoring companies and there is some support from Government and


it's called SMART funding and that ratio used to be 50% and it has


dropped to a third. It is a disincentive to train more than they


could. A lot of companies would train and source more UK cadets if


the cost could fall. Shipping is international and they can source


people from all over the world, some highly trained people. To us it's a


priority to try as reduce some of that burden to companies and in


return they'll offer good careers for the young people coming through.


Now, earlier in the programme we were speaking to John Mills, he is a


businessman and Labour donor, but voted for the Leave campaign. He was


arguing that when it comes to Brexit, customs, trade, issues at


borders are all things that we should be able to get around. It


should not cause excessive disruption if the UK leaves the


single market. What's your experience? The concern for us is


not so much on the container, the low load, the load on, load off type


market because things can be sorted. We have a concern about the


processing from the system for processing customs declarations, the


volumes will vastly increase when we come out of the credit union so that


needs -- customs union so that needs to be upgraded. But our real concern


is on the roll on/roll off sector. At the moment lorries turn up at the


ferry ports and go on board the ferries and come across and on to


the road network whether it be the UK or Europe. Any barrier through a


hard customs board are will be catastrophic in terms of the ports


and the business model and the ferry companies as well because you know


every small delay, the lorry getting through is going to, operation stack


will be a permanent feature on the M20. Operation stack being a road in


the UK which was standing for miles, lorries stuck, not able to move


across through to France. Just explain the daily movement at Dover,


just on its own. 10500 vehicles? It is 8,000 vehicles in total. It does


peak. In November it was over 10,000. It is 7,000 EU vehicles and


500 non-EU vehicles and that's where our concern is. On average it takes


about 20 minutes to clear to the Customs. Things can be improved and


things can be made more efficient, but either so any day with 8,000


vehicles passing through will be really difficult for the ports and


for the ferry companies to manage. The physical constraints... But they


have to find a way to manage. I find it very difficult to see how that's


going to happen other than what's going to be a massive disruption to


trade and if you think about it, it is just in time. You've got tomatoes


coming up from Spain. You put delays there and you've got, you put the


whole just in time sort of business model in jeopardy.


Gosh, it's really interesting. Guy, thank you for coming in. Guy Platten


the Chief Executive of the UK Chamber of Shipping.


In a moment we'll take a look through the Business Pages but first


here's a quick reminder of how to get in touch with us.


The Business Live page is where you can stay


ahead of all the day's breaking business news.


We'll keep you up-to-date with all the latest details,


with insight and analysis from the BBC's team of editors


Get involved on the BBC business live web page: bbc.com/business.


On Twitter, we are at @BBCBusiness and you can find us on Facebook


Business Live on TV and online, whenever you need to know.


And you have been in touch today which is great. We asked you the


question what surprises have you seen, received, or paid for from a


haven'ting machine? The BBC's Dominic


O'Connell is with us. First of all, explain what is on


offer in Singapore? Super cars! Not little ones? Not little toys, but


full sized super cars. If you're a billionaire that fancies add to go


the stable, you push a button and a couple of minutes a car is delivered


and you can take it for a drive and buy it. It's not really a vending


machine, but it is like a stack of cars, it is a novel way of selling


things. I'm just wondering about how you pay for it? . Not with notes.


You put in the PIN number and hope that it's approved. Something like


that. A viewer from Leeds said the best thing he got from a vending


machine is a hot kebab! I once saw eggs in a vending machine in Japan.


Japan has got everything in vending machines. Let's not mention what you


can get there. Dominic have you had any surprise snz In Japan,


everything. And on every street corner. They are almost everywhere


you walk along, vending machines are there selling just about everything


you require really. There you have it.


Let's talk about JP Morgan. It's part of the trickle of jobs out of


the City. They're convinced they're not going to be able to hold obto


passporting rights so they're moving to other European capitals so they


can keep their clients inside the European Union once we leave. What's


going on in their thinking when it comes to where? It depends on the


institution. There are all sorts of factors at play. We haven't seen any


particular things about tax. Everyone thought it would be tax


deals. Ireland does have a low rate of corporate taxment it is a low tax


environment. It depends, it seems to depend on where they have been


established before, property costs and just the individual


circumstances, JP Morgan for example was big in Dublin and it is getting


bigger. Frankfurt, we have seen a similar thing. The banks moving to


Frankfurt have been there before. Brussels lured Lloyds of London's


headquarters which nobody thought would happen. It hasn't quite played


out the way we expected. Thanks, Dominic. Good to see you. That's it


from Business Live today. There will be more business news throughout the


day on the BBC. See you soon. Bye-bye.


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