20/07/2017 BBC Business Live


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This is Business Live from BBC News with Susannah


A new report warns against the dangers of "no deal".


Live from London, that's our top story on Thursday 20th July.


The UK and the EU's top Brexit negotiators are due to reveal


the latest developments in the Brexit talks, we'll be live


Also in the programme, turbulent times ahead for easyJet -


the budget airline forecasts a lift in profits, but is it


prepared for the departure of its influential CEO Carolyn


The markets continue that global swing upwards.


And with the long summer break just around the corner,


we'll be looking at holiday camps with a difference -


we'll speak to a woman who's replacing football and baking


All throughout the day we're looking at the issue


of childcare costs - we'd love to hear from


you about your family's plans for the summer.


Are you taking time off or are you reliant on childcare?


Or do you give them a smart tablet and lope for the best like Susanna!


We start in Brussels - where the UK's Brexit Secretary -


David Davis - and the EU's chief negotiator - Michel Barnier -


will wrap up their second round of talks on Britain's


They are expected to give a progress report at a press conference later.


They've been focusing on three areas - citizen's rights on both sides,


the so-called 'divorce' bill Britain will have to pay, and the border


between Northern Ireland and the Irish Republic.


The EU says negotiations on the future trading relationship


There's huge pressure to reach an agreement.


According to an independent report released this morning -


the impact on the UK of no deal would be 'widespread,


It warns of potential chaos over customs checks,


British airlines being unable to fly, and UK nuclear


power plants - which are regulated by Euratom -


It also warns there would be a further fall


in the value of sterling - pushing up inflation - and hitting


But is UK business prepared for that scenario?


Britain's corporate lobby group - the Institute of Directors -


says while many firms in the UK are looking at contingency plans -


very few - only 11% - have started to put those


Bruegel is an economic think tank which works closely


We're joined by its deputy director- Maria Demertzis.


Maria, good to see you, welcome to Business Live we get the progress


update today, where do you think we will see the most success, having


been achieved? I think we will expect to hear something on


citizens' rights and possibly on Northern Ireland, but I think we


will see the least progress on the divorce bill. And it seems that the


key to this, is compromise, on both sides, because it's mutually


important that deals are done, looking at the characters involved,


how likely do you think that is? It would have to be right. At some


point a deal would have to be made so we can move on to the next part


of the negotiation, so some xro Mize needs to be made by October in my


view. And on this issue of citizens'


rights, one of the big stumbling blocks seems the role the European


Court of Justice has over settling questions over that. That seems to


be potentially one of the hurdles that will be trickiest to overcome


Indeed. It has been one of the red line of the UK position. Other parts


have been red lined but I think that is an important one for the UK, and


it defend on them how much they are prepared to actually let this go. Is


there a feeling there is a lack of direction from the UK Government at


this stage? We are split, we are hearing within the Cabinet, as to


the direction of policy regarding Brexit. That is the impression that


we get, they get here, the UK hasn't been revealing in terms of what it


wants to aKiev and how quickly I would agree a bit more forth coming


from the British position would be very welcome here. When you say more


forthcoming, what do you think those negotiators want to see, do they


want a concrete road map going forward? Well, if you ask me what I


would like to see, I would like to see the divorce bill being settled


as quickly as possible. This is not the most important part of the


Brexit negotiations therefore we should not be spending time or


capital on it. We need to move as quickly as possible in ensuring the


future relationship is a good one, for both parts of the negotiation


and we need to negotiate a good trade deal for the future. The


divorce bill is neither a big issue, nor is it economically significant.


Maria, if you were in the room there, advising both sides on the


best way to reach agreement, what would you be saying to them? Find


something sensible to settle the bill, and that is an important one,


the gap that the UK is going to leave by not paying into the budget,


this framework we have, will need to be covered by other countries, they


are not waiting to fill the bill. The EU is is not trying to be


difficult, it is trying to cover a bill and pay commitments it has


made. So it is important that we find a good position from the UK on


this part, but we have to do it quickly and move on, this isn't


something we should be spending lots of time on. Thank you Maria.


Let's take a look at some of the other stories making the news.


Low-cost airline EasyJet has reported that its third-quarter


total revenue increased by 16% to around $1.8 billion.


Passenger numbers rose 10.8% to 22.3 million over the period.


Looking ahead, the airline now expects profit in the range


of of $495 million to $547 million for the current financial year.


Easyjet is set to replace its chief executive Carolyn McCall,


who is leaving next year to join broadcaster ITV.


Volvo Cars has seen a 21% rise in operating profit to $820 million


in the first half of the year, thanks to rising sales


The Swedish firm is heading for its fourth year of record sales.


It sold over 277,000 cars in the first half,


More than a third of all card payments in the UK


are now contactless, according to new figures.


The trade association, UK Finance, said 33% of all spending on plastic


was settled with a tap instead of a swipe in May.


This is a rise from just 18% in the same month last year.


It doesn't feel like you are spending money when you tap.


In the last few hours China has said it has made "significant progress"


on a 100-day action plan for trade with the US -


and discussed a one-year plan on economic cooperation.


How well did these talks go, given the fact that a number of news


conferences were actually cancelled yesterday? Well, I feel that


analysts have a different sentiment to what China put out, because as


you mentioned we didn't any joint statement or news announcements, or


a press conference from this annual meeting in Washington DC, leading


some to speculate something broke down at these talks, and that we can


expect strained ties between the US and China in the coming days or


Mondays, as we have been reporting, the US wants to reduce its trade


deficit with China, it stands at more than $300 billion each year at


moment, and so when US President Trump met with his counterpart Xi


Jinping in Florida, they agreed to this 100 day economic plan. That led


to a couple of deals with US beef, natural gas sales and some financial


service, so this economic dialogue in Washington, is seen as the follow


up to that 100 days deal, but as we have been reporting, nothing has


come out of them, nothing specific and no new initiatives and so we


still have many issues between the US and China that needs to be


resolved, including the issue of excess Chinese capacity and taxes on


cars being imported into China, and so, trade tensions are expected to


follow in the coming months according to analysts. Thank you.


Asian shares are at near-decade highs, boosted by a rise in indices


around the world particularly off the back of some strong


The yen eased slightly after the Bank of Japan reinforced


expectations it will lag other central banks in reducing the


In Europe stocks opened slightly higher - Dax in frankfurt


In Europe stocks opened slightly higher - Dax in Frankfurt


Investors looking to take direction from the outcome


of a European Central Bank meeting which could indicate whether the ECB


will start tapering its own stimulus programme sooner rather than later.


After another soaring close on Wall Street yesterday -


Investors' focus on earnings is set to continue this Thursday


with attention turning to one of the biggest names in technology.


Microsoft reports its fourth-quarter results after the US market close,


and its cloud business is expected to remain a key driver of growth.


Wall Street will also hear more about the reorganisation


The tech giant confirmed earlier this month there would be


lay-offs, but it didn't disclose an exact number.


There are also plenty more firms reporting earnings


and among them is Visa, which reports third-quarter profits.


The company makes money by facilitating credit


India's efforts to go cashless should provide


And with more coal being transported around the country, the largest US


railroad Union Pacific is expected to report a rise in


Sue Noffke, UK Equities Fund Manager at Schroders joins us in the studio.


Good to see you. So, easyJet, God results? Good results after what was


a difficult year last year, with Air Traffic Control strikes, there is


fears over Brexit, this year you have had Easter move into the third


quarter period. Better punctuality, and a few other things coming to


fruition, so people are still wanting to spend on holidays and


travel and prioritising that, and you have seen despite capacity being


added across the industry, easyJet has been able to sell more seats to


more people. Do you think easyJet will be able to swerve any


turbulence, given its chief executive is leaving for ITV? Its


share price has dipped slight loin that news? It has been strong so far


in 2017, the shares have been one of the best performers in the FTSE 100.


It faces a number of head winds, so whether that is the appetite for


consumers to still take holiday, access to European market,


post-Brexit, controlling costs, you know, making sure that you are


getting enough revenues to cover your non-fuel costs. All eyes later


will be on the European Central Bank. We don't expect dramatic moves


from them. It is all in what Mario Draghi wants to try to communicate.


No-one expects interest rates to move but the European economic data


has been firmer, in recent months and so that raises questions about


the tapering of quantitative easing that was put in place when economics


were really softer, so it is a question of when, and how much that


tapering is going to involve. I will watch. Will he put a drag on it?


Still to come. We will be looking at holiday camps with a difference, we


will speak to a woman who is replaces football and baking with


coding and robotics. You are with Business Live from the BBCful


Underlying profits at Sports Direct fell nearly 60% this


year as the firm publish full year results.


Boss Mike Ashley says he wants to turn the firm


into the Selfridges of Sports - but how good a shape


Theo Leggett has been looking through the figures for us.


Theo is in the business news room. Why is sports direct struggling


Because of the falling pound, that is the key reason, Sports Direct


gets a lot of stock from Asia. The pound has fallen and has cost them


money. Sports Direct tried to mitigate that by taking out currency


hedges, but that went wrong when a fall triggered off a payment under


one of its contract which cost it 15 million. Revenues have been pretty


strong, and that might help to explain why its share price is up


sharply this morning, that is down to changes that have been announced


at board level, including the replacement, the belated replacement


of the finance director who resigned in the wake of that currency problem


last year. But, context is everything, isn't it. So if I step


over here and change the view you are looking at for a moment. You can


see that even with that spike today, Sports Direct share prize is less


than half the level it was about 18 months to two years ago.


The past 18 months have been pretty extraordinary for sports direct


haven't they? Yes, it has had a terrible PR record, problems at its


warehouse in Shire Brooke, employees allegedly frightened to take breaks


because of possibly getting penalties. And Mike Ashley's


management style has come under scrutiny. There has been a court


case in London where there were accounts of important meetings being


held in pubs and amending with drinking competitions. So investors


are keeping an eye on this company and in particular, its corporate


governance. Just before you go, how do you cope with childcare in the


holidays? My other half is long-suffering and she takes care of


most of that but I do do childcare a couple of days a week. It is a real


struggle for everybody. Now let's get the Inside Track


on a summer camp with a difference: Fire Tech Camp has replaced


traditional summer camp activities The camps were launched in 2013


and offer classes and activities More than 100 instructors have


been hired this summer and they will offer courses


in coding, app design, robotics, digital music production


and much, much more. Jill Hodges, founder


and CEO of FireTech Camp. Thanks for coming in. I am sure it


is getting busy as you approach the summer? It is very busy. Summer


camps have existed, where did you get the idea of doing something


around robotics and tech. I am American and this has been around in


The States for 20 years. So tech camps and summer camps where you go


and learn something, get those skills that have enrichment value


have been around for a long time. When I was looking for camps for my


own kids here, I couldn't find any so I started it myself. Lotsa people


find it a struggle to drag a ten-year-old from a digital device.


It is a hard sell them to put them into a week-long camp where they are


looking at it all week long? We are harnessing the excitement and


interest they have on technology and turning it into creative. They are


creating their own games. There are some parents who haven't sorted


childcare out yet, quite like the sound of this, how much does it


cost? We have causes that run for a full week, 9am to 5pm and they start


between 200 and ?500. There is a high cost of childcare, so it is a


big uplift? It is not just childcare and baby-sitting, we cover more in a


week than they would get a year in school. We accept childcare vouchers


and we have a scholarship programme. So you do provide some sort of


access to low-income families? Absolutely, we have sponsorship from


corporate and we sell fund a lot of scholarships. What gave you that


start, you felt there was a niche in the market, but why did you think, I


can do this? I love technology, my sister has a Ph.D. In computer


science and my dad is an engineer. I was always comfortable around


technology. As technology is more consumer friendly, people understand


less about what is going on inside and the kids will need that skill.


What sort of things do they do and the camps? This week we have a camp


that is for prototyping where kids are making their own fidgets


spinners. We have video game design, robotics where they are programming


robots so it is the beginnings of artificial intelligence they are


learning about. We have programming camps, 20 different causes. It is


difficult for low income families to access such skills, tell me more


about the scholarship programme? We have an application on our website


and there is a scholarship area, complete video that tells us why you


want to do it and what you think you can do with the skills you are going


to get. How important is it you feel these skills are harnessed for


future generations. You are aiming this at children so you hope they


will become the next coders and Robotics builders of the future? The


skills around it is critical. It is all about product design as well and


getting them to be creative. You said earlier, a lovely example with


one kid came on the camp with her own idea? One girl had an interest


in geology and she had a fossil she had found at the beach and she was


able to recreate the whole fossil and 3-D print it. So that was really


cool. Thank you very much for coming in.


Let's stick with the theme of childcare, a new report has found


that it now costs UK families an average of ?125 or $163


per week to look after their kids during the summer.


This means the cost of holiday childcare has


increased 4% since 2016 - and with rising inflation eating


into living standards, we've been asking parents how


they plan to manage over the summer break -


I can't work because I can't afford childcare costs for three children.


One of my children has got special needs so I need someone who is able


This is my salary so I have to give all my salary to the club.


There is no point to work then, if I can look after her


It would be good to keep the child centres open,


children's centres open for them to provide things and maybe


have the youth club running through the summer which has already


We had the last one last week, but it would be good to be


I think it would be good to have more provision at school,


after-school clubs and certainly school holiday ones as well.


I know when our child starts school there won't be that much clubs


I know when our child starts school there won't be that many clubs


running after-school, I don't think, so that


And also subsidise things I think also.


You know, they want us to work, but don't really give us the help


Sue Noffke, UK Equities Fund Manager at Schroders is joining


It is piecing it together, clubs and have some time off and I am


fortunate to have a nanny. Heather has treated to say she was fortunate


to be able to afford her full-time nanny but offered to help a friend


by taking her child part so those nanny shares are popular.


Someone else has said, when you are both self-employed, if we don't


work, we don't earn any money. Liz has said help from family and


friends. Sophia says with great difficulty.


She said having a child with special needs makes it more difficult.


They start at ten and end at three p:m., many clubs have shortened


hours. Richard says, do something radical,


if you have decided to bring up kids, stay at home and bring them


up. I couldn't have done this job!


They could have sat quietly in the corner. Thanks for all the business


stories that I've hit the papers today. And Facebook, it is trying to


think of a plan to redirect traffic through two new sites, because there


is this concerned that many news sites, many publications are losing


out because people don't pay for their content? Especially the young.


Older people still read newspapers, whether it is digitally or in paper


form. Facebook has been suffering from criticism that much of its news


is fake news and this is providing content from the publishers through


to users through the Facebook portal. Publishers are quite


interested because this is a way they could get subscription revenues


from people reading their content. One of the other big stories that is


being covered in the papers is the revelations about pay levels for the


BBC's top TV and radio stars. It throws up a lot of issues that could


apply to any business, the gender gap in pay and you know, quite


pronounced when you have people doing the same job, side-by-side,


paid very different amounts? There will be individual circumstances


where people do extra activities for the corporation, so it might not be


entirely like-for-like, but this level of transparency does come to


bear and asks a lot of questions. Not just the pay gap, but gender


diversity in total, where are the people who show that diversity.


There will be career breaks, women bring up children but they are doing


the same job, exactly the same on-screen time and it would seem


very unfair? That's right. Your company looks at differences in pay?


Yes, we look at people doing the same sort of jobs and the pay gap is


much lower, but we have some people who work part-time and some roles


are eligible for benefits and some are not, so there are differences.


You will be pleased to know that we're not on the higher rate of pay!


No awkwardness here. There will be more business news


throughout the day on the BBC Live web page and on World Business




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