tv BBC Business Live BBC News July 9, 2018 8:30am-9:01am BST
this is business live from bbc news with ben thompson and sally bundock. brexit breakdown. david davis quits as the uk's brexit secretary, saying he can no longer back theresa may's plan for leaving the european union. live from london, that's our top story on monday 9thjuly. the resignation of the man leading britain's negotiations with the eu creates more questions for business. we'll asssess what happens next. also in the programme... failing to connect. the world's fourth largest smartphone maker, xiaomi, disappoints on its stock market debut in hong kong. we will be live in the region. and european markets shrugging off that big brexit resignation and the pound is holding up in early trade. but what could the pressure on the prime minister mean for her future at downing street? and we'll get the inside track
on britain's plans for high speed rail from the woman running the country's only existing high speed link. can it help boost trade with the rest of europe after brexit? as more and more of us work on the move with a laptop and wifi, what would you miss most about the office? your colleagues, the gossip, the teamwork? let us know. use the hashtag #bbcbizlive. hello and welcome to business live. we start with that news this morning. britain's plan for brexit has a number of weaknesses. that's what the now former uk brexit secretary david davis has told the bbc in the last half an hour. he resigned from government late on sunday because he's not happy with the compromise theresa may reached with her cabinet on friday about the uk's future relationship with the european union. two other ministers resigned
along with mr davis. he says the prime minister's plans will undermine negotiations with brussels and that the uk parliament would not win back powers from brussels after brexit. so does he have a point? well, here are the key points of what was agreed. the uk will "maintain a common rulebook for all goods" with the eu, including agricultural products, after brexit. a treaty will be signed to avoid friction at the uk—eu border, including northern ireland. a so—called "joint institutional framework" will interpret uk—eu agreements. cases will still be referred to the european court ofjustice to interpret eu rules. the borders between the uk and eu will be treated as a "combined customs territory". the uk would apply domestic tariffs and trade policies for goods intended for the uk, but charge eu tariffs for goods heading into the eu. the plan says it will end the free
movement of people, "giving the uk back control over how many people enter the country." a "mobility framework" will be set up to allow uk and eu citizens to travel to each other‘s territories. what do ministers make up the departure of the brexit secretary? health secretaryjeremy hunt has been defending theresa may's plan on the bbc‘s today programme. a prime minister'sjob is notjust to get the support of the cabinet which is what theresa may successfully bid on friday, but also to get unity in the country on this very difficult issue. she also has to listen to the voices of business, to listen to the voices of business, to the people concerned about the implications of leaving the eu and she is making a very straightforward case, that in order to deliver a successful brexit, there are going to be some compromises along awake but what she is not prepared to do is compromise on red lines and do
what michael gove is clear she had not done. david davis says this policy hands control of large swathes of our economy to the eu. he is talking about this idea of a common rule book to govern trade between the eu and uk on goods and quite a lot of agriculture. in the detail, do you accept that under the plan, all existing eu rules and regulations relating to goods will have to be accepted? all of them?‘ common rule book says we will have the same rules and regulations. 50 the same rules and regulations. so the existing rules will stay for up us said will have to be accepted and thatis us said will have to be accepted and that is not what we agreed because what we said was that parliament would decide on each and every one of them. that was jeremy would decide on each and every one of them. that wasjeremy hunt earlier. our business editor simon jack joins me now. everybody discussing the decision of
david davis, what is your take? there are three reasons he went, firstly is the shape of the deal which is different from what he hoped, he wanted to have managed by buttons and our own trade policy and do things our own way, and this thing about a common rule book which means things would be a light when it comes to goods. there is the way it comes to goods. there is the way it was negotiated. he had a dwindling role in the negotiations as one of the powerful civil serva nts to as one of the powerful civil servants to overcome the only had four rows negotiating face—to—face with michel barnier and he was being sidelined and he was also meant to go on sidelined and he was also meant to goona sidelined and he was also meant to go on a tour of european cities to be the salesperson for this deal and in his letter he described himself asa in his letter he described himself as a conscript rather than a willing leader on it. for all of those reasons he thought that they needed a secretary of state in this department who would be more enthusiastic as a salesperson.“ department who would be more enthusiastic as a salesperson. if he did not believe it, how do you sell it to any eu leaders? the
negotiations into gone beyond just brussels and bureaucrats and it is now theresa may doing the negotiating. i spoke to a couple of cabinet ministers over the weekend. i asked how quickly michel barnier would knock this down if he would be dismissive. one minister said, we're going to be reaching beyond barnier and it will be interesting because i think national interest will have a bigger part to play. thrashing out the detailed spain, france, germany, italy want, their national leaders will have a bigger role. up to now it has been michel barnier as the front man but i think that will change. we had to leave it but thank you for coming in. and you can read more of simon's analysis on brexit on his blog which you can find on our website or via the business section of the bbc news app. and we will hear from other business leaders about this story which broke
after midnight last night, that david davis is leaving the uk government. we will stay right across that. let's take a look at some of the other stories making the news. nissan says it will issue an update later over how it measures vehicle exhaust gas at its domestic plants. in october, japan's second largest car—maker said that uncertified inspectors had signed off on final checks sold in the country for decades. it has blamed staffing shortages and said it would increase the number of trained staff to stop it happening again. chinese internet giant tencent has submitted a proposal to the hong kong stock exchange to list its online music entertainment business seperately on an american stock exchange. they confirmed the proposed—spin off in a statement but didn't reveal the size of the offering, nor which market in the us they want to register with. the uk high street is set to see more closures with mothercare announcing 60 stores will close by june next year. that's up from the 50 it had earmarked for closure. the uk retailer said its childrens world division was being placed into administration. the closures put 900 jobs at risk. it is supposed to be a big day for
the chinese smartphone maker xiaomi but shares got off to a shaky start on the first trading day in hong kong. yes, shares dropped some 6% as asian markets opened earlier today but have since recovered for the world's largest fouth largest smartphone maker. with us now is stephen mcdonell in beijing. as ever with these listings there is so much expectation and this did not start well. yes, in the initial hours at least some would say it was a disappointing performance from xiaomi on the hong kong stock exchange, dropping from 17 hong kong dollars down to 16 but as we have mentioned, it rallied back to almost where it started so i am not sure if
it is just first—dayjitters or represent a decent concern about the valuation of the company. xiaomi, apart from making smartphones, is the company that does other things and there is some concern from a nalysts and there is some concern from analysts that the sell—off could be because not all investors actually understand what the company does for of it makes air purifiers, something like an apple tv box to deliver tv stations and things like that through the internet to your television. the big reason they're watching closely is because there will be a big influx of these types of ipos in hong kong and other tech companies are watching closely to see how xiaomi goes. thank you very much, good to talk to you. this is what happened in the region on markets. markets looking pretty strong
at the start of a new trading week, after a positive end to friday s session on wall street. that in itself was a surprise, given the worries over the trade war that began with us trade tariffs imposed on chinese imports. china retaliated in kind. in europe, markets are pretty calm about the departure of uk brexit secretary david davis. the pound holding up. but of course the real test of investors nerves is still to come and there are still big questions for businesses after that proposal agreed on friday but also over theresa may's leadership. more on that in a moment, but first let's head to the us, where paul blake looks at what's ahead on wall street. wall street will be looking across the atlantic this week as donald trump heads to britain. last week the american ambassador said that trump would like a speedy trade deal with united kingdom once the uk wraps up its exit from the european union and that us government agencies were already
researching aspects of a potential agreement. back on american soil, attention will turn to earnings. tuesday sees an expected announcement from pepsi that sales increased thanks to its snacking division and thursday is likely to see delta announce a profit rise thanks to increased demand, higherfairs and a lower us corporate tax rate. and that is despite increased fuel costs. but the big day is friday when many of america's biggest banks announce earnings with most expected to share good news. joining us is sue noffke, uk equities fund manager at schroders. lovely to see you. a new trading week has started well for financial markets despite dramatic headlines like the departure of david davis. and trade was commencing on friday as well. i think the jobs report in the us had a positive tone and it is
back to goldilocks where the numbers of people in employment are positive, beating people's expectations, but there is no real sense that wage pressure is bubbling up sense that wage pressure is bubbling up that the federal reserve is behind the curve in terms of interest rate so it's going along nicely in the united states. a lot of the fears and anxiety of trade wa rs of the fears and anxiety of trade wars seem to have dissipated because quite a lot was priced in already. what is interesting, we have sat here and said the markets are nervous, looking at everything, but now it is the opposite, saying hear now it is the opposite, saying hear no evil, scene of evil, everything is fine and we concentrate on the big stuff. at least for today! but it will not last, we think.|j big stuff. at least for today! but it will not last, we think. i think there will be a lot of current. todayit there will be a lot of current. today it is taking the positives and trying to think big picture and interest rates and the dollar has
eased a bit which takes pressure off emerging markets. we can look at some reality when companies start to report again as we move into this new quarter. probably the start of next week we get a ramp up of earnings from the states and across europe and that will set the temperature of how the first half as played out and people's expectations for the second half of 2018. we expect them to come in strong, banking season kicks off, and it gives us a snapshot of how the first half of the year has gone for firms and an insight into what the next six months will bring. and an insight into what the next six months will bringlj and an insight into what the next six months will bring. i think it will be reasonably solid, i don't think it will be a blow out. particularly commodity firms will be strong, big earnings upgrades that and across the board in consumer financials, manufacturing, it is more modest increase. building on the good news we have had in the
last year or so. thank you for now. we will discuss a few other stories later. including the fact that a lot of people are choosing to work away from an office. we have been asking you what you might miss about not being in the office and we will talk about that later. still to come... and we'll get the inside track on britain's plans for high—speed rail from the woman running the country's only existing high—speed link. can it help boost trade with the rest of europe after brexit? you're watching business live from bbc news. let's return to our top story, news that brexit secretary david davis has quit. he said it would leave parliament with, at best, a week negotiating position. that all creates even more uncertainty for business that's been pushing the government for answers
on the uk's future trading relationship with the eu. carolyn fairbairn is director—general of the business group the cbi. she gave us her reaction to the resignation. it's undoubtedly a blow because on friday there was a ray of light. businesses have been wanting to make investment decisions, they've been facing uncertainty for many months, actually since the referendum itself, and here was the beginnings of a pragmatic way forward. so it is all about what happens next. it was also a ray of light because business voices had clearly been heard, the importance of frictionless trade was recognised. we will be watching what happens next. it is a race against time now. why do you say it's a blow? do you want somebody leading the negotiations with the european union who does not believe in the policy? the most important thing i think for business at the moment is that we have a shared cabinet position. so that we can go to the european union and negotiate. we have had two years to get to this
point and we have two months to negotiate this with brussels. so cabinet unity is the most important thing and so that is what we hope will hold over the next few days. most people that voted to leave the european union, if you've still got, effectively you're in the same customs union, you might almost be at some point in the single market so there is still the freedom of movement, if we ended up at that point which is what you would like, what did those people who voted to leave actually get out of this? well, i think this is about the balance we're going to be striking. i mean, we are leaving. the business community completely recognises that and that was the vote. this is all about how we get a good brexit that works for jobs and investment and growth and here the value of frictionless trade to businesses, our midlands manufacturers, ourfood producers, is so important that these are the things we need to protect. we will also be doing things differently in the future. there will be some important changes but frictionless trade, i think all the evidence shows how
important that is. if you want to read that letter from david davis is on the bbc news website. you're watching business live. our top story... the brexit secretary, david davis, has resigned, telling the bbc is because the government's agreed policy on brexit was dangerous and it looked less likely the uk would leave the customs union and single market. a quick look at how the markets are faring. they are shrugging off the uncertainty so far. concentrating on wider global issues rather than the day to day negotiation which this has descended into over brexit but more on that later. as we heard earlier in the programme, the uk is still trying to work out its future trade relationship with the rest of europe.
well, one way of boosting links is through rail and the advance of high speed rail will cutjourney times to make that more realistic. at the moment, britian lags behind continental europe and only has one operational section of high—speed rail known as hsi. however, importantly, it connects london with the channel tunnel. one of big challenges to grow the company is to increase the number of services. you can see that's been a bit of a struggle in recent years with the number of international services actually falling as the total number of trains fell to just over 7a,000 according to the latest numbers. changing that would boost returns for the group including uk and south korean pension funds that took over hsi last year in a deal that valued it atjust over $1.2bn. dyan crowther is the chief executive of high speed i ltd, which owns and operates the london to dover railway. welcome to business live. good
morning. you took on the role in 2016 and pride to that you worked in the railway sector for many years —— before that. i assume that if a very challenging thing to do because most of the headlines we get about the railway services in the uk are pretty bad! it is actually a great industry to work in. the 30 years i have been involved in the sector i have been involved in the sector i have worked for a nationalised business, for privatisation, so much change and opportunity and challenges. it has its challenges at the moment but over my 30 year career that has been plenty of highlights as well. you are in a fortu nate highlights as well. you are in a fortunate position at hs1, the only high—speed line in the country, so much debate about the second one, hs2, which would connect london to
the north—west. some look at it is how the model of rail services in the country should be but the infrastructure elsewhere is not up to it, that is the problem. hsl benefits from having infrastructure thatis benefits from having infrastructure that is only ten years old and that is part of its success. one of the things you have to do as an infrastructure manager is provide reliability and we measure our delays in seconds. that is what passengers want, it is why train operators like southeast to have experienced 12% growth last year which bucks the trend nationally because if you give passengers reliability they will continue to use the services but it also provides a great base for future growth. you have ambitious plans to expand hs1, enabling people to travel from london to bordeaux directly in less than five hours. this is a really competitive market in many ways. everybody wants to be
able to get around europe as quickly and easily as they can, competing not only with other rail options but also the likes of easyjet and ryanair. hsl has been enormously successful in terms of international growth, eurostar, our international operator, has experienced 3% year on year growth in the last ten years and one of the great things about hs1 is we still have capacity. i still have 50% capacity on my railway. as a chief executive and wa nt to railway. as a chief executive and want to fill that. why do you still have that capacity? i know when i try to get on a train from london to paris, you got to be quick off the mark, if you're going at any high demand time, all the tickets are gone and they are expensive because of high demand. when i talk about capacity, it is available pathways on the network. eurostar increased their train capacity last year and
brought in some new rolling stock, providing 20% more capacity on each service and that is a sign of their success as well. we have additional capacity and what we want to do is fill it either with additional eu rostar fill it either with additional eurostar services or other operators. what would you like to see on your departure board? if passengers arrived at st pancras, at the moment they can see paris and have started to seek amsterdam but what else do you want? we would like to see other european destinations and some of those could be frankfurt, geneva, bordeaux. how difficult is it to get those? you make it sound easy but there was a lot of logistics. we know it is not easy and that is one of the reasons we are taking a different approach. we look at the barriers to entry for new operators last year and one of them was the of dealing with a lot of different companies like my own. we are working together as companies and what we're doing is giving a
consistent commercial offer a consistent commercial offer a consistent message, and removing those barriers. that itself we believe will generate additional opportunities. we have to leave it there but thank so much for coming m, there but thank so much for coming in, we have other questions to ask but not enough time! 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. stay up to date with all the day's business news as it happens on the bbc‘s business live page. there is insight and analysis from our team of editors right around the globe. and we want to hear from you, too. get involved on the bbc‘s business live web page at bbc.com/business, on twitter we're @bbcbusiness, and you can find us on facebook at bbc money. business live, on tv and online. what you need to know when you need to know. what other business stories has the media been taking an interest in?
sue noffke from schroders isjoining us again to discuss. there is a story in the washington post, saying that for digital nomads work is where the laptop is. this is not a new trend, but what would you miss about the office? your colleagues? i would miss about the office? your colleagues? iwould miss miss about the office? your colleagues? i would miss the social interaction. i know you can get digital social interaction but there is something aboutjust talking to people around you. i chat to my collea g u es people around you. i chat to my colleagues throughout the day, just my observations and i want to know what they are thinking. also i remember the ceo of yahoo who stop people working at home because she argued that a lot of creativity is sparked from those spontaneous conversations in the workplace, the water cooler conversation is where a lot of innovation comes from. water cooler conversation is where a lot of innovation comes fromlj water cooler conversation is where a lot of innovation comes from. i have
a lot of inspiring chaps walking in or out the building, in the queue for sam burgess... in the ladies toilet! -- in the queue for sandwiches. this person says they find it more productive at home but it can be lonely, the same from another person, saying they get a bit depressed and not very disciplined! this one says, i work in an office and it was hell on earth and nothing could persuade me to return! it says it is full of people full of their own self importance and managers who wanted to do nothing but play around with politics and baby. this says, the worst pa rt politics and baby. this says, the worst part of the working week was the commute. we could do this show from home, right? shorts and t—shirt! from your lovely new kitchen! thank you for coming in. we will be back the same time tomorrow. have a good day. goodbye. hello. for the most part this week
will remain dry and settled with some sunshine once again but we will see a small change in the temperatures, temporarily cooling off the touch. today it will be in northern parts that we have cooler weather and it is mostly dry because the high pressure is still in charge. there is this week front moving southward which will bring a bit more cloud in scotland and northern ireland and a bit of rain a little move southward down the north east of england where it will remain quite cloudy into this afternoon. in scotland, brighter skies developing, the best of the dungeon in north—west england, the wales and the midlands and southern parts of england —— the best of the sunshine. another dry day at wimbledon, temperatures in the high 20s and maybe up to 29 or 30. elsewhere, across southern areas, with the
sunshine the temperatures get into the high 20s. further north we have something a bit cooler and fresher, 16 in newcastle, 17 in aberdeen. maybe 23 in the central belt of scotland. this evening and overnight it will remain quite cloudy in the east, particularly the north east of scotla nd east, particularly the north east of scotland where the cloud will thicken up into tuesday morning. overnight temperatures not quite as high as last night if you found that quite uncomfortable. temperatures around 10—15d. on tuesday, it will stay fairly cloudy particularly in the north—east with a few spots of rain. elsewhere the cloud will break up rain. elsewhere the cloud will break up to give us some bright and sunny spells, still quite warm in the south but the reds are not quite as deep, and fresher feeling south but the reds are not quite as deep, and fresherfeeling in south but the reds are not quite as deep, and fresher feeling in the north with cooler conditions and temperatures where they should be for this time of the year in the
south, 23 or 2a, 17—21 further north. into the middle of the week, high—pressure is still there but the airflow is coming in from a north—easterly direction and that will bring in more cloud generally for wednesday and thursday. still some bright spells and some sunshine, especially in southern areas where temperatures will start to creep up again with 2526 and even in the north they will move up and it will get hotter again by the end of the week and into the weekend. hello it's monday, it's nine o'clock, i'm victoria derbyshire, welcome to the programme. britains's brexit secretary, david davis, resigns, saying the prime minister's new brexit plan means the uk wouldn't truly regain powers after leaving the eu. it seems to me we are giving too much away too easily, and that is a dangerous strategy at this time. brexiteers say it is a significant blow for theresa may.
we'll be talking to a whole host of mps about what this means for brexit and theresa may's future. and obviously we want to hear from you wherever you are in the country about overnight developments. the mother of three who came into contact with the nerve agent novichok in wiltshire has died. a murder investigation has been launched. rescuers have gone back into the thai cave where a group of children have been trapped for more than two weeks.