tv BBC Business Live BBC News September 9, 2019 8:30am-9:01am BST
this is business live from bbc news with alice baxter and sally bundock. not so ready for take—off — british airways pilots begin a two—day strike over pay. live from london, that's our top story on monday the 9th of september british airways has grounded almost 100% of its flights today as pilots walk out over pay, but are they right to reject an 11.5% increase in their salaries? also in the programme... is the fire going out for china's dragon economy? new data suggests the us trade war
is beginning to take its toll. in markets, european shares have opened slightly up, following their asian counterparts, largely on hopes of more central bank stimulus. and we'll be getting the inside track on a hot—chocolate business that's been enjoying the sweet taste of success. today we want to know, with the ongoing ba strike, are you affected? are you stuck at home or in an airport? and if so, what are you doing to while away the time? just let us know — just use the hashtag #bbcbizlive. hello and welcome to business live. pilots for one of the world's largest airlines — british airways — have gone on strike today for the first time ever, after rejecting a pay offerfrom the airline. more than 1,700 flights have been cancelled with at least 195,000 passengers affected.
the two—day strike follows failed negotiations between the union and the airline over a pay offer of 11.5% over three years. british airways rejected a last—ditch proposalfrom pilots‘ union balpa to re—start negotiations aimed at averting strike action. unite and gmb, representing cabin crew and engineers, have accepted the pay deal, but pilots say the pay award should be higher, following recent years of low increases and ba's recent strong financial performance. last year iag, the airline's parent company, reported a full year operating profit of $3.6 billion dollars — a 9.5% rise on what the company made in 2017. speaking to the bbc, ba's boss alex cruz said the pay rise is well above inflation.
i'm really sorry that the cynical actions of the pilots‘ union have put us in this position. it's by all accounts an own goal. it's going to punish customers, it's going to punish our brand, it's going to punish the rest of the colleagues, as you mention, over 90% have already accepted the 11.5% deal. and it will also punish those pilots who won't have come to work every day at british airways to make it the best airline in the world. 11.5%, way above inflation, reflects the fact that ba has been doing better. never before has british airways offered such a deal. i wasn't at british airways at those times, many years ago. i do know that british airways was losing a lot of money. nearly 4,000 people lost theirjobs. and yes everyone at british airways took pay cuts and sacrifices, not just pilots. the company recognises that and this
is why this 11.5% deal, way above inflation, with an extra 1% for 2019, has unfortunately been rejected, and we believe it's a very, very generous deal. brian strutton is the general secretary of the pilots union balpa and he says pilots want a profit sharing agreement similar to the one the company's boss enjoys. anybody that is not getting a decent pay rise should. i know many occupations have had their pay kept down. that's not a good thing. but equally it is not a good reason to say that other people shouldn't get the pay rise they deserve. pilots are looking for an inflation proof deal and that's pretty much on the table from british airways, and we haven't been arguing about that part of the deal. as i said just now, its profit sharing that pilots have sought and it's that part of this that has led to the dispute and the dispute itself, i know, is very
destructive for passengers. we regret that. it's british destructive for passengers. we regret that. it‘s british airways‘ decision not to fly at all today. they could have had flights running if they wanted to. they have shut the airway down and that is reg retta ble the airway down and that is regrettable and we regret our part in that. the plot thickens. alastair rosenschein is a former ba 7117 pilot and aviation consultant. good morning. good morning. so, listening to both the manager doing aof listening to both the manager doing a of british airways and the man in charge of the balpa union, what do you make of the dispute? there are two sides to the story, like all disputes. the way it is presented from the airline, 11.5% pay rise, 4% this year, 3.5% the next two years. it isa this year, 3.5% the next two years. it is a three—year pay deal, not 11.596 it is a three—year pay deal, not 11.5% this year. nonetheless it is the amount offered to all staff and so on the amount offered to all staff and so on the face of it one may say why should the pilots be treated differently? as alice mentioned, the
engineers, ground crew, those who are paid a lot less than the pilots have accepted the deal. they have. in previous years when the airline was not doing so well, the pilots took a pay cut. as the ceo mentioned, this group has done the same. as i remember it, my understanding is that the pilots took a larger pick—up than the others and also to protect the jobs of some of their colleagues who were likely to be dismissed because the airline felt they had too many pilots. very shortly after that it went the other way and they needed more pilots. there is the historical aspect to this. there is also the fa ct of aspect to this. there is also the fact of tinkering with terms and conditions, which is not mentioned here. the aspect of wanting a profit share, that no doubt dates back to when they had taken a pay cut when the airline wasn‘t doing so well, so they feel they should have a bigger share when it is doing well. how damaging do you think of this will
be? british airways pilots have not gone on strike before, and yet we have flown with british airways and they have had lots of disruption due to technical problems or whatever. what do you think this might do for the airline? because of course it sounds like, by listening to the ceo and union leader, they are pretty farapart in terms and union leader, they are pretty far apart in terms of trying to meet in the middle and make an agreement. it appears that way. but as in all disputes, it will be resolved when they come round the table to talk, which will happen. the other thing is that the pilots are not an industrially active group, so further strike action, whilst it may happen this year, there is a possibility... they are stroke scheduled at the end of the month. at the 27th, yes. there are time for talks and if you have talks you can have a resolution. i don‘t think this is an ongoing aspect as far as customers are concerned. booking with british airways in the future, they should not think it is more risky in terms of strike action then
any other airline. i would say it is less likely, in fact, because as you know this is the first strike by pilots. you are sympathetic with these pilots, then? i am sympathetic with both. i‘m a shareholder, as well. alex cruz has to do his best to give a good return to the shareholders. so i really am on the fence on this. thanks for coming in, we appreciate it, and of course we will keep you up—to—date with out the strike action progresses and how it impacts you if you are trying to travel with ba. lots on the bbc website on that. let‘s take a look at some of the other stories making the news. lloyds is facing an extra bill of up to $2.19 billion to cover late claims for the mis—selling of payment protection insurance or ppi. as a result, the bank it is suspending its share buyback plans due to the uncertainty over the payments. the number of claims more than trebled in the run—up to the final deadline of 29th august. nissan‘s chief executive has
signalled that he is ready to pass on his role to the next generation. hiroto saikawa‘s comments came in response to reports that he may resign imminently. the troubled japanese carmaker‘s board is due to meet later today. mr saikawa has come under increasing pressure after revelations about his pay and plunging profits. we will be talking about that later on in the papers, as well. the japanese capital tokyo has been hit by a powerful typhoon which knocked out the power to nearly a million people and shut down much of the public transport system. it was the biggest storm to make a direct hit on tokyo in more than a decade. let‘s have a look at how the chinese economy is doing. the latest numbers we re economy is doing. the latest numbers were out over the weekend. exports fell quite a lot more than expected in august because shipments from the us slowed sharply. all of that added to worries about the effects of the
two nations‘ trade war. china is expected to announce more support measures soon, to avert the risk of a sharp economic slowdown. sarah toms is in singapore. nice to see you. the news was worse than expected, but not enough to wobble financial markets. no, that's right. the results were a bit of a surprise, of course. exports from china to the us fell by a whopping 16% compared to the previous year. and chinese exports to europe, south korea, australia, southeast asia, they all also worsened on an annual basis and that meant that china‘s overall exports fell by 1% in august and these weak results will only add pressure on china to beef up its stimulus measures and to help to avert that risk of a sharp economic downturn. so many analysts are concerned about it. this latest news
only adds to worries about the effect that the trade war is having. things are not likely to get any better. a fresh batch of tariffs has been announced by the us on a wide range of chinese goods are starting this month, and more us tariffs are due to take effect on october one. thanks very much. let‘s stay in the region now and have a look at those markets. japanese shares hit a 5.5—week closing high on monday, supported by hopes that stimulus from the world‘s largest economies would help stave off a global recession. so the benchmark nikkei average ended 0.56% higher. global equity markets also received a lift after china‘s central bank said on friday it was cutting the amount of cash that banks must hold as reserves, releasing liquidity to shore up a slowing economy dragged down by its trade war with the us. meanwhile european shares are expected to rise slightly at the open today, holding at five—week highs on hopes
for the european central bank meeting later this week where the central bank is expected to unveil a comprehensive stimulus package. and samira hussain has the details of what‘s ahead on wall street today. the latest us consumer credit numbers will be released on monday. now, this measures the change in the amount of consumer debt taken on to buy personal goods and services. so one example would be credit cards. now us consumer credit is expected to rise to $16 billion injuly after going up $14.60 billion in the month before. so why is this important? well, economists watch this figure pretty closely because if consumers are willing to borrow and are confident they can repay their debts on time, the overall us economy gets a boost too. but if consumers cut back on their spending, they are indicating concerns about their own financial stability in the near future, and that will have a direct impact on the us economy since two thirds
of it depends on consumer spending. joining us is simon french, chief economist for panmure gordon. lovely to see you. how are you doing? we‘vejust lovely to see you. how are you doing? we‘ve just been talking about the mayhem here in the uk and just how fraught things are, it‘s very difficult. an important week ahead again. there is, for people interested both in the uk economy but also uk assets. let‘s remind ourselves that uk stocks and shares are down against the global benchmark by about 25%. that a tt ra cts benchmark by about 25%. that attracts a lot of enthusiasm on the basis there is a valuation opportunity but you need to know what the political picture looks like. it is a critical week. the prime minister in ireland today, will there be movement on the irish backstop? seems unlikely but there are one of the clues investors are looking for to determine whether this is an opportunity or a value trap. later in the week we have the european central bank meeting, the
hope is they will unveil some compressive stimulus package. expectations are very high. the president of the ecb is coming to —— at the end of his tenure. will he provide a lot of support to the market as he potentially cuts the already negative inflation rate? that is a lot of stimulus but expectations iso— there is a risk he only disappoint and the financial markets are concerned. we will pause there. simon is back later with his ta ke there. simon is back later with his take on other stories, including a very gleaming report from kpmg. still to come... posh chocs — how a family business is keeping business sweet by designing bespoke confectionary. you‘re with business live from bbc news.
let‘s talk more about the week in westminster. it began with parliament defeating the prime minister as part of mps‘ attempt to block a no—deal brexit. that law should be finalised today in parliament. things didn‘t get much quieter over the weekend and today mps are to vote again today on holding a snap general election — with pm borisjohnson facing a second defeat. chris masonjoins us now from westminster to bring us up to speed. anyone who listens to your brexit podcast will know that you are keeping abreast with every twist and turn in this roller—coaster of a brexit journey. talk us turn in this roller—coaster of a brexitjourney. talk us through what is ahead for today. for monday there is, and this is a rare thing, a certain element of clarity about what will happen. we expect this law to block a no—deal brexit at the end of next month will become exactly
that, a law. and after that, the government will ask parliament for a general election and in all likelihood it will be rejected because the opposition parties have collaborated, got together, and say there should not be an election until this new law is actually implemented. notjust enacted but implemented. notjust enacted but implement it. in other words the government is forced to go to brussels and ask for a delay to brexit again. the twist is, and this is where we have no idea where we will end up, the government says it will end up, the government says it will not break the law but it won‘t ask for an extension either. and just talk us through what boris johnson is trying to do to date with this meeting with the irish prime minister? he is going to see leo for radtke, the taoiseach, in dublin this morning. this is a chance for him to talk to someone who is central to the brexit process, not least because of the thorny issue that we come back to over and over again of ourold that we come back to over and over again of our old friend the backstop. this insurance policy to keep the border on the island of
ireland open under any circumstances. the eu says it absolutely has to stay, the uk says it has to go in its current format. attempting to find a solution that pleases both sides is the very reason why theresa may‘s deal kept being rejected by parliament early in the yearand being rejected by parliament early in the year and we don‘t have any clarity about where we will end up next. thank you very much. chris mason part of our team covering every twist and turn of this story in westminster for every twist and turn of this story in westminsterfor us. an interesting story and pry mark on the website. do check it out. you‘re watching business live — our top story: british airways pilots have begun a two—day strike in an ongoing dispute over pay and conditions. a quick look at how the markets are faring. brand—new trading week. london has been trading, as have the other
markets for nearly 50 minutes. it‘s not too terrible looking. france are bucking the trend but flat in paris, really. now, let‘s get the inside track on some of the sweet stuff. the global chocolate market was worth some $103.3 billion in 2017. and it is growing rapidly at an annual rate of 7%. a lot of that comes from great britain, where sales have grow by 84% between 2010 and 2017, and seems to be continuing at that rate. most of the increase seems to be coming from the luxury end of the market, specially the handcrafted segment. flo broughton, co—founder of artisan chocolate brand choc 0n choc, is with us now. as you can see, she has brought lots in. we haven‘t tried any yet because
it looks... i don‘t want to eat it! it looks so fantastic and yet i am a chocoholic. thank you. it is all handmade so when dad and i set the business of we wanted to create things that make people smile, they wa nted things that make people smile, they wanted to try it and have something unique. your dad and yourself set this one up. you had just finished university, you are in the kitchen, what happened ? university, you are in the kitchen, what happened? we were playing with moulds and chocolate that dad had previously made and we put the chocolate into the moulds and showed them to our friends and lots of people were really impressed and said, why don‘t you make there was? so we went to a trade show, to the gift market rather than the food market, and we sold a lot. we are looking here at everything you see here, the viewer, is chocolate. i can‘t believe that‘s not cheese. cheese board with cheese and grapes and bits and bobs. the stilton is painted. it looks fantastic. we have a specialfamily painted. it looks fantastic. we have a special family secret, our patented process of how we make the
chocolate. we can create all these beautiful designs within the chocolate. you can have something really unique which means nobody else can do what we are doing. it's fantastic w mr terrible joke from our producer ben, saying it looks gouda. you can bespoke make anything. yes, we created the liberty building for one of our customers, but we can do anything for businesses, corporate designs, and we go with what is happening, what trends there are. we spot those quickly and we can recreate things within a day. took us through out the artisan chocolate sector has changed and evolved in the years that you have been operating. when choc 0n choc started in 2003, there was no other... there were lots of novelty brands but we were doing it with a belgian chocolate, good quality chocolate, and the designs we re quality chocolate, and the designs were so unique that people were really interested, so we did lots of tastings in stores, getting people to understand how lovely the chocolate was. let's talk logistics.
you are quite a small business but a turnover of over £1 million canal currently. all the chocolate comes from belgium. and then you craft it and build it into what you want it to be in bath in the uk. you export to be in bath in the uk. you export to the us and other places. how are you preparing for brexit? we originally stockpiled back in earlier parts of the year and we still have sufficient stock so that we can, if there is an issue at the end of october, we will have enough to be able to fulfil all our christmas orders. but potentially there could be an import duty on the chocolate. what about currency? we actually buy in pounds from there and we buy a block amounts of the increase what us will be on the import duties if that comes through. the devaluation of the pound has been an issue. it has. we will have to work with it, whichever way it goes, to work with it, whichever way it o to work with it, whichever way it goes, we are as uncertain as eve ryo ne goes, we are as uncertain as everyone else and hopefully our suppliers will understand, but equally so will our customers. they
will know we are doing it because if there is a price increase, if we have to put the price up, they will potentially understand it is because of what is happening notjust because we are trying to make extra. you have a few famous fans, i am not surprised. thank you for coming into. thanks for having me. try not to eat that during this next slot that tells you how to keep in touch. london, singapore, shanghai, new look. 0ur correspondence have your business world covered on air, on line and on the bbc‘s news app. check out the website for their insight and analysis. the bbc‘s business life page has the latest redding business use. we want your views, too. get in touch on the business life page, tweet us or find us on business life page, tweet us or find us on facebook at bbc money. join the bbc business conversation. let‘s chat through some other
stories. simon french isjoining us again to discuss. i had leave over the summer with my children and i picked up the paper and there you are, you had written and there you are, you had written an article all about brexit and the impact it may or may not have. did you like it? i did, a great read. thank you. you will talk about this report from kpmg. i thought you be perfect to discuss it given what you have been doing lately. no—deal brexit would push the uk into a recession, it says kpmg? another prediction of doom and gloom?‘ recession, it says kpmg? another prediction of doom and gloom? a fair takeaway. 0ne prediction of doom and gloom? a fair takeaway. one thing i would say is the uk is probably 50—50 at the moment as to whether it will enter technical recession in the third quarter. stepping back from what will happen over the next few months regarding a no—deal brexit, we are already in a fairly low growth trajectory and if you get any further disruption which will facilitate probably a further devaluation of sterling and significant frictions at the border, but even if you don‘t get those frictions we‘ve spoken about, you
will potentially get long term deregulation, i think it is a credible report. what i found interesting was there was the doom prediction if we don‘t get a deal, but how positive the outlook is potentially according to kpmg if we do get a deal, a boost of 1.5%. absolutely the right place to focus on. because the opportunity here, if some of the 2% to gdp comes back, some of the 2% to gdp comes back, some of the business investment and export orders, you have a potential surge in uk growth. it‘s very much a binary outcome depended on what happens in parliament over the next few months. before we say goodbye, have you ever been impacted by strike action when you‘ve been trying to travel around the world?|j think trying to travel around the world?” think i‘ve been lucky, actually. you‘ve avoided that. stuck in an airport for some time? definitely. what do you do to while away your time? sleep under the chairs. and spend lots of money. well... i'm far too frugal for that. he's too sensible, a true economist. thank
you, simon. we heard from many of you, simon. we heard from many of you so far today because we are asking, what do you do when you are stuck in the airport or stuck at home with that time? we have got tubs home with that time? we have got tu bs turtle, home with that time? we have got tubs turtle, if that is your twitter handle? they are asking for a profit sharing scheme for old ba in place. it's sharing scheme for old ba in place. it‘s outrageous, if people who do the work to get to share the profits, where does it end? a bit of sarcasm in that response. yes, a lot of people think, why question might does every pilot want to strike when i want does every pilot want to strike when iwanta does every pilot want to strike when i want a holiday? it‘s a nightmare. that has resonated with lots. its a joke, someone else says. i‘m a silver member, i picked up and for business class. now i am sat in limbo, waiting for time to deliver good news or bad. john, you are not alone. that‘s it from business live today. there will be more business news throughout the day on the bbc live webpage and on world business report.
goodbye. see you soon. good morning. there is going to be quite a bit of weather going on this week. fairly changeable, lots of heavy rain in the forecast, especially through this morning, courtesy of this very slow moving weather system pushing east. lots of cloud across the uk but for the republic of ireland and northern ireland, some clearance in the cloud and some sunshine here. the rain will ease off slightly across northern areas of the uk, but patchy rain to eastern parts, heavy and thundery and slow—moving showers in south wales and the south—west of england. there is will continue into the afternoon. quite a cool feeling day. those temperatures below the average for the time of year at 13 to 16 degrees. through tonight, most of the rain will clear and they will be patchy mist and fog developing,
especially in wales and the south—west of england. clear skies elsewhere. temperatures overnight down to about eight to 10 degrees. throughout tuesday, this little ridge of high pressure extends across the uk. that will keep things relatively settled but another weather system towards the north—west will gradually bring in some rain. after a bright and sunny start in northern ireland and western scotland, the rain spreads in. a bit of cloud moving eastward across england and wales but generally speaking you can see eastern scotland, southern scotland, much of england and wales, some sunny spells and feeling that bit warmer on tuesday, temperatures up into the low 20s. this area of low pressure moving through iceland is re m na nts of pressure moving through iceland is remnants of ex—hurricane dorian pushing its way north—east with these weather fronts spreading north—eastward and these weather fronts spreading north—eastwa rd and we these weather fronts spreading north—eastward and we have a westerly wind. quite a brisk westerly wind. quite a brisk westerly wind. quite a brisk westerly wind on wednesday, but helps push through the rain across england and wales fairly quickly. if you showers into the west of
scotla nd you showers into the west of scotland but generally by wednesday afternoon there will be some dry weather with sunny spells and feeling, again, that little bit warmer. temperatures 17 21. another ex—hurricane moving through. this is ex—hurricane moving through. this is ex—hurricane gabrielle moving through on thursday and it will tend to bring in much warmer conditions, much more humid conditions, especially across england and wales during thursday. a bit of rain, primarily across the northern half of the uk, so for northern ireland, scotland, northern parts of england, some sunny spells elsewhere. quite a bit of a temperature difference. england and wales quite warm and humid, further north still a little bit chilly, temperatures in the mid teens. goodbye.
you‘re watching bbc news at 9:00 with me, carrie gracie. the headlines: boris johnson is meeting the irish prime minister, leo varadkar, in dublin today, ahead of another critical week for brexit. this is the scene live at farmleigh house in dublin, where the two are set to give statements. brexit and the contentious irish backstop are top of their agenda. mps are to vote again today on holding a snap general election — with the prime minister looking set to face a second defeat. travel disruption for hundreds of thousands of british airways passengers, as pilots go on strike, it‘s the biggest walk—out, in ba‘s history. more than 120 firefighters have been tackling a major blaze at a block