tv World Business Report BBC News January 1, 2021 5:30am-6:01am GMT
time now for the latest business headlines. today the uk officially has left the eu's single market and customs union. but, is business ready for the move having had just days to prepare for the extra paperwork and checks? how are european businesses viewing the future? given both sides have largely said the deal is fair, what sort of long—term relationship can we expect? and we hearfrom a cheese maker in wales who says her business will flourish as she no longer needs to deal with eu red tape. more now on our top stories.
after many months, maybe even longer, years, of negotiation and uncertainty for business, today marks the start of a new era as the uk is no longer in the eu's single market and customs union. the last minute trade deal means uk business won't face tariffs and quotas when trading with the eu. but, there are other significant changes which businesses have had just days to prepare for. are they ready? joining me now is sallyjones, ey's brexit strategy and trade leader. good morning and happy new year to you. good morning, happy new year. on the whole, businesses we re year. on the whole, businesses were breathing a sigh of relief when we saw that deal brokered just for christmas and of course passing through parliament, so can businesses now move on with certainty this year? yes, in some respects,
but no and others. so, the deal is great for two things, really stopping the first is, zero tariffs, zero quotas on goods moving between the eu and the uk, and the second is it creates a framework on which we can build, but there are still so can build, but there are still so many things which are less beneficial from a business perspective than being a member of the single market and the customs union. at what are those things? really, ithink it boils down to the answers to three critical questions every business has to ask. can i lawfully continue to trade, can i practically continue to trade, and can i profitably continue to trade. so if we ta ke continue to trade. so if we take each of those in turn, that this question, can i lawfully traders often times about regulation. it's about the legal requirements for a third country business to trade into the eu member states, and often times there are really
quite stringent pieces of regulation that basically say, if you want to sell your product or service into the eu single market, grand, but you have to have sufficient substance within the eu that if something goes wrong, we can levy sanctions against you. so a standalone uk business doesn't have that substance then the eu will find it very difficult going forward to trade until that substance is there stopping the second question, can i practically trade in the eu is about normality than paperwork. can remove my goods across the border in a timely basis, can eye—movement people into the eu to provide their services on a timely basis. you have additional paperwork and visas and requirements to do that, and requirements to do that, and the third question, can i profitably continue to trade, is about the additional costs caused by that additional paperwork and there was simply come some traits that become too expensive or too difficult
going forward. and as you have just illustrated there is an awful lot for people to get their heads around, for the british retail consortium have said it is the biggest imposition of businesses have had to deal with in some 50 yea rs had to deal with in some 50 years stopping there will be a tricky few weeks and months ahead, the government have warned us of that, there will be that settling in period. for financial services, what are your thoughts on that? negotiations are continuing. actually it is not negotiations, it is a unilateral decision from the european commission about whether to grant what is called an equivalency decision, and in fa ct an equivalency decision, and in fact it is a number of different decisions across a range of directives that will determine the terms on which financial services from the uk can be traded into the eu. it isa can be traded into the eu. it is a unilateral decision, it was always intended to be part of the negotiation but the eu simply ran out of time, so now the intention is to have a decision by march of 2021. we are expecting that it will be a positive outcome but there is no guarantee at this point. all
right, sally, thank you for getting up so early on new year's day. i hope you have a good day and year ahead. thank you for your commentary. but, even with a deal in place experts warn the wrangling with the eu is farfrom over as business gets to grip with new ways of operating and with many issues, such as financial services, yet to be negotiated and the deal itself is up for review every five years. given both sides have largely said the deal is fair, what sort of long—term relationship can we expect? joining me now is dr ulrich hoppe, director general, german—british chamber of industry & commerce. good morning to you and happy new year to you as well! give us new year to you as well! give us your take new year to you as well! give us yourtake on, new year to you as well! give us your take on, from your perspective, from european businesses, to what extent they are ready for this change. they are ready for this change. they are as ready as they can be, because of because they knew changes was going to come and they have prepared in terms of
how to deal with the short—term issues of customs formalities, potential disruption at the border which we might see from january, so from today onwards but probably from middle of january onwards. so in order to keep trade flowing, of course, the extra paperwork will increase the costs and will they be able to pass on the costs to the consumers? you probably will see some pressure on prices going up because of the extra hurdles will be difficult for businesses to absorb in terms of their own profitability, so i think things are changing but they are as well—prepared as they can be but changes in the air because the new formalities will make trade more difficult and especially as your previous commentator has mentioned, there is also the issue of sending people aboard, how to get a visa, those will be extra costs, extra formalities and it will be timewise more difficult to plan and a lot of flexibility will have been lost. and from a practical point of view, we saw prior to the christmas break, miles of
hauliers stuck in the uk and that was to do with the coronavirus pandemic, et cetera, there was a real worry that there will be a short—term chaos, really, in terms of trade. is that your thinking in terms of what might happen? i know today will be very quiet obviously. i think the danger is that it that will happen probably from a january onwards because the warehouses are full, the companies have prepared for this commercial brexit day but will we see that in the middle of the january, probably and then onwards how well the customs systems are going to work with every company or every haulier has the paperwork ready so that the trucks can just keep on running. so, very difficult to predict but as always, a lot of companies have predicted disruption and we just have to wait and see how big that disruption will be, but companies are prepared for that in terms of their stockpiling, so we will not see empty shelves but it will be more expensive, the disruption will
make trade more difficult and it will take longer to transport goods and that has been factored in and it might also increase the freight rates because some hauliers will also try to increase their prices to cater for that. thank you for being on the programme. we shall talk to more about brexit and implications in a moment but let's now get some of the other business stories. spain and the uk struck a last—minute deal over gibraltar that eases access to the territory and removes the threat of fresh restrictions at the border with the european union. the territory will operate under passport—free schengen terms for the time being, but the final agreement is expected to come into force within six months. last year was the worst for the british high street in more than 25 years as the coronavirus accelerated the move towards online shopping. the centre for retail research says nearly 180,000 retail jobs were lost in the uk in 2020, up by almost a quarter on the previous year.
adobe flash player, the browser plug—in that brought rich animations and interactivity to the early web, has officially reached the end of its life. released in 1996, it was plagued with security problems and failed to transition to the smartphone era. adobe will no longer offer security updates for flash and has urged people to uninstall it. what will it take for the uk to boost its trade ties around the world ? what will be the sticking points with the world's biggest economies as prime minister borisjohnson tries to reach the trade deals that will help him realise his dream of a global britain. in a moment we'll hear from our correspondents in india and china, but first here's michelle fleury in new york on the challenges of getting a deal with the world's biggest economy, the united states.
for brexiteers, forging a new trade deal with america has been a much sought after prize and plenty of progress had been made on uk—us trade talks under the trump administration. mr trump supported brexit and was keen for a deal on america's terms. but what does that mean for the incoming biden administration? well, much of the work towards a new agreement has already been done. yet key differences remain stopping for instance, there is the issue of how to regulate the pharmaceutical industry, and what impact this may have on the buying power of the uk's national health service. of course that is of heightened sensitivity given the coronavirus pandemic. the change in leadership may also herald a more cautious approach to dealmaking. biden has already made noises about putting the interests of american industry first. still,
there is some pressure to put a deal before congress by april. of that deadline is missed, the mechanism to fast track and agreement through congress expires, and the brexiteers dreams of creating a new trade deal with america is likely to get snarled up in political rails. the relationship remains strategically very important for beijing and for london, in terms of trade and there is no sign that exit has dulled that at all. the uk is the number one destination in terms of chinese foreign investment and that has been hugely significant in terms of an increase over the last five years. it's important the other way as well. china is the uk's biggest export market. china hasn't really cultivated a trading relationship with the uk and seen it as a bridge to
the european union. instead it has been driven by the prospect of returns, it is seen as a safe haven and also prestige. life outside the european union holds a very significant challenge for the uk in terms of its relationship with asian, because it finds itself starkly between the world's two great trading nations. china and the united states. just look at what has happened over huawei and the pressure that has been exerted, ultimately, in the end, it was the us that succeeded, but look at the pressure exerted from both sides there, as a sign of the future that the uk could face. but uk also has very little choice but to pursue, maintain and to build upon its trading relationship with china. china has an ongoing need for advanced life sciences, advanced life sciences, advanced engineering, healthcare management, financial services, all things the uk as a leading global player in. a challenge for the
british government is going to be how it couples that with diplomacy. in terms of oppression and hong kong, in terms of accusations of what is going on in xi jinping. that is going on in xi jinping. that is going to be very challenging in terms of the diplomatic relationship and the trading relationship. —— xinjiang less thana relationship. —— xinjiang less than a month after the uk lives the european union, boris johnson is due to visit on the invitation of dramatist dinner in remotely stopping the visit comes close on the heels of donna grubb's recent trip to new delhi which experts believe signals a strong intent on both sides to develop a meaningful post exit partnership. both sides except the trade potential is enormous but are expected to drive a hard bargain when negotiating. there are several sticking points, though. london's demand to more
access and lower barriers in areas like healthcare and it as well as india's demands for liberal labour flows. owning these out could take several years but both india and the uk have expressed a desire for a partnership next year which could be a precursor to a free trade agreement. also, india and the uk are currently working closely on the covid—19 vaccine, with an indian institute prepared to produce a billion doses. with india as a crucial trade partner and market uk companies, given its size and population, boris johnson will want to build on these achievements and take the india— uk relationship to the level but given the rent remotely's recent protectionist tendencies and calls for a self—reliant india, these could be easier said than done. so, that was an interesting look at the future trade relationships that the uk can consider. some british companies are hopeful that brexit and being outside the european
to the opportunities. we have got more businesses to discuss a little later in the programme as well. there are fears that not enough of our old technology is being recycled. the royal society of chemistry has revealed that only 13% of people recycle old tech. it's estimated that 155,000 tonnes of electronics end up in uk bins each year. there are worries that new gadgets purchased as a result of the rise in home working will result in a spike in tech waste. the tampon tax ends today in england and wales as vat on women's sanitary products is cut to zero. eu law required members to tax tampons and sanitary towels at 5%, treating period products as non—essential.
campaigners say it is an end to a sexist tax. scotland became the first country in the world to make period products free in november. you are watching bbc news. a reminder of our top stories. new york is the latest major world city to see in the new year in subdued fashion because of the pandemic. the uk has left its partnership with the european union, bringing an end to a relationship that lasted nearly half a century. so, it's a new year, 2021. many may be breathing a sigh of relief that 2020 is now behind us. but the challenges posed by a global pandemic and for the uk and europe, getting to grips with a new relationship, are great.
2020 saw a tumultuous year for financial markets. some of the world's top indexes, though, did end the year in a better position than they started. for the us, they ended on record highs — the tech—weighted nasdaq gaining more than 43%. that was not the case for the uk's ftse 100 — it fell by 14.3% during 2020 one of the poorest performers in the world largest stock markets. joining me now is russ mould, investment director, aj bell. a regular on the show. happy new year, russ. how are you? awa ke new year, russ. how are you? awake and sober which is fantastic. let's talk markets. we know obviously for london, for the ftse100, the brexit
scenario, coupled with the pandemic, meant it had a tough year so is it as simple as that? those are the two biggest factors, far and away, the ftse 100 is an odd index and packed with oil and has two big oil openings and in the oil price collapsed last year and it has mining in it and collapsed last year and it has mining in itand mining commodities, raw materials, metals, where prices were hit by the first half recessions and banks and insurers and brexit has been a worry for them, the economy has been a worry for them but also central bank policy quantitative easing, unintentionally, to damage to banks's lending margins so the ftse100 is a bit of a mix but frankly, during a downturn, is not helpful at all and it is very, very under weighted technology compared to america which is blessed with some of the world's biggest players in the industry. absolutely, you mention some of the names like amazon, apple, facebook, they have had incredible years for many, have had incredible years for any have had incredible years for many, many reasons but looking at the us, the end of that record highs. the japanese
market, the highest year since 1989! the ftse100 is an international index, isn't it, and many say it does not reflect the uk economy. it is roughly two—thirds overseas so if you are looking to accentuate the positives because of the last year, tha nkfully because of the last year, thankfully is behind us, the things that wait on the ftse 120 20 were brexit, covid and a recession. by and large, we would like to think those things are going to be a bit behind is in the coming year so the ftse100 is up to one third from those it managed in march so markets are looking towards those stocks as a potential player on a global economic recovery. “— player on a global economic recovery. —— from those it reached in march. in terms of 2021 for the uk economy, we have talked to a degree about the practical problems with this new relationship with europe, et cetera. what are your thoughts? we have got a deal which covers manufacturing
and we have not got one which cove rs services and we have not got one which covers services yet, and that is half of uk export, 80% of uk gdp, so clearly still work to be done there. there is hope for a deal on services by the spring, for example, but then in the short—term, companies will be looking to get things out of warehouses they have not been shipping over the new year in case they turned up and running into a tariff and they will have to get used to customs declarations and supply chains so lots for companies to do in the short term and going forward , do in the short term and going forward, they will be looking forward, they will be looking for a services deal and as you have been hearing elsewhere in the show, looking for trade deals with other trading partners, india, america probably the biggest glittering prizes. the government has said it will be difficult for the next couple of weeks. things will be hard as we try to figure out how this all works going forward. in terms of economic growth this year, of course, you don't know how bad this pandemic is going to get before it gets better in the uk. would you dare to give me a
prediction? i think the international monetary fund is forecasting a reasonable bounce backin forecasting a reasonable bounce back in the uk economy of four, five, 6% but the bank of england, various independent groups like the international monetary fund and economics groups think it will not get back to where it was before the pandemic until late 2022 which i guess seems to make sense at the moment, the issue clearly will be in the vaccination programme and how that works out at how effective it will be and to what degree does that engender a bit of confidence, and may be brexit definitely will bring some short—term issues and short—term coils but if you bring some of the trade deals coming in, they could give confidence a boost as well. russ, good to talk to you and have a great year and i will see you again soon, i'm sure. the new year marks a big change in china — it will ban all imports of solid waste from the 1st of january. here are some details.
that is all from me for now. if you're watching us on bbc one, the trust will start very soon and with your —— if you're with us on and with your —— if you're with us on bbc world, i'll be back in five minutes. have a great day. hello there, a very happy new year to you. what a cold start it is as well for the first of january, 2021. we've got widespread frost this morning, some ice to watch out for, a bit of sunshine as well, but we'll also have a weather front bringing thicker cloud with some wintry showers. now, this is the weather front which will bring cloudier skies to england and wales. a northerly wind continuing to feed through wintry showers, particularly into northern scotland. but, like i mentioned, there will be sunshine around. watch out for some icy stretches first thing this morning across the south—west of england. there'll be some patches of freezing fog as well in the midlands and the south—east. this may tend to lift but stay in low cloud. there will be some spots of light rain at time, perhaps some sleet and snow over the high ground. probably the best of the dry and bright weather will be across scotland and northern ireland. that is away from northern coasts, where we're likely to see further snow showers. another cold day to come, maybe not as cold as it has been, but still
4—7 degrees is below the seasonal average. now, as we head on through tonight, it looks like the cloud and the showers push southwards. further showers will affect coastal areas, but many inland areas will see clear skies, lighter winds, so it's going to be another very cold night. a widespread frost in places, also some icy stretches to watch out for. so, into the first part of the weekend, we hold on to high pressure to the west of us, lower pressure to the east, so we maintain this northerly airflow. that'll continue to feed showers into coastal areas. wintry showers, that is, certainly over any higher ground. but inland areas should tend to stay dry with good spells of sunshine. but it's going to be another cold day on saturday — temperatures range from around freezing to five or six degrees closer to the coasts. as we head on to part two of the weekend, we start to see a slight shift in wind direction. higher pressure to the north, low pressure to the near continent. that'll start to feed in a north—easterly wind across the country, and that'll drive showers into north sea
coasts, a few of them pushing inland as well, and they will be wintry, especially over the higher ground, so probably the best of any dry and bright weather will be across southern, northern and western areas. and again, another cold day to come. when you factor in the stronger north—easterly breeze, it could feel quite raw. that breeze just picks up further as we head on into next week. a stronger easterly, which will feed in thicker cloud, outbreaks of rain at times, particularly across southern and eastern parts of england. and you'll notice it will stay quite cold, particularly when you factor in the strong easterly wind.
good morning, welcome to breakfast with charlie stayt. our headlines today: hospitals under extreme pressure as the new year begins. rising covid cases mean some seriously ill patients are being moved to hospitals on the other side of the country. a new era in the uk's relationship with the european union, as the brexit transition period officially ends. and, bringing in the new year during a pandemic — no crowds, but london's skyline is lit up with messages of thanks to covid heroes. good morning. tributes are paid to tommy docherty. the former manchester united and scotland manager has