tv BBC Business Live BBC News August 31, 2017 8:30am-9:01am BST
hello. this is business live from bbc news with ben thompson and sally bundock. slashing taxes? president trump promises to reform america's tax code — but will it be enough to stop us firms stashing cash overseas? live from london, that's our top story on thursday 31st august. top us companies are keeping $2.5 trillion in profits abroad, so can president trump persuade them to bring it back to the states by cutting taxes? also in the programme, india's illegal cash crackdown fails — we're live in mumbai to find out why. and a better—than—expected growth
figures in the united states and better manufacturing figures in china have boosted growth markets. you may have heard of fin tech but have you heard of phil tech? we're going to get the inside track on how the boss of playmob using technology to expand philanthropy. and as airport currency rates hit a new low in the uk, we want to know where do you buy your currency when going overseas? just use the hashtag #bbcbizlive. and if anyone tells us they buy their holiday cash at the airport, you are banned from the programme! we start today in the us in missouri, where president trump will lay out the details of his planned tax reforms. he described the current tax rules as "self—destructive" — they haven't been reformed for 30 years. he's calling for a more competitive system to boostjobs and wages, repeating his promise to cut america's corporate
tax rate to 15%. on paper, the us corporation tax rate is one of the highest in the world — it's currently 35%. but if you take into account various tax breaks, many top us firms pay a bit less — on average, 28.6%. that's still much higher than the 25% rate in china, 19% in the uk and just 12.5% in ireland. that's why many top us firms have their overseas headquarters in dublin. and that's meant a staggering $2.5 trillion worth of profits are channelled overseas by top us companies to avoid the american taxman. and with the us national debt spiralling towards $20 trillion, would cutting taxes boost the economy and tempt us firms to bring more profits home? or would itjust do more damage to the government's finances? speaking on wednesday, the us president explained why he believes
tax reform is needed. our self—destructive tax code cost americans millions and millions of jobs, trillions of dollars and billions of hours spent on compliance and paperwork. and some countries have an unbelievably low tax, including, by the way, china and some others that are highly competitive and really doing very well against us. they are taking us, frankly, to the cleaners. john weeks is the professor emeritus of economics at soas university of london. he's here to give us his take on this story, and were as we just heard, president trump with his ideas, his promises, but when will we see a concrete change, do you think? i think the first point to make, asa think? i think the first point to make, as a famous us jury
think? i think the first point to make, as a famous usjury said, taxes are the price we pay for civilisation, and the most liveable countries are the ones with a high taxes, denmark, sweden, so on. the usa has very low taxes, people can draw their own conclusion from that. the second point is that tax cuts for the middle—class will have a trivial impact on their incomes. the problem with the class incomes is their slow growth, the amount that tax would be cut would have very little impact. and third, cutting the corporate income tax, the main consequence of that would be to redistribute income to shareholders. ronald reagan tried the same thing almost a0 years ago, and it did not reduce overseas remittances, and this word, either. so you have explained some of the reasons why the change in the tax code would not
benefit the us economy, so the issue of any traction on capitol hill for president trump trying to put through change? i think that president trump is an unusual president in that he has a a lot of support in congress who may agree with him in ideological, but they don't like him personally, famous cases such as don't like him personally, famous cases such as senator don't like him personally, famous cases such as senatorjohn mccain. soi cases such as senatorjohn mccain. so i think it is quite possible some bill will go through, but it will not be the builder tron proposes, it will be one that is drawn up probably in the senate in with the leaders of the house. this isn't unique to the united states, the debate about cutting taxes to boost growth and vice versa. there is some truth in cutting taxes many more money truth in cutting taxes many more m o ney flows truth in cutting taxes many more money flows into government cough is because business is more productive. they might not bring back a lot from abroad, but they create jobs and wealth if taxes are lower. that is a
variation of the argument that has lower taxes mean more tax revenue, but the terrible evidence that is very weak. also the miracle evidence that cutting taxes stimulates growth is quite weak. so it is possible, but it is likely that we won't get a systemic demonstration of that. ten oi’ systemic demonstration of that. ten or 15 years ago, you wouldn't have had the congressional budget office doa had the congressional budget office do a study on the likely impact, and i have not seen such a study, and i don't believe that the office has been invited to do that. we will keep a close i on that. thank you for your time today. president trump has just kicked off his tour with tax reform top of the agenda, so we will keep track on how it goes. let's take a look at some of the other stories making the news. the french government is due to
reform labour laws later today. the measures will be a big test for president in manual macron who is facing protests next month, although one of the biggest unions has decided it will not take part. the new boss of uber, dara khosrowshahi, has told staff he will change the company's culture and may take it public in 18 to 36 months. the taxi hailing app is trying to recover from a string of crises that saw chief executive and co—founder travis kalanick ousted in june. mr khosrowshahi is the former boss of online travel company expedia. i got his name right the second time around! the troubled japanese giant toshiba has missed a self—imposed deadline of signing a deal to sell its memory chip unit. the company's board has been meeting to review a $i7bn offer from western digital and a revised last—minute offer of $18bn from bain capital — which brough in apple to help bolster its bid.
activity in china's factories sped up in august — suggesting the world's second—largest economy may still be expanding at a healthy rate. the purchasing manager's index unexpectedly rose to 51.7 — when economists had predicted a marginal decline. iamjust i am just not going to try and say it. we just have to practice it over and over. i have a feeling we will say the name a lot, the new boss of uber there. now, let's say the name a lot, the new boss of uberthere. now, let's talk say the name a lot, the new boss of uber there. now, let's talk about india. was india's crackdown on the black market a failure? the central bank says 99% of banned 500 and 1000 rupee notes were exchanged for new money. sameer hashmi is in mumbai. explain this for us. why did they
ban certain banknotes, and now it seems they are all back in circulation anyway? in november last year, this was a surprise decision by the indian government, where they decided to ban 86% of the currency, all high—value currency notes to be banned overnight, and the reason for that was they wanted to crack down on black money, money for which a taxes not been paid. they wanted to crack down on tax evaders and corruption. internal estimates were that about $60 billion will not come back to the system, and this will be regarded as black money which was floating in the system. but now the central bank has come back and said, actually 99% of those notes of comeback, and that means that a nalysts a re comeback, and that means that analysts are saying the policy was a failure, because if 99% of the notes are back, only $3 billion were
recouped, and that is not worth it for the problems it caused. that is an interesting story on why sometimes that just doesn't an interesting story on why sometimes thatjust doesn't work. let me show you the numbers. shares in tokyo ending up after the better—than—expected growth figures in the us gave a boost to confidence. in europe, the talk is still of the strength of the euro versus the pound. the debate about what central banks might do. can the bank of england afford a weak pound? we will talk about that more in the moment, but first let's head to the united states and michelle fleury. wall street will continue to play close attention to the devastating floods in the houston area. in a show of support, the new york
stock exchange was decked out in the texas flag. looking ahead this thursday, investors can chew over pending home sales data forjuly. the index focuses on houses where a contract has been signed, but isn't yet closed. so far, the recovery from the country's worst housing collapse has been uneven. forecasters see pending sales rising again, 0.a% injuly. but that doesn't appear to have helped sales of existing homes injuly, which fell sharply for a second month in a row. large declines in the north—east and midwest outweighed sales increases in the south and the west. personal consumption data forjuly — the federal reserve's preferred method of inflation — is expected to be positive after second quarter growth was revised up to 3% for the first time since early 2015. that's michelle, of course. joining us is jane sydenham from rathbone investment management. interesting, because michelle
touching on the upwards revision of gdp in the states, and she is looking ahead to the numbers we are going to get later today. it is all looking good for the us, and we mentioned china numbers better—than—expected as well.m mentioned china numbers better-than-expected as well. it is all looking better. we all got worried in the first quarter of the year, there was a slowdown in the us and indications of that elsewhere, but it looks as though the momentum is picking up again. the consumer still seems to be spending money, which is key. the revision was related to that. and given that 70% of the us economy, that is important. and that may be why factories in china in august had a better month? absolutely. let's talk about currency quickly. this sterling— euro parity creeping closer. this is twofold, the weak pound and the strong euro, and there was hope that we might hear something from the european central bank about whether they can afford a strong euro in the longer term, but
central banks don't tend to get involved in the early stages. if it isa involved in the early stages. if it is a persistent problem, they might. they don't, and what we have to bear in mind is europe has had such a difficult time in terms of growth, finally we are starting to see some positive growth, so the last thing the central bank wants to do is to try to intervene when we are finally beginning to see some positive signs. at this point in time i doubt it will be a priority. thank you for 110w. it will be a priority. thank you for now. i wanted to ask more about the markets, but we are being good because there is so much more to fit in this programme, including: gaming for good. we meet the tech entrepreneur putting her love of computer games to good use — for charity. you're with business live from bbc news. uk betting firm 888 has been accused
of failing to block access from customers who self excluded, and find £7.8 million. sean farrington is joining find £7.8 million. sean farrington isjoining us now find £7.8 million. sean farrington is joining us now from find £7.8 million. sean farrington isjoining us now from salford with more information. tell us more about what is finest specifically for. more information. tell us more about what is finest specifically fonm is about this self exclusion. if you we re is about this self exclusion. if you were gambling online, 888 is a lot roulette, poker, bingo, and if you thought you don't want to be able to access thought you don't want to be able to a ccess your thought you don't want to be able to access your account for whatever reason, you can tick a box somewhere, let them know, please freeze my account, don't let me access it, and that will help you out. but 7000 customers over a period of year said they wanted to be self excluded but were still able to access their accounts, so the commission has effectively find 888 nearly £8 million for this, saying not only did they have the technical
hitch that allowed it to happen, but they didn't pick it up which meant £3.5 million was deposited by those customers, and gambled over and over to an amount of £50 million that year. it is a strange trend, because we talked yesterday about credit ca rd we talked yesterday about credit card companies raising limits for people, and it is vulnerable customers most likely to see that access granted to them when they have said they do want it. the various authorities have been looking at the gambling sector in this area for awhile now. earlier in the year we had the competition and markets authority looking at the wider sector about initial offers, those offers you might see that say put £100 with us and we will double that for you if you better certain amount of time, but question marks over how long they have been holding onto the money. so alongside this fine for 888 today is the gambling sector being under pressure from those authorities to clean up their
act and to make it better for those vulnerable customers in particular. thank you, sean farrington in sa lfo rd. 0n on our website, details about toshiba. they were supposed to have reached a deal to sell their lucrative chip business. it has not made any agreement with the three parties it is in talks with at the moment. so toshiba are once again failing to deliver on a key deadline. you're watching business live. our top story: president trump has begun a speaking tour aimed at building support for his planned tax reforms. in an address in springfield, missouri, mr trump said he aimed to reform america's tax code fundamentally for the first time in more than 30 years. a quick look at how the markets are faring. i want to mention a big loser in
paris today. carrefour has issued a profits warning, which has come as a surprise. its shares are down and it has been downgraded byjp morgan. a pretty tough time for carrefour. a big, old—fashioned retailer, struggling with very hot competition. many retailers in this country and in the states are experiencing the same. now, something entirely different. ever heard of philtech? no, us neither. well, it's philanthropic technology, apparently. putting technology to use for good causes. and our next guest is doing just that, via her love of video games. jude 0wer‘s company playmob develops advertising campaigns for charities within video games and then targets players with those adverts. her business has reached over 150 million gamers worldwide so far.
and in total, the initiative has raised over $1 million. various beneficiaries include wwf and 0xfam. she is here with us. my kids play a lot of these games that you target, so explain how you help charities in that situation? there are two ways our platform works, and it is either by connecting an inapt purchase so a player can support our cause, or the brand can sponsor the content and the percentage of that spending goes back to our cause and we track the impact so you can see that by purchasing the item or completely that level, you are providing a meal or planting a tree or providing water. i immediately thought to myself, with all my kids and the
stuff they play, i make sure the in—app purchase is switched off as they can't spend. that doesn't help you. well, the average age of gamers is 35, so it's notjust kids that play. the average demographic of a social game is a woman in her mid—a0s. so a lot of kids' games, you can switch off the in—app purchase, but only a small percentage of revenue would come from that. 0nly percentage of revenue would come from that. only 3% of gamers spend on in—app purchases. so there is a big opportunity for brands to spend on media in games. digital advertising by 2020 is set to become $20 billion, and 25% of that is spent in game, so there is a big opportunity for brands to the part of existing games, which we can take a percentage off to give to charity, and the player doesn't have to spend money. it is like the player taking action like completing a level, and the money goes back to the cause.
what will it look like if a game has this sort of content? right now, there was a game called and we shot and you can buy a baby shark and you will get a message saying if you why this item, you will be supporting sharks in the real world. you can see the impact you will make. 0r sharks in the real world. you can see the impact you will make. or if it isa see the impact you will make. or if it is a branded level, say you are playing a game like angry birds, you get to the end of the level you are playing and a new level will appear, which could be about protecting the ocea ns which could be about protecting the oceans or the environment or endangered species. do people want to feel they are being sold to in that way? if you play, it is for enjoyment. do you feel like you are being sold to do if branded content is in the game? no. this is purpose driven marketing. it is talking to human values. at the start of the year, the charities aid foundation did a study of demos and 87% said they think games are perfectly placed to raise awareness of social
issues. we see this happening with millennials in generation z. they are not tech savvy, but socially conscious too. your background is pretty impressive. you have got your mbe already. 2015, you were named in the top 100 women in tech. the list is long. ben and i both said that we are always told it is tough for women in technology. is that your experience? we meet a lot of women in tech because of what we do as a living, so we don't know. in tech because of what we do as a living, so we don't knowlj in tech because of what we do as a living, so we don't know. i have beenin living, so we don't know. i have been in gaming for 17 years, so it is difficult for me to add to that as it is a world i have already known. it is a friendly community. it is male dominated, but it is getting better. the number of women in the games industry has doubled in
about eight years. we are about 22% women in the industry. but i have heard of examples where if i am going to a meeting, people i have not met think i am a man because i am called jude. i have not come across problems in gaming, but in wider tech, there are comments like, it must be easier for you to raise money because you have a rich husband. that would make me extremely cross. i was more determined to raise the money after that! all of this came to light recently with that google memo that then went all around the world suggesting that women can't work in tech because they are wired differently. and google sacked the employee who sent that memo. you have written about your view of that. you think they were right to sack him. i think so. we have to fix the problem. by google making an example of this person, it says it
was the wrong thing to do. we have to tackle the unconscious bias which is the root of the problem. we can put more women into the industry, but it is our perceptions that have to change. thanks for coming in. fascinating to hear about playmobil and your background. in a minute, we will look at the business pages. before that, a reminder of how you can get in touch with us. the business live pages where you can stay up—to—date with all the breaking news. you can get insight from our team of editors around the world. and we want to hear from you too. get involved on the bbc business live web page. we are also on twitter and facebook. business
live, on tv and online, whenever you need to know. and our viewers are a savvy lot if you go by the tweets about where you get your holiday money. not at the airport, the worst place. james says, i do it on my smartphone. another says, i use a special cover card which doesn't charge fees. another says, i am on holiday now and i got my money from a department store online. it offered next they click and select the jane sydenham is joining us again to discuss. game isjoining game is joining us game isjoining us again game is joining us again to select and pages. i guess his forces going in the direction. 0n the one hand, emmanuel macron wants to free up employment practices in france which have historically been a rigid. the other hand, that is making life worse for delivery drivers who feel
that they don't have many rights. but the site but changes in levels are cheaper and more flexible to move around. but there was a suggestion they could lose out. there is a fear that arise they have be further diminished and don't feel well protected. it is interesting that that should be in the news on the same day we are talking about uber looking to go public. absolutely. but it may be a long way away. that's it from business live today. bye— bye. we got woken up by some heavy
showers this morning across north—western parts of england, west wales, some thunderstorms as well. but for many of us today, it is a day of sunshine and showers. some of those showers will be heavy, but this morning there is a lot of sunshine. this area of cloud has brought heavy showers this morning. but foremost, a fairly chilly, but start. this morning and into the afternoon, showers become more extensive afternoon, showers become more exte ns ive a cross afternoon, showers become more extensive across parts of the uk. some of those showers will be on the heavy side. for south—west england this afternoon, the odd heavy shower. much improved in the south—east corner compared to yesterday. a mixture of sunshine and
showers for much of wales, northern england, scotland and northern ireland. some of the showers could be on the heavy side. this evening, those showers continue for a time until the night sets in. then those showers start to disappear. with clear skies, it will turn quite chilly again. but for many again, it will be a sunny start to friday. the showers will be nothing like as extensive as today. into the weekend, we have an
area of high pressure squeezing in for saturday. but things become wetter as we go through sunday. 0n saturday, light winds, plenty of sunshine. it will feel pleasant and warm, with temperatures where they should be for the time of year. by sunday, cloud increasing from the west and some outbreaks of rain. hello. it's thursday, it's nine o'clock. i'm victoria derbyshire. welcome to the programme. this morning: britain has the gayest parliament in the world — but what's it like for a poltitician when they come out? this morning, kezia dugdale, the former leader of scottish labour, tells us she was outed by a magazine against her will. i didn't have complete control over coming out. i came out in the middle of an incredibly intense election campaign.
it was the 2016 scottish parliament elections. it wasn't under my control, and i do regret that, i think that was unfair. and one conservative mp tells us he thinks he was turned down for a governmentjob because of he's gay. that full exclusive report in 15 minutes' time. also on the programme, tributes are being paid to diana exactly 20 years after she was killed in that car crash in paris.