tv BBC Business Live BBC News September 28, 2017 8:30am-9:01am BST
this is business live from bbc news with sally bundock and alice baxter. 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 28th september. president trump says tax cuts will bring jobs back to the us. he said it will boost the economy. but critics warn they'll fuel inequality and drive america deeper into debt. and will congress gave the green light anyway? we are getting the expert view. also in the programme: ryanair is threatened with legal action for allegedly misleading passengers about their rights following thousands of flight cancellations.
and even more of those on the way. and even more of those on the way. and the markets are slightly higher today, as they assess the impact of donald trump's tax proposals. and we will be getting the inside track on a picture perfect business. we're going to be hearing from the man who advises clients on the art they should be investing in. and today hugh hefner, the founder of playboy, has died at the age of 91. founded in the 1950s it became the largest—selling men's magazine in the world. today we want to know how you will remember hugh hefner. let us know. just use the hashtag bbcbizlive. hello and welcome to business live. do get in touch. don't hold back but keep it clean and then we can read them out on the programme. president trump has proposed
the biggest shake—up of the tax system since the 1980s. he says it will boost the economy and create jobs but critics say it favours the rich and could add trillions of dollars to an already soaring budget deficit. let's show you some of the details. at the moment the us has one of the world's highest corporate tax rates at 35 percent. a range of deductions mean that the average s&p 100 company actually pays an average federal corporation tax rate of 28.6%. but the president wants it to be even lower at 20%, bringing the us much closer to some of the world's other major economies. it is not as low as he promised during the election campaign. personal taxes would also be simplified with the current seven brackets reduced to just three. the lowest earners would see their rate rise from 10% taxed on their income to 12%.
the highest earners would see theirs cut. they would pay 35% instead ofjust under a0%. but the tax free allowance would be doubled for everyone, leaving most americans better off. the trump administration hopes the shake—up will persuade us multinationals to bring more business home. they have channelled an estimated $2.5 trillion in profits overseas. cash outside of the united states. here's what president trump had to say. but our country and our economy cannot take off like they should unless we dramatically reform america's outdated, complex, and extremely burdensome tax code. it's a relic. gotta change it. we have to compete, compete with other countries. inderjeet parmar,
professor in international politics at city university, is with me. good morning. sally talking through some of the numbers. we have all been waiting for this for months. what do you make of these nine pages? a bit more beefed out than the one page we got in april. does it live up to expectation? probably for wall street and the people who are very well off, that is what they have been hoping for. the political base that propelled donald trump to the white house in contrast to hillary clinton, they are likely to be very disappointed when they look at the detail of. the democrats are calling this a giveaway for the wealthy. that is what you are alluding to. it is a giveaway for the wealthy. in your package you showed there are so many trillions of dollars in tax havens offshore. the idea is to incentivise those people to bring that money home but when george w bush did this very kind of reform, back during his
administration ten or 15 years ago, what people did was they brought the money back to the united states but they brought the shares back of their own companies and gave themselves very large bonuses. many are asking the question as well that remains how does it all add up and how will he pay for it? if he is getting less tax money coming in, how will they find things? there is a huge problem here. before you get to vote on tax reform before the senate can vote on it, they have got to reconcile what this will do to the budget deficit, which is likely to increase. republicans are already divided on these kinds of questions and certainly the democrats will not vote on it so it could be a brutal battle through the senate. vote on it so it could be a brutal battle through the senatem vote on it so it could be a brutal battle through the senate. it is quite possible that nothing much will happen in the end. do you think it will make it through congress or will it go the way of obamacare, for
example? nobody can say what will happen but they think it will be far more difficult than you think. the political fallout for him, when people who voted for him who are normally democrats, i think they will look at it and be even more alienated and even his political base may see that when you count the dollars and cents, they are flying upwards towards the glass that donald trump represents as opposed to the class he claimed to stand for in the election and in every rally he claims he still stands for. thank you. we will talk about this more in the programme. many thanks for joining us. we will look at market reaction to all of that in a moment. let's take a look at some of the other stories making the news. toshiba has signed off on a deal to sell its chip unit to a consortium led by bain capitalfor $18 billion. the company agreed last week to sell the unit but the signing was delayed because apple — which is part of the consortium — demanded new terms on chip supply in return forfunding. facebook founder mark zuckerberg has dismissed comments by donald trump that the social media site has always been against him.
mr zuckerberg says that both ends of the political spectrum were upset about content they disliked, and that liberals in the us had accused him of enabling mr trump's victory. the founder of playboy magazine, hugh hefner, has died at the age of 91. hefner started publishing playboy in his kitchen in 1953. it became the largest selling men's magazine in the world moving 700 million copies a month at its peak. ——7 million. it made him a multi—millionaire, spawning a business empire that included casinos and nightclubs. and then of course there is the playboy mansion. we asked you to get in touch with us on twitter about this. how do you remember hugh hefner? send us your comments. ryanair has been threatened with legal action for persistently misleading passengers about their rights after the company cancelled thousands of flights. the civil aviation authority says it has launched enforcement
action against the airline over its handling of recent disruption. ryanair has just rya nair has just issued ryanair has just issued a statement, saying that it already fully complies with all eu legislation and they are meeting with the caa and will comply fully with whatever requirements they ask of them. let's talk to michael hewson at cmc markets. it would seem that it is going from bad to worse for ryanair because not only is the legal action threatened, but they have admitted they have got to cancel thousands more flights until the end of march. indeed. the share price reaction does reflect the negative news hitting the wires. it is only a very modest decline, down around 1%. this is in the context of a wider story. ultimately ryanair estimated watch the original cancellations would cost them, 25 million euros. if you pro rata that,
then the whole story could actually cost them 75 million euros at most. this for a company that made £1.1 billion in its last tax year and is estimated to make at least that in this tax year. what i think is more intangible is the reputation damage. and customers deserting the airline asa and customers deserting the airline as a result of it. we are going to watch it very closely. thank you, michael. ryanair shares watch it very closely. thank you, michael. rya nair shares have watch it very closely. thank you, michael. ryanair shares have gone down something like 1.5% today if they are trading in london. i will get to markets in europe in a second. first asia and the night before on wall street. a lot of this is reaction to the tax plans announced by president trump. they we re announced by president trump. they were widely anticipated by market globally in terms of what they will be and the impact on the world's biggest economy and therefore the impact on the global economy. many asian economies depend on the us consumer buying the goods en masse
that they make in their countries and then they shipped them to the world's biggest economies. look at europe quickly. this is how europe has started the day. we have been going for a0 minutes and it is fairly positive but fairly flat. we will talk in detail now because alice has the markets. thank you. joining us is mike bell, global market strategist at jp morgan asset management. good morning. as sally was saying, market reaction all to do with these tax proposals from donald trump being described as the biggest us tax overhaul in three decades. we have seen market rallying since november and expectation is on this announcement. what do you make of it all? since november, the markets have been going up because there is a big up in global growth, not because of expectations of tax cuts. investors around the world are very sceptical that donald trump will be able to pass any tax cuts, and if he does that provides an upside risks to markets, and if he doesn't, it is
priced in. i don't think it is quite right to say that the market rally was driven by expectations of tax cuts because people don't expect that. it played a big part in the sense that people are expecting, of course hoping, that big corporate like apple will bring many back to the usa, and the impact that will have. and it is notjust about the tax cuts but the weakening of the regulation in the financial services sector, that kind of stuff. it is all packaged into one. the trump pump. all packaged into one. the trump pump, however you want to describe it. it is interesting. earnings estimates to the end of 2018 are lower now than they were before the election. we are not that optimistic that we will get things through. there was a rally in shares related to tax cuts and financial regulation immediately after the election that a lot of that has come out since. i think there is an upside if the tax cuts are delivered. whether that will happen is that the question. in terms of money coming back to the us, that is likely to go through.
when the money comes back, they are hoping that companies will invest that in the us economy. more likely, they will pay that money out in dividends to shareholders. let's move on to talk about theresa may. the uk prime minister restating her determination last night to get tough on public spending. we have got to bring our debts down. the uk is still borrowing more than it is earning. the notion that we have had austerity is really we have gone from a period where we were borrowing 10% of gdp and that has gone down to 2% to 3%. we are still ina gone down to 2% to 3%. we are still in a position where government debt is going up. it is right that you don't want to be dramatically increasing that borrowing and trying to keep total government debt, which is around 80% of gdp, only going up very marginally. very good to talk to you. thank you for coming in. still to come: the art of investing in art. we speak to the man who knows his rembrandts from your raphaels and which is worth splashing the cash on.
and which to dump! you're with business live from bbc news. in the uk there is insufficient volume of uk nationals willing and able to fill the low—skill roles currently done by eu nationals. that's the verdict of a study by the recruitment & employment confederation. they say that eu nationals make up 15% of workers in low skilled roles and recruiters are warning that it will be near impossible to replace them with british substitutes. kate shoesmith, head of member engagement at the recruitment & employment confederation, is here. when i read this this morning ifelt i have heard this over and over again ever since week voted to leave
the european union injune last year. what is new about this particular study? what we have done here is look at the views of the workers, the eu nationals currently filling the low skilled roles, and we have also spoken to british people doing the same types ofjobs and british people that are currently unemployed, and getting their perspectives on the jobs market and what lies ahead after brexit. we have balanced that against talking to the employers and recruiters who work with those people and they are all saying the same thing. it is getting harder to find people to do the jobs that we don't have enough people. then implement rate now stands at a.3%, so implement rate now stands at a.3%, so what are we going to do post—brexit? —— the unemployment rate. we need to start thinking about that and finding answers now. so what are they? we know the reality so let's crack on and fix it. absolutely. from the uk government's perspective, what certainty are they giving to the eu nationals, the 15% of people doing the low skilled jobs? what will
happen to them going forward? what type of visa system will be put in place for them? what will happen for future people coming to the uk? it can't just be future people coming to the uk? it can'tjust be the case that we implement the visa system that we have for non—eu nationals because it is simply too odorous and the salary thresholds are too high. we need some of those answers from government. —— it is simply too onerous. this story took our interest, the travel company tui expects 10% growth despite hurricane poole in the caribbean and florida. much more available on the business page. you are watching business live.
donald trump is making the headlines again, we will look at his radical tax reforms and what they mean for the world's biggest economy. a hot debate as to whether they are good, not so good 01’ whether they are good, not so good or bad. the big question is whether they will get through at all or whether they get in the way of 0bamacare. a quick look at how markets are faring.... the markets have been rallying. but in europe... the ftse 100 the markets have been rallying. but in europe... the ftse100 is largely flat. in frankfurt, the dax is up slightly. and now let's get the inside track on the art of art... the global art marketplace is large, completely unregulated and mostly opaque. so is investing in art a good idea? global art sales fell 11% last year to $56.6bn, the lowest level since 2012. the us remain the top location for sales with an annual market share of a0% by value. and while this drop in the value of sales can be seen
as a buying oportunity, the biggest problem for the novice investor in art is how to know what pieces to chose. simply put, you need professional advice, which brings us to our next guest... tom mayou is director of operations at arts advisory firm beaumont nathan. . .. welcome. tell us, what do you do? the company we set up four years ago, with a mandate to deliver independent professional advice to the arts market, which is a new concept, it doesn't sound new, but it is in the art market. it's very opaque and unregulated and we thought there was a gap in the market so we've positioned ourselves there. you are for high net worth
individuals. typically, all institutions so we talk about big suitis institutions so we talk about big sums of money. why did you feel the system was broken and needed to be disrupted? previously when people we re disrupted? previously when people were taking advice, they took advice from people conflicted in their approach to any given transaction. talking about auction house specialists and salespeople that galleries, seeking to find the highest price when they make a sale, thatis highest price when they make a sale, that is how the business model works. we thought that we needed to rebalance works. we thought that we needed to re balance it, works. we thought that we needed to rebalance it, and put some weight back into the buyers. how did that go down, i bet you weren't popular! it could take a few noises at —— noses out ofjoint originally but people have realised that working with us is quite straightforward, we are very professional and by virtue of debunking the arts world, you can bring in new clients and increase
the volume of transactions, albeit ata fairer the volume of transactions, albeit at a fairer price. and give us your ta ke at a fairer price. and give us your take on how uss art, how do you become an expert? it is so subjective, you will tell a wealthy individual by this painting it will be worth this in four years, ten yea rs, be worth this in four years, ten years, or when you retire. it's very difficult, you had to look at historical considerations and commercial considerations. you have experts in both that you need to be able to tell how important the art is, and the work. and you need to think about technical things like condition, and commercial things. supply and demand, where the market has been historically and where it is going to go. that is the service we are trying to deliver. we have specialists who know everything from modern art to contemporary. and many have commercial specialists like me, who talk a bit more on that side of
things. we talk about the word "0k" when it comes to the arts market, is ita when it comes to the arts market, is it a class that is good to invest in —— overpaid. we saw a dip in the market in 2016, should people put money into it? —— "?opaque. you need to know what you are doing. there are parts of the market we would advise not going into. some sectors are struggling right now, 50% or so of the market is contemporary, but holding up well. you are in the traditional sector? we are across the hallway, being totally independent and balanced in our viewpoints, we can push people towards different sectors and we are not tied to the interest of any one sector. in parts, the market is struggling, the contemporary market is doing pretty well. so yes, you need to be careful. you have to take
good advice and be aware that it is a liquid asset. the returns are good if you can find them. interesting thoughts, thank you for coming in. it's good to talk to you. it's been suggested that catastrophic it has been suggested that this month's catastrophic hurricanes in the carribbean and the us could cost insurers $200 billion. but the world's biggest insurance market — lloyd's of london — says the financial impact is thought to bea the financial impact is thought to be a lot less than initially feared. we cannot make a final estimate on the final cost of this. for hurricane javi, and hurricane irma, our estimations are about $a.5 billion impacting the market. fully manageable for lloyds, we have net
financial resources, resources available and capital, robust capital position, we have reserves sitting there in the members of lloyds, ready to pay the claims. our net financial resources here are £28 billion. we are in a very strong position to react to the claims. that's the chief executive of lloyd's of london. joining us is james bevan, chief investment officer at ccla investment management to talk to us about the business pages today. we asked people to treat their thoughts on hugh hefner, who died today at the age of 91. we have a couple here... can you read them out? this one i can! ray richard said that he will remember hugh hefner as a dirty old man who liked old women. another one says that he was their idol, you can grow
old disgracefully or gracefully, hope you went out with a bang. philip in london, and entertainment legend and an advocate of freedom and being liberal. people should study his biography. there is more to him than nude pictures. james, can you fill in the blanks?” to him than nude pictures. james, can you fill in the blanks? i am completely in line with that comment... give as your take on hugh hefner. and he was a major businessmen. he was an extraordinarily competent man. he began his business with the circulation of 51,000, you didn't put a date on the cover because he was concerned it would not sell. the first circulation, it sold completely. it went from strength to strength, we know the circulation peaked at 7 million. he had a very successful run in casinos and inevitably, he also had hard times. he didn't always have it going well. and he kind of pioneered things a lot of people are doing now, like
men's magazines, it is massive business now. in the 1950s, he starred in his own reality tv show, in his home, the playboy mansion. and he was a brand, a strong brand that he was part of. it was an aspirational lifestyle statement in the 1950s, 60s and 70s. people say actually, i want to live like that, i want to be like that. it wasn't just the girls who acquired notoriety in the public arena, it was interviews with fidel castro, very interesting stuff. he had bone are views with martin luther king, john lennon, fidel castro... it was more than simply a men's magazine. yes, what he developed was an entire brand culture. it persists today.
the business empire is licensing the brand to create other products. it's a low capital company with brand ownership. the tv show we mentioned already in the 1950s, its revolutionary and a new idea at the time, featuring people in his mansion in black and white, and in an equal light. many television outlets refused to air it, they would not at the time. it was a period when doctors wouldn't prescribe contraceptives to single women at some stages. it's an interesting comment on social changes in that period. james, thank you for your analysis. very interesting. an interesting set of stories. thank you for watching, goodbye. a rather wet night across many parts
of the uk, some heavy rain spreading from west to east but the good news is that three the morning, this weather front clears north, is that three the morning, this weatherfront clears north, a damp and drizzly start across these eastern areas, things should improve. the further west you are, starting dry and bright in the sunshine, things will feel pleasant in the afternoon, a gentle southerly wind, temperature is once again above average for late september. 17 or 18 degrees this afternoon in the south—west and across wales, 20 or 21 degrees in the capital. some cloud hugging the coast of norfolk and suffolk. after that damp and drizzly start in eastern areas of north england and eastern scotland, things improving, except the far north—east of scotland. in the northern isles can cloudy and wet. it turns wetter in northern ireland
later. this big area of low pressure here, throwing the weather front further eastwards. on thursday night, that weather front continues to spread eastwards. a fairly strong south—westerly wind, and heavy rain at times spreading further eastwards. temperatures down to 12 or 13 degrees. you may need your umbrella first thing tomorrow morning. heady pulses of rain for some time, in western areas things improving the afternoon. showers in scotla nd improving the afternoon. showers in scotland and northern ireland on friday. but elsewhere, it becomes dry and bright. temperatures of 20 degrees, a little fresherfurther north and west. on saturday, it looks largely dry and find with sunny spells. some showers in northern and western areas. i is a 15-18d. on northern and western areas. i is a 15—18d. on sunday, the forecast turns very uncertain. the reason for thatis turns very uncertain. the reason for
that is i've got to take you over to this side of the atlantic. these hurricanes will cause problems for the weather computer models. over the weather computer models. over the next few days, they will track across the atlantic. as they do so, they are not going to be hurricanes any more but lose their tropical status. we will see a complicated mixture of low pressure systems on sunday. a lot of uncertainty that likely to turn wet and windy. more details available on the website. hello. it's thursday, it's 9 o'clock, i'm victoria derbyshire. welcome to the programme we must continue to deal with our debts. that's the message from theresa may this morning. she's due to speak shortly at the bank of england. you used to hear politicians being lambasted by their critics were all sounding the same. you don't hear that now. yesterday, pride in socialism from jeremy corbyn and
today pride in the free market from the prime minister. we will bring you theresa may's speech live from 9:30am. and has sexual harassment become depressingly normal part of a night out for many young people?|j night out for many young people?” have also had people trying to stick their hands up my skirt and grab my breasts. it is just not nice. but it has become something casual that gets thrown about all