:00:00. > :00:00.This is Business Live from BBC News, with Aaron Heslehurst
:00:00. > :00:10.Tax wars - can Brexit Britain and Trump's United States beat
:00:11. > :00:12.the likes of Ireland at their own game and lure
:00:13. > :00:16.back the multinationals and their billions?
:00:17. > :00:35.Live from London, that's our top story on Thursday 26th January.
:00:36. > :00:38.Can the President force through the tax cuts he says
:00:39. > :00:42.will help boost and fuel the world's biggest economy?
:00:43. > :00:44.Another big fine - Royal Bank of Scotland
:00:45. > :00:48.says its mis-selling in America's sub-prime crisis will now
:00:49. > :01:06.It is the Trump pump, the Dow on Wall Street passing through the
:01:07. > :01:08.20,000 mark on its first time in history. We'll bring you the latest
:01:09. > :01:10.on the markets. And we'll be getting
:01:11. > :01:13.the inside track on life in the fast lane with the boss of London's City
:01:14. > :01:15.Airport. Just how do you grow a business
:01:16. > :01:24.that's hemmed in on all sides? Scientists say smart devices or is
:01:25. > :01:26.good at doctors as spotting skin cancer. What would you like your
:01:27. > :01:28.phone to warn you about? We're talking about
:01:29. > :01:39.corporate tax cuts. It's a central part
:01:40. > :01:44.of President Trump's strategy to boost the US economy,
:01:45. > :01:46.and is on the agenda today at the Republican Party's annual
:01:47. > :01:50.retreat in Philadelphia. President Trump will be
:01:51. > :01:52.there to give an address, as will British Prime Minister Theresa May -
:01:53. > :02:04.a first for a foreign leader. Before winning the election,
:02:05. > :02:06.Mr Trump promised he'd tax rate from 35% to around 15%
:02:07. > :02:11.to try and keep more He's targeting the billions
:02:12. > :02:15.that US multinationals - like Starbucks, Google and Microsoft
:02:16. > :02:21.- make overseas. Mr Trump says he'll allow
:02:22. > :02:23.them to repatriate those But Britain's Prime Minister Theresa
:02:24. > :02:32.May has pledged to deliver the "lowest corporation rate
:02:33. > :02:35.in the G20," as the UK tries to make itself attractive to big companies
:02:36. > :02:40.once it leaves the European Union. And next door is Ireland,
:02:41. > :02:48.which is in the European Union and has successfully attracted
:02:49. > :02:50.multinationals like Apple, It has corporation
:02:51. > :03:08.tax of just 12.5%. Did demystify all of this and talk
:03:09. > :03:09.through the issues I'm joined by a guest.
:03:10. > :03:12.John Cullinane is Tax Policy Director at the UK's Chartered
:03:13. > :03:23.Aaron outlining where we are at at the moment. Interesting what Donald
:03:24. > :03:28.Trump has promised. The question is, can he deliver on those promises? It
:03:29. > :03:32.is included in the US, isn't it? It is, because the government is not
:03:33. > :03:37.all powerful, having a majority in parliament. Both houses of Congress
:03:38. > :03:40.have two agree. Obviously they are all now Republican, but in the
:03:41. > :03:44.American system they still have very different ideas and proposals as to
:03:45. > :03:49.how to go about these things. That the key difference. In the UK we
:03:50. > :03:52.have a budget, they announced tax changes that can come into affect
:03:53. > :03:56.almost immediately if not the next day. In the US, it's so difficult to
:03:57. > :04:00.change the tax laws. They just getting to the round the edges.
:04:01. > :04:06.There hasn't ever been a real reform of the. That's right. 35% is quite
:04:07. > :04:13.high on wild white terms now. Most countries have a lower tax rate. --
:04:14. > :04:17.or worldwide terms. They change the rules, the UK is pretty much taking
:04:18. > :04:22.what it was before in cash terms and it is taking vastly more than it
:04:23. > :04:26.used to take in the 1970s with a tax rate of 52%, because as it has
:04:27. > :04:30.driven down the rate it has broadened the base. One of the big
:04:31. > :04:33.on the US, will they broaden the on the US, will they broaden the
:04:34. > :04:42.base or will they just use it to pump money in? That is partly the
:04:43. > :04:44.difference between Congress and President Trump. John, we constantly
:04:45. > :04:47.hear that if President Trump is successful and get that tax rate
:04:48. > :04:50.down to around 15% mark, that's always good news for big
:04:51. > :04:55.corporations. But I'm wondering about, in the US you can imagine
:04:56. > :04:59.there is millions of them, millions of small to medium-size businesses,
:05:00. > :05:03.we know that as the bloodline of any economy, does that also benefit the
:05:04. > :05:08.smaller guys? Well, it can do. In the US, a lot of small businesses,
:05:09. > :05:12.even if they are incorporated, they look through it for tax purposes,
:05:13. > :05:16.they are still packs against the individual and the individuals have
:05:17. > :05:19.higher rates. In the UK it is becoming a problem that does the
:05:20. > :05:23.Corporation Tax rate is going down, any small business is tempted to
:05:24. > :05:28.incorporate that it otherwise wouldn't and pay the lower rates. On
:05:29. > :05:31.an international level, organisations like the OECD and
:05:32. > :05:35.others are trying to come up with an international tax system to make it
:05:36. > :05:38.simpler and also to avoid loopholes and tax evasion. If Donald Trump
:05:39. > :05:43.ploughs ahead with his plans, that will make it more, located, won't
:05:44. > :05:48.it? If Donald Trump's plans go through, ironically it will be a
:05:49. > :05:56.very low rate. The UK would arguably already be undercutting it because
:05:57. > :05:59.we are going to rate of 17%. His of 15% to have the white and state
:06:00. > :06:01.taxes, when you add on those they would be about 20%. We would be
:06:02. > :06:05.undercutting Donald Trump and his tax system would not be recognisably
:06:06. > :06:08.like ours or the rest of the world. Ironically it is the Republican
:06:09. > :06:12.leadership in Congress that want to change the nature of the tax system
:06:13. > :06:16.to make it a hybrid between Corporation Tax and VAT, that would
:06:17. > :06:21.make it a very different system to other countries, opening up the
:06:22. > :06:22.polls and double tax and so on. It's very complicated and the devil is in
:06:23. > :06:32.the detail -- opening up loopholes. The other big story that is just
:06:33. > :06:33.around, and news coming out about it this morning.
:06:34. > :06:39.Britain's Royal Bank of Scotland says its set aside another further
:06:40. > :06:41.$3.8 billion to cover fines in the United States.
:06:42. > :06:43.It's all linked to the mis-selling of financial products linked
:06:44. > :06:46.to risky mortgages in the build up to the 2008 financial crisis.
:06:47. > :06:49.Simon Jack is our Business Editor and he's been following the story.
:06:50. > :06:55.Simon, you were digging out this detail late yesterday, what can you
:06:56. > :07:00.tell us? This is another big financial body blow for RBS. They
:07:01. > :07:04.have put in nearly $4 billion to one side. This is just into a kitty they
:07:05. > :07:08.are putting together to have a monster find they are expecting for
:07:09. > :07:13.their role in the sub-prime crisis. The kitty is that $9 billion at the
:07:14. > :07:17.moment. They are saying this is not a settlement and it is not final,
:07:18. > :07:22.because it's very likely they will have to put more money in this kitty
:07:23. > :07:26.next year. Now, fine could be anywhere in the region of 10- $20
:07:27. > :07:30.billion, we just don't know yet. What it means that this charge they
:07:31. > :07:33.are taking today will guarantee another losing year for RBS. That
:07:34. > :07:39.will be the ninth year in a row that they have lost money. This is the
:07:40. > :07:44.bank that the UK public owns 72%. This is another big body blow. Is it
:07:45. > :07:54.yet? No, it's not. Management hope this is one step closer to the end
:07:55. > :07:57.of a very dark and very long tunnel. But I think we've got some way to go
:07:58. > :08:01.yet. Thanks, Simon. More detail on that, website as well. More stories
:08:02. > :08:08.making headlines all around the world... The broadcaster Sky has
:08:09. > :08:11.reported a 9% fall in profits, because of the rights of Premier
:08:12. > :08:16.League football matches. They reported a 9% fall in operating
:08:17. > :08:23.profits to just a pinch under $18 million. Rupert Murdoch's company
:08:24. > :08:25.offered to buy up the remaining 61% of the business.
:08:26. > :08:27.Facebook's push into virtual reality has a new boss.
:08:28. > :08:29.Hugo Barra's appointment was announced with this
:08:30. > :08:32.He'll lead the team which includes the Oculus unit
:08:33. > :08:34.which Mark Zuckerburg's company bought for $2bn some
:08:35. > :08:41.Barra has formerly worked at Google and Chinese phone maker Xiaomi.
:08:42. > :08:46.He just left, I think, didn't he? That was the news story. That is for
:08:47. > :08:50.a quick. -- very quick. Shares of Mattel -
:08:51. > :08:53.the largest US toymaker - slumped around 9% after its
:08:54. > :08:55.sales over the holiday period fell well short
:08:56. > :08:57.of analysts' estimates. Mattel - whose brands include Barbie
:08:58. > :09:00.dolls and Fisher Price toys - lost the contract to make
:09:01. > :09:02.Disney Princess figures Meanwhile, the wider toy industry
:09:03. > :09:08.grew by some 5% in 2016, led by Hasbro's Star Wars toys
:09:09. > :09:16.franchise. It's all about linking it up, isn't
:09:17. > :09:18.it, the Tory with the movie franchise. Big bucks. -- that we
:09:19. > :09:20.eat. Asian markets are keeping
:09:21. > :09:22.the momentum going after yesterday's record breaking session
:09:23. > :09:36.on the Dow Jones - hitting 20,000 Closing above it for the first time
:09:37. > :09:38.in history. History wise, in years... 131 years!
:09:39. > :09:49.At the moment, the Asian markets are just riding that optimistic wave
:09:50. > :09:54.coming from Wall Street? Absolutely. And I love some of the headlines
:09:55. > :10:00.that we're seeing about it. The FT says that the stocks are basking in
:10:01. > :10:06.the glow of the doubt going above 20,000. -- the Dow Jones. According
:10:07. > :10:13.to Bloomberg data, we have seen Asian stocks rise the highest level
:10:14. > :10:17.since 2015. We have seen a very solid earnings season on Wall
:10:18. > :10:21.Street. Good numbers from companies like Boeing. Of course as you
:10:22. > :10:27.mentioned, the Donald Trump effect. Some people call it the Trump train.
:10:28. > :10:33.We have seen stocks rising since November on optimism that his
:10:34. > :10:38.economic plans are going to be used. -- are going to boost stocks. Asian
:10:39. > :10:40.stocks are mostly higher today. Australia and India are closed. We
:10:41. > :10:43.will talk to you soon, thank you. The wow on the Dow from that Trump
:10:44. > :10:59.pump rippling around the world. Traders in the region telling us
:11:00. > :11:05.today's excitement not just from the hoorah on Wall Street,
:11:06. > :11:08.but also people being positive Not much more to say
:11:09. > :11:18.really except how long can Talking of the US - let's find out
:11:19. > :11:23.what's in store today. It's a big day, and here
:11:24. > :11:26.she is - here's Samira. More companies will be
:11:27. > :11:28.reporting earnings Thursday, including Google's parent company,
:11:29. > :11:29.Alphabet. Now, Google has been focusing
:11:30. > :11:32.on improving search advertising. So things like expanded text ads
:11:33. > :11:35.and little adjustments Microsoft will also be
:11:36. > :11:41.reporting earnings. And it seems cloud computing will
:11:42. > :11:45.continue to be a big moneymaker. Especially as more people move
:11:46. > :11:49.toward cloud services. Analysts will be asking
:11:50. > :11:51.questions about LinkedIn's That $26 billion deal to purchase
:11:52. > :11:56.the professional network And finally, the world's largest
:11:57. > :12:03.coffee chain, Starbucks, Cafes continue to drive sales,
:12:04. > :12:26.especially in its biggest market, That's Samira Khaleghi who has had a
:12:27. > :12:30.really busy couple of days. Haven't we all?! OK, OK, you are as busy as
:12:31. > :12:33.she, it out the! Joining us is Mike Amey
:12:34. > :12:35.is Managing Director and Portfolio Manager
:12:36. > :12:45.at the investment Nice to see you, Mike. Let's get
:12:46. > :12:49.your take on the 20,000 moment, were you popping the champagne or was it
:12:50. > :12:53.just one of those things? It was a celebratory cup of coffee, to be
:12:54. > :12:58.honest. Where you were expecting it? We had a couple of cracks at it, at
:12:59. > :13:01.some point it was going to happen. The two questions as to why we had
:13:02. > :13:06.such a big rally and how sustainable it is. I think, as you were talking
:13:07. > :13:11.about earlier, you know, I think tax is broadly the main reason. What you
:13:12. > :13:17.have done, if you cut Corporation Tax from 35 to 15, then corporate
:13:18. > :13:21.earnings goes up. So you have got this... It is going to get better as
:13:22. > :13:26.you get more of the money? If they get more of the money they should
:13:27. > :13:29.pay more for the stock. They are buying on the room and they can sell
:13:30. > :13:34.on the news, possibly? That's what we are a bit more worried about. You
:13:35. > :13:38.have had this big move up in markets and tax, and of course they are
:13:39. > :13:42.going to be the stimulus package through. And the markets continue to
:13:43. > :13:47.focus on that. Yesterday was a classic example. You have the tweet
:13:48. > :13:51.about building the wall, and the stock it's a new high. The markets
:13:52. > :13:56.get are looking for the good news. At some point you have got to
:13:57. > :14:00.recognise we are going to get a bubble. But I think it would be
:14:01. > :14:04.reasonable to be a bit more cautious, given the size of the
:14:05. > :14:11.movement, 10% last year. Momentum at the moment, maybe going forward just
:14:12. > :14:15.watch for a bit of... There could be some profit-taking as well, right?
:14:16. > :14:24.Don't get too carried away, we've had a decent run. Captain cautious!
:14:25. > :14:26.I like it! Might you are coming back to take us through some of the
:14:27. > :14:29.papers. We'll see you shortly. You're with Business
:14:30. > :14:34.Live from BBC News. We are just churning out the cars in
:14:35. > :14:38.the UK! The number of cars made in the UK
:14:39. > :14:41.reached a 17-year high last year, according
:14:42. > :14:42.to the industry's trade body. About 1.7 million cars rolled off
:14:43. > :14:45.production lines in 2016, Theo Leggett has been
:14:46. > :15:02.looking at the numbers. He is our internal Motorhead, a
:15:03. > :15:09.petrol head! Is he a petrol head? He loves it! Before I get in trouble,
:15:10. > :15:14.let me move on! Sio, we do well. When you're doing well in the UK
:15:15. > :15:18.making cars, a lot of them, 50 cents, they don't stay here in the
:15:19. > :15:24.UK, we ship them out, don't we? We ship out about eight out of ten of
:15:25. > :15:28.all cars made here. If those 1.7 million cars, more than 1.3 million
:15:29. > :15:32.go to 160 countries around the world. Most of them go to the
:15:33. > :15:36.European Union. More than half of them go to the European Union. This
:15:37. > :15:41.is a very successful industry in Britain. Part of the reason is that
:15:42. > :15:46.we specialise in hiring cars. And we have a very efficient manufacturing
:15:47. > :15:51.process for those cars -- hi end cars. This is not entirely a
:15:52. > :15:54.positive story. The Society of motor Manufacturers and radar putting the
:15:55. > :16:02.story out today, they are pointing out that investment in cars, new
:16:03. > :16:08.production lines and so on, went down to ?1.7 billion last year. They
:16:09. > :16:11.say that this high level of production, 17 year high level of
:16:12. > :16:15.production and record exports, is due to decisions that were taken a
:16:16. > :16:19.few years ago. It's very emphatic that this is not any sort of a
:16:20. > :16:25.Brexit bounce. And they are making the point here that what they want
:16:26. > :16:28.to see is the Government having a fairly soft attitude towards its
:16:29. > :16:33.negotiations with the EU, making sure that the car industry at least
:16:34. > :16:36.has some kind of access to the EU's Single Market and that tariffs are
:16:37. > :16:40.not paid either on cars that we export of the European Union or the
:16:41. > :16:43.parts that they are made of, a lot of which come the other way, because
:16:44. > :16:46.it says that if that happens it could be severely damaging for what
:16:47. > :16:50.is at the moment a rather successful industry.
:16:51. > :17:00.What do you drive? I drive a 1972 nanograms. From the great age of
:17:01. > :17:10.motoring. Wow! As US Republican party leaders lay
:17:11. > :17:16.out plans for tax cuts, will the big multinationals bring their profits
:17:17. > :17:18.back on shore, or can Brexit Britain A quick look at how
:17:19. > :17:34.markets are faring... Everything in green again, coming
:17:35. > :17:39.from the big jump, over 20,000 for the first time in history, the Dow
:17:40. > :17:46.Jones. And that ripple effect circulating around the world.
:17:47. > :17:48.Let's get the inside track on the airport at the heart
:17:49. > :17:51.of Canary Wharf which plays a vital role in bringing business leaders
:17:52. > :17:55.This year London City Airport is marking it's 30th anniversary.
:17:56. > :18:02.It currently handles 4.5m passengers a year flying to 48 destinations.
:18:03. > :18:07.71% of the flights link to a European Union destination -
:18:08. > :18:16.something which may change once the UK leaves the EU
:18:17. > :18:19.As with Heathrow, it's bigger rival on the other side of London,
:18:20. > :18:25.City Airport is looking to expand with more room for aircraft
:18:26. > :18:36.We have Declan collier with us. We just talked about the fact that you
:18:37. > :18:41.are planning to expand, but how do you do that given where you are? You
:18:42. > :18:45.are completely surrounded, so you can't add runways or anything of
:18:46. > :18:49.that nature. We have just received planning permission for doing that
:18:50. > :19:01.and we are about to spend ?350 million... A runway or a taxiway? We
:19:02. > :19:06.are building a parallel taxiway, make the runway more efficient in
:19:07. > :19:11.getting aircraft up and down. We are building more and bigger parking
:19:12. > :19:18.stands to take the next generation of jets. We were talking about the
:19:19. > :19:22.number of destinations. The people around the world watching, you have
:19:23. > :19:28.a limited size of runway because it is surrounded by skyscrapers, so you
:19:29. > :19:38.can only use a certain size of aircraft. 95% of your
:19:39. > :19:46.destinations... When Brexit came along, did you hold your breath?
:19:47. > :19:50.Once the UK does leave, and if there are travel restrictions or you need
:19:51. > :19:55.visas and passports, could that impact you, the airport, people
:19:56. > :19:59.travelling? I don't think so. Look, we say we are the only London
:20:00. > :20:04.airport actually in London. We are three miles from Canary Wharf, six
:20:05. > :20:09.miles from the City of London. We can and will develop, and you are
:20:10. > :20:13.right - we are focused today on Europe. 95% of our destinations are
:20:14. > :20:17.into Europe. With this development plan, we get the new generation of
:20:18. > :20:21.aircraft coming in with longer range, so we will open up
:20:22. > :20:26.destinations beyond Europe, to the Middle East and the Gulf, into
:20:27. > :20:31.India, Africa and hopefully expanding the destinations in
:20:32. > :20:36.America. How soon? If you look at Heathrow and what will happen now,
:20:37. > :20:40.the go-ahead there will take at least till 2030 before you see
:20:41. > :20:49.anything happening with increased capacity. We can increase our
:20:50. > :20:54.capacity in the next two, three years. What might you are Irish. I
:20:55. > :21:03.want to know - what is it with the Irish and aviation? Willie Walsh,
:21:04. > :21:07.Michael O'Leary, the boss of the biggest airline in the world in
:21:08. > :21:14.terms of bums on seats. Is it in your blood?
:21:15. > :21:17.I think we woke up one day and realised we are a small island off
:21:18. > :21:23.another island off the shores of Europe and the only way we can get
:21:24. > :21:28.around is to fly. We have been doing it for a long time. The invention of
:21:29. > :21:32.Irish coffee was at Shannon airport in the 1940s. We had the growth of
:21:33. > :21:38.duty-free coming out of the same place. And then in aircraft leasing,
:21:39. > :21:42.Ireland is the home for the vast bulk of the war's aviation fleets
:21:43. > :21:46.because of the financing. It must be in the blood. Must be! Thank you for
:21:47. > :22:05.coming in. Alcoholic drinks,
:22:06. > :22:06.talking of the Irish! - giant Diageo has
:22:07. > :22:08.just released results The maker of Smirnoff Vodka,
:22:09. > :22:12.Johnnie Walker whisky and Guinness stout says net sales were up more
:22:13. > :22:15.than 14 per cent, and operating The company says its spirits
:22:16. > :22:20.business in the US is doing much better, and in particular
:22:21. > :22:22.its scotch whiskey brands. The chief executive of Diageo,
:22:23. > :22:24.Ivan Menezes, spoke to us earlier. Our performance across
:22:25. > :22:26.the US, Latin America, Europe, Africa and Asia
:22:27. > :22:27.was And our categories and
:22:28. > :22:31.brands performed well. Johnnie Walker, our
:22:32. > :22:33.biggest brand, was up Our whisky brands in North America,
:22:34. > :22:42.like Crown Royal and The business is healthy, and it's
:22:43. > :22:46.a function of the strategy we been implementing in the last few years
:22:47. > :22:49.is really paying off. People around the world
:22:50. > :22:51.are drinking better, and Diageo does better when that
:22:52. > :22:53.happens, because our brand of premium, and we benefit
:22:54. > :23:22.from the trade up that happens I spoke to Ivan Minev is earlier. He
:23:23. > :23:28.is on our website. -- Menezes. I am wondering what he is drinking there.
:23:29. > :23:37.Martini. I should have asked what his
:23:38. > :23:42.favourite tipple is. I like beer and wine.
:23:43. > :23:51.I like champagne. I am an Aussie but I am not a big
:23:52. > :23:58.beer drinker. Shall we start on the newspapers.
:23:59. > :24:02.Our viewers have sent us tweets about the story in The Times about
:24:03. > :24:08.the smartphone. Doctors are saying it is as good if not better at
:24:09. > :24:16.detecting skin cancer than perhaps going to your GP. Amazing, isn't it?
:24:17. > :24:21.As we were saying earlier, one does not think about detection of cancer
:24:22. > :24:24.with smartphones. The clear thing is the computing power of smartphones
:24:25. > :24:28.is becoming phenomenal, and the number of things you can do is
:24:29. > :24:33.growing ever higher. And the demand for that kind of thing. When it
:24:34. > :24:36.comes to applications and wearable technology, a lot of it is to do
:24:37. > :24:45.with health, isn't it? Making us healthier or figuring out what is
:24:46. > :24:50.wrong, that sort of stuff. Can you go over your body with it?
:24:51. > :24:57.One in three people in Australia get melanoma.
:24:58. > :25:04.Let's hear what you had to say about this.
:25:05. > :25:07.One viewer says colon I would like my phone to tell me if I am getting
:25:08. > :25:19.too stressed and to calm me down. Colleagues can do that!
:25:20. > :25:26.We have had some CEOs start-ups who are coming up with wearable
:25:27. > :25:31.technology. We will cover that. We have got twice the supply is
:25:32. > :25:37.compared to what we will use in the next 40 years, so the price
:25:38. > :25:43.shouldn't go up much. The price of $100 a barrel that we saw in 2014
:25:44. > :25:48.will not come back? No. It will stay around the level it is at now. Spot
:25:49. > :25:57.on, mate. Thanks for joining us. Wrap it up, Sal.
:25:58. > :26:20.Cold is the theme through the day-to-day. Particularly so when you
:26:21. > :26:21.factor in the wind, which is quite a bitter wind. That is coming in from