27/11/2017 BBC Business Live

This is Business Live from BBC News

with Jamie Robertson

and Sally Bundock.

Boosting Britain after Brexit:

The UK government sets out its plans

for an industrial strategy

to transform the economy.

Live from London, that's

our top story on Monday

the 27th of November.

A billion dollar deal

for pharmaceuticals reasearch

kicks of the new focus

on development and technology.

But can the Government really

prescribe the right medicine

for Britian's economy?

Also in the programme....

Tourism in trouble.

One of Asia's most popular

destinations is closed

as the Indonesian authorities

prepare for a major

volcanic eruption in Bali.

It is cyber Monday today, with

retailers

It is cyber Monday today, with

retailers hoping more will part with

their cash. Share prices in Europe,

starting the week downbeat, not

catching the retail wave.

We'll be getting the inside

track on big tobacco

with the big boss of Philip Morris

in the UK.

Their brands include

Marlboro Lights, Parliament

and Dupont, but with the switch

to e-cigarettes gathering pace can

they ever really replace the huge

profits from traditional cigarettes

and tobacco?

Today is Cyber Monday, last

week was Black Friday...

Are you fed-up of all these

dedicated shopping days?

The dedicated shopping days?

Let us know - just use

the hashtag BBCBizLive.

Hello and welcome to Business Live.

As the clock ticks down on Britian's

departure from the European Union,

the Government is keen to reshape

the world's fifth biggest economy.

And to do that it's launching

a new "Industrial Strategy" as part

of Prime Minister Theresa May's

pledge to, as she put it "build

a Britain fit for the future".

It will focus on five major sectors

of the economy the Government thinks

the country is good at,

but needs more investment.

They include the construction,

artificial intelligence

and automotive sectors.

Another of them is pharmaceuticals.

The big headline is the £1 billion -

that's just over $1.3 billion that

US healthcare giant MSD is plowing

into a new UK research centre.

A lot of the focus is

on research and development

of new products and technology.

The UK currently spend 1.7%

of its wealth on that.

Which is below the 2.4% average

for advanced economies.

Michael Jacobs is director of

the Commission on Economic Justice

at the UK think tank the Institute

for Public Policy Research.

Michael De... It's quite

interesting, this government, a

Conservative government, very

against industrial strategy,

government interference. Does it

really need one?

Almost every other

developed country in the world has

an industrial strategy and is not

controversial. It is not something

that provides left and right in most

countries. But here, the

Conservative Party in general fields

if you leave markets and general

enterprise to their own devices, it

generates the best results of the

economy. The problem is as generated

very good results for our economy,

as we are beginning to realise, and

as the Chancellor had to admit last

week when the ONS downgraded our

productivity. This is a very welcome

sense that the government

acknowledges that it self,

government has to be more active.

What kind of leavers do you think

the government has to pull in order

to be able to push forward...

Productivity is one of the big

questions, so much in the news over

the last few weeks. Tiago it is a

bickering, industrial strategy.

Saying the government needs to

intervene in most parts of the

economy to get investment moving

better. The thing we have heard

about in the headlines this morning

is innovation.

Britain is good at

something is, pharmaceuticals,

automotive and so on. But in a

narrow range of sectors. If you look

at Germany, which supports more than

us, it is innovative across a range

of sectors. The government needs to

make sure businesses are investing

in research and development. As you

we in the invest much less of our

national income, and among a range

of sectors. Money put it in to

support businesses to do that.

It is

to do with new technology?

To

develop new technology, such as

pharmaceuticals or artificial

intelligence or driverless vehicles.

The government has also been talking

a lot about productivity, which is

how much we make every hour we work.

Where Britain's product red --

productivity record is terrible,

much worse than Germany, France or

the United States and stalled since

the financial crisis. But supporting

innovative frontier companies does

not raise productivity, because

those companies are already very

productive.

It is a big hinterland

of British companies.

Ordinary firms

in the everyday economy, firms in

retail or wholesale or tourism an

hospitality, food and drink.

Leaving

the government will do anything

about that?

That's what we're

waiting to see when industrial

strategy is published. Can improve

the improvements in productivity?

What could it do?

What we know is

most businesses don't realise they

are not as productive as they could

be. There is a huge disparity

between the productivity of the

best, the average in the worst,

especially around the country, some

parts of the country much less

productive than others most

businesses don't know that. Giving

businesses advice and support and

getting them to install new

technologies and installing

technologies which has been around a

long time, ordinary digital

economies, will help them

improve productivity. That is what

will make Britain richer and enable

us to pay higher wages.

Boring and

ordered my stuff.

Not if you are in

that sector. What people know now is

their wages have been stagnant for a

a decade.

Fascinating, thank you

very much indeed.

More on that industrial strategy

throughout the day. We will be

looking at it, the really big story

in business today.

Let's take a look at some

of the other stories

making the news...

The US media group, Time Inc,

is to be bought a rival corporation

in a deal backed by two conservative

billionaires, the Koch Brothers.

The Meredith group said

the agreement was reached in talks

on Sunday to buy up Time's

outstanding shares in a deal

valued at $2.8 billion.

Venezuela's President Nicolas Maduro

has appointed an army general

as head of the state owned PDVSA oil

company - and also

as energy minister.

In a televised address,

Mr Maduro said the new appointment

was aimed at tackling corruption

in the sector.

The country is under pressure to

deal with its huge debts.

Shares in the Japanese computer

games giant Ninetendo have hit

a new nine year high,

thanks to Black Friday.

They closed up nearly 2.5% thanks

to strong sales of the Switch

console which has continued to sell

well all over the world

since its launch in March.

One of Asia's most popular tourist

destinations is being closed down

because of the imminent threat

of a major volanic eruption.

Mount Agung on the Indonesian island

of Bali has been emitting huge

plumes of smoke and fire

which could also pose a dange

to airplanes in the region.

Our Asia Business Correspondent,

Karishma Vaswani, is in Singapore.

Just tell us about the warnings,

some are saying we could see an

eruption within 24 hours.

Yes, well

sadly there have been warnings from

the Indonesian officials since late

yesterday, in fact. Thousands of

terrorists have been stranded in

Bali because of these worries,

mainly volcanic ash as a result of

the fact Mount Agung was seen

committing these continuous ash

parts and there were explosive

eruptions and ash billowing

thousands of metres and the air.

Officials in Indonesia raised the

alert at the Mount Agung volcano to

level four, the highest level,

because of concerns that the

potential of a larger eruption. It

is very difficult, vulcanologists

say, to predict exactly when that

eruption may be all the size of the

eruption that officials are taking

no chances. They have closed the

only International Airport on the

airport, at least until tomorrow

morning. Every six hours there is an

evaluation of how bad the situation

is. More than 400 flights have been

affected, with heirlooms including

Qantas and Malaysian airlines

cancelling flights to and from the

eye lines. -- airlines.

The European

market, as you saw earlier, are all

headed low as we start a new trading

week. That follows the mood in Asia

as well. We were talking more detail

about the markets for the moment but

let's have a look ahead to the Dale

Wall Street with Samir Hussein.

Now that the American

Thanksgiving holiday

and Black Friday are behind us,

it's time to look ahead

to Cyber Monday, generally

when people do a lot

of their online shopping.

So, online retailers

are trying to attract shoppers

by offering deals that are not

available in stores.

So they incentivise customers

with discounts and free

shipping deals online,

ahead of the Christmas season.

In related news, fresh consumer

spending numbers for the month

of November are out on Thursday,

and analysts are expecting to see

a slight drop compared

to the month before.

On Wednesday, Federal Reserve

chair Janet Yelland

testifies before US lawmakers

on the US economic outlook.

This comes just two weeks before

the next Central Bank meeting

and it's expected to raise interest

rates then and this will also likely

be Ms Yelland's final

appearance before Congress,

as a replacement Fed

governor Jerome Powell

is set to take over

as leader early next year.

Joining us is Mike Bell,

Global Market Strategist at JP

Morgan Asset Management.

Let's start in China. We saw some

quite sharp sell-off sat the end of

last week, 3% down on Friday and

more today. What people about, debt?

A couple of concerns. The Chinese

economy we expect to slow in 2018,

so it grows at 6% rather than

seventh and we've been seeing for

most of this year. It is important

that that in perspective. It is

still growing significantly faster

than most other market economies,

because of the strength and

consumption coming through. But some

concerns around debt levels,

particularly in the corporate sector

and a little bit of profit taking on

shares of done well.

Should we be

worrying about it?

I think the likelihood of having a

serious impact on the UK or global

economy is quite low, because as

long as it delivers 6% growth, it

will be supportive of the global

economy.

Markets this week, Europe

starting the week fairly flat, a

little downbeat and lacklustre. We

ended last week in holiday mode in

the united states. Cyber Monday

today. Give us your take on Black

Friday, cyber Monday, all these

events, will it help the retailers?

What is fascinating is if you look

at the singles day sales, in China,

north of $25 billion worth of sales.

In 24 hours?

Yes, far more than you

saw in the US last year. About four

times more than they did across

Black Friday and Cyber Monday. The

problem for retailers is if they

discount too much, they may it an

increased amount of sales but the

profits may not look quite as good.

I think you have to look at it over

the whole Christmas period and see

what retail sales are right. You

look at the UK economy, signs are

not laggard. Lower football and

consumer confidence has been

deteriorating in the last 12 months.

We will get numbers out of Europe

this week which will be closely

watched and should be good?

In

contrast to the UK where there has

been deteriorating consumer

confidence, in the Eurozone consumer

confidence has continue to improve.

We expect that to be destroyed

asleep. As consumer confidence picks

up, consumption, retail sales in

Europe are rising. Quite a positive

picture in Europe but are less good

one here.

One example of consumer

confidence here, we asked people if

they were fed up with all these

Cyber Monday and the rest of it.

Tony says, never! That is one

example of consumer confidence.

Do you think there is an element of

sarcasm?

I don't think so, I think it's

genuine, believes it, I can tell.

Interesting the price of oil has

come down a little bit. Interesting

to keep an eye on that this week as

well.

Our view is the oil price has

come up a fair bit over the last

year and will probably stay

somewhere below the $60 a barrel

range. Somewhere in the 50- $60 a

barrel. We think it is more likely

to trade sideways rather than make

serious games.

We will get back to

you shortly. We will also talk about

another investment, Victor Keunen.

1007 this year. Just the beginning!

We will get your opinion on it

later. -- on temporary map.

Still to come...

We'll speak to the big boss

of Philip Morris in the UK

about whether e-cigarettes can

really replace the big profits

of traditional tobacco You're

with Business Live from BBC News.

We will be back with you.

National Consumer Week

launches today, and this year it's

focusing on problematic

subscriptions and

subscription traps.

Let's find out more,

joining us now is Tom MacInnes,

head of data at Citizens Advice.

What is a subscription trap?

We get

hundreds of people calling our

helpline with problems with

subscriptions where they have signed

up for something and found that

really easy and found it really hard

to leave and they end up running up

more costs when they are trying to

give up their subscription. So for

instance we had a woman who wanted

to give up the subscription to her

gym and in the terms and conditions,

if she lost her job, she was allowed

to leave and when she lost her job

she presented that evidence and they

asked for more evidence and asked

for a P45 and dragged out the

process so she was paying for

something that she didn't want or

need and made it difficult for her.

What protection is there against

that kind of thing? Do we have a leg

to stand on as a consumer if we

haven't read all the small print?

Well, it is the responsibility of

the companies to act in a

responsible way and not put

unnecessary barriers in the way, but

it is really important that you

check the terms and conditions

before you sign up and one of the

things that we're concerned about

this week is around online

subscription. It is easy to tick a

box online and it is not clear what

you are signing up to is an on going

commitment rather than a one off

cost.

Can you give us some golden

rules?

The obvious thing which is to

check the terms and conditions.

But

they can go on for pages and pages?

That's right, but the key part in

that then if you want to leave is

around the cancellation policy.

Check what the con sellation policy

and make sure you are stuck to go

that. If you want to speak to

someone, it is customer services and

if you are having problems, the

Citizens Advice helpline is there to

help you out too.

Tom, we appreciate

your time. There is a lot more on

that story on our websitement take a

look.

Looking at president BBC Live page

on our website. We have got driving

in the dark. It is really bizarre

picture of a rather weird looking

car!

There you go.

LAUGHTER

Technology is letting us down. We

will be back if our technology holds

up in a second!

You're watching Business Live.

Our top story:

The Buck Business Secretary has told

the BBC that the Government's new

industrial strategy, which is being

launched today, will make a massive

amount of difference to the economy

after Brexit. That's his promise.

A quick look at how

markets are faring.

Our computer works. The FTSE hasn't

moved at all. The DAX are down a

touch and the pound is looking

stronger. It was down at about 1.32

at the end of last week, but it

seems to have cofrd a little.

When is smoking not really smoking?

Well more and more tobacco giants

are diversifying away

from conventional cigarettes.

The number of cigarettes sold

globally is continuing to fall

as people seek to avoid what can be

a deadly habit.

The world's biggest international

tobacco firm by sales,

Philip Morris, is investing heavily

in developing smoke free products.

It says four million people

are already using its IQOS product

which works by heating up tobacco

rather than by burning it.

Peter Nixon is the UK

and Ireland Managing Director

of Philip Morris International.

Good morning.

Good morning.

What is

it, IQOS?

Heated tobacco. How does it work.

IQOS. We launched a couple of years

ago. It heats rather than burns

tobacco. You use a tobacco stick and

you put it in a holder and it

releases a vapour. Because it heats

it to a certain temperature, it

doesn't burn and releases 90% to 95%

of the harmful things you find in

smoke. We launched in Japan in 2014

and we have seen incredible results

and seven out of ten people who buy

this product are able to stop

smoking and move to it and that's

unprecedented in our industry. For

electronic second receipts we see

20%, seven out of ten people is

incredible. Four million people

already have switched and we see

8,000 to 10,000 people switching

every day, stopping smoking and

moving to this.

One, are you

marketing this to just users of

conventional cigarettes? Two, are

you marketing it to people who don't

smoke?

This is a product for

smokers. So we have 7.5 million

smokers in the UK. This is the

market I look after. Our objective

is to switch those 7.5 million

people to IQOS or electronic

cigarettes and reduced risk

products.

You wouldn't mind people

taking it up for the first time if

they never smoked before?

Our focus

is for smokers. Since we have

launched the product in Japan, we

see that vast majority, 99% of

people who use the product are

smokers. Because it uses tobacco and

heats tobacco, it is close to the

ritual that with cigarettes.

You

focus on the UK and Ireland. What

percentage of your sales is

traditional cigarettes and these new

products, the e-cigarettes are

heated tobacco?

It is small. The

heated tobacco we launched one year.

And IQOS one year. Electronic rig

receipts we have had for a number of

years.

A tiny percentage?

Heated

tobacco is a tiny percentage. You

are talking four or five percent.

Sorry to interrupt. By switching

from the traditional smokers to the

heated product that's a huge task

ahead, isn't it?

Technology has

moved fast and my objective is to

stop selling cigarettes and replace

the cigarettes with these things. If

we look at Japan, 15% of smokers

have moved to this. We sell more of

those products...

But what

percentage profit do you make, so a

packet of traditional cigarettes

compared to a packet of heated?

Well, at the moment we have just

launched. They haven't turned a

profit yet because we have spent $3

billion in developing the product

and the research and development and

400 scientists in Switzerland who

are developing it.

You can't have

done it without working out what

your profit margin will be? You want

to remain a profitable company

afterwards.

Absolutely.

It is more

profitable or less profitable?

It

depends how many people switch to

them. We have to see because we have

invested so much up to now. We have

to see how it goes in the future.

The potential of the product is

massive. 7.5 million people smoke

who want to stop smoking and this

provides an alternative.

Give us

some of the figures on how dangerous

it is. It will still kill you and it

has warnings on the packet?

When

compared with the smoke you find in

a cigarette and versus the harmful

chemicals, 90 to 95% less harmful

chemicals. This is what gives us

confidence that this can be a

reduced tobacco product.

Someone

tweeted to ask do you smoke?

I use

the IQOS product myself.

What's it

like?

I am not a big smoker, but I

use it as a social smoker, but I

have switched from smoking to this.

It is a shame we've run out of time.

So much more to discuss. Thank you

for coming in today. We appreciate

it.

In a moment we'll take a look

through the Business Pages but first

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whenever you need to know.

What other business

stories has the media been

taking an interest in?

Mike Bell is back.

He is Global Market Strategist at JP

Morgan Asset Management

joins us once more.

I am getting excited about Bitcoin.

Don't put any money into it that you

can't afford. Anything that exhibits

that kind of price gain, it looks

too good to be true usually ends

up...

This is different this time.

That's what they always say! There

is a lot of risks in it. The

currency that backs it has a great

future ahead, but Bitcoin, I think

there are significant risks.

It is a

rare commodity. It is very difficult

to mine them and create them

anymore. It is a rare commodity. It

is like houses in the UK! So, if you

have got a limited supply, the price

is going to continue to go up?

Supply and demand.

The problem with

Bitcoin it is not backed by a

government. So if it ever becomes

significant enough that governments

want to be able to control it, then

there is just the serious risk...

Central Bank. Let's move on.

This is

the ultimate internet play.

The bubble is yet to burst.

Speculators are doing well. One more

comment about the various retail

days. We were talking about this

earlier in the green room how this

impacts retailers who can't afford,

the smaller players, who can't

afford to discount against the likes

of Amazon who can afford to take a

hit for a couple of months in the

run-up to Christmas?

It is a huge

problem and it is not just on Black

Friday, you see online retailers

with massive scale competing against

smaller players that don't have the

capacity to compete with the large

players. That's not something that's

going to go away and that poses a

risk to the smaller players which

are being dominated by the larger

players such as Amazon.

Mike Bell,

thank you very much indeed for

joining us on Business Live.

We will be back again tomorrow,

won't we? That's it for the moment.

That's it, we will see you soon.

Have a good day. Bye-bye.