Deadline Day ... no, not that one.

0:00Wake Up To Money from BBC5 Live. Hello, welcome to Wake Up To Money. Apple has taken an even bigger bite of the smartphone market. Sales reached an all-time high. As Keir Starmer works to boost business and investment with China, Donald Trump says that's very dangerous. So what does that mean? We talked about Microsoft's record results on the show yesterday. So why did stock plunge by hundreds of billions of dollars? Our experts will make it make sense. A shoemaker whose baby footwear has been worn by the royal children, tells us why the decades-old firm is under threat of going under, and... Self-assessment.

0:38Tax doesn't have to be taxing. Oh, yes. I'm sorry for the reminder. It is that time of year again, and if you still have to file your return, we're going to get you in fighting shape before tomorrow's deadline. Wake Up To Money with Felicity Hanna. Very good morning to you. Welcome to Wake Up To Money on Friday, the 30th of January. It's four minutes past five. Yeah, I want to hear from you this morning. There's so much to talk about in the next hour. Get in touch. Let me know if you filed your tax return yet. If you have to, if that's still something you're planning to do before at the end of tomorrow.

1:13Because this time last week, there were still 3.3 million tax returns outstanding. So I'm just curious to know how many of those have now been done. Are you still having to do it? Are you still looking at the pile of paperwork? What is your game plan? Get in touch. this morning and let me know. But from Donald Trump to AI to dealing with China, I want your thoughts on everything today. So you know the drill. You can text me on 85058. You can send me a WhatsApp message on 08085 909693. And if you're on social media like X or Blue Sky, then just use the hashtag wake up to money. And I'll be keeping an eye on that.

1:50I will also be keeping an eye on our regular Friday panel this morning. Joining me is Mark Rushmore, the co-founder of the electric toothbrush brand Suri. Morning, Mark. Good morning. I feel like you're probably, as a co-founder of a business, you're probably someone who's quite organised. I feel like whatever paperwork, admin, tax returns, you have to do, do you get them done on like the first day? Just hyper-focused? I think that saying, if you want something done, give it to a busy person definitely resonates. And so I've fortunately got people who help remind me to get all this stuff done as soon as possible.

2:25Well, you can be our inspo this morning because I know we're going to hear from Wake Up To Money listeners who are maybe not as organised. Joining us today, Mark, is Anna MacDonald, Investment Manager at Aubrey. Morning, Anna. Good morning. And I filed mine on Monday. Do you know what? I sort of assumed that you would have been months back, just ready, organised. That makes me feel better. Thank you very much. I am busy, I promise. And joining both of you, making his Wake Up to Money Friday panel debut, actually, is Douglas McNeill, former Treasury special advisor who advised the likes of the then-Chancellor Rishi Sunak, former Prime Ministers Theresa May and Boris Johnson, and now works at Macro Advisory Partners and is our economist this morning.

3:09Morning, Douglas. Good morning. How are you then for your admin, for your life admin and paperwork and all that kind of stuff? Well, I'm usually a bit behind like most people, but I did get my tax return in a couple of months ago. So it turned out that I'd overpaid tax slightly in the year. So the tax hand owed me a few quid back. So it was in my interest to do it sooner rather than later. Oh, I mean, that's just joyful. That feels like it never happens. People are already getting in touch with their stories. David says, I'm paying my tax now. There you go, very organised. Brian in Chipping Norton says, been working through the night on my return.

3:43Still have tomorrow, so should be filed in time. Brian, that's just, that's taking me back to my university days. You've still got the night. You've still got hours to go. You'll be fine. Get in touch. Let me know your thoughts on that, on everything. 85058. But panel, what a week. There's always a lot to talk about at the end of the week, but this one has been particularly busy. Let's have a bit of a reminder. We talked quite a lot. Leanna was chatting about the impact of US geopolitics on last week's panel since the events at the World Economic Forum in Davos. Some countries have been looking for business elsewhere.

4:19It's been eight years since a Canadian prime minister visited China. And in that time, the world has changed dramatically. That was Canadian Prime Minister Mark Carney last week. And since then, it's been the turn of Sir Keir Starmer, who's currently in China. There are huge opportunities here in China. It's the second biggest economy in the world. And that's why we've got such a big business delegation. I mean, a really big business delegation. Keir Starmer has been joined by 54 organisations, or representatives from them, including CEOs from companies like Octopus Energy, JLR. There are even representatives from more cultural areas.

5:01Table Tennis England are out there and also the V &A Museum. And on the Today programme yesterday, I spoke to Graham Wallace, who's Managing Director at the British Chamber of Commerce in China, on what they want for British business. Well, obviously, we are hoping for some concrete outcomes, not just talk. We are hoping for progress on market access issues we've long raised. For example, tariffs on spirits, tariffs on active pharmaceutical ingredients. We're also hoping for some progress on the granting of qualifications, of licences. We really have a whole long list of market access wins. We are hoping the Prime Minister will advance, that ultimately will create more opportunity for businesses here on the ground.

5:43Mark, as a company then, do you deal with China? Is this something that could affect you? We do, yes. Yep. So we manufacture in China and we're out there. In fact, we have about four employees who are based between Hong Kong and Shenzhen. And what does what we're hearing from Keir Starmer kind of trying to warm up relations with China potentially mean for your business? So, I mean, for us, I think it feels like the right call. I think that, you know, it's basic economic realism, as Mark Carney mentioned, you know, second largest economy. It feels like actually engaging with them is sort of expedient for the long run.

6:25I don't think that, you know, being silent gives you more leverage. I think that, you know, engaging now and I don't think it's a coincidence, you know, looking at global politics, that both Canada and the UK are doing it right now when we have less reliable partners elsewhere, perhaps. Anna, that's an interesting point, isn't it? You know, there's a lot of kind of potentially reordering of how we view global trade at the moment. Have we seen any market reaction to what we're hearing coming out of China and Keir Starmer's visit? Not really. We haven't seen too much. AstraZeneca committed to a large facility in China yesterday.

7:10Their share price was relatively unmoved. And whilst the tariffs on Scottish whiskey were cut from 10 % to 5%, it's actually quite, I mean, it's an insignificant part for Diageo, but their shares also didn't move markedly because there are other bigger markets which have been more affected for them, such as the US. I'd say that what we're seeing is that the US is becoming, as Mark was mentioning, you know, a less reliable partner. Trump's mercurial nature means that on a relative basis, other countries that may have seemed more problematic seem relatively less so. We'll talk more about what you're calling Donald Trump's sort of mercurial attitude in a moment because it has been very interesting.

8:00But Douglas, I want to get your take on that AstraZeneca investment. I mean, it announced a really substantial£11 billion investment in China. But of course, it's been cooling on plans for expansion in the UK. Now, Keir Starmer says, well, this is good. This investment will support UK jobs. What's your view? Well, that's right. It's a good reminder that trade is a two-way street. We tend to focus on the export side of things and the opportunities for the UK. But it also requires us to take imports from China and to some extent for British companies to deploy capital in China. So Astra is putting a lot of money into China, clearly.

8:42And that's a nice thing. It's good to see a British company playing on the playing on the world stage in this way. But yeah, Astra has been scaling down its research presence in the UK in recent years. It has closed or downsized or plans to in a couple of cases, a couple of big facilities. And it's been pretty uncomplimentary about Britain as a place to do business, about Britain as a place for conducting pharmaceutical research. So that investment, welcome on the face of it. But it does cut both ways a little bit and illustrate a weakness as well. Anna, it's interesting, isn't it? Moving away from pharmaceuticals and onto that whiskey deal that was announced, that was signed while the Prime Minister was in Beijing, the government's saying it's going to be worth£250 million to the UK economy over the next five years.

9:30And that's obviously a big number, but it's quite a small big number, isn't it? Do we need lots of deals like this before it starts to really kind of pay off for the whole of the UK economy? um well yes to put it to put it uh frankly yes you do because it's it's a small number in i mean sorry yes as you say it feels like a big number but um it is completely dwarfed um by by um the size of our economy the size of their economy um goods are important but actually what we really really do very well in is services um luckily those aren't subject to tariffs um and we are fantastic at our exports of financial services, for example.

10:12So I think that we'll hope to continue to see those do very well. We've got a question in from Imran in Hawley, who says, Donald Trump said it was very dangerous for the UK to deal with China. I'll tell you what, Imran, let's play that clip. This is what President Trump had to say after being asked what he made of the UK doing business with China. Well, it's very dangerous for them to do that. And it's even more dangerous, I think, for Canada to get into business with China. So we'll come back, Imran. I know you've got more questions. But Douglas, that is really tricky, isn't it? What do you interpret President Trump as meaning when he says it's very dangerous?

10:56Because we do know that he's been threatening Canada with more tariffs if it goes ahead with its deals with China. That's right. And, you know, he does have some excuse for getting involved here because the trade deal that we signed with the US last year, the economic prosperity deal, does commit both countries, the UK and the US, to cooperation when it comes to non-market economies. Now, that is diplomatic speak for China, principally. So he might feel that he is entitled to be consulted a little bit when it comes to Britain making moves in its relationship with China. And yeah, it highlights the diplomatic tightrope that Keir Starmer has been walking this week.

11:40Better relations with China are desirable from an economic point of view. But China is a relatively small trading partner compared to the United States. We send about 3.5 % of our exports to China, for example. It's seven or eight times that when it comes to the United States. So it's a much more important trading partner and one that we definitely need to keep on board. Anna, the rest of Imran's questions then. Now, we don't give financial advice on wake up to money, but Imran has a more general question. They want to know, US stocks are said to be overvalued. China's economy is doing very well.

12:12I've heavily invested my pension in China as the US is in decline long term. What's your view? I mean, that's an interesting question, isn't it? Because these are the two largest economies, but very different economies. Yes. And in terms of how you would invest, I mean, remember that the US stock market, if that's what Imran's talking about, is about two thirds of global stock markets. So your decisions there are probably, you know, very, very important in terms of thinking about it. China has the stock market has been recovering very nicely. It's got some very good exposure to some tech names.

12:52The U.S. has highlighted just this week with the results series that we've had from all many of the big, big companies there that they are all starting to behave in pretty different ways, actually. And investors are becoming more, I say, more selective. They're not just going full throttle into the U.S. They're choosing their favorite of the big stocks. And actually, we've seen quite a rebound in in US smaller companies. And that's because ahead of the midterms, Trump is trying very hard to shore up his his popularity, which has been in decline. And it looks like in the midterm elections in November, the Republicans might not do so well.

13:30So he's trying to do things that are going to boost the dollars in people's pockets. He's going to try and improve affordability. And you might see quite a few actions in the US which will do that. And that might be quite good for those smaller domestically based companies. So I am not going to give financial advice. I think the most important thing is a well diversified portfolio, which has exposure to all parts of the globe, as it were, and different asset classes. But yes, there are there are some good opportunities in China and some areas of the US may be seen as being too quite overvalued.

14:07overvalued. But then again, we have just seen GDP growth of 4 % in the fourth quarter in the US, which is pretty phenomenal. Anna, thank you very much. And Imran, thank you for your question. What about, Mark, that other announcement that we had yesterday, this visa-free travel to China, where UK citizens will be able to visit China for 30 days or less without having to get a visa? And the idea is not just tourism, but that people travelling for business, as I know you do, will find that more straightforward? So in our example, because we're visiting China a fair amount, we have the longer term visas.

14:45So it's maybe not as relevant for us. But I must say, you know, the process of having to get one can be a barrier, I think, for travel or for, you know, initial visits. And so I think I see that as a positive to open this up for more people to be able to engage and work with China more easily. So you think that it might help sort of boost some of that growth, some of that investment running both ways? Definitely. In fact, I was taking Uber to the airport last week and the taxi driver wanted to set up his own business. And so he just booked a trip to Shenzhen to go and identify and source some products that he wanted to sell on Amazon.

15:26And so you can really see how, you know, be able to make that even slightly more easy for more people will enable more entrepreneurs, I think, in the UK. OK, let's talk about tech. It's been a week of tech results, hasn't it? We've had results from really big tech firms like Meta, Tesla, Microsoft, Apple overnight. There's been a lot of chat about AI as a result because we're seeing just enormous investments from some of these companies into their AI infrastructure. Morgan Stanley this week said that Britain is losing more jobs than it's creating because of artificial intelligence and that it's being hit harder than rival large economies like the US, like Japan, Germany, Australia.

16:09And there was an interesting piece in the FT yesterday. The investment minister, Lord Stockwood, said there needs to be a discussion in government about introducing a universal basic income, a UBI for workers in sectors that are likely to be wiped out by artificial intelligence. It feels like it's the conversation of our time, Anna, doesn't it? But just talk us through, summarise if you can, what we've seen from the big tech firms this week and how much AI was a part of that. well um we saw some divergent performance in the us as we did actually interesting enough in in europe as well with the two biggest tech names asml and sap asml make the machines that are used for making silicon chips and um they um as chips are ever more in demand uh they reached an all-time high SAP big German software company actually fell very sharply there's been a real divergence between the makers of silicon and the the users of it for to put it more bluntly and Microsoft had a huge fall this week because people worried about they've made huge investments in open AI and committed to even more capex next year of their own.

17:27And that has really led investors to question the returns that they're achieving. How many of us are using Copilot in Microsoft? What we thought might be a very good distribution system for a distribution for AI product. What happens if that take up isn't really there? Conversely, we have seen blowout numbers from Apple. Their iPhone 17 has sold incredibly well. And they said overall revenues were up 16%. I mean, this is on a huge base. So quite an impressive outcome, particularly with China. Sales of the revenues are up 38%, which has been very, very positive. So we are seeing quite divergent performance.

18:12Tesla talked about they had their first year of actually revenue declines and and and there's been lots of talk about what what Musk is going to do with all the different businesses he has. And there's been talk today about whether there's going to be some pressure for Tesla to to take on some of the other businesses, because at the moment of all the of all the horses in Musk's stable, Tesla is the only listed vehicle that there is. Oh, let's go back to Microsoft, because we did we did see some some huge investment, you know, meta making eye water investments in AI, for example. But Microsoft published amazingly good results and then wiped, what, you know, hundreds of billions of dollars off its share price.

18:57What is going on there? I think it is, as I say, that that that questioning on on the return of invest on investment. And I think there's also actually some concern about the ability for software to be replicated. Anthropics Claude has released a, you can now learn to, well, you can now create your own software on Anthropics Claude, even if you're not a software engineer. that kind of changes the basis for how people think about enterprise software, how they think about what we might all be able to do. And I think that's probably leading to some concerns about how strong what would call the moat, how many barriers to entry they are around your own software creation.

19:51It's a really, really important conversation, isn't it, Douglas? What's your view? People talk about whether we're in an AI bubble, whether AI companies are sort of investing too much or chasing after this elusive future AI based profit. What's your view? Well, I think in a way that Morgan Stanley report that you mentioned this week is is reassuring, obviously not positive. People are losing jobs or employment opportunities are coming down. But on the other hand, that's sort of the point of AI, to make companies more efficient. And if we can see that user companies are using AI in a way that helps them to make more money and ultimately to invest and hopefully to create more jobs, then that's a positive.

20:40That would tend to suggest that it's not a bubble, that there is actually a point to all of this. But I think in some ways, this is a key year for AI. There's been a lot of talk. There's been an awful lot of investment. we need to see this year user companies showing that they are able to use the technology in a way that makes them more efficient but also beyond that helps them to do things that they couldn't do before that's the real acid test for for all the hype around ai whether people can use it to do things that are new that they couldn't do before and also we also need to think about how the uk is mentioned earlier we're a very strongly services oriented economy rather than a manufacturing economy.

21:18So services may be the first area to see those cuts to jobs. Oh, that's interesting. So do you think because we're such a services-based economy, that's potentially why the UK might struggle more than some of the other big economies that we could be compared to? Yes, I do. And I also think the fact that it's a broader comment, but that we have some of the highest energy costs in Europe, for example, doesn't make it easy for companies to do business or even to decide to base businesses here and to grow, for example, manufacturing and other services like that. Why would you commit yourself to a country where it's more expensive to do business?

22:03Mark, what about you in your company? Are you using AI? We're hearing from Douglas and Anna, these sort of, you know, the different issues manufacturers and companies are having to deal with. What are your thoughts? I think Doug is absolutely spot on in terms of, you know, AI is meant to help make you more efficient. We're certainly seeing that across the board. So I think every day now people are using, you know, ChatGPT not to do our work, but to help accelerate and make things faster. I think a good example of that would be we downloaded all 15 ,000 of our reviews from Trustpilot. So we're 4.7 out of 5 rated.

22:39But, you know, you get such a wealth of information. Now, historically, we would have gone to a consultant, spent a lot of money, spent, you know, weeks or months interpreting the data to get a report back to get those insights. But now we've downloaded them, created a custom GPT, and we can talk, you know, almost to our customers and get instant insights from that data. So saving both money and time, which enables my teams to then develop products or services, adapt our customer service much more quickly and to become more efficient, which actually in turn enables us to divert money to hiring more people and growing the business in the right areas rather than sort of being more wasteful in terms of time or spend elsewhere.

23:23And I know that in your personal life, you've actually recently invested in a robot, maybe not quite a humanoid robot, but tell me what you bought. You know, I'm actually sat opposite here right now, hoping that it's not going to start beeping or making noise, but an absolute game changer. I feel like I'm late to the game with one of these robo vacuums. And so it's been sitting there. When I came down this morning, it had sort of died of battery and sort of left stranded alone in the kitchen. So I've just had to carry it back into its charging point. But I can highly recommend a robo vacuum. I thought they were meant to find their way back when they were running low.

23:59You know what? I thought so too, but unfortunately it got stuck on one of my kids' items of clothing. I've heard that they text you, don't they, when they get stuck. There are much more important questions to ask, but I must know, Mark, does your robot vacuum cleaner have a name? It does. My daughter called her Emily. Her? I don't think I've heard of one being a female so far, so that's very interesting. Okay, moving on from robot vacuum cleaners, although I do have more questions. We'll talk afterwards, Mark. Douglas, that question about UBI, universal basic income, I mean, it's quite interesting, isn't it, to hear a minister talking about it, but not talking about it as how we understand it, a universal basic income.

24:43The idea is that, well, it would be universal that everybody would have this certain level of income. But discussing instead it being introduced in specific areas that are perhaps being affected by the march of the machines, the launch of AI. I know you looked at UBI when you were advising government. What are your thoughts? Yes, we did some polling at one stage. This is a few years ago because it's not a new idea. in fact, the AI rise has given it a fresh lease of life, but it's an idea that's been around for quite a long time. And so we did some polling to see what people thought, did some focus groups, and funnily enough, it didn't go down all that well.

25:23People found it quite hard to get their heads around. They thought it sounded like an enormous expansion of the benefits system. They didn't, by and large, like that. And so strangely, whilst you might think that the idea of universal cash, i.e. more cash for everybody, would be quite popular. That wasn't in fact the case. Something of a relief because for government to bring in something that really would be universal or even span a number of different sectors would be extremely expensive. I mean, it would be as big a change as, I suppose, the launch of the welfare state. That's right. I mean, you can think of it as a sort of state pension, but for everybody, The state pension is a sort of universal benefit, but only for people of a certain age.

26:06Now, we spend about£150 billion a year on our state pension, and that's for maybe 10 million people or something like that. So if you expanded that to the whole of the working age population, for example, you're talking about another 40 or 50 million people. So you're talking about, gosh, the thick end of a trillion pounds of extra expenditure for government. So I wonder whether the investment minister has cleared his comments with the Treasury. I suspect not. Well, I suppose it is a conversation that shows how much the economy might change as AI develops. Well, I'm sure I'll be talking about it more in the coming years.

26:44Let's talk about something else that's happening over in the US. Donald Trump has said that he'll announce his pick for chair of the Federal Reserve today. Remember, that's the US's central bank, their version of the Bank of England. It's been a long-awaited decision from the president, who's been quite outspoken about his desire for interest rates to lower faster. And on Wednesday, the current chair, Jerome Powell, announced that the Fed would hold rates steady, despite quite intense political pressure being put on him. Randy Kroszner sat on the Fed's board until 2009, And he was chatting to Will earlier in the week about the key checks to the Fed's ability to make its own decisions.

27:26People worry a lot about the independence of the Fed. And I said the three key checks are the three S's. One is the Supreme Court, because, of course, there'll be an important Supreme Court decision about the president's ability to remove members of the Fed board, the Senate confirmation process. And also, I think someone who's very important is Scott Besant, the third S, the Secretary of Treasury, who I think has the president's ear to make sure that good choices are made. Right. I think there's two questions here. I'm going to start with you, Anna. The first question is, why is there so much concern over who might replace Jerome Powell and over how independent they will be?