15/12/2015 BBC Business Live


15/12/2015

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This is Business Live from BBC News with Aaron Heslehurst and Sally

:00:12.:00:14.

As firms continue to count the rising cost of hacking attacks,

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we ask if it's now time for governments to play a greater

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Live from London, that's our top story on Tuesday 15th November.

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2015 has seen a series of high-level global cyber security

:00:38.:00:42.

Some of the biggest victims of those attacks will be meeting

:00:43.:00:47.

The question on everyone's lips ? what, if anything,

:00:48.:00:51.

China's Island Factory - the global power is building

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artificial islands in the South China Sea.

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On the markets, Japanese stocks led losses across much of Asia as oil

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prices continued to slide and with investors remaining

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cautious ahead of a widely-expected US interest rate rise on Wednesday.

:01:24.:01:32.

And on Inside Track we have a real cracker of a CEO today.

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We'll be speaking to the man who heads United biscuits,

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they're the global snack firm behind brands including McVitie's

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and Jacob's crackers and Jaffa Cakes.

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Today as a rocket carrying three astronauts prepares to launch

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from Kazakhstan we want to know, does the idea of space

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Let us know - just use the hashtag #BBCBizLive.

:01:56.:02:15.

The past year has seen a record number of high level cyber security

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In the UK, Members of Parliament are meeting today to discuss

:02:20.:02:32.

the issue and will be joined by the Chief Exec

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They suffered a massive cyber attack in October.

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Hackers accessed personal details of almost 157 thousand customers,

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including more than 15,000 bank account numbers and sort codes.

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And they're not the only ones - PayPal, Ebay, JP Morgan and Sony

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Hacking costs firms that operate around the world an average of

:02:50.:03:00.

In the UK alone, it's estimated that hacking costs firms a total

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of $51 billion a year.

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$27 billion of that is lost revenues as the result of attacks

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with the other $24 billion spent on firms defending themselves

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What will they discuss today when business leaders and politicians

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meet? We're joined by Anthony Leather,

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senior consultant, Aerospace, Defence and Security,

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at Frost Sullivan. Outlining the possible cost of this

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problem, it is huge. TalkTalk is an example of that earlier this year.

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Absolutely. Side bar has really come onto the risk register for a number

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of companies, elevated by the UK Government as a Tier one national

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security issue. There is much more engagement required across

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Government, industry and business to try to tackle this. Europe is

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talking about this quite intensively and the EU may come up with rules

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and regulations that we would have to add here too. Give us a sense of

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where we are headed and what the politicians and business leaders may

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well discuss today? One of the biggest issues is transparency,

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people not reporting on attacks in the past, not sharing information.

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By Midge and collaboration was an issue, the EU cyber-security policy

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really drives better collaboration across countries, but also across

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some of the businesses as well to share threats and breeches and to

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ensure certain standards of cyber-security for the protection of

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information and data of customers. We talk about the billions, we just

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talked about the cost of UK firms, more than $50 billion, but I wonder,

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they spend billions but hackers are still getting through, it is a

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constant battle ground, so I keep hearing. Security firms constantly

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coming up with walls, hackers are constantly coming up with ways of

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getting around those, I guess the TalkTalk incident highlighted it is

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not just IT departments now. You make a good point, we moved away

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from the walls, people realised their networks would be penetrated,

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it is about realising the threats, having constant diagnostics running

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at the capability in place to remediate a lot of the issues. With

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that issue is found, to be one quite quickly. The engagement at boardroom

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level really needs to happen more moving forward because they are

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beginning to see hits on revenues and reputation and it is an issue is

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ready to be more active with. Thank you very much for coming in and

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sharing your expertise. We will be across any news that comes out of

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that meeting that is taking place today.

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The US city of Seattle has approved a law which allows drivers

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for the online taxi service Uber to join a trade union.

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Uber regards its unlicensed taxi drivers not as full-time employees

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but as contractors with flexible hours.

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The company has resisted efforts from drivers to negotiate

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collectively on pay and working conditions.

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A report says the UK should start fracking to establish the economic

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It claims shale could create jobs, but doubted if it would cut prices.

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Abundant shale gas in the US has helped domestic energy prices fall.

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Aviation officials in the United States say all small

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drones and model aircraft in the country must be registered

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Drone pilots will have to pay $5 to obtain

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The authorities promised to bring in regulation in response

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to concerns over privacy and security.

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Your boys have got drones. They have both got little ones.

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They can go up I take a picture. Do they have those ones?

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Yes, they are not expensive. If you had to register them all...

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I had one, I lost it, it flew off! Let's take a look round the world

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at what's business stories Slicks if you don't want a dog about

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this today, it is all over the BBC, a bit tricky! Tim Peake anti other

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astronauts are heading into space, take off is 11:03am GMT. It is quite

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an exciting moment, but this is an industry that is worth a lot

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globally but certainly to the UK economy as well.

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?11.3 million. A very exciting story. We have asked

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you to get in touch, are you excited about this, would you go to space on

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holiday? Yes! I would love to see the planet

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from up there. We would like to know your thoughts.

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Just stick me in a rocket, one-way ticket!

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I am getting it from the gallery! Let's move on!

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China is building huge artificial islands in a controversial area

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of the South China sea where six countries have a territorial

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Because the construction work is hundreds of miles out

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into the waters, no journalist has been able to film

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The BBC's Rupert Wingfield-Hayes flew in a small civilian aircraft

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into the security zone, unilaterally imposed by Beijing.

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You are threatening the security of our station.

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They are being told, don't come! Tell our viewers around the world

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how important this area is? It is a huge trading area with a lot of

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ships passing through? A huge number of ships. Think about

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the countries around the rim of the South China Sea, to the north you

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have China, the world's second-biggest economy, Japan, the

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world's third biggest, South Korea, Taiwan, Hong Kong, and to the south,

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Vietnam, the Philippines, Malaysia, Indonesia. A massive amount of the

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world economy is concentrated around this seed, and for that reason about

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40% of the world's trade is thought to pass through the South China Sea

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every year. A lot of it is manufactured, but also oil and gas

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coming into these economies, and about 11% of all of the crude oil in

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the world passes through the South China Sea, 6% of the liquid natural

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gas. Two figures are important, China get about 40% of its oil from

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the Middle East and all of it comes through the South China Sea. That is

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why China wants to be able to secure this area. But hang on, Japan gets

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80% of its oil from the Middle East and all of that comes through the

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South China Sea, too, so Japan is extremely nervous about what China

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is doing, building these islands, apparently military bases, to take

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control of the South China Sea. Astonishing figures. Thanks very

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much for that, we appreciated. Let's talk markets, keep this in

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mind, oil and Janet Yellin. Janet Yellen, the big boss

:11:09.:11:14.

of America's central bank, and the big slide in the black

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stuff is dominating. US crude fell as low

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as $34.53 a barrel on Monday. Brent crude traded over here,

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it fell to $36.33, its weakest level But keep this in mind -

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a fall below $36.20 would take oil Remember, just over a year ago oil

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was running at $120 a barrel. Nikkei closing down

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at a 7.5-week low. The Federal Reserve begins its last

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meeting of the year today, and traders see an 83% chance

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that the Fed will press It'd be the first time

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in almost a decade. Of course a rate hike would signal

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confidence in the US economy, but some investors worry

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it may slow growth. And the main question now turns

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to how many increases will follow Let's get the latest on what should

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be making the business headlines on that side of the Atlantic today.

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The event everyone has been talking about has arrived, the Fed's

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policy-setting group will begin a two-day meeting on interest rate

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policy on Tuesday and investors have almost fully priced in a rate

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increase, the first in the decade, and the debate is how many increases

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will follow in 2016. Low energy prices has helped offset the

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increase in products, and US anti-trust regulators are expected

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to decide whether or not they would want the $26 billion deal. They hope

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it will alleviate concerns that a deal would be anti-competitive.

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It has been quoted year for mergers and acquisitions.

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The lawyers will have made a lot of money! Carrying it all the way to

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the bank! Joining us is David Buik

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from Panmure Gordon Co. He doesn't need an introduction!

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Part of the family! Everybody is talking about it, let's

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start with the Fed. Almost to the point of boredom. The fact remains

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Janet Yellin is that truly conservative, she replaced Benbow 90

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just over a year ago and has been teasing us for a year now. It has to

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stop. If she does not stop teasing us, the bank will lose credibility.

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Should she have raised them sooner? There has just been too much

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rabbiting. To be fair to her, we have been doing the rabbiting.

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The other thing is, this forward guidance has proved to be rubbish,

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it doesn't matter what central Bank you speak to, the prognosis and

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forecasting of what will happen in the future has been, at best, Dyer.

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It is something you shouldn't get too involved in. Because she

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threatened it six months ago, the dollar went to the moon, emerging

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markets fell around our feet in dismay, will she, won't she, Shelby,

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shan't we? It has to stop. As the saying, the first will be on

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Wednesday, then one in March, one in September 2016... How do they know?

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The answer is, they don't. Let's take each day as it comes, put the

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symbolic rate up, back off, see how it works, if it works, go on, if

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not, put it back. The other question was about oil. It

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is over the papers. They are ruthless. We will talk about oil.

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Later. David will return and we will be talking to a guest that really

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takes the biscuit! We're going to be joined

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by the Chief Executive of United Biscuits, the company

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behind a host of tasty snacks including one of my

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favourites, Jaffa cakes! You're with Business

:15:55.:16:00.

Live from BBC News. UK astronaut Tim Peake is ready

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to make his landmark flight The space sector is now worth ?11.3

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billion annually to the UK economy. Sarah Rainsford is in Kazakhstan

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preparing for blast-off. Sarah, what does this launch

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mean for the UK space industry? Well, it does. Certainly the hope is

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that this will lead to further investments in the space industry in

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Britain. I mean the fact itself that there is a British man heading up to

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the International Space Station for the first time is proof of that will

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if you like to put more money into the space programme because the

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British Government paid around about, I understand, ?20 million for

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this seat for Tim Peake today on the rocket here behind me, the Soyuz

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rocket. That represents a significant investment for Britain,

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but it is a bit of a discount in terms of what the seats normally

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cost. Russia rents them out at $70 million for each seat. So Britain is

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getting a good deal here, but yeah, the hope is that Britain will then

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be increasing investment in the space programme, in the Space Agency

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and that will lead to more jobs. There is around about 34,000 people

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currently employed in Britain in the space industry and we are looking at

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up to 100,000 by 2030. Of course, that might be helped by the

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excitement about this flight. Tim Peake is the first official

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astronaut heading to the ISS: There is a huge amount of excitement at

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the cosmodrome where he is going to make the flight. His family and his

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friends are here. There is plenty of people wearing Union Flag bobble

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hats and waving Union Flags as he came out of the hotel and cheers and

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crowds wishing him well as he came out. Maybe that will add a bit of a

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thrust as well to the space industry back home.

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Thank you very much. Sarah Raynsford in Kazakhstan and we will be right

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across that later. Another story in the business News. Yahoo is told to

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cut free food for its staff. That's one of the suggestions to help boost

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its bottom line. Our top story: Cyber attacks costs

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the average global company $7.7 In the next few hours some

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of the UK's leading CEOs whose firms have been subjected

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to major hacking attacks, will meet with

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politicians in London. Top of the agenda, how

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to protect personal data Now it's time to make a cup of tea,

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put your feet and break out the digestives because we are going

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to discuss the business of biscuits. I will be talking about it. Aaron is

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busy off loading brands we know very well.

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We have the Chief Executive of United Biscuits.

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But first let's get some background on the company behind the treat.

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United Biscuits are behind some our most beloved snack brands

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including the likes of Jaffa cakes, hobnobs, Jacob's Cream Crackers and,

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of course, the classic McVities digestive.

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They currently sell products in 130 countries and are now

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growing their market share in emerging markets including

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the likes of Saudi Arabia, Nigeria and India.

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Last year the group was put up for sale by its private equity

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owners and acquired by a Turkish food giant Yildiz Holdings

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In April of this year Jeff van der Eems was appointed

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Chief Executive of United Biscuits after spending ten years

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I'm pleased to say that he joins me now.

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Welcome to the programme. Thank you for bringing in all this food!

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Eat away, enjoy! That's what they are there for.

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Jeff, clearly you have got a lot of very well-known, famous brands,

:20:40.:20:44.

fairly diversified. But you've just been acquired as we say by a Turkish

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company. That company has its own ambitions. Just talk us through how

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that is working out and what it means for you in terms of future

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growth? We are pleased that the Turkish company were the acquirer of

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United Biscuits. We have been under private equity ownership for 14

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years and it has complementary technologies and baking is at the

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core of their business. They started as bakers in 1944. We started as

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bakers 200 years ago. We share the same DNA.

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Was it a tough battle? I was reading that yielders fought off Kellogg's

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in the US as well as another rival, Burton's. It was a welcome tested

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auction, but it is hard to find global iconic brands. When we came

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to market it was a fierce contest and the Turkish prevailed. How did

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you get into crackers and biscuits. You're a Pepsi man! I was a banker.

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I was always introducing clients to do deals, but I wanted to be in a

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company that made things and what better company than a company that

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loves snacks. I love the products and you can't meet a person in the

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UK that hasn't eaten the product and enjoyed the product and has an

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opinion on it. It made me popular with my kids' friends!

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They all want to come over to your house. Always something in the

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cupboard. I have been there 11 years and I've really, really enjoyed it.

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What are the challenges for you? It is an industry you can't sit still,

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you have got to be thinking of the next new thing because there is so

:22:30.:22:31.

much competition out there? Yes, that's true. We are against the big

:22:32.:22:36.

global giants, we have to continually innovate and lower our

:22:37.:22:40.

cost base. A cracker is a cracker, isn't it? A cracker is a cracker, a

:22:41.:22:46.

biscuit is a biscuit, yes? A cracker is a cracker and you have got

:22:47.:22:51.

digestives, been on the market for 140 years, loved around the world,

:22:52.:22:57.

Carr's table water crackers and you come up with new things. If

:22:58.:23:03.

consumers want healthier savourier snacks with great taste. We are

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going to be nutritionally advantaged because we are baked as opposed to a

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fried snack. When you come up with new things, who is in your mind? Who

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is your customer that you think of when you think of the new product?

:23:18.:23:21.

Is it the mum? Is it the child? The mum tends to be the gatekeeper. But

:23:22.:23:26.

we analyse consumption trends carefully. We look at what

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consumesers do, when they eat and why they eat and we do this over the

:23:30.:23:36.

world, a digestive in Italy will tend to be consumed at breakfast. We

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look carefully, consumer tastes are similar, but how and when they eat

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the product can be dimp and that's where we have to market the product.

:23:46.:23:54.

Every time we talk, that is a cracker! Every time we talk to a big

:23:55.:24:00.

boss from a company that makes stuff in the food industry, we talk about

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China and it is interesting when China or the Chinese get an appetite

:24:05.:24:08.

for a western product, boy it flies off-the-shelf. The price goes up

:24:09.:24:13.

sometimes as well. Dot Chinese, do they have an appetite, do they like

:24:14.:24:18.

a cracker? They love crackers and they like biscuits that aren't as a

:24:19.:24:23.

sweet. That's the beauty of a digestive. It is not overly sweat

:24:24.:24:27.

and that plus the natural goodness of the natural digestive because it

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is high in whole grains and it makes it popular. Who to what extent are

:24:31.:24:37.

you selling the US? They like sweater things there and their taste

:24:38.:24:43.

buds are different? They do, but we sell Carr's table water there. They

:24:44.:24:52.

like that. Posh crackers. One of the beauties of biscuits, they are

:24:53.:24:56.

affordable. They offer great flexibility and taste and ?1. I was

:24:57.:25:04.

going to say 99 pence typically from one big supermarket here. Yes. They

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are great. What's the growth market? What's the

:25:09.:25:14.

footprint like? The developing markets are the fastest growing. We

:25:15.:25:20.

have quadrupled the size of our international and we focussed on

:25:21.:25:23.

China, the Middle East and Africa and Africa is booming for us. Is

:25:24.:25:27.

there a time of year that's important to you? Like now, I see

:25:28.:25:31.

you've got festive faces here. Or is it just throughout the year? I

:25:32.:25:35.

presume it is throughout the year? It is throughout the year and it is

:25:36.:25:39.

throughout the day and that's one of the great characteristics of our

:25:40.:25:44.

category, but festivals are big. The UK, Christmas is huge. We do packs

:25:45.:25:49.

for divalley in India and packs for Ramadan in the Middle East. Jeff, it

:25:50.:25:54.

has been a real pleasure. Thanks for lunch, breakfast, lunch and dinner!

:25:55.:25:59.

That's all from Business Live. We will see you soon. Bye-bye.

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