11/02/2016 BBC Business Live

Hello everybody, this is Business Live.

Taxing times for Google as it faces the backlash of politicians

in the UK over its tax agreement with George Osborne.

Live from London, that's our top story on Thursday 11th of February.

Google's tax settlement with the UK under scrutiny today -

we look at how companies shift their profits around the world

Also in the programme, Twitter shares slump,

despite the fact the little blue bird raked in more money in the past

three months - so why aren't investors happy?

Well, here's the problem - it just continues failing

And we will bring you the markets. It is the same old story. A lot of

jitters over the global economy and the central bank has no ammunition

left. And the Brits are coming -

in the world of wine, that is. We'll be getting the inside track

on why more vineyards And today we want to know,

do you care about where your The public and political backlash

against corporate tax avoidance This morning, US search giant Google

and UK tax officials will be grilled by British MPs about a $189

million tax settlement. France's Finance Minister said

it was tantamount to state aid. Meanwhile, the European Commission

is preparing draft laws to force multinationals to publish a country

by country breakdown It follows anti-tax avoidance plans

announced last month by the EU's tax policy commissioner

Pierre Moscovici. Those plans incorporate tougher

international rules on what's called In plain English, that's shifting

profits to low tax locations! So if you sell internet ads

or cafe latte in Britain, you can't book the sale in Dublin,

Amsterdam or the British Virgin It certainly goes along

with the public mood. UK Finance Minister George Osborne

was hugely criticised for agreeing a $189 million tax settlement

with internet giant Google - In France and Italy,

ministers have been suggesting they're going to go after some much

bigger sums in back taxes. Dr Stuart Thomson is

Public Affairs Consultant Let's talk about today's grilling.

Google bosses, HMRC having to answer to UK politicians. Will anything

come out of this? Highly doubtful. Most of the deals are done behind

closed doors. The amount they can say in public will be fairly

minimal. It will not stop the politicians having an absolute pop

at the HMRC and Google. It is a lot of bad reputation, these sessions.

Depending on how HMRC react and Google. My guess is they will say

they have done a good deal. Where do we go from here? The pressure is

mounting. Hubbard opinion, politicians not just in the UK but

internationally, in fact. It is an issue in the United States and

across Europe. How will this finally play out? It is interesting that

George Osborne has completely miss read this. His claim this was a good

deal initially fell flat with his own party and particularly the

public. We are now looking to Europe to step in and sort out the mess.

The British public are looking to the European Commission to try to

force the British government to try to get more money out of Google. We

are largely relying on Europe. Can that be done then? The British

public are looking across the water to the likes of France and Italy.

France and Italy get more money out of Google than say the British did.

They are going to be fuming! If the commission actually looks at this

issue, as it has done with other tax issues in the Netherlands and

Ireland, it will of course apply pressure on the commission. If they

see other countries are doing better deals and they are looking at the

British Steel, it is bound to have an impact. So yes, British

politicians will not like to admit it but Europe is the way forward.

Some are arguing that from the point of view of the companies themselves,

they are doing their job in the sense that they are making the most

profits they can. They are pleasing their board of directors whereas the

tax authorities should have been more proactive in going after the

big guys as opposed to concentrating on small businesses. Even

individuals, self-employed individuals and going after them.

Absolutely, if you have to spend 30 minutes on the phone with HMRC

waiting for an answer, you are going to be particularly livid when you

see deals like this being done. Senior Google executives allegedly

being paid more than the tax deal was worth. What we need is the

government to be robust and stand-up. That needs the Treasury

and HMRC to be able to do that. It needs a shift in a position as far

as they are concerned. We have to see if they can do that. Thank you

very much indeed. It is a complicated area.

In other news, luxury electric car maker Tesla says it lost

$320 million in the three months to December.

Its shares have lost almost a third of their value since the beginning

of the year, on investor concerns about continuing losses.

However, they jumped in after hours trading after boss Elon Musk

promised investors it would stop losing money this year

while forecasting a 70% growth in vehicle sales.

Oil giant BP says global demand for energy will increase by 34% over

the next two decades, driven by growth in the world

Oil's market share though will decline in favour of natural

BP forecasts renewable energy sources like bio-fuels and wind

power will provide around 15% of global power generation by 2035.

Food and drink giant Nestle has ended its sponsorship of the IAAF,

as it fears the doping scandal engulfing the world athletics

governing body could damage its reputation.

The Swiss company said it had taken the decision

However, IAAF president Lord Coe said he was angered by the decision

I don't know what he's going to do, but he will not accept it.

Last month, sportswear giant Adidas ended its sponsorship deal

Lord Coe putting his foot down. But what is he going to do about it? We

shall wait and see and we will tell you all about it when it does

happen. Let's look at Thomas Cook. Losses at Thomas Cook narrowed in

the 3 months to the end of December. Customers opting to go elsewhere.

Spain, the Caribbean more in fashion. North Africa is not, for

obvious reasons. Security concerns, threat of terrorism. And a very

similar stories are what we talked about last week earlier this week.

Total, the French oil giant, saying it needs $45 a barrel of oil to

break even. A barrel of oil at the moment is $30.44. They are a long

way off. You are looking at me blankly at! I get it.

Full year profits at the British-Australian miner

Rio Tinto have fallen by 51%, partly because of slowing demand

How is Rio getting on? The numbers are not pretty. Profit pretty much

have to do $4.5 million last year. -- billion. To putted really simply,

we can blame it on China. Slowing growth and demand from the mainland

has resulted in steep falls in commodity prices. Iron ore, copper,

we are seeing prices at their lowest in years. These are hurting miners

across the board. Rio Tinto are scrapping their dividend policy of

maintaining a raising their payouts each year. Now there are rivals have

done similar. That is because these miners are under pressure to

conserve cash as well as to cut costs. Salaries are to be frozen

because of the bleak outlook. Thank you.

Let's stay with the markets. Not great news. Some fresh cracks

appearing in the global markets. Investors are turning their backs on

the shares. They are dumping their money into the so-called safe

havens, like the Japanese yen, which is not great news for corporate

Japan. As the yen goes up, their profits go down. Even with Japan's

market closed, this is the last close... Today it is closed in Japan

for a public holiday. Despite that, the dollar hit a 15 month low

against the yen. Gold prices hitting their highest since May. Investors

are betting the US Fed could be done raising interest rates. Same old

vibe in Europe. The global slowdown. Everybody is worried about that and

the fact that the central bankers have got no more tools lab, no more

ammunition to fight another slow down. On that cheery note, let's

find out what is being talked about on Wall Street. At the moment 1 big

topic is that little bluebird. Investors have been getting used to

earning reports from Twitter that contains bad news about how many

users they are investing. The number of people has actually fallen. That

more than anything explains the initial dive into it share prices

after the report came out. Bear in mind the price of the has fallen by

more than 2/3 in the past year as investors apparently lose faith that

tweeters can be converted into a sustainable business. Can Twitter's

latest efforts to improve their service allowed to turn the corner?

Start attracting new users and find a way to make more money from then?

In his video presentation to analysts and investors, the Twitter

boss tried to sound upbeat. We believe we can build the largest

daily connected audience, 1 that watches together and can talk with 1

another in real-time. It is what Twitter has provided for close to 10

years and what we will continue to drive in the future. The other

question prompted by Twitter's problems, and its collapse in share

price, is does the company now become an irresistible takeover

target for other players in the technology sector?

Check your Twitter feed for updates. Michelle is on Twitter.

Joining us is Mike Amey, managing director and portfolio

manager at global investment firm, PIMCO.

Are you on Twitter? We are, I am not. I am all Facebook. -- I am on

Facebook. Only recently. Twitter have not made it that far yet.

Facebook goes 1 way, Twitter the other. We are looking at that board.

That is a horrid opening? The US has a bad run into the close. Markets

have taken a little bit of a leg down overnight. The classic ones you

look at overnight at the yen. That has been doing very well. Some of

this is a response to that. People are looking for a circuit breaker.

Janet Yellen did little to calm nerves? She was in no man rush to

raise interest rates. But the US economy is still doing fine. If the

US economy is doing fine, why not raise interest rates? Because she

can see what is going on in the rest of the world. She tried to say as

little as he possibly could and tried not to rock the boat. She

looked like she got away with it until that laid close, where people

just said, that's out of the way, let's go back to... I was reading in

1 market report that actually everybody was looking ahead to her

speech and that was keeping markets a little bit buoyant. When she had

finished, they then concentrated back on China, oil, global

pressures. It went pear shaped again Chumak Rio that is right. She pulled

a magic rabbit out of the bag on 1 hand. There was a little bit of

hope. The markets put themselves into this self reinforcing Ron

where... What are you telling your clients? I am really worried. You

have got the oil price, the commodities, you have got the big

boss of Mirsky, which is all around the world. He says it is in the

worst -- a worse state than 2008. The central bank has no ammunition

left. It is pretty dire. Yes, there are a couple of things we should

remember. To some degree is these levels are already reflecting some

risks. Do not forget that income growth is still doing okay. Wages

are going up. It is not a given that everybody will stop spending. House

prices still going up. For most people things do not look too bad.

That should be okay as long as it the case.

Still to come, how do you fancy a collapse of English is, I know that

he does, we will be telling you more about that a bit later. Live on BBC

News. All prices are tumbling, we have talked about that already, who

would want to predict the future of the energy market right now? We have

just seen them publish their latest output, we have been speaking to the

BP chief economist, formerly of the Bank of England. What has he been

saying? I guess what he has been saying at the moment, I played a

game recently, with all of the chief executives and got them to try and

predict your prize in six months' time, I got everything from $6 the

formally be Prime Minister. Their one has got a clue. BB are looking

at the next 20 years, what is the global demand for energy and supply.

The former economist from the Bank of England, this is what he had to

say. The key driver of energy demand is the world economy, as the world

economy continues to grow. It needs more energy to drive those high

levels of activity and living standards and that is what drives

this increase in energy demand of around about a third in the next 20

years. In the short time we have got massive oversupply, right now the

pile of unused oil this to a growing every day, it is not getting

smaller, it is growing, that is why you are seeing prices in the gutter,

$27. You think the second half of this year you may see at the cup.

The other interesting thing, is that if they are right about global

demand and what the mix of energy that we are going to use for the

future, then we are not there to hit the global targets hit in the Paris

summit at the end of last year. On their projections, the Paris climate

summit objectives will be missed. At the moment who would want to bet

where the oil price will be in one day and even one year's time? I love

this one. It is on the website. It is on the BBC website, go and check

them out. Shoppers failed to spot the cheapest deals. This is a survey

done by the money advice service. They asked 2000 customers to choose

the best value deals, only 2% came out with the best deal. The I can

smell a deal, my wife is hopeless though. It is all of this confusing

thing, 342, you don't bear which one is the good deals and which one is

not ripping you off but spending more money. Buy one get one free.

You are watching businesslike, searching questions for Google over

its tax bill, 189 million in taxes, is that enough for this

multinational giants to pay? Google and HMRC will be before UK

politicians today getting a grinning. Do tune in for that. Let

us get on to a subject that you may love or hate, what is all favourite

wine? French Burgundy or Spanish Rioja. What about English fears,

which is what Aaron is now producing on the table. The Chinese president

was treated to UK home-grown wine during his recent visit last year,

whether or not he will be ordering a case, it seems that British winds

may be on the up. Applications to develop British Vineyards rose. They

rose by more than 40% last year, the UK winemaker is much smaller. And

the sparkling wine production is tiny compared to the major champagne

houses, around about 35,000 bottles each year. It was recently bought by

an investment firm and made a loss in the first half of the year, the

chief executive, we dragged him in a studio and he has brought a couple

of props. Welcome to the programme, Sally and I were talking about this

earlier this morning, saying, this whole UK British sparkling wine, has

been a real phenomena. It has been a real buzz over the last few years.

Why now? Have things changed? Why all of a sudden over the last few

years has the British wine industry shot through the roof? I think it

has got much more public awareness, because of the international

competition and awards. And the spate of good news basically. Not

only that, but the arrival of the first champagne house in England,

Tass and Joe, the French are coming. They have clearly seen

that we are onto a good thing and demand far outstrips supply at the

moment. It is a combination of factors including climate. It hasn't

happened overnight, the first pioneers of image sparkling wine

were at it 20 years ago at least. It has been a story about climate

change, if we look back 25 years, the weather that they had in the

capital of champagne is what we have now. So we are able to produce

wines, at a level of sophistication to rival the best champagne. Is this

one of your problems, the industry is growing, you are growing, English

wine growers, only account for 0.14% of the UK market. It is about 25

million drinkers. Is it a problem? What is this going to cost me a a

bottle of this? Danish mine, the markets developing, people like us

who are going for the luxury end of the market, very good about what we

do. The age the wines for four years and we only use the grapes, and we

are completely uncompromising in the approach to make the best wines.

There are other people who are maybe ageing wines from not as long, a lot

of the entry point champagne that you buy in the supermarket, might be

brought in using maiden fruit, it might only have been aged for a

year. So there is a range from 15 to ?17 as an entry point to 30 or 40,

there will be special and luxury additions coming out over the next

few years which will be heading towards ?100. We have been told that

we are out of time. Which is a real shame and we appreciate you coming

in, very interesting to hear how that has developed over time. In a

moment we will have a look at the business pages, here is a quick look

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business news. Whenever you need to know. So get in touch, Mike is back.

We talked about Twitter already, let us talk about gap which is the top

story. Mind the Gap. This is the latest to be named and shamed, as to

not pay enough taxing the UK. It is a classic example of the challenges,

they have basically paid no corporation tax since 2011, despite

having annual sales of ?300 million. There is a classic example of the

challenges that you face, with a company, they have got a Dutch

components, so there is a question of how much, of the profits they put

through Holland and the UK and the US. And how you get that money off

them basically. Yes, 40 seconds left, beer, big deals coming up,

nearly $300 million work? SAB Miller, and another are trying to

merge, they had to sell some of their brands. The Japanese yen going

up so it makes it cheaper to buy other companies, so, there is a

Japanese company called Asahi, which is going to buy. And SAB Miller, are

going to look at the deal? They have $60 billion worth of sales year, so

there is an anti-competitive risk, if they don't sell something. Good

on you. He can come back. That is business live, see you soon.

Hello we are remaining with the cold theme for the foreseeable future, a

good-looking day on the cards for much of