18/02/2016 BBC Business Live


18/02/2016

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This is Business Live from BBC News with Ben Thompson and Aaron

:00:00.:00:07.

Reshaping Britain's relationship with the European Union -

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businesses on tenterhooks as leaders of the world's biggest trading bloc

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gathering in Brussels to try to hammer out a deal.

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Live from London, that's our top story on Thursday

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Trade figures from Japan shows exports falling

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again, squeezed by China's waning appetite for its goods.

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Is it yet more evidence that the country's Abenomics

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And higher education and lower prices.

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We'll get the inside track on cut-price university courses.

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As the University of the People delivers online teaching

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without the heavy cost, we'll find out how it works.

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And since it's a topic we just can't escape here in the UK -

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the Business battles over Brexit - so we want to know what do

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Would British business be better off in or outof the European Union?

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You can't have failed to notice the clamour and excitement

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European leaders prepare for a summit today on the future

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For the UK Prime Minister, David Cameron, that means fighting

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for changes to the way the region is run.

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It's a big deal for companies, who all want certainty in a time

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So amid all this Brexit chatter - what do businesses really think?

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Those wanting to stay in the EU, claim trade and productivity

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Then there's growth - French bank Societe Generale says

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leaving the EU could "reduce British economic growth,

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And that could hurt the currency, Japanese bank Nomura believes

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"the pound could fall 10 to 15% if overseas investors

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The voices that want out of the EU club, such as leading figures

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in the Commonwealth, have cited immigration

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as an obstacle, saying they face difficulties employing people

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And small business groups complain about "EU red tape" and want rules

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that unfairly impact small business liberalised.

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Others, like white goods manufacturer Ebac, said the UK

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needed its own trade policy to strike deals with growing

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Professor Nigel Driffield, Strategy and International Business

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at Warwick Business School, joins us from there,

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and David Buik from market commentator Panmure Gordon

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Let me start with Nigel. Good to have you. Viewers around the world

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watching this they perhaps are starting to

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What is more expensive! Bad news from Japan - exports have fallen for

:03:25.:10:27.

a fourth straight month. The value of country's exports fell by 12.9%

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in January from a year earlier. Ali Moore is in Singapore for us. I can

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only imagine with all of the other bad news that Japan has been

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injuring, they do need this like a hole in the head and policymakers

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must be struggling to reignite the world's third biggest economy? This

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is the biggest fall in annual exports since the financial crisis.

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No surprise that it has been put down to weaker demand from China,

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one of the key trading partners, exports fell by 17.5%. Another

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headache for policymakers. On Monday we find out that the economy in

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Japan is shrinking again. Partly because of a very big demand --

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decline in consumption, the central bank pushing interest rates below

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zero, there are not many tools left, remarkably, investors seem sanguine,

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the Nikkei closed up by more than 2%. Thank you very much. We can show

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you those numbers. Tokyo shares closed up more than 2% higher today,

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bouncing back from losses to extend a global rally fuelled by a surge in

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oil prices. And Yesterday European markets saw some of their best gains

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so far this year, as financial stocks and commodity prices soared,

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led by that gain in crude oil prices. Last night's Fed minutes may

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well have helped, too - they showed that policymakers are cautious about

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a deterioration in financial conditions around the world. Another

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factor weighing on the Fed was the response of Chinese policymakers and

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what they'll do about slowing growth. Michelle Dewberry has the

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details of the day ahead on Wall Street. If you had to pick one

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company whose performance stands as a measure for all of the consumer

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sector in America you could do worse than Walmart, the world's biggest

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bricks and mortar chain Alyce annual earnings on Thursday and it is

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possible they would show the first decline in revenue for 25 years. It

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is not expected to be by much and the company still rakes in nearly

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500 billion dollars every year. But the profits are also expected to

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slip slightly. However, shares have been rising in recent months as

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investors improve the cost-cutting measures and its attempts to lay

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claim to online shopping. Also out tomorrow, weekly job figures which,

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as always, will capture plenty of investor attention. We can stay with

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the markets. Joining us is Brenda Kelly, Head Analyst at London

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Capital Group.. And happy birthday. Thank you for coming in on Europe

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birthday! Bonjour? I am trying to keep the European theme going! We

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were talking about oil, we thought yesterday that Iran will not listen

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to that freezing. With all of those agreed freezes. We thought Iran will

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not do that give us the update, Russia says no? They say they will

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not necessarily keep it frozen in 2016 so we have record levels of oil

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being pumped by these countries and freezing them is one thing but

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ultimately demand is not there and over the next couple of years we

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will see demand for oil dropping back considerably so with supply

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still very much front and foremost, it is looking very shaky for oil

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prices to consider -- maintain. The reason for the jump was the weekly

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inventory which is lower than expected but that could just be one

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weekly point that we do not depend on, the real driver is supplied,

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which is high, although possibly frozen, and demand is weakening and

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China is one of the biggest slowing down economies and that is one of

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the reasons behind lower demand. Yesterday, the minutes from the Fed,

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they give packed on the markets. We can see what is happening already.

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Yesterday there was a big boost for the US markets and Asian markets

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from what we heard from the Fed. Yes, the fact that there are

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different headwinds, not necessarily just domestic, preventing this hike

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in interest rates. We have seen something of a balanced but we are

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still in this tightening all Aussie when it comes to the Federal Reserve

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so any up the news might well make them rollback on what they said at

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the last meeting. And we could well see interest rate hikes in the next

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year but the market is not pressing anything. It is pressing a cut from

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the Federal Reserve, albeit a small probability. That would mean a big

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change in the picture. He must come back and take us through the papers.

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Higher education, lower price. We will see you shortly.

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We meet the firm offering university courses for a fraction of the price

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And it's aiming for students in the developing world.

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We look at the rise of online learning -

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can you really get higher education at rock bottom prices?

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You're with Business Live from BBC News.

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There has been a sharp fall in profits at Centrica,

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But it's a different story for British Gas itself.

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Our industry correspondent John Moylan has the details.

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They up, down, can you explain it? British Gas is the residential arm

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of Centrica and profits soared at ?574 million, the best performance

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since 2014. The two main reasons the company are stating is that the

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customers used more gas in 2015. Temperatures at the beginning of

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2015 were more normal whereas the previous year they had been slightly

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milder so customers used less gas. The second thing is that the company

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has to insulate people's homes, the equal scheme the Government insisted

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on, and the cost of that were less than the previous year. However, I

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sat down in front of the boss of Centrica, Iain Conn, and put to him

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that surely this is because the companies have not been passing on

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the big pitfalls we have seen in gas to customers over the past few

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years. This is what he had to say. Because we buy some of our gas and

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head of time, her cost of gas is down 24% -- our cost. People need to

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remember nearly 60% of the bill is not the actual commodity, and as a

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result our costs have come down just over 10% and we reduced prices --

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reduced prices by 10% last year. Furthermore we made a third

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production at the end of this year making a total of 14% so we really

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are trying to pass everything onto the consumer to be as competitive as

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we can be. Profit up at British Gas but down at the parent company,

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Centrica, which has been really hit by the falling global oil and gas

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prices and it also has a lot of pirate stations and the price of

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power, electricity, has fallen in the UK as well. As always, thanks,

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our industry correspondent there. The number of UK homes worth more

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than ?1 million, set to triple by 2030. Look at that. That is just

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yours? Yeah right! Unbelievable. In or out - we're not talking

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about the hokey kokey. European leaders are in Brussels

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to try to agree a deal on key reforms, that will ultimately decide

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whether Britain stays or leaves Full coverage of that across the BBC

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today. Now - if you've been

:19:17.:19:19.

to university or college - But many believe such an education

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should be available for all, And one man has set up the first

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non-profit, tuition Shai Reshef, founded

:19:29.:19:34.

the University of the People. Its open to students around

:19:35.:19:41.

the world and currently has more than 3000 students

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from 180 countries. It's not completely free, however -

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there is a small charge for most students, with a payment of $100

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for the exam processing fee. And it's already attracting

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the high-calibre staff with academics from Harvard,

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Stanford and Yale. And Unesco estimates

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that by the year 2025, there will be

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98 million young people seeking seats in universities that don't

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physically exist. Shai Reshef, president and founder

:20:14.:20:15.

of University of the People, Shai, great to have you with us in

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the studio. This is amazing that the first question that comes to your

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mind looking at the numbers, how do you make money? We don't. It is

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nonprofit, however we rely on everything free on the Internet,

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open source technology, open educational resources and

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volunteers. We have 4000 professors who jumped on board to help achieve

:20:43.:20:46.

our mission and as such we are able to beat tuition free. Moreover, by

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the end of this year we are sustainable -- be tuition free. You

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are not for profit, but I mean it must take money to run what you are

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offering. Yes, as I said, we are going to be sustainable but until

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that point we are supported by foundations, with many great

:21:11.:21:14.

individuals and corporations standing behind us to make it

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happen. If I fancied a change of career and came to you and I wanted

:21:19.:21:22.

to study to be an astrophysicist or something... What would it cost me?

:21:23.:21:28.

What would I need to subscribe to, to pay, to join the University? We

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only offer a business administration...

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LAUGHTER However, as I said, $100 per exam,

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$100 a year for the students who study full-time. How does that

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compare with cost around the world? We know that depending where you

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study the cost can be very different. Give us sense of how that

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compares? That is a good question. Compared to the USA, it might be

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about 1% of the cost, in other countries it varies, and a fraction

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of the cost here in the UK. In other countries, however, I think the most

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important thing to say is it is a remission that no one will be left

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behind for financial reasons and as such we offer scholarships who

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cannot afford even this amount. Yes, I wanted to ask about that. Speaking

:22:21.:22:22.

about developing countries as well. $1000 is still a lot of money for

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many people, particularly in developing countries full stop what

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opportunities do you have four people their? We have scholarships.

:22:30.:22:33.

It is our aim that no student should be left behind for financial reasons

:22:34.:22:38.

and we have scholarships to enable students to go. Right now, I mean,

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lately we announced 500 scholarships for Syrian refugees. We have

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scholarships for different genders, nationalities and different cultures

:22:51.:22:53.

who need help and we bring them to study with ours. Tuition free. It is

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really nice to see. I am sorry time is against us. But good luck with

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it. An amazing system. Shai, the founder of the University Of The

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People. Lets take a quick look

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at the stories making business The Wall Street Journal has

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"Overproduction Swamps Smaller Chinese Cities,

:23:17.:23:19.

Revealing Depth of Crisis". Above a photo of stored

:23:20.:23:20.

cement mixer bodies, it says that Beijing had hoped that

:23:21.:23:22.

smaller Chinese cities would help drive the expansion of the middle

:23:23.:23:25.

class and sustain economic growth. The New York Times says the battle

:23:26.:23:29.

between Apple and law enforcement officials over unlocking

:23:30.:23:33.

a terrorist's smartphone is the culmination of a turning

:23:34.:23:34.

of the tables between the technology And the Daily Telegraph claims

:23:35.:23:37.

new research shows home sellers lose out on thousands of pounds

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if properties lack 'kerb appeal'. It says what people need

:23:42.:23:43.

to do is tidy the garden, Brenda Kelly, head analyst

:23:44.:23:46.

at London Capital Group, Where shall we start? Let's start

:23:47.:24:02.

with this amount. China three years prior to a year ago, the use more

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cement than all of the native state of the 20th century. That is not the

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case? It is not the case, and certainly the way China has been

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restructuring its economy it has been trying to reorganise our lot of

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the rural parts of it and create a more reformed middle-class, building

:24:22.:24:24.

itself from within rather than depending on exports but because of

:24:25.:24:28.

the cheap credit and the fact there has been overproduction domestically

:24:29.:24:31.

it has created a slowdown in growth in China. A very interesting story

:24:32.:24:37.

here based on small city, which is ultimately seeing slower growth at

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the moment. Did you know that China actually provides 80% of the global

:24:44.:24:48.

supply of shiitake mushrooms? Which I did not know! No! There you go.

:24:49.:24:56.

They are trying to provide growth because there are so many other

:24:57.:25:01.

growers in the sector, and it is producing havoc. The smaller farmers

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are starting to feel the bite so the global slowdown is starting to get

:25:05.:25:09.

into regular people's lives. Let top national obsession, global

:25:10.:25:14.

obsession. House prices. This statistic. You stand to lose this

:25:15.:25:23.

money if you do not keep up, and if you have a BMW in the drive? Yes,

:25:24.:25:28.

people prefer a mini Cooper or something. They don't like BMWs. I

:25:29.:25:33.

don't know why. There must be some kind of connotation to owning a BMW.

:25:34.:25:37.

You could lose up to 20% of the value of your house if you do not

:25:38.:25:41.

pay the upper around it. That makes sense to an extent but 20% is a huge

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amount for just one thing that of paint on the door and weeding run

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the front. But this amounts up to about ?100,000 loss. Wonderful

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stuff. Happy birthday again. Thank you for coming in.

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There will be more business news throughout the day on the BBC Live

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webpage and on World Business Report.

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