26/04/2016 BBC Business Live


26/04/2016

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This is Business Live from BBC News with Ben Thompson and Sally Bundock.

:00:00.:00:08.

BP slumps to a loss of almost 500-million dollars for the first

:00:09.:00:11.

It's blamed the collapse in oil prices.

:00:12.:00:21.

Live from London, that's our top story today, Tuesday

:00:22.:00:23.

The tumbling price of oil and ongoing costs of the Gulf

:00:24.:00:41.

of Mexico spill takes its toll on giant BP but shares are headed

:00:42.:00:44.

Also in the programme....Three US tech giants reveal how much money

:00:45.:00:50.

they've been making - we'll be looking at the little blue

:00:51.:00:52.

bird and why it's facing some serious headwinds.

:00:53.:01:00.

Mozilla's Firefox goes head to head with Microsoft and Google -

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but can it ever stand out in the crowd?

:01:07.:01:08.

The boss of Mozilla will be here to tell us why and OPEN

:01:09.:01:11.

And as Twitter prepares to unveil its latest

:01:12.:01:18.

In the last hour or so BP has reported its first quarter

:01:19.:01:40.

results and they don't make for pretty reading.

:01:41.:01:43.

The tumbling oil price has taken its toll on energy

:01:44.:01:47.

companies around the world - and BP is no exception.

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The group reported a replacement cost loss of $485 million -

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but when you take into account some adjustments the figure comes

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in as a surprise profit of just over half a million dollars.

:02:07.:02:09.

This was better than expected and BP shares opened higher this morning.

:02:10.:02:17.

Still the year before the company reported a profit of more

:02:18.:02:26.

And the massive fall in profits were caused, in part,

:02:27.:02:30.

by costs relating to BP's oil spill in the Gulf of Mexico.

:02:31.:02:33.

The Macondo blowout occurred 6 years ago, but still continues to affect

:02:34.:02:38.

the business' performance in first three months of the year,

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Shareholders haven't had an easy ride.

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Since their peak in 2014, the value of the company has slumped 30%.

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Investors have been so dismayed at the company's performance

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that they voted against Chief Executive Bob Dudley's

:02:58.:02:59.

proposed pay rise earlier this month.

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Explain this to us? First of all, The oil price has fallen, that is

:03:06.:03:18.

the main reason for the loss. There's also the money that they've

:03:19.:03:20.

had to accrue for the spill. That explains the difference, the

:03:21.:03:30.

non-accounting issues that are not appearing in the profit and loss,

:03:31.:03:34.

they are not related to the oil price that account for the profit.

:03:35.:03:46.

This really is the raw end of what we have heard so much about, the

:03:47.:03:51.

persistently falling oil price that seems to be going nowhere fast. We

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have seen BP and Shell cutting production, exploration and R D to

:03:58.:04:02.

try to balance the books in this era? That is one of the reasons why

:04:03.:04:04.

BP is in a better position. They have got rid of their worse

:04:05.:04:17.

operations, so they are quite well placed, they are quite lean and

:04:18.:04:23.

efficient. Once they have drawn a line under the well spill, which the

:04:24.:04:31.

recent consent decree suggests they may well be able to do that in the

:04:32.:04:35.

near future, then they can move forward. That is why they were able

:04:36.:04:39.

the maintain the dividend at 10 cents. They lost a lot less on an

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ongoing basis. Things are improving for them. The oil price is rising.

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The IAEA is of the opinion that the huge oversupply not that long ago,

:04:56.:04:59.

six million barrels a day, it's now about one-and-a-half, so we are

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moving back into balance. A word on that strategy because Bob Dudley,

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the Chief Executive, talking this morning about the challenging

:05:06.:05:08.

environment, saying we are driving towards our near term goal of

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rebalancing BP's cash flows and it's exactly that, rebalancing in this

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era. Things were very different a couple of years ago? The oil price

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was then seemingly on a relentless march north and really it collapsed

:05:24.:05:30.

mainly due to shale production. The US jumped from being the third

:05:31.:05:34.

producer to the largest producer in the world. That was entirely due to

:05:35.:05:41.

shale production in places like Texaco and North Dakota. The oil

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price crashed to below the cost of production in these places so people

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aren't sinking new wells in Texas and North Dakota so the US

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production is starting to roll over the wells that were sunk a couple of

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years ago and no longer being sunk and the oil price is rising. Thank

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you very much for explaining all of that.

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Apple is about to report its earnings later on Tuesday -

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with investors closely watching out for its latest sales numbers.

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The last time the company put out its financial results it warned

:06:13.:06:15.

we could see the first-ever decline in iPhone sales in 2016.

:06:16.:06:21.

China has been a major growth area for the company.

:06:22.:06:23.

of Justice has approved Charter Communications purchase

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of cable operators Time Warner Cable and Bright House networks.

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The deal will create the second largest cable broadband provider

:06:35.:06:39.

Charter had to agree to not stop its content providers

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from separately selling shows online, as part of the approval.

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This is the point where we take a look at the Business Live page,

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dominated by BP this morning but also many other stories. British

:07:03.:07:07.

American tobacco always in the Spotlight, always a controversial

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one, it tells us cigarette sales grew by %, it's interesting if you

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look at where they increased. The company always looking for new

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markets around the world, it seems it's found them. Grew by %.

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contract has been announced in the last few hours.

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Lets take you to our Asia Business Hub in Singapore,

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Tim McDonald is following this for us.

:07:46.:07:49.

Malcolm Turnbull described this as a momentum endeavour. It has a price

:07:50.:07:58.

to match, it will make it one of the biggest projects. The winner is a

:07:59.:08:07.

French firm, DCNS, it will build subs like the Barracuda. There'll be

:08:08.:08:12.

12 in all and the contract covers upkeep. The project will create

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about 2800 jobs in Adelaide where it will be built. Japan had been a

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front runner in the contest and has called the decision regrettable and

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is seeking an explanation from the Australian government and a separate

:08:26.:08:27.

German bid also missed out on that. Let us have a look at the markets

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around the world. We have got the Federal Reserve

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having its monthly meeting as the Central Bank decides on the cost of

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borrowing, also the Bank of Japan. Many markets are risk averse,

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treading water ahead of the Central Bank meetings. Let's look at Europe.

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We have mentioned lots of earning stories out that do affect the

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markets. BP shares higher, helping the FTSE 100, a big weighting on the

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London Stock Exchange. Results out from Whitbread better than expected.

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It will be a real day for results and corn rat numbers because we are

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going to hear from Apple and also Twitter, its first quarter earnings

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are coming out as well after the market close in the US. Shares in

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the company are down some 66% from the peak. So what has Jack got

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planned for the company now, can he revive the little blue bird?

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Michelle has more from New York. We can't stop sharing. Just stop and

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think how many times a day do you check and interact on social media

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sites? Why isn't Twitter more popular? What's the problem? I've

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got a few different social media platforms that I use and I

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personally don't find a great need for Twitter. Do you use it? No. It

:10:02.:10:07.

appeals to a younger audience and Facebook is more user friendly for

:10:08.:10:12.

people who are more accustomed to being online. Brevity is key to its

:10:13.:10:17.

appeal, June like Facebook, blogs are limited to 140 characters. The

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number of people using it has grown over the past four years, but as you

:10:23.:10:27.

can see from this graph, the pace of that growth is decelerating,

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grinding to a halt last quarter. A far cry from when the stock first

:10:33.:10:39.

took flight in November 2013. It's now 35% below the $26 a share it

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commanded on that first trading day. Twitter went out to Wall Street in

:10:47.:10:49.

2013 and said we are going to be this size. It's told advertisers, we

:10:50.:10:53.

are going to be this size and reach this many people. It's not just a

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matter of Wall Street getting it, advertisers at some point are going

:10:58.:11:01.

to say, wait a minute, if we want to reach a lot of people, we are going

:11:02.:11:04.

to go to Google, Facebook, we don't need to go to Twitter. Could the NFL

:11:05.:11:12.

save Twitter? It will screen ten National League games this season on

:11:13.:11:15.

Thursday nights, extending its content beyond the posts of

:11:16.:11:18.

journalists, politicians and celebrities. Twitter's core users

:11:19.:11:24.

are loyal and vocal. The problem for Wall Street is, there aren't enough

:11:25.:11:28.

of them. And, with its share price doing poorly, some investors may

:11:29.:11:33.

unfollow the micro-bloging site if it fails to grow its user base.

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Joining us is Nick Hungerford, CEO of Nutmeg Investment Management.

:11:50.:11:52.

What are we expecting from Apple? This could be the first quarter in

:11:53.:11:59.

51 quarters that we see declining revenues from Apple. That will be an

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absolute disaster for Tim Cook, not in terms of analyst expectations but

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in terms of the reputation. He hasn't seen a decline in quarter

:12:09.:12:12.

since he's been at the helm of the company. Why is that? You have the

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problems they have with the i watch which hasn't taken over really as

:12:18.:12:21.

the big new gadget. You have issues in China where the iPhone was meant

:12:22.:12:24.

to be expanding sales and it was going to be the great hope for

:12:25.:12:30.

Apple. They have been a bit slower than expected. I don't know the

:12:31.:12:33.

numbers off the top of my head, but the amount of money they make each

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quarter, it's a big number isn't it? Yes. If it comes down a bit... They

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are not losing sleep over this are they do you think or are they? It's

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a shame for Apple in terms of, you see their star somewhat waning and

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other tech companies, maybe not Twitter, but Facebook especially

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taking on that mantle of perhaps being Silicon Valley's favourite son

:12:58.:13:01.

and that is a shame for Apple. From all the excitement of tech which we

:13:02.:13:07.

all enjoy talking about, let's talk Central Banks. The Are you not

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excited by that? No! In a word, no. We have got the Bank of Japan and

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the Federal Reserve in the US talking about interest rates. The

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Federal Reserve has been forecasting and tipping us off that interest

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rates are going to rise probably twice this year, although they have

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speculated it might be up to four times. So if they are going to do

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something, they need to move this month which is very unlikely, or

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they need to signal that they are going to move in June which is

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probably more likely. The Bank of Japan will take their lead from

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that, but they are in negative interest, their currency is

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appreciating when they want it to depreciate. We should send you to

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Washington! You could be on Fed Watch? I've spent many an hour stood

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there, I have to say, that is probably why!

:14:02.:14:11.

Mozilla's Firefox used to go head-to-head with

:14:12.:14:13.

Microsoft's Internet Explorer in the battle of the web browsers.

:14:14.:14:16.

Now, thanks to the rise of Google Chrome, Mozilla has been

:14:17.:14:18.

We'll speak to the company's Executive Chairwoman,

:14:19.:14:23.

Mitchell Baker, about the future of Firefox.

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You're with Business Live from BBC News.

:14:27.:14:28.

Costa Coffee and Premier Inn, says full year profits rose

:14:29.:14:39.

Coffee chain Costa saw Like for like sales up 2.9%

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and the hotel business saw a rise of 4.2% on the same time last year.

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Chief Executive Alison Brittain says she's "confident of making good

:14:50.:14:52.

As well as announcing a great set of results with sales up 12% which is

:14:53.:15:12.

lovely, I'm also talking about the growth strategy for the business and

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I am going to confirm today that we will continue to grow out to 2020,

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we are looking at 20,000 more respects for the hotel business and

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the best part of ?1 billion for Costa. To do that, we are going to

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have to do things differently, grow and innovate in our UK business. We

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are going to have to focus our strengths on growth in the

:15:35.:15:37.

international business and we are going to have to put some

:15:38.:15:40.

infrastructure in and capability that will help us be efficient and

:15:41.:15:52.

productive. Clearly Costa is a big growth area four-year. In China you

:15:53.:15:59.

have big expansion plans. China is a good long-term opportunity. We have

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put in place a good local team building the brand, voting in local

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food and Logistics and Supply. Which is what you have to do when you are

:16:09.:16:13.

overseas will stop we already have 380 stores there, we plant on having

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700 in the near term. We have to leave it there.

:16:20.:16:24.

Alison Brittain, the Chief Executive of Whitbread.

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If you need any more details about the results being announced today,

:16:31.:16:37.

go to our page on the BBC website. To prove it is live, there is our

:16:38.:16:44.

interview of a few moments ago. A busy morning for corporate results.

:16:45.:16:50.

BP dominating things. Also the story of ScottishPower, paying a fine,

:16:51.:16:55.

pledging and apologising for leaving customers out of pocket as a result

:16:56.:17:04.

of an ID upgrade. Cobham's shares crashed.

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You're watching Business Live - our top story...

:17:12.:17:15.

BP's numbers falling as it grapples with a much lower oil price, and the

:17:16.:17:24.

costs of the oil disaster mounting up this year. On top of all that,

:17:25.:17:36.

that slump in the price of oil hitting them. Two Isco, three is a

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crowd. -- two is company. Can we trust the tech companies

:17:47.:17:57.

with our personal data that we readily hand over?Mitchell

:17:58.:18:00.

Baker is a Silicon Valley pioneer, and boss of

:18:01.:18:02.

the not-for-profit company Mozilla. It's best known for its

:18:03.:18:04.

Firefox web browser. But its a tiny player

:18:05.:18:06.

in the land of giants. It has just 4% of the market,

:18:07.:18:09.

compared to Google's Chrome browser which takes a quarter of the market

:18:10.:18:11.

and Microsoft's 39%.But that hasn't stopped Mitchell Baker pushing

:18:12.:18:14.

for a more open, sharing web, rather than one driven

:18:15.:18:17.

by corporations and profits. It is a tough market we are

:18:18.:18:31.

fundamentally different, we are not-for-profit organisation trying

:18:32.:18:35.

to build openness and freedom. And understanding in opportunity into

:18:36.:18:41.

life. We worked differently. Hopefully if you are using our

:18:42.:18:44.

product and you love it, you are not always noticing that. The values and

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the reason Mozilla exists shows in our product. I wanted to ask you

:18:50.:18:55.

about the concept of the open web. It is an important one. It touches

:18:56.:19:04.

on many things, differentiating you from your rivals. Can you tell us

:19:05.:19:08.

about that? It is the idea that the web belongs to all of us. If you are

:19:09.:19:13.

a business, you can build a business on the web without needing to go to

:19:14.:19:18.

one company given you permission or one government. The open Web is the

:19:19.:19:23.

idea that we as citizens have a piece of the web, and the Internet

:19:24.:19:28.

or the network, the path we call the web is important, not just because

:19:29.:19:36.

of an economic engine, it is important for citizens and the

:19:37.:19:39.

technology should reflect those things. It was news to me today that

:19:40.:19:48.

Mozilla Firefox is a non-for profit making organisation. I assumed it

:19:49.:19:53.

was like its rivals. Functioning in the same way. How do you operate in

:19:54.:20:00.

that way and stay in the game? The likes of Google making enormous

:20:01.:20:04.

amounts of money, ploughing it back in, making the user experience

:20:05.:20:07.

better and better. How do you stay in the game if you're not making a

:20:08.:20:15.

profit? We are hybrid organisation. Part of being nonprofit means there

:20:16.:20:19.

is a global network of people who assist us. We have a core of

:20:20.:20:24.

employees, a large number of volunteers around the world who are

:20:25.:20:29.

important. On the business side we try to do something similar. Not try

:20:30.:20:32.

to make ourselves the centre of the world. Trying to build a platform

:20:33.:20:37.

where partners, businesses work with a level playing field. How do you

:20:38.:20:43.

struggle to get people on board? People investing, advertising?

:20:44.:20:48.

Actually, the philosophy draws people. People sometimes ask, hiring

:20:49.:20:57.

in silicon valley is hard, can you hire anyone? We hire great talent.

:20:58.:21:02.

Great technology, the mission and the impact and influence. Because of

:21:03.:21:07.

our goals, we're not trying to be the most popular, common, to have

:21:08.:21:11.

the most users to make the most money. We are trying to have people

:21:12.:21:16.

interested in security to meet user experience we provide, enough

:21:17.:21:20.

involvement in marketing and mind share to change the industry. We

:21:21.:21:25.

have been quite effective in that. A big part of what you do is

:21:26.:21:29.

discussion over privacy and data protection over the Internet I am

:21:30.:21:35.

interested in that row between the FBI and Apple. Apple refusing the

:21:36.:21:43.

FBI access to the iPhone of terrorists. Where do you stand on

:21:44.:21:47.

that? First of all, I want to reframe it. It is often framed by

:21:48.:21:54.

privacy against security. Our belief is it is wrong. It is all about

:21:55.:22:01.

security. The encryption on your phone, you're all my ability to keep

:22:02.:22:05.

my financial information or location information away from other people

:22:06.:22:13.

is a security issue. We think it is all a security issue, personal

:22:14.:22:17.

security, national security. We are trading off one former security for

:22:18.:22:26.

another. In our physical lives we are used to trading security for

:22:27.:22:30.

convenience. My security for my kids' security. The security for

:22:31.:22:36.

each one of us is fundamental. Our own ability both as citizens and

:22:37.:22:46.

consumers, if your business is insecure you cannot function in the

:22:47.:22:50.

same way. If we begin dismantling security across-the-board we will

:22:51.:22:52.

all suffer in ways we don't understand. Particularly, more and

:22:53.:22:57.

more data is growing. Everything will be transmitting data. Security

:22:58.:23:04.

is very fundamental. Really lovely to speak to you. Thank you for

:23:05.:23:08.

explaining that. Nice to have you on the programme. Some breaking news

:23:09.:23:17.

about Mitsubishi motors. Admitting to using improper fuel tests since

:23:18.:23:23.

1991. This has been taking place at a news conference in Tokyo. They say

:23:24.:23:27.

they will set up a special committee made up of external experts to

:23:28.:23:32.

investigate the fuel economy manipulation issue. A lot going on

:23:33.:23:39.

there. Since 1991 this falsification has been ongoing. We not expecting

:23:40.:23:45.

in earnings forecasts from Mitsubishi even though it was

:23:46.:23:49.

scheduled. They are not sure there which states will have an impact for

:23:50.:23:55.

them -- in which stage will have an effect on their results. Admitting

:23:56.:24:02.

improper fuel tests since 1991, huge implications for the business. I

:24:03.:24:07.

would imagine that will be our top story tomorrow.

:24:08.:24:11.

What other business stories has the media been

:24:12.:24:13.

The first ten stories were about BHS. You have even got to that. We

:24:14.:24:31.

should mention it. Viewers around the world, it is a big retailer in

:24:32.:24:36.

the UK. A mainstay of the high street for so long. Perhaps no more

:24:37.:24:42.

in administration. The two previous owners of BHS, the current owner and

:24:43.:24:47.

the previous owner, Sir Philip Green are getting a lot of stick for this.

:24:48.:24:53.

This is a global issue, not just the British one. The gap that has been

:24:54.:24:57.

created in the BHS pension fund, over ?500 million. There will be a

:24:58.:25:03.

lot back to see whether or not any impropriety has taken place over the

:25:04.:25:07.

last decade or so in filling that fund. This is a problem affecting so

:25:08.:25:12.

many people. Let's squeeze in one more. Parroting no one hates their

:25:13.:25:18.

job any more? I assume you don't, you are the boss? It is tough if I

:25:19.:25:26.

did. A US survey, 80% of people enjoy and are satisfied by their

:25:27.:25:32.

job. The real inspiration, why you like your job, not necessarily your

:25:33.:25:36.

pay, it is the respect other people give you. That is the conclusion in

:25:37.:25:43.

the report? The most important thing in that report. It strikes me that

:25:44.:25:48.

the bosses have come up with that, it is not the pay! It does help.

:25:49.:25:58.

There will be more business news throughout the day

:25:59.:26:01.

on the BBC Live webpage and on World Business ReportWe'll

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Very unseasonable, the weather at the moment. Basically another day of

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sunshine and showers. That is not the full picture. Turning

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