02/12/2015 BBC Business Live


02/12/2015

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This is Business Live from the BBC with Ben Thompson and

:00:07.:00:09.

The war on Islamic State as the UK votes on air strikes in Syria.

:00:10.:00:16.

We'll assess why coalition forces haven't cut off the terror group's

:00:17.:00:19.

Live from London, that's our top story on Wednesday, 2nd December.

:00:20.:00:42.

Coalition air strikes have so far, failed to choke off Islamic State's

:00:43.:00:45.

main source of revenue, the oil fields in Syria that generate more

:00:46.:00:50.

We'll look at attempts to cut off the supply.

:00:51.:00:54.

Facebook founder Mark Zuckerberg and his wife will give away 99%

:00:55.:00:59.

of their shares in the company to good causes - the stake is

:01:00.:01:03.

This is how the European markets look in early trade ahead of

:01:04.:01:14.

eurozone inflation data due within the hour, with prices set to see

:01:15.:01:17.

The first lady of motor racing will be with us later.

:01:18.:01:31.

Claire Williams is the Deputy Team Principal at Williams Formula 1 and

:01:32.:01:34.

she's here to talk fast cars and the highs and lows of the billionaire

:01:35.:01:38.

Also we want to know what you think of Mark

:01:39.:01:43.

Zuckerberg and Priscilla Chan's decision to give away 99% of their

:01:44.:01:46.

What do you think the kid will think when she gets older?

:01:47.:01:55.

Pressure is mounting to choke off the biggest source of revenue

:01:56.:02:08.

The United States says it is the best funded terrorist organisation

:02:09.:02:17.

Later today the British Parliament is due to vote on whether it too

:02:18.:02:21.

The United States estimates oil revenue generates about $40 million

:02:22.:02:29.

a month for so-called Islamic State, or nearly $500 million a year.

:02:30.:02:33.

Jihadists control vast swathes of territory in Syria and Iraq

:02:34.:02:36.

It is estimated one-third of ISIS' oil revenue comes from fields

:02:37.:02:44.

But so far security forces have been careful not to irreversibly

:02:45.:02:48.

damage the sites, so they can be used again in the future.

:02:49.:02:52.

But Islamic State engineers have been able to repair damage quickly,

:02:53.:02:55.

and keep the oil and funding is flowing.

:02:56.:02:59.

So the new goal of the coalition forces is to knock out

:03:00.:03:03.

specific installations for up to a year, but will this strategy work?

:03:04.:03:07.

Crispin Hawes is Managing Director, Middle East and North Africa

:03:08.:03:10.

It is great to have you with us. Let's start on that. I mean, can you

:03:11.:03:26.

bomb so specifically that you knockout an installation just for

:03:27.:03:30.

six to 12 months. It sounds like a hard task? You can certainly bomb a

:03:31.:03:34.

specific installation, recovering that installation, nobody will be

:03:35.:03:37.

able to tell you when and how they can do it unless you put a reservoir

:03:38.:03:41.

engineer on the ground after the explosion. The timing of recovery, I

:03:42.:03:51.

think, is somewhat suspicious. We are talking about the fields that

:03:52.:03:55.

were once productive in Syria. We are talking about 25,000 barrels a

:03:56.:04:01.

day against Syria's pre-war production of 330,000, even if they

:04:02.:04:05.

destroyed the well head installations that are producing

:04:06.:04:08.

oil, there is still potentially the vast majority of the fields still

:04:09.:04:13.

ready to be recovered in a post-war scenario. We see it from the air,

:04:14.:04:17.

images of the transportation, the oil has got to go somewhere to the

:04:18.:04:23.

buyers, right? We see, you know, vast columns, miles of these tanker

:04:24.:04:28.

trucks. I'm wondering why they are not more of a target or at least

:04:29.:04:32.

start looking at the buyers. Who is buying the oil? Well, first of all

:04:33.:04:37.

the US-led coalition has been in the last couple of weeks bombing the

:04:38.:04:41.

transport networks themselves. They talked about 116 trucks being hit

:04:42.:04:44.

the week before last. They are targeting. Of course, that involves

:04:45.:04:49.

an expansion of the target pool because the majority of people

:04:50.:04:54.

driving or managing this flow of crude are not members of IS as if

:04:55.:04:59.

this was a situation that had a membership card, but they are, for

:05:00.:05:03.

want of a better word, civilians who are associated with the organisation

:05:04.:05:07.

through trading. So by bombing them, you are extending the target pool

:05:08.:05:14.

beyond terrorists as it were, to civilians co-operating trading with

:05:15.:05:18.

them. Who buys the oil? A wide range of people down to civilians in

:05:19.:05:23.

Syria. The oil that is being produced here is very high sull far,

:05:24.:05:29.

very sour, heavy crude. It is refined poorly to produce a heavy

:05:30.:05:34.

diesel. It is then burned in generators across Syria. So when you

:05:35.:05:40.

cut off this source of revenue to Daesh, you will also cut off one of

:05:41.:05:44.

the few remaining sources to parts of the Syrian population.

:05:45.:05:46.

Unfortunately, we're going to have to leave it there. It is interesting

:05:47.:05:49.

stuff. We will see how this progresses. We appreciate your time.

:05:50.:05:56.

Five corporate sponsors of football's world governing body

:05:57.:05:58.

Fifa are demanding what they call "independent oversight" of reforms.

:05:59.:06:01.

Fifa has been engulfed by allegations of corruption

:06:02.:06:03.

since US authorities indicted 14 officials this summer.

:06:04.:06:06.

The letter was sent from Adidas, McDonald's, Coca-Cola, Visa and the

:06:07.:06:10.

Lufthansa management and unions are to meet today to discuss jobs and

:06:11.:06:18.

Strikes have plagued the German airline over the last 18 months,

:06:19.:06:26.

last month the carrier suffered the longest strike in its 60-year

:06:27.:06:29.

A US court has ordered that the Bank of China pay

:06:30.:06:40.

a fine $50,000 each day for refusing to turn over information on Chinese

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customers accused of selling fake luxury goods.

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The bank has been held in contempt of court

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and will have to start paying the daily penalty from next week.

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The Bank of China is planning to appeal against the fine.

:06:54.:07:02.

Let's look at the tablet. I think I've got it under control. I found

:07:03.:07:12.

this very interesting. This is papercuts for Le La scas Rue. Some

:07:13.:07:23.

-- De La Rue, the issue is plastic banknotes. A number of countries

:07:24.:07:25.

around the world are considering that. They are hard wearing. They

:07:26.:07:30.

last longer. They survive a trip in the washing machine. Good news!

:07:31.:07:35.

Australia has plastic notes. We have had plastic notes for a long time.

:07:36.:07:38.

We have had plastic notes for a long time. Talking of Australia, did you

:07:39.:07:41.

do that? You did that! First of all, let's go straight over to Singapore.

:07:42.:07:51.

Sharanjit Leyl has the details in our Asia Business Hub in Singapore.

:07:52.:07:55.

Growth better than expected and they think it is down to me, to exports!

:07:56.:08:04.

Aaron, it is your native land and just like you, it is an economy

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that's full of surprises! It grew 2.5% in the three months to

:08:09.:08:11.

September from the previous year. That was compared to under 2% the

:08:12.:08:15.

previous quarter and of course, despite the huge slowdown that we

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have been talking about, its biggest trading partner is China and you

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have got falling commodity prices and exports, of course, all of that

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despite all of that, exports actually rose. They jumped about

:08:29.:08:33.

4.6% in the quarter and this in part actually due to the weaker

:08:34.:08:38.

Australian dollar which means exporters reaped bigger benefits and

:08:39.:08:42.

profits when they bring a lot of the profits back home, when the exchange

:08:43.:08:47.

rate is taken into account. The Australian dollar dropping 9% on

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record low interest rates and analysts we have been talking to

:08:50.:08:52.

saying the effects are unlikely to last as the global economy

:08:53.:08:54.

many don't expect trade can off set a declining mining investment for

:08:55.:08:59.

instance. Mining a years, but it is falling as China's

:09:00.:09:10.

demands start to fade. You were seeing on the screen the

:09:11.:09:16.

Sydney stock market or one variation of it. Down, despite the better than

:09:17.:09:19.

expected figures for growth. economic data ahead of what's likely

:09:20.:09:27.

to be a big month for the US when the long touted, much anticipated

:09:28.:09:30.

rise in interest rates comes. It was European data that was

:09:31.:09:35.

more upbeat, dispelling fears that the migrant

:09:36.:09:39.

crisis could force a sharp spike European manufacturing also came

:09:40.:09:46.

in strongly, an 18 month So could the ECB's offer some more

:09:47.:09:49.

stimulus at tomorrow's meeting? Is a rate rise on

:09:50.:10:08.

Street is watching later today. offering her economic outlook this

:10:09.:10:23.

Wednesday at the Economic Club in Washington DC. She will be

:10:24.:10:24.

lawmakers. Investors are going to keep an eye on the latest jobs data

:10:25.:10:32.

US Labour department due out on course, comes

:10:33.:10:42.

US Labour department due out on Friday. Most economists believe

:10:43.:10:44.

companies added 190,000 workers in November. Separately, the Federal

:10:45.:10:51.

Reserve issues its so-called beige book which offers a snapshot of the

:10:52.:10:57.

health of the economy and two clothing makers report earnings with

:10:58.:11:03.

I noticed a big story today, talking of Telegraph Media Group.

:11:04.:11:13.

I noticed a big story today, talking of Brazil, saying it is facing its

:11:14.:11:20.

worst recession since the 1930s? Data out overnight suggesting

:11:21.:11:23.

contraction. India and China are growing strong and Russia, not at

:11:24.:11:28.

all. The brick story is starting to unravel. It is interesting how that

:11:29.:11:33.

starts to unravel as the more developed economies, we start to see

:11:34.:11:35.

the growth. That's right. What is interesting the growth isn't robust.

:11:36.:11:41.

It is not like we are seeing a big spike in developed economies that's

:11:42.:11:44.

cancelling out the growth elsewhere. It is all still very tentative, yet

:11:45.:11:48.

we are seeing a big sell off in emerging economies? In developed

:11:49.:11:51.

markets, the focus really this week is on the ECB. What they do and

:11:52.:11:56.

whether there is more quantitative easing, we have got inflation out

:11:57.:12:00.

across the eurozone today. That doesn't really suggest we are into

:12:01.:12:04.

the boom times yet in the west. It is going to be pretty flat,

:12:05.:12:12.

indeed. Lots of stuff for Mr Marrow Draghi to contemplate. Indeed. Are

:12:13.:12:15.

you going to come back and talk about the papers and talk about Mark

:12:16.:12:20.

Zuckerberg. We are going to be speaking to the First Lady of motor

:12:21.:12:26.

racing, Clare Williams, the deputy team principal of Williams. She will

:12:27.:12:29.

be here to talk about fast cars and the highs and the lows of the

:12:30.:12:34.

billion dollar industry. You're with Business Live from BBC

:12:35.:12:42.

News. Morrisons is about to fall out of

:12:43.:12:47.

the index. It has gone. Out of Britain's top 100 companies. It is

:12:48.:12:51.

one of the victims of the regular shake-up. Victoria is looking at who

:12:52.:12:56.

is in and who is out and why any of this matters. She is in Salford.

:12:57.:13:01.

Vic, talk us through where are we, who is in, who is out? Good morning,

:13:02.:13:06.

boys. This is the FTSE 100, it is the 100 most valuable companies that

:13:07.:13:10.

are listed on the London Stock Exchange and every three months or

:13:11.:13:13.

so they take a look at this list and they try and work out whether or not

:13:14.:13:17.

it actually represents all the companies true value. So at the

:13:18.:13:20.

moment we've got three that come out and three that are looking like

:13:21.:13:23.

they're going to come in and Morrisons is one of the ones that's

:13:24.:13:27.

going to be dropped and it matters because both big and small investors

:13:28.:13:31.

alike. Well, they are keen on something called tracker funds and

:13:32.:13:35.

they buy a little proportion of each and every company listed on the FTSE

:13:36.:13:39.

100. So if you fall out of the list, lots of investors are going to sell

:13:40.:13:44.

your stock. Listen to this. This is a markets experts and she z this is

:13:45.:13:48.

what she thinks it means for a company like Morrisons. When a

:13:49.:13:53.

company loses its place in the elite list that makes up the FTSE 100,

:13:54.:13:57.

they stand to lose a bit of market value. The other thing that happens

:13:58.:14:01.

is a lot of fund managers, a lot of tracker funds which are products

:14:02.:14:05.

that track markets such as the FTSE 100, and they look to replicate

:14:06.:14:10.

every single company in that market by buying or selling it, now if they

:14:11.:14:14.

know that a company is going to fall out of the index, they will sell

:14:15.:14:16.

that company and that's going to weigh on the share price which is

:14:17.:14:20.

the last thing a company like Morrisons needs right now. Of

:14:21.:14:23.

course, once you're out, it is difficult to get back in because the

:14:24.:14:28.

value of your entire portfolio has fallen and this is not good news for

:14:29.:14:33.

a company like Morrisons. We heard today from the British Retail

:14:34.:14:37.

Consortium that prices had been falling for 31 consecutive months.

:14:38.:14:40.

If you do the maths, that's under three years of prices falling. Not

:14:41.:14:44.

good news for the supermarkets because they are struggling from

:14:45.:14:47.

online, people buying their shopping online and also from big supermarket

:14:48.:14:54.

price wars as well. It says a lot that a company like Particled Pay,

:14:55.:14:58.

an online payments processor is joining.

:14:59.:15:02.

Thank you. From the boys in the studio to the girl in Salford,

:15:03.:15:12.

goodbye. A quick look at the stories. England cannot build enough

:15:13.:15:13.

homes. You're watching Business Live,

:15:14.:15:21.

our top story. The British parliament is expected

:15:22.:15:22.

to give its backing today to UK air strikes directed against

:15:23.:15:25.

Islamic State militants in Syria. The pressure has been growing

:15:26.:15:27.

on coalition forces whose air strikes have, so far,

:15:28.:15:30.

failed to choke off Islamic State's main source of revenue, the oil

:15:31.:15:33.

fields in Syria that generate more Staggering amounts of money. Stay

:15:34.:15:49.

tuned to the BBC for full coverage of that vote taking place later.

:15:50.:15:51.

That's how today's guest describes the powerful, multibillion dollar

:15:52.:15:55.

and often dangerous world of Formula 1 racing.

:15:56.:15:58.

Probably the most powerful woman in the world of motor racing

:15:59.:16:00.

at the moment, Claire Williams is deputy team principal at

:16:01.:16:03.

She is the daughter of Frank Williams, founder

:16:04.:16:11.

Despite her connections, she had to fight to get to the top.

:16:12.:16:16.

After graduating with a politics degree,

:16:17.:16:17.

she started out as press officer at Formula 1, eventually moving to

:16:18.:16:20.

a job in the communications team at Williams, despite her father's

:16:21.:16:23.

disapproval, where she then spent the next decade working her way up.

:16:24.:16:31.

Williams is one of the world's leading Formula one teams coming

:16:32.:16:34.

in third in this year's Formula one constructers' championship.

:16:35.:16:37.

While it's a sport that generates more than a $1.5 billion a year

:16:38.:16:41.

in revenues, it's a tough industry to be a part of.

:16:42.:16:44.

On average, a team needs an income of at least $350 million to have any

:16:45.:16:48.

realistic hope of winning races, so, unsurprisingly, some smaller teams

:16:49.:16:51.

And, guess what? She's here. Great to have you with us in the studio.

:16:52.:17:06.

We want to start knowing more about too. I know what we just said but

:17:07.:17:12.

many people would say, the child of somebody who owns the company, they

:17:13.:17:16.

are in a good position, handed to you on a silver platter. The truth

:17:17.:17:21.

is, your dad didn't want you in the company. They didn't, neither of my

:17:22.:17:25.

parents did. So it was an interesting start for me in life.

:17:26.:17:30.

Neither of my parents wanted their children to have the expectations

:17:31.:17:33.

they would one day take over this amazing Formula one team. They

:17:34.:17:37.

wanted us to make up own way in the world and that is what I wanted to

:17:38.:17:41.

do anyway but life didn't really take that course for me. What does

:17:42.:17:46.

the job involve? There is a tendency to think of sport is something that

:17:47.:17:51.

doesn't need to make money or be commercially successful but it is

:17:52.:17:55.

that. You have to generate revenue, otherwise the team doesn't make

:17:56.:17:59.

sense. We are one of the few independent teams in Formula one 's

:18:00.:18:06.

so what keeps us going is the money from sponsorship and the Formula one

:18:07.:18:14.

organisation. My dad was very successful, he did that 40 years, he

:18:15.:18:19.

has kept the team racing through some of the greatest partnerships,

:18:20.:18:24.

and my role is to get the money in. Who does the money come from? So, we

:18:25.:18:30.

have about 20 partners in our community of sponsors, ranging from

:18:31.:18:35.

the likes of Martini, who joined us at the start of last year, then the

:18:36.:18:40.

second-largest resourcing company in the world, we have a whole raft of

:18:41.:18:44.

partners which means we can do what we love to do. That is their

:18:45.:18:49.

generosity but what about the impact of the actual races themselves? Am I

:18:50.:18:54.

right in saying that apart from Monaco, every other country you have

:18:55.:19:00.

to pay to host Formula one. What is the economic impact on that

:19:01.:19:06.

community, that economy on each of those countries? At obviously costs

:19:07.:19:12.

a lot for these countries to host a Formula one race but you think about

:19:13.:19:16.

the number of people that go and watch every Grand Prix we racing, we

:19:17.:19:21.

have next year 21 races on the calendar and invariably for a lot of

:19:22.:19:24.

countries Formula one is the jewel in their crown. You can imagine how

:19:25.:19:28.

many people are staying in hotel rooms, going out to restaurants in

:19:29.:19:33.

the evening to eat, and all the other economic benefits that can

:19:34.:19:36.

bring, having 100,000 people coming watching your race. What effect does

:19:37.:19:42.

money have no sport? You have some tough opposition against other

:19:43.:19:46.

teams. Is there a direct correlation between funding and success? I

:19:47.:19:50.

think, as a team, we have always proved that we can, on a much

:19:51.:19:57.

smaller budget, beat the smaller -- beat the bigger teams. We are seeing

:19:58.:20:03.

in Formula one nowadays the costs of going racing escalating

:20:04.:20:05.

significantly and is now looking at the Sadie 's who have won the world

:20:06.:20:09.

championship, they did that on at least 300 million sterling, not

:20:10.:20:14.

dollars. We are operating on 110 million sterling this year. Money,

:20:15.:20:20.

of course it is important. It has an impact on success but it isn't

:20:21.:20:23.

everything as we have proved in the past. It is about what you do with

:20:24.:20:28.

your money. It is like any business with the right people in the right

:20:29.:20:32.

jobs, that is going to drive you toward success. Are you a car lover?

:20:33.:20:47.

A petrol head? Yes, I like cars. I like somehow fall road cars, brute

:20:48.:20:51.

cars. That's the great thing about Formula one. These amazing machines,

:20:52.:20:57.

the most technologically advanced machines in the world, designed by

:20:58.:21:00.

some amazingly bright people, and these heroes that get into them and

:21:01.:21:05.

drive 300 commenters are now every Sunday, it is a sport I love. Have

:21:06.:21:10.

you ever driven one? Net-mac, my dad would never let me. It is about the

:21:11.:21:16.

brains and money of the operation. My driving skills are not up to

:21:17.:21:21.

much, I'll stick to the road. He said there are 21 races. Anything

:21:22.:21:26.

happening in the development of F1? Any exciting developments for next

:21:27.:21:32.

year? Next year, it is status quo, but Formula one is fantastic and we

:21:33.:21:38.

have some amazing races, but 2017 is the evolution of Formula one where

:21:39.:21:42.

we will see some amazingly different race cars, very futuristic, lovably

:21:43.:21:47.

to be five seconds a lap faster than they are. New tyres, new engine for

:21:48.:21:54.

Miller, said 2017 is the year to look out for. One to watch. Really

:21:55.:21:59.

good to see you. Thank you very much and good luck for the next one.

:22:00.:22:01.

In a moment, we'll take a look at that Facebook story, but, first,

:22:02.:22:05.

as part of the BBC's 100 Women series, we've been meeting young

:22:06.:22:08.

Melanie Goldsmith's mantra is "You're only worth what someone will

:22:09.:22:15.

pay", how her alcoholic sweets are being

:22:16.:22:18.

My biggest moment of joy was hiring our first full-time employee.

:22:19.:22:28.

And they've come out of nowhere, you know, they're not

:22:29.:22:39.

We make deconstructed edible cocktails,

:22:40.:22:41.

Business success is so encompassing and who's behind it.

:22:42.:22:46.

My name is Melanie Goldsmith, I'm 26 years old, I am the Director

:22:47.:22:52.

How about this for generosity? Mark Zuckerberg and his wife, they have

:22:53.:23:10.

pledged to give away the vast majority of their tech giant to good

:23:11.:23:16.

causes. They made an announcement in a letter to their new daughter.

:23:17.:23:23.

The couple say they will give away 99% of their shares to causes

:23:24.:23:25.

which advance human potential and promote equality.

:23:26.:23:28.

At the moment, that share value equates to about $45 billion.

:23:29.:23:31.

The couple say they'll give more details on the donation when they

:23:32.:23:34.

Well, certainly Mark's case. Maternity leave for Priscilla Chan.

:23:35.:23:51.

Our tech guru is here with us. I'm wondering if this raises the bar in

:23:52.:23:55.

terms of philanthropy and all the other billionaires in the tech

:23:56.:24:00.

world. I think it is obvious from the letter. They put this letter on

:24:01.:24:04.

Facebook. Somebody said to me, following Mark Zuckerberg on

:24:05.:24:07.

Facebook is like following any of your mates. It is like they are on a

:24:08.:24:12.

gap year, go around the world and do stuff, talk about their philosophy,

:24:13.:24:17.

then post baby photos. The differences he has used the platform

:24:18.:24:22.

in a different way, expressing what him and his wife want to do with

:24:23.:24:26.

their money, which is to give it away. There is a reply at the end of

:24:27.:24:32.

the letter from Melinda Gates from the Gates foundation and praising

:24:33.:24:37.

what they want to do. The Gates foundation is a big contributor to

:24:38.:24:43.

health and education charities. Mark Zuckerberg and Priscilla Chan have

:24:44.:24:47.

now had to decide how that money is going to be spent. Not all in a

:24:48.:24:51.

rush, it isn't going to be sold immediately but over many years.

:24:52.:24:54.

James, this is interesting because you had to be 70-75, you are a

:24:55.:24:59.

billionaire, you gave away your fortune. Now you're doing it in your

:25:00.:25:04.

mid-30s. He is the first of his generation. It puts pressure on his

:25:05.:25:10.

rivals in Google and other big tech companies we have had some follow

:25:11.:25:18.

the wake of Bill and Melinda Gates. One point, I've just looked back on

:25:19.:25:22.

interview I did with Mark Zuckerberg in 2000 81I told him he was idiot

:25:23.:25:26.

not to have sold up the year before. Why are we even talking to

:25:27.:25:37.

you? Last year, Facebook paid in corporation tax $7,000. That was

:25:38.:25:41.

it. They posted a loss of 28 million. We won't get into that. It

:25:42.:25:45.

is legal, some people are raising that. Nice to see you, gentlemen.

:25:46.:25:52.

That is it from us. Same time, same place tomorrow. Goodbye.

:25:53.:26:14.

Dry and mild, wet and windy, light and

:26:15.:26:15.

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