Browse content similar to 11/02/2016. Check below for episodes and series from the same categories and more!
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Hello everybody, this is Business Live. | :00:07. | :00:10. | |
Taxing times for Google as it faces the backlash of politicians | :00:11. | :00:12. | |
in the UK over its tax agreement with George Osborne. | :00:13. | :00:18. | |
Live from London, that's our top story on Thursday 11th of February. | :00:19. | :00:35. | |
Google's tax settlement with the UK under scrutiny today - | :00:36. | :00:39. | |
we look at how companies shift their profits around the world | :00:40. | :00:43. | |
Also in the programme, Twitter shares slump, | :00:44. | :00:48. | |
despite the fact the little blue bird raked in more money in the past | :00:49. | :00:52. | |
three months - so why aren't investors happy? | :00:53. | :00:56. | |
Well, here's the problem - it just continues failing | :00:57. | :00:58. | |
And we will bring you the markets. It is the same old story. A lot of | :00:59. | :01:12. | |
jitters over the global economy and the central bank has no ammunition | :01:13. | :01:13. | |
left. And the Brits are coming - | :01:14. | :01:16. | |
in the world of wine, that is. We'll be getting the inside track | :01:17. | :01:19. | |
on why more vineyards And today we want to know, | :01:20. | :01:22. | |
do you care about where your The public and political backlash | :01:23. | :01:26. | |
against corporate tax avoidance This morning, US search giant Google | :01:27. | :01:45. | |
and UK tax officials will be grilled by British MPs about a $189 | :01:46. | :01:53. | |
million tax settlement. France's Finance Minister said | :01:54. | :01:59. | |
it was tantamount to state aid. Meanwhile, the European Commission | :02:00. | :02:12. | |
is preparing draft laws to force multinationals to publish a country | :02:13. | :02:15. | |
by country breakdown It follows anti-tax avoidance plans | :02:16. | :02:19. | |
announced last month by the EU's tax policy commissioner | :02:20. | :02:28. | |
Pierre Moscovici. Those plans incorporate tougher | :02:29. | :02:36. | |
international rules on what's called In plain English, that's shifting | :02:37. | :02:39. | |
profits to low tax locations! So if you sell internet ads | :02:40. | :02:46. | |
or cafe latte in Britain, you can't book the sale in Dublin, | :02:47. | :02:49. | |
Amsterdam or the British Virgin It certainly goes along | :02:50. | :02:52. | |
with the public mood. UK Finance Minister George Osborne | :02:53. | :03:00. | |
was hugely criticised for agreeing a $189 million tax settlement | :03:01. | :03:09. | |
with internet giant Google - In France and Italy, | :03:10. | :03:12. | |
ministers have been suggesting they're going to go after some much | :03:13. | :03:19. | |
bigger sums in back taxes. Dr Stuart Thomson is | :03:20. | :03:33. | |
Public Affairs Consultant Let's talk about today's grilling. | :03:34. | :03:50. | |
Google bosses, HMRC having to answer to UK politicians. Will anything | :03:51. | :03:55. | |
come out of this? Highly doubtful. Most of the deals are done behind | :03:56. | :03:59. | |
closed doors. The amount they can say in public will be fairly | :04:00. | :04:02. | |
minimal. It will not stop the politicians having an absolute pop | :04:03. | :04:10. | |
at the HMRC and Google. It is a lot of bad reputation, these sessions. | :04:11. | :04:14. | |
Depending on how HMRC react and Google. My guess is they will say | :04:15. | :04:22. | |
they have done a good deal. Where do we go from here? The pressure is | :04:23. | :04:27. | |
mounting. Hubbard opinion, politicians not just in the UK but | :04:28. | :04:32. | |
internationally, in fact. It is an issue in the United States and | :04:33. | :04:37. | |
across Europe. How will this finally play out? It is interesting that | :04:38. | :04:41. | |
George Osborne has completely miss read this. His claim this was a good | :04:42. | :04:48. | |
deal initially fell flat with his own party and particularly the | :04:49. | :04:52. | |
public. We are now looking to Europe to step in and sort out the mess. | :04:53. | :04:56. | |
The British public are looking to the European Commission to try to | :04:57. | :05:03. | |
force the British government to try to get more money out of Google. We | :05:04. | :05:08. | |
are largely relying on Europe. Can that be done then? The British | :05:09. | :05:14. | |
public are looking across the water to the likes of France and Italy. | :05:15. | :05:19. | |
France and Italy get more money out of Google than say the British did. | :05:20. | :05:26. | |
They are going to be fuming! If the commission actually looks at this | :05:27. | :05:31. | |
issue, as it has done with other tax issues in the Netherlands and | :05:32. | :05:40. | |
Ireland, it will of course apply pressure on the commission. If they | :05:41. | :05:43. | |
see other countries are doing better deals and they are looking at the | :05:44. | :05:47. | |
British Steel, it is bound to have an impact. So yes, British | :05:48. | :05:54. | |
politicians will not like to admit it but Europe is the way forward. | :05:55. | :05:59. | |
Some are arguing that from the point of view of the companies themselves, | :06:00. | :06:03. | |
they are doing their job in the sense that they are making the most | :06:04. | :06:08. | |
profits they can. They are pleasing their board of directors whereas the | :06:09. | :06:12. | |
tax authorities should have been more proactive in going after the | :06:13. | :06:16. | |
big guys as opposed to concentrating on small businesses. Even | :06:17. | :06:21. | |
individuals, self-employed individuals and going after them. | :06:22. | :06:26. | |
Absolutely, if you have to spend 30 minutes on the phone with HMRC | :06:27. | :06:30. | |
waiting for an answer, you are going to be particularly livid when you | :06:31. | :06:35. | |
see deals like this being done. Senior Google executives allegedly | :06:36. | :06:37. | |
being paid more than the tax deal was worth. What we need is the | :06:38. | :06:43. | |
government to be robust and stand-up. That needs the Treasury | :06:44. | :06:49. | |
and HMRC to be able to do that. It needs a shift in a position as far | :06:50. | :06:52. | |
as they are concerned. We have to see if they can do that. Thank you | :06:53. | :07:00. | |
very much indeed. It is a complicated area. | :07:01. | :07:03. | |
In other news, luxury electric car maker Tesla says it lost | :07:04. | :07:06. | |
$320 million in the three months to December. | :07:07. | :07:12. | |
Its shares have lost almost a third of their value since the beginning | :07:13. | :07:15. | |
of the year, on investor concerns about continuing losses. | :07:16. | :07:22. | |
However, they jumped in after hours trading after boss Elon Musk | :07:23. | :07:25. | |
promised investors it would stop losing money this year | :07:26. | :07:28. | |
while forecasting a 70% growth in vehicle sales. | :07:29. | :07:34. | |
Oil giant BP says global demand for energy will increase by 34% over | :07:35. | :07:38. | |
the next two decades, driven by growth in the world | :07:39. | :07:41. | |
Oil's market share though will decline in favour of natural | :07:42. | :07:46. | |
BP forecasts renewable energy sources like bio-fuels and wind | :07:47. | :07:51. | |
power will provide around 15% of global power generation by 2035. | :07:52. | :07:59. | |
Food and drink giant Nestle has ended its sponsorship of the IAAF, | :08:00. | :08:03. | |
as it fears the doping scandal engulfing the world athletics | :08:04. | :08:09. | |
governing body could damage its reputation. | :08:10. | :08:15. | |
The Swiss company said it had taken the decision | :08:16. | :08:17. | |
However, IAAF president Lord Coe said he was angered by the decision | :08:18. | :08:23. | |
I don't know what he's going to do, but he will not accept it. | :08:24. | :08:35. | |
Last month, sportswear giant Adidas ended its sponsorship deal | :08:36. | :08:37. | |
Lord Coe putting his foot down. But what is he going to do about it? We | :08:38. | :08:49. | |
shall wait and see and we will tell you all about it when it does | :08:50. | :08:56. | |
happen. Let's look at Thomas Cook. Losses at Thomas Cook narrowed in | :08:57. | :09:00. | |
the 3 months to the end of December. Customers opting to go elsewhere. | :09:01. | :09:04. | |
Spain, the Caribbean more in fashion. North Africa is not, for | :09:05. | :09:09. | |
obvious reasons. Security concerns, threat of terrorism. And a very | :09:10. | :09:15. | |
similar stories are what we talked about last week earlier this week. | :09:16. | :09:25. | |
Total, the French oil giant, saying it needs $45 a barrel of oil to | :09:26. | :09:33. | |
break even. A barrel of oil at the moment is $30.44. They are a long | :09:34. | :09:43. | |
way off. You are looking at me blankly at! I get it. | :09:44. | :09:46. | |
Full year profits at the British-Australian miner | :09:47. | :09:51. | |
Rio Tinto have fallen by 51%, partly because of slowing demand | :09:52. | :09:53. | |
How is Rio getting on? The numbers are not pretty. Profit pretty much | :09:54. | :10:06. | |
have to do $4.5 million last year. -- billion. To putted really simply, | :10:07. | :10:13. | |
we can blame it on China. Slowing growth and demand from the mainland | :10:14. | :10:18. | |
has resulted in steep falls in commodity prices. Iron ore, copper, | :10:19. | :10:24. | |
we are seeing prices at their lowest in years. These are hurting miners | :10:25. | :10:29. | |
across the board. Rio Tinto are scrapping their dividend policy of | :10:30. | :10:32. | |
maintaining a raising their payouts each year. Now there are rivals have | :10:33. | :10:37. | |
done similar. That is because these miners are under pressure to | :10:38. | :10:40. | |
conserve cash as well as to cut costs. Salaries are to be frozen | :10:41. | :10:49. | |
because of the bleak outlook. Thank you. | :10:50. | :10:56. | |
Let's stay with the markets. Not great news. Some fresh cracks | :10:57. | :11:01. | |
appearing in the global markets. Investors are turning their backs on | :11:02. | :11:05. | |
the shares. They are dumping their money into the so-called safe | :11:06. | :11:10. | |
havens, like the Japanese yen, which is not great news for corporate | :11:11. | :11:16. | |
Japan. As the yen goes up, their profits go down. Even with Japan's | :11:17. | :11:26. | |
market closed, this is the last close... Today it is closed in Japan | :11:27. | :11:31. | |
for a public holiday. Despite that, the dollar hit a 15 month low | :11:32. | :11:37. | |
against the yen. Gold prices hitting their highest since May. Investors | :11:38. | :11:44. | |
are betting the US Fed could be done raising interest rates. Same old | :11:45. | :11:48. | |
vibe in Europe. The global slowdown. Everybody is worried about that and | :11:49. | :11:52. | |
the fact that the central bankers have got no more tools lab, no more | :11:53. | :11:56. | |
ammunition to fight another slow down. On that cheery note, let's | :11:57. | :12:04. | |
find out what is being talked about on Wall Street. At the moment 1 big | :12:05. | :12:06. | |
topic is that little bluebird. Investors have been getting used to | :12:07. | :12:16. | |
earning reports from Twitter that contains bad news about how many | :12:17. | :12:23. | |
users they are investing. The number of people has actually fallen. That | :12:24. | :12:27. | |
more than anything explains the initial dive into it share prices | :12:28. | :12:32. | |
after the report came out. Bear in mind the price of the has fallen by | :12:33. | :12:37. | |
more than 2/3 in the past year as investors apparently lose faith that | :12:38. | :12:48. | |
tweeters can be converted into a sustainable business. Can Twitter's | :12:49. | :12:51. | |
latest efforts to improve their service allowed to turn the corner? | :12:52. | :12:56. | |
Start attracting new users and find a way to make more money from then? | :12:57. | :13:02. | |
In his video presentation to analysts and investors, the Twitter | :13:03. | :13:05. | |
boss tried to sound upbeat. We believe we can build the largest | :13:06. | :13:11. | |
daily connected audience, 1 that watches together and can talk with 1 | :13:12. | :13:19. | |
another in real-time. It is what Twitter has provided for close to 10 | :13:20. | :13:22. | |
years and what we will continue to drive in the future. The other | :13:23. | :13:27. | |
question prompted by Twitter's problems, and its collapse in share | :13:28. | :13:31. | |
price, is does the company now become an irresistible takeover | :13:32. | :13:33. | |
target for other players in the technology sector? | :13:34. | :13:41. | |
Check your Twitter feed for updates. Michelle is on Twitter. | :13:42. | :13:42. | |
Joining us is Mike Amey, managing director and portfolio | :13:43. | :13:44. | |
manager at global investment firm, PIMCO. | :13:45. | :13:48. | |
Are you on Twitter? We are, I am not. I am all Facebook. -- I am on | :13:49. | :14:00. | |
Facebook. Only recently. Twitter have not made it that far yet. | :14:01. | :14:06. | |
Facebook goes 1 way, Twitter the other. We are looking at that board. | :14:07. | :14:16. | |
That is a horrid opening? The US has a bad run into the close. Markets | :14:17. | :14:21. | |
have taken a little bit of a leg down overnight. The classic ones you | :14:22. | :14:25. | |
look at overnight at the yen. That has been doing very well. Some of | :14:26. | :14:30. | |
this is a response to that. People are looking for a circuit breaker. | :14:31. | :14:36. | |
Janet Yellen did little to calm nerves? She was in no man rush to | :14:37. | :14:43. | |
raise interest rates. But the US economy is still doing fine. If the | :14:44. | :14:49. | |
US economy is doing fine, why not raise interest rates? Because she | :14:50. | :14:52. | |
can see what is going on in the rest of the world. She tried to say as | :14:53. | :14:56. | |
little as he possibly could and tried not to rock the boat. She | :14:57. | :15:00. | |
looked like she got away with it until that laid close, where people | :15:01. | :15:04. | |
just said, that's out of the way, let's go back to... I was reading in | :15:05. | :15:10. | |
1 market report that actually everybody was looking ahead to her | :15:11. | :15:14. | |
speech and that was keeping markets a little bit buoyant. When she had | :15:15. | :15:19. | |
finished, they then concentrated back on China, oil, global | :15:20. | :15:25. | |
pressures. It went pear shaped again Chumak Rio that is right. She pulled | :15:26. | :15:30. | |
a magic rabbit out of the bag on 1 hand. There was a little bit of | :15:31. | :15:35. | |
hope. The markets put themselves into this self reinforcing Ron | :15:36. | :15:42. | |
where... What are you telling your clients? I am really worried. You | :15:43. | :15:52. | |
have got the oil price, the commodities, you have got the big | :15:53. | :15:57. | |
boss of Mirsky, which is all around the world. He says it is in the | :15:58. | :16:04. | |
worst -- a worse state than 2008. The central bank has no ammunition | :16:05. | :16:10. | |
left. It is pretty dire. Yes, there are a couple of things we should | :16:11. | :16:17. | |
remember. To some degree is these levels are already reflecting some | :16:18. | :16:22. | |
risks. Do not forget that income growth is still doing okay. Wages | :16:23. | :16:30. | |
are going up. It is not a given that everybody will stop spending. House | :16:31. | :16:34. | |
prices still going up. For most people things do not look too bad. | :16:35. | :16:38. | |
That should be okay as long as it the case. | :16:39. | :16:50. | |
Still to come, how do you fancy a collapse of English is, I know that | :16:51. | :16:56. | |
he does, we will be telling you more about that a bit later. Live on BBC | :16:57. | :17:05. | |
News. All prices are tumbling, we have talked about that already, who | :17:06. | :17:09. | |
would want to predict the future of the energy market right now? We have | :17:10. | :17:16. | |
just seen them publish their latest output, we have been speaking to the | :17:17. | :17:20. | |
BP chief economist, formerly of the Bank of England. What has he been | :17:21. | :17:26. | |
saying? I guess what he has been saying at the moment, I played a | :17:27. | :17:30. | |
game recently, with all of the chief executives and got them to try and | :17:31. | :17:33. | |
predict your prize in six months' time, I got everything from $6 the | :17:34. | :17:39. | |
formally be Prime Minister. Their one has got a clue. BB are looking | :17:40. | :17:44. | |
at the next 20 years, what is the global demand for energy and supply. | :17:45. | :17:49. | |
The former economist from the Bank of England, this is what he had to | :17:50. | :17:56. | |
say. The key driver of energy demand is the world economy, as the world | :17:57. | :18:02. | |
economy continues to grow. It needs more energy to drive those high | :18:03. | :18:04. | |
levels of activity and living standards and that is what drives | :18:05. | :18:08. | |
this increase in energy demand of around about a third in the next 20 | :18:09. | :18:14. | |
years. In the short time we have got massive oversupply, right now the | :18:15. | :18:17. | |
pile of unused oil this to a growing every day, it is not getting | :18:18. | :18:21. | |
smaller, it is growing, that is why you are seeing prices in the gutter, | :18:22. | :18:27. | |
$27. You think the second half of this year you may see at the cup. | :18:28. | :18:31. | |
The other interesting thing, is that if they are right about global | :18:32. | :18:35. | |
demand and what the mix of energy that we are going to use for the | :18:36. | :18:39. | |
future, then we are not there to hit the global targets hit in the Paris | :18:40. | :18:42. | |
summit at the end of last year. On their projections, the Paris climate | :18:43. | :18:47. | |
summit objectives will be missed. At the moment who would want to bet | :18:48. | :18:51. | |
where the oil price will be in one day and even one year's time? I love | :18:52. | :19:01. | |
this one. It is on the website. It is on the BBC website, go and check | :19:02. | :19:06. | |
them out. Shoppers failed to spot the cheapest deals. This is a survey | :19:07. | :19:11. | |
done by the money advice service. They asked 2000 customers to choose | :19:12. | :19:16. | |
the best value deals, only 2% came out with the best deal. The I can | :19:17. | :19:21. | |
smell a deal, my wife is hopeless though. It is all of this confusing | :19:22. | :19:28. | |
thing, 342, you don't bear which one is the good deals and which one is | :19:29. | :19:31. | |
not ripping you off but spending more money. Buy one get one free. | :19:32. | :19:41. | |
You are watching businesslike, searching questions for Google over | :19:42. | :19:47. | |
its tax bill, 189 million in taxes, is that enough for this | :19:48. | :19:52. | |
multinational giants to pay? Google and HMRC will be before UK | :19:53. | :19:55. | |
politicians today getting a grinning. Do tune in for that. Let | :19:56. | :20:00. | |
us get on to a subject that you may love or hate, what is all favourite | :20:01. | :20:05. | |
wine? French Burgundy or Spanish Rioja. What about English fears, | :20:06. | :20:11. | |
which is what Aaron is now producing on the table. The Chinese president | :20:12. | :20:16. | |
was treated to UK home-grown wine during his recent visit last year, | :20:17. | :20:21. | |
whether or not he will be ordering a case, it seems that British winds | :20:22. | :20:26. | |
may be on the up. Applications to develop British Vineyards rose. They | :20:27. | :20:32. | |
rose by more than 40% last year, the UK winemaker is much smaller. And | :20:33. | :20:36. | |
the sparkling wine production is tiny compared to the major champagne | :20:37. | :20:40. | |
houses, around about 35,000 bottles each year. It was recently bought by | :20:41. | :20:51. | |
an investment firm and made a loss in the first half of the year, the | :20:52. | :20:55. | |
chief executive, we dragged him in a studio and he has brought a couple | :20:56. | :21:01. | |
of props. Welcome to the programme, Sally and I were talking about this | :21:02. | :21:05. | |
earlier this morning, saying, this whole UK British sparkling wine, has | :21:06. | :21:12. | |
been a real phenomena. It has been a real buzz over the last few years. | :21:13. | :21:18. | |
Why now? Have things changed? Why all of a sudden over the last few | :21:19. | :21:22. | |
years has the British wine industry shot through the roof? I think it | :21:23. | :21:29. | |
has got much more public awareness, because of the international | :21:30. | :21:33. | |
competition and awards. And the spate of good news basically. Not | :21:34. | :21:37. | |
only that, but the arrival of the first champagne house in England, | :21:38. | :21:45. | |
Tass and Joe, the French are coming. They have clearly seen | :21:46. | :21:49. | |
that we are onto a good thing and demand far outstrips supply at the | :21:50. | :21:57. | |
moment. It is a combination of factors including climate. It hasn't | :21:58. | :22:03. | |
happened overnight, the first pioneers of image sparkling wine | :22:04. | :22:06. | |
were at it 20 years ago at least. It has been a story about climate | :22:07. | :22:11. | |
change, if we look back 25 years, the weather that they had in the | :22:12. | :22:16. | |
capital of champagne is what we have now. So we are able to produce | :22:17. | :22:20. | |
wines, at a level of sophistication to rival the best champagne. Is this | :22:21. | :22:26. | |
one of your problems, the industry is growing, you are growing, English | :22:27. | :22:33. | |
wine growers, only account for 0.14% of the UK market. It is about 25 | :22:34. | :22:42. | |
million drinkers. Is it a problem? What is this going to cost me a a | :22:43. | :22:48. | |
bottle of this? Danish mine, the markets developing, people like us | :22:49. | :22:51. | |
who are going for the luxury end of the market, very good about what we | :22:52. | :22:56. | |
do. The age the wines for four years and we only use the grapes, and we | :22:57. | :23:00. | |
are completely uncompromising in the approach to make the best wines. | :23:01. | :23:03. | |
There are other people who are maybe ageing wines from not as long, a lot | :23:04. | :23:08. | |
of the entry point champagne that you buy in the supermarket, might be | :23:09. | :23:15. | |
brought in using maiden fruit, it might only have been aged for a | :23:16. | :23:20. | |
year. So there is a range from 15 to ?17 as an entry point to 30 or 40, | :23:21. | :23:25. | |
there will be special and luxury additions coming out over the next | :23:26. | :23:27. | |
few years which will be heading towards ?100. We have been told that | :23:28. | :23:34. | |
we are out of time. Which is a real shame and we appreciate you coming | :23:35. | :23:38. | |
in, very interesting to hear how that has developed over time. In a | :23:39. | :23:43. | |
moment we will have a look at the business pages, here is a quick look | :23:44. | :23:47. | |
at how you can stay in touch. You can stay ahead with all of the day | :23:48. | :23:50. | |
is breaking business news, keep you up-to-date with all of the latest | :23:51. | :23:54. | |
details with insight and analysis from BBC's team of editors around | :23:55. | :23:58. | |
the world and we want to hear from you too. Get involved with the BBC | :23:59. | :24:08. | |
business news live web page, and you can find us on Facebook and BBC | :24:09. | :24:17. | |
business news. Whenever you need to know. So get in touch, Mike is back. | :24:18. | :24:24. | |
We talked about Twitter already, let us talk about gap which is the top | :24:25. | :24:29. | |
story. Mind the Gap. This is the latest to be named and shamed, as to | :24:30. | :24:36. | |
not pay enough taxing the UK. It is a classic example of the challenges, | :24:37. | :24:40. | |
they have basically paid no corporation tax since 2011, despite | :24:41. | :24:46. | |
having annual sales of ?300 million. There is a classic example of the | :24:47. | :24:51. | |
challenges that you face, with a company, they have got a Dutch | :24:52. | :24:56. | |
components, so there is a question of how much, of the profits they put | :24:57. | :24:59. | |
through Holland and the UK and the US. And how you get that money off | :25:00. | :25:09. | |
them basically. Yes, 40 seconds left, beer, big deals coming up, | :25:10. | :25:16. | |
nearly $300 million work? SAB Miller, and another are trying to | :25:17. | :25:19. | |
merge, they had to sell some of their brands. The Japanese yen going | :25:20. | :25:25. | |
up so it makes it cheaper to buy other companies, so, there is a | :25:26. | :25:31. | |
Japanese company called Asahi, which is going to buy. And SAB Miller, are | :25:32. | :25:41. | |
going to look at the deal? They have $60 billion worth of sales year, so | :25:42. | :25:47. | |
there is an anti-competitive risk, if they don't sell something. Good | :25:48. | :25:56. | |
on you. He can come back. That is business live, see you soon. | :25:57. | :26:09. | |
Hello we are remaining with the cold theme for the foreseeable future, a | :26:10. | :26:14. | |
good-looking day on the cards for much of | :26:15. | :26:16. |