26/02/2016 BBC Business Live


26/02/2016

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This is Business Live from BBC News with Ben Thompson

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A mammoth battle between the world's most

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valuable company and the US government - Apple acts

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to try to stop the FBI hacking into the iPhone.

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Live from London, that's our top story.

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Apple versus the FBI - the tech giant tries to overturn

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a ruling forcing it to help the FBI access the iPhone

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But could it spark a new battle between the tech sector

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Finance ministers from the G-20 group of top

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economies meet in Shanghai as they tackle an expected global slowdown.

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The spotlight is firmly fixed on China.

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We'll assess another volatile week on the markets.

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And we'll get the inside track on Ethical Earnings.

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From humble beginnings on England's South coast

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But how does Body Shop stay true to its ethical roots when its parent

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company is the multi-national cosmetics giant L'Oreal?

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Today we want to know: Apple versus FBI, who do you side with?

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You know what to do...Just use the hashtag BBCBizLive.

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And we're starting with a mammoth tech battle.

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Apple has launched legal action to try and overturn a ruling that

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says it must help the FBI hack into the iPhone of the

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Some big tech firms are lining up to back Apple in its fight.

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On February 16th, Apple was ordered to write

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a programme to unlock Syed Farook's iPhone to access data.That means

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Apple writing software to disable the phone's passcode protection -

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You know how it works - if you tap in the wrong code too

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many times, you could end up deleting all your data.

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Tim Cook, the boss of Apple, the world's

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most valuable company, claimed it would create a backdoor

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or master key to millions of iPhones, leaving users

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criminals and unwarranted surveillance.

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Well, it's reported Apple is now looking at ways to re-design

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the iPhone to make it un-hackable in the future.

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Here's the Head of the FBI and the boss of Apple

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I love encryption, I love privacy, when I hear corporations take you

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that we will take you to a world where no one can look at your stuff,

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part of me think, that great. But then I think law enforcement

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really just save people's lives. If we knew a way to get the information

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that we haven't already given, if we knew a way to do this that would not

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expose hundreds of millions of other people, we would obviously do it.

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The only way we know would be to write a piece of software that we

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view as the software equivalent of cancer. Not mincing his words. We

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have an associate here joining us. I can only imagine the FBI... They

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have tech know-how, they tried to get into this phone, they failed,

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this is great publicity for Apple, but do they have to be seen doing

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what they are doing because of its shareholders? A cynic might say it's

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their shareholders but Apple say this is a point of principle about

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user privacy. It's about making sure that the only person who can get

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into your data is you. It's about setting a precedent that if you

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allow it in this case, other tech firms and other people who maybe

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have less pure motives will be able to use this software to hack into

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phones will stop that's one of the arguments, Apple say that if they

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give you this software, there is a possibility it will get into the

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hands of others. It could be exploited by parties who don't have

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the right to get into your data. I'm just wondering, can the US

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authorities actually force Apple to write this code, because if I was, I

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would say, we tried, we just can't do it. It means the writing an

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entirely new code to be able to allow them, currently they don't

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have the software, is that right? It's not that they can't, they are

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clear that they can do it, they can create a bespoke service, the reason

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they say they can't be made to right it is because they say it will be

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compelled speech and speech in America is protected by the first

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Amendment. But... I'm still trying to get my head around this. Because

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if... Some may say that Apple are getting too big for their boots but

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if they broke the code, to get this alleged terrorist information, so to

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speak, they just lock the code and block that away, never to be...? But

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is that realistic? Wantage realistic, it will be out there.

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It's like inventing the nuclear bomb. The FBI say this is a bespoke

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one-off piece of code we want to install on one device, but Apple say

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it's not the first time they have been asked to crack into an iPhone

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and then the FBI will be using it everyday. The whole point of

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blackberries, the security and privacy they brought, particularly

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in the Middle East, is that a similar row? It is, and it will keep

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raging on in the digital age until legislation kicks in to say whether

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it is or isn't legal. Just very briefly, I have a tech experts tell

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me that if this wasn't such a public story as it is, if it was private,

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then Apple probably would do it, do you agree? I would disagree with

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that, that's what Edward Snowden was saying, nobody knew about it, but

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what Apple has released is a list of 11 previous requests by the FBI

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where they have said no. Always a pleasure. Thank you.

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The London Stock Exchange says its chief executive -

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Xavier Rolet - will step down and retire if the merger

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It has given further details of the potential deal -

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saying the combined group would would be a UK company -

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with headquarters in London and in Frankfurt.

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Shares in struggling Japanese electronics giant Sharp have fallen

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again, over doubts about a takeover to rescue the firm.

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Robin brand is there for us in Shanghai. Front good to see you. I

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can only imagine one of the focal points being discussed there is can

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bankers do any more but I don't know, some will say that is hard,

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because they don't maybe have any ammunition left? Yes, I think the

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view is that the armoury has run dry, really. Had a brief exchange

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with Dr Mark Carney, the Governor of the Bank of England. Very

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tight-lipped but they gather here with the bulk of them, with little

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left to do, having said that, probably the most prominent central

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banker here, the head of the Chinese central bank did kick off this

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meeting with some positive words, really, I think meant to make those

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attending the meeting feel more confident in particular about where

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China is going, and he said he didn't see or rather hinting he

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didn't see any further moves towards the devaluation of China's currency,

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and also, looking towards the downturn here, I mean China's

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economy growing but the days of double digit growth are over. There

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is a slow time, a downturn coming but he hinted, he believes perhaps

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the Government can spend their way out of this downturn by borrowing

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more. Good stuff. As you you can see Asian

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shares closing. A quick look at what is happening in Europe, because all

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eyes will be on that G20 meeting in Shanghai. Crucially that issue or

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whether there will be extra help to support the second largest which in

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the world, which is China. Michelle has details on Wall Street. How did

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the US economy go. Look no further nan the revised fourth quarter GDP

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numbers out from the commerce department this Friday. The numbers

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are expected to show the economy expanded less in gone 15 that was

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initially reported. I guess that is what revisions are for. Also out,

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this Friday, from the commerce department, consumer spending

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numbers which were flat in December, a slight boost in these January

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numbers is expected, however. And finally, in the retail sector, which

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didn't generally have a strong holiday season, it is expected that

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department store chain JC penny will be a bright spot.

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Let us stay with the markets. Nick hunger gored is with us.

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-- great to see you. Quickly, touching on the G20. The markets are

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up there, hoping for a bit of optimism, we are talking about the

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central banker, there was so much pressure on them, you think I am

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going to reveal this, you think they have some more tools to use.

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Absolutely. I was watching that report, quickly scrabbling notes

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about what else there is to go. I managed to get to ten things.

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Interest rate, balance sheet, overmarket operation, minimum

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reserve requirements, asset purchase, shall I keep go something

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there is plenty things to do. Let me stress it is not just the

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responsibility of the central bankers. Exactly. Mark Carney gave a

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speech and said everybody promised in 2004 that they were going to make

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structural reforms. All of the Governments in the G20s less than

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half of what was promised has happened. If they have got the

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options, why are they not using them? They have and they will. We

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have discovered some of these option, because of what has happened

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since the financial crisis, I mean, it, you know it is very very, very

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infrequently that we have talked the about negative interest rates before

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the financial crisis. So they are being revealed and happen, now they

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are on the table, let us see what they are going to use next. Can, for

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people watching round the world here in Britain, investors, how do they,

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how, what should they read, let me get this right. What should they

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read into the market, the volatility has been phenomenal. It's a mug's

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game trying to get the right timing to get in or out? 100%, for

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investors there is very little point in trying to turn the market, let me

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give you an example. In the ten years to the end of 2015, investing

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in the FTSE all share including dividends you would have received

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about 11.2% an annum. If you missed the ten best days out of the 3650

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days in ten year you would have got 4.7% per annum. Less than half. If

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you had missed the 25 best days in those 10 years, you would have had a

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negative return of 0. 8%. That is great statistics so stay in... If

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you are investing, you are doing it for the long-term. You saw the FTSE

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yesterday went up 2.5%. We love those stats. You will take us

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through The Papers. Thank you. Still to come. Ethical earnings, the

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boss Of body shop tells how it stays true to its ethical roots.

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British Airways owner IAG has reported a 64% rise in profits

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It's been helped by a more than 17% fall in fuel costs.

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IAG is the parent company of Iberia, Vueling and Aer Lingus

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Boss Willie Walsh described the numbers as "very

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The price of oil has been falling steadily over the past year -

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so has this drop fed through to IAG's figures yet?

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Normally buy out as far as three years inned a vans. In 2015 we were,

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if you like, using fuel we bought in 2013, so we saw some benefit but a

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lot of the benefit was off set by the strengthening dollar, about 60%

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of the benefit you would have expected was off set because the

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dollar was stronger against the euro and the pound and we will see some

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continuing benefit in 2016, because the hedges we put in place are

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unwinding and therefore we will get additional benefit from the current

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lower spot price. We don't price our tickets solely based on the price of

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oil, fuel represents about 30% of our cost base, 70% of our coast base

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is managed in another way, the market is very competitive, we will

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continue to be competitive, and prices have been dropping, if you go

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back to 2012, when the price of oil peaked since IAG was created, we

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have seen average fares fall. There has been an impact in the reduction

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in the oil price which has already been felt and passed on to

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consumers. Royal Bank of Scotland has

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made its eighth annual loss in a row, after recently setting

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aside billions for expected fines The group, which is mostly

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owned by the taxpayer, posted a loss of almost ?2 billion,

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although this is down from the ?3.5 billion loss it

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reported a year earlier. Business owner warning of an

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information deaf it is ahead of the EU referendum that is the story in

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the Telegraph. Small businesses saying they don't have enough

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information to make a good decision about in or out when it comes to the

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debate over the UK's continued membership of the EU. They are

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calling for more information, more clarity on what would happen if the

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UK does decide to leave the EU. Our top story -

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Apple versus the FBI. The tech giant tries to overturn

:17:41.:17:44.

a ruling that would force it to help the FBI hack into the iPhone

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of the San Bernadino gunman - Could this turn into the mother

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of all battles with America's mighty Tech sector pitched

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against the US government? Arity on what would happen if the UK

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does decide to leave the EU. More on that, we will get more

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details of that at the start of next week. We will have full coverage

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here on business live. Do we have time for a couple of tweets. Apple

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100% in the right. It's a slippery slope into mass sun rablts. I have

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time for a couple of tweets. Apple 100% in the right. It's a slippery

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slope into mass sun rablts. I haven't got them open. "I am team

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apple. Security is the key on an iPhone. The back door will violate

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one's privacy." Thank you. Keep your comments coming in.

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These days, ethical business is big business, but that's much easier

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How do you stay true to your founding principles

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when you become part of a giant corporate machine?

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Well, one company that knows all too well is the Body Shop.

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From its humble beginnings as a single shop on England's South

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coast, it's now part of the cosmetics giant L'Oreal -

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but still prides itself on its ethical credentials.

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It's chief executive is Jeremy Schwartz, but the firm

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was founded by the late Dame Anita Roddick who opened her

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40 years later, it's a globally recognised consumer brand with over

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And it may surprise many fans that it was swallowed up

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by the multinational beauty empire of L'Oreal ten years ago.

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So can the Body Shop still claim to be an ethical retailer?

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The BBC's Maryam Moshiri put this question to boss Jeremy Schwartz.

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Well the fact you may not be so familiar with is we are in 65

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countries round the world. I believe we are the retailer, that is in more

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countries than any other retailers an we have 65 million people coming

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in our stores every year, so I think we are very relevant to many people

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round the world and the way we do that is by having exceptional

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products made from natural ingredients that are not tested on

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animals and 100% vegetarian, they respect people's skin. There are so

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many different companies that do ethical products and ethical retail,

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how do you differentiate yourselves from a market that is now pretty

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saturated compared to when Body Shop started? When you are an innovator

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and pioneer you are recognised as being the first, so people know that

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we were more natural, we are the first company to bring ethical

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sustainable products across many category, we have skin care and

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body, we have make up which many other companies don't have, the way

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we stay ahead is by going round the world and finding ingredients, and

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ways that women in different countries use products. In Korea,

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the average Korean spends 30 minutes every morn and using seven different

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products to care for her skin, we have just launched some products

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from Korea, worldwide, so that is exciting and surprising for women.

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When I used to go Body Shop it was attractive because of the ethical

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ethos, then I know that some people when it was taken over by L'Oreal

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were disappointed because a big company, a small company, how do

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they work out together? They shouldn't have been disappointed

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because L'Oreal was very excited to not only support but completely

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embrace all the ethics of the Body Shop and they have done that, and

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they have kept, as I am the leader of it, the Body Shop autonomous in

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what we do. We have benefitted from all that L'Oreal can bring, which is

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the ability to use our community Fairtrade ingredients but we have

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kept absolutely the spirit we have already had.

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I have done a straw poll among some of my friends who are a similar age,

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they say that they feel that the brand Body Shop has lost its way a

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bit. How do you find that path again, do you think? We have

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launched a commitment called enrich not exploit. It's a mission for the

:21:57.:22:00.

company, the way we are going to ensure that we are the most ethical,

:22:01.:22:05.

and sustainable company in the world. We know that the women that

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you are talking about are very connected to the global situation,

:22:09.:22:13.

they are very digitally Saivet, they are concerned about the planet. This

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is a way we are going to connect to women like you are describing, to

:22:18.:22:21.

show that they can buy products that are good for them but do good for

:22:22.:22:26.

the planet as well. We are launching products, and I may tell you one

:22:27.:22:31.

called Spa. It sourced from all round the worldle. We have a flower

:22:32.:22:35.

from Japan, I can assure you, that there is not one you don't know who

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wouldn't feel very proud tow have this product in her bathroom and

:22:40.:22:42.

have her friends see her, that she has got it and know they will say,

:22:43.:22:46.

wow I wish I could o have that too. I would like to invite you into our

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stores because I think you will be surprised. So you are making plastic

:22:50.:22:54.

packaging out of pollution. That is interesting, how does it work?

:22:55.:22:59.

Imagine cows, or imagine if you would breathing out for a second,

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you breathe out CO2 and cows emit methane. We have a way of capturing

:23:05.:23:09.

that, we are giving it to insome times and they proeating it and

:23:10.:23:13.

turning it into plastic, we are turning that not just into bags but

:23:14.:23:18.

more into actual packaging, we will be launching packaging that is made

:23:19.:23:22.

from air. We are calling it air carbon. It's a revolution. The chief

:23:23.:23:29.

executive of Body Shop speaking to Maryam. So yes, interesting stuff

:23:30.:23:33.

there, there is a make up theme to the programme today. How do you keep

:23:34.:23:42.

your ethical roots? Is a make up theme to the programme today. How do

:23:43.:23:45.

you keep your ethical roots? One more tweet. "Privacy over human

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life. That is sick corporate world caring only about stock prices."

:23:48.:23:54.

Between the battle between the FBI and apping. I can't get this thing

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to work, so you can't put it on the screen. Pfizer, giving up just

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citizenship it could save them money in taxes. Everybody thought the

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reason Pfizer had bought this Irish company to merge and move its

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headquarters from the US to Ireland was so it could reduce its corporate

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tax rate from the 35% charged in America, which is one of the highest

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in the world, to the 17-18% in Ireland. But what people hadn't

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realised was there was going to be the opportunity to bring in from

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overseas about $150 billion worth of profit Pfizer made, into Ireland and

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benefit from lower tax, because they couldn't have brought that money

:24:40.:24:48.

into the States and had it with the tax.

:24:49.:24:52.

Car, because there is a story here in the Huffington Post, half of new

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cars could be electric by 200040. We know that they are booming in

:25:00.:25:04.

popularity but half of all new cars to be electric? That puts huge

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pressure on infrastructure. That is one of the reasons why that may

:25:08.:25:12.

never come to be the case. It is only 1% of cars sold at the moment

:25:13.:25:16.

that are electric, we have some want I to go. Can you imagine changing

:25:17.:25:22.

the petrol and gas stations to electric plugs. The fact the oil

:25:23.:25:28.

price is so low is motivating people and car companies to build gas

:25:29.:25:32.

guzzlers as they are called. So all round the world we are seeing a drop

:25:33.:25:38.

off in electric gases because gas cars are getting cheaper. Batteries

:25:39.:25:43.

have to be made better. People are worried about running out of

:25:44.:25:46.

batteries on their way. Lots of way to go but maybe possible by 2014. A

:25:47.:25:52.

-- 200040. Have a great weekend. We will be

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back same time, same place on Monday.

:25:57.:26:07.

Compared with last couple of day, we have got a lot more cloud in the sky

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across the UK, but for most of us the weather will stay dry. The cloud

:26:14.:26:17.

is courtesy of an area of low pressure that continues to form to

:26:18.:26:21.

the south-west of the UK, and this brings some uncertainty, as

:26:22.:26:22.

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