14/04/2016 BBC Business Live


14/04/2016

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

:00:00.:00:11.

BP's boss faces backlash over his giant pay package -

:00:12.:00:13.

in the same year the company made record losses.

:00:14.:00:17.

Live from London, that's our top story on Thursday 14th April.

:00:18.:00:37.

Why is BP boss Bob Dudley getting a 20% pay rise when the company

:00:38.:00:40.

Shareholders are demanding answers at the company's AGM in London.

:00:41.:00:44.

Nestle sales get a boost, as the popular noodles return

:00:45.:00:52.

to shelves in India, after last year's health scare

:00:53.:00:56.

And where oil goes, equity markets follow.

:00:57.:01:02.

But all eyes will be on China for its latest growth

:01:03.:01:04.

And with the rise of cards and contactless payments,

:01:05.:01:08.

What does the future look like for the humble cash machine?

:01:09.:01:15.

We'll be speaking to the woman running one of the leading

:01:16.:01:18.

independent cash machine networks in Europe.

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Today we want to know, is cash still king?

:01:21.:01:22.

Or do you use credit cards or contactless to pay for things?

:01:23.:01:25.

A big response to that question so keep your comments coming in.

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We start here in London where in a few hours,

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oil giant BP's bosses will face shareholders at its annual meeting.

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In fact, it could turn into a full-on revolt.

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It's because of growing anger over how much the boss is being paid.

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And here's why many say the numbers just don't add up.

:02:02.:02:05.

Last year, BP reported the company's biggest ever loss.

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As it struggled with the plunge in oil prices.

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That's forced it to make massive job cuts - over 7 thousand workers -

:02:15.:02:19.

or 9% of its workforce, will go by the end of next year.

:02:20.:02:22.

But this is what's really got shareholders angry.

:02:23.:02:29.

Last year, BP boss Bob Dudley saw his pay rise by 20 percent

:02:30.:02:32.

At the same time, BP investors have seen their shares slump over

:02:33.:02:37.

the past twelve months, losing almost a quarter

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of their value, over 23 per cent, since this time last year.

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And if BP needed any more awkward numbers, how about this one?

:02:58.:03:00.

The boss of arch rival Shell, Ben van Beurden -

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saw a massive cut in his pay package last year, down 77 percent -

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That's about a quarter of what Mr Dudley made.

:03:13.:03:16.

Ashley Hamilton Claxton, Corporate government manager

:03:17.:03:17.

at Royal London Asset Management is with me.

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So this is very important to you. Tell us where you stand on this

:03:20.:03:24.

issues likely. We invest more about issues likely. We invest more about

:03:25.:03:31.

half of up to 5 million members and we have a duty to be responsible

:03:32.:03:34.

with what we do with their money. Our concern is that in a year when

:03:35.:03:40.

the company has made a massive loss, the CEO has received the maximum

:03:41.:03:44.

possible bonus he could receive. But he has hit its targets and many have

:03:45.:03:48.

argued he performed well, dealing with the crisis in the Gulf of

:03:49.:03:53.

Mexico extremely well, and responding to the collapsing oil

:03:54.:03:55.

prices. He has been running the company in a very difficult time, so

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should he not get the reward for hitting those targets? We do not

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dispute that he had his targets, which we think are very important.

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The risks we sort can be very real for a company, so we do not dispute

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he has had those targets. Our concern is for the message that the

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company is sending to shareholders at a time when they had made a

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massive loss. We think the board should have exercised discretion.

:04:27.:04:29.

What is likely to happen at the AGM? Will beget a revolt -- will they get

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a revolt? They need 25% of votes against this remuneration package,

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as I understand. The vote is actually retrospective because the

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package has already been awarded. It will not change the pay-out. This is

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what they agreed to pay him. If we had a high vote, 20 or 25%, the

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board would need to ask tough questions about whether they made

:04:58.:05:00.

the right decision and hopefully consider that next year when they

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come to make a decision. Many have said that the board is out of touch

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with shareholders and also those who work with BP, many of whom will lose

:05:13.:05:17.

their jobs by the end of next year. Do we know with the board or those

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who do this kind of work within BP consulted with any of the bigger

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shareholders before they went forward with this remuneration

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package? Most companies discuss changes in pay with their

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shareholders. They might not discuss specific numbers in advance but they

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will often discuss the structure of the page. Thank you so much for

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coming in and sharing your thoughts. We will be right across the story.

:05:42.:05:48.

Simon Jack is going to the AGM so follow him on Twitter and he will

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keep you up-to-date. Full coverage across the BBC.

:05:53.:05:57.

In other news, 40,000 workers at US telecoms giant Verizon have gone

:05:58.:05:59.

on strike after negotiations over contracts failed to reach agreement.

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The unions represent customer service and network technicians

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who have been without a contracts since August.

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Talks have stalled over Verizon's plan to cut healthcare

:06:08.:06:09.

Presidential candidate Bernie Sanders spoke

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at a protest in New York in praise of the workers.

:06:13.:06:19.

British fashion brand Burberry has warned that profit for next year

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will come in at the lower end of expectations.

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Sales were down 2% in the six months to March and chief executive

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Christopher Bailey says the luxury market remains "challenging".

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Burberry shares are down 25% in the past 12 months.

:06:32.:06:41.

The families of those killed when one of the pilots

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of a Germanwings passenger plane crashed it into the French Alps

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are suing the US flight school where he was trained.

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The lawsuit claims that the Airline Training Centre of Arizona failed

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to properly screen the medical history of Andreas Lubitz.

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Lots more on all of these stories online, including Burberry which we

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just mentioned. Warning of a challenging year. Today, on the FTSE

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100, the shares are lower, they have really been hit extremely hard over

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the last 12 months. Not true of all makers of luxury goods. Some are

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faring better than others. Burberry is interesting, going through a

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difficult time. China is one of the big reasons it has been suffering,

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as the slowdown has affected demand. Full details

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of what we have been told this morning and that warning about

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profits coming in. Nestle, the world's biggest food

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company, has reported first-quarter sales that beat analysts' estimates,

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boosted in part by a by a faster-than-expected recovery

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of Maggi noodles in India. Yogita Limaye is in

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Mumbai and can explain. The issue has been that big recall

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we saw last year. That hit the performance of the firm but they are

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back on the shelves and they are doing well.

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They did get back on the shelves in November, but after five months of

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not being in production or being sold anywhere in India. And

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while you are seeing a fast recovery, Maggi has once again

:08:09.:08:11.

become the market leader here about a 50% market share. Let me

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tell you that last year, at this time the market

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share was anything between 75 and 80%. Rivals have taken over part of

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that market share and those rivals include foreign brands like Unilever

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and brands like IDC. Maggi still having to fight a bit, although it

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is the market leader, to regain the position they had last year. Still

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having a few challenges. Nestle have said that they will introduce

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variance of the most popular flavour and hopefully then they will be able

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to narrow the gap. Thank you, as always. I want to show you the

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numbers on the markets as they stand. This is what happened

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overnight in Asia. The story is China, where we have growth figures.

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Overnight, we will have full coverage. But also oil. I spoke

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about it at the start of the programme, whale oil goes, equity

:09:12.:09:18.

markets follow. -- where oil goes. This is what

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Europe is doing. Some optimism because oil hit a new high

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yesterday. Still significantly down on what we have seen of late. The

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issue is that we got better-than-expected Chinese export

:09:30.:09:31.

figures, suggesting that the worst could be over, to an extent.

:09:32.:09:37.

Certainly, investors were buoyed by what they have heard and that has

:09:38.:09:40.

translated to a higher start for Europe. We will talk about that in

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more detail shortly but we have the details in what -- on what is ahead

:09:47.:09:52.

in Wall Street. On Thursday, we will hear from the biggest US mortgage

:09:53.:09:57.

lender, Wells Fargo, as well as Bank of America. The mood is slightly

:09:58.:10:00.

better now after JP Morgan surprise the market with a

:10:01.:10:06.

better-than-expected results. But there will probably be more

:10:07.:10:08.

pessimistic news from the International Monetary Fund. We will

:10:09.:10:13.

hear from Christine Lagarde about the fund's updated global policy

:10:14.:10:17.

agenda. At home, we will also find out the latest inflation figures.

:10:18.:10:23.

Economists expect it to have increased impact as Americans pay

:10:24.:10:27.

more for gasoline. Underlying inflation is still expected to be

:10:28.:10:31.

slow, which would back the Federal Reserve's cautious approach to

:10:32.:10:32.

raising interest rates. Joining us is Colin McLean,

:10:33.:10:35.

MD of SVM Asset Management. Good morning. I hope you are well.

:10:36.:10:45.

Let's talk about the financial markets, which had a really hyper 48

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hours. A lot of people just did not own very

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much mining stock any more. They have been scrambling with these

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positions. I touched on it there, where oil goes, equity markets

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follow. But is it not a knee jerk reaction? Better-than-expected

:11:10.:11:11.

export figures from China, and everyone says that the worst is over

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and everything is back on track. Is it that simple? It does help a

:11:14.:11:19.

lot of things but I don't think anyone really knows where the oil

:11:20.:11:21.

price is going. whether there is going to be any

:11:22.:11:23.

restraint in the oil producers, with Iran pumping more

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and determines to get a share back in the market. We will not get

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figures on China's mining until we get some of the mining updates

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next week. So we do not really know what the

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numbers are, there has just been a scramble. And banking stock back

:11:47.:11:48.

in fashion thanks to JP Morgan, coming out with better-than-expected

:11:49.:11:52.

results. One of our guests this week was

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saying that expectations were so low about earnings

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that the news was better and that would buoy the markets. It was not

:11:58.:12:07.

great, the earnings. And there were problems in the investment

:12:08.:12:09.

stock. But still better-than-expected.

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The key was to cut costs and manage expectations. Overall, it will not

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necessarily translate with the other banks, but it was a decent result on

:12:20.:12:24.

bad expectations. Thank you for being here. He is not going away

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yet. As record numbers of us opt

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for contactless technology to pay for goods and services,

:12:34.:12:37.

is there still a future for humble We speak to the boss of cash

:12:38.:12:40.

machine network Your Cash. You're with Business

:12:41.:12:46.

Live from BBC News. More retail results

:12:47.:13:05.

in the UK this week - today it's the turn of high street

:13:06.:13:07.

mainstay - JD Sports. It's just posted full year results,

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with pre-tax profits up 45 per cent. The retailer says is sales were up

:13:11.:13:13.

20 per cent to Nick Carroll is a retail analyst

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at the market research firm, What did you make of these results?

:13:16.:13:24.

These were excellent results. It is a multifaceted

:13:25.:13:26.

business, JD. But they are firing on all soldiers. It does not matter

:13:27.:13:34.

which way you cut it, these were excellent results. Let's talk about

:13:35.:13:37.

Burberry. We have heard figures from them this morning and we have

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touched on it already this morning but the challenge has always been

:13:41.:13:44.

for Christopher Bailey to try to come up with an answer to the China

:13:45.:13:49.

problem. Yes. And many people have tried to do that. There is no doubt

:13:50.:13:54.

that the slowdown in China has affected business. But there has

:13:55.:13:57.

also been a slowdown in the European and American markets. As a whole,

:13:58.:14:01.

the business is obviously suffering. The positives, the retail

:14:02.:14:07.

like-for-likes was broadly flat. I know that is hard to believe but in

:14:08.:14:11.

a market that has been struggling, Europe and America have suffered

:14:12.:14:15.

when the Asia-Pacific regions suffer. Less people are travelling

:14:16.:14:19.

and travelling consumers make up a big part of the business in the

:14:20.:14:24.

Americas and Europe. And talking of travelling consumers, many of those

:14:25.:14:28.

in China are travelling close by, to Japan or other countries in Asia.

:14:29.:14:32.

Many argue that Burberry's lack of presence in those countries is part

:14:33.:14:36.

of the problem. Yes. That is an issue. We found that they are

:14:37.:14:41.

actually pulling back on licensing deals in the Japanese market. We do

:14:42.:14:46.

not know if that will relegate them moving into that market more on

:14:47.:14:49.

their own terms. If they did, they would see a benefit from that.

:14:50.:14:51.

It is reported that the company that makes Peppa Pig has been snapped up

:14:52.:15:14.

by ITV. Just speculation but shares are not by 11%. It shows the power

:15:15.:15:21.

of advertising around children's television. Peppa Pig could have a

:15:22.:15:25.

new owner! You're watching Business Live -

:15:26.:15:28.

our top story... BP's boss, Bob Dudley,

:15:29.:15:30.

faces a backlash over his giant pay package in the same year the company

:15:31.:15:33.

made record losses. The AGM getting under way in London.

:15:34.:15:46.

Simon Jack is there. You can keep in touch with us.

:15:47.:15:49.

When's the last time you paid for something using cash?

:15:50.:15:52.

Chances are you're using it less and less, with a rise in credit

:15:53.:15:55.

According to Visa Europe, the number of contactless payments

:15:56.:16:05.

And one in seven payments were conducted using contactless

:16:06.:16:09.

So what does this mean for bank notes and the cash

:16:10.:16:15.

Well, one former banker still thinks that cash is king.

:16:16.:16:21.

Jenny Campbell began working at the age of 16,

:16:22.:16:24.

counting cash on bank counters and filling up cash machines

:16:25.:16:27.

She owns YourCash, an independent provider of cash machines

:16:28.:16:35.

across Europe after leading a management buyout

:16:36.:16:38.

The company handles around 78 million transactions across three

:16:39.:16:53.

countries with around 5,000 ATMs, dispensing $4 billion

:16:54.:16:55.

But as cards take over from cash, what impact does it have

:16:56.:17:01.

Jenny Campbell, Chief Executive of YourCash Europe, joins us now.

:17:02.:17:06.

We have got so many questions for you from viewers about this. Quite

:17:07.:17:14.

an emotional subject. We are attached to cash but we're using

:17:15.:17:24.

less. I love the digital revolution. I will buy train tickets online and

:17:25.:17:28.

do my shopping online and I think it is about keeping options for the

:17:29.:17:32.

consumer. You might be surprised to 50% of all payments in the UK are

:17:33.:17:37.

still made with cash. The other payments make up the rest and they

:17:38.:17:42.

are growing through the likes of us and cash is beginning to decline

:17:43.:17:47.

slightly. However, we come into play with our business by providing

:17:48.:17:53.

probably the only access to cash as other avenues closed down, by

:17:54.:17:57.

closing branches, removing cash machines in villages, others might

:17:58.:18:02.

call business so I will put machines in the local convenience store, free

:18:03.:18:08.

to use, the banks pay me for that service and that gives access to

:18:09.:18:11.

cash and a still believe there is a strong place for cash to tip people,

:18:12.:18:16.

to give young people the sense of money management in their lives and

:18:17.:18:22.

even the Chief Executive of the Bank of England last said cash will be

:18:23.:18:26.

here for a long time come. He would say that! He is also moving to

:18:27.:18:33.

another company this year and we would not be doing those notes if we

:18:34.:18:40.

thought they were going. You touched on some of the practical uses, other

:18:41.:18:44.

comments coming in, somebody suggesting the charity collectors

:18:45.:18:49.

are unable to use cards, you need coins for the box. Supermarket

:18:50.:18:56.

trolleys, you need car parks to catch up. Alison says it comes down

:18:57.:19:02.

to safety, the worst thing that banks ever did and it is not safe,

:19:03.:19:06.

do people still feel that carrying cash in your pocket is safer than

:19:07.:19:12.

using contactless cards? The battery will not run out, when I talk to

:19:13.:19:17.

large audiences I say, how many people don't have any cash in their

:19:18.:19:21.

pocket and you will get a handful and I say, I bet you're thinking, I

:19:22.:19:28.

need to get some today? It is a choice and the market continues to

:19:29.:19:32.

evolve and it will do, we are seeing Waitrose, the digital store that

:19:33.:19:36.

recently opened and that is relevant, you have a captive

:19:37.:19:40.

audience of employees but you will still need the options of older

:19:41.:19:45.

people, less well off, cash is hugely important. The fact we're

:19:46.:19:51.

having this debate and with huge interest, it shows this is an issue

:19:52.:19:55.

for your business going forward because when you started this, they

:19:56.:20:03.

needed the management buyout, at RBS, we're using cash less and it

:20:04.:20:07.

will become less as time goes by so how are you thinking about your

:20:08.:20:10.

business in the future? Were in different markets, we are in the

:20:11.:20:15.

Netherlands and are half the number of cash machines there and no banks

:20:16.:20:21.

doing new cash machines so we provide access through supermarkets

:20:22.:20:24.

and opening up in Ireland later this month, that is a big cash economy

:20:25.:20:28.

and in other parts of the world which have gone down a very steep

:20:29.:20:33.

cash decline, such as Sweden, we are seeing, stop, he still made this

:20:34.:20:40.

access to cash. It comes back to consumer choice. And I would align

:20:41.:20:46.

this two books going digital. But book shops would close but we still

:20:47.:20:52.

like to touch and feel books. And on cost, people do point out that money

:20:53.:20:58.

costs, printing, you touched on polymer banknotes, but the cash

:20:59.:21:02.

machine network and printing and coins, that costs money but digital,

:21:03.:21:08.

after the technology, it looks after itself. You must have a lot of

:21:09.:21:15.

overheads? It is a low-cost model that we can pass on to the shop

:21:16.:21:19.

owners because before they have the ATM they take cash to the bank,

:21:20.:21:24.

going around the circulation route and costing money and with my model,

:21:25.:21:28.

shopkeepers put their own money into the ATM which is recirculated back

:21:29.:21:33.

to the consumer so that reduces costs and we can share some of the

:21:34.:21:36.

revenue with them will be received with the banks. Cards, there are

:21:37.:21:43.

fees to be paid, so the British Retail Consortium will tell you that

:21:44.:21:47.

cash is cheaper to process them cards. We have run out of time, but

:21:48.:21:54.

other portion -- passion is breeding dogs and you'll become a judge? I am

:21:55.:22:00.

climbing the ranks with my flat coated retriever. But they are a

:22:01.:22:06.

very important part of my business. Breeder, trainer and a judge yet to

:22:07.:22:11.

come? Absolutely! Thank you for coming in!

:22:12.:22:14.

We've been focussing on the energy market this morning with BP

:22:15.:22:16.

and the impact of lower oil prices on the company.

:22:17.:22:20.

Well, this weekend, 15 major oil producers will meet in the Qatari

:22:21.:22:23.

capital Doha to try to decide whether to freeze oil production,

:22:24.:22:25.

Europe's biggest oil producer - Norway - has been hit badly

:22:26.:22:31.

Our Asia Business Correspondent Karishma Vaswani spoke

:22:32.:22:34.

to the Prime Minister of Norway, Erna Solberg.

:22:35.:22:37.

She started by asking her what she expected

:22:38.:22:39.

I hope that they will find an agreement but they do not expect

:22:40.:22:51.

that, in a way. Norway is lauding oil production, we have had that for

:22:52.:22:57.

ten years so as a producer at the impact is becoming lower on the

:22:58.:23:02.

markets but gas production is higher, which is more direct to the

:23:03.:23:08.

European market. Tax transparency has become a key issue in the world

:23:09.:23:14.

as a result of the Panama Papers, in Norway, everybody publishes their

:23:15.:23:18.

taxes. Is this a model other countries could use? What we have

:23:19.:23:23.

done is we have a totally open system but you have to give up your

:23:24.:23:29.

identity when checking. Our model, when you are both open on how much

:23:30.:23:34.

tax you are paying and their income, and open on who is looking at your

:23:35.:23:41.

numbers. That is a good balance. The Prime Minister of Norway.

:23:42.:23:45.

Interesting, that interview is online in full. Colin has returned.

:23:46.:23:57.

Over to you. Abu Dhabi, it is known for being tax-free, but it is

:23:58.:24:03.

introducing another fee, 3% been visible fee, but only applying to

:24:04.:24:07.

expats. We know these countries have to bring in more money by the oil

:24:08.:24:11.

price is falling but this is only applicable to foreigners. For some

:24:12.:24:17.

other countries in the Gulf, they would like to rebalance the working

:24:18.:24:20.

population and try to maintain full employment amongst nationals, they

:24:21.:24:27.

want to scale back. Economies are not growing but these oil prices and

:24:28.:24:34.

they need to readjust. But if you economies in that region have to

:24:35.:24:38.

think of ways, there is a sales tax coming in in Saudi Arabia? There is

:24:39.:24:43.

a great quote, the government said, one of the worries is that it could

:24:44.:24:48.

affect the population but there is a quote from one minister who says the

:24:49.:24:51.

job of the government is to make people happy. Many people would

:24:52.:25:03.

disagree! 3% tax? It will not! The Times, car buyers drive Britain into

:25:04.:25:07.

debt. Are we borrowing too much to buy cars? Not just cars, student

:25:08.:25:13.

loans, the consumer credit is booming. Isn't that part of the

:25:14.:25:20.

response to lower interest rates? Borrowing has become cheaper over

:25:21.:25:23.

the last year so that is part of the response, it is easier to borrow and

:25:24.:25:29.

it is probably quite good for the economy to see consumer demand so it

:25:30.:25:32.

has got some good results but it will take the credit back-up to uni

:25:33.:25:39.

before the crisis levels. We are addicted to debt in the UK? One of

:25:40.:25:46.

our problems? Culturally? But a lot of other countries are struggling to

:25:47.:25:50.

create consumer demand so I think we are maybe not so badly placed! Nice

:25:51.:25:54.

to see you. That is it from us. Goodbye.

:25:55.:26:09.

For many of us were looking at a cloudy start to the day and we have

:26:10.:26:15.

a few patches of morning rain around, notably for the north of

:26:16.:26:19.

Wales, through Shropshire and spots of rain across the Midlands. The

:26:20.:26:24.

computer model is struggling to get the details right with this area

:26:25.:26:25.

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