:00:00. > :00:07.This is Business Live from BBC News with Aaron
:00:08. > :00:12.Japan wants G7 leaders to start shovelling the cash to boost
:00:13. > :00:15.But Germany and the UK still say austerity -
:00:16. > :00:42.Live from London, that's our top story on Thursday, 26th May.
:00:43. > :00:45.The debate over how governments can spur global economic growth -
:00:46. > :00:49.we'll be live in Japan, as leaders from the G7 get together.
:00:50. > :00:55.Shares in Alibaba fall almost 7% in New York,
:00:56. > :00:59.as the world's biggest e-commerce company says its accounting
:01:00. > :01:03.practises are being investigated by US regulators.
:01:04. > :01:06.And a mixed bag on the markets around the world.
:01:07. > :01:08.The big market news today, the price of oil back
:01:09. > :01:25.And we'll be getting the inside track on the taylor made
:01:26. > :01:29.Legendry designer and businessman Sir Paul Smith will be on the show
:01:30. > :01:31.to talk about his brand and why shareholders aren't
:01:32. > :01:35.And, as the head of Coca-Cola UK launches a withering attack
:01:36. > :01:37.on George Osborne's sugar tax - surprise, suprise -
:01:38. > :01:39.saying it won't work and will hit the poorest members
:01:40. > :01:42.of society the hardest, we want to know what you think?
:01:43. > :02:06.We start in Japan where leaders of the G7 group of nations
:02:07. > :02:09.are gathering in Ise Shima - in the mountains
:02:10. > :02:16.Up for discussion - terrorism , the refugee crisis,
:02:17. > :02:18.tensions with China over territorial waters and Britain's referendum
:02:19. > :02:36.The IMF has revised down its world growth forecasts three
:02:37. > :02:49.The economic picture is getting worse, not better.
:02:50. > :02:58.Should governments be splashing the cash - spending more money
:02:59. > :03:05.Or is austerity the way to go - cutting back and spending less?
:03:06. > :03:08.On one side you have the UK and Germany who believe
:03:09. > :03:11.that the only way to a sustainable economy is by spending less.
:03:12. > :03:14.On the other side you have Japan which has been spending billions
:03:15. > :03:27.It has been calling on its G7 partners to commit
:03:28. > :03:29.to doing the same - saying cuts lead to
:03:30. > :03:34.stagnation and recession.m> The United States, Canada,
:03:35. > :03:50.So is there any hope of a deal to boost public spending?
:03:51. > :03:52.Karishma Vaswani joins us from Ise-Shima, where
:03:53. > :04:05.A lot of these G leaders might be wondering to themselves is Japan
:04:06. > :04:10.really the right party to be dishing out this sort of advice, given they
:04:11. > :04:14.have spent some three-quarters of a trillion US dollars trying to boost
:04:15. > :04:19.spending and it hasn't exactly worked? Worked? You are right, in
:04:20. > :04:21.fact it hasn't worked at all. If you look at the history
:04:22. > :04:31.growth John Arne Riise and -- price environment and
:04:32. > :04:38.problem, being billions of dollar worth of Government money, monetary
:04:39. > :04:41.policy where you remember, earlier in year it cut interest rates to
:04:42. > :04:45.get consumers and companies to spend again, that didn't
:04:46. > :04:58.to revitalise Japan, structural reforms, now this is
:04:59. > :05:01.what Germany and the United Kingdom say will actually
:05:02. > :05:07.to make those structural reforms. It means you have to sit down, look
:05:08. > :05:09.at different parts of your economy and figure out
:05:10. > :05:16.what is working and what is not. That takes time. Japan says it come
:05:17. > :05:17.on guy, let us get together and throw more money at the problem.
:05:18. > :05:20.He needs the backing from his partners a
:05:21. > :05:26.say in the Finance Minister's weekend that just passed they
:05:27. > :05:31.we can't agree on any global cooperation, a joint action plan on
:05:32. > :05:33.the economy, let us just decide to go our own way and hope for the
:05:34. > :05:56.best. Steel, is, has appeared to be on the
:05:57. > :06:00.agenda. Say it big global issue. Yes, and certainly some comment
:06:01. > :06:03.coming out from the European Commission President who talked
:06:04. > :06:08.about the fact that Europe will not remain defenceless in what he says
:06:09. > :06:11.is a distorted market for the steel industry. No surprises there, all of
:06:12. > :06:16.the attention being place odd between one country that isn't even
:06:17. > :06:22.at the G7 summit. China. There were a number of references to China's
:06:23. > :06:23.overcapacity in the steel sector, what European countries
:06:24. > :06:33.for its part, Beijing has hit back and said this is not our problem.
:06:34. > :06:38.Although China has spent the last three decades as par of its
:06:39. > :06:38.Industrial steel factories it says it is not
:06:39. > :06:42.because of its problem that is causing
:06:43. > :06:52.weaker within European's steel sector that
:06:53. > :06:53.is causing the issues, so likely we will hear more about that
:06:54. > :07:00.over the next couple of days. Unlikely as you suggest we might see
:07:01. > :07:16.any grand joint action plan. We can hope.
:07:17. > :07:25.The price of oil has gone above $50 a barrel for the first time in 2016,
:07:26. > :07:29.following supply disruptions and increased global demand.
:07:30. > :07:32.The price of Brent crude hit $50.07 a barrel in Asian trade,
:07:33. > :07:38.on the back of US data showing oil inventories have fallen.
:07:39. > :07:40.Shares of Japanese airbag manufacturer Takata have
:07:41. > :07:42.surged by 21%, the daily limit in Tokyo trading.
:07:43. > :07:47.This comes after the Nikkei newspaper reported private equity
:07:48. > :07:49.giant KKR may look to take control of the company.
:07:50. > :07:52.Takata is at the centre of the biggest safety recall
:07:53. > :07:54.in the car industry's history because of its potentially deadly
:07:55. > :07:57.airbags linked to at least 11 deaths and more than 100
:07:58. > :08:11.Workers at French nuclear power stations are on strike this Thursday
:08:12. > :08:20.as industrial action escalates over controversial labour reforms.
:08:21. > :08:23.The CGT union said staff at 16 of France's 19 nuclear plants had
:08:24. > :08:27.On Wednesday, the government said it was dipping into strategic oil
:08:28. > :08:40.reserves after strikers blockaded refineries.
:08:41. > :08:43.Tata Steel says it's still in the process of considering bids
:08:44. > :08:47.A short list of bidders had been expected following the company's
:08:48. > :08:51.The deadline for potential buyers to make formal
:08:52. > :08:55.Tata has declined to say how many actual bids it has received.
:08:56. > :08:57.Meanwhile, the UK Government plans to allow an overhaul
:08:58. > :09:01.A $713 million pension deficit has been deterring potential
:09:02. > :09:26.Shares in Alibaba fell almost 7% on Wednesday after the online retail
:09:27. > :09:28.giant revealed that US regulators are investigating its
:09:29. > :09:41.Leisha, what more do we know at this stage?
:09:42. > :09:49.Well, what we know is that Alibaba chose to list in the US which has
:09:50. > :09:54.very different financial reporting as well as accounting standards so
:09:55. > :09:59.they are asking Alibaba for more details on how it calculates the
:10:00. > :10:04.numbers of one of its affiliate companies as Westminster as other
:10:05. > :10:10.general transaction, it has asked for data on somebody called singles
:10:11. > :10:13.day, that is a 24 hours fire sale they hold each year and that brings
:10:14. > :10:19.in billions of dollars each year. It is worth stressing a request for
:10:20. > :10:24.more information doesn't mean they have violated any laws but it raises
:10:25. > :10:29.a red flag for investors because there have been concerns is about
:10:30. > :10:35.the structure, as well as transparency issues
:10:36. > :10:37.Thank you for that. Staying with the markets.
:10:38. > :10:40.OK, quick flash of what's driving the markets around the world.
:10:41. > :10:42.One important note is the price of oil.
:10:43. > :10:46.As you've heard, crude oil is back up above $50 a barrel for the first
:10:47. > :10:52.That said, Asian shares struggled to gain traction.
:10:53. > :10:54.Look, let's be frank, and even the market experts
:10:55. > :10:57.are saying this, the markets are all a bit boring
:10:58. > :11:06.It's always the same focus, US interest rates, will we see
:11:07. > :11:10.world's biggest economy raise rates next month?
:11:11. > :11:12.And China, the impact of the China slowdown.
:11:13. > :11:15.So let's find out what'll be driving Wall Street today.
:11:16. > :11:26.Here she is, Samira, with an NY wrap.
:11:27. > :11:30.Two of the biggest US discount chains will post
:11:31. > :11:33.earnings on Thursday, Dollar Tree and Dollar General.
:11:34. > :11:36.We have seen some tough times recently for American retailers,
:11:37. > :11:39.They cater to low-income customers, compared to retailers
:11:40. > :11:51.Investors are taking that as an indication that perhaps dollar
:11:52. > :11:57.In economic news we will get durable-goods numbers on Thursday.
:11:58. > :12:02.Orders for long-lasting American-manufactured goods likely
:12:03. > :12:06.This is a closely-watched metric, it can be an indication of how much
:12:07. > :12:22.Here in the studio is the one and only Jeremy Cook. Morning, great to
:12:23. > :12:28.see you. Let us, indeed, one and only. We are excited about this oil
:12:29. > :12:35.stories as you can tell. Goldman Sachs is now predicting that crude
:12:36. > :12:43.is going to consistently stay above this $50 mark. What do you think?
:12:44. > :12:46.What is driving it? It is an unwind of the unnaturally bearish state we
:12:47. > :12:51.had at the begin of the year. Markets are oversupplied, even with
:12:52. > :12:54.the fall off in supply we saw in the fire in Canada, some militant
:12:55. > :13:00.activity in Nigeria, that has boosted the price a bit. Demand is
:13:01. > :13:07.starting to come back as well. Risks to that top side, risk to it comes
:13:08. > :13:10.back to $60-70 a barrel. The shale operators who were put off business
:13:11. > :13:14.are going to come back and say our costs are covered so we can come
:13:15. > :13:17.back in. Saudi have said they are looking to expand production, if
:13:18. > :13:22.they expand production that price is going to come lower. So discussing
:13:23. > :13:27.between Opec and Russia about freezing out, how much has that
:13:28. > :13:30.helped? It has helped a bit. Unless Iran's part of this conversation it
:13:31. > :13:37.won't mean anything, they are back on the markets.
:13:38. > :13:41.Briefly, they, US productivity, worker productivity expected to drop
:13:42. > :13:46.for the first time in 30 years. Yes. It's a big story, because it means
:13:47. > :13:50.that wages aren't going higher any time soon, that the average worker
:13:51. > :13:55.isn't producing as much. What is the problem? It seems that innovation of
:13:56. > :13:59.companies have gone through the global financial crisis are holding
:14:00. > :14:02.on the cash, they are not investing and the economy isn't moving
:14:03. > :14:04.forward. Good to talk to you. We will go through papers in a moment.
:14:05. > :14:06.We will go through papers in a moment.
:14:07. > :14:10.We hear from a man who's been tailoring his own path
:14:11. > :14:12.in the clothing business for over 40 years.
:14:13. > :14:15.Sir Paul Smith will be telling Business Live about what it takes
:14:16. > :14:21.to stay on top in the ever-changing world of design.
:14:22. > :14:29.You're with Business Live from BBC News.
:14:30. > :14:32.Consumers are still feeling the impact of one of banking's
:14:33. > :14:35.biggest scandals, with complaints about Payment Protection Insurance
:14:36. > :14:42.still topping the list of woes heard by the Financial Ombudsman Service.
:14:43. > :14:45.There were plenty of other complaints too, including more
:14:46. > :14:47.people struggling to repay a payday loan.
:14:48. > :14:50.Rob Young is in the Business Newsroom for us.
:14:51. > :15:04.I get mobile. I haven't had claim but I get phone calls and I get them
:15:05. > :15:12.together, a lot of people are fed up.
:15:13. > :15:18.The financial ombudsman service, which mediates between financial
:15:19. > :15:20.companies and consumers, received on average 4000 complaints about
:15:21. > :15:27.possible PPI mis-selling every single week last year, making up
:15:28. > :15:33.more than half of its caseload. Consumer organisations say it shows
:15:34. > :15:37.that the complaint procedures put in place by the banks and regulators do
:15:38. > :15:41.not work. They say they must be made much simpler, so people don't feel
:15:42. > :15:45.they have to go to the ombudsman to complain when they don't think they
:15:46. > :15:50.are getting the money they are owed. There are some other complaints as
:15:51. > :15:54.well, it is not just PPI. There have been all sorts of products
:15:55. > :15:58.complained about, a big increase in the number of complaints about
:15:59. > :16:02.payday loans. There is a crackdown on the industry by the regulator
:16:03. > :16:06.which capped the interest rate that people are able to pay, and the
:16:07. > :16:11.total amount it would have to repay compare to the loan that they take
:16:12. > :16:15.out. The rise suggests people are not happy with the service. There
:16:16. > :16:19.was also an increase in the number of complaints about packaged bank
:16:20. > :16:24.accounts will stop you pay a monthly fee and get travel insurance with it
:16:25. > :16:25.as well. The ombudsman has said in a lot of these cases people get a
:16:26. > :16:38.pretty good deal. Some stories that have paid our
:16:39. > :16:42.interest on the website. A nod towards this, Debenhams has a new
:16:43. > :16:52.Chief Executive, joining from Amazon.
:16:53. > :17:01.Is Debenhams going online? Exactly. Ongoing story about the pensions
:17:02. > :17:04.deficit at Kempton -- Tata, largely due to Chinese dumpling.
:17:05. > :17:10.Our top story, the debate over how to stimulate sluggish global
:17:11. > :17:21.growth kicks off in Japan as G7 leaders meet.
:17:22. > :17:24.Now, let's get the inside track on a man who has built
:17:25. > :17:30.a global business empire by cutting his cloth to suit.
:17:31. > :17:35.Paul Smith, the legendry designer, has been a force in the world
:17:36. > :17:38.of fashion and business for 40 years.
:17:39. > :17:45.He began his career in 1970 after his teenage dreams of becoming
:17:46. > :17:48.a professional racing cyclist were shattered by
:17:49. > :17:53.After opening his first clothing shop, he took night classes
:17:54. > :17:57.in tailoring which culminated in designing his first menswear
:17:58. > :18:01.collection which in 1976 was showing in Paris under
:18:02. > :18:06.Since then, the brand has expanded, now operating in 66 countries
:18:07. > :18:10.You might think that the biggest part of that business
:18:11. > :18:17.But in fact it's Japan where the company has really succeeded,
:18:18. > :18:21.with 200 shops in streets and department stores.
:18:22. > :18:23.Although it's never made a loss, the business has suffered recently.
:18:24. > :18:28.Last year the business turned over more than $280 million,
:18:29. > :18:31.but saw pre-tax profits almost halve during the period,
:18:32. > :18:40.Victoria Fritz went to meet the man himself at Chelsea Flower Show
:18:41. > :18:45.and began by asking him why he likes to visit the garden show.
:18:46. > :18:50.I come at 7:30am, when nobody is around, it is great.
:18:51. > :18:54.I love the energy, I put on four fashion shows a year,
:18:55. > :18:59.so I know what it is like to do things in a short space of time
:19:00. > :19:07.When they do these amazing gardens, I can identify with that.
:19:08. > :19:12.A lot of the photographs are of close-ups of flowers,
:19:13. > :19:18.which then can influence prints on a dress or a shirt or a scarf.
:19:19. > :19:21.You have been in the Japanese gardens, is that the sort
:19:22. > :19:26.of thing we will see on the catwalks in a few months?
:19:27. > :19:28.There is an artisan garden at the back.
:19:29. > :19:30.The man who does the garden is a customer anyway,
:19:31. > :19:38.The birds have already nested in his garden space.
:19:39. > :19:41.Japan is a big market for you, one of your biggest,
:19:42. > :19:44.but we have seen a slowdown in the economy and in consumer spending.
:19:45. > :19:50.A lot of people overexpanded, not necessarily in Japan,
:19:51. > :20:00.They thought it was a market that would grow bigger than it has.
:20:01. > :20:02.Locally, Paul Smith has been good in all of those markets,
:20:03. > :20:06.we are still seeing an increase in all of Asia.
:20:07. > :20:10.A tiny increase, but we have never been too greedy,
:20:11. > :20:15.In the case of Japan, we have a lot of shops,
:20:16. > :20:21.but we have been there for many years, we have a local partner.
:20:22. > :20:24.It sounds like a lot of shops, but a lot of local brands
:20:25. > :20:30.would have 400 shops, we have got just over 200.
:20:31. > :20:37.You have remained a privately-owned company, what is the benefit
:20:38. > :20:42.I have never borrowed, still independent, and when you have
:20:43. > :20:47.not got shareholders breathing down your neck,
:20:48. > :20:49.it is a big advantage, because they are always
:20:50. > :20:54.Often you do things which are not correct, so you go into an area
:20:55. > :20:59.which is not comfortable, and a lot of them, the big
:21:00. > :21:03.companies, they have borrowed a lot, so they still have repayments
:21:04. > :21:06.to take care of, the business is not there, so it is a worry
:21:07. > :21:12.What makes you think you can run the company better
:21:13. > :21:20.One of the things with my company, it is probably a bad thing,
:21:21. > :21:22.maybe I am too autocratic, but I hope I'm not,
:21:23. > :21:27.but I am very immersed in all aspects.
:21:28. > :21:33.I left school at 15, I started a business in my early 20s,
:21:34. > :21:38.so at some point I have written an invoice, ordered fabric,
:21:39. > :21:45.All of those things have given me a grounding and a down-to-earthness
:21:46. > :21:48.which a lot of other people have not had.
:21:49. > :21:52.They have only had one aspect of their world,
:21:53. > :21:58.and often that is not rounded enough, and the balance isn't there.
:21:59. > :21:59.The Chelsea Flower Show did not exist at all,
:22:00. > :22:01.this was just a field three weeks ago.
:22:02. > :22:05.Logistics and the movement of staff and product must be a huge
:22:06. > :22:10.It is important to keep a balance and to understand that you need
:22:11. > :22:18.You need fashion shows, publicity, and that is one aspect
:22:19. > :22:23.Then you need a site to your business, which is very
:22:24. > :22:27.much about understanding what most of us here wear,
:22:28. > :22:31.which is very simple clothes, we sell lots of classic
:22:32. > :22:35.suits for men and women, lots of white shirts, black dresses,
:22:36. > :22:38.as well as the things you see on the catwalk.
:22:39. > :22:41.Balance is very important, keeping your feet on the ground.
:22:42. > :22:46.Nobody cares how good you used to be.
:22:47. > :23:06.The big boss of Paul Smith, Paul Smith, the one and only! I love this
:23:07. > :23:11.story, not for the workers, but in China 60,000 workers at the company
:23:12. > :23:17.that does a lot of things, but it supplies a lot of products, some of
:23:18. > :23:23.the guts to the Apple iPhone, they have replaced 60,000 workers with
:23:24. > :23:31.robots. In one factory as well, it has gone from 110,000 to 50,000. The
:23:32. > :23:37.city is only to put 5 million, so it has boosted the unemployment figures
:23:38. > :23:41.by 4.1% overnight. If we are seeing more research and develop and from
:23:42. > :23:46.them and Apple within this sphere of influence and it is bringing people
:23:47. > :23:51.back him, that is good news, but if the next Apple phone comes out that
:23:52. > :23:54.is simply having a bigger screen and the robots can make it, this is a
:23:55. > :24:01.longer term productivity issue for China. It is part of a wider trend
:24:02. > :24:06.across China. And also, you were doing a story about the fact that
:24:07. > :24:10.outside the AGM in Chicago for McDonald's we are seeing strikes,
:24:11. > :24:17.people want a higher daily wage. It is those jobs that are in danger of
:24:18. > :24:27.being automated. Yes, these low skilled, labour-intensive jobs
:24:28. > :24:38.be simply put aside to machinery and costs can be saved.
:24:39. > :24:44.This says the sugar tax will not work and it will hurt the poorest
:24:45. > :24:49.members of society. It is a regressive tax, it takes more from
:24:50. > :24:53.poorer people than it does from rich people. If their wages are being
:24:54. > :25:00.used for fatty foods or sugary drinks or biscuits, a lot of the tax
:25:01. > :25:08.will hurt them a lot more puff -- a lot more. Mexico but in a sugar tax,
:25:09. > :25:13.sales went a bit lower, but other things increased, like fruit juices.
:25:14. > :25:20.If your plan is to reduce calorie intake, it does not actually work.
:25:21. > :25:25.There was a study done in the US. A couple of tweets. Somebody says, the
:25:26. > :25:30.sugar tax is another way to raise income. One person says, sugar is a
:25:31. > :25:34.basic commodity, why tax what the majority needs? It is not fair. Very
:25:35. > :25:40.good for the Government. There will be more business news
:25:41. > :25:46.throughout the day on the BBC Live webpage and on World Business
:25:47. > :26:09.Report. A lot of clout across the British
:26:10. > :26:10.Isles at