26/05/2016 BBC Business Live


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This is Business Live from BBC News with Aaron


Japan wants G7 leaders to start shovelling the cash to boost


But Germany and the UK still say austerity -


Live from London, that's our top story on Thursday, 26th May.


The debate over how governments can spur global economic growth -


we'll be live in Japan, as leaders from the G7 get together.


Shares in Alibaba fall almost 7% in New York,


as the world's biggest e-commerce company says its accounting


practises are being investigated by US regulators.


And a mixed bag on the markets around the world.


The big market news today, the price of oil back


And we'll be getting the inside track on the taylor made


Legendry designer and businessman Sir Paul Smith will be on the show


to talk about his brand and why shareholders aren't


And, as the head of Coca-Cola UK launches a withering attack


on George Osborne's sugar tax - surprise, suprise -


saying it won't work and will hit the poorest members


of society the hardest, we want to know what you think?


We start in Japan where leaders of the G7 group of nations


are gathering in Ise Shima - in the mountains


Up for discussion - terrorism , the refugee crisis,


tensions with China over territorial waters and Britain's referendum


The IMF has revised down its world growth forecasts three


The economic picture is getting worse, not better.


Should governments be splashing the cash - spending more money


Or is austerity the way to go - cutting back and spending less?


On one side you have the UK and Germany who believe


that the only way to a sustainable economy is by spending less.


On the other side you have Japan which has been spending billions


It has been calling on its G7 partners to commit


to doing the same - saying cuts lead to


stagnation and recession.m> The United States, Canada,


So is there any hope of a deal to boost public spending?


Karishma Vaswani joins us from Ise-Shima, where


A lot of these G leaders might be wondering to themselves is Japan


really the right party to be dishing out this sort of advice, given they


have spent some three-quarters of a trillion US dollars trying to boost


spending and it hasn't exactly worked? Worked? You are right, in


fact it hasn't worked at all. If you look at the history


growth John Arne Riise and -- price environment and


problem, being billions of dollar worth of Government money, monetary


policy where you remember, earlier in year it cut interest rates to


get consumers and companies to spend again, that didn't


to revitalise Japan, structural reforms, now this is


what Germany and the United Kingdom say will actually


to make those structural reforms. It means you have to sit down, look


at different parts of your economy and figure out


what is working and what is not. That takes time. Japan says it come


on guy, let us get together and throw more money at the problem.


He needs the backing from his partners a


say in the Finance Minister's weekend that just passed they


we can't agree on any global cooperation, a joint action plan on


the economy, let us just decide to go our own way and hope for the


best. Steel, is, has appeared to be on the


agenda. Say it big global issue. Yes, and certainly some comment


coming out from the European Commission President who talked


about the fact that Europe will not remain defenceless in what he says


is a distorted market for the steel industry. No surprises there, all of


the attention being place odd between one country that isn't even


at the G7 summit. China. There were a number of references to China's


overcapacity in the steel sector, what European countries


for its part, Beijing has hit back and said this is not our problem.


Although China has spent the last three decades as par of its


Industrial steel factories it says it is not


because of its problem that is causing


weaker within European's steel sector that


is causing the issues, so likely we will hear more about that


over the next couple of days. Unlikely as you suggest we might see


any grand joint action plan. We can hope.


The price of oil has gone above $50 a barrel for the first time in 2016,


following supply disruptions and increased global demand.


The price of Brent crude hit $50.07 a barrel in Asian trade,


on the back of US data showing oil inventories have fallen.


Shares of Japanese airbag manufacturer Takata have


surged by 21%, the daily limit in Tokyo trading.


This comes after the Nikkei newspaper reported private equity


giant KKR may look to take control of the company.


Takata is at the centre of the biggest safety recall


in the car industry's history because of its potentially deadly


airbags linked to at least 11 deaths and more than 100


Workers at French nuclear power stations are on strike this Thursday


as industrial action escalates over controversial labour reforms.


The CGT union said staff at 16 of France's 19 nuclear plants had


On Wednesday, the government said it was dipping into strategic oil


reserves after strikers blockaded refineries.


Tata Steel says it's still in the process of considering bids


A short list of bidders had been expected following the company's


The deadline for potential buyers to make formal


Tata has declined to say how many actual bids it has received.


Meanwhile, the UK Government plans to allow an overhaul


A $713 million pension deficit has been deterring potential


Shares in Alibaba fell almost 7% on Wednesday after the online retail


giant revealed that US regulators are investigating its


Leisha, what more do we know at this stage?


Well, what we know is that Alibaba chose to list in the US which has


very different financial reporting as well as accounting standards so


they are asking Alibaba for more details on how it calculates the


numbers of one of its affiliate companies as Westminster as other


general transaction, it has asked for data on somebody called singles


day, that is a 24 hours fire sale they hold each year and that brings


in billions of dollars each year. It is worth stressing a request for


more information doesn't mean they have violated any laws but it raises


a red flag for investors because there have been concerns is about


the structure, as well as transparency issues


Thank you for that. Staying with the markets.


OK, quick flash of what's driving the markets around the world.


One important note is the price of oil.


As you've heard, crude oil is back up above $50 a barrel for the first


That said, Asian shares struggled to gain traction.


Look, let's be frank, and even the market experts


are saying this, the markets are all a bit boring


It's always the same focus, US interest rates, will we see


world's biggest economy raise rates next month?


And China, the impact of the China slowdown.


So let's find out what'll be driving Wall Street today.


Here she is, Samira, with an NY wrap.


Two of the biggest US discount chains will post


earnings on Thursday, Dollar Tree and Dollar General.


We have seen some tough times recently for American retailers,


They cater to low-income customers, compared to retailers


Investors are taking that as an indication that perhaps dollar


In economic news we will get durable-goods numbers on Thursday.


Orders for long-lasting American-manufactured goods likely


This is a closely-watched metric, it can be an indication of how much


Here in the studio is the one and only Jeremy Cook. Morning, great to


see you. Let us, indeed, one and only. We are excited about this oil


stories as you can tell. Goldman Sachs is now predicting that crude


is going to consistently stay above this $50 mark. What do you think?


What is driving it? It is an unwind of the unnaturally bearish state we


had at the begin of the year. Markets are oversupplied, even with


the fall off in supply we saw in the fire in Canada, some militant


activity in Nigeria, that has boosted the price a bit. Demand is


starting to come back as well. Risks to that top side, risk to it comes


back to $60-70 a barrel. The shale operators who were put off business


are going to come back and say our costs are covered so we can come


back in. Saudi have said they are looking to expand production, if


they expand production that price is going to come lower. So discussing


between Opec and Russia about freezing out, how much has that


helped? It has helped a bit. Unless Iran's part of this conversation it


won't mean anything, they are back on the markets.


Briefly, they, US productivity, worker productivity expected to drop


for the first time in 30 years. Yes. It's a big story, because it means


that wages aren't going higher any time soon, that the average worker


isn't producing as much. What is the problem? It seems that innovation of


companies have gone through the global financial crisis are holding


on the cash, they are not investing and the economy isn't moving


forward. Good to talk to you. We will go through papers in a moment.


We will go through papers in a moment.


We hear from a man who's been tailoring his own path


in the clothing business for over 40 years.


Sir Paul Smith will be telling Business Live about what it takes


to stay on top in the ever-changing world of design.


You're with Business Live from BBC News.


Consumers are still feeling the impact of one of banking's


biggest scandals, with complaints about Payment Protection Insurance


still topping the list of woes heard by the Financial Ombudsman Service.


There were plenty of other complaints too, including more


people struggling to repay a payday loan.


Rob Young is in the Business Newsroom for us.


I get mobile. I haven't had claim but I get phone calls and I get them


together, a lot of people are fed up.


The financial ombudsman service, which mediates between financial


companies and consumers, received on average 4000 complaints about


possible PPI mis-selling every single week last year, making up


more than half of its caseload. Consumer organisations say it shows


that the complaint procedures put in place by the banks and regulators do


not work. They say they must be made much simpler, so people don't feel


they have to go to the ombudsman to complain when they don't think they


are getting the money they are owed. There are some other complaints as


well, it is not just PPI. There have been all sorts of products


complained about, a big increase in the number of complaints about


payday loans. There is a crackdown on the industry by the regulator


which capped the interest rate that people are able to pay, and the


total amount it would have to repay compare to the loan that they take


out. The rise suggests people are not happy with the service. There


was also an increase in the number of complaints about packaged bank


accounts will stop you pay a monthly fee and get travel insurance with it


as well. The ombudsman has said in a lot of these cases people get a


pretty good deal. Some stories that have paid our


interest on the website. A nod towards this, Debenhams has a new


Chief Executive, joining from Amazon.


Is Debenhams going online? Exactly. Ongoing story about the pensions


deficit at Kempton -- Tata, largely due to Chinese dumpling.


Our top story, the debate over how to stimulate sluggish global


growth kicks off in Japan as G7 leaders meet.


Now, let's get the inside track on a man who has built


a global business empire by cutting his cloth to suit.


Paul Smith, the legendry designer, has been a force in the world


of fashion and business for 40 years.


He began his career in 1970 after his teenage dreams of becoming


a professional racing cyclist were shattered by


After opening his first clothing shop, he took night classes


in tailoring which culminated in designing his first menswear


collection which in 1976 was showing in Paris under


Since then, the brand has expanded, now operating in 66 countries


You might think that the biggest part of that business


But in fact it's Japan where the company has really succeeded,


with 200 shops in streets and department stores.


Although it's never made a loss, the business has suffered recently.


Last year the business turned over more than $280 million,


but saw pre-tax profits almost halve during the period,


Victoria Fritz went to meet the man himself at Chelsea Flower Show


and began by asking him why he likes to visit the garden show.


I come at 7:30am, when nobody is around, it is great.


I love the energy, I put on four fashion shows a year,


so I know what it is like to do things in a short space of time


When they do these amazing gardens, I can identify with that.


A lot of the photographs are of close-ups of flowers,


which then can influence prints on a dress or a shirt or a scarf.


You have been in the Japanese gardens, is that the sort


of thing we will see on the catwalks in a few months?


There is an artisan garden at the back.


The man who does the garden is a customer anyway,


The birds have already nested in his garden space.


Japan is a big market for you, one of your biggest,


but we have seen a slowdown in the economy and in consumer spending.


A lot of people overexpanded, not necessarily in Japan,


They thought it was a market that would grow bigger than it has.


Locally, Paul Smith has been good in all of those markets,


we are still seeing an increase in all of Asia.


A tiny increase, but we have never been too greedy,


In the case of Japan, we have a lot of shops,


but we have been there for many years, we have a local partner.


It sounds like a lot of shops, but a lot of local brands


would have 400 shops, we have got just over 200.


You have remained a privately-owned company, what is the benefit


I have never borrowed, still independent, and when you have


not got shareholders breathing down your neck,


it is a big advantage, because they are always


Often you do things which are not correct, so you go into an area


which is not comfortable, and a lot of them, the big


companies, they have borrowed a lot, so they still have repayments


to take care of, the business is not there, so it is a worry


What makes you think you can run the company better


One of the things with my company, it is probably a bad thing,


maybe I am too autocratic, but I hope I'm not,


but I am very immersed in all aspects.


I left school at 15, I started a business in my early 20s,


so at some point I have written an invoice, ordered fabric,


All of those things have given me a grounding and a down-to-earthness


which a lot of other people have not had.


They have only had one aspect of their world,


and often that is not rounded enough, and the balance isn't there.


The Chelsea Flower Show did not exist at all,


this was just a field three weeks ago.


Logistics and the movement of staff and product must be a huge


It is important to keep a balance and to understand that you need


You need fashion shows, publicity, and that is one aspect


Then you need a site to your business, which is very


much about understanding what most of us here wear,


which is very simple clothes, we sell lots of classic


suits for men and women, lots of white shirts, black dresses,


as well as the things you see on the catwalk.


Balance is very important, keeping your feet on the ground.


Nobody cares how good you used to be.


The big boss of Paul Smith, Paul Smith, the one and only! I love this


story, not for the workers, but in China 60,000 workers at the company


that does a lot of things, but it supplies a lot of products, some of


the guts to the Apple iPhone, they have replaced 60,000 workers with


robots. In one factory as well, it has gone from 110,000 to 50,000. The


city is only to put 5 million, so it has boosted the unemployment figures


by 4.1% overnight. If we are seeing more research and develop and from


them and Apple within this sphere of influence and it is bringing people


back him, that is good news, but if the next Apple phone comes out that


is simply having a bigger screen and the robots can make it, this is a


longer term productivity issue for China. It is part of a wider trend


across China. And also, you were doing a story about the fact that


outside the AGM in Chicago for McDonald's we are seeing strikes,


people want a higher daily wage. It is those jobs that are in danger of


being automated. Yes, these low skilled, labour-intensive jobs


be simply put aside to machinery and costs can be saved.


This says the sugar tax will not work and it will hurt the poorest


members of society. It is a regressive tax, it takes more from


poorer people than it does from rich people. If their wages are being


used for fatty foods or sugary drinks or biscuits, a lot of the tax


will hurt them a lot more puff -- a lot more. Mexico but in a sugar tax,


sales went a bit lower, but other things increased, like fruit juices.


If your plan is to reduce calorie intake, it does not actually work.


There was a study done in the US. A couple of tweets. Somebody says, the


sugar tax is another way to raise income. One person says, sugar is a


basic commodity, why tax what the majority needs? It is not fair. Very


good for the Government. There will be more business news


throughout the day on the BBC Live webpage and on World Business


Report. A lot of clout across the British


Isles at


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