09/12/2016 BBC Business Live


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This is Business Live from BBC News with Rachael Horne


yep a cash pile twice the size of the US economy - hidden offshore.


So the question is what can be done to tackle the tax dodgers?


Live from London, that's our top story


Clawing back what they are owed, governments and campaigners


will today sit down for a major pow wow to discuss how they can get back


the trillions of dollars in tax revenue that's been


Also in the programme, South Korea's parliament has voted


the capital for the latest on this developing story.


On the markets another day another record -


a record close on wall street - a record high on the


Nikkei - and in europe the markets are up.


And we'll be getting the inside track on the biggest


financial stories of the moment, with our Economics Correspondent


Andrew Walker, including that long talked about Fed rate rise.


Come January United will charge you to put your carry on bag in the


overhead locker. Do you think the difference between full-service and


budget carriers is blurring? Get in touch.


We are talking tax - and why many big businesses


and wealthy people seem to pay so little of it.


Today politicians from all round the world are in London


for a Global Tax Transparency Summit.


They'll be discussing how to promote tax transparency


According to the Tax Justice Network, as much as $36 trillion


That's twice the GDP - of the world's biggest


In other words - double the value of all the goods and services


It's not just about tax evasion - but also legal tax avoidance.


Bloomberg estimates that US companies have stashed $2.1 trillion


in profits overseas as part of a perfectly legal operation


On Thursday McDonald's said it's moving its non-US tax base


from Luxembourg to the UK due to the "significant number of staff"


But there's more to it than that The Luxembourg tax affairs


of the fast food giant are under formal investigation


It says McDonalds has paid no corporate tax in the city state


despite booking profits worth hundreds of millions


Alex Cobham is the chief executive of the Tax Justice Network. That


figure, $36 trillion, that is monumental. It would be the world's


biggest economy. You need to think about the income and revenues we are


forgoing every year in countries all around the world to understand why


this is such a big problem. The services we are losing, the


inequality we are suffering because that income is not being taxed as it


should be. After back -- after McDonald's is moving its operations


from Luxembourg to the UK, is that a sign that the tide is turning?


Public opinion and outrages working? The EU is changing its attitudes?


Things are moving, but moving slowly. We are still lacking the


kind of transparency that would allow us to know that McDonald's are


declaring profits in the places where they are doing business. The


OECD requires multinationals to report on a country by country


basis. The activities and profits they are making. We need that in the


public domain, so the public can see that McDonald's are playing fairly


UK is not playing the same UK is not playing the same


Luxembourg is playing, in order to take profits from elsewhere and not


tax them. What needs to be done to change the situation, we talked


about the President-elect talking about an amnesty, bringing all that


offshore revenue back in, and then charging at a reduced rate. That is


based on a flawed understanding. 90% of US companies profits were shifted


offshore -- 19%. That is up to 25%. This is not a problem that the


effective tax rates are too high. That is a problem that


multinationals realise it is optional to pay tax. Lowering the


tax rate will not stop that. We need transparency that makes it obvious


and allows the consumers and citizens to vote with their feet.


Are you going to the summit? Absolutely, I think we will get some


great action today. South Korean parliament has voted


to impeach President Park over There have been mass rallies every


Saturday for the past six weeks calling for Park to quit,


and opinion polls show overwhelming Let's cross to Steve


Evans, who's in Seoul. The vote goes to the highest court


in the land, basically the parliament, saying we wrote that she


should be sacked. The highest court in the land accepts the vote, and


has its own investigation, looking at the matter. And we'll either say,


we agree with you over some months, or implement the sacking, in plain


language. In the meantime, President Park seizes to have any power. --


ceases to have any power. She remains president, but all the power


passes to the Prime Minister. The Prime Minister is talking about the


uncertainty. Saying the military needs to be on heightened alert in


case Kim Jong-Un in North Korea decides to press the situation


because of the uncertainties of power here. Check out our website.


Japan going bananas for Fife. The Irish -based fruit distributor, sold


to a huge Japanese conglomerate for 751 million euros. About $800


million. Bananas are big. Supplying one in three bananas in Japan. Also


the King of the banana. Let's touch on some of the other big stories.


Australia has given approval for the sale of the country's


largest private land-holding, the Kidman estate.


It's being bought by Australia's richest woman, Gina Rinehart,


and her business partner, Chinese developer Shanghai Cred.


The estate makes up about 1.3% of all Australian land


and is about the size of South Korea.


The sale has been halted several times due to concerns


Concerns about Chinese buying land in Australia.


The US government says it will investigate whether the planned


sale of an almost 20% stake in Russia's biggest oil company


The Swiss based commodities trader Glencore and Qatar's soverign wealth


fund are supposed to buy 19.5% of Rosneft in a deal the Kremlin has


presented as proof foreign investors are still interested in Russia.


Wholesale prices in China have surged at the fastest


The Producer Price Index - that tracks the cost of goods


as they leave the factory - was up 3.3 per cent in November,


They were driven by the rising cost of commodities like coal and steel.


Record closes on Wall Street yesterday.


The Dow was up. Let's look ahead to Europe.


In Europe, one of the biggest factors impacting on the markets


is the European Central Bank's decision to extend its bond-buying


programme until at least December 2017, but cut its purchases by E20bn


a month - could that spark another taper tantrum?


And Samira Hussain has the details about what's ahead


The University of Michigan's consumer survey is out on Friday.


This is important because two thirds of the US economy depends


on consumer spending, so just how confident Americans feel


will really influence how much they spend.


The expectation is that consumer sentiment will be up


and this comes off the heels of a six-month high


signs that people are feeling increasingly good about


In earnings news, the maker of Ski-Doo snowmobiles and Sea-Doo


BRP is expected to report a rise in profits, as the company has been


Investors will be looking for the company to comment


I can imagine that would be a fun company to work for.


Joining us is Richard Fletcher, Business Editor


Good morning. They can hear you. This rally at Wall Street. One day


after another. Last night in Japan, the McKay went over 19,000. -- the


Nikkei. Looks like we will get to the magic number before the end of


the year. Is it the Santa Claus rally for the Trump hump? Apparently


the technology stocks could be in trouble next year. It is the


infrastructure stocks. Goldman Sachs up 32% since the election. The Dow


up 12%. Nasdaq only eight. There are winners and losers. All driven by


that positive sentiment what they might think Trump may do. We have a


dead on search for a rate rise, the stocks should be nervous, they


shrugging it off. You have to be brave to bet against the market,


even though it looks quite fragile. Why would the markets be nervous


about interest rate rise? Companies, the cost of capital will increase,


therefore you would find markets a bit nervous. You will come back and


take us through the papers. Some good stories.


Next week could be a big one for this lady, Janet Yellen.


She is expected to announce a rise in US interest rates.


We're going to be discussing that and much much more


with our Economics Correspondent Andrew Walker.


You're with Business Live from BBC News.


30 trade associations representing the whole of the UK's


food and drink industry have joined forces to make the case


for continued access to EU workers post-Brexit.


In a letter published in the Guardian, they argue that EU


workers play an important role in the supply chain and some


Our Business Correspondent, Theo Leggett, has all the details.


Is this scaremongering? Serious stuff. The industry is genuinely


worried. 30 trade organisations, the National Farmers' Union, the British


Retail Consortium. Food and Drink Federation. I don't think this is a


blast. They rely on seasonal workers, they have a big pool of


potential employees from the European Union, skilled and


unskilled. They are saying, we know we are leaving the European Union,


you have to think about the impact it will have on our industry. If


we're not able to access this pool of very useful workers, food and


drink prices will rise, the industry will suffer. How many employees are


we talking about, EU workers working in these industries? As a whole, it


employs about four million people. A large proportion are seasonal


workers for work from the European Union. If these people cannot get in


there may be a shortage. The industry is asking for an


unambiguous reassurance from the government that EU workers that are


here can stay. Longer term, recognition that EU workers provide


an essential reservoir of skilled and unskilled labour. A commitment


from the government that if work permits are introduced, there is a


point system, the food industry must be treated equally with the


financial sector and the automotive sector. Not place at a disadvantage,


and they can still get hold of the workers they need. Great stuff. Have


a great weekend. Here is a quick look at what we have


got on our live page. Here is something on crowdfunding, which has


been successful very quickly and there are not many rules. The


Financial Conduct Authority are setting out new rules to protect


people who are in the crowdfunding market.


You're watching Business Live - our top story:


A global tax summit is taking place in London today,


aimed at trying to work out how to claw back the trillions


of dollars that have been parked overseas.


A quick look at how markets are faring...


And now let's get the inside track on the ECB saying it


will extend its bond-buying programme until at least


December 2017 as it kept interest rates unchanged.


The E80bn a month quantitative easing scheme had been


due to end in March, although the bank had been


expected to extend it for at least six months.


This is known as the taper, and we mention the taper tantrum. Well, the


markets seem uncertain. We firstly had the euro rising. Then it fell


back, suggesting that maybe it was not a tapering. Mario Draghi, the


European Central Bank president, hates the word. He remembers the US


taper tantrum, which was when the Fed started indicating that it was


going to start slowing down its quantitative easing programme, its


purchase of bonds in the financial markets. The dollar rose sharply and


we had serious turbulence affecting some of the emerging markets, with


money flowing back to the US. Clearly, Mario Draghi wants to avoid


that kind of turbulence affecting the euro particularly because if


anything equivalent happened and you saw money flowing into the Eurozone,


you would see the currency strengthening, and he does not want


that to happen. You can interpret the policy statement either way.


They are continuing the programme for longer than they had previously


indicated. On balance, it means they will be spending more money than


they had previously committed to do. More than half $1 trillion. You


mentioned that the euro reacted at first because they thought I would


be some tapering. Do they want to see Europe being weaned off this?


This is like a drug. It is not sustainable or realistic to have all


this cheap money. I think what the markets and policymakers want is to


be satisfied that the Eurozone economy is strong enough to be


weaned off. Once out in that position, they would love to see,


but the ECB and Mario Draghi himself would love to see the Eurozone being


strong. It will take a lot longer. Let's talk about oil. We have Opec's


agreement last week. We have another meeting this weekend. Opec did


manage to agree, somewhat to people's surprise, that it would cut


production for the first time in many years. But this was conditional


on a commitment from non-OPEC countries to make a cut of 600,000,


half of what Opec was committing to do. Yes, Russia had already made a


commitment to provide half of that non-OPEC cut, but at this meeting


this weekend, they will be discussing with other members


including Azerbaijan and Kazakhstan, Mexico, Oman and several others


whether they will also make some contribution. It has been quite


striking as markets have taken different views of how likely some


sort of deal is and the price of oil has moved up and down, but it is


still comfortably above the levels it was at before the Opec meeting,


when they made this provisional agreement. But isn't it the case


that it is one thing for Opec members or non-OPEC members to say


we will do it, and actually doing it? Yeah, there are always issues


over whether members comply with their run commitment and implement


the cuts they have made. But clearly, the financial markets think


there is a decent chance of at least some of the members doing it, in


particular the big one, Saudi Arabia. The Saudis have had a big


change of strategy. They were thought to be wanting to do a lot of


harm to the American shale industry by keeping prices low. Looks like


they have given up on that. Let's talk about the Fed. We are expecting


interest rates to rise. How much by? Most likely by a quarter of a


percentage point. They have a target band for this market rate that banks


charge one another for overnight lending. The expectation is that the


top and bottom of that band will rise by a quarter of a percentage


point. But some think it could be a larger rivals. Like half of 1%? That


would be a shock. It probably will not be that, but the fact that some


people are even thinking in those terms is an indication of how the US


economy is doing relatively well. The labour market is pretty strong.


Unemployment is down 4.6%. There are still a lot of people who are not


active in the labour market who could come back into it, so perhaps


things are not as strong as that headline figure suggests. But it is


a striking contrast with Europe, where the unemployment rate is 9.8%


and around 20% in a couple of countries. Have a good weekend.


In a moment, we'll take a look through the business pages


but first, here's a quick reminder of how to get in touch with us.


keep you up to date with insights from the BBC's editors around the


world. And we want you to get involved too. You can find us


online, on Twitter and Facebook. Business life, on TV and online,


whenever you need to know. -- Business Live.


What other business stories has the media been


Richard Fletcher, Business Editor of The Times


Australia has been a contentious deal, but the government have


approved the sale of this large chunk of land the sound -- size of


South Korea to Gina Reinhard, but also the Chinese partner, which is


the controversial part. So Australia supplies all the raw materials for


China's infrastructure, and now we are going to feed them. It is


intriguing. The size, for a little Brit like me, is difficult to even


contemplate. 300,000 head of cattle. It is huge! Obviously, you will know


it has been controversial in Australia because of the whole idea


of Chinese control etc, so they have got a minority stake and the


Australian partner appears to have control of the board, which appears


to have kept people happy. The size of it is immense. It is bigger than


Ireland. It is 2.5% of Australia's agricultural land. It is massive.


The controversies about China owning too much land in Australia. I wonder


if this paves the way for other deals to be done with China


partners. Australia does need agricultural land to feed a lot of


people. Although interestingly, beef was not part of the Chinese diet.


Neither was ice cream, but they are the second biggest consumers of ice


cream in the world! Let's move on. As we were discussing earlier, oil


prices have been putting all year. The airline industry has had eight


years in the black, so they have had a good time. There is that joke, if


you want to turn a large fortune into a small fortune, by an airline.


It is slightly more bumpy. There is a bit of turbulence ahead.


Richard Fletcher, always a pleasure. Have a great weekend. See you again


next week. Bye-bye. We have some cooler weather to


arrive this weekend, but today will be another mild day. We have the


wind is coming in from the south


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