04/12/2017 BBC Business Live

This is Business Live from BBC News

with Ben Thompson and Sally Bundock.

A breakthrough over Brexit?

The British Prime Minister heads

to Brussels as crucial talks over

the Irish border issue continued

late into the night.

Live from London,

that's our top story

on Monday 4th December.

Reaching a deal on arrangements

for the border between the UK

and Ireland is key to moving

on to crucial Brexit trade talks.

We'll assess the

chances of success.

Australia investigates Facebook

and Google's dominance of the global

of the global advertising market.

Our Asia Business team

will have the latest.

A bumper start to the trading week

in Europe as they look ahead to tax

reform in the US, we will tell you

all you need to know.

reform in the US, we will tell

you all you need to know.

Are you fed up with paying

airlines extra to carry your

luggage on their planes?

We'll meet the man who says his

company provides a fast

and simple solution.

And the twin brothers who lost out

to Mark Zuckerberg in the battle

to control Facebook have become

Bitcoin billionaires.

So this morning we want

to know, would YOU invest

in virtual currencies -

would you put cash into bitcoin?

Hello and welcome to Business Live.

It is a very important week for

Brexit.

It is a very important

week for Brexit.

It is a big day for Brexit.

In a few hours' time

Britain's Prime Minister Theresa May

will sit down for lunch with the EU

Commission President

Jean-Claude Juncker.

On the menu is the rather chewy

issue of whether enough progress has

been made to start talks

on a post-Brexit trade deal.

A weekend of diplomatic activity has

brought the two sides closed

A weekend of diplomatic activity has

brought the two sides closer

together on the UK's financial

settlement and citizens rights.

That comes after last week's offer

of more money from Downing Street ,

a sum the BBC understands could be

as high as $60bn.

But when it comes the issue

of the land border between the Irish

Republic and Northern Ireland nobody

wants a hard border,

and the Republic's Foreign Minister

has told the BBC "more credible

answers are needed"

for talks to move on.

That border is

politically important.

But the two sides' economies

and citizens also depend

on goods flowing freely.

In 2015, that trade

was worth just over $4bn.

But there's financial

inter-dependence across Europe too.

Last year, the UK exchanged

about $730bn of goods and services

with the other 27 EU countries.

Joining me now from

Brussels is Paul Hofheinz,

President of the think-tank The

Lisbon Council.

Good to see you. Outlining some of

the issues there as far as what is

at stake and where agreement is

needed before talks can progress, we

believe there has been some sort of

progress as far as the divorce bill

is concerned but are we ready to

move on to the Nketiah stage?

--

next stage. All indications is there

is a deal, we won't know if there is

is a Pope or not until we see smoke!

You don't haul out of the machinery

unless you think you are going to

getten agreement. The Prime Minister

is here, the Irish Government met in

cabinet to talk over their part of

the equation, everyone is being

consulted and talked to, briefly, it

is only a deal to start the next

round of talks, which are going to

be equally complex and possibly even

more complicated and much more

important, the trade deal is going

to be the mother of all

negotiations, here and hopefully we

will be able to move on the that

later today.

We are just hearing on

the news agencies now, I mean we

have a statement here from Ireland's

European affairs minister, saying

that yes, we are hopeful a deal will

be done, but there is no agreement

yet. It is crucial that that

agreement is done particularly on

the Irish border issue before these

talks can progress.

Yes, that is

absolutely right. Burr the equally

interesting thing to me is look at

what is happening today. The Prime

Minister is here in Brussels,

talking about what is going on in

Ireland while the Irish Government

issues very important statements on

it. This is a sign to come and in

some ways of a sign where the work

remains to be done. No-one in the

European Union is going to get ahead

of the Irish Government on this.

There are very important

negotiations that will need to take

place over the Irish process, the

result at the end of the day will

have to be accept to believe the

Irish Government. The EU won't force

something on them. That will become

a very important issue going

forward. You see it today and

hopefully we have enough of a deal

to not stop all of the other

important parts of the package.

Is

there a danger all of the talks get

so bogged down in the two basic

issues that we don't make any

progress on the other stuff?

Well, I

would say yes there is danger, the

good news is everyone seems to have

a strong awareness of it. The

problem with the Irish issue is

there is no easy solution, it is

difficult to imagine what you could

put on tb table that everyone would

agree to, but I am telling you they

are working hard on that and

hopefully they come up with

something that fits the bill.

Paul

it is good to talk to you. Thank you

very much.

Thank you very much.

Let's take a look at some of

the other stories making the news.

The biggest corporate takeover

of the year looks likely

to happen in the US.

The retail chain CVS Health says

it's buying the country's third

biggest health insurer Aetna

in a deal valued at $77bn.

It's being seen as a pre-emptive

move to see off Amazon's impending

entry into selling medicines.

The White House could accept

a slightly higher corporate tax

rate in order to get

the reforms through Congress.

Budget chief Mick Mulvaney implied

it could agree to a 22% rate,

despite the Senate passing a 20%

rate on Saturday.

The bill still needs to be

reconciled with the House version

before President Trump can sign

the reforms into law.

Greece is looking to a meeting

of Eurozone finance ministers

in Brussels later to approve

the release of its

latest bailout funds.

An agreement was reached with the EU

and IMF over the weekend

for the almost $6bn loan.

Greece has been struggling for years

to restructure around

$350bn of public debt.

You may have noticed Ben's voice is

different. You need a hot toddy! It

is a good opportunity for you to

speak more. Let douse that now. Let

us look what the is going on in

business. We have the Business Live

page as ever looking at all the

stories breaking, we have Facebook,

you may remember some months ago

Facebook announcing it would have a

brand-new building full of new

employees in London, well today is

the day, they will open up this

building, so it is announced today

the new London office creating 800

new jobs in the UK. By the end of

next year 300,000 people will be

working for Facebook in the UK, so

that is among the stories on The

Bliefz page. We will stay with that

theme.

We will stay with that theme.

Australia has become the latest

country to ask if Google

and Facebook are too powerful

in the advertising world.

The competition regulator

is going to look into

whether they are damaging

traditional media such

as the country's struggling

newspaper industry.

Leisha Santorelli is in our Asia

business hub with the story.

All print media round the world have

the same issue, so what are the

Australian authorities hoping to

achieve?

Absolutely, I can't

remember the last time I saw a young

person pick up a newspaper, so as

you mentioned it is a global problem

but Australia is particularly

concentrated and so now they are

looking at the big tech companies

like Facebook and Google. They are

very powerful, so what they are

looking to find out is whether there

is a dark side to their power and

whether it has harmed the #3450ed

media industry be it is consumer or

publishers, this has to do with the

future of journalism and the quality

of news. In Australia many of the

newspaper, magazines and TV stations

they have been struggling with years

of falling advertising revenues and

this has translated into big job

cuts. The national media union says

round 2500 journalism jobs have been

lost in the past five years so

Australia's competition regulator

will look into these firms and

release a report by late next year.

We will watch this space with great

interest. Interesting to cover that

story.

January Japan is having a flat day.

Let us show you Europe, they are

having a bumper situation and this

is all in how Wall Street will start

trading. That is because basically,

the Senate passed tax cut

legislation late Saturday night

early Sunday morning, there is a bit

more do in terms of the politics of

this but it is another hurdle

overcome and there is great

anticipation of what this means for

corporate America, the world's

number one economy and therefore the

global economy. We will talk about

that in more detail in a moment but

first let us hear from Zoe Thomas

with more detail. US law makers are

expected to pass a short-term spend

businessman they to as the

Government runs out of money on

Friday. Both sides have express a

desire to avoid a Government shut

down. Democrats want to see

increases in immigration spending,

Republicans would like to see cuts

to health care subsidy, the Senate

banking committee votes on the

nomination of Jerome Powell to be

head of the organisation. He is

expected to take a similar line as

the Churnet chairman. The US labour

department releases job fig yours

for November. Analysts expect it to

show an up take in retail hiring.

Joining us is Jeremy Cook,

Chief Economist at World First.

That he are talking about 22%, that

could be a boost for US figures.

Trump wanted 15% so getting to 20%

is is a give away from his original

plan, 22%, I think he will deal on

it. He wants tax reform given the

fact none of his plans round the

wall or Obamacare have to come to

pass this the first thing gets over

the line, the reason why European

stocks are so high and obviously

everyone is watching to see the what

the dough and SNP doing a lot of the

tax cut is focussed on corporate

America, the executives who run the

businesses and how much Monday will

be repatriated into the US as a

result of tax cuts on profits

elsewhere.

We will talk about that

later because there is interesting

stuff in the press about whether

that will feed through to the create

jobs and prosper any the places that

need it. What else are you watching

in terms of news or this week in

Europe?

, there is so such thing as

a free lunch. This is an important

lunch between the Prime Minister and

obviously Jean-Claude Juncker in

Brussels, talking about the Irish

issue. It is front and centre of

Brexit now, and it is definitely the

line that needs...

Are we seeing the

impact on the pound? It was very

sensitive last week as different

bits of so-called breakthroughs were

filtering through.

Pound traders

have got board of breakthrough, we

need new, that the EU Commission

meeting where we can talk about

trade is next Thursday, Friday, so

it will remain volatile into that,

but obviously, the weight of

expectation is towards some form of

resolution, any disappointment in

the recent sterling strength will

fall apart quickly.

Thank you for

now. We will talk later about some

of the paper stories. See you soon.

We will immediate meet the man who

thinks he has found and alternative

to paying badge fee, you pay him to

take them to your destination. Stay

tuned. You are with Business Live.

Britain's biggest business group has

warned that growth will be subdued

for the next couple of years.

That's despite strong global growth.

Joining us now is Rain Newton-Smith,

Chief Economist at the Confederation

of British Industry.

Rain, talk us through this forecast,

it is a mixed picture isn't it?

Yes,

so what we see in the UK economy is

steady but subdued growth over the

next couple of years, with growth of

round 1.5%, drifting down slowly to

1.3% in 2019. And the story behind

that is we see high inflation of

round 3%, a peak of about 3% this

year, that is eating into household

budgets, in real terms and making

it, so what we are seeing as a

slowing in household spending, on

the high street, on going out and

other consumer services. And at the

same time, the fog of uncertainty

round Brexit is leading to more

subdued growth in business

investment over the next couple of

years.

As you just said there, how hold

spending is played an important role

in the last year or so, but what

about looking ahead, to what extent

will household spending boost growth

here?

So it is important to remember

that we still expect the economy to

grow, we still expect households to

spend but it is just at a softer

pace than what we have seen over the

past couple of years, so we expect

to see consumption growth slowing to

1% per year, so that main engine of

the UK economy, just has its foot

off the gas at the minute. We are

seeing that shifting down in gear,

in growth across the UK.

Some businesses have done well out

of the weak pound?

So, it is true,

one of the things that will be

boosting the economy over the next

couple of years is net trade, so the

weaker sterling is supporting our

manufacturers, it is making our

exports more competitive and it is

also really important to remember

the global economy is doing really

wet at the moment. That is providing

a boost to our exports so that will

be one of the engines of growth in

the economy. But it is set against

the weaker picture on cost stick

demand so household spending and

business investment.

Thank you very much.

Let's mention a couple of movers on

the FTSE 100. Rio Tinto shares doing

well on the news of a new chairman,

Simon Thompson. Sky's shares up 2%

as well.

You're watching Business Live.

Our top story:

Everyone is keeping a close eye on

UK Prime Minister, Theresa May, as

she heads to Brussels for crucial

Brexit negotiations.

Talks over the border

with Ireland could be

on the verge of a breakthrough.

The talks can't progress until the

issue of the Irish border is

resolved and the so-called divorce

bill from the European Union.

A quick look at how

markets are faring.

The pound is in the spotlight as far

as the negotiations are concerned.

You get to the airport and your bags

are heavier than they should be and

they are tipping the scale and it is

quite expensive. Or you have to pack

them in the queue.

Last year, US airlines

alone collected $4.2

billion in baggage fees.

That's 2.5% of their revenue!

And the baggage fees

were the highest area of profit

growth, increasing 10%

compared to 2015.

That's while ticket prices

only went up by 1%.

So, no wonder it may

seem like a good idea

to send your bags along separately,

something our next guest has

turned into a business.

Adam Ewart is founder

of Send My Bag.

Good morning.

Good morning.

So, Adam

tell us how this started. Your

girlfriend was coming home from uni

and had a lot of bags and you came

up with a solution?

Yes, just like

yourself, I got hit with excess

baggage fees. I had another business

at the time where we were

transporting musical instruments

around the world. We got charged

£50. After dragging them on and off

the coach and getting to the

airport, I thought it is ridiculous.

I jotted down the back of an airline

napkin a couple of brand names that

I thought could work if indeed,

there want something already out

there. I went home. I looked online

to see if there was something. There

wasn't. I set-up Send My Bag.com and

started off for my girlfriend. Got a

little bit of press around it. It

only cost £100 to set-up. The first

website, I am not a technical

person, the first page was an e-mail

contact us page and it worked and

the figures that you have quoted £4

billion in excess fee ins 2007, that

was only £400 million. So, the

airlines have been going for baggage

over the last ten years as they have

looked for new areas. So we have

just gone with the market and

launched new services and knew

routes along the way.

What do you

charge?

£16 within the UK. £25 to

£30 within Europe and services

around the world, we have an

American service which is popular

which is $99.

How does the bag get

there? Does it go on the same plane?

No, a different plane. We will

collect your bag before you travel

and have it waiting for you when you

get there. We work with major

logistics partners so your bag is

safe and secure with us. We

delivered 200,000 bags last year,

the airlines mishanded 22 million

and lost 1 million.

How many do you

lose?

No, we give you a sturdy

plastic holder so you loop through

two cable ties and they don't come

off. We will give you one of those,

we are not using a sticky-backed

piece of paper that can peel away

when 2 gets caught.

You are talking

about your costs of the bags, £25 in

Europe, isn't it less than if you

put a bag in the hold with a

low-cost carrier, so therefore, why

would I choose this extra log scale

idea that could cause more headaches

if it is not where I want it to be

when I want to be. At least it is on

the plane with me, you have got a

sense that it will arrive when I

arrive?

That probably is more of a

sense than a guarantee. If you are

on the plane and you think my bag is

safely under me, maybe, it is not,

maybe it is whipping its way around

the airport. So, with Send My Bag it

was set-up to solve a problem. So I

didn't think this is a good idea,

let's see if people want it. It was

set-up of the back of a problem. As

the airlines increased their prices

people go, I hate waiting for 55

minute in Gatwick when you have got

off a plane with two small children

is not fun. Maybe you are travelling

from the Middle East and Emirates

charge you $700, that's designed to

not bring that second bag. It is a

wide range of people that turned to

the service.

Who is your typical

customer? It strikes me that it is

only people sending two or three

bags. If it is just one bag you

might as well pay to put it on the

plane, but if it's two or three,

people travelling with a lot of

stuff might benefit?

We started off

for the student market. A lot of

that was about the excess factor.

Although you are travelling with one

bag if you end up five kilos with

Ryanair, you end up paying them

twice. If you are a student arriving

in Paris and you have to go to the

Paris Metro with a large suitcase,

that's not fun. When you move into

our international routes, if you are

travelling to New York, you would

think, why would I pay for a bag

when off free check bag with the

airline, but it moves into the

convenience factor for people. So

you can sweep straight through

check-in and a major market for us

is the south connecting market.

There is 50 million flights where

people book their own connections

and if you have to get your bag and

check it, re-check it and look at

the hassle that went on in the

Schengen zone during the summer if

you have to check it to a legacy

carrier to go to New York or

wherever you're going, that's a lot

of hassle.

You are a great example

of someone who encountered a problem

and created a business to solve it.

What advice would you have to

someone who wants to do the same?

Don't let anything set you back.

Give it a go. Actually try to make

money. Set-up with as low-costs as

possible. Don't go asking everybody

else for money. Do it yourself. I

wouldn't want to invest in somebody

unless they said, "I have made

money." Or acquired users. You have

to go for it, there is a reliance on

everyone going, "I have a start up.

Let's pitch it." Do something

yourself and if you need more

funding, go and get it.

Very

interesting. And Adam married the

girlfriend too! Just a little bit of

extra information. You see. It all

worked out in the end!

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.

Stay up-to-date with the day's

business news as it happens on the

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And we want to hear from you, too.

Get involved on the BBC business

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Business Live on TV and online,

whenever you need to know.

Jeremy Cook joins us again.

He will talk about the stories in

the press. We've mentioned Brexit.

We talked about it a lot already.

Let's talk about the Bitcoin

billionaires.

Yes.

Jeremy, gritted,

through gritted teeth, tell us what

this story is about.

Two people who

maybe familiar to a fair few viewers

around their investments or certain

investment in Facebook and they had

a lawsuit against mark Zuckerberg.

They put $11 million into Bitcoin

back in 2010, I think, it was and

now according to the figures, the

rise, they are now the first Bitcoin

billionaires. Hopefully...

Multibillionaires.

Hopefully they

can buy themselves nicer jumpers. I

am not a great fan of a button up

cardigan.

This is multibillionaires

on paper unless they can realise it

in real money, that's the question,

isn't it?

The reason Bitcoin is

volatile because it is so liquid.

There is so little out there to be

able it trade. You see big, big

swings on it on a day by day basis

hence why it is up 10,000%. If the

confidence goes away, there is no

reason why if it is worth 10,000 or

$11,000 today for a single Bitcoin

why it can't be worth $10 or $11 in

the next week and therefore their

billionaire story evaporates.

There

is a lot of excitement about the US

tax reform. There is an article

about how a company plans to spend

its tax cut money?

This is the thing

about the trickle down as some

people would call it around what

happens with the tax cuts. They give

it to the businesses, but how does

the business spend it? Donchts they

spend it on infrastructure or

investing to as some pharmaceutical

companies said, you know, what we

are not going to pay our workers

anymore. We will give it back to the

shareholders and give it back in

share bite backs. That happened a

lot through the global financial

crisis and you know if this

continues it won't help the economy

at all.

Jeremy, thank you very much. Thank

you. You did well.

I survived. I got

through it.

Without a