30/01/2018 BBC Business Live

Live from London, that's our top

story on Tuesday 30th January.

The internal document

points to a slowdown

in growth over the long-term,

but government ministers have been

quick to criticise

the nature of the leak.

Is the honeymoon

over for cryptocurrencies?

South Korea introduces a ban

on anonymous trading -

but will others follow suit?

And ahead of a Fed meeting and rate

setting decision later

and the anticipation

of President Trump's first State

of the Union address -

markets look like this...

Tackling the turbulence -

the president of Emirates tells us

how he's plotting a course

for clearer skies after a tough 18

months for the Middle

East's biggest airline.

And staying with airlines,

the boss of Easyjet says he'll

cut his salary to match that

of his predecessor.

So today we want to know,

would you reduce your pay

to the same as a colleague?

Let us know.

Just use the hashtag #BBCBizLive.

Hello and welcome to Business Live.

The UK economy will grow more slowly

outside the European Union

no matter what deal is struck

with Brussels, a leaked

government document suggests.

The BuzzFeed news website

reports that Whitehall

analysis found that growth

over the next 15 years could be up

to 8% lower than if the UK

stayed in the EU.

Government sources say the UK

will not be worse off,

and its preferred bespoke trade deal

option was not analysed

in these figures.

We're joined by our economics

correspondent Andrew Walker.

What

correspondent Andrew Walker.

What does

correspondent Andrew Walker.

What does it

correspondent Andrew Walker.

What does it tell

correspondent Andrew Walker.

What does it tell us,

correspondent Andrew Walker.

What does it tell us, if

correspondent Andrew Walker.

What does it tell us, if anything?

correspondent Andrew Walker.

What does it tell us, if anything?

Well, it's looking at how the

economy would perform under three

different scenarios compared with

what we currently have. So it's not

making a specific forecast that the

economy will grow by so much over

the next 15 years, but that it will

be less than it would otherwise have

been by a certain amount. Those

figures are 8% less cumulative

economic growth if we were to go out

on what is sometimes called WTO

terms, so with no trade deal, 5%

less if it were a comprehensive free

trade agreement with the European

Union, 2% less if the UK were to

remain in the single market but

having left the customs union. It

must be said that inevitably, when

you are looking over economic

projections over such a long period,

there is an enormous amount of

uncertainty associated with them and

of course, Brexit supporting MPs

have been quick to point that out.

Iain Duncan Smith has said this is a

highly speculative assessment which

needs to be taken with a pinch of

salt. He suggests that it has been

leaked deliberately to feed into the

political debate.

Downing Street

says their preferred option has not

been included in this analysis, but

people watching this will say, we

were told that there was no

analysis, the Downing Street wasn't

going to do an analysis, and

actually, there is. What's going on?

The analysis argument was about the

suggestion that there were detailed

impact assessments, sector by

sector, in what was called painful

detail. From what we have seen so

far from these Buzzfeed links, this

doesn't go into that kind of level,

it is broadbrush assessments of the

overall impact. It would be very

surprising if the government were

not having at least some sort of

broad indication of what we could

expect under the various scenarios.

Your point about the timing is

interesting as well, Iain Duncan

Smith pointing out that there are

said to be quite a bit of turmoil

within the Conservative Party at

senior levels with regards to

Brexit, how it is being handled,

where the negotiation process is

being headed, hard, soft and

whatever is in between.

Mr Duncan

Smith is not saying anything

explicit about who he thinks is

responsible for the leak, but some

sources are saying that the

imprecations of this are favourable

to the Philip Hammond view of the

world, the Chancellor's view, that

the UK economy would be better off

maintaining its position as close as

possible to the EU and the single

market.

And whilst we will look at

these forecasts and what they mean

for business, one of the big

retailers in the UK this morning,

House of Fraser, has been saying, we

want a definite signal about what

kind of Brexit deal we are having.

Business wants to know what the deal

will be and then they can plan.

Yes,

indeed. And the fact that we have

this analysis looking at such a wide

range of potential outcomes is

indicative of the fact that they

will probably have to live with a

certain amount of uncertainty for

some time yet. It perhaps would have

been useful if this analysis had

contained some assessment of what

the government's preferred option

is. This idea of the comprehensive

trade deal to include financial

trade services, one assumes it would

come somewhere between the two

figures of 2% for being in the

single market and the 5% for a

comprehensive trade deal. That is

what the government is probably

aiming at, but Brexit supporters of

course reckon they can do better

than these figures suggest.

We will

keep an eye on it.

Let's take a look at some of

the other stories making the news.

US soft drink maker

Dr Pepper Snapple is to merge

with coffee company Keurig Green

Mountain.

The deal will bring together

well-known brands such as Dr Pepper,

Orangina, Schweppes and Sunkist

with Green Mountain Coffee Roasters.

Keurig Dr Pepper will have

a combined annual revenue of $11bn.

Oil giant Exxon Mobil plans to spend

$50 billion in the US over

the next five years.

More than $35 billion

of that is for new projects.

Exxon's Chief Executive said

the investment is partly due to cuts

to the corporate tax rate.

Nissan car sales hit

a record high in 2017.

It helped the wider group to become

the best selling car

manufacturer of the year.

Total sales came in at 10.6

million light vehicles.

The group beat Volkwagen and Toyota,

which came in second and third

for the year respectively.

Not a day goes by without

a headline about so-called

cryptocurrencies.

Today, a ban on anonymous

cryptocurrency transactions comes

into effect in South Korea.

From now on, only accounts linked

to a verified bank account will be

allowed to buy and sell Bitcoins.

This is all in the name

of transparency.

The South Korean government wants

to cut down on any illegal

activity that could be

going on because of

the anonymous nature

of cryptocurrency transactions.

You may remember the

WannaCry attack last year

that affected hundreds of thousands

of people in 150 countries -

and asked for ransom

to be paid in Bitcoin.

That kind of negative publicity has

helped to shape opinion.

Earlier in January, two exchanges -

Bithumb and Coin-one -

were raided by South Korean tax

authorities over concerns that not

everyone is paying their fair share.

And just last week in Japan,

one of the world's biggest

cryptocurrency heists took place.

Simon Taylor is the co-founder

of 11fs, a consultancy

which advises banks

and governments on

the future of money.

So Ben was talking

the future of money.

So Ben was talking about

the future of money.

So Ben was talking about some

the future of money.

So Ben was talking about some of

the future of money.

So Ben was talking about some of the

the future of money.

So Ben was talking about some of the

stories that have come into the

limelight, a lot of it painting a

picture that this is a murky world

of crypto currencies. South Korea

has taken steps to regulate it. What

are your thoughts about what South

Korea has decided to do?

It is

sensible. The big concern around

crypto currencies has been the

unlimited. Governments are rightly

concerned about fraud and terrorist

financing, scary things. People

could lose a lot of money. People

are losing a lot of money. People

have taken out debt and mortgages to

buy cryptocurrencies, which are

highly volatile. So the need for

transparency and protection makes

sense, but there is a balance here

that needs to be struck, because if

we overregulate, with potentially

push this further underground.

But

why do the transactions need to be

anonymous anyway?

Because all of the

transactions are out in public, they

are transparent.

But we don't know

who is making the payments.

If you

bought a coffee this morning on the

way in and you got the train you get

every day, I only need two or three

transactions to figure out who you

are. So it's easy for me to break

your privacy if all of your

transactions are in the public,

especially if your name is attached.

So there was a concern early on with

the technology that we wanted to

maintain privacy, but in doing so

you also create a problem about,

what of that person commits a crime.

So now we have exchanges where you

would take your pounds or dollars or

Euros and exchange those for your

crypto currencies. They have your

passport and your identity. So the

South Koreans have that, if you have

this identity information, if that

person commits a crime, you should

share that information with the

regulators and you shouldn't allow

somebody to be anonymous in the

first place.

Isn't the entire point

of cryptocurrencies the fact that

they are not regulated by the old

institutions, the banks with

regulators and shareholders, and the

fact that they are not constrained

by that? So saying you have to link

it with a bank account defeats the

object.

The key is balance. How we

balanced the possibility of not

being part of the system and

creating efficiency and

transparency, which are the benefits

of the technology, with the

opportunities that if you bring in

too much control, you may push this

underground?

Thank you for coming

in. Cryptocurrencies and Brexit sums

us up. They are a daily event. Let's

move onto something else that is a

regular event on this show, ride

sharing apps.

Ola - India's ride-sharing company -

is moving in to the Australian

market in its first international

venture.

The Australian taxi app industry

is currently dominated by Uber,

Ola's biggest rival in India.

Devina Gupta is live in Delhi

and can tell us more.

It is such a competitive market and

they are all vying for a share. Who

is going to win?

Well, we are

looking at a tough competition and

it has been a tough market in India

as well with Ola and Uber competing.

Ola hopes to expand in Australia,

which is Uber's turf. We have also

seen that Ola is now inviting

private hire vehicle owners to

register with them. It brings in

experience of being in the Indian

market, where it is known for

experimenting with electric vehicles

and also with a system called Ola

play, which is on wide entertainment

and popular with its 200

million-plus customers in India.

Interestingly, both Ola and Uber

have a single investor in the

Japanese Softbank and they would be

competing in conditions which are

quite different from India. But in

Australia, there would be more

competition for Ola from European

taxi apps as well and the home-grown

Australian competition as well.

We

have now got Remi Olu-Pitan with us.

She is the fund manager at

Schroders. Another busy day. We have

two mentioned the Fed. The last

meeting was presided over by Janet

Yellen, the Fed chair. What are your

expectations?

We expect the Fed to

say that the economy is doing OK and

that the path of tightening interest

rates will be maintained. Janet

Yellen's term has been successful.

And as she hands over her role, we

expect to say that the Fed will

remain on course.

Speaking of

announcements, it is also President

Trump's first State of the union

address. What are we expecting him

to say?

We expect him to say that he

has been making America great again.

And that that will continue. He will

elaborate on the Trump effect. We

expect him to announce some form of

infrastructure spending. We expect

him to say that the tax cut if

successful and companies are

increasing wages. So we expect a

positive story. The only caution is

whether he announces anything around

trade policy, any protectionist

agenda.

In the meantime, stock

markets are pretty negative. We had

a torrid time on Wall Street. Asia

was all red. Your thoughts?

In the

grand scheme of things, it has been

a great start to the year. There has

been a bit of red, but it has been a

strong start. So it is reasonable to

expect a bit of a pull-back.

Overall, the backdrop is still

supported. Corporate earnings are

strong, so we expect the market to

continue to climb higher.

We are

going to talk about Amazon go and

that supermarket later and whether

it is too easy to shoplift. And too

easy to spend! Let's move on.

Still to come:

Is the worst of the turbulence over

for the Gulf's biggest airlines?

We sit down with the boss

of Emirates about the airline's

plans to tackle tougher times.

You're with Business

Live from BBC News.

In a few hours, the government

will launch an inquiry

into construction giant Carillion,

which collapsed two weeks ago,

putting thousands of jobs at risk.

Joining us now to talk

about this is Lord Maude,

former minister for Business,

Innovation and Skills.

Welcome to Business Live. Good

morning to you.

Good morning.

There

are so many elements to this

collapse of Carillion. It is hard to

know where the Government start to

investigate.

Clearly they need to

understand what went wrong. I was

the minister responsible for the

efficiency programme where we took

£50 billion out of the overhead

running costs of government in the

space of five years. One of the

things we did was to look at how we

did government procurement and it

was almost as if that at that stage

procurement was being done in a way

to freeze out small supplies making

the Government reliant on a handful

of big suppliers. They used to do

you have got to show three years

accounts and insurance in place to

cover the last of the liability

under a contract before you bid for

the contract. So, a hole lot of

things like that which were counter

productive and gave far too much

power to a handful of big suppliers

and we reformed that in the space of

five years in a way that did give a

lot of support to UK-based smaller

suppliers who found themselves in

many cases for the first time able

to bid for and win government

contracts.

Briefly, how

comprehensive will this

investigation be and will it be one

that people will believe in?

I hope

so. It will to be comprehensive and

look at everything. It will not

avoid the fact that businesses,

sometimes fail. That is a fact of

life whether the Government is

counter party or not. Sometimes

businesses are not well run and

sometimes external events move

against them in a way that makes

them unsustainable. It will need to

look at what happened here, but the

one thing, I would be concerned

about, was we have set in place a

system where the Government had

Crown representatives senior figures

who spent a bit of time dealing

specifically with suppliers and that

post was left unfilled I'm told.

Thank you for your time on Business

Live.

No matter what deal is struck with

Brussels. The document was leaked to

BuzzFeed. It says that in a period

of the next 15 years, growth could

be as low as 8% or 8% lower if the

UK stayed in the European Union. It

is 8% lower than if it was trading

at WTO rules. The Government makes

it clear, they say this analysis

does not take into account the

Brexit option that it prefers, but

nonetheless, concerns too about

whether that stewedy shows the fate

of the UK economy after Brexit.

The past decade has been good

to Middle Eastern Airlines,

particularly those in the Gulf.

They've been the biggest

buyers of new planes,

they've been building bigger

and bigger airports and passenger

numbers have soared.

But the last 18 months

have been much tougher -

blamed on economic uncertainty

and worries over security

and global terrorism.

And also some frOksist actions in

the US.

-- protectionist actions in the US.

The biggest airline

in the region is Emirates.

It's based in Dubai -

and operates more than

3,600 flights a week.

Those flights go to more than 150

destinations around the globe.

And last year they carried more

than 59 million passengers.

I caught up with company's

President, Sir Tim

Clark in Los Angeles.

And I stared asking him how

the firm has been coping

with the problems of the past year.

I used to tell the team we probably

have two major events that are going

to affect us. Having five, six,

seven or eight in six months is

difficult. I think we learn from

what happens. We learn about how we

went about managing the issue, how

we managed to transform certain

elements of the business to deal

with it and the more you do that,

the more capable you are when things

come along. You never know what

they're going to be. We moved

quickly on the laptop ban. It took

us four days to get the company's

procedures and protocols so we could

deal with that. We introduced

technology into the company so we're

stripping out layers of process and

dare I say, people in that context,

but you know, it goes on. This is a

continuation of addressing the

business, the various pockets, the

corners, every part of the business

is under the microscope.

One of the

things that people will notice are

the most visible changes for example

starting to charge to book a seat in

Emirates economy. Do you worry that

that changes the brand? It changes

it into a low-cost model?

Now, it's

clear to us that the price sensitive

nature of our markets is becoming

more and more apparent and that

assisted by the onset of the digital

world in terms of the BTC reach

through airline online systems and

also booking and search engines, I

can name a few, that are there and

place prices in front of consumers

more and more. Far more than ever

before and the consumer is becoming

far more price sensitive and far

more discerning and in that context,

we found that people are prepared to

go for the lowest price, but they

would like a menu of things to

select so if they want seat

selections, they want better food

and whatever it maybe, more baggage,

etcetera, they're prepared to pay it

with an uplift through the ancillary

stream.

Emirates always put the on

board product front and centre of

what it offers. It is not just an

airline. It is everything that goes

with it. If it becomes all about

price, be that the price

transparency on flight website and

the number, do you lose that thing

that you have had for so long?

We

must deliver what we have done in

the past, create the aspirations

through the brand marketing

programme and deliver the

aspirations and better and somehow

we have got to be able to do that

cheaper and I believe we can and

that requires in the next few years

a fundamental change in approach to

the manufacturers of our aero

planes, the interior, the

distribution systems themselves. We

have to go after that and the secret

of this is the way we apply digital

technologies to all of this.

Technology absolutely changes the

experience that passengers have on a

flight, be that the TV, be that the

wi-fi, be that the seat. What's the

biggest change for you?

We have been

the pioneers, path finders in a lot

of what's gone on in the last few

years. For instance, you know, TVs

in all seats in all classes, we were

the first to do that back in the

early 90s and as we've gone on we've

pushed the manufacturers to increase

content and increase their

technological aspects of screens,

touch-screen, etcetera, the size of

the servers, how much we can deliver

and more recently, the advent of

wi-fi and bringing in the internet

into the aircraft.

What is it that

passengers tell you they want most

on planes?

Connectivity. Once we

crack that, and the smartphone came

along and the ability and

connectivity became the sort of

ruling mantra, call it what you like

of mankind, so we had to transfer

that into the aeroplanes.

That was Sir Tim Clark Speaking to

me there.

Ryanair told us it has agreed to

recognise a union that represents

its pilots. It hasn't recognised

them in a union. They said they

would do that in a bid to avert the

strikes over Christmas. They have

signed on the dotted line. They will

recognise the unions.

Remi is back to look

through the papers.

It is a BBC debate today as well,

about the pay and equality between

men and women, but the new boss of

easyJet saying he will take a pay

cut to match that of his

predecessor.

That's noble. That's a

5% cut in his pay, a reduction of

about £34,000. That's meaningful and

that's quite good particularly given

that his predecessor was very

credible lady. So it makes a lot of

sense.

Just to say as well, to put

it into prospective, both the new

boss of easyJet and Caroline McCall,

the previous boss were both earning

over £700,000 per year in excess of

that. So that's where we are.

Yes.

A

lot of you getting in touch. It

reflects your point Reme. Colin

says, "No, give them a pay rise to

match." Peter says, "I don't earn

enough to take a pay cut." Joe says,

"Increase my colleagues, but decease

mine."

That's a good idea so the

average of both previous salaries,

many of you have noted that actually

you don't earn enough to be taking a

pay cut and you can understand that

viewpoint, can't you, Reme?

I think

that's reasonable. I think most the

most important thing here is it has

to be fair. So the previous pay, if

it is clearly unfair, the reason for

the gap, that's what is most

important. There has to be some

level of unfairness.

Reme, nice to

see you. Thank you for your

comments. We will see you