:00:03. > :00:13.have been killed. Those are the headlines. Now for
:00:13. > :00:14.
:00:14. > :00:20.the latest financial news with Sally.
:00:20. > :00:24.Welcome to World Business Report. The headlines: Barclays is said to
:00:24. > :00:29.be accused of abusive practices costing the taxpayer half-a-
:00:29. > :00:38.million pounds. Will Portugal get the next slice of
:00:38. > :00:48.its much needed bail-out? The inspectors will give their verdict.
:00:48. > :00:54.
:00:54. > :00:58.Stock price plunges by 5%. The UK bank Barclays has been
:00:58. > :01:02.accused of designing and using two schemes to enable it to avoid
:01:02. > :01:06.paying �0.5 billion in tax. The tax avoidance schemes have been
:01:06. > :01:10.described as highly abusive. The Government yesterday announced
:01:10. > :01:15.draft legislation to block them and sake but payments of billions of
:01:15. > :01:18.pounds in future taxes. All Britain's big banks have signed the
:01:19. > :01:22.code committing them not to engage in tax avoidance. Barclays has not
:01:22. > :01:26.been officially named yet, but the BBC has approached the bank for
:01:26. > :01:33.comments and there has been no response from them so far. I am
:01:33. > :01:37.joined by an the season City watcher to give us his take on this
:01:37. > :01:41.story. Embarrassing headlines for Barclays. We must say at this point
:01:41. > :01:45.back that tax a point since -- avoidance is not illegal in the UK
:01:45. > :01:52.but there is a code of conduct. All of the UK banks have signed up
:01:52. > :01:58.to that. I sense, though, that this is perhaps a story of a bank,
:01:58. > :02:03.suggested it to be Barclays, going to Robinho and saying, what is your
:02:03. > :02:10.view on this scheme and this game? -- revenue. It may be that the
:02:10. > :02:13.Treasury has jumped on it and said that the bank in question is
:02:13. > :02:17.attempting a tax avoidance scheme, which of course it has committed
:02:17. > :02:23.not to do. We need to get to the bottom of this. We need as -- we
:02:24. > :02:28.need statements from all of the individuals concerned. It is
:02:28. > :02:35.interesting. The language coming from the Treasury is quite strong.
:02:35. > :02:40.Highly abusive schemes. It just underlines the sort of difficulty
:02:40. > :02:45.between the banks and the UK Government. Absolutely. The problem
:02:45. > :02:50.is, you might be throwing the baby out with the bathwater. All of the
:02:50. > :02:53.banks are important to the UK economy. The Treasury is supporting
:02:53. > :02:58.the Government in whatever the Government is trying to do. There
:02:58. > :03:02.is a political element as well. The Government wants to see, wants to
:03:02. > :03:07.show that it is doing everything possible to make sure that all tax
:03:07. > :03:13.avoidance schemes are made illegal. It is perfectly correct to do that.
:03:13. > :03:16.We have to be very careful in accusing fingers when it is
:03:16. > :03:20.possible that the situation is that somebody is going to the Treasury
:03:20. > :03:30.and saying, what is your view on this scheme? We shall watch this
:03:30. > :03:32.
:03:32. > :03:36.space. No doubt Barclays will respond later. Thank you.
:03:36. > :03:40.Let's move on to Portugal. It will find out today whether it has
:03:41. > :03:44.passed the latest test of its main international backers. The country
:03:44. > :03:49.that was given back bail-out less than one year ago has made deep
:03:49. > :03:53.spending cuts and introduced reforms. The European Union,
:03:53. > :03:57.European Central Bank, and International Monetary Fund will
:03:57. > :04:03.release their results on the third review of Portugal's progress this
:04:03. > :04:07.morning. It is likely to approve the next slice of the bail-out
:04:07. > :04:11.worth 14 billion euros. Let's go live to Brussels. We will speak to
:04:11. > :04:16.a Portuguese Economist and former MEP for the Portuguese Socialist
:04:16. > :04:24.Party. I presume you are with that belief, that you'll get the extra
:04:24. > :04:32.funding today? Good morning. I think so. All of the indications
:04:32. > :04:36.are that the troika will agree to have this second part of the loan
:04:36. > :04:46.being available to the Portuguese authorities. But I do think that
:04:46. > :04:48.
:04:48. > :04:52.the main issues are still in front of us. I do not see that Portugal
:04:52. > :04:57.and the whole of the European periphery will make it is there is
:04:57. > :05:03.not economic development in the rest of Europe, it there is not a
:05:03. > :05:10.motor. This is the main issue. The second issue is the interest rates.
:05:10. > :05:16.They are far too high. We are not offered nothing like the 1% that
:05:16. > :05:23.the ECB is using in its operation. Something more like five or 6%.
:05:23. > :05:30.This does not seem compatible with a full recovery. These two issues
:05:30. > :05:34.really remain on the table as the main problems. How can they be
:05:34. > :05:38.tackled specifically? As you say, they are tricky ones to do and
:05:38. > :05:44.there is a lot of goodwill for Portugal. There has been a lot of
:05:44. > :05:53.change there, deals done with unions, cost cutting. Those in the
:05:53. > :06:03.public sector have taken a big hit. This is necessary, but it is not
:06:03. > :06:07.
:06:07. > :06:15.sufficient. David Cameron had a good idea when he decided to launch
:06:15. > :06:20.his letter. This is absolutely crucial. We need countries like
:06:20. > :06:27.Germany. We need the motors of the European economy. If they do so,
:06:27. > :06:35.they will help enormously. Coupled with austerity in Portugal and in
:06:35. > :06:42.other countries they will be able to get back on their feet again.
:06:42. > :06:46.The issue of the interest rates is also very important. The German
:06:46. > :06:55.Chancellor did not want to discuss this issue at the last summer. I
:06:55. > :07:00.think that sooner or later she will have to. -- the last summit. We
:07:00. > :07:07.cannot continue in this situation with the lack of economic growth.
:07:07. > :07:14.We cannot have a country like Portugal paying such a high
:07:14. > :07:18.interest rates. Sepoy. The closely watched housing index
:07:18. > :07:22.in the US is expected to show a continued slide in the value of
:07:22. > :07:26.homes in America. Despite recent gains in the number of home sales
:07:26. > :07:30.and in employment at the market remains depressed and for the first
:07:30. > :07:37.time American's wealthiest are losing their hives at a faster rate
:07:37. > :07:44.than any other group. 100 miles east of Manhattan is the swanky
:07:44. > :07:48.seaside resort of the Hamptons. nice for you, very large. A wealthy
:07:48. > :07:52.enclave often tied to Wall Street bonuses, there has been a quiet
:07:52. > :07:57.surge in distressed properties here. These real-estate agent says the
:07:57. > :08:04.owners of this house have to sell to satisfy their bank lines. It has
:08:04. > :08:09.been on the market for about five years. We started out and $6
:08:09. > :08:13.million. Now we're at $3.2 million. The number of unsold homes in the
:08:13. > :08:18.Hamptons has hit a 30-year high. Prices have plummeted and there are
:08:18. > :08:23.more than 1,000 houses were more than $1 million in distress. This
:08:23. > :08:28.huge house in the Hamptons is worth about half what it was just five
:08:28. > :08:32.years ago. It is one of dozens of houses in the glamorous Hamptons
:08:32. > :08:37.location that I'm now distressed pr prIt could take many
:08:37. > :08:41.years to work through this area's housing problems.
:08:41. > :08:46.Japan's last remaining maker of chips the PCTs has filed for
:08:46. > :08:56.bankruptcy protection. The news sparked profit-taking on the
:08:56. > :08:58.
:08:58. > :09:04.markets. -- for PCs. The share price today it dropped by
:09:04. > :09:10.24% with more sellers now on the sidelines waiting to unload. Its
:09:11. > :09:17.supplies are also affected. Amid the sell-off investors are seizing
:09:17. > :09:26.opportunities with competitors market share from one mess
:09:26. > :09:30.competitor. Media reports say it is seeking an alliance with other
:09:30. > :09:39.companies. The downfall is due to heavy spending to keep faith with
:09:39. > :09:43.market leaders. This could be the end of the company. But bits of
:09:43. > :09:50.pieces of it could be purchased by other chip makers around the world.