:00:01. > :00:11.BBC World News. Now for the latest financial news
:00:11. > :00:23.
:00:23. > :00:26.Hello. This is World Business Report. The headlines: US
:00:26. > :00:31.politicians step back from the fiscal cliff and put in measures to
:00:31. > :00:41.deal with the budget crisis. And Asian shares she -- hit five-
:00:41. > :00:52.
:00:52. > :00:55.month highs. And WPP returns its headquarters to London.
:00:56. > :01:02.The US House of Representatives has backed a deal to end America's
:01:02. > :01:05.immediate budget crisis. The Bill includes higher taxes for
:01:05. > :01:10.households households ore than $450,000 a year but delays cuts to
:01:10. > :01:13.government spending for two months. The Senate has already passed the
:01:13. > :01:18.Bill but a number of House Republicans had been trying to
:01:18. > :01:28.amend it, to include new spending cuts. President Obama welcomed the
:01:28. > :01:31.outcome of the vote. Under this law, more than 98% of
:01:31. > :01:36.Americans and 97% of small businesses will not see their
:01:36. > :01:40.income taxes go up. Millions of families will continue to receive
:01:40. > :01:44.tax breaks to help raise their kids and send them to college. Companies
:01:45. > :01:50.will receive tax credits for research and the investments they
:01:50. > :01:53.make and the clean energy jobs they create.
:01:53. > :01:58.Michelle Fleury has been up all night watching events on Capitol
:01:58. > :02:03.Hill. She joins us from our New York bureau. Good to see you. We
:02:03. > :02:09.have a bit of a snapshot of what he had to say. had to say. this
:02:09. > :02:13.new Finance Bill. What we saw his the House Republicans essentially
:02:14. > :02:18.holding their noses and passing this deal through. About one-third
:02:18. > :02:24.of them voted in favour of it, along with Democrats. That was
:02:24. > :02:30.enough to get it through and they detain law that can be signed... An
:02:30. > :02:39.act that can be signed into law by the President. It raises the taxes
:02:39. > :02:45.$450,000 $450,000 a year. It also means that,
:02:45. > :02:50.for many unemployed Americans who are worried that their benefits
:02:51. > :02:55.might dry up, they will still be able to collect that. And there
:02:55. > :03:03.will be changes to inheritance tax and how much tax people have to pay
:03:03. > :03:07.on dividends, capital gains tax. Some big changes. The fiscal cliff
:03:07. > :03:12.averted. More of a slope, less of a cliff. And it finally got done if
:03:12. > :03:16.you like in the final award before the business day resumes in America.
:03:16. > :03:23.But it's a short-term fix and the battle will return in February,
:03:23. > :03:27.about debt limits? That is right. There are a couple of things you
:03:27. > :03:32.have to remember. Their only addressed the tax side of things
:03:32. > :03:37.and did not cut the spending cuts. Those were deferred for two months.
:03:37. > :03:41.That conversation will begin all over again. And of course there is
:03:41. > :03:46.this debt ceiling which you mentioned. The US Treasury at the
:03:46. > :03:52.same time as the fiscal cliff was being negotiated talked about, on
:03:52. > :03:56.December 31st, how the US Treasury hit the debt ceiling. How much
:03:56. > :04:01.money it can borrow before it has to seek permission at Congress to
:04:01. > :04:08.borrow more. The Treasury can move finances around so that it can
:04:08. > :04:13.carry on paying its bills for the it will have to beat permission
:04:13. > :04:17.Presidoney. President Obama, as well as
:04:18. > :04:22.welcoming the deal we have reached, also said he would not allow the
:04:22. > :04:26.debt ceiling to become a big issue in the months ahead. He said it was
:04:26. > :04:33.thought possible for America not to live up to its financial
:04:33. > :04:36.commitments. Of course you may debt rating downgraded as a result
:04:36. > :04:40.of a tussle between Congress and Treasury.
:04:40. > :04:44.Thank you. Let's take a look at how the
:04:44. > :04:54.markets are reacting to the result in Washington. Sharanjit Leyl is in
:04:54. > :04:54.
:04:54. > :05:02.Singapore. Talk us through the market. As you can imagine, Asian
:05:02. > :05:08.stocks reacted very positively to that news. The dollar fell after
:05:08. > :05:12.that last minute deal, to stave off the fiscal cliff. Asian investors
:05:12. > :05:16.are cheering these developments. They have been many concerns about
:05:16. > :05:22.a US slowdown from the tax rises and spending cuts that could plunge
:05:22. > :05:26.the US economy into recession and that would impact Asia's export
:05:26. > :05:32.relied economy, which count on the US market and consumers to buy a
:05:32. > :05:39.lot of their products. A huge relief to investors in Asia. There
:05:39. > :05:43.has been a slow recovery here in demand from Europe due to the debt
:05:43. > :05:50.crisis. And also the slowdown in China. We have heard in the last
:05:50. > :05:55.few days that Hu Jintao said China would work towards global growth
:05:55. > :05:59.this year. This is after signs of stronger manufacturing over in
:05:59. > :06:09.South Korea, manufacturing expanded their for the first time since May
:06:09. > :06:13.
:06:13. > :06:18.All All of this obviousl obviousl
:06:18. > :06:25.outside outside Japan continued to extend
:06:25. > :06:30.year. Thank you. The world's The world'sadvertising
:06:30. > :06:34.group, WPP, moves its headquarters back to London today. The head and
:06:34. > :06:38.founder of the company, Sir Martin Sorrell, moved its base to Dublin
:06:38. > :06:42.in 2008 due to Labour government plans to tax overseas profits. The
:06:42. > :06:45.return follows changes to tax laws made by the current UK government.
:06:45. > :06:49.The question of how much tax big international companies pay in the
:06:49. > :06:55.UK was a big theme in 2012 which embroiled big names like Starbucks,
:06:55. > :07:03.Google and Amazon in very public rows. Sir Martin told our business
:07:03. > :07:08.correspondent that the company's move was symbolic.
:07:08. > :07:12.We were very transparent about this. We moved our headquarters. You
:07:12. > :07:16.don't have to move your headquarters out of the UK to
:07:16. > :07:21.have an have a procurement department in an
:07:21. > :07:26.offshore base. You can have a branding operation in an offshore
:07:26. > :07:30.base. And the criticism of some companies, like Google all
:07:30. > :07:35.Starbucks for Amazon, a because they have done that. They don't
:07:35. > :07:45.happen to be based in the UK but companies Even in the UK can do
:07:45. > :07:51.
:07:51. > :07:55.that. -- even. We operate in 110 countries, some operate in more.
:07:55. > :08:00.Starbucks have coughed up a bit of money to do the decent thing. That
:08:00. > :08:04.can't be the right way to decide how much tax a company should pay?
:08:04. > :08:10.They did negotiate ahead of time and agreed a royalty. It was
:08:10. > :08:16.perfectly transparent. You have to be very careful. You get into
:08:16. > :08:21.dangerous territory. Starbucks decided they would make a minimum
:08:21. > :08:27.corporation tax payment. They have actually invested in apprenticeship
:08:27. > :08:37.schemes. How should they make the rules better? For the right model
:08:37. > :08:39.
:08:39. > :08:43.is set to make a contribution. -- the right. I hate the phrase
:08:43. > :08:50.corporate social responsibility. All of the contributions you make
:08:50. > :08:56.to stakeholders are a question of judgement. If companies choose,
:08:56. > :09:00.just as they do environmentally for sustainably or socially responsible
:09:00. > :09:05.projects, if they choose in terms of building their long-term rounds
:09:05. > :09:09.to make a contribution to all this they called us on a long-term basis,
:09:09. > :09:14.all credit to them. Every company with deal with without exception
:09:14. > :09:19.knows that doing good is good business. That was Martin Sorrell,
:09:19. > :09:27.chief executive of WPP, with his views as to why they decided to
:09:27. > :09:31.move the world's biggest advertising agency back to London.
:09:31. > :09:35.The markets are very strong and robust at the start of the new year
:09:35. > :09:39.of trading, in the affection to the result we got in the US to that
:09:39. > :09:45.debate going on amongst politicians in Washington about how to balance
:09:45. > :09:49.their budgets. The markets are strong today. Japan is closed.
:09:49. > :09:58.Chinese markets also closed for public a new year holidays. But
:09:58. > :10:03.Hong Kong is up 2%. Australia, 1.2%. South Korea up 1.6% and Singapore
:10:03. > :10:08.also up over 1%. Singapore is coming out with some good news
:10:08. > :10:12.about its economy and the outlook in general, I would say for the
:10:12. > :10:16.global economy is, is much more positive today. They are very
:10:16. > :10:21.grateful that those politicians met the deadline and cam
:10:21. > :10:23.could vote, in favour of solving the fiscal cliff issue before