tv BBC Business Live BBC News September 17, 2019 8:30am-9:01am BST
continue to move its way eastward. towards the end of the week, we will start to pick up a southerly wind. temperatures will start to rise but as you can see again on friday, we're just looking wall—to—wall sunshine, lots of bright skies. this is business live from bbc news with sally bundock and tadhg enright. see you in court. apple takes on the eu in a fight over a multi—billion tax bill. live from london, that's our top story on tuesday the 17th of september. apple is challenging a mammoth tax bill over its so—called sweetheart deal with ireland. it's a landmark case in the eu's efforts to close tax loopholes. also in the programme. doing a deal — president trump announces that the us and japan have
reached an agreement over trade. financial markets in europe look like this right now. the price of oil has edged lower. we will talk you through the winners and losers. and cashing in on the growing education market — we'll be hearing from a maths tutoring business which has added up to an empire worth hundreds of millions of dollars a year. and we want to hear about your box set guilty pleasures, after netflix reportedly agreed a half—billion—dollar deal to show old episodes of seinfield. today we want to know, was it worth it? what's your favourite binge watch? get in touch — just use the hashtag bbcbizlive. mine is frazier, for the record. hello and welcome to business live. i'm with you, brazier is very hard to beat. let's focus on another big
name that you have all heard of, apple. one of the world's most valuable tech firms is heading to court, in a bid to overturn a multi—billion—dollar tax bill in ireland. it's part of a landmark case in the eu's efforts to close tax loopholes by multinational companies. three years ago, the european commission ruled apple received illegal state aid from ireland when it effectively paid only a 1% tax on its profits. the commission ordered ireland to collect $14 billion in taxes from the firm and apple is appealing against it. but it's not the only tech giant under the spotlight. last week, google paid $1 billion to settle a french investigation into whether it had underpaid taxes. the search giant pays little tax in many european countries because it reports almost all of its sales in ireland. in a bid to close tax loopholes, france earlier this year passed a new digital services tax, meaning large multinationals will have to pay a 3% tax on sales generated in france.
multinationals and their taxes are one of the big political issues of oui’ era. suzanne rab is with me now. she's a barrister at serle court chambers. looking at the letter of the law, i suppose, as did the political considerations in all of this, who do you think actually has the stronger case? brussels or apple along with ireland? the commission is bringing the case under the eu state aid rules, which are used when a member state gives a selective advantage to accompany. it is not unusualfor advantage to accompany. it is not unusual for tax measures to advantage to accompany. it is not unusualfor tax measures to be challenged under that regime. the issue here is whether in fact the advantage has been selective. certainly, there are some difficult issues in this case to consider. obviously, the consequences are potentially much further reaching.
this case has got a lot of road to travel before it reaches a conclusion. but if ultimately, the court finds against apple and ireland, lots of other companies and other low tax jurisdictions, might they have to change their ways? well, the principles that are at issue in this case are not isolated. there are numerous other state aid cases that are running through the appeal courts at eu level. there are also pending commission investigations and similar probes, an example including nike. this case raises some wider implications. looking at the bigger political picture here, to change the law on all this requires consensus across lots of different countries, including low tax jurisdictions who obviously have a vested interest in keeping things the way they are. so if we are to address the issue of multinationals, and how much tax they pay, is ultimately the answer
and perhaps what we had about france is doing, deciding to add a locally charged sales tax on everything multinationals do within that country? it is true that the issue here about where tax should be paid and how much is one which has perplexed many governments come up with digitised businesses, where views can differ about where taxes should be paid, there are attempts amongst national legislatures to introduce new rules like the ones we have seen. but there is no consensus globally about the methodology for doing that. the g7 have attempted to come to a consensus, but still, there is no harmonisation. ultimately, there is a bit for supranational ultimately, there is a bit for supra national rules but ultimately, there is a bit for supranational rules but they are very ha rd to supranational rules but they are very hard to put in place. we will be watching with interest. thank you for joining be watching with interest. thank you forjoining us. let's take a look at some of the other stories making the news. the office provider wework is reportedly planning to delay its initial public offering after investors questioned
how much the company is worth and raised concerns over its corporate governance. the company's leaders were preparing to go on a roadshow to market the shares this week ahead of a trading debut next week, but it's now expected to shelve the flotation until at least next month. international air—safety regulators are finalising a report that criticises the us approval process for boeing 737 max jets. the regulators are also expected to call for a wide—ranging reassessment of how complex automated systems should be certified on aircraft built in the future. the us federal aviation administration is expected to come under fire for a lack of clarity and transparency. britain's supreme court will today begin hearing two appeals to determine whether the prime minister acted lawfully in suspending parliament in the run—up to brexit. the uk's highest court will have to resolve two contradictory judgments after the suspension was challenged in separate cases. borisjohnson says he will wait
to see what the judges say before deciding whether to recall parliament. president trump has announced that the us has reached an initial trade agreement with japan. sarah toms joins us now from singapore with the latest. what more can you tell us? well, it is still very sketchy at the moment. us president donald trump says an initial trade agreement has been reached and it is expected that he and the japanese prime minister shinzo abe will sign a deal in new york later this month. it is a deal that could be implemented without congressional approval. but as i said, the exact details have not been released. but the trade pact is expected to be limited to just a few industries like agriculture, digital trade, and industrial tariffs. japan will likely cut tariffs on us
agricultural products like beef, chicken and pork. that would give american farmers some more access to the japanese market. in return, the us is expected to cut tariffs on some industrial products, like machinery. but it appears unclear what that means for the car industry. japan is of course eager to avoid tariffs on its cars, the country is heavily dependent on exports and cars, of course, are the biggest export, accounting for most of the $67 billion us trade deficit with japan. the devil will be in the detail as they continue their arrangements. good to hearfrom you, sarah tom is in singapore. let's look at the markets in that part of the world and how they got on today, japan open for the first time this week, having been closed on monday, pretty flat as you can see but big losses in hong kong again. it is 100 days since the protests in hong kong started and it is really being felt in terms of the impact on the local
economy, of course. that is the night before on wall street. let's show you europe, to say the cost of oil has gone down a bit today but it is still much higher than last week. on friday a barrel of brent cost around $60 and now it is around $68 per barrel. flat markets in europe, a big mover in london is serious minerals with projects in north yorkshire in the uk, failing to raise vital funding, shares down today by some 63% in london. and vivienne nunis has the details of what's ahead on wall street today. america's central bank begins a two—day meeting on interest rates today. the federal reserve is widely expected to cut rates by 0.25% when it concludes the meeting on wednesday. investors will be paying close attention to what fed chair jerome powell says about the bank's future plans. separately on tuesday, the fed will release new figures on industrial production and manufacturing output, at a time when a global economic slowdown and the us—china trade war has left us manufacturing weaker than it has been for years.
in finance news, delivery firm fedex is expected to report a fall in profits, while software maker adobe inc is expected to post higher than expected results thanks to growing software subscriptions. joining us is louise dudley, portfolio manager of global equities at hermes investment. thank you forjoining us. i suppose the big focal point is the fed and what its decision—makers ultimately decide and it is by no means certain that they are going to go for a rate cut, is it? i think that they are going to go for a rate cut, is it? ithink some that they are going to go for a rate cut, is it? i think some of the indications are definitely that is what is going to happen. we saw from last week, that supportive measure coming in. however, markets have not reacted too much to that support within europe. the question is, if they do the right cut, will they get they do the right cut, will they get the support from the equity markets? everyone is going to be watching the guidance and the language around the cut. it is always about the press
conference on the wednesday, isn't it, after they finish the meeting and they announce what they are doing. you have got the fed this week and a bank of england and the bank ofjapan, week and a bank of england and the bank of japan, there week and a bank of england and the bank ofjapan, there is very much a central bank focus this week but it is getting drowned out by what is going on in saudi arabia, the price of oil and the reaction to that, the uk supreme court, i mean, so much is going on. yes, and certainly, last week, there was quite a bit of a risk on rally that happened and we wondered if it was the rebound coming in and obviously come over the weekend, we had the oil strike and now things are back in turmoil again. ijust wanted and now things are back in turmoil again. i just wanted to and now things are back in turmoil again. ijust wanted to get and now things are back in turmoil again. i just wanted to get your ta ke again. i just wanted to get your take on the oil situation, are you worried about where the price of oil is headed and the vulnerability of the reserves, etc, in places like the reserves, etc, in places like the middle east? it is going to be a case of how quickly they can get back on board. some people are talking days, weeks. but the expectation is that it will happen. the countries that are going to be worried are those that don't have the energy reserves, so that is china and japan. the us have their
own supply so they are not so concerned. finally and briefly come in the uk, how much our investors watching what is going to come out of the supreme court in the next few days about whether parliament ultimately will come back sooner than expected ? ultimately will come back sooner than expected? i think we have already seen a lot of subdued levels from the pound. to a certain extent, you know, it is a bit of wait and see. we arejust you know, it is a bit of wait and see. we are just hoping things continue to progress along and who knows what the outcome will be? thank you forjoining us. you will be back a bit later with a review of the papers. we look forward to that. and we want to know what your box set favourites are so have a think about that. still to come. cashing in on the growing education market — we'll be hearing from a maths tutoring business which has added up to an empire worth hundreds of millions of dollars a year. you're with business live from bbc news. crude oil prices saw their sharpest rise in 30 years yesterday,
following drone attacks on two saudi arabian refineries at the weekend. we often think, how is this going to impact us at the pump and energy prices? ben thompson is at a petrol station in stockport to assess how this could affect us all. over to you. another day, another glamorous location! good morning. we are talking about the impact on not only the petrol forecourt and what the attack in saudi arabia could mean for petrol prices but also the implication is that it has for us as consumers. about 93% of all the stuff that we buy in the shops is delivered by truck. so far, —— for the haulage firms, their cost will go the haulage firms, their cost will 9° up the haulage firms, their cost will go up significantly and they will have to pass the price on to us. what impact could it have? steve from the portland fuel consultancies with me. give us a sense of housing of this is. i know the programme has only spoken about the attacks and
global oil prices up 15—20%, how does that filter through to places like this? the prices are up about 5p now from friday night. for the average consumer, they can bear the cost, it is about £2.50 to fill up your tank but for hauliers, it is much more, it is 5% of a major cost of their so it is about 2.3 —— two or 3% of costs added to the bottom line and they often can't bear that kind of entries in their cost base. and they therefore have to pass it onto factories and supermarkets and affirms they are delivering to which ultimately means we end up paying more. absolutely, i mean, there will be some suppliers who can bear the cost of a haulage increase if it is a marginal cost of their product. but there will be a lot that can't and we will end up seeing price rises as a result if this continues. briefly, what happens if it continues? the us says it will step in and saudi arabia has supplies and this is a temporary problem, isn't it? hopefully, yes, from what we have seen so far, it is a temporary
issue and we can manage it and it could calm down —— should come down. but we are looking at where we go from here. the us is already talking about retaliatory strikes. thankfully, donald trump was out last night saying he does not want a war which is nice to hear him saying that, but we need to see where we go from here. if things escalate in the middle east, we could see an escalation in the price is down the line. good to talk to you, steve irwin from the portland fuel consultancy. the cost is likely to be passed on to us in the short term but it could just be a temporary issue. i will see you soon. you're watching business live. our top story, one of the world's most valuable tech firms, apple, is heading to court, in a bid to overturn a multi—billion dollar tax bill in ireland. it's part of a landmark case in the eu's efforts to close tax loopholes used by multinational companies. we will be watching it very closely
in the weeks and months ahead. education has long been regarded as the ladder to success and prosperity. it's a theory that's fuelled a massive boom in the tutoring and supplemental education market. it's so big, that one market research firm expects the market to hit us$180 billion by 2026, as parents around the world are more and more willing to invest in their children's education outside of school. riding the wave of this phemonenon is mathnasium, an american maths—only supplemental education franchise. since its foundation in 2003, it's opened over 1,000 centres globally and was ranked number three in forbes' "best franchises in america" in 2018. it'sjust launched in the uk. steve felmingham is with us now. he's the director of uk operations for mathnasium learning centres. thank you forjoining us. why do you
see such a need for specifically maths tutoring? what is going on in schools that the gap needs to be plugged? i think it is worth making the point that in many ways, we should never exist, there should be no need for us to exist. sadly, there is a need and that is driven by the fact that in most cases, schoolteachers are dealing with classes of 30, 35 children at a time. by necessity, they have to teach to the average of the class. we can pick up the children that are either side of that, the ones that are struggling or even the ones that are struggling or even the ones that are farahead. the are struggling or even the ones that are far ahead. the system just cannot cope with that level of disparity between the ones that are a little behind and the ones that are ahead. i know you are overseeing the uk operations but this is a global company. is there a global need? we always wonder as parents, wherever we are in the world, "is there a better education in hong kong or china?" wherever it might be? i think the reality is slightly different, there is a perception
that actually, everyone is doing better than we are. in fact, they are not. it is the same everywhere. i think children are children everywhere, there are always children who will excel who will then get bored by the regular routine of the curriculum in school and those that struggle to keep up. ours is all about a personalised programme. every child is on an individual programme. wherever they are in the world, our teaching method is identical. we don't change that. we may change the sequence in which certain elements are taught but the whole offering is the same wherever we are in the world. how much have you decided parents are willing or should be willing to pay for this? in many ways, we compare it, cost wise, with a private tutor. quite often, our parents will pay somewhere in the region of £30— 35 per hourfor tuition. somewhere in the region of £30— 35 per hour for tuition. and that is one tuition, isn't it? yes but in a group environment so they will spend face—to—face time with an instructor who will then give them problems to work through, and then leave them
alone, and that is a deliberate strategy to help foster some independence. they will only leave them alone for a few minutes but it will be working with the child, getting them started on a particular concept, and then moving on, leaving that child to work through slightly on their own and then back to them. it is not a per hour cost proposition is it? how does it work? it works very much like the gym, the name mathnasium makes it sound like gymnasium, you pay a monthly fee. of? typically about £300 per month. people are not paying that to go to a gym unless you are in stupendous luxury, and there's many parts of this country where that is half of a family's monthly rent. yes, that is true, the gym analogy is probably more culpable to having a personal trainer because in a way, that is what we are offering, that the child is in what we are offering, that the child isina what we are offering, that the child is in a centre, and has individualised attention. we would encourage pa rents individualised attention. we would encourage parents and their children to come very frequently. so we will
get their best progress and the child will get the best progress if they come several times a week. do they come several times a week. do the children really enjoy it? i have a realjob getting my kids going to anything educational, in terms of maths tutoring or anything, outside of school. yes, that is absolutely the key. if you can get them enjoying it, so they see maths as a series of puzzles and challenges rather than just problems, then they wa nt to rather than just problems, then they want to be there. i have seen children running in, excited to do maths. is it just children running in, excited to do maths. is itjust for children running in, excited to do maths. is it just for children? children running in, excited to do maths. is itjust for children? what about adult struggling formats? we get a call for that quite a lot, when we explain to the parents how we teach a concept, very often, it isa we teach a concept, very often, it is a common response for a parrot to say, "i wish i had been taught like that". the parents can learn, too. extra tuition. thank you forjoining us. best of luck with the uk launch. thank you. as the indian economy faces a slowdown, the big online companies that had invested in india are in a bind. some are moving away from big cities
to find new customers while others like amazon are hoping for a policy change to help them tide over the tough times. bbc‘s devina gupta reports. london based online retailer kooks is preparing to launch a new collection. after a disappointing year, it desperately wants to turn around its fortunes in its single biggest market, india. but the timing is tricky. the indian economy is facing a slowdown, and everything from demand to spending has been affected. and so, the fashion house has started building a customer base beyond the big cities. 65% of has started building a customer base beyond the big cities. 6596 of the population is under 35. it is tech savvy and very aspirational. even the big e—commerce firms like amazon, that have been operating in india for around six years, are yet to turn profitable here. that said, it has just invested more than $5 billion in india. much of it has
been used to create a global centre in hyderabad. spread over 9.5 acres, this is amazon's largest campus across the world, where it plans to employ nearly 15,000 across the world, where it plans to employ nearly 15, 000 people across the world, where it plans to employ nearly 15,000 people in softwa re employ nearly 15,000 people in software development and technical operations. but while international players believe that india has a huge potential as a market, for amazon, expanding here hasn't been an easy task. e—commerce only makes up an easy task. e—commerce only makes up around 5% of the retail market here. india is in the midst of a downturn, so it could be awhile before online players see returns their investments. divina gupta, bbc news, hyderabad. louise is still with us and we have been chewing over our favourite box set binges and guilty pleasures, tell us about the netflix story? what has really happened here is that basically, we have continued...
netflix has acquired some more streaming rights, and it is getting more complicated... because of all the tussling going on within the streaming sector right now. netflix largely had it to itself exact the. disney is coming into the market with a big competitor. used to be able to watch lots of disney programmes are netflix but they have pulled them off. and now it is friends and the of a. friends is going, i don't know if the office is still there but seinfeld is coming in 2021, that is their move as they lose things like friends and the of a. i think they are continuing to respond to the more competitive marketplace, apple came in last week so they are continuing to keep in the news about the new things, bringing new customers. and the money for a show which is... and in 80 episodes but it is 20 years old, half $1 billion. it is reported but the way i understand it, it is the re ru ns the way i understand it, it is the reruns that bring most eyeballs to the likes of netflix rather than the
newer shows like house of cardsth, despite the fact it had cult status. let's see what you have been saying about this. elaine says, "it's got to be documentaries on netflix for me, making a murderer, evil genius we re me, making a murderer, evil genius were both a great watch". and marco underlines the business case for this decision, saying he has seen the entire box of seinfeld about ten times and he now halfway the 11th. nigel says his fave binge watches have to be ready gervais is after live, sopranos, peaky blinders, blacklist, i watched that, what are yours question my peaky blinders i love. i have been recommended but i have not started it yet. it is great, but the shorter ones, the documentaries, i'm more interested in those rather than getting to a whole day of watching. that is very
lofty , whole day of watching. that is very lofty, watching documentaries. what have you been addicted to most recently. that is not recent, i be doing that for young. killing eve, did you see that? it was something else. bob in the us says the of his is definitely is, and ashley says drive to survive is the bestial netflix but i can't say have seen it. peter wilson said himself and his wife watches peaky blinders on netflix and it is historically based so they love the drama. thank you for joining so they love the drama. thank you forjoining us. thanks for your company. there's been a lot of corporate stories we've not been able to mention this morning in the programme but business live is an updated page on the bbc website all the time. just go to bbc business and you will see the page with all you need to know as it happens. lots of details on there about the potentially postponed floatation of wework so
people on that. we will be back tomorrow. have a good day. goodbye. (tx weather) it has been a rather chilly start to the day but for most of us it is fine and dry with lots of bright skies out there. we have got high pressure moving in from the west, gradually moving eastwards but this is going to be the dominant weather feature throughout the week. it is going to give us very settled conditions. while there is a bit of cloud floating around across england and wales, making the sunshine a bit hazy from time to time, thick cloud moving its way into the north—west of scotland, foremost, it is dry and bright with sunny spells out there. maximum temperature is getting up in the mid to high teens, perhaps 20 or 21 celsius in the south, just like yesterday. tonight, clouds thickening up across scotland with some outbreaks of rain moving in. for many of us, with clear skies,
one or two mist and fog patches, nothing too extensive, but quite chilly again, temperatures in single figures. there is a bright start to the day, lots of sunshine for england and wales on wednesday. always the cloud across scotland and still a few outbreaks of rain here. temperature is very similar to today. that high pressure will stick with us as i mentioned for the rest of the week. it is moving eastward but by thursday, it is slap bang right on top of the uk and that means there will be some light wind. the potential for some means there will be some light wind. the potentialfor some mist and means there will be some light wind. the potential for some mist and fog again in the morning but that should clear away and we are looking at lots of sunshine. just a bit of cloud affecting the far north of the northern isles. temperatures on thursday 18—21dc. high pressure moving its way gradually towards the east. but it is still influencing their conditions across the uk on friday. so again, we are expecting lots of sunshine. the morning could start off a little bit cloudy and misty with some fog but that will
clear away. lots of sunshine by the afternoon, with temperatures 20—23. those temperatures will continue to rise as we go into the start of the weekend. high pressure still moving eastward but the air will be becoming more in from the south, so bringing some warmer conditions. but then for the second half of the weekend, we will start to see a bit ofa weekend, we will start to see a bit of a breakdown to that higher pressure as it moves away some showers. for saturday, lots and lots of sunshine, temperatures 19—25. showers moving their way in by sunday and with that, temperatures starting to creep down, with the potential for one starting to creep down, with the potentialfor one or starting to creep down, with the potential for one or two sundry downpours. goodbye. —— sundry downpours.
this is bbc news. i'm ben brown at the supreme court in london, where judges will begin to consider whether the prime minister acted lawfully in suspending parliament. the uk's highest court will review two cases which led to differing judgments on whether the suspension by borisjohnson was motivated by brexit. i think the best thing i can do is wait and see what the judges say. we'll bring you the latest as the hearings get under way in 90 minutes' time. i'm annita mcveigh, our other main stories at nine: victims of stalking, harassment and child sexual offences