tv BBC Business Live BBC News September 15, 2017 8:30am-9:01am BST
this is business live from bbc news with jamie robertson and rachel horne. tackling tech tax — the eu has been losing billions of dollars in tax revenues from companies like google and facebook. now it wants to make multi national tech firms pay up. live from london, that's our top story on friday 15th september. taxing the tech giants — the eu plans a shake—up of the system to make the likes of google and apple pay theirfair share. but will ireland play ball? plus: hacked off! russian cyber—security billionaire eugene kaspersky hits back after the us government bans his products as a threat to national security.
the ftse is down, and the spanish market, all down following what happened yesterday. and we'll be getting the inside track on the big tech stories of the week, including the ongoing row over russian hacking in the us. rory cellanjones will be here to talk about his exclusive interview with the founder of kaspersky labs later in the programme. so today we want to know, how safe do you feel online? and do you trust internet security companies? let us know, just use the hashtag, #bbcbizlive. hello and welcome to business live. we start in the estonian capital tallinn, where european union finance ministers are gathering this weekend. top of the agenda are plans for a shake—up of the way huge tech firms, the likes of google, facebook, apple and amazon, pay taxes.
the giants of the so—called ‘digital economy‘ have faced criticism in europe forfailing to pay what some see as their fair share of tax. so what's being proposed? well, the plan is to make the companies pay tax wherever in the eu they make money, notjust where their headquarters are, or where they are based for tax purposes. at the moment, many have their european headquarters in low—tax countries such as ireland and luxembourg, earnings from across the region are channelled there to minimise tax. they have other systems to avoid tax, too. a report by eu lawmakers claims that between 2013 and 2015, european union states lost 5.4 billion euros, that's $6.4 billion, in tax revenues from google and facebook alone. the european commission is threatening to take ireland to court for failing to collect 13 billion euros in back—taxes from apple. ireland claims it hasn't broken any european or irish law.
meanwhile, amazon, which has its eu tax residence in luxembourg, paid almost no tax between 2013—2015, because its subsidiary there made no profit. amazon says it pays all taxes it's required to pay. this is what was said when they made the ruling against ireland at apple last year. this decision sends a clear message. member states cannot give an unfair tax benefits to selected companies. no matter if they are european or foreign, large or small, no matter if they are european or foreign, large orsmall, part no matter if they are european or foreign, large or small, part of a group 01’ foreign, large or small, part of a group or not. jason karaian, global finance and economics editor at digital publication, quartz is with me. thank you for coming in. as jamie
was saying, tech companies aren't doing anything wrong, but it seems law is not fit for purpose in these situations. what do eu finance ministers want? tax is one of the things that eu member states guard probably the most jealously, things that eu member states guard probably the mostjealously, in terms of their sovereignty. there area number of terms of their sovereignty. there are a number of different schools of thought they are discussing in estonia over the weekend. as the current system goes, which is good for ireland, malta, where tech companies are charged on rough it in subsidiaries, what france wants, forwards put, is for companies to be taxed on revenues of where sales ta ke taxed on revenues of where sales take place. much larger taxes in places like germany, the uk and france. the estonians are a middle ground at the moment, they want to establish where they have a significant digital presence, where users, where clients are, it is not clear. there are complications.
users, where clients are, it is not clear. there are complicationsm is not clear what they want, and different member states want different member states want different things. it is a better set up different things. it is a better set upfor different things. it is a better set up for ireland at the minute, they are getting more by having apple —based there. explain why they are refusing to collect back taxes from apple that the eu is trying to force them to collect? it is upside down that they don't want these taxes, because they see their low tax regime, their light touch, as far as multinational companies go, they have a large professional services industry, built up around these companies, and collect some tax, but not nearly as much a scandinavian company would. they want to keep the status quo. they have a lot of companies based there and they have other benefits and just the tax. is there a comp i is? one of the basic rules about taxation is you tax where value is created. value can be created at the point use it, or where the product is made, or where people are employed to sell
it, which doesn't happen to be the same country where it is sold. is there a combination of all of those things? that is usually how it works out. this is a reflection of how tech companies, online companies especially like google and facebook, work. there aren't factories. servers are in one country, users are elsewhere, costs are in different places, international property is in different countries. these are companies that don't work like companies used to when these tax laws were formed. there needs to bea tax laws were formed. there needs to be a compromise. some solution that eve ryo ne be a compromise. some solution that everyone is happy with. when it comes to the eu, it is impossible to make all 28 members at the moment happy. that is where we are now, and there will be spicy debates, i would say, in the estonian capital this week. jason karaian, thank you for your time. let's take a look at some of the other stories making the news. three women who used to work at google have filed
a lawsuit in san francisco, alleging the company pays women less than men for comparable work. google says it will review the lawsuit, but disagrees with the "central allegations". it comes as companies in silicon valley face growing scrutiny over gender equality. google is also under investigation by the us department of labour over its pay practices. business leaders who employ around 1 million workers in the uk and eu will sign a letter this weekend, imploring both sides of the brexit negotiations to get a move on. a draft of the letter, seen by the bbc, urges negotiators to clarify the rights of uk and eu citizens working abroad by october. it also calls for real progress towards future arrangements by the end of 2017. the letter was drawn up by trade group the cbi and circulated to top business leaders. the value of the crypto—currency bitcoin has slumped for a second day, by almost 8 %. it's now down to around $3,500 from a high ofjust below
$5,000 earlier this month. the latestjolt to confidence has come from china. btc has announced it will close. sarah toms is in singapore. what can you tell us? the price of bitcoin fell sharply following the btc‘s china announcement that came late on thursday, but it has regained ground since then. btc china is one of the country's largest bitcoin exchanges. the news it. trading by the end of the month comes in response to the chinese government tightening regulations. there has been a steady flow of media reports saying china plans to shut down all bitcoin exchanges. earlier this month, the central bank
banned initial coin offerings, used asa banned initial coin offerings, used as a way for virtual currency start—ups to raise money. crypto currency has ballooned this year, especially in china, so why the crackdown? it is a highly risky market, china wants to stamp out financial risk and protect market stability and investors, but another reason could be that a lot of people in china have found investing in bitcoin and other virtual currencies gives them a way to get around the restrictions on how much money they can get out of the country. thanks, sarah. the japanese market is a part of percent, incredible considering the missile threat. the interesting thing in the us are talks of higher interest rates, which we will go into ina interest rates, which we will go into in a second. that seems to have crystallised the idea that we might
getan crystallised the idea that we might get an interest rate rise in the us sometime later in the year, november or december, we will talk about that ina or december, we will talk about that in a second. all the markets in europe start down. yesterday, the uk market, spooked by the idea of higher interest rates here, a surge in the value of the pound, going up half a percent. the prospect of foreign earnings decrease, and the ftse went down. let's go to new york. wall street will get a snapshot of consumer spending. this friday, the us commerce department releases retail sales figures for august. a strong number would be seen as a sign that the economy is continuing to gain momentum this quarter. economists, though, are looking for a modest increase of 0.1%, compared to a sharpjump of 0.6% injuly, when consumers bought lots of cars and spent
more on discretionary items. worth pointing out, this follows an interesting inflation report on thursday, a rise in petrol prices and rental accommodation helped to boost consumer prices in august. many on wall street took that to mean that the likelihood that america's central bank would raise rates in september have gone up. one—stop to watch this friday is larry ellison's company oracle, reporting a 6.9% rise in quarterly revenue. the software maker's aggressive push into the cloud seems to be paying off. joining us isjeremy cook, the chief economist from world first. thank you for coming in. let's talk about that north korea launch, because we saw that happen, and we didn't see much of a reaction from the markets. why is that? why are the markets. why is that? why are the markets. why is that? why are the markets not reacting when something of this nature happens? this is the fifth, sixth or possibly
seventh missile test we have seen from north korea in the past two months or so. suddenly, we are getting bored of it. the rhetoric around it, it is not boring for people in south korea and japan, but the rhetoric around it has lessened a little bit. a month ago, he was talking about new king one, and we haven't heard the sabre rattling as loudly since. this is probably another missile test. if we were to see another nuclear test, and a missile test, the movement of the weapon and the delivery system within a short amount of time, the markets may pay attention to that. it is difficult to price armageddon in the market... it is! if you stop and think about it. the yen will always rise when the north koreans do a test like this. people say, "why are people buying the japanese yen?" the yen
moves higher, it is one of the strange quirks of the market. whatever happens with nuclear weapons, we can talk about interest rates, fairly certain by the end of the year, wouldn't you say? notjust in the uk, a lot of places. the rhetoric about interest rates has picked up in the last month or so. yesterday's inflation numbers in the us picking up. maybe november or december back on in the us. the bank of england yesterday, it would be a policy mistake, but they have got to get the inflation hawks of their backs. the us market rose, isn't that odd? it is an odd move will stop the it is an indicator of confidence within the us economy allied with retail sales, and that will continue to run higher as well. we may hear something from the europeans in november, it is all going in for
higher rate by christmas. jeremy cooke, thank you for your time. some breaking news, a report from the metro newspaper, there are reports of people suffering facial burns after a white container exploded on the london underground, ona train. exploded on the london underground, on a train. reports of people coming out of the underground suffering those burns. this happened in the last few minutes, we have just received these reports, but we will bring you more details as they come reuters sabre uk police have no comment on it. but we will bring any details straight to you. we will get the inside track on the big tech stories of the week, including the ongoing row over russian hacking in the united states. last year was a good year for british boat builders.
a lot of them are at the southampton boat show and ben's there for us this morning. ina time in a time of austerity, can people afford to buy boats? it is an interesting one. we are in southampton because we are talking about the booming industry in boat building in britain. we have come out onto the water to get a great view of the show here. hundreds of exhibitors are here over the next ten days, with hundreds of visitors expected to see what is on offer. this is a big business for britain. we made 10,000 boats here last year. we made 10,000 boats here last year. we sold about 85% of them overseas, so we sold about 85% of them overseas, so it's a big export success story, employing about 33,000 staff. this isa employing about 33,000 staff. this is a princess yacht which will set
you back about £8 million. that is made down the road in plymouth. they employ engineers and craftsmen to make those and sell them around the world. we have been hearing from business is down here this morning. an £8 million yacht is not in everybody‘s price bracket, but there are all sorts of ways you can get involved in this industry. one of these will cost you anything from £50,000 to a quarter of £1 million. we have also been talking to a firm that rents out the boat for a couple of hours. or you can have a time—share. you can borrow it. so the industry is adapting to how people want to spend their money. but it is really a story of export success. 85% of the boats made in
the uk are sold overseas. at the southampton boat show, people are putting the finishing touches to their vessels. they are expecting a busy few days and hoping for people with a few million pounds to spend. but not you, ben. you never know! maybe he got a pay rise, or did well on the currency markets. we have some currency news. look at the lovely graph. if you need dollars for your holiday money, go and get them today. our top story — the eu says it has been losing billions from companies like google. now it wants to make multinational tech firms pay up. we are getting some breaking news of a possible explosion on a tube train
at parsons green station in west london. the district line is part suspended between earls court and wimbledon. we are receiving reports from reuters as saying the london ambulance service says it is on the scene at parsons green station in west london. we have reports of a canister possibly exploding and peoples face and skin being affected bya peoples face and skin being affected by a white powder. this week, apple decided people might be be willing to pay nearly $1,000 for a phone. it's hoping augmented reality features and added nascent technology will persuade consumers to dig deep. and the us dept of homeland security telling all government agencies to remove the russian it protection software kaspersky from their computers. apparently, there are fears over links some kaspersky execs might have with russian intelligence. let's get the inside track on this week's big stories with our technology correspondent rory cellanjones. what is the deal with kaspersky?
kaspersky is one of the world's biggest cyber security companies. it was founded by eugene kaspersky. it is russian —based, but it has a global operation. lots of people use it. we put it on your computer to defend against malicious software. it is well—respected, but now the us government has said it can't be used on any of its government computers and that has had a knock—on effect. one of the biggest retailers has already taken the product off the shelves. i have been speaking to eugene kaspersky about those allegations that he is too close to the kremlin and that his company can't be trusted. we don't have any secrets. we don't do anything about against our customers or against governments. we are cyber security company which is known for more than 20 years. there are no facts, only
rumours from anonymous sources. so all this bad news about us, it is not true. please pay attention to the quality of the product and please stay with us. you can trust us. he says it's all about politics. now, the iphone. would you spend $1000? this week, the iphone x is supposedly the biggest leap forward since the iphone. it is a very interesting phone. it is a bit of a departure. no home button, you swap up departure. no home button, you swap up from the bottom. people find that difficult at first. getting rid of the touch id we have all got used to and instead having facial recognition to log in. look at it,
and it logs on. a whole new way of doing business with an iphone. an extraordinary price tag, but here is what has struck me about the marketing strategy. most of the event onjudo was marketing strategy. most of the event on judo was about two other iphones, the iphone eight and the iphones, the iphone eight and the iphone eight plus. they said, these are fantastic! by the way, we have another one which is not coming along until november which will be even greater. i am confused already. which one has the facial recognition? the iphone x, which isn't out until november. but that isn't out until november. but that is the one i have been reading about. i thought that was the eight. exactly, and that is problem. early adopters will know that the iphone x is the future of phones, according to apple. but there will then look at the iphone eight and go, is it worth splashing out money in
september when that phone will be out of date in november? is the iphone a cheaper? yeah. the iphone x is up into $1000. let's talk about equifax. they have had a difficult summer. they were hacked, which affected 143 million customers. and they dealt with it terribly. this was a week ago. a week later, very little information has come out about how many people are affected. in the uk, i have been trying to ring them for a week and got nothing out of them. politicians in the united states are getting angrier and angrierand united states are getting angrier and angrier and there was an embarrassing incident where another equifax website unconnected to this data breach in argentina was found to have a fault. it had a login which was admin and a password which was admin. this does not look good for a company that is supposed to have our most valuable data on its
hands, say from intruders. rory cellan—jones, i am sure you would keep our data safe. thank you for your time. here is a quick reminder of how to get in touch with us. the business live pages where you can keep up with all the latest breaking news. and we want to hear from you. get involved on the bbc business live web page. we are also on twitter and facebook. more breaking news now on that report of an expression we had from the district line tube train at parsons green station in london. the district line is now partly suspended. the london ambulance service says it is on the scene. we
we re service says it is on the scene. we were saying a few minutes ago that the police said they were not aware of anything. they are now aware of an incident at parsons green station in west london and they said officers are in attendance. some passengers have been left with facial burns according to london's metro newspaper. the police are only saying an incident has happened. what other business stories has the media been taking an interest in? jeremy cook isjoining us again to discuss. we are going to talk about this story in the independent. this is the foakes story in the independent. this is the foa kes takeover of story in the independent. this is the foakes takeover of sky which was announced as being referred on grounds of media plurality. a couple of hours after that, the murdochs
came out and said that if britain is to be this global buccaneering trading nation, brexit will live and die by trade and investment. so this is the first acid test. this will be the excuse when anything goes wrong, they were selected because of brexit. you can blame anything on brexit. you can blame anything on brexit. you can blame anything on brexit. you can blame your car breaking down in the morning on brexit. that's it from business live today. there will be more business news throughout the day on the bbc live webpage and on world business report. you can keep up—to—date with that news we had of a possible explosion in west london after reports of an expression attitude train at parsons green station. goodbye. the overall theme of the next couple
of days is still to be sunshine and showers. today, a fraction cooler given that the wind has more northerly about it. but on occasion, sunshine and showers doesn't cut the mustard, because they will gang together in south wales. let's look at the picture around the middle of the afternoon. by this stage, it will be more showery than persistent rain. that will not be the case for east anglia. here, it will look like an leaden skies. then you get a chance of sunshine once that feature has gone through for northern ireland. the south—west of scotland is doing well with the northerly breeze. it is the north and east of scotla nd breeze. it is the north and east of scotland that are picking up more than theirfair share scotland that are picking up more than their fair share of showers. that continues overnight as another
belt of weather eases across the british isles, plumping those showers together. towns and cities may see temperatures fall into single figures. where are keeping an eye on the prospect of low pressure over the north sea influencing scotla nd over the north sea influencing scotland and northern ireland. elsewhere, if you are stepping out, you will need something waterproof because there will be plenty of showers, some of those quite sharp. any of the premier league fixtures, there will be enough about the cloud for a showery burst of rain at some point. in scotland, the rain may be quite prolonged. and it is going to be a chilly
night. but a bright enough start to sunday. still a speckling of showers, not with the intensity, nor will they be as widespread. it is 9am, welcome to the programme. the sound becoming too familiar in japan. siren a second missile in three weeks is launched by north korea days after the un security council voted to impose tougher economic sanctions on north korea for testing a powerful nuclear bomb. we will be speaking to a tourist awoken by the sirens. social media, we get to air our