tv BBC Business Live BBC News July 11, 2019 8:30am-9:01am BST
this is business live from bbc news with maryam moshiri and sally bundock. taxing the tech giants. france looks set to introduce a new ground—breaking digital tax, which could lead to a fresh trade war with the us. live from london, that's our top story on thursday the 11th ofjuly. the tax will hit the likes of google and facebook, and has received little support on both sides of the atlantic, with the trump administration concerned about its potential impact. also in the programme — south korea prepares for the worst, as it puts $250 million aside to deal with escalating trade tensions with japan.
the financial markets in europe have opened and are looking positive for now. and would you let a computer pick your outfit? we'll be hearing from the online personal shopping service whose stylists get a helping hand from technology. today we want to know — are you concerned about the impact sugary drinks are having on your health? new research shows it increase the chances of getting cancer, so to what extent do you choose what you eat based on health? and should beat drinks industry take more responsibility? get in touch —— should the drinks industry take more responsibility? hello and welcome to business live. we start in france — where a pioneering tax on tech firms is expected to be approved by the senate today, after clearing the lower house last week. it comes amid public anger across the continent at tax avoidance by the likes of google, amazon and facebook,
who locate their eu headquarters in low—tax countries and pay virtually nothing elsewhere. but it has already threatened to spark new trade tensions — with the trump administration launching an investigation to see whether the move "unfairly targets us firms". the plan — masterminded by french finance minister bruno le maire — is for a 3% digital services tax on all revenues rather than profits made in france. it will hit all companies with global revenues of more than $843 million. around 30 tech companies are likely to be affected — mostly from the us. the french finance ministry estimates that the tax will raise more than $500 million this year, with that figure rising in future years. france failed to persuade eu partners to impose a europe—wide tax in the face of opposition from low—tax countries such as ireland, where many big tech
firms have their eu bases. it's now pushing for an international deal with the 3a countries of the organization for economic cooperation and development. the us has raised objections and the tech industry warns digital taxes could lead to higher costs for consumers. shona ghosh is a senior technology reporter for the website business insider. good morning. so, explaining how this will work. there will be a vote today. what are your thoughts on this move? it's an opening salvo. various governments have been talking for years about how amazon, facebook, google all of these companies make a lot of money through online sales and advertising and root their sales through low tax countries and don't pay taxes in countries and don't pay taxes in countries like the uk and france. there is a sense that they are messing over those countries and
smaller retailers. it is an opening shot to try and sort out the problem. whether it will be how the ultimate solution will look remains to be seen. it could trigger a fresh trade war between europe and the us or at least that's the impression the white house wants to give france. yes. we know that the white house is capable of doing that. we've seen how they've treated huawei and how they've become a pawn in the us china trade war. the white houses more than capable of doing that. clearly there is more of a united front among the european nations particularly in the uk and france. the treasury secretary stephen mennie chin said recently that the t20 will try and push ahead to try and come up with a global a nswer to to try and come up with a global answer to this issue —— steven
mnuchin. countries like ireland are pushing back because they benefit from having these low tax regimes and having companies like apple based there, reaching sales through the country and having international bases there. perhaps it's down to the uk or france to push forward with initial legislation and set the example for everyone else. thank you. when we get news from the authorities in france we will let you know what they decide. let's take a look at some of the other stories making the news. the british consumer goods giant reckitt benckiser has reached a $1.1; billion settlement with the us authorities. it's over claims that it's former subsidiary indivior illegally tried to increase sales of a drug used to treat opioid addiction. the company maintains it has done nothing wrong but says a settlement is the best way to draw a line under the issue.
brazil's lower house of congress has approved big changes to the country's pension system by introducing a minimum retirement age and increasing workers' contributions. the federal government spends nearly half its budget on pensions and reform was a key election pledge for president bolsonaro. trade unions have led widespread protests against the changes. here in the uk the energy firm cuadrilla has announced fracking is due to resume at its site in lancashire by the end of next month. no fracking has taken place since december because of a series of underground tremors. critics argue the technique to extract gas and oil is is bad for the environment. in the us it has been used to significantly increase the amount of domestic energy production. south korea has said it's setting aside up to $254.8 million to help cope with japans export limits on high tech materials — the latest in the tit—for—tat battle between the two asian giants.
hyung eun kim is in seoul. this escalating trade dispute could impact on some of the world's top tech firms. it's having a big impact on companies like samsung. that's right. especially yesterday, tensions escalated even further because japan accused that some materials may be leaking to north korea. this is a serious allegation and could mean that, it's accusing south korea of complying with un sanctions against north korea and the south korean government was quick to respond to the allegation, saying the accusation is groundless. tension is of course escalating, many of south korea's expressing anti—japan sentiment. seven out of ten south koreans said they support
boycotting japanese goods. it remains to be seen if anything will change tomorrow because there will be working level talks between trade officials of japan and be working level talks between trade officials ofjapan and korea. this is the first of its kind since the trade war or trade restrictions to earlier this week. let's talk about the markets because in asia we've seen quite a bit of movement especially in terms of the nikkei. markets moving positively. injapan shares in nintendo were the most traded and rose 4.2% after the company introduced nintendo switch lite, a device dedicated to hand—held game play. let's have a look at what european stocks are doing. they are following the lead of asia.
let's get more now on the speech from the head of federal reserve, samira hussain sent us this report. all fed shares have a difficult balancing act. they need to keep inflation low and everyone in work, and they also need to keep markets calm while being able to change their mind when the economy changes course. butjerome powell has a more precarious position than most. in the face of constant criticism from president donald trump, he must keep doing what's best for the us economy while never being seen to cave into presidential pressure. his appearance in congress on wednesday showed what a tightrope mr powell is on. first was the politics. he was asked what he would do if the president tried to have him fired. if you got a call from the president today or tomorrow, and he said, i'm firing you, pack up, it's time to go, what would you do? well, of course i would not do that. i can't hear you. laughter.
my answer would be, no. but if he was watching, president trump may have been mollified by the rest of mr powell's appearance, because in his comments on the economy, mr powell seemed to suggest the fed is getting ready to cut rates — exactly what mr trump has been urging. nice to see them chuckling in congress. joining us isjeremy stretch, head of currency strategy at cibc world markets. good morning. i'm guessing you are hanging on jerome powell's good morning. i'm guessing you are hanging onjerome powell's every word. absolutely. one of the big events of the week, we were watching and waiting for that testimony. we had the prepared statement earlier so we we re had the prepared statement earlier so we were going through that before he appeared on capitol hill. the question and answer session was always going to be important and clearly he's left the market with a clearly he's left the market with a clear impression that the fed would
be cutting rates at the end of the month. but some are still assuming he could be cutting notjust a quarter of a point but may be a half point. i'm not sure he will but that is one of the discussion points and hence the reason why equity markets in particular have been so well supported. let's talk about the uk, because we had some figures from the royal institute of chartered surveyors about the housing market. why are these figures so interesting? the majority of the data we've been seeing has been very downbeat. here we see some evidence that perhaps there is a bit of resilience or rebound in housing market. price expectations which had been heavily in negative territory have rebounded. they were still marginally low. it is an important sign that the housing market has a bit more resilience and there are also signs of new enquiries picking up. perhaps people are starting to look through some of those brexit related issues and deciding, if they have to move house it is still an opportune time. i was going to
change the subject, did you want to follow on? i was going to say, is beginning get into the summer season, where beginning get into the summer season, where are you beginning get into the summer season, where are you at this summer? we've got a lot going on and we are going to find out who our next prime minister is going to be in the uk. will people be able to leave their desks and go on holiday and not look at what's going on for and not look at what's going on for a week or not? you're right. there isa a week or not? you're right. there is a great layer of uncertainty, not just brexit related issues but we are waiting for the transitions of the european central bank, as we await the debate about us interest rates. there are a number of variables and that will keep people possibly quite nimble. i think people will be lining up positions is beginning to the summer lull but will be monitoring those positions and monitoring the news flow from the sunbed in to make sure they can
look at any opportunities should they come through as we see structural change is playing out over the next few months. we've got to be nimble this summer. not too much alcohol by the pool! your question was better than mine by the way! laughter we still have much more for you this morning. including... how comfortable do you feel about an algorithm picking your outfit for work? we'll be hearing from the online personal shopping service whose stylists get a helping hand from technology. you're with business live from bbc news. the proportion of women on ftse 350 boards has gone up from 7% to 32% according to the latest female ftse board report. but the report says there's worrying evidence that women are being appointed to symbolic roles, rather than reflecting wider
changes in workplace culture. melanie, have you had a look at this report? what do you make of it?|j have had a look at the report. it is a good news story. since the report 20 years ago, we started moving from 7% to 32% which is a fantastic result. we are well on track to meet the target by 2024 representatives of women on boards. isjust i don't think so but there are some worrying trends we need to look at. we do need to look at the nature of the board roles being taken up by women and increasing amount. undoubtedly, we know that market facing roles,
the cfo, the ceo, those roles are still worryingly low. where we have seen still worryingly low. where we have seena still worryingly low. where we have seen a great increase in the amount of nonexecutive directorships being taken up by women. that's something we would have to look under the bonnet and say what exactly is happening here? another worrying trend is the short length of tenure. women on boards typically have a shorter length of tenure. what is happening there as well? i don't think it'sjust happening there as well? i don't think it's just tokenism happening there as well? i don't think it'sjust tokenism but happening there as well? i don't think it's just tokenism but there are some trends we have two nip in the budget in order for us to really see equal representation. ethnic minority women, how are they being represented? they are one in ten. we acknowledge that that is not where we want to be and so this year, we've been looking at our bame women
pipeline. this is a winterwatch pipeline. this is a winterwatch pipeline from across all of these fears saying there are women ready and waiting to be part of the ftse 350 boards. you're watching business live — our top story, in a few hours from now, france's parliament will decide whether to introuduce a new digital tax, which is likely to target global tech giants. would you let a computer decide how to dress you? using technology is one way to remove what for some of us is a daily headache of deciding what to wear. i have to say, when you present on tv, it's even more exaggerated. tell me about it! stitch fix is one company that's trying to do just that by using the combination
of its own algorithm and personal stylists to pick out indvidualised outfits. customers receive boxes of clothing, pay for the items they want and return the rest. it was the brainchild of katrina lake who started by sending her first shipments from her own apartment but soon became the youngest female chief executive to list her company on the stock exchange at the age of 34. when i sat down with katrina she explained to me how her business works. the way it works is we get to know our clients, men and women, they come online to our website, they fill out a style profile letting us know what types of price points they like, what categories of clothes they are looking for, what aesthetics they gravitate towards. and then they'll schedule a date to receive a stitch fix. a stitch fix will be a set of five items that are curated specifically for you, that are selected by a stylist based on your preferences and what you're looking for, so that you can try things on in the comfort of your own home. you try things on, you can try things on with your own shoes, with the things you already own, and then you simply keep and pay for what you'd like and you send everything else back in an easy eay.
it's just like the luxury of having a personal stylist but at a much broader, accessible range of price points. so, how do you work out what exactly a man 0!’ a woman needs in terms of fashion? we actually use a combination of human stylists and algorithms. so, we arm our stylists with these amazing algorithms that really help us to be able to understand over this broad base of millions of people, because we already have a large business in the us, what types of products are likely to work for what types of people. and so our stylists will be able to know that this denim is more likely to work for your body shape, or this denim is going to be great for your price point. and that's based on real data that we have based on all of the experience that we had serving our many clients. so, this is where you see data and retail really working together. how important is that, given that in store sales are having problems baiting the us and very much in the uk? ——problems both in the us and very much in the uk? there's some categories
of clothing, denim for example, dresses for example, that are incredibly difficult to shop online for. you can look at a whole page of 30 pairs of denim and you would have no idea which ones are best for your body shape. and so, to be able to have a stylist who have algorithms and data that really understand what historically has worked for different women and men of different shapes and sizes is really, really helpful in starting to understand, out of all of the options out there which ones are going to be best for you. how did you actually come up with the idea of stitch fix in the first place? i'm not the most fashionable person in my family, and i wasn't a stylist, but i really love the idea of being able to have access to help and really loved the idea of having somebody to help me pick clothes. i still love clothes, i still love to feel my best and i still love being confident, and now i have two children and i have lots of other priorities. and so i really felt like there is this need in the market to be able to combine this personal styling and making shopping easier. there is a big difference in the us and the uk in terms of the kind of markets you're working with. how do you make sure that you nailed both markets correctly? the merchandise is actually not
at all similar across the two markets, because we really are respectful of the way that people dress and what different brands and different styles people are looking for. from a psychographic perspective, though, i think there is actually lots of similarities. i think baiting the us and in the uk, there's ——i think both in the us and in the uk, there's lots of people, men and women, who feel like they have a lot of priorities in their lives and aren't finding that e—commerce and spending time sifting through pages in e—commerce or spending their weekends at stores is the way that they want to spend their quality time. how important is diversity? i know that you are a very diverse company. how important is that to running a business? i deeply believe that, and our management team is incredibly diverse, our board is incredibly diverse and our whole company is very diverse. that's been true since the origination of the company. to me, i think it's really important. we talk about the idea of culture add versus culture fit, and i think people with different backgrounds bring different perspectives. if you fill a room with people who are all the same as you, you're not actually bringing anything new.
you're not actually learning, you're not growing. and so, i think it's a really core tenet of what we do at stitch fix and we're really proud to be able to be that living, breathing example of what diversity in the workforce can look like. diversity dividend, they call it. let's ta ke diversity dividend, they call it. let's take a look at brexit. a no—deal brexit would cause the pound to plummet and be worth the same as the dollar — that's according to the boss of virgin, sir richard branson who has been speaking to the bbc. he said that this would be "devastating" for virgin, and force the group to shift investment out of the uk. a hard brexit would result in the freightjust a hard brexit would result in the freight just disappearing, so a hard brexit would result in the freightjust disappearing, so that would be another 100 million down the drain. i can carry on. there is a list, an enormous list when you
look at each company. it obviously is going to result in us spending a lot less money in britain and putting all our energies into other countries. we are going to look at some of the other stories out there today. this one has got so much traction today, everyone is talking about it, it is reported in the british medicaljournal, looking at 100,000 people in france to show that sugary drinks lead to a higher risk of cancer. indeed. there are always stories about the incidence of cancer and how it can be changed by life style of cancer and how it can be changed by lifestyle but i think the important point here is the reference to sugary drinks. that seems to be one of the increasing debating points in terms of raising counter risks in terms of sugar and links to obesity. outside of smoking it seems to be the case that obesity
and sugarare it seems to be the case that obesity and sugar are contributing factors. it's not just fizzy and sugar are contributing factors. it's notjust fizzy drinks, its juices. even if you were to squeeze oranges in your own home that is considered to be one of the sugary drinks. you're still talking about natural sugars. not being a medical man, but the ethos i would look at in life is things in moderation. as long as you don't overdo any particular thing, you're not necessarily putting yourself at obvious risk. moderation is the way forward. i think that's a good plan. let's bring in some tweets. so many people are tweeting about this. parry says, more tax on sugar means iam parry says, more tax on sugar means i am paying parry says, more tax on sugar means iam paying more parry says, more tax on sugar means i am paying more to eat and drink the same things i was eating before. it will squeeze more money out of the less fortunate. dan says i gave up the less fortunate. dan says i gave up these drinks last year and i switched to prosecco. prosecco is
actually full of sugar. that's probably why i like it! quite a few people are already on board with this thinking though. let's talk about the other story we've highlighted which is amazon. it becomes the fastest growing music streaming service. many of us might be surprised. indeed, although it seems it's playing catch up. obviously there are other services which are widely subscribed to already. in a sense, the rate of catch up is what we are talking about. one of the interesting points in the stories is the demographics involved. this service is looking at a different demographic, obviously most of them have been targeted to youngerage most of them have been targeted to younger age groups. here most of them have been targeted to youngerage groups. here it most of them have been targeted to younger age groups. here it seems to be that amazon are getting over 555 signing up quite significantly. that'5 signing up quite significantly. that's quite an interesting divergence and may be it's also a function of the amazon subscriber base. do you get your music streaming through amazon if you are a member of amazon prime? you can
extend your services into that. as with all of these companies, they are trying to broaden their offering to keep you within one particular sphere and not transposing you into some of the other technology giants. it's such a massive market, there is room for everyone. indeed. the whole music industry has changed immeasurably. we offer certain age where we would have bought our music in different ways. what is on your amazon or spotify or apple music?- the moment i've been listening to british group bastille. in our house, my boys are crazy about queen. they saw bohemian rhapsody.
is the next generation coming through! my little girl wants listened to notorious big. will say no more. that's it from business live today. good morning. quite an messy picture, a lot of cloud around. the focus this afternoon on thundery showers especially in eastern scotland. low pressure moving into scotland, it's quite messy at the moment. lots of cloud with outbreaks of rain. a lot of the rain clearing away to the east and then further showers developing and moving further towards the east this afternoon. a few bright skies in the south—east of england, a few sunny spells in northern ireland and the west of scotland. maximum temperature is getting up to 21—25. it's in the north—east of england
and eastern scotland that they will be heavy on thundery showers developing. the lightning bolts as we get into this evening will be giving quite a bit of rain in a short space of time. that could lead to some problems. both showers and thunderstorms clearing away to the east and many of us overnight tonight will be drier with clearer spells. not a cold night, temperatures no lower than 11—16. into friday, something a bit quieter. high pressure building in from the west. we've still got a weather system moving south across eastern areas. that will bring a few showers on friday especially during the afternoon where they can be a bit heavy. elsewhere, some sunny spells and for most of us it's going to bea spells and for most of us it's going to be a dry day on friday. a bit more cloud for scotland and northern ireland. maximum temperature is about 19—24. feeling quite warm when you get that sunshine especially.
into the weekend, this area of high pressure will continue to build in from the west, moving east. that will settle things down nicely as we go through saturday and sunday. can't completely rule out the odd shower during saturday. quite a bit of cloud but some bright skies and a bit of sunshine coming through the cloud from time to time. feeling chilly along the north sea coasts. 18,16 chilly along the north sea coasts. 18, 16 in aberdeen. elsewhere, further inland, temperatures getting into the low to mid 20s. by sunday, another dry day with sunny spells and define a weather continuing into the early part of next week as well. temperatures remaining around the low to mid 20s. goodbye.
you're watching bbc news at nine with me carrie gracie — the headlines: the ministry of defence confirms that three iranian ships have tried to intercept a british oil tanker in the persian gulf. senior labour figures say they're appalled by allegations that close allies ofjeremy corbyn tried to interfere in anti—semitism cases. there is obviously some participation in these disciplinary cases from the leader's office, which means they are responsible for dealing with the rebuilding of trust in thejewish dealing with the rebuilding of trust in the jewish community. the french parliament is expected to approve a new tax on technology giants that could provoke retaliation from the united states. fruitjuices and fizzy drinks are linked to increased chances of getting cancer, according to a major new study. researchers discover the earliest evidence of modern