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tv   Dateline London  BBC News  July 11, 2021 2:30am-3:01am BST

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constitutional reform and better living conditions for all. in an audio message posted on twitter, she urged the people of haiti to continue fighting. more than 30 million people in the southwestern united states are experiencing another brutal heatwave. nearly 200 square miles of forest has been closed due to wildfires and people have been moved from their homes, close to the nevada border in northern california. queen elizabeth has sent a message of support to the england men's football team, ahead of their euro 2020 final on sunday. if they beat italy, it'll be their first major tournament victory since 1966. italy haven't lost any of their previous 33 matches. now on bbc news, dateline london.
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hello and welcome to the programme which brings together some of the uk's leading commentators, bbc specialists and the foreign correspondents writing, blogging and broadcasting to audiences back home from the dateline london. this week, a taxing question for the g20 — making multinationals pay theirfair share, and is the head of the imf naming and shaming the g7 over vaccination? i am joined byjeffrey kaufman, a news anchor in both his native canada and the united states as well as a much—travelled foreign correspondent. isabel hilton, newspaper columnist and broadcaster who founded china dialogue, an independent organisation trying to foster greater understanding of china and improve its environment. and you see him there, our bbc business editor simonjack,
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good to have you with me in the studio. welcome to isabel and jeffrey. lovely to see you again from distant parts. now, no taxation without representation — the slogan of the american colonies after a sales tax imposed on them by the british parliament when they had no elected voice. the companies that will end up paying more tax as a result of the global corporate tax deal on the agenda for the finance ministers of the countries which form the g20 meeting in venice this weekend, may lack representation, but they have had the money to fund a skilled lobbying operation to try to influence the shape of this reform. you may not feel much sympathy for them or indeed for caribbean tax havens, but should we be more concerned about the impact on the poorer nations? simon, explain to me exactly what this proposed deal is. there are two pillars to this. the first one is new rules to force companies to pay taxes on the sales and profits they generate in the countries in which they operate, even if they don't have physical operations there.
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this clearly targets the digital services companies, the googles of this world, who basically make enormous profits and sales in countries where they don't necessarily have a massive physical presence. that's part one. part two is a global minimum tax rate, which was agreed at the g7 and ratified at the g20, of at least 15%. us and france would like to see it higher, other countries would like to see it lower, but at least 15%. what that would do is reduce the incentive for companies to shift profits around the world to low—tax jurisdictions, where they can deprive what people see of their native countries in tax revenue, which has been in the tax equivalent of outer space. there was a particular apple arrangement where they had a subsidiary that wasn't resident for tax purposes in any country on the world! so that's why i say it's the tax equivalent of outer space. but that's been changed and let's hope there is real consensus for this change and we've been talking about it for years.
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two things happened — biden and covid. biden is a fan of these proposals, where donald trump wasn't. and covid, you've got exchequers around the world which have been cleared out by covid and need some way to fill them back up again. thank you for that. a very clear explanation. isabel, does it, in your judgment, pass the fairness test on a global basis? i don't think that this particular set of arrangements will pass the fairness test in the sense of greatly benefiting poor countries. i think that's not entirely what it was designed to do. after all, the 620 countries account for more than 80% of global gdp, so we are already in a monstrously unfair situation. i think what poorer countries might hope for is, if greater tax revenues can be harvested by the richer countries from multinationals, that might make richer countries more generous towards the poorer countries, which they certainly need to be.
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but as simon said, there are two aspects to this, and both have been criticised. the tax rate, because it's relatively low and certainly i think president biden would have liked it higher. but he has a very limited chance of getting it through congress against republican opposition. but the second problem is the taxation for operations would be on a tax rate where the profit margin is more than 10%. i can see the tax lawyers of the multinationals rubbing their hands and getting to work on new strategies for evading it. so i think it's not necessarily the great miracle that rishi sunak proposed it to be, but we shall see. i think everyone agrees that these corporations need to pay tax, they need to pay more tax, partly because they're destroying businesses in other countries that
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do pay tax. there's a kind of a double whammy. but whether or not this is going to deliver, we will see. i'm sure those lawyers would probably characterise it as �*tax avoidance�* rather than �*evasion�*. in terms of the statistics, jeffrey, around a third of the profits of us multinationals were listed for tax purposes in three countries — ireland, luxembourg and the netherlands — which, surprise, surprise, have comparatively low corporate tax rates, but which only accounted for, i think, 5% or 15% of their sales maximum, in 2018 figures. janet yellen, the us treasury secretary, must be rubbing her hands with glee at the prospect of this. this is an early victory for her, for sure. - she is respected and a seasoned diplomat in the financial world. this is something that she very much wanted and, you know, i this is something that really represents the shift - from the trump white house to the biden white house - and it reflects new realities of the global economy. -
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governments need more money and we are all aware of these i stories of amazon and apple and starbucks sending - their money to places . where they're not doing business, where theyj can pay lower taxes — places like panama and | bermuda, luxembourg, the netherlands, ireland. and of course - it is tax avoidance, on a technical level. for us as consumers, _ and as taxpayers in the uk see, on the high streets and main i streets in the us and elsewhere closing down their shops . because amazon has taken the business away, this - is revenue that's being lost and the taxation goes - with those closing shops. they need to recover, - it needs to come back in real dollars that can be sent to support governmentl infrastructure, government operations and building - a future. simon, how does this, in terms of the implementation,
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deal with something that all treasuries rely on, which is exemptions often created as incentives to encourage companies to locate in a particular part of the country and we do a lot of it in the uk, make new research investment? presumably exemptions to be negotiated, that's the fine detail. is that where this could all end up being not as substantial as they hope? it could get messy in a number of ways. it looks like we are getting towards an exemption for financial services. take a bank like hsbc, headquartered in the uk in london, does most of its business in asia. rishi sunak is worried that we have this big massive bank, i'm not likely to get a massive profit out of this, many companies are working unregulated over there, they have a physical presence and there should be an exemption for that. i think the messy bit will be, when you take a company like amazon, its retail arm,
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the reason it is destroying big businesses on high streets and main streets is because its profit margins are almost zero in its retail business. how are you going to attack that? there is talk about trying to find the profitable bits of amazon. its web services, cloud computing, that makes an astonishing amount of money, it's easily the most profitable bit of amazon. trying to tax that separately — where does that end? every company has subsidiaries — are you going to say, i like this one, and this one, but i'm not going to count that one, i think that's going to get very messy indeed. talking to tax lawyers, which i do boringly enough on a quite regular basis, is this going to put the big four accountancy firms out of business and aggressive tax plans, where they move it on the global map? oh, no, this is going to be a bonanza for them because this gives them a whole new set of rules to talk into and advise their clients.
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people may not feel much sympathy for places like bermuda and panama, but they are signed up for this deal and it is the end of the good times from their point of view. is there any sense of a moral obligation on other parts of the world? these countries are going to go through quite a traumatic adjustment and what might be a more attractive way of doing business, but one that might have consequences in the short—term. i guess, again, it remains to be seen how traumatic it is. i suspect, like the tax lawyers, the tax havens will not be quite as badly hit as you perhaps think they should be if this to work. every tax haven is little bit different, and it is not just a low corporate tax that they offer. some of them offer zero personal income tax, zero inheritance tax and a whole range of benefits including secrecy, that are attractive to businesses, and i suspect that they will continue to proffer these
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services, and clients will continue to find them useful. they didn't exist for nothing, and i don't think that this one measure is going to do away with them. and then you have countries like ireland, where one in eight people is employed by these giant, particularly the digital firms, and i think they won't leave ireland just because they don't have a low tax rate. if there's a uniform tax regime, there is no particular advantage in relocating and they're pretty much embedded. so, conditions will vary depending on the arrangements countries put in place. jeffrey, do you think the modern—day descendants of the stamp act congress of 1765 will actually vote to endorse this? it has to be ratified by each . country, and if the us doesn't ratify it, then - there's a big problem. biden, as we know, has a split senate and a razor—thin -
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majority in the house, - and he's got to get it passed. republicans, it's really- interesting the cultural divide that this represents. biden and the democrats argue this is about investing - in infrastructure, education, and a clean environment. i republicans say that _ that is not how you get growth. you do not tax - corporations to do it. you give corporations more money so they can invest. i this is the dichotomy. within american politics when it comes to finances and financial policy. - they've got to win, _ biden has to win in the senate. he needs two thirds support to get this through and so he has| to find and persuadel republican senators, who are somewhat more - moderate than their brethren in the house, to support this, and it's going to be tough. . watch this channel, because i
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the outcome is far from clear. you lived in a tax haven. very briefly. can a country like that survive? there are all sorts of other wheezes to be had out there. for example, the super rich will, individuals will still find these places useful but ijust want to pick up on whatjeffrey said. people think it is great that we will get all of these extra taxes. we are mainly talking about these us super companies, and actually the big winner on this is going to be the united states, and it's always been the case whenever we've had this debate, that us presidents say, listen, buddy, ifanyone�*s going to tax these companies, it's going to be us. and i think they will get most of the tax revenue because it will make no sense if you got your brains trust in california, having all of these outposts in far—flung places around the world. so, the us is going to be the big winner. but the point is correct that the ability to set your tax rates is going to be a big
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part of sovereignty. thank you very much. it's less than a month since the members of the g7 were meeting on an english peninsula saying they would end the pandemic by getting safe vaccines to as many people as possible as fast as possible and this week the managing director in effect told them that they're being too mean and too slow. kristalina georgieva said the richest nations must do more to help the poorest cope with what they called the devastating double blow of pandemics and the economic damage set the price the g7 baulked at paying would be cheap at half the price. what do you make of this? just before the meeting of the g20, they suggested that a stinging rebuke of the speed and the enthusiasm of the biggest nations have shown for tackling this disparity created by the pandemic.
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well, indeed, and it is hard to disagree. it was said at the time of the g7 promise that it was pretty unedifying to see the world's extremely wealthy countries promising to end a pandemic with an offer of approximately a tenth of what is required, according to the who. the who says we need about 11 billion doses for the rest of the world, and they collectively offered rather less than one billion. it's really not good enough and it is a pattern of lack of solidarity that just ran through that summit and has been pretty much in evidence for 18 months. it was very much the same on the climate finance pledge which was also on the table at the g7 summit. that is a pledge of 100 billion a year, which has been on the table
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since the copenhagen summit in 2008, which has never been fulfilled. it is still not fulfilled and that will come up in the 620. and these things matter, notjust because it looks mean and ungenerous, which is certainly unattractive, but it matters because we live in a connected world and if countries are being pushed into crisis and further in the pandemic case, will be breeding new variants, which will come back to us as we ought to have learned by now, if there being pushed into deeper financial crisis, it is going to generate instability and crises which in the end the developed world has to deal with and on climate again, you wreck the glasgow cop by refusing to honour the promises to the poorer world because we need everyone to put their shoulders to the wheel in glasgow. so, this is utterly self—defeating.
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we really ought to be — we ought to deliver on the promises and vaccines are up there as a very conspicuous promise. there is a whole queue of other promises behind them. joe biden said america would be the arsenal of vaccination. does he not want to spend the money? he is investing hugely within the us. isn't there an opportunity, given the imf director said there would be trillions in extra global economic benefit, if only the countries that have the money were spending it in a very short period of time to get the vaccine out there. just today the imf approved 160 billion towards this effort, - which is a significant step that had been stalled. . it does move things forward. you are right _ the us is sending one million vaccines to indonesia. - that is a staggeringly small amount for a country- being ravaged by covid—19,
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and to give you an idea - of this, 7.98 billion people, take about a quarter of that as children, you have 6 billion adults. - each needing two vaccines, | until the johnson & johnson vaccine can be spread - around the world at least. we only have about 3 billion vaccines delivered and most of them to the first world, - only 5% of the adult population has had two vaccines in india. so we do have a looming catastrophe. _ we have this very worrisome i recovery happening and we saw the us economy recoveringj with 7% growth, and that is fantastic, but it is- a k—shaped recovery. you see the western economies go up, and the developing and i emerging economies going down. the separation that isabell was talking about between the wealthy nations i and the poorer nations is going to be exacerbated
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by this pandemic. - but also because of this challenge it really can . come back and bite the western nations because these - variants are out there. if we don't control this virus. and the variants before it can reproduce and change, - we are going to be in trouble for a very long time globally. and so this is a huge - impetus to invest in this. it's not happening fast enough i and we seeing some acceleration but it is still unacceptable. something of a moral challenge as well for the uk pm. he chaired the summit and he was kind of the driving force in getting that communique. saying in this country that we've got vaccination allows for us to have this almost bonfire of covid—19 regulation on the 19th ofjuly and we'll know when they make the final decision.
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in a sense, there's a danger, a dangerous approach to this. some say the duty of an elected government is the defence of their own citizens. and the uk government has painted itself into a bit of a corner with its vaccine strategy because with its vaccine strategy it is relying 100% on it and social distancing is going out and it relies on the strut to do the donkey work in terms of keeping the country safe. so that puts in the difficult position to contribute to the vaccines because you're putting all your bets in the vaccines and keeping this country safe. the uk pledged 100 million doses and in government circles, the uk has done its bit here. and they put 100 million on the table and given this, the direction of travel with the restrictions and social distancing on the way out, vaccines are going to be there, they have to be there to support, which i think probably ties their hands a little bit in the generosity that they can make.
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but as jeffrey and isabel said, this is a pandemic. if you don't do it like that, it comes back to so much vaccinate everywhere, or you vaccinate nowhere in some sense. how do you respond when the measures are lifted, i will continue to wear a mask on public transport and credit situations and i think, that is also not going to feel, oh, my goodness me, isn't life so weird? i think we've gotten used to some new protocols and remember we used to look a little puzzled when asian travellers would get off the airport and i would think, what are they doing? that was sars 20 years ago. and jeffrey. how will you respond? i think removing masks in the public transport, j
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crazy, we're are - setting ourselves up for yet another 180 i from the government. but then boris johnson - understandably wants to move the economy forward, - but we cannot be in suspended animation perpetually, - but somewhat more incremental approach might be wise here. i am in london right now. scotland is not doing terribly well in terms of numbers. i too will continue to wear a mask, and none of these decisions at a government level are easy and clearly, there are a lot of sectors are hurting. none of them are negatively affected by mask wearing. mask wearing, the removal of the obligation is entirely politics and i have very little sympathy for that. so, i will continue to wear one. just before we go, a minute to talk about something you think perhaps we have not paid enough attention to but we need to keep it in our minds. jeffrey, do you want to kick us off? i have not lived in canada -
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for a quarter—century and i've just been mortified by these reports of unmarked - indigenous graves. found in residential schools across canada. you've heard of that overj the last number of weeks and canadians are so proud of their goodness and this i is just not something i that is easy to stomach. in the wake of that, - a really interesting piece of news this week that is kind of tangential— but also important. mary simon appointed canada's first indigenous governor- general in northern quebec, she is now going to be - a representative, and in- essence canada's head of state, that is going to be symbolic, i
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usually symbolism in that role because it doesn't really matter, but in this role, | it is really fascinating but one caveat is, - she isn't bilingual. she does not speak french, which the other official - english of canada and that sets up a bit of a problem _ forjustin trudeau but given what is happened recently, | canadians seem disposed to. saying that it is a good move. she said she will learn as quickly as she can. i will continue to be fascinated by the impact of withdrawal of forces because very big interest and one of the world's biggest copper deposits which china bought ten years ago, has never been able to develop so there are minerals, including rare earths that china would like to have — another thing is security and watching the china make friends with the taliban has
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been really interesting because it is hoping that with taliban support, it can continue to secure xinjiang but to defend against attacks against an energy pipeline in western china and pakistan, which runs through some very hostile territories, and we're watching china develop into a security actor well beyond its borders and i think that's going to be well worth watching. how they will make friends with a government that is so heavily criticised for its treatment of its minoritymuslim community. how long have i got? just under a minute. i am not sure that this hasn't got enough attention. but it is going to be one of the defining things of our age. there is covid—19 in this climate, but inflation. i think you're at this very interesting point was the economy is roaring back 7% growth in the us, you can't have 7% growth with interest rates at next to zero for very long — what is going to be interesting is whether the supercharged economies and recoveries, when they still got policies, borrowing money which is more
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suited to a financial crisis of ten years ago, at some point, something has to give. there's already signs that the government, the rate at which they can borrow money is going up which have big implications for companies and individuals. thank you very much to isabel, simon and jeffrey, thank you all for watching, we're back at the same time next week. wherever you are in the world, goodbye. hello, fairly quiet on the weather front right now. plenty of dry weather across the uk, but we expect some showers and even the odd downpour and thunderstorm. and, of course, it's a very big day in the world of sport. we've got wimbledon, we've got
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the final at wembley too, so eyes on the weather too. we'd like the best weather we could possibly get. so, this is what it looks like early in the morning — some sunshine and dry, but weather fronts are approaching and showers are brewing. the good news is that, for wimbledon, we're expecting fine weather conditions, very pleasant temperatures of around 18 to 20 celsius with some scattered clouds. so, this is what it looks like for most of us through the morning. it's dry, but then in the afternoon, very quickly, heavy showers will develop across parts of northern england and scotland. some of them could be thundery. also in the southwest, a weather front is approaching at the same time, so wet weather for the west country, parts of wales too. and this weather front will move slowly eastwards through the course of the day, so areas that will have been dry through the afternoon may turn a little cloudy and then wet, and that does mean that, just around kick—off time, we are expecting some rain at wembley. but the good news is
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that it should be mostly light and fleeting. so, the forecast, then, into the week ahead. well, here's a dip in thejet stream here. and you see some blobs of blue, so that indicates further showers on the cards. quite often, when we do get a dip in thejet stream, we have low pressure over us and the ingredients for further showers, so lots of showers on the way once again on monday, some of them heavy. if you squint, you canjust about make out some lime green colours there. that indicates a downpour or two. temperatures in the sunshine will be around 20 degrees or so. the good news is that on tuesday, the weather improves. there will be fewer showers around. but we are watching these very close by over the near continent, northern france. they could just about clip the southeast. but the further north and west you are, i think the drier and brighter the weather will be on tuesday. and then from midweek onwards, we are expecting high pressure to gradually drift from the azores in our direction. that means that the weather will settle down, there will be more dry weather around, lighter winds and also a little bit warmer too.
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i suspect in one or two spots eventually towards the end of the weekend, temperatures will hit 25. but wherever you are today, have a good day.
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welcome to bbc news — i'm mark lobel. our top stories. the widow of haiti's assassinated president claims he was killed because of his drive to improve the lives of his people. we hear from the country's minister for elections for now i think the country is calm. but we still believe there is a threat for the elections to come and we still believe haiti will need some kind of assistance. california and nevada brace themselves for record breaking temperatures as the us heatwave continues. and within the last few minutes argentina has won the copa america, beating arch rival brazil. the world number one, australia's ash barty, wins the wimbledon women's singles final.


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