21 July 2014 Last updated at 05:45

Business Live: Monday 21 July 2014

    06:00: Joe Miller Business Reporter

    Good morning. There's mounting pressure on president Putin - as Britain, France and Germany prepare to impose tougher economic sanctions on Russia. Plus we'll have news of a Treasury consultation into UK pension reforms. Stay with us.

    06:01: Matthew West Business Reporter

    Morning folks. You can get in touch with us in the usual way @BBCbusiness or bizlive@bbc.co.uk


    The chancellor, George Osborne, has made a significant change to his reform of private pensions - announced in the last Budget. Savers - who are to be given unrestricted access to their pension funds from April next year - will receive independent guidance rather than advice from their pension provider.


    According to the Daily Mail, David Cameron "vented his fury" at Russia's alleged obstruction of the investigation into the fate of MH17. In a 30 minute phone call to President Putin yesterday, the prime minister warned: "We'll freeze Russian billions". The Independent concurs, in a slightly less alarmist tone: "Prominent Russian oligarchs, businesses and politicians could face wide ranging and draconian new EU sanctions," the paper says, "as the West unites to punish Moscow for the shooting down of flight MH17".

    IPOD INVENTOR 06:24: Radio 5 live

    Tony Fadell, the inventor of the iPod, has been talking to BBC 5 live's Wake Up to Money. He says it took just eight months to make the original iPod (13 years old this year!) from design to production. "We worked days and nights and we went through 18 generations of iPods really quickly". Fadell says if he could invent anything, it would be better batteries.


    Senior Tories have apparently told The Sun that Jobcentres are failing to get people into lasting work - and should be shut down. Private firms and charities could take over their role, the paper says, in a "radical overhaul" being looked at for the party's election manifesto. But the idea is said to be strongly opposed by others in the party, including the Work and Pensions Secretary, Iain Duncan Smith.

    PENSION ADVICE 06:35: Radio 5 live

    Tom McPhail, head of pensions research at Hargreaves Lansdown has been talking to BBC 5 live this morning about the government's proposals for pensions advice. He says he expects advice to be delivered through the government's Money Advice Service and Pensions Advice Service. "It's going to work a bit like the NHS, it will be free at the point of entry but there are catches," he adds.

    PENSION ADVICE 06:45: Radio 5 live

    More from Tom McPhail on pensions. He explains the "catches" in terms of the government's pensions reforms. Effectively the reforms amount to greater flexibility, which means pensions companies creating ever more complex pension products - hence the need for independent financial advice. He suspects people who will use the government's advice service will be those with very small pension pots. He also points out that the average pension pot is only around £30,000.

    RUSSIA SANCTIONS 06:47: BBC Radio 4

    Will renewed sanctions on Russia have an effect on the markets? Steven Saywell, a currency specialist at BNP Paribas, tells Today that while he expects GDP in Russia to contract, he foresees no "sustained impact" for the markets more broadly. We will have more on the markets reaction when they open at 08:00.

    06:56: Radio 5 live
    An Apple ipod from 2006

    More from iPod inventor Tony Fadell. He tells Wake up to Money: "I think we are going to see a much more rapid evolution in the development of things than you wouldn't expect." He cites "unloved" everyday household items like the smoke alarm as examples - suggesting they will send us a text message in the future when the battery is running out rather than continuously beeping.

    07:01: Breaking News

    Tesco boss Philip Clarke is to leave the company. He has been the chief executive since March 2011.

    TESCO BOSS 07:04:

    Philip Clarke will be succeeded by Dave Lewis, currently of Unilever, who will take the helm at Tesco on 1 October.

    TESCO BOSS 07:07:

    Clarke joined Tesco in 1974 - working on the shop floor in Liverpool. He was appointed to the board in November 1998 and was later became the supermarket's international director.

    TESCO BOSS 07:09:
    A Tesco supermarket sign

    The departure of Phillip Clarke is unlikely to come as a huge surprise to the markets. Tesco has been losing market share, and reported lower profits two years in a row. In its most recent set of accounts, Tesco reported its worst quarterly sales in more than 20 years. At its recent annual shareholder meeting chairman Sir Richard Broadbent reportedly appealed for Clarke to be given more time in his role.

    TESCO BOSS Via Twitter Bryan Roberts, retail analyst at Kantar

    tweets: *Cancels original wardrobe plans & puts TV suit on*

    TESCO BOSS 07:17:

    More on Tesco: Not only has the supermarket announced the departure of Clarke but it has also issued a profit warning. It says current trading conditions are "more challenging than we anticipated" referring to its first quarter sales figures at the start of June. It claims the overall market is weaker, while investments in improving "the customer offer" and building long-term loyalty will hurt sales and trading profit.

    TESCO BOSS 07:23:

    It's probably also worth noting that Tesco confirmed the resignation of its finance director, Laurie McIlwee, in June, following reported unrest among investors. McIlwee had been with the company for 15 years, but there had been speculation that Clarke and McIlwee had fallen out. Either way, the two men at the top of Tesco have now left.

    SKY BUYS LOVE 07:24:
    Great British Bake Off

    In non-Tesco news, Sky has bought a 70% stake in the UK-based production company behind hits such as Great British Bake Off and Benefits Street. Love Productions, which was set up in 2004, will continue to operate as a separate company, Sky says.

    TESCO BOSS 07:27:

    In June, Philip Clarke told the BBC: "I have never been more determined. I'm not going anywhere. I am going to see through a fundamental reshaping of Tesco." The board, it seems, had other plans.

    TESCO BOSS Via Twitter Andy Verity Business reporter

    tweets: "Tesco's appointment of Dave Lewis from Unilever is the first time in decades that an outsider taken over as chief executive"

    TESCO BOSS 07:35: Via Email Bryan Roberts, retail analyst at Kantar Retail

    emails the BBC: "Philip Clarke inherited a troubled business that had not seen enough investment in the UK and also featured misguided overseas expansion. Although a lot of progress has been made under Clarke, he has failed to reignite performance in a British grocery market that has undergone structural change and a huge shift in shopper behaviour."

    TESCO BOSS 07:36:

    Tesco says Dave Lewis, the incoming chief executive, will receive a basic salary of £1.25m. Mr Lewis, who is currently at Unilever, is also on the board of BSkyB. He has been with Unilever for nearly 28 years and has worked in almost every corner of the world. Significantly, Tesco says Mr Lewis has "been responsible for a number of business turnarounds".

    TESCO BOSS 07:45:

    We'll have news on Tesco's share price shortly after the markets open at 8, but in the meantime, have a look at how the supermarket's stock has been faring since November last year.

    TESCO BOSS Via Twitter Andrew Clark, deputy business editor of The Times

    tweets: "Philip Clarke's exit at Tesco doesn't exactly sound 100% voluntary - he has 'agreed with the board' that it's an 'appropriate time' to leave."

    PENSION ADVICE 08:05: BBC Breakfast

    The Chancellor has been talking to BBC Breakfast about the government's pension reforms. He says 18 million people will be able to access free impartial advice. The government is working with the Citizens Advice Bureau and Age UK among other organisations. Mr Osborne adds anyone that wants free face-to-face advice can have it.

    RUSSIA SANCTIONS 08:10: BBC Radio 4

    Asked about the prospect of further economic sanctions on Russia, the Chancellor admits that there would be an impact on the UK's finances (many UK companies do business with Russian firms), but says the government is "prepared to undertake further sanctions". Mr Osborne tells the Today programme that the "economic hit" of "allowing international borders to be ignored and airlines to be shot down" is greater than imposing sanctions.

    PENSION ADVICE 08:14: BBC Breakfast

    More from the Chancellor: Defending the decision to free up the pensions market, he says it is a patronising to tell people they don't know how to spend their own money. He claims the government is happy to trust people who have saved for their future to decide what to do with their money.


    Shares in Tesco are leading the FTSE in early trading, up 3.5%, following news of chief executive Philip Clarke's imminent departure. The main European indexes have opened as follows:

    • The FTSE 100 is marginally up
    • The Dax in Frankfurt is down 0.2%
    • Paris' Cac 40 is marginally down
    TESCO BOSS 08:30: BBC Radio 4

    BBC business editor Kamal Ahmed tells Today that outgoing Tesco boss Philip Clarke told him he wanted to stay in his job until his retirement at 60 - he's now 54. He adds that things have been tough for Tesco - "Aldi and Lidl have eaten it from the bottom, while Waitrose and Sainsbury's have eaten it from the top," Kamal says. "Tesco has found itself rather marooned".

    TESCO BOSS 08:33: BBC Radio 4

    Kamal says Tesco has a problem of "users versus choosers" - people use the supermarket because it is convenient, but generally don't make a concerted choice to use it. The hope is that Unilever's Dave Lewis, a marketing man, can change this.

    Retired people on a bench

    Has the Chancellor seen this? The Sydney Morning Herald reported last week that an inquiry set up by the Australian government has recommended forcing citizens to put at least part of their pension pot into an annuity - citing the UK pensions industry as an example of where that works well (at least for now). The inquiry says pensioners are less likely to manage their long term savings efficiently where they are not compelled to take out an annuity.

    TESCO BOSS Via Twitter Kamal Ahmed BBC Business editor

    tweets: "How the mighty fall: Tesco confirms a party tomorrow to mark Philip Clarke's 40 years at the business 'has been cancelled'"

    HOUSE PRICES 09:02:
    A row of houses in London

    It's a new day, so that means a new house price index. This time it's from property website Rightmove, which says average asking prices for houses fell 0.8% in July. That's the first fall since December and compares with a rise of 0.3% last month. But the website says prices are up 6.5% on the same time last year.


    Shailesh Rao, the man at Twitter responsible for overseeing growth in emerging markets, has told the Wall Street Journal the social media company has no plans to enter China. "We certainly have a value of reaching every person on the planet and we believe that Twitter is for everyone everywhere," he said. "Unfortunately at this point we don't operate in China and that's the reality. We would love to but it's not an option that's available to us at this point."

    KRUSTY KILLED 09:21:

    One of the main characters in US hit TV show The Simpsons - Krusty the Clown - is to be killed off, according to the Independent. Quite how Bart Simpson and the show will survive without the whiskey swilling anti-hero is hard to say. But the loss of major characters has hit other TV shows very badly. Family Guy's talking dog Brian was killed off in the show's 12th season, sparking a wave of protest from fans. He was brought back to life two episodes later.

    SLIM WORKING 09:34:

    Carlos Slim, the world's second richest man, thinks we should all be working a three-day week. The 74-year-old Mexican wants us to work until later in life, the FT reports, but also have time to "generate new entertainment activities". But those three days should be about 11 hours long, says the tycoon. Harsh.


    There are signs that some Russians are taking the prospect of further sanctions by the West very seriously indeed. Mikhail Kasyanov, who was prime minister during Putin's first term, told Bloomberg: "The threat of sanctions against entire sectors of the economy is now very real and there are serious grounds for business to be afraid. If there will be sanctions against the entire financial sector, the economy will collapse in six months."


    On Sunday, we reported that a US court had ordered a cigarette company to pay a whopping $23.6bn to the wife of a smoker who died of lung cancer. But as Bloomberg Businessweek explains, "reviewing courts routinely knock down super-size punitive awards," and the firm may end up paying out an awful lot less. Also, the "cigarette industry long ago calculated the flow of individual liability verdicts into its cost of doing business," says the magazine.

    ECB URGED TO QE 10:14:
    The euro logo pictured at the European Central Bank

    The case for the European Central Bank (ECB) to introduce quantitative easing is "overwhelming", says the Financial Times leader today. The ECB must do whatever it takes to meet it's inflation target, says the editorial, and "simple common sense" should make it choose QE, which the FT says has become the standard tool for beating low-inflation.


    Dutch electronics firm Philips has said it expects its core profit to rise in the second half of the year following cost-cutting measures, but said that overall, 2014 would remain challenging. Pre-tax profits in the three months to 30 June were slightly better than expected at 415m euros (£329m). But chief executive Franz van Houten still expects costs in the second half of the year to be higher.

    3D PONIES 10:45:
    My Little Pony

    Hasbro, the toy maker, is experimenting with 3D printing. Fans of the My Little Pony product will be able to design their own versions of, well, little ponies, which will be 3D printed and shipped to them. "What 3-D printing truly empowers is the creation of artwork that maybe wouldn't make sense for mass production, but it makes sense for a unique item," John Frascotti, chief marketing officer at Hasbro. told the New York Times.

    PENSION ADVICE 10:59: Via Email Steve Baseby, from Bath, England

    emails: "Cute dig at Osborne on pension annuities, but look at the Australian interest rates to explain why enforced annuities could be politically acceptable there but not here. What the different approaches do show is that different economies require their own solutions, and that no solution can be set in stone."

    UK DEFICIT 11:11: Via Email Anthony Reuben Business reporter, BBC News

    The Office for National Statistics has put out UK deficit figures based on an EU measure, which show that the amount the government spent (above the amount it borrowed) jumped from 5.2% of GDP in 2012/3 to 5.8% in 2013/4. The government's preferred measure suggests it fell.

    The Dragons (L-R) Duncan Bannatyne, Kelly Hoppen, Deborah Meaden, Piers Linney, Peter Jones

    Fancy yourself as having the next big business idea? Always wanted to pitch it on Dragons Den? It's a lot harder than most people think to get investment for their business. The BBC's business team has spoken to three influential and very different business investors - including Bill Maris, founder and managing partner of Google Ventures - who have agreed to take your questions on how to get your business the money it needs to get off the ground. You can also email your questions to haveyoursay@bbc.co.uk.


    It's a big week for technology firms - as Amazon, Apple, Facebook and Microsoft are set to announce earnings. Amazon, despite exits relentless expansion, has never really wowed investors in terms of profit. Sucharita Mulpuru, principal analyst at Forrester, says: "The question isn't so much how much Amazon's top line is growing but whether it has managed to make any headway on the bottom line. International growth has been weak in recent years and, barring a significant change, we'll likely hear about their 'innovation' and continued 'growth' of Prime, inferred with broad vagaries and few details."

    BBC ACCOUNTS 11:50:

    The BBC's annual report is released today. The corporation pulled in £3.7bn in licence fees, and £1.3bn from its commercial arm - mainly BBC Worldwide. BBC One spent the most money - £1.3bn - on content, distribution and infrastructure.

    TESCO BOSS 12:02: Via Email Jon Copestake, Retail Analyst at The Economist Intelligence Unit

    "Strategically many of the decisions taken under Clarke may be commendable as long term goals. The firm has left loss-making markets like Japan and the USA, built dark stores to support online growth, developed an affordable tablet to tie in with its Blink Box acquisition and bought up cafe and restaurant chains to augment future experience-based shopping."


    The co-founder of discount supermarket chain Aldi - the thorn in the side of the UK's "big four" - has died aged 94. Karl Albrecht was one of Germany's most successful entrepreneurs, and built the Aldi empire with his brother Theo. He was not a flashy man - no private jets or yachts - and was buried away from the TV cameras. For the German readers among you, the Frankfurter Allgemeine has an intriguing profile of Mr Albrecht.

    Via Twitter Katie Martin, markets news editor, Wall Street Journal

    tweets: "If you ask to be forgotten for asking to be forgotten does it break the internet?"

    MARKET UPDATE 12:31:

    European markets are flat (ish) with Tesco remaining one of the biggest risers on the FTSE 100 - up 2.5% to 292.1p. In contrast one of the biggest fallers is WM Morrison, which is down by almost as much, falling 2.42% to 173.7p.

    • The FTSE is down 0.31%, or 20 points to 6728.51.
    • The Dax is lower by 0.81% or 78.70 points to 9641.32
    • The Cac-40 is lower by 0.38% or 16.56 points to 4318.75
    LISTEN AGAIN 12:44: World Service

    Can the EU afford to put in place more aggressive economic sanctions against Russia? James Nixey, head of the Russia and Eurasia program at Chatham House in London, gives Business Daily his view. Also, Africa's youngest billionaire tells the programme how he built an empire, and Lucy Kellaway of the Financial Times tackles out-of-office emails.


    How well do you know your area? How many of your neighbours, for example, do you think own their own home? How many young people live in your area? These, and other burning questions of our age, can now be answered via the medium of an interactive quiz brought to you by the ONS. Enter your postcode (England & Wales only), and you'll be faced with seven searching questions.

    12:58: Joe Miller Business Reporter

    That's it from the Live page for today. Join us tomorrow for more business news from 06:00.


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