Category: Business News

  • Brexit: UK officials in Brussels for latest talks

    File pic from July's talksImage copyright
    AFP

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    David Davis and Michel Barnier, pictured at the start of July’s talks

    Formal Brexit talks are due to resume in Brussels later, with British negotiators urging the EU to show “flexibility and imagination”.

    Brexit Secretary David Davis wants to broaden discussions to include trade.

    But the EU says there has to be progress on the issues of citizens’ rights, the Irish border and the “divorce bill” before talks can widen.

    Both sides have said there is no real prospect of a breakthrough in this third round of talks.

    BBC’s Europe correspondent Kevin Connolly said the mood for the talks had been set by a series of briefings “that betray a good deal of mutual exasperation”.

    The EU has accused the UK side of “magical thinking” on the issue of the Irish border.

    And the UK has said the Europeans are “massively over-egging” their financial demands.

    Mr Davis is expected to say that the UK’s firm goal remains to secure a “mutually beneficial” agreement that works for people and businesses across Europe.

    He will say this week’s “technical talks” will build on the July round and the papers the UK has recently published on its vision for its withdrawal from the EU.

    “For the UK, the week ahead is about driving forward the technical discussions across all the issues,” he will say.

    “We want to lock in the points where we agree, unpick the areas where we disagree, and make further progress on a range of issues.

    “But in order to do that, we’ll require flexibility and imagination from both sides.”

    The European Commission’s chief negotiator Michel Barnier said on Twitter last week that the focus of the third round of negotiations would be “orderly withdrawal”.

    The EU position had been “clear and transparent” since day one, he said. It was “essential” to make progress on citizens’ rights, settling accounts and the Irish border, he added.

    Mr Davis and Mr Barnier will meet on Monday afternoon to formally start the negotiations.

    Officials will then meet in working groups to discuss the detail behind each side’s proposals, before the round is closed by Mr Davis and Mr Barnier on Thursday.

    Setting the scene – political correspondent Chris Mason

    Fairly technical. No big bang. No breakthrough. But no breakdown. 10 words that don’t make for a great headline, I’m afraid. But it is the mood music around the Brexit talks resuming in Brussels.

    Meanwhile, at Westminster, there is “a new politics around Brexit” according to Phillip Blond, the director of the centre right Respublica think tank on BBC Breakfast this morning.

    He was talking about Labour’s policy shift: promising to stay in the single market and a customs union for a transition period after Brexit.

    The reaction, on Radio 5 live’s Your Call this morning, suggests the instinct of those on the winning side of a referendum is that such a vote should mark the end of the conversation on a subject: the people have spoken and we should leave, and leave properly.

    And those on the losing side think it should mark the start of a conversation: about what leave should look like, or whether we should leave at all.

    The UK is set to leave the EU by the end of March 2019, following last year’s referendum vote.

    In the first phase of negotiations, British and EU officials are meeting each month for four days in Brussels.

    On Sunday, Labour said it would keep the UK in the single market and customs union for a transitional period after leaving the EU.

    It said this was needed to avoid a “cliff edge” for the economy.

    Meanwhile, the British Chambers of Commerce and the Association of German Chambers of Commerce have jointly pleaded with politicians to put economic interests first in their Brexit discussions.

  • Uber's new boss: What do we know about Dara Khosrowshahi?

    Dara Khosrowshahi is Uber’s pick to be its new chief executive, so what do we know about him?

  • Uber names ex-Expedia boss Dara Khosrowshahi as CEO pick

    Dara KhosrowshahiImage copyright
    Getty Images

    Image caption

    Dara Khosrowshahi has not commented on the development

    Uber has chosen Expedia boss Dara Khosrowshahi to be its chief executive, ending months of speculation in the firm’s search for a new leader.

    The decision was made by Uber’s board late on Sunday, a source told the BBC, but the company has made no official announcement.

    Mr Khosrowshahi would replace Travis Kalanick who resigned in June following pressure from shareholders.

    The firm is battling to repair its image after a series of scandals.

    Several big names – including Hewlett Packard boss Meg Whitman and General Electric chairman Jeff Immelt – had been touted for the role.

    Mr Immelt ruled himself out of the race over the weekend, while reports intensified that Ms Whitman was the most likely successor despite her saying she also wasn’t interested in the job.

    Corporate image

    Mr Kalanick bowed to pressure from shareholders in the San Francisco-based firm has swirled in June and stood down.

    His resignation came after months turmoil at the firm, including a series of controversies about sexual harassment, macho culture and the departure of senior executives.

    Uber’s board has been meeting daily and was deliberating on its pick for a new leader over the weekend.

    A spokesperson for the company declined to comment on the appointment and there has been no comment from Mr Khosrowshahi.

    He has been chief executive of online travel firm Expedia from 2005.

    If he takes the Uber job, he would have a steep task ahead of him. It includes repairing Uber’s corporate image, improving relations with investors and creating a profitable business after years of losses.

  • Why did we use leaded petrol for so long?

    Chemist Thomas MidgleyImage copyright
    Science Photo Library

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    Chemist Thomas Midgley insisted that tetraethyl lead was safe

    Leaded petrol was safe. Its inventor was sure of it.

    Facing sceptical reporters at a press conference in October 1924, Thomas Midgley dramatically produced a container of tetraethyl lead – the additive in question – and washed his hands in it.

    “I’m not taking any chance whatever,” Midgley declared. “Nor would I… doing that every day.”

    Midgley was – perhaps – being a little disingenuous. He had recently spent several months in Florida, recuperating from lead poisoning.

    Some of those who’d made Midgley’s invention hadn’t been so lucky, which is why reporters were interested.


    50 Things That Made the Modern Economy highlights the inventions, ideas and innovations which have helped create the economic world in which we live.

    It is broadcast on the BBC World Service. You can find more information about the programme’s sources and listen online or subscribe to the programme podcast.


    On the Thursday of the week before Midgley’s press conference, at a Standard Oil plant in New Jersey, a worker named Ernest Oelgert started hallucinating. By Friday, he was running around the laboratory, screaming in terror.

    On Saturday, with Oelgert dangerously unhinged, his sister called the police. He was taken to hospital and forcibly restrained. By Sunday, he was dead. Within the week, so were four of his colleagues – and 35 more were in hospital.

    Only 49 people worked there.

    ‘The loony gas building’

    None of this surprised workers elsewhere in Standard Oil’s facility. They knew there was a problem with tetraethyl lead.

    As Gerald Markowitz and David Rosner note in their book Deceit and Denial: The Deadly Politics of Industrial Pollution, the lab where it was developed was known as the “the loony gas building”.

    Nor should it have shocked Standard Oil, General Motors or the DuPont Corporation, the three companies involved with adding tetraethyl lead to gasoline.

    Image copyright
    Science Photo Library

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    An aerial photograph of DuPont’s Deepwater factory site, where tetraethyl lead was developed

    The first production line in Ohio had already been shut down after two deaths. A third plant elsewhere in New Jersey had also seen fatalities. Workers kept hallucinating insects – the lab was known as “the house of butterflies”.

    Better working practices could make tetraethyl lead safe to produce. But was it really sensible to add it to petrol, when the fumes would be belched out on to city streets?

    About a century ago, when General Motors had first proposed adding lead to petrol – in order to improve performance – scientists were alarmed. They urged the government to investigate the public health implications.

    Midgley breezily assured the surgeon general that “the average street will probably be so free from lead that it will be impossible to detect it or its absorption”, although he conceded that “no actual experimental data has been taken”.

    Image copyright
    Science Photo Library

    Image caption

    Chemist Thomas Midgley with the Delco laboratory test engine

    General Motors funded a government bureau to conduct some research, adding a clause saying it had to approve the findings.

    Risky, but useful?

    The bureau’s report was published amid the media frenzy over Oelgert’s poisoned workmates. It gave tetraethyl lead a clean bill of health and was met with some scepticism.

    Under pressure, the government organised a conference in Washington DC in May 1925. The debate there exemplified the two extremes of approach to any new idea that looks risky, but useful.

    In one corner: Frank Howard, vice-president of the Ethyl Corporation – a joint venture between General Motors and Standard Oil. He called leaded petrol a “gift of God”, arguing that “continued development of motor fuels is essential in our civilization”.

    Image copyright
    Alamy

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    Dr Alice Hamilton argued the benefits of adding lead to petrol was outweighed by the risks

    In the other corner: Dr Alice Hamilton, the country’s foremost authority on lead.

    She argued leaded petrol was a chance not worth taking. “Where there is lead,” she said, “some case of lead poisoning sooner or later develops, even under the strictest supervision.”

    Hamilton knew that lead had been poisoning people for thousands of years. In 1678, workers who made lead white – a pigment for paint – were described as suffering ailments including “dizziness in the head, with continuous great pain in the brows, blindness, stupidity”.

    The Romans used lead in water pipes. Lead miners often ended up mad or dead – and some correctly intuited that low-level, long-term exposure was also unwise.

    “Water conducted through earthen pipes is more wholesome than that through lead,” wrote the civil engineer Vitruvius, 2,000 years ago. “This may be verified by observing the workers in lead, who are of a pallid colour.”

    Pollution v progress

    Many societies still grapple with the general question on which Howard and Hamilton disagreed: how much pollution is a price worth paying for progress?

    There’s some evidence that as countries get richer, they tend initially to get dirtier and later clean up.

    Economists call this the “environmental Kuznets curve”, and it makes intuitive sense. If you’re poor, you prioritise material gains. As your income grows, you may choose to spend some of it on a nicer, safer environment.

    Image copyright
    Alamy

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    The Roman civil engineer Vitruvius warned against the dangers of lead 2,000 years ago

    But was lead-free petrol really such an expensive luxury? True, the lead additive solved a problem: it enabled engines to use higher compression ratios, which made cars more powerful.

    However, it was not the only way to solve the problem.

    Ethyl alcohol had much the same effect and wouldn’t mess with your head, unless you drank it. Midgley knew this, having combined petrol with practically every imaginable substance, from iodine to camphor to melted butter.

    Why did the petrol companies push tetraethyl lead instead of ethyl alcohol? Researchers who have studied the decision remain puzzled. Cynics might point out that any old farmer could distil ethyl alcohol from grain. It couldn’t be patented, or its distribution profitably controlled. Tetraethyl lead could.

    The crime connection

    The US didn’t tax lead in petrol until the 1970s, then finally banned it as part of clean air legislation, as the country moved down the far side of the environmental Kuznets curve.

    Two decades later, in the 1990s, rates of violent crime started to go down. There are many reasons why this might have happened, but the economist Jessica Reyes had an intriguing thought.

    Children’s brains are especially susceptible to chronic lead poisoning. Is it possible that kids who didn’t breathe leaded petrol fumes grew up to commit less violent crime?

    Image copyright
    Alamy

    Reyes could test her hypothesis: different US states phased out leaded petrol at different times.

    By comparing the dates of clean air legislation with subsequent crime data, she concluded that more than half the drop – 56% – was because of cars switching to unleaded petrol.

    Other researchers have found similar links between lead water pipes and urban homicide.

    Disputed science and delayed regulation

    You can put a dollar figure on the value of crime reduction, Reyes found. It’s about 20 times higher than the cost of de-leading petrol – and that’s before you count other downsides of children breathing lead, like worse performance in school.

    How did the US get this so wrong for so long?

    Image copyright
    A Periam Photography / Alamy Stock Photo

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    Asbestos continued to be widely used in construction despite the emerging evidence of its dangers

    It’s a tale of disputed science and delayed regulation, much like you could tell about asbestos, or tobacco, or other products we now know slowly kill us.

    The problem is that people who want to ban things aren’t always disinterested visionaries like Hamilton. Sometimes they’re obstructive cranks. The only way to tell the difference is by conducting studies.

    And, as Gerald Markowitz and David Rosner point out, “For the next four decades, all studies of the use of tetraethyl lead were conducted by laboratories and scientists funded by the Ethyl Corporation and General Motors”.


    More from Tim Harford:

    How Diesel’s engine changed the world

    Battery bonanza: From frogs’ legs to mobiles and electric cars

    Why the falling cost of light matters

    How a razor revolutionised the way we pay for stuff


    And what of the scientist who first put lead in petrol?

    By all accounts, Midgley was a genial man who may even have believed his own spin about the safety of a daily tetraethyl lead handwash.

    But, as an inventor, his inspirations seem to have been cursed. His second major contribution to civilisation was the chlorofluorocarbon, or CFC, which improved refrigerators, but destroyed the ozone layer.

    In middle age, afflicted by polio, Midgley applied his inventor’s mind to lifting his weakened body out of bed. He devised an ingenious system of pulleys and strings. They tangled around his neck, and killed him.

    Tim Harford writes the Financial Times’s Undercover Economist column. 50 Things That Made the Modern Economy is broadcast on the BBC World Service. You can find more information about the programme’s sources and listen online or subscribe to the programme podcast.

  • Why is the heir to Samsung on trial?

    Lee Jae-yong has pleaded not guilty – a South Korean court’s verdict is due on Friday.

  • Jeff Immelt of General Electric quits race to be Uber boss

    Jeff ImmeltImage copyright
    Reuters

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    Immelt said he had “immense respect for the company and founders”

    General Electric chair Jeff Immelt has ruled himself out of the race to become the new boss of taxi service Uber.

    In a tweet, Mr Immelt said he had “decided not to pursue a leadership position at Uber”.

    Hewlett Packard Enterprise chief executive Meg Whitman is now reported to be “the most likely candidate”.

    Uber has been searching for a new chief executive since June after previous boss Travis Kalanick resigned following pressure from shareholders.

    His resignation came after a chaotic few months at the firm and followed a review of practices there amid a series of scandals including complaints of sexual harassment, a macho culture and the departure of senior executives.

    Image copyright
    Getty Images

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    Hewlett Packard Enterprise’s Meg Whitman has been floated as a candidate

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    ERIC PIERMONT/AFP/Getty

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    Former Uber boss Travis Kalanick resigned following pressure from shareholders

    Ms Whitman has previously said she is not interested in the job, posting on Twitter that “I am not going anywhere. Uber’s CEO will not be Meg Whitman.”

    However, the New York Times said she was “emerging as the likely candidate” to be selected as Uber’s new chief.

    She is currently president and chief executive of Hewlett Packard Enterprise Company, having split its computer and printer business (HP Inc) from its corporate hardware and services operations in 2014.

    Under her tenure she has dramatically shrunk the firm, arguing a smaller firm is better able to compete with new start-up rivals.

    Uber’s eight-member board is expected to vote later on Sunday on the firm’s new leader.

  • Blaenau Gwent: New firms created using US jobs model

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    Media captionWes Fisher, of Flame Protect UK, says the firm has a contract with Warner Bros

    About 1,200 small businesses have been developed in Blaenau Gwent since 2011, as the local authority tries to tackle high levels of unemployment.

    They have been set up or helped after it became the first Welsh council to adopt the American Sirolli model.

    This sees support given to people to turn passion into businesses in the absence of major outside investors.

    While the area has the highest unemployment levels in Wales, they fell from 14.1% in 2012 to 8.1% in 2016.

    Prof Max Munday from the Welsh Economy Research Unit, said the scheme was “useful” in helping people make their own opportunities.

    But he said challenges in creating mass employment in the area “should not be underestimated”.

    Blaenau Gwent – which has a population of 70,000 – has lost many big employers, including the Ebbw Vale steelworks, which once gave work to 34,000 people.

    Ironworks at Tredegar and collieries in places such as Six Bells, Abertillery, are also long gone while plans to create 6,000 jobs with the Circuit of Wales at Ebbw Vale have disappeared.

    Without replacements for these, the BG Effect has supported 1,187 business ideas or people who need help with existing operations.

    It mentors entrepreneurs, offers advice on getting start-up grants and gives help with finding premises, web design and marketing products.

    Those it has helped include a company which gives furniture a new lease of life and a babywear shop in Abertillery.

    There are also jam and cake-makers, an interior designer, a fitness club and dance company.

    The project’s Moe Forouzan said it is “like an old telephone exchange”.

    “We listen to people and connect them to those who can help,” he said.

    “The key to the project’s success is our volunteer resource panel, made up of people from all areas of business, that help us support our clients with their business ideas.”

    One business launching in September is Language Lambs, with Anna Snowden McVeigh – a qualified teacher who is fluent in French, Greek and German – set to puts on classes in Six Bells.

    “Children have the ability to pick up languages so easily,” she said.

    “I’ve seen at first-hand the advantages of learning a second language so I decided to turn my love of teaching to a younger audience in a bid to help them learn a skill that could open doors for them.”

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    BG Effect

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    Laura Doel and Moe Forouzan from the BG Effect help people turn their business ideas into reality

    Two men behind another business have worked on TV soaps Eastenders and Coronation Street, as well as at the Glastonbury Festival and Disney on Ice.

    However, they are not actors or performers but specialists in making sure sets are fireproof.

    They built Flame Protect UK up from scratch in Abertillery and the BG Effect is helping with an expansion into carpet and office cleaning services.

    BG Effect facilitator Laura Doel said: “It’s our clients who make their own dreams come true, we just give them a helping hand.”

    The man behind the model, US-based Dr Ernesto Sirolli said: “The future of every community lies in capturing the passion, energy and imagination of its own people.”

    Cardiff Business School’s Prof Munday said not just Blaenau Gwent but the wider valleys area has found it difficult to attract manufacturing or services inward investment.

    He believes the BG Effect is “akin to developing the foundation economy” and helped people make their own opportunities.

    But he cautioned: “The challenges faced for this area should not be underestimated and, running alongside these innovative programmes, there still needs to be attempts made to market the wider area to inward investors.”

  • Theresa May attacks ‘unacceptable face of capitalism’

    Theresa May

    Image caption

    Theresa May will announce new measures this week

    Businesses who pay excessive salaries to senior executives represent the “unacceptable face of capitalism”, Prime Minister Theresa May has said.

    The “excesses” of some bosses was undermining confidence and “damaging the social fabric of our country”, she wrote in the Mail on Sunday.

    Firms that face shareholder revolts over salaries and bonuses will be named on a new public register, Mrs May said.

    She also said firms could decide how workers are represented in boardrooms.

    The Conservatives’ manifesto said executive pay should be approved by an annual vote of shareholders.

    Mrs May’s article does not mention this commitment, but instead says firms that have a “shareholder revolt” on pay will be named on a new public register.

    The Department for Business, Energy and Industrial Strategy said that a “revolt” would be defined as 20% of shareholder opposition.

    ‘Symbolism’

    Stefan Stern, director of independent think tank, the High Pay Centre, told the BBC: “These shareholder votes are already in the public domain, and reported by the media.

    “But the symbolism of being named on a list is something that will get the attention of company boards.

    “They won’t want to be on this list, for as well as the adverse attention it brings, it could also make them potentially vulnerable to hostile investors.”


    Analysis

    Image copyright
    PA

    By Joe Lynam, BBC business correspondent

    The Royal Dutch Shell chief executive Ben van Beurden saw his total pay package soar by 54% to £7m last year.

    The Reckitt Benckiser boss Rakesh Kapoor took a pay cut of one third in 2016 – and still pocketed £14.6m.

    But they are both dwarfed by Sir Martin Sorrell. The advertising giant WPP paid him £42m last year and £210m over the past five years.

    At the moment, shareholders have a vote on these payouts every year, but it is not binding on the executive team.

    Even if it were, in order to change how bosses are paid it would still need a sustained change in culture by the giant institutional investors – as they own most of the shares in listed companies.

    Pension funds and banks would need to consistently vote in large numbers against the chief executive’s pay and that – despite regular talk of a “shareholder spring” – has yet to happen.


    Mr Stern said that Mrs May’s proposals were “a step in the right direction”, but that more needed to be done to address the systemic issue of high executive pay.

    Mrs May said new measures – to be announced this week – would also ensure workers’ voices were “properly heard in the boardroom”.

    She said the government will set an “expectation” that publicly-listed companies have in place an employee advisory panel, or an employee representative on their boards.

    ‘Broken rules’

    Mrs May said most of the UK’s biggest businesses invested in their workforces and looked after the interests of employees and investors.

    However, she said that “too often in recent years we have also seen another, unacceptable, face of capitalism”.

    A “minority of firms are falling short of the high standards we expect of them,” she added.

    “Some have deliberately broken rules that are designed to protect their workers.

    “Others have ignored the concerns of their shareholders by awarding pay rises to bosses that far outstrip the company’s performance.”

    Earlier this year the £48m pay package of WPP’s Sir Martin Sorrell was rejected by one in five shareholders at the firm.

    It was the seventh year in a row that more than a fifth of shareholders voted against his pay.

    In a non-binding vote last year, BP shareholders rejected a pay package of almost £14m for chief executive Bob Dudley.

    This month, a report revealed the pay of top chief executives’ had fallen in the past year.

    However, the High Pay Centre’s research said there was still “a huge gap” between the pay of the bosses of FTSE 100 companies and the rest of their staff.

  • Brexit: Keep single market for transition period – Labour

    Sir Keir StarmerImage copyright
    PA

    Labour would keep the UK in the EU single market and customs union for a transitional period after leaving the EU, the party has said.

    Shadow Brexit secretary Sir Keir Starmer set out Labour’s new position in the Observer.

    The shift in policy would mean accepting the free movement of labour after leaving the EU in March 2019.

    Sir Keir said the transition would be “as short as possible but as long as necessary”.

    Meanwhile, Brexit Secretary David Davis urged the European Commission to have a flexible approach to talks.

    Labour’s leadership has been criticised by opponents for a lack of clarity on what deal Britain should seek immediately after the EU.

    Sir Keir said a transitional period was needed to avoid a “cliff edge” for the economy, so that goods and services could continue to flow between the EU and UK while complex negotiations on the permanent deal continued.

    “Labour would seek a transitional deal that maintains the same basic terms that we currently enjoy with the EU,” he wrote.

    “That means we would seek to remain in a customs union with the EU and within the single market during this period.

    “It means we would abide by the common rules of both.”

    ‘Unlimited migration’

    He compared this with the government’s preference for “bespoke” transitional arrangements, which he said were highly unlikely to be negotiated before March 2019.

    He did not say how long the transitional period would be – only that it would be “as short as possible, but as long as is necessary”.

    The customs union is the EU’s tariff-free trading area, while the single market also includes the free movement of goods, services, capital and people.

    “Those who campaigned to leave the EU are likely to be concerned that this could see unlimited migration continue for some time after Brexit,” said the BBC’s political correspondent Iain Watson.

    After the transitional period, Sir Keir said, the new relationship with the EU would “retain the benefits of the customs union and the single market”, but how that would be achieved “is secondary to the outcome”.

    Remaining in a form of customs union with the EU was a “possible end destination” for Labour, he said, but that must be “subject to negotiations”.

    “It also means that Labour is flexible as to whether the benefits of the single market are best retained by negotiating a new single market relationship or by working up from a bespoke trade deal.”

    He said a final deal must address the “need for more effective management of migration”.

    Party leader Jeremy Corbyn’s office confirmed that the proposals had been agreed with him and were official policy.

    TUC general secretary Frances O’Grady said it was a “sensible and reasonable” approach to take, and would give working people “certainty” on their jobs and rights at work.

    But Liberal Democrat Brexit spokesman Tom Brake said it was “all spin and no principle”.

    Former-UKIP leader and leading Brexiteer Nigel Farage tweeted that Mr Corbyn had “betrayed every Labour voter”, having said he would support the UK leaving the single market during the general election campaign.

    ‘Temporary customs union’

    The government has also called for a transition period to help business adjust after Brexit.

    But chancellor Philip Hammond and trade secretary Liam Fox said the UK would be “outside the single market and outside the customs union” during this period.

    A paper subsequently published by the government said it could ask Brussels to establish a “temporary customs union” after March 2019.

    But during this period, it would also expect to be able to negotiate its own international trade deals – something it cannot do as an EU customs union member.

    Meanwhile, Brexit Secretary David Davis will meet the European Commission’s chief negotiator Michel Barnier on Monday to formally open Brexit discussions.

    The government said this week’s negotiations were “likely to be technical in nature”, ahead of more substantial talks in September.

    It said both sides must be “flexible and willing to compromise” when it comes to solving areas where they disagree.

  • Why do jeans sizes vary from shop to shop?

    We asked professional size 8 fit model Megan Taylor to investigate.