Category Archives: Brexit

Britains former ambassador to Washington has described the internal market bill as hugely damaging to our international reputation, warning that it could deter other countries from entering into agreements with the UK in the future.

Kim Darroch told the Guardian that if it becomes law, in violation of the withdrawal agreement signed with the EU last year, it would endanger the countrys prospects of achieving trade deals with the EU and the US, and have an enduring impact on its global standing.

It is the most astonishing thing I can recall through my entire public service career: a minister said we are knowingly breaking international law, said Darroch in an interview. Over the course of a 43-year career at the foreign office, he served as envoy to the EU in Brussels and national security adviser, before becoming ambassador to the US.

Its potentially hugely damaging to our international reputation. It puts at risk future international agreements, if people think the Brits are just going to say: we didnt like this on reflection, and we would like to rewrite this part unilaterally, the retired diplomat, now Lord Darroch of Kew, said.

The bill survived its latest parliamentary hurdle on Monday night, passing its second reading in the House of Commons by a margin of 77 votes.

Governing the flow of goods and services between the UKs four constituent nations, the bill stipulates it takes precedence where it contradicts elements of the withdrawal agreement, and the British government has admitted that would break international law.

Darroch said the impact could be first felt in negotiations with the EU to establish new trade relations after Brexit.

Ive talked to a few people in Brussels, and they are determined not to just walk away from the table because of this. Its equally inconceivable you would get the UK-EU deal through if this passes into law, he said.

The effect of the bill on Northern Ireland would have other ramifications, particularly if it led to customs checks on the border with the Republic of Ireland, something the withdrawal agreement was designed to prevent. The return of a hard border would jeopardise the 1998 Good Friday agreement, to which the US is guarantor.

The UK-US deal is at risk because, even if Donald Trump is reelected, its quite hard to see the Republicans taking back the House [of Representatives], Darroch said. And as long as the House is in Democratic hands, the leadership have made it clear that a UK-US free trade deal wouldnt be possible if we put at risk the Good Friday agreement.

Darroch was forced to resign as ambassador to Washington in July last year after his reports back to London on the turmoil and dysfunction in the Trump administration were leaked. Donald Trump declared his officials would no longer deal with the UK ambassador, and Boris Johnson, who was at the time running to replace Theresa May as prime minister, failed to offer Darroch a clear statement of support. The former diplomat gives an account of his turbulent time in Washington in a memoir, Collateral Damage, published in the UK on Tuesday.

Darroch speculated the internal market bill could be a negotiating ploy to force concessions from Brussels. If so, he said, it was not a very good one.

If we were to back down or find a way through with the EU, that would limit the damage, but the fact that we contemplated it is still damaging, he said. The downsides, with the EU free trade deal, the US free trade deal and our international reputation are so big, I cant quite believe they will carry through on it.

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Brexit bill hugely damaging to UK's reputation, says ex-ambassador - The Guardian

In early 2016 billionaire scientist David Harding opened a San Francisco office for his booming London hedge fund Winton Group. It was seen as a bold step by the firm which at the time managed $34bn in client assets to move into the worlds technology heartland. The company, competing with US tech giants such as Google and Facebook for talented staff, was hoping to tap into the Bay Areas huge pool of coders and innovation.

The move was symbolic of the UK firms global ambitions following phenomenal growth in the years after the credit crisis but also of the strength of the industry in London, with many of the star performers based in the upmarket Mayfair district. In 2015, six out of the worlds 10 biggest hedge funds were listed as basing their money management wholly or jointly out of the UK. Winton was 10th largest on the HFM Global Billion Dollar Club list.

Five years later, that number has shrunk to three. Winton has closed its California operation and reduced its presence in New York. Poor performance, particularly during the coronavirus pandemic, and a controversial decision by Mr Harding to move away from a style of investing he pioneered in the 1980s have weighed on the firm, whose assets have recently tumbled to around $12bn. Staff numbers have been cut. And at the start of this year Winton ranked 23rd and is likely to have fallen further after recent losses.

It is not alone. A number of Londons biggest hedge fund firms, including CQS and Lansdowne Partners, have suffered big losses this year. Dissatisfaction with lacklustre performance in the $3.2tn industry which uses bets on rising and falling prices across markets and which once seemed to offer the promise of profits in any environment has led to more than $120bn of client outflows globally since the start of 2018, according to data group HFR. Investor interest has moved on from hedge funds to fast-growing US technology stocks and the private equity and debt sectors.

As growth in the once-booming industry has stalled, London has looked exposed. New York, Connecticut and the wider North American hedge fund sector have been better able to withstand the downturn than managers in the UK, holding on to assets and delivering higher returns.

The share of global hedge fund assets run by UK-based managers has shrunk from 14.9 per cent at the end of 2015 to 12.6 per cent at the start of the coronavirus crisis, according to HFR. The USs share dipped slightly, from 77.2 per cent to 76.9 per cent, with Canada and France both picking up new business. US-based managers made an average return of 56 per cent between January 2012 and July 2020, according to investment firm Aurum Fund Management, while UK-based managers made 40 per cent.

The best firms by and large are in New York and always have been, says Wintons Mr Harding. The UK is slightly little brother to the US.

Now the disproportionate impact of the coronavirus crisis on the London sector, which employs thousands, and uncertainty over the future trading relationship with the EU threaten to further damage the UK capitals prospects, say industry observers. Once the Brexit transition period comes to an end in December, UK firms could lose some marketing privileges to EU-based clients and could eventually also face tougher rules if they want to run EU-based funds.

The US dominates the hedge fund industry. Its been trending in that direction for quite some time, says Troy Gayeski, co-chief investment officer at New York-based SkyBridge Capital, which invests in hedge funds. This has only been amplified by the pandemic. The US has the growth engines.

Primary among those is the US stock market, which is more likely to be traded by US-based hedge fund managers than their European rivals, and has dramatically outpaced European indices this year, continuing a long-running trend. The S&P 500 index has soared to record highs this summer and despite recent falls is still up 3.4 per cent this year, while the Nasdaq has climbed 21 per cent. In contrast, the Stoxx Europe 600 is down 6.4 per cent and the FTSE 100 is down 20.2 per cent, in dollar terms.

Some of the hedge fund winners through this years market turmoil have been huge funds headquartered in the US, albeit with some London operations. While US managers such as Bridgewater Associates and Renaissance have not been immune from market falls, Elliott Management, Millennium Management and Citadel are among those to have come through the crisis largely unscathed and made money by cutting risk levels, and profiting from market dislocations, according to investors.

Travel restrictions during the pandemic are not helping UK managers either. Since the discovery of Bernard Madoffs massive Ponzi scheme in 2008, many investors have insisted upon meeting their money managers face to face and doing extensive on-site due diligence before investing. Now, with coronavirus making that harder, coupled with better performance from US managers, some big American institutions are preferring to invest with easier-to-access domestic firms and are eschewing European funds.

Theres just so much [investor] capital in the US, which benefits the US hedge fund managers on their doorstep, says one London-based executive who has recently left the industry and moved into the tech sector in pursuit of better growth and profitability. Whatever Japanese and European investors have just pales into comparison with the US.

Deadlock in the talks over the shape of the UKs future trading relationship with the EU threatens to further damage the industry, say legal experts. As it stands, from next year UK-based managers face barriers marketing some fund management services to EU-based clients.

A critical issue for the London industry is the system of delegation the extent to which an EU-based firm can delegate the management of a fund to a UK-based manager. Such arrangements are lucrative for many London managers, who use firms in countries such as Luxembourg or Ireland with little in the way of traders or risk managers to delegate back to the UK, where the fund managers sit. However, the European Securities and Markets Authority, the EU regulator, in August wrote to the European Commission to recommend a tightening of the rules, which could mean UK firms having to move more investment professionals to mainland Europe.

We are at a crunch point, says Leonard Ng, a partner at law firm Sidley Austin, who advises on UK and EU regulatory issues. This will be a period of stress for the asset management industry.

Delegation...is about moving the centre of activity away from the UK into the EU, adds Mr Ng, who predicts a splintering around Europe of the expertise that is currently centred in London. A dilution of that expertise in London threatens jobs and tax revenues in the UK.

While some high-profile executives in the UK industry including Crispin Odey and Paul Marshall backed an exit from the bloc, others are now looking at what it means for their business and whether they need to relocate.

London-based H2O Asset Management, which manages 21.7bn in assets and which was co-founded by former Crdit Agricole star fund manager Bruno Crastes, opened an office in Paris last year as a hedge against Brexit and is considering relocating fund managers there, says a person familiar with the firm. Mr Crastes changed his residency from the UK to Monaco in 2017, the year after the UKs Brexit referendum vote, according to regulatory filings.

Last year former GLG star trader Greg Coffey, one of Europes best-known hedge fund managers, moved his hedge fund firm Kirkoswald Capital to New York over concerns about Londons role as a financial centre.

While few believe London will cease to be a hub for hedge funds, an ebbing away of the industry puts further pressure on its place in global finance. As recently as March 2018, London was ranked as the worlds top financial centre, according to Z/Yens Global Financial Centres index. It has subsequently slipped into second place, behind New York. And in the consultancys most recent survey, in March, London suffered the second-biggest fall of any of its top 40 rivals in the score used to determine its ranking. It now sits only marginally above third-placed Tokyo.

Brexit has hurt [hedge fund managers]. A lot are French or Italian, says one former London-based manager now located in continental Europe. Thats scared them, they dont feel theyre welcome.

The upmarket London district of Mayfair once an area of muddy fields before King James II gave permission in 1686 for an annual fair to take place in May has long been synonymous with the UK hedge fund industry. Traders relocated from the City of London in the 1990s and early 2000s to be near the areas private banks and their ultra-wealthy clients, exchanging trading ideas and gossip in trendy hang-outs such as The Wolseley on Piccadilly and The Arts Club on Dover Street.

The arrival of high finance, an influx of ultra-luxury retail boutiques and soaring office rents changed the character of the neighbourhood. Funds such as Lansdowne Partners, based just off Berkeley Square, and GLG Partners, which paid then-record rents for space on Curzon Street, grew to be among the global industrys biggest names.

That growth was helped by the introduction of the euro in 1999, which provided arbitrage opportunities that funds could trade, and a wealth of tech stocks to bet against in the dotcom bubble of the opening years of the 2000s.

When the euro came in, hedge funds absolutely nailed it [the trading opportunity], says Rick Sopher, chief executive of investment firm Edmond de Rothschild Capital Holdings. It was the golden age of European hedge funds.

But many of the trading opportunities that made European traders rich have since shifted to the other side of the Atlantic, particularly as the US tech sector has grown. [European hedge funds] had to look for growth companies, and the companies on their doorstep were not growing that much, adds Mr Sopher.

Some who know Mayfair and its hedge fund occupants well see signs of change. Laurence Davis, owner of Mayfair institution Sautter Cigars on Mount Street expects more of his loyal hedge fund customers to move out of the UK. He has already seen some managers leave, he says, but not yet in the huge numbers that might happen. We havent felt Brexit in terms of hedge funds in central London [yet].

While the impact on the ground is clouded by the effects of coronavirus and the growth of sectors such as private equity, the fortunes of a number of big-name firms have waned.

Lansdowne Partners was once seen as the gold standard in equity investing. But it wrote to investors at the start of the year to describe a disappointing 2019 in which its main fund had made just over 1 per cent while equity markets had soared, according to a letter seen by the Financial Times. The investment group has been further caught out this year, by large bets on airline stocks and on a recovery in the UK. During the summer, it shut its flagship hedge fund, which is down 22 per cent this year.

Close by on Trafalgar Square, Michael Hintzes CQS, known as one of Europes best credit traders, was caught out in this years market slump. A fund that he personally manages, which had one of the sectors best records including gains of more than 30 per cent in 2012 and 2016, lost around $1.4bn in the market turmoil, thanks largely to bad bets on structured credit.

Firms such as GLG, now part of Man Group, GAM and Odey have also faced their own struggles since their heydays. The value of GLG has been written down by more than $1bn since it was bought by Man, GAM suffered a scandal involving a star fund manager that cost it billions of euros in assets, while Odey's assets have also fallen.

Wintons Mr Harding says the performance of his fund, which is down around 17 per cent this year, has been very, very disappointing. However, he adds that does not mean the fund is broken and he does not regret his decision to change trading strategy away from trend-following. Im quietly confident in the longer term, he adds.

Not all London funds are struggling. Man Group manages $108bn and has relocated GLGs traders from Mayfair to the City of London. While Marshall Wace, based a short distance from Mayfair near Sloane Square, has $45bn in assets. Both have grown strongly in recent years.

Yet some in the sector see the London industrys struggles as part of wider problems.

At one point London had a real shot at potentially surpassing New York as the financial hub of the world, says Mr Gayeski. But the eurozone crisis and Brexit [changed that].

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How Brexit and Covid-19 combined to hit UK hedge funds - Financial Times

A man looks into a shop selling face masks in Dublin city centre. The government's failure to properly communicate its Covid-19 public health message has been described as an "abuse of power".

Niall Carson/PA Images via Getty Images

DUBLIN Brexit is back on the agenda for Ireland's small businesses and start-ups, despite the continued threat of the coronavirus pandemic.

Research published on Tuesday from the Economic and Social Research Institute (ESRI), showed that small and medium-sized enterprises (SMEs) lost between 6 billion euros ($7.1 billion) and 10 billion euros from March to June with many companies using up their cash reserves.

Meanwhile, Ireland officially entered recession last week after the economy contracted a record 6.1% between April and June.

Julie Sinnamon, the chief executive of Enterprise Ireland, the agency responsible for developing the country's indigenous businesses and a regular early stage backer of tech start-ups, spoke to CNBC on the impact of Covid-19.

"The immediate impact on companies was liquidity, so a lack of funding," she said.

Enterprise Ireland established a number of funds and mechanisms to provide emergency capital to companies. It has approved 34.4 million euros of funding for Irish companies affected by the coronavirus so far. Much of that has been through the Sustaining Enterprise Fund, which provides liquidity of up to 800,000 euros, with up to 200,000 euros of that being non-repayable.

It hasn't been without challenges. Some companies have complained of a slow process in getting applications submitted and approved during what are emergency times. In June, just five large companies had been approved for the maximum800,000 euros from the Sustaining Enterprise Fund, with a total of 20 approvals at the time. As of Sep. 11, there have been 53 companies approved. Enterprise Ireland said it aims to complete applications in 20 days.

"I think between now and the end of the year we will succeed in supporting and using the funding available," Sinnamon told CNBC. "But this slow start in terms of companies applying is not any different than we would have expected, or would have seen in previous crises when you had similar supports available for companies."

Sinnamon said Enterprise Ireland's attention is now shifting to longer-term efforts. Covid-19 has seen the agency balancing the needs of companies facing an immediate risk of collapse and those that have been forced to pivot into new areas.

"For some of them it has required investing in innovation, changing their products. In some cases, it was really just retracting into their shell in the short term, but in others it was diversification," she said.

At the start of 2020, Enterprise Ireland's priorities were very different. Since 2016 the company's top line messaging has been around Brexit preparedness, developing support funds and grants for those most exposed.

"We are really trying to reactivate the (Brexit) plans for companies who had parked them in the height of the Covid crisis to make sure that they're continuing with their plans," Sinnamon said.

It has been urging Irish companies to reduce their dependence on the U.K. for exports and to diversify into other markets. The U.K.'s Brexit transition period with the EU is set to end on Dec. 31 and there's still a real chance that both sides will fail to agree a trade deal before that date.

Sinnamon said that around 15 years ago, 45% of Irish exports went to the U.K. Enterprise Ireland set a target to lower that to 33% by 2020 and it is now at 31%, she said.

In 2019, according to figures provided by the agency, exports to the euro zone grew by 15% and North America by 16%.

"We're growing exports to the rest of the world at a faster rate and hence our overall dependence on the U.K. market is now down. It's only 31% of our exports and declining," she said.

In February, Sinnamon announced her intention to step down from her role as chief executive of Enterprise Ireland, coinciding with the winddown of the agency's current five-year strategy. Those plans were put "on ice" due to the Covid-19 pandemic, but she said it is still her intention to step down this year.

Clarification: This story has been updated with more information on the amount of approvals for theSustaining Enterprise Fund.

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Irish start-ups grapple with dual impact of the coronavirus and Brexit - CNBC

When the cabinet minister Brandon Lewis was asked in the House of Commons whether a new bill designed to regulate trade within the UK after Brexit would break international law, he confirmed it would in a limited and specific way. The comments ignited a firestorm within his party as backbenchers and grandees tore into the government for threatening to damage the UKs reputation for respecting the rule of law.

As the Guardians deputy political editor, Jessica Elgot, tells Anushka Asthana, it is not the only source of disquiet within the party. Some MPs are furious at new restrictions aimed at slowing the spread of Covid-19 that restrict gatherings to six people. Others are exasperated at a summer of repeated U-turns and stories of incompetence.

While Boris Johnsons 80-seat majority has not yet looked seriously under threat, are there signs that his party is falling out of love with the man who led them to their biggest election victory in a generation?

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Brexit, Covid and u-turns: why Tory backbenchers are getting restless podcast - The Guardian

Brexit has been four years in the making, but with fewer than four months to go before the UK leaves the EU single market and customs union, the country is still without the tools to be border-ready, it has emerged.

A leaked government document seen by the Guardian shows key IT systems continue to be under development, some legislation is still needed to allow information on passengers and freight to be shared, and plans for a national network of advice centres for trucks is currently unfunded.

Tourist and business passengers will also be affected, says the Border and Protocol Delivery Group, a cross-departmental command tasked with getting the borders Brexit-ready for 1 January.

Passengers on Eurostar and at airports could face significant disruption at St Pancras station in London if UK nationals are not allowed to use e-gates, the document says. Some may turn up at EU borders without correct paperwork, such as passports valid for at least six months.

Passenger volumes would be lower in January but there would be a risk of significant disruption during peak travel periods, particularly in April and summer 2021, says the document.

The revised planning assumption, according to the report, is that checks will be applied to 100% of all passengers who carry a British passport as they will now be third-country nationals and not eligible for free movement across EU borders.

It is forecasting a worst-case scenario of potential queues of one to two hours in Dover and the Eurotunnel in January. The risk of queues would be greatest at countries that dont lay on extra resources for British arrivals or who insist on extra red tape such as stamps on passports.

In an ideal scenario, the government is hoping to have a Smart Freight website and ultimately a smartphone app running by 1 January. Drivers or their clients need to use this website to demonstrate to the authorities they have completed electronic paperwork before getting the green light to drive into Kent.

In theory this will prevent congestion in Kent and allow an orderly procession of up to 7,000 trucks a day on to the ferries and Eurotunnel shuttles as normal.

But the software for the site is still under development. The design is still in the alpha stage but if approved it will move to a private beta test for further development. It wont be ready for public testing until the end of November, according to an infographic in the document, Managing and Mitigating Disruption.

Only one site, in Ashford, has been bought by the government to hold lorries in the event of congestion. The recently acquired Mojo site will hold 2,000 of the expected 7,000 trucks, the document says. Other sites under consideration are Manston airport, which can hold 4,000 lorries, and the Waterbrook site behind the Mojo site which can hold 950 freight units.

Operation Brock will swing into action if there are delays at Dover and Folkestone, with a one-way system allowing vehicle-only lanes southbound at junctions 8 and 9 on the M20. It can control the movements of 2,000 lorries.

A border impact centre (BIC) will be built for the end of the transition period on 31 December to help national and local authorities get to grips with controls they need to put in place for border-destined traffic.

The scale of the challenge facing the government is underlined in an observation that 26 government departments and public authorities have either operational and/or policy responsibilities in relation to the border, using over 100 IT systems between them. It adds that currently there are legal, technical and cultural barriers hindering effective information sharing between these organisations with an amendment in the trade bill to enable data sharing.

Trucks crossing the border will encounter a range of authorities with Home Office requirements on passports and visas for incoming drivers, Department for Transport checks for driver permits, HM Revenue & Customs for potential tariffs and customs declarations, and the Department for the Environment responsible for animal and food safety checks.

The document notes that not all EU requirements are the same. The Netherlands and Belgium require pre-registration on freight arrivals adding to the burden for drivers.

It also notes that all food and plant products need certification while fish products require health plus UK catch certificates. If they dont have the sanitary certificates, they could be turned back to the point of departure by EU member states.

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Unfinished IT systems and lorry queues: what leaked Brexit document reveals - The Guardian

In allowing ministers to interpret law-breaking as consistent with the ministerial code, the new cabinet secretary, Simon Case, seems to have fallen at his first hurdle. We must hope its a touch early for Polly Toynbee to write him off as Johnsons ideal lackey (Boris Johnsons push for no deal will harm the country and his party, 14 September). Still, Lord Hennessy, who supervised Cases PhD, may be reflecting on the praise he lavished so recently, saying that Cases appointment is a beacon of hope ... He believes in speaking truth unto power ... He is one of those people ... you dont mess around with because they are a level above (Whitehall chief likely to resist politicisation of civil service, say allies, 2 September).

This puts me in mind of Vernon Bogdanors statement that David Cameron was one of the ablest students I ever taught. Is endorsement from such academic luminaries the kiss of death? Or is there a disconnect between scholarly achievement and real-world performance in the field of government and politics?Robert GreenThames Ditton, Surrey

With reference to your article (Brexit: barristers question selection of legal team leading UK drive to override deal, 15 September), it is interesting to read the following statement by Suella Braverman during a House of Commons debate on the European withdrawal bill on 20 December 2019, as recorded in Hansard: Historically and traditionally, the UK has been viewed around the world as a beacon of justice, a symbol of fair play and the home of democracy. That has been called into question over the last year. Through the enactment of this bill, we will be able to reclaim our reputation as the home of democracy, to seize the opportunity to write our history, of which our successors can be proud, and to restore our credibility as a nation where people can trust their politicians and a nation that does not break its promises.Nicholas VosperLondon

In 1721 the lord chief justice determined that a breach of the law of nations constituted a common law offence. So much for legal advice on the ministerial code. Last year, the court of appeal confirmed that a contract induced by an unlawful act including a threat to breach an existing binding arrangement entitled the threatened party to treat the contract as void. Who could blame the EU for pointing to that principle at some future date should a trade agreement be entered into. So much for legal advice on the implications of legislation breaking a treaty. When the history of the distinguished holders of the office of attorney general including Mansfield, Pollock and Selborne comes to be written, Suella Braverman will be lucky to run to a derogatory footnote.Prof Rob MerkinSidmouth, Devon

In the House of Commons, Boris Johnson variously described the internal market bill as a protection a safety net an insurance policy (Brexit: internal market bill passes by 77 votes amid Tory party tension, 14 September). It would be simpler to call it a backstop a resigning matter, surely.Alec ReidBristol

The photograph of Boris Johnson on the front page of the print edition of the Guardian on 15 September says it all: an arrogant man who has no regard for the rules, sitting in a seat with a prohibited sign.Chris ArrowsmithCam, Gloucestershire

Your front-page photo caption reads Boris Johnson listening in the House of Commons as MPs debated the internal market bill. Surely you missed out the word not.Mark FieldingShipley, West Yorkshire

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Brexit Britain: from beacon of justice to law-breaking state - The Guardian

ByteDance has agreed to list TikTok on a US stock market at some point after its proposed partnership deal with American software group Oracle, and Donald Trump s special envoy to Northern Ireland has warned against creating a hard border by accident. Plus, the FTs Demetri Sevastopulo explains why Democratic US presidential nominee Job Biden is struggling with Latino voters.

ByteDance proposes US IPO for TikTok to woo White House

https://www.ft.com/content/8d2c74d6-d742-4fa9-b7cf-5af9bb85af6b

Trumps Northern Ireland envoy issues border warning

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Biden struggles to close enthusiasm gap with Latino voters

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ByteDance pledges TikTok IPO, Mulvaney on Brexit, Biden tries to win with Latino voters - Financial Times

Britain warned the Brussels bloc it was not prepared to give up our rights on sovereignty, laws and fishing after Mr Frost and Mr Barnier shared a poignant moment. Mr Barnier tweeted that he and Mr Frost paused together in front of a war memorial following dinner on Monday in Westminster.

He said: "At the occasion of the working dinner with my counterpart David Frost at Carlton Gardens, a brief moment remembering our shared European history."

There continue to be a number of key sticking points in the way of agreeing a post-Brexit deal before the transition period ends in January.

The points of dispute - the "level playing field" of measures designed to ensure fair competition between the UK and EU, fisheries and the governance of any deal - will be on the agenda in Tuesday's sessions.

Ahead of the talks, Downing Street acknowledged significant differences remained between the two sides and reminded the EU it is "not asking for a special, bespoke or unique deal".

The Prime Minister's official spokesman said: In terms of the discussions that we have been having throughout the intensified process, they have continued to be constructive but significant differences still remain on a number of important issues.

Our position on our sovereignty, laws and fisheries is clear - we will not give up our rights as an independent state.

"We will continue to engage constructively with the EU on these key issues and will work hard to reach the broad outline of an agreement.

"But as we have been clear all along, we are not asking for a special, bespoke or unique deal."

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READ MORE:EU blasted for absurd and contradictory Brexit demands

5.31pm update:Brexiteers laud UKs exit as EU strides towards country called Europe

The European Union took another huge step towards a full-blown superstate on Tuesday after five days of bitter wrangling over a coronavirus rescue fund ended in a deal.

After a record-breaking summit negotiation marred by controversy, EU leaders finally agreed on a 750 billion spending plan for the blocs regions and industries worst hit by the pandemic. To pay for the aid, the European Commission was granted unprecedented borrowing, taxation and spending powers to run up 390 billion in joint debt to be handed out as grants rather than loans.

Conservative MPs said the pact showed Britain had quit the EU in the nick of time.

Former Brexit minister David Jones said: Had we still been a member, wed end up taking the second-largest share of bailing our countries right across the continent.

Fortunately were not and I think in hindsight more or less everybody, whether they voted to leave or not, will realise Britain has had a lucky escape on this occasion.

This is another step towards an increase in powers for the European Commission and reduction in power for the national government. Its a further step along the road to a creation of a country called Europe.

4.22pm update:Peers clash over post-Brexit farm support system

Peers have clashed over a new support system for farmers as the UK moves away from Europe's Common Agricultural Policy.

Liberal Democrat Lord Teverson called for a cut in the transition period to payments under new environmental land management schemes (ELMs).

But other peers warned, in committee stage debate on the Agriculture Bill, that a shorter transition period could hit farm incomes.

Lord Teverson told the Lords said it was better to introduce the new ELMs in five years rather than the seven proposed in the Bill.

But Tory Baroness McIntosh of Pickering said the transition period from direct payments should remain at seven years.

Lady McIntosh said it was the biggest change faced by farmers for a generation and a delay would give the Government time to develop a good scheme, rather than a "half-baked" one.

3.12pm update:Merkel accused of interfering in 2017 general election over Brexit

Angela Merkels Germany was accused of trying to influence the 2017 general election by undermining former Prime Minister Theresa May over Brexit talks, unearthed reports reveal.

According to a 2017 report by The Telegraph, senior officials in the German government and in Brussels openly mocked Theresa May in what was described as an attempt to undermine the former Prime Minister.

Ahead of the general election in June 2017, Mrs Merkel claimed Britain had illusions over what it could hope to achieve from Brexit.

Weakening Mrs Mays mandate with the electorate tilted the balance in favour of the EU negotiators, and Conservative sources suggested she was the victim of a coordinated plot.

Emily Ferguson is taking over live reporting fromRebecca Perring

2.25pm update: PM is confident Brexit was fair

British Prime Minister Boris Johnson is confident the 2016 Brexit referendum result was fair, his spokesman said on Tuesday.

Asked in the light of a parliamentary report into Russian influence in Britain whether Johnson thought the outcome of the referendum was fair, the spokesman said: "Yes, absolutely."

DON'T MISSFarage takes on EU again as Italexit campaign praises him [COMMENT]Italexit campaign No Europe - For Italy launches on Thursday [INFO]EU poised to stop trade with UK when the Brexit transition period ends[REVEALED]

1.56am update: Pompeo hails 'constructive' Brexit talks with Boris

Mike Pompeo said it was a constructive visit after he met Prime Minister Boris Johnson.

He said: "Our two countries' long-standing, strong bilateral relationship has laid the foundation for today's candid discussion on issues ranging from 5G telecommunication to our negotiations for a US-UK free trade agreement.

1.15pm update:Farage takes on EU again as Italexit campaign praises him for freeing UK from 'EU cage'

Nigel Farage is making his mark yet again in his battle against the EU after it emerged he has helped inspire the man behind Italys Italexit campaign.

Prominent Brexiteer and Brexit Party leader Nigel Farage has been hailed a true British patriot who sent away the technocrats from Brussels by anti-EU campaigner Gianluigi Paragone, a former senator for the anti-establishment 5Star Movement in Italy.

Mr Paragone revealed he had met with Mr Farage just before launching his Italexit campaign 'No Europe for Italy, which will take place on Thursday, July 23.

12.44pm update: Brexit will split financial markets - BoE

Brexit will make markets less efficient but it won't be disastrous for Britain's economy, an appointee to the Bank of England's Financial Policy Committee (FPC) said on Monday.

Jonathan Hall told the Treasury Select Committee that Brexit represented a longer term risk of increased fragmentation and complexity in financial services.

He said: "This would increase friction costs for the economy, the supervisory burden."

11.49am update: 'Brexit was always gift to Putin'

Guy Verhofstadt, chief Brexit negotiator for the European Parliament, tweeted following the release of the Russia report: "Brexit was always a gift to Putin because it weakened the European Union & left Britain divided, isolated. The #RussiaReport shows just how many questions remain unanswered."

11.25am update: Italy could follow in UK's Brexit footsteps

Italy will officially launch a campaign to unshackle itself from the EU on Thursday as the Mediterranean country looks to follow in Britain's Brexit footsteps.

The EU has another crisis on its hands after Italian politician Gianluigi Paragone, a former senator for the anti-establishment 5Star Movement, said it was time for Italy to launch its Italexit campaign ' No Europe for Italy' on Thursday, July 23. He said Italy would no longer be "blackmailed" by the Brussels bloc.

10.32am update: Russia meddled in Scottish referendum but unclear on Brexit - report

Russiameddled in the 2014 Scottish referendum and the British government failed to ask for a deep assessment of possible Kremlin-directed interference in theBrexitvote, the British parliament's intelligence and security committee said.

The report said: "There has been credible open source commentary suggesting thatRussiaundertook influence campaigns in relation to the Scottish independence referendum in 2014"

It said there were open source indications thatRussiasought to influence theBrexitcampaign but that the British government had not sought deep evidence of meddling.

The report castRussiaas a hostile power which posed a significant threat to the United Kingdom and the West across a range of fronts, from espionage and cyber to election meddling and laundering dirty money.

It added: "It appears thatRussiaconsiders the UK one of its top Western intelligence targets."

9.46am update: Pound Sterling enjoys rise

The pound briefly rose above $1.27 for the first time in six weeks on Tuesday.

The currency had enjoyed its best day in three-weeks on Monday, lifted by the generally buoyant market mood which allowed investors to overlook poor British economic data and lack of concrete progress on Brexit trade talks.

9.35am update:Nigel Farage lashes out at Remainers over Russia report

Nigel Farage has demanded serious apologies after an investigation reportedly found that Russia did not attempt to meddle in the Brexit vote.

The Brexiteer hit out after a long-awaited probe into alleged Russian interference in British democracy, due to be published later today, found nothing to suggest Russia played any part in the 2016 EU referendum, the Daily Telegraph reported.

Mr Farage tweeted: So, no evidence of Russian interference in the referendum. Some serious apologies are due.

8.48am update: US Mike Pompeo to meet Boris

As Britain toughens its stance on China due to its handling of the coronavirus and a crackdown in Hong Kong, U.S. Secretary of State Mike Pompeo's visit is an attempt to stiffen Boris Johnson's resolve and dangle the potential reward of a post-Brexitfree trade deal, diplomats say.

Mr Pompeo will discuss ways to tackle the growing might of China when he meets Mr Johnson on Tuesday, just a week after London ordered a purge of Huawei gear from the 5G network.

President Donald Trump lauded Mr Johnson's ban on Huawei, though he also claimed he had forced London's hand due to concern over China, which he considers to be the US' main geopolitical rival of the 21st century.

8.15am update: Policing minister says he doesn't know if Russia meddled in Brexit

Policing Minister Kit Malthouse said he does not know if Russia meddled in the Brexit vote or the Scottish independence referendum.

Asked on BBC Breakfast why it has taken so long for the report to be published, he said there has been a general election, adding: "And the fact that this report is the property of the committee itself and they make a decision about its publication.

"The fact that the committee took a little time to get going after the general election probably delayed it too.

"But it'll be here in, you know, a couple of hours, and we'll be able to read it and digest it."

Asked if he thinks Russia tried to influence the Scottish and EU referendums, he said: "I don't know. I haven't read the report. I'll have to wait and see what they have to say."

8.02am update:Taoiseach welcomes Brexit EU fund

Micheal Martinwelcomed a 5 billion reserve fund to support countries worst affected by the impact of Brexit.

It comes after the EU agreed on a 1.82 trillion budget and coronavirus recovery fund.

Micheal Martin said it is a strong deal which includes a substantial and significant package of measures.

The budget and recovery fund was finally agreed in the early hours of Tuesday after a marathon four-day summit in Brussels.

7.50am update: EU fishermen demand SAME access to UK waters in Brexit deal as system working well

Brexit trade talks with the EU will resume on Tuesday, but a breakthrough is not expected as the bloc is still adamant European fishermen must have the same access to UK waters - something British negotiators are keen to avoid.

Gerard van Balsfoort, Chairman of the European Fisheries Alliance, has told Michel Barnier to insist fishing rights remain the same after the conclusion of the Brexit transition period this year.

The EU's chief negotiator was told losing access to the waters could be disastrous for many EU states.

Mr van Balsfoort told the Telegraph: Loss of access to fishing grounds, to markets for fish or the return of overfishing will ultimately harm all of us.

"Michel Barnier knows this."

7.39am update: Brexit deal is possible but ambitious - Germany

German Foreign Minister Heiko Maas said on Tuesday: "The aim of reaching an agreement between Britain and the European Union on future ties between the two by October is ambitious but achievable.

An agreement on the basis of the Political Declaration is sporty but still possible."

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Brexit LIVE: UK sends EU dire ultimatum - before rivals share 'poignant moment' in London - Daily Express

The UK government announced its plans for a new 705m post-Brexit border infrastructure but the EU is poised to step in to stop trade after the transition period is over if they detect unfair competition, it has been revealed.Last week Cabinet Minister Michael Gove said the Government had been laying the groundwork for months to help Britains borders after the end of December.

But concerns have been raised about how the EU could stop trade between the UK if they think there is not a level playing field.

Speaking toExpress.co.ukNick Witney, senior policy fellow at the European Council on Foreign Relations, said: My suspicion is we will end up with a deal which provides minimal legal cover for shipping goods in either direction without quotas but with the British side not actually ready to implement any new system of vetting goods for regulatory requirements.

Mr Witney explained there are concerns Britons will start exporting goods to Europe which are subsidised providing unfair competition for European producers.

He said: More initially in the short term the EU is worried that the possibility of all sorts of people from around the world could sell stuff into Europe via the UK and undercut European producers.

Or send stuff into Europe that is not the right standards.

He added how Europeans will be poised to step in and stop things coming if they detect any reason to think that its unfair competition which would be a very messy situation to live with for months and years.

Mr Witney said the UK and EU will end up with a compromise by the end of the year rather than a breakdown.

He thinks this will happen because of two reasons, firstly the British side will not be ready at the end of December for trade between the EU.

READ MORE:EU blasted for absurd and contradictory Brexit demands

International Trade Secretary, Liz Truss, feared the new border arrangements with the EU will not be ready in time for January.

Her leaked letter addressed to Rishi Sunak and Mr Gove highlighted four key areas of concern about the Governments Brexit border plans.

Mr Witney said: I think we are way behind the curb and that will certainly increase the internal pressure on the Government to find a way not to have an absolute breakdown at the end of the year.

Ms Truss raised concerns that UK ports will not be prepared to carry out full import checks when they come into place in July next year.

DON'T MISSEU fishermen demand SAME access to UK waters in Brexit deal [UPDATE]Iain Duncan Smith SNAPS after Brexit Britain trade warning [INSIGHT]Brexit travel: Britons could face higher holiday costs[ANALYSIS]

She also warned that some ports could be exposed to smuggling from January.

Mr Witney also highlighted how the brand knew IT system to help check goods heading to the EU from the start of January has not been tested yet.

When Britain leaves the European Single Market in January, the Government has planned to put a new IT system in place to manage the additional border checks that are needed.

The system, known as Goods Vehicle Movement Service (GVMS), requires those transporting goods to have a GVMS reference number before being able to leave for the EU.

The reference numbers will be checked by customs officials at locations which are unspecified at the moment.

HMRC is not planning to test the new system until November, a month before Britain will leave the EU Single Market.

Mr Witney said the most critical thing to ensure is that on the 1 January goods can continue to move in both directions without tariffs and quotas.

He added: I suspect that the EU will be prepared to cut some provided that theyre convinced were sincere in wanting to get our plans properly in place.

And provided that they will reserve to themselves the right to step in at any particular point and say no were not having any more of whatever it is because were not happy.

The UK is set to leave the transition period at the end of December.

However, if a trade deal is not agreed by the end of the year the UK will face the prospect of tariffs on exports to the EU.

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Brexit shock: EU poised to stop trade with UK when the transition period ends - Express

The EU Commission has agreed to undertake mass borrowing for the first time in a landmark recovery deal. The talks, lastingover 90 hours and stretching over five days, saw tensions flaring and emotions run high between the blocs leaders. Charles Michel, the European Council president announced that the deal had been reached on Twitter at 5:30am in Brussels. French President Emmanuel Macron hailed the news, and called the agreement a historic day for Europe. THIS BLOG IS NOW CLOSED. Click HERE for today's latest Brexit updates

The recovery deal is centred on a 390 billion programme of grants to financially weakened member states.

The COVID-19 recovery plan also contains 360 billion in loans, and is attatched to a1.074 trillion seven-year budget, bringing the totalfinancial package to anabsurdly high 1.82 trillion.

The talks saw EU leaders struggle through negotiations partially due to the "frugal" members, those beingAustria, Denmark, the Netherlands and Sweden,resistingthe idea of permitting the bloc to borrow money and hand it out as budgetary expenditure for member states.

In response to those nations concerns over grants to financially weak members, they were offered rebates, withAustrias annual reduction being doubled to 565 million a year, and the Netherlands rebates set to rise to 1.92 billion from 1.57 billion.

The budget talks were just hours shy of breaking the record for the longest ever EU leaders meeting, which remains the 2000 Nice summit.

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7.37am update:THIS BLOG IS NOW CLOSE. ClickHEREfor today's latest Brexit updates

6:04am update: EU leaders reach unprecedented 1.82 trillion budget deal

After five days of bitter negotiations, EU leaders have agreed on their new seven-year budget.

The 1.82 trillion deal includes 750 billion for coronavirus relief measures, including 390 billion in grants and 360 billion in loans for financially weakened countries.

European Council President Charles Michel announced news of the agreement on Twitter, with a one-word post saying Deal!

4:42am update: EU emergency budget talks conclude with a deal

The EU has agreed to terms for a seven year budget, plus funds for coronavirus relief

4:40am update: Day 5 of EU budget talks near conclusion, green policy to be slashed

A final negotiating document on an emergency budget has been shared with EU delegates, according to POLITICO.

The budget sees a reduction in the Just Transition Fund, designed to help EU countries move to cleaner energy, by a huge 20 billion.

3:30am update: Report on Russian interference in UK releases today

The Russia report from the UK parliaments intelligence and security committee is set to be released today.

Its release comes nine months after Prime Minister Boris Johnson blocked its publication ahead of the 2019 general election.

Publication of the document comes after the committee rejected Mr Johnsons choice of former minister Chris Grayling as the new chairman.

Members voted by five to four to support the veteran Conservative Julian Lewis instead.

12:00am update:Belgian socialists warn of new election if no coalition formed

Paul Magnette, leader of Belgiums Socialist Party, has warned the country could face another election if a coalition government is not formed in the next 50 days.

After the King tasked him with looking for a possible coalition, Mr Magnette said: We have about 50 days to find a solution, failing which we will have to call a new election.

Currently the country is governed by Sophie Wilms, who was given emergency powers for six months due to the coronavirus pandemic.

Ms Wilms, leader of the Reformist Movement party, took over as caretaker Prime Minister due toBelgium'sinconclusive 2019election results.

Dylan Donnelly takes over from Richard Percival

9:30pm update:MPs defeat Tory backbench attempt to guarantee parliamentary approval of post-Brexittrade agreements

Ministers resisted a Tory backbench attempt to give Parliament a definitive say on post-Brexit trade deals as flagship legislation appeared in the Commons this evening.

Concerns were raised that politicians in Westminster would be unable to prevent the Government reneging on commitments to protect the NHS and maintain animal welfare and food standards under the current terms of the Trade Bill.

But the Government stressed UK law offers such protections and any changes would have to come before Parliament.

They rejected new clause four by 263 votes to 326, majority 63.

8pm update: US gets involved in Brexit talks

US Secretary of State Mike Pompeo arrived in the United Kingdom on Monday to discuss China, 5G and a Brexitfree trade deal with Prime Minister Boris Johnson.

Pompeo, who did not speak to reporters on the plane, was due to be greeted by US Ambassador Woody Johnson shortly after landing.

The US State Department said ahead of his visit: "While in London, Secretary Pompeo will meet with Prime Minister Boris Johnson and Foreign Secretary Dominic Raab to discuss global priorities, including the COVID-19 economic recovery plans, issues related to the Peoples Republic of China (PRC) and Hong Kong, and the US-UK Free Trade Agreement negotiations."

6.30pm update: Sterling reaches highest rate against Euro

The Pound recovered from an early-morning 20-day low against the stronger euro, but investors remained bearish as Britain's bleak economic outlook andBrexitrisks weighed on the currency.

Against the Euro, the pound was at 90.375 pence per Euro, similar levels to last Monday's close

With a new round ofBrexitnegotiations between Britain and the EU beginning on Tuesday, hopes for a trade deal in time for the year-end expiry of the transition period following Britain's departure from the bloc are fading fast.

Kaspar Hense, a portfolio manager at Bluebay Asset Management, said: "There will be a deal but it will be a hardBrexit, probably worse than a Canada deal."

5.30pm update: Scottish Secretary urges united approach on UK internal market after Brexit

Different regulations on goods between Scotland and the rest of the UK will cost consumers, the Scottish Secretary has warned.

Alister Jack has urged the Scottish Government to work with the UK Government on the establishment of the new internal market.

In the past week, a row has developed between Holyrood and Westminster over what the Scottish Government has called a "power grab" using the new Internal Market Bill.

Mr Jack said: "For me, it's fantastic these powers will no longer be exercised in Brussels.

"But it brings a risk that different standards, rules and regulations set in Scotland, England, Wales and Northern Ireland could emerge, creating barriers to trade and extra costs for business and consumers.

"That's in no-one's interests."

4.30pm update:Brexitwill split financial markets says Bank of England

Brexit will make markets less efficient but it won't be disastrous for the UK economy, an appointee to the Bank of England's Financial Policy Committee has said.

Jonathan Hall, told a confirmation hearing in Parliament's Treasury Select Committee this afternoon: "It will cause fragmentation, it will cause inefficiency, there will be problems with regulation, but it's not going to be disastrous... for the economy."

3:30pm update: Concerns on Government commitment to a Green Brexit

Environmentalists have raised concerns that the Government is "watering down" its appetite for a greenBrexitand recovery from the coronavirus pandemic.

Environment Secretary George Eustice used a speech to environmental groups this afternoon to insist that the approach to green regulation after the UK quits the EU system will help boost nature.

During the speech, he also stressed that Prime Minister Boris Johnson and the Government want to see a green recovery for the UK as it emerges from the COVID-19 crisis.

But RSPB chief executive Beccy Speight, who was also speaking at the online conference organised by think-tank Green Alliance, voiced the concerns of many in the sector over the gap between the Government's rhetoric and action on the environment.

She said: "We're seeing patterns that show a kind of watering down around the appetite for a greenBrexit, a watering down of the appetite of a green economic recovery."

Ms Speight stressed that we "would want to see more ambition, more heart and certainly more investment in nature" in order to deliver a real, green recovery, warning that what has been announced for nature so far "did not touch the sides" of what is needed.

1.37pm update: 'We will not give up our rights as an independent state' - Downing Street

Britain will continue to engage "constructively" with the EU on a post-Brexit trade deal, but is refusing to give up its rights as an independent state, a spokesman for Boris Johnson has warned.

The spokesman told reporters: "Our position on our sovereignty, laws and fisheries is clear, we will not give up our rights as an independent state.

"We will continue to engage constructively with the EU on these key issues and will work hard to reach the broad outline of an agreement, but as we have been clear all along we are not asking for a special, bespoke or unique deal."

Both sides will resume talks on Tuesday after the UK's chief negotiator David Frost hosts EU counterpart for dinner on Monday evening.

12.39pm update:EU told to do Brexit deal in bid to avoid global unemployment spike like Great Depression

Liam Fox has warned of a possible spike in global unemployment higher than anything since the Great Depression.

During an interview with Sky News, Dr Fox urged the UK and European Union to agree a good open trading relationship post-Brexit.

The former International Trade Secretary stated that a deal between Britain and the EU would give a boost of confidence to the global trading system when it is desperate need of a positive signal.

Mr Fox said: "We want to see Brexit done, I still hope we will see a good open trading relationship between Britain and the European Union.

"I think that now goes beyond the bilateral relationship.

"It is obviously good for Britain and our European partners to have open liberal trade between us.

"I think now the global trading system is slowing down because of COVID, we have the COVID emergency on top of that.

"We may well be seeing problems with global unemployment, a spike higher than we have seen since the Great Depression.

"It is very important that all countries understand that they need to do even more to keep trade moving.

"I think a good agreement between Britain and the EU would give a boost of confidence to the global trading system at a time when it very much needs one."

11.51am update: Liam Fox exposes key 'incentive' for EU to agree quick trade deal

Brexit negotiations could benefit from a new "incentive" the coronavirus pandemic has exposed, according to former International Trade Secretary Dr Liam Fox.

The UK and EU have been struggling to find common ground to secure a final trade agreement as both sides remain firm over their red lines.

But according to former International Trade Secretary Dr Liam Fox the coronavirus pandemic has exposed a new "incentive" that could push Brussels into a deal.

Speaking to Times Radio, he said: "I think there is an added incentive now for Britain and the EU to come to a good trade agreement.

"Weve got not only a slowing down of the system but weve got the emergence of COVID.

"Weve probably got an incipient global financial crisis on our hands, or certainly an economic crisis.

"The world lacks one thing at the moment and that is confidence. If we can manage to come to a good trade agreement with the European Union I think that will give a good boost to the international system."

10.55am update:Three quarters of UK hauliers could be shut out of EU if no trade deal agreed

Up to three quarters of British hauliers could be shut out of the EU if a post-Brexit trade deal is not agreed, triggering new fears over shortages of food and other goods.

The Freight Transport Association (FTA) warned permits would be made available for only 2,088 businesses from January - significantly down from the 8,348 that were registered for journeys last year.

The trade group warned companies are already under financial pressure because of the coronavirus crisis, and need a resolution within weeks as it prepares for its "Christmas peak".

The FTA's European policy manager Sarah Laouadi said: If you learn whether you have the right to continue operating as a company on Dec 28 and the only fallback plan is the ECMT system, which requires applications and allocations for permits, it will be too late."

10.38am update: Brexit talks could COLLAPSE as stubborn EU digs in heels - UK told to cave over fishing

Brexit talks are in danger of completely collapsing and a no deal scenario becoming increasingly probable, with EU member states digging their heels in on fishing and the level playing field - the UK's red lines.

The UK and EU are resuming talks on a post-Brexit trade deal in London today as the two sides desperately try to thrash out an agreement and overcome a number of hurdles.

Negotiations began in March but following several rounds of talks, both sides have lamented the lack of progress and significant differences that still exist.

This means Britain's future relationship with the bloc remains undecided - more than four years after the UK voted to leave the EU in a historic referendum.

Now allies of Boris Johnson say he believes Brexit talks could completely collapse over the next few weeks as EU member states take an increasingly tough stance against British demands.

Those close to the Prime Minister have warned he is prepared for leaders of the EU27 pulling out next month because of what one source described to The Times as a chasm between the sides.

Link:

Brexit LIVE: EU budget talks conclude with leaders to spend billions on COVID-19 relief - Daily Express