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EU urges swifter Brexit talks as London seeks ‘flexibility’

Britain's Secretary of State for Exiting the European Union David Davis (L) and European Union's chief Brexit negotiator Michel Barnier talk to the media, ahead of Brexit talks in Brussels, Belgium August 28, 2017. REUTERS/Francois Lenoir

By Gabriela Baczynska and Alastair Macdonald

BRUSSELS (Reuters) – The European Union’s chief negotiator Michel Barnier said on Monday he was concerned at the slow progress of Brexit talks, while his British counterpart David Davis called for “imagination and flexibility” to move on.

British officials arrived in Brussels on Monday hoping to push the EU toward talks about their post-Brexit ties, which the bloc refuses to launch until there is agreement on London’s exit bill and other pressing “divorce” matters, including the rights of EU citizens in Britain after March 2019.

“To be honest, I am concerned. Time passes quickly,” Barnier told reporters as he welcomed Davis back for a new round of talks. The third formal session since the process began in June, it is due to wind up on Thursday.

“We must start negotiating seriously,” Barnier said. “The sooner we remove the ambiguity, the sooner we will be in a position to discuss the future relationship.”

He welcomed a series of proposals London made over the summer break, but made clear they fell short of what EU leaders want to see before they will agree to open negotiations on the future free trade agreement the British government wants.

Impatient with the structure of talks agreed among the 27 other states and now binding Barnier’s negotiators, the British position papers made frequent reference to a future relationship with the EU rather than just the immediate task of bringing legal clarity for people and business when Britain leaves.

“The UK government has published a large number of papers covering important issues related to our withdrawal and our vision for a deep and special partnership,” Davis said.

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

To do that would require “flexibility and imagination from both sides”, he said.

But the EU wants to settle the major separation issues of ensuring expatriate rights, agreeing a divorce bill and squaring the circle of the future Irish border before jumping into talks about post-Brexit ties with London.

“The EU 27 and the European Parliament are united. They will not accept that separation issues are not addressed properly,” Barnier said. “I am ready to intensify negotiations over the coming weeks in order to advance.”

British officials took a relaxed view of Barnier’s implied criticisms, noting it was a familiar line from the former French minister, and dismissed a suggestion talks were going badly.

 

NO BREAKTHROUGH EXPECTED

The EU has already signaled that the slow progress so far has made talks about a new accord with Britain less likely to start after an EU summit in October, as had been hoped.

The EU and Britain seem far apart on agreeing how much London should pay the bloc on departure to account for previous commitments.

The Irish issue is extremely delicate because of the history of political violence there, as well as the complex economic consequences of Brexit.

Dublin said on Monday much of the future border arrangements between Northern Ireland and Ireland could be solved before Brexit talks enter the next phase.

Neither side expects major breakthroughs this week in talks aimed at unraveling more than 40 years of union. Neither seems ready for major political concessions at this stage.

An EU official said it was “clearly worrying that we have major differences of core issues … with very little time to land all this, even if Britain moves”.

Britain’s opposition Labour Party on Sunday offered an alternative to the policy pursued by Conservative Prime Minister Theresa May by saying it would stay in the European single market for a transitional period after Brexit.

The British and German chambers of commerce together urged negotiators on Monday to start talks about future trading relations, and particularly customs arrangements, swiftly.

Writing in Le Monde in his native France, Barnier said the EU and Britain must remain allies for their common defense: “The Union of 27 and the United Kingdom will have to join forces to stand up to common threats,” he said.

“The security of our citizens cannot be haggled over.”

 

(Additional reporting by Philip Blenkinsop and Jan Strupczewski; editing by Andrew Roche)

 

Slow divorce risks leaving future Britain-EU ties in limbo

FILE PHOTO: A worker arranges flags at the EU headquarters as Britain and the EU launch Brexit talks in Brussels, June 19, 2017. REUTERS/Francois Lenoir/File Photo

By Gabriela Baczynska

BRUSSELS (Reuters) – Divisions between Britain and the EU over mapping out their divorce will be laid bare in Brussels next week when the two sides meet for another round of talks whose timetable already looks tight.

Expectations of a breakthrough are minimal. London wants to focus on what happens after Brexit but the bloc says more ground must first be covered on settling the terms of departure, including the bill, leaving dozens of officials to pick their way through a diplomatic minefield from Monday to Thursday.

The 27 remaining EU states are also insisting on making headway on expatriate rights and the future status of the Irish border before declaring the “sufficient progress” that would allow them to broach talks about Britain’s future relationship with the EU.

Time is limited for negotiations, which started in June and should conclude before the expected Brexit date of March 2019. Otherwise Britain risks leaving the EU unclear on what happens next.

“There are no major expectations as regards next week’s round. The documents published by Britain (this week) refer more to the future relationship than the things to settle in the first place,” an EU diplomat said.

“Many matters, including the financial aspect most importantly, remain unclear from the British side… which makes any ‘significant progress’ less likely in (subsequent negotiations in) October.”

Talks have been slowed by an ill-judged snap election called by Prime Minister Theresa May that weakened her governing Conservative Party and exposed rifts among her ministers over what sort of Brexit they would seek.

Position papers released this week have made clear London will look to closely replicate many of its existing arrangements as an EU state after it leaves.

But the EU wants much more detail on the three priority areas before moving on to anything else.

“We won’t be talking about the future during this round,” an EU official said. “We need detail, the withdrawal deal …has to be a legal text.”

One key point of contention is London’s desire, reaffirmed this week, to break free from the jurisdiction of the EU’s top court, the European Court of Justice (ECJ).

For the EU, ensuring the ECJ can police the withdrawal and continue to have the final say in disputes involving EU citizens residing in Britain – and Britons living in the EU – is essential.

The bloc gave short shrift to what May called an initial “generous offer” on citizens’ rights, saying more detailed legal assurances were necessary.

While there is some common ground, sources on both sides say more technical work is needed. For a graphic, please see: http://tmsnrt.rs/2tws2uK

TIME IS MONEY

But the issue of money is seen by both sides as the hardest nut to crack for now. The EU has floated a divorce bill of around 60 billion euros ($71 billion), which London has dismissed as far too high.

“We should pay not a penny more, not a penny less of what we think our legal obligations amount to,” Britain’s foreign minister Boris Johnson said on Friday.

The bloc hopes to agree a formula with Britain for calculating the figure and sees that too as a precondition to moving to any talks about post-Brexit arrangements.

Without that, the EU has said the talks risk stalling and its chief Brexit negotiator Michel Barnier has already warned time is running out.

But British negotiators have said they will go “line by line” through the EU’s financial expectations and reiterate next week they see the EU’s sum as excessive.

“I would not want to get hopes up that we will see a breakthrough on this issue next week,” said a senior EU official involved in the talks.

“If you look at where we are and where we need to be, the gap is big. I say that in the next round it is unlikely we will make major progress in closing that gap.”

Some pieces of the puzzle should however start falling into place in more talks next month, sources said. This could include a political agreement on the future border between Britain and EU state Ireland.

Technical arrangements around the border would only come in the second phase of talks, as they would largely depend on the nature of future bilateral relationship, including customs arrangements.

A senior EU official warned Britain not to use the North Irish peace process as a bargaining chip, adding that the British government papers showed a lot of “magical thinking” about how the border could function in future.

While opening “phase two” talks had initially been expected in October, Barnier has already signaled this is now less likely to happen. London has said it was still confident the EU would move towards discussing future relations by October. ($1 = 0.8470 euros)

(Additional reporting by Philip Blenkinsop, Julia Fioretti, Robert-Jan Bartunek, Writing by Gabriela Baczynska, Editing by John Stonestreet)

UK banks behind schedule in post-Brexit preparations: ECB

Sabine Lautenschlaeger attends at a news conference at the ECB in Frankfurt October 26, 2014. REUTERS/Ralph Orlowski

FRANKFURT (Reuters) – British-based banks seeking to relocate to the European Union before Britain leaves the bloc are behind schedule in their preparations for the move, a European Central Bank supervisor said on Wednesday.

International banks based in London risk losing access to the EU’s single market once Britain leaves it in 2019, forcing many to consider moving parts of their businesses to the bloc and seek a license from the ECB, the sector’s watchdog.

But Sabine Lautenschlaeger, who represents the ECB’s supervisory arm on the central bank’s board, said progress had been slower than hoped.

“Frankly, the banks are not as far advanced as we would like them to be,” Lautenschlaeger said in a newsletter article.

“Of the banks that have indicated an interest in relocating operations to the euro area, a number of the larger banks have made progress in their planning. But we have not seen many final decisions yet.”

She added the ECB would not grant licenses to “empty shells” and would take a tough stance on “back-to-back transactions”, where a bank would conduct trades out of its EU base but process and risk manage them at its London office.

“While we do not rule out this practice per se, ultimately we expect banks to manage relevant parts of their risks locally and independently,” Lautenschlaeger said.

Lautenschlaeger also said she expected banks moving to the EU to update their recovery plans, which kick in if they fail, “shortly” after moving.

(Reporting By Francesco Canepa; Editing by Angus MacSwan)

EU says mulling ‘range of actions’ on Venezuela but sanctions unlikely now

FILE PHOTO: Venezuela's President Nicolas Maduro talks to the media during a news conference at Miraflores Palace in Caracas, Venezuela, June 22, 2017. REUTERS/Marco Bello/File Photo

By Robert-Jan Bartunek and Gabriela Baczynska

BRUSSELS (Reuters) – The European Union is considering a “whole range of actions” in response to rising tensions in Venezuela, a spokeswoman said on Wednesday after the head of the bloc’s parliament called for targeted sanctions against President Nicolas Maduro.

Venezuela jailed two leading Maduro critics on Tuesday in a fresh blow to the opposition after deadly protests erupted around an election last Sunday, prompting the United States to impose sanctions on the leftist president.

Washington and the EU tend to coordinate their sanctions but the bloc has been divided over how to respond. Spain has been the most vocal in advocating sanctions, while others have so far mostly been cautious.

The European Parliament head, Antonio Tajani, joined the small choir calling to punish Maduro.

In a letter Tajani said that following the “unjustified arrests” of opposition leaders Antonio Ledezma and Leopoldo Lopez, he would like to consider “freezing assets and imposing travel ban to the EU to the members of the Venezuelan government including its President, Nicolas Maduro and its entourage”.

Since the bloc needs unanimity to introduce sanctions, diplomats in Brussels said that did not seem imminent.

Catherine Ray, a spokeswoman for the EU’s executive Commission in Brussels, told a news briefing:

“Consultations with member states are ongoing to ensure an appropriate and coordinated response by the EU. Obviously the whole range of actions is (being) discussed.”

Diplomats explained the bloc was working on joint declaration on Venezuela, where clashes last Sunday marred the election of a new political body with sweeping powers to strengthen the hand of the leftist government.

The EU has suggested it might not recognize the result of the voting.

The diplomats said the declaration would threaten Maduro with more “measures” it can take against what Tajani described as a country “falling into dictatorship”, but would not mention sanctions specifically.

On Monday, the United States government slapped sanctions on Maduro, freezing his assets subject to U.S. jurisdiction, and barring Americans from doing business with him.

(Editing by Pritha Sarkar)

With 20 months until Brexit, UK orders year-long EU migration study

FILE PHOTO: UK Border control is seen in Terminal 2 at Heathrow Airport in London June 4, 2014. REUTERS/Neil Hall/File Photo

By William James

LONDON (Reuters) – Britain ordered a year-long study of EU migration on Thursday to help it design a post-Brexit immigration system that is due to come into force just six months after report is completed.

EU citizens’ freedom to live and work in Britain will end as soon as it leaves the bloc, scheduled for March 2019, but ministers have said they will design a system that allows businesses to hire the workers they need.

However, with Brexit negotiations already under way and the EU hoping to wrap up talks by October 2018, critics said the study should have been commissioned sooner and that uncertainty was already driving EU nationals out of the UK labor market.

Interior minister Amber Rudd asked the Migration Advisory Committee (MAC), a public body that advises the government, to look at how migration affects the labor market and the wider economy, and how the post-Brexit rules need to work to support the country’s plans for an industrial revival.

Concern about the long-term social and economic impact of immigration helped drive last year’s vote to leave the EU, and the government has a long-standing aim to bring net migration into Britain below 100,000. In 2016, net migration was 248,000.

“The public must have confidence in our ability to control immigration — in terms of type and volume — from within the EU,” Rudd wrote in an article for the Financial Times.

“That is why, once we have left the EU, this government will apply its own immigration rules and requirements that will meet the needs of UK businesses, but also of wider society.”

Ministers have so far said little about the kind of immigration system they want to replace the EU’s freedom of movement rules, leaving companies and workers in limbo and forcing some to make alternative plans

“The government needs to explain why this study wasn’t commissioned a year ago, directly after the referendum,” said lawmaker Ed Davey of the pro-EU Liberal Democrat party, citing lower numbers of EU nurses wanting to work in the health sector.

“Ministers must explain how their negotiations will minimize the damage Brexit will do to our economy and public services.”

A government statement said Rudd would stress in a letter to the MAC that “there will be an implementation period when the UK leaves the EU to ensure there is no ‘cliff edge’ for employers or EU nationals in the UK”.

Rudd said the government would “set out some initial thinking on options for the future immigration system” later this year.

Immigration minister Brandon Lewis said the MAC would make interim reports, and that its work was not the only source the government would use to design its new immigration system.

A wide range of companies have already expressed concern that they will not be able to hire the people they need to operate, from skilled financiers to unskilled farm workers. The effect could be to force them to relocate.

The government said the MAC, which is expected to report back in September 2018, will be asked to look at a range of issues:

– Existing patterns of EEA (European Economic Area) migration, including which sectors rely most on EU labor.

– The economic and social costs and benefits of EU migration to the British economy.

– The potential impact of a reduction in EU migration and the ways in which both business and the government could adjust to this change.

– The existing impact of immigration, from both EU and non-EU countries, on the competitiveness of British industry and skills and training.

– Whether there is any evidence that the availability of unskilled labor has led to low UK investment in certain sectors.

– If there are advantages to focusing migrant labor on high-skilled jobs

(Editing by Guy Faulconbridge and Louise Ireland)

‘No whistling, just ticking’: EU pushes on Brexit talks

European Union's chief Brexit negotiator Michael Barnier addresses a news conference at the EU Commission headquarters in Brussels, Belgium, July 12, 2017. REUTERS/Francois Lenoir

By Alastair Macdonald and Robert-Jan Bartunek

BRUSSELS (Reuters) – The EU’s negotiator pressed Britain on Wednesday to offer more post-Brexit rights to European expats and accept it will pay a hefty sum on leaving if it wants a quick start to talks on a future trading relationship.

Michel Barnier, who holds a first full round of talks next week, betrayed impatience with London during a Brussels news conference. Britain had yet to respond to detailed proposals from him on many issues, he said, and had fallen short on what it has offered on citizens’ rights, as well as on what it owes.

Asked his view on Foreign Secretary Boris Johnson’s remark on Tuesday that Brussels could “go whistle” if it thought Britain would pay what Johnson called “extortionate” demands, Barnier showed no desire to join in any cross-Channel banter:

“I’m not hearing any whistling, just the clock ticking,” the Frenchman said, echoing his refrain of the past year that time is tight to conclude terms for an exit in March 2019 that can limit disruption for businesses and millions of people.

Barnier said he wants detailed proposals from the British next week to match those made by the EU on issues they want settled in a withdrawal treaty.

These include the rights of expats left on either side of a new EU-UK border, a methodology for calculating how much Britain will owe to cover commitments to the EU and how to manage the new border, notably on Ireland.

Only if there is progress on all three of these would EU leaders agree to open negotiations on a future free trade deal.

For now, however, 3 million Europeans in Britain would have fewer rights under London’s proposal than Britons on the continent, notably in the matter of being able to bring in relatives, he said. And those rights in Britain would not be guaranteed by the treaty or ultimately by the EU’s judges in Luxembourg.

NEGOTIATING POSITIONS

Even some EU governments concede that the demand for much of the relations between Britain and the bloc to be under ultimate scrutiny by the European Court of Justice – anathema to many of those who voted for Brexit a year ago – is a “maximalist” position and may have to be moderated in negotiations.

An early indication of how far apart the two sides really are will come from Monday, when British officials are due in Brussels for the first of four, week-long, monthly rounds of negotiations which they hope can show enough progress to see EU leaders agree at a summit in mid-October to open trade talks.

Barnier urged London to be clear on its willingness to pay a bill, which the EU executive have put at potentially 60 billion euros ($70 billion), if it wants to win the Union’s trust.

He dismissed suggestions from Brexit supporters that the EU was holding Britain to “ransom” and stressed that he was open to negotiating the amount “line by line” but first the British had clearly to take responsibility for their share of EU budgets.

“I cannot imagine that a very great country like the United Kingdom is not a country that takes responsibility,” he said.

In a sign of the domestic dramas that have delayed Britain’s response, three leaders will separately see Barnier on Thursday: the first ministers of Wales, which backed Brexit, and Scotland, which did not, as well as opposition leader Jeremy Corbyn.

With May hobbled by losses in a miscued snap election last month, Corbyn’s Labour party and the devolved governments are pushing her to modify her Brexit plans – though Barnier stressed he would only be negotiating with British ministers.

(Additional reporting by Francesco Guarascio and Foo Yun Chee; Editing by Andrew Roche)

G20 communique agreed apart from climate issue: EU officials

Delegates attend the official dinner at the Elbphilharmonie Concert Hall during the G20 summit in Hamburg, Germany July 7, 2017. REUTERS/Kay Nietfeld

By Paul Carrel and Noah Barkin

HAMBURG (Reuters) – World leaders meeting for a summit in Germany have agreed every aspect of a joint statement apart from the section on climate where the United States is pushing for a reference to fossil fuels, European Union officials said on Saturday.

The officials said aides had worked until 2 a.m. to finalize a communique for the Group of 20, overcoming differences on trade after U.S. officials agreed to language on fighting protectionism.

“The outcome is good. We have a communique. There is one issue left, which is on climate, but I am hopeful we can find a compromise,” said one EU official, speaking on condition of anonymity. “We have all the fundamentals.

“We have a G20 communique, not a G19 communique,” he added.

The section that needs to be resolved by the leaders relates to the U.S. insistence that there be a reference to fossil fuels, the official said.

With the final statement almost nailed down, the summit marked a diplomatic success for Chancellor Angela Merkel as she finessed differences with U.S. President Donald Trump, who arrived at the two-day summit isolated on a host of issues.

Trump, who on Friday found chemistry in his first face-to-face meeting with Russian President Vladimir Putin, congratulated Merkel for her stewardship of the summit.

“You have been amazing and you have done a fantastic job. Thank you very much chancellor,” he said.

Trump and Putin on Friday discussed alleged Russian meddling in the U.S. election but agreed to focus on future ties rather than dwell on the past, a result that was sharply criticized by leading Democrats in Congress.

For Merkel, the summit is an opportunity to show off her diplomatic skills ahead of a federal election in September, when she is seeking a fourth term in office.

She treated the leaders to a concert at Hamburg’s Elbphilharmonie on Friday night, where they listened to Beethoven while their aides began their all night slog to work out a consensus on trade that had eluded the leaders.

Trade policy has become more contentious since Trump entered the White House promising an “America First” approach.

The trade section in the statement the aides thrashed out read: “We will keep markets open noting the importance of reciprocal and mutually advantageous trade and investment frameworks and the principle of non-discrimination, and continue to fight protectionism including all unfair trade practices and recognize the role of legitimate trade defense instruments in this regard.”

CLIMATE CLASH

Climate change policy proved a sticking point, with the United States pressing for inclusion of wording about which other countries had reservations.

That passage read: “… the United States of America will endeavor to work closely with other partners to help their access to and use of fossil fuels more cleanly and efficiently …”

The climate section took note of Trump’s decision last month to withdraw the United States from the landmark Paris climate accord aimed at combating climate change, and reaffirmed the commitment of the other 19 members to the agreement.

Merkel chose to host the summit in Hamburg, the port city where she was born, to send a signal about Germany’s openness to the world, including its tolerance of peaceful protests.

As the leaders met on Saturday, police helicopters hovered overhead. Overnight, police clashed with anti-capitalist protesters seeking to disrupt the summit.

In the early morning, heavily armed police commandos moved in after activists had spent much of Friday attempting to wrest control of the streets from more than 15,000 police, setting fires, looting and building barricades.

The summit is being held only a few hundred meters from one of Germany’s most potent symbols of left-wing resistance, a former theater called the “Rote Flora” which was taken over by anti-capitalist squatters nearly three decades ago.

Police said 200 officers had been injured, 134 protesters temporarily detained and another 100 taken into custody.

(Writing by Paul Carrel; Editing by Noah Barkin and Janet Lawrence)

EU parliament asks for Turkish accession talks to be suspended

FILE PHOTO: A European Union (L) and Turkish flag fly outside a hotel in Istanbul, Turkey, May 4, 2016. REUTERS/Murad Sezer/File Photo

STRASBOURG (Reuters) – The European Parliament on Thursday asked for Turkey’s European Union accession talks to be suspended if Ankara implements a constitutional overhaul, backed by a referendum in April, which expands the powers of President Tayyip Erdogan.

The parliament has limited influence on the issue and Turkey said on Thursday it rejected proposals that it drop its EU membership bid in favor of cooperation in other areas.

EU leaders have been critical of Erdogan and his behavior toward opponents, both before and after an abortive coup against him a year ago. But they do not want to undermine an agreement struck last year whereby Turkey effectively stopped migrants reaching Greece, easing a crisis that had threatened EU unity.

The resolution passed by the parliament on Thursday “calls on the Commission and the member states, in accordance with the Negotiating Framework, to formally suspend the accession negotiations with Turkey without delay if the constitutional reform package is implemented unchanged.”

Erdogan’s proposed constitution would greatly expand his powers, which he says is necessary to ensure stability in Turkey.

Opposition parties and human rights groups say the reforms threaten judicial independence and push Turkey toward one-man rule. The EU has also expressed concern.

The Venice Commission, a panel of legal experts from the Council of Europe, a rights body to which Turkey belongs, warned in March ahead of Turkey’s referendum that the proposed constitutional shakeup represented a “dangerous step backwards” for democracy. Ankara rejected the criticism.

(Reporting by Julia Fioretti in Brussels; editing by Andrew Roche)

UK government says to introduce EU ‘repeal bill’ to parliament next week

Britain's Secretary of State for Exiting the European Union David Davis leaves Downing Street after a cabinet meeting in London, Britain July 4, 2017. REUTERS/Hannah McKay

LONDON (Reuters) – Legislation to begin the process of transferring European Union law into British law will be presented to parliament next week, Prime Minister Theresa May’s spokesman said on Tuesday.

The spokesman said Brexit minister David Davis had given colleagues an update on the “Repeal Bill”, which will shift EU legislation into British law as part of the Brexit process, at a weekly meeting of May’s top team of ministers.

“He said the legislation, which is the start of the legislative process for Brexit, is expected to be tabled next week,” the spokesman told reporters.

Tens of thousands of EU-related laws have made their way onto the British statute book during more than 40 years of membership of the bloc and unpicking that complex legislative web is likely to take many years.

The repeal bill, which the government says will help achieve a smooth transition as Britain leaves the EU, will transpose EU law and repeal the 1972 European Communities Act which formalizes Britain’s EU membership.

It will also give parliament the power to change existing laws to make sure they work after Brexit.

(Reporting by Kylie MacLellan, editing by Elizabeth Piper)

EU agrees to use sanctions against cyber hackers

Participant of the Pro-Europe "Pulse of Europe" movement waves European Union flag during a protest at Gendarmenmarkt square in Berlin, Germany, April 2, 2017. REUTERS/Fabrizio Bensch

LUXEMBOURG (Reuters) – The European Union can levy economic sanctions on anyone caught attacking EU states’ computer networks, EU foreign ministers said on Monday, the bloc’s latest step to deter more attacks following incidents in Britain and France.

With German national elections in September, interference in democratic votes is a concern for the bloc after accusations of Russian meddling in the U.S. presidential election last November and the French election in May.

EU foreign ministers agreed that so-called restrictive measures including travel bans, assets freezes and blanket bans on doing business with a person, company or government could be used for the first time.

“A joint EU response to malicious cyber activities would be proportionate to the scope, scale, duration, intensity, complexity, sophistication and impact of the cyber activity,” the bloc said in a statement.

U.S. intelligence agencies concluded last year that Russia hacked and leaked Democratic Party emails as part of an effort to tilt the presidential election in favor of President Donald Trump, which Russia denies.

A British intelligence agency has told political parties to protect themselves against potential cyber attacks, while the French government dropped plans to let its citizens abroad vote electronically in Sunday’s legislative elections because of the risk of cyber attacks.

(Reporting by Robin Emmott, editing by Ed Osmond)