Latest Brexit News: Both sides need to ‘step forward’ says May

Theresa May has insisted it is for both sides, not just the UK, to move the Brexit process forward so discussions on future trade relations can begin.

She will meet the EU’s Donald Tusk, who has told the UK it has until the start of December to offer further guarantees on money and the Irish border.

Ministers have given her their backing to increase the UK’s “divorce bill” but only if the EU shows movement on trade.

Arriving in Brussels, the PM said both sides “must step forward together”.

Environment Secretary Michael Gove refused to confirm or deny reports that the government had agreed to pay about £40bn to pave the way for EU leaders to approve the next phase of talks at a summit on 14 December.

The UK voted to leave the EU in June 2016, and served the EU with formal notice of Brexit in March 2017. This began a two-year countdown to the UK’s departure day which will be in March 2019.

The British prime minister will later meet Mr Tusk, who as European Council president represents the 27 other member states, on the margins of a summit on security threats in Eastern Europe.

The BBC’s Europe reporter Adam Fleming said he did not expect a “massive step forward” on Brexit but the meeting was an important “small step in the diplomatic dance” between the sides.

Asked whether she was prepared to offer a “blank cheque” to the EU to get what the UK wants, Mrs May signalled the onus was on the EU as well as the UK to make progress.

“These negotiations are continuing but what I am clear about is that we must step forward together,” she said. “This is for both the UK and the EU to move onto the next stage.”

Last week Mr Tusk said the EU was “ready” to move onto the next phase of Brexit talks but the UK must first show more progress on the outstanding issues.

‘Exemplary’

Mr Gove, who was one of those ministers reported to have sanctioned the higher offer at a meeting of a key Brexit committee earlier this week, hit out at the “assumptions” and “assertions” reported in the media.

“I am not going to reveal what happened in a cabinet sub-committee,” he told BBC Radio 4’s Today.

“I am not going to provide a commentary on the negotiating stance because the PM and David Davis should be free to get the best deal for Britain.”

The PM, he added, was handling the negotiations in an “exemplary fashion”, saying he was confident that she would “put the national interest first” at all times.

During Friday’s meeting, Mrs May will also warn EU leaders to be wary of “hostile states like Russia” and pledge the UK will stay committed to European security after Brexit.

“We must be open-eyed about the actions of hostile states like Russia who threaten the potential growth of the Eastern neighbourhood and try and tear our collective strength apart,” she said.

She is expected to use the summit to demonstrate that the UK can contribute to European security after Brexit, for example by spending £100m over five years to fight Russian disinformation campaigns.

85-year-old San Francisco law firm Sedgwick plans to shut down

San Francisco law firm Sedgwick, hit by an exodus of attorneys and unable to find a merger partner, told employees this week that it will shut down in early January.

The 85-year-old firm specialised in defending insurance companies in lawsuits against the companies and their policyholders. It had expanded geographically and into other lines of business but has been hit by a wave of defections this year.

In January, three Sedgwick partners, including Michael Tanenbaum, who served as the firm’s chairman from 2007 to 2015, left to start their own firm. They took with them 14 other Sedgwick attorneys, including three partners, plus 18 other staff members. The same month, Drinker Biddle & Reath announced it was opening a Dallas office staffed with 23 lawyers including nine partners from Sedgwick.

From there the departures continued, forcing the firm to close offices in Washington; Houston and Austin, Texas; and Fort Lauderdale, Fla. By August, the firm was down to 106 partners and 210 total attorneys, compared with 131 partners and 271 total attorneys at the end of 2016, according to as legal website Law360.

The firm still has offices in Chicago, Dallas, Kansas City, London, Los Angeles, Orange County, Miami, New York, New Jersey and Seattle, according to its website.

Sedgwick Chairman Michael Healy did not return requests for comment.

According to news reports, merger talks with Clyde & Co., a British firm with an office in San Francisco, fell through, but Clyde could end up hiring some Sedgwick employees.

“A lot of people thought (Clyde) might be the white knight. By the time they evaluated it, (Sedgwick) had lost so many revenue generators, partners, that they backed out,” said Larry Watanabe, a recruiter in San Diego County who placed some Sedgwick attorneys with other firms.

In an email, a spokesman for Clyde said those reports “are entirely speculative and have not come from us, although we are a fast-growing law firm in the U.S. with a focus on the insurance sector and a sizable California presence.”

In 2015, Sedgwick was 35th on a list of law firms ranked by the number of attorneys in California. At that time in had 147 lawyers in the state, down 16 percent from 2015, according to the list published by California Lawyer, which included firms with headquarters outside the state. That same year, it ranked 14th on a list of law firms based in California, ranked by total number of lawyers nationwide.

It’s common for struggling law firms to merge or be acquired, but not shut down completely, Watanabe said.

The last major San Francisco firms to close their doors were Heller Ehrman, which filed for bankruptcy in 2008, and Thelen, which dissolved less than a month later.

The Great Recession took a toll on law firms as corporate clients moved to slash costs. The legal profession took a “big sink” in profitability and productivity after 2007, said San Francisco attorney Bradley Marsh, a shareholder with Greenberg Traurig. Since then it has recovered, “but not by a whole lot.”

Many companies continue to move more legal business in-house, and are hiring accounting and consulting firms to take over much of the routine work normally done by law-firm associates, such as discovery and document review.

Some firms survive by charging top dollar — $700 to $1,100 per hour for partners — in premium areas such as white-collar criminal defense, intellectual property and tax law. Others go for high-volume work in commodity areas, including insurance, where partners charge $350 to $400 an hour. That can work, until partners start leaving with a big chunk of the business.

Watanabe doesn’t know what sparked the exodus at Sedgwick, but said that once it starts, its hard to stop. When employees see partners leaving and offices closing, “they get spooked,” he said.

You’ll never guess the US cities where startups are growing fastest today

While San Jose and Boston are well-known startup hubs, a few southern and Midwestern cities made their way onto this year’s list.

After a slump amid the Great Recession, more and more startups are emerging and entrepreneurship has been on the rise since 2011. From creating jobs to boosting the economy, with this rise comes a number of benefits. People often associate entrepreneurs and startups with Silicon Valley, if not New York City or Boston, because a disproportionate share of venture capital investments flow to startups based in those cities. However, other metropolitan areas have been experiencing some under-the-radar growth.

Over the past year, 26 metropolitan areas across the country experienced a boost in growing startups, and the areas that saw the most substantial growth were Atlanta, Indianapolis and Portland, according to the Kauffman Foundation’s recently released its 2017 Index of Growth Entrepreneurship. The findings reveal not only how entrepreneurship is growing across the U.S., but where.

To rank the cities, the researchers took three factors into account: startup growth rate, share of scale-ups and high-growth company density. Both startup growth rate and share of scale-ups are employment-based measurements, and share of scaleups refers to companies that grew to 50 employees or more in less than 10 years of operation. High-growth company density, which is the only revenue-based measure of the study, looks at the proportion of “high-growth” companies — private companies that have at least $2 million in revenue and a minimum 20 percent growth over a three-year period — in a certain area.

So, wonder which cities have been bustling in the startup scene? Look no further. Here are the top 10 cities with the most entrepreneurial activity, according to this year’s Kauffman Index of Growth Entrepreneurship.

1. Washington, DC

Washington, DC, has the best cumulative score across startup growth rate, share of scale-ups and high-growth company density. Compared to the other 39 largest U.S. cities, the D.C. area has the highest density of high-growth companies. In other words, it’s the area with the largest proportion of businesses that earn more than $2 million in annual revenue and have seen 20 percent revenue growth over the past three years. In a recent survey of startups in D.C., 217 respondents said they planned to hire more than 1,000 people collectively in 2017.

2. Austin

Coming in second is the southern city of Austin. However, this is not very surprising, because Austin is recognized for being an entrepreneurial hub and also came in second place in last year’s Kauffman Index. The number of employees at an Austin company grows an average of 85 percent in the company’s first five years of operation. Austin also has the second-highest density of high-growth companies.

3. Columbus

Moving up a slot from last year, Columbus, Ohio, takes the bronze for the most entrepreneurial activity, according to the index. That’s largely because startups grow an average of 96 percent in their first five years, in terms of employment. While it’s not a usual suspect when it comes to the startup scene, Columbus has the highest share of scale-ups of any city, at 2.5 percent. That means that around 25 out of every 1,000 Columbus firms founded in the past 10 years have scaled to at least 50 or more employees since they launched.

4. Nashville

Music isn’t the only thing Nashville should be famous for. Turns out, it’s also a bustling startup city. Moving up a rank since last year, the southern city has a 95.6 percent startup growth rate: The number of employees at a Nashville company grows an average of 95.6 percent in the company’s first five years. That’s on top of a 2.09 percent share of scale-ups, meaning about 209 of every 10,000 businesses in this area grows to 50 employees within its first decade.

5. Atlanta

Yet another southern city to make it into the index’s top 10 is Atlanta. In fact, just in the past year, Atlanta has seen major entrepreneurial action, moving up a whopping 10 slots from 2016, when it ranked 15th. That’s because employment at Atlanta new companies grows by an average of 112.6 percent in their first five years. The city also has a fairly large high-growth company density at 191.4 — that’s the number of companies out of 100,000 with annual revenues more than $2 million (and growing by 20 percent over a three-year period).

6. San Jose

Not a shocker, but important to note: San Jose is number six on this year’s list of the top 10 cities, moving down three slots since last year. While there’s still plenty going on in this area in terms of startups and venture capital investment, the city may have seen a drop because of a relatively low high-growth company density of 94.4 (out of 100,000). Its proportion of fast-growing companies with annual revenues of at least $2 million was lower than many other cities on the list.

7. San Francisco

Another not-so-shocking Bay Area addition to the list is San Francisco. This metropolitan area (which includes Oakland and Fremont, Calif.) saw the largest proportion of venture capital-backed business exits over the past year compared to other major cities, meaning there are a large number of what Kauffman identifies as “growth companies” in San Francisco and the East Bay. According to the study, venture exits include IPOs, acquisitions and buyouts. Meanwhile, the area has the fourth-highest rate of startup growth, with an average employment growth rate of 106.9 percent within a startup’s first five years.

8. Boston

Basically the Silicon Valley of the East Coast, Boston has also long been recognized as a very entrepreneurial city. That’s why it’s no surprise that it made the cut for this year’s top 10. Although it’s moved down two spots since 2016, Boston ranks fourth in terms of cities with the highest density of venture capital-backed business exits. Major companies that got their start in the city of Boston include Liberty Mutual, Marshalls, Samuel Adams and Timberland, to name a few.

9. Minneapolis

Shuffling from 16th place last year to ninth place this year, Minneapolis has the highest rate of startup growth of any major U.S. city, with an average employment growth rate of 121.3 percent within a startup’s first five years. The city is also home to the University of Minnesota, whose venture program has helped launched more than 100 companies in the past decade (82 percent of which are still in business), and last year alone helped give life to 17 new businesses.

10. Indianapolis

Also seeing a big improvement since 2016, Indianapolis moved up 10 places from 20th to 10th on the Kauffman list over the past year. Especially when it comes to tech, Indiana is seeing some major activity. According to a recent report by PwC, in 2016 alone, the state saw a total of 23 deals with a combined total of $51.5 million in fundraising just by new technology companies. When you extend beyond just tech, these numbers are even larger. Plus, according to Kauffman, about 220 of every 10,000 businesses in Indianapolis grows to 50 employees within its first decade.

Venezuelan authorities arrest six top executives from US-based oil company

Venezuelan authorities have arrested six executives from a US-based oil refiner, the country’s chief prosecutor has revealed.

Reports said authorities arrested Jose Pereira, the acting president of Citgo, a US-based and Venezuelan-owned refinery, during an event at state oil company PDVSA’s headquarters in Caracas. Five other executives from the company were also detained.

Reuters said prosecutor Tarek Saab said he was leading a crusade against “organized crime” within PDVSA. Since taking office in August, he has arrested around 50 oil managers in the widening corruption investigation, the news agency said.

Mr Pereira was promoted in April as interim president of Citgo, the US refining and marketing unit of the nation’s state oil company PDVSA.

Citgo owns three refineries and a network of terminals and pipelines in the United States.

He was previously Citgo’s vice president of finance. He replaced Nelson Martinez, who was named as Venezuela’s oil minister in January.

The news agency said that in the case of the Citgo arrests, Mr Saab said his office had uncovered a $4bn planned deal with foreign firms that would have seen Citgo “unfairly” indebt itself and even be offered as guarantee for the loan.

“This board of directors put Citgo in danger. That’s corruption, corruption of the most rotten nature,” Mr Saab said in a statement.

Citgo did not immediately respond to a request for comment.

President Nicolas Maduro’s government and PDVSA, which is formally known as Petroleos de Venezuela SA, have repeatedly vowed to take steps to combat corruption.

Yet opposition leaders say PDVSA has been crippled by poor management, corruption and under-investment during 18 years of socialist rule. They attribute the arrests to in-fighting among rival government factions.

Technology and Healthcare boost stocks

The market’s biggest winners this year, technology and healthcare, powered U.S. stock indexes to more all-time highs on Tuesday.

Huge technology companies like Apple and Facebook continued their ascent, while strong reports from companies including medical device maker Medtronic and construction and technical services company Jacobs Engineering helped healthcare and industrial companies, respectively.

Basic materials companies, which have done better than the rest of the Standard & Poor’s 500 index, also rose. Telecommunications companies declined, while energy companies and banks didn’t do as well as the rest of the market.

Apple, Facebook, Alphabet, Microsoft and Amazon, the five most valuable companies on the stock market, all rose more than 1 percent, and they’ve all had a very strong year. JJ Kinahan, chief market strategist at TD Ameritrade, said that’s not about to stop.

“They’re seeing better earnings, better sales, better growth,” he said. “It’s difficult to argue with that.”

The S&P 500 index climbed 16.89 points, or 0.7 percent, to 2,599.03. The Dow Jones industrial average gained 160.50 points, or 0.7 percent, to 23,590.83. The Nasdaq composite added 71.76 points, or 1.1 percent, to 6,862.48.

The Russell 2000 index of smaller-company stocks rose for a fourth day and picked up 15.49 points, or 1 percent, to 1,518.89. All four indexes set records. The Russell had struggled in recent weeks, but on Tuesday it beat its record close from early October.

Big-name technology companies led the way overall. Apple rose $3.16, or 1.9 percent, to $173.14 and Facebook added $3.12, or 1.7 percent, to $181.86. Health care companies climbed as well. Those two sectors are the best-performing parts of the market this year.

Homebuilders climbed after the National Association of Realtors said sales of homes grew in October. They’re down slightly from last year because there are so few houses on the market, but the tight supply and rising prices have sent homebuilder stocks soaring this year. On Tuesday, NVR advanced $59.69, or 1.8 percent, to $3,377, while D.R. Horton gained $1.15, or 2.4 percent, to $49.35.

Along with those reports, investors were cheered by projections from Goldman Sachs analyst David Kostin, who forecast that the S&P 500 will rise 14 percent in 2018 if corporate taxes are cut.

Budget aim to help UK ‘seize opportunities’ from Brexit

The UK must “seize the opportunities” from Brexit while tackling deep-seated economic challenges “head on”, Philip Hammond is to say in his second Budget.

The chancellor will promise investment to make Britain “fit for the future” as an “outward looking, free-trading nation” once it leaves the EU in 2019.

But he will also commit to supporting hard-pressed families with the cost of living and address housing shortages.

Labour say he should call time on austerity and boost public services.

In his Commons speech, which will begin at about 12:30 GMT, Mr Hammond will set out proposed tax and spending changes.

He will also update MPs on the current state of the economy, future growth projections and the health of the public finances.

He has been under pressure in recent months from sections of his party who argue that he is too pessimistic about the UK’s prospects when it leaves the EU.

In response, he will set out his vision for the UK after Brexit as a “prosperous and inclusive economy” which harnesses the power of technological change and innovation to be a “force for good in the world”.

Unlike past years, few announcements have been briefed out in advance of the big day.

But the chancellor is expected to announce more money for teacher training in England and extra cash to boost the numbers of students taking maths after the age of 16.

He has signalled he wants to speed up permitted housing developments and give more help to small builders.

In a nod to younger voters, discounted rail cards will be extended.

An extra £2.3bn for research and development and £1.7bn for transport links are designed to address the UK’s lagging productivity.

Extra money is also expected to be found for new charge points for electric cars and for the next generation of 5G mobile networks.

Expect the theme of innovation to ring through the speech, with Mr Hammond hailing the UK as being “at the forefront of a technological revolution”.

The image Mr Hammond has cultivated as a safe, unflashy pair of hands in uncertain times – hence his ironic “box office Phil” nickname – was dented in the March Budget when he had to backtrack on plans to hike National Insurance for the self-employed.

Asked on Sunday whether this would be a bold or boring Budget, he settled for describing it as “balanced”.

While some Tory MPs would prefer a safety-first approach with no controversy, others want him to turbo-charge efforts to prepare the UK for life after Brexit.

Most hope he will begin to address issues perceived to have hurt the Tories at the election, such as the financial pressures on public sector workers and young people.

In remarks released ahead of the speech, Mr Hammond strikes an upbeat tone, saying he will use the Budget to “look forwards, embrace change, meet our challenges head on and seize the opportunities for Britain”.

Yes, that’s the way it’s been for the last twenty years. The last one was in March and normally there wouldn’t be another one until Spring 2018.

But Mr Hammond thinks late autumn is a more suitable time for tax and spending changes to be announced and scrutinised before the start of the tax year in April. So from now on, Budgets will take place in November.

But aside from the timing, the choreography of Budget day will remain the same.

Mr Hammond will be photographed in Downing Street holding the famous red ministerial box – used to carry the statement – aloft before making the short journey to the Commons.

While tradition dictates he can take a swig of his chosen tipple during his speech, Mr Hammond is expected to eschew anything too strong and confine himself to water during what is normally an hour-long statement.

Quite a lot. In the last nine months, the UK has triggered Brexit and begun negotiations on the terms of its departure from the EU.

Economic conditions have changed too, although there is fierce debate about how much of this is attributable to uncertainty and negativity over Brexit.

Inflation has risen to 3%, its highest level in five years, while growth has faltered a little.

However, borrowing levels are at a 10-year low, giving Mr Hammond more flexibility, while employment remains at record levels.

The political backdrop has also changed enormously.

The loss of their majority in June’s election sparked fresh Brexit infighting within the Conservatives.

The government has the backing of the DUP, but Mr Hammond – who is distrusted by many on the right of the party – does not have unlimited political capital in the bank.