Aurelia Butler

The UK is seeking a significant increase in trade with the six Gulf Cooperation Council states as it launches talks to secure a deal that skirts the contentious issue of human rights.International trade secretary Anne-Marie Trevelyan said the prospective agreement would target a £1.6bn annual boost to the UK economy, from increased exports of manufactured goods and agricultural produce to financial and digital services.“We are looking to do a really comprehensive, ambitious and modern, forward-thinking FTA (free trade agreement),” she said. “I don’t want to limit it to goods . . . we will be creating the footprint for all our sectors.”During the negotiations, the GCC is expected to push for its own preferential access to the UK market by seeking the reduction of tariffs and other barriers.The talks kick off on Wednesday in Riyadh, Saudi Arabia, where the GCC headquarters are based. The other members of the Arab bloc include Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates.The GCC collectively forms the UK’s seventh largest export market, representing £33.1bn in annual bilateral trade; demand for goods and services in the region is expected to grow by 35 per cent to £800bn by 2035, according to the UK.Thani Al Zeyoudi, the UAE’s minister of state for foreign trade, said the talks presented a “big opportunity” to grow UK-GCC trade and seal an agreement that would strengthen links “with a trusted trading partner, further diversify supply chains and accelerate knowledge transfer”.The UK believes a deal could deliver “significant benefits” to British farmers and manufacturers. GCC tariffs on goods imports are generally set at 5 per cent with some much higher, such as cereals at up to 25 per cent and chocolate up to 15 per cent.The negotiations will avoid sensitive discussions over human rights in the Gulf, where states face criticism for repressive policies, including the murder of critical Saudi journalist Jamal Khashoggi and the UAE’s detention of British academic Matthew Hedges for alleged spying. British nationals trapped in archaic legal systems often complain about a lack of government support in securing justice.Expressing any UK “anxieties” over human rights would remain the responsibility of the Foreign Office, Trevelyan said. But enhanced trade links would allow the UK to engage more effectively on rights issues, she added.Gulf states also come under scrutiny for lax standards and poor conditions for the region’s large number of migrant workers, many of whom arrive in debt, leading to circumstances akin to forced labour.Anne-Marie Trevelyan, UK international trade secretary: ‘We are looking to do a really comprehensive, ambitious and modern, forward-thinking FTA (free trade agreement)’ © Peter Nicholls/ReutersAs part of any trade agreement, Trevelyan said the UK would ask the Gulf states to reaffirm their commitments to standards set by the International Labour Organization, as well as environmental standards enshrined in the Paris agreement on climate change.She said the Gulf states would benefit from greater access to UK business, including clean energy technology as the bloc’s members work towards reducing large carbon footprints. GCC members such as the UAE and Qatar have recently signed large investment partnerships with the UK. Boris Johnson, UK prime minister, continues to court Gulf investment into the post-Brexit economy and recently met Saudi Arabia’s de facto leader, Prince Mohammed bin Salman, among other regional leaders. Officials said the timeframe for any GCC trade pact would depend on the willingness of the bloc to negotiate a substantive deal, pointing to the UK’s ability to move at pace when sealing previous agreements with Australia and New Zealand.Relations between the GCC nations have been fraught in recent years, including a Saudi-led embargo on Qatar that ended last year. Since then, Riyadh has also raised tariffs on an array of goods to protect its economy.Some GCC members, including the UAE, have privately raised the prospect of concluding bilateral agreements with the UK, given the difficulty in finding common ground within the bloc.Trevelyan said she was committed to finalising a GCC deal first. It may not be as ambitious but could act as “a starting point” ahead of discussions with those who “want to go further”.“I am very happy to look at that in due course,” she said. More

Rail bosses are calling on unions to accept almost 2,000 job losses, as the two sides seek to overcome their differences in talks after the biggest transport strike in a generation brought much of Britain grinding to a halt. With prime minister Boris Johnson calling on the sector to modernise or “go bust”, the RMT rail union and employers will resume negotiations on Wednesday in a bid to avoid more strikes this week. Industry executives said infrastructure owner Network Rail is set to offer a 3 per cent pay increase, or more, if savings can be made through modernisation, with train operating companies set to offer a similar deal. But Network Rail also told unions it would formally start a consultation on 1,800 job losses and “dumping outdated working practices”.Although the public body said it hoped the “vast majority” of job losses could be voluntary, the two sides are still far from a deal. Mick Lynch, the RMT leader, said his priority was a settlement ensuring no compulsory redundancies. Passengers stayed home after warnings to make only essential trips during Tuesday’s strike, which involved 40,000 employees at Network Rail and staff at 13 train operating companies. Only around one-fifth of mainline trains were running and many lines were closed entirely. Services are expected to be disrupted until well into Wednesday morning as the network restarts. Further strikes are planned for Thursday and Saturday.Even if a deal is reached and the action called off, the rail industry said there would still be disruption on Thursday as the industry resets. The strike has already hit retailers hard, with footfall across all UK high streets down 8.5 per cent compared to last week, according to data from Springboard, and a 27 per cent drop in central London.A Network Rail executive said the two sides came close to a last-minute deal late on Monday, but added that the RMT did not go far enough on modernising maintenance practices in return for a higher pay deal. The RMT leadership is pushing for pay rises of 7 to 8 per cent to compensate for inflation that is expected to hit 11 per cent this year. But Johnson said on Tuesday that pay discipline was needed to limit inflationary pressures, while arguing that rail modernisation was essential.The prime minister called for “union barons to sit down with Network Rail and the train companies” to agree to reforms such as phasing out ticket offices and said the country had to “stay the course”.He added: “If we don’t do this, these great companies, this great industry, will face further financial pressure, it will go bust.”Mick Lynch, head of the RMT, said the union ‘had no choice’ but to proceed with the strike © Stefan Rousseau/PAThe leader of the TUC has warned that strikes could spread to other industries, and on Tuesday the Communication Workers Union said it would ballot members over industrial action at Royal Mail in a row over pay. While the government has refused to negotiate directly with the RMT, in effect ministers control the industry’s finances. Network Rail is state-owned, while the Department for Transport sets annual budgets for the services run by private train operating companies under coronavirus pandemic-era changes.Business leaders warned the strikes would hit the sectors hardest that were just recovering from the economic impact of Covid-19.

The strike means more people are likely to stay at home during the week than at any time since the last pandemic lockdown, delivering another hit to businesses in city centres.But the Covid-driven adaptation to remote working has meant that the industrial action is not as disruptive as previous stoppages.Government figures showed traffic flows were similar to the previous Tuesday, below what would be expected during a train strike.“Work from home has blunted the effect of day one,” one government official said.Additional reporting by Emma Dunkley and Daniel Thomas More

The National Union of Rail, Maritime and Transport Workers is nowhere near being one of the UK’s biggest trade unions. But this week the RMT, as it is known, aims to show that it is all muscle. Strikes by 40,000 of its members largely shut down Britain’s railways on Tuesday and are set to do the same on Thursday and Saturday, causing widespread disruption in between and inconveniencing millions of people. Although these rail strikes will be less of an encumbrance than they were before the pandemic for some businesses, they will still impose a significant cost. Plenty of workplaces cannot work remotely. City centres, which were ravaged by the pandemic, will take a further beating — and this week is the high season for school exams. With inflation set to hit 11 per cent, all employers face problems with pay-setting. The Treasury faces a complicated version of this conundrum: it needs to keep control of public sector pay, a key driver of the cost of state services. The government is worried about every pay settlement it agrees becoming a benchmark for the next negotiation. Pay rises also have consequences for inflation, which are particularly alarming at the moment. Public sector pay policy has to fill jobs so that public services can be delivered, but the government also has responsibility, along with the Bank of England, to avoid a wage-price spiral.Ministers have indicated they want to aim for 2 per cent pay rises. But from 2010 to 2021, public sector pay dropped in real terms by 4.3 per cent, before the latest rise in inflation. The Treasury has stored up a problem for itself by spending a decade trying to squeeze the public sector pay bill.This is, at root, why the public sector unions are getting ready for industrial action. Some services — particularly care, schools and hospitals — were already stretched before 2020, and routinely struggled to recruit enough staff. They also spent two years at the sharp end of the pandemic. Conservative ministers clearly relish a railway battle and have tried, rather unconvincingly, to blame Labour for the strike. They may calculate that the RMT, which has a tradition of robust confrontation, is a harder opponent than many unions, so this fight is one to pick and win. The government is right to have taken a tough initial stance. The principle it should seek to establish is that each pay deal should be treated on merit, with service quality and staff retention kept in mind, as well as cost. In this case, there is a deal to be done: the RMT has a point that the employers’ offer, which works out at a 2 to 3 per cent rise, hardly looks generous after two years of freezes. The cost of living crisis makes it particularly tough for the union’s long tail of members on low-paid jobs. But in return for any improved offer, the RMT must make concessions on productivity and modernisation. Commuter demand for rail transport is uncertain as more people work from home, and railway technology has advanced: drones and sensors can now replace some engineers walking up and down the lines to check rails. After talks on Monday still failed to reach agreement, Network Rail wrote to the RMT with plans to consult on 1,800 job losses and changes to working practices; it said it hoped the majority of job redundancies could be voluntary. As part of any settlement, the union has to accept the reality that the industry is changing.It is part of the government’s responsibility to impose fiscal control on behalf of taxpayers, but it also needs to minimise disruption to passengers and businesses, and to keep public services running in the long term. More

A union representing thousands of Rolls-Royce workers in the UK has rejected the engineering group’s latest pay offer, which included a £2,000 cash lump sum to help with the cost of living crisis.Unite, which mainly represents workers across industry, said the offer — which includes a 4 per cent pay rise — from the FTSE 100 group to its members “falls a long way short of the cost of living crisis claim submitted by our members and their expectations”.Senior union representatives were in talks to “decide next steps”, Unite added. The rejection comes 24 hours after Rolls-Royce chief executive Warren East made the offer to 14,000 of its staff and highlights workers’ concerns over the biggest squeeze on their incomes since the 1950s. It also comes amid public sector industrial action over pay.New data published on Tuesday showed that consumer price inflation rose to a 40-year high of 9 per cent in April, while research company Kantar predicted that shoppers faced a £380 increase in their annual grocery bills. At the same time, household energy bills have soared and petrol and diesel prices have reached record highs.The one-off payment would go to 3,000 junior managers as well as 11,000 unionised shop floor workers, who were also being offered a 4 per cent pay rise backdated to March. If accepted, the proposals would have cost about £45mn. “This is a good deal for our colleagues that is fair and competitive, with an immediate cash lump sum to help them through the current exceptional economic climate,” the company said. “We will continue to talk to our people.”

Rolls-Royce is one of the largest manufacturers in the UK, employing just under 20,000 people at its plants across the country, including at sites in Derby and Bristol. Other employers have decided to provide additional pay to help with rising food and energy costs in recent weeks. Lloyds Bank this month announced 64,000 employees would receive a £1,000 bonus.East said in the memo to staff that a “simple wage increase” was “just not affordable and, in fact it would be irresponsible”, adding that it would damage the company’s “future competitiveness in the UK, by adding too much cost into the long-term wage bill at times of such high uncertainty”. Rolls-Royce, paid by customers according to hours flown by aircraft fitted with its engines, took a big financial hit from the grounding of flights during the coronavirus pandemic. It cut thousands of jobs and was forced to shore up its balance sheet with £7.3bn of new equity and debt in 2020.The company told investors in February that it expected to be “modestly” cash positive this year, with analysts forecasting it will generate £134mn in free cash flow. More