Wikipedia founder Jimmy Wales said: "I think that's one of the biggest dangers is the impact on the start-up ecosystem in Shoreditch. If we want to host the next Facebook we want those young companies 100 per cent focused on making a great product that people enjoy.
"Paying them to deviate from their normal task in order to comply with complex security regulations; it's just going to kill it.
"Certainly we already know that there is a brain drain to Silicon Valley. Loads of young entrepreneurs will go there. The harder we make it for people to do business here the easier we make it for the US to get all our best talent."
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If the UK position is rejected, the Government could be faced with a choice between remaining in the Customs Union or accepting a hard Irish
The size of the proposed penalty has not been disclosed.
Walter Leroy Moody became the oldest US inmate put to death since executions resumed in the US in the 1970s.