Brexit: Britain's Biggest Deal

Theresa May is about to press the button on Brexit...

and head off on a mission.

The United Kingdom is leaving the European Union.

And my job is to get the right deal for Britain as we do.

I can't think of a more complex negotiation

in modern diplomatic history.

Outnumbered, facing 27 different countries.

across the negotiating table.

Don't believe that this is not going to hurt you - it will hurt you.

And that's why it is such a stupid decision to take.

For Brexiteers, the dream is a quickie divorce.

I am genuinely optimistic, I really am.

I think we should aim to put a bit of a tiger in the tank.

ENGINE ROARS

But there is political danger all around.

From Westminster...

If she doesn't deliver what they want, they will stab her in the back

just as they did with Major, and, in effect, with DC, with Cameron.

..to Scotland.

I've, you know, been very clear. I think our

second independence referendum is highly likely.

The truth - no-one knows where this will end up.

My anxiety is that the gain is very small

and the pain is going to be very large.

I think we should be confident, optimistic, pragmatic, open-minded.

It sounds like a diplomatic mission from hell. A nightmare.

I think it is!

But it's one that the people have voted for,

so it has to be carried out.

When the Prime Minister packs her bags for Brussels,

how hard is it going to be?

Is she ready? Is the country ready to do the deal?

I had a secret wish to make a joyful building.

To make a building that would relax people coming in and, you know,

this is a very limited but still a power in architect,

is to influence the mood of people.

Welcome to the brand-new HQ of the European Council,

where Brussels' power lies.

This is where the Brexit talks will take place.

I hope that it will help people respect each other

and to have joyful meetings.

I want to give them a homely space,

a space where their deep talents can be expressed, like poets.

But Brexit might mean more stern words than poetry.

This has got to be clear. I'm leaving you for good and all.

Council, if you'll prepare a judgment of divorce in this matter.

And you've got to divorce me.

But divorce is messy.

Breaking up is hard to do.

Britain wants out of the EU,

but we've been in for more than 40 years, with our countries,

our systems becoming more and more tangled up with each other,

more and more enmeshed.

And we only have two years to hammer out a divorce deal.

British ministers are also all too aware that with a series

of elections right around the continent,

it could be months before they get down to any serious talking.

So, straightaway, the clock is ticking.

This is the most complex divorce ever, in history.

The number of assets and income streams and expenditures that have

to be separated from each other,

and I think people don't always realise that,

that we have become, over more than 40 years,

very integrated into the European Union,

so no-one should underestimate the complexity of this task.

There's no real precedent for this other than Greenland.

Now, Greenland is part of Denmark, which has about 60,000 people,

and decided to leave the European Union and, actually,

the main industry in Greenland is fish.

And it took three years for the negotiation to be completed.

Now, in the case of the UK you're talking about

the second-biggest economy in Europe, with 60 million people.

So it is significantly a bigger challenge.

And we've got a lot more to worry about than herring and cod.

We've got a lot more than fish to deal with.

It's going to be the mother of all divorces.

Some people will do well - lawyers and accountants.

The bean counters could have a field day.

Because the EU is likely to try and make us pay.

Money - a lot of money - is on the table.

One of the first things the EU might well do is slap down a bill

of as much as £50 billion for Britain to pay

in order just to get out.

That potentially massive bill is for Britain's share

of existing EU spending commitments,

like the pensions of EU officials.

And if we don't pay,

the other countries will have to stump up.

There are some liabilities there.

It will be very hard to settle what they are, and of course,

whenever you get into money,

as in any negotiation in life,

that is one of the most vexing and controversial things.

Given the sensitivity in the UK to being, for many years,

the second-biggest contributor into the EU budget and then the anger

that was felt by people about that in the referendum campaign,

any such question will be extremely sensitive.

But hang on - remember this?

We can take back control of £350 million a week!

Wasn't the campaign based on getting money BACK from Brussels?

What would WE all make of an exit bill?

So we have a cheque here for 50 billion to the European Union

that UK taxpayers might have to pay to the rest of the EU to get out.

-We've been lied to.

-Is that what you feel?

-Yeah.

I don't think anybody was explained to enough

what was actually going to happen.

Can't believe it. People had heard about that before, surely.

Cheap at the price. To get out of Brexit, yes.

Who are we going to pay the money to?

-The European Commission in Brussels...

-Exactly. Well, sod 'em.

-Sod 'em?

-Yes. And Gomorrah.

-LAURA LAUGHS

-All right?

We should never, ever have given us a referendum.

None of us are educated enough to vote on something so serious.

We just need to be tough. Same as any business deal.

I voted Out, so it's all my fault, I apologise.

THEY LAUGH

You were the chair of the Vote Leave campaign,

you gave people a sense of expectation we were going to

get money back.

Won't it be rather embarrassing for you if instead we end up

being asked to shell out to get out of the thing?

We will get money back. There's always a chance.

Always a...uh, potential that we'll pay a one-off leaving fee.

But that one-off fee having been paid,

what will happen is that for years to come, money that we would

have given the European Union we'll now be able to spend ourselves.

But if we have to pay a one-off fee of some billions,

won't some voters who were persuaded by your arguments have every right

to feel pretty cross with you?

Well, I think that we won't be paying the enormous sums that

have been talked of. In fact, in my view, we should actually

be due a rebate.

But we will see what happens in those negotiations.

What does the British Government say if Michel Barnier,

the lead negotiator, slaps down a bill for £50 billion?

I think, uh...

I think we have, uh...illustrious precedent in this matter.

You will doubtless recall the 1984 Fontainebleau summit in which

Mrs Thatcher said she wanted her money back,

and I think that is exactly what we will get.

That we will say no, that is what you're saying.

It is not reasonable, I don't think, for the UK, having left the EU,

to continue to make vast budget payments.

I think everybody understands that and that's the reality.

I can't see at this moment in time the constructive approach

on either side, how do we make the best of this, you know?

This is very much now a fight.

Are we hurtling along on a collision course?

If the EU tries to insist the cash is agreed up front...

..could the whole deal be derailed before it's even begun?

I believe it will be a very tough negotiation and it could very well

be that after a couple of weeks, everything breaks down because there

is no agreement on the principal itself of a cheque to be paid.

I think the EU will indeed deliver that bill and I'll tell you

what I think will happen.

In that event, part of the media will whip up even more

a storm of anti-EU feeling and so even more people will come to

the conclusion the sooner we are rid of this ghastly bunch of people,

the better. And that will drive the cliff-edge scenario.

"Because they're unreasonable, you can't do business with them,"

it'll be whipped up. "And you can't get a deal..."

And the sooner we're out, the better.

But as everyone knows, divorce isn't only about cold, hard cash.

Even if the money is settled, the deal means

disentangling ourselves from the hidden ways we're bound together.

The EU and the UK have been intertwined for more

than 40 years, and that will take a lot of unravelling.

If you like, you could picture it as a huge Jenga tower and the task here

is to remove or replace the elements that connect to the EU

without having the whole fall apart.

It's going to require a lot of concentration, a lot of skill,

and it's going to need a real appreciation

of how the two interconnect.

Since 1973, much in our daily lives

has been governed by EU law.

The quality of the water we drink...

..the farms where our food is grown.

And what happens to the law?

All the rules and regulation - it all has to be worked out

in a two-year deadline.

One good example is the European Medicines Agency...

..which supervises the safety standards for all medicines

that are available within the EU.

I'm going to give you something new that we use with good results.

You'll be all right in a few days.

Once UK has left the EU,

there will need to be something in place of that

to make sure that the products available in the UK

meet requisite standards.

Even the way we do our air traffic control is now on an EU basis,

you have to separate that out so that you know when aircraft

can land, where people can fish, how farm subsidies are paid,

and you could imagine talking for months about each of them.

It sounds like a diplomatic mission from hell.

-A nightmare.

-I think it is!

But it's one that the people have voted for,

so it has to be carried out.

Our skies right now are governed by the EU,

with a myriad of European legislation.

It's in both sides' interests to sort it out,

but it will take a lot of officials a lot of time.

It's the sheer scale that will be so difficult to manage,

because there may be some tasks that in themselves are not

particularly difficult, but when you add it to the huge to-do list

that the Government will have, to make sure that Brexit runs smoothly,

then it becomes in itself a real challenge.

The lights in Whitehall are burning later than usual,

with two new departments to cope.

Government lawyers are right now trawling through thousands of pieces

of legislation to work out what's next.

Enough to make even the most brilliant minds boggle.

I deal with tough mathematical questions every day

but please don't ask me to help with Brexit.

LAUGHTER

Remember, Theresa May doesn't just have to sort out the money

and, well, the whole legal system...

..but the hardest thing of all is how do we do

business with Europe in the future?

And for months, she dodged the question.

Brexit means Brexit and we're going to make a success of it.

People talk about the sort of Brexit that there is going to be -

is it hard, soft, grey, white?

Actually, we want a red, white and blue Brexit.

That is the right Brexit for the United Kingdom.

Are we going to get a detailed plan, Prime Minister?

Finally, in January,

she laid out her vision of what the referendum result really meant,

and what kind of deal that would entail.

The United Kingdom is leaving the European Union

and my job is to get the right deal for Britain as we do.

But the message from the public before and during

the referendum campaign was clear -

Brexit must mean control of the number of people who come to Britain

from Europe, and that is what we will deliver.

Gaining control over our borders and our laws

meant losing something else.

We want to buy your goods and services, sell you ours,

trade with you as freely as possible.

But I want to be clear.

What I am proposing cannot mean membership of the single market.

In one phrase, undoing nearly three decades of British history.

Since 1992, we've done business in Europe

largely without tariffs or barriers,

in the single market. Remember who used to think it was a good idea?

The combination of the single market in 1992 and the Channel Tunnel

in 1993 is going to make a historic difference to the future of

the whole of Europe and its place in the world and our place in Europe.

For many big British businesses,

the single market has been hugely beneficial.

We are walking away from the biggest trade partnership that exists.

-Will you admit there will be losers as well as winners?

-No, because...

We cannot get a deal that is going to be as good as our

current relationships inside the single market.

Well, with great respect, I think it'll be considerably better.

I don't want to pretend that there won't be difficult questions,

because there will be challenges.

By the way, I don't want to pretend that this country doesn't

have economic challenges.

Of course we have challenges.

But we can meet all those challenges,

and I think the Government is setting out

a very positive programme for doing so.

And we can do a great free-trade deal with our partners.

So, what would a free-trade deal with the EU look like?

If you have a look at a free-trade agreement -

although I wouldn't necessarily wish it on anybody -

you'll see at the back of the agreement there are schedules,

and the schedules have, in minute detail, every different sort

of product in every different form that that product might come in.

And there is detail as to what tariff will apply in that case,

and it's line by line for literally hundreds, thousands of pages.

So, Theresa May has set herself a huge task.

Any new trade deal will require the agreement of 27 other nations

and to be approved by 38 different national and regional parliaments.

But Britain is isolated. In Brussels, it didn't start well.

The brutal truth is that Brexit will be a loss for all of us.

There will be no cakes on the table,

for anyone.

There will be only salt and vinegar.

IN FRENCH:

The mood is a little bit like you're having a divorce, you know?

They feel betrayed, this is not proper,

you know - that's the mood in Brussels at this moment in time.

And nobody's showing any flexibility.

She knows Europe's leaders feel

the survival of their union is at stake.

They fear good a deal for us would tempt others to leave.

I hope the Continental EU 27 negotiations will do everything

in their power to make it a friendly process - although it's going

to be very difficult.

But I think those who imagine that Britain will be able to dictate

to the rest of the European Union will be disappointed

and they might find it humiliating.

The strategy in Brussels is clear -

for every single one of the 27 EU member states, apart from Britain,

to stick together along with the European Council

and the European Commission.

But Britain knows they all have some different interests

and some different agendas, so the British strategy - pick them off.

Divide and conquer.

That means working not just with national governments,

but powerful groups inside their countries, too -

and using them to apply pressure for a deal.

Our fancy tastes might help.

We drink more Prosecco from Italy

and more Champagne from France than anyone else.

Surely the EU won't want tariffs on those?

Even more importantly,

Britain is the biggest export market for Germany's mighty car industry.

The UK needs to identify very quickly every single nation's

real stake in this game.

And the number one thing that politicians react to...

is jobs.

What happens when that million car workers in Bavaria,

whose jobs rely on British exports,

that's one million people who are in work because they sell

a large number of cars to the UK,

what happens when they start saying, "Hang on a second,

"are you saying that my job will go because you will refuse

"to have an arrangement with the United Kingdom because you think,

"for political purposes, that's best?"

We should be talking and will be talking to the very people

that make things and get people jobs and they pay their taxes,

because that's where politics really sits.

And then there's the City of London.

Britain has one of the most highly developed

banking and financial systems in the world.

The UK will also try to persuade the EU that

it's in everyone's interests

to give London's massive financial services industry

a special status in any deal.

I'm quite clear, I'm pragmatic.

I'm trying to work with the Government to ensure,

when it comes to them doing a deal with the European Union,

it doesn't make us poorer.

That means, for example, recognising the importance

of privileged access to a single market.

That means recognising the importance

of our ability to attract talent.

I think the reality of a so-called hard Brexit is we would lose,

so would the EU because the jobs that would leave London

wouldn't go to Paris, Madrid, Brussels, Frankfurt.

They'd go to Singapore, Hong Kong or New York.

A so-called hard Brexit means we lose as a city,

our country loses, but so does Europe.

It's certainly the case that if the current negotiators on behalf

of the European Union try to penalise the City of London,

they would actually be penalising themselves, because the depth

and breadth of the capital market that is the City of London

helps sustain European industries.

So, we should ignore sabre-rattling

from European capitals at the moment, should we?

I think we should be confident, optimistic, pragmatic, open-minded.

Aren't you gambling

that the European Union will put economics ahead of politics?

I mean, when has the European Union

EVER put economics ahead of politics?

Well, the answer to that is that I think the EU leaders

will be very responsive to their electorates

and to their business communities,

who can see the advantage of striking a deal with the UK,

where you have a strong EU supported by a strong, independent UK,

but where you maximise trade between them.

I know there is the view in the UK with many

that economics ultimately trumps politics.

I wouldn't rely too much on that.

Britain, on the 23rd of June,

the economic argument for staying was overwhelming,

and yet it was the political set of arguments, however disorderly,

which trumped the rather clear economic arguments.

And a key ally of Angela Merkel warns we cannot

have it all our own way.

Cherry-picking - that cannot really be an option.

A state which isn't a member of the European Union and which isn't

a member of a single market can't be better off

than a member state of the European Union, so whatever the new relation,

the new agreement between the European Union and the UK will be,

it will have to be less

than the current EU membership of the European Union.

But the real Brexit enthusiasts believe the costs of leaving

will be swept away by the trading opportunities

with the rest of the world.

You've then got the FTAs, the free-trade agreements

with the rest of the world, that we will now be able to do.

We've got an embarrassment of choice,

because a lot of people want to do a free-trade deal,

and so the task will be "How do we prioritise?"

If you look at other countries which have been outside the single market,

they've managed to secure for themselves not just trade deals

worth far more than the European Union

has been capable of negotiating for itself,

they've also been able to pursue economic policies

which have fostered growth, creativity and innovation.

Before any new deals can happen,

we have to tie up the arrangements with the European Union.

And it's even more daunting, because there's a deadline.

Can we really move that fast?

How long do you think it will actually take?

The average accession negotiation to join the EU, for example,

is about seven years, and if you look at the negotiation

of the trade agreement between the European Union and Canada,

that took about seven years to negotiate.

So, I think the quickest one the EU has ever agreed

has been within a period of about four years.

Typically, 8-11 years is not uncommon

for negotiating a trade deal.

But couldn't we just put our foot down?

Lawrence Tomlinson owns a string of businesses, including Ginetta cars.

He's a man used to doing deals.

You might just remember him from the referendum campaign.

Well, actually, Boris took me out for a spin to start with,

which was quite disconcerting, but I was really surprised,

he drove it very well and then we brought him back

and we did a few doughnuts and it seemed

to catch the imagination of the campaign.

And now around here, you call it the Borismobile.

We do, we call this old girl the Borismobile.

-CAMERAS CLICK

-We're taking back control.

LAUGHTER

In terms of the length of time it's going to take,

some people say this might take as long as a decade,

it's going to be very complicated and that delay

is going to mean uncertainty and that can be really damaging.

I think the Government will just plough straight on.

I mean, it's just utter bollocks that it should take ten years.

-Why?

-Well, World War II took just over five years and, in fact,

I think it shows the reasons why we should leave, you know,

that things like this could perceivably take ten years.

It's ridiculous, so let's get on,

let's get a nice, clean hard Brexit and let's dictate it.

MUSIC: Take Me Out by Franz Ferdinand

That's it, more gas.

SHE YELPS

'The Government wants to get cracking.

'They've set themselves a target

'of negotiating a new trade deal in two years...'

We did it!

'..on top of all that tricky divorce.'

SHE LAUGHS AND SIGHS

Every European diplomat, pretty much every expert,

is very cynical about this being done within two years.

Why are you sure it can be done?

Well, it certainly can be done in two years

and there's no reason why it shouldn't be.

I think we should aim to put a bit of a tiger in the tank.

As I say, the deal with the EU, that negotiation, I think,

should be fairly straightforward because we are in line

with the rest of the EU when it comes to our standards

and our trade arrangements.

We just need to perpetuate that agreement.

What do you say to many supporters of leaving the EU who say,

"Look, we could do this another way.

"We could just repeal the act, we could just walk out.

"It could all be done in a couple of years"?

My answer to that is you could do that,

but you need to think about what you're left with,

and if you're left with not a very good relationship

with other European countries and no clarity

about the future arrangements in our biggest market because, after all,

almost half of our trade is with the European Union,

then I don't think that's a very satisfactory position to end up in.

So, it's a kind of crash and burn.

You could do it fast, but we'd burn ourselves on the way out.

So, you could do a quick deal.

The question is, "Could you do a good quick deal?"

Everybody agrees that getting it done in record time is a challenge

of historic proportions.

This is Down Street Station,

hundreds of feet below the posh streets of London's Mayfair

and, during World War II,

the Government used to come down here for secret meetings.

Churchill used to spend time in these warrens,

trying to decide what to do in the war.

There's a bath!

Some people compare it to the biggest job for any leader

since the Second World War.

For you, is it right to compare this to a challenge

as great as the Second World War?

In its complexity, it is right to compare it.

This is nothing like as grave a challenge as the Second World War.

It's not even the gravest moment since the Second World War,

but it is the most complex. That is certainly true.

I don't think ever before has a government had to negotiate

over so many subjects with such a complex set of negotiating partners

on the other side and so many competing demands on their own side.

I can't think of any parallel to that

for any British Government in history.

Are ministers being straight with us about how hard it might be?

One former Prime Minister doesn't think so.

I've watched with growing concern as the British people have been

led to expect a future that seems to be unreal and over-optimistic.

Obstacles are brushed aside as if of no consequence,

whilst opportunities are inflated beyond any reasonable expectation.

My own experience of international negotiations

makes me doubt the rosy confidence being offered to the British people.

Should you not just level with people

and manage their expectations?

Because it's one thing saying, "It might be a bit difficult,

"there might be some bumps in the road," but there are millions

of people who are worried about what might happen here.

It's very important to understand that...

I mean, I am genuinely optimistic. I really am.

I think it's a fantastically exciting moment.

I think we're going to do brilliantly well,

but it's also important, at the outset of any negotiation,

not to go into it with a sort of Eeyore-ish hesitancy

about how things are going to turn out,

but to recognise and to communicate to our friends and partners

that this is going to be good for both of us.

But, just as you suggest, Eeyore might have been a bit gloomy,

Tigger might have been a bit naive.

All of us who are working on this - Liam Fox, the Prime Minister -

we all understand there are challenges and there are problems.

None of them, individually,

is by any means an insoluble problem

and there are ways of taking advantage of the position we're in,

which will be greatly to the benefit

of the UK economy, UK consumers and people in this country.

This is Theresa May's deal - can she get it done?

She has a wafer-thin majority, but, so far,

she seems pretty much unstoppable.

Her bill to trigger Article 50 and start the Brexit process

passed through the Commons easily.

The ayes to the right - 498.

The nos to the left - 114.

CHEERING

It certainly felt historic, but I was also conscious

that, in a way, this was the easy part.

It was easy to make the case in the House of Commons

that we should honour the referendum and respect the result.

The difficult part is making the individual decisions

that will ensure that Britain is in a stronger position in the future,

but there are going to be inevitably difficult days ahead.

What there hasn't been - yet - is intense political pressure.

The referendum turned everything upside down.

Mr Speaker, it's not so much the Iron Lady as the Irony Lady.

I've got a plan. He doesn't have a clue.

It's left Labour divided and confused.

Do you think we are potentially at the start

of a really fundamental reshaping of British politics?

I just don't think you can tell, at the moment.

I mean, what is clear to me is that if the choice is between

a sort of hard-Brexit Tory Party and a hard-Left Labour Party,

there will be millions of people who feel politically homeless.

The fact, at this moment in time with this issue of Brexit,

that you don't have an opposition capable -

or looking as if it's capable - of winning, is a problem.

I mean, that is a problem for our democracy.

Brexit has clearly been difficult for the Labour Party,

but I do think the worst is over

and now we can hold the Government to account

in a much more united way.

The difficulty for us as a pro-European party was

whether to give the Prime Minister permission to start the process.

Now, we'll hold her to account every step of the way.

But one party has sees an opportunity in crisis.

Hiya, King's Cross, please.

Tim Farron is the Liberal Democrat leader.

And he's calling for a second referendum,

but this time, on the Brexit deal.

I think you kind of keep fighting for what you believe in.

You've got to have the courage of your convictions and I think

that what politicians tend not to do is say stuff that is uncomfortable.

Thank you very much. Thank you, bye-bye.

He's off to Doncaster, where nearly 70% of people voted to leave,

to thrash out HIS plan with some of them.

The bottom line is, eventually, she's going to come back

with some kind of a deal, and the question is,

do you trust her and Parliament to sign it off?

Our point is that people should be able to have one last look

over the cliff and say, "I'm going over," or, "Do you know what?

"I'd rather not."

I don't agree with another referendum.

You know, the country's made a decision.

Why are we having the bickering?

Let's go forward together. We will get there.

It's going to happen so, everybody, get behind it

and make it happen in the best possible way.

I don't think it happens in the best possible way

if there's no resistance and no challenge to the Prime Minister.

The trouble is, it's not a football match.

It's not like we've scored one goal.

You come in now, Tim, you get your referendum,

you score another one and then we take it to a penalty shootout.

-It's not best of three.

-It's not best of three.

Although we've had two so maybe it should be.

But you get one crack at it, you see.

What she's doing by saying, "You're out of the single market"

without even arguing our place is settling for a poor deal,

and that's why we're saying that the people should decide at the end.

So, no, I think the job of a good opposition

is to challenge the Government so that they're better.

For many voters, though, here and round the country,

immigration was the priority.

-Right, the reason why they come here...

-I'll tell you in a second.

-The reason why they come here is because of...

-Money.

-You're about to say benefits, aren't you?

-Yeah, of course.

-It's not.

-Honestly, it's not. They've never heard of benefits.

-Oh, come on!

-Honestly, they haven't.

-What's in that coffee?

-Honestly, they haven't.

-I'll have some of that!

Your average European in Britain is youngish, working, paying taxes.

They are.

And we have a kind of misconcept of the value or the damage

that European labour is doing here.

Democracy has spoken. Do you not believe in democracy?

Yeah, I do. I think democracy means two things.

One is having the grace to accept when you've not won,

and the second is, you don't flipping give up.

You stake out a case and you argue people to follow you,

and you may succeed or you may fail.

A referendum on the deal is not just democracy - it's about closure.

It's about the country agreeing that, yes, this deal,

we're content with it.

The danger of there not being a referendum at the end

is the Government decides and three-quarters of the country say,

"I didn't vote for that," and there is simmering resentment

and there's no closure.

I can see why he's a politician, he has a lot of personal charm,

he's a very persuasive speaker.

But did he change my mind? Not for a moment.

We've got to take it on the chin and move forward as a United Kingdom

and, actually, let's make this happen.

Let's stop the rot, stop the circle -

let's just get on with it.

Theresa May's calculation is that most Britons would agree with that.

They just want her to get on with it.

And it's the decision to control the country's borders

that has defined the Prime Minister's plan.

But will she actually be able to cut

the numbers of people who come here?

We're seen as a brilliant business making brilliant cakes.

We've been in Taunton since 1865.

I'd like to think we'll be here for another 150 years.

Chris Ormrod runs a bakery in the heart of Somerset.

We employ 400 people locally, 200 of them British and the other 200

are from a mixture of nationalities from the EU,

and in some cases, beyond.

So, if you suddenly give me a very hard Brexit and say,

"You can't employ unskilled labour,"

I kind of worry where I'm going to get my staff from

to do the sort of things that we do and to carry on growing the business

for the future, and that is a sleepless night kind of question

and I don't know how to answer that properly at this stage.

Chris isn't the only person worried here.

Chef Lubo has been in Britain for eight years.

When we first moved here,

my daughter was five months old, and now she's eight.

My son is six, so both my children were raised here.

They went to kindergarten, they went to school here.

They feel they belong here.

If it was going down the hard Brexit way, then the worst-case scenario

for us would be to move, me and my whole family, over to Slovakia.

That's not what we planned.

That's not the future we planned for our children.

So, it's not just about us.

It's about our children and it would have

a massive impact on their lives, as well, yeah.

The fate of the three million or so EU citizens who live here,

as well as more than a million Brits who live on the Continent

will be on the table when the Brexit talks begin.

But this business - and many others - depend on them.

I suspect most people would say,

"Why don't you just hire more Brits locally?"

Believe you me, we have tried.

As I stand right now, we've got 30 vacancies.

That's very nearly 8% of my workforce and I can't fill them

and the simple truth is there just aren't enough local people

that want to come and work in a factory.

Fears shared in very different industries

in very different parts of the country.

Let me give you one simple statistic.

12.5% of London's workforce -

that is more than 600,000 Londoners

and they're Londoners, by the way,

were born in countries in the European Union.

They work in construction, they work in finance, they work in tech,

they work in the professional services.

They help our city thrive and flourish.

If we can't continue to attract them,

we're going to struggle and suffer.

But Theresa May has been absolutely clear - we're not staying

in the single market and she's determined

to bring immigration down and that means an end to freedom of movement.

I accept the argument.

There are parts of the country that don't want immigration.

There are parts of the country where the voters there

voted to leave the EU because they thought

it would lead to less immigration.

I'm quite clear in relation to London -

if we're going to continue to flourish and thrive,

we need to continue to be able to attract talent.

Since the referendum, the Government's tried to reassure

individual industries they won't lose their workers,

but does that mean immigration won't fall?

Right now, on what the Government is telling us,

we're going to still be bringing the majority,

probably the large majority, of these people in from Europe,

yet that was the main reason people gave for pulling us out of Europe.

So, all I'm saying is a very simple thing.

When people start not just to see the pain, but start to realise

in terms of the gain, we're not going to be pulling

those European numbers down to a few thousand.

People are going to carrying on coming because we want them to come.

For how long should voters expect

to continue to see significant levels of immigration

from the European Union? Because that's what it's about, isn't it?

There was a political promise of us being able

to bring immigration down, leaving the European Union, of course...

It will come down. Listen, make no bones about it, the Prime Minister,

ex-Home Secretary, is determined that it will come down,

but it'll come down in a way that doesn't do harm.

For swathes of voters, though, shouldn't you be preparing them

for something that feels rather different

to what they think they were promised?

Might we not end up with a bad compromise here

where significant levels of immigration remain over time

so that business doesn't lose out,

but then also a new bureaucratic system

of dealing with work permits and visas for business?

That's not going to be a great compromise for anyone, is it?

Look, it's going to be a good outcome.

It's going to be a good outcome because A - we'll control it,

that's the first thing.

We'll decide and we'll make decisions on economic,

also on social grounds and so on.

Secondly, the bureaucracy can be overstated.

It doesn't have to be bureaucratic. It's very plain, what we want to do.

We want to keep our economy running

at the same time as bringing immigration down. I want to do both.

And how long should it take?

Well, it'll take what it takes because the economy will drive it.

But there's another fault line, a fundamental one -

the tension between Scotland and the rest of the UK.

Just listen to this from the Prime Minister's very first speech

on the steps of Number Ten.

It means we believe in the union - the precious, precious bond

between England, Scotland, Wales and Northern Ireland.

Yet more than 60% of those who voted in Scotland

chose to remain in the EU

That's encouraged those who believe in independence

to push for a second vote.

Theresa May, in deciding to play to the hard-Right Brexiteers

of her own party rather than trying to find maximum common ground,

is in danger of making a decision to leave the EU,

which I already think would have been damaging,

potentially quite catastrophic for the UK.

Your opponents would say, though, you're trying to use

this situation to revive the independence arguments.

I deliberately didn't, the morning after the EU referendum,

say, "Right, that's it, we're off

"and we're having a second independence referendum,"

because I wanted to see if we could find that compromise ground.

I'm not hugely optimistic about it at this stage

because we've been met with a bit of a brick wall from the UK Government,

but I'm honouring the commitment I made in this very room

on 24th June to exhaust all possibilities.

But, equally, I've been very clear.

I think a second independence referendum is highly likely.

You just dispute the sense,

the claim that the case for independence has been

strengthened fundamentally by the fact that the UK is leaving the EU.

-No, the case for independence is weaker now.

-It's weaker?

The truth about the Scottish Nationalist Party

is that they have one aim -

they want to destroy the United Kingdom and they will bend

and twist any aspect of politics

in order to fit this preordained ideological goal

and we should call them out.

In Westminster,

some politicians think you're bluffing about holding a referendum.

Well, I'm not and I never have been.

I always think that sometimes kind of says more about them

than it says about me

because it suggests that there are politicians in Westminster

who think Brexit and all of this is some kind of game.

It's not a game, it's really, really serious

and the implications for the UK are serious

and the implications for Scotland are serious.

Some of your colleagues now talk about autumn 2018 as a likely date.

Within that window, I guess,

of when the outline of a UK deal becomes clear

and the UK exciting the EU,

I think would be the common-sense time

for Scotland to have that choice,

if that is the road we choose to go down.

Just to be clear, you're not ruling out autumn 2018?

I'm not ruling anything out, no.

It seems the government in Scotland is deadly serious

about another vote on independence.

It means when Theresa May is up to her eyes in trying

to get a good deal from the European Union,

she might also be grappling in a fierce fight

to keep the UK together.

There are serious issues for Northern Ireland, too.

The peace process which ended the Troubles

partly depended on an open border with the Republic in the south.

But Theresa May's decision to leave the single market

and what's called the Customs Union

could force a return to a hard border,

with echoes of the past.

The risks to the peace process, I think, are substantial.

If you start putting a hard border down there,

quite apart from all the disruption and the difficulty,

you will change that context in a way that is profound and adverse.

Tony Blair has told us in this programme that there is

a real risk to the peace process

while the border issue is unresolved,

that things could be very unpredictable in Northern Ireland.

Is he right?

Well, no, I don't think he is and the reason he's not right

is because everybody is seized of the issue so we, all of us,

want to solve it and what does solve it mean?

It means having a frictionless border.

It means not going back to the borders of the past.

I am confident we can actually get a resolution

which is comfortable for the people of Northern Ireland

and also comfortable for the Republic of Ireland, as well.

By the end of the month, Theresa May will press the button

on two years of Brexit negotiations.

They'll be as complex and as tortuous

as anything that's been attempted since the European Union was born.

This time, every leader in that room is negotiating

not just with their foreign counterparts,

but with their own media,

with their own parliament,

with their own party and with their own public and that is a very,

very tough negotiation to get right, that multi-dimensional chess game.

There are crucial elections in France and Germany this year.

With Europe's most powerful politicians distracted,

it may be autumn before any serious talks begin in this town.

With so much to negotiate, no-one doubts one thing -

there'll be long days, late nights, it will go to the wire.

In a negotiation which is relatively fixed in time,

why would you make a major concession,

once you've started the negotiations, halfway through?

You would save that all up for when you're getting to the 11th hour,

for when you're approaching the end of the two years

and that will make it an agonisingly difficult process. It always does.

There's always somebody holding out for a bit more.

Most European deals, in the end,

are settled either at the last minute or after the last minute.

David Cameron learned that lesson the hard way

in previous battles in Brussels.

And it's frankly not acceptable for the way for it to be left

to this last minute and then attempt at reopening it

and the sort of ambush at 1am

at the end of a European Council meeting.

I just think this is no way for an organisation to conduct itself

and I find it immensely frustrating, but, you know,

in this town, you have to be ready for an ambush at any minute

and that means, you know,

lock and load and have one up the spout and be ready for it.

That's exactly what I did.

The reality of these negotiations,

particularly at three o'clock in the morning,

is that no plan survives contact with the enemy.

You can have spent months preparing the perfect game plan,

but, just as in a military campaign, it will all come down

to those fine, minute judgments you make on the spot.

Bon soir. Des frites, s'il vous plait, pour trois euros.

'In this diplomatic game,

'the questions - who has most to lose and who blinks first.'

Voila.

This is Brussels' most famous chippie

and Angela Merkel even popped down here from a summit

when things got a bit fraught late at night and round here,

things do get very, very late

and very, very tricky and the closer we get

to the end of the two-year deadline,

the more pressure there is on Theresa May.

Her opponents across the table,

they know full well she doesn't want to walk away with nothing.

If the deadline looms, and there's deadlock,

one option for the Government is to seek a temporary arrangement,

but that's not what ministers want.

What does that transitional arrangement look like?

If it consists of more or less staying in the status quo

in terms of access to the single market

and everything that goes with that

in terms of respecting the rules of the European Court of Justice,

allowing freedom of movement of labour,

then I think there are many people in this country

who would find that very difficult to accept.

Look, this is the reality. There's a bunch of people.

They have lived, eaten, drank, slept,

everything for this moment and they are not going to let anybody

snatch it away from them and Theresa May knows that.

You can't appease them and if she doesn't deliver what they want,

they will stab her in the back, just as they did with Major

and, in effect, with DC, with Cameron.

Ministers don't want to extend the talks beyond the two years,

so if there's no deal,

that leaves only one option - the cliff edge.

The cliff edge describes the reality of one day

being in the EU with everything that that means

and the next day being out of it with no deal.

And the level that you switch between

between those two worlds is very dramatic,

which is why it's described as falling off a cliff edge.

There is a risk of no deal.

If we get no deal, I think business would regard that

as a pretty severe outcome so, you know,

you're playing for very high stakes in this for sure

because there are a myriad of technical questions,

all of which actually impact on jobs and business and industry

and trade and commerce so...

Look, I think no deal is a bad deal.

If you are so optimistic about getting a good deal, though,

why did you warn your Cabinet colleagues that the risk

of us having to walk away and not getting a deal at all is very real?

-HE LAUGHS

-Be careful!

What I said to them was they've got to do the work

for the so-called plan B or C or whatever it is.

It's not plan A.

But you acknowledge it is plan B, plan C, plan D,

whatever you call it, the risk of not getting a deal...

Wherever it goes on the list,

it's our responsibility as a government

to make preparation for all possible outcomes.

We're going into a negotiation. We don't control the whole thing.

By far and away the highest probability is plan A

or some variant of it, namely a comprehensive free-trade deal.

You are acknowledging, very publicly,

there is a real risk of what's known as the "cliff edge".

We walk away without a deal and some people say

that's a catastrophe even to contemplate that.

No, it's not a catastrophe to contemplate things.

You contemplate things so you either avoid them or mitigate them.

But were we to walk away, would that not be a catastrophe?

If you went out on the street today

and said to the ordinary member of the public,

"Should the Government prepare for all outcomes?"

They would say, "Of course."

If you had to describe the chances in percentage terms

of us getting a deal, what would you do?

I don't intend to go down that route.

The aim of my department is to deliver plan A.

In two years' time,

the world's eyes will be on this building in Brussels.

Whatever the outcome for Britain and the EU in March 2019,

it will make history.

There are both short and long-term economic factors,

which mean that Britain is likely to thrive and to succeed,

provided we take the right decisions,

provided we approach these negotiations

and indeed provided we approach the world with the right attitude.

You will see the results, the negative results,

one would say, sooner or later, but I believe rather sooner than later.

Don't believe that this is not going to hurt you.

It will hurt you and that's why it is such a stupid decision to take.

I think this is a defining moment and Brexit has been a crossroads

for politics and what matters now is the way ahead

and I think the political divide will be between those that believe

in a collaborative, cooperative approach with our EU partners,

in other words changing the relationship, not severing it

and those that want to sever it and walk off completely

and that's the real battle that now lies ahead.

We want the best for Europe. We want a new approach.

They want us there at the table for so many reasons.

There are so many things that we do together

that we will continue to do together.

Whether we crash out or sail smoothly, think of this.

Theresa May will almost inevitably

be the last British Prime Minister

to sit at a European table like this.

There'll be no more - no Thatcher handbaggings,

no Blair-Chirac bust-ups,

no Sarkozy telling David Cameron to shut up...allegedly.

It'll be it.

Probably one night in March 2019, probably one very late night,

Theresa May will walk out of here,

taking Britain out of the European Union with her.

What she achieves or does not achieve in this room

will define her record and change our country.