29/06/2016 Newsnight


29/06/2016

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Question - what do we want from Brexit?

:00:00.:00:07.

We'll ask how realistic our aims and ambitions are.

:00:08.:00:23.

We'll hear from Brussels, and an exclusive interview

:00:24.:00:26.

with the French finance minister who offers a little

:00:27.:00:28.

Meanwhile, at Westminster, the Labour Party drama continues.

:00:29.:00:47.

Might be in my party's interest for him to sit there. It is not in the

:00:48.:00:55.

national interest. For heaven's sake, go. What about Europe? Where

:00:56.:00:58.

were you when we needed you? We've been talking

:00:59.:01:01.

to the grassroots. This is a coup, not only

:01:02.:01:02.

long planned but a coup against the values that

:01:03.:01:05.

Jeremy Corbyn has expressed so well It is a coup against the Labour

:01:06.:01:07.

Party membership. And leave or remain -

:01:08.:01:12.

what's Scotland thinking About the UK these days? I've

:01:13.:01:24.

switched sides, and I have decided to vote Yes to independence from the

:01:25.:01:29.

United Kingdom in another referendum. I know a lot of my

:01:30.:01:30.

friends have also swapped sides. The referendum reaction phase

:01:31.:01:33.

is over, the thinking phase is now underway as to what Brexit

:01:34.:01:38.

is really going to mean. Thinking caps - and berets -

:01:39.:01:41.

on. And the issue around

:01:42.:01:44.

which all revolves is this - Can we get decent access

:01:45.:01:46.

to the single market without also having to accept full freedom

:01:47.:01:53.

of movement, which the voters It's the big issue in the EU

:01:54.:01:55.

negotiation, and in the Tory Party We'll have more on the Tory

:01:56.:02:02.

leadership shortly. The Europeans are pretty keen

:02:03.:02:05.

to play hardball in defence of free movement, but is it credible

:02:06.:02:11.

for them to resist British requests for a brake on migration,

:02:12.:02:14.

when many of their own citizens Gabriel Gatehouse is in Paris today

:02:15.:02:16.

for us, and he sat down for an exclusive interview

:02:17.:02:21.

with the French Finance Minister, Michel Sapin, who gave a first chink

:02:22.:02:25.

of a sign that there may Your President, Francois Hollande,

:02:26.:02:40.

has said the United Kingdom should leave quickly. How quickly?

:02:41.:03:03.

Would freedom of movement be a red line, non-negotiable? Some people

:03:04.:03:10.

have suggested it would, for Britain's access to the single

:03:11.:03:11.

market? If I understand you correctly,

:03:12.:03:47.

premium of movement is negotiable? Everything is negotiable? --

:03:48.:03:50.

freedom. Who should be in charge of the

:03:51.:04:30.

negotiations on the European Union side? Is it the commission for the

:04:31.:04:32.

European Council? I ask, because I imagine the

:04:33.:04:47.

Council, representing as it does the member states, some of whom also

:04:48.:04:50.

have their own issues with freedom of movement, might be more inclined

:04:51.:04:54.

to give a bit on that in negotiations than the commission?

:04:55.:05:01.

Many people are saying nothing will change for at least two years, until

:05:02.:05:08.

the coupling is complete, if you like. But, in financial areas, do

:05:09.:05:16.

you expect changes to begin earlier than that? Do you envisage some

:05:17.:05:21.

French banks, perhaps, moving their operations out of London to Paris?

:05:22.:06:06.

Are you surprised that the level of planning for this on the British

:06:07.:06:14.

side, or lack thereof? And the leaders of the Leave camp

:06:15.:06:42.

are likely to be the leaders of the country soon.

:06:43.:06:52.

I want to ask you about the nuclear power plant at Hinkley Point. I know

:06:53.:07:02.

there is a final decision expected in September. Does Brexiter change

:07:03.:07:04.

your calculation is? Let me put the question this way, do

:07:05.:07:37.

you think it is less likely now to be agreed?

:07:38.:08:01.

In other words, it's too early to say? Yes. Minister, thank you very

:08:02.:08:06.

much. It sounds as though Michel Sapin

:08:07.:08:12.

is breaking with the European line by suggesting that freedom

:08:13.:08:14.

of movement could be negotiable, although there are nuances

:08:15.:08:18.

in all this that don't Our diplomatic editor Mark Urban

:08:19.:08:21.

is in Brussels where the leaders of the 27 other EU members sat down

:08:22.:08:26.

without David Cameron Mark, what did you make of that line

:08:27.:08:38.

from the French finance minister, that everything is on the table?

:08:39.:08:43.

Well, fascinating. The truth is that we have to confess this to the

:08:44.:08:47.

viewer, we are in such an unprecedented situation that it is

:08:48.:08:51.

quite hard to calibrate Smoggie statements and some of these

:08:52.:08:53.

positions. If you take the harsh words from the 27 leaders here today

:08:54.:09:00.

at face value, what Michel Sapin is saying is that we haven't received

:09:01.:09:04.

the British ideas yet and, until we do, everything is on the table. You

:09:05.:09:08.

could read it that way, nothing more than that. I think if you voted

:09:09.:09:12.

Leave in the referendum, you could also take some comfort from the fact

:09:13.:09:17.

that he was willing to go on to that area of freedom of movement and

:09:18.:09:20.

there did seem to be something that he was willing to talk about in

:09:21.:09:24.

broad terms, even if it is not part of the so-called Norwegian model or

:09:25.:09:29.

a specific template. I think it is a fascinating thing that the EU has

:09:30.:09:33.

used such harsh language today with Britain, really to try to get out

:09:34.:09:37.

the meaning of what was said and the degree to which it was meant. I met

:09:38.:09:44.

earlier with the Swedish Prime Minister, to ask him if there was an

:09:45.:09:47.

element in this really trying to Britain.

:09:48.:09:50.

I don't hear that kind of discussion, and I would

:09:51.:09:52.

like to underline that Great Britain will stay a good partner, also,

:09:53.:09:55.

And all the member states are expressing that we want a good

:09:56.:10:00.

relationship with the United Kingdom.

:10:01.:10:03.

Do you think it would be possible, though, for Britain to get a free

:10:04.:10:07.

trade package, like Norway's, but makes amendments to that?

:10:08.:10:10.

Or is it a take it or leave it offer from your point of view?

:10:11.:10:13.

Depending on exactly what you mean, but yes, you have different options.

:10:14.:10:16.

But there is no question that if you want to have the single

:10:17.:10:22.

market, if you want access to the single market,

:10:23.:10:25.

you need also to approve of the four freedoms.

:10:26.:10:28.

Freedom of movement is clearly critical there.

:10:29.:10:35.

Does that mean any deal in which the UK tried to amend

:10:36.:10:38.

or soften that and retain access to the single market?

:10:39.:10:40.

You might argue we are getting slightly mixed messages, but they

:10:41.:10:53.

have only had a few days to get their ducks in a row. One thing they

:10:54.:10:59.

are all saying is there is no negotiations until we invoke Article

:11:00.:11:04.

50. How rigidly is that line being applied? Well, let's use a military

:11:05.:11:10.

analogy, I sometimes like those. Clearly, close combat cannot begin

:11:11.:11:18.

until a new British Government has chosen one of these options, is it

:11:19.:11:22.

like Canada, Norway, something completely different? It can't start

:11:23.:11:26.

until that point. On the other hand, despite the euro flannel we have

:11:27.:11:31.

heard about there not being any negotiations before Article 50 is

:11:32.:11:35.

invoked, we have heard opening salvos in the past two days. The

:11:36.:11:39.

Prime Minister saying yesterday to the other leaders, you will have to

:11:40.:11:43.

look at this issue of free movement. The leader saying back, don't expect

:11:44.:11:48.

to two Leave cherry pick or get a Norway without free movement. Today,

:11:49.:11:52.

the opening, defining positions are being laid out. In the coming

:11:53.:11:55.

months, while Britain is choosing its new leader and the options are

:11:56.:11:59.

being refined, there will be talks between the different key European

:12:00.:12:03.

powers, the French, the Germans, the others like that, and they will come

:12:04.:12:08.

together at around the time that Britain's new Prime Minister is

:12:09.:12:14.

chosen, in Slovakia, to finesse and home down their position in

:12:15.:12:18.

anticipation of what the new British Government will choose. At that

:12:19.:12:21.

point, I think we should get much more clarity.

:12:22.:12:24.

Getting our EU negotiating stance straight is entwined with a second

:12:25.:12:26.

important decision - who will be the next Prime Minister?

:12:27.:12:29.

In effect, the process of choosing both is down

:12:30.:12:31.

to the Conservative Party, which is in full leadership election mode,

:12:32.:12:34.

Nick Watt, our political editor, is with me

:12:35.:12:40.

We have had some candidates declaring and also some hints of

:12:41.:12:47.

some tensions, perhaps, between Boris Johnson and Michael Gove? Yes,

:12:48.:12:52.

we have the fascinating leaking of an e-mail written by Michael Gove's

:12:53.:12:57.

wife, a Daily Mail columnist, suggesting not is all sweetness and

:12:58.:13:01.

light at the top of the Boris Johnson campaign. Michael Gove is

:13:02.:13:03.

co-chair of the campaign and his wife says you have to demand

:13:04.:13:07.

specific guarantees and assurances from Boris Johnson before you

:13:08.:13:11.

support. Intriguingly, Sarah Vine also wrote that you come below that

:13:12.:13:19.

husband, bring to the campaign the support and confidence of Rupert

:13:20.:13:21.

Murdoch and Paul Dacre, the daily mail editor. This is what wrote.

:13:22.:13:33.

Whoever said the era of press barons is over? This race is going to be

:13:34.:13:43.

well and truly underway with the launch of the Boris Johnson and

:13:44.:13:46.

Theresa May campaigns tomorrow, so we thought we would take a look at

:13:47.:13:50.

how the contest is going and the way it is shaping the Brexiter

:13:51.:13:51.

negotiations. Barely a week has passed

:13:52.:13:53.

since David Cameron's resignation as Prime Minister,

:13:54.:13:55.

but blink and you'll miss the start The favourite, Boris Johnson,

:13:56.:13:58.

will declare this morning, The young outsider, Stephen Crabb,

:13:59.:14:02.

well, he declared this morning. Having been brought up in a council

:14:03.:14:10.

house by a single mother, Stephen Crabb's background could not

:14:11.:14:14.

be more different to the Etonian Stephen Crabb, you are the underdog

:14:15.:14:18.

and you come from a very different background to the average

:14:19.:14:25.

Tory grandee. A bit like Margaret

:14:26.:14:28.

Thatcher in 1975. Are there any lessons

:14:29.:14:31.

for you from that campaign? I'm not afraid of being the underdog

:14:32.:14:34.

but I actually think there is space in this leadership campaign,

:14:35.:14:38.

this leadership debate, for not just a coronation,

:14:39.:14:43.

not even for a two-horse race. I think we have to get past this

:14:44.:14:47.

Boris-stop Boris dichotomy. Mindful of the fate

:14:48.:14:51.

of the last blonde to stand for the Tory leadership -

:14:52.:14:53.

Michael Heseltine - Boris Johnson kept something of

:14:54.:14:55.

a low-profile at Westminster today. But he will be out of the traps

:14:56.:14:59.

in the morning with a declaration that he offers a chance to believe

:15:00.:15:03.

in ourselves and a hope that he will be able to unite

:15:04.:15:06.

the Remainders and Leavers I am backing Boris Johnson

:15:07.:15:09.

because the people have been very clear that they want to leave

:15:10.:15:15.

the European Union. They were right to

:15:16.:15:19.

make that decision. I think they expect that process

:15:20.:15:21.

to be led by someone Boris has sent confusing signals

:15:22.:15:23.

this week over his stance on the two core issues

:15:24.:15:30.

at the heart of the referendum. Free movement of people and access

:15:31.:15:33.

to the single market. If we have to except freedom

:15:34.:15:37.

of movement, if freedom of movement was the single biggest objection

:15:38.:15:43.

to leaving the EU in the first place, we are going to lose

:15:44.:15:47.

the advantages of membership of the EU whilst not gaining

:15:48.:15:50.

necessarily very much in return. Those who supported Brexit made

:15:51.:15:55.

a number of assertions and promises which, in practice,

:15:56.:15:59.

are going to be very difficult, One grandee who is supporting

:16:00.:16:02.

Theresa May wonders whether Boris lacks that Prime

:16:03.:16:12.

Ministerial gravitas. A point illustrated in the Commons

:16:13.:16:15.

with a dig at "Borisconi". I can't imagine, it just slipped

:16:16.:16:18.

out that way. And a lot of people think that

:16:19.:16:21.

Boris Johnson has been fun but they are really,

:16:22.:16:26.

really doubtful about whether he can be trusted to be serious,

:16:27.:16:29.

to apply himself. Whereas Theresa May,

:16:30.:16:31.

I think, most definitely can. And I think also, when she walks

:16:32.:16:34.

into the room to try and undertake these negotiations, she will be

:16:35.:16:38.

treated seriously but she will be Seven years as Home Secretary

:16:39.:16:42.

and she wasn't leading Whereas, I think if Boris Johnson

:16:43.:16:48.

were to go into such a room, he would get very,

:16:49.:16:54.

very short shrift. This is the first time in British

:16:55.:16:57.

history that the grassroots membership of a political party

:16:58.:17:00.

will be deciding who our That is quite a responsibility,

:17:01.:17:03.

given that this election will be shaping the negotiations

:17:04.:17:10.

about Britain's place in Europe that will set the course of UK politics

:17:11.:17:13.

for decades to come. So far, the contest

:17:14.:17:18.

is following the usual path There is a clear frontrunner,

:17:19.:17:21.

but that does not guarantee victory. The odds are against

:17:22.:17:30.

the frontrunner but, frankly, I think we are now

:17:31.:17:32.

into such open territory that very little about history is a guide

:17:33.:17:36.

to what is going to happen. The wise candidate, who might very

:17:37.:17:41.

well get elected at the end of the day by the 150,000

:17:42.:17:46.

Conservative paid-up members, is one that is able not just

:17:47.:17:51.

to unify the Conservative Party but is going to be able to reach

:17:52.:17:55.

some form of consensus This evening, the Tories

:17:56.:17:58.

were meant to put the troubles of the referendum behind them

:17:59.:18:04.

at their annual summer party held But there are reports of trouble

:18:05.:18:07.

over the seating plan worthy If Remainers and Leavers

:18:08.:18:14.

are uncomfortable about sitting together, is there any hope

:18:15.:18:21.

the new leader can heal Joining me now is Conservative MP

:18:22.:18:23.

and Chair of the Foreign Affairs select committee Crispin Blunt -

:18:24.:18:29.

he's backing Boris. You are explaining something, you

:18:30.:18:40.

not about the negotiation because if it fails, there still in an OK

:18:41.:18:47.

situation? The committee looked at this and this report in April and I

:18:48.:18:50.

suggest people read that as it is highly likely or European partners

:18:51.:18:55.

cannot agree a strategy between themselves, if there is a qualified

:18:56.:19:00.

minority blocking any deal, those people who want to deal positively

:19:01.:19:05.

with the UK or those who want to be seen to punish us. ... Then that

:19:06.:19:12.

does not work and the European Parliament asked to approve this. If

:19:13.:19:18.

all that fails, we have two cell into the single market on the most

:19:19.:19:24.

favoured nation terms with talents of about 3%, 10% in some areas like

:19:25.:19:31.

cars. And that is not the end of the world. It is better than that.

:19:32.:19:38.

Because we then get control of immigration, we have control of free

:19:39.:19:46.

movement, we don't have to pay billions into the EU budget, we can

:19:47.:19:50.

decide where that gets spent. It gets better, we are regulating our

:19:51.:19:59.

own market. I understand, you think the backstop is... Can I ask you,

:20:00.:20:07.

what you understand why what Boris Johnson wrote in the Telegraph, this

:20:08.:20:12.

line about British people being able to work, study, travel and buy homes

:20:13.:20:22.

in the EU. What did he mean by that? I don't know. I don't know what

:20:23.:20:31.

Boris Johnson meant that. Can you see any outcome when that happens?

:20:32.:20:39.

We can restrict them... Can we live in the United States if we have the

:20:40.:20:45.

means? I cannot go and live in the United States. You can get a green

:20:46.:20:50.

card. You are supporting him, he has written this thing, which appears to

:20:51.:20:55.

imply that we. Them coming here but we will have the right to go there.

:20:56.:21:00.

He has just been in the middle of a campaign, he should know if that is

:21:01.:21:07.

achievable. Do you think so? My view is that we will have to come to some

:21:08.:21:11.

deal about how people can move between the UK and the rest of the

:21:12.:21:16.

European Union. Can you see them allowing us freedom of movement but

:21:17.:21:19.

us allowing them freedom of movement? Your candidate for Prime

:21:20.:21:24.

Minister, who was meant to be an expert on this, has just written...

:21:25.:21:28.

Failed quite certain that everybody is going to this in turn everything

:21:29.:21:33.

that he says because it is a significant campaign. ... He was

:21:34.:21:38.

paid several thousand pounds for this article and he wrote something

:21:39.:21:42.

that was reassuring about what the position would be for the British

:21:43.:21:47.

that appears to most commentators to be utterly wrong. Are you not

:21:48.:21:52.

worried? There is uncertainty all over the place amongst the

:21:53.:21:58.

candidates, certainly in the media. Let me finish this point. It is

:21:59.:22:02.

important in the national interests that we get as much certainty as

:22:03.:22:07.

possible about what the bottom line is for the UK. But if we take the

:22:08.:22:16.

bottom line, can I live, travel, study and via home in France? On

:22:17.:22:22.

your bottom line? No, if the negotiations... So how can Boris

:22:23.:22:27.

Johnson give me that reassurance? That is what he is seeking to

:22:28.:22:31.

achieve and it is obviously in the mutual interest of both the United

:22:32.:22:35.

Kingdom and our European partners that that is the case. In the same

:22:36.:22:41.

way... The same way as it is in our mutual interest at the tariff

:22:42.:22:46.

fishing, particularly with European partners, if they sell twice as many

:22:47.:22:50.

manufacturing goods to us as we sell to them, that they would want to see

:22:51.:22:54.

those tariffs reduced. Quickfire round? There are some issues, do you

:22:55.:22:58.

think immigration from non-EU countries, if your candidate wins,

:22:59.:23:07.

will go up or not? Promises were made to Asian communities that it

:23:08.:23:12.

would be easier to get relatives in. My view is that we should regulate

:23:13.:23:19.

immigration from outside the United Kingdom consistently across the

:23:20.:23:23.

piece. More or less from outside the EU? Irrigation to be the same. You

:23:24.:23:29.

are not going to answer that. This is more serious than trying to

:23:30.:23:36.

score... These are questions that have not been answered. And your

:23:37.:23:40.

candidate is gone to stand for Prime Minister. But you know perfectly

:23:41.:23:46.

well that the numbers of people coming into the United Kingdom are

:23:47.:23:50.

not necessarily, depending on what system you set up, it is going to

:23:51.:23:55.

depend on how many people come here. If you put a cap on the number of

:23:56.:23:59.

visas you will allow, that is one way of controlling it, and are you

:24:00.:24:07.

going to go by the number of... And finally, we're going to have control

:24:08.:24:14.

over this. We're going to do the important business of trying to

:24:15.:24:17.

protect British unskilled and semiskilled Labour and having to

:24:18.:24:20.

compete with people who have professional qualifications coming

:24:21.:24:24.

from central, eastern and southern Europe or anywhere else. That is why

:24:25.:24:30.

they are not allowed in. That is a very long way of saying you don't

:24:31.:24:33.

know if immigration will go up or not. We have to leave it there.

:24:34.:24:35.

Thank you very much. Well, Labour have provided more

:24:36.:24:37.

in the way of sparks this week, with a crisis that has given

:24:38.:24:40.

new life to the words There was no challenge

:24:41.:24:43.

to the Corbyn leadership today, Any news about Jeremy Corbyn? Chief

:24:44.:25:03.

Whip went in to see him this evening and he is sleeping on their

:25:04.:25:07.

conversation. This took place after the Deputy Leader said he should

:25:08.:25:11.

think about going. I spoke to an ally the sickening and this person

:25:12.:25:17.

told me that Jeremy Corbyn is in the very bad place. He said he is not a

:25:18.:25:20.

broken man but he is a good-hearted man. He cannot believe that friends

:25:21.:25:25.

have turned against him and he believes the decision by Ed Miliband

:25:26.:25:28.

to speak out against his leadership was an act of betrayal. And this

:25:29.:25:34.

person has broken to family members and the message coming from the

:25:35.:25:37.

family is, what are you doing to Jeremy Corbyn? The message coming

:25:38.:25:42.

from his allies in the Labour Party is, you have to protect the legacy.

:25:43.:25:48.

That is code for, do not resign as leader egos if you do, the left will

:25:49.:25:53.

lose control of the Labour Party. Because as soon as he goes, then

:25:54.:25:57.

there can obviously be a leadership contest, but if he is there and

:25:58.:26:02.

there is a challenge, he will be on the ballot paper. I was going to ask

:26:03.:26:07.

if there would be any challenge tomorrow? I presume not but I think

:26:08.:26:12.

we might have got one today, tomorrow? Angela Eagle is ready to

:26:13.:26:17.

go. She has got 51 signatures ready for a challenge or 36 signatures if

:26:18.:26:23.

it is not a challenge and a vacancy. As a understand it, there are people

:26:24.:26:27.

in her circle saying, do not challenge. Hold back, if you

:26:28.:26:33.

challenge, Jeremy Corbyn will be on the ballot paper and that will be an

:26:34.:26:37.

invitation to the momentum grassroots campaign to get on the

:26:38.:26:41.

streets and really make quite a protest for Jeremy Corbyn. Thank

:26:42.:26:42.

you. The strife in Labour has really been

:26:43.:26:45.

about who is in control of the party and, in particular,

:26:46.:26:48.

should MPs defer to MPs usually find it easier

:26:49.:26:50.

than party members to get slots on TV programmes like this,

:26:51.:26:54.

but we thought it might be more useful at this point,

:26:55.:26:57.

to hear from the grassroots, so Lewis Goodall has been sounding

:26:58.:26:59.

them out. Just a warning his piece begins

:27:00.:27:01.

with some flash photography. Last September, Jeremy Corbyn

:27:02.:27:04.

was elected with the biggest mandate Only nine months later, he faces 172

:27:05.:27:11.

of his MPs telling him to go. His opponents hope the shock Brexit

:27:12.:27:18.

result would drain his support Newsnight has spoken to 50 chairs

:27:19.:27:21.

and secretaries of local Labour Parties up and down

:27:22.:27:33.

the country who supported Of these, 45 say they would support

:27:34.:27:35.

and nominate Mr Corbyn again in the event of another

:27:36.:27:39.

leadership contest. It's fair to say they

:27:40.:27:41.

are not exactly happy Chris Williamson was an MP,

:27:42.:27:44.

but is now a party chairman in Derby The attempted coup by certain

:27:45.:28:15.

members of the Parliamentary Labour The fact is, Jeremy Corbyn

:28:16.:28:21.

was elected with an overwhelming mandate, a mandate that is

:28:22.:28:27.

unprecedented, the biggest mandate that any leader of any political

:28:28.:28:32.

party has ever achieved in history. It's very regrettable, it is a civil

:28:33.:28:35.

war that the membership Newsnight has learned that,

:28:36.:28:41.

and down the country, over the next few days,

:28:42.:28:44.

local Labour parties will be having special meetings to discuss the dire

:28:45.:28:48.

situation facing the party, like Party members are, by nature,

:28:49.:28:51.

pretty loyal to the party and I think that most of us feel

:28:52.:28:58.

quite hurt with what's We are seeing an attempted coup

:28:59.:29:01.

against Jeremy Corbyn. Furthermore, this is a coup not only

:29:02.:29:06.

long planned, but a coup against the values that

:29:07.:29:10.

Jeremy Corbyn has expressed so well I think he absolutely would win

:29:11.:29:12.

another leadership election. In the last week, 18,000 people have

:29:13.:29:19.

joined the Labour Party and 60% of them have written that the reason

:29:20.:29:24.

they were joining is to support One group that is determined to hold

:29:25.:29:27.

MPs' feet to the fire is Momentum. They are pressuring and agitating

:29:28.:29:33.

at meetings like this one, going on behind me in Camden,

:29:34.:29:35.

with Keir Starmer. They know that if they don't

:29:36.:29:38.

support Jeremy Corbyn, Indeed, one London Labour

:29:39.:29:41.

chairman told me that deselection isn't just possible

:29:42.:29:47.

for them, it's certain. They won't stop, he said,

:29:48.:29:50.

until they get the sort Tonight, Jeremy Corbyn

:29:51.:29:52.

remains defiant. But whether he wins again or loses,

:29:53.:29:59.

one thing from these The acrimony and mistrust

:30:00.:30:02.

within the party is deep. Whoever is leader, the task

:30:03.:30:05.

of rebuilding will be enormous. Lewis Goodall. More on Labour

:30:06.:30:21.

tomorrow, I expect. Economic forecasts are not very

:30:22.:30:24.

likely to be reliable, but I thought you might be

:30:25.:30:26.

interested to hear how the city economists have changed their view

:30:27.:30:29.

about economic growth over this The group Consensus Economics track

:30:30.:30:31.

all the reputable forecasts, Since the Brexit vote,

:30:32.:30:35.

the average forecast for this year's growth has been downgraded this year

:30:36.:30:38.

by half a percentage point. Next year, the growth

:30:39.:30:43.

downgraded by 1.7%. Believe the forecasts,

:30:44.:30:48.

by the end of next year, the economy will be 2.2% smaller

:30:49.:30:56.

than it would have been had And what is a loss of 2.2%

:30:57.:30:59.

of national income? Well, you remember the famous

:31:00.:31:03.

?350 million a week we were said 2.2% of national income

:31:04.:31:06.

is ?350 million every We're all trying to get our heads

:31:07.:31:10.

around the effects of Brexit. Our business editor

:31:11.:31:18.

Helen Thomas is with me. Helen, any signs of gloom, doom or

:31:19.:31:32.

buoyancy? First things first, it was a good day in the markets. The FTSE

:31:33.:31:36.

100 is actually back up above what it was before the referendum result.

:31:37.:31:41.

That is good news. The FTSE 250 and the pound also had a good day, but

:31:42.:31:45.

they are still well down on where we were last week. The economic story

:31:46.:31:50.

is still really uncertainty. In that environment, we are looking for any

:31:51.:31:52.

early indicators we can offer what is going on out there. One area is

:31:53.:31:57.

hiring and hiring intentions. We have the first look at some data

:31:58.:32:04.

from Tam Dalyell, the professional body for human resources, they have

:32:05.:32:08.

done a snap survey of their members. Here are some numbers. One thing to

:32:09.:32:12.

emphasise a very early days. This is recruitment and tension over the

:32:13.:32:15.

next five months. About 50% say it is too early to say, about 30% say

:32:16.:32:20.

no particular change. But when you go on, you have 18% saying they are

:32:21.:32:26.

less likely to hire, and then 14% talking about a recruitment freeze.

:32:27.:32:31.

Getting down to the nitty-gritty, about 9% are saying they are more

:32:32.:32:36.

likely to cut jobs. A side note on that data, it was a question where

:32:37.:32:40.

you could take more than one box, so there is doubling up in brackets.

:32:41.:32:47.

Another big picture takeaway is how unprepared businesses were for this

:32:48.:32:51.

result. Do you have a post Brexit plan? 6% have won, 26% are working

:32:52.:32:57.

on one currently, quite frantically, you might think! 54% still don't

:32:58.:33:01.

have one in place. You can see why people might be. This is obviously

:33:02.:33:09.

still before we have proper data, are there any other early signs? We

:33:10.:33:15.

should stress we are really in reading economic tea leaves

:33:16.:33:21.

territory. Nothing definitive. Springboard monitors footfall in

:33:22.:33:26.

shopping centres, high streets and retail parks. Last week, they

:33:27.:33:30.

thought it was down 5% on the year before. They say they saw a marked

:33:31.:33:34.

deterioration in the second half of the week after the referendum

:33:35.:33:37.

result, compared to the first half of the week. There are lots of

:33:38.:33:43.

reasons we go shopping or not. Football! Yes, and a big one is the

:33:44.:33:47.

weather. Springboard said they checked the weather and it is

:33:48.:33:51.

broadly similar to last year. They do think there was a deterioration

:33:52.:33:55.

after the result of the referendum. These are small, early signals,

:33:56.:34:01.

nothing definitive. As you say, until we get any hard data, it is

:34:02.:34:07.

what we got. A letter written to the Times in the wake of the referendum

:34:08.:34:10.

result suggested the United Kingdom should be renamed Poundland, as the

:34:11.:34:13.

currency is the only thing that we have in common.

:34:14.:34:15.

It may be a slight exaggeration, but it is certainly the case

:34:16.:34:18.

that there is great anxiety in Scotland about being dragged out

:34:19.:34:21.

of the EU against the wishes of the majority of its voters,

:34:22.:34:24.

and lots of talk about a second referendum on Scottish independence.

:34:25.:34:26.

So will that really happen - and is there any way

:34:27.:34:29.

Outside the Scottish Parliament, old friends gather.

:34:30.:34:39.

Veterans of the 2014 campaign for Scottish independence meet

:34:40.:34:43.

with renewed energy, the same purpose but wildly

:34:44.:34:45.

A demand that Scotland stays in the European Union.

:34:46.:34:55.

The political case for independence has never been as strong.

:34:56.:34:58.

The argument we made that it doesn't really matter what way Scotland

:34:59.:35:01.

votes in the UK, it can always be overruled,

:35:02.:35:03.

We've seen it happen in a most dramatic fashion.

:35:04.:35:08.

Many of the people I've been speaking to in this

:35:09.:35:10.

crowd voted for Scottish independence in 2014.

:35:11.:35:13.

So, in a sense, we could perhaps discount the views of this group

:35:14.:35:16.

of people that are already on the side of an

:35:17.:35:19.

The question is, how much has this trauma,

:35:20.:35:23.

this Brexit referendum, had an impact on those

:35:24.:35:25.

We need to keep pressure on people in that building behind us...

:35:26.:35:31.

According to the polls, at least, there are plenty of people

:35:32.:35:34.

who are now reassessing their opinion of independence.

:35:35.:35:37.

I voted No in the previous Scottish independence referendum.

:35:38.:35:42.

In this EU referendum, again, I voted to remain with the EU.

:35:43.:35:47.

But now, based on this outcome, I have switched sides and decided

:35:48.:35:50.

to vote to Yes to Scottish independence from the

:35:51.:35:53.

United Kingdom, should we have another referendum.

:35:54.:35:55.

And I know plenty of my friends have changed their minds as well.

:35:56.:36:00.

But while the political case may have strengthened,

:36:01.:36:02.

Since the 2014 referendum, the oil industry in Scotland has

:36:03.:36:07.

Oil prices are roughly half what they were in the Scottish

:36:08.:36:13.

The IFS puts Scotland's fiscal gap between overall spending and overall

:36:14.:36:17.

revenues at around ?10 billion a year and widening.

:36:18.:36:23.

Any future independence offer will have to be very different

:36:24.:36:26.

from that presented to the Scottish people in 2014.

:36:27.:36:29.

It will have to be ruthlessly honest and tell some hard truths.

:36:30.:36:32.

Independence will be an expensive and difficult business,

:36:33.:36:35.

but we will go into it with our eyes open, if you like.

:36:36.:36:38.

That, at least, is the kind of offer that will have to be made.

:36:39.:36:41.

That will be a very sobering experience.

:36:42.:36:43.

It may be that this will be a difficult argument to win,

:36:44.:36:46.

but it is probably the only Yes argument that could win.

:36:47.:36:49.

On the table for David Cameron yesterday, nothing save

:36:50.:36:54.

For Nicola Sturgeon today, a spread stacked with nibbles and,

:36:55.:37:00.

After all, creative rule bending is an EU artform.

:37:01.:37:07.

I think it would be very unlikely that Scotland would be recognised

:37:08.:37:10.

as a member state without having achieved independence from the rest

:37:11.:37:12.

of the United Kingdom at a domestic level.

:37:13.:37:16.

But it is an interesting question, whether the EU can adapt

:37:17.:37:19.

so as to give some sort of protection, autonomy

:37:20.:37:22.

status to the regions of a former member state.

:37:23.:37:27.

Because this isn't simply a matter of law, it's a matter

:37:28.:37:30.

Always first a question of political will, with the law to be put

:37:31.:37:35.

These are very early days, of course, but there is no sign yet

:37:36.:37:41.

The EU President Donald Tusk and member states have

:37:42.:37:47.

so far refused to meet with the Scottish First Minister

:37:48.:37:50.

There is no shortage of bits of Europe that would like to be

:37:51.:37:57.

treated as separate in EU negotiations, not least in Spain

:37:58.:38:00.

who, we were told today in a press conference,

:38:01.:38:02.

opposes any negotiation by anyone other than the Government

:38:03.:38:04.

Prime Minister Mariano Rajoy argued emphatically if the United Kingdom

:38:05.:38:10.

Nicola Sturgeon, then, didn't leave with anything concrete.

:38:11.:38:20.

I've received a lot of sympathy and a lot of good wishes today.

:38:21.:38:23.

That, of course, doesn't translate into an automatic

:38:24.:38:27.

easy path for Scotland, but it does mean I leave Brussels

:38:28.:38:32.

tonight to travel back to Edinburgh in good heart and optimistic.

:38:33.:38:40.

There are, though, some who think we could get through this

:38:41.:38:42.

constitutional crisis, if that is what it is,

:38:43.:38:45.

by MPs getting together and agreeing to ignore the people,

:38:46.:38:47.

ignore the outcome of the referendum.

:38:48.:38:51.

I'm on my way now to meet someone who is famous for framing

:38:52.:38:54.

Former Labour MP Tam Dalyell came up with the famous West

:38:55.:39:00.

As passionate today as ever about the sovereignty

:39:01.:39:05.

MPs should have the balls to use their best judgment,

:39:06.:39:14.

If their best judgment, as I understand it is the best

:39:15.:39:23.

judgment of 450 more, is that Britain should remain

:39:24.:39:27.

within the European Community, they should have the balls to say

:39:28.:39:30.

This is a matter of cowardice if they don't.

:39:31.:39:45.

The big change for Scotland from 2014 is it is a case

:39:46.:39:49.

that the country can't now be in both unions,

:39:50.:39:51.

It could simplify the politics, but end up making

:39:52.:39:56.

We've had hopes and fears in the programme today,

:39:57.:40:05.

Scotland, economics, the negotiation.

:40:06.:40:07.

Let's finish with some reflections on all that.

:40:08.:40:10.

I'm joined by the columnists Melanie Phillips, from the Times,

:40:11.:40:13.

and Jonathan Freedland from the Guardian.

:40:14.:40:18.

Melanie, you were pretty keen on Brexit, does it worry you that

:40:19.:40:26.

you're seeing potential disintegration of the UK? I would be

:40:27.:40:30.

extremely concerned about the potential disintegration of the

:40:31.:40:33.

United Kingdom. I think it is distinctly premature to worry all

:40:34.:40:36.

over again about Scotland. I think Nicola Sturgeon has been extremely

:40:37.:40:41.

wise to be cautious in her phrasing. A second referendum for independence

:40:42.:40:46.

is on the table, fine, let's have it on the table. There is no problem in

:40:47.:40:50.

that. But she is wise to be cautious for a number of reasons. First, as

:40:51.:40:55.

we can see, the EU itself is not necessarily keen to have Scotland as

:40:56.:41:00.

a member because this will open Pandora's Box again to other

:41:01.:41:05.

secessionist movements in Europe and they don't want that. Secondly, from

:41:06.:41:11.

the Scottish people's perspective themselves, nobody knows what this

:41:12.:41:14.

thing is going to look like to which they all want to continue to sign

:41:15.:41:18.

up. They don't know what Europe or the EU will look like, they don't

:41:19.:41:22.

know, we don't know what deal the EU will finally do with the United

:41:23.:41:27.

Kingdom. Can I ask, let's fly ahead ten years, if it was the case that

:41:28.:41:32.

Scotland didn't leave the UK, and everybody could see the date at

:41:33.:41:37.

which that destiny was set was devoted to Brexit, would you regret

:41:38.:41:42.

Brexit in that situation? No, I would regret very much of Scotland

:41:43.:41:45.

left the United Kingdom, they are an integral part of the United Kingdom.

:41:46.:41:55.

However, for me, national self-governance is overall. I know

:41:56.:41:59.

that you are a Remainer, Jonathan, where should the country draw the

:42:00.:42:03.

line on the balance between free movement, restricting that, and

:42:04.:42:06.

getting access to the single market? It seems to be the fundamental

:42:07.:42:10.

question we are facing. Just on the Scotland thing, if you or a patriot

:42:11.:42:15.

and are doing it for the country, a price worth paying is to break up

:42:16.:42:18.

the country seems like an odd thing to say. The balance of free

:42:19.:42:23.

movement, access to the single market seems crucial for the

:42:24.:42:27.

economy. Everybody says so. Even people on the Leave side said that.

:42:28.:42:31.

Boris Johnson's very unique brand of magical thinking, in which he

:42:32.:42:36.

famously said he is pro-cake and pro-eating it, even he was

:42:37.:42:40.

constantly saying through the campaign, of course we will be in

:42:41.:42:44.

the single market, plenty of other Leavers were as well. It is vital. I

:42:45.:42:49.

think we will be sending the economy to pen Yury if we break out of it.

:42:50.:42:54.

It's quite clear that the electorate have a problem with the free

:42:55.:42:58.

movement. Before the result, I was writing that Labour needed to change

:42:59.:43:01.

the message and say that it is something we need to look at. I

:43:02.:43:05.

think the European powers themselves, France and Germany, are

:43:06.:43:09.

also going to look at it. That might be where the action could be,

:43:10.:43:15.

actually. You would, presumably, Melanie, say that free movement is

:43:16.:43:18.

the red line and get whatever we can on single market access after that?

:43:19.:43:22.

For me, the red line is British national self-government. For that,

:43:23.:43:28.

we need to be able to determine our own immigration policy, for that we

:43:29.:43:31.

need not to have the free movement rules. That is how it works for me.

:43:32.:43:37.

I understand, obviously, there is a big problem here in respect of free

:43:38.:43:43.

movement of the one hand, against sovereignty on the other,

:43:44.:43:45.

potentially. We have already seen there is a slight frisson of a hint

:43:46.:43:51.

from the French that possibly, just possibly, it might be discussed.

:43:52.:43:59.

This is our story, and it is leading in the Daily Mail, Europe starts to

:44:00.:44:04.

crack on migrants? Yes, also, I'm not an economist, I yield to others

:44:05.:44:08.

that no much more about this than I do, but I'm listening to people that

:44:09.:44:12.

do know about the way economists worked who are saying that, you

:44:13.:44:16.

know, the free market is not the be all and end all. Sorry, the single

:44:17.:44:22.

market. You talk about, quite rightly, Boris Havering, but Michael

:44:23.:44:25.

Gove was very clear during the campaign, we come out of the EU, we

:44:26.:44:29.

come out of the single market. His view is that we can negotiate with

:44:30.:44:33.

the countries of the EU independently. Outside the single

:44:34.:44:38.

market? We heard Crispin Blunt saying... Our economy is so bound up

:44:39.:44:46.

with them, so intertwined. Our economy is unique. Nobody, but

:44:47.:44:50.

nobody knows how it will be for us because we have never been in this

:44:51.:44:54.

situation before. We are not Norway, we are not Switzerland. I want to

:44:55.:44:58.

keep moving this along. How, Jonathan, does the interaction of

:44:59.:45:03.

this with the Tory leadership contest work? We might think the

:45:04.:45:06.

leadership election is not the best way to frame a national decision

:45:07.:45:14.

about policy? It means somebody like Boris Johnson, who I think would be

:45:15.:45:19.

someone who wants to be flexible on this and negotiate something that

:45:20.:45:21.

would look a lot like Remain is having to go further and adopt a

:45:22.:45:31.

harder Leave position. Somebody like Theresa May, you would think she

:45:32.:45:34.

would be the more pragmatic, responsible figure. Partly, polling

:45:35.:45:39.

suggesting she is polling the Leave pulling ahead because she looks like

:45:40.:45:43.

a responsible adult, rather than ad-libbing it like Boris Johnson.

:45:44.:45:49.

Yet, if you want somebody who negotiates on something like LIBOR,

:45:50.:45:53.

it would be helpful to have somebody like Boris Johnson, who has been to

:45:54.:46:01.

China. It is the dilemma, we have had conversations about it. The

:46:02.:46:07.

Times, they say that in a poll, Tory activists say that Theresa May is at

:46:08.:46:10.

55%, Boris Johnson at 38%. There is a very clear mandate from

:46:11.:46:21.

the people. She could be Prime Minister and say, Boris, negotiate

:46:22.:46:27.

with the European Union? She could but you cannot have a Prime Minister

:46:28.:46:34.

who is a Remainer. This was about taking back control and the Prime

:46:35.:46:37.

Minister will be chosen by 150,000 people.

:46:38.:46:38.

A couple of big Tory beasts will declare themselves candidates

:46:39.:46:42.

for the leadership tomorrow, and maybe one in the Labour Party.

:46:43.:46:45.

Nick Watt will be live on Facebook live from the Boris launch,

:46:46.:47:08.

Wednesday's wet and windy weather leaving so was nice to

:47:09.:47:10.

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