0:00:36 > 0:00:38Hello and welcome to the Daily Politics.
0:00:38 > 0:00:41So another day, another blizzard of Brexit stories.
0:00:41 > 0:00:46Plus ca change.
0:00:46 > 0:00:48The Prime Minister is preparing for her big vision speech tomorrow.
0:00:48 > 0:00:51Before that she'll meet the EU Council President Donald Tusk,
0:00:51 > 0:00:57amid stark differences over Brexit plans for Northern Ireland.
0:00:57 > 0:01:00Two big retailers, Maplin and Toys R Us,
0:01:00 > 0:01:03go into administration, putting over 5,000 jobs at risk.
0:01:03 > 0:01:08Is Brexit causing a big chill in Britain's retail sector?
0:01:08 > 0:01:12And what is the picture for the broader business environment?
0:01:12 > 0:01:15The Culture Secretary announces that the government will not
0:01:15 > 0:01:18implement the second stage of the Leveson Inquiry, ruling out
0:01:18 > 0:01:22a probe into the relationship between journalists and the police.
0:01:22 > 0:01:26We'll have the latest on this breaking story.
0:01:26 > 0:01:28And fancy a pint of fizz?
0:01:28 > 0:01:32One English winemaker is laying down imperial pint bottles of sparkling
0:01:32 > 0:01:35wine ready to drink once we leave the EU.
0:01:35 > 0:01:43But will it leave a bitter taste?
0:01:45 > 0:01:47All that in the next hour and with us for the whole
0:01:47 > 0:01:50of the programme today is Tim Martin, founder and chairman
0:01:50 > 0:01:52of the Wetherspoons pub chain.
0:01:52 > 0:01:56He also campaigned for Leave in the EU referendum campaign.
0:01:56 > 0:01:58Welcome back to the programme.
0:01:58 > 0:02:01First today, the Culture Secretary Matthew Hancock has confirmed
0:02:01 > 0:02:03that the Government will not implement the second stage
0:02:03 > 0:02:06of the Leveson Inquiry.
0:02:06 > 0:02:09Part two had been intended to examine unlawful action
0:02:09 > 0:02:12by media organisations, plus relations between
0:02:12 > 0:02:14journalists and the police.
0:02:14 > 0:02:17Speaking in the Commons this morning Mr Hancock explained
0:02:17 > 0:02:20the reason for his decision.
0:02:20 > 0:02:23During the consultation 12% of direct respondants were in favour
0:02:23 > 0:02:28of reopening the Leveson Inquiry with 66% against.
0:02:28 > 0:02:31We agree, and this is the position that we set out
0:02:31 > 0:02:34in the Conservative Party manifesto.
0:02:34 > 0:02:37Sir Brian, who I thank for his service, agrees
0:02:37 > 0:02:43that the inquiry should not proceed on the current terms of reference,
0:02:43 > 0:02:48but believes that it should continue in an amended form.
0:02:48 > 0:02:52We do not believe that reopening this costly
0:02:52 > 0:02:56and time-consuming public inquiry is the right way forward.
0:02:56 > 0:02:59So considering all of the factors that I announced to the House today,
0:02:59 > 0:03:02I have informed Sir Brian that we are formally
0:03:02 > 0:03:05closing the inquiry.
0:03:05 > 0:03:07Matt Hancock speaking there.
0:03:07 > 0:03:10Well, Mr Hancock's Shadow in Parliament is the Deputy Labour
0:03:10 > 0:03:16leader Tom Watson.
0:03:16 > 0:03:21He has been at the forefront of the campaign to push ahead with part two
0:03:21 > 0:03:24of the Leveson Inquiry. This was his response.
0:03:24 > 0:03:26There is more to be gained politically by our political parties
0:03:26 > 0:03:29from standing up to the tabloid media than bowing down to it.
0:03:29 > 0:03:32And when every Conservative MP who was then in Parliament backed
0:03:32 > 0:03:35this policy, including the current Prime Minister and the present
0:03:35 > 0:03:39Secretary of State, they didn't really mean it.
0:03:39 > 0:03:44They were waiting for the wind to change, waiting for the force
0:03:44 > 0:03:47to die down, waiting for a time when they could, as quietly
0:03:47 > 0:03:51as possible, break their promises.
0:03:51 > 0:03:55Well, there is another dimension to this story because overnight
0:03:55 > 0:04:00Tom Watson confirmed that he would no longer be receiving
0:04:00 > 0:04:05any donations from the privacy campaigner Max Mosley amid a row
0:04:05 > 0:04:10over a racist by-election leaflet from 1961 that he is
0:04:10 > 0:04:17said to have published.
0:04:17 > 0:04:19We will explain that in a moment.
0:04:19 > 0:04:20We will explain that in a moment.
0:04:20 > 0:04:22Here is Tom Watson speaking about that in the Commons.
0:04:22 > 0:04:25And I think I should take the Mosley issue head
0:04:25 > 0:04:26on with your indulgence, Mr Speaker.
0:04:26 > 0:04:29If I thought for one moment he held those views contained in that
0:04:29 > 0:04:31leaflet of 57 years ago, I would not have given
0:04:31 > 0:04:34him the time of day.
0:04:34 > 0:04:38He is a man, though, who, in the face of great family tragedy
0:04:38 > 0:04:43and overwhelming media intimidation, chose to use his limited
0:04:43 > 0:04:51resources to support the weak against the strong.
0:04:52 > 0:04:59Tom Watson. With me in the studio is our political correspondent. Explain
0:04:59 > 0:05:02why this is important, this dimension to the story of Max
0:05:02 > 0:05:09Mosley.Tom Watson's office has been part funded by the Max Mosley
0:05:09 > 0:05:13family. Max Mosley is a privacy campaigner, he has long held clashes
0:05:13 > 0:05:18with some of the British tabloids. In recent years he has been a
0:05:18 > 0:05:22campaigner for tougher regulation of them. Labour says it will no longer
0:05:22 > 0:05:28take any more money from the family over this row over this racist
0:05:28 > 0:05:32pamphlets from the by-election. Max Mosley has strongly denied any
0:05:32 > 0:05:38recollection of the leaflet, though he has admitted if it is genuine,
0:05:38 > 0:05:44the content is racist. £5,000 has been donated to Mr Watson's office,
0:05:44 > 0:05:47the last donation received last year. Now that the nation has come
0:05:47 > 0:05:51to an end and the party says it is moving away from large-scale
0:05:51 > 0:05:57donations.In terms of part two of the Leveson Inquiry, that was a
0:05:57 > 0:06:01manifesto commitment to not go ahead with it in the Conservative
0:06:01 > 0:06:06manifesto.Yes, that is right. But it has been an extremely heated
0:06:06 > 0:06:10debate over the Leveson Inquiry. You remember the public outcry over the
0:06:10 > 0:06:15alleged victims of phone hacking by the News of the World. There will be
0:06:15 > 0:06:23many major press newspaper groups who will be extremely happy. But the
0:06:23 > 0:06:26victims who have been campaigning who thought when David Cameron
0:06:26 > 0:06:31pledged to have the second part of Lavis that that would be it and it
0:06:31 > 0:06:35would happen, they will be disappointed.Tom Watson took the
0:06:35 > 0:06:39opportunity to accuse the government of bearing bad news, bearing in mind
0:06:39 > 0:06:44the weather.He said the government had capitulated and was failing the
0:06:44 > 0:06:47victims of press intrusion. The government has been cleared today,
0:06:47 > 0:06:51they think there have been changes and the press is in a different
0:06:51 > 0:06:55place to where it was when all this was happening and the things that
0:06:55 > 0:07:00happened that Leveson Inquiry did too. That is what Matt Hancock was
0:07:00 > 0:07:03saying today. Tom Watson says the victims have been failed.
0:07:03 > 0:07:05Tom Watson says the victims have been failed.
0:07:05 > 0:07:08Theresa May is meeting European Council President Donald Tusk today
0:07:08 > 0:07:11to give him a sneak peek of the themes in her big
0:07:11 > 0:07:13Brexit speech tomorrow.
0:07:13 > 0:07:16But hanging in the air will be the reaction on both sides
0:07:16 > 0:07:18of the Channel to the EU's draft withdrawal agreement,
0:07:18 > 0:07:20published yesterday, which set out the Commission's view
0:07:20 > 0:07:23of the legal consequences of December's deal on the first
0:07:23 > 0:07:26phase of negotiations.
0:07:26 > 0:07:30It's fair to say that here in the UK it went down like a cup of cold sick
0:07:30 > 0:07:33with lots of people and not just Eurosceptics of long-standing.
0:07:33 > 0:07:36The hostile response centred around the EU's "fallback option" to keep
0:07:36 > 0:07:40the Irish border open in the event of no deal, with the EU trying
0:07:40 > 0:07:46to put it in law that Northern Ireland would remain bound
0:07:46 > 0:07:50to EU rules and regulations, even if Great Britain
0:07:50 > 0:07:52decided to go another way.
0:07:52 > 0:07:55Well, yesterday at PMQs Theresa May kicked back hard,
0:07:55 > 0:07:58saying no British Prime Minister could ever agree to an effective
0:07:58 > 0:08:02border between Northern Ireland and Great Britain.
0:08:02 > 0:08:05And last night David Davis was talking tough to his Tory
0:08:05 > 0:08:08colleagues, saying that there was no way the UK would be handing over
0:08:08 > 0:08:11billions of pounds in a divorce bill until everything was agreed
0:08:11 > 0:08:16to the UK's satisfaction.
0:08:16 > 0:08:18Former Prime Minister John Major was on hand dispensing his
0:08:18 > 0:08:19wisdom to the government.
0:08:19 > 0:08:22he said that by the time Brexit happened the electorate would have
0:08:22 > 0:08:25changed, so Parliament had to have a decisive
0:08:25 > 0:08:27and free vote now.
0:08:27 > 0:08:32Nobody can truly know what the will of the people may then be, so let
0:08:32 > 0:08:40Parliament decide or put the issue back to the people.
0:08:40 > 0:08:42John Major there.
0:08:42 > 0:08:47And yesterday the government also said EU citizens who come
0:08:47 > 0:08:55here during the transition will get indefinite leave to remain.
0:08:55 > 0:08:56That was an apparent U-turn.
0:08:56 > 0:08:57That was an apparent U-turn.
0:08:57 > 0:09:01But in a sticking point with the EU, the British government says British
0:09:01 > 0:09:03judges must have the final say over their rights and not
0:09:03 > 0:09:04the European Court of Justice.
0:09:04 > 0:09:11Well, to discuss all this we're joined by the Conservative MP
0:09:11 > 0:09:15, sorry by the Labour MP Pat McFadden.
0:09:15 > 0:09:20McFadden.
0:09:20 > 0:09:25And Iain Duncan Smith.
0:09:25 > 0:09:29Do you accept there was no way that the government could sign up to a
0:09:29 > 0:09:35deal to keep Northern Ireland effectively in the EU?The EU has
0:09:35 > 0:09:38thrown down the gauntlet to the government and they have said there
0:09:38 > 0:09:42are three ways of meeting the commitments that you, the United
0:09:42 > 0:09:46Kingdom, agreed to in December. Remember this is based on an
0:09:46 > 0:09:49agreement made just a matter of weeks ago in December where the
0:09:49 > 0:09:55government agreed that there was a common body of EU law and policy
0:09:55 > 0:10:02that underpinned the island economy between North and south and that
0:10:02 > 0:10:08they would try to maintain that either by agreement or buy this
0:10:08 > 0:10:14backstop option. What we cannot have in this debate is the government
0:10:14 > 0:10:18having set out various red lines about leaving the customs union,
0:10:18 > 0:10:24leaving the single market, having no hard border between Northern Ireland
0:10:24 > 0:10:31and the Republic, and also the UK as a whole securing the exact same
0:10:31 > 0:10:34benefits, that is the phrase David Davis used, that when those things
0:10:34 > 0:10:40become difficult that we lash out and blame everybody else. So it is
0:10:40 > 0:10:44for the Prime Minister now if she does not like the text published by
0:10:44 > 0:10:49the EU yesterday to say how she is going to squirt those circles and
0:10:49 > 0:10:53meet those commitments.Iain Duncan Smith, what is the government
0:10:53 > 0:10:58getting so het up about? We expected this, that was what was going to be
0:10:58 > 0:11:03written down in legal text on the basis of what was agreed on Sunday.
0:11:03 > 0:11:07This is the EU's pitch for what they believe will be the final outcome.
0:11:07 > 0:11:13This is one element of it, their view is there will be no deal and no
0:11:13 > 0:11:17arrangement. The government's response is right, they have said
0:11:17 > 0:11:23they do not agree with it and they are rejecting it.That is the
0:11:23 > 0:11:27fallback option, that is not all the options. They are setting out what
0:11:27 > 0:11:32was supposedly agreed in December. Isn't the real problem that it was
0:11:32 > 0:11:37not nailed down it was kicked into the long grass?No, the EU has gone
0:11:37 > 0:11:42for an option that is absurd. Let me complete this. Right now there is no
0:11:42 > 0:11:46need for that kind of border, that kind of problem, no matter what the
0:11:46 > 0:11:51arrangement is. I will give you three examples. One, they are
0:11:51 > 0:11:57unreported mostly by any channel, the head of HMRC and the head of
0:11:57 > 0:12:01Defra have appeared in front of a committee and they were asked
0:12:01 > 0:12:04whatever the outcome do you believe we will have to have a hard border
0:12:04 > 0:12:10with checks? They have both said no. They believe their systems will
0:12:10 > 0:12:16allow them not to do it. Second, in the EU parliament they themselves
0:12:16 > 0:12:21have produced a report in which they said this is an opportunity for the
0:12:21 > 0:12:26EU to agree a form of friction is border with the UK, using the right
0:12:26 > 0:12:31technology, and that could be applied to the rest of the EU. They
0:12:31 > 0:12:34are critical of the commission and it is their believe there would have
0:12:34 > 0:12:39to be a hard border in Northern Ireland. Right now we do not have
0:12:39 > 0:12:42one, we do not need one in the future and it is feasible for us to
0:12:42 > 0:12:45do that. That would be better for them to put forward as the final
0:12:45 > 0:12:51fallback option.Isn't Iain Duncan Smith right that there is bad faith
0:12:51 > 0:12:57from the EU. It undermines the whole idea of the constitutional
0:12:57 > 0:13:02settlement of the UK which they know they will not sign up to it?We are
0:13:02 > 0:13:06in a unique situation historically here because this will be the first
0:13:06 > 0:13:12time ever that Northern Ireland will be outside the European Union with
0:13:12 > 0:13:17the republic inside. In the past we had a situation where both places
0:13:17 > 0:13:21were outside the European Union. And for 40 odd years they were both
0:13:21 > 0:13:27inside. This is historically unique and it is not simple. Secondly, this
0:13:27 > 0:13:32is based upon things that we have agreed. If we don't like the way the
0:13:32 > 0:13:37European Union has worded it, then the challenge is for us to come up
0:13:37 > 0:13:43with something convincing that can be agreed.Hasn't the government put
0:13:43 > 0:13:47forward the idea of technical solutions? Iain Duncan Smith cited
0:13:47 > 0:13:52the idea of Defra representatives saying ways can be found, whether it
0:13:52 > 0:13:57is through preclearance or declaration before people reach the
0:13:57 > 0:14:03border, but you can keep it open and frictionless. Isn't the EU using the
0:14:03 > 0:14:09political situation in Ireland and with the UK to beat the UK and
0:14:09 > 0:14:14Northern Ireland at least in the customs union?The fibre is
0:14:14 > 0:14:22connected to the Kneebone. There is no need for a border down the Irish
0:14:22 > 0:14:26Sea because the Northern Ireland question here is actually a
0:14:26 > 0:14:33crystallisation of the question facing the whole of the UK. It is
0:14:33 > 0:14:36the essential choice before us. We can either have a system of high
0:14:36 > 0:14:40market access with minimum barriers and all the benefits the government
0:14:40 > 0:14:45says it wants to have, and that will come with high obligations to a
0:14:45 > 0:14:49common set of rules. All we can do what I think most Brexiteers want,
0:14:49 > 0:14:57which is to have low obligations, but alongside that will come a lower
0:14:57 > 0:15:01level of market access. What we cannot have, what is an illusion
0:15:01 > 0:15:05which the government must stop pedalling, is to pretend we can have
0:15:05 > 0:15:09the same market access that we have now with a much lower set of
0:15:09 > 0:15:12obligations. That is the reason agreement is not being reached and
0:15:12 > 0:15:17we have got to get off that illusion and make the fundamental choice the
0:15:17 > 0:15:21country faces.
0:15:21 > 0:15:25Pat McFadden called it an allusion, others have called it fairy
0:15:25 > 0:15:30godmother thinking. Isn't it time to accept that this mythical idea at
0:15:30 > 0:15:33you and your colleagues have that has all the benefits and keeps her
0:15:33 > 0:15:36frictionless trade that means we don't have to sign in to any of the
0:15:36 > 0:15:41laws and regulations is just one? Let's separate two elements, which
0:15:41 > 0:15:45is very important. The first is what happens at the border. There is no
0:15:45 > 0:15:49need for any of these physical checks, for delays. There is a
0:15:49 > 0:15:53reason for that. There are lots of other countries in the world that
0:15:53 > 0:15:57have trade arrangements that don't go through this process.Even Norway
0:15:57 > 0:16:01has a border weather is infrastructure.Because the EU
0:16:01 > 0:16:04insisted that Norway had a border. If you talk to the Norwegians they
0:16:04 > 0:16:08will tell you they don't believe they need a border.I will let you
0:16:08 > 0:16:16come on but first, on this basis of yours, you can't blame the EU,
0:16:16 > 0:16:19because there is no trust. And I put to you that there is no trust
0:16:19 > 0:16:23because they have seen the likes of leaked letters and memos from the
0:16:23 > 0:16:25Foreign Secretary, Boris Johnson, suggesting a hardwood wouldn't be
0:16:25 > 0:16:30that bad and comparing that border, or having no border, to being the
0:16:30 > 0:16:35same as two London borrowers. That is why they don't trust you and you
0:16:35 > 0:16:43can't blame them.I don't think it is anything to do with trustedWas
0:16:43 > 0:16:46unhelpful Boris Johnson...?The technology exists for all sorts of
0:16:46 > 0:16:49items sorry pass through two locations through different levels
0:16:49 > 0:16:54but to have been registered. All of this can be picked up quite happily.
0:16:54 > 0:16:59There are two elements. The border issue is being used by the EU and
0:16:59 > 0:17:04Ireland to try and force us into a position. This is about negotiation,
0:17:04 > 0:17:09not about trust. The other element that Pat was talking about is about
0:17:09 > 0:17:21market access. We're leaving and we won't have
0:17:22 > 0:17:25exactly the same kind of access in that one sense but you do not know,
0:17:25 > 0:17:28and we do not know, and you are sitting here with somebody right now
0:17:28 > 0:17:31who is in a business and running a company and selling things... We
0:17:31 > 0:17:33don't know how business will react. My sense is that business will
0:17:33 > 0:17:35continue to sell and trade with the EU. Our responsibility is to ensure
0:17:35 > 0:17:38we have the least amount of friction in that but the competition is up to
0:17:38 > 0:17:41British business and I believe they will meet that challenge without a
0:17:41 > 0:17:47single problem.Will you?Yes, we will. I think the whole issue is
0:17:47 > 0:17:52mischaracterised. I will give one example, which is we sell copper
0:17:52 > 0:17:57burg cider from
0:17:57 > 0:18:00burg cider from Sweden and we sell more than the whole of Sweden
0:18:00 > 0:18:04combined, or did at one stage. It is from a small-town in southern
0:18:04 > 0:18:10Sweden. If impediments are put in the way of trade by the EU, for the
0:18:10 > 0:18:16sake of argument and we switch to the perfectly good cider suppliers
0:18:16 > 0:18:22in this country, who suffers,
0:18:22 > 0:18:26in this country, who suffers, as it is the citizens of the EU. The
0:18:26 > 0:18:30people who represent them are not elected so unlike Ian Duncan Smith
0:18:30 > 0:18:34or the Prime Minister or the other parties, they are not collected.
0:18:34 > 0:18:38That is the difficulty. But it is not the case of the UK, people like
0:18:38 > 0:18:41us or get lots of stuff from all around the world, are going to
0:18:41 > 0:18:46struggle. We can immediately eliminate the customs duties,
0:18:46 > 0:18:50invisible, but everyone in the UK pays for them.What do you say to
0:18:50 > 0:18:56that, Pat McFadden?On the exiting the EU select committee that Iain
0:18:56 > 0:18:59Duncan Smith referred to, we take evidence of this all the time and
0:18:59 > 0:19:03what we have been told is there is nowhere in the world which pulled
0:19:03 > 0:19:07out of a customs union in the way we are proposing to and that doesn't
0:19:07 > 0:19:13result in a border, including the border between Norway and Sweden,
0:19:13 > 0:19:17which is a hi-tech border but a border all the same and there are
0:19:17 > 0:19:21checks all the same. We were even told by somebody from Turkey
0:19:21 > 0:19:25recently that their trucks are held up for up to two days at the border,
0:19:25 > 0:19:31so I think a lot of people still need to be convinced that... This
0:19:31 > 0:19:36comes down to these incompatible red lines, where they have said they
0:19:36 > 0:19:41want absolutely no border in Ireland but they also want to pull out of
0:19:41 > 0:19:45the common system of rules and customs duties that has helped to
0:19:45 > 0:19:49facilitate that over the years. The Government has failed to square that
0:19:49 > 0:19:55circle. Let me say something else - faced with the incompatibility of
0:19:55 > 0:19:59those red lines, what you see from Boris Johnson and from others in
0:19:59 > 0:20:06recent days is comments now saying a border won't be so bad or, even
0:20:06 > 0:20:10worse, openly attacking the Good Friday Agreement. This is hugely
0:20:10 > 0:20:14irresponsible and is the result of the throwing out of these
0:20:14 > 0:20:19ideological lead driven redlines. Iain Duncan Smith, are you, as John
0:20:19 > 0:20:24Major accused you and colleagues of, boxing in the Prime Minister and
0:20:24 > 0:20:29making it impossible to square that circle to get a deal done?No, the
0:20:29 > 0:20:33Prime Minister has been very clear on day one that she voted to remain
0:20:33 > 0:20:37but recognises the vote to leave included leaving the customs union
0:20:37 > 0:20:42and single market. Let me take pact to task. Of course there is a
0:20:42 > 0:20:45border, the question we are talking about is, it is a border where you
0:20:45 > 0:20:49end up, as in this ridiculous scenario, of queues of people not
0:20:49 > 0:20:53being able to cross.What evidence do you have but it will be
0:20:53 > 0:20:58ridiculous?Turkey has a customs arrangement, and entry to the
0:20:58 > 0:21:01customs union, because they have chosen to join it. Their
0:21:01 > 0:21:05recommendation is not to do a deal because these people don't stick by
0:21:05 > 0:21:08it. They have queues because the EU is imposing artificial problems at
0:21:08 > 0:21:14the border. The point here is, what we are looking for - and this is why
0:21:14 > 0:21:18it is a nonsense - the EU has chosen to discuss all these bits and pieces
0:21:18 > 0:21:26before a trade arrangement.Comes back to the issue of trust. David
0:21:26 > 0:21:29Davis, the Brexit secretary, has said he is going to withdraw or an
0:21:29 > 0:21:35egg on the contract payment of oil spilled it dockedIt is not
0:21:35 > 0:21:40reneging, everything is agreed on offering agreed. We are in the
0:21:40 > 0:21:44business of only agreeing the money with them if they are in the
0:21:44 > 0:21:50business of doing the deal. They sit down and talk about trade and as for
0:21:50 > 0:21:55Pat, one last point on Pat and his party, this is a party that stood at
0:21:55 > 0:21:57the last election saying they were guaranteeing they were leaving the
0:21:57 > 0:22:02customs union, they have no renege or as Frank Field said the other
0:22:02 > 0:22:08day, ratted on that.Briefly, Pat McFadden, are you also ratting on
0:22:08 > 0:22:14your own supporters, Leave supporters?It is never ratting on
0:22:14 > 0:22:18Labour voters to put jobs and the economy first. We did not sound on a
0:22:18 > 0:22:22platform saying we would pull out of the customs union, we stood on a
0:22:22 > 0:22:25platform saying we would try to maintain the benefits of the customs
0:22:25 > 0:22:30union and the single market and this week we put jobs and people's
0:22:30 > 0:22:34standard of living first. We're the Labour Party, that is what we are
0:22:34 > 0:22:40for. Pat McFadden, Iain Duncan Smith, thank you.
0:22:40 > 0:22:43Well, as the politics of Brexit look ever more complicated,
0:22:43 > 0:22:44the practical implications for business seem increasingly
0:22:44 > 0:22:46difficult to fathom.
0:22:46 > 0:22:49In the meantime, it's been a difficult week on the British high
0:22:49 > 0:22:55street with both Toys R Us and Maplin Electronics
0:22:55 > 0:22:56falling into administration.
0:22:56 > 0:22:59The announcements follow weak results from several big retailers,
0:22:59 > 0:23:01and with the shape of the transition agreement, let alone
0:23:01 > 0:23:03the final Brexit deal still to be pinned down,
0:23:03 > 0:23:09business is looking a little anxious.
0:23:09 > 0:23:13Elisabeth Glinka has been to visit one such firm.
0:23:13 > 0:23:17If you run a business the extent to which you worried about Brexit
0:23:17 > 0:23:21probably depends on what you do. Based in Wiltshire, this company
0:23:21 > 0:23:28makes high-grade adhesives, used in everything from pacemakers to CT
0:23:28 > 0:23:30scanners and satellites. Once manufactured, the product must be
0:23:30 > 0:23:36used within 48 hours, shipped across Europe at subzero temperatures.I am
0:23:36 > 0:23:40very worried. This business is at risk. If we don't know how we are
0:23:40 > 0:23:45going to solve the problem of customs and how that is going to
0:23:45 > 0:23:52work in the future, I don't know if we can sustain it and we are under
0:23:52 > 0:23:56pressure from our customers and shareholders.So if the likes of
0:23:56 > 0:24:01Boris Johnson or Liam Fox says, "Come, come, you should be more
0:24:01 > 0:24:05positive, we need to be trading with the world," what would you say?I
0:24:05 > 0:24:09would say I am positive. You don't get to do what I do unless you are
0:24:09 > 0:24:13positive and I am always optimistic. We have grown this business from
0:24:13 > 0:24:18nothing to where it is today through optimism, planning and investment.
0:24:18 > 0:24:22All those things take a positive attitude. But if I am asked by my
0:24:22 > 0:24:28customers, what are you going to do? If I can't answer that question the
0:24:28 > 0:24:32business is in trouble. It is a fundamental question of our
0:24:32 > 0:24:37existence.Rex's company is the only one on the European continent making
0:24:37 > 0:24:41these specialised products. 85 the scent of his sales are with the EU.
0:24:41 > 0:24:46At the moment we can ship to Barnsley just as easily as to Brad
0:24:46 > 0:24:51Slava, it is just the same.You would be hard pressed to find a more
0:24:51 > 0:25:00literal example of trade. Since Britain voted to leave the EU
0:25:00 > 0:25:04economy has continued to grow but we haven't actually left yet and as the
0:25:04 > 0:25:09deal looks uncertain, many UK firms remain concerned about the future.
0:25:09 > 0:25:13Take the Welsh fishing fleet. Well the rest of the UK's fisherman Art
0:25:13 > 0:25:18excited by the prospect of an end to EU quotas, the well to specialise in
0:25:18 > 0:25:20shellfish and so the vast majority to France and Spain and think
0:25:20 > 0:25:27difficult plea -- differently. The Anglo Dutch giant Unilever has yet
0:25:27 > 0:25:31to decide whether its future remains in the UK and the Kfar industry's
0:25:31 > 0:25:39problems are well documented. Yesterday, a company committed to
0:25:39 > 0:25:46keeping its new model in the UK.
0:25:48 > 0:25:49keeping its new model in the UK.If you talk to the majority of the
0:25:49 > 0:25:52captains of industry they are strongly opposed to Brexit. They
0:25:52 > 0:25:56believe it would be bad for the industries but most of them are
0:25:56 > 0:26:00extremely reluctant to speak out and say so because they know half of
0:26:00 > 0:26:07their customers may be in favour of Brexit and half not.This morning a
0:26:07 > 0:26:09report from the Business Select Committee concluded that at least
0:26:09 > 0:26:13for the automotive sector, Brexit negotiations are an exercise in
0:26:13 > 0:26:20damage limitation. For small firms like Epoxy, promises only go so far.
0:26:20 > 0:26:23Our guest of the day Tim Martin knows a bit about business
0:26:23 > 0:26:26and was a leading Leave campaigner in the EU referendum.
0:26:26 > 0:26:28We're also joined by the chair of the Business Select Committee,
0:26:28 > 0:26:30the Labour MP Rachel Reeves.
0:26:30 > 0:26:34Welcome to the programme and I will come to you in a moment. First of
0:26:34 > 0:26:37all, the chief executive of Maplin, which has gone into administration,
0:26:37 > 0:26:40said there was a combination of factors but cited very clearly a
0:26:40 > 0:26:46drop in the value of the pound post the referendum.Well, it is very
0:26:46 > 0:26:49difficult to say because if you look at VAT receipts for December they
0:26:49 > 0:26:57are up 15%. Income tax was up 5% so government receipts are very
0:26:57 > 0:27:02positive.You must accept that the drop in the value of the pound has
0:27:02 > 0:27:05hit businesses.It has hit lots of them in a beneficial way. It is an
0:27:05 > 0:27:11automatic stabiliser, a floating pound. It has gone up and down over
0:27:11 > 0:27:16the years and that is a good thing. The companies that -- countries that
0:27:16 > 0:27:20are problems are like Greece where they don't have the automatic
0:27:20 > 0:27:24stabiliser. Some have gone up, some have gone down to drop it is the way
0:27:24 > 0:27:28it operates.Rachel Reeves, isn't this the normal cycle of business?
0:27:28 > 0:27:31The site of the drop in value of the pound but said there were other
0:27:31 > 0:27:37contributory factors so, alone, is it still really a step too far to
0:27:37 > 0:27:40blame Brexit?I certainly wouldn't blame Brexit for what has happened
0:27:40 > 0:27:44at Toys "R" Us and Maplin. I was thinking back to when I was growing
0:27:44 > 0:27:49up and going to toys R us was a big treat. I remember going with my dad
0:27:49 > 0:27:54and sister. But I've got two small children and we haven't been to toys
0:27:54 > 0:27:59"R" Us. I don't think it has stayed modern. This isn't all about Brexit
0:27:59 > 0:28:07but there are businesses and my select committee today has put out a
0:28:07 > 0:28:12report on the motor industry. There are businesses struggling because of
0:28:12 > 0:28:15Brexit, especially if you don't get the sort of deal which ensures that
0:28:15 > 0:28:20frictionless free-trade which allows them to move in and out of the
0:28:20 > 0:28:24country with ease and without tariffs.Even Toyota who have made
0:28:24 > 0:28:28this announcement about building a new car in the UK say it has to be
0:28:28 > 0:28:33on the basis of being able to trade freely with the EU.I understand
0:28:33 > 0:28:37that up to a point but the main aspect of the EU is that it is a
0:28:37 > 0:28:43customs union that puts barriers to trade outside the union so it is
0:28:43 > 0:28:48free trade for 7% of the world, the other 93% not. So for us it will
0:28:48 > 0:28:53bring prices down. For the car industry, they will either have to
0:28:53 > 0:28:57locate the parts they need from the other 93% of the world, which will
0:28:57 > 0:29:02happen in some cases, all we will have to negotiate a deal. It is in
0:29:02 > 0:29:06everyone's interest to negotiate a deal but I think everyone is jumping
0:29:06 > 0:29:09on the bandwagon of trying to frighten the public. We are talking
0:29:09 > 0:29:19about
0:29:20 > 0:29:22knocking down trade barriers, not putting them up by leaving. The
0:29:22 > 0:29:24customs union should be called a tariff barrier union.Do you agree
0:29:24 > 0:29:26with that? Tim obviously wants to leave the customs union and doesn't
0:29:26 > 0:29:30want any partnership in the way that has been put forward and that Labour
0:29:30 > 0:29:33are supporting?If you look of a trade deals the EU has with the rest
0:29:33 > 0:29:35of the world they are facilitating lower tariffs and more trade with
0:29:35 > 0:29:41other countries.
0:29:41 > 0:29:45other countries. If you look at Labour's policy of staying in a
0:29:45 > 0:29:50customs union, that will be good for the automotive sector and many other
0:29:50 > 0:29:53manufacturing sectors in particular that rely on just in time delivery
0:29:53 > 0:29:58and getting components in from other European countries very quickly. We
0:29:58 > 0:30:02went a Honda in Swindon, my select committee, and saw vans arrived
0:30:02 > 0:30:06every seven minutes to bring in parts. There were no warehouses,
0:30:06 > 0:30:10they went straight into the production line. That wouldn't be
0:30:10 > 0:30:13able to happen if you had on customs checks, which is a risk of a heart
0:30:13 > 0:30:18Brexit.
0:30:18 > 0:30:22Nobody has been able to say categorically that any trade done if
0:30:22 > 0:30:27there is a deal will be replaced in any short amount of time by trade
0:30:27 > 0:30:34deals with these other countries, even if we took the tariffs away.
0:30:34 > 0:30:38Rachel and her fellow MPs will have the power to abolish all tariffs on
0:30:38 > 0:30:43incoming goods into the UK on day one when we leave.What percentage
0:30:43 > 0:30:49of trade would that resulting?That would immediately result in a big
0:30:49 > 0:30:54boost to the incomes of people in the UK, said that is a good start.
0:30:54 > 0:30:57Then you can negotiate with other countries for free trade agreements
0:30:57 > 0:31:02in addition.What we will not be able to do is get rid of tariffs
0:31:02 > 0:31:08that we are exporting around the world. For British farmers and
0:31:08 > 0:31:12British manufacturing companies, whether it is pharmaceuticals or
0:31:12 > 0:31:16automated, we cannot get rid of the tariffs other countries charge. The
0:31:16 > 0:31:21risk is that it does have a boost for consumers in the short term, but
0:31:21 > 0:31:30it will put British people out of work if they cannot do that.I
0:31:30 > 0:31:35understand the risk, the maths is that we import more than we export.
0:31:35 > 0:31:38Consumers will gain more in income than will be lost in sales to the
0:31:38 > 0:31:45EU.We need to be selling more things overseas to grow our
0:31:45 > 0:31:51production. If we grow down your road, we will be putting more farms
0:31:51 > 0:31:55and farm labourers out of work and more factories out of work.That is
0:31:55 > 0:32:02not true. It might be good for your business, but it will not be good
0:32:02 > 0:32:07for the other ordinary businesses. The ordinary British worker will be
0:32:07 > 0:32:13better off.Not if they don't have a job.That is a scare story frankly.
0:32:13 > 0:32:16If you look at Australian and New Zealand farmers they have done
0:32:16 > 0:32:24extremely well on world markets when tariffs were abolished.There is not
0:32:24 > 0:32:27a single automotive company that would come into our Select Committee
0:32:27 > 0:32:34and say there was any reason why it would be good for them, not a single
0:32:34 > 0:32:38one.Let's move on to immigration because you have said EU nationals
0:32:38 > 0:32:41are important to your business. How worried are you there has been
0:32:41 > 0:32:45slowing down in the rate of growth in the number of workers coming to
0:32:45 > 0:32:52the UK from the EU?Exactly what I said about EU workers, they are
0:32:52 > 0:32:57excellent workers, and I think the country benefits, like Australia,
0:32:57 > 0:33:03New Zealand and Singapore from a gradually rising population, with
0:33:03 > 0:33:06relatively low birth rates. I would like to see the population to
0:33:06 > 0:33:12continue to rise and that is the main benefit. I would like to see
0:33:12 > 0:33:17immigration controlled by the UK Government, not run by the unelected
0:33:17 > 0:33:21oligarchs in Brussels. That is what has wound up the population not only
0:33:21 > 0:33:26in this country, but around the world.Would you be happy with the
0:33:26 > 0:33:30idea of staying in the single market?The single market is an
0:33:30 > 0:33:35name. I am in favour of immigration, but I wanted controlled by the
0:33:35 > 0:33:40government and not the EU and at the moment it is controlled by people we
0:33:40 > 0:33:48have not elected. Yeast immigration, but at a controlled level.
0:33:48 > 0:33:52Controlled by Rachel. Flattery will get you everywhere. If you were in
0:33:52 > 0:33:57control, would it not be better that you were held accountable for
0:33:57 > 0:34:00immigration, whether you kept levels relatively high, maybe not as high
0:34:00 > 0:34:05at the moment, and you could be blamed for it rather than successive
0:34:05 > 0:34:11British governments blaming the EU? People want to see tighter controls
0:34:11 > 0:34:14on immigration and British Parliament and British politicians
0:34:14 > 0:34:19making those decisions about who can come in and out of the country. We
0:34:19 > 0:34:23have to respect and understand those legitimate concerns people have
0:34:23 > 0:34:27about the levels of immigration in recent years. I do think we need to
0:34:27 > 0:34:32see change after the referendum, but let's not throw the baby out with
0:34:32 > 0:34:36the bath water. Let's ensure we have frictionless, tariff free trade, but
0:34:36 > 0:34:41we also need to control immigration. A level of agreement there. Thank
0:34:41 > 0:34:41you.
0:34:41 > 0:34:42Thank you.
0:34:42 > 0:34:44And for more reporting and analysis of Brexit,
0:34:44 > 0:34:48check out the BBC News website, that's bbc.co.uk/brexit.
0:34:48 > 0:34:51Research published today suggests council tax rises
0:34:51 > 0:34:54are on the way across England, predicting they will be
0:34:54 > 0:34:57the largest hikes for 14 years.
0:34:57 > 0:35:00The Chartered Institute for Public Finance and Accountancy
0:35:00 > 0:35:02has asked all local authorities to provide figures
0:35:02 > 0:35:09for council tax rises.
0:35:09 > 0:35:13The average property in England will be paying more than £80 a year
0:35:13 > 0:35:15extra in council tax when bills arrive in April,
0:35:15 > 0:35:16according to this survey.
0:35:16 > 0:35:18There will be some big regional discrepancies,
0:35:18 > 0:35:22with band D properties
0:35:22 > 0:35:25in the North East due to pay an average of almost £1,800 a year.
0:35:25 > 0:35:27That's more than £250 higher than the bill
0:35:27 > 0:35:29for taxpayers in outer London, according to the survey.
0:35:29 > 0:35:35Here's the chief executive of Cipfa, as it's known, Rob Whiteman.
0:35:35 > 0:35:37So, the headline figure from our research is that council
0:35:37 > 0:35:41tax is going up by an average of 5.1% across the country.
0:35:41 > 0:35:44That's about £80 per year for most households and that is the biggest
0:35:44 > 0:35:48increase we've seen for 14 years.
0:35:48 > 0:35:51Two of the biggest pressures that councils face are adult social care
0:35:51 > 0:35:54and children's services.
0:35:54 > 0:35:57Obviously, the number of people approaching old age has gone up
0:35:57 > 0:36:01and therefore there is more elderly care needed.
0:36:01 > 0:36:04And for children's services, there is a mixture of more children
0:36:04 > 0:36:08with learning disability requirement packages but at the same time,
0:36:08 > 0:36:11the role to protect children who are vulnerable has also seen
0:36:11 > 0:36:15quite an increase, so in both those areas councils are generally
0:36:15 > 0:36:23spending more money than they have resources to do.
0:36:25 > 0:36:31I think I said a hike in £1800 a year. When we are talking about
0:36:31 > 0:36:40regional discrepancies, I meant an average of £1800 a year. We asked if
0:36:40 > 0:36:41a minister was available to talk about this, but no one was.
0:36:41 > 0:36:43about this, but no one was.
0:36:43 > 0:36:45I'm joined now from Nottingham by Alison Michalska, who runs
0:36:45 > 0:36:48the adult and children's services in that city and is also the current
0:36:48 > 0:36:51president of the Association of Directors of Children's Services.
0:36:51 > 0:36:53And with me here in the studio is the Conservative MP
0:36:53 > 0:36:55Kevin Hollinrake, who sits on the local government
0:36:55 > 0:36:58select committee.
0:36:58 > 0:37:03Welcome to both of you. Allison, the Local Government Association says
0:37:03 > 0:37:08that by 2020 councils will have lost more than 85% of central government
0:37:08 > 0:37:14funding compared with levels in 2013. You work on the front line
0:37:14 > 0:37:18providing children's services in Nottingham. How have the cuts
0:37:18 > 0:37:22affected you?They have had a devastating impact up and down the
0:37:22 > 0:37:27country. In Nottingham as the government roles are reducing, and
0:37:27 > 0:37:31although council tax is going up in the poorest areas, that raises the
0:37:31 > 0:37:39least money. Nottingham city is very deprived. We have estimated around
0:37:39 > 0:37:4360% of our families living in poverty. A council tax rise raises
0:37:43 > 0:37:48the least money in places like Nottingham. Up and down the country
0:37:48 > 0:37:53there is a huge increase in demand. As money is going down from
0:37:53 > 0:37:58government to provide services, the demand is going up. The increase
0:37:58 > 0:38:02across the country we have seen in the last ten years is just shy of an
0:38:02 > 0:38:0580% increase in the number of children who are subject to a child
0:38:05 > 0:38:13protection plan. They are the most expensive services. While councils
0:38:13 > 0:38:19like Nottingham are having to do around the country is to introduce
0:38:19 > 0:38:22early help and early intervention services and that means we are not
0:38:22 > 0:38:26able to help children and families early and then they reach crisis and
0:38:26 > 0:38:29that is when they need to be intervening with our most expensive
0:38:29 > 0:38:34levels of service.You said the council tax rises will help a bit,
0:38:34 > 0:38:39but you have said it raises the least money in some of the most
0:38:39 > 0:38:45deprived areas. What do you want to see the government doing?We
0:38:45 > 0:38:49released a policy paper at the end of last year and what we want the
0:38:49 > 0:38:53government to do is to recognise that if it wants to be a country
0:38:53 > 0:38:57that works for all people it first and foremost needs to be a country
0:38:57 > 0:39:04that works for all children. We need a sustainable funding settlement for
0:39:04 > 0:39:08children's services. By 2020 the gap in funding for children's services
0:39:08 > 0:39:13will be at least £2 billion. Without that sustainable funding we will be
0:39:13 > 0:39:19unable to provide the very effective early help and early intervention
0:39:19 > 0:39:23services, the family support, they are the services whereby local
0:39:23 > 0:39:27authorities up and down the country are helping families to care for
0:39:27 > 0:39:31themselves and their own children. Without that what we need to do is
0:39:31 > 0:39:34to respond more urgently and with more expensive intervention
0:39:34 > 0:39:42services.As you have laid out extremely clearly and powerfully the
0:39:42 > 0:39:47local challenges that local government needs to do, what are you
0:39:47 > 0:39:54going to do about it?I agree with a lot. The Secretary of State did give
0:39:54 > 0:40:01a four-year funding settlement in 2016. It was a real terms increase
0:40:01 > 0:40:05between 2018 and 2020. Let's put it in context in terms of our national
0:40:05 > 0:40:12finances. We are spending too much, £40 billion every year more than we
0:40:12 > 0:40:16get in taxes. It was 150 billion when we took over the economy in
0:40:16 > 0:40:212010. At the same time we have halved unemployment and we are one
0:40:21 > 0:40:26of the fastest-growing economies in the G7.So why are there these
0:40:26 > 0:40:32problems?Every local authority has to look at its own costs and has to
0:40:32 > 0:40:37become more efficient. Nottingham itself, £27 million every year in
0:40:37 > 0:40:41terms of efficiencies. A lot of councils have become efficient.They
0:40:41 > 0:40:45have fulfilled what the government has said to them, they have cut
0:40:45 > 0:40:51services and spending to the bone. There is no more and we have had a
0:40:51 > 0:40:55succession of local government representatives saying that,
0:40:55 > 0:40:58Conservative, Labour, Liberal Democrat, right across the board.
0:40:58 > 0:41:03What are you going to do? It is not enough to say look at the context,
0:41:03 > 0:41:08we are spending X amount of money when there are far more elderly
0:41:08 > 0:41:13people and far more children with complex needs. To say you will
0:41:13 > 0:41:18continue cutting does not answer the question.I did not say that.
0:41:18 > 0:41:21Nottingham will see a real terms increase in funding over the next
0:41:21 > 0:41:28two years. Beyond that there are two things we need to do. The biggest
0:41:28 > 0:41:35pressure is that 34% of spending is adult social care and we need a
0:41:35 > 0:41:39long-term sustainable model for funding that care. We need an extra
0:41:39 > 0:41:43£9.4 billion and in this spending round we need to put more money in
0:41:43 > 0:41:50in the future. I personally think we need to look at a social solution.
0:41:50 > 0:41:55The other thing we need to do, and your clip illustrated it perfectly,
0:41:55 > 0:42:00is the funding of local authorities is totally unfair. Nottingham gets
0:42:00 > 0:42:05around £800 per person per year in terms funding, whereas parts of
0:42:05 > 0:42:10London, wealthy parts of London, are getting £1100 a year to spend. That
0:42:10 > 0:42:14is not right. The government is committed to put in a new fairer
0:42:14 > 0:42:21funding reviewed to make sure all areas get a fair amount of. Less.
0:42:21 > 0:42:26Absolutely not, it will be more, but it will be fairer, so Alison can do
0:42:26 > 0:42:29a good job that she does with the right amount of resources.Do you
0:42:29 > 0:42:35like what you have heard?Fairer funding that would benefit
0:42:35 > 0:42:39Nottingham city, of course I like that. But we have to be clear, it is
0:42:39 > 0:42:43some of our most efficient and most wealthy councils that are also
0:42:43 > 0:42:50struggling. It is the lack of a comprehensive tackling child poverty
0:42:50 > 0:42:53strategy that is getting in the way and it would be great if the
0:42:53 > 0:42:59government could address that. Yes, money is going up in some areas but
0:42:59 > 0:43:03it is not going up anywhere near as the level of demand and need that we
0:43:03 > 0:43:09have and that is across adult and children's' services.You have
0:43:09 > 0:43:13listened to the debate. Do you think it is their council tax goes up,
0:43:13 > 0:43:17that the government is trying to get local government to make those
0:43:17 > 0:43:20decisions to distance themselves some would argue from painful
0:43:20 > 0:43:25decisions being made at a local level? Do you think it is my
0:43:25 > 0:43:29constituents pay perhaps up to 5% more?There is a good case for
0:43:29 > 0:43:33people like me paying more perhaps, but I am not sure how fair council
0:43:33 > 0:43:39is. What really sticks in my crore listening to what Alison said is the
0:43:39 > 0:43:45fact that we are talking about paying 10 billion a year, and we are
0:43:45 > 0:43:51paying that now to the EU. Alison only needs 2 billion. People say
0:43:51 > 0:43:56what we paid to the EU is not much, but it should be allocated to this
0:43:56 > 0:44:01country.A Brexit point for you. What do you say to that? It will be
0:44:01 > 0:44:05interesting to see whether there is any damage to the economy or whether
0:44:05 > 0:44:10that money can be spent in other areas and it has been promised to a
0:44:10 > 0:44:14number of different areas already. We have to look at local government
0:44:14 > 0:44:18finance in isolation. It has to be that everybody gets a fair amount
0:44:18 > 0:44:24for the needs of that local area and we have a sustainable model of care.
0:44:24 > 0:44:29Should there be a re-evaluation of council tax properties?That is not
0:44:29 > 0:44:32the problem, it is about distributing the money more fairly.
0:44:32 > 0:44:34the money more fairly.
0:44:34 > 0:44:36After months without a government following last year's
0:44:36 > 0:44:38inconclusive general election, which saw gains for
0:44:38 > 0:44:42the anti-immigrant AfD, Germany's two largest parties have
0:44:42 > 0:44:45finally done a deal to form a so-called grand coalition.
0:44:45 > 0:44:49Angela Merkel's Christian Democrats have had to make significant
0:44:49 > 0:44:51concessions to Martin Schulz's Social Democrats to make
0:44:51 > 0:44:53the deal - which the SPD had originally ruled
0:44:53 > 0:44:55out - happen.
0:44:55 > 0:44:58But the coalition deal is not yet quite sealed.
0:44:58 > 0:45:01The final hurdle is a vote of the SPD's entire membership,
0:45:01 > 0:45:03which concludes on Sunday.
0:45:03 > 0:45:06Joining us from the German city of Cologne via the internet
0:45:06 > 0:45:09is a British SPD, and former Momentum,
0:45:09 > 0:45:11activist, Steve Hudson, who is leading the campaign
0:45:11 > 0:45:14to get his comrades to say "nein" to the deal.
0:45:14 > 0:45:17And in the studio here is the academic and SPD supporter
0:45:17 > 0:45:23Dr Isabelle Hertner.
0:45:23 > 0:45:28Welcome to both of you. Steve, what is wrong with another grand
0:45:28 > 0:45:33coalition? The SPD will be in government.Every grand coalition up
0:45:33 > 0:45:41to now we have seen the SPD support fall significantly.The AFD is the
0:45:41 > 0:45:47Alternative fur Deutschland, the right-wing group.
0:45:48 > 0:45:53right-wing group.Yes, they have an anti-refugee agenda. They point to
0:45:53 > 0:45:58the SPD and say, you are all the same, and we see SPD support
0:45:58 > 0:46:01crumbling. And we go through another grand coalition there is a real
0:46:01 > 0:46:06danger the SPD will cease to exist. Let's put that to Isabel Hertner. It
0:46:06 > 0:46:11hasn't worked well for the SPD. They have suffered and it has been a long
0:46:11 > 0:46:18time since the SPD was the largest party so what is the point?I
0:46:18 > 0:46:22understand what you are saying and it has been difficult for the SPD to
0:46:22 > 0:46:28make their presence felt in coalition. But I would still say
0:46:28 > 0:46:31that they are more determined now than ever, that when the coalition
0:46:31 > 0:46:40contract was written they made some important concessions and if they do
0:46:40 > 0:46:44enter the grand coalition they are actually holding some very important
0:46:44 > 0:46:49ministries, like finance, work and social affairs, so they can actually
0:46:49 > 0:46:53make their mark.Steve, isn't that the point? Angela Merkel is in a
0:46:53 > 0:46:58much weaker position on the SPD will have a much more dominant role this
0:46:58 > 0:47:01time.Both major parties are suffered massively at the last
0:47:01 > 0:47:09election and both are much much weaker. I don't agree that the SPD
0:47:09 > 0:47:13had a strong hand and what is the point in having the finance ministry
0:47:13 > 0:47:16if you are not allowed to raise taxes for the rich, not allowed to
0:47:16 > 0:47:21incur any public debt, you are still bound to a programme of public
0:47:21 > 0:47:27austerity which is massively punishing working people in Germany.
0:47:27 > 0:47:31Isn't that why they are losing support, because they haven't been
0:47:31 > 0:47:34able to put forward this agenda Steve has outlined and are seen as
0:47:34 > 0:47:38betraying their roots?Yeah, but when you look at the coalition
0:47:38 > 0:47:43contract, they are suggesting that more money needs to be spent on the
0:47:43 > 0:47:48eurozone, more solidarity for southern European countries, against
0:47:48 > 0:47:53youth unemployment and so on. So they are actually trying to pull
0:47:53 > 0:47:57their weight and if you think about the bigger picture and the eurozone
0:47:57 > 0:48:03as a whole, then I do think there is a good case for having the SPD in a
0:48:03 > 0:48:07coalition government.Steve, the result will be on Sunday and most
0:48:07 > 0:48:11people at this point think that most SPD members will back the coalition
0:48:11 > 0:48:18so isn't this all just a bit too late?We will have to see. We have
0:48:18 > 0:48:21seen a really extraordinary campaign. The party conference
0:48:21 > 0:48:25passed a motion guaranteeing a free and fair debate and we've had
0:48:25 > 0:48:29exactly the opposite and ended up with the SPD leadership sending
0:48:29 > 0:48:34along with the postal ballot a 3-page letter on why you should vote
0:48:34 > 0:48:37yes. Online, younger members, new members joining the party, are
0:48:37 > 0:48:43streets ahead but the average age of the SPD member is 60 and many of the
0:48:43 > 0:48:47SPD we simply cannot reach online but we have been able to reach with
0:48:47 > 0:48:53the others. We don't know how it will turn out but we are very, very
0:48:53 > 0:48:57worried - how is a genuine renewal of the SPD possible? How are we
0:48:57 > 0:49:01going to turn around in former years' time if you have been part of
0:49:01 > 0:49:04another coalition with conservatives and say, now we are different and
0:49:04 > 0:49:10have something better to offer?What would you say?I would say yes, it
0:49:10 > 0:49:17is true and I do see your point but in the grand scheme of things,
0:49:17 > 0:49:19triggering new elections, because that could happen, and then you
0:49:19 > 0:49:25would see the SPD vanishing even more and the far-right AFD would
0:49:25 > 0:49:31come second. That's what the polls show us. I don't know if that is a
0:49:31 > 0:49:37very palatable solution for the future of Germany and also for the
0:49:37 > 0:49:41eurozone, or the European Union as a whole. I see this very much as a
0:49:41 > 0:49:47European discussion.Steve, it is a risky strategy, isn't it? New
0:49:47 > 0:49:52elections could see more AFD representatives in the Bundestag,
0:49:52 > 0:49:58which you would be against, and the SPD could be wiped out and you would
0:49:58 > 0:50:01have gambled on your so-called radical agenda for the SPD and
0:50:01 > 0:50:04retaining their principles by not being part of this grand coalition
0:50:04 > 0:50:11only to be wiped out.We saw that a year ago the SPD was on twice its
0:50:11 > 0:50:18current support.Yes, but for how long?But why was it on that?Answer
0:50:18 > 0:50:23the first question, how long, and then tell us why.For a couple of
0:50:23 > 0:50:27weeks. But Martin Schulz, who was then the leader of the party,
0:50:27 > 0:50:31rejected that all full programme of welfare cuts which was the SPD
0:50:31 > 0:50:36legacy from the last SPD led government and this whole third way
0:50:36 > 0:50:42politics of publishing the pool for being poor, and when he did that the
0:50:42 > 0:50:46SPD's ratings went through the roof. That is the key. If we need to go
0:50:46 > 0:50:49through a new election that is where we've got to turn round and say to
0:50:49 > 0:50:54our electorate, we are there for you again, not the capital and the
0:50:54 > 0:50:58corporations.Isabelle Hertner, do you think that would happen? If
0:50:58 > 0:51:02there was a radical left-wing agenda and the sort of promises being made
0:51:02 > 0:51:05by Steve... You could argue that that worked here for Jeremy Corbyn
0:51:05 > 0:51:09and support for the Labour Party increased at the last general
0:51:09 > 0:51:15election, the SPD could benefit?I am not so sure because those people
0:51:15 > 0:51:20who voted AFD, I don't think they are going to switch to the SPD back
0:51:20 > 0:51:24any time soon. A lot of them are disgruntled Conservatives and those
0:51:24 > 0:51:30people who didn't vote in the past, so I don't see them coming in big
0:51:30 > 0:51:36numbers to join the SPD. I do not think that's going to happen and
0:51:36 > 0:51:44also, there was a party on the left of the SPD, which could mop up
0:51:44 > 0:51:48further activists further to the left and voters anywhere.Do you
0:51:48 > 0:51:52think there is a future for the social Democratic left? You have
0:51:52 > 0:51:54written a book about the British Labour Party, the French Socialists
0:51:54 > 0:51:59and the German SPD that we'd been talking about but if you have got
0:51:59 > 0:52:02the left wing party in Germany, is there really room politically for
0:52:02 > 0:52:10the SDP now?I think the SPD has to find its place again, and it is
0:52:10 > 0:52:15squeezed. On the left is left party, on the centre-right is the CDU,
0:52:15 > 0:52:20which is moved to the left, so the SPD's for manoeuvre is quite
0:52:20 > 0:52:27limited. But I think it has a strong case.Isn't that the point, Steve?
0:52:27 > 0:52:31If you are a real left winger, why don't you vote for the Greens or
0:52:31 > 0:52:38another party?The Greens have become another middle-class party.
0:52:38 > 0:52:40Pol
0:52:40 > 0:52:51Die Linke have been a Communist Party and the many people are
0:52:51 > 0:52:54unelectable on those grounds. The SPD is like a football team. You
0:52:54 > 0:52:58don't change your party. What has happened as most of those people who
0:52:58 > 0:53:02were SPD voters, a lot of them have just given up voting altogether so I
0:53:02 > 0:53:06don't think we will get all the AFD voters coming straight back to the
0:53:06 > 0:53:09SPD but rather that millions of people who have given up because
0:53:09 > 0:53:12they've been abandoned by the system, told the system was rigged
0:53:12 > 0:53:17against them, some have gone to the AFD but most have given up voting.
0:53:17 > 0:53:21What we saw with Labour in the last election was all those millions of
0:53:21 > 0:53:26people coming back and that's what I want for the SPD.All right, Steve
0:53:26 > 0:53:30Hudson and Isabelle Hertner, thank you very much. We will find out the
0:53:30 > 0:53:32result very soon.
0:53:32 > 0:53:34Now, avid viewers of the Daily Politics quiz
0:53:34 > 0:53:37will recall us asking this week which Winston Churchill
0:53:37 > 0:53:39tipple is set to return in pint-sized form after Brexit.
0:53:39 > 0:53:42The answer of course was champagne - with the war-time leader said
0:53:42 > 0:53:44to enjoy "an imperial pint" of the stuff, because half
0:53:44 > 0:53:50a bottle was "insufficient to tease my brains".
0:53:50 > 0:53:52I'm sure that is the same with everybody!
0:53:52 > 0:53:55Well, we couldn't have a publican - Tim Martin - on as our guest
0:53:55 > 0:53:57of the day without asking whether Brexit will lead
0:53:57 > 0:53:59to a revival of pints of bubbly.
0:53:59 > 0:54:02But let's first speak to Hubert de Billy from Pol Roger in France,
0:54:02 > 0:54:07whose champagne Churchill was said to be partial to.
0:54:07 > 0:54:11Welcome to the programme. Your family actually knew Churchill. What
0:54:11 > 0:54:18exactly did he like so much about pint sized champagne?He loves it
0:54:18 > 0:54:23because he was drinking it in couples and he used to say that when
0:54:23 > 0:54:28he was drinking a bottle, Clementine was not happy and when he was
0:54:28 > 0:54:34drinking a half bottle, he was not happy.So this was the absolute
0:54:34 > 0:54:37perfect compromise, to have something in between. How many
0:54:37 > 0:54:44glasses do you get out of a pint sized bottle?A pint is exactly 56.8
0:54:44 > 0:54:52centimetres, to be precise so roughly you can have four glasses,
0:54:52 > 0:54:56approximately.Perfect for breakfast, clearly! Is that a pint
0:54:56 > 0:55:03sized bottle you have got next to you on that table?Yes, that is the
0:55:03 > 0:55:11imperial pint, it is what he used to drink during the war.And pints of
0:55:11 > 0:55:17champagne - were they popular before Brussels band of the size in 1973?
0:55:17 > 0:55:26Er Whipp don't forget... Yes, it was popular before the war because after
0:55:26 > 0:55:29the war a lot of business has been through the glass, champagne through
0:55:29 > 0:55:35the glass, which was something new and it was true that the pint was
0:55:35 > 0:55:42popular before the war and with the business of champagne by the glass,
0:55:42 > 0:55:46it has been decreasing slowly but surely and champagne people, when
0:55:46 > 0:55:52they
0:55:52 > 0:55:57they create it, they will ask for the imperial pint, plus the fact
0:55:57 > 0:56:03that it is true that we prefer to count in the unit of bottles so with
0:56:03 > 0:56:09a bottle, among them bottles, a half bottle, a Jeroboam is four bottles.
0:56:09 > 0:56:17The imperial pint was a strange size, I will say, in the French way
0:56:17 > 0:56:22of life!Used stick to that! Tim, do you fancy pint sized bottles of
0:56:22 > 0:56:28champagne?I love the idea. How much you have to admire Churchill? Not
0:56:28 > 0:56:32only was he a Great War leader and a great writer and journalist but he
0:56:32 > 0:56:36actually got that much a day. He also dictated to his secretary while
0:56:36 > 0:56:41he was in the bath and so I wouldn't fancy trying that in the modern era.
0:56:41 > 0:56:45No, and I doubt that you should suggest it any more on that basis!
0:56:45 > 0:56:49Don't forget that at the same time, Churchill used to say that the
0:56:49 > 0:56:54Magnum was the best size for two gentleman, providing that one of
0:56:54 > 0:57:00them was not drinking!Fair enough. What about the taste? It is all
0:57:00 > 0:57:03about the taste. Do those bottles enhance the taste of drinking
0:57:03 > 0:57:10champagne or not?No. The best size is a Magnum.Well, you would say
0:57:10 > 0:57:22that!I will give you an example. It is like a hotel room. If you take a
0:57:22 > 0:57:26one star or a 4-star you have a bed inside and you will sleep but not in
0:57:26 > 0:57:36the same comforts. And the percentage of air compared to widen
0:57:36 > 0:57:40the Magnum is the best size.I am convinced. I will only drink
0:57:40 > 0:57:47magnums! Do you agree it has to be Magnum is all the way? Is this just
0:57:47 > 0:57:52a gimmick?Yes, but we like gimmicks, interest, talk, it's Boks
0:57:52 > 0:57:56Ofcom the solution and the English like pint so let's drink champagne.
0:57:56 > 0:58:01We can all dream to that! You enjoyed that pint sized bottle,
0:58:01 > 0:58:07Hubert. Thank you for joining us. As we have been on air, Donald Tusk is
0:58:07 > 0:58:10arrived at Downing Street for talks with the Prime Minister Theresa May.
0:58:10 > 0:58:13He had plenty of journalists shouting questions at him as he went
0:58:13 > 0:58:27in. Oh, to be a fly on the wall. Some advance notice of what the
0:58:27 > 0:58:29Prime Minister will be outlining in her speech tomorrow and no doubt
0:58:29 > 0:58:32some strong views on the EU's draft document yesterday. I wonder if they
0:58:32 > 0:58:34will be serving champagne at lunch, pint-size Magnum. We will have a
0:58:34 > 0:58:37special programme tomorrow from 1:30pm until 2:30pm but I am afraid
0:58:37 > 0:58:42that is all we've got time for four today. I am rather hungry for
0:58:42 > 0:58:47something! Thank you for being our guest today. Andrew has a special
0:58:47 > 0:58:55This Week later with Liz Kendall, Andrew Walmsley, did Brian bless and
0:58:55 > 0:58:55David