:00:00. > :00:07.while another has been released while investigations go on. It has
:00:08. > :00:12.just gone to 30 a.m. . Now on BBC News, it's time for HARDtalk. --
:00:13. > :00:28.2:30am. Welcome to HARDtalk. . I am Stephen
:00:29. > :00:31.Sackur. Politicians and civil servants usually abandon their
:00:32. > :00:35.offices in the dog days of August, but not this year in London, where
:00:36. > :00:38.Brexit is now an overwhelming political priority.
:00:39. > :00:42.Theresa May's Government has issued a raft of proposals on what trade,
:00:43. > :00:44.border and legal arrangements might look like post Brexit,
:00:45. > :00:47.with a striking focus on continuity rather than change.
:00:48. > :00:49.My guest to one of the Conservative Party's
:00:50. > :00:50.staunchest Brexiteers, MEP Daniel Hannan.
:00:51. > :01:18.If Brexit isn't a clean break, then what's the point?
:01:19. > :01:28.Daniel Hammond, welcome to HARDtalk. We are six months into a two-year
:01:29. > :01:32.process that will end with the departure of the UK from the
:01:33. > :01:36.European Union. Are you satisfied with what has happened in those
:01:37. > :01:40.first six months? Yes I am. I think it is gone better than many
:01:41. > :01:47.expected. We were told during the referendum campaign that the very
:01:48. > :01:52.act of voting Leave would trigger a downturn. I don't think anyone now
:01:53. > :01:56.argues that happen. We grew faster in the six months after than we did
:01:57. > :02:02.in the six month before. Whether you look at exports, consumer
:02:03. > :02:05.confidence, retail sales, overseas investment, the stock exchange...
:02:06. > :02:10.They are all rising. Britain is in a strong position, and I am hopeful
:02:11. > :02:14.that we can have an amicable process that leads to a mutually
:02:15. > :02:20.advantageous outcome. Of course, this is a process which is a two Way
:02:21. > :02:27.St. We have wishes, desires, things that we want to achieve. I say we,
:02:28. > :02:32.as the United Kingdom. The European Union, all 27 states still in at,
:02:33. > :02:36.they have their own take and concerns in this. It is interesting
:02:37. > :02:41.that European politicians seem to be feeling that the process is not
:02:42. > :02:45.working, starting with the negotiated themselves, which left
:02:46. > :02:48.negotiations at the end of July expressing deep frustration with
:02:49. > :02:54.what they believed was the lack of preparedness from the UK's side. I
:02:55. > :02:57.don't recognise that description. I think the government is now making
:02:58. > :03:01.public what was in its private negotiating positions up until now.
:03:02. > :03:06.And they are very sensible, moderate proposals on how to maintain
:03:07. > :03:11.judicial co-operation, how to ensure mutual recognition of goods and
:03:12. > :03:17.services, the border in Ireland, customs, and so on. But Stephen, I
:03:18. > :03:22.do really buy that this is a win- lose operation, where we have our
:03:23. > :03:29.desires, and the 27 as. It is plain that it is in the interest of the UK
:03:30. > :03:34.for our partners to prosper. It would not be in our interest for
:03:35. > :03:37.Brexit to lead to some sort of prolonged bout of uncertainty about
:03:38. > :03:41.the euro, which affected the prosperity of our neighbours. We
:03:42. > :03:49.wanted to do well. We should go into this process looking for win- win
:03:50. > :03:52.outcomes. Surely this is an exercise in power dynamic. Surely you would
:03:53. > :03:59.agree that right now the leveraged lies with the European partners,
:04:00. > :04:05.rather than the UK. Michel Barnier, he gives reminding us that the clock
:04:06. > :04:09.is ticking. The UK will leave in 18 months now, come what may. It is
:04:10. > :04:13.clear from so many different voices in the UK that we cannot, now,
:04:14. > :04:18.conceive of leaving with no deal. So we have to do a deal. I am not sure
:04:19. > :04:22.why that countdown is considered only disadvantageous to us. Imagine
:04:23. > :04:27.there was no Article 50, no deadline. Then we really would be in
:04:28. > :04:32.a position where the talks could be strung out endlessly, where
:04:33. > :04:37.continuing financial tribute could be exacted from us, where we could
:04:38. > :04:41.be subject to all the rules without any hope of getting out. Citing
:04:42. > :04:45.putting an end moment on it and saying we are leaving, with or
:04:46. > :04:49.without a deal, by such and such a date focuses both sides, it makes it
:04:50. > :04:52.more likely that we will have a mutually beneficial arrangement. I
:04:53. > :05:01.am talking about leverage and who holds the cars. -- the cards. Some
:05:02. > :05:05.have said that if we leave without a deal, placed could stop flying. Car
:05:06. > :05:11.manufacturers have said if there is no deal based would be to send their
:05:12. > :05:14.components, receive their components from European manufacturing sites,
:05:15. > :05:19.and reduction will stop. That is a pressure was the United Kingdom has
:05:20. > :05:31.to deal with. If you really took it seriously... There are 27 countries
:05:32. > :05:35.in EU. There are many more not an EU. The idea that our players will
:05:36. > :05:38.be grounded in such an absurd fantasy. It is ridiculous that we
:05:39. > :05:43.are even discussing it is a proposition. You don't need to be
:05:44. > :05:47.part of a political union to trade with another country. And actually,
:05:48. > :05:51.I suspect that the trade talks with the EU will be technically the
:05:52. > :05:55.easiest bit of these hold negotiations. There will be some
:05:56. > :06:00.tough talks about the money and agricultural standards and so on,
:06:01. > :06:05.but the basic idea of a free trade area - remember that these will be
:06:06. > :06:08.the first trade talks in history where you start from a position of
:06:09. > :06:14.zero tariffs and regulatory equivalents. So for the first time,
:06:15. > :06:18.the bias is looking the other way. With respect, you are one of the
:06:19. > :06:22.longest serving Brexiteers I can think of. Your voice has been a
:06:23. > :06:26.strong voice in the Tory party to withdraw for a long time. You
:06:27. > :06:35.clearly have a vested interest in saying there is no urgency or
:06:36. > :06:42.problem. But let me quote Jon Foster from the CBI. He says it there needs
:06:43. > :06:46.to be urgent agreement to ensure the goods and services still flow
:06:47. > :06:51.freely, otherwise we have a profound problem. And the CBI declared itself
:06:52. > :06:56.encouraged by the proposals established last week on how the
:06:57. > :07:00.customs union would work. Hears talk about urgency. Urgency works in
:07:01. > :07:07.favour of the European Union, rather than be UK, it seems to me. -- he
:07:08. > :07:10.was talking about urgency. He's talking about a collapse of the
:07:11. > :07:14.talks. Let me stop you right there, because what you have just said is
:07:15. > :07:19.very important. Back in January, Theresa May said at Lancaster house,
:07:20. > :07:23.she said while I am sure that a positive agreement can be rich, I am
:07:24. > :07:28.equally clear that no deal for Britain is the better deal than a
:07:29. > :07:33.bad deal for Britain. I am saying that. That is a statement of the
:07:34. > :07:38.obvious. If you had some kind of deal, some kind of Hunger Games type
:07:39. > :07:44.deal, where you had to send a boy and a girl each year... No, it is a
:07:45. > :07:48.statement of the obvious to say there is a point where you would
:07:49. > :07:53.walk away. What I am saying is that applies to both sides. On the day
:07:54. > :07:57.that we leave, we become the EU's single biggest export destination,
:07:58. > :08:00.right click it is not in the interests of anyone in Brussels, and
:08:01. > :08:03.I've not heard anyone their say otherwise, for us to walk away
:08:04. > :08:09.without the trade arrangements put in place. But the percentage of GDP
:08:10. > :08:16.of the European collective is tiny compared to a percentage of GDP
:08:17. > :08:21.trade with Europe reserves rise. Clearly, we have more to lose than
:08:22. > :08:28.they have. Techie both sides have an incentive to reach a deal. -- both
:08:29. > :08:32.sides have an incentive to reach eight deal. Of course it is bigger
:08:33. > :08:36.than the UK then the EU. But the balance of trade is in favour of the
:08:37. > :08:40.EU. It is selling to Britain much more than it is buying from Britain.
:08:41. > :08:44.It is not normal in any trade negotiations for a salesman to bully
:08:45. > :08:48.a customer. Let's into detail of what has happened in the last few
:08:49. > :08:53.weeks. I think we can agree that the British government has shown signs
:08:54. > :09:01.in the last few weeks to be very keen to find ways to coalesce around
:09:02. > :09:03.transitional arrangements that can maintain a positive economic
:09:04. > :09:09.relationship with the European Union after this two year deadline has
:09:10. > :09:13.passed. It seems to me, looking at the detail, that key concessions
:09:14. > :09:19.have already made. I want to know how you feel about them. For
:09:20. > :09:24.example, on money, David Davis, the Brexit Cabinet Secretary, he is
:09:25. > :09:30.saying now that, quote, programmes at the UK wants to consider this is
:09:31. > :09:35.a bedding in, we will participate in. It's easy sent a signal that
:09:36. > :09:42.ongoing parents will continue to the European Union. -- payments. Is it
:09:43. > :09:52.acceptable to you? Remember that it was a narrow result. 52 % voted to
:09:53. > :09:57.leave, 48% voted to stay. The best system would leave in place of our
:09:58. > :10:01.existing arrangements. What ever we end up with will go too far for
:10:02. > :10:05.some, not far enough others, we should try to build a consensus that
:10:06. > :10:09.is suitable for most of the 48% and most of the 52%. Part of that is
:10:10. > :10:14.remaining part of these various programmes, where they are in
:10:15. > :10:17.everybody's interest. What about the jurisdiction of the European Court
:10:18. > :10:23.of Justice for a transitional period? No, we're working an
:10:24. > :10:27.arbitration mechanism such as other non-EU countries in this part of the
:10:28. > :10:31.world have, like the Swiss or the Norwegians, we can have mutual
:10:32. > :10:36.applicability of each other's judgements, and an arbitration
:10:37. > :10:42.mechanism that makes both the use of the ECJ and the other party. That
:10:43. > :10:49.sounds very complicated. I have heard people say this, and I think
:10:50. > :10:56.it is important to highlight the difference: The ECJ has direct
:10:57. > :11:00.effect on member states. It is the only court they can do that. That is
:11:01. > :11:05.looking at staying in the ECJ on those terms. We are looking to have
:11:06. > :11:10.a friendly bilateral deal. It is not in a sense quite personal to you? I
:11:11. > :11:14.am wondering how you react to it in a personal way. You spent the best
:11:15. > :11:17.part of your adult life, politically, working to free
:11:18. > :11:22.Britain, as he was said, from the shackles of the European Union. But
:11:23. > :11:26.now, we have a government which this summer is sending a message to the
:11:27. > :11:30.public which essentially says, worry not, although we are leaving the
:11:31. > :11:34.European Union, and we will do all the symbolic stuff that involves
:11:35. > :11:38.leaving, actually, what annuity is the watchword, and we will keep as
:11:39. > :11:42.much of what we had before as we possibly can. Is that in some ways
:11:43. > :11:48.sticking in your throat? No, on the contrary. Before the referendum, I
:11:49. > :11:52.have wrote a book on why you should Vote Leave. It said that the day
:11:53. > :11:58.after Brexit will do quite like the day before. That is where Devenish
:11:59. > :12:03.and can start to begin. But it is a new status quo. That is the point.
:12:04. > :12:16.Did make it is a grisly in is to keep those bits of European
:12:17. > :12:24.co-operation working for all sides. -- it is obviously best to keep
:12:25. > :12:27.those bits. You can give a rule through domestic laws, or bilateral
:12:28. > :12:32.treaties, like the Swiss, but you have sensible things that, you
:12:33. > :12:35.should them. Research programmes, educational programmes, fine. The
:12:36. > :12:40.Swiss deal with the European Union based on the economic free trade
:12:41. > :12:44.area, that is a highly comic's agreement. And that is a much
:12:45. > :12:49.smaller country than we are. You could take many years to negotiate a
:12:50. > :12:57.deal that is British version of what the Swiss have. We don't have many
:12:58. > :12:59.years. After this message from the Cabinet, including Philip Hammond
:13:00. > :13:03.and David Davis, in a joint statement, is that whatever
:13:04. > :13:07.transition we have, it must be over by the time of the next election,
:13:08. > :13:13.which will be 2022 at the latest. So there is very little time, here. The
:13:14. > :13:16.Swiss managed it, and of course there are smaller country, but that
:13:17. > :13:22.gave immense leverage, because there were 8 million people, rather than
:13:23. > :13:26.65 million, and they have a deficit, rather than surplus, with EU. They
:13:27. > :13:35.did manage to sit down and work on issues like fisheries and the
:13:36. > :13:39.permissible noise of lorries, or whatever. Both sides except that
:13:40. > :13:42.this was at least that where they are largely in a free-trade area,
:13:43. > :13:46.but largely outside all of the politics. And I really don't think
:13:47. > :13:49.it is rocket science to do something similar. One of the most senior
:13:50. > :13:56.members of your party, the Conservative Party, George Osborne,
:13:57. > :14:02.now in its the Standard newspaper in London. He put his name to the paper
:14:03. > :14:06.which wrote a scathing editorial about where the government is taking
:14:07. > :14:11.Brexit, just yesterday, in which is scornful conclusion was written is
:14:12. > :14:17.working hard to prove that we can recreate what we already have. What
:14:18. > :14:21.on earth is all this about if, in the end, even your message is, you
:14:22. > :14:24.know what, so much of what we are going through this and is an
:14:25. > :14:28.anguished to get is what we are ready have?
:14:29. > :14:35.What we are getting is the right to democracy, to make our own laws and
:14:36. > :14:42.live under our own Parliament. Otherwise, we would be getting the
:14:43. > :14:46.right to trade with companies around the world, the right to be more
:14:47. > :14:49.global. But it does not mean that you have stopped cooperating with
:14:50. > :14:54.your friends and allies across the Channel. It is possible to be an
:14:55. > :14:58.independent country, takeback control in the sense that British
:14:59. > :15:03.law becomes supreme in our own territory, but to use that control
:15:04. > :15:10.through multilateral deals to have working, acceptable arrangements
:15:11. > :15:16.with countries who are our friends, suppliers and customers. I don't
:15:17. > :15:20.wish to flatter you, but you sound so emollient and reasonable that one
:15:21. > :15:29.wonders what this difficult negotiation is all about. I think it
:15:30. > :15:32.may be easier than you think. Unfortunately, you are not
:15:33. > :15:37.representative of so much of what people are... People are emotionally
:15:38. > :15:46.invested in wanting it to fail. Is Boris Johnson? Of course not. I am
:15:47. > :15:52.deliberately not quoting your political opponents or your rabid,
:15:53. > :15:59.pro-EU opinions in this country. I am trying to focus on the nature of
:16:00. > :16:07.negotiations today. Quoting Boris Johnson, who told negotiators to,
:16:08. > :16:12.quote, blow whistle if they get part of the compensation package for part
:16:13. > :16:17.of Britain leaving the EU. You've been in this game for a while, what
:16:18. > :16:22.would you expect to be happening at an early stage? Wouldn't you expect
:16:23. > :16:29.both sides to put in a high opening bid? You would expect the EU to come
:16:30. > :16:38.out with a high figure and for the British to say, a whistle. I would
:16:39. > :16:42.not expect that. I would not expect the Foreign Secretary to use that
:16:43. > :16:46.kind of language and tiring in negotiation with the very people who
:16:47. > :16:51.Britain will have to do a deal with -- go whistle. On the issue of
:16:52. > :16:57.financing, it seems that the obvious way to solve it is for both sides to
:16:58. > :17:02.accept impartial arbitration. A neutral tribunal and said, you work
:17:03. > :17:09.out the assets, you work out the liabilities, and we both agree to
:17:10. > :17:14.your ruling. I am sure it would be a lot less than the EU is currently
:17:15. > :17:19.working for. But if it is not, you'll be willing to pay it? Of
:17:20. > :17:26.course we will pay a bill is. We are not the kind of country who breaks
:17:27. > :17:32.treaties. So, go whistle was just fundamentally unhelpful? A figure
:17:33. > :17:35.that the EU was coming out with, even the European Commission has
:17:36. > :17:41.completely dropped. Boris Johnson has already been vindicated, they
:17:42. > :17:44.are no longer asking for that amount. If you are so short that
:17:45. > :17:50.everything in the best possible world can be achieved with goodwill
:17:51. > :17:53.and good temper, do you accept that the European position, which is that
:17:54. > :17:58.they can be no meaningful debate about long-term issues in terms of
:17:59. > :18:05.future trading in an economic relationships between Britain and
:18:06. > :18:09.the EU, none of that can happen until the three divorce issues have
:18:10. > :18:13.been sorted out, that is, the money, the compensation package, the status
:18:14. > :18:20.of the land border between Northern Ireland and Ireland, and the third
:18:21. > :18:25.one, which is the status of EU citizens in the UK and vice-versa.
:18:26. > :18:31.Do you accept that? We have just spoken about the first, I think
:18:32. > :18:34.there will be arbitration on money. Ireland is a British priority as
:18:35. > :18:39.well. They are our closest neighbour and we all have an interest in
:18:40. > :18:45.wanting peace and prosperity in northern Ireland. We don't want to
:18:46. > :18:54.stabilisation. That is not just an EU priority. The point is... We are
:18:55. > :18:57.talking about... The Irish prime ministers said they are not
:18:58. > :19:03.satisfied with the progress made so far. Since he said that, we have
:19:04. > :19:07.come up with two very practical, workable ways of not having an
:19:08. > :19:16.obstructive land border in Ireland. One is to have a kind of, we will
:19:17. > :19:24.involve the EU tariff, and we can also work with dismantling the
:19:25. > :19:31.border check but neither of those... It is this old message again, it
:19:32. > :19:36.takes two to make a deal. The Irish and the commission and many other
:19:37. > :19:40.European leaders, whether it be on Ireland or the British government's
:19:41. > :19:44.rather convoluted take on customs and tariffs, the Europeans are not
:19:45. > :19:53.buying what the British are offering. On Ireland, we have said,
:19:54. > :20:00.even if neither of those schemes is accepted by the EU, we will not
:20:01. > :20:05.employs physical border tax -- impose. But it leads to the very
:20:06. > :20:09.important question of what kind of trade deal we get with the EU. You
:20:10. > :20:14.can't discuss Ireland in isolation unless you are also talking with
:20:15. > :20:18.some idea of what the eventual customs and tariff arrangements
:20:19. > :20:23.between the EU and the UK will be. You can't say this is a completely
:20:24. > :20:27.separate issue that we will talk about, and then we will come onto
:20:28. > :20:36.the broader one. Likewise with money. If we put in money for the
:20:37. > :20:40.sake of good will and to have a deal, we need to know what that deal
:20:41. > :20:46.is going to be. The issues are going to have to be discussed in parallel.
:20:47. > :20:52.You said, fundamentally, leaving the EU is about democracy. Concentrating
:20:53. > :20:58.on that, Tony Blair, an opponent of yours who believes Britain is better
:20:59. > :21:04.off inside the EU, he said, people may decide that they actually don't
:21:05. > :21:08.want to leave on the terms set out. There has to be some way, either
:21:09. > :21:12.through Parliament or an election, possibly another referendum, in
:21:13. > :21:20.which people are able to express their view. As a Democrat, who sees
:21:21. > :21:25.this as fundamentally about an argument in the UK, would you agree?
:21:26. > :21:30.There is no evidence that what he has said has happened. We have had a
:21:31. > :21:35.general election... The Democratic case for letting the British people,
:21:36. > :21:40.either in a parliamentary vote or in a direct referendum, have a say when
:21:41. > :21:44.the outline of the deal is done? The only justification for another
:21:45. > :21:50.referendum would be if it were on a different question. If there were
:21:51. > :21:55.substantively different deals from the one that they've read Cameron
:21:56. > :22:00.negotiated in February last year. If that were to happen, if a looser
:22:01. > :22:06.arrangement... That would be different. But you know as well as I
:22:07. > :22:15.that that is not happening. It is quite surprising it hasn't happened.
:22:16. > :22:18.I expected that, but I don't know what is going to happen next. I
:22:19. > :22:24.don't think you can make those predictions. We do have to accept
:22:25. > :22:29.the outcome. The idea that they would be taking this line that they
:22:30. > :22:35.have taken if it had gone the other way, it is absurd. Thinking one last
:22:36. > :22:41.time about what might happen next, I have talked about unpredictability.
:22:42. > :22:45.It is clear that the Conservatives are deeply split on the European
:22:46. > :22:51.issue. There are people in it who have said, openly, I would be
:22:52. > :22:56.betraying my principles if I didn't make it clear that country comes
:22:57. > :23:01.before party. One MP has said that, if the hard Brexit option is pursued
:23:02. > :23:06.by her own government, she would leave the Tory party. This could
:23:07. > :23:12.split your party? I hope all politicians would ultimately put
:23:13. > :23:18.country before party. If not, they need to ask some hard questions. All
:23:19. > :23:24.the parties were split by the referendum. The majority of
:23:25. > :23:30.Conservative MPs voted Remained, and a minority voted leave. Since the
:23:31. > :23:36.referendum, the MPs who voted remain have behaved with exemplary
:23:37. > :23:42.Democratic respect. They did not try to argue, they accepted the outcome.
:23:43. > :23:45.They said, if this is the instruction from the British people,
:23:46. > :23:50.let's try to make it successful. There is a legitimate argument about
:23:51. > :23:58.the terms of Brexit, which parts we keep, how much we shadow what the EU
:23:59. > :24:05.is doing. We should welcome the input from any interested parties.
:24:06. > :24:11.But the fact of leaving the EU, having the supremacy of British law,
:24:12. > :24:16.that is no longer in question. We have to end there. Thank you for
:24:17. > :24:41.being on HARDtalk Thank you very much, Daniel. -- HARDtalk.
:24:42. > :24:44.Yesterday was a pretty humid day, wasn't it?