:00:12. > :00:19.Hello and welcome to HARDtalk, I'm sure they. It's the divorce of the
:00:20. > :00:23.century but who will pay the bill? As the UK negotiates its exit from
:00:24. > :00:27.the European Union, the optimists believe it can reshape local trade,
:00:28. > :00:32.freeing it from the barriers to outsiders that any customs union of
:00:33. > :00:35.group of countries creates. That task is harder, though, because
:00:36. > :00:38.British running as the Theresa May threw away her parliamentary
:00:39. > :00:42.majority in a General Election that's left the government severely
:00:43. > :00:47.weakened. My guest today Nicky Morgan is worried about Brexit, and
:00:48. > :00:51.indeed opposed it, and her view matters, not just because she used
:00:52. > :00:55.to be in the British Cabinet but because she has taken the chair of
:00:56. > :00:58.one of the UK's most important watchdogs, the Treasury Select
:00:59. > :01:01.Committee. She has described herself as an insurgent, who or what is she
:01:02. > :01:32.prepared to overthrow? Nicky Morgan, welcome to HARDtalk.
:01:33. > :01:35.After you were dismissed from the Cabinet by Theresa May when she
:01:36. > :01:38.became Prime Minister you said I'm revelling in being part of the
:01:39. > :01:43.awkward squad. Should the government be worried? Thank you first of all
:01:44. > :01:48.for having me. I think when you're released if you like from the bounce
:01:49. > :01:51.of collective responsibility it's nice to be able to ask the questions
:01:52. > :01:55.from the backbenches that you otherwise couldn't have asked. Yes,
:01:56. > :01:59.I think as you said in your introduction, Brexit is a huge deal
:02:00. > :02:03.for this country in so many different ways and I think there are
:02:04. > :02:07.a lot of us who have many questions still to be answered at we'll do
:02:08. > :02:10.that and the more you put former ministers onto back benches and into
:02:11. > :02:16.select committees, we know how government works, we know which
:02:17. > :02:19.buttons to press. You are in the, a sense the people who have motive and
:02:20. > :02:24.opportunity because you're not worried about chances of promotion
:02:25. > :02:28.any more, you said you're not interested in sucking up to anybody,
:02:29. > :02:33.you're the insurgents now. It's about asking those questions... Is
:02:34. > :02:39.it because you want to halt and reverse Brexit? Look, I don't renege
:02:40. > :02:43.from the fact I was a committed campaigner for the remains I'd the
:02:44. > :02:46.debate. You accept it's going to happen, no second referendum? I'm
:02:47. > :02:57.not in favour of a second referendum. -- remains side. I think
:02:58. > :03:01.we have a situation now that needs to be negotiated in the national
:03:02. > :03:05.interests above the point is, and I think this Brexit issue if you like
:03:06. > :03:09.has put before politicians that question of country before party or
:03:10. > :03:13.which way does it work in a way that I haven't seen, certainly I've been
:03:14. > :03:17.in Parliament for seven years, I've been involved in the Conservative
:03:18. > :03:20.Party for 28 years, I haven't seen that question put in this way
:03:21. > :03:24.before. This is fundamental stuff that affects not just internal
:03:25. > :03:27.political British life but has implications for the national
:03:28. > :03:32.interest and potentially for Europe and even beyond that? Absolutely,
:03:33. > :03:35.one of the reasons I was a committed Remain campaigner was our
:03:36. > :03:41.geopolitical place in the world, we had more power and influence being
:03:42. > :03:45.influential in the EU, that's what our allies around the world wanted
:03:46. > :03:48.us to be. Look, that's not going to be the case, we're still going to
:03:49. > :03:52.have a deep and special Prutton ship, as the Prime Minister says,
:03:53. > :03:56.with Europe. The Prime Minister hopes that will be the case and that
:03:57. > :04:00.depends on negotiations which began again before we were speaking a
:04:01. > :04:03.couple of days. You've asked for further information from the Bank of
:04:04. > :04:07.England about the invocations of Brexit but you're not exactly asking
:04:08. > :04:15.a neutral player. Mark Carney, the governor of the bank, was heavily
:04:16. > :04:20.criticised about... Many of which have not come to place. In a sense
:04:21. > :04:23.he's one of the experts your Cabinet colleague, former Cabinet colleague
:04:24. > :04:28.Michael Gove said the British had heard enough from. There was a whole
:04:29. > :04:35.point behind that, it was shortened to we're not listening to experts
:04:36. > :04:38.now. I think Mark Carney, the bag of England governor, was right to warn
:04:39. > :04:42.of the potential consequences -- Bank of England. Of course at the
:04:43. > :04:47.moment Brexit hasn't happened and we are some way from that split,
:04:48. > :04:51.expected in March, 2019. I think we're beginning to see that working
:04:52. > :04:55.its way through the economy. Even the questions you're posing our kind
:04:56. > :04:58.of loaded, aren't they? You talk about the cliff edge facing
:04:59. > :05:02.businesses when we leave, it's going to be in your view a cliff edge
:05:03. > :05:06.we're going to be dropping off. It's a cause for concern. You say the
:05:07. > :05:14.risks of the EU not agreeing a divorce agreement with Britain views
:05:15. > :05:18.on the... This is Nicky Morgan who wanted to remain in the EU revelling
:05:19. > :05:23.in being the awkward squad, to quote your words. I think you are able, as
:05:24. > :05:29.a politician, I'm a former lawyer as well, to take on the role as a chair
:05:30. > :05:32.of a Select Committee. You are there to hold government accountable to
:05:33. > :05:36.Parliament. Parliament is going to be hugely important in this process,
:05:37. > :05:40.we're asking the questions our constituents want us to ask. But I
:05:41. > :05:44.think anybody that thinks Brexit is going to be easy and painless has
:05:45. > :05:48.not been straight with the British public. These things are always
:05:49. > :05:53.doable, there will be a negotiation, I very much expect that there will
:05:54. > :05:58.be an end a deal, but it's going to be bumpy and people are realising
:05:59. > :06:03.that. What do you make of how the European Union is handling these
:06:04. > :06:06.negotiations? A couple of days ago Jean-Claude Juncker, president of
:06:07. > :06:10.the commission, said he's seen all the proposition papers the British
:06:11. > :06:15.government submitted in the summer, a substantial pile of papers, and he
:06:16. > :06:20.said none of them is satisfactory. It's to be expected. I was EU budget
:06:21. > :06:25.Minister for a while a couple of years ago and EU negotiations, both
:06:26. > :06:28.sides often dance around a bit and a deal is done often towards the end
:06:29. > :06:33.of the allotted time. I wouldn't expect any less or any more from the
:06:34. > :06:37.EU at the moment. On those position papers, though, I do have to wonder
:06:38. > :06:41.that it's good to see the details and the clarity that we now have but
:06:42. > :06:45.there's a lot still to be resolved. I do wonder how it's taken 12 months
:06:46. > :06:49.to get to that particular level of detail. I think a Select Committee
:06:50. > :06:53.chairmen like me and Parliament will ask for a lot more detail. British
:06:54. > :06:56.ministers can be expected to be hauled in front of you more
:06:57. > :07:00.frequently than over the last year or so by the previous committee? The
:07:01. > :07:05.previous committees have been very active already but there was plenty
:07:06. > :07:09.of cross-examination and I think committees like mine and others
:07:10. > :07:13.won't just be focusing on our own ministers if you like, normally the
:07:14. > :07:17.Treasury Select Committee would quiz Treasury ministers, but they will
:07:18. > :07:21.also go further and there may well be other relevant enquiries where we
:07:22. > :07:25.will ask in other ministers too because Brexit is such a big thing,
:07:26. > :07:29.it crosses so much of government. Would you like to hear from the
:07:30. > :07:32.Prime Minister because in a sense she embodies the whole government.
:07:33. > :07:36.The chairs of the Select Committee are part of a bigger committee
:07:37. > :07:40.called the liaison committee that quizzes the Prime Minister twice a
:07:41. > :07:46.year at least so I would expect at least that Brexit will come up in
:07:47. > :07:50.the next liaison committee meeting. In terms of the particular
:07:51. > :07:53.proposals, there's prostration not on the British side only, the
:07:54. > :07:57.Association of German Chambers of commerce and industry said in the
:07:58. > :08:01.course of this week that politicians need to put shared economic
:08:02. > :08:05.interests first -- frustration. It's really worried about the delays in
:08:06. > :08:09.this process, it says it wants a temporary customs arrangement with
:08:10. > :08:13.Britain for this transition period. Do you share that ambition that they
:08:14. > :08:17.should at least have something in place very soon so that we are then
:08:18. > :08:20.able to prepare the ground for the 31st of March and that businesses
:08:21. > :08:25.don't find something that will almost change overnight? One of the
:08:26. > :08:28.important moves this summer, and exceptions from the British
:08:29. > :08:32.government that there will be a transition period asked for -- an
:08:33. > :08:36.acceptance. We don't know what the EU will offer up. It's very
:08:37. > :08:40.important to listen to the voice of business, not least because they are
:08:41. > :08:44.critical to a strong economy, they are employers and I think it's very
:08:45. > :08:47.encouraging to hear the views of German business as well and they
:08:48. > :08:51.will no doubt be talking to their own government. I think the issue
:08:52. > :08:57.is, although we haven't technically until March, 2019 actually... It
:08:58. > :09:00.will be before that period when the negotiations end because there has
:09:01. > :09:04.to be time for the EU and UK parliaments to approve the final
:09:05. > :09:09.agreements. We also know, and I'll be asking for further evidence on
:09:10. > :09:11.this, that British businesses, particularly financial institutions,
:09:12. > :09:15.are going to make decisions within the next few months, if not weeks,
:09:16. > :09:19.about where they're going to locate, where their employees are going to
:09:20. > :09:26.be, how they set themselves up in Europe going forward, so we don't
:09:27. > :09:30.have 18 months, I think we probably have a matter of six to seven months
:09:31. > :09:34.to really get to the nub of this. Those are options, of course they're
:09:35. > :09:37.going to look at what we would do if Britain actually were to be unable
:09:38. > :09:41.to agree a deal with the European Union, that's entirely prudent. It's
:09:42. > :09:44.a bit like the UK businesses that were considering leaving Scotland if
:09:45. > :09:49.Scotland had voted to leave. Now here we are going to leave but
:09:50. > :09:54.that's not to say there's not going to be an arrangement. Let me put to
:09:55. > :10:05.you what Jarryd Lyons said, the people who backed Brexit said in the
:10:06. > :10:12.sun in August, he said that the City of London is the best. The threat is
:10:13. > :10:16.moving elsewhere. It's not Europe, Amsterdam, Frankfurt, it's not
:10:17. > :10:21.Paris, much as they would would wish it was. To follow a famous phrase,
:10:22. > :10:25.he would say that, wouldn't he, given his views. He used to work
:10:26. > :10:29.with your colleague, the Foreign Secretary Boris Johnson. We know
:10:30. > :10:33.which side Boris is on in the referendum debate. We the point is
:10:34. > :10:38.there I number of differences, we know some of the banks are looking
:10:39. > :10:42.seriously at Frankfurt, we know Paris is on manoeuvres to tempt
:10:43. > :10:45.business overseas and we know businesses are preparing. Your right
:10:46. > :10:49.to say of course everyone hopes we don't get to a cliff edge no deal
:10:50. > :10:53.scenario but they have to prepare for the worst-case and making
:10:54. > :10:58.decisions employment, finding the local regulatory licenses, those
:10:59. > :11:03.take months, not weeks, not days, so people are preparing. One Hoggies
:11:04. > :11:07.colleagues, Professor Patrick Minford, said Brexit can be compared
:11:08. > :11:11.to the event that gave birth to your modern political party, the repeal
:11:12. > :11:14.of the corn laws and he says we should simply abolish trade barriers
:11:15. > :11:22.without asking others to do the same, just as we did in 1846 when
:11:23. > :11:25.Sir Robert Peel, that revolutionary insurgent in UK politics, basically
:11:26. > :11:29.abandoned the pricey form of protectionism that kept up the price
:11:30. > :11:34.of corn when farmers in Britain were under pressure. It reduced the price
:11:35. > :11:37.of fruit, it helped stimulate the Industrial Revolution, never mind
:11:38. > :11:41.changing the whole political dynamic and arguably providing the base on
:11:42. > :11:45.which the Conservative Party still thrives, the party of free trade and
:11:46. > :11:49.enterprise. Patrick mentored was one of the people who said during the
:11:50. > :11:53.report into the referendum said it would be OK if manufacturing
:11:54. > :11:57.disappeared -- Patrick Minford. I know as an MP representing a
:11:58. > :12:04.manufacturing area that that would not be a good thing for local or
:12:05. > :12:08.national economies. The other thing is a lot of this debate is we would
:12:09. > :12:12.like this or that, we would like no tariffs but what are the other
:12:13. > :12:15.markets going to do? The moment and other market puts up a tariff or
:12:16. > :12:19.barrier then the response from our businesses, different sectors, will
:12:20. > :12:22.be the UK needs to do the same. I think to actually expect there to be
:12:23. > :12:26.unlimited free trade is not actually... It doesn't really
:12:27. > :12:30.reflect the world we live in in the 21st-century. You're worried a world
:12:31. > :12:33.in which Donald Trump for example has been so critical of free trade
:12:34. > :12:37.and the consequences of free trade for many people who have lost out is
:12:38. > :12:42.not actually world in which that bright scenario for Britain beckons.
:12:43. > :12:47.I think at the end of the day we will, as I said before, it will be
:12:48. > :12:50.bumpy for a while, there will be a future for Britain, many people are
:12:51. > :12:54.confident it will be a bright future and I hope that's absolutely the
:12:55. > :12:58.case. You don't want to play Cassandra in this role as chairman
:12:59. > :13:02.of the Select Committee? If you're always sounding the alarm that
:13:03. > :13:06.people are dealing with that the part of the debate than elsewhere.
:13:07. > :13:11.That's what Britain expects us to do but also we need to be realistic.
:13:12. > :13:15.Looking forward, in a strange way we appear in terms of the politics of
:13:16. > :13:18.your party to have gone backwards, some of the decisions which were the
:13:19. > :13:23.slow acting poison which arguably almost destroyed it 20 years ago and
:13:24. > :13:28.put it in opposition for a decade appear to be back. In the words of
:13:29. > :13:36.your former leader David Cameron, is the party destined to bang on about
:13:37. > :13:39.Europe for another decade again? I hope not, Europe has been a fault
:13:40. > :13:42.line running through the Conservative Party for a long time
:13:43. > :13:46.now, with all the time I've been involved in politics and many others
:13:47. > :13:49.as well. Having had the referendum we now don't have the voices saying
:13:50. > :13:53.we've got to leave the EU, it's going to happen, so we have to
:13:54. > :13:57.negotiate in the national interests and get the best possible deal for
:13:58. > :14:00.the country. But I think one of the other challenges is going to be, and
:14:01. > :14:04.perhaps in this autumn ahead, we have our party conference coming up,
:14:05. > :14:07.is how the Prime Minister and ministers set out what else the
:14:08. > :14:12.Conservative Party in government is going to be doing because that's
:14:13. > :14:16.very important. The danger is the whole oxygen of Whitehall is sucked
:14:17. > :14:19.into this whole Brexit debate and that's inevitable because it's very
:14:20. > :14:23.big, very challenging and complex but actually we know there are many
:14:24. > :14:26.other reasons and issues people want us to tackle and many reasons why
:14:27. > :14:31.people voted to leave in the referendum which would be solved by
:14:32. > :14:35.Brexit. Those policy ideas to tackle those issues, for example lack of
:14:36. > :14:39.employment opportunities or poor education in parts of the country,
:14:40. > :14:45.have to be dealt with by government departments at the same time.
:14:46. > :14:53.I wonder how much opportunity there will be in Parliament did that. You
:14:54. > :14:58.can't forget the deal that was me with the Democratic Unionist Party
:14:59. > :15:02.to get some sort of majority. It would only take some people to
:15:03. > :15:06.rebel, perhaps people like yourself, who are supporters of the EU, for
:15:07. > :15:11.the whole process to be slowed down. There is a little riskier, it
:15:12. > :15:15.actually, it is in their? That this could become the dominant issue for
:15:16. > :15:20.the next 18 months, and everything is crowded back. There is a huge
:15:21. > :15:24.risk that this becomes a huge issue and the only issue that is talked
:15:25. > :15:28.about. I think that is wrong for a number of reasons. There is a big
:15:29. > :15:36.issue is that I think people expect us to tackle. Some people think, you
:15:37. > :15:40.know, the referendum happened in June 2006 in the way they still talk
:15:41. > :15:48.about it? But it would also be bad news for the Conservative Party. Let
:15:49. > :15:53.me ask you, though, your colleague, Anna Soubry, who was a supporter of
:15:54. > :15:59.remain, a former minister sacked by Theresa May, she wrote an article
:16:00. > :16:04.this month saying could she see herself joining with people who were
:16:05. > :16:08.like-minded and wanted to say the country from an appalling Brexit?
:16:09. > :16:12.She said at the moment, not now, but it is not impossible. If you have
:16:13. > :16:17.people like that same ultimately I could work against my party or leave
:16:18. > :16:24.it, that adds to the instability, does it? If people like Anna Soubry
:16:25. > :16:32.felt the party was not for them, that would be a shame. She is a
:16:33. > :16:36.committed worker, she was in Cabinet and now in Parliament. But this is
:16:37. > :16:41.not an issue that is just entirely academic. It is not entirely
:16:42. > :16:44.academic. It is such a huge and important issue for the country by
:16:45. > :16:48.the next generations, and people feel strongly about it. But it also
:16:49. > :16:52.goes back to the leadership of my party and make it clear that the
:16:53. > :16:56.Conservative Party is and remains a broad church on this issue and
:16:57. > :17:02.others. There could be differing views, but there are a space for
:17:03. > :17:08.everybody. You need people like Anna Soubry, who is a talented East
:17:09. > :17:16.Midlands politician, to work for us. Your seat, the seat you represent,
:17:17. > :17:22.and her seat, also in the Midlands, these were Labour held seats. You
:17:23. > :17:26.had to convince people, so you don't feel they are guaranteed to see
:17:27. > :17:32.conservative in the next election? People changed their minds in
:17:33. > :17:35.marginal seats. In order to win a marginal seat, it is about building
:17:36. > :17:41.a coalition of voters, persuading them of the - of your cause, that
:17:42. > :17:44.they want to support your party at this time. So you are always
:17:45. > :17:48.conscious that this is not to last forever. The Conservative Party is
:17:49. > :17:52.or is thinking about a message that will appeal to those voters in the
:17:53. > :17:56.middle. And the we are better when we appeal to the centre ground. But
:17:57. > :18:00.I don't think that people like me, like Anna Soubry, it should feel
:18:01. > :18:04.that the Conservative Party does not have a place for us. I think I'll be
:18:05. > :18:11.a mistake in terms of appealing to the broad collection of voters that
:18:12. > :18:20.we need to. The former Chancellor of the Exchequer, George Osborne,
:18:21. > :18:30.dismissed Theresa May with a little relish as a dabble in walking. I had
:18:31. > :18:34.the pleasure of working with him in the Treasury. He was good to work
:18:35. > :18:38.for. In terms of leadership, it is a false air and to predict how long
:18:39. > :18:42.somebody will last all who will take over, and everything else. I have
:18:43. > :18:46.been clear, and I don't think Theresa May is the right person to
:18:47. > :18:53.text of the next election. And think everybody in the Conservative Party
:18:54. > :18:56.is not the election that we sought or expected. It is could be harder
:18:57. > :19:01.because we don't have the majority, in terms of putting our programme of
:19:02. > :19:08.government through. Theresa May was asked by BBC week, is it your
:19:09. > :19:12.intention to lead the party into the next election? And her answer was
:19:13. > :19:18.yes, she is ever the long-term. It is difficult to predict what is
:19:19. > :19:21.ahead. I feel that there were mistakes made in the general
:19:22. > :19:26.election campaign. There was a focus very much on one person, which are
:19:27. > :19:29.think is a mistake, because I think the Conservative Party as a team.
:19:30. > :19:33.There were mistakes in the way the manifesto was handled. But also know
:19:34. > :19:36.that no leader wants to put a date on their departure in advance. David
:19:37. > :19:48.Cameron found it difficult when he said he was going to go. He said
:19:49. > :19:52.halfway through a Parliament, and it signed his own mortality. She said
:19:53. > :20:00.whatever she might have felt a few months ago, in immediate aftermath
:20:01. > :20:04.of the election, after saying that she took responsibility, she is now
:20:05. > :20:08.saying, stuff you, I can carry on. Can she carry onto the next
:20:09. > :20:13.election? Would she be comfortable that would be comfortable carrying
:20:14. > :20:20.on under Theresa May into the next election? Jurak I was stand on a
:20:21. > :20:29.Conservative platform... I think has had a difficult first year as
:20:30. > :20:36.primers. -- I would stand on a Conservative platform. Labour's vote
:20:37. > :20:43.went up to the highest it has had since 1945! It didn't win, because
:20:44. > :20:52.your majority! I think I have the highest vote share of Conservatives
:20:53. > :20:57.that we have had... As I say, you can't get away... What could she say
:20:58. > :21:02.they could make are acceptable as a leader for the next election? I
:21:03. > :21:07.think one of the things it has been missing is an attempt, not an
:21:08. > :21:10.attempt, but a real move to reconcile the fault lines in the
:21:11. > :21:15.Conservative Party, which are typically shown up by Europe. So,
:21:16. > :21:18.for example, in the autumn of last year, there was an attempt to
:21:19. > :21:23.sideline the 48%, people like me, who had voted Remain, and were going
:21:24. > :21:31.all out Brexit. I think the election result put a brake on that. I have
:21:32. > :21:34.been clear in articles. I think things are changing, and it is
:21:35. > :21:38.important that they do, in terms of bringing United party together. If
:21:39. > :21:48.the Prime Minister and the Cabinet were able to do that, build a strong
:21:49. > :21:51.parliament that would be a step forward. The Evening Standard
:21:52. > :21:56.newspaper in London, which should say is edited by George Osborne
:21:57. > :22:00.wrote an interesting article a few days go, talking about the feeling
:22:01. > :22:06.that the party was out of step, particularly with young voters. It
:22:07. > :22:13.quoted some unnamed Tory MPs. The thing is, the Tories to represent
:22:14. > :22:17.us. The generational tops, David Davis, at Boris Johnson, they are
:22:18. > :22:23.bluffers. We do want lovers. There is a real dismay at the mediocrity
:22:24. > :22:29.of Theresa May's team. And they write about that. -- we don't want
:22:30. > :22:36.bluffers. I think you have to keep all Cabinet is - look, I had my
:22:37. > :22:41.review period. I was handed me at P45. I think every body has a shelf
:22:42. > :22:46.life. I think need to make sure that a team holds together and let you
:22:47. > :22:52.all work together and support each other. But if you change the faces
:22:53. > :22:56.around the tables, just for the sake of it, that is a mistake. She has
:22:57. > :23:03.moved a lot of people into different jobs, but she didn't bring in any
:23:04. > :23:10.new blood. Will a reshuffle... That is why the privacy can't stay in
:23:11. > :23:14.office forever. Isn't it? I think just in terms of younger voters, I
:23:15. > :23:18.think thinking about it, we need to think is a party how we will appeal.
:23:19. > :23:24.The trouble is, if you look at the way that the boat is backed up, we
:23:25. > :23:29.have a lot of old people, not so many young. And the older dying off,
:23:30. > :23:35.and the younger, there will be more and more of them. Of course. And you
:23:36. > :23:39.need to have views and policies and so on that appeal to the young
:23:40. > :23:43.generation. That means the Promina said Mr bring in new people, we
:23:44. > :23:47.should not be afraid of that. But also go back to where we started, we
:23:48. > :23:53.have this massive challenge Brexit. And we have to deal with that in the
:23:54. > :23:55.national interest. Nicky Morgan, thank you very much for being on
:23:56. > :24:23.HARDtalk. Thank you. We're moving into the last day
:24:24. > :24:27.of August, but in some places,