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Nicky Morgan - Chair of UK Treasury Select Committee

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Hello and welcome to HARDtalk, I'm sure they. It's the divorce of the

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century but who will pay the bill? As the UK negotiates its exit from

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the European Union, the optimists believe it can reshape local trade,

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freeing it from the barriers to outsiders that any customs union of

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group of countries creates. That task is harder, though, because

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British running as the Theresa May threw away her parliamentary

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majority in a General Election that's left the government severely

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weakened. My guest today Nicky Morgan is worried about Brexit, and

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indeed opposed it, and her view matters, not just because she used

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to be in the British Cabinet but because she has taken the chair of

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one of the UK's most important watchdogs, the Treasury Select

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Committee. She has described herself as an insurgent, who or what is she

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prepared to overthrow? Nicky Morgan, welcome to HARDtalk.

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After you were dismissed from the Cabinet by Theresa May when she

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became Prime Minister you said I'm revelling in being part of the

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awkward squad. Should the government be worried? Thank you first of all

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for having me. I think when you're released if you like from the bounce

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of collective responsibility it's nice to be able to ask the questions

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from the backbenches that you otherwise couldn't have asked. Yes,

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I think as you said in your introduction, Brexit is a huge deal

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for this country in so many different ways and I think there are

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a lot of us who have many questions still to be answered at we'll do

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that and the more you put former ministers onto back benches and into

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select committees, we know how government works, we know which

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buttons to press. You are in the, a sense the people who have motive and

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opportunity because you're not worried about chances of promotion

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any more, you said you're not interested in sucking up to anybody,

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you're the insurgents now. It's about asking those questions... Is

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it because you want to halt and reverse Brexit? Look, I don't renege

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from the fact I was a committed campaigner for the remains I'd the

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debate. You accept it's going to happen, no second referendum? I'm

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not in favour of a second referendum. -- remains side. I think

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we have a situation now that needs to be negotiated in the national

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interests above the point is, and I think this Brexit issue if you like

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has put before politicians that question of country before party or

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which way does it work in a way that I haven't seen, certainly I've been

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in Parliament for seven years, I've been involved in the Conservative

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Party for 28 years, I haven't seen that question put in this way

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before. This is fundamental stuff that affects not just internal

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political British life but has implications for the national

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interest and potentially for Europe and even beyond that? Absolutely,

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one of the reasons I was a committed Remain campaigner was our

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geopolitical place in the world, we had more power and influence being

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influential in the EU, that's what our allies around the world wanted

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us to be. Look, that's not going to be the case, we're still going to

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have a deep and special Prutton ship, as the Prime Minister says,

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with Europe. The Prime Minister hopes that will be the case and that

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depends on negotiations which began again before we were speaking a

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couple of days. You've asked for further information from the Bank of

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England about the invocations of Brexit but you're not exactly asking

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a neutral player. Mark Carney, the governor of the bank, was heavily

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criticised about... Many of which have not come to place. In a sense

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he's one of the experts your Cabinet colleague, former Cabinet colleague

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Michael Gove said the British had heard enough from. There was a whole

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point behind that, it was shortened to we're not listening to experts

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now. I think Mark Carney, the bag of England governor, was right to warn

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of the potential consequences -- Bank of England. Of course at the

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moment Brexit hasn't happened and we are some way from that split,

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expected in March, 2019. I think we're beginning to see that working

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its way through the economy. Even the questions you're posing our kind

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of loaded, aren't they? You talk about the cliff edge facing

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businesses when we leave, it's going to be in your view a cliff edge

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we're going to be dropping off. It's a cause for concern. You say the

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risks of the EU not agreeing a divorce agreement with Britain views

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on the... This is Nicky Morgan who wanted to remain in the EU revelling

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in being the awkward squad, to quote your words. I think you are able, as

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a politician, I'm a former lawyer as well, to take on the role as a chair

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of a Select Committee. You are there to hold government accountable to

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Parliament. Parliament is going to be hugely important in this process,

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we're asking the questions our constituents want us to ask. But I

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think anybody that thinks Brexit is going to be easy and painless has

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not been straight with the British public. These things are always

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doable, there will be a negotiation, I very much expect that there will

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be an end a deal, but it's going to be bumpy and people are realising

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that. What do you make of how the European Union is handling these

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negotiations? A couple of days ago Jean-Claude Juncker, president of

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the commission, said he's seen all the proposition papers the British

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government submitted in the summer, a substantial pile of papers, and he

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said none of them is satisfactory. It's to be expected. I was EU budget

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Minister for a while a couple of years ago and EU negotiations, both

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sides often dance around a bit and a deal is done often towards the end

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of the allotted time. I wouldn't expect any less or any more from the

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EU at the moment. On those position papers, though, I do have to wonder

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that it's good to see the details and the clarity that we now have but

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there's a lot still to be resolved. I do wonder how it's taken 12 months

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to get to that particular level of detail. I think a Select Committee

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chairmen like me and Parliament will ask for a lot more detail. British

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ministers can be expected to be hauled in front of you more

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frequently than over the last year or so by the previous committee? The

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previous committees have been very active already but there was plenty

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of cross-examination and I think committees like mine and others

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won't just be focusing on our own ministers if you like, normally the

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Treasury Select Committee would quiz Treasury ministers, but they will

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also go further and there may well be other relevant enquiries where we

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will ask in other ministers too because Brexit is such a big thing,

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it crosses so much of government. Would you like to hear from the

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Prime Minister because in a sense she embodies the whole government.

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The chairs of the Select Committee are part of a bigger committee

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called the liaison committee that quizzes the Prime Minister twice a

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year at least so I would expect at least that Brexit will come up in

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the next liaison committee meeting. In terms of the particular

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proposals, there's prostration not on the British side only, the

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Association of German Chambers of commerce and industry said in the

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course of this week that politicians need to put shared economic

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interests first -- frustration. It's really worried about the delays in

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this process, it says it wants a temporary customs arrangement with

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Britain for this transition period. Do you share that ambition that they

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should at least have something in place very soon so that we are then

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able to prepare the ground for the 31st of March and that businesses

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don't find something that will almost change overnight? One of the

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important moves this summer, and exceptions from the British

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government that there will be a transition period asked for -- an

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acceptance. We don't know what the EU will offer up. It's very

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important to listen to the voice of business, not least because they are

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critical to a strong economy, they are employers and I think it's very

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encouraging to hear the views of German business as well and they

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will no doubt be talking to their own government. I think the issue

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is, although we haven't technically until March, 2019 actually... It

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will be before that period when the negotiations end because there has

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to be time for the EU and UK parliaments to approve the final

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agreements. We also know, and I'll be asking for further evidence on

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this, that British businesses, particularly financial institutions,

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are going to make decisions within the next few months, if not weeks,

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about where they're going to locate, where their employees are going to

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be, how they set themselves up in Europe going forward, so we don't

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have 18 months, I think we probably have a matter of six to seven months

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to really get to the nub of this. Those are options, of course they're

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going to look at what we would do if Britain actually were to be unable

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to agree a deal with the European Union, that's entirely prudent. It's

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a bit like the UK businesses that were considering leaving Scotland if

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Scotland had voted to leave. Now here we are going to leave but

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that's not to say there's not going to be an arrangement. Let me put to

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you what Jarryd Lyons said, the people who backed Brexit said in the

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sun in August, he said that the City of London is the best. The threat is

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moving elsewhere. It's not Europe, Amsterdam, Frankfurt, it's not

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Paris, much as they would would wish it was. To follow a famous phrase,

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he would say that, wouldn't he, given his views. He used to work

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with your colleague, the Foreign Secretary Boris Johnson. We know

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which side Boris is on in the referendum debate. We the point is

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there I number of differences, we know some of the banks are looking

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seriously at Frankfurt, we know Paris is on manoeuvres to tempt

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business overseas and we know businesses are preparing. Your right

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to say of course everyone hopes we don't get to a cliff edge no deal

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scenario but they have to prepare for the worst-case and making

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decisions employment, finding the local regulatory licenses, those

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take months, not weeks, not days, so people are preparing. One Hoggies

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colleagues, Professor Patrick Minford, said Brexit can be compared

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to the event that gave birth to your modern political party, the repeal

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of the corn laws and he says we should simply abolish trade barriers

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without asking others to do the same, just as we did in 1846 when

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Sir Robert Peel, that revolutionary insurgent in UK politics, basically

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abandoned the pricey form of protectionism that kept up the price

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of corn when farmers in Britain were under pressure. It reduced the price

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of fruit, it helped stimulate the Industrial Revolution, never mind

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changing the whole political dynamic and arguably providing the base on

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which the Conservative Party still thrives, the party of free trade and

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enterprise. Patrick mentored was one of the people who said during the

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report into the referendum said it would be OK if manufacturing

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disappeared -- Patrick Minford. I know as an MP representing a

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manufacturing area that that would not be a good thing for local or

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national economies. The other thing is a lot of this debate is we would

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like this or that, we would like no tariffs but what are the other

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markets going to do? The moment and other market puts up a tariff or

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barrier then the response from our businesses, different sectors, will

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be the UK needs to do the same. I think to actually expect there to be

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unlimited free trade is not actually... It doesn't really

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reflect the world we live in in the 21st-century. You're worried a world

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in which Donald Trump for example has been so critical of free trade

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and the consequences of free trade for many people who have lost out is

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not actually world in which that bright scenario for Britain beckons.

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I think at the end of the day we will, as I said before, it will be

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bumpy for a while, there will be a future for Britain, many people are

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confident it will be a bright future and I hope that's absolutely the

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case. You don't want to play Cassandra in this role as chairman

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of the Select Committee? If you're always sounding the alarm that

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people are dealing with that the part of the debate than elsewhere.

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That's what Britain expects us to do but also we need to be realistic.

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Looking forward, in a strange way we appear in terms of the politics of

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your party to have gone backwards, some of the decisions which were the

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slow acting poison which arguably almost destroyed it 20 years ago and

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put it in opposition for a decade appear to be back. In the words of

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your former leader David Cameron, is the party destined to bang on about

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Europe for another decade again? I hope not, Europe has been a fault

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line running through the Conservative Party for a long time

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now, with all the time I've been involved in politics and many others

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as well. Having had the referendum we now don't have the voices saying

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we've got to leave the EU, it's going to happen, so we have to

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negotiate in the national interests and get the best possible deal for

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the country. But I think one of the other challenges is going to be, and

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perhaps in this autumn ahead, we have our party conference coming up,

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is how the Prime Minister and ministers set out what else the

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Conservative Party in government is going to be doing because that's

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very important. The danger is the whole oxygen of Whitehall is sucked

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into this whole Brexit debate and that's inevitable because it's very

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big, very challenging and complex but actually we know there are many

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other reasons and issues people want us to tackle and many reasons why

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people voted to leave in the referendum which would be solved by

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Brexit. Those policy ideas to tackle those issues, for example lack of

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employment opportunities or poor education in parts of the country,

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have to be dealt with by government departments at the same time.

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I wonder how much opportunity there will be in Parliament did that. You

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can't forget the deal that was me with the Democratic Unionist Party

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to get some sort of majority. It would only take some people to

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rebel, perhaps people like yourself, who are supporters of the EU, for

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the whole process to be slowed down. There is a little riskier, it

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actually, it is in their? That this could become the dominant issue for

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the next 18 months, and everything is crowded back. There is a huge

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risk that this becomes a huge issue and the only issue that is talked

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about. I think that is wrong for a number of reasons. There is a big

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issue is that I think people expect us to tackle. Some people think, you

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know, the referendum happened in June 2006 in the way they still talk

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about it? But it would also be bad news for the Conservative Party. Let

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me ask you, though, your colleague, Anna Soubry, who was a supporter of

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remain, a former minister sacked by Theresa May, she wrote an article

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this month saying could she see herself joining with people who were

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like-minded and wanted to say the country from an appalling Brexit?

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She said at the moment, not now, but it is not impossible. If you have

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people like that same ultimately I could work against my party or leave

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it, that adds to the instability, does it? If people like Anna Soubry

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felt the party was not for them, that would be a shame. She is a

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committed worker, she was in Cabinet and now in Parliament. But this is

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not an issue that is just entirely academic. It is not entirely

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academic. It is such a huge and important issue for the country by

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the next generations, and people feel strongly about it. But it also

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goes back to the leadership of my party and make it clear that the

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Conservative Party is and remains a broad church on this issue and

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others. There could be differing views, but there are a space for

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everybody. You need people like Anna Soubry, who is a talented East

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Midlands politician, to work for us. Your seat, the seat you represent,

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and her seat, also in the Midlands, these were Labour held seats. You

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had to convince people, so you don't feel they are guaranteed to see

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conservative in the next election? People changed their minds in

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marginal seats. In order to win a marginal seat, it is about building

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a coalition of voters, persuading them of the - of your cause, that

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they want to support your party at this time. So you are always

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conscious that this is not to last forever. The Conservative Party is

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or is thinking about a message that will appeal to those voters in the

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middle. And the we are better when we appeal to the centre ground. But

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I don't think that people like me, like Anna Soubry, it should feel

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that the Conservative Party does not have a place for us. I think I'll be

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a mistake in terms of appealing to the broad collection of voters that

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we need to. The former Chancellor of the Exchequer, George Osborne,

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dismissed Theresa May with a little relish as a dabble in walking. I had

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the pleasure of working with him in the Treasury. He was good to work

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for. In terms of leadership, it is a false air and to predict how long

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somebody will last all who will take over, and everything else. I have

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been clear, and I don't think Theresa May is the right person to

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text of the next election. And think everybody in the Conservative Party

:18:47.:18:53.

is not the election that we sought or expected. It is could be harder

:18:54.:18:56.

because we don't have the majority, in terms of putting our programme of

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government through. Theresa May was asked by BBC week, is it your

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intention to lead the party into the next election? And her answer was

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yes, she is ever the long-term. It is difficult to predict what is

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ahead. I feel that there were mistakes made in the general

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election campaign. There was a focus very much on one person, which are

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think is a mistake, because I think the Conservative Party as a team.

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There were mistakes in the way the manifesto was handled. But also know

:19:30.:19:33.

that no leader wants to put a date on their departure in advance. David

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Cameron found it difficult when he said he was going to go. He said

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halfway through a Parliament, and it signed his own mortality. She said

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whatever she might have felt a few months ago, in immediate aftermath

:19:53.:20:00.

of the election, after saying that she took responsibility, she is now

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saying, stuff you, I can carry on. Can she carry onto the next

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election? Would she be comfortable that would be comfortable carrying

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on under Theresa May into the next election? Jurak I was stand on a

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Conservative platform... I think has had a difficult first year as

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primers. -- I would stand on a Conservative platform. Labour's vote

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went up to the highest it has had since 1945! It didn't win, because

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your majority! I think I have the highest vote share of Conservatives

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that we have had... As I say, you can't get away... What could she say

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they could make are acceptable as a leader for the next election? I

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think one of the things it has been missing is an attempt, not an

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attempt, but a real move to reconcile the fault lines in the

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Conservative Party, which are typically shown up by Europe. So,

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for example, in the autumn of last year, there was an attempt to

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sideline the 48%, people like me, who had voted Remain, and were going

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all out Brexit. I think the election result put a brake on that. I have

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been clear in articles. I think things are changing, and it is

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important that they do, in terms of bringing United party together. If

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the Prime Minister and the Cabinet were able to do that, build a strong

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parliament that would be a step forward. The Evening Standard

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newspaper in London, which should say is edited by George Osborne

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wrote an interesting article a few days go, talking about the feeling

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that the party was out of step, particularly with young voters. It

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quoted some unnamed Tory MPs. The thing is, the Tories to represent

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us. The generational tops, David Davis, at Boris Johnson, they are

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bluffers. We do want lovers. There is a real dismay at the mediocrity

:22:18.:22:23.

of Theresa May's team. And they write about that. -- we don't want

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bluffers. I think you have to keep all Cabinet is - look, I had my

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review period. I was handed me at P45. I think every body has a shelf

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life. I think need to make sure that a team holds together and let you

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all work together and support each other. But if you change the faces

:22:47.:22:52.

around the tables, just for the sake of it, that is a mistake. She has

:22:53.:22:56.

moved a lot of people into different jobs, but she didn't bring in any

:22:57.:23:03.

new blood. Will a reshuffle... That is why the privacy can't stay in

:23:04.:23:10.

office forever. Isn't it? I think just in terms of younger voters, I

:23:11.:23:14.

think thinking about it, we need to think is a party how we will appeal.

:23:15.:23:18.

The trouble is, if you look at the way that the boat is backed up, we

:23:19.:23:24.

have a lot of old people, not so many young. And the older dying off,

:23:25.:23:29.

and the younger, there will be more and more of them. Of course. And you

:23:30.:23:35.

need to have views and policies and so on that appeal to the young

:23:36.:23:39.

generation. That means the Promina said Mr bring in new people, we

:23:40.:23:43.

should not be afraid of that. But also go back to where we started, we

:23:44.:23:47.

have this massive challenge Brexit. And we have to deal with that in the

:23:48.:23:53.

national interest. Nicky Morgan, thank you very much for being on

:23:54.:23:55.

HARDtalk. Thank you. We're moving into the last day

:23:56.:24:23.

of August, but in some places,

:24:24.:24:27.

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