12/12/2012 Newsnight


12/12/2012

Outside Europe. How might Britain fare if it left the European Union? Jeremy Paxman talks to Mayor of London Boris Johnson and other guests.


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Transcript


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It's December 12th, 2020 eight years from now, Britain has left

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the European Union, at least, that's what increasing numbers of

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us seem to want. Some time very soon, David Cameron is going to

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have to tell us What If he our destiny in Europe to be. Will we be

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allowed a vote on the subject? Tonight we explore whether if we

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quit we would be throwing off shackles or crippling ourselves.

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With testimony and argument from those on both sides of the debate.

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We will hear from Paris and the author, Irvine Welsh in Edinburgh.

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What might the future be like, the Mayor of London has his own ideas.

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What we want to do is end the misery and mistrust, and stop

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everybody blaming us for not sharing the zeal of the

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eurofederates. We don't share that zeal. We don't have any ambition to

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pool British sovereignty and create this single state, we don't want to

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do that, give us a new relationship. You stop blaming us for being the

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backmarkers, we stop moaning, and we have a new treaty.

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Latest opinion polls seem to suggest that nearly three-quarters

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of us may want to leave the European Union, or to have a

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different sort of relationship with it. Some time in the very near

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future, the Prime Minister is expected to announce that we will

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be allowed a vote in a referendum on whether to stay in, or get out.

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So, that's what we are exploring tonight. These people, our own

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viable destin -- our only viable destiny is part of the European

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Union project, to these, we have nothing to lose but chains. Quickly,

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what is your position, what do you think if we decide to leave? It is

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a dangerous and cold environment we are in. Prosperity we will not have

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inward investmentors coming into Britain, we won't -- investors

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coming into Britain, and we won't be able to export leasely. We are

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not part of a regional block, we are an isolated country. We are cut

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off from the source of peace and stability in Europe. You think it

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is a Promised Land, don't you? will go on doing business with

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European countries companies as we do now, but smaller percentages.

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Firstly, the European Union is heading for a disaster, and the

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customs free we are trapped in, we will be able to negotiate our own

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deals, the future for Britain should be global, not European.

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run a global company? I try to. The biggest advertising company in the

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world, isn't it. What do you think it will be? I would be worried in

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2020, limited access to 500 million, and access to a $17 trillion dollar

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economy. Limited access to exports and financial services company,

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apart from advertising agencies and the like. We will probably still be

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renegotiating bilateral trade agreements in 2020, eight years on.

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And last, but not least, we will probably have a diminished

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political significance. So, I worry about it in all those context, and

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from the point of view of somebody trying to run a multi national

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company, I'm extremely worried about lack of access. You run a big

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financial house. Yes. Why do you take a contrary view? If I can put

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it simply. If we weren't in, we could actually enjoy the benefit of

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free trade. Which, ironically, we were supposed to have got from a

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Common Market, but we don't, with the remainder of the world. How do

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you think about it? A lot of it depends on the deal that Britain

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gets with the rest of Europe. There is an assumption here, that you

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just show up in Brussels, in a few years time, with a list of demands

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and you pick and choose, we will comply with these EU rules, but not

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those. That deal is not available, if it was available to Britain, it

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would have to be available to all other countries, and a single

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market would unravel. So, I think there is a choice between in or out,

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and if Britain is out, like Martin said, limited access, and very

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importantly, the countries that Britain wants to trade with, China,

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India, they are not natural free traders. They open their markets

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because the juggernaut of the European Union comes along and says

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you get access to our markets. Britain doesn't matter here.

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are Norwegian, and Norway is outside the EU, you think even that

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is too close? Yes, we are in the EU agreement, which is the single

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market. The European economic agreement? It is the single market,

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and we think that is too much, for us. What do you think, supposing

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Britain joined you, which is probably the best we could hope for,

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that we would be in some sort of arrangement, you are shaking your

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head, you can explore that later. We are a big market place for

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Europe, we trade a massive deficit for these countries, �45 billion a

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year. I think in 2020 Britain will be a member of the European Free

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Trade Association. That would be good. We will explore that in depth

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shortly a referendum will reduce our complicated feelings about the

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European Union, to a simple binary choice, in or out. So, back to the

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future. We have asked our Economics Editor, Paul Mason, to sketch out

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the possible consequences of each choice, first off, how leaving the

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EU might be good for you, by the year 2020.

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Here's the scenario, in 2015, in a referendum, Britain votes to leave

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the European Union. Under the Lisbon Treaty, a two-year

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transition process begins. Our MEPs leave the parliament, and

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Britain's EU Commissioner stand down. By the summer of 2017, the

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transition is complete, Britain is out of the single market, the

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Common Agricultural Policy, the Common Fisheries Policy, the

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European Court of Justice. Blue flags disappear from Britain's

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beaches. But what then? It is December 12th, 2020, here is the

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news. The Office for Budget Responsibility today confirmed that

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the for the third year in a row, Britain is growing faster than at

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any time since the Blair era. GDP growth stood at 4%, but the

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Chancellor said inflation remained unacceptably high. Predicting what

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Britain's future might look like, if we left the EU, is difficult,

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because there is no authoritative research. But, if we did leave, and

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growth picked up, what might have gone right to make that happen?

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Over a period of time, we would benefit, because we could have

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freer trade with the rest of the world, lower food prices, we could

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wind down some of the renewables, lower electricity prices, fewer

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directives and regulation, more small businesses would come back.

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We wouldn't have all these problems of people coming from Europe and

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wanting our welfare benefit, and to use the NHS. In all these ways,

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Britain would benefit. Britain is a net importer from the European

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Union, running a trade deficit with the EU last year. That should make

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it possible to do a trade deal, one option would be to do what Norway z

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and remain part of the European Economic Area. But in this, more

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radical scenario, the UK secures a favourable bilateral trade deal,

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modelled on Switzerland. It quickly signs new bilateral deals with key

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markets set to experience high growth, Brazil, China, India and

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Russia Some analysts claim European

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regulations cost business �19 billion a year. In this scenario

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these are scrapped, the UK would choose which social legislation it

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wanted to keep, for example, the Working Time Directive, or the

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agency workers directive, which have been controversial here.

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In this scenario, agricultural subsidies, �3.8 billion are phased

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out. And Britain's �8 billion net transfer to the EU ends. And there

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is free movement of labour in and out of the EU is cancelled, there

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would likely be a work force affect, and it -- effect, and it might be

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positive. Unemployment is at an all-time low, as manufacturing

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employment is rising, and as European migrant workers leave. The

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number of EU citizens living in the UK, which peaked at two million in

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2012, has halved. Most coffee bars and fast food stores are now 90%

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staffed by UK nationals. Financial services account for about 10% of

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our GDP now, but in our future scenario, if things went right for

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Britain, outside Europe, the City of London could benefit, as Europe

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regulates, home mojises, clamps down, London could effectively

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become an off-shore centre, a giant Singapore. The prospects for

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Britain in the 21st century, if you like, as a global nation, not a

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European-focused nation, as a global nation, are fabulous. That

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is really because the kind of English-speaking world in

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particular, I think, will do extremely well in the 21st century,

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Canada, Australia, America, India. We should plug into that.

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All scenarios are speculative, and this best-case scenario, the

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assumption is globalisation continues. That might be

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overoptimistic, but some do dream of a booming city, in a booming

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Britain, outside the EU for good. These three are apostles of

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withdrawal, reasoned you? Take that as a compliment. It may have been

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intended that way, who can say. That was a very narrow view that

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piece. What would Britain feel like outside the EU? I think our

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democracy would be regenerated. When we have general elections now,

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we debate schools and hospitals, because there is no point

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discussing business regulation, all of those things are now decided by

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European law. There is almost nothing the British Government or

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parliament can do about these things. We would suddenly have

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furious debates on how we managed industry, how we dealt with our

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renewable energy targets. We would be in charge of these things. And

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democracy would benefit, more people would vote in general

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elections, we would be in charge of our own house again.

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It's hard to believe that we have been more regulated if we are

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outside. We might feel a bit freer in that regard. If you look at

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those wonderful things where you look at the 246 words in the

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Gettysburg address, and the 10,000 words on the policy of eggs in the

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EU, I wouldn't imagine we would be subject to more regulation, which

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is not what we want? We regulate ourselves more than the Europeans

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do. We gold plate our regulation. We wouldn't have anything to gold

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plate. You will have your shout in a second or two. What do you think

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it would be like? I think it would be a proud and independent nation

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outside the EU and and play a proper role on the world scene. The

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EU is only 27 countries, there are 180 countries in the world. We have

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growing markets f we want to talk economy, in Asia, where Britain

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will be able to do business. We will look at that in a moment or

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two. Let's look at something else, we have heard how it might be on

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the sun lit uplands, supposing there was another possibility,

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:12:04.:12:07.

supposing it didn't go right when we left the European Union.

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Here's the scenario again, in 2015 the UK votes to leave the EU, by

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2017, following a fractious process of boycotts and treaty disputes it

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is out. This time it goes badly. They are calling it Black Monday,

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the British Aerospace factory is to close with a loss of 5,000 jobs.

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The move came as Airbus, based in Toulouse, said the end of called

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fri,-free cross-border manufacturing, has -- friction-free,

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cross-border manufacturing has made this factory uneconomic. With

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doubts over the future of Nissan, an urgent debate is scheduled in

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parliament. About half of all the goods we export end up in Europe,

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and much of that trade is dependant on the absence of friction, within

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cross-border manufacturing processes. If Britain fail to

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negotiate a decent trade agreement with Europe, that could be at risk.

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As this graph shows, the proportion of UK trade beyond the EU has grown,

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steadily. But this rebalancing has taken ten years to achieve, and

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pushing it further could be hard. Even if we ended up in a situation

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where growth is really looking up, and things look rosy in 2020, we

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would probably still have been better off if we had stayed in,

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particularly because tide is turning in our direction. The EU is

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now with the reforms because of the eurocrisis, entering service

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liberalisation territory, more and more people use English as a

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language. Exactly at a time when Britain's liberal influence is

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finally opening up this single market to its true potential, it

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would be foolhardy to leave, and partially lock ourselves out of it,

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when we could be benefiting completely from this. There was

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chaos at all Britain's airports, as well as in Portsmouth and

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Southampton, as Britains returning from Spain raced to reach the 1st

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of January deadline, set by the Spanish Government. If we cancelled

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the free movement of labour between here and the EU, other countries

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might retaliate. There are 400,000 Brit living in Spain, and in the

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worst case scenario, fry-ups and Guinness on the Costa del Sol,

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could be for holiday makers only. If somebody that agrees strongly

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with free movement of labour, I think it will have a net negative

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impact. Some of the very highly- talented people coming to the UK,

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most recently in the software industry, will stop coming. This

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will be a quid pro quo arrangement, it is not as if we could ask the

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Poles to leave, and the Brits working in Germany and France will

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be allowed to statement this will be something that will damage us in

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two ways. Suppose the global conditions change, suppose the

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world deglobalises, then, there is a danger that Britain gets crunched,

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between the much bigger trading blocks of Asia, the Americas, and

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Europe theself, and even City would find it hard to -- the City would

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find it hard to survive that. The EU has already turned nasty Against

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Switzerland, forcing it to abandon its secret banking practices. If

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Britain lost the battle with Frankfurt or Paris, it might not

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look so good for the City. One's bound to ask, why, if this is

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such a wonderful institution, opinion seems to be turning against

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it in this country? I think that's because people have been fed a diet

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of stories, such as we get from the other side. But, actually, Europe

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has made us prosperous, it has brought prosperity to us and the

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rest of the continent. I worry that in 2020, we would find that the

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Americans wouldn't be interested in us, they would be interested in

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Europe, the Chinese wouldn't be interested in you, they would be

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interested in Europe. Inward investors would no longer want to

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invest in us, they would invest in Europe. We would be lonely and

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poorer. I think the time something very interesting, the transition

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period, we would be out in 2017, precisely the wrong time, that is

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probably precisely the time that western Europe will see some sort

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of recovery. It will be difficult, tough slaving until then, but it

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will come back. And France, Italy, Spain and Germany will be leading a

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revival in GDP in Europe. Do you find this scaremongering a bit

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pathetic? There is just too much uncertainty. The one thing that I

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don't quite understand, why do people here believe that the

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European Union is holding Britain back, but they are looking up to a

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country such as Germany, which is doing well at the moment, which is

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also in the European Union, and they manage to export, not twice as

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much to China as Britain, not three-times, not four-times, but

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probably six-times as much. Despite having to carry most of southern

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Europe? And despite being in the euro and having all the same

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regulations under social legislation. If you make that

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thought experiment, how much freer or better would Britain be better

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off, would there really be no regulation in this country. Would

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people be want to go work 100 hours a week, no health and safety

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regulation. What do you mean no health and safety regulation, we

:17:13.:17:17.

will have home-grown health and safety regulation? How exactly will

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that be different from the European rules that are now being worked out

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between all the European countries. We would have chosen them ourselves,

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instead of letting some other nationality choose them? Then,

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every time you want to export something to the continent, you

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have to go through a safety certificatation process, because

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you are not going to import anything from Bangladesh that isn't

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tested. That is the same, if we have to export goods to any other

:17:41.:17:44.

part of the world. We have to conform with their markets. The

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important thing to remember is this, Paul Mason's figures were wrong,

:17:48.:17:53.

half our trade is not with Europe. Because of the Rotterdam effect, if

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we transshift shuft that shows the trade figure. The true figure is

:17:57.:18:01.

38%. I'm not suggesting that 38% of our overseas market isn't important,

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it is important, but it is a declining part of our overseas

:18:05.:18:08.

business. The eurozone is contracting, large parts of the

:18:08.:18:12.

European economy, and we find ourselves as the sixth-biggest

:18:12.:18:19.

economy in the world, forbidden from making. Europe won't continue

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contracting forever. Nothing lasts forever. There could be a

:18:23.:18:27.

drafplatic bust in the eurozone in the next five years, you can't deny

:18:27.:18:31.

that. But there are markets growing in the next five years, and we are

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forbidden for bilateral trading. have more leverage as a �500

:18:36.:18:43.

million market with �17 trillion of GBP. It gives you the ability to

:18:43.:18:47.

negotiate those bilateral agreements. Switzerland have more

:18:47.:18:51.

bilateral agreements than we do on their own. We will introduce some

:18:51.:18:55.

specific witness, we have also been joined by Sir David Tang, who owns

:18:55.:19:01.

a number of successful businesses in China and the UK, he's CEO of

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ByBox Business. Stuart Miller a businessman who is here, your ByBox,

:19:07.:19:15.

I'm sorry, I'm joined from Edinburgh by the writer, Irvine

:19:15.:19:18.

Welsh. If we rid ourselves of this great bogeyman of the European

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Union, what do you think it would do to us Irvine Welsh? I don't

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think it would do that much on the basis of what I have heard today.

:19:27.:19:31.

The argument seems to be constructed on the neo- liberal

:19:31.:19:34.

defence of the elites, whether in Brussels or Westminster. I think

:19:34.:19:40.

people, middle-class people, who are struggling with debt, and

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working-class people who are struggling to find jobs or having

:19:43.:19:48.

their pay and conditions constantly eroded, and the poor people who are

:19:49.:19:52.

just struggling to get by, are going to be massively underinspired

:19:52.:19:59.

by this debate. It just seems to be kind of, the advocacy of one set of

:19:59.:20:04.

self-serving elites against another. Broaden it out then? Well, I mean,

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there is so many different scenario, the fact that when you are trying

:20:10.:20:14.

to talk about constitutional arrangements, and look at how that

:20:14.:20:18.

pans out economically. We have no accord here, and basically people

:20:18.:20:25.

don't know. It is all conjecture and speculation. Everybody knows

:20:25.:20:29.

that essentially what happens economically is sometimes very

:20:29.:20:34.

little to do with membership of these kind of institutions. You can

:20:34.:20:38.

be Greece or Iceland, it doesn't really make that much odds. It is

:20:38.:20:43.

all about what happens in the global economy. Let's take your

:20:43.:20:48.

first point there. When he says that big business, of the kind that

:20:48.:20:53.

you two represent, sold us a pup on Europe, he's right, isn't he?

:20:53.:20:57.

don't think so. I don't think so at all. Small businesses benefit

:20:57.:21:00.

hugely, every worker in this country benefits from the

:21:00.:21:04.

additional employment and growth you get. Why do they keep

:21:04.:21:09.

complaining about regulation then? Because businessmen always complain

:21:09.:21:11.

about regulation, they will complain about regulation if

:21:11.:21:17.

Britain has sole control of it. is true that there is excessive

:21:17.:21:22.

regulation. You want us to join the euro? It is true that there is a

:21:22.:21:26.

negative result of that. But the ability to deal with it inside the

:21:26.:21:31.

group. It is nonsense to suggest that it is not. To be able to deal

:21:31.:21:35.

with it inside the ten is the way to go, not outside the ten. It is

:21:35.:21:38.

to be inside arguing your base, instead of being on the outside.

:21:38.:21:45.

You have a greater faith in our ability to pluns people. I have a

:21:45.:21:48.

great faith in negotiating something that makes sense. Your

:21:48.:21:51.

business is small, isn't it, has it worked for you, the European Union?

:21:51.:21:55.

It is a bit clunky. I have to come back on the point about it being

:21:56.:22:00.

successful for smaller companies. Us expanding into Europe. How big

:22:00.:22:05.

is your company? We employ 350 people in five or six countries.

:22:05.:22:08.

This year we have launched in Tel Aviv and Toulouse, it was just as

:22:08.:22:11.

difficult in both territories. There is something very wrong in

:22:11.:22:15.

that. It should be much easier from my perspective to launch new

:22:15.:22:18.

offices and businesses in an EU member-state, than one that isn't

:22:18.:22:22.

part of the EU. I get the fact it is difficult, these aren't easy

:22:22.:22:26.

problems to fix, it is things like local taxation. What is the problem

:22:26.:22:30.

with the EU? If you think about every state having local tax regime,

:22:30.:22:36.

I understand why, we can't move down the fact of an integrated

:22:36.:22:39.

fiscal platform, that is far too complicated and it couldn't work.

:22:39.:22:43.

There has to be an easy answer to the question, if I open an office

:22:43.:22:47.

in France, how can I submit an invoice, it can't be that

:22:47.:22:52.

complicated. But it is. Landing the conversation right in the heart of

:22:52.:22:57.

a UK entrepeneur, trying to expand across Europe, it should be

:22:57.:23:03.

friction-free and easier. In 2012 outside you will customs forms and

:23:03.:23:06.

VAT forms. You make it sound like it is simply filling forms in, it

:23:06.:23:11.

is not as easy as that. Opening offices, directors responsibilities

:23:11.:23:14.

in different countries, complicated legal exposure. People watching it

:23:14.:23:18.

think I might be moaning about some form filling, this has some teeth,

:23:18.:23:23.

you get it wrong, and you get fined. That is not a free market.

:23:23.:23:26.

firing people in France as a business. I have operated three

:23:26.:23:31.

businesses in France, every time I have suggested any kind of

:23:31.:23:35.

downseizing my financial director has turned pale. There is a

:23:35.:23:38.

completely different set of labour laws operating under there, which

:23:38.:23:45.

are clearly not business-positive. You must view the treatment of

:23:45.:23:52.

labour, without the safeguards that the European Union imposes, with

:23:52.:23:59.

some disquiet, don't you, after leaving? I don't think you can in

:23:59.:24:03.

practice say this European Union is this kind of, you know. The

:24:03.:24:07.

European Union is a neo-liberal organisation too. It is increase

:24:07.:24:11.

league, the whole point of the European Union since the treaty of

:24:11.:24:18.

Rome is to be expansive, is to be, there hasn't been one architect of

:24:18.:24:21.

European integration who has said that's enough integration. That is

:24:21.:24:25.

an issue. People have the right to challenge any constitutional

:24:25.:24:28.

arrangements, they have the right to challenge any kind of power

:24:29.:24:32.

block. Whether it's Westminster, whether it's Brussels, they have

:24:32.:24:36.

the right to think about the constitutional arrangements that

:24:36.:24:46.
:24:46.:24:47.

benefit them. But, the whole kind of pardigm that we are in now, we

:24:47.:24:52.

have had 30 years of neo-liberals in this country, to think that the

:24:53.:24:56.

European Union has managed to save working-class and middle-class

:24:56.:25:00.

people from the effects of that, is very, very erroneous. The only

:25:00.:25:05.

thing that we are saying is that people would be reduced to an even

:25:05.:25:10.

kind of worst state if we were outside the European Union. Again,

:25:10.:25:14.

possibly not. Do you agree with that, Nigel Farage? When you talk

:25:14.:25:17.

about working-class people, one of the biggest concerns out there is

:25:17.:25:21.

about jobs. Whilst free movement of people has worked, when we had

:25:21.:25:25.

northern European countries in the European Union. To have extended

:25:25.:25:31.

our borders, to the whole of Eastern Europe, as we have done

:25:31.:25:36.

since 2004, has meant a massive oversupply in the unskilled markets.

:25:36.:25:40.

Which has meant that many households have members of the

:25:40.:25:44.

family unemployed which wouldn't have happened. Withdrawal means an

:25:44.:25:49.

end to European integration, calling a spade a spade? It means a

:25:49.:25:53.

total end to European integration. That means an end to the people

:25:53.:25:58.

coming in to give vitality to the creative industries and industries.

:25:58.:26:03.

We use work permits, we don't have a total open-door. We have had

:26:03.:26:07.

massive oversupply in the unskilled labour supply, that is an

:26:07.:26:09.

irresponsible. My grandparents wouldn't have got into the country.

:26:10.:26:17.

And my father. You are better at central planning, you know five

:26:17.:26:21.

years ahead what these small nimble businesses in the heart of London

:26:21.:26:25.

need, you issue the right work permits and make sure people around

:26:25.:26:29.

the world know that these immigration permits are available

:26:29.:26:33.

but others aren't. This is very complicated. You are so proud of

:26:33.:26:38.

your flexible labour market and you want to micromanage it. What I know

:26:38.:26:44.

is on the 1st of January 2014, we are opening our social security and

:26:44.:26:48.

welfare system up to millions of people from Romania and Bulgaria,

:26:48.:26:52.

and I don't think that is good for working families in this country.

:26:52.:26:56.

It was said this was a neo-liberal organisation, the European Union is

:26:56.:27:01.

based on idealism, it is an idealism we don't find particularly

:27:01.:27:05.

comfortable in this country. It is about peace and working together.

:27:05.:27:12.

Why do we do it then? It helps economic growth and business. The

:27:12.:27:15.

underlying reason was to keep the peace between France and Germany.

:27:15.:27:20.

Why is it so unpopular? Because Brussels is always used as the fall

:27:20.:27:23.

guy. It has gone beyond peace between France and Germany.

:27:23.:27:26.

Everything that goes wrong it is Brussels. We haven't had an

:27:26.:27:31.

extensive and detailed debate about it yet. We may well do if we go

:27:31.:27:36.

into a referendum phase. Have a and meaningful debate as opposed to

:27:36.:27:41.

something else. One of the arguments is that by being within

:27:41.:27:47.

the European Union this country makes itself open to all sorts of

:27:47.:27:50.

inward investment from Asian and other countries, the merging

:27:50.:27:54.

economies, and Brazil and Russia, India and China. It also, because

:27:55.:28:02.

people like the idea of access to the single market, is that true?

:28:02.:28:06.

I think I hear all these politicians, big business talking

:28:06.:28:12.

about the European Union, Britain, as if the businesses don't matter.

:28:12.:28:17.

Not a single mention has been made about what it is that underlies the

:28:17.:28:20.

business, that people want to do. Whether it is trade, or whether it

:28:20.:28:24.

is investment, whether it is the product, or the services. I mean,

:28:24.:28:29.

Germany does very good because the Mercedes Benz car is damn good F

:28:29.:28:33.

Britain made good things, and provided good services, China would

:28:33.:28:40.

buy it. And China will invest in it. Already China does quite well with

:28:40.:28:45.

Britain. It has, for example, on the London Stock Exchange, I think,

:28:45.:28:52.

eight listed companies, worth about �16 billion. 43 smaller quoted

:28:53.:28:59.

companies on AIM worth about �3.5 billion. People underestimate the

:28:59.:29:03.

language, �300 -- 300 million people in China are learning

:29:03.:29:09.

English. And also, they have a history through Hong Kong, which is

:29:09.:29:15.

possibly one of the greatest free zones, as far as a free market is

:29:15.:29:21.

concerned, about how China will get out. Britain should do much more in

:29:21.:29:26.

Hong Kong. Let me just say one more thing. The question, whether the UK

:29:26.:29:31.

is in or out of Europe, I think is very, going to be very low on

:29:31.:29:37.

agenda for any businessman. I was precisely going to ask you, do they

:29:37.:29:43.

care? You predicted what I was going to say. And the answer is no.

:29:43.:29:47.

You look at the car industry, the Aerospace industry, and the

:29:47.:29:54.

financial industry, they do care. The point about the Briks, the next

:29:54.:30:01.

11, is valid, we haven't penetrated those markets. We have sent an

:30:01.:30:05.

expedition to Brazil, it is not in the top 11 markets, they have

:30:05.:30:11.

already exceeded the UK in their markets, they play better football

:30:11.:30:16.

too. Why did we buy Rover? Because it was being run down, they saw the

:30:16.:30:20.

opportunity to create that band and the technology, and bring it back

:30:20.:30:23.

to China and replicate it, and sell millions of cars. You are right, we

:30:23.:30:27.

have to do both. We have to focus on a massive European, western

:30:28.:30:30.

European market, which at the moment is in recession, but will

:30:30.:30:34.

come out of recession, that is one thing. We also have to build our

:30:34.:30:39.

training positions in the Brazil- Russia-India-China. We are not

:30:39.:30:46.

allowed to. Can I just add one other very important thing. One

:30:46.:30:50.

very important thing. How do we manage to get a third of our

:30:50.:30:55.

business there. The euro, the Chinese regard as extremely

:30:55.:30:58.

dangerous, they simply don't understand or can predict where it

:30:58.:31:03.

is going to go. The sterling is not as great a currency, purpose, but

:31:03.:31:06.

there is much more certainty. And already the British Government is

:31:06.:31:15.

doing quite a lot in terms of trying to help the currency to

:31:15.:31:17.

become convertible. More than anybody else. Britain is doing

:31:18.:31:23.

quite well. And so the question whether it is in or out, for me is

:31:23.:31:26.

irrelevant. The Norwegian experience, how much do you suffer

:31:26.:31:30.

from being outside the European Union? I don't think we suffer at

:31:30.:31:35.

all. And to be honest. You can't compare, you are an oil-dependant

:31:35.:31:40.

economy, and Britain is 12-times bigger than Norway, you have masses

:31:40.:31:44.

amounts of oil. It is the same as Switzerland, it is the fallacy of

:31:44.:31:48.

the people here. Norway, Switzerland, stable, rich, comfy

:31:48.:31:51.

place, if we are outside the European Union, we will be the same.

:31:51.:31:54.

That is clearly not the case, they are niche players. They have fish

:31:54.:31:58.

in nor way, and we have given away an industry on the own that would

:31:58.:32:04.

be worth �3 billion a year of what is caught in British waters is

:32:04.:32:09.

given away to all the other fleets fleets.

:32:09.:32:12.

We have to negotiate fish in British waters. The very rude

:32:12.:32:18.

English people talking all over each other. I agree. I think we

:32:18.:32:20.

manage well outside the European Union. We have an oil-based economy,

:32:20.:32:25.

that is true. But the revenue from the oil is transferred into the

:32:25.:32:29.

Norwegian society. That's a political choice we have made.

:32:29.:32:35.

it not also true that you have to abide by European regulation, isn't

:32:35.:32:40.

that true? To get access to the single market? That's true. You are

:32:40.:32:47.

essentially governed by facts from Brussels? No we are not. E-mail!

:32:47.:32:52.

the EU agreement, the single market agreement has a clause where we can

:32:52.:32:57.

actually veto a directive if we don't like it. We have done that.

:32:57.:33:00.

That's pretty gracious of them, you are not in it and you are allowed

:33:00.:33:06.

the right to veto something? We are also invited in the beginning.

:33:06.:33:09.

There is an important connection between two people here. One of the

:33:09.:33:13.

things that I think makes Norway and Hong Kong, funnily enough, a

:33:13.:33:17.

success. If you look, a number of people run things called the

:33:17.:33:21.

Economic Freedom Index, they look at things like taxation to see how

:33:21.:33:24.

easy it is to do business. If you look at that in the top ten

:33:24.:33:28.

countries in the world, you regularly get Norway, Hong Kong,

:33:28.:33:33.

Singapore, Chile. Scale, it is scale. Totally different. It is

:33:33.:33:38.

nothing to do with that. 60 million versus five million. That is not to

:33:38.:33:44.

take anything away from Singapore, but it is ...What Are you saying.

:33:44.:33:50.

The European Union regularly comes way down it. Let me ask you this,

:33:50.:33:54.

if Britain were to decide to leave the European Union, and let's

:33:54.:33:59.

suppose it is an amicable-ish sort of separation, do you think the

:33:59.:34:05.

rest of Europe could impose hare riches on British trade with

:34:05.:34:09.

Europe? They can't. Not massively so, there is a trading ray genome

:34:09.:34:14.

that is global under the trade organisation -- trading regime that

:34:14.:34:18.

is under global trade organisations. If you want free access to the

:34:18.:34:21.

single market, then you have to take all the regulations. We are

:34:22.:34:27.

already saddled with most of those? You want to get rid of them. Unless

:34:27.:34:31.

you comply with the safety standards, for example, according

:34:31.:34:36.

to which we want our product, so make, for consumer safety. You will

:34:36.:34:40.

have to have safety certificatation. We do that everywhere in the world.

:34:40.:34:44.

Everywhere we sell from. The result of that is Britain sells more to

:34:44.:34:49.

Germany than to China, Brazil, India, Russia, South Africa, Canada,

:34:49.:34:53.

and Australia combined. Do you think the market would want to sell

:34:53.:34:59.

to us, what do you think? Is it because the markets are so easily

:34:59.:35:02.

accessible. The percentage of overseas trade done with Europe is

:35:02.:35:05.

38% and falling every single year. You have made that point. Thank you

:35:06.:35:08.

very much. The growing strength of dislike of

:35:09.:35:12.

the European Union is generally held to be a political problem,

:35:12.:35:16.

especially for the Conservatives. For many of them, the Prince across

:35:16.:35:23.

the wart certificate Boris Johnson, Mayor of London, -- water is Boris

:35:23.:35:27.

Johnson, Mayor of London, old skill and Bullingdon Club chum of David

:35:27.:35:30.

Cameron. I have been talking to him. Does he think Britain will still be

:35:30.:35:35.

in the EU in 2020. All of people who are pro-Europe

:35:36.:35:41.

would, I think, be very, very reluctant to see us leave. All

:35:41.:35:45.

together. That doesn't mean it won't happen? It doesn't. I think

:35:45.:35:50.

what needs to happen now, is we need to have a new relationship

:35:50.:35:55.

with the EU. And what people will say, before you put this to them, I

:35:55.:35:58.

know what the objection will be. They will say this is not on the

:35:58.:36:03.

table. Our partners will never allow this. They will never accept

:36:03.:36:08.

this kind of renegotiation. So I just want to illustrate why I think

:36:08.:36:13.

it is deliverable. First of all you better tell us what it is you think

:36:13.:36:20.

our relationship should be? What it should be is a relationship where

:36:20.:36:26.

he sheare off a lot of the expressances. I don't see a need

:36:26.:36:31.

for us to be in the common fisheries policy. I don't see why

:36:31.:36:35.

we have the Social Chapter affecting bits of employment law

:36:35.:36:40.

that aren't really strictly speaking for us. Are you happy for

:36:40.:36:47.

the Common Agricultural Policy? That should be wholly reformed or

:36:47.:36:52.

repatrioted. We should leave the Common Agricultural Policy? In its

:36:52.:36:55.

current form it is indefensible any way. The question would be either

:36:55.:36:59.

out or staying within the EU, but not part of the Common Agricultural

:36:59.:37:04.

Policy s the Common Fisheries Policy and one or two other things?

:37:04.:37:08.

That's right. It would be membership of an outer teir. Do you

:37:08.:37:11.

think David Cameron can deliver such a thing, a relationship where

:37:11.:37:15.

we are within the European Union, but not part of the common

:37:15.:37:19.

agricultural policy, the Common Fisheries Policy and the other bits

:37:19.:37:25.

and pieces? I do. Shouldn't he tell us what his basic minimum is, then?

:37:25.:37:29.

I'm sure he will reveal all. He has some great speech about this coming

:37:29.:37:34.

up. Here is what I think he should say. What we want to do is end the

:37:34.:37:38.

mystery and mistrust, and stop everybody blaming us for not

:37:38.:37:44.

sharing the zeal of the euro- federates. We don't share that zeal.

:37:44.:37:52.

We don't have any ambition to pool British sovereignty, to create this

:37:52.:37:58.

a plural ld usle state, give us that relationship, you stop blaming

:37:58.:38:03.

us for being the backmarkers, we stop moaning and we have a new

:38:03.:38:08.

treaty. Based on the INGle market, which we put to the British people.

:38:08.:38:11.

At that stage the Prime Minister would have to make it pretty clear

:38:11.:38:14.

that he was going to campaign for that treaty. That would be the deal.

:38:14.:38:18.

Obviously it would be if the people didn't want it, we would leave.

:38:18.:38:22.

that is your view, why did you sign the called people's pledge, which

:38:22.:38:27.

was for an in-out referendum? Because that is is what I'm

:38:27.:38:31.

advocating. The people's pledge, that is your signature on it, the

:38:31.:38:36.

people's pledge did not say this is into a reformed EU, or out all

:38:36.:38:41.

together, it was in or out? But it goes without saying that if people

:38:41.:38:47.

voted against the new relationship I'm decribing, we come out. You

:38:47.:38:52.

have to frame it, one way or the other it has to be framed as an in-

:38:52.:38:55.

out referendum. I'm trying to construct the circumstances in

:38:55.:39:00.

which we would actually keep the benefits of a single market. Just

:39:00.:39:04.

because you sign a pledge for an in-out referendum, it doesn't mean

:39:04.:39:06.

you will automatically campaign to come out of the whole thing. I

:39:06.:39:10.

don't happen to think that is the right position. Don't you think

:39:10.:39:19.

this is matter casiwistical interpretation of your signature?

:39:19.:39:22.

No, not at all, what this country needs is a chance for people to

:39:22.:39:27.

debate the issue and a chance for the public to vote on whether to be

:39:27.:39:31.

members of the EU. Here is the point, if they were to vote to come

:39:31.:39:36.

out, we would be losing, in my view, my judgment, after write beg this

:39:36.:39:42.

for an awfully long time, we would be losing substantial protections

:39:42.:39:46.

for British business, for British enterprise, that eblg cyst within

:39:46.:39:51.

the single market. You -- Exist within the single market. You are

:39:51.:39:54.

want to go stay in the single market, and abide by all the

:39:54.:39:59.

internal market directives? certainly there. Here is a whole

:39:59.:40:04.

pile of them, the control of potato wart disease directive, the control

:40:04.:40:09.

of carnation leaf? That would be a DG60, under the CAP, and it might

:40:09.:40:14.

well be that we could reform that one. What about the one on African

:40:14.:40:18.

horse sickness, do we abide by that one? That is a very nasty Business,

:40:18.:40:24.

injure he moo, if you contracted African -- Jeremy, if you

:40:24.:40:31.

contracted African horse sickness. I would contract anything! These

:40:31.:40:35.

directives, the efficiency of boilers, for example, are we going

:40:35.:40:39.

to have to carry on abiding by that? All these directives we would

:40:39.:40:43.

still have to abide by? I certain lie think it is worth us staying in

:40:43.:40:47.

the single currency. This is your idea of freedom, is it? The African

:40:47.:40:52.

horse directive. You are asking me about all the detail. The African

:40:52.:40:56.

horse disease, or the potato wart, I'm fairly confident would actually

:40:56.:41:02.

turn out to be and come under the broad heading of the CAP. It may be

:41:02.:41:08.

that we could derrogate from that kind of thing. Put yourself in the

:41:08.:41:12.

position of a head of a multinational corporation, I'm sure

:41:12.:41:17.

you have done it many times, would you invest in Britain if there was

:41:17.:41:20.

any uncertainty about whether we would continue to be fully-pledged

:41:20.:41:22.

members of the European Union? Business people don't generally

:41:22.:41:26.

want to get involved in the political debate. I certainly think

:41:26.:41:31.

one of the reasons why I take the position I do, that it would add to

:41:31.:41:35.

people's, to business investors' uncertainty about the UK, in the

:41:35.:41:40.

long-term. I think it might conceivably be a deterrent to

:41:40.:41:45.

foreign direct investment. What might be? If they thought that we

:41:45.:41:48.

were not going to be members of the internal market. That is why I

:41:48.:41:51.

believe that's the right position for the country. So what you say to

:41:51.:41:55.

people is, look, if you, the British people, don't want to be

:41:55.:42:00.

members of the internal market, and you take the, you don't want any

:42:00.:42:03.

directives at all, from any decisions at all to be made in

:42:03.:42:08.

Brussels for the smoothing or easing of trade or removing of non-

:42:08.:42:12.

tarrif barriers to trade, you want us to pull out completely. That

:42:12.:42:16.

will certainly be on the table. They could, by voting against the

:42:16.:42:22.

deal that I'm decribing, they would be voting to come out. Now, I don't

:42:22.:42:26.

happen to think that would be the best way forward. I don't think

:42:26.:42:33.

that would necessarily be the end of the world. People said, when we

:42:33.:42:36.

didn't join the euro, that those buildings over there, the City of

:42:36.:42:42.

London, would collapse, and that great big radioactive rats would

:42:42.:42:48.

crawl out of the gutters and knaw the face of the last British banker,

:42:48.:42:53.

it would be a disaster. It hasn't been a disaster for the country or

:42:53.:42:56.

London. If there was a slightest possibility of David Cameron being

:42:56.:43:02.

unsuccessful in his negotiation, there would bound to be a

:43:02.:43:05.

possibility that we would have to leave the club? Several big ifs

:43:05.:43:09.

there, but I don't think that is likely. Given all those ifs, would

:43:09.:43:14.

you make an investment decision in Britain? I think business would

:43:15.:43:19.

welcome clarity. We have been on this now, for so long, and we

:43:19.:43:25.

haven't had a referendum since 1975. It is perfectly obvious that the

:43:25.:43:30.

Europe question has got to be put to the British people. I think the

:43:30.:43:33.

formula that I have come up with. What is the Europe question? Do you

:43:33.:43:37.

want to be in it or not. Johnson thank you very much.

:43:37.:43:40.

Just in case you are worried about contracting African horse sickness,

:43:40.:43:45.

don't, you would indeed have to be a horse, a mule or donkey, or a

:43:45.:43:50.

zebra, perhaps. The risk of the disease entering this country in

:43:50.:43:55.

any legal trade it thought to be very small. How realistic are Boris

:43:55.:43:59.

Johnson's plans for renegotiating the relationship with the EUU.

:43:59.:44:05.

We're joined by the former -- EU, we're joined by the former Europe

:44:05.:44:12.

Minister now. Supposing David Cameron said we want out of the

:44:12.:44:15.

Common Agricultural Policy and various policies we don't like what

:44:15.:44:19.

would the reaction be of the rest of Europe? I listened with great

:44:19.:44:25.

attention to Mr Johnson, I know that he has a great sense of

:44:25.:44:31.

humour! That is why I wonder if he is being serious. Because, on the

:44:31.:44:35.

one hand, he explains to us that the British people are very

:44:35.:44:40.

miserable in Europe. That it damages its sovereignty, and on the

:44:40.:44:46.

other hand, he wants to renegotiate a treaty, only for the UK. Which

:44:46.:44:52.

means that the UK is going to conclude a treaty with the UK. As

:44:52.:44:57.

perhaps you know, a treaty is a contract between many people, or

:44:57.:45:00.

countries, and I don't think that the Europeans, and especially the

:45:01.:45:08.

French, I think, will accept this proposal. Can I ask you this

:45:08.:45:11.

question, do you think the French would care if Britain decided to

:45:11.:45:17.

leave the EU? I think that, well I'm not the interpreter, neither

:45:17.:45:20.

are the French Government or the French people. But I think that the

:45:21.:45:30.
:45:31.:45:31.

feeling in Europe, by and large, is that it is time for the British

:45:31.:45:35.

Government, I don't think the British people are so anti-European,

:45:35.:45:40.

not as much so as the British Government, in my view. I think it

:45:40.:45:46.

is time for the moment of truth, and to say that if the UK is still

:45:46.:45:52.

in the EU, why? Because I think that Mr Johnson has lost his memory.

:45:52.:46:02.
:46:02.:46:05.

The history of Britain is European. If you look back to Geoffrey Howe,

:46:05.:46:09.

the attorney general at that time, he said Europe is solidarity. He

:46:09.:46:17.

said exactly in a famous quotes, "sovereignty is not like virginity",

:46:17.:46:21.

either you have it or you have not. It can be shared. That is the

:46:21.:46:28.

purpose of Europe. If Great Britain wants to build Europe alone, it

:46:28.:46:33.

won't work, and it will be a shame for the British economy. If I can

:46:33.:46:41.

add a word. Thank you very much indeed. Emma Reynolds is the shadow

:46:41.:46:44.

Europe Minister, of the Labour Party. Will the Labour Party give

:46:44.:46:50.

the British people a referendum? in or out? We don't think it is the

:46:50.:46:55.

right time now to hold a referendum. Nobody is suggesting you do it

:46:55.:46:57.

tomorrow? It will depend what happens with the rest of the

:46:57.:47:00.

European Union. The eurozone will integrate more closely it remains

:47:00.:47:04.

to be seen what the relationship between those who are outside the

:47:04.:47:08.

eurozone, and those within the eurozone, will be. You heard Boris

:47:08.:47:12.

Johnson say there were very specific things that he thought a

:47:12.:47:15.

Conservative Government would wish to renegotiate with the rest of

:47:15.:47:18.

Europe, agriculture, fisheries and so on. What would you like to

:47:18.:47:22.

renegotiate? Certainly we would like to see a reform of the Common

:47:22.:47:26.

Agricultural Policy. You wouldn't like to renegotiate anything?

:47:26.:47:30.

he is proposing is totally unrealistic. I'm not interested in

:47:30.:47:33.

what you think of his policies, I'm interested in what your policies

:47:33.:47:38.

are? In Government we said we wanted to look at renegotiating

:47:38.:47:42.

structural funds, European regional policy, but I certainly don't think

:47:42.:47:46.

we want to repatriate things like employment and social legislation,

:47:46.:47:51.

we don't want to repatriate other part of the...You Want to reclaim

:47:51.:47:56.

British fisheries, or stop subsidising French farmers, you

:47:56.:48:00.

don't want to do any that have? get money back from the CAP, we

:48:00.:48:06.

would like to have reform on the CAP and give less money to that.

:48:06.:48:11.

That is a cross-party thing. In order to repatriate the power you

:48:11.:48:14.

would need the agreement of 26 other member states. The Common

:48:14.:48:17.

Market, and the rest of the European Union, is based on a

:48:18.:48:23.

compromise between those 27 member states. And if Britain tries to

:48:24.:48:30.

unpick that, it will all unravel. David Cameron can't do it, it is

:48:30.:48:33.

posturing? I think Boris Johnson is posturing, we will see what he

:48:33.:48:37.

comes up with, his speech has been postponed several times, we will

:48:37.:48:41.

see what he says. Where will we end up after another three or four

:48:41.:48:46.

years? I think the shift in public opinion, and in business opinion,

:48:46.:48:51.

in this country, is so fundamental and so great, that we are seeing

:48:51.:48:57.

big changes in politics. I think that Cameron, whether he likes it

:48:57.:49:00.

or not, will be forced into a referendum. I think he will do

:49:00.:49:05.

everything he can to avoid an in- out referendum. But Labour will,

:49:05.:49:10.

within a couple of days, will match the promise. I think a referendum

:49:10.:49:14.

is coming, by 2016 there will be one. Whether it ends it or not, I

:49:14.:49:18.

don't know, but the 17 European countries are moving towards a full

:49:18.:49:22.

political European. We cannot go on that jouorny. Our relationship will

:49:22.:49:25.

change fundamentally, whether it is as much as I want it to be, in a

:49:25.:49:28.

few years time, I don't know. In the end that is where we are going.

:49:28.:49:32.

You would welcome a referendum, on your side of the fence?

:49:32.:49:36.

referendum is a distraction, but if the people of Britain want it we

:49:36.:49:39.

should have it. Come the moment when the British people look at

:49:39.:49:42.

what it would really mean to leave Europe, they will decide they don't

:49:42.:49:45.

want to do it. They will decide they don't want the economic loss

:49:45.:49:48.

of growth, they don't want to be cut off from the rest of Europe,

:49:48.:49:54.

and they don't want to be alone in the world. Irvine Welsh, briefly,

:49:54.:49:59.

if there is a referendum, would you be in favour of the people of

:49:59.:50:04.

Scotland having a say? You would quite possibly have a scenario

:50:04.:50:10.

whereby you have a British vote about membership of the EC, and

:50:10.:50:14.

Scotland votes to stay in, and England votes to stay out. Then you

:50:14.:50:20.

have a constitutional question, I mean, does England drag Scotland,

:50:20.:50:24.

or is England de facto left leaving the union, and going it alone.

:50:24.:50:30.

would have to man Hadrian's Wall, wouldn't we! There is still the

:50:30.:50:34.

west loathe y'allian question, that is like the west and Lothian

:50:34.:50:36.

question. Thank you very much. That's more

:50:36.:50:39.

than enough for tonight. Kirsty is here tomorrow, until then, good

:50:39.:50:49.
:50:49.:51:10.

here tomorrow, until then, good night.

:51:11.:51:13.

Hello there, there is nowhere near as much fog around overnight. It

:51:13.:51:17.

will be a frosty start in the morning. Potentially icey in

:51:17.:51:22.

Scotland as well. We have some sleet and snow around the central

:51:22.:51:24.

belt moving northward, leaving behind some patchy fog in the

:51:24.:51:27.

afternoon. That will be affecting the vale of work, potentially. Much

:51:27.:51:32.

more fog in the morning, most lifting. We will see some sunshine

:51:32.:51:36.

developing. Pretty good across the Midland, except for the cold. East

:51:36.:51:39.

Anglia too. Sunshine across the southern counties for a while. Then

:51:39.:51:42.

the cloud increasing and a few spots of rain or drizzle arriving

:51:42.:51:47.

in the south west later in the day. It is here we will have the highest

:51:47.:51:51.

temperatures. Some of the rain thrifting into South Wales, crisp

:51:51.:51:54.

and cold and bright and frosty. An unusually mild start to the day

:51:54.:51:57.

across Northern Ireland. Thanks to the cloud we have at the moment.

:51:57.:52:00.

The sunshine will come through fairly quickly. A lot of cloud for

:52:00.:52:06.

Scotland, and here some snowfall. Early in the morning, as much as

:52:06.:52:10.

five centimeters around the Glasgow area, potentially, working

:52:10.:52:13.

northwards to Inverness. You can see how the temperature change from

:52:13.:52:18.

Thursday to Friday as it turns milder across the north but wetter

:52:18.:52:22.

too. That story is mirrored greater across the south. The low

:52:22.:52:27.

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