EU Special: The Economy Newsnight

EU Special: The Economy

In-depth investigation and analysis of the stories behind the day's headlines with Evan Davis.

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The mirage of the market miracle. Better economic prospects inside


Europe. Half a million jobs lost. The balance on jobs will be strongly


positive. It is bad for our economy. The uncertainty and risk. A global


trading nation. Permanently poorer if we left. They were wrong then and


they are wrong now, and we have a great future ahead of us.


It's a referendum special tonight, on the EU and our economy.


Politicians on both sides will make their case,


and we'll have expert commentary to help our panel of undecided


We'll sketch out possible paths the economy could take if we leave.


It's 2030 and the Queen is 104. The Chilcot report is due to be


published any day now. And in the business news, plans to turn Canary


Wharf into a banking theme park. It is empty offices right now, since


the banks closed when we left of the EU.


We'll ask if Britain could open itself up to more trade


with the rest of the world, or whether it'll simply


Welcome to our special programme on the EU and the British economy.


Broadly speaking we're asking if leaving would bring economic


Short answer: something in-between, but we'll be debating precisely


what, with our experts and politicians on each


We also have in the studio here our panel of undecided voters -


Back then we were discussing sovereignty, and back then most


of them said they thought the economy was more important.


Nobody knows what the effect of Brexit would be on the economy.


It's all speculation of a more or less informed kind.


But today the Treasury gave us its view of the effects of leaving.


It's inside the zone of sanity, it's not mad, it is defensible,


but it is at the pessimistic end of expectations.


By 2030, under any scenario, our national income is projected


But the Treasury says we won't be as much better off,


There is a huge range of uncertainty.


Their best Brexit case is that we'll be 3.4 per cent worse off


That is, our national income will be 3.4 per cent smaller.


The worst case, we'll be 9.5 per cent worse off.


Their central case has our national income about 6.2 per cent poorer


It's not always helpful to put that into pounds and pence


because all households are different, but the Treasury has


chosen to turn percentages into pounds, giving a figure


of thousands of pounds per household, lost each year


Last week we introduced you to our audience. Let's get some initial


feelings on our economy. A show of hands, how many of you trust to the


Treasury to give us the best figures at their disposal, the right kind of


data? And is up. OK. Who do you believe, do you know who you would


believe or turn to for economic advice? I think the government has


got a point in evaluating and giving information. However, I feel like


there is a scare tactic and it worries me that you come out with


the figures like this, that a household will lose ?3400 perhaps


all the, ... -- her household. You can make up the figures, I think,


because it is all an assumption. And that worries me. Who should I


believe and what should I do? Does anyone have a different opinion?


There is a fear factor about import duty. They say that it will become


more difficult for us to export if we leave but really, I think we need


to know the facts. Can we also put import levies on goods coming in?


That is a question that will come up. Any other questions? Jenny? I am


a first-time buyer, and my big is interest rates and what the effect


will be. At the moment, I do not know who to trust on that and I need


a voice to trust. Let's see if any of you get closer to making a


decision by the end of the programme.


We're live blogging the programme at


There's lots of extra background, analysis, and fact checking


Not to imply the experts are, that my team are not experts.


Before we go to our other guests, lets first take a few minutes to not


think about the precise numbers but the things that will be


There are different scenarios, inevitably, but what underpins them?


Britain, a big interesting economy on the edge of Europe, marked by two


distinctive characteristics that shape our relationship with the


continent. Services is our specialty, or at least London's.


Britain is the world's second-biggest exporter of services.


Much as banking but accountancy, law, all sorts of business activity.


Secondly, global connections, particularly in manufacturing.


Foreign companies invest, own and run more of our families than in


most other large countries. Britain has a relatively globalised economy.


Connected to the world through history and commerce. Britain, you


might say, is something of a hub. It is attached to continental Europe,


it is close to the United States. So how does this role that we have


there on potential decisions to leave the EU? First thing, we're not


going to leave Europe. France will still be 21 miles from Dover, but


let's try to imagine what life will be like if we do leave. It's 2030.


The Queen is 104. The Chilcot report is due to be published any day now.


And in the business news, plans to turn Canary Wharf into a banking


theme park. It is empty offices right now since the banks closed


when we left the EU. A community devastated as unemployed bankers


have been unable to find any other work. A square mile of the old city


of London is where the remaining banks have retreated two. The EU


never liked the city and got revenge on it when we left. They refused a


trade deal in financial services. Meanwhile, manufacturing is


struggling. The effect fell on some golf courses. Japanese businessman


love to play on British greens, but there are not as many of them now as


they invest less. Spain has picked up much of the direct investment in


Britain used to attract. For economists who want to remain in the


EU, those nightmare vignettes are far from impossible. Take the fate


of the city of London, a fast service export. Access to the single


market is really important for a lot of firms within the service sector,


because it allows you to passport your services into other countries.


For example, currently if you are a bank based in London, you have a


client in Singapore who wants to do business in Portugal and you can do


that from London. But you cannot do that if you are not part of the


single market. And for example, Switzerland. Zurich is a big banking


sector and Switzerland has lots of trade with the EU. But Swiss banks


are not in the single market. If you think about the number of Swiss


banks that are based in London, for example, one of the reasons that


they are there other than the UK's deep capital market is that it


grants them access to the EU, which they do not have from Switzerland,


which is not that far away. And for manufacturing, the issue is the


potential loss of foreign investment, deterred by possible


hassles over Britain outside the single market. At the moment, the


car industry, as with a lot of industries, is very integrated


across Europe. You have quite complex supply chains which means


that car manufacturers in one country are using parts from other


countries within Europe. And what happens, on what will potentially


happen if the UK were to leave the EU, is that those relationships


start to break down, because they are harder to maintain and there are


worries as to whether or not the UK is complying with the right


regulations. It makes organisation more costly. Now don't have


nightmares. That is the worst Brexit case that we could muster. It is


possible to turn the argument upside down. To describe a best case.


It is 2030. The Queen is 104. Excitement is mounting for the 14th


in the series of Star Wars trilogy is. And in the business news,


written's production of driverless cars has reached a new peak. Britain


has been a European leader in the industry ever since the UK


established its helpful regulatory regime. The rest of Europe was


slowing to the market, debating regulation incessantly. French taxi


drivers protested against the technology. Meanwhile, the new


banking district in Birmingham is ready to open, with a services


sector expanding, and Canary Wharf spilling out further to the north of


England. That is the more optimistic take, but can we justify it? One


argument is about our ability to shape our own decisions on things


like driverless cars, to do so to promote business and trade. I think


it is absolutely credible that if there is Brexit, the government


could move quicker than the European union does at the moment, where you


have to keep 28 countries on side and there are all sorts of


individual country interests, and you have to go through all the


negotiations in Brussels itself, which can be irksome. I think


Britain would be more nimble. When you think about a fast changing


21st-century economy, the nimble will inherit the earth. Fortune


favours the flexible. And we would be more flexible. And the danger to


the city? To services, to our specialty? Personally, I do not


believe that. I believe that the investment banks like Deutsche bank,


they are there not because they like the weather, they are there because


they appreciate the cluster of talent that surrounds the financial


services industry, including legal services and accountancy, unique to


London. And you need a premier financial sector within the time


zone of Europe, and none compares with London. And be clear, the


Brexit side starts the debate with a ?10 billion advantage. We at least


do not have to pay a net contribution each year to the EU.


Nice money to have. There will be a boost on the public finances because


at the moment our net contribution is about ?10 billion and that could


be used for other public expenditure, or it could be used to


cut the deficit. Now, what you want to know is which scenario, best case


or a worst case, is more likely. But there is, I'm afraid, is one of


those situations where you just have to decide which risk you are more


comfortable taking. The hope with Brexit is that we get a better


trading relationship with the rest of the world. The fear is that we


damage the best trading relationship that we have got, which is the one


with the EU. I have to say both the published economic analysis suggests


that the effect of leaving would be negative but not catastrophic. The


argument is mostly bingeing on trade and economic models suggest that


free trade is a good thing. They also hinge on immigration.


Economists tend to think that it boosts growth, so to get the best


deal leaving the EU, ironically, we need to stay open to more people.


The Treasury analysis shied away from assuming immigration would fall


if we left. But one group, Oxford Economics, have looked at detail in


nine overall scenarios, making different assumptions. Leaving the


EU needn't necessarily be a massive economic disaster. Of all our


scenarios that we modelled, there was a negative impact on the size of


the EU if the UK economy leaves. It is about how we use the economic


levers we get back from Brussels. The best case scenario is that we


retain a trade deal with the EU but we broke new deals with the rest of


the world. That would mean we maximise our trade and limit any


impact of leaving. Conceivably, you could have a positive benefit from


that. The problem with that is that those two things are, to a large


degree, intentional. The more you are in the EU block, the harder it


is to make deals outside. Leaving the EU is a big decision but do


remember, remain on leave, the economy is expected to grow over the


next few decades, and it is expected to trade and remain global. But


which is the route that best exploits our national potential?


Sorry it's all so "one hand, other hand".


Economics is a bit that way at the best of times,


and in this case there are many uncertainties about the out option,


Let's talk risks first with Liz Truss, Secretary of State


for Environment, Food and Rural Affairs, who supports


remaining in the EU, and Daniel Hannan, who is a member


of the European Parliament, but a well known eurosceptic,


Can we agree on one thing? That it is not a catastrophe if we choose to


leave, not an economic catastrophe? The paper we have launched is they


begin -- is a rigorous analysis. We would see a 6% gap in GDP. We would


see households across the UK worse off by ?4300 per year. I think that


is bad economically. We are talking about real people's jobs, incomes,


and lives. I know the league campaign has said it is a small


price to pay, but I think it is far too much. -- leave. 6% is the


difference between the economy in 2015, between George Osborne's


forecast of what it would be, and what actually occurred. That was the


error over five years in the forecast in the 2010 Budget. You


saying that Parliament was a catastrophe? I am saying during the


economic crash households lost ?3000. It is a serious amount of


money. It isn't helpful... I think it is, because the reason we do


it... The average household income is a disposable income. Correct. You


are taking something which is a GDB income. That is unhelpful. If you


share it over households, it is a share of the impact. -- GDP. It


could be from services, a school place, from the NHS. It reflects our


national wealth. National income, yes. As you said, all economists


have said if we see reducing levels of trade we will see reducing


income. That will hit people's pockets and wallets. There is


virtually no economist who thinks there will not be an impact. In the


document, which runs up to 200 pages... It is robust and rigorous.


It is big. Have you modelled the potential upside of the kind we


described in that scenario of driverless cars, being a more


nimble, flexible economy, with the ability to make decisions where we


will not be hamstrung by the EU? For example, the money we pay in... I


don't think you have modelled that. That is one of the active


ingredients the out campaign say will... There is all of this


evidence that extra trade makes more, because you are exposing


yourself to extra competition from around the world. It is increased by


being more open, by being a full member. Is it not fair to say that


you've left out some of the things the other side of the argument would


say are the active ingredient? The reason you want to leave is to do


stuff. You haven't even modelled you argument. It is all about your


assumptions. There are lots of spurious claims. On regulation, the


fact is we share a lot of regulation across the youth. That helps us


trade across the wider market. For example, if you are a food producer


you have to slap a single label on your bottle and you can sell your


goods in Spain, Germany. -- across the EU. If you are exporting to


China or the US you have to create a different system. The shared


regulations help us trade and help our companies innovate and grow our


national wealth. Central estimate does not model ordered the effects I


know you would like to be modelled. The 6% between leaving and not. What


is your central estimate? We will be substantially better off. She didn't


answer your question, do you think it will be a catastrophe. Ministers


know it won't be a disaster. As recent as two months ago they were


threatening to walk out over a trivial thing. 6%. It isn't a


catastrophe. I don't want to get debated this 6%. Where are your


figures published? Then we can scrutinise. Where is it? You know it


is ridiculous to put figures on these things. The Treasury's figures


are regularly wrong. It is impossible to model that far ahead.


To look forward to 2030. Who knows if we will have driverless cars,


massive breakthroughs in biotech... You suggesting there is no


intelligent analysis -- are you suggesting. You can make some


guesses. They have done it and put it in their model. How can you


criticise? I will tell you why. I have known George Osborne for 20


years. He has always been a strong supporter of the European project.


For many years he was a supporter of the euro. I'm not blaming him. I


think it is admirably consistent of him. But the idea that this is some


disinterested analysis. This is straightforward propaganda. It is


results driven. It began with what was a potentially scary figure. They


then changed the variables. We don't want it to get to that figure. Not


one hand went up when they were asked... We look forward to hearing


your assumptions and your figures. A prominent supporter of the league


campaign, putting a lot into it. -- leave. He thought ?4300 per


household loss is a bargain basement price to pay for restoring security.


I don't agree with that. If I did not think we would be better off


financially, I wouldn't be sitting here making this case. For me, the


central fact is every continent is growing except Antarctica and


Europe. Britain is a global country. We are linked by history, our


language, our law, to more distant places. We need to reorient away


from a declining, tired euro zone towards the bits of the world which


are prosperous. Do you acknowledge that there are risks in leaving?


There are risks in staying and leaving. A percentage that you could


be wrong. Of course. There are risks in whatever we do. I would rather


face those risks in command of our own destiny, able to decide our own


policies, to chart our own course, so we can mitigate those risks


ourselves rather than handing power to people who may not have our best


interests at heart. We have our panel of voters here. Anybody on the


panel who would be willing to accept an economic loss in order to get our


sovereignty or our independence or our borders back? You would? I would


because it would be a short-term economic loss. I hear what is being


set. If we were in charge of our destiny, and I believe in the people


of the UK that we would take the short-term loss and turn it into a


positive in a short period of time. Nobody else would? Basically if we


lose economically you don't want to leave, is that correct? Did you say


you would? I think I would. I am prepared for that if we get our


sovereignty back. Why not? And a long-term loss not. We don't know if


it would be long-term. Let me introduce you to the panel.


On the leave side we have Gerard Lyons, economic


adviser to the mayor of London Boris Johnson


and Fazana Baduel, who set up and runs a PR company,


and on the remain side Juergen Maier, the UK chief


executive of Siemens, and investment fund manager,


One of the key things we were talking about in the video was


foreign direct investment. Particularly engineering,


electronics, any of the things your company might have been involved


with. What do you think the effect of leaving the EU would be on that


investment? We are a significant investor in the UK. We have been for


many years. Just going back to the discussion you were having here, you


know, I do not see such a thing as a short-term effect on the Brexit.


Because what would happen is we would go into at least a two-year


period of the glaciations. Actually there is nowhere in the world where


there has been a new trade deal done within two years. I think it would


be longer. But what is key is that in that two-year period companies


like Siemens and many others are making decisions as to whether we


are investing here in new factories, in new research and development,


technology, and that will actually have an impact on the jobs we are


creating ten years down the line. 15 years down the line. Whatever


happens this is going to have a long return effect. That is a two-year


pause which has a long-term effect. Short-term disruption has a


long-term effect. But what about the long-term? What about in ten years,


do you think, if Britain gets reasonable relations with Europe,


will Siemens look at Britain and think of it differently compared


with, for example, Spain. Let's look at your example of driverless cars.


One of the reason why Britain could not on its own create a market for


driverless cars is because you have to build those cars. And the


technology around it. The European standards. Ultimately they will


become global standards. What I am saying is if we define cars here,


just for Britain, you would have to drive it to Dover and leave it there


because it will not work in France. -- design cars. You have just


described the argument for remaining. But Europe has the


significant influence on those global standards. And actually we


significantly underestimate the positive influence we, as Britain


have come on European and global standards. -- as Britain have, on


European and global standards. There is this idea we will be victims of


trade regulations and Harris. There is not one state which is not part


of a trade regulation. -- and tariffs. There is a European free


trade area. The only country not in it is Belarus. We would not be


walking away from that comment... But it is a single market, though.


You are mixing things up. We are in a single market which offers huge


advantages to a company like Siemens. To build companies from


here, have influence from here, into the EU. But how do you answer that?


Getting a free trade deal will leave compliance burdens. How do you get


over that? It is really important to get this point about the transition.


The day after we leave, and it could be a few years after the vote, but


the day after we leave all above existing standards are in place. --


all our existing. All of our acceptance of EU technical standards


are in place. That will be the case until one side or the other changes.


There will be a gradual divergences. As Lord roads correctly said at the


launch, it will be years before we notice any change, and it will be a


gentle process. -- Lord Rhodes. It will not be a sudden change, Brexit.


Quick comment. We are able to export over 60% of our cars. We can do it


easily in Europe because we share standards. If we start diverging we


will just be producing cars for a domestic market which is smaller. It


makes much more sense to have a common European standard on things


like that so we can export more of our products. One good way of


framing the argument is to think about what we stand to lose from


leaving, mainly the trade deal, we have with the EU.


And what we stand to gain from leaving, in the trade deals


we might be able to sign with the rest of the world.


The Leave side argue we will lose very little if we leave,


because we'll have a great trade deal with the EU.


What kind of deal might we get from the European Union? Here is the


starting position for the former Swedish Prime Minister. Do you think


it is possible we would have full access to the single market without


free movement of people? No. The given wisdom is that fewer EU rules


we sign up to the worse our access to EU markets will be. So how strong


is our negotiating position in terms of trade to change that? We sell to


hunt and ?23 billion of goods and services to the EU. That is 12% of


our economic activity. We also buy a slightly larger amount from the EU.


Our imports are ?291 billion. In terms of the European Supply chain,


we are pretty important. A trade partner to the EU of similar scale


to America, say. Some Brexit folk think because we buy so much more


from the EU then we sell to it, other countries will be keen to cut


deals. EU exports to the UK represent about 3% of economic


output. Still, remember, the EU would have 27 nations, each with


their own agendas. Ireland's exports to Britain are worth between eight


to 10% of their annual economic activity. The EU tends to give


countries more say on things which affect them disproportionately. The


Netherlands, France, Germany, they all do trade with us. For Italy we


are not a big partner. Exports to us make just 1.5% of their economic


output. Other political factors might be bigger for them. Some of


our trading partners might get annoyed at the UK were offered


better trading terms than they have. Might Spain want to make sure live


outside the EU is grim as part of its strategy to keep a lid on its


would-be breakaway regions? The trading instincts of Brussels might


mean that they make things tougher. At this stage, we just don't know.


We have looked at the trade deal with the EU.


Gerard, we will get a deal with the EU, correct? Yes. First and


foremost, you do not need to have a trade deal to trade. You can go into


any shop in the UK and pick up an item that says made in China. Most


people will be confused to discover we do not have a trade deal with


China. You do not need that. If we decide to leave, the first two


years, nothing changes. Then we can decide to trade on the world trade


organisation books. But the organisation focused on


manufacturing. The UK economy is a service economy. If you look at the


European Union, Open Europe, an independent organisation, believes


that three quarters of the European economy is services but only a


quarter of the trade is services. The rest of Europe does not like to


trade in services. The good thing is because we are so competitive, at


the end of the day we will be able to trade. And the financial sector


will do particularly well. Do you believe that the financial sector,


is not a possibility that the EU will say, we never really liked your


banks, and we will not give you a trade deal? 17 years ago, we had a


big debate as to whether Britain should get rid of the pound and join


the euro. Then it was feared that London would lose out. I understand


that, but why give us a deal and not Switzerland? The reality is that


then the competition was with Amsterdam, Frankfurt and Paris. Now


the competition to London is New York, Singapore and Hong Kong. The


reality is that globally, Finance has congregated in a few centres. I


want to pin you down on one specific question. A London-based bank with


the customer in Singapore who wants to transact something in Portugal,


this is not a ludicrously fanciful idea. Would they be able to do that


if we left the EU and did not have a deal on financial services? Would a


London bank be able to serve a Singapore customer in Portugal? Yes.


No, they wouldn't. Technically,... But they wouldn't be able to do it


without a deal, would they? There are two things, retail and


wholesale. Retail is segregated and you were right about wholesale


banking. But we need to take the lesson from New York. People look at


New York and North America. America ensures that people need to have a


New York presence or New York qualification. You are technically


right but there is no reason to think that anywhere else in Europe


would be able to do it. If they were tough, as you suggest, then we can


learn from the Americans and be quite tough ourselves. Finance


congregates in a few centres. Nicola, you have been congregating


financially for many years, and you are a Remainer. I do quite confident


in what will happen when we leave? It is quite clear to us that... If


you look across all industries, 75% of the word investment comes to the


UK because we are in the EU. If you ask the companies investing, they


will say that is the reason. The same is true in financial services.


If we leave the EU, it will cause mayhem for major financial


institutions. They will have to move to Frankfurt or Paris. Unless we do


get a deal? Gerard says that we might get a deal. Well, the Swiss


could not, so why would we? Look at her London is positioned. We are


positioned well in the new growth markets. Chinese currency comes to


London, Islamic growth markets, the biggest foreign exchange trading


room. People trade dollars in London. If it is all going so well,


why stop it and move onto something else? That is what I do not get


about this film. It seems to me that there is fantastic innovation going


on in the city. Why risk it? It is not a risk. The last decade has


shown that globalisation, technical change and innovation are moving in


one direction. Countries that do well are adaptable and flexible and


control their own destiny. As we do. The European Union is going in the


opposite direction, controlling, regulating and centralising. Global


finance needs to break free from that. One important point is that


the single market is not complete. One of the major aspects of it that


is not complete his services. 78% of our economy is dependent on services


and we have the most to gain if we stay in. There is a major benefit


that we will accrue if we manage to stay in. The irony here is that the


single market is not complete and that does not prove whether we


should stay in and finish it on leave. Everyone else has incomplete


access. It is an incomplete market. When you say why change, there was


an interesting phrase that you have used twice, once in the film and


once in the studio, which is that Brussels does not like the city very


much. Everyone recognises that. We had been on the receiving end of


malicious regulation. Short selling bands, the financial transactions


act. It would be even worse if we were outside. But would it be better


if we leave or will it be better if we stay? It makes sense to take back


control of our own regulation and have it in the hands of people who


do not start with a proposition that a capitalist system is wrong. The


idea that Germany and France are going to give us a better deal than


they have got, they are going to give us full access to the single


market, from which we benefit hugely, I can mention an area like


agriculture, countries like Norway and Canada do not have full access


to agriculture trade. The point is that the single market does not work


in services. But they do not have full access to their financial


services passport either, Canada does not. The government produced a


report on the financial sector, a competency report, which pointed out


that in the last decade the UK has lost the ability to control


regulation and finance. The good thing, it said, was that in the


future regulation is set at a global level and that is the point that


Daniel is making. Many of these key areas, important for the UK


financial services, it is globalisation that is the key for


the future. The question is, do we want to build on the successes of


the single market, why the net, expand it through new trade


agreements like TTIP, with a free trade agreement with China, or do we


want to spend ten years renegotiating a worse deal? But


financial services... Lets leave it there. You have got a flavour of


that argument but many who want to leave hope for a better deal with


the rest of the world. More trade and all that


flows from it. The question is whether the world


will want to deal with us. So what kind of deal might a post


Brexit Britain get from the rest of the world? The key argument has been


that the EU tangles are in the regulation and makes it hard to win


business in a faster growing market. If we could get rid of that


entanglement, perhaps we could gain outside Europe. The world has lower


tariffs than when we joined the EU but believed campaigners say they


want to go for trade deals with the rest of the world as well and they


argue that ours could be bespoke. Tailored just to us. EU trade deals


with the rest of the world have to fit in all 28 states. The EU's


advantage is leverage. Britain is a market of 65 million people but the


EU is more powerful because it has half a billion. And, remember, we


will have to learn how to do trade deals again. It might take a while.


The EU Singapore deal took seven years, the Canada deal, five years.


Since we already meet EU standards, we could conclude them faster,


perhaps, but what if post Brexit Britain breaks from these laws?


Switzerland's deal with China includes some financial linkups and


took five years. And previous attempts to cut a deal with the US


failed. The US government say they want us to stay in Europe, so how do


the leaders -- as do the leaders of China and India. They also prefer to


deal multilaterally, with blocks of countries rather than one at a time.


It also might be impossible to wrestle a deal out of all of them. A


US deal might involve taking genetically modified produce. To cut


a deal with the EU, we would probably need to restrict it. The


choice of which deal to choose would be hours and ours alone to make.


Fazana Baduel, you are a business woman, and you have opened offices


in other countries outside of Europe. You would like to open in


India, or have you managed to open in India? I am in the process of. It


would be easier if we had a bilateral trade agreement with


India. I believe the EU has been negotiating for nine years, and for


China? They are not even talking. And what makes you think, for the


audience to get an idea of what a trade deal is, what would a British


trade deal with India have in it that would help you? What is the


line going to say? Lower tariffs, for instance. There are tariffs on


public relations industries? There are on goods and services. I opened


up by business six years ago in the UK. My business came from emerging


markets. I did not seek out business from emerging markets, I found out


that the growth is outside of Europe. Europe is a stagnant


economy. I do not understand why we, our taxpayers income is going to


spend ?300 million a week, giving to the EU. Just on this specific thing


of the trade deal with India, does your business face a tariffs in


India, doesn't face other restrictions and operations? We face


other restrictions. I want to really have a granular example of something


you want the British government to negotiate and I want to find out why


the Europeans are not negotiating that. I would love for the UK to


have a specific bilateral trade agreements so that both countries


would work together. What would be in the? Nahrendra Modi came to the


EU and he said he would like the UK and India to come together to work


on -- the EU and India to come together to work on Smart cities.


Fundamentally, if we have to go via the EU for a larger trade


relationship, it is going to never happen. It has been so many years


and we have not actually got anything. Liz Truss, it is true, we


have never tried a British negotiation with India. It might be


easier than negotiating with 28 countries and India. I have


considerable direct negotiations with China and the US. On getting


our agricultural products into those markets. For example, although the


EU is able to sell beef to the US, we cannot as a UK government,


because of the BSE issue is that we have had. There are nontariff


barriers to getting into the US. It has taken us 20 years of


negotiations. I hope to make progress this week. Likewise with


China, there are products we cannot negotiate to China, like glamour,


because of bilateral discussions. These deals with other countries


take years and years and years. If you look at the length of time the


Canada trade deal took, 27 years... It took seven years. On our own we


would have done a bilateral trade deal right away. We have a bilateral


relationship with the US about getting meat products in. It has


taken 20 years. None of these things are easy. The idea that we could


wave a magic wand and get an instant trade deal... It must be easier when


you do not have to worry about French film makers and Italian


textile deals. I think the central point here is what was just said


about where the growth is. I agree. I do not disagree at all. Our


exports have fallen by 55% in the last ten years. Where will they be


in 20 years? Hello does it have to go before we drop this bizarre idea


that we need to merge our political institutions? That has nothing to do


with that. The fact is that EU companies like Germany exported more


than we do. It is not the EU holding us back it is that we need to make


more effort on exporting, which is what we're doing this is not about


restrictions from Europe. This is about our own ability to export,


which is important and I think those markets are important. We making


this sound like the EU has not negotiated other trade deals. There


are 53 trade deals that the EU has negotiated with other countries. And


I think it is somewhat naive to think that we are suddenly, within a


three-year period, going to negotiate all of these great trade


deals and ignore the biggest trade that we do with our local area. The


EU's total trade deals are $7.7 trillion. Chile's are $54.3


trillion. Singapore, South Korea and Chile have bigger trade deals than


the EU. Countries that are able to set trade deals to suit their own


interests to do well. Britain is one of 28, we are at the back of the


queue of the EU is focused on manufacturing. Services does not


figure prominently. Weight at the moment the EU is


negotiating with the US, which is controversial, and many people do


not want it. With the US, if we left, would they rather now


negotiate with Britain? They have said they wouldn't. Would they


rather say, frankly, we don't have time for you individually, can we


deal with you as a block? The answer is, look at the Major of our


economy, our instincts and inclinations. Japan doesn't have a


deal with the US. The constraints of a trade deal are the interests, or


protectionist interests come of one or another party. You can see this


in certain industries, including textiles. We are a much more


maritime economy, in that sense we can speak to non-EU economies who


have successfully negotiated trade agreement around the world because


they don't have to worry about French film-makers, or Polish farm


workers, or whatever it is. And that allows them to get a much more


liberal and productive deal. How hopeful argue that an EU deal will


occur with India and then your business will be opened up?


Logically, if the UK negotiates with India it would be in the interests


of the UK. Not one of a number of different countries. I also think it


is a defeatist mentality that if we look we cannot compete on a global


stage without clinging onto the petticoat of a stagnant economy, the


EU. It isn't. It is. I did not choose to do business outside of


Europe, I was forced because that is where the economic growth is, in


India, in Russia, in China. Europe isn't the future. It is better to


have a fantastic base of a 500 million person market for your


product. We are running out of time. And I do want to finish. I want the


audience to have a last word. We have discussed trade deals with the


U, the rest of the world, which are perhaps three of the biggest


arguments. -- with the EU, with the rest of the world. Anything that


makes you excited or fearful? We shouldn't be defeatist. We should be


positive. We should get over the complex issues we are talking about.


If we do that we can do it together. One way to look at it is to say if


you are cautious, you hang on to what you have got. If you are more


daring you perhaps think maybe we can do better as this side have


argued. How many of you at the moment would think economically we


should be a bit cautious? How many of you are feeling daring?


Absolutely, we should have more faith in ourselves. Holly, you were


saying this earlier... Yeah, we should be daring. Why don't we have


the skills to set up these trade agreements? Why can't we do it? The


fifth largest economy in the world. One of the members of the Security


Council. The Commonwealth, Nato, how much bigger do we have to be before


we can run our own affairs? We do, but we work with other countries to


do better. That is what we are talking about. The bureaucrats of


the you run it. Bottom line is we want to do both. We don't want to


carry on trading. And through the EU we can create the better trade


deals. But why do we have to pay... Gentlemen, ladies, we have to leave


Our live blog page will still be live for another 40 minutes or so.


Take a look at that at


A lot of people do argue they want facts in this


debate, but be clear - it is not facts we need:


We need to know the unobservable answer to the question,


what happens if we leave, or if we don't?


Which is why there's still an argument.


I hope you found the discussion tonight helpful.


Have a very good night. Thank you for watching.


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