EU Special: The Economy Newsnight

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 bbc.co.uk/newsnight.

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 bbc.co.uk/Newsnight.

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.