23/05/2016 Newsnight


23/05/2016

What would Britain out of Europe look like? As the referendum vote nears, Evan Davis digs deep into the European debate.


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No way, you don't need to be in the single market to trade. The global

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body, Switzerland, is not in the European Union. The suggestion of

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Norway and Iceland doing pretty well, but Bosnia, Serbia and the

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Ukraine... I think we should remain part of this free trade area. Take

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Switzerland, for example. Britain would be on the outside. It is as

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credible as Jean-Claude Juncker joining Ukip.

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Welcome to a world in which Britain votes to leave the EU.

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We're here for a special Newsnight with politicians,

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experts and voters to ask how we might fare.

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Veteran negotiator Jonathan Powell gives his take on how

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The markets are in turmoil, and there is a run on the pound. The

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Prime Minister sent a senior civil servant, played by me, to Brussels

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to begin scoping negotiations with the EU. Jonathan we are very

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disappointed but of course you need to be reminded that it is up to you

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to put forward your suggestions. And the Brexiters give us

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their upbeat vision of life outside. Outside the EU, Britain is the

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region's foremost knowledge-based economy. We lead the world in

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biotech, services, law, education, the audiovisual sector.

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Hello, welcome to the last of our six referendum specials,

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each devoted to one big issue in the campaign.

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Today we're looking at what Britain might be like, outside the EU,

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We'll ask what kind of country we'd opt to be, and also,

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what kind of relationship we'd have with the rest of the EU.

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Now, nothing in life is certain, In or Out.

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But you don't want to make a choice on June 23rd based on vague thoughts

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of life outside - you want a specific vision.

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And if you're thinking of voting to stay in, you surely must ask

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George Osborne was today painting his picture

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This is what happens if Britain leaves. The economy shrinks, the

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value of the pound falls, inflation rises, unemployment rises, real

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wages are hit, as are house prices, and as a result government borrowing

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goes up. The central conclusions from the Treasury analysis are

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clear. Voting to leave will push our economy into a recession.

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Meanwhile, Boris Johnson painted his scene in

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the Telegraph today - that Britain outside would forge

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a new relationship "based on free trade and with traditional British

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leadership on foreign policy, crime-fighting,

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intelligence-sharing and other intergovernmental

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Well, we'll see a vision of life outside tonight, and test it too.

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With us here, our panel of undecided voters.

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They've been with us for the six programmes,

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We also have a panel of specialists, to offer their arguments.

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And a leading politician from each side.

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For Leave, it is Andrea Leadsom, minister in the Department

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For Remain, it is former Labour front bencher, Chuka Ummuna.

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I wonder, before we get stuck in, Andrea Letson, you were in the

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Treasury under George until the election. I wonder what you made of

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the Treasury analysis today? Well, generally, economic forecasts are

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absolutely reliable for one thing and that is that they are always

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wrong. If you go back in history, show me an economic forecast that

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was right and I will be amazed. This one in particular, this so-called

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recession, in fact, just squeaks to -0.1% for four quarters. That is

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lost in the rounding soba might not be any truth to it. And of course

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the point is that it makes all these horrendous assumptions about what

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happens, so an economic forecast is only as good as the assumptions you

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put into it and I do not accept any of the assumptions. And Treasury

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officials, have they been duped by the political class? Why would they

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come up with analysis also? Let's be clear, the Chancellor set up the

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Office for Budget Responsibility and was very clear when we did it that

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the problem is that over many years Treasury officials have got the

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forecast wrong and have persuaded themselves to point in one direction

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or another. Secondly, it is absolutely clear that an economic

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forecast is only as good as the input into it. If you are sure, as

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these forecasts do, that we will be pulling up the drawbridge and we

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will not be doing any trade with anyone, that we will lose the

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European Union free trade agreements, that there will be no

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continuity there, that we will not get the same trade deal, then of

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course you can make it look as bad as you like. What do you think of

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the Treasury website? If you click on it, it has a big banner saying

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that if Britain leaves the EU, recession results. A very solid

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assertion for what is obviously a rather vague thing. I am very

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surprised that the Treasury secretary would allow this sort of

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thing. Chuka Umunna, did you find the announcement convincing or was

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it overcooked? Nicola Sturgeon warned that it was overcooked. I

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think they have probably got it about right and that is an unusual

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thing for a Labour politician to say. We live in extraordinary times

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and the London School of economics has been critical of the government

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and of the Treasury for having a conservative estimate of the adverse

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impact. People like Capital Economics have said they have been

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to free-flowing. But if you look at a broad swathes of different groups,

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the governor of the Bank of England, the IMF, different economic

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organisations, trade unions, there is a broad consensus that if we came

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out, certainly in the short-term, it would have a negative effect and in

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the medium to long term, it would as well. I think Andrea has conceded

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that there would probably be a 1% hit on GDP and I think that would be

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a bad thing. We should not be playing Russian roulette with jobs.

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Did not hear her concede that. A quick reminder that we're

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running our live blog If you go to bbc.co.uk/newsnight

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you'll find articles, analysis and fact-checking in real

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time with the show. Let's ask now what kind of country

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a post-Brexit Britain How would we use the freedoms

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we gain by unshackling ourselves We can't just let George

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Osborne answer that. So we asked the Tory MEP Dan Hannan

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to set out his view for us. He's a passionate outer,

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and he's on the campaign committee We think it's as good a view

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of the dominant Leave vision, The only question people ask these

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days is why it took so long. Outside the EU, Britain

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is the region's foremost We lead the world in biotech,

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services, law, education, Outside the EU's clinical trials

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directive, we are again at Outside the EU's rules on data

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retention, Hoxton has become the software capital of Europe,

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the Silicon Valley of Outside the downright malicious

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rules on pensions, equity and insurance, our financial

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services are booming. Not only in London but in Edinburgh,

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Leeds and Birmingham. And our older industries

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have revived, too. Our farmers, always more innovative

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than their continental rivals, Our fishing grounds have once again

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become a great renewable resource. And outside the EU's energy

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boondoggles, fuel prices have fallen back to world levels,

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leading to a revival of our steel, cement,

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ceramics and plastics producers. Britain has raised its eyes

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to more global horizons. Yes, we still participate

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in the great European common market that stretches from non-EU Iceland

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to non-EU Turkey, but we have been able

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to lift our eyes to more distant, more opulent markets,

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markets to which we Over the last ten years,

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every continent on this planet has experienced significant economic

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growth except Antarctica and Europe. When we joined in 1973,

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the 28 countries that make up the EU And it is dropping

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virtually by the minute. We no longer have to pay ?20 billion

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gross, ?10 billion net every year for the privilege of belonging

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to the world's only Family incomes have received

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a triple boost. Food prices are lower outside

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the common agricultural policy. Fuel bills are lower

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because energy prices have And taxes are lower

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because of the independent dividend. And that means more household income

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for everyone and a general stimulus As the Eurozone continues

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its genteel decline, Britain has become the leader

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of a wider European bloc. Those 22 European states

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and territories that are linked to the EU through a common market,

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not through political union. No longer are laws handed down to us

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by Eurocrats invulnerable to public opinion and immune to the ballot

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box, by indeed European Commissioners who often

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owe their positions to having been We have recovered that precious

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right to hire and fire the people Those megabanks, those

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multinationals that have spent years and spent millions lobbying Brussels

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to get rules that suit them They are now facing a lot more

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competition from start-ups Of course the economy

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as a whole has benefited. The British Eurocrats,

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the British MEPs who have lost their tax-free,

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Michelin-starred Or rather, we've been redeployed

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to the more productive bits Daniel Hannan's picture

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of Britain outside the EU. It's one that posits

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an internationalist Britain, a free trader nation, embracing

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globalisation and with a bonfire Other visions of a Brexit

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are available - but it has to be said that Dan's there is pretty

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commonly shared Let's explore it first

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with our political guests. Andrea Leadsom, are you attracted by

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the division? Absolutely. If we vote to leave, we will have a ?10 billion

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a year independence dividends. That is as much as the NHS needs during

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this Parliament to keep it on the road. ?10 billion a year, so we

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could give it to him in one year. Simon Stephens says that if the

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economy does not perform well, the ?10 billion will not get to him. But

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Dan Hannan said something interesting, that we could lead the

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world in law, audio sectors, but what is currently stopping us

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leaving the world they are right now? I can tell you every day, day

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in, day out, as an energy minister and previously and energy Minister,

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you are stopped and limited by EU rules and policies and the need to

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get things agreed. The EU as the sole right to negotiate free-trade

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agreements, so there are huge limitations from EU directives. The

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unintended consequences of EU directives, if you allow me I will

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give you an example. The agency workers directive, in my

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constituency I have a lot of HGV drivers, and they say to me that the

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problem with the agency workers directive is that it means that if

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you are employed through an agency for 12 weeks, you have a permanent

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contract equivalent. So that is a perfectly good idea but the problem

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is that what happens is they get laid off after week 11 for a week

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and a bit and then the clock starts ticking again. So the unintended

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consequences of a good idea, but when you just make it work across 28

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member states, it has unintended consequences which are disastrous

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for people trying to look after a family. But that is an argument for

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very few employment protections at all. I am a former employment law

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and I know. The qualification requirement for unfair dismissal is

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two years and the argument is that when people get near to their, they

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suddenly do terrible things. The problem with the league campaign is

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that they can lean back paint this vision -- they paint this vision of

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a deregulated labour market. Many employment relations will go, a lot

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of them. We will probably get increased tariffs so if you look at

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things that you buy on the High Street, 28% of the goods on High

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Street shelves come from the EU. But on the first point, the deregulated

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labour market, is it fair to say that if we leave, Britain becomes

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more deregulated? People like Lord Lawson, the former chairman of Vote

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Leave, he said that structural reform is crucial to economic reform

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and it is hard to achieve within the EU. Is that division? The question I

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am trying to get at, if you like regulation and you want labour

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protection was, and if there are things you like, should we run a

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mile from your vision of Brexit, which would be a more deregulated

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one? If we vote to Leave we wake up and

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nothing has changed because all of the EU laws and regulations are in

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UK law. This is an important point because people on the remains I'd

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like to say there would be no maternity and paternity leave, no

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constructive dismissal and that is obviously rubbish. On June 24 you

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wake up and nothing has changed. You have the freedom to then decide if

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you want to change things so the point is the government of the day

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then decides with the support of the people in a general election whether

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or not... You don't want us to leave the European Union to strengthen

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employment protection. The UK were the first to introduce rules against

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female genital mutilation. It goes against... It will be the choice of

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the UK... It goes against everything and Andrea has written pamphlets and

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signed up to things with free marketeers within the Conservative

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Party and I respect that is her point of view. The idea that you

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want to leave the European Union... Can you clarify whether you think a

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result of leaving the EU would be a Britain that is if you like more

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deregulated, more like Hong Kong and less if you like continental

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European? Very specifically in the area of employment law I would not

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expect to see massive deregulation, I would not expect to see a

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whittling down of workers rights. You would keep the working Time

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directive? We would make amendments to it which would suit the UK more.

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In the NHS people who are learning how to do neurosurgery for example,

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as things stand with the working Time directive there are real

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problems... You want to weaken it. I am seeing make it adapt to the UK

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situation. That means weakening it. Time off, leave? The Dan Hannan

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vision which sees as doing so much better outside, I just wonder what

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the active ingredient of making it work is? I assumed a lot of that was

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about deregulation and I have looked at various people on the Leave side

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and it implies it is all about deregulation, getting rid of the

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shackles and it's not that? It's the ability to choose policies. For me

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as energy Minister, let's get away from employment law because that's a

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subject which is a red herring. Deregulation... Why is it a red

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herring? There is not an effort or desire to weaken the workers rights.

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THEY TALK OVER EACH OTHER You said let's get off employment regulation,

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get onto something else. The sorts of areas the UK could do better in

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his negotiating free trade agreements with other parts the

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world, with the 2.3 billion consumers in the Commonwealth with

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whom we have ancient ties of culture, language, trade deals. Look

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at Pakistan and Jamaica, we have deals with them.

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Let's introduce our broader panel now - Peter Sutherland,

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former director general at the World Trade Organisation

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and European commissioner for competition.

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Ngaire Woods, Dean of the Blavatnik School

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Kathrine Kleveland, leader of the Norwegian 'No to EU' party.

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And the former British Ambassador to Warsaw Charles Crawford.

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Peter Sutherland, we saw that very favourable if you like view of the

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UK, what was your take on that, the Dan Hannan view? First of all let me

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make one very important point, at the beginning of this programme two

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examples were cited, Norway and Switzerland. As what could happen

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outside the EU. Both of those countries have two apply all EU

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regulations including the regulations referred to. They have

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to allow free movement of people and they have to make a contribution in

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the exact same way as the UK to the budget of the EU. That is a vitally

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important point. We will come to the negotiations we have and all that.

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It's a very important point, on the regulatory point, the EU through the

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creation of an internal market has been the most dynamic force in

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bringing movement to the European economy that has existed in the last

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50 years. Why has the economy not been dynamic? Without the EU we

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would be in a much worse situation as a continent than we are. But why

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then has the EU, and Dan Hannan said it, the growth rate has not been

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spectacular, it has grown over the last decade but not very much. Why,

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if it is such a poor spur competition, why has it been so

:20:53.:20:58.

lacklustre? There are inherent flaws in the political reaction to the

:20:59.:21:02.

dynamics of globalisation in Europe but it is not the EU which has

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caused the problem. The problem has been mitigated by opening up borders

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economic borders in Europe. Closing them down, as the Brexit people

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really want because it will be possible otherwise to remain in a

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trading relationship, is not the answer. Katherine Kleveland, you are

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the guest from Norway, you have come here to intrude on our private grief

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as we have our argument. What is the feeling in Norway about joining up

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and large? In Norway we are very satisfied being outside the euro,

:21:42.:21:48.

the EU. And still most Norwegians want to be out. We have no majority

:21:49.:21:57.

on every single pole in the question about EU membership for 11 years. So

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they are not in any doubt, what is it that drives it, is it fresh, is

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it oil? What makes Norway different to Denmark, Sweden, Finland and so

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many others? We are satisfied outside the EU and I think it is a

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lot of things. Democracy, sovereignty. We have had unions by

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our neighbour countries were sometimes before so we know

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something about the union. But we have said no in referendums in both

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1972 and 1994 and still it is hard, it is a very high majority who want

:22:43.:22:48.

to be outside the EU. I think we want to make the decisions

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ourselves, I think we are very satisfied being outside and yes. We

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will talk more about the Norway option... I want to say something

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about the scaremongering, because I directed my soggy scaremongering

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from the referendum in Norway -- I recognise all the scaremongering. I

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want to talk about the positive vision for Britain outside of the

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lies on trade deals signed with countries outside of Europe. India,

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China, Switzerland has signed a deal with China for example. Can you give

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us your assessment of the ease with which we will be able to sign those

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deals? The essence of trade deals is how much market do you have two of

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the other side? It Switzerland wants to have a trade deal with China it

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says this is our market, quite small, your market is enormous, we

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need a treat wheel with you. China says, as they have done, fine, you

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can give us completely open entry into your economy and we will open

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up for you to trade into ours in 15 years' time. That is a deal, that is

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a deal you can do. That is the deal China did with Switzerland. If

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everybody in the world believed in a free market as a matter of religious

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faith Britain might have a chance but that's not how it works.

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Countries say how big is your market and that is the deal we will do.

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That is why Britain is part of a European market of 500 million and

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is part of some successful trade deals with more than 60 other

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countries and that is Britain's market. If Britain wants to

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negotiate those alone there are two problems, they will always be the

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rule taker. The big economies will dictate terms. And it takes time, it

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takes an average 28 months to come up with a trade deal. The reason

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that is important is that all these flourishing sectors that Dan Hannan

:24:58.:25:03.

talked about need investment. When investors want to come to Britain

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they want to know two things, they want certainty about what the rules

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will be and they want a bigger market share. So if Britain says we

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are not sure what we are going to have, it will take a few years to

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negotiate and we want have access to a big market, Britain has a problem.

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-- we will not have access. Is that a problem for the Brexit side? No,

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Singapore's average time taken is 22 months for free trade agreements.

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Switzerland has far greater access to world economies than does the EU

:25:43.:25:46.

in terms of the GDP they have access to. And of course the point is that

:25:47.:25:53.

when the UK votes to leave the EU we currently have tariff free trade

:25:54.:25:58.

with the EU so simply what Remain like to say is that tariffs will be

:25:59.:26:01.

hyped but World Trade Organisation rules would prevent that. The

:26:02.:26:07.

imperative to the European economy of continuing to trade freely and

:26:08.:26:12.

have access to the UK market will incentivise an agreement on

:26:13.:26:15.

continued tariff free trade. That will be easily done because we have

:26:16.:26:19.

aligned our goods and services to theirs for the last 43 years. Easier

:26:20.:26:26.

than... That as a whole load of assertion, the first thing to point

:26:27.:26:33.

out. It is vision, Chuka. It is fantasy in my view. 44% of our

:26:34.:26:42.

experts go to the EU -- our exports. On average by percent of the exports

:26:43.:26:49.

come to us -- 5%. In terms of our trade with them, obviously there is

:26:50.:26:57.

balance, I don't argue we will not be able to trade but the question is

:26:58.:27:02.

as has been saved are the terms on which you can trade. I remember when

:27:03.:27:06.

I was Shadow Business Secretary and I went on a trip to Beijing and I

:27:07.:27:10.

met with parts of the Chinese government as you do. They said, why

:27:11.:27:15.

is it there are some people in your country that want to leave the

:27:16.:27:18.

European Union because when you are negotiating with us whether it is

:27:19.:27:22.

trade or whatever it may be you are sitting on one side of the table

:27:23.:27:26.

with half a billion other people and negotiating with our 1.3 billion

:27:27.:27:30.

people. Why do you want to sit in the corner with your 65 million? The

:27:31.:27:36.

question is the terms in which we can get it. People in this debate,

:27:37.:27:41.

one of the criticisms of Barack Obama was that you would never

:27:42.:27:45.

accept, Boris Johnson said you would never accept what we have if you

:27:46.:27:48.

were there the United States but we are not the United States. A poll

:27:49.:27:57.

today of the FTSE 350, the 350 listing companies were asked what

:27:58.:28:04.

the impact of Brexit would be. How many said it would be positive? Can

:28:05.:28:14.

you guess? It was 1%. Are they old alluded, that they don't know how

:28:15.:28:18.

good it will be? Because Dan Hannan says we will be leaders in so many

:28:19.:28:22.

sectors, the companies that Britain currently has clearly don't know. I

:28:23.:28:28.

am amazed you would say that as a BBC journalist because you would

:28:29.:28:31.

know that of the businesses in the UK only about 5% or 12% export to

:28:32.:28:38.

the EU so why would Brexit the better for non-exporters? That's a

:28:39.:28:45.

completely misleading... I think there are around 200,000 companies

:28:46.:28:51.

that export to the EU, the question is how many people do the employee?

:28:52.:28:57.

A lot. This is an odd islands, they are interconnected. Look at the car

:28:58.:29:02.

industry for example, big manufacturing sites in the

:29:03.:29:06.

north-east for examples. If anything negative impacts on those industries

:29:07.:29:09.

it's not just the car industry affected its all of the supply

:29:10.:29:15.

chain, the consumer businesses which service the employees and others in

:29:16.:29:20.

those businesses. In the end our economy is interconnected and it is

:29:21.:29:23.

interconnected with the rest of the world and that is the issue. The

:29:24.:29:27.

rest of the world is the point, what does the UK have going for it? We

:29:28.:29:32.

are the world's fifth guest economy, we have the best contract... THEY

:29:33.:29:41.

TALK OVER EACH OTHER We have so much going for us. I want to talk to the

:29:42.:29:52.

panel of voters. How many of you thought the video of Dan Hannan was

:29:53.:29:59.

realistic? How many of you thought it was not a realistic view? You

:30:00.:30:07.

thought it was too optimistic? I remember in the first and second

:30:08.:30:10.

episode of this series feeling relate upbeat about leaving the

:30:11.:30:15.

European Union but since then I have noticed it has been increasingly

:30:16.:30:20.

difficult to get anybody to substantiate their claims. Last week

:30:21.:30:27.

for example they spoke about ?350 million per week and you asked a lot

:30:28.:30:30.

of questions and they couldn't substantiate it. That is my problem.

:30:31.:30:36.

How many of you felt attracted to Britain which was a bit more

:30:37.:30:41.

deregulated, which was changing the regulations, throwing a lot of them

:30:42.:30:46.

away, is that attractive or unattractive? I think it's quite

:30:47.:30:49.

attractive but I just think it's unrealistic. Why? I just don't think

:30:50.:30:58.

that what Britain would look like if we left. It sounds nice but I don't

:30:59.:31:02.

think it's realistic. Any other views? I just wonder how it will

:31:03.:31:10.

happen. There are some lovely ideas but it looks like a bag of ideas, I

:31:11.:31:15.

don't know how it happens I don't know how to join the dots.

:31:16.:31:22.

Andrea, can you help them out? They are not quite persuaded. They do not

:31:23.:31:27.

have any specific objections but the risk that connection between the

:31:28.:31:31.

description and what you will actually get. I totally understand

:31:32.:31:35.

that and the difficulty for people who are advocating for the UK to

:31:36.:31:39.

leave the EU is that it is impossible, as I have said. Economic

:31:40.:31:43.

forecasts, you can be sure they will always be wrong so it is impossible

:31:44.:31:47.

to say that this is absolutely what it will look like. I feel that you

:31:48.:31:52.

have to look at instead in the rear-view mirror, what do we now?

:31:53.:31:56.

And what we do know, the facts are that this ?10 billion independent

:31:57.:32:01.

dividend, we know we will get that and that he is a huge sum of money.

:32:02.:32:05.

That would mean that we did not need any more policies. I don't want to

:32:06.:32:11.

go back to that. Then we need to look at, what are the advantages of

:32:12.:32:14.

the UK in world terms? Are we big enough to stand on our own two feet?

:32:15.:32:20.

The English, the time zone, the contract law. We have had all that

:32:21.:32:25.

and we need to move on. We have another big chunk to get through.

:32:26.:32:27.

Well, look, we have discussed at some length

:32:28.:32:29.

But there is a second dimension to this -

:32:30.:32:35.

will we have with our old chums in the European Union?

:32:36.:32:38.

Vote Brexit, and on June 24th, talks will start on some kind

:32:39.:32:41.

of new treaty arrangement to govern our relationship with the EU.

:32:42.:32:44.

There has to be some kind of deal to replace the EU treaties.

:32:45.:32:47.

The main challenge is to negotiate new rules

:32:48.:32:52.

There are a range of options that could keep us close

:32:53.:32:57.

There's been a lot of talk of being like Norway.

:32:58.:33:04.

It's out of the EU, but in a group called the EEA with almost full

:33:05.:33:08.

One down from that is being like Switzerland, out of the EU,

:33:09.:33:14.

and only a partial member of the single market.

:33:15.:33:21.

Switzerland can pick and choose what it signs up to.

:33:22.:33:23.

But the EU can pick and choose what access it gives Switzerland.

:33:24.:33:26.

Mostly following the principle that the more access to the EU market,

:33:27.:33:36.

the more strings attached. The backstop option if nothing else

:33:37.:33:37.

is arranged, is simply for Britain to be a member

:33:38.:33:40.

of the World Trade Organisation. No special EU deal, but facing more

:33:41.:33:42.

barriers to European trade. It should be said that the preferred

:33:43.:33:49.

option that Brexiters are coalescing around would place us outside

:33:50.:33:51.

of the single market - Whatever happens in the event

:33:52.:33:54.

of an Out vote, we'll try to negotiate some kind

:33:55.:33:58.

of friendly deal with the EU, as it accounts for

:33:59.:34:00.

44% of our exports. Unfortunately, it's not just down

:34:01.:34:02.

to us, it's also down to them. So how might the conversation

:34:03.:34:05.

with Brussels go? We asked a veteran diplomat

:34:06.:34:17.

to look into that. Jonathan Powell served

:34:18.:34:19.

as Tony Blair's chief of staff in Downing Street; he's

:34:20.:34:21.

firmly for Remaining in, and with the help of a former EU

:34:22.:34:23.

commissioner, Antonio Vittorino, has been imagining the kinds

:34:24.:34:26.

of discussion we might be It is the morning after the night

:34:27.:34:35.

before. Vote Leave has had a surprise victory. The markets are in

:34:36.:34:40.

turmoil and was a run on the pound. The Prime Minister has sent a senior

:34:41.:34:44.

civil servant, played by me, to Brussels to begin negotiations with

:34:45.:34:51.

you. With clear red lines set by the referendum on immigration, budget

:34:52.:34:53.

contributions and sovereignty. As you can imagine, we are very

:34:54.:34:57.

disappointed at the result of the referendum but of course we respect

:34:58.:35:02.

the decision of the British people. But you need to bear in mind that it

:35:03.:35:09.

is up to you to put forward your suggestions. It is up to us to

:35:10.:35:17.

decide how they can be accepted. The first option is to remain in the

:35:18.:35:21.

single market, like Norway. As a member of the European economic

:35:22.:35:27.

area. It has benefits, it is outside the European Union. You are

:35:28.:35:36.

proposing the Norway model which means joining the EEA. But you know

:35:37.:35:42.

very well that being in the single market rings along certain

:35:43.:35:49.

responsibilities, such as the indivisibility of the four freedoms.

:35:50.:35:51.

The free flow of capital services and goods includes also the free

:35:52.:36:00.

flow of people. You cannot take three and leave one out. You are

:36:01.:36:03.

putting those conditions on our memberships of the single market. It

:36:04.:36:08.

would be a rejection of the things the British people have voted for,

:36:09.:36:14.

we cannot do that. I am seeing more than that. I am saying that the

:36:15.:36:17.

development of the single market will be decided by us in Brussels

:36:18.:36:24.

and we will send you the rules to be permitted. In Oslo, this is called

:36:25.:36:31.

government by fax. But we are a serious country, and we must be

:36:32.:36:35.

allowed to have our own special relationship. Why would we not be

:36:36.:36:38.

allowed to have a different relationship to Norway? Norway is a

:36:39.:36:41.

serious country. You cannot say that! But the reality is that we can

:36:42.:36:48.

setup a special arrangement for a former member like you. But let's be

:36:49.:36:54.

frank, we are concerned with other member states who feel tempted to

:36:55.:37:02.

use the British Pathe. So I will not anticipate that there is too much

:37:03.:37:07.

willingness to change the rules of the European Economic Area. The

:37:08.:37:12.

Norwegian option would not work for us. If we had to obey the rules,

:37:13.:37:17.

they will not let us have a free ride. I will try something else. The

:37:18.:37:23.

second option is to leave the EU and rejoin at much like Switzerland,

:37:24.:37:28.

which has over 120 separate agreements. -- rejoin EPTA. But if

:37:29.:37:33.

we cannot be inside of the single market, we would like to be outside

:37:34.:37:38.

it but with free access. We could be in EFTA like Switzerland. What is

:37:39.:37:44.

wrong with being like them? They have an excellent relationship, with

:37:45.:37:47.

separate agreements that they do not have to accept. Why can we not have

:37:48.:37:51.

exactly what they had? They even had a referendum on immigration, to stop

:37:52.:37:55.

immigration into Switzerland. But that is the problem. The Swiss model

:37:56.:38:03.

is broken. The EU refused to accept the decision in the referendum on

:38:04.:38:09.

immigration. And we have put into question the entire agreement with

:38:10.:38:12.

Switzerland. We are putting pressure on them to make an overall revision

:38:13.:38:18.

of the position, the relationship between the EU and Switzerland. How

:38:19.:38:23.

can you expect us to offer you something that we are putting into

:38:24.:38:30.

question? Norway. But we are a bigger country than Switzerland. Why

:38:31.:38:33.

can we not have the relationship that Switzerland have come up with

:38:34.:38:37.

the advantages of the single market, without immigration. Why can we not

:38:38.:38:42.

have our services and free access to the EU? For a simple reason. Because

:38:43.:38:45.

the agreement with Switzerland does not cover services and it does not

:38:46.:38:52.

include financial services, which art in an economic area that is very

:38:53.:38:57.

important. You are not serious about the Swiss model. He would exclude

:38:58.:39:02.

our services from the EU under the circumstances? Yes. That is the

:39:03.:39:06.

system. In which case, we will not go for that option. Even if the

:39:07.:39:11.

Swiss option was on offer, I could not tell the Prime Minister that the

:39:12.:39:16.

services were excluded. That is 80% of our economy. I have to try

:39:17.:39:21.

something else. The third option is a free trade agreement with the EU

:39:22.:39:25.

like Canada, where we control our borders and try to get as much

:39:26.:39:28.

access as we can for goods and services. Yes, we can negotiate a

:39:29.:39:35.

free trade agreement with the UK, as we have done with Canada. It would

:39:36.:39:42.

also be in our interest, I believe. Nevertheless, I must say that this

:39:43.:39:47.

agreement will take time to negotiate. We have negotiated for

:39:48.:39:50.

several years with the Canadians and it has not yet been concluded in the

:39:51.:39:56.

sense of being ratified. I am not optimistic. But we are not Canada,

:39:57.:40:04.

we are your guest trading partner. Germany has a trade deficit with us

:40:05.:40:07.

and they will not want to stop selling Mercedes to us. You will not

:40:08.:40:12.

want to stop selling Portuguese wine to us. Open trade is in your

:40:13.:40:17.

interest. Yes, you are a major trading partner. A big, worldwide

:40:18.:40:22.

economy. But you sell 44% of your goods to us and we only sell to you

:40:23.:40:32.

8%. And you mention the trade deficit, but let's be clear, you

:40:33.:40:36.

have a trade deficit with only two countries, Germany and the

:40:37.:40:40.

Netherlands. They are definitely important countries in the EU

:40:41.:40:43.

economy but you need to bear in mind that there are other member states,

:40:44.:40:48.

and the Germans might be interested in selling you the Mercedes but

:40:49.:40:54.

probably the Polish are much more attached to the idea of free

:40:55.:40:58.

movement of people. And Jonathan, in this conversation we always need to

:40:59.:41:04.

bear in mind, even if only one rejects the agreement, it will not

:41:05.:41:11.

come into force. The three negotiated options will not work. As

:41:12.:41:16.

a negotiator, I always have a back-up, best alternative and I will

:41:17.:41:21.

try that now. The final option is not to seek any special relationship

:41:22.:41:25.

with the European Union but to revert to the World Trade

:41:26.:41:29.

Organisation rules. You could consider that possibility. But

:41:30.:41:35.

probably you should think about it carefully. The question is not the

:41:36.:41:43.

weight of tariffs, the question is the nontariff areas. Administrative

:41:44.:41:49.

rules, consumer protection rules, standards. Do we want to go back to

:41:50.:41:55.

that world? But if you are proposing to impose sanctions on us, we will

:41:56.:41:59.

take measures against you, reciprocal measures under world

:42:00.:42:02.

trade organisation rules. It is awkward to listen to British

:42:03.:42:06.

officials speaking about sanctions and protectionism. But let me say

:42:07.:42:12.

frankly, you need to speak to the opposition at the World Trade

:42:13.:42:14.

Organisation because at the moment you are integrated into the European

:42:15.:42:19.

Union as a group of countries. When you are standing alone, you have to

:42:20.:42:24.

redefine not only your position within the World Trade Organisation

:42:25.:42:26.

but in relation to all the other trading partners. Remember what

:42:27.:42:33.

Barack Obama said here in London a few weeks before the referendum. If

:42:34.:42:39.

you leave the European Union, you go back to the end of the queue. The

:42:40.:42:45.

only other option for Britain would be a customs union like Turkey or an

:42:46.:42:51.

accession agreement like Albania but neither are on the table and we

:42:52.:42:54.

would not want them if they were. I have been negotiating for 40 years

:42:55.:42:59.

and in my opinion this is one of the most difficult negotiating hands I

:43:00.:43:02.

have ever seen. There is a choice on one hand between sovereignty and on

:43:03.:43:05.

the other hand, access to the single market. I will have to go back and

:43:06.:43:09.

tell the Prime Minister that he has to choose.

:43:10.:43:11.

So a bit of mock diplomacy there, from Jonathan Powell.

:43:12.:43:14.

I think it's fair to say that he didn't seem to try very hard

:43:15.:43:17.

in those negotiations - but then he is trying to convince

:43:18.:43:20.

us not to get into them in the first place.

:43:21.:43:23.

Charles Crawford, I don't know if you have 40 years of diplomatic

:43:24.:43:28.

experience, but you have got some. How do you think negotiations would

:43:29.:43:36.

go? Well, can I answer the lady over there who says that she cannot see

:43:37.:43:42.

how we get there? I think part of the problem is imagining time. A 20

:43:43.:43:51.

year period, unscrambling this relationship, it is more realistic

:43:52.:43:55.

than six weeks. That is the first thing to think about. What was

:43:56.:43:59.

revealing about that exchange was that first of all Jonathan Powell is

:44:00.:44:03.

talking to the commission, not talking to other EU governments. And

:44:04.:44:07.

the EU commission brazenly aren't giving us one of the reasons why we

:44:08.:44:10.

should leave, which is that they are saying that we do not want other

:44:11.:44:14.

countries to get it into their heads that you could be like these others.

:44:15.:44:19.

It is really obnoxious. But it is right that we would have to put

:44:20.:44:24.

forward a plan. And I think the key difference I have with you is how

:44:25.:44:30.

far we would want to go in terms of leaving the single market. There is

:44:31.:44:38.

a case to be made for having an arrangement like the EEA, at least

:44:39.:44:42.

as a first step. The EU is currently not going to be able to sustain

:44:43.:44:48.

itself because of the Eurozone problems. The EEA option is

:44:49.:44:52.

basically the Norway option? Hang on, that involves free movement. So

:44:53.:44:57.

are you saying that we go through all of this and we still are going

:44:58.:45:01.

to have free movement of people at the end, potentially? You are going

:45:02.:45:06.

to have rules which apply to everybody. Within the European

:45:07.:45:11.

Union, within the single market space, if you stay within the single

:45:12.:45:15.

market of the logic is that you have to carry on with some arrangement

:45:16.:45:19.

for free movement of people. Without any control over those rules, that

:45:20.:45:22.

is the problem for the Swiss and the Norwegians. They have no control

:45:23.:45:29.

over the rules. Andrea Leadsom, can you envisage any Out a scenario in

:45:30.:45:36.

which free movement continues as it is? Certainly not where free

:45:37.:45:44.

movement was uncontrollable. Immigration has been a good thing,

:45:45.:45:46.

where it is connected to the skills we need and it is manageable. The

:45:47.:45:51.

problem with immigration has been the uncontrollable volumes of it,

:45:52.:45:57.

with the skills that we do not need. What I'm getting at, is it the

:45:58.:46:01.

position of the Leave campaign, should the voters are shown that we

:46:02.:46:08.

leave the single market in order not to have free movement? I think what

:46:09.:46:12.

voters should think from the leave side is that we would not have

:46:13.:46:16.

uncontrolled immigration. So we would leave the single market? In my

:46:17.:46:22.

opinion, yes, we would. But the trouble is... Are we going to have

:46:23.:46:27.

our cake and eat it? If we leave the single market, yes. We would not

:46:28.:46:34.

have free movement. I think it is possible, look, there is a big

:46:35.:46:37.

omelette here and we will not be able to turn it into 28 ex. That is

:46:38.:46:43.

for sure. We're going to have to negotiate transitional arrangements

:46:44.:46:45.

of some sort and we are going to have to stay in Europe. We are not

:46:46.:46:50.

going to float off to the Pacific somewhere. The real issue is how you

:46:51.:46:56.

go in there with a firm, coherent, step-by-step approach. For me, the

:46:57.:47:01.

main reason for leaving is because I think, I really do think, that the

:47:02.:47:05.

European Union with the Eurozone problem is becoming increasingly

:47:06.:47:09.

risky to stay in. But do you really think that we will be immune from

:47:10.:47:13.

what happens in the Eurozone if we leave the European Union? At least

:47:14.:47:17.

with us being around the table, we have some prospect of actually

:47:18.:47:21.

shaping and influencing what happens in the European Union. And let's not

:47:22.:47:26.

forget, and I say to the voters here, this is the biggest economic

:47:27.:47:32.

block near us. The single market, as it currently is, is our domestic

:47:33.:47:36.

market. If we leave the European Union, all of these big global

:47:37.:47:40.

issues that we have, we are not going to be immune from their

:47:41.:47:44.

impact. Take migration, immigration is what we have been talking about,

:47:45.:47:48.

and how did that start? It started because of instability and problems

:47:49.:47:51.

in the Middle East and growing jihad is in Africa to a lesser extent.

:47:52.:47:56.

That is not going to go away if we leave the European Union. The

:47:57.:48:00.

question is not us being trampled over by European partners, and nine

:48:01.:48:03.

times out of ten when there is a vote on the council, and it is the

:48:04.:48:07.

European Council and Parliament that make the laws, not the commission.

:48:08.:48:11.

When there are votes on that, we are with the majority. In the majority

:48:12.:48:21.

of cases. Nine out of ten times, and we can amplify that. I am a lawyer

:48:22.:48:28.

and I deal with the law. How we amplify British influence, that is

:48:29.:48:31.

what this is about. Where we have protested and gone against, where we

:48:32.:48:37.

have asked for a special deal, we have never yet managed to achieve, I

:48:38.:48:41.

cannot think of a time where we have actually been accepted and agreed

:48:42.:48:45.

with and taken into account. But that is nonsense. Peter Sutherland.

:48:46.:48:54.

First of all that is nonsense, Schengen, Eurozone, there has been a

:48:55.:49:01.

great attempt and there will continue to be a great attempt to

:49:02.:49:08.

accommodate and be as good as we can be in maintaining relationships with

:49:09.:49:13.

the United Kingdom but the bottom line is that the alternatives which

:49:14.:49:18.

were on the programme in the Jonathan Powell extract are the only

:49:19.:49:24.

alternatives and nobody on the Brexit side from the beginning of

:49:25.:49:31.

this debate has been willing to say this is the route we are going to

:49:32.:49:37.

take because they all have huge flaws. We have heard Andrea Leadsom

:49:38.:49:43.

say, willing to give up full membership of the single market as

:49:44.:49:47.

is is currently comprise so that gives us a clear picture. If that is

:49:48.:49:54.

the case it will include almost certainly services being excluded

:49:55.:50:00.

from the internal market. That is 80% of the British economy. I am

:50:01.:50:08.

going to let Katherine in. From the Norwegian point of view the EEA

:50:09.:50:15.

agreement is much better than EU membership but still we in my

:50:16.:50:22.

organisation want to get rid of the EEA agreement. You want to go back

:50:23.:50:27.

down to something else? We want to negotiate and other trade agreement

:50:28.:50:33.

because by the EEA agreement we have to accept a lot of the EU laws and

:50:34.:50:39.

regulations and we want to decide ourselves and I am quite sure that

:50:40.:50:46.

the UK will have the possibility to make a good trade agreement both

:50:47.:50:51.

because you want it and need it and because the EU want it and need it.

:50:52.:50:57.

We have established something very important which is that the dominant

:50:58.:51:03.

view of the Leave containers is exit the single market because that's the

:51:04.:51:05.

only way to get a significant amount of sovereignty back. Ngaire Woods,

:51:06.:51:14.

how damaging or not damaging would that sacrificing full membership of

:51:15.:51:19.

the single market be? The only scenario in which it's not damaging

:51:20.:51:25.

is the scenario where Britain continues to abide by all EU

:51:26.:51:29.

regulation as a venue had to say why leave? It feels to me that at the

:51:30.:51:33.

essence of this is that there is a big part of the Leave campaign which

:51:34.:51:37.

is let's run away from a scary ghost and what is that ghost? That ghost

:51:38.:51:42.

was the European Union which was dreamt up 30 years ago, ever closer

:51:43.:51:48.

union. That is gone, there is no such European Union any more. The

:51:49.:51:53.

European Union has been hugely modified over the last six years.

:51:54.:51:57.

The Eurozone is moving more quickly towards something? I think the

:51:58.:52:03.

Eurozone crisis which began in Greece has put a huge crack, the

:52:04.:52:10.

migration crisis has put a crack through Schengen. There is not a

:52:11.:52:19.

majority of politicians in Europe crying for an ever closer EU any

:52:20.:52:24.

more, that is ten years out of date. This scary ghost people want to run

:52:25.:52:30.

away from simply isn't there. Ngaire that is so not the case. Look at the

:52:31.:52:37.

five Presidents report, they want to synchronise insolvency law, company

:52:38.:52:40.

law, they want to bring in place fiscal union, fiscal transfers from

:52:41.:52:49.

Germany to Greece. How would you deal with banks too big to fail? I

:52:50.:52:55.

will come back to that but an employment in Greece is about 50%,

:52:56.:53:02.

in Italy 38%, for five years. It is destroying a lifetime for those

:53:03.:53:06.

kids. The migration crisis is forcing people to put up barbed wire

:53:07.:53:11.

fences. This is a Schengen area in absolute crisis and there are

:53:12.:53:15.

solution, of the commission, is closer union, you are so wrong if

:53:16.:53:19.

you think it's yesterday's issue. That debate has been well made. An

:53:20.:53:25.

employed people are not crying out for more European Union. -- who

:53:26.:53:27.

employed. I can agree. Bill implied. We have another point, are you

:53:28.:53:42.

worried about the sacrifice of service trade with the EU if we say

:53:43.:53:47.

we will give up the full membership of the single market? We are happy

:53:48.:53:51.

to what a way because then we can control who comes into our country

:53:52.:53:55.

but now our banks for example don't have a passport to operate around

:53:56.:54:01.

the EU? That is a great big red herring. The city is going nowhere.

:54:02.:54:05.

Financial services in the UK employs 2 million people. It is a successful

:54:06.:54:11.

industry which stretches from Aberdeen to Manchester to Birmingham

:54:12.:54:15.

to Bournemouth to Northampton to the city. Canary Wharf is as big as

:54:16.:54:20.

downtown Frankfurt financial services. There is no other

:54:21.:54:24.

financial services Centre in the entire of Europe. We compete with

:54:25.:54:28.

New York, Hong Kong and Singapore. It is going nowhere. The European

:54:29.:54:35.

Union needs access to the UK financial services market, no

:54:36.:54:39.

question. It is amazing that that can be said when the IMF, the

:54:40.:54:46.

governor of the Bank of England, the clear argument that needing a single

:54:47.:54:52.

passport as a financial operator to operate all around Europe is

:54:53.:54:56.

crucial, is crucial to where you operate from. It entitles you to

:54:57.:55:03.

operate across Europe and if you lose it you lose the right to

:55:04.:55:09.

operate. Then you have to open a subsidiary in the European zone.

:55:10.:55:16.

That is a big red herring. But there are disadvantages. There are not

:55:17.:55:22.

actually. But then your subsidiary serving a client import school has

:55:23.:55:25.

to get the agreement of the Portuguese regulator or a Spanish

:55:26.:55:29.

regulator. The regulatory rules are different. They are not very

:55:30.:55:37.

different at all. That is such a red herring, it's not going to stop

:55:38.:55:42.

financial services. We have just learnt in 2008 what happens to an

:55:43.:55:46.

economy if it loses access to wholesale financial markets. If the

:55:47.:55:50.

banking system collapses and stopped lending to each other you have

:55:51.:55:54.

meltdown in the economy. The financial services centre is in the

:55:55.:55:59.

UK, European countries will need to continue to access UK-based

:56:00.:56:03.

financial services. We recognise a lot of the scaremongering from the

:56:04.:56:11.

referendum in 1994 and everything was for us, we did not lose 100,000

:56:12.:56:18.

jobs, the investment did not dry up. We had a successful economy and we

:56:19.:56:24.

have low and employment so we wish you welcome out. Chuka Umunna, do

:56:25.:56:34.

you think the EU will play hardball with the UK if we leave and if they

:56:35.:56:40.

are going to play hardball does that not say we should be wary about

:56:41.:56:43.

treating these people as our friends, is that an argument for

:56:44.:56:48.

staying because they will be bad to us if we leave? These are not our

:56:49.:56:54.

enemies, they are our friends but I think the idea they would give us a

:56:55.:56:58.

deal, full access to the single market, and ability to shape its

:56:59.:57:03.

rules, not paying to be part of it and having all the benefits, the

:57:04.:57:07.

idea they would give us that kind of deal that they don't even give

:57:08.:57:11.

themselves is for the stars, is for the birds if that's the right

:57:12.:57:14.

expression. I don't see that happening. In the end it's about

:57:15.:57:21.

future generations and ensuring they have access to the opportunities we

:57:22.:57:26.

have had and then some. The simple fact is that the world is different

:57:27.:57:30.

now, it is interconnected and I think we should be self-confident

:57:31.:57:33.

enough to bleed we can continue to do what we have always done very

:57:34.:57:37.

well which is punch above our weight. A lot of the heads of

:57:38.:57:40.

government and ministers I have spoken to in the EU, one of the

:57:41.:57:44.

reasons they worry about the UK leaving is because they recognise

:57:45.:57:49.

the value of our traditional role of leadership within it. Far from being

:57:50.:57:52.

trampled over. You speak to so many people in the EU and they will

:57:53.:57:56.

complain about the exercise of British influence because we shape

:57:57.:58:00.

so much which goes on it. I want to give you the last word Andrea,

:58:01.:58:03.

interesting debate about what it will look like. I have three

:58:04.:58:10.

children, 20, 18 and 12 and the best thing I can say is that my views are

:58:11.:58:15.

all about their future. I believe the future will be brilliant outside

:58:16.:58:19.

of the EU and if we stay with the EU are trade is completely flat-lining

:58:20.:58:23.

and it has done for ten years. They are in a disastrous position and if

:58:24.:58:27.

we leave the future is very bright. Thank you all. That's the last one,

:58:28.:58:35.

panel, you have heard the debate. You are not a scientifically

:58:36.:58:39.

representative panel, you were selected by a polling company, not

:58:40.:58:44.

by us, because you were undecided at the beginning of the six programmes

:58:45.:58:47.

and because you could come in for six programmes! Thank you for that.

:58:48.:58:55.

How many of you are now 100% sure how you will vote, how many have

:58:56.:59:02.

fully made up your mind? How many of you are feeling one way or another?

:59:03.:59:10.

OK. This is the big one, this is not scientific, how many of you would

:59:11.:59:18.

vote Leave? Angela. How many are feeling Remain? Were you genuinely

:59:19.:59:27.

undecided at the beginning of this? That is a great panel! What was

:59:28.:59:33.

going through your mind? I don't want to believe the scaremongering

:59:34.:59:37.

but the economy is in a perilous state at the moment. Recession could

:59:38.:59:43.

be absolutely costly. And the Scottish question, if Britain votes

:59:44.:59:52.

out, could all that open up again? I came here as undecided, leaning

:59:53.:00:00.

towards in but as I listen to the arguments I wanted to move out. But

:00:01.:00:05.

my concern is not for me it is for my family, children and

:00:06.:00:11.

grandchildren. Basically I cannot see any any benefit in leading the

:00:12.:00:16.

EU. It makes us safer, it makes our economy stronger and I can see any

:00:17.:00:22.

of that. In any case I trust my Prime Minister with what he says. We

:00:23.:00:29.

have elected a government and he says and he cannot make anything,

:00:30.:00:35.

make it up. So I put my trust in him and what I hear. A lot of people

:00:36.:00:40.

groaning as you say that! Angela you said you would vote Out, what

:00:41.:00:48.

century that way? I see it as in parliament, governing our own rules,

:00:49.:00:54.

sovereignty. We are a powerful country, we can stand on our two

:00:55.:01:00.

feet and go for it. I have heard some powerful arguments on both

:01:01.:01:05.

sides but I think the way we operate and the way we are, we have had so

:01:06.:01:13.

many negative relationships with some of the directors and the

:01:14.:01:17.

policies which have happened recently that I don't think we are

:01:18.:01:23.

suitable. We need to leave it there, that's all we have time for, thank

:01:24.:01:28.

you to the panel of voters, you have been loyal and stuck with it so

:01:29.:01:32.

thanks to you and thank you to our expert guests and Andrea Leadsom and

:01:33.:01:36.

Chuka Umunna. Emily will be in the chair tomorrow, I will see you on

:01:37.:01:43.

Wednesday. Good night.

:01:44.:01:50.

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