23/05/2016 Newsnight


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


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


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


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


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


credible as Jean-Claude Juncker joining Ukip.


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


We're here for a special Newsnight with politicians,


experts and voters to ask how we might fare.


Veteran negotiator Jonathan Powell gives his take on how


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


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


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


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


to put forward your suggestions. And the Brexiters give us


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


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


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


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


each devoted to one big issue in the campaign.


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


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


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


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


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


of life outside - you want a specific vision.


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


George Osborne was today painting his picture


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


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


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


goes up. The central conclusions from the Treasury analysis are


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


Meanwhile, Boris Johnson painted his scene in


the Telegraph today - that Britain outside would forge


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


leadership on foreign policy, crime-fighting,


intelligence-sharing and other intergovernmental


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


With us here, our panel of undecided voters.


They've been with us for the six programmes,


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


And a leading politician from each side.


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


forecast wrong and have persuaded themselves to point in one direction


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


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


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


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


European Union free trade agreements, that there will be no


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


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


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


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


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


surprised that the Treasury secretary would allow this sort of


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


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


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


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


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


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


impact. People like Capital Economics have said they have been


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


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


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


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


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


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


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


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


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


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


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


a post-Brexit Britain How would we use the freedoms


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


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


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


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


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


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


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


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


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


retention, Hoxton has become the software capital of Europe,


the Silicon Valley of Outside the downright malicious


rules on pensions, equity and insurance, our financial


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


Leeds and Birmingham. And our older industries


have revived, too. Our farmers, always more innovative


than their continental rivals, Our fishing grounds have once again


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


boondoggles, fuel prices have fallen back to world levels,


leading to a revival of our steel, cement,


ceramics and plastics producers. Britain has raised its eyes


to more global horizons. Yes, we still participate


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


to non-EU Turkey, but we have been able


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


markets to which we Over the last ten years,


every continent on this planet has experienced significant economic


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


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


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


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


to the world's only Family incomes have received


a triple boost. Food prices are lower outside


the common agricultural policy. Fuel bills are lower


because energy prices have And taxes are lower


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


for everyone and a general stimulus As the Eurozone continues


its genteel decline, Britain has become the leader


of a wider European bloc. Those 22 European states


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


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


by Eurocrats invulnerable to public opinion and immune to the ballot


box, by indeed European Commissioners who often


owe their positions to having been We have recovered that precious


right to hire and fire the people Those megabanks, those


multinationals that have spent years and spent millions lobbying Brussels


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


competition from start-ups Of course the economy


as a whole has benefited. The British Eurocrats,


the British MEPs who have lost their tax-free,


Michelin-starred Or rather, we've been redeployed


to the more productive bits Daniel Hannan's picture


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


an internationalist Britain, a free trader nation, embracing


globalisation and with a bonfire Other visions of a Brexit


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


commonly shared Let's explore it first


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


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


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


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


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


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


Dan Hannan said something interesting, that we could lead the


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


member states, it has unintended consequences which are disastrous


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


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


and I know. The qualification requirement for unfair dismissal is


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


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


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


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


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


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


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


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


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


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


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


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


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


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


one? If we vote to Leave we wake up and


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


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


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


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


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


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


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


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


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


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


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


signed up to things with free marketeers within the Conservative


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


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


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


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


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


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


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


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


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


as things stand with the working Time directive there are real


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


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


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


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


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


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


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


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


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


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


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


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


his negotiating free trade agreements with other parts the


world, with the 2.3 billion consumers in the Commonwealth with


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


at Pakistan and Jamaica, we have deals with them.


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


former director general at the World Trade Organisation


and European commissioner for competition.


Ngaire Woods, Dean of the Blavatnik School


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


And the former British Ambassador to Warsaw Charles Crawford.


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


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


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


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


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


regulations including the regulations referred to. They have


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


our neighbour countries were sometimes before so we know


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


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


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


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


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


about the scaremongering, because I directed my soggy scaremongering


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


hyped but World Trade Organisation rules would prevent that. The


imperative to the European economy of continuing to trade freely and


have access to the UK market will incentivise an agreement on


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


industry for example, big manufacturing sites in the


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


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


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


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


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


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


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


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


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


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


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


episode of this series feeling relate upbeat about leaving the


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


difficult to get anybody to substantiate their claims. Last week


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


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


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


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


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


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


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


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


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


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


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


have any specific objections but the risk that connection between the


description and what you will actually get. I totally understand


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


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


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


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


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


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


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


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


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


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


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


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


Well, look, we have discussed at some length


But there is a second dimension to this -


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


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


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


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


The main challenge is to negotiate new rules


There are a range of options that could keep us close


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


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


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


and only a partial member of the single market.


Switzerland can pick and choose what it signs up to.


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


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


the more strings attached. The backstop option if nothing else


is arranged, is simply for Britain to be a member


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


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


option that Brexiters are coalescing around would place us outside


of the single market - Whatever happens in the event


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


of friendly deal with the EU, as it accounts for


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


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


with Brussels go? We asked a veteran diplomat


to look into that. Jonathan Powell served


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


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


commissioner, Antonio Vittorino, has been imagining the kinds


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


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


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


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


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


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


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


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


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


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


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


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


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


very well that being in the single market rings along certain


responsibilities, such as the indivisibility of the four freedoms.


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


agreement will take time to negotiate. We have negotiated for


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


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


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


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


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


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


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


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


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


Netherlands. They are definitely important countries in the EU


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


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


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


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


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


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


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


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


with the European Union but to revert to the World Trade


Organisation rules. You could consider that possibility. But


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


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


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


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


take measures against you, reciprocal measures under world


trade organisation rules. It is awkward to listen to British


officials speaking about sanctions and protectionism. But let me say


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


Organisation because at the moment you are integrated into the European


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


redefine not only your position within the World Trade Organisation


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


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


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


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


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


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


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


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


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


tell the Prime Minister that he has to choose.


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


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


in those negotiations - but then he is trying to convince


us not to get into them in the first place.


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


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


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


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


year period, unscrambling this relationship, it is more realistic


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


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


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


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


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


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


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


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


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


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


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


itself because of the Eurozone problems. The EEA option is


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


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


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


to have rules which apply to everybody. Within the European


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


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


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


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


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


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


movement was uncontrollable. Immigration has been a good thing,


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


problem with immigration has been the uncontrollable volumes of it,


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


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


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


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


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


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


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


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


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


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


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


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


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


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


European Union with the Eurozone problem is becoming increasingly


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


alternatives and nobody on the Brexit side from the beginning of


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


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


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


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


the case it will include almost certainly services being excluded


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


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


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


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


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


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


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


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


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


We have established something very important which is that the dominant


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


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


how damaging or not damaging would that sacrificing full membership of


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


is the scenario where Britain continues to abide by all EU


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


industry which stretches from Aberdeen to Manchester to Birmingham


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


downtown Frankfurt financial services. There is no other


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


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


Union needs access to the UK financial services market, no


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


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


passport as a financial operator to operate all around Europe is


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


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


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


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


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


to get the agreement of the Portuguese regulator or a Spanish


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


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


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


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


banking system collapses and stopped lending to each other you have


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


future generations and ensuring they have access to the opportunities we


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


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


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


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


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


reasons they worry about the UK leaving is because they recognise


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


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


complain about the exercise of British influence because we shape


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


many negative relationships with some of the directors and the


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


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


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


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


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


Wednesday. Good night.


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