:00:00. > :00:07.THERESA MAY: We are living through an important moment
:00:08. > :00:19.We face a time of great national change.
:00:20. > :00:26.If you're just managing, I want to address you directly.
:00:27. > :00:30.When we take the big calls, we'll think not of the
:00:31. > :00:37.We'll listen not to the mighty but to you.
:00:38. > :00:42.We'll prioritise not the wealthy, but you.
:00:43. > :00:48.We won't entrench the advantages of the fortunate few.
:00:49. > :00:51.And we will make Britain a country that works not for a privileged few,
:00:52. > :01:01.# But I'll still reach out to the top
:01:02. > :01:25.There was a changing of the guard at Buckingham Palace today.
:01:26. > :01:29.The man who won an election a year ago met the Queen this afternoon,
:01:30. > :01:34.Then as he was driven out, Theresa May was driven in to be
:01:35. > :01:38.For those that have found the last three weeks
:01:39. > :01:40.disconcertingly turbulent, the familiar routine
:01:41. > :01:43.of the cars coming and going, that peaceful transfer of power,
:01:44. > :01:54.We are surely in the early stages of a national adventure.
:01:55. > :02:00.For a start, Boris Johnson is Foreign Secretary.
:02:01. > :02:03.Plus, two other Brexiteers have the job of delivering Brexit.
:02:04. > :02:05.And Theresa May made clear beyond that, there'll be
:02:06. > :02:08.To kick us off I'm here with Newsnight's own cabinet -
:02:09. > :02:15.our policy editor Chris Cook, diplomatic editor Mark Urban,
:02:16. > :02:17.business editor Helen Thomas and political editor Nick Watt.
:02:18. > :02:30.Nick, let's start with the new appointments.
:02:31. > :02:38.Yes, if Margaret Thatcher was not returning, Theresa May was not for
:02:39. > :02:42.waiting. Within one hour of arriving in Downing Street, she was launching
:02:43. > :02:46.her new cabinet. She didn't want such a prominent face from the
:02:47. > :02:50.failed side of the referendum, so George Osborne was out. There are
:02:51. > :02:55.Brexiteer Limerick in charge of taking a side of the European Union,
:02:56. > :02:59.Boris Johnson, big senior post for him, David Davis was a tough nut as
:03:00. > :03:02.John Major's Europe minister and he will be in charge of the
:03:03. > :03:06.nitty-gritty negotiations are getting is out, and Liam Fox, former
:03:07. > :03:09.Defence Secretary is going to be in charge of international trade
:03:10. > :03:15.negotiating new deals outside the EU. We can see pictures of them
:03:16. > :03:22.tripping up Downing Street to hear their positions. We have seen the
:03:23. > :03:26.three Brexiteers. Three men, all Brexiteers, but there was balance in
:03:27. > :03:31.the Cabinet as well. Yes, another key theme is unity, seasonal to big
:03:32. > :03:37.posts the two remainders, Amber Rudd as Home Secretary, Theresa May has a
:03:38. > :03:52.high regard for her, and early job she had was aristocracy adviser for
:03:53. > :03:55.the film Forwarding Is In A Funeral. Helen, the economics, Philip
:03:56. > :04:01.Hammond, what do we know about him? We saw this huge change. He looks
:04:02. > :04:04.like a choice designed to reassure. There is a hint of continuity, he
:04:05. > :04:10.worked with George Osborne shadowing the Treasury in opposition, he is
:04:11. > :04:14.known as a fiscal hawk so perhaps his inclination will be to keep a
:04:15. > :04:21.tight grip on the purse strings, but he is taking over in very different
:04:22. > :04:25.times. The economy and the fiscal position, Theresa May was describing
:04:26. > :04:28.quite an ambitious agenda. The economy may not be working to her
:04:29. > :04:33.favour for all of that. Absolutely, that is the big unknown. Nobody
:04:34. > :04:37.really knows what the uncertainty around Brexit is going to mean the
:04:38. > :04:41.economy, what damage is being done or maybe done. Philip Hammond has
:04:42. > :04:49.this balancing act. On the one hand he has a weakening economy which
:04:50. > :04:54.will make the target harder, but he has a boss who wants less austerity,
:04:55. > :04:58.so how he manages that balancing act will be the question. A big question
:04:59. > :05:02.for the rest of this Parliament. And foreign policy, Mark. Boris Johnson,
:05:03. > :05:13.Foreign Secretary, who would have thought it? Clearly if you look at
:05:14. > :05:20.Twitter, people find that rather gag-tastic. There could be some
:05:21. > :05:24.dodgy missions going across the desk of MI6. Remember he had an
:05:25. > :05:28.unsuccessful trip abroad to Israel and Palestine when he was the mayor.
:05:29. > :05:32.The best he can do is to be an ambassador and go out and sell the
:05:33. > :05:37.country. We need to talk about the Boris style of diplomacy, and he has
:05:38. > :05:39.history. I can read you a couple of quotes, on the Queen and
:05:40. > :05:50.Commonwealth, it supplies with regular clearing -- cheering crowds
:05:51. > :05:54.of flag-waving piggy ninnies. Just a couple of months ago, his limerick
:05:55. > :06:03.about the president of Turkey. There was a young fellow from Ankara... He
:06:04. > :06:09.won a prize in the Spectator magazine for that poetry. Are people
:06:10. > :06:16.outside of Britain,, will they take him seriously? They will have to.
:06:17. > :06:20.The real thing to look for here is the way the Foreign Office itself is
:06:21. > :06:23.being eclipsed now, for a long time Downing Street has taken on the
:06:24. > :06:28.important stuff, and in this Brexit moment, we can look at this trio of
:06:29. > :06:33.people Theresa May has put together. Boris will only be doing a small
:06:34. > :06:38.part of it. David Davis, tough negotiator, Liam Fox, and if it is
:06:39. > :06:43.proving really hard to disentangle freedom of movement from free trade
:06:44. > :06:46.access, or other free trade deals are not rolling in, who better to
:06:47. > :06:55.point that out than those three experts, Fox, Johnson and Davis?
:06:56. > :07:01.Let's talk about Brexit, Chris. We know a little bit about what David
:07:02. > :07:07.Davis' vision is. This week he published an article about his
:07:08. > :07:13.vision, and I'm not a trade expert. I think whoever wrote that isn't a
:07:14. > :07:18.trade expert either. There are some fairly fundamental problems with it,
:07:19. > :07:26.his idea we could put together trade deals that give us something better
:07:27. > :07:32.than they -- than the EU in one or to years, that is ambitious. He is
:07:33. > :07:35.very dismissive of what economists call nontariff barriers, the admin
:07:36. > :07:40.required to get stuff over a border can be more important than the
:07:41. > :07:44.tariff. He is also very nonchalant about services. He talks a lot about
:07:45. > :07:48.what would happen if Germany blocked our car exports, not a lot about law
:07:49. > :07:53.or advertising or things where we make a lot of money. We have talked
:07:54. > :07:56.about some of the themes. Let's get on with the rest of the programme.
:07:57. > :07:58.Theresa May pitched herself as a continuity candidate,
:07:59. > :08:01.but from the moment she arrived in Downing Street, it looked
:08:02. > :08:04.In particular, some radical words on how Government is now
:08:05. > :08:23.Here's Nick's take on this historic day.
:08:24. > :08:30.Her Majesty is well versed in the rituals of the transfer of power in
:08:31. > :08:37.her kingdom. After seven decades on the throne.
:08:38. > :08:43.But rarely can the Queen have seen such a ruthless display of prime
:08:44. > :08:49.ministerial authority so soon after her new First Minister took leave of
:08:50. > :08:54.her in Buckingham Palace. We believe in a union not just between the
:08:55. > :09:00.nations of the United Kingdom, but between all of our citizens,
:09:01. > :09:04.everyone of us, whoever we are, and wherever we are from. That means
:09:05. > :09:11.fighting against the burning injustice, that if you are born poor
:09:12. > :09:14.you will die on average nine years earlier than others, if you are
:09:15. > :09:19.black, you are treated more harshly by the Criminal Justice Act and the
:09:20. > :09:25.nephew white, if you are white, working-class boy, you are less
:09:26. > :09:30.likely than anybody else in to go to university,. In her first speech
:09:31. > :09:34.outside her new home, she lavished praise on David Cameron, but left no
:09:35. > :09:38.one in any doubt that the personal political credo of this grammar
:09:39. > :09:44.school girl would be different to her Tony and predecessor. A decade
:09:45. > :09:47.ago, David Cameron George Osborne said to themselves and private how
:09:48. > :09:51.remarkable it was the speed with which they took over the
:09:52. > :09:55.Conservative Party. But they also said to themselves that they could
:09:56. > :09:58.lose that within a nanosecond. This evening they learned how true that
:09:59. > :10:02.prediction was when the new Prime Minister marched into Downing Street
:10:03. > :10:07.and said that the era of the privileged few running number ten
:10:08. > :10:13.was over, and then she unceremoniously ended George
:10:14. > :10:16.Osborne's Cabinet career. Few in Westminster were mourning the demise
:10:17. > :10:21.of George Osborne as the Tory party woke up on this balmy summers
:10:22. > :10:27.evening to the new regime. Politics is brutal, it really is, and not
:10:28. > :10:29.just the senior cabinet ministers and ministers, but all of their
:10:30. > :10:35.teams who have been working extraordinarily hard, suddenly
:10:36. > :10:38.nothing. I am a select committee chair, and they are about the only
:10:39. > :10:43.people who still have a job, because we were elected by parliament, but
:10:44. > :10:46.it is a brutal business. The senior Cabinet appointments were the most
:10:47. > :10:50.eye-catching. Theresa May's allies were keen to point to her message to
:10:51. > :10:58.the nation on how she will govern in a different manner. Frankly, a
:10:59. > :11:02.priority for Theresa May is always that of those who are disadvantaged.
:11:03. > :11:09.She is the daughter of a vicar, I think her late father must have
:11:10. > :11:12.instilled in her this issue of looking after those who are
:11:13. > :11:19.disadvantaged, making sure the state supports those who need help, and I
:11:20. > :11:27.see from that speech, my interpretation is going to be a
:11:28. > :11:30.powerful agenda going forward. I was the future once!
:11:31. > :11:33.LAUGHTER David Cameron left Parliament on a
:11:34. > :11:40.warm note. He knows that his vision to keep Britain in a reformed EU has
:11:41. > :11:43.failed. Theresa May would like her Premiership to be remembered for
:11:44. > :11:48.great social reforms, but she knows it will be defined by her success or
:11:49. > :11:52.failure in negotiating Britain's exit from the EU. Supporters who did
:11:53. > :11:58.a different view to the new Prime Minister in the referendum say she
:11:59. > :12:08.could deliver a deal. Theresa May was a Remain. I am an Out. But there
:12:09. > :12:14.is no longer a difference between the camps. She has been clear that
:12:15. > :12:18.we are not going back on that vote but we will make it work for
:12:19. > :12:23.Britain. As Kennedy put it, we must not negotiate in fear but neither
:12:24. > :12:27.must we fear to negotiate. I think Theresa has set out a stall that she
:12:28. > :12:30.intends us to negotiate as a strong country in a positive spirit. Nigel
:12:31. > :12:37.Farage doesn't represent this country. We will be a responsible
:12:38. > :12:40.European neighbour and nation contributing to the Globe and to
:12:41. > :12:46.Europe, but just not within that political structure. Theresa May is
:12:47. > :12:50.a rare political beast, a senior figure who is barely known even
:12:51. > :12:53.after a decade at the top. Friends say the country will soon warmed to
:12:54. > :13:00.their new Prime Minister. Where on earth does this
:13:01. > :13:02.leave the Conservatives? United around the slogan Brexit
:13:03. > :13:04.means Brexit, but what does United around the vision
:13:05. > :13:07.for the disadvantaged? United around the socially liberal
:13:08. > :13:09.agenda, for same-sex Let's talk to two people
:13:10. > :13:17.from different wings of the Conservative Party -
:13:18. > :13:19.the MP Heidi Allen, and Peter Lilley, who was a Cabinet
:13:20. > :13:27.minister in the Thatcher Good evening to you both. Heidi
:13:28. > :13:30.Diallo, are you happy with what you heard? It feels like the
:13:31. > :13:35.Conservatives reborn. I couldn't believe what I was hearing from
:13:36. > :13:38.Theresa May. It feels like everything I said in my maiden
:13:39. > :13:44.speech, and this is a new era, it is brilliant. You had been in the
:13:45. > :13:49.referendum campaign, a bit rude about Boris Johnson. He is now
:13:50. > :13:53.suddenly back. In a different role. I wasn't rude about him, I just felt
:13:54. > :13:56.that his intentions were not actually around the country and
:13:57. > :14:00.whether Brexit was the right thing, just about whether he wanted to be
:14:01. > :14:07.leader, and I didn't feel he was the right man, so I am delighted. Are
:14:08. > :14:11.you on board, Peter Lilley? I was confiding in your earlier that I am
:14:12. > :14:15.unusually euphoric. I don't know euphoria normally, but I feel we are
:14:16. > :14:19.heading in the right direction, we can get on with it, and I think she
:14:20. > :14:24.has created a structure which will enable us to speed up the process
:14:25. > :14:28.far more than people are expecting. Let's come to Brexit in a minute.
:14:29. > :14:33.When she spoke about the nasty party, back in 2002, many would say
:14:34. > :14:38.she was really talking about the tone and the policies, some of which
:14:39. > :14:42.were associated with you as the welfare and social security in the
:14:43. > :14:45.90s. Are you happy that the journey the party has taken, through David
:14:46. > :14:47.Cameron to the tone she struck today, you are completely happy with
:14:48. > :14:54.that? Yes, very much so. I think we ought
:14:55. > :14:59.to be a party whose focus is on those who can least help themselves.
:15:00. > :15:02.We obviously want to let everybody fulfil their potential because,
:15:03. > :15:06.unless they do, we won't be able to help those who can least help
:15:07. > :15:10.themselves. We have to enable people to fulfil their potential so we have
:15:11. > :15:13.the wealth and the ability to help those who are at the bottom of the
:15:14. > :15:18.pile who have least opportunities. Can I take it that social
:15:19. > :15:23.liberalism, same-sex marriage, that debate is over. You were against it
:15:24. > :15:28.when the vote came up. It's done. Everybody seems to be accepting that
:15:29. > :15:35.now. I hope so. What about the economic liberalism? We think of the
:15:36. > :15:40.Conservatives as being deregulators. Today we were hearing workers'
:15:41. > :15:45.rights are back on the agenda. You are comfortable with that? Is that
:15:46. > :15:50.the party you joined? Why can't we do both? It is about finding the
:15:51. > :15:55.right amount for the right context, isn't it? Saying that you are the
:15:56. > :16:00.party that wants to overregulate everything, or under... The world
:16:01. > :16:04.isn't like that now. We have to be flexible. I was so pleased to hear
:16:05. > :16:07.Theresa May talking about some of the more difficult things for a
:16:08. > :16:12.Conservative Party to get a hold on, but we have to do it. The journey
:16:13. > :16:16.you described to Peter, yes, we have come through it. What we need to do
:16:17. > :16:22.is convince the people that we have come through it. And that will be
:16:23. > :16:27.harder but it is doable. We are all social liberals now. Are you not
:16:28. > :16:32.still an economic liberal? Do you not fear that National Living Wage
:16:33. > :16:37.at ?9, some of the talk about other stuff... You either had to have a
:16:38. > :16:41.Minimum Income Guarantee or a minimum wage. We had a mixture of
:16:42. > :16:44.the two, which is rather silly. Now we have moved to having a living
:16:45. > :16:49.wage. That should be the basic protection for people in work. And I
:16:50. > :16:52.think that is very acceptable. I never believed you could have
:16:53. > :16:57.neither. Right. You are sounding all in harmony with everything you have
:16:58. > :17:02.heard... That is very disappointing for TV, but it happens to be true.
:17:03. > :17:06.That's fine. I'm trying to get clear where everybody is. Doesn't it show
:17:07. > :17:10.how we had to get the right leader? Somebody who had been so neutral
:17:11. > :17:15.that could do what we are experiencing now, bring both sides
:17:16. > :17:22.together. I don't want to intrude, I don't want to poop the party you are
:17:23. > :17:26.having. Let's talk about Brexit. The three Brexit leaders, Liam Fox,
:17:27. > :17:32.Boris Johnson and David Davis, I don't know if they have the same
:17:33. > :17:37.vision of Brexit. What is the minimum Brexit that means Brexit?
:17:38. > :17:43.Well, it was about taking back control of our laws, money and our
:17:44. > :17:49.borders. We have to do those things. I hear lots of discussion about
:17:50. > :17:56.negotiation. There will have to be some ne gogs Asians. --
:17:57. > :18:01.negotiations. What I hope she's created a structure, she's got David
:18:02. > :18:08.Davis there, I hope she will lead the process in the way Ted Heath led
:18:09. > :18:14.the opposite process. I hope David Davis will have that delegated power
:18:15. > :18:17.from her so we can get it done quicker because the one danger we
:18:18. > :18:21.face is uncertainty. The sooner we can have it done, the less
:18:22. > :18:26.uncertainty. Philip Hammond suggested it would take six years?
:18:27. > :18:32.That is one reason why he will be a much better Chancellor than Foreign
:18:33. > :18:36.Secretary. I wonder putting those three to look after the process, is
:18:37. > :18:42.that a reward for what they did in the referendum? Or is it, OK, guys,
:18:43. > :18:51.nothing to do with me, it is yours to sort out? I think it's probably
:18:52. > :18:54.70% the former and a tiny bit the latter. If you want something to be
:18:55. > :19:02.done well you have to appoint people that believe in it. Theresa May
:19:03. > :19:06.recognises her strengths in leadership and it is all about
:19:07. > :19:10.having the right team. I wonder, Peter, if they don't get remotely
:19:11. > :19:15.what they have written they are going to get... What have they
:19:16. > :19:18.written? David Davis has written a big piece on what he is going to
:19:19. > :19:24.achieve. If he doesn't get close to that, and there are people that are
:19:25. > :19:29.sceptical, do we have to have another referendum on the deal that
:19:30. > :19:33.emerges? No, it wouldn't depend on David Davis achieving what he's
:19:34. > :19:39.written in one article. Right. The referendum result was clear. We have
:19:40. > :19:48.to deliver it. There isn't too much doubt about that delivery. We also
:19:49. > :19:52.have to go into any negotiations on trade, which will take place after
:19:53. > :19:59.we have left. We have to go there with a hard-headed realisation that
:20:00. > :20:05.if it's trading on WTO tariff terms, so be it, we don't want that. That
:20:06. > :20:08.is the backstop? Only if you go into negotiations knowing that you can
:20:09. > :20:14.take what they think is the worst they can impose on you, that you can
:20:15. > :20:19.succeed. And then we will get a good deal for us, for Europe and for the
:20:20. > :20:20.world. So much to pan out over the next few years. Thank you both very
:20:21. > :20:22.much. Now, we need to talk
:20:23. > :20:23.about economic policy. Can I be the first to label it
:20:24. > :20:26.Theresa-nomics? But call it whatever you want,
:20:27. > :20:30.we know a little of what it consists of, and the most striking paradox
:20:31. > :20:34.about the transfer of power today, is that having voted to leave
:20:35. > :20:36.the EU, with many arguing that we can Britain could be
:20:37. > :20:39.liberated to become a kind of deregulated offshore enterprise
:20:40. > :20:43.hub like Singapore or Hong Kong, we've appointed as Prime Minister
:20:44. > :20:45.who seems keen on regulation, particularly the stuff
:20:46. > :20:48.that makes us more Here's our business
:20:49. > :21:02.editor, Helen Thomas. We are told that Brexit means
:21:03. > :21:08.Brexit, so what does that mean? The UK somehow needs to dismantle its
:21:09. > :21:11.relationship with the European Union, piece by piece, the rules
:21:12. > :21:16.governing everything from trade in the economy, Labour, immigration,
:21:17. > :21:22.environmental protection are likely to change. But how? One Brexit
:21:23. > :21:26.blueprint, a regular feature of the campaign, takes its inspiration from
:21:27. > :21:31.the glinting skyscrapers of Hong Kong or Singapore.
:21:32. > :21:36.An open free trade economy shorn of the red tape and stifling
:21:37. > :21:40.bureaucracy of the EU single market and with lower taxes and lighter
:21:41. > :21:46.regulation for business. Indeed, George Osborne seemed to nod to this
:21:47. > :21:51.with his post-vote pledge to cut corporation tax below 15%. But not
:21:52. > :21:56.so fast. Maybe Singapore isn't the place for us. Theresa May this week
:21:57. > :22:00.laid out a very different vision for Britain's business future. She was
:22:01. > :22:04.still in campaigning mode before all the twists and turns that handed her
:22:05. > :22:09.the keys to Number Ten, but she spoke about an economy that works
:22:10. > :22:12.for everyone, that could involve constraints on executive pay, it
:22:13. > :22:17.could mean a stronger Government hand in areas like competition
:22:18. > :22:22.policy, or in foreign takeovers. It could also, she said, mean putting
:22:23. > :22:27.not just consumers on companies' boards, but employees as well.
:22:28. > :22:31.An industrial strategy that takes a sceptical look at foreign takeovers
:22:32. > :22:34.has a distinctly European flavour. And putting workers or their
:22:35. > :22:39.representatives on to companies' boards is a page straight out of
:22:40. > :22:43.German corporate governance 101. She's identified a real problem. I
:22:44. > :22:47.don't think she's got the right solution, the right solution is to
:22:48. > :22:51.put more responsibility on investment institutions. It doesn't
:22:52. > :22:56.link in with what George Osborne has been saying about the economy, so we
:22:57. > :23:00.don't have a joined up Government strategy towards the economy and
:23:01. > :23:03.towards business. We don't know much about Theresa May's economic
:23:04. > :23:07.thinking. She's never been in the Treasury. She's never been in the
:23:08. > :23:10.Department of Business. So we are going to have to learn these things
:23:11. > :23:15.over the next few weeks. I hope she gets on with it. The paradox is that
:23:16. > :23:20.those who thought they knew what Brexit model they were signing up to
:23:21. > :23:23.may find that the finished article looks rather different. We are
:23:24. > :23:27.headed for Brexit. Destination unknown.
:23:28. > :23:28.I'm joined now by the Brexit-supporting
:23:29. > :23:32.economist Gerard Lyons, and by Remainer Mariana Mazzucato
:23:33. > :23:35.whose book Rethinking Capitalism addresses many of the financial
:23:36. > :23:38.issues that will confront the new Prime Minister.
:23:39. > :23:40.And first, Rupert Harrison, who worked as George
:23:41. > :23:54.How much of Osborne-nomics do you think survives the transition? Apart
:23:55. > :23:58.from dealing with Brexit and the relationship with the EU, which is
:23:59. > :24:04.going to overwhelm economic policy making for the next few years, other
:24:05. > :24:08.than that, Theresa May, there is going to be a change of emphasis and
:24:09. > :24:11.tone. It will be continuity, largely. It will be struggling still
:24:12. > :24:16.with public finances that are not going to be ideal and if you think
:24:17. > :24:20.about the big, some of the big themes of economic policy of the
:24:21. > :24:26.last six years, that's included taxes on the low-paid, the National
:24:27. > :24:31.Living Wage, binding shareholder votes on executive pay, tax
:24:32. > :24:36.avoidance, tax evasion. It will be more continuity. Have you spoken to
:24:37. > :24:45.George tonight? No. Do you think he will look back on his time at Number
:24:46. > :24:49.11 with satisfaction? He wanted a different result in the referendum.
:24:50. > :24:54.Overall, I think so. The judgment must be he inherited an economy at
:24:55. > :24:58.one of the darkest moments in our economic history. I remember Mervyn
:24:59. > :25:05.King before 2010 said, whoever inherited the situation at the
:25:06. > :25:09.upcoming election would have to take such difficult decisions that they
:25:10. > :25:16.would be out of power for a generation. Then we had unemployment
:25:17. > :25:20.fall to 5%, the highest employment rate in our history, GDP growth has
:25:21. > :25:24.been the same as the US over the last six years, so he could be
:25:25. > :25:29.satisfied with that part of it. Mariana Mazzucato, how big a change,
:25:30. > :25:33.if you take Theresa May at her word, at what she said in speeches, how
:25:34. > :25:37.big a change is that? If you take her three big points, which are
:25:38. > :25:47.productivity, lagging wages and the need to reform executive pay, and
:25:48. > :25:54.the need for - she said industrial policy - Vince Cable did, the
:25:55. > :25:59.current minister has not said that word. He is running the Ministry as
:26:00. > :26:05.an enterprise zone, I think, which is about reducing different types of
:26:06. > :26:10.impediments for business. If she goes ahead with those three things,
:26:11. > :26:13.really tackling productivity, tackling executive pay and
:26:14. > :26:17.reigniting a vision around industrial policy and innovation
:26:18. > :26:20.policy, that will require a massive change, a change within the
:26:21. > :26:25.Treasury, but especially she will need absolutely a new minister in
:26:26. > :26:31.this because, currently, they are not, if you want, running a show
:26:32. > :26:35.that is trying to get long-term investment in this country. Hammond,
:26:36. > :26:38.I found very interesting, he continued to say that financial
:26:39. > :26:43.services is one of our key industries. That depends on what you
:26:44. > :26:47.finance to do. Finance is not serving the real economy. Nothing
:26:48. > :26:51.has been done on that. If she wants to have proper innovation policy, we
:26:52. > :26:57.will need proper kind of finance. Do you think what we heard today,
:26:58. > :27:00.Gerard Lyons, a big shift or maybe it is just words? There will be a
:27:01. > :27:03.significant shift. There is some continuity in the fact that the
:27:04. > :27:08.Conservatives were elected on the manifesto last year, so they still
:27:09. > :27:15.have to... What do you mean, they junked the fiscal stuff? On fiscal
:27:16. > :27:20.stuff, they do need... There will be some continuity. I was going on to
:27:21. > :27:27.say, there needs to be a significant shift. The previous Chancellor
:27:28. > :27:29.became far too tactical. We need to see more investment, more
:27:30. > :27:34.innovation, and more infrastructure spending. The UK Government can
:27:35. > :27:38.borrow at the lowest rate ever. It's been lower now than it was in recent
:27:39. > :27:43.years, so that creates a great opportunity. Monetary policy has in
:27:44. > :27:46.the past and is still now a big shock absorber for the economy, so
:27:47. > :27:51.that is still there. Fiscal policy needs to move on. We had Brexit
:27:52. > :28:00.strategy. There are three pots we need to look at. Hold the Brexit one
:28:01. > :28:06.for a minute. We have a fantastic opportunity to reposition the UK in
:28:07. > :28:10.the changing growing global economy, despite the near term uncertainty,
:28:11. > :28:18.there are lots of positives and it is about positioning ourselves with
:28:19. > :28:22.India, China... I just want... I just want to put one of your points.
:28:23. > :28:27.It sounds like that the gist of these two guys is, this is a
:28:28. > :28:32.complete turnaround because there was too much austerity, he
:28:33. > :28:37.underinvested, borrowing was cheap, this is ripping up George Osborne's
:28:38. > :28:42.policies? Theresa May will be thrilled to hear this. Look, there
:28:43. > :28:46.is going to be a change of tone. As I say, the elephant in the room is
:28:47. > :28:51.Brexit renegotiating our trade relations with the rest of the room.
:28:52. > :29:00.Outside that, it will be continuity. Puts curbs on executive pay... She
:29:01. > :29:03.talked about tax avoidance, tax evasion. She is a new Prime
:29:04. > :29:10.Minister. She wants to put a new tone, new emphasis. As I say,
:29:11. > :29:17.outside of the core issues... Industrial strategy, it is true that
:29:18. > :29:22.that phrase has not been used by Sajid Javid. If she was to do what
:29:23. > :29:27.she said, that would require a revolution. I don't think it will be
:29:28. > :29:31.possible. Brexit, as David Cameron has said, will occupy the Civil
:29:32. > :29:36.Service for the next decade. It is a complete waste of time. The
:29:37. > :29:42.investment you are talking about in research and development, the
:29:43. > :29:47.investment in human capital formation, by the way, are not going
:29:48. > :29:49.to happen. 80 billion euros of research money is what we no longer
:29:50. > :30:05.have access to. Quite on the contrary. We often
:30:06. > :30:09.overlook the fact that we gave Brussels most of the money in the
:30:10. > :30:15.first place. Let's not have the Brexit argument yet. What Rupert was
:30:16. > :30:18.saying was very important, it is about enabling the environment at
:30:19. > :30:22.the past, and it is about creating an enabling environment again. But
:30:23. > :30:28.don't you think there has been a shift in emphasis towards a more
:30:29. > :30:31.continental model with more regulation, the exact opposite of
:30:32. > :30:37.what you Brexiteers were selling to us, which was a kind of
:30:38. > :30:42.deregulated... That is how you would like it to be. That is how you were
:30:43. > :30:45.telling us it was going to be. The benefit is trying to pick Best
:30:46. > :30:49.practice from around the world, but we need to do what suits the UK
:30:50. > :30:54.economy, and it does come back to the Brexit issue. That was very much
:30:55. > :31:01.about three pots, to need to be ticked, the sovereignty and having
:31:02. > :31:05.an immigration policy, probably a points-based immigration system, and
:31:06. > :31:12.we don't need to be in the single market. As Peter Lilley was saying,
:31:13. > :31:15.it is about positioning the UK outside the single market with an
:31:16. > :31:31.eye on the Kontinen and the global economy. The key change... For what
:31:32. > :31:34.kind of investment? We continue to have lagging investment in this
:31:35. > :31:41.country, we have very low business spending. What actually died
:31:42. > :31:49.investment in the long-term, not the short term cheap investment that
:31:50. > :31:53.just reducing taxes... It is not money, it is capacity in key things
:31:54. > :31:58.like rail and road. And we will come back... What kind of infrastructure?
:31:59. > :32:05.Green infrastructure, that is what we want. I'm so sorry, we will have
:32:06. > :32:08.to come back. There is so much, we will have to disentangle this and
:32:09. > :32:11.put it into ten discussions over the next five years!
:32:12. > :32:14.One thing that is painfully obvious is how divided the country has
:32:15. > :32:16.been over the last few months, not to mention
:32:17. > :32:19.Suddenly, Theresa May has risen to the top,
:32:20. > :32:21.powered by a remarkable sense of unity.
:32:22. > :32:24.It's not just the goodwill that's shown to a new occupant
:32:25. > :32:26.of Downing Street; she has not stabbed anyone, stamped
:32:27. > :32:28.on their head or questioned their ability to govern on account
:32:29. > :32:39.By universal acclaim, she was the grown-up
:32:40. > :32:43.The Tory Party thought that, and most of those to the left
:32:44. > :32:46.of the Tory Party thought that too, at least in comparison
:32:47. > :32:50.But it is a thin crust of unity, atop a torrid overheated soup.
:32:51. > :32:53.We'll talk more on that, but first, the issue of immigration proved one
:32:54. > :32:55.of the most divisive in the referendum.
:32:56. > :32:57.Katie Razzall went to Birmingham, Britain's second largest city,
:32:58. > :33:00.to find out what people on all sides of the immigration divide feel
:33:01. > :33:05.Political faces of the past are on show in Birmingham at a time when
:33:06. > :33:09.modern politics has been in turmoil. It was Tony Blair who opened the
:33:10. > :33:13.door to EU migration on a grand scale. As Home Secretary, our new
:33:14. > :33:18.Prime Minister tried and failed to get the numbers down. She had a
:33:19. > :33:24.tough line on immigration before, and I think that will continue now.
:33:25. > :33:27.She was the Home Secretary that introduced vans that offered illegal
:33:28. > :33:31.immigrant is an easy pass home, so I think it is fair to say with some of
:33:32. > :33:35.her tough rules, some of them being controversial, we are only going to
:33:36. > :33:39.continue to go down that road, and coming from a migrant background, it
:33:40. > :33:45.does make you wonder whether we are as welcome here in the country as we
:33:46. > :33:48.have been previously. I don't think she is somebody who from her own
:33:49. > :33:57.personal Per Spett of values immigration, and whether we like it
:33:58. > :34:04.or not, we are of immigrants. That is how some perceived Theresa May's
:34:05. > :34:09.immigration stance. Her limits on non-EU migrants divided opinion, as
:34:10. > :34:14.did her speech at last year's Conservative conference. When
:34:15. > :34:19.immigration is too high, when the pace of change is too fast, it is
:34:20. > :34:24.impossible to build a cohesive society. There is no doubt
:34:25. > :34:29.immigration played a key role in the referendum. Almost all of the West
:34:30. > :34:36.Midlands region voted leave, including multicultural Birmingham.
:34:37. > :34:46.I met a restaurant and leave voter. So quickly it happened, it is
:34:47. > :34:49.unbelievable. Mr Haque wants immigration restrictions cut to
:34:50. > :35:01.allow more immigration Chip Kelly for chefs -- particularly the chess.
:35:02. > :35:09.She has made it corrugated for us, and now she is the Prime Minister.
:35:10. > :35:12.She will have to change. Across the West Midlands and beyond, hate
:35:13. > :35:17.crimes rose after Brexit, like at this halal shop, firebombed in
:35:18. > :35:22.Walsall. Theresa May has touted herself as a unifier of the country.
:35:23. > :35:27.On a more local level, others are attempting unity. At Birmingham
:35:28. > :35:31.social enterprise, they are creating a hate crimes toolkit. Theresa May
:35:32. > :35:35.will have to do a lot more to persuade them of her unifying
:35:36. > :35:39.credentials. I categorically don't believe that we can get behind a
:35:40. > :35:43.leader that has not been democratically elected, she doesn't
:35:44. > :35:47.have the mandate from the people. Some of the language we are hearing,
:35:48. > :35:52.the statistics we see from her past policies and how she wants to move
:35:53. > :35:56.forward well add to the divides and divisions, and the pain we are
:35:57. > :36:01.feeling as a country, particularly around immigration, equality and
:36:02. > :36:04.justice. I am not happy that this is the person who is supposed to
:36:05. > :36:09.represent us in our time of need and bring us together, and unite us and
:36:10. > :36:13.hope. But of course there are plenty who believe that our country will
:36:14. > :36:22.stay divided if Me doesn't deliver on Brexit. In West Bromwich I met
:36:23. > :36:25.activists determined to keep pushing the new PM forward, someone they
:36:26. > :36:30.believed failed on immigration as Home Secretary. She says she is
:36:31. > :36:35.tough on immigration, but her time in the Home Office hasn't proved
:36:36. > :36:40.that. As a country, we should be able to choose who comes in and who
:36:41. > :36:45.doesn't. So if she doesn't deliver that? I think it will be massive
:36:46. > :36:48.around here. Definitely. I think everybody is jittery about it, she
:36:49. > :36:54.is an unknown quantity, but that is the same with any Prime Minister.
:36:55. > :36:57.Delivering Brexit will be Theresa May's most pressing concern, but she
:36:58. > :37:01.will need to do it whilst uniting communities, not driving them apart.
:37:02. > :37:04.Joining me in the studio now is the Times columnist
:37:05. > :37:05.Matthew Parris, Guardian columnist Polly Toynbee, senior editor
:37:06. > :37:08.of the Economist, Anne McElvoy, and down the line from East Sussex,
:37:09. > :37:10.the former editor of the Telegraph and Thatcher
:37:11. > :37:20.Good evening to you all. Let's start with the positives. What has been
:37:21. > :37:27.good for the Tory party and about Theresa May? The good thing is she
:37:28. > :37:30.is therein a relatively short time, and the blood-letting stopped quite
:37:31. > :37:34.quickly, and it was considerable blood-letting. We have seen the
:37:35. > :37:43.divisions intensified since the vote, and the fact that they were
:37:44. > :37:47.able to stop this feud between the Brexiteers and gone over a kind of
:37:48. > :37:51.middle ground leader who will deliver most of what the Brexiteers
:37:52. > :37:57.want, but was Remain and has kept some prominent new remain as in the
:37:58. > :38:02.Cabinet, that is the main thing. Are you happy today, Polly? You would
:38:03. > :38:06.prefer Theresa May to Andrea Leadsom? Absolutely. I am impressed
:38:07. > :38:13.with the ruthless speed with which they have affected this. The removal
:38:14. > :38:21.van was there, he is gone, the next one in. The contrast with Labour is
:38:22. > :38:25.so excruciating, it really is. I think what we always see is the
:38:26. > :38:31.Tories know about power. They know what they are there for and how to
:38:32. > :38:34.do it. But tanks on the Labour lawn, all of this blue collar Conservatism
:38:35. > :38:39.that is the pitch, I don't know if you believe it will happen, but...
:38:40. > :38:45.They are terribly good at that. Saint Francis of Assisi from
:38:46. > :38:53.Margaret Thatcher, and think of Cameron's greenest government ever
:38:54. > :39:00.and hugging would and huskies. We are on the positives! She did it
:39:01. > :39:06.very well, I will say that for her, and we wait to see if it is real.
:39:07. > :39:08.Are you feeling euphoric? She is excellent, she is the best leader
:39:09. > :39:14.the Conservative Party could have on the circumstances, call her Theresa
:39:15. > :39:20.May jar or Teresa Millburn. But it isn't really a very easy question,
:39:21. > :39:29.the question is, can anyone do the job. That brings us to Charles. Can
:39:30. > :39:35.any one do this job? It certainly has a decent chance of working, but
:39:36. > :39:40.there are tensions in there. They can't yet be resolved. What it
:39:41. > :39:47.essentially is is that Theresa May is a Remain leading a Brexit policy,
:39:48. > :39:51.and while that can bring some sort of unity, it also makes you wonder
:39:52. > :39:55.what is going on, because you can't really be a remain any more because
:39:56. > :40:01.we are not going to remain, so we have to hear from Theresa day we
:40:02. > :40:05.Brexit is a good thing, and she has to have a vision of why it is an
:40:06. > :40:10.enormous thing, and I think there is a slight tendon set to see it as a
:40:11. > :40:13.compartment. You put it all in one compartment and get on with the rest
:40:14. > :40:18.of what is happening, but this is about becoming a free country again,
:40:19. > :40:23.with massive consequences for what Parliament does, foreign policy,
:40:24. > :40:28.trade, the environment, for the union possibly, so all of this has
:40:29. > :40:38.to be expressed positively. So she has to pretend to be keen on it? I
:40:39. > :40:43.think she has to be keen on it. If she is pretending, she will be found
:40:44. > :40:48.out. Matthew, it is hard to see how decades of Tory divisions on our
:40:49. > :40:53.relationship with Europe could be resolved by this. If anyone can do
:40:54. > :40:58.it, she can. I agree with Charles, she has to be keen on it, she will
:40:59. > :41:02.be. She has been given a job by the party, and that is to deliver the
:41:03. > :41:08.best possible deal she can. The question is, how good a deal can she
:41:09. > :41:10.deliver? I am a Marxist in this respect, there are terrible
:41:11. > :41:17.underlying forces in history and economics, and she will face in 34
:41:18. > :41:21.years in which the domestic economy, she will run out of money, and she
:41:22. > :41:25.is running out of friends, Britain is running out of friends abroad. If
:41:26. > :41:30.anybody can square this circle, she can do it, but can anybody? No Prime
:41:31. > :41:35.Minister has ever arrived in office with us knowing so little about her.
:41:36. > :41:45.No hustings, no electioneering, we know nothing about her economics.
:41:46. > :41:52.She is a much better known quality than anyone else, we know the cut of
:41:53. > :41:56.her jib, and in terms of wanting to remain, she was marginal. All awful
:41:57. > :42:00.lot of people were on the margins of remain Brexit, and we talk about
:42:01. > :42:03.this as if it were some kind of religious tribe who went to
:42:04. > :42:09.extremes. That is what this Cabinet reshuffle is that she has done is
:42:10. > :42:13.trying to reflect. I'm sure as Matthew and Charles were both
:42:14. > :42:17.saying, feud tensions underlie this, and they are now rocketing through
:42:18. > :42:21.both main parties. You describe Brexit as if it were a thing, a
:42:22. > :42:25.known quantity. Nobody knows what it is, it is what anybody wants it to
:42:26. > :42:31.be. Charles, do you trust Theresa May to deliver what the voters said
:42:32. > :42:36.they wanted back on June the 23rd? And do we know what that is? I think
:42:37. > :42:42.she will certainly try to do that, but I think she does have a big Rob.
:42:43. > :42:44.What happened in the vote was that it was enormous popular rejection of
:42:45. > :42:50.the view of almost everybody in charge of everything. And Mrs May
:42:51. > :42:56.comes in as a representative of that defeated establishment. She is doing
:42:57. > :42:59.a good job of trying to bring it all in together, and she is saying the
:43:00. > :43:02.right sort of thing, but it is a fundamental problem that she is not
:43:03. > :43:11.what people were asking for when they voted in the largest vote in
:43:12. > :43:14.British history for anything. And Mrs May was against it, and she is
:43:15. > :43:19.part of what they were rebelling against, so she has a lot of work to
:43:20. > :43:23.do. Matthew? We know what people were asking for, they were asking
:43:24. > :43:29.for things no one can deliver, and Mrs May can't deliver them. She will
:43:30. > :43:41.do her best... Will the party falls apart again when she delivers, let's
:43:42. > :43:45.say, Brexit -lite. She has gone about it in a canny way, she has
:43:46. > :43:53.appointed the geldings rather than the stallions of Brexit, Boris and
:43:54. > :43:57.Liam Fox and David Davis. They will do their best, but she will never
:43:58. > :44:05.satisfy Charles Moore, she will never satisfy the ultra-in the
:44:06. > :44:09.Conservative Party who would always believe that some marvellous deal
:44:10. > :44:17.could have been done if only we had had the right leader. Boris wants to
:44:18. > :44:21.have his cake and eat it. This is a pragmatic country, and the people
:44:22. > :44:25.who concede the best, as Blair did and as Cameron did for a while,
:44:26. > :44:29.people who somehow come through the middle, or they create the new
:44:30. > :44:34.middle, that is what she has to do. I hope she can. I'm sure it is
:44:35. > :44:39.difficult, but I don't believe the country is so polarised that there
:44:40. > :44:44.isn't a way through. Labour could find it if they wanted to, and if
:44:45. > :44:48.they don't, the Conservatives will. This country is in the midst of its
:44:49. > :44:52.deepest, most serious crisis that Cameron has left us with that she
:44:53. > :44:57.has to pick up the pieces from. She may be the best person on offer to
:44:58. > :45:03.do that, but don't underestimate the Herculean task. Charles Moore? Polly
:45:04. > :45:09.is right. One reason Cameron ultimately failed is like all the
:45:10. > :45:11.politicians in the Western world at present who have failed to
:45:12. > :45:17.understand how the world is changing in the light of the effect of the
:45:18. > :45:23.credit crunch, we still haven't had a change politician coming to the
:45:24. > :45:26.top, we haven't had a sat in this generation, we have had a crisis,
:45:27. > :45:33.but we haven't had the response to the crisis, and Mrs May, very able
:45:34. > :45:39.and sensible, she represents that establishment view rather than the
:45:40. > :45:44.change. So I am not saying it can't happen, but it is a very big task,
:45:45. > :45:48.but it has hardly yet been imagined. The analysis of what is wrong with
:45:49. > :45:52.the world, really, and therefore the conference about how to put it
:45:53. > :45:57.right. We have ten seconds. We can all make an analysis of what is
:45:58. > :46:00.wrong with the world and what people want, but the question is is it
:46:01. > :46:07.possible that a generation of British politicians can deliver what
:46:08. > :46:11.people want? I don't think it is. But what if they analyse it right
:46:12. > :46:16.rather than analysing it wrong? We will hit those constraints if
:46:17. > :46:18.Michael is right, and Theresa May can pull us all together if he is
:46:19. > :46:19.wrong. Well, that's enough historic
:46:20. > :46:33.days for this month. No one died, but the biggest beast
:46:34. > :46:37.in the department seems to have gone to the backbenches following his
:46:38. > :46:41.colleague. It does seem to flash in front of your eyes. Good night.
:46:42. > :47:01.TICKING. Hello. It has been another day of
:47:02. > :47:04.sunshine and showers, the showers continuing through this evening and
:47:05. > :47:07.overnight before dying away, and Thursday looks like the driest day
:47:08. > :47:10.of the week for many of us.