:00:00. > :00:00.A new-look government, a new-look Whitehall,
:00:07. > :00:09.a new message but many familiar faces, the same money troubles
:00:10. > :00:22.Should we expect a decisive, radical, reforming government,
:00:23. > :00:24.or one that's going to get stuck with Brexit?
:00:25. > :00:28.Our priority will be to send out a very strong and clear message that
:00:29. > :00:30.Britain will remain a very attractive place to invest,
:00:31. > :00:33.to create jobs, to do business, and we will take whatever steps
:00:34. > :00:35.we need to take to make sure that remains the case.
:00:36. > :00:38.But at the French embassy tonight, the Foreign Secretary
:00:39. > :00:43.was already experiencing life on the outside.
:00:44. > :00:56.We'll look at what to expect from the new administration.
:00:57. > :00:59.And what did Theresa May say to George Osborne as she let him go?
:01:00. > :01:03.Our political editor has found out and it wasn't pretty.
:01:04. > :01:12.And refugees' experiences told on BBC2.
:01:13. > :01:27.So, has Europe managed to sort out its response?
:01:28. > :01:33.For six years, Theresa May has been quietly sitting in the Cabinet.
:01:34. > :01:35.She's avoided the plotting, mostly, and has presumably been
:01:36. > :01:37.making private judgements about all her colleagues
:01:38. > :01:43.Today, she's had the chance to form a government
:01:44. > :01:46.of her own and her colleagues at last find out what she's been
:01:47. > :01:49.Bad news for some, as they were dropped.
:01:50. > :01:53.Good news for others, with fresh faces given a big
:01:54. > :01:57.It nets out as a hugely different government.
:01:58. > :01:59.We've become used to remarkably few personnel changes
:02:00. > :02:01.over the last six years, so this is a shock to
:02:02. > :02:07.And a bigger change than last year, when the coalition ended and the Lib
:02:08. > :02:15.Here's our political editor Nick Watt.
:02:16. > :02:21.Before we go into what it all means, just this extraordinary story
:02:22. > :02:25.tonight that you have managed to get hold of about Theresa May and George
:02:26. > :02:29.Osborne? Reds Downing Street were pretty clear yesterday that Rita Mae
:02:30. > :02:32.had sacked George Osborne, he didn't resign and I've learned to like they
:02:33. > :02:37.had a very frosty meaning -- meeting at Downing Street yesterday in which
:02:38. > :02:40.trees may make pointed remarks to the outgoing Chancellor. She said he
:02:41. > :02:44.had overpromised and under delivered and took issue with his surplus
:02:45. > :02:49.target and said that has given them a nightmare, he could never deliver
:02:50. > :02:52.it and perhaps it was a bit of a stunt as people said, to catch the
:02:53. > :02:55.Labour Party. I understand to reason may was repeating what she had said
:02:56. > :03:01.in a speech in Birmingham the day before where she had rear --
:03:02. > :03:04.reiterated her pledge to been the surplus target and she said George
:03:05. > :03:07.Osborne had not done enough to challenge deep economic reform and
:03:08. > :03:10.she was going to do it. The reverberations from the sackings and
:03:11. > :03:13.appointments are rebounding around Westminster still. We thought we
:03:14. > :03:14.would take a look at how the new Prime Minister has gone about
:03:15. > :03:27.forming her government. Not since Harold Macmillan's night
:03:28. > :03:31.of the Long knives in 1962 have we so much ministerial blood flow along
:03:32. > :03:36.Downing Street. Theresa May has reordered an entire government as
:03:37. > :03:41.she responds to the twin instructions from the electorate.
:03:42. > :03:47.Tate Britain out of the EU and change the ways of the governing
:03:48. > :03:49.elite. As you waded through the blood, it was clear that the new
:03:50. > :03:57.Prime Minister had three aims in mind. Number one, deliver Brexit
:03:58. > :04:01.with a Nixon in China approach. Theresa May's appointment of a trio
:04:02. > :04:05.of Brexiteer is to take charge of Britain's exit from the EU fulfils
:04:06. > :04:10.her pledge to ensure the referendum winners run this process. Allies who
:04:11. > :04:15.say that only arch Eurosceptics have a hope of success are drawing
:04:16. > :04:17.parallels with the way in week the hardline Richard Nixon delivered a
:04:18. > :04:23.breakthrough in US relations with China. The Prime Minister might also
:04:24. > :04:28.be trying to create some space should the negotiations turn out to
:04:29. > :04:32.be slightly more talent in. What the Prime Minister has done is said,
:04:33. > :04:36."OK, you have done the heavy lifting intellectually about this. Deliver
:04:37. > :04:40.it for me in government". I think that because they are trusted,
:04:41. > :04:44.deeply trusted by all Conservatives, both in parliament and in the
:04:45. > :04:47.grassroots, to be true to their beliefs on that, that they are
:04:48. > :04:52.actually in the best place to make the deals and perhaps the slight
:04:53. > :04:57.compromises you have two, to deliver Brexit and deliver it for the
:04:58. > :05:01.benefit of the British people. Number two, rewiring Whitehall. Not
:05:02. > :05:04.since the era of Tony Blair, who loved to abolish and set up
:05:05. > :05:09.government departments, have we seen such people Whitehall. For example,
:05:10. > :05:13.the business, innovation and skills department is renamed, and its
:05:14. > :05:20.headquarters houses some of the new bees. There is pain and delight in
:05:21. > :05:22.equal measure as the very un-Thatcherite industrial strategy
:05:23. > :05:28.makes a return and climate change is nowhere to be seen on the nameplate.
:05:29. > :05:33.Number three, social reform in the spirit of Joe Chamberlain. In her
:05:34. > :05:37.first statement outside number ten, the new Prime Minister delivered an
:05:38. > :05:41.unmistakable message of change by making clear that she would tackle
:05:42. > :05:46.burning injustices. This thinking owes much to her new Joint Chiefs of
:05:47. > :05:52.Staff, Nick Timothy, who is the biographer of the great social
:05:53. > :05:57.reformer, Joseph Chamberlain. Being from Stratford-upon-Avon, close to
:05:58. > :06:03.Birmingham, with Joseph Chamberlain and his sons as well, I think that
:06:04. > :06:14.is something of a role model to us all, the ability to devolve power
:06:15. > :06:18.but also, to champion our cities and be a real champion for those on
:06:19. > :06:24.National Living Wage, those hard-working families that I think
:06:25. > :06:28.she keeps going back to. Theresa May will finalise her new government
:06:29. > :06:34.over the coming days as she turns to the lower ministerial ranks. The
:06:35. > :06:37.blood-letting is not yet over. Nick Watt, there.
:06:38. > :06:39.While we've all been banging on about Europe
:06:40. > :06:41.for the last six months, ordinary life has rumbled
:06:42. > :06:43.on, but quite a number of domestic problems have been
:06:44. > :06:47.The Theresa in-tray is piled high with things to be resolved.
:06:48. > :06:57.Some prime ministers have the option of staying vague and drifting
:06:58. > :07:07.Theresa May won't have that luxury. Her decisions will be made in high
:07:08. > :07:09.definition. Theresa May's permission may well be remembered for good or
:07:10. > :07:14.ill by how well the Brexit negotiations go. But on domestic
:07:15. > :07:18.policy, she's not inheriting a blank piece of paper.
:07:19. > :07:21.There are three important areas I would pick out and keep an eye on
:07:22. > :07:28.Secondly, the roll-out of universal credit.
:07:29. > :07:30.Secondly, the roll-out Thirdly, the NHS.
:07:31. > :07:32.This economist explains how these issues have been
:07:33. > :07:43.-- made more, get it by the effects of the vote on Brexit. The exchange
:07:44. > :07:45.rate has fallen and the cost of importing things is going to be
:07:46. > :07:46.higher. That will push up on inflation.
:07:47. > :07:49.It will leave less money spare for people to spend
:07:50. > :07:52.The second thing that's going to happen is GDP
:07:53. > :07:54.growth is likely to slow and hiring decisions
:07:55. > :07:57.potentially wage growth will be a little slower too.
:07:58. > :07:59.Both of these things are actually quite bad for
:08:00. > :08:02.the public finances because we need people to spend so that we can tax
:08:03. > :08:07.This is a graph showing what markets expected
:08:08. > :08:13.coming years before the Brexit vote, and this is after.
:08:14. > :08:16.You can see more than a few years out that they are
:08:17. > :08:20.look at the very left of the graph.
:08:21. > :08:24.Inflation is now expected to be sharply higher.
:08:25. > :08:27.This expert from a think tank on living standards
:08:28. > :08:30.explains how this might be a problem for Damian Green, the new Work and
:08:31. > :08:34.We've got wages growing at a pretty modest rate
:08:35. > :08:39.We've also got a benefit freeze, which means benefits aren't going
:08:40. > :08:41.anywhere, it's only working-age benefits over the next few years.
:08:42. > :08:44.So relatively modest levels of inflation mean that for both
:08:45. > :08:46.workers and those relying on benefits, in
:08:47. > :08:48.work and out of work, their living standards
:08:49. > :08:54.are likely to start to
:08:55. > :08:57.flat-line again, or even maybe fall over the next few years.
:08:58. > :09:00.One important issue that will affect this is the roll-out of the troubled
:09:01. > :09:04.It was intended by this point to be helping 6 million people.
:09:05. > :09:10.This plan to reform a range of working-age
:09:11. > :09:17.Even before Brexit came along the Government was facing a
:09:18. > :09:20.On the one hand, if it was able to implement
:09:21. > :09:24.meant actually many working-age households would be losing out
:09:25. > :09:27.We are about to start entering the territory
:09:28. > :09:29.of postcode lottery, where
:09:30. > :09:31.identical families in different parts of the country would have
:09:32. > :09:34.different outcomes depending on whether they are on the old system
:09:35. > :09:38.But if it doesn't work, then that is a hit to
:09:39. > :09:40.the Treasury, because by moving from the old system
:09:41. > :09:44.Treasury stands to save somewhere in the region of ?4 billion or so.
:09:45. > :09:47.This analyst from the Nuffield Trust, a
:09:48. > :09:49.health think tank, exclusively reveals to Newsnight her maths
:09:50. > :09:51.suggest trouble ahead for Jeremy Hunt, who
:09:52. > :09:57.NHS hospitals are really under a lot of pressure at the moment.
:09:58. > :10:00.We know they are already missing a lot of their targets
:10:01. > :10:05.And at the same time they have an underlying financial
:10:06. > :10:11.That means it's costing them ?3.5 billion more to
:10:12. > :10:14.treat the patients that they have coming in than they are actually
:10:15. > :10:21.Look at emergency departments, where 95% of
:10:22. > :10:25.attendances should be dealt with in four hours.
:10:26. > :10:29.We met that target for bits of 2014, we flirted with it in
:10:30. > :10:35.2015, but in 2016 we've been miles away.
:10:36. > :10:39.So how big a task is it for the NHS to get back into budget for 2020?
:10:40. > :10:45.First of all, hospitals will need to cut their costs every year by 3%.
:10:46. > :10:49.Over recent years they've only managed to cut them by 2%
:10:50. > :10:53.and the government's own efficiency review has found that 2% really
:10:54. > :10:59.So hospitals are going to have to exceed that for the next three
:11:00. > :11:07.In addition to that we are going to need to see a slowing in the rate
:11:08. > :11:11.In recent years, the NHS does 3% more work a year.
:11:12. > :11:14.We think we are going to need to see that slow down to around 2%.
:11:15. > :11:19.There are schemes that cut NHS demand relatively painlessly,
:11:20. > :11:22.for example, by putting doctors inside care homes.
:11:23. > :11:25.That could mean some people get treated before their minor
:11:26. > :11:28.But there are also other ways of cutting NHS
:11:29. > :11:34.For example, we could just stop keeping up with some
:11:35. > :11:41.All of those things would suppress demand
:11:42. > :11:48.But would an electorate that has just voted, it thinks, for more
:11:49. > :11:56.The problem is that it's the painful stuff that's certain to save money
:11:57. > :11:58.short-term, and the hospital overshoot could reach
:11:59. > :12:11.Brexit is not Theresa May's only problem.
:12:12. > :12:12.A little memo therefore the new Prime Minister.
:12:13. > :12:16.Before we digest all that, Chris is here with one small legacy
:12:17. > :12:20.a letter from the PM's office released on the web.
:12:21. > :12:23.It's all about the severance pay of special advisors.
:12:24. > :12:29.It's a bit different to everything we have been talking about but
:12:30. > :12:31.explain. So there's a process in white or called ministerial
:12:32. > :12:36.direction. When civil servants think they are being asked to do something
:12:37. > :12:39.they shouldn't be doing, for value for money grounds come usually, they
:12:40. > :12:43.say to a minister, "We will do this but you have to put in writing you
:12:44. > :12:47.have asked us to do it". David Cameron has asked the Cabinet Office
:12:48. > :12:50.to pay extra severance pay to his own special advisers because he
:12:51. > :12:54.feels sorry they have lost their jobs in a sudden shock over the last
:12:55. > :13:00.month. So we don't know how this is going to be debated but the cost is
:13:01. > :13:07.going to be, special advisers, who have got around ?750,000 in total...
:13:08. > :13:12.About ten of them. Now they are going to get about ?1 million. It is
:13:13. > :13:15.distributed unevenly, five figure sums for a Sahm, and four figures
:13:16. > :13:19.for others, months of plays the issue. So they get a few months and
:13:20. > :13:23.he wants them to get some extra months because it's been a rush?
:13:24. > :13:27.Exactly and if you are as it servant who has perhaps the these civil
:13:28. > :13:31.service redundancy scheme strewn down all been made redundant and
:13:32. > :13:36.watched the Prime Minister saying, "That's very unfair, what these poor
:13:37. > :13:39.chaps I know are getting", and intervening personally, this might
:13:40. > :13:40.rankle a little. Thank you for joining us.
:13:41. > :13:42.So, that's the old government's last gesture.
:13:43. > :13:47.With me now are Jill Rutter from the Institute for Government,
:13:48. > :13:49.Philippa Stroud, a former Conservative adviser who now sits
:13:50. > :13:52.in the House of Lords, and Phil Collins who writes
:13:53. > :14:01.So much to talk about them if you are not too depressed by listening
:14:02. > :14:06.to Chris' previous peace. On white or, how big a radical reform of
:14:07. > :14:12.white or have we seen? We are just adjusting it now. Two things have
:14:13. > :14:15.been. Theresa May by Brexit. One issue, we said she would have a
:14:16. > :14:18.secretary of state for Brexit and she's created that, seem to have
:14:19. > :14:21.gone for the option of creating a new Brexit ministry. If I'd been
:14:22. > :14:25.Cabinet Secretary, I'm not sure I would have advised that straightaway
:14:26. > :14:28.but she's gone for that. She is beefing up international trade with
:14:29. > :14:31.this new department with Liam Fox but we always had a rather odd thing
:14:32. > :14:35.which was a non-ministerial apartment doing trade which had a
:14:36. > :14:38.minister. That may be a growth of that with some people moving into
:14:39. > :14:46.that. She has done some things she did not have to do. She has created
:14:47. > :14:51.this new business, energy and industrial strategy department and
:14:52. > :14:54.in doing so, abolished the EC, which was created by Gordon Brown for Ed
:14:55. > :15:00.Miliband in 2008 and also moved skills which is one of the footballs
:15:01. > :15:04.of Whitehall back to education and given it universities, too. Does
:15:05. > :15:07.this distract people? Is it now they are going to spend six months
:15:08. > :15:11.thinking about where their desk is rather than getting or can it be
:15:12. > :15:16.done very smoothly? The departments affected will be distracted. It
:15:17. > :15:19.takes some time to get going when you do things. You have got all
:15:20. > :15:23.those bread-and-butter issues like where you are going to base people,
:15:24. > :15:27.what you are going to pay them, things like that to sort out.
:15:28. > :15:30.Generally our advice has been to think very carefully before you do
:15:31. > :15:34.machinery of government changes and generally don't do them. There's
:15:35. > :15:38.usually a better option. David Cameron took that advice, that was
:15:39. > :15:41.one of the great things about his administration. You only want to do
:15:42. > :15:46.it if you think there a long-term benefit.
:15:47. > :15:51.Brexit potentially demands that. Phil Collins, how impressed are you
:15:52. > :15:56.buy the ability of the new team to carry through Theresa May's
:15:57. > :15:58.objectives? Well, on the threshold of Downing
:15:59. > :16:02.Street Theresa May gave what I thought was a really impressive
:16:03. > :16:04.speech, full of huge ambitions for improving the life chances of the
:16:05. > :16:09.least well off, and that's incredibly difficult to do. Let's
:16:10. > :16:12.pretend you weren't having to extricate Great Britain from the
:16:13. > :16:16.European Union at the same time, the ambitions she set out are immense
:16:17. > :16:20.and I worry about the candidates into microwaves forced up 22 people
:16:21. > :16:25.in the Cabinet, slight second and third 11 feel about it, the other
:16:26. > :16:29.thing linked to that is if you take out George Osborne, for good or ill,
:16:30. > :16:32.he did some big things, pension liberalisation, Northern Powerhouse
:16:33. > :16:37.and Living Wage Commission Michael Gove on education and in the early
:16:38. > :16:40.days justice on prisons, they have energy and passion for reform and I
:16:41. > :16:45.wonder if that energy will exist in the existing cabinet. Are you
:16:46. > :16:48.worried about that, Philippa? I think Michael is a huge loss to the
:16:49. > :16:54.government, personally. I would love to have seen him have a place. But
:16:55. > :16:58.actually, I really like what she has done with the Department for
:16:59. > :17:02.Education. Adding in universities, but also skills and apprenticeships,
:17:03. > :17:05.and giving it to someone like Justine Greening, who is deeply
:17:06. > :17:10.committed to social mobility for sub I've spoken to Justine over this one
:17:11. > :17:15.numerous times. Do you think she's going to be strong? She needs to be
:17:16. > :17:20.tough and be nice to the ones she needs to be nice to. She won't beat
:17:21. > :17:24.up people but she is focused. Social mode is what she wants to do. It's
:17:25. > :17:27.what she has actually wanted to do for the last few years. She's come
:17:28. > :17:31.into this department really well thought through, and she has
:17:32. > :17:35.literally, from cradle all the way up through university and onto the
:17:36. > :17:40.skills agenda and the apprenticeship agenda, that is a social reformer's
:17:41. > :17:44.dream package in all honesty. We wanted skills agenda at the DWP to
:17:45. > :17:48.go with employment, but for her to have it there as well is fantastic.
:17:49. > :17:52.All of that is good and I don't doubt the fine intentions, but it's
:17:53. > :17:56.incredible hard to do. It's very hard to do in a time of plenty,
:17:57. > :17:59.during the Blair government it was found difficult to make progress on
:18:00. > :18:02.this and there was plenty of money sloshing around. When you have very
:18:03. > :18:06.little money it's even more difficult. It's going to be very
:18:07. > :18:11.hard, they are hostages to fortune in Theresa May's speech they are
:18:12. > :18:16.huge. And you have a question of the European Union. I think she's been
:18:17. > :18:22.quite clever on that. She said... Can I put you over there? I will put
:18:23. > :18:26.you over there. Do you think a government can do more than one
:18:27. > :18:29.thing at once? This is quite a big thing, leaving the European Union.
:18:30. > :18:33.Can it deliver this whole reform agenda, industrial strategy,
:18:34. > :18:38.quality, corporate governance, all of that and leave the European
:18:39. > :18:45.Union? Or can a government only chew gum or walk, it can't do both at the
:18:46. > :18:49.same time? Governments do lots of things, there is business as usual
:18:50. > :18:52.as well as reform. The key restraint is the political capital the Prime
:18:53. > :18:56.Minister has to deploy. When the question is, how much will she have
:18:57. > :19:01.to deploy sorting out Europe, lots of this will be done ahead of a
:19:02. > :19:05.mid-level, final deals are only done a head of government level. She has
:19:06. > :19:08.somebody to do the heavy lifting. David Davis will do the heavy
:19:09. > :19:18.lifting, whether he does it in the way she wants it done is critical,
:19:19. > :19:24.whether -- that will be critical whether they bash heads together. As
:19:25. > :19:27.she put the people in who she knows shares her agenda so she doesn't
:19:28. > :19:32.have to do so much? I think that is where you see the bandwidth now. Are
:19:33. > :19:37.you worried you won't get it all done? There is just a lot of stuff.
:19:38. > :19:40.One moment, the comment about No 10 and big hitters, that's important.
:19:41. > :19:45.One of the things she has done is cleared out of No 10 of all of its
:19:46. > :19:48.special advisers, hence Chris's comments about special advisers.
:19:49. > :19:54.Always a terrible mistake to do that, all of that memory and people
:19:55. > :19:57.who know what you are doing on. It gives her the chance to bring in
:19:58. > :20:02.people who are aligned with her agenda and genuinely want to do some
:20:03. > :20:06.of the reform. They will take a year to learn. You asked me if I'm
:20:07. > :20:11.worried, that I'm pleased about Justine and about Sajid Javid going
:20:12. > :20:17.on at ACOG, really focused on building houses. That is one of the
:20:18. > :20:22.things we absolutely need I think Liz Truss's appointment at Min of
:20:23. > :20:25.Justice is important too. Michael was focused on the academisation of
:20:26. > :20:30.prisons and you have somebody who has a strong education background.
:20:31. > :20:35.If she chooses to she could come in and improve things. -- DCLG. If you
:20:36. > :20:38.want to do lots of things on the domestic and social agenda isn't the
:20:39. > :20:41.rule that you need money? The one thing she will not have, surely, is
:20:42. > :20:45.oodles of money. They haven't got loads of money but that's not to say
:20:46. > :20:49.you can't do things. Lots of prison reforms don't need lots of money so
:20:50. > :20:52.if Liz Truss picks up the bat on from Michael Gove, which she might,
:20:53. > :20:56.she is a reformer herself, there are things that can be done and there
:20:57. > :21:00.are plans. There is lots on welfare that can save money if you look at
:21:01. > :21:04.it. You cannot necessarily use money as an excuse because you haven't got
:21:05. > :21:07.any. But it worries me. I think leaving the European Union is
:21:08. > :21:11.several things at once, that's not just one thing, that is lots of
:21:12. > :21:14.things. If the Government can do that in the next few years before
:21:15. > :21:17.the election and nothing else it will already have been quite
:21:18. > :21:22.successful. So I'm not sure it can even manage that, let alone these
:21:23. > :21:25.other things. It partly depends on her style of government as well,
:21:26. > :21:28.which we don't know yet. David Cameron was always very good at
:21:29. > :21:34.almost being a chairman and letting his Secretary of State get on. She
:21:35. > :21:39.is a good manager, people say. If she can achieve the chairmanship
:21:40. > :21:44.role and work with her secretaries of state, she has the ability to
:21:45. > :21:48.implement social reform. One of the things she doesn't have so many of
:21:49. > :21:51.his civil servants, some people think that helps things move more
:21:52. > :21:56.smoothly but Brexit will absorb a lot of the civil service's time and
:21:57. > :21:59.effort, just mapping where Europe matters to us. We've been there for
:22:00. > :22:04.40 years, it's a really big exercise. Quite a lot of these other
:22:05. > :22:08.reforms require civil servants to do them. If the brightest and the best
:22:09. > :22:12.are being creamed into the Brexit ministry it's going to reduce the
:22:13. > :22:15.capacity of quite a lot of other places. It will be interesting to
:22:16. > :22:19.see whether she goes slow on the pace of cuts to the civil service.
:22:20. > :22:21.Thank you very much indeed, let's hope she is not watching and getting
:22:22. > :22:23.depressed about the job she has got! Brexit Britain has certainly been
:22:24. > :22:25.enjoying 15 minutes of fame, the world looking upon us
:22:26. > :22:28.with a variety of reactions. Here's a little clip of the news
:22:29. > :22:32.of his Cabinet appointment being given to a US State Department
:22:33. > :22:34.spokesman last night. He is paid to diplomatically
:22:35. > :22:37.suppress any inappropriate reflex. And his replacement
:22:38. > :22:39.as Foreign Secretary has just been For our European colleagues,
:22:40. > :22:51.the British situation raises all sorts of questions -
:22:52. > :22:54.not always very welcome ones. And now they find themselves working
:22:55. > :22:57.with a Foreign Secretary who has, over the years, treated
:22:58. > :22:59.the EU with derision. A little earlier, I spoke
:23:00. > :23:01.to the Lithuanian foreign What does he think of
:23:02. > :23:10.Boris Johnson's past indiscretions, and will they make it difficult
:23:11. > :23:13.to take him or British Frankly it depends how he will
:23:14. > :23:17.present this stuff, or what has efforts to remedy what was
:23:18. > :23:25.done. The German Foreign Minister,
:23:26. > :23:31.Frank-Walter Steinmeier, called some of the things he said in the
:23:32. > :23:33.referendum campaign irresponsible And it is true that Boris Johnson
:23:34. > :23:37.has been a critic of Does that make it harder to work
:23:38. > :23:43.with him, do you think? Many things I disagree
:23:44. > :23:46.with what he said, But this was the campaign
:23:47. > :23:51.in the UK and now So now he has to prove
:23:52. > :23:57.everything that was said by him, by all of those Brexit leaders,
:23:58. > :23:59.this is just his task. There has been one issue
:24:00. > :24:04.which has been the There are many Lithuanians,
:24:05. > :24:13.as you know, living in the UK. And uncertainty over
:24:14. > :24:17.their status for How quickly do you think
:24:18. > :24:22.we can sort that one out? I don't think days or weeks,
:24:23. > :24:24.probably not. But this is a very
:24:25. > :24:27.important part of the It's not only with regard
:24:28. > :24:30.to Lithuanians, or Poles or other EU citizens
:24:31. > :24:32.who live in the UK. But also, let me
:24:33. > :24:34.mention UK citizens who So we have to negotiate
:24:35. > :24:41.decently, and also smoothly, in order to make sure
:24:42. > :24:48.that they should feel more certain. Just on Article 50, I wondered
:24:49. > :24:51.whether you would be happy to talk to the British before
:24:52. > :24:53.Article 50 is invoked. I know the official position is that
:24:54. > :24:56.talks start when we talks before that, do you
:24:57. > :24:59.think? Frankly, we need to know
:25:00. > :25:06.what the UK wants to do. Because, to depart
:25:07. > :25:09.the European Union there could be various options, frankly speaking,
:25:10. > :25:12.and different models. And we need to know
:25:13. > :25:15.what we would like to have as a Single Market, mobility
:25:16. > :25:24.freedoms, other aspects, it could be the Norwegian
:25:25. > :25:26.model, the Swiss model, So, first of all we
:25:27. > :25:31.have to know what we are going to negotiate and then
:25:32. > :25:34.we will see the positions. Obviously Britain leaving
:25:35. > :25:43.is going to leave a big hole We put in 10 billion
:25:44. > :25:47.euros or more into the European budget net
:25:48. > :25:50.of what we take out. I just wonder whether you have
:25:51. > :25:53.started thinking about what is going to fill that hole that that
:25:54. > :25:56.leaves the European Union. This hole will not be
:25:57. > :26:06.filled, definitely. Because the UK is leaving,
:26:07. > :26:09.and this is also a small hole in our hearts, frankly speaking,
:26:10. > :26:12.because we need the UK and we feel And that means that we really have
:26:13. > :26:21.to define the future, given the interests first of all,
:26:22. > :26:23.and I believe, I'm convinced as close as possible ties with EU,
:26:24. > :26:28.which has to do with trade, services So it is too early to say
:26:29. > :26:34.what kind of hole in the budget will be,
:26:35. > :26:36.because it depends I'm hearing your
:26:37. > :26:39.message very clearly. Linas Linkevicius, thank you very
:26:40. > :26:42.much for talking to us. Thanks.
:26:43. > :26:50.Thanks. Before we move on and we are getting
:26:51. > :26:55.news of a serious event in France, it is Bastille day there, there is
:26:56. > :27:01.an incident in Nice and it looks serious, it seems that a truck has
:27:02. > :27:06.gone into a crowd of people. Reuters are quoting the local prefect who
:27:07. > :27:11.says 30 people are dead, social media video shows people running,
:27:12. > :27:19.which you can see, in panic following the incident. A journalist
:27:20. > :27:23.with the local Nice newspaper reported there was lots of blood and
:27:24. > :27:26.lots of injured. We don't know exactly what it is, people talked
:27:27. > :27:33.about it as an attack of some kind, we have social media pictures. Some
:27:34. > :27:44.reports, and again all of this is very early days, some reports talked
:27:45. > :27:48.of shots being fired by police. This is a tragic story coming from France
:27:49. > :27:53.on Bastille Day, a holiday in France. We will try and bring you
:27:54. > :27:55.more on that as we get it. In the meantime let's return to our
:27:56. > :27:57.previous items. One change we will have
:27:58. > :28:00.to acclimatise ourselves to is that we'll be seeing less of George
:28:01. > :28:02.Osborne. Six years in the Treasury,
:28:03. > :28:11.and a turbulent six years at that. We heard earlier about the difficult
:28:12. > :28:15.conversation he had with Theresa May when she sacked him.
:28:16. > :28:19.David Grossman looks back at his tenure.
:28:20. > :28:22.So the hi-vis Chancellor fades, for now at least,
:28:23. > :28:27.from the political scene, hanging up his fluorescent
:28:28. > :28:31.But we can at least see what Mr Osborne has
:28:32. > :28:33.built and compare it to the plans he submitted
:28:34. > :28:39.The primary task that George Osborne set for himself was eliminating
:28:40. > :28:44.Here was the planned reduction from his first budget.
:28:45. > :28:52.But this is what he actually achieved, still a long way to go.
:28:53. > :28:54.Indeed, after the Brexit referendum, both Mr Osborne
:28:55. > :28:57.and the soon-to-be-new Prime Minister abandoned
:28:58. > :29:05.The reason for the failure to get the deficit down as much as he hoped
:29:06. > :29:07.isn't because he tried to implement tax rises, or benefit cuts,
:29:08. > :29:09.or public service cuts and they didn't happen.
:29:10. > :29:11.The measures he announced did happen.
:29:12. > :29:14.It's because the economy didn't grow as strongly as he thought
:29:15. > :29:18.and that meant that tax revenues kept disappointing.
:29:19. > :29:21.But, and it's a big but, Mr Osborne gets credit from many
:29:22. > :29:22.economists for absorbing the political embarrassment
:29:23. > :29:24.of repeatedly missing his targets rather than reducing government
:29:25. > :29:31.spending even further to try to meet them.
:29:32. > :29:35.I think the biggest criticism to me on the macro side is that
:29:36. > :29:37.all the adjustment in the fiscal position was on spending.
:29:38. > :29:40.He slashed spending dramatically and I think that's one
:29:41. > :29:42.of the reasons we see so many unhappy people.
:29:43. > :29:43.Local government spending, for example, has really
:29:44. > :29:50.And that's a very controversial Chancellor.
:29:51. > :29:51.And that's a very controversial judgement.
:29:52. > :29:53.George Osborne's second objective was under the extremely broad
:29:54. > :30:02.For a start, this meant moving the country away from a reliance
:30:03. > :30:05.on the financial sector that left us so exposed after the crash,
:30:06. > :30:10.Obviously one of the big tenets was this march of the makers
:30:11. > :30:13.and to have more rebalancing towards manufacturing.
:30:14. > :30:16.And I think actually the makers would like to see a bit more spring
:30:17. > :30:19.in their step than they have at the moment.
:30:20. > :30:23.I think they still see quite a lot of challenges ahead.
:30:24. > :30:26.But I think where you can see some things the Chancellor did do
:30:27. > :30:28.to help manufacturing was a real focus on research
:30:29. > :30:34.Rebalancing the economy also meant reducing the ratio of household debt
:30:35. > :30:40.But this proved impossible in an era of ultra-low interest rates
:30:41. > :30:48.which discouraged saving and encouraged borrowing.
:30:49. > :30:53.Households are choosing to spend a lot relative to their incomes,
:30:54. > :30:55.so the household saving ratio is at a very low level
:30:56. > :30:59.And the amount of borrowing, how we finance this borrowing, well,
:31:00. > :31:02.the amount of borrowing we do from overseas is at extremely high
:31:03. > :31:05.So we are a country in which the household sector
:31:06. > :31:08.is borrowing a lot of money, the Government is still borrowing
:31:09. > :31:11.a lot, not as much as it did, and that borrowing is being financed
:31:12. > :31:17.The third objective we could measure Mr Osborne against is his ambition
:31:18. > :31:19.to spread growth beyond London and the south-east of England.
:31:20. > :31:21.As a Cheshire MP, the Chancellor championed the so-called
:31:22. > :31:25.This was partly about infrastructure but partly about political
:31:26. > :31:33.I think it has but I think there's a lot more to be done.
:31:34. > :31:37.I think what he did was highlight some of the issues and to start
:31:38. > :31:41.in train some of the devolution of powers and give more power
:31:42. > :31:47.But I think what people would say is we need to see more connections
:31:48. > :31:50.between Sheffield, Manchester, Leeds, some of our northern cities
:31:51. > :31:55.but also in the Midlands, between Nottingham and Leicester.
:31:56. > :31:57.I think focusing on the transport infrastructure between some
:31:58. > :31:59.of the UK's bigger cities undoubtedly needs to be the focus
:32:00. > :32:05.We've got a dual economy, London and the south-east,
:32:06. > :32:09.a few other metropolitan areas, are dominant.
:32:10. > :32:14.Much of the country isn't really doing very well and again, that has
:32:15. > :32:20.In a strange ironical way, maybe Brexit will do that
:32:21. > :32:24.Indeed, like his friend David Cameron, perhaps Mr Osborne's
:32:25. > :32:26.entire time in office will come to be defined
:32:27. > :32:34.If Brexit does result in economic calamity, as he warned, well,
:32:35. > :32:36.Mr Osborne will get blamed for letting it happen.
:32:37. > :32:39.If on the other hand, Brexit is a roaring success,
:32:40. > :32:41.he will get none of the credit, having argued
:32:42. > :32:56.David Grossman die on George Osborne. We can't bring you more on
:32:57. > :33:02.that ghastly episode in Nice. -- David Grossman there. They're ready
:33:03. > :33:06.to be quite a few dead when a lorry went into a Bastille Day festivity
:33:07. > :33:07.in the city of Nice. We will try to bring you more at the end of the
:33:08. > :33:09.programme. You might have seen
:33:10. > :33:11.Exodus on BBC2 this week. Three nights, three one-hour
:33:12. > :33:13.programmes, with real-life testimony of refugees, telling the stories
:33:14. > :33:24.of their journeys into Europe. I survived Isis, I survived
:33:25. > :33:27.beheadings, I survived Assad. I was almost killed
:33:28. > :33:44.for a stupid idea Well, the programmes
:33:45. > :33:48.aroused quite a reaction. They are still on the
:33:49. > :33:51.iPlayer, of course. There have been times when Europe
:33:52. > :33:58.can collectively excuse its messy response to the refugee
:33:59. > :34:05.and migrant crisis by saying were unexpected and unmanageable
:34:06. > :34:21.in the short term. That excuse obviously wears thin
:34:22. > :34:22.as time passes. Joining me now in the studio
:34:23. > :34:25.is former International Development And from Brussels, the Director of
:34:26. > :34:32.Migration Policy Institute Europe, We have not spoken about this for
:34:33. > :34:35.very long because we've been in the middle of a referendum campaign but
:34:36. > :34:36.how have things changed in the last six months, particularly from the
:34:37. > :34:39.journeys that were documented in that series? I think what you saw in
:34:40. > :34:42.the TV programme was fairly harrowing but fluid generally --
:34:43. > :34:45.Jenny, where people were finding their passage from Turkey, through
:34:46. > :34:49.degrees and then upwards through the Western Balkans into various
:34:50. > :34:51.locations in Europe. The key change that has occurred in the European
:34:52. > :34:55.Union, one of the reasons why the refugee crisis has not been so much
:34:56. > :34:59.in headlines in the last three months is the instigation of a deal
:35:00. > :35:03.with Turkey to try to stem the flow from Turkey degrees and then the
:35:04. > :35:09.closure of the borders across the Western Balkans route. What we see
:35:10. > :35:12.now is a far more sedentary process. Those people who had already made it
:35:13. > :35:17.to Greece but have not been able to move further through across Europe
:35:18. > :35:20.are now kept in sometimes poor reception conditions in Greece
:35:21. > :35:23.itself. A number of people who have arrived from Turkey and managed to
:35:24. > :35:31.make it across, despite the deal over the last three or four months,
:35:32. > :35:32.hiding themselves on the islands and in substantially different
:35:33. > :35:37.conditions than the islands were used to dealing with before March
:35:38. > :35:42.this year. Things have slowed down. And people are sort of stock. Very
:35:43. > :35:45.briefly in terms of the numbers leaving, the places from where most
:35:46. > :35:50.came, has that number fallen dramatically? So the numbers
:35:51. > :35:53.arriving on the Greek islands have fallen dramatically and that is a
:35:54. > :35:56.combination of the message that the borders are closed now to Europe,
:35:57. > :36:01.that you will not move on from Greece but also, the proactive
:36:02. > :36:05.actions of the Turkish coast guard and the Turkish government itself,
:36:06. > :36:10.preventing departures degrees. On that sort of singular benchmark of
:36:11. > :36:13.the EU- Turkey deal, it has been successful in reducing numbers but
:36:14. > :36:17.that does not necessarily reduce the numbers of people who have been
:36:18. > :36:21.displaced, whether from Syria, Iraq or other countries. It does not
:36:22. > :36:24.resolve the underlying problems of a large number of people displaced in
:36:25. > :36:27.the region of Syria. Andrew Mitchell, it is months now since the
:36:28. > :36:32.peak of the migrant and refugee crisis. As Europe improved its
:36:33. > :36:38.performance, quite apart from blocking people out, the conditions
:36:39. > :36:41.in which they are in, has that been satisfactorily resolved? It is a
:36:42. > :36:47.massive failure on almost every count. First, it is a failure to
:36:48. > :36:51.look after the 4.5 - 5 million people displaced within Syria, where
:36:52. > :36:54.we argued for safe havens. That was the right policy and should have
:36:55. > :36:58.been implemented. We have failed from Europe to look after
:36:59. > :37:05.effectively the huge number of people who have gone into Lebanon on
:37:06. > :37:08.and Jordan and indeed, into Turkey, where the camps and accommodation is
:37:09. > :37:11.extremely good. We have failed them and failed to educate their
:37:12. > :37:14.children. We have failed to give them hope because of course, all
:37:15. > :37:19.these migrants and refugees, they don't want to recreate Syria in
:37:20. > :37:22.Europe. They want to go back to the areas from which they have been
:37:23. > :37:25.driven off under gunfire and then moving further afield, when you get
:37:26. > :37:30.to Europe, people who do put themselves into the hands of the
:37:31. > :37:33.modern-day equivalent of the slave trader, in a leaky boat, in the hope
:37:34. > :37:37.of reaching a more prosperous sure, they should be properly looked after
:37:38. > :37:40.when they arrive on the European coastline, properly processed. But
:37:41. > :37:43.the aim of the policy should not be to bring them into Europe. It should
:37:44. > :37:48.be to get them back when you have dealt with the crisis. Justin Pugh
:37:49. > :37:52.Manitou into, you would have thought Europe could muster the money to
:37:53. > :38:00.build decent camps and have them properly fed and reasonably sanitary
:38:01. > :38:02.conditions. Is that what they have in Greece at the moment? Well, it's
:38:03. > :38:05.better but still reliant on doctors going out from Britain, for example.
:38:06. > :38:11.The European Union has not got its act together properly. But you are
:38:12. > :38:14.right in what you say, there should have been European money, UN money,
:38:15. > :38:19.International money to make sure that these people were kept safe,
:38:20. > :38:23.got medicine, got properly fed and sheltered and in none of those three
:38:24. > :38:28.areas which I have sketched out, the areas through which they go, has
:38:29. > :38:31.that happened. Elisabeth, of course, there have been two different
:38:32. > :38:35.approaches, one is helping the ball once they arrived and the other is
:38:36. > :38:37.helping Beadle out there which has been very much the British garden
:38:38. > :38:41.at's approach. They said they would rather not encourage people to come
:38:42. > :38:48.to Europe but help them near the camps in Lebanon on Paul Jordan. How
:38:49. > :38:51.is that working out? -- Lebanon or Jordan. The European picture may not
:38:52. > :38:55.be great but how is that working out? I think the ambition is
:38:56. > :39:00.admirable in terms of thinking about how to do protection in regional
:39:01. > :39:02.origin, in part because some of the most vulnerable people don't have
:39:03. > :39:05.the opportunity to move or undertake, or are capable of
:39:06. > :39:09.undertaking these dangerous journeys. One of the big challenges,
:39:10. > :39:13.however, is whether you are just doing support in the short term,
:39:14. > :39:18.food, shelter, making sure people are staying alive, against trying to
:39:19. > :39:22.create new opportunities for people in the regional origin which is a
:39:23. > :39:26.lot harder. That is exacerbated by the fact that there is a funding
:39:27. > :39:29.shortfall, despite the investments made by the UK Government and other
:39:30. > :39:36.governments, there is a persistent funding shortfall into the multiple
:39:37. > :39:39.billions in nature. That means that when people have become refugees,
:39:40. > :39:42.they tend to be refugees for long periods of time and they don't find
:39:43. > :39:46.themselves by doing opportunities in the region of origin because there
:39:47. > :39:50.is no support beyond perhaps even food and shelter and not even in
:39:51. > :39:55.some cases. So we have to ask the question, if that is the policy, how
:39:56. > :39:59.much money will we have two invest to achieve that? Alongside two other
:40:00. > :40:02.issues... I'm going to have to stop you because we have a breaking story
:40:03. > :40:10.and I have to go to it. Thank you for joining us. The situation in
:40:11. > :40:15.Nice is ongoing. This is what the witness, Colin, just told the BBC
:40:16. > :40:22.News Channel. I'm in the port in Nice. We were basically sitting just
:40:23. > :40:30.in front of the old town in Nice and saw several hundred people running
:40:31. > :40:34.towards us, looking panic stricken. We tried to ask a few of them what
:40:35. > :40:39.the hell was going on, and finally got one who said, "You need to go,
:40:40. > :40:45.the police have told us to run". So we thought, OK, we all move did the
:40:46. > :40:49.same direction as the crowds. -- moved in the same direction. At the
:40:50. > :40:57.base of the hill where the castle is in Nice, the police came running and
:40:58. > :41:01.said, "Run now". It is clearly a very bad situation in Nice. You can
:41:02. > :41:05.get more on the BBC News Channel. That is all we have time for the
:41:06. > :41:08.night. We will bring you more on that story tomorrow, and you can
:41:09. > :41:19.follow developments online as well. Until tomorrow, good night.
:41:20. > :41:26.A lot of dry weather through this weekend and there will be some
:41:27. > :41:27.complications. The complications on Friday will be courtesy of this