:00:00. > :00:00.We used to know where we were with this guy.
:00:07. > :00:09.It was about rescuing the nation's finances...
:00:10. > :00:25.No unfunded spending, no irresponsible extra borrowing...
:00:26. > :00:26.But will a new regime bring new priorities?
:00:27. > :00:30.Ahead of Phillip Hammond's first Autumn Statement, we ask who he is -
:00:31. > :00:34.And we get a glimpse into his formative years.
:00:35. > :00:36.I think what we've seen with the new government is,
:00:37. > :00:39.understandably, a change of tone and a desire to draw a contrast
:00:40. > :00:43.Philip Hammond's contribution to that, early on in his
:00:44. > :00:45.chancellorship, he talked about a reset of fiscal policy.
:00:46. > :00:47.I think people probably overinterpreted too much meaning
:00:48. > :00:53.We got hold of half a bottle of sherry and proceeded to drink it.
:00:54. > :01:05.Very randomly, we ended up having a bit of a cheeky snog!
:01:06. > :01:08.Hail Trump! Hail our people! Hail victory!
:01:09. > :01:10.As footage emerges of neo Nazis celebrating Trump's election,
:01:11. > :01:13.we ask the former deputy secretary of state where US
:01:14. > :01:22.Finally, come's America in photographs. We talked to the former
:01:23. > :01:30.Wall Street trader who took them. When anonymous Cabinet colleagues
:01:31. > :01:33.reportedly described the Chancellor of the Exchequer as "arguing
:01:34. > :01:36.like an accountant, seeing the risk of everything" last month,
:01:37. > :01:40.it was, somewhat strangely, Tomorrow, when Philip Hammond
:01:41. > :01:47.delivers his first Autumn Statement, we should get the strongest
:01:48. > :01:51.indication yet of whether this alleged caution will prove to be
:01:52. > :01:54.a strength or a weakness in these The scariest Brexit-related
:01:55. > :01:58.predictions may not have immediately come true but the Treasury's
:01:59. > :02:00.goalposts have already moved quite a lot since George Osborne moved out
:02:01. > :02:07.of Number 11. Deficit reduction is no longer
:02:08. > :02:10.the top priority and apart from Jams - that's families who are just
:02:11. > :02:13.about managing, and our report later tonight into spiralling food
:02:14. > :02:15.prices won't provide them with much comfort -
:02:16. > :02:18.it's not clear yet In a moment we'll take a good look
:02:19. > :02:25.at the character of the man delivering the Autumn statement -
:02:26. > :02:29.and the political journey he's made. First, though, Newsnight's Chris
:02:30. > :02:31.Cook has been considering the scale One word above all defined the last
:02:32. > :02:43.six years of government. The largest budget deficit of any
:02:44. > :02:45.economy in Europe... George Osborne's intention
:02:46. > :03:01.in 2010 was to almost close By now, the squeezing on spending
:03:02. > :03:06.and tax was supposed The deficit last year
:03:07. > :03:15.was still 3.8% of GDP. So we're two to three years behind
:03:16. > :03:22.on a target set only six years ago. That also means that the stock
:03:23. > :03:24.of public borrowing hasn't stayed Our stock of debt was supposed
:03:25. > :03:31.to touch just 70% of GDP Well, the Brexit vote is expected
:03:32. > :03:43.to weigh on short-term growth. The average economic forecast back
:03:44. > :03:45.in June projected our economy The average dole claim projections
:03:46. > :03:55.for next year were about 710,000 people, now they're
:03:56. > :03:59.about 830,000 people. Well this line shows how
:04:00. > :04:09.the Government had reduced the deficit and what it expected
:04:10. > :04:12.to happen to the deficit in the coming years,
:04:13. > :04:14.measured in billions of pounds. The Treasury expected
:04:15. > :04:16.us to hit its target for moving from a deficit
:04:17. > :04:19.to a surplus in 2019-20. Now, this new line is
:04:20. > :04:22.the Resolution Foundation's estimate of what that slightly slower growth
:04:23. > :04:25.will do to those projections, And you can see that the deficit
:04:26. > :04:31.doesn't become a surplus Well, if the Chancellor
:04:32. > :04:38.wants an overall surplus, austerity will need to be deeper,
:04:39. > :04:41.or will have to continue for longer, The Government could slog on,
:04:42. > :04:50.or it could change its fiscal rules in ways that would give it more room
:04:51. > :04:53.to invest in infrastructure, But the key point is this -
:04:54. > :04:59.this Autumn Statement will be Our political editor
:05:00. > :05:17.Nick Watt is here. What have you learned? Think we can
:05:18. > :05:22.be pretty sure we will be talking about that group of people you have
:05:23. > :05:25.just mentioned, the Jams. These are people just about managing, and they
:05:26. > :05:30.have been identified by Downing Street as the key group of voters in
:05:31. > :05:33.need of help. There have been some tensions between Number 10 and 11
:05:34. > :05:37.Downing Street over this. Philip Hammond has been saying that the
:05:38. > :05:41.first responsibility is to ensure financial stability. But he has come
:05:42. > :05:47.round to Theresa May's mission. You will see some measures relatively
:05:48. > :05:50.modest. It will be interesting, one thing to look at tomorrow is
:05:51. > :05:55.something we recently highlighted on Newsnight. There is going to be a
:05:56. > :06:02.modest reduction in George Osborne's planned cuts to Universal Credit.
:06:03. > :06:08.What that will mean, as lope bus-load paid workers with more
:06:09. > :06:12.hours, their benefits will be reduced at a more modest and slower
:06:13. > :06:15.rate. The first fiscal event, in Treasury speak, since the Brexit
:06:16. > :06:20.vote, it really is a huge moment for Theresa May's government. We thought
:06:21. > :06:23.we would take an in-depth look at the character and journey that has
:06:24. > :06:25.brought Philip Hammond to the job he always dreamt of having, in
:06:26. > :06:33.circumstances he never envisaged would happen. I must warn you, this
:06:34. > :06:35.film does contain detail of his disco days.
:06:36. > :06:40.Until now, we've known him as the dull man of British politics.
:06:41. > :06:42.Spreadsheet Phil, even to his friends.
:06:43. > :06:47.Philip Hammond has risen with barely a trace but today he is
:06:48. > :06:50.emerging as one of the central figures as a new order judders into
:06:51. > :06:57.Since his days as a teenager in Essex there
:06:58. > :07:00.Philip, the deadly serious student, businessman
:07:01. > :07:02.and politician, and then there is Phil, the resourceful entrepreneur
:07:03. > :07:07.and charmer with a twinkle in the eye.
:07:08. > :07:17.Suburban Essex may not have felt that it was quite at the centre of
:07:18. > :07:20.Luckily, a schoolboy entrepreneur and his
:07:21. > :07:26.close friend were on hand to enliven the scene.
:07:27. > :07:28.There was one disco that used to take place in Shenfield
:07:29. > :07:34.I sort of said to him, we could do that.
:07:35. > :07:44.And so, to cut a long story short, Philip hired a hall, sold tickets,
:07:45. > :07:47.asked me if I'd DJ, and I was getting my
:07:48. > :07:51.whatever it was, 20 quid or something, for DJing.
:07:52. > :07:58.And Philip was just making a fortune!
:07:59. > :08:00.Even as a teenager, Philip Hammond was showing characteristics that
:08:01. > :08:07.That would be the sort of thing that I'd
:08:08. > :08:11.But if it hadn't got a Phoenix stamp on it, it
:08:12. > :08:15.Philip Hammond stamped all of the records owned by the business,
:08:16. > :08:18.even though they were in the care of his mate.
:08:19. > :08:21.He once said to me that he wanted to be a millionaire.
:08:22. > :08:23.I think he said by the time he was 30.
:08:24. > :08:26.And I think he did actually achieve that in the end.
:08:27. > :08:28.I remember going round to his house once.
:08:29. > :08:30.We got hold of half a bottle of sherry.
:08:31. > :08:33.And very randomly, we ended up having a bit
:08:34. > :08:49.Who'd have thought that Philip Hammond was such a good kisser?
:08:50. > :08:52.He used to wear, as memory serves, quite a long black leather coat.
:08:53. > :08:55.And he had very long jet black hair that
:08:56. > :08:57.kind of hung like crows wings down past his shoulders.
:08:58. > :09:00.He was very distinctive to look at, very tall,
:09:01. > :09:05.I can remember that in history classes for example he
:09:06. > :09:09.would come in with his Daily Telegraph.
:09:10. > :09:11.He always would finish his classwork ahead of everybody else.
:09:12. > :09:15.And he put his big boots up on the desk
:09:16. > :09:17.and he would start reading the Telegraph.
:09:18. > :09:18.And swapping political dialogue with our history teacher,
:09:19. > :09:25.And usually towards the end of the class
:09:26. > :09:28.they would swap papers and then they would sort of score jolly
:09:29. > :09:30.points off each other, making political points.
:09:31. > :09:35.But I do seem to remember him talking about the joys
:09:36. > :09:39.And the fact that one shouldn't feel guilty
:09:40. > :09:42.At Oxford, the political geek was in his element.
:09:43. > :09:45.Here he is watching the seminal debate at the Oxford union in 1975,
:09:46. > :09:50.days before Britain first voted on its relationship with Europe.
:09:51. > :09:52.It took another two decades after making millions in business
:09:53. > :09:56.before Philip Hammond finally answered his true calling.
:09:57. > :10:04.In 1993, a familiar figure was watching.
:10:05. > :10:07.There is a whole subclass of the population which no longer
:10:08. > :10:08.understands the distinction between right and wrong,
:10:09. > :10:13.Philip Hammond was not elected to parliament until his early 40s.
:10:14. > :10:16.It is better they wonder why you do not speak then
:10:17. > :10:23.And he watched as youngsters such as George Osborne overtook him.
:10:24. > :10:25.His breakthrough came when George Osborne appointed him
:10:26. > :10:28.as his deputy in the opposition Treasury team way
:10:29. > :10:32.Newsnight understands that the future Chancellor almost
:10:33. > :10:35.quit the front bench at that point because the new post
:10:36. > :10:41.But he stayed on after he was tipped off about the move, giving him time
:10:42. > :10:43.to reflect on how it might eventually taking closer
:10:44. > :10:51.Something that always struck me back then was I think it
:10:52. > :10:54.been very easy for someone in Philip Hammond's
:10:55. > :10:59.position being brought in as George Osborne's deputy,
:11:00. > :11:02.even though he was a decade older than him, to bear some
:11:03. > :11:08.I think that he understood that this was a balanced ticket, as you talk
:11:09. > :11:10.That George was younger, more political,
:11:11. > :11:13.there was a driving force behind the leadership and Philip
:11:14. > :11:21.In the lengthy years of opposition and
:11:22. > :11:25.early days of government, Philip Hammond was
:11:26. > :11:27.seen as something of a dry Eurosceptic Thatcherite.
:11:28. > :11:29.He was critical of the decision to legalise
:11:30. > :11:32.same-sex marriage and on Europe some colleagues thought the man now
:11:33. > :11:35.dubbed the Secretary of State for soft Brexit might even support
:11:36. > :11:48.The Philip Hammond I knew was a pretty Eurosceptic
:11:49. > :11:49.individual and certainly one who I thought
:11:50. > :11:51.would not make the change he
:11:52. > :11:53.He is a very pragmatic figure indeed.
:11:54. > :11:56.I assume the Foreign Office has worked its usual magic on
:11:57. > :11:59.people and he has seen the importance of changing your mind
:12:00. > :12:02.And now he is indeed, appears to be to the outside
:12:03. > :12:04.world, leading the drive for soft Brexit.
:12:05. > :12:07.Rather than the hard Brexit you might have expected some years
:12:08. > :12:14.But close friends say he was never an outer, just
:12:15. > :12:17.a classic sceptic who wanted to see the EU reform.
:12:18. > :12:18.There's been a widespread misunderstanding of
:12:19. > :12:19.the Conservative Eurosceptic position.
:12:20. > :12:21.The classic Eurosceptic position which Philip I think
:12:22. > :12:26.wholeheartedly held and 85% of the party,
:12:27. > :12:29.was that we are cautious of Europe, we think it needs reform,
:12:30. > :12:41.Finally at the age of 60 and after 19 years in
:12:42. > :12:43.Parliament, Philip Hammond secures dream job when his Oxford
:12:44. > :12:47.contemporary Theresa May appointed him as her Chancellor in the summer.
:12:48. > :12:50.Friends say the Chancellor regards himself as more of a finance
:12:51. > :12:53.minister than some grand political figure who meddles
:12:54. > :12:58.His primary aim is to ensure financial stability, for now
:12:59. > :13:01.that means resetting the dial on the economy by abandoning George
:13:02. > :13:07.Osborne's plan to achieve an overall budget surplus by 2020.
:13:08. > :13:08.One Osborne ally believes the Autumn Statement
:13:09. > :13:13.will actually mark continuity with the old regime.
:13:14. > :13:16.I think what we've seen with the new government
:13:17. > :13:19.understandably is a change of tone and a desire to draw a contrast with
:13:20. > :13:24.And Philip Hammond's contribution to that early
:13:25. > :13:27.on in his chancellorship, he talked about a reset of fiscal
:13:28. > :13:29.policy and I think people probably overinterpreted too much meaning
:13:30. > :13:36.The reality on substance I think is largely
:13:37. > :13:38.continuity, particularly Philip Hammond himself is a fairly
:13:39. > :13:47.He believes in balanced budgets and I think
:13:48. > :13:50.that we will see evidence of that in the Autumn Statement this week.
:13:51. > :13:52.Phil Philip Hammond knows that
:13:53. > :13:54.his success will depend in large part on maintaining a constructive
:13:55. > :14:02.As passing acquaintances at Oxford, they have an effective, though not
:14:03. > :14:06.He is dismissive of her approach on immigration and I have learned
:14:07. > :14:08.that the Treasury has been irritated by
:14:09. > :14:10.briefings that the Chancellor is wary of the Prime Minister's mission
:14:11. > :14:19.The people who are just about managing.
:14:20. > :14:22.Philip Hammond sees some merit in this idea, but he has reminded
:14:23. > :14:24.Number Ten that his first priority must be to ensure financial
:14:25. > :14:30.The two Oxford contemporaries know their government
:14:31. > :14:33.will ultimately be defined by how successfully they navigate the UK
:14:34. > :14:36.Newsnight understands that the Chancellor has
:14:37. > :14:46.He is unimpressed by what he regards as the excessively optimistic claims
:14:47. > :14:48.of Brexiteer Minister Boris Johnson and Liam Fox.
:14:49. > :14:52.And he fears that the UK could tumble out of the EU in a hard
:14:53. > :14:55.Friends say he is so concerned about business uncertainty
:14:56. > :14:58.that he believes that the UK should negotiate a transitional deal
:14:59. > :15:00.to cover future trading relations at the same time
:15:01. > :15:09.Theresa May appeared to float this idea yesterday.
:15:10. > :15:14.It is clear that one of the things that Philip is increasingly
:15:15. > :15:17.coming to the realisation, is that we may need to put in place
:15:18. > :15:20.transitional arrangements so that negotiations do not have to stop
:15:21. > :15:26.It may well be in our national interests
:15:27. > :15:28.to continue those negotiations for some time to get
:15:29. > :15:35.While the Chancellor is wary of Liam Fox and
:15:36. > :15:38.Boris Johnson, he has formed an alliance with the third
:15:39. > :15:50.Friends say he regards the Brexit secretary as a grown-up, immersing
:15:51. > :15:57.himself in the gritty detail of his job. Britain will have its first
:15:58. > :16:02.proper introduction to data the two Philip Hammond 's. Spreadsheet
:16:03. > :16:06.Philip might be the man for the moment as finances and a bumpy
:16:07. > :16:09.phase. But Phil, the confident charmer, will need all his political
:16:10. > :16:14.wiles to survive the choppy Brexit waters ahead.
:16:15. > :16:16.We're joined by the Conservative MP Heidi Allen and Labour's shadow
:16:17. > :16:23.Minister for Industrial Strategy, Chi Onwurah.
:16:24. > :16:30.You have got to cheer your man to the rafters tomorrow, that is how it
:16:31. > :16:36.works. But what are you hoping to see? We're getting ready some big
:16:37. > :16:42.clues about what we're likely to tomorrow. I have been campaigning
:16:43. > :16:49.hard to reverse the damage done to the universal credit system last
:16:50. > :16:53.year. I'm hearing ?1 billion putting in to reducing the harsher rates.
:16:54. > :16:58.Given the fiscal climate and the fact that we are to lift the
:16:59. > :17:06.national minimum wage, it is not bad. It had been suggested that 2
:17:07. > :17:10.billion was the figure that would make a meaningful difference. 2
:17:11. > :17:15.billion would have fully reversed all the changes put into work
:17:16. > :17:20.allowances. That goes some way, though not as much as I would have
:17:21. > :17:24.liked. But given the economic situation we are still in with the
:17:25. > :17:28.deficit and the debt, we have got to be a bit realistic. But if they're
:17:29. > :17:34.bumping up the national minimum wage. I've also heard that letting
:17:35. > :17:40.agencies will be banned for people ranting in the private market. Just
:17:41. > :17:49.to focus on the broader economic picture. Your maiden speech focused
:17:50. > :18:00.on universal credit. And people afterwards questioned why you were a
:18:01. > :18:03.Conservative! I think it is an old-fashioned view perhaps of where
:18:04. > :18:08.the Tory party, what people thought it was. It is changing. I would not
:18:09. > :18:13.have joint if I had thought it was going to continue in that way. But
:18:14. > :18:29.Theresa May is pushing that new broom. I just do not like the term
:18:30. > :18:33.JAMs. I know what the term means to me, it means the people that used to
:18:34. > :18:38.work with me at Royal Mail who just about every day, would make ends
:18:39. > :18:43.meet. It is money hand to mouth, choosing whether to put on the
:18:44. > :18:48.heating or do their shopping. A basic thing. These are the people I
:18:49. > :18:52.am fighting for as many of us are across the whole house. So the
:18:53. > :18:58.squeezed middle. Even less than that, people on very low incomes.
:18:59. > :19:00.Are we seeing the ghost of Ed Miliband appearing in these
:19:01. > :19:09.conservative economic policies? I think Theresa May is challenging --
:19:10. > :19:13.channelling much of Ed Miliband's policy and the squeezed middle has
:19:14. > :19:19.extended to incorporate many more people. Since the financial crisis
:19:20. > :19:26.we have bad actors incomes staying the same. -- average incomes. Many
:19:27. > :19:33.people are worse off today, we had wasted six years and is why Philip
:19:34. > :19:37.Hammond needs to set out his fiscal plans and how we're going to see
:19:38. > :19:44.growth, sustainable growth back in the economy. In the face of huge
:19:45. > :19:50.uncertainty that we have proposed Brexit and post-Trump. And if he
:19:51. > :19:53.sets out fiscal plans and they bear a passing resemblance to the
:19:54. > :19:59.manifesto that you fought the let's bash the last election on, where
:20:00. > :20:09.does that leave the labour economic policies? The Tories are failing by
:20:10. > :20:14.their own targets, we had 711 ?50 billion added to the national debt
:20:15. > :20:18.at the same time as people have got poorer. So everyone around the
:20:19. > :20:21.country who sweated blood and tears for its charity is now worse off.
:20:22. > :20:27.That is the key difference between us. But also, Theresa May talked
:20:28. > :20:33.about industrial strategy yesterday but we had no idea what she means by
:20:34. > :20:38.that. What she announced, and industrial challenge fund of some
:20:39. > :20:45.amount in four years, that is not an industrial strategy. And the failure
:20:46. > :20:49.of George Osborne's economic has convinced the Conservative Party we
:20:50. > :20:52.need an industrial strategy and need the state to intervene and ensure
:20:53. > :20:58.sustainable growth, but still to see any indication of specific measures
:20:59. > :21:05.to support our industry and investment. In the meantime you
:21:06. > :21:10.would welcome this taper on the universal credit. Absolutely, it was
:21:11. > :21:16.obscene that the poorest in our communities, 50% of children in
:21:17. > :21:19.households on universal credit, it seemed they were paying the price of
:21:20. > :21:24.austerity. This does not fully address that, but it is better than
:21:25. > :21:39.nothing and we are glad that they are reflecting that. Osbournomics
:21:40. > :21:44.has been absolutely busted. Six years in Downing Street and now his
:21:45. > :21:49.predecessor has given up on it. What you say to the people who had wage
:21:50. > :21:53.freezes because austerity was the answer to the deficit, who may have
:21:54. > :21:56.lost their jobs in the public sector because austerity was the answer to
:21:57. > :22:04.the deficit, people who have really been squeezed, as a direct result of
:22:05. > :22:07.the policy is your party enacted. It is not fair to say it is just
:22:08. > :22:12.because the policies that were enacted. George Osborne said it is
:22:13. > :22:17.the poorest that suffer when deficits are high. Now Philip
:22:18. > :22:23.Hammond is saying deficit reduction cannot be the top priority. So just
:22:24. > :22:28.let those two together, the poor will suffer more. Whilst I prefer a
:22:29. > :22:33.relaxation, that we will not aim for a surplus in this Parliament, I
:22:34. > :22:36.think it is right that we release the pressure just a little because
:22:37. > :22:43.it was becoming unbearable. And I believe under the previous
:22:44. > :22:46.administration it was all about the production of the deficit almost to
:22:47. > :22:52.the cost of everything else. So it is right that we release that. But
:22:53. > :22:55.not just George Osborne policies, this has been a difficult period
:22:56. > :23:00.across the world not just for our country. And it is turbulent. My
:23:01. > :23:05.worry with Brexit is that it will get more turbulence so I'm glad to
:23:06. > :23:10.get this extra cash to help them right back. Looking back at that
:23:11. > :23:15.comment about high deficit hitting the poorest hardest, are you
:23:16. > :23:20.suggesting that your colleagues who advocated Brexit have not -- have
:23:21. > :23:25.caused people to suffer more in the short-term at least? I'm hoping
:23:26. > :23:29.absolutely not. I know what I'm fearing, but Britain is a resilient
:23:30. > :23:35.country and I suspect we are all adjusting. My constituents wanted to
:23:36. > :23:39.remain but we've got to accept the decision and I know it is a tired
:23:40. > :23:48.phrase, but this is what British people do. The Prime Minister has
:23:49. > :23:53.announced ?2 million going into research and development and size
:23:54. > :23:57.funding. We have the innovation and that translates into jobs. There's
:23:58. > :23:59.not enough money to go around and it is finding that balance. Thank you
:24:00. > :24:01.very much. They called it Project Fear
:24:02. > :24:04.during the referendum campaign but there are signs that some
:24:05. > :24:06.of the warnings of post-Brexit economic trouble may be
:24:07. > :24:10.crystallising into Project Fact. Credit Suisse published its annual
:24:11. > :24:14.Global Wealth report today and estimated that Britain is one
:24:15. > :24:17.and a half trillion dollars poorer in dollar terms due to the fall
:24:18. > :24:21.in the pound since the vote to leave But even if you're not one of those
:24:22. > :24:27.people who don't trust experts, it's hard to see a number of that
:24:28. > :24:31.magnitude, my ten-year-old tells me there are twelve noughts
:24:32. > :24:33.in a trillion, in the context Much closer to home,
:24:34. > :24:39.Newsnight has been told that because of the value of sterling,
:24:40. > :24:42.food prices are likely to rise by more than 5% over
:24:43. > :24:46.the next six months - We may not be a nation
:24:47. > :24:56.of shopkeepers, but we are a nation Savouring the memories
:24:57. > :25:02.of products from the past, days when Smash meant potato
:25:03. > :25:05.and instant coffee Grocery shopping is at the very
:25:06. > :25:11.heart of our life. We all need the basics
:25:12. > :25:14.of life, we have to eat. But the cost of those essentials
:25:15. > :25:18.is critical to the economy. The more we spend on the weekly
:25:19. > :25:21.shop, the less we've got left It's easy to be nostalgic
:25:22. > :25:28.about Spangles and old brands. The fact is, back then in the 70s
:25:29. > :25:34.and 80s, your supermarket shop would take up a much bigger chunk
:25:35. > :25:38.of your money than it does now. In fact, over the past few years,
:25:39. > :25:40.food prices have actually But now, following Brexit,
:25:41. > :25:50.while the pound has weakened, that means ingredients and packaging
:25:51. > :25:53.that come from abroad have So, someone is going to have to soak
:25:54. > :25:56.up those increased costs. That's either the supplier,
:25:57. > :25:59.the retailer or us, the customers. This man knows the answers
:26:00. > :26:01.better than most. Justin King ran Sainsbury's
:26:02. > :26:04.for a decade, during which time sales grew,
:26:05. > :26:07.but prices stayed flat. He thinks the fall of
:26:08. > :26:10.the pound now is bound to Something of around 40% to 50%
:26:11. > :26:18.of what we buy in the shops is sourced abroad in currency
:26:19. > :26:21.other than the pound. With the current rate
:26:22. > :26:24.of exchange, we could expect that to be about 10% more
:26:25. > :26:31.expensive than a year's time. If that's about half
:26:32. > :26:35.of what we buy, that means something in the order
:26:36. > :26:36.of 5% inflation. After years of little or no
:26:37. > :26:39.changes in price, that rise But it's a prediction
:26:40. > :26:42.backed up by the group that oversees the whole British
:26:43. > :26:44.food and drink industry. But I think some prices will have
:26:45. > :26:52.risen between 5% and 8%. I think that's about
:26:53. > :26:54.where the consensus lays. We've heard about battles
:26:55. > :26:56.involving Marmite and Toblerone, but not all suppliers
:26:57. > :27:00.are multinational giants. Many are small companies,
:27:01. > :27:04.having to deal with a trading environment
:27:05. > :27:06.that has been mixed up. Raw material costs have gone up
:27:07. > :27:10.considerably since the 23rd of June. That is something we
:27:11. > :27:13.are having to manage. And they haven't gone up a little
:27:14. > :27:15.bit, they've gone We buy all our raw materials
:27:16. > :27:20.in dollars or euros. So, we don't want to pass that cost
:27:21. > :27:22.onto the consumer, but we can't
:27:23. > :27:26.absorb everything. We are having to look at ways
:27:27. > :27:29.to manage through cost So, the challenge is
:27:30. > :27:34.how to find creative ways to avoid passing on rising
:27:35. > :27:39.costs to price conscious customers. We could buy from the UK,
:27:40. > :27:42.rather than buying abroad. So we are looking at producing
:27:43. > :27:45.a hedgerow smoothie at the moment, and all
:27:46. > :27:51.the fruit comes just from the UK. Christmas is the busiest time
:27:52. > :27:54.of the year for retailers, glossy Justin King thinks many are simply
:27:55. > :28:04.holding off inevitable price rises. When I think back to the financial
:28:05. > :28:08.crisis of 2007-8, there was a lot of conversation at that time
:28:09. > :28:13.about why we weren't immediately seeing the effects on the consumer
:28:14. > :28:16.and consumer behaviour. It actually took the best part of 18
:28:17. > :28:19.months, maybe closer to two It was 2010 before we saw consumers
:28:20. > :28:31.start to change the way that they shopped, batten
:28:32. > :28:33.down the hatches a bit. I think that's the timelines
:28:34. > :28:35.we are talking about. Big, famous shops don't
:28:36. > :28:38.have a divine right to exist. Woolworths and BHS,
:28:39. > :28:39.both testament to that. So, if there is a grocery battle
:28:40. > :28:42.brewing, what determines The challenge is that the best run
:28:43. > :28:48.businesses will be able They won't pass it all
:28:49. > :28:53.onto customers, they will look Businesses that are already
:28:54. > :29:03.stretched, already perhaps with lower margins,
:29:04. > :29:04.perhaps with less strong relationships with customers,
:29:05. > :29:07.they are the ones that are going to suffer in that environment,
:29:08. > :29:09.because they will get squeezed in the jaws of not being able
:29:10. > :29:12.to put prices up and costs Can you see a familiar High Street
:29:13. > :29:19.name disappearing this time, because they just can't keep up
:29:20. > :29:21.with this battle? I just can't tell you
:29:22. > :29:25.which one it will be. It will become clear over time
:29:26. > :29:31.who the winners and losers are. We have become very used
:29:32. > :29:34.to very low food prices. But if these warnings are right,
:29:35. > :29:37.they may soon become Time now for your Donald Trump news,
:29:38. > :29:46.much of it culled from meeting at the New York Times earlier
:29:47. > :29:49.which was scheduled, then cancelled, Tonight, the President Elect
:29:50. > :29:55.believes that humankind has played Yesterday, of course,
:29:56. > :30:02.he thought it was all a hoax He currently doesn't
:30:03. > :30:08.want to prosecute Hillary Clinton. During the election campaign,
:30:09. > :30:10.you'll recall, he insisted that she would be jailed
:30:11. > :30:12.in the event of him winning and regularly encouraged supporters
:30:13. > :30:14.to chant 'lock her up'. And while some of those supporters
:30:15. > :30:19.chose to celebrate his victory in Washington this weekend by making
:30:20. > :30:22.Nazi salutes and espousing undiluted white supremacism,
:30:23. > :30:26.today he strongly condemned the so-called alt-right
:30:27. > :30:30.extremists who nonetheless still consider his Chief of Staff,
:30:31. > :30:34.Stephen Bannon, to be a sort of patron saint
:30:35. > :30:37.of the whole movement. Here, in case you haven't seen it,
:30:38. > :30:41.is the footage of a man called Richard Spencer,
:30:42. > :30:46.who claims to have coined the very term alt-right,
:30:47. > :30:47.addressing fellow fascists The mainstream media -
:30:48. > :31:06.or perhaps we should refer to them Ambassador Wendy Sherman
:31:07. > :31:18.is Senior Counselor, Albright Stonebridge Group
:31:19. > :31:21.and was President Obama's Deputy She previously worked
:31:22. > :31:38.as his Under Secretary of State I don't want to seem ungrateful for
:31:39. > :31:42.you giving your time tonight, but are we wasting our time trying to
:31:43. > :31:49.analyse Donald Trump at this point? It seems a little like trying to
:31:50. > :31:55.nail jelly to the wall, or jello, as you would say? What has happened
:31:56. > :31:58.here, and President Obama spoke on this when he met President-Elect
:31:59. > :32:01.Trump, he is now coming to understand what it is to be
:32:02. > :32:07.President of the United States. These issues are complex and there
:32:08. > :32:11.is a reason why President Obama has proceeded in the way that he has.
:32:12. > :32:15.Yes, I am glad that he has condemned the alt-right meeting that took
:32:16. > :32:19.place. I would also like to apologise for all of the demeaning
:32:20. > :32:23.things he said during the election that have many people in the streets
:32:24. > :32:27.of my country very scared on a daily basis about what is going to happen
:32:28. > :32:30.and whether their rights are going to be protected. I'm glad he said
:32:31. > :32:34.that maybe humankind has something to do with climate, but I want to
:32:35. > :32:39.make sure he is going to hold onto the climate accord which the whole
:32:40. > :32:42.world has signed up to. I don't know that we are throwing spaghetti
:32:43. > :32:48.against the wall, but I agree that we don't know exactly where we are
:32:49. > :32:52.going to land and we will see whether as an intellect tramp really
:32:53. > :32:55.becomes, in fullness, what is required of a President of the
:32:56. > :32:59.United States. You mentioned the people living in fear of some of the
:33:00. > :33:02.comments he made, or fear of the wrong locations of some of the
:33:03. > :33:06.comments. Plenty of people cheered them. If he doesn't deliver on the
:33:07. > :33:10.stuff that you worry about, would you not have a whole new raft of
:33:11. > :33:15.worries that his supporters might have a grievance? Well, his
:33:16. > :33:21.supporters may have a grievance, but they won the election and he is the
:33:22. > :33:24.President-Elect, even Secretary Clinton got the majority of the
:33:25. > :33:28.popular vote, as your viewers I am sure know by now. We have an
:33:29. > :33:33.electoral college system, so small states get to have a say and states
:33:34. > :33:38.cannot decide, through popular vote, who wins. We have a pretty divided
:33:39. > :33:42.country in terms of the feelings here and what the President of the
:33:43. > :33:46.United States is supposed to do is bring the country together.
:33:47. > :33:52.President-Elect Trump has yet to do that, and to give reassurance to the
:33:53. > :33:55.people that did not vote for him. I was glad on the night of the
:33:56. > :33:59.election that he said he wanted to be President for all of America, but
:34:00. > :34:03.he has yet to take the steps and say that things come in my view, that
:34:04. > :34:06.will give the assurance they need. And we have to see what his policies
:34:07. > :34:14.bring on issues like immigration, what he will do about taking on all
:34:15. > :34:17.of the wealth at the top of our population, and not well distributed
:34:18. > :34:22.throughout the population. There is a lot to be seen and a lot to come
:34:23. > :34:25.ahead. We are all watching and waiting, and making sure that we
:34:26. > :34:30.stayed, forthrightly, what is necessary to really be President of
:34:31. > :34:36.the United States. Let's talk about the things we do know. I have been
:34:37. > :34:39.swotting up on your speeches, in the context of international diplomacy,
:34:40. > :34:45.when you were speaking in Geneva, just before the Iran negotiations
:34:46. > :34:48.began in 2013, and then the Carnegie endowment for International peace in
:34:49. > :34:52.February of last year. It's really boring, isn't it? A lot of this to
:34:53. > :35:02.go see Asian, it is really detailed, and it demands a level of
:35:03. > :35:05.application. -- it is really detailed and demands a level of
:35:06. > :35:09.application that maybe he has not demonstrated. Can it be more like
:35:10. > :35:13.Ronald Reagan, with people like you in the background doing the heavy
:35:14. > :35:25.lifting? You can delegate, but you certainly have to have a grasp of
:35:26. > :35:29.it. I picked up a copy of The Art Of The Deal, Donald Trump's book,
:35:30. > :35:32.because I wanted to understand how he thought about things. Bradley,
:35:33. > :35:34.doing a deal for a building is different from negotiating change
:35:35. > :35:39.when it comes to international security. If a building doesn't get
:35:40. > :35:44.built, a building doesn't get built. If the Iran negotiation had not been
:35:45. > :35:50.successful, we might find ourselves at war. The stakes are quite
:35:51. > :35:53.different. There are many people that have an interest in the
:35:54. > :35:58.outcome. That agreement in particular was not just a bilateral
:35:59. > :36:02.arrangement with the United States. It was an agreement reached with the
:36:03. > :36:10.entire international community. Very briefly, the co-author said that
:36:11. > :36:14.Trump will not just have his eye on closing down elements of the press
:36:15. > :36:18.and the media, he would be keen to enact some sort of silencing of
:36:19. > :36:23.freedom of speech. Do events today make that look a little bit
:36:24. > :36:27.excessive? Well, to go back to your opening, James, for today, it makes
:36:28. > :36:30.it look better. He actually had the meeting with the New York Times and
:36:31. > :36:35.said the first Amendment was something nobody should worry about,
:36:36. > :36:38.which is freedom of speech. He did and on the record interview with the
:36:39. > :36:42.New York Times. But that is today. We need to see sustained openness.
:36:43. > :36:44.Starting tomorrow. Thanks for your time this evening.
:36:45. > :36:46.The forgotten corners and the forgotten people of America
:36:47. > :36:48.have moved sharply into focus since Donald Trump's victory
:36:49. > :36:51.and it's fair to say that most city dwellers -
:36:52. > :36:52.not to mention most media professionals -
:36:53. > :36:55.have been surprised by what they've seen.
:36:56. > :37:00.In 2012, he turned his back on a 20-year career
:37:01. > :37:02.as a Wall Street trader and, like a latter day William Hogarth,
:37:03. > :37:05.set off with his camera to chronicle the oft-overlooked underbelly
:37:06. > :37:11.In an exclusive film for Newsnight, here he shares some
:37:12. > :37:31.I'm a photographer and writer and I spent the last two years talking to
:37:32. > :37:35.voters, a lot of them Trump voters. They are people that feel very much
:37:36. > :37:39.like the country has left them behind, economically and socially.
:37:40. > :37:42.They feel very much like there is a sense of humiliation, a sense of
:37:43. > :37:49.feeling very much like the world has humiliated them. With Trump, they
:37:50. > :38:00.see somebody who they think is helping them to restore their pride.
:38:01. > :38:05.Laurie is in a small town in Ohio. She said she was frustrated and
:38:06. > :38:09.there was nothing in the town for her kids to do. She had five
:38:10. > :38:14.children, two of them fell into drug use, like a lot of the places I went
:38:15. > :38:19.to. She felt very much like the world had left her behind. She had
:38:20. > :38:25.voted for Obama the first time, she bought into the idea of hope and
:38:26. > :38:29.change, and she did not see that coming, so she was going to vote for
:38:30. > :38:38.Trump. She was very explicit about that. The gentleman in the picture
:38:39. > :38:41.is in a McDonald's in Virginia, in a town that lost the textile mills 25
:38:42. > :38:51.years ago. Since then, it has not recovered. I believe he is a
:38:52. > :38:56.part-time minister as well. He had made a home-made Trump button. One
:38:57. > :38:59.of the things about the Trump campaign that people made fun of was
:39:00. > :39:11.the kind of ad hoc nature of it. It wasn't professional. For people like
:39:12. > :39:14.Billy, it really represented to him that the campaign was real, it was
:39:15. > :39:21.true. It represented him because it didn't have the trappings of a big,
:39:22. > :39:30.professional campaign. The pictures of the bar owner, who had been a
:39:31. > :39:35.firefighter all his life, is retired, he was very tall on whether
:39:36. > :39:38.to vote for Trump or not. His frustration with Hillary Clinton and
:39:39. > :39:40.frustration with what she represented, the sense of
:39:41. > :39:46.entitlement, I think that ultimately pushed him on voting for Trump, even
:39:47. > :39:50.though he was aware of the many problems Trump hard. It wasn't an
:39:51. > :39:55.easy decision for him. He didn't just jump on a bandwagon and say he
:39:56. > :40:01.loved this guy, he was very torn. Ultimately, I think he represents
:40:02. > :40:03.what I saw in a lot of voters, have the Democrats have a better
:40:04. > :40:11.candidate, I think we would not be where we are today. Sitting in a
:40:12. > :40:15.truck, he has a Confederate flag on his truck. When you look at Paul,
:40:16. > :40:20.you realise he also has only one leg. He talked about having been put
:40:21. > :40:36.in the slow classes at school and made fun of all his life, as a
:40:37. > :40:40.cripple and a retard. For him, what the flag represented was a community
:40:41. > :40:46.that he could join, that accepted him. It doesn't help to yell at him
:40:47. > :40:50.and say he is a racist. You have to look at a more holistic approach and
:40:51. > :40:54.ask, why did he get here? Why did he get to this point, where he finds an
:40:55. > :40:59.identity through the Confederate flag? Through voting for Trump? I
:41:00. > :41:07.think when you look at Trump voters, you look at the anger that is
:41:08. > :41:11.manifested in their vote, ask, how did it get there? What are the
:41:12. > :41:15.conditions that created that? If you are going to stop the anger, stop
:41:16. > :41:18.Trump in the long run, stop politics like this, you have to address the
:41:19. > :41:23.inequality and the context that created that anger.
:41:24. > :41:33.Clarification, we wrongly said earlier that Damian Green had said
:41:34. > :41:37.on this programme that restoring cuts to Universal Credit would cost
:41:38. > :41:40.?2 billion. It was not Damian Green that told us that.
:41:41. > :41:43.But before we go, it was reported today that the number of plastic
:41:44. > :41:45.bags left on our beaches has halved following the introduction
:41:46. > :41:47.of the 5p charge for them in October last year.
:41:48. > :41:51.But perhaps we underappreciate the aesthetic qualities
:41:52. > :42:01.The film American Beauty knew a bag's worth.
:42:02. > :42:18.Like a little kid begging me to play with it.
:42:19. > :42:29.That's the day I realised that there was this...
:42:30. > :42:41.And this incredibly benevolent force wanted me to know that there was no
:42:42. > :43:30.Sometimes there's so much beauty in the world.
:43:31. > :43:33.High-pressure building across the UK,