13/03/2018 Newsnight


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13/03/2018

Analysis of the stories behind the day's headlines with Evan Davis. How can we punish Russia? Why did Trump dump Tillerson? The Spring Economic Statement.


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TRANSLATION: I don't care. I

couldn't care less.

0:00:180:00:19

Ever get the feeling

someone's laughing at you?

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He was actually laughing

at accusations of US

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election interference,

but President Putin might as well

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have been talking about Salisbury.

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So what, if anything,

can we do about Russia?

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One option - kick Russian state

television out of Britain?

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Or maybe boycott the World Cup?

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But is there really anything

we can do to intimidate

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such a large nation?

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There have been declarations

of solidarity today from the US

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to France and Germany -

but how far will their support

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extend beyond rhetoric?

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What kind of strategy will work?

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We'll reflect on the choices,

or lack of them.

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Meanwhile, it's goodbye from him.

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US Secretary of State Rex Tillerson

has been shown the door,

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which means the West is not

at its most cohesive - in fact,

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not even the West Wing is.

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Is US foreign policy in disarray,

or has Trump now found someone

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who can see it his way?

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And puzzle time: which Disney

character has the chancellor

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likened himself to?

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But what is a Tigger?

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# The wonderful thing about tiggers

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# Is tiggers are wonderful things!

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# Their tops are made out

of rubber

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# Their bottoms are

made out of springs!

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Yes, some upbeat economic news

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in his spring statement gives

Philip Hammond a spring

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in his step.

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# I'm the only one!

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Time, then, to ask

whether it's time to ease

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the squeeze on public spending.

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Hello.

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Yesterday, the Prime Minister had

said Russia should tell us what it

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knows about the Salisbury attack

by the end of today.

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Her time horizon was quickly

hardened into a theatrical midnight

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deadline for the Russians

to respond, and we

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are not far off that.

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Today, we heard a Russian response -

Moscow says Britain must supply

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samples of the poison found

on Mr Skripal and his daughter,

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and anyway denies any

involvement in the attack.

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It's perhaps unsurprising that

the Russians are not playing ball.

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But it leaves a challenge

for Theresa May as tomorrow -

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to mix metaphors -

the ball now lies in her court.

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What does Britain do?

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The helpful news for her is that

from Germany to France

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even to the White House,

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there is now increasing

support from close allies.

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Here's Mark Urban.

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Britain set the timescale,

little more than 24 hours for Russia

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to come up with answers

on the poisoning in Salisbury.

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But it's a type of pressure that's

not likely to cow president Putin.

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I think it's very difficult

to see whether the Kremlin

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is worried or not.

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But if we judge purely

by what is in the Russian press

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and the Russian newspapers, it

is not on the front pages anywhere,

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including on the main

internet websites.

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And it doesn't seem to be

that this is the core issue

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which is going to dominate

the remaining several days

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of the Russian election campaigning.

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It is quite remarkably absent

for the kind of crisis

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that is looming on the horizon

from public opinion.

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And asked today about Britain's

challenge, Russian Foreign

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Minister Sergey Lavrov responded

with one of his own.

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TRANSLATION: We immediately

requested through an official note

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access to that chemical agent

so that our experts could

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analyse it in accordance

with the Chemical

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Weapons Convention.

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So, time is short for Russia,

but they aren't going to buckle.

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The march of minutes also prompts

questions for the UK's allies.

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Since late last week,

British diplomats have been

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consulting European capitals,

often reluctant to sanction Russia

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in the past, gauging their appetite

for tough action now.

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It's a very complicated issue.

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We have certain very large European

countries like Germany,

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France and Italy, where the

sentiment is not as firm on Russia

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as we see in other countries.

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So it is still an open question.

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But I think there is a universal

condemnation of this kind of attack.

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But what the EU will do

is still not very clear.

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And unfortunately, we have

seen in the past that

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sometimes tough talk has not

followed by concrete action.

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And President Trump,

often assailed by critics

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for being in Putin's thrall,

says Russia must now

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provide clear answers.

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It sounds to me like they believe

it was Russia and I would certainly

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take that finding as fact.

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It will be organised in Russia!

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For many European countries

the question may be

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whether they are prepared to boycott

the football World Cup in Russia.

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Germany are the reigning champions,

but interestingly, even Germany's

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bestselling tabloid could be ready

to advocate a boycott.

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I think there are things

beyond football.

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So in the case that, for example,

Prime Minister May would ask

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for a British boycott

of the World Cup, and would ask Nato

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allies in Europe, in the West,

to join into the boycott,

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I would say we as a newspaper,

a news organisation,

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would not be in favour of turning

down a request.

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We would be in favour

of supporting that request.

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And as the last hours of Mrs May's

ultimatum trickle away,

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it's time also for her to decide

what steps the UK

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should take on its own.

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From expelling spies

in the Russian Embassy -

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which today tweeted out a series

of messages warning Britain

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against tough action -

to imposing so-called Magnitsky

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law-type sanctions on Russian

officials or even using GCHQ

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capabilities

against the Kremlin.

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Well, cyber-countermeasures

are something that has

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to by definition happen

in the shadows, so to say.

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In the classified domain,

through the intelligence agencies

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of the British Government

or European governments

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and the United States.

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This is also something that has been

discussed during the Obama

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administration in the

United States, during

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the election interference.

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Whether the US should,

you know, for example,

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have a more offensive cyber strategy

against Russia, to maybe have

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intelligence communities leak

information about corrupt Kremlin

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officials, where their money is,

how they are using Western financial

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institutions to hide their stolen

money and to launder that money.

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I think these are all

potential options.

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The choices are many,

but the dilemma is acute.

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A nerve gas attack

on British streets may be

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an unprecedented outrage,

but the response, the extent,

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and even what it's meant to achieve,

are all the subjects

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of fierce debate.

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And Mark's here now.

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Our political editor

Nick Watt is here too -

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Nick, we'll come to you in a moment.

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Mark, update us on the investigation

in Salisbury today.

We have known

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for a couple of days that

identifying the agent suddenly

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recast the investigation and they

are looking further back. As a

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result of what we have learned

today, we can now see that it is a

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window of between one and a half and

four and a quarter hours during

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which they think this happened,

never before they got the pub in the

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centre of Salisbury. In that window

of time, the is very important. But

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they are still saying that they

don't know how and when the poison

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was dispensed -- the car is

important. There was speculated

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within the law enforcement community

that there was some kind of method

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of dispensing it inside the car.

That would not appear to be the case

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from what the police have said

today. But the car is important and

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where it was during 40 minutes after

they had left home and before they

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arrived in the town centre, much

longer than is needed for that

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journey. This is the key thing we

have heard from the police, though -

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they are still saying there is no

suspect, and they must be keen to

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make a determination of someone of

that kind.

So they want people who

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saw the red BMW.

The pressure is on.

Theresa May is going to step up

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tomorrow and talk about whatever the

Russians have responded. What might

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she do?

I understand there will be a

substantial response from the Prime

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Minister in the House of Commons

tomorrow, but we will not see the

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full range of measures in the UK for

two broad reasons. In the first

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case, there will be things that the

UK will do that they will not want

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to advertise. And in the second

place, there is an assumption that

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Vladimir Putin will retaliate, and

therefore the UK needs some space to

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be able to respond to that. There is

also a hope that the UK will not be

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alone. There were two encouraging

phone calls today with two Nato

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allies, Chancellor Merkel and

President Trump.

Thanks.

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In a further development today,

it was confirmed that

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counterterrorism police are leading

an investigation into

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the unexplained death in London

yesterday of a man believed to be

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Russian businessman

Nikolai Glushkov.

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Mr Glushkov sought exile in Britain

after being convicted of fraud

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in Russia and had become a vocal

opponent of President Putin.

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There seems to be no evidence

linking this latest death

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to what happened in Salisbury -

but the timing is at the very least

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awkward as the world waits to see

how Mrs May responds

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to the Skripal affair.

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So let's discuss that response now.

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I'm now joined by Andrew Mitchell,

Conservative MP and the former

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Secretary of State for International

Development.

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He is leading a cross party group

of MPs preparing to back

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a "Magnitsky amendment"

to the government's Sanctions Bill.

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Also with me is the Washington

Post columnist and LSE

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professor Anne Applebaum.

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In Washington is Andrei Illarionov.

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He was chief economic

advisor to Putin -

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and is now a senior fellow

at the Cato Institute's Center

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for Global Liberty and Prosperity.

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I wonder if I could start with you,

Andrei Illarionov. Where do you

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think we go when it looks as though

the Russians are somehow not taking

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the British complaints very

seriously?

Well, that is not

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surprising.

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surprising. The traditional response

of the Russian authorities is like

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that. Remember what happened with

the Litvinenko case, when he was

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poisoned in Britain 12 years ago. So

it is not a surprise. What is more

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surprising is the lack of response

from the British side and the

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western side to all these cases of

aggression, whether it is against

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Britain, as it was in 2006 and 2018,

or against Georgia in 2008 or

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against Ukraine in 2014, against the

United States during the

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intervention in the election and so

on.

We know the charge sheet. Tell

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us what we should be doing?

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us what we should be doing?

There

are at least two sides of potential

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response. One is punishment of those

who are responsible for all those

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acts of aggression and terror. It

should be clearly said that that is

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a terrorist act. The other one is

more long term and a wider response

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from Britain and not only from

Britain, but from the wider West.

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The final long term goal of such a

strategy is to have Russia, free,

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democratic, rule of law based on

peaceful.

Sorry to interrupt, but

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what do we actually do? We know the

goal. What do we do?

You don't know

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yet, because there is no consensus

in the western world. There is not

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even discussion about what the long

term goal is. There was not much

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discussion about the strategy

itself. That is why it is firstly

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necessary to come to an

understanding among the Western

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countries of what the West wants

from Russia. That is the main

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question new post at the beginning.

What kind of Russia would you like

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to see?

Lets hope that there. Andrew

Mitchell, it does feel as though we

0:13:030:13:10

don't have a strategy here. While

lurching after a headline that will

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work on Thursday. Is there actually

a strategy for a medium-sized

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country like Britain to have

sanctions that work against someone

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like Russia?

I am sure there will

be. It is comparatively early. We

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have the statement yesterday from

the Prime Minister. There will be

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another tomorrow, but the most

important thing is to gather the

0:13:320:13:34

evidence. We must find out where

culpability lies and put it in my

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view through the United Nations.

Firstly, it may be circumstantial.

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Is that good enough?

We must be

absolutely clear about what

0:13:480:13:52

happened, or we won't have

conviction when we put it into the

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public domain through the United

Nations so that our allies can see

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the threat it poses to all of us.

Is

it premature for the Prime Minister

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to stand up tomorrow and pretend we

are starting on a new path? It is

0:14:030:14:08

our deadline, not theirs. Do we need

to do it that fast?

, the deadline

0:14:080:14:14

was to answer two questions.

And

tomorrow, should she be saying this

0:14:140:14:20

was the response, or should she say

now we will think about it response

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and gather a coalition of allies?

I

think she will take it to the next

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stage. She will say what evidence is

now available, how she will put into

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the public domain and what the

consequences are.

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And the same question to you.

The

nature of the question shows what is

0:14:390:14:46

the important point, the UK needs to

be part of an alliance, part of the

0:14:460:14:50

European Union, what with EU allies.

Unfortunately this is the worst

0:14:500:14:54

possible moment for the UK to leave

the EU just as Russia becomes the

0:14:540:15:00

surgeon in many spheres not just

inside Britain. The most the UK

0:15:000:15:06

could do to revive those alliances,

the better. It is all about the

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allies but also about understanding

why we do have power and influence.

0:15:120:15:17

The Russians keep their money, their

wives and children, their property,

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in this country and western Europe.

Ending that practice, the

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money-laundering done, enforcing our

own laws and using those laws about

0:15:260:15:32

mysterious money, we now allowed to

go and ask people where your money

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comes from. Pushing that through,

ending the practice of using shell

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companies to buy property, companies

in the UK, that could all make an

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enormous difference.

And you would

agree with that, you support the

0:15:470:15:54

Magnitsky Amendment.

Yes, that

enables us to take serious measures

0:15:540:15:59

against those conducting themselves

in this way from Russia and I think

0:15:590:16:04

Parliament will want to see

something like the full Magnitsky

0:16:040:16:08

Amendment that has been introduced

in America and Canada.

A couple of

0:16:080:16:13

other options, a World Cup boycott,

surely pointless unless everyone

0:16:130:16:19

does the same?

I think it is silly

to involve sport and talk about a

0:16:190:16:28

ban. We need to use the leverage we

have in those areas where we can

0:16:280:16:33

control things that matter. And

working in conjunction with other

0:16:330:16:36

allies. Imagine if we could end

Russian money-laundering all across

0:16:360:16:42

Europe and begin working with the EU

to close all the loopholes.

I would

0:16:420:16:55

not ban RTX. I spoke out during the

Russian bombing of Aleppo and they

0:16:550:17:01

carried that in Russia. I do not

think it is sensible to ban arty.

It

0:17:010:17:09

gives credence to the view that

broadcasting is partisan here.

It is

0:17:090:17:22

not sensible to ban Russian state

elevation.

Of all the things, the

0:17:220:17:30

specific things you've heard, I know

you want a big strategy for the West

0:17:300:17:35

to align itself. What would you do

specifically if you with the UK?

Let

0:17:350:17:42

me just address what my colleague

has already said, everyone should

0:17:420:17:48

understand this is war. This is

aggression against Britain,

0:17:480:17:53

aggression against other countries,

aggression against the West. And in

0:17:530:18:00

the war of aggression there is no

response that would be enough or not

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enough. So that is why all these

instruments that have already been

0:18:050:18:10

mentioned dealing with illegal

financial assets in London or the

0:18:100:18:18

Magnitsky act or the state

broadcaster of all of them are

0:18:180:18:22

important. All of them are important

but they are only elements. Some

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elements of the possible grand

strategy. So you do not need to

0:18:280:18:33

forget about the long-term goal of

such a strategy. And that is why

0:18:330:18:39

those instruments could not

0:18:390:18:46

those instruments could not only be

elements but if you really want to

0:18:460:18:49

win the war you need to give this

expression.

Thank you very much.

0:18:490:18:57

Well, we've referred to it already.

0:18:570:18:59

Rex Tillerson, US secretary

of State, has finally,

0:18:590:19:01

after months of chat about it -

been sacked by President Trump.

0:19:010:19:04

Mr Tillerson was reportedly

not actually told,

0:19:040:19:07

other than finding out with everyone

else when the President

0:19:070:19:10

announced it on Twitter.

0:19:100:19:11

One satirical website suggested that

Tillerson had been surprised to find

0:19:110:19:14

he was still in the job.

0:19:140:19:17

He had certainly been semi-detached

from the Trump operation

0:19:170:19:19

for almost his entire

period in office.

0:19:190:19:26

When he was appointed 13 months ago,

Rex Tillerson was an outsider.

0:19:260:19:31

He wasn't a politician, but a former

Exxon chief executive, and he'd

0:19:310:19:34

never met Donald Trump

until he was offered the job.

0:19:340:19:39

At his Senate confirmation,

a record number of

0:19:390:19:41

votes went against him.

0:19:410:19:42

Democrats suggested

he was too pro-Putin.

0:19:420:19:45

Now of course,

the line is he has been

0:19:450:19:47

sacked because he is too

anti-Russian for president Trump.

0:19:470:19:51

That is not the President's line.

0:19:510:19:53

We got along actually quite well.

0:19:530:19:56

But we disagreed on things.

0:19:560:19:58

When you look at the

Iran deal, I think

0:19:580:20:00

it's terrible, I guess

he thought it was OK.

0:20:000:20:05

I wanted to either break it or do

something and he felt a little

0:20:050:20:08

bit differently.

0:20:080:20:09

And President Trump is right,

they clearly have been at

0:20:090:20:12

odds.

0:20:120:20:13

In tone and substance,

again and again.

0:20:130:20:15

In the summer Tillerson openly

registered his opposition to

0:20:150:20:19

Trump's plan to withdraw

from the Paris climate accord.

0:20:190:20:22

I was free to express my views.

0:20:220:20:30

I took a counter view

to the decision that

0:20:310:20:33

was made.

0:20:330:20:34

But I fully appreciate the elements

behind why he took the

0:20:340:20:37

decision.

0:20:370:20:38

And then there was a striking

interview that Tillerson

0:20:380:20:40

gave to Fox News after racist

violence in Charlottesville,

0:20:400:20:42

distancing himself from

the president's views.

0:20:420:20:44

I don't believe anyone

doubts the American

0:20:440:20:52

people's values

or the commitment of

0:20:580:21:00

the American government,

or of the

0:21:000:21:01

government agencies to advancing

those values and defending those

0:21:010:21:03

values.

0:21:030:21:04

And the President's values?

0:21:040:21:05

The president speaks

for himself, Chris.

0:21:050:21:07

Tempting as it is to see this

in terms of policy differences,

0:21:070:21:10

perhaps the real story is just

the chaos in the White House.

0:21:100:21:12

John Kerry, Hillary Clinton,

Condoleezza Rice,

0:21:120:21:14

Colin Powell, Madeline Albright

and Warren Christopher, the last six

0:21:140:21:16

secretaries of state have all served

four years, not one.

0:21:160:21:19

And no-one needs reminding

that there have been all

0:21:190:21:21

too many comings and goings

in an administration so young.

0:21:210:21:29

Well the replacement to Rex

Tillerson is Mike Pompeo. He is a

0:21:320:21:39

defender of the CIA after a Senate

report on torture detailing

0:21:390:21:43

practices such as waterboarding. He

said that they were heroes and not

0:21:430:21:50

torturers. So where I things in the

White House?

0:21:500:21:59

I'm joined from Washington by

David Frum - he was a speechwriter

0:22:030:22:06

for George W Bush and has recently

written a book about

0:22:060:22:08

Donald Trump's White House.

0:22:080:22:09

Anne Applebaum is still with me too.

0:22:090:22:13

I think he will be remembered at the

least bad Secretary of State under

0:22:130:22:18

Donald Trump. I will direct

attention to a story that may not

0:22:180:22:26

broken in the UK but is indicative

of what is going on. Rex Tillerson

0:22:260:22:30

was not the only person to lose his

job today, Donald Trump also lost

0:22:300:22:36

his chief personal aide, the person

who would walk around with the

0:22:360:22:39

president and hold onto things for

him. It turns out he was escorted

0:22:390:22:42

from the building to the new job

because he is under investigation

0:22:420:22:47

for serious financial crimes. That

is the kind of thing that is

0:22:470:22:50

happening more and more, people

going out for reasons that another

0:22:500:22:56

administration 's would have

prevented them even serving as

0:22:560:23:01

visitors let alone star.

You were a

fan of Rex Tillerson?

I think he

0:23:010:23:07

will be remembered as a disastrous

secretary of state. He treated the

0:23:070:23:10

State Department as if it were a

kind of non-performing part of Exxon

0:23:100:23:14

and tried to reform it, bases. He

stuck to a tiny group of advisers,

0:23:140:23:19

he ignored diplomats and expect. He

tried to do large-scale reforms

0:23:190:23:25

which no one saw the point of,

mostly to do with cutting money

0:23:250:23:28

which is not how you want to push

the diplomatic corps. All kinds of

0:23:280:23:35

people left the State Department.

Huge numbers of exits.

He made

0:23:350:23:39

diplomacy seemed like an

unattractive thing. Having said

0:23:390:23:45

that, these things are not

exclusive, on the one hand you could

0:23:450:23:49

say he was a terrible secretary of

state at also say the next one main

0:23:490:23:53

be no better. So not clear that we

have reason to rejoice.

Do we think

0:23:530:24:01

might Pompeo will be less of a

restraining influence on the

0:24:010:24:05

president and the world will be more

subject to changes and policy

0:24:050:24:11

changes in the presidency?

Mike

Pompeo was a businessman and member

0:24:110:24:17

of Congress, and much more sensitive

reader of the personality of the

0:24:170:24:23

president than Rex Tillerson. So he

will bend more to the presidential

0:24:230:24:29

will then Rex Tillerson and seems

more in line with his views on Iran.

0:24:290:24:33

But we're already escalating crisis

in the Korean peninsula, the idea

0:24:330:24:38

that we could escalate that with

Iran as well, to nuclear crisis at

0:24:380:24:45

the one time.

And just expand on

your idea about more instability to

0:24:450:24:53

come. And thinking in foreign

policy. You have all these crises

0:24:530:24:57

but just in terms of the sort of

day-to-day stuff outside of the

0:24:570:25:00

three or four critical things on the

top of the list for the Secretary of

0:25:000:25:06

State.

Donald Trump has repeatedly

said that he has his administration

0:25:060:25:12

not quite the way he wants, but

almost. Indicating more changes are

0:25:120:25:16

to come. And he also seems to be

more and more impatient on any kind

0:25:160:25:21

of restraint on him. That augurs ill

for those members of his

0:25:210:25:24

administration who have tried to

restrain him in one way or another.

0:25:240:25:28

Chief of staff John Kelly, people

who are good at their jobs and have

0:25:280:25:37

told the president you cannot do

this or that.

It feels like people

0:25:370:25:44

come and go so frequently, can we

believe that for another three years

0:25:440:25:48

or even seven years under resident

tramp, that that kind of place of

0:25:480:25:53

chaos can carry on.

It happens in

other countries, Italy for years had

0:25:530:26:00

government that changed constantly,

in Latin American countries people

0:26:000:26:04

come and go all the time. We get

used to thinking of the United

0:26:040:26:08

States as a stately model where

things happen slowly and

0:26:080:26:11

administrations do not change. And

the secretaries of state stick

0:26:110:26:16

around for four years but really

there's no reason to expect that.

0:26:160:26:19

This is a president who wants to

hear, he wants people to express his

0:26:190:26:25

will and when they do not he fires

them. He does not want to hear

0:26:250:26:32

people contradict him. But he did

not like about Rex Tillerson is that

0:26:320:26:37

he sometimes said no, that is not

how things are, I see things

0:26:370:26:42

differently. Mike Pompeo, he has

been good and ripping the president,

0:26:420:26:49

outlining his views with those of

the president. Done a couple of

0:26:490:26:52

things that think are worrying, one

of them he actually lied about an

0:26:520:26:58

CIA report and said it showed there

was no Russian interference of

0:26:580:27:03

significance in the election whereas

the report said the opposite.

I do

0:27:030:27:09

not want to talk much more about

Russia but how much did it play in

0:27:090:27:16

the sacking of Rex Tillerson?

We do

not know the answer to that because

0:27:160:27:20

we do not know exactly when Rex

Tillerson was fired. The president

0:27:200:27:25

clearly has been on his way to this

decision for some time for Doctor

0:27:250:27:28

John Kelly the. As said to

reporters, that he had indicated to

0:27:280:27:35

Rex Tillerson on Friday to be braced

for bad news. But the actual firing

0:27:350:27:38

happened today, the day after Rex

Tillerson gave support to the UK in

0:27:380:27:43

a way that is more forthright than

the president has yet done. He has

0:27:430:27:47

not yet agreed that Theresa May was

correct in what she said to the

0:27:470:27:53

House of Commons. In any normal

administration the US and the UK

0:27:530:27:57

would have worked out their

statement in advance. In private

0:27:570:27:59

agreement before either country made

a public statement on the matter so

0:27:590:28:04

serious. So if he has undercut

Theresa May and that is quite

0:28:040:28:10

troubling and troubled Rex

Tillerson.

0:28:100:28:14

In the end, international news

completely overshadowed the first

0:28:140:28:16

ever Chancellor's Spring Statement.

0:28:160:28:17

On this day in years past

we would have had a full-on Budget,

0:28:170:28:20

but Philip Hammond has moved that

to the autumn, so today

0:28:200:28:23

we had a slimmed down

update on where we are.

0:28:230:28:25

The Chancellor's central thought

was that the economic news

0:28:250:28:28

is marginally better -

spring is in the air, but the long

0:28:280:28:30

term projections have not changed,

and so only if things continue

0:28:300:28:33

to improve will there be

extra money to spend.

0:28:330:28:37

Nevertheless, the Chancellor

was in an upbeat form,

0:28:370:28:40

eschewing his traditional role

as the gloomy one in the cabinet.

0:28:400:28:44

And if, in the autumn,

the public finances continue

0:28:440:28:47

to reflect the improvements that

today's report hints at,

0:28:470:28:51

then in accordance with our balanced

approach and using the flexibility

0:28:510:28:54

provided by the fiscal rules,

I would have capacity to enable

0:28:540:28:59

further increases in public spending

and investment in the years ahead.

0:28:590:29:05

While continuing to drive value

for money to ensure that not

0:29:050:29:08

a single penny of precious

taxpayers' money is wasted.

0:29:080:29:16

He even likened himself to Tigger.

Now he had to offer a more

0:29:220:29:27

optimistic outlook.

0:29:270:29:32

With hope of more spending later,

but not so optimistic that people

0:29:320:29:35

could demand extra spending NOW.

0:29:350:29:36

And here's a graph to show why.

0:29:360:29:37

This is the OBR graph on borrowing.

0:29:370:29:39

That's the Office for

Budget Responsibility -

0:29:390:29:41

the official forecaster.

0:29:410:29:42

This goes back over a decade.

0:29:420:29:43

So this is what has happened

over the last decade -

0:29:430:29:46

you see borrowing soar,

and now, the government

0:29:460:29:48

has got it right down.

0:29:480:29:51

It's a huge adjustment.

0:29:510:29:55

So are we there yet,

as every impatient child asks

0:29:550:29:57

on a long car journey?

0:29:570:29:59

Can we relax now?

0:29:590:30:03

This is what the OBR did think

would happen to borrowing over

0:30:030:30:06

the next five years; this

is what they projected

0:30:060:30:08

back in November.

0:30:080:30:09

Borrowing falling,

but still not disappearing.

0:30:090:30:11

So that's the old forecast,

And then we got the new,

0:30:110:30:14

more optimistic one today.

0:30:140:30:15

Here it is - and you see that

not much has changed.

0:30:150:30:20

Borrowing comes down,

but is not eliminated.

0:30:200:30:22

Well, I'm joined by Nick Watt.

0:30:220:30:30

What were your impressions of this

statement?

Against the backdrop you

0:30:300:30:34

were talking about, the dour

Spreadsheet Phil macro became de

0:30:340:30:40

rigueur Phil and indeed liberated

Phil. He gave a much stronger

0:30:400:30:46

indication of spending in the

November Budget, but said no, I do

0:30:460:30:51

have my fiscal head room, but

November is a long way off, so let's

0:30:510:30:56

be cautious about that. And to other

things he will do in November is

0:30:560:31:00

that he will use that headroom to

keep taxes low and to keep paying

0:31:000:31:04

down the deficit. But we also saw

liberated Phil, and the Chancellor

0:31:040:31:09

was able to make arguments against

labour that he was not allowed to

0:31:090:31:13

make in the general election. He is

essentially going to say the choice

0:31:130:31:15

now between vote Conservatives and

you will get spending up and get

0:31:150:31:22

down, vote Labour and you will get

spending up and that up, to which

0:31:220:31:26

Labour will no doubt say, if used in

the late and economy, you can expand

0:31:260:31:29

an economy.

One eye-catching thing

not so much obvious from the speech

0:31:290:31:36

but from the documentation of the

OBR - about Brexit.

That's right, a

0:31:360:31:41

very striking graph in the OBR book,

saying that the UK will be paying

0:31:410:31:46

its Brexit divorce bill up until

2064. It's important to say that the

0:31:460:31:51

OBR is mapping out the Treasury

plan. That means it will take 48

0:31:510:31:59

years after the referendum for the

UK to finally settle its accounts.

0:31:590:32:03

The Treasury is very relaxed about

this. They are saying two key things

0:32:030:32:07

which you should be able to see from

that graph. 75% of that will be paid

0:32:070:32:13

off by 2022, which coincidentally

will be the next general election.

0:32:130:32:16

The other thing they are saying is

that this was actually a UK idea, to

0:32:160:32:21

ensure that the UK doesn't make any

payments earlier than if it had been

0:32:210:32:26

a member state of the European

Union. And obviously, the crucial

0:32:260:32:30

thing is pensions and if the UK

wanted to change the profile of

0:32:300:32:34

those payments, we could negotiate

it.

Thank you.

0:32:340:32:38

Mel Stride is Financial Secretary

to the Treasury, and Peter Dowd

0:32:380:32:40

is Shadow Chief Sectary

to the Treasury.

0:32:400:32:47

Mel, are you happy with the level of

public services and how much we are

0:32:480:32:52

spending on them?

Well, we always

want to do more and we have done a

0:32:520:32:56

great deal.

So you must be happy.

We

have spent over £60 billion on

0:32:560:33:03

additional public expenditure. In

the last Budget, we put an extra 6.3

0:33:030:33:08

billion into the National Health

Service.

You are quoting all these

0:33:080:33:13

numbers, but are you happy with the

level of public services at the

0:33:130:33:17

moment?

Going forward...

Are you

happy?

It has to be seen in the

0:33:170:33:25

context of taking a balanced

approach.

So are you happy?

What I

0:33:250:33:29

am happy is that the Chancellor's

sense of direction is that we need

0:33:290:33:33

to keep bearing down on the deficit,

and the OBR says we are successfully

0:33:330:33:38

doing that. At the same time, we

look to invest in public services.

0:33:380:33:44

So obviously, you are unable to say

you are happy with the level of

0:33:440:33:48

public services at the moment, and

yet your policy is to cut them by

0:33:480:33:53

another 1% in 2019, another 1% on

top of that in 2020 and another 1%

0:33:530:33:58

in real terms per capita. The

day-to-day spending on public

0:33:580:34:02

services still has to be cut year

after year. So you must be pretty

0:34:020:34:07

unhappy. You can't say you are happy

with them at the moment, and you are

0:34:070:34:11

planning another three years of

cuts.

We have to look at the whole

0:34:110:34:15

picture, which is firstly being a

responsible government that takes a

0:34:150:34:20

sensible approach to bringing down

the deficit.

You could put up taxes.

0:34:200:34:27

Well, this comes to my other point.

Firstly, we need to bear down on the

0:34:270:34:33

deficit, or we will leave ourselves

vulnerable to external economic

0:34:330:34:36

shocks. Secondly, we want to invest

in public services and we have done

0:34:360:34:40

a huge amount of that.

Prior to

cutting them.

Thirdly, we do want to

0:34:400:34:46

make sure we do whatever we can to

alleviate the financial pressures on

0:34:460:34:50

a hard-working family.

0:34:500:34:56

a hard-working family.

You are

outlining a big group of

0:34:570:34:58

incompatible objectives. You are not

giving me a policy. We would all

0:34:580:35:03

love lower taxes, better public

spending and less borrowing.

0:35:030:35:09

Stewardship of the economy is of

course about choices.

Petered out,

0:35:090:35:13

your choices are to spend more and

tax more, correct?

To tax more in

0:35:130:35:20

relation to the top 5%, yes.

The

Conservative Party are saying you

0:35:200:35:26

can have all the welfare state you

like and pay no more tax, which

0:35:260:35:30

isn't true. On the other side,

Labour are saying we can levy more

0:35:300:35:35

tax but someone else will pay

because it will come from the rich,

0:35:350:35:37

which also isn't true.

Well, it is

true. I have spoken to you before

0:35:370:35:43

about funding Britain's future. We

set out in the manifesto £46 billion

0:35:430:35:48

worth of expenditure and £48.6

billion.

Paul Johnson went on to say

0:35:480:35:54

Labour's manifesto had a lot of

overestimates on what you can get

0:35:540:35:57

from the rich and it did not balance

out.

Yes, it did.

0:35:570:36:08

out.

Yes, it did.

Do you take expert

advice?

Of course we do.

And is

0:36:080:36:13

there any group of experts better

than the Institute for Fiscal

0:36:130:36:16

Studies on making these kinds of

financial conjecture?

Of course they

0:36:160:36:19

are entitled to their view, but we

do take advice.

But their view is a

0:36:190:36:24

pretty good view. They have a good

overview of the tax system.

But that

0:36:240:36:29

is not the only view.

But should the

public believe them, who have no

0:36:290:36:36

agenda, or you, who are trying to

sell us better public services

0:36:360:36:41

without having to pay for them's

well, the government refused access

0:36:410:36:49

to the OBR. The guy running the OBR

used to run the IFS. You would get

0:36:490:36:54

the same answer from the OBR, I

suspect.

Maybe a at least we could

0:36:540:37:00

have the opportunity to test that

out.

Isn't the truth that both of

0:37:000:37:04

you are trying to infantilise the

nation and denied the nation a

0:37:040:37:08

sensible decision we have to make,

that if we want better social care

0:37:080:37:11

and they better NHS, we probably

have to spend another £15 billion on

0:37:110:37:15

public services? Borrowing is not

too low, so we have two tax more,

0:37:150:37:20

and we have to tax real people more

to pay for extra public spending. Do

0:37:200:37:25

you have any agreement with that?

And my Justin Tucker Ghulam?

It is

0:37:250:37:30

not about being in cloud cuckoo

land. We are trying to set out

0:37:300:37:33

spending plans in our document.

So

you are against straightforward

0:37:330:37:38

increases in spending?

At the end of

the day, we would not start from

0:37:380:37:45

where we are now. The point I was

making before is the question of

0:37:450:37:51

investment. We are not getting the

investment in the economy that we

0:37:510:37:54

need.

Do you ever think that maybe

we just need a bit more tax to pay

0:37:540:38:02

for social care? You are from Devon.

What do your local Conservative

0:38:020:38:07

council say about funding in their

backyard?

We recognise that there

0:38:070:38:13

are precious out there.

If the

vulnerable and elderly of Devon are

0:38:130:38:18

to be supported, it is essential

that additional funding is secured.

0:38:180:38:22

That is your local Conservative.

There is no way of my taking up the

0:38:220:38:27

money.

There is, put up taxes.

Some

will say that that is possible, but

0:38:270:38:34

we know from history that it is not

possible.

It's not possible to raise

0:38:340:38:40

taxes for better public services?

What are you talking about?

Because

0:38:400:38:46

we take a balanced approach to the

economy, which means we have to get

0:38:460:38:50

on top of the debt. Equally, we want

to take the pressure of hard-pressed

0:38:500:38:55

households. That doesn't mean

overburdening them with additional

0:38:550:38:59

taxes, the kind of spending policy

that the Labour Party will pursue

0:38:590:39:03

will not leave people feeling better

off. It will make them worse off and

0:39:030:39:07

in the long term would derail the

hard work we have done.

The

0:39:070:39:11

government have their own fantasy

figures in their Budget and to make

0:39:110:39:15

up fantasy figures for Labour is

ridiculous. We have set up our

0:39:150:39:19

spending plans.

And the IFS say they

are not credible.

People have

0:39:190:39:27

different opinions, but the bottom

line is that the nation is in a mess

0:39:270:39:31

in terms of economic growth,

productivity. Schools are having

0:39:310:39:37

cuts to their budget. And people out

there recognise that. People out

0:39:370:39:45

there who can't get social care

recognise that.

He says he is not

0:39:450:39:52

happy with public services as they

are.

I didn't say that.

You didn't

0:39:520:39:58

say you were happy.

I don't agree

with Peter's characterisation of our

0:39:580:40:02

country and our economy.

Half your

cabinet are arguing the same thing.

0:40:020:40:09

This is an economy with a

near-record level of employment.

0:40:090:40:12

Then why is it not possible... If it

is going well, as

0:40:120:40:22

is going well, as you say, why do we

not have social care that is

0:40:230:40:27

adequately funded?

We will have a

green paper on social care. We have

0:40:270:40:31

already put £2 billion into social

care. And the reason we have been

0:40:310:40:34

able to do those things is that our

stewardship of the economy has been

0:40:340:40:38

responsible. If you go for this tax

and spend and spray the money

0:40:380:40:41

around, it ends up in disaster. We

end up back where we were in 2010.

0:40:410:40:52

You keep saying tax and spend. You

have gone from a strong and stable

0:40:520:40:59

economy to the magic money tree. You

gave the DUP £1 billion, which

0:40:590:41:03

suddenly was found. The magic

monetary analogy went. The bottom

0:41:030:41:07

line is that the country is in need

of investment and we are not getting

0:41:070:41:11

it from the government.

And that,

gentlemen, is where we have to leave

0:41:110:41:16

it. It was a good discussion. Thank

you both. That is all we have time

0:41:160:41:21

for. I will be here tomorrow. Until

then, good night.

0:41:210:41:28