:00:09. > :00:16.Hello and welcome to The Brexit Effect with me Christian Fraser.
:00:17. > :00:18.Is the UK economy standing at the cliff edge -
:00:19. > :00:21.or is there a soft landing the other side of Brexit?
:00:22. > :00:24.We will hear from business leaders in Bristol on what type
:00:25. > :00:25.of relationship they want with the EU.
:00:26. > :00:36.There is no clear visibility on what's going to happen to those
:00:37. > :00:41.guys post hard Brexit, soft Brexit, whatever Brexit.
:00:42. > :00:44.They have been lean years for the pig farmers of Yorkshire -
:00:45. > :00:50.I think it will be all right for pig men,
:00:51. > :00:55.Migration from Europe is at a record level.
:00:56. > :00:58.But what will ending freedom of movement mean to the UK economy
:00:59. > :01:03.We have an expert panel with us this evening to debate the big issues.
:01:04. > :01:05.Michael Gove is here - the former Tory Cabinet
:01:06. > :01:08.minister one of the chief architects of the Vote Leave campaign.
:01:09. > :01:11.Sir Vince Cable of the Liberal Democrats -
:01:12. > :01:16.former Business Secretary and a strong Remain supporter.
:01:17. > :01:18.Professor Anand Menon of King's College London -
:01:19. > :01:23.who leads the independent research body, UK in a Changing Europe.
:01:24. > :01:25.And Dia Chakravarty, Political Director of
:01:26. > :01:27.the TaxPayers' Alliance - a think tank for for lower taxes
:01:28. > :01:34.And we'll have the view from Strasbourg.
:01:35. > :01:37.Article 50 still to be triggered, but for those British MEPs elected
:01:38. > :01:49.to represent us in Europe, life is already changing.
:01:50. > :01:52.Hello and welcome to the Brexit Effect -
:01:53. > :01:55.this is our special programme looking more in-depth at what lies
:01:56. > :02:03.We're now almost six months on from the Brexit vote,
:02:04. > :02:07.still we have only a partial picture of where we are heading,
:02:08. > :02:10.and a great deal of uncertainty over who has the power to formally
:02:11. > :02:15.Yet for all these obstacles there's no question we are slowly moving
:02:16. > :02:23.Last week, while the Supreme Court sat to consider the issue,
:02:24. > :02:25.MPs voted overwhelmingly to support Theresa May's plan to begin
:02:26. > :02:30.But even if there's clear support for that,
:02:31. > :02:33.there is no such agreement in Parliament on what kind
:02:34. > :02:40.The overwhelming evidence is that they do not want hard Brexit.
:02:41. > :02:43.There is not a consensus out there for hard Brexit.
:02:44. > :02:47.And if we're going to reach a consensus it has to be a genuine
:02:48. > :02:54.Our amendment also lays out an important challenge to those
:02:55. > :02:56.on the benches opposite, who say they respect the result
:02:57. > :02:59.of the referendum but whose actions suggest they are looking for every
:03:00. > :03:05.On the question of a vote on the final deal, now,
:03:06. > :03:08.I heard him say today, I expect there will be a vote.
:03:09. > :03:10.Well, I expect that the district line will turn up
:03:11. > :03:15.He said, as I understood it, it is inconceivable
:03:16. > :03:21.Well some people would have said that it was inconceivable that
:03:22. > :03:23.Donald Trump would be elected as president of the United States.
:03:24. > :03:26.It does not fill me with a great deal of confidence.
:03:27. > :03:29.It was perfectly clear, made clear not just
:03:30. > :03:32.It was perfectly clear, made clear not just by the vote leave campaign,
:03:33. > :03:37.a role in, but it was made perfectly clear by the then Prime Minister,
:03:38. > :03:41.It was made perfectly clear by my right honourable
:03:42. > :03:42.friend the then Chancellor of the Exchequer,
:03:43. > :03:48.It was made clear by every single one of the leading representatives
:03:49. > :03:51.of the Remain campaign that voting to leave the European Union meant
:03:52. > :03:55.The government has to be able to carry through the effect
:03:56. > :03:59.And the plain choice we face is whether to constrain
:04:00. > :04:01.the government or not to constrain the government.
:04:02. > :04:04.My argument is that if we constrain the government we will end up
:04:05. > :04:07.with a worse result from the point of view of people like me
:04:08. > :04:15.So, the views from Parliament last week during the debate. I could go
:04:16. > :04:20.of, your fellow leave campaigner Iain Duncan Smith said this vote had
:04:21. > :04:25.given the government a blank cheque. Do you think it was so significant?
:04:26. > :04:29.I think it has certainly given the government clear instruction. Not
:04:30. > :04:33.just the overwhelming majority of conservatives but the entire House
:04:34. > :04:37.of Commons saying now is the time to leave, let's trigger article 50 B
:04:38. > :04:42.for the end of March, that gives the government the clear instruction to
:04:43. > :04:45.get on with it. I would not say it is an entirely blank cheque. There
:04:46. > :04:51.are two things to bear in mind. One, the nature of the mandate and
:04:52. > :04:57.arguments made to leave. And secondly the need to address some
:04:58. > :05:00.specific concerns. The government made it clear that they were going
:05:01. > :05:05.to produce a plan before article 50 was formally triggered, that's the
:05:06. > :05:08.basis on which the Parliamentary vote was secured, so there will be
:05:09. > :05:13.more detail from the government before we formally trigger Brexit.
:05:14. > :05:18.Is the plan comprehensive, is it enough? We don't know enough about
:05:19. > :05:21.it. If I can shift your metaphor from blank cheques to bricks and
:05:22. > :05:27.mortar, the country has voted and I accept that, to move house. We don't
:05:28. > :05:33.know what the house is that we are moving to. And there needs to be
:05:34. > :05:36.some process by which we decide whether we want to complete the
:05:37. > :05:40.move, the house may be bigger and better, it may be full of dry rot.
:05:41. > :05:44.There needs to be a proper process which Parliament leads, now
:05:45. > :05:49.established by the courts, to decide whether the move should proceed. The
:05:50. > :05:54.concern is that there are some politicians on the Remain side who
:05:55. > :05:58.are, in the words of Michael, obfuscating, trying to delay the
:05:59. > :06:02.process? I think there has been a serious loss of the benefit of the
:06:03. > :06:07.doubt on both sides during the course of the referendum campaign.
:06:08. > :06:10.And I think it does seem, to a lot of Brexit campaigners, I was
:06:11. > :06:15.personally want even though my organisation did not take a stance,
:06:16. > :06:23.that a lot of Remain supporting MPs are trying to stop the process in
:06:24. > :06:24.some shape or form in the name of Parliamentary scrutiny.
:06:25. > :06:27.Parliamentary scrutiny is a brilliant thing but it does often
:06:28. > :06:33.seem like there is some intention on the part of some Remain supporting
:06:34. > :06:37.MPs to stop the process somehow. The other party in this is the Supreme
:06:38. > :06:41.Court, if they say the government needs a mandate, the timetable is
:06:42. > :06:44.off again, isn't it was yellow one of the many things we don't know
:06:45. > :06:50.about the Supreme Court is whether they will specify what this plan
:06:51. > :06:55.should be. Plan could be a statement saying do the best for the country,
:06:56. > :06:58.see you later, or the Supreme Court could say there needs to be
:06:59. > :07:04.something more substantive, and that could be significant. Aching up on
:07:05. > :07:07.the point Oliver Letwin made, if you have to mandate the government,
:07:08. > :07:13.don't you tie their hands? What was it John Major said? Don't bind my
:07:14. > :07:17.hands when I'm negotiating with Europe. Isn't there a danger of
:07:18. > :07:21.limiting the negotiations? It seems perfectly reasonable that Parliament
:07:22. > :07:27.should set out a set of objectives which will necessarily be brought.
:07:28. > :07:31.And what is sometimes called the soft Brexit option, causing minimum
:07:32. > :07:35.disruption and damage while actually leaving the European Union, if
:07:36. > :07:39.Parliament were to give that general direction that would seem to be
:07:40. > :07:42.perfectly reasonable. This is not a conventional negotiation. You must
:07:43. > :07:49.remember article 50 triggers a process which will conclude with the
:07:50. > :07:52.European Union making us an offer, conventional negotiation is not what
:07:53. > :07:56.is going to happen. There is a danger that if you put it in
:07:57. > :08:01.legislation it is narrow and confines what the government can do.
:08:02. > :08:06.De negotiation will be very tightly drawn, it will be a bill in perhaps
:08:07. > :08:10.18 or 20 words. Before that the argument will be how much is
:08:11. > :08:16.revealed in that plan. The argument of Oliver Letwin is, and Vince is
:08:17. > :08:19.right, it's a different sort of negotiation from other treaty
:08:20. > :08:23.negotiations, but the more that you reveal beforehand, the greater the
:08:24. > :08:27.potential for your case to be picked apart by others. OK.
:08:28. > :08:29.So far the economy has out-performed many of the forecasts
:08:30. > :08:32.But there are still longer-term concerns over what kind
:08:33. > :08:35.of deal will be negotiated, and, crucially, what will happen
:08:36. > :08:37.in those days after the divorce settlement takes effect.
:08:38. > :08:41.The CBI - that represents many big businesses -
:08:42. > :08:43.has been pushing for a gradual transition towards a new
:08:44. > :08:48.And a couple of weeks ago, the Prime Minister hinted
:08:49. > :08:52.that the Hovernment is working to avoid a so called "cliff edge".
:08:53. > :08:55.Our business editor Simon Jack has been to the West of England to get
:08:56. > :08:58.the thoughts of company bosses there.
:08:59. > :09:01.Britain is on a journey out of the European Union.
:09:02. > :09:03.It officially sets sail at the end of March when we'll
:09:04. > :09:08.So far the route we're going to take has been, well,
:09:09. > :09:17.So we've come to Bristol to find out what businesses here want to know
:09:18. > :09:18.about the potential perils and potential opportunities
:09:19. > :09:26.For firms like this manufacturer of aerospace components, initial
:09:27. > :09:28.anxiety has given way to just getting on with it.
:09:29. > :09:31.In fact the company has just spent ?400,000 on this new machine.
:09:32. > :09:34.I was very pro-remain as a business person because I didn't want
:09:35. > :09:35.the uncertainty that Brexit is still potentially
:09:36. > :09:45.But people have decided on what they want to happen.
:09:46. > :09:49.Let's roll up our sleeves and move forward.
:09:50. > :09:54.In fact the economy has not really dimmed at all since the vote,
:09:55. > :09:56.and here at the UK's largest independent financial adviser,
:09:57. > :09:58.investor confidence has been looking up.
:09:59. > :10:00.I think things are a lot more certain.
:10:01. > :10:04.Two things in particular we've learned.
:10:05. > :10:07.One is that we're definitely leaving the European Union.
:10:08. > :10:09.And the other is that people have certainty that actually,
:10:10. > :10:14.the day after the Brexit vote, the world hasn't fallen to pieces.
:10:15. > :10:20.But hang on a moment, remember, we are still in the European Union,
:10:21. > :10:23.and there is a gap to be bridged between where we are now
:10:24. > :10:29.The government wants to start the exit process
:10:30. > :10:36.That means the UK will actually leave in March 2019.
:10:37. > :10:38.If no new deal between the UK and the EU has been
:10:39. > :10:42.Are we heading for the edge of a cliff?
:10:43. > :10:45.With precious little time to negotiate a new rule book,
:10:46. > :10:50.A regulation, customs and trade no man's land?
:10:51. > :10:54.Mike Summers is worried about potential delays
:10:55. > :10:57.at a new border with Europe, and he's worried about the future
:10:58. > :11:05.There is no clear visibility on what's going to happen to those
:11:06. > :11:07.guys post hard Brexit, soft Brexit, whatever Brexit,
:11:08. > :11:15.whatever type of Brexit we're talking about.
:11:16. > :11:19.All this talk of cliff edges has prompted ministers to start talking
:11:20. > :11:22.about a transitional period to give the UK a bit more breathing space
:11:23. > :11:31.Having a longer period to manage the adjustment
:11:32. > :11:36.between where we are now as full members of the European Union
:11:37. > :11:40.and where we get to in the future as a result of the negotiations
:11:41. > :11:43.that we will be conducting would be generally helpful.
:11:44. > :11:45.Another thing that would be helpful is more assurance
:11:46. > :11:53.One is that freed from Europe, then we will be able to tear up
:11:54. > :12:00.When we look at it the UK was always at the top of the list in terms
:12:01. > :12:02.of gold plating regulation that came out.
:12:03. > :12:06.So actually it could be that freed up from Europe that's a green light
:12:07. > :12:10.So we're not quite sure which way that's going to go.
:12:11. > :12:12.So what has emerged from the mist and the murk
:12:13. > :12:19.There are fears that we won't get the deal done in time,
:12:20. > :12:21.we'll step into the unknown off this so-called cliff edge.
:12:22. > :12:24.But some ministers are coming round to the idea of some sort
:12:25. > :12:27.of transitional deal to smooth that process.
:12:28. > :12:29.And others are deeply sceptical about how much that might
:12:30. > :12:31.cost and how long that process might take.
:12:32. > :12:33.One thing businesses want is still the one thing
:12:34. > :12:47.Vince Cable, if there's going to be a transition, how long should it go
:12:48. > :12:52.on for? I see this in two stages. And I think this is what Philip
:12:53. > :12:55.Hammond was arguing for. You have a first stage where the basic
:12:56. > :13:01.framework is agreed. You are in or out of the single market, you accept
:13:02. > :13:04.or don't accept the customs union, the formula for the settlement of
:13:05. > :13:08.Britain's remaining debts on the budget, whatever. There is a lot of
:13:09. > :13:14.detail that will take years to sort out. Let me take one single example.
:13:15. > :13:21.I did a conference with independent travel operators, now they operate
:13:22. > :13:25.under something covering package holidays, and nobody imagines that
:13:26. > :13:29.this kind of detail can be renegotiated, it's taken 30 years to
:13:30. > :13:33.get there, within a small period of time. So there will have to be a
:13:34. > :13:38.framework in which the government agrees with the European Union that
:13:39. > :13:41.we're going to stay in the single market either overall or for many
:13:42. > :13:45.product categories all we are going to leave it. And once that is
:13:46. > :13:50.established you can then begin to talk about all the technical detail
:13:51. > :13:54.which is massive. I take your point but if you have to negotiate a
:13:55. > :13:57.transition, why not get on with the real deal? Why do we need a
:13:58. > :14:03.transition to get to deal we to negotiate again? If you don't do
:14:04. > :14:07.anything for two years and then you start, I can understand that's not
:14:08. > :14:11.helpful to anybody, and I don't think that's what Philip Hammond and
:14:12. > :14:15.others mean. You do in gauge with negotiation, you get the framework
:14:16. > :14:19.agreed, and there is technical detail that will take a long time to
:14:20. > :14:22.negotiate. To take another example, all the stuff around the car
:14:23. > :14:26.industry, whether or not they will be able to remain in the customs
:14:27. > :14:30.union so they don't have all the vast bureaucracy involved in rules
:14:31. > :14:35.of origin, or widgets flying backwards and forwards. You can
:14:36. > :14:39.agree a framework, the car industry remains in the customs union, maybe,
:14:40. > :14:43.maybe not, I don't know. But when you've agreed it then you agree the
:14:44. > :14:48.mechanics of how it plays out. Is there a cliff edge? No, I think the
:14:49. > :14:53.phrase was actually used by one of the leaders of the CBI and I think
:14:54. > :14:57.that it has been given a great deal of additional currency because
:14:58. > :15:00.people want to make the prospect of leaving seems somehow perilous
:15:01. > :15:03.instead of potentially liberating. I think it is the case, Vince is
:15:04. > :15:08.right, that there are some issues that need to be resolved as part of
:15:09. > :15:11.completing the article 15 negotiations. We need to divvy up
:15:12. > :15:17.the resources of the European Union and the debts between us. And there
:15:18. > :15:21.are issues, and Vince mentions the regulations governing transport and
:15:22. > :15:26.travel. We can agree outside the European Union and say that we will
:15:27. > :15:30.abide by them as we abide by other global rules and regulations that
:15:31. > :15:35.govern how, as is done. I think some of the argument for transition runs
:15:36. > :15:37.counter to the need for certainty. And I think there are certainly some
:15:38. > :15:41.people who argue that the transition would provide a period of
:15:42. > :15:47.adjustment. The danger is that the longer transition, the less certain
:15:48. > :15:51.you are about the final destination. It was said today that it would have
:15:52. > :15:55.to be for a fixed period, you couldn't have an open-ended
:15:56. > :15:59.transitional period. And in that sense the question is why not move
:16:00. > :16:02.quickly to concluding all of those things that constitute a proper
:16:03. > :16:06.deal, both the division of response but it is in debts and comprehends a
:16:07. > :16:11.free trade agreement between Britain and the European Union which should
:16:12. > :16:15.work in both countries interests. If you then have a transitional
:16:16. > :16:17.arrangement between our current situation and what might be the
:16:18. > :16:23.eventual free trade agreement then how do we know that a transitional
:16:24. > :16:28.arrangement is going to take less time to negotiate than the final
:16:29. > :16:32.deal? It may well be that a transitional arrangement in all its
:16:33. > :16:35.complexity becomes a way of disposing activity from getting to
:16:36. > :16:39.the eventual deal we need to have. You raise the issue of cost as a
:16:40. > :16:44.representative for the taxpayers Alliance. PO BR says it will cost as
:16:45. > :16:49.an extra ?250 million a week probably to transition. There is no
:16:50. > :16:54.specification over whether we would pay in for transition but that seems
:16:55. > :16:57.to be the cost. This is the thing, without knowing what this transition
:16:58. > :17:01.means, what it involves, how long the period lasts, how can we
:17:02. > :17:05.possibly have any sort of cost estimate to go ahead with it? It is
:17:06. > :17:09.definitely a point that whether this is actually going to be another
:17:10. > :17:15.layer of added uncertainty which is Mrs can't cope with, I don't think
:17:16. > :17:20.it is the right way to go, that is always going to be a worry. You talk
:17:21. > :17:22.about cost and also limited resources, it could be costs but it
:17:23. > :17:27.could be other things like civil service time etc, at a cost. Is it
:17:28. > :17:32.not worth focusing all of those resources and focusing on getting
:17:33. > :17:36.out, as it were, and going towards the final deal rather than dividing
:17:37. > :17:39.focus and working on something for a little while and then something
:17:40. > :17:44.else? That I think will be crucial and that's what we need to look at.
:17:45. > :17:49.But if we get to the period at the end of article 50, October 2018 on
:17:50. > :17:53.current projections, and there is no deal on the table, no transition,
:17:54. > :17:58.what happens to all those products that we export to the European
:17:59. > :18:05.Union? It will be March 2019 I think when it ends. So if we don't have a
:18:06. > :18:11.deal the world's trade organisation rules will apply. And what is wrong
:18:12. > :18:16.with that? A certain amount of tariffs are mandated. But we would
:18:17. > :18:21.be quids in with our deficit with Europe. It would still impede trade
:18:22. > :18:24.because people would have to pay to trade goods either way. The more
:18:25. > :18:27.important thing is that you lose the certainty of the market and the
:18:28. > :18:30.equivalence of regulation that allows service providers to trade in
:18:31. > :18:35.Lisbon like they were trading in Liverpool. This isn't actually about
:18:36. > :18:40.tariffs, this is about regulatory equivalence. This is about saying,
:18:41. > :18:45.we accept euros, you can come and do business here, and that is true for
:18:46. > :18:48.the city in particular. We are in the regulatory framework, we set the
:18:49. > :18:54.gold-plated standard on regulation. So we may choose to proceed with an
:18:55. > :18:59.option where we keep the regulation that has been negotiated.
:19:00. > :19:05.Effectively we grandfathered single market rules. If that happens the
:19:06. > :19:10.disruption is limited. I don't think we can be cavalier about the
:19:11. > :19:16.imposition of tariffs. It affects a narrow part of the economy but the
:19:17. > :19:19.car industry, aerospace industry, pharmaceuticals to some extent,
:19:20. > :19:22.these are industries where vast amounts of stuff goes backwards and
:19:23. > :19:26.forwards across frontiers. It would have a crippling effect if you had
:19:27. > :19:28.to have customs control, tariff imposition or tariff relief every
:19:29. > :19:35.time one of those transactions happen. Simply saying WTO rules,
:19:36. > :19:39.tariffs, so what, that may not affect substantial chunks of the
:19:40. > :19:43.economy but for supply chain industries it's crippling. There are
:19:44. > :19:47.good reasons to think that the Chancellor will prevent, it's being
:19:48. > :19:51.written up that he has the upper hand on his Brexit colleagues in the
:19:52. > :19:57.Cabinet. It's always dangerous to try to read too much into a comment
:19:58. > :20:01.here and a phrase there when you have collective Cabinet discussion
:20:02. > :20:04.going on. Both Vince and I served in the same Cabinet, we know sometimes
:20:05. > :20:09.certain comments are overinterpreted. Sometimes there was
:20:10. > :20:13.division when in fact people were in the same place. I think Philip's
:20:14. > :20:17.comments about the advantages of transition were in some cases
:20:18. > :20:22.overinterpreted because there are different types of transition, not
:20:23. > :20:26.too complicated this further. We could be in a situation where we
:20:27. > :20:30.acknowledge that we have to continue paying into European Union covers
:20:31. > :20:33.for a period after we've left in order to settle certain debts and
:20:34. > :20:39.seal certain obligations. Ayew relaxed about transition? At this
:20:40. > :20:45.stage I would want to know more before I could feel confident that a
:20:46. > :20:51.transitional period is the right thing. I am open-minded. I think it
:20:52. > :20:55.may well be the case that the period between the end of the article 15
:20:56. > :21:01.negotiations, March 2019, and the period where we are fully outside
:21:02. > :21:04.may involve certain changes or alterations in the nature of
:21:05. > :21:06.Britain's relationship with the European Union. But until you've
:21:07. > :21:12.seen what proposed, it's difficult to know. At the thing I always say
:21:13. > :21:16.is, if we are going to have a transition, and during that period,
:21:17. > :21:23.unless it's perfectly clear what the terms and length, that can generate
:21:24. > :21:27.uncertainty. The Chancellor spoke recently that there would need to be
:21:28. > :21:30.significant physical infrastructure changes at ports, we would need to
:21:31. > :21:35.train large numbers of people, and you can't do that inside 18 months.
:21:36. > :21:42.I think the time element is crucial and the attraction of the
:21:43. > :21:49.transition. A complete trade deal will be impossible in 18 months. It
:21:50. > :21:53.will be easier to do than a trade deal and it gives us a bit of
:21:54. > :21:56.breathing space to deal with practicalities. Frankly negotiating
:21:57. > :21:59.across the breadth of our economy a deal with our biggest trading
:22:00. > :22:03.partner within two years when you are also doing article 50, and it's
:22:04. > :22:07.not really two years because these elections are coming up in Europe
:22:08. > :22:11.and they will stop negotiating for the duration, it makes a lot of
:22:12. > :22:17.sense. But more cost involved? In our experience, with the greatest
:22:18. > :22:19.respect to both politicians here who have run departments, government
:22:20. > :22:23.departments and the consultants who work with them are very good at
:22:24. > :22:28.producing a huge price tag and saying, this is what it will cost
:22:29. > :22:32.taxpayers. We don't often see that it is justified. This is why details
:22:33. > :22:37.are really important. How long a period we talking about? How will
:22:38. > :22:41.they just avoid implying a number of new civil servants? Why aren't we
:22:42. > :22:44.looking at what resources we have within departments at the moment and
:22:45. > :22:47.seeing whether we can make more efficient use of those resources
:22:48. > :22:52.which are already in place? These are all questions that have to be
:22:53. > :22:57.asked. I just wanted to pick up something that Vince said about WTO
:22:58. > :23:02.rules. No one is saying that's where we want to end up but I think that
:23:03. > :23:06.could be a good starting point. And that's where our negotiators come in
:23:07. > :23:11.and we had to that. But it does add a little bit of certainty which
:23:12. > :23:16.businesses are crying out. Quite we are all sitting here presuming there
:23:17. > :23:19.could be a transition. One of the chief negotiators said there would
:23:20. > :23:24.be useful is in transition but there were some important caveats, it
:23:25. > :23:26.depends what Britain wants. Vince made the point powerfully earlier,
:23:27. > :23:30.of course there is the gauche nation, there is a lot to talk
:23:31. > :23:34.about. Ultimately we cannot force the EU 27 to come to a conclusion
:23:35. > :23:38.that they consider isn't in their own interests. We've got to accept
:23:39. > :23:41.the fact that while we can seek to reason and weigh up certain
:23:42. > :23:44.advantages that we have against some of the advantages that the European
:23:45. > :23:50.Union has in this negotiation, if the 27th side that they want to opt
:23:51. > :23:56.for a particular cause that we think might be damaging for them, then
:23:57. > :24:00.they can take that decision. I think the notion of building up from a WTO
:24:01. > :24:04.situation will be very costly. Firms in the supply chains that Vince
:24:05. > :24:06.talked about will have made discussions a song you costs, might
:24:07. > :24:11.be thinking about different investment decisions in member
:24:12. > :24:17.states as a result. Don't they have those processes in place if they are
:24:18. > :24:20.dealing with WTO countries? Absolutely, but what Vince was
:24:21. > :24:24.talking about with supply chains, if you take a manufacturer of cars for
:24:25. > :24:29.instance, parts of cars cross borders several times while they are
:24:30. > :24:31.being manufactured. So within the manufacturing process, arguing
:24:32. > :24:36.caring costs and certainly administrative delays at borders, it
:24:37. > :24:39.is these things have to be checked, it will slow the whole process up.
:24:40. > :24:41.Jury out on transition for the moment.
:24:42. > :24:44.We are going to talk food and farming next.
:24:45. > :24:49.It's a big sector worth more than ?108 billion to the UK economy.
:24:50. > :24:52.75% of our agricultural exports go to the EU, and last year,
:24:53. > :24:55.our payments from Brussels under the Common Agricultural Policy
:24:56. > :25:01.Those subsidies will, of course, stop when we leave the EU.
:25:02. > :25:03.But not all farmers received that support, and there is one sector
:25:04. > :25:06.in particular that has done pretty well since the vote and now
:25:07. > :25:13.I have been north, to a place I know very well, to find out more.
:25:14. > :25:23.The dales of West Yorkshire, known to the locals as God's own country.
:25:24. > :25:25.In Otley they've gathered for the year-end auction of pigs.
:25:26. > :25:27.There are big orders for Christmas hams.
:25:28. > :25:30.Though this day will begin with bacon.
:25:31. > :25:37.After years without subsidy, pig farmers say they can
:25:38. > :25:45.A falling pound and a world shortage of pork, notably in China,
:25:46. > :25:50.has led this year to a 30% jump in exports.
:25:51. > :25:54.And even at home these smallholders are seeing a Brexit dividend.
:25:55. > :26:02.The prices are really good at the minute.
:26:03. > :26:04.In fact ?1.90 for a normal pig is really good, isn't it?
:26:05. > :26:13.Pig prices have been good here recently.
:26:14. > :26:17.Today this prize pig brought the top price in the country, ?3.10 a kilo.
:26:18. > :26:21.On average two years ago they were getting just 80p.
:26:22. > :26:26.But it's not been so good for us to British consumer.
:26:27. > :26:28.The UK is not self-sufficient in pigs.
:26:29. > :26:32.We import a lot of our bacon and ham.
:26:33. > :26:35.So the increased demand has been good for exporters but the cost
:26:36. > :26:37.of your average bacon butty has gone up.
:26:38. > :26:42.In fact wholesalers say since the referendum smokey bacon
:26:43. > :26:49.The uncertainty in prices and in supply and demand will persist.
:26:50. > :26:54.And the problem is familiar to the farming industry as any other.
:26:55. > :26:56.Not that that uncertainty is undermining the wider UK economy.
:26:57. > :27:01.Since the vote consumer confidence has soared.
:27:02. > :27:04.Retail sales in October were up 7% on the same month last year.
:27:05. > :27:08.The economy grew 0.5% in the third quarter,
:27:09. > :27:10.better than expected, which means the UK will be
:27:11. > :27:13.the fastest-growing of the G7 economies this year.
:27:14. > :27:23.For 2017 growth has been downgraded and government finances
:27:24. > :27:26.are projected to be ?122 billion worse up to 2021 than was
:27:27. > :27:32.Such a hole in public finances might limit future farm payments.
:27:33. > :27:37.But since these farmers are not losing hand-outs their biggest
:27:38. > :27:43.concern is the size of the market and where they might export.
:27:44. > :27:46.I think it will be hard until we know what they are actually
:27:47. > :27:53.The exchange rate and all the exports will be quite difficult,
:27:54. > :27:55.nobody really knows how it will pan out.
:27:56. > :27:57.The general public ought to concentrate on supporting
:27:58. > :28:05.And there's plenty of farmers in Britain that produce
:28:06. > :28:11.I think it will be all right for pig men, yeah.
:28:12. > :28:18.Pig farmers, like the rest of us, have plenty of questions.
:28:19. > :28:20.Maybe a bumper Christmas, but they don't yet know enough to be
:28:21. > :28:23.sure that politicians won't make a right pigs ear of it.
:28:24. > :28:37.I'm sure they won't make the pigs ear. I wanted to remind you of a
:28:38. > :28:40.quote before Brexit, you said we would have a bloodbath in the
:28:41. > :28:44.financial markets, would you accept, looking at those figures, it's not
:28:45. > :28:47.been anything of the sort? We certainly haven't had Armageddon,
:28:48. > :28:56.but equally there has been an impact. An 18% devaluation which I
:28:57. > :29:01.think is the largest since the war, is a very substantial factor. It has
:29:02. > :29:06.some positive consequences and it will help exporters and people
:29:07. > :29:08.competing with imports. But equally, squeeze living standards,
:29:09. > :29:14.particularly next year when petrol prices and food prices feed through,
:29:15. > :29:17.that's the basis of a somewhat more pessimistic growth forecast the
:29:18. > :29:22.office budget responsibility have come up with. I think the optimists
:29:23. > :29:26.and extreme pessimists have been confounded. We've had a modest
:29:27. > :29:31.impact so far. I think the thing coming over the horizon is the big
:29:32. > :29:35.business investment decisions as opposed to fairly routine business
:29:36. > :29:38.operations, they are not being made, the evidence suggests that. And that
:29:39. > :29:43.will take a toll until we get greater clarity about the outcome.
:29:44. > :29:47.One of the things apparent to me in this fantastic market where I was
:29:48. > :29:51.yesterday is, with the greatest respect to the people I spoke to,
:29:52. > :29:55.how many of them were in their dotage. There weren't many young
:29:56. > :29:57.farmers, and they would say that's because the European Union hasn't
:29:58. > :30:04.supported young farmers particularly in livestock. I think there are all
:30:05. > :30:09.sorts of reasons why UK farming has faced tough times inside the
:30:10. > :30:14.European Union, in particular UK fisheries. If we redesign how we
:30:15. > :30:20.choose to subsidise our farmers then one of the things that we can do is
:30:21. > :30:23.that we can encourage a more environmentally sensitive approach
:30:24. > :30:27.towards land use and we can shift subsidy away from some of the barley
:30:28. > :30:32.barons who receive an enormous amount towards smaller farmers, and
:30:33. > :30:37.hill farmers who make a contribution not to just high quality produce,
:30:38. > :30:42.but also make sure the countryside continues to look beautiful and to
:30:43. > :30:47.be an asset. What about that farmer who said people need to buy British?
:30:48. > :30:50.I think a lot of people try to support their British farmers when
:30:51. > :30:52.they go into supermarkets but is there anything you can do in
:30:53. > :30:56.government to encourage people to buy British?
:30:57. > :31:05.Heavy devaluation helps people. Better labelling? Better label. As
:31:06. > :31:08.Vince said, if you make imports unaffordable, people will buy
:31:09. > :31:12.domestic products. We saw the black hole in the figures there that the
:31:13. > :31:15.OBR says will be there, it is only a forecast that. Will make it
:31:16. > :31:19.difficult to commit to farm payments, isn't it? At the moment,
:31:20. > :31:22.we have a complete lack of clarity over what will happen to those
:31:23. > :31:26.sectors that receive money from the European Union. I'm not going to
:31:27. > :31:30.defend the common agricultural policy because I wouldn't know how
:31:31. > :31:34.to begin to do that. It is a fact that many farmers got money out of
:31:35. > :31:37.the policy, I'm sure they are worried about their future. It would
:31:38. > :31:40.be nice to have clarity now about what the Government intends to do in
:31:41. > :31:46.the short-term for those people. For all the good numbers, wages are
:31:47. > :31:52.pretty limp and my bacon sandwich is getting more expensive. Quite. We
:31:53. > :31:58.heard about the petrol price. Often the easiest answer is to cut taxes.
:31:59. > :32:06.We pay, I think 60% of what we pay at the pump goes straight to the
:32:07. > :32:11.treasurery. We could cut taxes there. Absolutely right what was
:32:12. > :32:14.just said, it's important these farmers find out what is actually
:32:15. > :32:17.going to happen to them. The beauty of Brexit should have been that we
:32:18. > :32:21.now decide what happens with our money. That really should be the
:32:22. > :32:27.case. We should be lobbying politicians to get the best deal for
:32:28. > :32:30.what works for our farmers as well. Maybe carve out a bit of common
:32:31. > :32:35.ground here actually. I think Michael's comments on how you might
:32:36. > :32:40.reorganise is very sensible. Shifting the subsidies in that kind
:32:41. > :32:44.of way seems to be absolutely right. The big picture is how much money
:32:45. > :32:48.the Government will have. If the OBR forecasts are correct that the
:32:49. > :32:52.effect of Brexit negotiation and the uncertainty of the next few years is
:32:53. > :32:55.to slow the economy down, then of course there's less Government
:32:56. > :33:00.money. If we have the additional proposal to cut tax on petrol,
:33:01. > :33:02.there's a bigger hole in the budget. The big picture relates to
:33:03. > :33:06.Government revenue, which is not great. I can see the scope within
:33:07. > :33:11.the farming sector, for example, for having a more rational way of
:33:12. > :33:15.allocating subsidy. This is public sector broadcasting. We're bringing
:33:16. > :33:19.Remain and Brexit closer together. Let's turn to one of the key issues
:33:20. > :33:22.with Brexit you could say THE issue -
:33:23. > :33:25.and that is migration. People in the UK voted
:33:26. > :33:27.Leave for many reasons, but controlling immigration was one
:33:28. > :33:30.of the big messages on the doorstep. So if we end freedom of movement,
:33:31. > :33:33.how much impact could that have Chris Morris has
:33:34. > :33:39.been taking a look. Free movement is linked to
:33:40. > :33:45.membership of the EU's single market. Here it is, the 28 EU
:33:46. > :33:51.countries plus Iceland, Norway, Switzerland and the invisible dot in
:33:52. > :33:57.the middle, Liechtenstein. The free market is more than a Free Trade
:33:58. > :34:00.Agreement. A basic deal moves taxes, tariffs and quotas on goods and
:34:01. > :34:03.services from one country to another. The sing the market takes
:34:04. > :34:08.that from a starting point but it has a common set of regulations on
:34:09. > :34:11.everything from chemicals to working hours, a mutual recognition of
:34:12. > :34:18.standards on things like safety and packaging. It guarantees the EU's
:34:19. > :34:22.Cherished four freedoms, the free movement of goods, services, capital
:34:23. > :34:32.and people and on that, says the EU, there can be no compromise. The
:34:33. > :34:36.single market and its four freedoms, four freedoms, are indivisible.
:34:37. > :34:40.Cherry-picking is not an option. In other words if you want free
:34:41. > :34:43.movement of goods, you've got to accept free movement of people. Now
:34:44. > :34:47.you can make an economic argument for saying that full free movement
:34:48. > :34:50.of people isn't strictly necessary for the functioning of a single
:34:51. > :34:55.market. But this is about politics too. If the UK won unilateral
:34:56. > :34:59.restrictions on the free movement of people, who knows what other
:35:00. > :35:03.countries mite begin to demand. The EU seems pretty determined not to
:35:04. > :35:06.give the UK anything which looks like a better deal than the rest. So
:35:07. > :35:10.it's tricky and there will be a price to pay. But if there's one
:35:11. > :35:14.lesson the Government has to take from the referendum, it's that
:35:15. > :35:18.immigration numbers from the EU have to be seen to be coming down. That
:35:19. > :35:21.would seem to mean that free movement has to go. What are the
:35:22. > :35:27.numbers we're talking about? Well, in the year to June 2016, according
:35:28. > :35:30.to the Office for National Statistics, an estimated 285,000
:35:31. > :35:37.citizens from other EU countries immigrated to the UK. While about
:35:38. > :35:42.95,000 emigrated abroad. So a net migration figure of about 190,000,
:35:43. > :35:47.that's record levels. But look at how that breaks down. For 41% of new
:35:48. > :35:52.arrivals, the main reason for coming was a definite job. But for another
:35:53. > :35:56.31%, well, they were looking for work, with no guarantee of a job and
:35:57. > :36:01.that may be one area where the Government could decide to tighten
:36:02. > :36:07.the rules quite considerably. I think the Government's likely to
:36:08. > :36:12.adopt a work permit system. We have no wish to stop tourists and
:36:13. > :36:15.students and people coming in to invest their own money or people who
:36:16. > :36:22.can take care of their own livelihoods, but what we do want to
:36:23. > :36:27.do is to have a numerical control on the number of people who come in to
:36:28. > :36:32.take low paid jobs in our economy and there are still unemployed
:36:33. > :36:35.British people. There would need to be some kind of control. The easiest
:36:36. > :36:40.way to do that would be a work permit system. We have a work permit
:36:41. > :36:44.system for the rest of the world, it would be creating justice between
:36:45. > :36:47.Europe and the rest of the world. To compare with immigration from
:36:48. > :36:51.outside the EU. New arrivals last year, nearly half of them came to
:36:52. > :36:55.study. They were students. That is obviously a different thing and
:36:56. > :36:59.they're not from the single market. But if the UK does impose
:37:00. > :37:03.restrictions on people coming from the EU, how might the EU respond to
:37:04. > :37:07.Brits hoping to go in the opposite direction? And what other
:37:08. > :37:12.restrictions mite be imposed? There are a host of other questions. Do
:37:13. > :37:16.you make a distinction between high-skilled and low-skilled job
:37:17. > :37:19.seekers? What about sectors of the economy like agricultural and
:37:20. > :37:23.construction, that depend heavily on labour from elsewhere in the EU? How
:37:24. > :37:28.do you regulate any system in the first place? The Home Secretary
:37:29. > :37:33.Amber Rudd told Parliament last week there would be a feed to have some
:37:34. > :37:37.sort of documentation for EU nationals in the UK post Brexit, so
:37:38. > :37:41.not just work permits. It would be complex. One estimate to leave you
:37:42. > :37:46.with, simply registering EU nationals already here for permanent
:37:47. > :37:50.residence would take, at the current rate it's being done, 140 years. An
:37:51. > :37:52.awful lot for the Government to chew on. It needs to come up with some
:37:53. > :38:02.answers fairly quickly. If we pick up on one point in his
:38:03. > :38:06.report there, 31% come here looking for work. If you wipe out those who
:38:07. > :38:11.don't have a fixed job, you deal with the number quite drastically. I
:38:12. > :38:18.suppose one does, though wipe out sounds drastic. If it was up to me,
:38:19. > :38:22.as soon as it was possible after the referendum result became understood
:38:23. > :38:28.and known, I would have said that anybody who has, who was in this
:38:29. > :38:31.country on the 23 June should be allowed to be here. That should have
:38:32. > :38:35.been the case, I think. The Government didn't make that
:38:36. > :38:40.announcement. Now it's a bit late to deal with those questions because a
:38:41. > :38:44.lot of other questions are coming in the horizon as well. It's a terrible
:38:45. > :38:48.idea for politicians to decide on a number when it comes to immigration.
:38:49. > :38:51.Politicians are not good at working out how many people we need from
:38:52. > :38:54.anywhere in the world. It should be left to the businesses. The idea
:38:55. > :38:57.that you might have to have a job lined up if you come into the
:38:58. > :39:00.country, could be a good idea, students also. So when you have a
:39:01. > :39:04.real purpose to come into the country, that could work out. We
:39:05. > :39:08.should look into it. People like us, who have family or grew up outside
:39:09. > :39:12.the EU, that's how a lot of the world actually move around. I think
:39:13. > :39:16.that's something to look into. How do you determine who was here in
:39:17. > :39:19.June? There is a massive administrative problem there. The
:39:20. > :39:23.reason why the Government couldn't do that, even if it was minded to,
:39:24. > :39:31.is they don't know who's in the country at any given time. Unless
:39:32. > :39:35.migrants have registered to vote or are claiming benefits, we don't know
:39:36. > :39:41.who they are. Couldn't we use the national card system? Jo It's not a
:39:42. > :39:46.re-- It's not a reliable guide as to who is in the country. When it comes
:39:47. > :39:51.to the numbers, this is as much as politics as the economy now. One of
:39:52. > :39:54.the clear things about the Brexit vote was dissatisfaction about
:39:55. > :39:59.perceived levels of migration. I think our politicians know that. Do
:40:00. > :40:03.you accept that? Yes. You accept that migration has to come down? I
:40:04. > :40:07.accept that this is inevitable. You weren't very clear on that before
:40:08. > :40:12.the vote. I always argued that the fact that you have totally
:40:13. > :40:14.uncontrolled migration for the European Union is difficult to
:40:15. > :40:17.justify. It's leading - I don't understand the Liberal Democrat
:40:18. > :40:21.position. You are saying we can somehow remain in the single market
:40:22. > :40:26.while at the same time bringing down migration. You made a very sensible
:40:27. > :40:29.point, when we talk about free movement of labour, there are
:40:30. > :40:33.different categories of people. I rather agree that it would be
:40:34. > :40:38.sensible to restrict people coming on a purely opportunistic basis
:40:39. > :40:42.looking for jobs. It's not clear that breaches the single market. If
:40:43. > :40:46.people are offered jobs here and are free to come when they've got bona
:40:47. > :40:51.fide employment, that is observing the spirit of free movement. This
:40:52. > :40:56.whole argument has been polarised between ridiculous extremes. I spent
:40:57. > :40:58.five years negotiating with the Germans about free movement of
:40:59. > :41:03.professionals as part of the single market. They restrict movements of
:41:04. > :41:07.professionals. We don't apply the rules as we should? We've got a
:41:08. > :41:11.pretty liberal approach to it. Given that the Government is now in a very
:41:12. > :41:16.awkward position, that I think genuinely, they want to preserve
:41:17. > :41:20.freedom of trade and keep the sing the market as far as trade's
:41:21. > :41:24.concerned, but restrict movement. We should be looking for that kind of
:41:25. > :41:30.way forward. I don't understand what the problem is. There are two
:41:31. > :41:37.specific political problems about migration. We have a
:41:38. > :41:41.non-contributory welfare system. Secondly, we pay benefits to people
:41:42. > :41:44.in work, working tax credits. Which meant these people could come over
:41:45. > :41:48.here and claim from the state, even if they hadn't contributed
:41:49. > :41:52.beforehand. There was a perception that this isn't fair. But that was
:41:53. > :41:56.something that came from the peculiarity of our welfare system.
:41:57. > :42:02.That made us slightly different to other member states. David Cameron
:42:03. > :42:07.negotiated improvements in that. Which we rejected. What happened to
:42:08. > :42:11.the Australian points system? Well, it was dismissed, that's the wrong
:42:12. > :42:15.word, rejected by Theresa May. I argued that we should have an
:42:16. > :42:18.Australian style points system. You still believe that? It doesn't
:42:19. > :42:23.matter whether it's Australian, what I think we need to have is a system
:42:24. > :42:27.similar to that, whereby we say that we're willing to accept people if
:42:28. > :42:30.they've got skills and if they've got the capacity to contribute to
:42:31. > :42:36.economic growth. We're also willing to accept a number of people who are
:42:37. > :42:39.fleeing persecution and to whom we should provide refuge. As it
:42:40. > :42:42.happens, I would go further than the Government is willing to at the
:42:43. > :42:45.moment and I would do things the Government has ruled out. One, I
:42:46. > :42:51.would guarantee every EU citizen here the right to stay. Who, because
:42:52. > :42:56.you don't know who's here? If we provide that guarantee, then we'll
:42:57. > :43:01.find that actually - So we have an amnesty, everybody gets a passport?
:43:02. > :43:06.If you're an EU I Zen, you're allowed. They will rush to the door.
:43:07. > :43:11.If it's the case we are about to go over the cliff edge, I don't think
:43:12. > :43:14.they will. It will be an interesting question as to whether or not
:43:15. > :43:17.European citizens think we're a good bet or not. The second thing, is I
:43:18. > :43:21.would, to be fair to Vince, I think he has argued for that, I would
:43:22. > :43:25.exempt students from net migration figures. I would also be more
:43:26. > :43:29.flexible - That's 40-odd % of the number. It's making a complete
:43:30. > :43:34.nonsense, producing complete self-harm. We've heard this week
:43:35. > :43:37.they're going to halve the numbers. It's got nothing to do with
:43:38. > :43:40.immigration. They're not immigrants. For technical reasons they're
:43:41. > :43:44.included in the numbers. That's about enforcement as well. If you
:43:45. > :43:48.are here on a student visa, it shouldn't be that difficult if the
:43:49. > :43:52.UK border agency worked properly to work out once the visa, once that
:43:53. > :43:55.course is over, if they don't have a job to stay back with they don't
:43:56. > :44:00.stay back. That shouldn't be such a difficult thing to do. Joo the
:44:01. > :44:05.public, of course, people were concerned about migration, it was an
:44:06. > :44:11.issue during the debate. I think the public are savvier than often given
:44:12. > :44:14.credit for. If people have a proper job and they're not undercutting
:44:15. > :44:18.wages, they're welcome. People come to study, they're welcome. If people
:44:19. > :44:21.come to either gain the benefits system or come here with the
:44:22. > :44:25.explicit aim of taking advantage a demand for low-cost labour which
:44:26. > :44:28.undercuts the wages of people here, that's not acceptable. Many people
:44:29. > :44:32.would ask what's the problem with the work visa system? You said your
:44:33. > :44:37.family came from outside Europe. They're still over. There it's just
:44:38. > :44:44.me. Anybody from outside Europe needs a visa. That's why you don't
:44:45. > :44:49.need to go to Australia! I guess, if we made some restrictions on people
:44:50. > :44:53.who were - We get rid of the 31% looking for work and say if you've
:44:54. > :44:59.got a work visa you can come. Well, I guess that's the way the system
:45:00. > :45:02.could work. Yes, I think one of the points John Redwood made, which is
:45:03. > :45:07.fair, if there's seen to be equivalence between the European
:45:08. > :45:10.Union and other countries that would be an entirely non-discriminatory
:45:11. > :45:16.policy when it comes to nationhood. That would be a good thing. Now, it
:45:17. > :45:19.may well be that we end up having a deal whereby we give preferential
:45:20. > :45:23.treatment to certain types of people from the European Union, that's a
:45:24. > :45:27.request that the EU makes. But as a starting point, I would far rather
:45:28. > :45:32.than we had a totally non-discriminatory system. A tighter
:45:33. > :45:36.border at Calais and Dover? Yes. What about Northern Ireland and the
:45:37. > :45:41.Republic? We've had a common travel area since the 1920s. I think it's
:45:42. > :45:46.perfectly possible for us to have - You can't put a border upon it, can
:45:47. > :45:50.you? One of the things, the Republic of Ireland is, like the UK outside
:45:51. > :45:54.Schengen, so of course, it's going to be the case that you will have
:45:55. > :45:58.the capacity for individuals who are trying to get into Ireland to be
:45:59. > :46:02.checked bit Irish. And you have the capacity, if we wish to, to have
:46:03. > :46:05.certain checks at the border, random checks, if we think it's
:46:06. > :46:12.appropriate. On the whole we've been able to work successfully between
:46:13. > :46:19.Britain and Ireland since the 1920s. I don't see it's an insuperrabble
:46:20. > :46:23.obstacle. If you're attracting professionals, that's all good. What
:46:24. > :46:27.happens to south Lincolnshire, that dramatic need for migrant labour.
:46:28. > :46:31.Will those people fill out the forms for a three-four month stay or look
:46:32. > :46:35.elsewhere. What about a seasonal - If it's three months, they're not
:46:36. > :46:38.covered by restrictions. They're not in the immigration numbers unless
:46:39. > :46:41.they're a year over a year. We don't understand why. Would that have
:46:42. > :46:45.worked? Could that have worked to have a seasonal veesament I believe
:46:46. > :46:49.Australia has that and when they need an influx of people - The The
:46:50. > :46:54.former Home Secretary ruled that out. She's now the prm. We have had
:46:55. > :46:58.seasonal worker schemes in the past. It depends on what the industry
:46:59. > :47:03.might demand. Part of the challenge is that in some of those areas like
:47:04. > :47:06.Lincolnshire where you have migrant labour working in agriculture, you
:47:07. > :47:12.had a strong vote to leave. In America, when you had restrictions
:47:13. > :47:16.on low cost labour in agriculture, what you had was wages creeping up a
:47:17. > :47:20.bit and increased mechanisation and increase prod ductivity as well. If
:47:21. > :47:24.you put a work visa system in place, is there a danger you dissuade the
:47:25. > :47:27.people you want, the high skilled workers who say I can't be bothered
:47:28. > :47:31.with Britain, it's too difficult? You reduce the flexibility of the
:47:32. > :47:36.labour market, the ability to respond quickly to a demand for
:47:37. > :47:39.labour goes down slightly because of an administrative hurdle. Anyone
:47:40. > :47:42.who's filled in an immigration form to go to the United States knows you
:47:43. > :47:46.have to steel yourself for the process. A lot will depend on what
:47:47. > :47:50.the bureaucracy looks like. It will have an impact. It will have an
:47:51. > :47:54.impact of people would want to go to Europe from Britain to study or
:47:55. > :47:57.work. Yes, again, let's keep study separate, because that should never
:47:58. > :48:01.be part of the immigration regime any way. If you want to do a
:48:02. > :48:07.six-month attachment in Paris, you might need a work visa in future. We
:48:08. > :48:10.would hope common sense prevails. Short-term assignments, shouldn't be
:48:11. > :48:13.covered by immigration. These net immigration figures which the
:48:14. > :48:16.Government uses and again I don't want to get into the whole history
:48:17. > :48:19.of the net immigration target, which was a very bad thing to have done in
:48:20. > :48:25.the first place. They cover people who were moving for over a year. So
:48:26. > :48:28.with a bit of common sense and sensible statistics you can allow a
:48:29. > :48:33.lot of flexibility of short-term labour. Very quickly before we
:48:34. > :48:37.finish on this, a sector by sector skills based system, would that
:48:38. > :48:42.work? I don't know necessarily that each sector can come to a consensus
:48:43. > :48:47.itself about how many workers it might need. I'm open to a debate
:48:48. > :48:50.about how to manage a work permit system better, yes.
:48:51. > :48:52.On Thursday, European leaders are getting together
:48:53. > :48:56.They will discuss Brexit, but over a dinner to
:48:57. > :49:00.Her spokeswoman says that's reasonable, as they need to prepare
:49:01. > :49:05.Perhaps it's also a sign that the UK is already on its way out.
:49:06. > :49:08.Article 50 is yet to be triggered, but as Kevin Connolly
:49:09. > :49:10.has been finding out, in Strasbourg, life
:49:11. > :49:13.for those we elected to the European Parliament isn't
:49:14. > :49:25.It is the season of Advent in the Christmas market in Strasbourg and
:49:26. > :49:31.of course, the season of Brexit too. The difference being that everyone
:49:32. > :49:39.knows what to expect once Advent is over. No-one these days is watching
:49:40. > :49:45.the clock and the calendar more cautiously than Britain's block of
:49:46. > :49:52.MEPs. They are on the frontline of Brexit. So what are they picking up
:49:53. > :49:56.about the way the rest of the EU now views the UK's imminent departure?
:49:57. > :50:01.It was very nice actually the first time I came back after the Brexit
:50:02. > :50:04.referendum and I was feeling a bit nervous about how I might get
:50:05. > :50:08.received. A French assistant called, even before I got into the
:50:09. > :50:11.Parliament, called across and said, "Welcome home." That was very
:50:12. > :50:15.touching and very nice. That is the attitude we've had. You're right,
:50:16. > :50:17.sympathy. They know we did our best in the referendum to campaign for
:50:18. > :50:21.Britain to stay and that we're continuing to support the European
:50:22. > :50:25.Union the best way we can. The new year will bring a new test of the
:50:26. > :50:31.UK's standing, when the European Parliament chooses the chairs of its
:50:32. > :50:37.20 committees. The UK currently holds three and may yet hang onto
:50:38. > :50:40.all of them. Richard Corbet, Labour's Deputy Leader here, says
:50:41. > :50:46.that's because his fellow MEPs don't blame him and his colleagues for
:50:47. > :50:50.Brexit. In the meantime, we are there, we are appreciated by our
:50:51. > :50:54.colleagues, at least some of us are, probably not those like Nigel
:50:55. > :51:01.Farage, who would happily blow the whole place up. But those of us who
:51:02. > :51:09.legitimately take part in fighting our corner within the system, they
:51:10. > :51:12.pressure that we're -- appreciate that we're not representing the Tory
:51:13. > :51:16.Government. There can be a surprising sense of the wheels
:51:17. > :51:22.continuing to turn, for now at least. And one of the Brexiteers,
:51:23. > :51:32.rejected any analogy with Turk yes, sir voting for Christmas. -- turkeys
:51:33. > :51:35.voting for Christmas. I like Turkies and I like Christmas. I voted myself
:51:36. > :51:38.out of a job. I'm happy that the country voted to leave. I think it
:51:39. > :51:41.will be the right decision. Wre making sure that we're going to
:51:42. > :51:45.deliver the best Brexit that we possibly can for the UK. It means
:51:46. > :51:49.that we use every ounce of influence we have here whilst we're still
:51:50. > :51:55.inside the bubble. So in the shadow of Brexit, it's business as usual
:51:56. > :51:59.for Britain's MEPs, for now. What will happen when the tough talking
:52:00. > :52:03.begins next year though? That's another matter.
:52:04. > :52:07.Advent and Christmas will soon be over, of course, but for British
:52:08. > :52:10.MEPs the period of counting down will go on. They'll be among the
:52:11. > :52:14.first to know whether British influence in the EU is going to last
:52:15. > :52:17.right up till the moment of Brexit or quietly fizzle out somewhere
:52:18. > :52:27.along the way. Next year will tell. Yes it's interesting that last
:52:28. > :52:31.point. If you are a British MEP, it must be like changing jobs. If
:52:32. > :52:34.you're on the way out, you're not privy to the same conversations.
:52:35. > :52:37.You're locked out of important meetings. Is that a problem for the
:52:38. > :52:41.UK that we're not in some of these meetings? I think while we're still
:52:42. > :52:44.in, we're bound to follow the rules. The European Union is still
:52:45. > :52:49.legislating and it's hard to avoid the impression that the Government
:52:50. > :52:51.is so preoccupied with leaving that it's slightly taking it's eye off
:52:52. > :52:54.the ball when it comes to influencing legislation at the
:52:55. > :52:57.moment. It must be a very weird situation to be an MEP at the moment
:52:58. > :53:01.because you know you're going to be out of the door. I would be surprise
:53:02. > :53:05.today we got those three committee chairs when they come to select them
:53:06. > :53:08.next week. A lot of the work in Europe goes on in the back rooms and
:53:09. > :53:13.before the ministers turn up. Is it important that these MEPs are in
:53:14. > :53:19.there? I think that quite a lot of the work is done not just by MEPs
:53:20. > :53:23.but by the people who are our diplomats and civil servants wokking
:53:24. > :53:27.in our team in Brussels. But one of the things that leaving the European
:53:28. > :53:31.Union will compel us to do is to concentrate on making sure that the
:53:32. > :53:35.laws and regulations that we ideally take back control of are shaped in
:53:36. > :53:41.the right way. So there are talented people in the European Parliament
:53:42. > :53:44.and I'd like to see those talents deployed to make sure Britain
:53:45. > :53:50.becomes more competitive because of changing rules and regulation that's
:53:51. > :53:54.we can determine back here now. You've been testing the temperature
:53:55. > :53:58.around Europe. Do you feel that they are going to stick together as this
:53:59. > :54:05.coherent block in this negotiation or can we divide and conquer? I
:54:06. > :54:10.should say first and foremost, I'm about 25 years too old for that. I
:54:11. > :54:13.think politics will prevail. What I found quite striking in talking to
:54:14. > :54:17.politicians across Europe at the moment is the political imperative
:54:18. > :54:22.is not to give us a deal when it comes to breaking up the four
:54:23. > :54:25.freedoms we heard about earlier. They're prepared to self-harm to get
:54:26. > :54:30.the deal they want? They're prepared to put politics above economics. If
:54:31. > :54:34.you're a mainstream centrist French politician, what you want to do
:54:35. > :54:39.least is make Brexit look appealing for those who are tempted to vote
:54:40. > :54:44.for the National Front. Same in the Netherlands. In the Netherlands they
:54:45. > :54:48.reckon the Brexit will cost 10 billion euros over five to ten
:54:49. > :54:52.years. They say they have to take the hit, otherwise they will say,
:54:53. > :54:56.you've given them a good deal, we can do the same thing. There are
:54:57. > :55:00.political considerations. Do you think there's a strand of thought in
:55:01. > :55:04.Europe, if we make this as hard as possible and give them the worst
:55:05. > :55:09.deal maybe they'll balk at the last minute. Ireland voted twice, the
:55:10. > :55:13.Netherlands voted twice. They all vote twice and then they get the
:55:14. > :55:16.decision they finally want. That's why it's important to make sure
:55:17. > :55:20.everybody knows Brexit is going to happen. Taking from what you just
:55:21. > :55:23.said, political decisions will be impacted by economic decisions as
:55:24. > :55:27.well. If the citizens in those countries think that by giving us a
:55:28. > :55:30.bad deal, the rest of the EU countries are going to get a bad
:55:31. > :55:34.deal from us. Don't forget a lot of those people sell products to us,
:55:35. > :55:38.they need a good deal as much as we do. If that affects the economy of
:55:39. > :55:41.those countries, I think that would also impact on the policy, the
:55:42. > :55:48.political side of those countries as well. I think that's why we really
:55:49. > :55:53.should get a good deal if our negotiating play -- negotiators play
:55:54. > :55:57.our cards right. We can, over the next 18 months, change some minds in
:55:58. > :56:01.Europe. I absolutely take the point that Anan makes, people are worried
:56:02. > :56:05.about what they regard as the forces that have been unleashed by the
:56:06. > :56:08.Brexit vote. I think as the clock ticks, there will be rational
:56:09. > :56:12.judgments being made and indeed pressure brought to bear on European
:56:13. > :56:18.governments by their corporate sector and business sector. I think
:56:19. > :56:21.that over the course of the next 18 months opinions can change. While at
:56:22. > :56:24.the moment there are some people who are hoping that Britain might begin
:56:25. > :56:29.to regret the vote, what I suspect may happen is that in Europe, not
:56:30. > :56:33.that they will give us the softest and easiest deal available, but that
:56:34. > :56:37.opinion may change. This is our last programme of the year for the Brexit
:56:38. > :56:41.Effect, when you're sitting over your Christmas dinner, Vince, with
:56:42. > :56:46.your Turkey wish bone thinking of Brexit in the months ahead, what
:56:47. > :56:49.will you be wishing for? I accept that we're in a different place from
:56:50. > :56:55.a year ago. We've got to try and make a success of this. I go along
:56:56. > :57:00.with that broad view. I hope that we prodouse what is loosely called a
:57:01. > :57:05.soft Brexit. It is possible that we could finish up in a very, very bad
:57:06. > :57:09.place. Go back to my metaphor about moving house, you've decided to
:57:10. > :57:12.leave, furniture is in the removal van and you discover the place
:57:13. > :57:16.you're going to is full of dry rot and it's collapsing. We might have
:57:17. > :57:20.to re-open this issue. I'm not saying that because I want to
:57:21. > :57:27.destabilise, but I think we've got to keep at the back of our minds
:57:28. > :57:29.that - trying and get as good a negotiation as possible, but we
:57:30. > :57:32.might have to, Parliament might have to rethink. Keep your wishes secret,
:57:33. > :57:34.we are out of time. No doubt plenty more
:57:35. > :57:36.twists and turns to come, but that is where we must leave
:57:37. > :57:38.it for now. Thanks to all my guests
:57:39. > :57:40.this evening: Sir Vince We will be back in the new year
:57:41. > :57:46.keeping track of The Brexit Effect. For now, from us all,
:57:47. > :58:09.thanks for watching. Hello. Good evening, it's another
:58:10. > :58:13.mild night out there. We've got southerly winds, bringing that mild
:58:14. > :58:18.air in from quite a long way south. Frost free across the board. And a
:58:19. > :58:19.lot of cloud overnight as well. Some rain drifting north across