0:00:00 > 0:00:04Here's Politics Europe.
0:00:04 > 0:00:08MUSIC PLAYS.
0:00:08 > 0:00:39Hello and welcome to Politics Europe, your regular guide
0:00:39 > 0:00:43to the top stories in Brussels and Strasbourg.
0:00:43 > 0:00:48On today's programme: As the EU signs what leaders have called
0:00:48 > 0:00:50an historic agreement on defence co-operation,
0:00:50 > 0:00:55are we edging closer to the much-wanted EU army?
0:00:55 > 0:00:57The European Parliament has been debating tax avoidance
0:00:58 > 0:01:02after the release of the Paradise Papers.
0:01:02 > 0:01:08Will the EU take action where member states have struggled?
0:01:08 > 0:01:11What's going on in Poland?
0:01:11 > 0:01:14The European Parliament says the Polish Government has committed
0:01:14 > 0:01:17serious violations of the rule of law and could impose sanctions.
0:01:17 > 0:01:19We'll have the latest.
0:01:19 > 0:01:24And: As new figures on the numbers on EU nationals coming to the UK
0:01:24 > 0:01:27to work are released, has talk of Brexitists of EU
0:01:27 > 0:01:36citizens leaving the UK been exaggerated?
0:01:36 > 0:01:41So all that to come and more in the next half an hour.
0:01:41 > 0:01:44And joining me for all of that is Rachel Sylvester
0:01:44 > 0:01:48from The Times and Toby Young from The Spectator.
0:01:48 > 0:01:51First, here is our guide to the latest from Europe
0:01:51 > 0:01:57in just 60 seconds.
0:01:57 > 0:02:01As the great philosopher David Hasselhoff once sang,
0:02:01 > 0:02:04"I have been looking for freedom, still it can't be found."
0:02:04 > 0:02:07And there was similar frustrations for the German Chancellor who today
0:02:07 > 0:02:10missed a self-imposed deadline to try to form a workable
0:02:10 > 0:02:12Government coalition.
0:02:12 > 0:02:14The European Parliament named its press room in Strasbourg
0:02:14 > 0:02:17after Daphne Caruana Galizia, the Maltese journalist killed last
0:02:17 > 0:02:19month after reporting allegations of corruption.
0:02:19 > 0:02:22Have reports of the Brexitists been exaggerated?
0:02:22 > 0:02:26The latest figures from the Office for National Statistics show
0:02:26 > 0:02:31the number of EU Nationals working in the UK continues to rise.
0:02:31 > 0:02:34They say a cold shower is character-building but it's not
0:02:34 > 0:02:38something MEPs are looking to try.
0:02:39 > 0:02:42It was up all this week after it was announced the hot water
0:02:42 > 0:02:44in their offices would be permanently switched off
0:02:44 > 0:02:46because of health concerns.
0:02:46 > 0:02:49And where did you get that hat, Mr Juncker?
0:02:49 > 0:02:52The answer: A number of academic institutions where the EU President
0:02:52 > 0:03:02has received honorary degrees in recent weeks.
0:03:02 > 0:03:14Well, let's just pick up on that element about the ONS figures.
0:03:14 > 0:03:17There is talk of 'Brexodus' ie figures showing that nationals
0:03:17 > 0:03:21fleeing the UK really
0:03:21 > 0:03:24is not as great as we thought because the figures released
0:03:24 > 0:03:28by the ONS suggests that the number of EU nationals working in the UK
0:03:28 > 0:03:31has actually reached a record high of 2.37 million migrants.
0:03:31 > 0:03:33Rachel, what do you make of this?
0:03:33 > 0:03:35I have to say I am confused.
0:03:35 > 0:03:38I thought other figures from the ONS showed a dramatic slowdown
0:03:38 > 0:03:40in the number of EU nationals coming here post-Brexit?
0:03:40 > 0:03:43Well, the problem is we need a lot of EU nationals working
0:03:43 > 0:03:45in the economy, particularly in low-skilled jobs.
0:03:45 > 0:03:48And I think there's a real danger of expectations not being met,
0:03:49 > 0:03:53people voted for Brexit because they were cross
0:03:53 > 0:03:55about particularly low-skilled immigration, but actually I think
0:03:55 > 0:03:59a lot of it is going to continue after Brexit and the government
0:03:59 > 0:04:02is going to need a lot of it to continue because businesses
0:04:02 > 0:04:05will demand it, farmers will demand it and it is just inevitably
0:04:05 > 0:04:07the economy will mean it carries on.
0:04:07 > 0:04:10Does that mean, Toby, despite these figures that actually
0:04:10 > 0:04:13there are real problems around the corner in terms of EU
0:04:13 > 0:04:19migrants going home?
0:04:19 > 0:04:22Well, that's often the move made by Remainers who predicted that
0:04:22 > 0:04:23merely by voting to leave,
0:04:23 > 0:04:25we would trigger this mass
0:04:25 > 0:04:27Brexodus, and as I turns out, it hasn't happened,
0:04:27 > 0:04:28as you say
0:04:28 > 0:04:30there's a record number of EU nationals currently working
0:04:31 > 0:04:34in the UK - over 100,000 more there were this time last year
0:04:34 > 0:04:35including more in the NHS.
0:04:35 > 0:04:38So they moved to, say, "Oh, well, yes, it hasn't yet
0:04:38 > 0:04:42because we haven't left yet but it might happen when we leave."
0:04:42 > 0:04:45One thing we do learn is that the people coming now,
0:04:45 > 0:04:47mostly the biggest increases in Bulgarians and Romanians
0:04:47 > 0:04:49which rather suggests it's low-skilled workers who are coming
0:04:49 > 0:04:51here and maybe doctors, professionals, others are thinking,
0:04:52 > 0:04:54"You know what - I don't think so"?
0:04:54 > 0:04:57I think there are now more doctors, more EU nationals working as doctors
0:04:57 > 0:05:00here as of June 2017 than there were in June 2016.
0:05:00 > 0:05:02So that doesn't seem to be happening either.
0:05:02 > 0:05:05The way in which remainders present their case is by talking
0:05:06 > 0:05:07about the numbers leaving without taking into account
0:05:08 > 0:05:08the numbers arriving.
0:05:09 > 0:05:11It's exactly the same sleight of hand they accused Boris
0:05:11 > 0:05:13of in calculating the 350 million a week figure,
0:05:14 > 0:05:16it wasn't a net figure, it was about outflows
0:05:16 > 0:05:18and not inflows.
0:05:18 > 0:05:23If you include inflows in the calculation, turns out net
0:05:23 > 0:05:26there are more EU nationals working here than there ever
0:05:26 > 0:05:27have been before.
0:05:27 > 0:05:28Rachel, just a sleight of hand?
0:05:28 > 0:05:32No, I think the issue more is that the people who voted
0:05:32 > 0:05:35for Brexit are going to be furious because they feel they voted
0:05:35 > 0:05:39to bring down immigration and they'll feel betrayed
0:05:39 > 0:05:41by the Brexiteers who promised that.
0:05:41 > 0:05:43Isn't there already upward pressure on wages?
0:05:43 > 0:05:46Aren't we seeing low-skilled jobs better paid than they were,
0:05:46 > 0:05:48because there are fewer unskilled migrants beginning to come in..
0:05:48 > 0:05:51But didn't they vote on what they perceived to be too
0:05:51 > 0:05:52many people coming?
0:05:52 > 0:05:55Even though those people were needed for the economy.
0:05:55 > 0:05:57That's the argument the Government has got to end.
0:05:57 > 0:05:59We'll see where the figures go, of course.
0:05:59 > 0:06:03This week was described as historic by one EU foreign policy chief
0:06:03 > 0:06:05as the EU moved closer to deeper defence integration
0:06:05 > 0:06:09between member states.
0:06:09 > 0:06:13The Permanent Structured Co-operation pact or Pesco
0:06:13 > 0:06:15for short, should come into force next month.
0:06:15 > 0:06:1823 countries have declared they'll take part so far with Portugal
0:06:18 > 0:06:21and the Irish Republic eventually expected to also sign on.
0:06:21 > 0:06:27Only Denmark, Malta and, of course, the UK will remain unaffiliated.
0:06:27 > 0:06:30The pact was originally proposed by France and Germany,
0:06:30 > 0:06:38keen to bolster the EU after the Brexit vote.
0:06:38 > 0:06:40The agreement requires countries to increase defence budgets in real
0:06:41 > 0:06:43terms and also it asks them for providing substantial support
0:06:43 > 0:06:52including personnel for EU military missions.
0:06:52 > 0:06:56Nevertheless, it falls short of full European Defence Union that
0:06:56 > 0:06:58commission President Jean-Claude Juncker envisaged in the State
0:06:59 > 0:07:03of the Union address this year.
0:07:03 > 0:07:07Estonia's Defence Minister, Juri Luik, said even with PESCO
0:07:07 > 0:07:11in force, collective defence will always remain in NATO.
0:07:11 > 0:07:15Despite traditional British scepticism about further
0:07:15 > 0:07:19integration, Boris Johnson has welcomed the move and said the UK
0:07:20 > 0:07:24was supportive and would be like a flying buttress
0:07:24 > 0:07:26to support the cathedral.
0:07:26 > 0:07:28Well, to discuss this here in the studio,
0:07:28 > 0:07:31we have the new UKIP leader Henry Bolton and in Cambridge
0:07:31 > 0:07:32the Labour MEP Alex Mayer.
0:07:32 > 0:07:35Alex Mayer, if I could start with you first: I mean
0:07:36 > 0:07:38Labour Governments, as well as conservative Governments,
0:07:38 > 0:07:41have always been iffy about Europe getting its act together on defence
0:07:41 > 0:07:43and basically we have been accused of blocking it.
0:07:43 > 0:07:52Is Labour now actually in favour of closer EU defence co-operation?
0:07:52 > 0:07:53Yes, we are.
0:07:53 > 0:07:57And I think that what's happened over the last few months and years
0:07:57 > 0:08:03is that the whole geopolitical situation has changed.
0:08:03 > 0:08:07When I talk particularly to my eastern European colleagues
0:08:07 > 0:08:11in the European Parliament, they're particularly worried
0:08:11 > 0:08:14about Russian aggression and want to make sure that European
0:08:14 > 0:08:16defence is strengthened and I believe that working together
0:08:16 > 0:08:19will enable us to do that.
0:08:19 > 0:08:22And Henry Bolton, that's surely a good thing if the EU begins
0:08:22 > 0:08:26to look after itself rather than always having to prelie
0:08:26 > 0:08:28--rely on others, above all the Americans?
0:08:28 > 0:08:33There's two aspects to that.
0:08:33 > 0:08:37Maybe I can start by saying that although we didn't sign up to PESCO
0:08:37 > 0:08:40on Monday, it's quite clear that the - we are already
0:08:40 > 0:08:43in principle going to be participating in other areas of this
0:08:43 > 0:08:46such as the European Defence Fund and various other mechanisms that
0:08:46 > 0:08:49govern procurement and so on.
0:08:49 > 0:08:53And those in turn are all going to be governed by Brussels-based
0:08:53 > 0:08:55political and regulatory decision-making that we won't be
0:08:55 > 0:08:56fully participating in post-Brexit.
0:08:56 > 0:08:58So we will be subordinating elements of our military,
0:08:58 > 0:09:01industrial and scientific and research as well as our
0:09:01 > 0:09:08military, to EU policy.
0:09:08 > 0:09:12But given the threat we now know we seem to be facing from Russia,
0:09:12 > 0:09:14you think of Crimea, you think of the Ukraine,
0:09:14 > 0:09:17surely it makes sense for the EU to start putting more oomph
0:09:17 > 0:09:21behind its military capability?
0:09:21 > 0:09:25Well, co-operation and EU member states co-operating and ensuring
0:09:25 > 0:09:29that their command and control can work together so they are compatible
0:09:29 > 0:09:31with each other, yes.
0:09:31 > 0:09:36But centralised political direction, policy and regulatory frameworks
0:09:36 > 0:09:38is not the way to go.
0:09:38 > 0:09:42NATO is the alliance that has kept the peace up
0:09:42 > 0:09:43until now, militarily.
0:09:43 > 0:09:46But Jens Stoltenberg is entirely OK with this development.
0:09:46 > 0:09:51Well, I'm not, and UKIP is not.
0:09:51 > 0:09:55We see a whole range of areas in which it implies deeper political
0:09:55 > 0:09:59integration with the European Union when every - and compromise
0:09:59 > 0:10:02of our own autonomous and sovereignty, but I'll come back
0:10:02 > 0:10:04to that, autonomous and sovereign military capabilities
0:10:04 > 0:10:06and our ability to deploy them, unilaterally, the problem
0:10:07 > 0:10:09here is that NATO has managed to survive and work effectively
0:10:10 > 0:10:19as a military deterrent for decades without that regulatory framework.
0:10:19 > 0:10:21OK, Alex Mayer, let me just ask you this -
0:10:21 > 0:10:24isn't the real danger of this is a paper tiger,
0:10:24 > 0:10:28at the end of the day there's a lot of talk about Europe
0:10:28 > 0:10:30getting its military act together but basically it's a sort
0:10:30 > 0:10:33of bureaucratic getting your act together rather than real tanks
0:10:33 > 0:10:42on the ground?
0:10:42 > 0:10:45I mean, I just think this has been blown out of all proportion.
0:10:45 > 0:10:48This is a UKIP storm in a tea cup.
0:10:48 > 0:10:50It is good news if European countries want to co-operate
0:10:51 > 0:10:52with each other on defence.
0:10:52 > 0:10:55No-one is forcing anybody to be a part of it.
0:10:55 > 0:10:58As we heard in the introduction to this report, Britain is not
0:10:58 > 0:11:01a part of it, Malta is not a part of it.
0:11:01 > 0:11:03You can choose whether you want to.
0:11:03 > 0:11:05So what is wrong with European countries choosing to work
0:11:06 > 0:11:06together on defence?
0:11:06 > 0:11:10Just as we choose to work together in the UN or in NATO.
0:11:10 > 0:11:13And as you rightly said, the Secretary-General of NATO has
0:11:13 > 0:11:13welcomed this move.
0:11:13 > 0:11:16We don't want to do anything to duplicate NATO, but European
0:11:16 > 0:11:19countries choosing to work together, I think, is a good thing
0:11:19 > 0:11:21and will help strengthen our defence.
0:11:21 > 0:11:23And where is your leader on this, Jeremy Corbyn,
0:11:23 > 0:11:26because he traditionally is very iffy about NATO
0:11:26 > 0:11:26and military alliances?
0:11:26 > 0:11:30But he's very much in favour in making sure that people
0:11:30 > 0:11:32collaborate with each other and making sure we have successful
0:11:32 > 0:11:35missions to try and keep a more peaceful and stable world.
0:11:35 > 0:11:35Yes.
0:11:36 > 0:11:38I mean, Donald Trump has always argued that Europe cannot keep
0:11:38 > 0:11:40relying on the Americans.
0:11:40 > 0:11:42So surely this is just a natural political development that
0:11:42 > 0:11:45at the end of the day Europe is going to have
0:11:45 > 0:11:53to turn its attention to defence.
0:11:53 > 0:11:56His concern is the amount that people are spending on defence.
0:11:56 > 0:12:00And the problem with the - the - the whole PESCO concept is that
0:12:00 > 0:12:03member states will not, certainly not to any great extent,
0:12:03 > 0:12:04we cannot expect them to increase their...
0:12:05 > 0:12:08That's part of the deal, isn't it, they have to increase it
0:12:08 > 0:12:10in real terms?
0:12:10 > 0:12:14But part of the deal is for NATO is 2% and they don't maintain that.
0:12:15 > 0:12:17They're not going to increase their national capabilities
0:12:17 > 0:12:17to support PESCO.
0:12:18 > 0:12:21What they will do is they will say, "Hang on a minute, we can pool
0:12:22 > 0:12:23assets and thereby save costs."
0:12:23 > 0:12:25This is one of the things driving it.
0:12:25 > 0:12:28Now what concerns me is at the moment member states,
0:12:28 > 0:12:30who are also members of NATO, pledge assets, military assets
0:12:31 > 0:12:32and capabilities, to NATO.
0:12:32 > 0:12:34Now, they're going to be pledging those same assets
0:12:34 > 0:12:35to the European Union.
0:12:35 > 0:12:39You can't do both.
0:12:39 > 0:12:39OK.
0:12:39 > 0:12:42Let me bring our guests in, Toby, how do you read this?
0:12:42 > 0:12:46Is this a serious move by Europe to get its act together on defence?
0:12:46 > 0:12:47Or actually just talk?
0:12:47 > 0:12:50Well, it seems like part of the ground clearance they need
0:12:50 > 0:12:53to do in order to create an EU-wide army.
0:12:54 > 0:12:56And is this a good thing?
0:12:56 > 0:12:59Well interestingly it was one of things which those of us
0:12:59 > 0:13:03on the leave side flagged up as a risk if we remained in the EU
0:13:03 > 0:13:06and that was always dismissed by remainders as being in the same
0:13:06 > 0:13:09category of fake news, as saying Turkey might imminently
0:13:09 > 0:13:10join the EU.
0:13:10 > 0:13:13Why is a problem if NATO is OK with it?
0:13:13 > 0:13:23The difference is if we remain in the EU and EU army does
0:13:23 > 0:13:25eventually get created, it's not clear that we
0:13:26 > 0:13:26would
0:13:26 > 0:13:29have a choice if our troops were called up to fight
0:13:29 > 0:13:30in an EU war.
0:13:30 > 0:13:33Whereas in NATO we do at least have a right to street yes.
0:13:33 > 0:13:34--Veto.
0:13:34 > 0:13:36Every NATO country has to unanimously endorse a military
0:13:36 > 0:13:38action before it commits its troop.
0:13:38 > 0:13:40And Rachel, is this move by Europe actually maybe one
0:13:41 > 0:13:42of the consequences of Brexit?
0:13:42 > 0:13:44Because obviously we are with France, the big player
0:13:44 > 0:13:45in European defence.
0:13:45 > 0:13:46Now we are out.
0:13:46 > 0:13:49Is that perhaps what's driven the Europeans to think,
0:13:49 > 0:13:50"Crikey, we better get our act together"?
0:13:50 > 0:13:53I think also, yes, exactly, Britain's been a sort of a block
0:13:53 > 0:13:59on further integration.
0:14:00 > 0:14:04If it leaves, then the rest of the EU is going to more and more
0:14:04 > 0:14:07gather together and I think - I don't see we can complain
0:14:07 > 0:14:07about that.
0:14:07 > 0:14:11I think if we choose to leave, that's their right to do so.
0:14:11 > 0:14:13Brexit is actually led to this?
0:14:13 > 0:14:15Brexit has taken away an obstacle to achieving it but that's
0:14:16 > 0:14:16exactly the point.
0:14:16 > 0:14:19Jean-Claude Juncker's point that this is about a full -
0:14:19 > 0:14:22full European Union military union, that's what he wants and that's
0:14:22 > 0:14:26what the direction of travel is, that's absolutely where we're going.
0:14:26 > 0:14:28Let me just ask Alex Mayer there.
0:14:28 > 0:14:31Is that where you would like Europe to go?
0:14:31 > 0:14:35I don't think that there's any - I don't think there's likely to be
0:14:35 > 0:14:36a European army.
0:14:36 > 0:14:39I don't think that's the end goal and I don't think anyone's ever
0:14:39 > 0:14:41going to be forced into it.
0:14:41 > 0:14:44This is a union of countries of Europe who want to get together
0:14:44 > 0:14:49and share ideas and resources on dependence.
0:14:49 > 0:14:51That's what's happening.
0:14:51 > 0:14:54No-one is being forced into it, no troops are going to be called up
0:14:54 > 0:14:56from different countries without their say so.
0:14:56 > 0:14:59This is just people collaborating together to try to get the best
0:15:00 > 0:15:01from the resources that they have.
0:15:01 > 0:15:03Henry Bolton, entirely voluntary arrangement which people can
0:15:03 > 0:15:04take or leave.
0:15:04 > 0:15:07Well, that's what NATO is and this is not.
0:15:07 > 0:15:10This will be regulated as was made clear in the Government paper issued
0:15:10 > 0:15:15in September that this will be regulated by the European Union.
0:15:15 > 0:15:17And we won't be part of that.
0:15:17 > 0:15:21Now, to Boris Johnson's bit about flying buttress,
0:15:21 > 0:15:22
0:15:22 > 0:15:25to an extent I would agree with that analogy, but a buttress is outside
0:15:26 > 0:15:27the building, supporting it from the outside.
0:15:27 > 0:15:31If we are able to maintain our own full spectrum military capabilities,
0:15:31 > 0:15:34we will always want to co-operate and support our friends and allies
0:15:34 > 0:15:35abroad, including EU member states.
0:15:35 > 0:15:38We just do not believe, and UKIP certainly doesn't believe,
0:15:38 > 0:15:41that we need to be subordinate to EU decision-making either
0:15:41 > 0:15:44within the commission or politically in order to do that.
0:15:44 > 0:15:48We are far, far better able to do that if we are that -
0:15:48 > 0:15:50if we're outside the building but supporting it.
0:15:50 > 0:15:52OK, people, thanks very much.
0:15:52 > 0:15:54Henry Bolton, Alex Mayer, thanks very much for your time.
0:15:55 > 0:15:57Now, could we soon see the EU impose sanctions on one
0:15:58 > 0:16:01of its own member states?
0:16:01 > 0:16:08Well, MEPs voted this week to start official proceedings against Poland
0:16:08 > 0:16:11over concerns that the Nationalist Government in Warsaw is clamping
0:16:11 > 0:16:13down on the independence of the judiciary.
0:16:13 > 0:16:17In a resolution adopted by 438 votes to 152,
0:16:18 > 0:16:21the European Parliament voted to launch the so-called Article 7
0:16:21 > 0:16:24process which could lead to the suspension of Poland's voting
0:16:24 > 0:16:29rights in the Council of the EU.
0:16:29 > 0:16:32In a debate in Strasbourg, MEPs said the country had conducted
0:16:32 > 0:16:36serious violations of the rule of law.
0:16:36 > 0:16:42But the vote didn't go down very well with one Polish MEP.
0:16:42 > 0:16:45Why are you leaving?
0:16:45 > 0:16:49No, because I have to say something to you.
0:16:49 > 0:16:52I have to say something to you.
0:16:52 > 0:16:56Your attack to Mr Lewandowski, I find it outrageous.
0:16:56 > 0:16:57If there is one...
0:16:57 > 0:16:58APPLAUSE.
0:16:58 > 0:17:05..sensible - if there is one sensible reasonable colleague of us,
0:17:05 > 0:17:09sometimes even a little bit boring, then it is Mr Lewandowski and to say
0:17:09 > 0:17:12that he lose his senses, I think it's the Polish Government
0:17:12 > 0:17:17that has lost its senses and not Mr Lewandowski.
0:17:17 > 0:17:18APPLAUSE.
0:17:18 > 0:17:19It's interesting, isn't it, Rachel?
0:17:19 > 0:17:23There is a sort of, it seems to me, tension between the old western
0:17:23 > 0:17:26European countries and the new eastern European countries.
0:17:26 > 0:17:31This kind of symbolises I, doesn't it?
0:17:31 > 0:17:33-- This kind of symbolises it, doesn't it?
0:17:33 > 0:17:34Exactly.
0:17:34 > 0:17:37But I do think it's interesting that the EU has to uphold the rule
0:17:37 > 0:17:39of law, liberal democracy, that sense of...
0:17:39 > 0:17:41But sanctions is a big step.
0:17:41 > 0:17:43It's a big step and there is definitely -
0:17:43 > 0:17:47and we're going to see that in the Brexit negotiations as well,
0:17:47 > 0:17:48the old EU, the new EU.
0:17:48 > 0:17:51But I think ultimately, the EU does have to uphold those
0:17:51 > 0:17:53values which is what it stands for.
0:17:53 > 0:17:55Toby, the counter-argument which the Poles make is,
0:17:55 > 0:17:58"Look, we are a democratically elected government, what we choose
0:17:58 > 0:18:01to do in our country is none of your business,
0:18:01 > 0:18:05leave us alone".
0:18:05 > 0:18:09I think it's for someone on my side of the Brexit debate who both
0:18:09 > 0:18:12believes in the rule of law, believes in universal human rights
0:18:12 > 0:18:15and so forth but also believes in national self-determination,
0:18:15 > 0:18:17this is a really tricky one.
0:18:17 > 0:18:20But I think the EU would certainly have a lot more credibility
0:18:20 > 0:18:24as the upholders of the rule of law and universal human rights
0:18:24 > 0:18:26if they hadn't supported the Spanish Government
0:18:26 > 0:18:28in its absolutely brutal crackdown of the independence
0:18:28 > 0:18:30movement in Catalonia.
0:18:30 > 0:18:33Is that, Rachel, the sort of divide between east and west?
0:18:33 > 0:18:37I mean, is it possible that down the line we could see eastern
0:18:37 > 0:18:39European countries maybe looking to Britain and thinking,
0:18:39 > 0:18:43"I think we want out of this club too"?
0:18:43 > 0:18:46Or becoming a bloc within a bloc, perhaps.
0:18:46 > 0:18:47I don't know, that is a possibility.
0:18:48 > 0:18:49There's definitely a different culture, isn't there,
0:18:49 > 0:18:52that sort of Franco-German access of closer integration,
0:18:53 > 0:18:59you know, the EU, the sort of faith, the true faith, definitely driven
0:18:59 > 0:19:03from that side of the bloc and you could - you could easily see
0:19:03 > 0:19:07a sort of a different culture of a bloc within a bloc developing,
0:19:07 > 0:19:07I think.
0:19:07 > 0:19:10Because one of the interesting things, Toby, it always seems to me
0:19:10 > 0:19:14as much of this sort of argument around Brexit is that we're
0:19:14 > 0:19:18going to have to teach the Brits a lesson so no one else dares do it.
0:19:18 > 0:19:22And yet there hasn't really, so far, been any sign of anyone looking
0:19:22 > 0:19:24to do a sort of Pexit or whatever.
0:19:24 > 0:19:26Well, I always thought there was a slight red herring
0:19:26 > 0:19:30on the part of the EU.
0:19:30 > 0:19:33I mean, I think one of the reasons I'm optimistic that the EU
0:19:33 > 0:19:36will eventually compromise and strike a deal and there will be
0:19:36 > 0:19:41movement in December is because if we are actually forced
0:19:41 > 0:19:48by the EU through their intransigence to crash out
0:19:48 > 0:19:51without a deal and end up trading with the rest of Europe via WTO
0:19:51 > 0:19:55rules and we make a success of that, then there might be a stampede
0:19:55 > 0:19:56for the exit.
0:19:56 > 0:19:56OK.
0:19:56 > 0:19:58So earlier this week, the European Parliament called
0:19:59 > 0:20:02an urgent debate on the so-called Paradise Papers - a leak of 13
0:20:02 > 0:20:04million documents reportedly tying major companies and political
0:20:04 > 0:20:07figures to secretive overseas financial arrangements.
0:20:07 > 0:20:10MEPs call for a step-up in the fight against tax avoidance.
0:20:10 > 0:20:18Adam Fleming has the details.
0:20:18 > 0:20:18Papers, papers everywhere.
0:20:19 > 0:20:22But the documents MEPs cared about this week were the ones that
0:20:22 > 0:20:24revealed how the rich pay less tax.
0:20:24 > 0:20:28The so-called Paradise Papers.
0:20:29 > 0:20:32TRANSLATION:When I consider that this cup of tea,
0:20:32 > 0:20:35when I bought it, I paid more tax than an international sporting
0:20:35 > 0:20:41company pays on its entire turnover, then it's really outrageous.
0:20:41 > 0:20:44It's not just an individual case, from the Queen, to Facebook,
0:20:45 > 0:20:47to George Soros, to Uber, to Shakira, to eBay -
0:20:47 > 0:20:50all of them are mentioned in the Paradise Papers.
0:20:50 > 0:20:54More than 60 billion euros a year are being lost to the EU.
0:20:54 > 0:20:57The leader of the centre left group called tax avoidance a cancer
0:20:57 > 0:21:02on the European economy.
0:21:02 > 0:21:08TRANSLATION:States are imposing austerity whilst at the same time,
0:21:08 > 0:21:11multinationals are taking billions out of the economy and not paying
0:21:11 > 0:21:14tax, thereby depriving people of this income and we have drawn
0:21:14 > 0:21:21attention to this repeatedly as socialists.
0:21:21 > 0:21:23The Paradise Papers originated here, Bermuda, a British overseas
0:21:23 > 0:21:30territory thrusting the UK into the spotlight.
0:21:30 > 0:21:32Another day, another leak of embarrassing documents
0:21:33 > 0:21:36about the role of the city of London as the global centre
0:21:36 > 0:21:38for tax avoidance.
0:21:38 > 0:21:41Successive British governments have postured about leading
0:21:41 > 0:21:44on transparency, but it's easy to play the good guy when you have
0:21:44 > 0:21:46so many post-colonial territories to do the dirty work
0:21:47 > 0:21:48at your bidding.
0:21:48 > 0:21:53Avoiding civilised rules on tax was always part of the Brexit agenda
0:21:53 > 0:21:59but any attempt to turn Britain into the Bermuda of the north
0:21:59 > 0:22:02is likely to flounder, since the EU will surely make
0:22:02 > 0:22:04cleaning up the overseas territories a condition
0:22:04 > 0:22:05for any future trade deal.
0:22:05 > 0:22:08But the rest of the EU got the blame too.
0:22:08 > 0:22:12Remember, it was an EU directive in the 1980s that let multinational
0:22:12 > 0:22:14companies pay tax in any European headquarters country rather
0:22:14 > 0:22:20than where their revenues and profits were really made.
0:22:20 > 0:22:22Remember, tougher action has been taken against the LuxLeaks
0:22:22 > 0:22:25whistle-blowers than against the accountants,
0:22:25 > 0:22:29corporate executives or politicians involved.
0:22:29 > 0:22:31Remember, that the commission's own president, Mr Juncker,
0:22:31 > 0:22:36was Prime Minister of Luxembourg when his country was conniving
0:22:36 > 0:22:38with big accountancy firms to erode the tax bases
0:22:38 > 0:22:42of larger EU economies.
0:22:42 > 0:22:45Jean-Claude Juncker and his commissioners decamped to Strasbourg
0:22:45 > 0:22:48as usual and had their weekly meeting in this very room
0:22:48 > 0:22:51and they say they're gripping this issue.
0:22:51 > 0:22:54For example, they want every company to publish every activity it does
0:22:54 > 0:23:00in every country so they can be taxed properly and they want
0:23:00 > 0:23:03to publish a blacklist of global tax havens at the start
0:23:03 > 0:23:04of next month.
0:23:04 > 0:23:08But some MEPs say the hold-up comes from the member states.
0:23:08 > 0:23:10Which countries are blocking it?
0:23:10 > 0:23:11Oh, so many.
0:23:11 > 0:23:14I mean, of course you have the inner European tax -
0:23:14 > 0:23:19tax paradises, like the Ireland, the Malta, Cypress, but then
0:23:19 > 0:23:23surprisingly you have a number of big countries, and I forgot
0:23:23 > 0:23:26to mention the United Kingdom and all these crown dependencies.
0:23:26 > 0:23:28But then you have big countries like Germany.
0:23:28 > 0:23:31Wolfgang Schauble when he was Finance Minister,
0:23:31 > 0:23:33not so long ago, was the key opponent to country-by-country
0:23:33 > 0:23:37reporting by multinationals, because he wants to preserve
0:23:37 > 0:23:41the reputation of the big German multinationals.
0:23:42 > 0:23:46So you know there's no holy finance ministers there.
0:23:46 > 0:23:48And this week, the Parliament Council and Commission fails
0:23:48 > 0:23:52to agree a new law on money laundering, after eight attempts.
0:23:52 > 0:23:56Looks like the murky world of tax avoidance will stay murky
0:23:56 > 0:24:02for a while.
0:24:02 > 0:24:07I have to say, I have a slight sense of deja vu in that I'm sure
0:24:07 > 0:24:10David Cameron was, you know, going to crackdown on tax avoidance,
0:24:10 > 0:24:12he had summits here, and task force there.
0:24:12 > 0:24:15I mean, without being unduly cynical, do you think anything
0:24:15 > 0:24:17is actually going to change any time soon?
0:24:17 > 0:24:20Well, the EU should be the vehicle for dealing with this.
0:24:20 > 0:24:22This is something that has to be dealt with internationally.
0:24:23 > 0:24:26One country on its own is never going to be able to sort out
0:24:26 > 0:24:27a global tax problem.
0:24:27 > 0:24:31But it just seems to be caught up in the weeds yet again of,
0:24:31 > 0:24:33you know, individual self-interest.
0:24:33 > 0:24:35I suppose politically, though, it's like manna from heaven
0:24:35 > 0:24:37for Jeremy Corbyn, though, isn't it?
0:24:37 > 0:24:38Of course, yeah.
0:24:38 > 0:24:41This plays to his narrative about the rich are doing terribly
0:24:41 > 0:24:43well, it's just us poor people on the austerity.
0:24:43 > 0:24:46And the Conservatives should do something on the Crown dependencies,
0:24:46 > 0:24:49they could do more on publication of transparency and that
0:24:49 > 0:24:52sort of thing.
0:24:52 > 0:24:54And it will be a brilliant way of demonstrating they're not
0:24:55 > 0:24:56the party of the rich.
0:24:56 > 0:24:59Toby, is it possible, I think we heard I mentioned
0:24:59 > 0:25:02in the film there, that as part of the Brexit negotiations,
0:25:02 > 0:25:04the EU might say, "You know what, UK, Crown dependencies,
0:25:04 > 0:25:06you got to get a grip of them"?
0:25:07 > 0:25:10Well, they might but it's going to be easier for them to make
0:25:10 > 0:25:14that case if they're a bit more flexible about making a trade deal
0:25:14 > 0:25:17with us because in the absence of a trade deal we're going to have
0:25:17 > 0:25:19take advantage of whatever we can.
0:25:19 > 0:25:22I think MEPs would have more credibility on this issue.
0:25:22 > 0:25:24They weren't subject to a particularly low tax rate,
0:25:24 > 0:25:27lower than any of the member states tax rates themselves.
0:25:27 > 0:25:30I mean they get away with paying very little tax.
0:25:30 > 0:25:33Being an MEP is actually a form of tax avoidance and I would say
0:25:33 > 0:25:36in response to the Jeremy Corbyn stuff around the Paradise Papers,
0:25:36 > 0:25:40let's not forget that the top 1% of earners are paying 27%
0:25:40 > 0:25:43of the total income tax take, higher than it's ever been before
0:25:43 > 0:25:45and certainly higher than under any Labour
0:25:45 > 0:25:45Government.
0:25:45 > 0:25:45OK.
0:25:45 > 0:25:47We'll have to leave it there, folks.
0:25:47 > 0:25:50Toby Young and Rachel Sylvester, thank you very much