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tv   HAR Dtalk  BBC News  June 13, 2017 2:30am-3:01am BST

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to her party's mps, for the conservatives' performance in the general election. the political uncertainty looks likely to delay the queen's speech, when the government's policies are formally presented, from its scheduled date on monday. in france, president macron‘s new centrist party seems likely to win by a landslide in the upcoming final parliamentary elections. after this weekend's first round of voting, en marche is on course to win more than two thirds of the seats in the national assembly. the russian opposition politician, alexei navalny, has beenjailed for 30 days following demonstrations across the country. earlier hundreds of people were detained during a day of anti—corru ption protests. the rallies were called by mr navalny, a strong critic of president vladimir putin. now on bbc news, it's hardtalk. welcome to hardtalk. i am stephen
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sackur. the western world, for so long the dominant force in global politics and economics, is confused and uncertain. in the past week, elections in the uk and france have pointed to fractures in europe. donald trump's worldview and angela merkel‘s are poles apart. in the west consensus is no more. my guest is stephen king, influential economist, writer, and chief economist, writer, and chief economist to hsbc bank. is liberalisation stuck in reverse gear? —— globalisation. welcome to hardtalk. given the
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dramatic nature of events in the uk, we have to start with britain and moved to the world as a whole. the uk. we have just moved to the world as a whole. the uk. we havejust seen moved to the world as a whole. the uk. we have just seen an election that has brought about a hung parliament and the sense that no one knows really what the government theresa may forms will actually do about brexit and other challenges. do you feel a deep sense of incoherence and uncertainty in britain? there is. brexit was 52- 48 in favour of leaving the eu. 40 84 remain. those who wanted to leave, they were a variety of different views as to what people wanted. some had an astounding view of things in
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the past in the 1960s when globalisation was getting on their way. 0thers globalisation was getting on their way. others said the eu was far too protective. we are better off outside of it to recover productivity. 0thers focused on the issues of migration. that was clearly a n issues of migration. that was clearly an issue for many people in the uk to be in many ways, the vote for brexit was a vote against the eu. it is that split that has made life so difficult for politicians across the political spectrum over the last few months. when we talk about that, we must remember the conservative party under theresa may got 43% of the vote, but 40% of the vote went to jeremy corbyn and got 43% of the vote, but 40% of the vote went tojeremy corbyn and the labour party, selling a hard left and radically socialist agenda at a tax and spend agenda. in terms of
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britain and a broad consensus over yea rs britain and a broad consensus over years about liberal economics and open economies and embracing globalisation, is that at an end? there was little debate about something that matters, economic growth. economic growth, you have decent growth with tax revenues. you can doa decent growth with tax revenues. you can do a lot with public spending. you can target pensions and healthcare as well. what you want to do. in the past ten years, we have seen little economic growth. we are battling over the spoils of economic activity. that battle becomes awful to be on the one hand, some say it should be a low tax economy. that only benefits the wealthy according to some people. you could have a high spending economy. evidence from around the world is if you have high public spending you can squeeze out entrepreneurial activity. both
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parties refused to discuss how you make the cake bigger. as a consequence, they were not able to discuss how to create revenue to do what they want to achieve. my point is borne out of your book, brave new world, talking about globalisation. it seems there is a lesson from the united states, where one can argue donald trump, whatever he actually is in terms of a successful billionaire businessman, he is no fan of globalisation and small l liberal economics. 0ne fan of globalisation and small l liberal economics. one can say the same arguably about theresa may and certainlyjeremy corbyn, and others like bernie sanders in the us. there seems to be a move away in the west in many different countries away
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from this liberal consensus, of which globalisation is an important pa rt which globalisation is an important part the pillar absolutely. what has happened is the narrative has changed. go back to before the financial crisis. 1989 with the berlin wall. there was a powerful sense at the time that the world could be a better place with western liberal and democratic values, and the world could be better and the west could trade with china or brazil, etc. but we have seen growth rates slow down dramatically, even in china and india. there has also been a much bigger sense of winners and losers in the west. inequality. bernie sanders was telling me just the other day that as far as he is concerned, the rise of the billionaire oligarch class is one of the fundamental sicknesses that is
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undermining the health of his nation, the united states, today. undermining the health of his nation, the united states, todaym is possible. if you look around the world, you realise that globalisation has actually dragged a huge number of people out of the tea. bernie sanders said during the campaign that he said it wasn't working for the us and elsewhere. —— out of poverty. i think that is a mistake. in the us, you have winners and losers. in china, you have had and losers. in china, you have had an extraordinary transformation in living standards over the past few yea rs. living standards over the past few years. it has a different effect on things. in china, income equality has gone up because of a dramatic increase in globalisation. 0thers remain in poverty, but many have been lifted out of it. the us and europe. it is a different story. some have been left behind for one reason and others have done well for another copy it is a western
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difficulty, not a global one. in the us, you want high levels of income equality in the usual way. in the case of the uk and europe, it is more complex. you have an increase in overall income equality. but you have dramatic increases in regional income inequality. london has done well in the last 30 years. wales, you have been left behind. in the eurozone, europe, germany, you are doing quite well... in a sense you have got a stake in this because you work for one of the biggest transnational corporate banks for many years, the chief economic adviser. you ever a system where the banks were bailed out for totally as u nsta ble banks were bailed out for totally as unstable behaviour in 2007 and eight. —— oversaw it. you also oversaw a financial system that helps the very rich and did nothing
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for the low and middle earners. 0ver a generation, if you live in the united states, europe, your living standards have not only risen by ten many cases have actually gone down. —— but in. i provided advice to many people. i did not have the power to give those kinds of results. you we re give those kinds of results. you were not the architect of the system, you were a happy and co mforta ble system, you were a happy and comfortable cog in the wheel, if you like. you must have seen in 2008 the fallout of the crash which are so many people. it is worth remembering. in the period before 2007, there were warnings about what might happen. no one got the whole story. i was writing in 2003, 2004, about the dangers of the us housing
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bubble, for example. clearly, house prices were rising quickly. look at the us at the time. there was little willingness to speak about these dangers and listen to them. in hindsight, there was a bubble. look at the attitude of the us government at the attitude of the us government at the attitude of the us government at the time, whether it was the administration, congress, they said we need a property owning democracy. look at regulators. they were happy to allow the growth of so—called sub—prime lending. many things were going on. when i warned of these kinds of things, and other people as well, who were warning about the dangers associated with it, there was a collective unwillingness to listen, whether you where a bank, a finance minister... the power of the system is vested very clearly with transnational corporations and an elite who are tied into the
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political system and who can game it. that may be changing right now. to go back to the british election, you remain a key economical voice in britain. who does theresa may listen to when she has to put together a brexit strategy? the argument is in recent times, frankly, big business has been somewhat discredited in the eyes of the public, she has not been listening to them. i think the way she has put her policies across is look at the person in the north of england, wales, whatever, she wants to reach out to more people. big business has in one sense been ignored. that is highly understandable. i saw a survey after the election from the institute of directors, which has seen 67% of business leaders professing to be
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either quite or very pessimistic about the future of their businesses in the uk today. to you, does that represent something of a crisis here in the uk in terms of where the economy is going to go as brexit uncertainty continues? part of the in —— uncertainty is do we have access to the single market, if we have it, what do we have access to? britain attracts lots of business from abroad with transnational corporations. it does so because it has a flexible - market, the has a flexible labour market, the english language, all of these advantages. people come to britain precisely because they want proper full access to the single market so they can sell to the whole of europe by building cars, for example, in britain. if it turns out these companies, japanese, american, whatever companies, if they have no
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access, risky access, they may go to germany, poland, wherever. do you read where we sit today? you are a much more loose adviser to hsbc now. not the chief adviser. they are classic transnational business with a long history in london as well as hong kong. that is true. going forward , hong kong. that is true. going forward, the directors, bosses, those of hsbc, they have to make a choice, do we continue to invest in eight london headquarters, or do we put more future investment into a european hub or hong konga london. the prime minister, so much confusion. hard brexit, soft brexit, what is a boardroom like hsbc doing? i cannot speak for them as i what is a boardroom like hsbc doing? i cannot speakfor them as i do not represent them. but in terms of any company, whether it is american,
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japanese, whatever it might be, they will be thinking hard about whether britain is the right place to be copied the consequence for britain is they have a balance of payments deficit over the last few years funded by investment coming from abroad. is that funding does not come through, the sterling could be weaker. —— if. that could be good for exports. but that is not right. it raises import prices. it means prices in the shops go up. it means a lower wage rise. 0ne prices in the shops go up. it means a lower wage rise. one of the ironies of the brexit vote is many people who might have voted for brexit in england or wales, wherever, as a consequence of the falling sterling and spending power, they are worse off. i think one of the economic forecasting groups said the hard brexit, which is pulling out with no deal on preferential access to the
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single market, they said that it could cost, over the next ten years, 2.6% of gdp. if we go for a so—called norway option, for access to the civil market, even though no voice in how it is shaped, that might be half as damaging, 1.3% loss over the decade. in your view, how grave is the threat hanging over the united kingdom, today, in terms of economic damage done? burst of all, i should reveal my own preferences. i voted remain, so i had economic concerns about the consequences of any kind of brexit. i would also note that if you interpret brexit is a vote against, three double, immigration, it is a difficult under those circumstances to the norwegian type model. -- first of all. freedom of labour, movement of labour, is one of the pillars of physical market. if you refuse that, then you this cannot have full access to the civil market. and the desire to have
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anala civil market. and the desire to have an a la carte menu, to pick that and the other, within the eu itself, there are rural. within the scope of those rules, it makes a difficult summer can those rules, it makes a difficult summer can easily do have full control over immigration and at the same time be a member of either the single market or the european economic area. —— it make -- it —— it makes it difficult to have full control over. you have just come from the united states, where you have witnessed, as we all do, donald trump's impact on america. all the legal issues, russia, investigation issues, but let's just talk about donald trump and economics. his message is one of america first. an embrace of the idea of protectionism when necessary for americanjobs. the idea of protectionism when necessary for american jobs. the building idea of protectionism when necessary for americanjobs. the building of walls were necessary to stop people coming into his country. it is the
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very antithesis of this small liberal open economics that we have talked about as the consensus for the last generation. add to that, you know, the message coming from britain, and would you say that we are at the end of an era in terms of the west's economic thinking?” think we probably are. if you go back a long way to 1944, the so—called brettoneaux conference. these institutions recognise something important, which was that countries connected with each other and engage with each other. people had learnt after the terrible extras of the interwar period that having countries that did not relate to each other, did not engage with each other, was very damaging. —— bretonneux. trying to avoid the
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damages of the treaty of versailles, you have money coming through to europe, a generous act by the us, you had the seeds being signed for what eventually became the european union. the importance of each of these that was by creating the rules of the game internationally, trade connections, connections and other people and their movement, and so on, it meant, in one sense, that wealth and income could rise pretty swiftly. but what has happened over the last ten or 15 years, partly because of the growth and the increase in income equality, there isa increase in income equality, there is a sense that these institutions, in fact, all the global economy, has failed. it has raised questions about the security of the nationstate. a retreat in the west, but not a retreat in the years. china is not talking about retreating. china is absolutely...
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beijing is entirely happy about this, because it gives china an opportunity to create its own form of globalisation, which competes... it isa of globalisation, which competes... it is a very different brand of globalisation that we now need to look towards and to understand as perhaps the pre—eminent force of the zist perhaps the pre—eminent force of the 21st century. i have this sense, and this is a long historical sweep, of where we move from eight pre— columbus world where post columbus world. the point about this is that we have lived all allies with a sense of it is europe, it is the us, it is basically the west that governs the world. —— a pre—columbus. and you can take this back to columbus. pcs of european empire building? absolutely. and that reaches into a populace is with you as having the dominant power after the second world war and of
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course with the fall of the berlin wall and so on, the thought was that western values had won. —— apotheosis. because the west has lost its way, and other countries have been successful, especially china, we start to see these questions coming through. with donald trump, he said that they would withdraw from the transpacific partnership. this would link north america, south america, and asia, to create a trading bloc, whereby a ready could agree on the rules of the game and engage with each other. important, of course, be dpp excluded china. —— tpp. important, of course, be dpp excluded china. -- tpp. this book is subtitled the and of globalisation. whatever the politics of the day in the united states are indeed the united kingdom is, those forces might include the unfolding, or the
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third unfolding of the digital age, the internet, and within that goes with it. -- the internet, and within that goes with it. —— end. you could include artificial intelligence, robotics, 3-d artificial intelligence, robotics, 3—d printing, all of these things. surely they are going to leave us all interconnected. whether we like it or not. that is a natural conclusion. although you can cast doubt on some of this. the reason i doubt on some of this. the reason i do that is not because of technology that has come of what you do that. so if you look at previous eras of globalisation... bec technology tries to globalisation, doesn't? not necessarily. it decrease the cost of medication around the world. —— but technology. social media, i think, has credit circumstances where you have a herding of idea, which is of pursuit of belief, rather than a pursuit of belief, rather than a pursuit of belief, rather than a pursuit of truth. —— decreases. under those circumstances, it makes it possible for politicians to be
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popular who would not have been yea rs popular who would not have been years ago. donald trump was delayed at exploiting social media. people might live at his twitter accounts, but it did well for him. one of the biggest issues in late 20 century was the growth of what has been described as global supply chains. you make something and... you have your iphone and it is made in china and sold for a vast amount in the us. nevertheless, you have this global supply chain. capital can go in search of relatively low—cost labour in different parts of the world. but imagine a world where by robotics means that robots are even cheaper than the low—cost labour. and why not bring the production backup? that process of reshoring will be eight interesting and potentially dangerous tree of the next decade. because the more that you reshore, the more difficult it is to spread well to other parts of
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the world, so it will be harder to catch up. one of betrayed that -- when i betrayed you as a big fish, it seems to me that you spend your entire career at the heart of a financial and economic system which looked forward with great optimism to the future, because it felt to me and you, at your hsbc bank, you are pa rt and you, at your hsbc bank, you are part of it, you felt that the world was yours, going in your direction. do you not feel that any more? do you feel... i know that you have left hsbc, but you still represent an importantand left hsbc, but you still represent an important and influence are worse in the west. you still fear for the future? yes. -- influentialforce. i think when people west such a retreat into the idea of nationstates, it starts to define itself as asked against them, whoever they might be. globalisation was once a desire or mechanism to
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reduce the dam in the world. it was us reduce the dam in the world. it was us altogether. some might dispute that. but it is dramatic reductions in terms of global poverty of the last 30 or 40 years, you could say that this a great powerful and in economic terms a very successful story. but when you return to the nationstates and start talking about us nationstates and start talking about us and them, you end up with a much more antagonistic relationship between different countries around the world. and the most obvious antagonistic relationship that might exist in the year ahead is the existing superpower and the aspiring superpower, namely the relationship between the us and china. and then going back to the pre—post—columbus world, if you go back and look at all these chinese led organisations, thatis all these chinese led organisations, that is cut are familiar. because this is something i recognised from my pre— columbus day. this is something i recognised from my pre- columbus day. back to the future? back to the future. stephen king, we have two and about. they
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give a much indeed. —— we have too end it there. thank you very a much indeed. —— we have to end it there. —— thank you very much indeed. yesterday was a bit of a breezy day for most parts of the uk, with a fair bit of cloud and a little bit of sunshine. in the north—west of the uk, we got temperatures up but we got to 20 celsius in the south—eastern corner. we're going to go a little bit warmer than that in the next few days, particularly so for england and wales. are quite, —— a lot of dry weather and the forecast and the winds are quite,
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light as well. some decent conditions getting out and about. 12 or 13 degrees today and yes, some rain to be had, mainly in the north and west. a wet start in western scotland. the eastern side will be that the drier, perhaps brighter as well. mainly in the north and west. a wet start in western scotland. the eastern side will be that the drier, perhaps brighter as well. a fair bit of cloud in northern ireland through the morning. some outbreaks of rain as you will find in northern england. about here, not so large, but rain nonetheless. then the cloud breaks up there. sunshine possible during the morning across much of our southern counties. light winds as well, so a reasonable start to a pretty pleasant day. we will see some good spells of sunshine across the southernmost counties. patchy cloud developing. but with light winds, sunshine,
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it will become pleasant out there. temperatures will get into the low 20s. to the west of rain time in scotland, that it becomes lighter and more patchy with time. showers in northern ireland. one or two in northern england, but few and far between by this stage. 19 degrees for aberdeen and belfast, 23 in the south—eastern corner. and then as we go onto tuesday night, heading into wednesday, this low pressure system is trying to push in from the west. it is running into this high, and that results in the south—westerly wind being pushed north. that will bring warm air our way. wednesday will be the peak of our temperatures this week across england and wales in particular.
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we start on a fairly warm note, and there will be a good deal of sunshine, light winds, too, with temperatures rising quickly through the morning. through the north, more of a breeze. welcome to bbc news, broadcasting to viewers in north america and around the globe. my name is mike embley. our top stories: "i got us into this mess and i'm going to get us out." britian's prime minister apologises for losing her party's majority in a disastrous general election. in russia, hundreds of anti—putin protesters and the country's main opposition leader are arrested as tensions run high. heading for a new era in french politics. we take a closer look at president macron's centrist party as it looks set to claim a landslide in the parliamentary elections. finding the voice to help heal a community. the orlando gay chorus povides comfort one year
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