tv Politics and Public Policy Today CSPAN April 4, 2016 9:00am-11:01am EDT
>> mr. johnson, on the day that you came out for brexit, the pound fell, supposedly because you are a very effective communicator, and that made it more likely that brexit would happen. when the governor of the bank of england came and gave evidence to us on europe he described brexit as the biggest risk to financial stability. he said there would be downward pressure on foreign directing investment, on investment particularly in tradable goods and on household consumption. are you not concerned that a period of uncertainty in the british economy would have those effects? >> well, we've heard this -- first of all, i don't believe
that -- i've looked at fdi of london at the moment, what's going on in the city, what's happening with our economy. no sign whatever of people being discouraged from investing, coming to london. that remains massively strong. so i'm not quite certain what this period of uncertainty is that you speak of. i seem to remember that when we were considering whether or not to go into the euro, people were saying very much the same sort of thing. it didn't transpire. on the contrary, london flourished, prospered like never before. if you ask me about the pound, the pound will be as strong and as robust as the uk economy. and my view is that the risks are in remaining in the eu. if you look, why should we remain tethered to this anti-democratic system --
>> sorry, i'm not talking -- i'm not now asking you questions about the long term. i'm asking you questions about the short term. the period before, we've your relationship with the eu. the period before we negotiated 15 new trade agreements. when the governor of the bank of england is telling us that there would be volatility in the foreign exchange markets, this would have a detrimental impact on foreign direct investment, on investment in the british economy, particularly in the tradable goods sector, and on household consumption. now if you could just look beyond the city of london, in the northeast we have 140,000 manufacturing jobs dependent on exports to the eu. and nissan and hitachi, the two
biggest direct foreign investors, have both said they would not invest more in the event of brexit. do you think, therefore, it is responsible to dismiss as airy-fairy these concerns about uncertainty and the impact on investment? >> actually, you're wrong about nissan. they've changed their tune since the euro -- >> i'm not wrong. >> as far as i can remember, nissan said they would continue to invest irrespective. >> no, nissan have not said that. what nissan have said is they would not close the current factory. they would not move it but they would not put any new investment in. and we get 27 billion pounds of foreign direct investment into this country every year, and a period of uncertainty, while you were deciding what a british deal meant, would undoubtedly mean that we lost investment for a period of perhaps two years.
don't you think that that is a worry for those people who have jobs in the northeast in manufacturing? >> i think it shouldn't be a worry. i hope very much that people will do their best to persuade those who aren't interested. there is no need to worry. as far as i remember, nissan did take a strong line in favor of the uk joining the euro and said that they would close the sunderland plant if they did not join the euro. that did not obviously happen. neither of those two things happened and that was the right decision. i think the uk will be more competitive if we leave the eu. i think we'll be able to set our own course, do our own trade deals, and legislate it in a way that is in the interest of british manufacturing. >> well, a minute ago you were complaining that renault wanted to structure the rules on truck design. now nissan obviously are
completely happy with the european rules on car design. surely you can see that it's chicken and -- what is good for the goose is good for the gander and we have 140,000 jobs dependent on this. >> no. because of course, when selling into the european markets where there will continue to be standards set at an european level, obviously it will be in the interests of nissan to make vehicles that are acceptable for this market just as they make them acceptable for the united states as they also have many, many detail provisions for what they want in their markets. i really think that there is such a deal of negativity about our ability to do this. and we are missing -- we would be missing a massive opportunity to make this country more competitive, to be able to set our own economic course.
and to restore democracy in this country. >> you've made those points quite thoroughly quite early on in those exchanges. you were, i felt, trying to distance yourself from the view that we would want a deal akin to that of switzerland. you see, just over three years ago you said, we could construct -- i'm quoting -- a relationship with the eu that more closely resembled that of norway or switzerland. i'm still quoting. except that we would be inside the single market counts. makes it sounds as if you're very supportive of the idea of the single market which you cast some doubts about. >> i do. >> i'm about to ask you a question. what is the single market? >> there used to be something called the internal market council. that's now as far as i can
remember being scrapped in favor of the completely discounted market -- >> what is the single market? >> i don't think it is possible to do that. i was speculating there about a possible relationship you could have. it doesn't really make sense. because in the end, you're either part of the single judicial system or you're not. the difficulty i think we would have -- coming back to the whole two referendums idea that some people floated a while back, could you, as it were, vote to get rid of a lot of the stuff that isn't necessary, and then reaccede into the scene. in the end -- >> your -- >> i'm giving you a very, very clear position. >> are you for or against the two referendums approach? >> i think we have one referendum and we get on with it. >> afterwards, that's the end of our relationship within the eu.
we don't try and engage in another referendum? >> i think the difficulty -- >> just to be clear. i want to be clear whether that's your view. >> that's my view. >> that's all i need to know. >> so that means that you can't be part of the so-called -- >> it is your view for a while, and some months ago, and it is very helpful now that we had that clarification. >> i think i've been very clear about that. >> you have just now. >> i mean i think i have been pretty clear before this august committee. >> one more point. do you agree that a large proportion of the trading goods that would come in, as you know, the eu has a service with us. that trading goods would be covered under wto rules? >> yes, certainly. >> and therefore, germany, for example, is more likely to be able to get access than we would to their market for our services
which are dependent on much more detailed than single market negotiations. >> well, it is certainly the case that the germans have, in my view, a massive interest in making better use of uk services and i think when people say they discriminate against the city of london, that's never happened in the past. i think it would be utterly foolish of european economies to not make use of what is a massive resource for the whole of this area. the city of london also serves industries in which we excel, are vital for any big european company that wants to raise capital. this is the place to come. it always will be. and i think -- >> good morning. on the line of questioning about
the negotiation and relationship we have in total trade with europe, just to get to some of these figures. the uk represents 15% of total gdp of europe. for our exports, exports, total exports to europe, that's 45% of our exports. but in terms of europe's total exports to the uk, it is just -- i don't know how you call it, 7% to 10%. it is quite small. nonetheless, it is -- >> i'm not certain of that. >> the point i'm trying to make is -- the relative importance for us, 45% of our total exports with europe, is a very significant proportion of our total trade but for europe, 10% roughly, is not vanishingly small but far less significant. do you think that this puts us as a very poor negotiating
disadvantage when we start? >> no, i don't think so at all. as i said early on, i think it is massively in the interests of the -- of our friends, our partners, to continue to trade free, and indeed more freely. germans, they have 27 billion pounds net. so with us, they are the most influential in the european council. even the french have a considerable net balance of trade with us. i just think that it would be very curious, bizarre, totally self-destructive of them to not only -- the great thing is that this conversation is not happening in a vacuum. everybody's thinking about this. the time is now.
people can prepare for what i think will be a very exciting -- >> you talk about germany and france. it is absolutely right to talk about two specific countries but you can talk about other countries where they have trade deficits with the uk and they would presumably turn around and argue that they don't want an exit. >> we brought that point up a moment or two ago, as you know, the competence for negotiating trade deals resides exclusively with european commission. if i may just elaborate that
point for a second. one of the problems that we have as a country in trying to do free trade deals around the world is the eu commission does not in my view well represent us in international trade. for instance, the audio/visual sector which this city is doing brilliantly, probably producing are mo tv and film than new york, will produce more than los angeles. because of french objections, we can never do a free trade deal that involves the audio/visual sector. it's totally hopeless for the uk economy. we need to have the ability to strike our own deals. >> let me talk about the financial services in particular. i think you mentioned three. all three of those banks are u.s. domiciled and would be in the uk anyway. can you think of any international banker, for example, specifically somebody who is a senior member of an international bank, like goldman's, deutsche bank, any number of these international banks, which agrees with the fact that the uk would be better off outside europe? >> i can certainly say -- i won't way to give way to private conversations but i can certainly say that there have been plenty of people i've spoken to from those types of institution who have felt -- to
get back to where we really began this conversation, the balance of the argument is much more equivocal than is commonly supposed. they believe -- they really do think that london would flourish whatever happened. london has the right tie to the right -- >> that doesn't concur with what i'm finding when i talk to these international bankers privately. >> well, i have to say, i'm getting a different message. i respectfully direct you back to what some of them were saying at the time of the euro debate. goldman sachs was very clear that there would be -- it was a terrible mistake for britain not to go in. we heard the same from the cbi, from lord mandelson, from all sorts of people. indeed from colleagues of ours. and friends of ours. >> i'm not an enthusiast myself. >> i had mr. tyrie back in 1991 wrote an interesting pamphlet suggesting that the single market could not be complete without a single currency. >> unfortunately -- and you've also misrepresented it quite badly.
if you go further on in the document you'll find some very interesting passages explaining why the project of the euro is being formed at a single and rather dangerous moment in the cycle which -- >> i was not -- >> it's very kind of you to -- order. order. >> common sense on the euro. >> it's very kind of you, boris, to -- >> i just thought i'd bring it up.
>> -- to read all my materials. >> never say never. >> you are illustrating exactly what i began this session with again which is very partial and basking really humorous approach to a serious uk question. what we need is a much more balanced exchange in which people make an effort to qualify and represent the points that they make and represent each other's views with some accuracy. >> i'm glad you said that. because i think that some of my views have been, as i said, misinterpreted. i'm glad to set straight some of the gross misrepresentations. >> that's enough of that, boris.
>> we had a little bit from andrew that the city sf london corporation has got an official position. many, many institutions have got official positions with the city survey. 84% of respondents in the uk voted to stay in. the governor of the bank of england said if the uk came out of europe and failed to negotiate a proper agreement on financial services with europe, that it would be detrimental to the city of london. do you disagree with these institutions that are pretty unequivocal about this? >> as i say, mr. conyer, they're not unanimous -- >> 84%. >> there are plenty who take an opposing view.
my impression is that the balance of opinion is very moderate about this. and most people think that the stakes -- the stakes are much -- >> it's difficult to -- >> are much lower than they were. >> you did -- >> the interesting feature of -- i think exports in the last ten years, exports of natural services to the eu have gone down for about 39% of our financial services exports by 32%, possibly even lower as a proportion of our exports. there are opportunities to go around the world. this is the moment to go global. what i fear is by staying locked into the eu system, where they consecrate the right to set trading arrangements to the commission, we're missing huge, huge opportunities. it would be -- i think it would be -- i think it would be massively beneficial to europe as well. >> can i ask you just one question? because you talk about the rest of the world.
we did ask the rest of the world, why do they trade? london? why u.s. banks want to come to london? every one of them talk about the cluster effect, the support that goes with it and they also talk about the fact that it gives you access to 550 million people in a single market. that's something that's incredibly important to them. all of them are saying, we would be off our trolley to come to europe. >> the access to 550 million people is going to remain, in my view. >> but how can you be sure? just because they would be -- those countries, those -- countries don't trade with countries. people trade with each other. businesses trade with each other. businesses need a -- businesses need a place to find capital. they need support. they need services of all kinds perform they're going to continue to find them in london. i think if you look at the story of this city, since the decision not to go into the euro, it's a
story of unbelievable growth and dynamism which they have completely failed to spot. they were wrong then and they're wrong now. i do understand -- one thing i've been wrestling with is this problem you raise. why is it there's a certain type of person they often in the big corporations or the big banks who take this line and i think there is an enormous european -- an enormous entry of lobbyists, of people involved in negotiations of conferences and all these things who are basically one way or the other turning left on the plane as a result of our membership of the european union. that is the reality. and i think -- the people i think that would benefit massively from this change would be -- i think those companies would not be remotely
disadvantaged but i think the 95% of uk businesses that do not actually export to the eu but have to comply with 100% of the eu regulation. >> that's another debate. but i want to finish off in one area, which is nobody can deny the european union is the single biggest union in the world. and it's incredibly important. financial services are also very, very important for this. the rest of the world wants to trade with europe through britain. what is key to a great deal of this is the regulation that comes from financial service as a result of british, europe and the fact that that -- is the fact these financial service regular laces tend to lead the world because they aren't very good regulations. were we to come out of europe, we would have no influence on those regulations. we would be subservient to an
architecture driven forward by europe, which isn't as good as we are. we would we want to influence the world's population? >> i defer to your knowledge of this sector, but i don't think that's entirely accurate about what would happen because many of these standards, many of these regulations are now set not in the single market, whatever we want to call it these days. they are international regulations based on -- i don't need to spell out to you, the in which -- think about the imf or the -- the paradox, i think, actually is that britain would gain influence in some of these. let me explain why. because if you look at the wto
or the imf or the g-7, g-20, bodies that try to set standards for financial services of one kind, the eu as an institution is now trying to interpose itself and speak for all 28 in those debates. >> actually, what you would find is the uk would regain strength in those conversations. >> this is a fantastically, fantastically complex area with
huge amounts of overlap and underlap. it's the underlap where you have financial crisis going on. involved with the chairman and financial service actually in 2012. these have been led by us. europe is catching up and europe is looking to us. you cannot deny the biggest economy in the world, the biggest single economy would have a less influential part to play in these international agreements than britain would with a relatively -- with important financial services center. it's not the same size banking market. >> i think paradoxically what he might get is an intense indication of european influence and global conversations about these matters because you would have not just the eu speaking in its own voice but you would have the uk with all its influence in financial affairs around the table as well. a lot of coordination between --
one of the difficulties is that we as a country now are more and more often outvoted in the european counselor of ministers. it's hard sometimes to maintain that we are effectively influences proceedings in a way we would like. and i think there are other ways to get financial influences. >> i don't disagree with you. there are many things wrong with the european union but would you not agree it's better, but if he's better, if we're going to be inside, negotiating, trying to change that -- >> look, we're -- look, i totally -- yes, that was a position i was in for a long time.
that was a position many of us have been in before. but i think -- several things have curdled my belief that that was possible. first of all, lisbon and the annihilation over human rights, you know, we thought -- we were told this had way more significance than the b-note, remember? the chart of fundamental rights is now in the ecj and it's being used by the court of justice. it was perfectly obvious -- i think a lot of people were encouraged by the speech of 2013, the talk of wholesale repatriation of powers, so on. i don't think anybody in their right mind can say that has
happened. when you look at -- this is something which everybody -- there were two sides to this argument. maybe he's going to deny that, but in the end, when you look at the massive concentration of power that is now taking place in the eu. you couple it with the loss of control over borders and immigration, which i think has been so damaging to public -- to public confidence and policies, i think the argument only goes one way. and i'm interested. you haven't asked me as mayor of london about the impact on our city of immigration. >> you'll get more. you'll get more questions. rachel. >> thank you, mr. chairman. mr. chancellor, on the 19 of march you said i think what we should do is strike a new trade deal on the lines of what canada achieved. when did canada start negotiating the u.k. bill and what's so good about this?
>> as i said several times, i think what we want is a british deal. >> you said on the lines of what canada has achieved. >> we wouldn't be in the same position as canada because we've been in the eu and we've been able to do a deal rapidly. the attractions of the canadian deal is one of them. it involves a large wholesale removal of tariffs. >> my question is when the negotiations started. they started in 2009. and at the moment they're not yet in force so the eu/canada agreement took seven years to negotiate and still not in force. so it takes quite a long time. i assume the negotiators are pretty good and it's taken them
seven years to negotiate a deal and it's still not in force. the former canadian trade minister, who had some part in these negotiations, wrote a piece in the "times" today, and he said, it is factious to think there's a real comparison between the canada's relationship and with the e.u. and the u.k. block. we want would a much deeper relationship than the canadian. >> yeah, i think that's right. you know, i -- the point about the canadian deal, obviously, you have two very different systems, two very different trading relationships. the eu deal with canada took a while to negotiate. i don't see why on earth that should be the case with the uk, which has been a member of the eu for 44 years. and i point you to the u.s./australia deal, which was completed in less than two years.
>> the difference, mr. johnson, with respect between the u.s./australia deal and a deal with the eu, and this is what "the times" says today, any ambitious deal has to be ratified in the case of the eu in 27 legislators. that's not the same with a deal between the u.s. and australia. that is why it takes time. goes on to say, years of uncertainty, and will likely drop in investment. >> i haven't seen any -- >> i haven't finished. in your response to mr. garnier, you said there are, of course, arguments on both sides. i think these are pretty compelling arguments for -- >> no, don't think those are good arguments at all. >> you don't? >> no. there are no good economic arguments. >> so, the governor of the bank
of england is not making good economic arguments for staying in the european union. the chancellor is not making good economic arguments to stay in the european union. they're all making political arguments. is that what you're saying, mr. johnson? >> yes, i am. and i think quite seriously the economic impact would be positive. in fact, my economic adviser said it would be overwhelmingly positive. it was the right thing to do. and i have to say i agree with him. i think it would unshackle us from a great deal of excessive regulation and it would be a huge boost for british democracy. we would take back control of very considerable sums of money. >> do you think that part of the success of the uk economy is
being an outward looking trading -- >> yes, i do. >> in that case, do you not think having free trade with our nearest neighbors is an important part of our success as an economy? >> i do. i see absolutely no reason why that should not be perpetuated. >> you may see no reason for it not being perpetuated but it needs the agreement of 27 legislators which canada has found is not always that easy to achieve. what evidence do you have to suggest, mr. johnson, that we would be able to achieve an agreement in two years? >> i'd cite the prime minister, david cameron, those we could do free trade -- >> 20 trade agreements between the eu and another country -- >> there is absolutely -- >> -- that's going to take less
than two years, mr. johnson? >> i'm sorry? >> can you point to another trade agreement between the eu and another country that's taken less than two years to negotiate? >> don't forget, people want to understand the context. >> can you point to -- >> the uk will remain within -- >> mr. johnson -- >> the eu remains within the existing treaty for two years anyway, and i believe it would abundance time to negotiate a free trade. if you can point to me any european country that wishes to -- any eu country that wishes not to do a free trade with us, i'll be happy to look at it. i've asked you a question -- >> well, i'm telling you -- >> sorry, mr. johnson, with respect -- >> thank you, mr. chairman. do you know of any trade deal between the eu and any other country that has taken less than two years? yes or no. >> given we are -- no, i don't. that is one of the -- >> i'll move on. >> that is one of the defects of the eu.
you're making my point, if i may say so because one of the catastrophic weaknesses of the system is that the eu is unable to strike these deals. they cannot do a free trade deal with china. iceland has done a free trade deal with china. switzerland has done a free trade deal with china. >> i believe my point it's very difficult to secure these type of trade arrangements, and given that it takes such a long time to make a deal and we are dependent on the deal -- >> i think this is absolute scare-mongering and total nonsense. there is already -- you know perfectly well there is already a free trade area in the european land mass stretching from portugal to turkey to the borders of russia. it's absolutely nonsensical to
try to pretend that post brexit britain is going to be a british -- get back to my point. it is not britain country that trades. it's british people, companies, funds. they will continue to trade, more than ever before, with countries, with people, with partners on the continent of europe. and i think it is -- don't forget, 70% of our non-eu trade is done without any trade deals whatever. >> we may well trade, however, whether we have a trade agreement and whether we have tariffs and other nontariff barriers -- >> why would they -- >> order, order. you have to stop interpreting. >> sorry. forgive me. >> if i say so, when you answer questions, it would help if you try to address the question that was asked, even if it may not -- >> i think i demolished all the questions that was asked. >> not the one you would like to hear or have asked.
we make up our minds what we're going to ask here. >> forgive me. >> thank you very much, mr. chairman. i pick on canada because it's the country you cited as an example, what you thought we should do is strike a deal along the lines of canada. let's look a little bit more at the canadian deal. do you think the canadian deal is good for the service sector in canada, in accessing eu markets? >> this question had been asked before. i think the canadian deal has some aspects that i think are attractive such as the removal ever 97 or possibly 98% of tariffs. that seems to be an attraction. it is clearly not ideal for the uk. what we want as george osborne has rightly said, we want a british deal and that's what we'll get. >> let's look at the nontariff
barriers. if you look at agriculture, for example, some tariffs have been eliminated in most areas, not all. more than 90% of beef and sheep exports go to europe. tariff on those exports for canada still exist. tariffs of more than 12% if you go closer. so there's still substantial tariff barriers in areas. so, do you think the canadian deal would be good for farmers in the uk if we were to secure that deal? >> as i say, there are attractions to the canadian deal. there are obviously things we would do much, much better. i think the fact that the uk has been part of the eu for 44 years bodes very well for doing a substantial free trade deal involving a comprehensive deal with farm services, goods and
agricultural products as our friends have absolutely no interest not to do such a deal. >> you make that assertion, mr. johnson, but the german finance minister, who appeared the same day you did, said you're either in the single market or not in the single market, and if you're not in it, then you have trade arrangements. we might have those arrangements, as you rightly say, currently, but there's no guarantee, whatsoever, we would have the same sort of access in the other countries you have mentioned this morning, switzerland and norway both have to contribute to the eu budget and accept free movement. you want the best of both worlds, which we all would agree would be fantastic. >> that's the -- >> in reality, that's -- >> that's the -- come on. >> the reality is not always the
same. i like to deal in realities, mr. johnson. if we move on now to the other aspects of the canada deal, inside the eu, financial firms based in the u.k. can sell services contradictory to e.u. countries through passports. does canada have those arrangements in its deal with the eu? >> on passports i see absolutely no reason why they are -- our friends, our partners should not continue -- when you consider their banks benefit very considerably from their presence in london, they would want to have reciprocal arrangements. i think deutsche bank has about 8,000 employees in london. >> tell everybody in the room, it's 11:00 a.m., the bell will sound and we will observe one minute silence, as will the rest of the house of commons, in
respect for the -- with respect to the events in brussels. please, carry on, but we may need to interrupt you. >> yes, thank you, mr. chairman. mr. johnson, you assert we get these arrangements, but presumably canada wanted these arrangements and wanted further barriers to be broken down. that was not to be achieved. i don't think there's any evidence that we will get everything we want through a negotiation. other areas -- >> defeatist, if i may say so. >> you're not pointing to any evidence. i'm pointing to the evidence that exists based on the trade deal you cited as this type of trade deal that you wanted. when we're making such important decisions, and when our constituents have to make such important decisions, i think
they need to do that based on the facts. if you look again at the airline industry, the relationship with the -- between canada and the eu, again, does not afford the same sort of access that a single market does. so i believe there are risks for farmers, from the canada deal. there are risks to financial services, to airlines, and risks to most of the manufacturers as well. i'm afraid, mr. johnson, you haven't provided any evidence that we could secure -- >> i merely point out to you that unlike canada, we've been a member of the european union for 44 years. >> and because of our membership of the eu, we have access to the single market and -- >> and that -- >> and the evolution of terrorists and other trade barriers. you are, mr. johnson, making my point. it's because we are members of the eu that we have a better deal than canada. >> my point is it's thanks to
the close relationships, close understanding there is between our countries and our systems of trade, i think it would be absolutely no difficulty at all, given the substantial balances that they have in their favor with us. i'm speaking particularly about france, spain, germany. i think there is absolutely no problem getting -- >> we are at 11:00 a.m. [ bell ringing ]
1700 who are able to negotiate trade deals. the pity of those that do trade deals for us, 3.6% of commission officials come from this country and i'd like to know how you think -- answer this rhetorically, how do people think we can expect that european commission to do deals with other countries around the world that will reflect britain's needs? >> well, mr. johnson, you cited the canadian deal. it took seven years to negotiate. it will take seven years to fully implement. i don't want to take until 2030 to get access to markets we can access today. last of all, let me -- >> it's a free trade. >> let me ask my question. john conley who gave evidence to this committee on the 8th of
march, who are one of those 27 that can do negotiations, our ambassador to the uk representative in brussels and he was for many years the sherpa on g-20 deals, he said different countries have very different views and i would personally expect regardless of what the european wanted, on the european union side it would take them some time to work out what they wanted to do. he is one of those 1700 people who you say would be able to do these negotiations. i have every confidence he would be able to do the negotiations. as he says, it would take some time. >> i think you're being too pessimistic about british business and our ability to do this deal. what the prime minister has said, what lord kerr has said, the ambassador to the e.u.,
there is absolutely no doubt we could do a free trade deal and do it, am my view, in very short order. it's overwhelming in the interest, not just of the uk but of our partners to do such a deal. >> and wolfgang says that that -- you're either in the single market or you had a trade agreement. >> yes, that's what we want. >> a trade agreement that would give us all the benefits you believe, mr. johnson. >> absolutely. that is the way forward. i must remind you, it is -- yes, because it is -- >> yes? >> i say that because if you look at what wolfgang said, i remember that and he spoke of the disaster that would happen on the european continent, disaster for the european economy if the uk left in my view, the disaster is being
caused by the euro and the catastrophic failure of that policy. driven by germany. unemployment rates in greece -- >> let's say -- >> i'm going to say, i'm not taking lessons about wolfgang about economic disaster in europe. look at what has happened. look at what has happened on that continent. you know, if you -- if you order -- >> order, order. >> look at what happened between the working people -- >> order. boris, when i ask you to quiet down, i would be grateful if you did. that may or may not be a very interesting point, but it's certainly not closely related to the question you were asked. i would like to ask you a question that is related to what you were asked. i should tell you i don't know. is there a free trade agreement
bilateral free trade agreement between two regional bodies or one country and a regional body that gives full access to financial services? >> i can't give you the answer to that. i don't know. >> i don't think there is. but if there is, come back and let us know. >> if you -- if you -- if by that question you're implying -- >> these things are very difficult to know, boris. >> if you're implying that the rest of the european union were to be so foolish as to discriminate, i think that would be wholly wrong. the precedent is amply there in the case of the euro. >> yes. >> we were told money and power and banks would migrate away from london. it did not happen. they were wrong then and wrong now. those who said the single
currency -- >> the 85% in those polls, the 70-odd percent in another poll. >> yes. >> you made one other remark which we need to clarify. you said the governor of the bank of england was making a political argument. do you think the government was going beyond -- >> i have a high regard for the governor of the bank of england. i wouldn't want to infer -- you know -- i'm sure you asked him something along those lines. i think he's expressing his views as the governor of the bank of england. i happen to think -- >> but was he right to do so or wrong to do so, i'm asking you? >> i think he's perfectly right to express his views.
i don't agree with them. >> thank you. >> he has a right to make an economic argument or political argument? >> he has a right to express his views. >> so the governor should be able to make a political argument about the european referendum, do you think? >> i think what the governor of the bank was saying is that there were short term -- >> we heard what you had to say. we don't need it translated. but i think it's wholly inconsistent for you to say that there isn't an economic argument for staying in the european union but an economic argument the governor made. i'm not sure i share your confidence but that's about as consistent as some other points we've made this morning. i want to pick up on rachel's points about the post referendum. you seem to think, unlike our former man in brussels who's been at the heart of european negotiations for years, that we'll be able to negotiate a
favorable deal pretty much on the same terms we've had now because we've had that relationship with the european union. >> that's right. on what basis? what evidence? surely we would face some penalties. >> why? >> because you made the argument yourself in 2015 in the newspaper in germany, and i'm wondering if you make a euro argument to pro-europeans, euro skeptical argument, but you said yourself in august 2015, we would face some penalties. what penlites have in mind? >> i'm sure that there would be some -- i frankly have no idea what penalties they might be so foolish as to try to impose, but there would be -- let's face it, there would be some short term feeling of hurt.
we would need to point out that it was overwhelmingly in the interest, not just of the uk but of the whole of the european union that we should stop a system that is, in my view, out of control, is anti-democratic and is weakening the trust of people in politics. and if you look at what's happening across the eu, you've got the rise of the far right, you've got anti-german demonstrations taking place in greece -- >> let's keep -- >> and i think that the eu -- the experiment has been damaging. >> you've repeatedly this morning talked about it is euro or risk of exposure to the euro even if we were parts of the single market. we should be, whether we remain or leave. >> can i -- can i --
>> i want to move on, if i may to domestic -- to the domestic implications. i see this picture of a prime minister in the vote, could be a different prime minister, they won't be talking about children who choke on balloons and we can choke on tea bags. they'll talk about the practical realities of leaving the european union. earlier you said there's no reason for uncertainty. do you not agree if we were to leave the european union, there would be an economic shock? >> no. as i said -- >> you don't think there would be an economic -- >> the best comparator is with the y2k bug. >> i've heard that bug. in fact, your own economic adviser has said leaving the eu would be an economic shock.
you don't agree with the governor of the bank of england but you can't explain why. now you don't agree with your own economic adviser. could you -- please point to any evidence beyond arguments and beyond a view -- >> yes, beyond argument. you don't want argument. >> and the economic shock of the -- >> i give you the most obvious. first of all, jerry lyons has been absolutely clear the eu would benefit -- the uk would benefit from brexit and i think he's right. second of all, what is the evidence that would not be an economic shock, i simply point to you, i revert to all the arguments made at the time of the euro decision. there were many people who were saying then that it would be --
>> i think i -- >> i'm -- i'm going to -- i'm going -- >> pass that. i think -- >> i think on the contemporary -- >> order, order. we heard that argument six or seven times in response. it's a very interesting point. one people can weigh outside this room, but we have heard it before. you've now alluded to it again in response to that question. if you have some new point -- >> can i make a further point? >> please make a new point. >> even the cbi, which got it so wrong about the euro recently said that -- they had a study that came out a couple of days ago where they predicted what would happen upon a brexit. which i thought was negative. even in the most negative scenarios, there were still more jobs by 2030. i think that would happen is the british economy, the british economy would be galvanized and
we would take back control over our borders and we would take back control over 10.8 billion pounds net we sent to brussels. it's high time we did so. >> you can't even tell us what the brexit scenario would look like. the events this week shows that economic forecast -- so let's not -- >> why are you predicting -- >> let's not -- your economic advisers predicted the economic shock. that's an initiative we can take to city hall. >> i think that's -- >> let me just take, instead of -- let me just take your own view. when you were questioned by andrew marr he raised this metaphor to describe what would happen in the event of brexit.
and he said there would be a period, i can draw a diagram, if that would be helpful -- >> i get -- >> and you said it might. >> our risks are relatively the same as the y2k millennium bug. i think we're talking ourselves into needless negativity. >> i can't -- >> i really think -- you can say if we -- >> hold on. >> hang on a minute. i'm shutting down this y2k bug stuff up. keep falling back on this argument. the only -- the only relevance of the y2k bug here is that there was no evidence for the y2k bug and there isn't much evidence for the arguments you're making. >> there isn't any evidence for the arguments you're making. >> well, i cited your economic adviser. i cited the german newspaper -- >> did you -- >> let's go to an independent
report released by the cbi. i know you don't have much time for them. it was conducted by pwc. a vote to leave the eu would cost the british economy 100 billion pounds and 950,000 jobs. how many job losses would it take to change your mind again that britain would you be part of the european union? >> it predicts there will be 3 million more jobs. >> by 2030. so people are worried about paying bills the next ten years, what do you -- >> i think the country as a whole would be 10 billion pounds better off from day one net. >> secondly, we would take back control of our frontiers and we would relieve the colossal pressure on wages, the downward pressure on wages -- >> no, no.
it's very, very important. it's very -- you're asking about whether people would be better off. >> no, i think -- >> i think you -- >> i'm trying to -- >> let's talk about employment. let's talk about jobs. >> i'm trying to bring you back to the next two or three years because most families can't plan their finances over a -- >> let's talk about jobs and -- >> as they plan -- >> let's talk about family finances. >> how many jobs -- >> i'm not going to instruct you to stop interrupting the questioner again. i want you -- i want -- >> this is -- >> order. >> if we got direct answers -- >> order. boris, let him ask you the question and then try to address your answer to the question, not to what happens what you might have wanted the question to be. >> in the short term, there would be an economic shock. there would naturally -- of course there is, because there is natural uncertainty. even if the government has a
clear position about its platform for negotiation, which i'm not aware it does, we would have to get the agreement of every other union state. that breeds certainty and risk. i put a bit more stock in independent analyses by economists that worry about job losses in the short term. i wonder what work you have done as mayor of london what would happen in terms of jobs in london in the next two to three years. how many job losses of londoners would it take, people on the trading floor or people who clean the trading floor, how many jobs would be lost in the next two to three years? how many job losses would it take four -- >> thank you, i believe the london economy along with the rest of the uk economy would benefit from the removal of a huge amount of regulation and red tape.
it would also, i think, benefit many, many londoners on low incomes who currently have very poor access to services such as the nhs or education, whatever it happens to be, simply because of the pressure on those services from uncontrolled immigration. let's be very honest about this. i'm pro-immigration. i think it's a good thing but it's absolutely wrong of politicians to be unable to control those mroes. we've seen -- i think the last year for which we have figures, we had 330,000 net immigration into this country. that is unquestionably exercised. it's something i believe you should care about very strongly. unquestionably exercised downward pressure on the wages of all our constituents. it has gravely exacerbated the -- it has put huge pressure on public services of all kinds. it is not reasonable for us in london or anywhere else in this country to be asked to cope with that kind of numbers without
some sort of measure of control. people feel that very strongly. i think it was lord rose who came to this committee and made the point that a brexit would actually lead to an increase in wages for the low pay. i think that's something you might bear in mind when you talk about jobs and the impact of jobs of a brexit. >> would you in the event of a brexit, want london to be -- >> i've given that answer. >> then you must surely -- but your views tend to change. so i'm just wondering whether further down the track, we've negotiated britain taking part, you accept we may still be subject to european regulations. they may still insist on freedom of movement. even if they didn't, a country like ours, a city like london,
is still relying on immigration to drive its country. >> controlled immigration. it's totally wrong. politicians should continually tell their electorates they should control numbers. there's no reason at all why this country shouldn't be able to attract talented people but without having an open door policy. the whole argument has changed very much over the last 20 years or so because you were able to move to another eu country if you were in search -- if you had a job to go to. when i went to work on the continent, i had to go and report to the commune, i had to show i had a job and all the rest of that. that's been gone from the indoctrine of european citizenship. that is leading to colossal pressures across the eu.
when have a free travel area, gigantic free travel area, and you have huge difficulties controlling immigration coming into the eu zone, then you are make life really, really difficult for government at all levels. >> i just want to finish on the issue of trust. firstly, are you not concerned that if we were to leave the european union but still be subjected to eu regulations -- let me just make this point. still subjected to eu regulations and still to drive the economy, are you not concerned that people who are voting to leave the european union on the basis of sovereignty and immigration might feel defeated and the second thing i'm interested in is what criticisms about the facts you put across or lack of facts and answers?
i don't think many people would doubt you put across an enthusiastic and rather passionate case for leaving the european union. do you not understand why many of us find it hard to believe that passion and believe your authenticity when over the course of your political career you've been making very different arguments? >> rubbish. i haven't. if there is no -- to answer your second point first, i don't think -- you would be hard pushed to find a single british politician or journalist who has written more about the failures of democracy in the eu over the last 30 years than me. i really don't think -- with the possible exception of daniel hammond, i don't think there's a single one. i resent it very much. i've given you my explanation of what i think has gone wrong and is going wrong with the european union. this thing is out of control.
it's totally out of control. what we knee to do is take back control. particularly over the funds and over our borders. somebody sent me a cutting from 25 years ago, which predicted, thursday, january 17, 1991, which predicted the ec was facing 800,000 immigrants a year. and as i reported, 1992 draws near, the issues become increasingly, british anxieties that abolition of frontier could see migrant workers wandering unchecked from czechoslovakia to london. that was 25 years ago when andrew was writing about how you need a single currency. i was accurately predicting what would happen in a border-free europe. as for your first point about what would happen post-brexit
and what we do with our front, there is no reason at all why you should not be able to have free trade, as exists, as i say, from iceland to the borders with russia without having free movement in the way we currently have it. it didn't actually exist before mastrit anyway. it is not the needs of the persians. there's no reason why we should have it. when you spoke in the house of commons in 2003, which is a bit more recent, i have a strong impression from that reading of that speech that you were strongly supportive of immigration that came with it. do i take it you've changed your view? >> i was supportive of
enlargement because it was then the view of the government that -- and i thought rightly, the british view, if we widened the eu it would somehow become a more tenuous relationship. what's happened instead is the widening of the eu has seen an intensification of the dominance of europe. the whole federal structure has accentuated german preponderance within europe. as for my -- >> with respect to the enlargement. >> i would not have -- for instance, i think it was the blair government that decided prematurely to allow the eu accession countries to have free movement.
and i don't think -- to get rid of the derogation, as i recall. >> you said it was rubbish that you changed your view earlier. i'm just looking as what you said in 2003, which is not that long ago. you said it is hard to think of a measure. this is the measure for the measure of the introduction of ten countries into the eu, including the east european member state. i think of something the government could have brought to the house i could have supported with more pleasure. >> of course. >> you also said recently, for the light of me i cannot see the logic of limiting immigration on the grounds it increases house prices. >> i think there are of plenty of reasons to. there are plenty of pressures that the immigration puts on all kinds of services. the point i was making there is the impact of foreign buyers on the london market.
and i think that has been grossly exaggerated. what is certainly the case, if you look at welfare, the nhs, if you look at wages, there's been huge pressures caused by immigration. i think what nobody wanted to see was -- >> the question that i'm asking you, though, is -- i'm sorry to interrupt because we hoped to finish. you did say it was rubbish that you changed your view. i'm trying to clarify what you feel about immigration constitutes clarification -- >> i'm in favor of immigration but i'm in favor of controlled immigration. >> that's what you meant when you said you support unreservedly the expansion of the eu. >> yes, because -- >> even though there were no proposals for control on the table at the time. >> no. it was the blair government, it was the blair government, as i recall, that decided to ditch the derogations and allow unfettered immigration. and that, i think, was a
mistake. >> you were assuming at the time you said that at some time a derregation would appear. >> no, other countries decided, to protect themselves against such flows and continued to have the derogation. we chose not to. >> helen has one point she wants to come back to and then i'll bring in john madden. have i two further colleagues that want to get in. we will run over, if necessary. >> thank you very much. you said that the cbo document claimed after brexit 3 million jobs would be created. that's not what it says. it says in the short term our results show employment levels fall, over the longer term total uk employment could be around 350 to 600,000 in our exit two scenario relative to remaining in the eu.
that's what they say. they do not say that it will increase by 3 million, mr. johnson. >> well, it does. you've got to combine tables 4.1 and tables 5.5. i leave that to your ingenuity. that is -- you will see even in the worst case scenario -- >> i don't show you're quite as on top of those tables, which you appear. you're reading from a scrap that was passed to you -- >> because you've been constantly conferring with some chaps to your left. >> i quite understand. do you not have them at your fingertips but we'll take a look at them and come back to them. >> john mann. >> mr. johnson, i have the pleasure of hearing your 2003 speech. that was the first time i'd hear you speak.
and you also said then, if we didn't have a european union, we would invent something like it overnight. i appreciate people do change their -- >> overnight -- overnight is -- >> it was the most pro european speech for my liking that i'd heard in parliament to that time. with the mood of mr. blair and his government at the time. it's interesting to see how people change their views. but i wanted to hone in on one of the things you said that i thought was inappropriate. this is under british law, a sitting of a parliament select committee. the governor of the bank of england has readmitted a contract. he's not allowed to make political comments. i would judge if he were to make political commentary, that would be a sackable offense. you've said he's made political commentary. and i give you the opportunity, mr. johnson -- >> i didn't say that. >> you -- mr. johnson, you said that the governor of the bank of england has made political
commentary in relation to what he said to this committee. i give you the opportunity just to correct the record, which exists, verbatim, to correct what you meant to say is the governor of the bank of england made appropriate commentary as he saw fit. would you like to correct the record? >> i would like to see what the record says, first of all. my memory is the governor of the bank of england had the ability to say whatever he wanted to say. >> no, i wrote it down. you said political comment, that's how you describe the governor of the bank of england. i'm giving you the opportunity to clarify the record. if you don't wish to, that stands. >> i would love to see the record before -- >> so, that -- well, that's -- >> i'm grateful to you for writing down words, political comment. doesn't seem to represent a very accurate shorthand note of what i said. >> well, there is a verbatim tape and record of the
proceedings. we'll see what you said. in my view, your comment is holy inappropriate to a committee like this. it is a sackable offense. we'll see where that takes us in the future. >> i think you will. >> now, you also referred to the canadian -- we could be like canada. you said in relation to the canadian agreement, i'm quoting you again, that it's an attraction with the wholesale removal of tyrants. you also suggest we might need a deeper relationship than canada has because of our 44 years. in that canadian agreement, what is the single big stumbling block that's led to prime minister harper not being able to sign it during his tenure?
>> i think one of the biggest difficulties is, obviously, that canada has a very different history -- >> no, no, there's only one big stumbling block. i'm sure you understand what's going on in canada. there's only one stumbling block to this agreement for prime minister harper. i'm asking you if you're aware what that stumbling block is? >> we must let boris answer this question. >> i'm sorry, the attractions of the canadian agreement from my point of view, is that it gives free trade in a huge numbers of areas. removes 98% of tariffs. as i said before, i don't consider it to be the perfect model for what we need to achieve. what we need is a british deal. >> the reason prime minister harper couldn't sign it and the reason it's taken seven years, still not enacted, is because the eu insisted in those
negotiations the charter for development of human rights be included. that's the reason prime minister harper refused to sign it. though, in fact, in it, there are significant factors relating to human rights. this small agreement, how long is it? >> well, it's -- >> it's the length -- >> it's you, if i say so, mr. mann, who seemed to attach such great significance to the -- >> but you wer-- >> i was merely isolating one attraction of it. and it is -- one thing i might point out is that he's absurd -- it's absurd for us currently to be -- >> my question is, how long is the agreement? here is an expert witness. i'm trying to hone your expertise. how long is the canadian agreement? >> have you read it? are you aware of the name of it? >> you who attach such great significance.
>> you're not aware of the name of the canadian agreement -- >> i'm not interested in the deal that has defects -- >> are you aware of the content? >> it gets rid of 98% of tariffs. that seems to -- >> are you aware of the content of the human rights? >> we mentioned that. you're making my point. because i think that it is absurd that the e.u. should be introducing such requirements into international -- into negotiations. absolutely mad. >> clause -- >> what is on earth -- >> we need boris' reply to the specific point that john made. >> yeah, i just -- i'm -- i have to say i think it's absurd that the obstacle to the e.u./canada trade deal should have been the charter of fundamental rights, i'm taking this from you, if that is indeed the case. i see no reason why the charter should be such an obstacle. it seems totally irrelevant to our trade concerns.
anybody who's studied the 55 articles of the charter of fundamental rights will know that some of them are very peculiar indeed. they go way beyond the normal understanding of human rights. why on earth the e.u. -- the commission feels it necessary to use this as the basis for trade negotiations is beyond me. and i don't -- totally inappropriate. >> doesn't the current trade negotiations ongoing with canada and -- >> totally wrong. mr. mann, it shows why we need the negotiation -- >> boris, boris -- john, have a go. >> what it shows is that what the negotiating stance of europeans is and why it took the canadians, why it took them seven years to negotiate.
clause two of the canadian agreement it says that canadian products can only be imported and sold in the e.u. if they fully respect the e.u. regulations without any exemption. so the e.u. in that current negotiations is requiring full acceptance of e.u. regulations to allow canadian products into the e.u. that's their negotiating -- >> i hesitate -- >> boris -- >> i hesitate to be remotely disrespectful to this committee, but of course if you want to sell into the domestic market, you have to make sure that your goods comply with those domestic requirements. that's the case for the u.s. exporting to the e.u. or switzerland exporting to the e.u. one of the interesting things in spite of not being a member of
the so-called single market, the united states has seen a much bigger increase in its exports per capita to the e.u. than we have. and the same is true also of switzerland. countries don't trade with countries, people trade with people, businesses trade with businesses. they will continue to do so to a huge extent. >> countries put on tariffs. >> that's -- >> you raised the animal -- directive of 2002. what's your access of the negotiations ongoing with china. >> of which negotiation? >> the axit negotiation. >> if you talk about the e.u./china -- >> no, the british negotiation. >> i'm sorry, i can't give you an informed commentary on that except to say i think it's very sad that we are currently unable
to do a free trade deal with china because that power, that competence has been given to the e.u. >> well, now china refuses to do any specific negotiations with the u.k. on it at the moment. and i'm meeting in two weeks time on the very issue. >> i'm sure -- >> in our area. now, the animal byproducts directive, which country initiated that? >> i'm sorry, i can't tell you. >> you came in 2001, same time as me. you can't recall what happened when we came in? that might lead to the british government wanting to -- >> i'm sorry. it's -- >> why did that directive get brought in at the behest of the british government? >> well, of course because we wanted -- as i recall, to restore trade in british beef, in british livestock, with the rest of the e.u.
and we were keen to persuade them to accept our beef. as i recall -- as i recall they didn't. and actually in spite of our membership, in spite of our membership at the e.u. they kept out our beef. did that. -- they did, illegally. in a highly discriminatory way. >> the directive came in in order to -- in order that -- >> did the french drop their ban? >> you cited that as an example of terrible regulation, but in fact that regulation that you did not vote or argue against in parliament was precisely to tackle tariff barriers -- >> i'm sorry, possibly you weren't here at the beginning of this conversation which was only a couple of hours ago. but what happened -- the chairman, mr. terry, said that
there was no evidence to suppose you couldn't recycle tea bags. i pointed out that this resulted from cardiff council manically overinterpreting an e.u. directive. i made no comment on the rights and wrongs of that directive which related as you rightly say to bse. what i commented on -- what i commented on was the ludicrous goal plating of that directive and the behavior of cardiff council and i think the record will reflect that, mr. mann. >> the beauty of these hearings there's a record of them. >> i know. >> if any witness is inconsistent, then that can be seen by -- >> i think you will find i have been consistent. go back and -- >> all the statutory instruments you said there are 2,500 a year. you have been in parliament for about six years, i think. came in the same day as me.
>> well, i have been -- >> how many have you voted against? >> i'd be out of parliament for a while. >> you have been in six years, starting the same period as i have been. that would be around 15,000 you're claiming in the period you have been in parliament. how many have you voted against? >> many of them as you know. >> well, how many? >> cannot be -- >> 14,000? >> cannot be voted against them all. because they go through -- i used to serve on something called european standing committee "b" and it was a completely pointless exercise. there was nothing this parliament can do to stop the vast majority of this stuff. it's absolutely true. it goes through -- it goes through on and on. >> just a second. let boris finish. >> there was nothing we could do -- and the europeans are asking if there's anything we can do practically do -- to stop the
stuff we were rubber stamping and we couldn't. >> could any member attempt to force a vote on any issue in here, so i'm asking you on how many occasions out of these 15,000 you have attempted by vote or by speaking to block them of the 15,000? >> well, certainly when i was on the european standing committee "b" i'd have to go back and look at what i said. but i certainly remember being appalled by some of the things we were being asked to rubber stamp. it was made clear to me that that was a position we were in. this stuff had to go through the house of commons and there was very little -- in fact, nothing we could do about it because of the supremacy of the european law under the 1972 european union -- >> so you have hardly forced any votes on any of them during your period of time in here?
>> because it would have made no difference what ever. as you know, i think it's absurd to pretend otherwise, this house has no ability to stop european legislation or indeed statutory instruments. >> an important and clear exchange, we have your point on that issue. which is well made, i think. many of us have some sympathy with the point that you're making, but i do want to pick up on one of the agriculture points that john mann made and bring in george kerevan at this point. >> thank you. >> this is turning into the european agriculture council. let's have an all nighter. fisheries council. >> part of the reason, boris, is you do occupy the odd minute or two on the sidelines of our conversations with the remarks of exactly that kind.
george kerevan? >> at your now famous speech, you said that the common agriculture policy was demented and adds about 400 pounds a year to every household in the country. can you clarify, are we to take from that that if britain votes to leave the e.u. the average household will be 400 pounds better off in some direct way? >> i think that there would be some reductions in the cost of food made possible by getting rid of some bureaucracy and some
provisions in these current -- >> just the number -- the number that's strategically used. i'm trying to get the number. >> let me give you -- mr. kerevan, i think it is very important for my side of the argument to stress that we believe in subsidizing agriculture and supporting agriculture. there would be -- i don't think it would be reasonable to expect british agriculture to survive without direct support. what we're advocating -- >> i appreciate that. i'm trying to clarify the number -- the number. you used a specific number which got a lot of publicity. and maybe right, maybe wrong. so are you saying it's not 400 if we leave -- what's -- >> i think the extra cost of food as a result of the c.a.p. is about 400 pounds per family. >> by whom? >> i'd be very happy to write to you with the provenance of that statistic, but that's certainly a statistic i've read for a long time. >> trying to find out --
>> before making it in a speech like that. >> well, mr. kerevan, i'd be happy to supply you and mr. terry with the origins of it. but if you think about it, for second you can see that if you support agriculture in all sorts of ways through subsidies and through tariffs that there will be an extra cost. the question for us is is the c.a.p. efficient? >> 400 is misleading? because it's not what people -- >> it's the c.a.p. efficient in the way that -- >> we're trying to clarify -- you have a number. you introduced the number. you don't know where it came from. i'm trying -- is it 400 pounds savings, or do you know? >> i didn't -- look, let's be very clear. there is a cost to the -- >> you used a specific number two weeks ago. you don't know where it came from. you're saying it wouldn't be 400, it could be less than that. >> you were speaking about a saving, i was speaking about a cost. >> you said a 400 pound cost at
the moment. you used the number. if we leave -- i'm asking do we save that 400 wherever it came from? >> my answer is we wouldn't save all this 400. >> how much? >> i can't give you that figure. but what we would certainly continue -- >> does the 4 hundred include -- >> certainly continue support for agriculture. >> right. >> and all farm earns would receive -- farmers would continue to receive the current levels of subsidy. we'd need -- >> that's fine. the current -- >> we need to make sure that was baked in very firmly. and that that stewardship payments, deficiency payments, payments for -- >> but the current level, do you mean by that the amount that as well as u.k. subsidy to farming and fishing? do you mean the net -- the money that comes from europe, money goes out and comes back in. about $3 billion pounds a year goes to rich farmers from the u.k., you would maintain that?
>> yes. but don't forget a massive saving in the form of -- i think from the -- i think the european agriculture guidance fund is something to which we are huge net contributors. we pay in much more than we get back. the -- we would save i think the net contribution on the feoga -- it's a considerable net payment we make into the european agricultural system. there's more funds available for support of other vital services in this country and indeed for -- >> we all understand. >> and from our point, i think everybody does understand. there are huge sums -- >> i appreciate your editorial
comment as a journalist, right. the 400 which you have used, it comes from the taxpayers alliance, its comes from -- it comes from data which is seven or eight years old, so it's quite whiskery and he does not include netting back the money that comes to british farmers which is $3 billion a year. even in his own grounds, that 400 is misleading, which it does -- it is misleading because it does not include the money coming back to the british farmers. >> yes, i think as i've tried laboriously to point out at the moment, if you look at the office of national statistics figure we contribute $20 billion, we get back through either the agriculture or the regional funds or whatever about -- and through the abatement, we get back about $10 billion pounds. >> i understand that. so the 400 figure is misleading then. let's conclude that.
>> so there's scope for a colossal savings for british taxpayers. >> i understand that. >> i'm glad you understand that. that's a vital point. >> it is a vital point. the vital point now that you have explained that farmers get money back is that the 400 pounds which you're using, which doesn't include a loan for that net back, that's as an exaggerated figure. no it's the extra cost as part of the c.a.p. and it reflects the -- >> you get money back. >> the additional bureaucracy of the c.a.p. system. with the export refund, all sorts of mechanisms that i think are exceedingly inefficient. and i think it would be possible to have strong domestic support for farmers to repatriate the c.a.p. in such a way to support british farmers in a way -- >> well, how would you change the support? >> well, i think you'd -- what you wouldn't do is -- in my
view, the e.u. is party to evil in the way it discriminates against agriculture products from sub saharan africa. for instance. i think that there are goods that would benefit families in this country that come from markets that are currently prevented from exporting to us by the external e.u. tariff. i think that's something that people should care about very much. i think that the whole system of intervention of price intervention, although they have moved away from that a great deal, there's still -- it's still crazy. >> i'm asking you what your system would be. >> well, my system would be one of basically of -- i mean, this
is something that obviously, you know, would be a matter for government and parliament to decide. >> so you -- >> my preference would be for deficiency payments that were baked in and supported agriculture in the way it needed to be supported and stewardship payments as well. i think many farmers need support for lacking after the land and not just for producing. >> but no less than -- >> and absolutely vital to -- thank you, mr. kerevan for this question, vital to get across that it would be at the level that they currently enjoy and that level is perpetuated. >> so actually, the 400 pounds -- >> no, because -- >> -- is wrong. >> the e.u. system involves all sorts of mechanisms including interventions for prices. >> the bulk of -- >> there's a business -- >> the bulk -- >> there's a business in london that the c.a.p., before it was
invented i think portugal didn't even -- >> not talking about portugal. >> and the result -- >> talking about british farmers. >> e.u. sugar regime has done fantastic damage to the interest of the e.u. -- to the u.k. sugar producers. tate and lyle is facing huge problems because of the e.u.'s approach. they would be totally liberated by brexit. >> okay. let's move on. >> and sugar cane producers in poor countries around the world would benefit. >> you made your point. okay. we have left the e.u. let's move on to that scenario. you have said on several points this morning that there's actually -- there's an existing free trade area across the whole of europe, from iceland -- but that's not true.
because agriculture not subject to free trade. if the u.k. left, we would then face the tariff barriers on the food products by being outside, we should mention. >> why? >> because the e.u. applies the very tariffs that you mentioned that you knew about. they applied to norway. so are you saying we would -- we would unlike -- we would have to negotiate free trade excess for agriculture products? >> i think given the huge exports of agricultural products to this country from the e.u., the rest of e.u. they would be insane not to do a deal with us involving free trade and agriculture products. >> that would require access to the rules. >> no. >> why? >> we have already discussed
free trade agreements that the e.u. has done with other third parties. i see no reason at all why there shouldn't be free trade. well, they might. but on the other hand. they might not want their wine or their -- or to face discrimination in this country. >> you would advocate countertariffs? >> i don't think that's a need for any such thing. tariffs or countertariffs. i think it's an increasingly primitive way to think of the world. britain is global. we should be trading globally. >> if you take the concrete example of norway, norwegian products face tariffs because norway is in the economic area, but not within the e.u. it does not have free trade on agriculture products, they are subject to the tariffs, and unless you can negotiate them away. i think it's reasonable to assume that part of negotiating those away if that was possible would be accepting the common
rules for the agriculture -- so you wouldn't get rid of that. so it's either out and face the tariff barriers or in and keep the -- >> well, i don't -- i think it's a non sequitur. i don't think that's true. i think that yes, we would want to keep free access. i think in the overwhelming interest of the e.u. to do so. however, there is no reason i think for us to be part of the c.a.p. where we have -- you send in a huge check to brussels. that gets dissipated on all sorts of support schemes around the e.u. and then you get a smaller support back for your agriculture. we have a system whereby we were able to support our agriculture and support it generously thanks to the massive saving we were making. >> so you would --
>> on some areas, you're more supportive and others will say that the big barons have done over the last 25 years. you might consider exactly how you wanted to develop your program. to be the benefit of all producers in this country. >> will you used the 400 pound sum again in your speech? >> i think it -- i'm grateful to you for bringing it up. i think it's a handy reference point for the effect on prices of the c.a.p. what i'm saying to you -- >> but you can't justify the number? >> you said that the taxpayer alliance has produced that number and that's their calculation. what i'm saying to you is that there is in my view, ample scope for saving on the weird architecture of the c.a.p. and also -- if you want to know how much -- the net contributions --
>> i'm asking for numbers. >> overall we -- i think from memory we contribute -- i think we contribute about $6.5 billion to the fioga budget. and get about $4 billion back but i have to check those numbers. that's a savings of 2.5. >> okay. >> we made some progress in the exchange. chris philip wants to come on. i'm sorry this is going on so long. >> no. we have some way to get to the record. i'm sure you're looking forward to -- >> the -- >> chris, fire away. >> some of you -- >> sorry, chris. >> carry on.
well, thank you for joining us this morning, boris. thank you for your patience which has been exceptional and goes above and beyond the call of any duty. so thank you. i want to start by talking about some of the future prospects for the european union if we stay in which have been held out to us as one might say carrots or as inducements. one of the provisions in the deal that was struck a few weeks ago on a regular basis competence would be reviewed with a review to returning some to the united kingdom. how likely do you think it is that were we to stay in there would be a return of competence? >> i'm grateful for that because i think it goes to the heart of the single market. i think it was rachel reeves who said, you know, we weren't in the euro, therefore, we didn't have to worry about the way things were going.
i have -- i don't take that view. one of the reasons that my attitude has changed perhaps mr. mann from that speech i made in 2003 which is before the lisbon summit and before the euro experiment got so out of hand, i think that the five presence report shows so clearly bent on more integration of social policy, of company law, of all sorts of areas of property rights. all sorts of things that have not hitherto been thought necessary for the functioning of the monetary unit. but i think inevitably they want to do it through the single market. and i think that will have an impact on us. i don't foresee any prospect at all of post -- in that context of a repatriation of powers tour country. that's not going to happen. you have seen what happened in the renegotiation. we got absolutely zilch.
i mean, you know, effectively. and i think that's the best we can hope for. >> do you draw any comfort from exemption from the union or is that sort of a platitude. >> look, i don't want to minimize that. it's something, but it's -- you know, there are very few cases before the european court of justice, very few times that the court of justice has actually rely on that provision to form its federalizing judgments. actually most times it is very, very federalizing anyway. very, very centralizing anyway. it doesn't need to have -- so i think it's you know, it's a nice symbol. but not of much practical assistance. >> there's a provision in the arrangements to look at removing regulations i think on the annual review and look at what regulations they can cancel.
i think i established in questioning the commissioner lord hill a few weeks ago, so far not a single regulation he is aware of has ever been repealed. always a one-way street. so in a similar vein do you have any expectation that if we did stay inside and if the british government sort of battled energetically we'll get some regulations taken away from inside? >> well, i'm no lord hill, but i think that the e.u. does technically repeal measures in so far as they're replaced by new ones. i think they will argue there's been some that have been repealed. but in the course of their sort of subsidiarity compare to get rid of stuff where they think that they have been ultra vires, nothing has happened. i don't see any prospect of that happening. you know, not a single part of
-- you know, where is the corpus of the european law? where is it being winnowed down as a result of british intervention? i can't see it. we probably have got something that's not suitable for us. it's a political union and the time has come i think for us to say the emperor has no clothes. >> you can stand to one side from the political projects. the -- >> i mean, i think that it is so fundamentally dishonest of us to keep pretending that we are able to be in it just for free trade and for nothing else. this is an avowedly political project. they want a single plurality. that's a huge increase in the e.u. law and i think it's time to make a judgment and to say that only -- the only way forward is for us to make -- to
value our democracy. you know, we fought for this. >> okay. so moving on to immigration which we briefly touched on in earlier exchanges. currently net immigration is about 330,000 in the most recent figures of very roughly speaking, half is in the e.u. if we were to leave the e.u. at what level do you think we'll get the immigration down to? >> well, obviously, you'd be able to control it much more easily because you wouldn't be constantly -- i mean, you wouldn't have to admit people, because there are now some places in the e.u. that you can get some travel documents that is not wholly above board and people are coming here, you know, without any clear job already existing.
many of them do wonderful things for this country. but if you have uncontrolled immigration of the kind we have had in the last 10 or 15 years or so, it will have very serious impacts. and we need to work out as a country what we really -- what is the ultimate size of the u.k. population? how far are we going to go with this thing? it will be 92 million by 2050. that's an awful lot of people. i mean, we need to think of the impacts of that most of this is driven by immigration. how are we going to cope? >> could you -- could you venture a number that people might be able to sort of consider, the net immigration figure we might be able to can you venture a number the net immigration figure we might be able to achieve were we to draw? >> i think one of the difficulties with this is government's endlessly come out with figures that they think they're going to be able to achieve, and then they disappoint the electorate. i think it would be unwise to come out with a figure. what i think we could do -- [ inaudible ]
>> well, i don't know about that. [ everyone talking at once ] >> perhaps right to be asking which of my figures you don't particularly don't like. >> i think it's particularly clear we can say we aren't crystal clear. >> i've seen studies saying you could get it down to 50,000 a year. i'm -- >> in total? >> i'm not necessarily endorsing those. i think the difficulty will be there's a very large demand from business, an industry, but you should at least be able to control it. you should be able to decide what type of labor you want. do you want skilled labor of a certain kind? do you need certain unskilled jobs filled? how does it work? and at the moment, what you've seen is a huge, huge downward pressure on wages, and that's had a big impact on our country.
>> of the current inward immigration flow from the eu, what proportion would you characterize as helpful, that is so say high skilled, filling gaps, et cetera, versus unskillful, which is to say less skilled, more of a drag? >> i think the issue is more to do with control and what the scope is for uk politicians to take responsibility for what is happeni happening. and at the moment, it is way out of control, and people feel it, they know it, they can see hundreds of thousands of people coming here net every year, and i don't see how we can stand up to the electorate and tell them anymore that we can stop this thing when we patently can't. >> and the final point on immigration, before briefly moving on, what do you think would happen in a brexit scenario, to those, must be 3 or 4 million eu citizens currently living and working in the
country? >> yeah, i think there are about -- well, i may get this wrong, but i think there are about 2.3 million eu citizens in the uk, about 2.2 uk citizens in the rest of the eu, something like that. their rights would be unaffected, and i would hope that, you know, they would be -- you know, we already have, as everybody knows, huge numbers of french people living in london, huge numbers of people from all around the eu, indeed, huge numbers of americans, huge numbers of canadians, australians, russians. there are all communities speaking 300 languages on the streets of the city. i don't think that there would be any threat to that -- >> so, effectively, as part of our exert negotiation over the two-year period, we have effectively grandfathered residency rights to any eu citizen living here and would presumably, similarly exit a brit living in spain to receive grandfathered residency rights in spain that would last their lifetime. >> absolutely.
and those rights, to the best of my knowledge, are respected under the vienna treaty. >> would that not trigger a massive influx of people in that two-year period seeking to acquire those grandfathered rights? wouldn't we see a huge flock up to and including the day -- >> of brits coming back -- >> no, no, of people from europe. if we said any resident up to the 18th, gets lifetime grandfathered residency rights, but after that, they're subject to any rules -- >> during the period of the renegotiations? >>presumably, during the renegotiations, let's say it takes two years, we continue to be full members of the eu with all the normal laws applying. let's say from the 23rd of june, 2018, two years later onwards, we get to control our borders as we see fit, but any eu resident who's pitched up before then would get these grandfathered, lifetime residency rights. wouldn't that -- and vice versa for brits overseas -- wouldn't that create an incentive for
every person living in romania to jump on a plane and come over here before june 18 to get their lifetime rights? >> well, i'm not certain that that is the case, but if it were the case and if it seemed that that was a risk, i think you could probably take some steps to prevent it by unilaterally deciding to install border controls or -- sorry, install restrictions on free movement of labor, which is what we're talking about. and don't forget that this is -- to go back to -- this is not something that is as deeply engrained in the dna, in the religion of the eu, as everybody now pretends. this is something that really only arose post masterate. >> i have one final question. i will have taken far less time than anyone else so far. in terms of this debate we've had frequently about the nature of the future and trade
agreement post brexit, we've talked about canadian citizens in norway and you said you'd like to see a british deal that is distinct -- >> british deal. >> for the committee's benefit, the country's benefit, give a rough sketch of how that might look in terms of goods, services, financial services and any sort of obligations that may get imposed on us, like free movement or border contributions? >> i think both of those would be locked off, but it would be massively free movement and budgetary contributions, but it would be massively in the interests of our partners to do a deal based on free trade in goods and services. and i'm sure that's what we would achieve. it's very important to recognize that we would retain the ability to work with our european friends and partners in all the other areas of eu cooperation that matter greatly to this country and to europe. so, on the common foreign security policy or on home justice and criminal affairs, we would remain active partners, but it would all be done
intergovernmental level. there would be no need, as i say, for this supernational judicial approach. >> but if we had full single-market access, we'd have to sign up to the regulations, wouldn't we? >> no. no. the whole point is, 95% of uk businesses do not do trade with europe. but they have to conform with 100% of the regulations. those businesses that want to export to the eu, we would want to encourage that, we do a free trade deal, would, of course, like the americans or the canadians or the chinese or anybody else, exporting to the eu, would have to make sure that their vehicles or whatever it happened to be, conform to eu standards if they wanted to have access to that market. but there's many reason why we in this country should be subject any more to the single judicial system of the single market. that is what i'm saying. >> and just to play devil -- my
final question, chairman -- just to play devil's advocate on that point, if it were possible to do the deal you're ascribing, why hasn't norway done it, because they are subject to budgetary contributions, they are subject to free movement as a quid pro quo for the kind of access you're prescribing. >> this is the fifth biggest economy in the world and it's been in the eu for 44 years. they have with us a net balance of trade of about 80 billion pounds, i think. they have had all sorts of economic shops, which you've discussed extensively this morning. they're going to want rapidly to move over brexit as fast as possible, do a brilliant free trade deal, get on with it, allow their businesses to trade freely with a huge market, to profit from engagement with us. that's the future for them as well as for us. >> thank you very much. >> thank you. >> boris. i'd just like to end with one point and give you an opportunity for a last word. first of all, i'm very grateful that you've been able to give
evidence now for nearly three hours. normally, we take a break after two, if we have an extended session, as we do. >> perfect. absolutely perfect. >> -- governor of the bank. i just want to come back to a point, and it relates to almost everything you've been asked. i was trying to get at it at start, which is whether you accept that some of the claims you've been making, even in recent weeks in some cases, in speeches, can easily mislead people, and wouldn't it be better to qualify these remarks much more carefully? and i'll just take you through a few of them. just now you said that immigration has a huge downward impact on wages. as far as i'm aware, that's an extremely controversial issue and that evidence on it is very difficult to pin down, certainly, in -- >> well -- >> hang on. hang on a minute. i'm going to give you a chance to reply to all the points. you said that -- a moment when i scribbled down the headings --
you said that there would not be any economic shock, even in the short term, of brexit, even though your own economic adviser -- and i'm quoting -- only recently said leaving the eu would be an economic shock, and economic shocks depress economic activity. you said that, in a speech very recently in darford, that 400 pounds was being added to the cost of food of every household. but anybody listening to that might think, oh, what, if i leave the eu, then i might pick up 400 pounds of benefit. but as you yourself, once you were cross examined on it thoroughly, acknowledged that's not the case. >> but there would be a saving -- >> hold on. >> okay, go on. >> you maintained that figure would be lower. u