00:09:16.000We watch many of the same daytime soaps and comedy shows.
00:09:21.440And there's a natural sense, even body language and things like that work in much the same way.
00:09:26.960People understand each other in a different way.
00:09:28.980It's not the same when you're dealing with people, even from continental Europe, who are quite similar, much more similar to people from Britain than people from China or Japan or many other parts of the world are.
00:09:40.940But the people from the KANZUK countries, there's a very natural and automatic alignment.
00:09:45.840And one of the things about the European Union was, as it's moved towards its deeper political union, we in Britain have found that, although we were happy to go along with it quite a long way, in the end, there was just a little bit too much difference between us.
00:10:00.920Some of our constitutional traditions, the ways that they thought of things, the balance between the individual and the state, the attitudes to regulation and freedom, and the balance between diversity of approaches and the level playing field.
00:10:19.200It isn't that the Europeans were enormously distant from us.
00:10:22.180They're much more similar to us than the Japanese or some others.
00:10:25.840But they were different enough that we found that we couldn't quite go along with it.
00:10:29.600And if you think, from a British perspective, that that's why we're leaving the EU, that they were pretty happy to be together with medium-sized countries of similar values, and by working together, we can achieve more than we would individually, but found that, in the end, we just couldn't quite go along with it.
00:10:46.800The natural thing, from the British point of view, is to think, well, is there anyone else out there that might be more similar to us, that we might not face that particular barrier of finding that, in the end, we couldn't take that final step?
00:10:58.400And I think if you frame the question in that way, it answers itself.
00:11:02.140There's nobody in the world that's remotely as close to the UK as the New Zealanders, Australians, and Canadians.
00:11:09.260So that's the natural thing for us to try doing in that context.
00:11:12.800And I think that one important feature of that, relative to the European Union, is because we have natural affinities, it won't be necessary to impose the same kind of one-size-fits-all approach.
00:11:26.760Within the European Union, they were trying to force together countries that had quite different political traditions, cultural traditions, in many cases, had been at war with each other historically.
00:11:36.300So they had to overcome natural antipathies rather than natural alignments.
00:11:42.340And whereas in the case of the Kansak countries, you don't need to do any of that.
00:11:47.060And so I don't think we would need to have anything like the same forcing of regulatory convergence, legal convergence.
00:11:55.140These things will just happen quite naturally.
00:11:56.920That doesn't mean you wouldn't have any institutions at all.
00:11:59.140I mean, even the UN has some kind of institutions.
00:12:02.480But it does mean that the things that you had wouldn't be anything like the European Union's agenda at all.
00:12:08.460To bring it back to that very idea that seemed to drive Brexit for so many people, there was a lot that, certainly in Western press coverage, we were seeing that was framing it as about immigration wholly.
00:12:20.720Or about, you know, just this populist wave that we're seeing in other parts of the world really coming home to roost in the UK.
00:12:26.820And there were, I think, a number of people that were saying that the arguments for Brexit on the immigration, on the anti-elite, on the populism were in spite of the economics of it.
00:12:37.100Whereas there was this entire other stream that I don't think got as much play outside of the UK, and perhaps not even in the UK in some of the media coverage,
00:12:45.560which was that it was an economically positive move, or even in some cases economically neutral, but not as catastrophic as some of the Remain alarmists were saying.
00:12:55.020And we've now seen a little bit of a bump, I'd say, or I'd say a negative bump immediately in sort of that shock reaction to the Brexit vote, which seemed to rebound in terms of the markets.
00:13:07.580But when we look at the economics of this, what's the part of the story that you find is missing from the people that say a leave, a true Brexit is going to be economically disastrous?
00:13:18.140OK, so two things there. First of all, just a little point about the immigration.
00:13:23.360So the immigration issue, I think, should be understood as being the most retail or the most everyday life version of the loss of sovereignty.
00:13:33.280So when people said, oh, well, we've lost sovereignty, and that means that we don't have the ability to set some obscure piece of financial services regulation,
00:13:41.920or some engineering company can't do quite what they want to do, that all might seem, for most people, very distant to them.
00:13:48.700They don't quite know what that means or why they would care.
00:13:51.140But when the government says, well, we would like to keep immigration to the hundreds of, to the tens of thousands instead of the hundreds of thousands,
00:14:01.100and then every year it's the hundreds of thousands, and the government says, well, that's because the EU says we have to let lots of people in.
00:14:06.640And actually, for all the talk that much of the immigration, the net immigration from outside the EU is larger than the EU,
00:14:14.860it's actually the EU bit, which the government, which hasn't worked out as the government expected,
00:14:20.420that tells people what losing sovereignty means.
00:14:23.700What losing sovereignty means is you can't, our government can't do what it wants to do.
00:14:29.180And people see that. People visibly see that in their neighborhoods and in their communities.
00:14:32.700And that, of course, then translates, that then gives them a sense of what that might mean for the businesses and so on and other parts.
00:14:39.780So I see the immigration question as just a reflection, a retail version of the sovereignty question.
00:14:45.900And that has implications for all kinds of business regulation and lots of other things as well.
00:14:51.480Now, the thing that I would say about the economics of Brexit,
00:14:56.140I don't think you should assume that Brexit is going to make a large difference economically either way.
00:15:03.960So it isn't really about we leave the EU so as to make some enormous, at least in the short term, economic gain.
00:15:11.160I think that would be a mistake to imagine that's the point.
00:15:14.100The key thing about the economics of Brexit is that they're not sufficiently negative
00:15:18.500to deter us from grasping the very considerable self-determination opportunities,
00:15:24.180the increased stability of the union, less likelihood of Scotland leaving, for example,