Welcome to hardtalk, im stephen sackur. The British Governments Brexit Strategy can be summed up in new Prime Minister borisjohnsons three word phrase do or decline. The uk is leaving on october the sist the uk is leaving on october the 31st he says, deal or no deal. Right now a deal between london and brussels appears unlikely, so what about the alternative . Well, my guest is iain duncan smith, former conservative party leader and ardent brexiteer. Can Prime Minister johnson deliver a no deal exit and what will it mean for britains politics and economy . Iain duncan smith, welcome to hardtalk. If i may, let me begin by quoting to you the words of an eu official in brussels uttered just a couple of days ago. A no deal exit now appears to be the uk governments central scenario. Would you agree with that . In the sense that the government has made it clear they think the existing Withdrawal Agreement is dead, unless there is major surgery to it, and there is major surgery to it, and the government has set out the starting point, the end of the backstop, and then theyre not prepared to discuss it. I suspect theyre open to other discussions, but thats certainly not the discussion. What theyre saying is essentially yes, thats the position where in, we prepare for no deal no deal and find out whats going to happen with the European Union. Its up happen with the European Union. Its up to them really. You must be delighted . I always wanted a relationship with the European Union but they said the only way you can do this is to deliver on the referendum, which is to leave, so to that extent you have to decide your leaving come what may. So right now if we are blunt about it were in the process of some kind of weird blame game with Boris Johnson and key ministers saying theyll only talk to brussels, only negotiate, if brussels accepts the Withdrawal Agreement, and, of course, the backstop within it, are com pletely course, the backstop within it, are completely dead and they know brussels can ever accept that so essentially theyre trying to pile the blame on brussels for the com plete the blame on brussels for the complete failure of any negotiation. Actually the failure of the negotiation goes back a long way, it goes back to the way theresa may and her government approached the negotiation. I dont blame the eu by the way, im one of those who always says if i was them i would have behaved in almost pretty much the same way. They do a lot of trade deals, they know exactly how to operate in a trade deal and they treat you immediately as a third country. They did that and theyre a lwa ys country. They did that and theyre always very aggressive, thats what they do but my problem was the British Government seemed to think theyre talking to friends. Theyre not friends because we are leaving the eu so they behaved in a way that they thought. The British Government has been trying to find ways to satisfy the concerns of the eu, mannerfrom ways to satisfy the concerns of the eu, manner from heaven ways to satisfy the concerns of the eu, mannerfrom heaven for them, and the result is the deal we have now, beneficial to the eu dramatically, but not to the uk at all. But why wont borisjohnson but not to the uk at all. But why wont Boris Johnson be but not to the uk at all. But why wont borisjohnson be straight with the british people . Why does he still say. At least he said a few weeks ago, the chances of a no deal brexit to one against. That is patents nonsense. Depends what you mean by deal and a no deal and this is too simplistic. What we have is a Withdrawal Agreement, an all encompassing process that has payments we are meant to make, £39 billion to them, but it has a limitation period where we would stay in for maybe two or three years and accept the role of the court of justice and the backstop would mean Northern Ireland would have to remain pretty much in the Customs Union and mostly in the single market. Thats the Withdrawal Agreement, which we are saying is dead, but in the meantime, they have prepared for not having the Withdrawal Agreement and so are we, and so what does that entail . It means there are between 17 and 30 what they call many deals. These are deals all about trains landing, aviation safety, transport. They are not deals. They are, they all the elements about functionality that are deals so when borisjohnson talked about i million that are deals so when borisjohnson talked abouti million to one, the a nswer talked abouti million to one, the answer is theres lots of deals to be done, they arent the overarching deal but there elements of functionality and the idea were leaving with functionality is nonsense. You can leaving with functionality is nonsense. You can dress leaving with functionality is nonsense. You can dress it up anywhere you like and call it no deal brexit, whatever you like, but the fact is, the conservative party, for generations has prided itself on being the party of business, of sound money, of fiscal responsibility. If there is a no deal brexit, which you appear now to a cce pt no deal brexit, which you appear now to accept is highly likely, that reputation is going to be shredded. Well, lets place what comes in front of Everything Else, which is that we asked the british people and told them at the same time their decision is binding, whether or not they wanted to stay in all leave the eu and my view at the end of it all is democracy trumps Everything Else so we is democracy trumps Everything Else so we have to get on with it. Whether one likes it or not, the reality is they voted to leave so we have to leave. But with respect, you didnt tell them that would involve abandoning notions like sound money, abandoning notions like sound money, a strong pound, fiscal responsibility, being a party that actually listened to business, all of that has been jumped. You actually listened to business, all of that has beenjumped. You didnt actually tell them that. Because most of that is complete nonsense with respect. The reality for us is all of these things are transitory. Whats already happened since we left is the pound fell. My view is it was overvalued anyway, so thats meant our exports have boosted and finally enough whats really putting pressure on the eu at the moment in a monetary sense is there economy is teetering on the edge of recession and germany is in trouble, a three day working week in some of their manufacturing sectors, but theyve seen a defect 12 tariff on their goods because the pound fell by 12 . Their goods because the pound fell by i2 . That means if they have ta riffs by i2 . That means if they have tariffs after that, they have ta riffs tariffs after that, they have tariffs on top of the fall. Already their competitiveness in the uk has fallen. When we look at this carefully, what were saying is these things move around, floating currencies move in adjustment with each other and the key element that needs to be decided, and ive talked to most as nurses and the vast majority say theyre not worried about this any longer and those made the progress. I dont know what businesses you talk to. Banks, industry, farmers. Youve talked about the currency issue and we see a weaker pound but its not just about the weak currency, to quote mark carney, the governor of the bank of england, youre not a fan of his but he is the governor of the bank of england and he said in the event of no deal, sterling will fall and risk premiums on uk assets will rise and volatility is going to spike higher. If were talking about honesty, why dont you come clean with the British Public and say all of that is true and we are prepared to accept very, very high price for this brexit of hours. I dont believe the price is high. What i say to those who forecast the worst cases, they may come about but then again they may not come about. Lets ta ke m ost again they may not come about. Lets take most of their previous forecasts, almost every single previous forecast by the bank of england has been wrong. They forecasted after we voted for brexit that unemployment would rise by 500,000 but instead employment has gone up by nearly 1. 5 million. We said we would have an immediate stock market crash but it hasnt. All these various things have been thrown at us again and again and again. Many of their models are quite incorrect. I dont doubt there may be adjustments taking place straight after if we leave without any particular Withdrawal Agreement with the eu but i believe very quickly indeed that will all rectify and stabilise itself. Frankly you question the competence it seems of the governor of the bank of england but i cant imagine you question the competence of your own government and its officials stop it i do you do . Working on no brexit. Let me just finish this. Almost all the main forecasters have been fundamentally wrong through this process. These are the same bodies that fail to spot the crash in 2008. Everyone of them, the treasury, the bank of england, the imf, all of them didnt get it and theyve all forecast exactly the same with or without margins about terrible problems after the vote and they we re problems after the vote and they were wrong. I have a very simple view about this, they dont know the future any more than you or i. The £2 billion currently being spent on no deal preparation is being handled by officials you have no faith in. Im talking about forecasting. Those very officials have talked about, for example, the real dangers in the education department. Weve seen the leaked e mails, warehousing and stockpiling capacity they say will be limited and this department has limited levers to address the risks and we are heavily dependent on the actions of major suppliers and other departments to ensure continued provision of food for schools. This is the kind of planning thats happening. Are you saying these fear officials are theia mongering and incompetent . Be careful when you plan for these things you understand whats going to happen, not what you think will happen in a worst case and ill give you an example. The other day i went to a presentation by the contingency executive, all right, and they were to tell us all these things about where they have set their requirements and what they thought would go wrong. They told us they had planned for enormous hold ups at calais which would backlog traffic in dover although eight up, so all of these great plans for stack backs would happen because this would slow down fresh food coming across and cause major problems. I asked them a simple question, i said problems. I asked them a simple question, isaid in problems. I asked them a simple question, i said in all your Contingency Planning did you bother to talk to the calais Port Authority and the president of the port du nord . They and the president of the port du nord . They have and the president of the port du nord . They have said they would be no delays and they said they would let everything through that went through before and if they have to stop anything that goes back a0 kilometres to an inspection point, which they are now completing, that is based on what happens at rotterdam daily. The time limits and the delays at calais are now absolutely being refuted by the french authorities themselves. Absolutely being refuted by the french authorities themselvesm they are not being delayed. With respect, its not about what happens at calais, it is dover as well. The dover authority. Can i finish, the dover authority. Can i finish, the dover authority. Can i finish, the dover authority has also said, which they took no account of, but they will not stop anything coming into the uk that would have passed through previously and any inspections will be done well away from the port and theyll prioritise things like fresh food. With all that going on, you have to ask yourself a question about government. Are we in the business of feeding people and getting this right . So many different officials and experts predicting a much, much more painful no deal brexit than you appear ready to countenance, but lets park that for a moment and talk about the looming constitutional crisis the United Kingdom faces. There are many senior figures inside your party, including very recent former ministers, including Philip Hammond, the chancel chancel in the diet chancellor of the exchequer, and the former Prime Ministerjohn major who was sitting in that chair a short time ago, all adamant that they can and they will block any no deal brexit. How are you going to make sure they are wrong . Its up to them what they want to do. I dont see what the mechanisms are but parliament is parliament and theyll have to make their decisions. Right now the default position is that it is law we will leave on the 31st of october whatever. By the way, thats under european law, so unless we ask for an extension, we have to leave under european law, which we are governed by and till 11pm on the 31st of october. So parliament can do what it likes, but the key issue is even if parliament were to try to change the date, european law, unless we ask for an extension and are granted one, we leave at the end of the article 50 process. You seem to know borisjohnson will be the Prime Minister at that period, it ways possible the Prime Minister will be replaced and there may be a vote of confidence in Early September and he may lose it. He may lose it and in which case under the fixed Term Parliament act, as lord sumption said at the other day quite rightly, under the fixed Term Parliament act you have 1a days in which somebody else, a party, has to command a majority in the house, otherwise its accepted in the act that a government in place continues until another one is in place and formed. Youve missed out something, would borisjohnson formed. Youve missed out something, would Boris Johnson resign formed. Youve missed out something, would borisjohnson resign if he lost a vote of confidence . Lord sumption was clear about this, there is no requirement for the government to resign, because thats what you would have as Prime Minister. But there is precedent. Weve never had this before under the fixed Term Parliament act. 0k, under the fixed Term Parliament act, but it seems the tory party is in danger of ripping itself apart. Here are the words of sir malcolm rifkind, if the Prime Minister refused to accept the normal consequence of losing a confidence vote and sought to prevent both parliament and the electorate having a final say on no deal, they would create the gravest constitutional crisis since the actions of child the first led to the civil war charles i. The actions of child the first led to the civil war charles i. A lot of what dear old malcolm is doing is talking about what used to happen in the old days. Before the fixed Term Parliament act you had a vote of confidence and if you lost you had to resign and there was a general election. That was the precedent what has happened since the formulation of this fixed Term Parliament act is its very clear, its a very different process. What is meant to do is allow for a process for another government to be formed. If you have a vote of confidence and lose the vote of confidence, the government stays until another government can be formed. If another government cant be formed, then 1a days later the Prime Minister has to call an election within reasonable time. That is the process. It is not as it was. Malcolm rifkind im afraid is looking at what used to happen and not what happens now. Thats the constitutional position. I have to tell you lord sumption, no small beer on the idea of the constitution, said categorically to all three days ago that this is the process , all three days ago that this is the process, this is what will happen and the government does not have to resign until either the election or that other government is formed. Coming back to the notion of the conservative party tearing itself apart, whatever happens over the next few days and weeks, it seems to me that the party cannot continue to include people such as yourself on one side and those like dominic grieve, ken clarke, Philip Hammond on the other who feel that no brexit would be a complete trail of the interests of the british people. What is going to happen to your party . What is going to happen to all parties. The labour party is quite divided over this issue. Im simply making a point. Yours focus on the conservative party, the reality of politics in the public divided on this issue. Wejust have to recognise it. What we have to do is recognise the overarching priority is to deliver on the democratic vote of the british people. 17. A million people, the largest number ever to vote in a british election, voted to leave the European Union. That is our number one priority was to let me stop you there, interesting. Number one priority, isnt that exactly the same assay, we are no longer the conservative party, we are a brexit party. We have boys been the conservative party but we are also the party that. You are the brexit party and Dominic Cummings who is the most important adviser to artic to Boris Johnson, the most important adviser to artic to borisjohnson, his strategy is to ensure that