Now on bbc news, its hardtalk. Welcome to hardtalk. Im stephen sackur. In british politics, 2020 is the beginning of the johnson era, thanks to his thumping parliamentary majority, Prime MinisterBoris Johnson has the opportunity to reshape the country. That means an exit from the eu at the end of this month but then what . How will he recalibrate britains economy, its trading and diplomatic relationships . My guest is former conservative chancellor george osborne, whose own political career was killed off by brexit. Is borisjohnson the leader britain needs . George osborne, welcome to hardtalk. Good to be here. I want to begin with a pithy quote, words from you delivered apparently in the hours after the 2016 referendum when witnesses reliably informed us that you said and i will paraphrase because you used a rude word but you said that, dave is screwed, that is David Cameron, i am screwed and other countries are screwed. Your career and daves were effectively finished but do you now believe, in retrospect, that the country was and is screwed . Well, i think leaving the eu is a bad decision for britain but. The language was stronger than a bad decision for britain. I think brexit has an impact on our economy, makes people poorer than they would otherwise be in our country and diminishes britains influence in the world but we have now, as a country, had two chances to have a say on that, one in the referendum and second in the general election, which happened just last month, and so now we have to move on to make the best of it and i dont do so because i think, you know, brexit is a bonus to the country but i do so because we are a democracy, we have now settled this decision and we all have to come together and work out a way forward. Have to come together and also got to reflect on responsibilities and roles in what has happened over the last three years. Interestingly, last year you said this, look, we held a referendum that we should not have had, we lost the referendum and the consequences for the country are grave and the only thing that i can plea in my mitigation is that a huge number of people wanted that referendum. I made a case against it but i wasnt heard. My question to you is now do you now regret not shouting louder . I made a forceful case inside the government at the time, i was the chancellor of the exchequer, that we should not be having a new referendum. There were very few allies in the cabinet on the position and in the end, 600 members of parliament voted for that referendum, including the vast majority of the labour party. So, the political consensus at the time and, indeed, media consensus at the time cabinet that britain had to resolve the issue, have the vote and many calling for the vote and the referendum assumed we would stay in the eu and not what transpired. I understand the way you lay these things out but it seems to me the one opportunity you had to really make a stand was at the beginning because you when David Cameron were famously very close, notjust neighbours at number 10 and 11 downing street but he trusted your advice. You told him it was a bad idea but if you said to him, look, this is the most important decision facing us in the country since the second world war, and i cannot go along with this and if you insist on referendum i am out of here, that may have made a difference . I dont think it would have, honestly. I think the train was leaving the station, the political train, towards referendum inside the conservative party, inside the conservative media and other elements of the political spectrum. But you never tested that proposition. And i dont think my resignation would not have made any difference and, ifanything, once the decision was made, i thought, well, i am someone who may be able to influence the outcome, i am the countrys finance minister, i can set out the economic consequences of leaving, and, in the end, of course, that didnt work. I thought then i actually had the responsibility to make the argument and make sure the country knew what it was voting for and knew about the consequences. And thats interesting because you were if i may say so a much stronger pro remain campaigner then even David Cameron was and your message was simple, that if we do this, if we vote to leave the eu, we put at risk the foundations of the british economy. It may be that your interventions were counter productive. Your opponents, including Boris Johnson, called it project fear and now that we look back at that, with three years of hindsight, it seems you were the politician that the British Public no longer wanted to listen to. Would you agree with that . I dont think that is true. Others can have their view on how the public thought about me but only a few months earlier i had led with David Cameron a very successful Election Campaign in which we were re elected as leaders of the country. I think its a false memory as the years go past that somehow by then the cameron regime was unpopular or people were antiestablishment. Only a year earlier, the conservatives had won a resounding victory and the economic message was a very important part of that victory. Just on the referendum and what our opponents called project fear, i have not seen the counterfactual, and in a way we will never know, but i am not sure that if we had not made those economic arguments, we would have won the referendum, we may have lost it by a bigger margin because the truth be told, when he got to the vote, the british people were not particularly enamoured with the eu and the swing voters, the people you appeal to in any campaign, were people who emotionally wanted to leave but were nervous of the economic consequences so, inevitably, the campaign focused on that. One more question then on looking back at 2016 and on your possible culpability. Its interesting to me than in the last year or so they have been quite a few Academic Studies and i am very taken by one, by a gentleman called thiemo fetzer, who was an associate professor at warwick, and he has written in the Harvard Business review a fascinating study based on detailed analysis, of voting patterns, individual constituencies, and he says that in his analysis there is no doubt that austerity induced cuts to the welfare system since 2010, that is the cuts that you oversaw, played a very important part in shoring up support for the Uk Independence Party and for the Vote Leave Campaign in the brexit referendum. A clear correlation. Ive never heard of him but ijust dont agree with him for two simple reasons one is, that of course the alliance of brexit voters was notjust people in left behind, depressed towns in the north of england that we have been talking a lot about british politics but also retired voters, pensioners, people in the south of england who were the very people who at the time it was often a charge levelled at me that they had escaped austerity. They had not been the target of government cuts. Second, i would say that you have to look at cause and effect and austerity was not a sort of voluntary policy. It was a consequence in britain and basically every other western nation of the financial crash. Did the financial crash hit poorest communities hardest in britain . Yes, it did. And did the financial crash potentially have a role in brexit . Yes, potentially it did. But i think this, the assumption of the question, i have not read the study, is that somehow a set of deliberate Government Policies led directly to the brexit vote and i just think that is not true. I think underpinning the study, and certainly underpinning my question, was a proposition that you became a politician who was seen to be ultra zealous about austerity in a way that went beyond fixing the public finances after the crisis that came with the financial crash in 2008 and you had to deal with that in 2010. It went beyond far beyond that and in some peoples minds it became a fetish, you were absolutely obsessed with austerity strategy. That is just totally, not true in fact, of course, the longer i was in office as chancellor, the more we moved onto issues like the northern powerhouse, building up the north of england, other policies like trying to attract tech investment in britain and the like. But you were still, you were still, if i may say so, central to your policy was the notion that we have to eliminate the deficit. The deficit was over 10 of National Income when i became the chancellor 10 years ago. That was about the highest in the developed world, certainly the highest in britains peacetime history. In the first couple of years that i was chancellor, almost all of our near neighbours had fiscal crisis of one kind or another, easy to forget now ireland, portugal, greece, spain whole set of other countries with much smaller deficits had problems. In the end, there are two proofs of the pudding, the first is now we can look back on the last decade, britain had the strongest recovery from the financial crash of any major advanced economy of the world over the last 10 years. We now see it over the last 10 years. We created more jobs in the government then any British Government has created, or created conditions for those jobs. And, finally, missing is this central fact, which is that in 2015, the country got a chance to vote again on what you call this fetishistic Economic Policy and they embraced it and re elected David Cameron and the conservatives. And their anger and alienation poured out the year later in the referendum. Thats a specious theory because, clearly, they were voting, youre saying they voted for one set of politicians and nine months later they changed their mind. No, what im suggesting also is that there was something interesting, if we bring it to present day and analysis on what is happening politics right now in the conservative party, post David Cameron and post george osborne, we have borisjohnson and his chancellor, sajid javid, who are committed it seems to opening the spending taps and much less concerned about this elimination of the deficit. This is a News Programme and something has happened between 2010 and 2020. Ten years the financial inheritance is the same. The strategy is different. Of course the strategy is different because the fundamentals are different in 2010, the british deficit was over 10 . Today, thanks to the steps we took, and acknowledged by the new conservative government, the deficit, we have not the latest figures but will be below 2 . It will be around just over 2 . That is a completely different economic situation. As it happens, the fiscal rules that sajid javid, who i am a big fan of, has just announced, almost identical to the fiscal rules i announced 10 years ago, which is you balance the current budget over a three year horizon and you aim to have debt falling by the end of the parliament. As it happens, this strategy is actually not that dissimilar, even though of course the economic circumstances have moved on. What we have is a Prime Minister who now pushes, well, he doesnt even talk about the conservative party, he talks about the one nation conservative party, he talks about the peoples government, and if we believe the Times Newspaper today, he is intent on trashing all of the pet projects that you and David Cameron developed during your administration and pushing an all new agenda. Even thought i am a newspaper editor, i would not believe everything in the newspapers would you accept there is a very different tone to the conservative party today to the one that you and David Cameron led . I think the conservative party has evolved. First of all, borisjohnson was the mayoral candidate for the london election in 2008 and again in 2012. He is a close colleague of david and myself. He has since the general election acknowledged the role that we played in getting the conservative party out of opposition but im nothing other then proud of what the conservative party achieved in the most recent election, proud because, as a northern mp, i was trying to get the parties strong in the north and we did make big advances in 2010 and 2015 but of course the real advance came last month. I think it is a demonstration that the conservative party can be that one nation party and to have been part of a Success Story that has seen the conservative party win four elections, increasing vote share in each election is something i am not embarrassed about. I think its a real political Success Story you talk about this sort of sunlit world where the tories have achieved triumph after triumph but in the midst of that story you yourself, george osborne, have seen your political career killed off and i wonder how, personally it is to see Boris Johnson in number 10, with his incredible parliamentary mandate when, just four years ago, you were the coming man, you were the chancellor of the exchequer, side by side with David Cameron, indeed appreciably younger than borisjohnson and, yet, here you sit now with your political careerfinished, editing a newspaper and he is in number 10. Is that gauling . Of course i did not want to lose the eu referendum, because of the consequences for the country, but you have to accept at the top of british politics that your career can come to an end and i had 11 years as chancellor and shadow chancellor, a longer run than most people get in politics and ifeel nothing more than incredibly lucky and privileged to have done those roles at that time. Borisjohnson says that he can have both a deeply advantageous trade deal with the eu sown up by the end of 2020 and, at the same time, a transformative deal negotiation under way with the americans and other Global Trading partners as well. It all sounds like have your cake and eat it all over again. Is that the way you see it . Ell, i think britain has accepted, and indeed in the official forecast well, i think britain has accepted, and indeed in the official forecast which of the treasury accepts we will see come the march budget what the latest figures are but britain has accepted essentially a lower long term growth rate and lots of decisions in politics, notjust in this country but elsewhere, are made where you trade off economic efficiency, if you like, for things like sovereignty or, you know, particularly strong feelings about your culture and whatever. But my question for you. Britain made a decision essentially to be a bit poorer that it otherwise would be in order to be outside the eu and have at least nominal control over issues that otherwise the eu would have decided. But is Prime Ministerjohnson levelling with the British Public about the degree to which real choices have to be made . Choices which havent yet been made or outlined to the public . But is Prime Ministerjohnson levelling with the British Public about the degree to which real choices have to be made . Choices which havent yet been made or outlined to the public . One, for example is, if he is serious in his message that there will not be close alignment, a level Playing Field with europe, then there will not be the completely free trade that he is envisaging at the same time as he does deals with other trading powers, like the United States. It seems to me, what hes offering as a proposition, is very difficult to deliver. As a former chancellor, what is your take on that . Well, we have got to see. Youre certainly right that a lot of the fundamental decisions about the trading relationship with europe have not been decided because were in essential parked until after we left the eu, which we will do at the end of this month. And were going to then face these question of, do we align with eu rules and therefore have a sort of loss of control over what those rules are, in order to be able to sell our goods and services into european markets. . The Prime Minister says quite plainly, no, because it is all about control. Well, i think it will depend sector by sector. You see, i think in car manufacturing, we will end up probably following european car standards. But when it comes to Financial Services, we do not need to follow european Financial Service rules. So i think it will be more pick and mix than it looks. I think you know, another couple of things bearing in mind first of all, there is a big trade deficit with the eu so, in the end, the eu will need this deal as much as we do. Really . as much as we do . This is really a question of leverage. Where does the leveraged sit, in britains relationship with europe or indeed with the United States . I think, once we are out of the eu, the eu does not have all the cards it certainly has had in these negotiations because we would have been able to exit in an orderly way and then i think there will be a serious consideration in other european capitals about whether you really want to erect trade barriers with one of the Major Trading partners of france and germany and belgium and so on and a very big market for a lot of european goods. I suspect where the argument is going to come down is all around this issue of divergence. How far can britain diverge from european rules . Notjust regulations but also tax and Environmental Protection and employment protection. And we will see. I personally think its going to be a long drawn out process. I think they will do a deal by the end of this year, at least on paper, the Free Trade Agreement with eu, but there will be lengthy transitions. We are not falling off