for some parts of the state. tropical storm harvey is still bringing torrential rain. at least 20 people are known to have died, many trapped in cars. flooding has affected more than 30% of us oil refinery capacity, and the storm has now moved into louisiana. president trump has said "talking is not the answer" to the north korea missile crisis. pyongyang has claimed tuesday's missile test overjapan is just "the first step" for military operations in the pacific. the us defence secretary, james mattis, has insisted there is still room for diplomacy. thursday marks 20 years since the death of princess diana in paris. her sons, the princes william and harry, have visited a memorial garden, created at london's kensington palace, in memory of their mother's life and work. now on bbc news, it's time for hardtalk. hello and welcome to hardtalk, i'm shaun ley.

it's the divorce of the century but who will pay the bill? as the uk negotiates its exit from the european union, the optimists believe it can reshape global trade, freeing it from barriers to outsiders that any customs union of a group of country creates. the task is harder because british prime minister theresa may threw away her parliamentary majority in a general election that has left the government severely weakened. my guest today, nicky morgan, is worried about brexit and indeed opposed it and her view matters, not because she used to be in the british cabinet, but because she has just taken the chair of one of parliament's most important watchdogs, the treasury committee. mrs morgan describes herself as an insurgent. what or who is she prepared to overthrow? nicky morgan, welcome to hardtalk.

after you were dismissed from the cabinet by theresa may when she became prime minister, you said, "i'm revelling in being part of the awkward squad." should the government be worried? well, thank you first of all for having me. i think when you're released, if you like, from the bounds of collective responsibility it's nice to be able to ask the questions from the backbenches that you otherwise could not have asked. and yes, as you said in your introduction, brexit is a huge deal for this country in so many different ways and i think there are a lot of us who have many questions still to be answered and we will do that. and the more you put former ministers on to backbenches and into select committees,

we know how government works, we know which bits to press. and you are also the people who, in a sense, have motive and the opportunity because you are not worried about your chance of promotion any more. i think you said, "i'm not interested in sucking up to anybody, we're the insurgents now." well, i think it's about asking those questions... is it because you want to halt and reverse brexit? no. look, i don't hide from the fact that i was a committed campaigner for the remain side of the debate. you accept it is going to happen? i do accept it's going to happen. so no second referendum? no, i'm not in favour of a second referendum because i think if you ask people the question, if politicians or the establishment say, we're not very keen on the answer, let's have another go, actually that breaks down that trust between politicians and the electorate even further. so i think we have a situation now that needs to be negotiated in the national interest but the point is, and i think this brexit issue, if you like, has put before politicians that question of country before party or which way does it work, in a way that i have not seen certainly.

i've been in parliament for seven years, i've been involved in the conservative party for 28 years, i haven't seen that question being put in this way before. so this is fundamental stuff that effects notjust internal british political life but has implications for the national interest and potentially for europe and even beyond. absolutely. one of the reasons i was a committed remain campaigner was because i felt, our geopolitical place in the world, we had more power and influence actually be able to be influential in the eu, that's what our allies around the world wanted us to be. but look, that's not going to be the case, we're still going to have a deep and special partnership, as the prime minister says, with europe. the prime minister hopes that will be the case and that depends on the negotiations which have just begun again a couple of days before we are speaking. you have asked for further information from the bank of england on what the implications of brexit are but you're not exactly asking a neutral player, are you? mark carney, the governor of the bank, was heavily criticised after the referendum because he had issued some dire warnings about what would follow from a vote to leave the european union, many of which have not come

to place, and, in a sense, he is one of the experts your former cabinet colleague michael gove said the british people had heard enough from. well, i think michael said... there was a whole quote behind that, it was shortened to we're not listening to experts now. and i think actually mark carney as the bank of england governor was right to warn of the potential consequences. of course at the moment brexit has not happened and we are some way from that split, expected in march 2019, and i think we are beginning to see that working its way through the economy. but even the questions you are posing are kind of loaded, aren't they? you talk about the cliff edge facing businesses when we leave. it's going to become in your view, a cliff edge we're dropping off. it's a cause for concern, you say the risks of the eu not agreeing a divorce agreement with britain, views

on the desirability of a transitional arrangement to provide more time to negotiate and prepare. this is nicky morgan who wanted to remain in the eu revelling in being in the awkward squad, to quote your words. no, i mean, ithink actually, you know, you are able as a politician, i'm a former lawyer as well, to take on the role as a chair of a select committee. you are there to hold government accountable to parliament. parliament is going to be hugely important in this process, we are asking the questions our constituents want us to ask. but i think anybody who thinks that brexit is going to be easy and painless has not been straight with the british public. these things are always doable, there will be a negotiation, i very much expect that there will be an end deal but it's going to be bumpy and i think people are realising that. what do you make of how the european union is handling these negotiations? we had just a couple of days ago jean—claude juncker, who is president of the commission, saying that he has seen all the position papers the british government has issued during the course of the summer, and they are a pretty substantial pile of papers, and he says, rather dismissively, none of them is satisfactory.

i think it is to be expected. i was eu budget ministerfor art while a couple of years ago and eu negotiations are always... both sides dance around a bit and eventually a deal is done, often towards the end of the alloted time period. to be honest with you, i wouldn't expect any less or any more if you like from the eu at the moment. and i think, you know, on those position papers, though, i do have to wonder that it's good to see the details and the clarity we now have but with a lot still to be resolved and i do wonder how it has taken 12 months to get to that particular level of detail. i think parliament select committee chairmen like me are going to be asking for a lot more detail.

so british government ministers can expect to be hauled in front of you perhaps a bit more frequently than they have been in the last year or so by the previous committees? i think the previous committees have been very active already but yes, i think there will be plenty of cross examination and i think that committees like mine and others will not be just focusing on our own ministers if you like. normally the treasury select committee would quiz treasury ministers. but of course we are going to be interested in ministers in the department for exiting the eu and there may well be other relevant enquiries where we will ask other ministers as well. because brexit again is such a big thing and it crosses so many different parts of government. would you like to hear from the prime minister since, in a sense, she embodies the whole government? well, what happens is the chairs of the select committees are part of a bigger committee called the liaison committee that quizzes is the prime minister twice a year at least. so i would expect, i'm sure that brexit and our whole eu negotiations will come up as a subject in the next liaison committee meeting. now, in terms of the particular proposals there is frustration not just on the british side.

the association of german chambers of commerce and industry said in the course of this week that politicians need to put shared economic interests first. it's really worried about the delays in this process and it says it wants a temporary customs arrangement with britain for this transition period. do you share that ambition that there should at least be something in place very soon so that we are then able to prepare the ground for the 31st of march and that businesses don't find suddenly the rules change overnight? i think one of the important moves if you like this summer has been, it seems to be an acceptance from the british government that there is going to be a transition period asked for. of course, this is a negotiation. we don't know what the eu are going to offer up. but i think it's very important to listen to the voice of business, not least because they are critical to a strong economy, they are employers, and i think it's very encouraging to hear the views of german business as well and they will no doubt be talking to their own government. but yes, i think the issue is, although we have technically until march 2019, actually it will be before that period when the negotiations end

because there has to be time for the eu parliament and uk parliament to approve the final agreements. and we also know, and i will be asking for evidence, further evidence on this, that british businesses, particularly financial institutions, are going to make decisions within the next few months if not weeks about where they are going to locate, where their employees are going to be, how they're going to be able to set themselves up in europe going forward. so we don't have, what, 18 months, i think we have a matter of six to seven months to get to the nub of this. but those are options, aren't they? of course they are going to look at what we would do if britain actually were to be unable to agree a deal with the european union, that is entirely prudent. it's a bit like the uk businesses that were considering leaving scotland if scotland had voted to leave. here we are going to leave but that's no reason to say there will not be an arrangement and let me put to you what gerard lyons, who is a member of economies for free trade, these were the people who backed brexit, said in the sun newspaper in august. he said, "the league table ranking financial centres has london as number one.

its rivals are new york, singapore, hong kong. that is where the future competition is. those banks have all got bases there already. that is the threat if there is one. it's not really europe, it's not amsterdam, it's not frankfurt, it's not paris, much as they may wish it was." to follow a famous phrase, he would say that, wouldn't he? given his particular views. he used to work for your colleague, the foreign secretary borisjohnson. well, there we are. and of course we know which side boris was on in the referendum debate. but the point is, it's... there are a number of different businesses. we know some of the banks will be looking seriously at frankfurt. we know paris is on manoeuvres to try to tempt business overseas. and we know that businesses are preparing. you are right to say that of course everybody hopes we don't get to a cliff edge no deal scenario but they have to prepare for the worst case and making decisions about employment, finding the local regulatory licenses, those take months, not weeks or days. so people are preparing. one of his colleagues, professor patrick minford, said that he thinks brexit can in many ways be compared to the event which gave birth

to your political party, the modern version of your political party, the repeal of the corn laws. and he says we should simply abolish our trade barriers without asking others to do the same, just as we did in 1846 when sir robert peel, that revolutionaries insurgent in conservative politics, basically abandoned the pricey form of protectionism that kept up the price of corn when farmers in britain were under pressure. it reduced the price of food, it helped to stimulate the industrial revolution, never mind changing the whole political dynamic and arguably providing the base on which the conservative party still thrives, as a party of free trade and enterprise. well, ithink, two things i would say. firstly i think patrick minford was one of the people who said in the course of the report on whether to call a referendum, that it would be ok if our manufacturing industry just disappeared. well, i know as an mp representing a heavy manufacturing—based area,

that that would not be a good thing for local employment or our national economy. the other thing is actually a lot of this debate is sort of, we would like this, we would like that, we would like to have no tariffs, but actually what are other markets going to do? and the minute another market, another country puts up a tariff or puts up a barrier then actually the response from our businesses, different sectors, is going to be well, actually, the uk needs to do the same. so i think to actually expect there to be unlimited free trade is not actually... it doesn't really reflect the world we live in in the 21st century. and you're worried that the world in which donald trump for example has been so critical of, free trade and the consequences of free trade, where many people have lost out, is not actually a world where that bright scenario for britain beckons. ijust don't think... look, i think at the end of the day, we will, as i said before... it will be bumpy for a while. there will be a future for britain. i know many people are very confident it's going to be a bright future and i hope that absolutely is the case. you talk about looking forward.

in a strange way which appear in terms of the politics of your party to almost have gone backwards. some of the divisions which were the slow—acting poison which arguably 20 years ago destroyed the conservative party and put it in opposition for more than a decade do seem to be back. in the words of your former leader david cameron, is the party now doomed to bang on about europe for years to come, again? well i really hope not. i mean i have to say, look, europe has been a fault line running through the conservative party for a long time now. pretty much all the time i have been involved in politics and many others as well. i think we, in a way, having had the referendum, we now don't have the voices saying, we've got to leave the eu, it's going to happen. so we've now got to, as i say, negotiate in the national interests, get the best possible deal for the country. but i think one of the other challenges is going to be, and i think perhaps in this autumn ahead, you know, we have our party conference coming up, is how the prime minister and ministers set out what else the conservative party in government is going to be doing because that's very important.

the danger is that that all gets squeezed out. absolutely. the danger is that the whole of the oxygen of whitehall is sucked into this whole brexit debate, and that's inevitable because it's very big, very challenging, very complex. but actually we know there are many other reasons and issues people want us to tackle and many reasons why people voted to leave in the referendum which will not be solved by brexit but actually those policy ideas to tackle those issues, for example lack of employment opportunities or poor education in parts of the country, have to be dealt with by government departments at the same time. i wonder, though, how much opportunity there's going to be in parliament to do that. because notwithstanding the deal which your party made with a small northern irish party, the democratic unionists, to get some kind of majority in key votes. the fact is, it would only take a dozen or so of your colleagues to rebel — perhaps people like yourself, who were supporters of staying in the eu, or particular details of brexit — for the whole process to be slowed down. i mean, there is a real risk here, isn't there, that actually, this becomes — whether

you like it or not — the absolutely dominant issue for the next 18 months, and everything is crowded out. the — you're right. there is a huge risk that this becomes a huge issue and the only issue that is talked about. and i have to say that would be wrong for a number of reasons. first of all, there are some big issues is that i think people expect us to — to tackle. i think many people think, you know, "the referendum happened injune 2016, why are they still talking about it? " and so that's about explaining about the detail, the level of complexity of any deal. but also it would be bad news for the conservative party. let me ask you, though — you talk about the danger of the party — if it doesn't hang together, it hangs apart. your colleague, anna soubry, who, like you, was a supporter of remain, a former minister sacked by mrs may, the prime minister, wrote an article, this month, in which she said, you know, "could i see myself joining with like—minded people who want to save our country from the appalling fate of hard brexit?" "well, at the moment,

i can only say ‘not now,‘ but it's not impossible." and if you have people like that saying "i could ultimately vote against my party or leave it, because of this issue," that adds to the instability, doesn't it? well, it would be a tremendous shame if people like anna felt like the conservative party was no longerfor them. anna is a totally committed conservative, and it was a delight to work alongside her, both in cabinet, and now in parliament. you mentioned putting country before policy. well, i was going to say, it takes us back... but this is not an issue that is just entirely academic. yeah — it — it's not entirely academic. it does take us back to that debate. it's such a huge and important issue for the future of the country for the next generations. there are people who feel strongly about it. but it goes back, also, to the leadership of my party, and making it clear that the conservative party is and remains a broad church on this issue, as on others. there will be differing views,

but there is space for everybody. we need people like anna, who is a talented midlands — east midlands member of parliament — to win seats like hers, in the same way we need other people to win other seats in other parts of the country. and as you, yourself, have said before, your seat, loughborough, the seat you represent, and her seat, also in the midlands, are seats that were labour—held seats. you had to — when you didn't win it the first time — you had to convince people... absolutely. ..the party had to convince people — so therefore you don't feel that they are guaranteed to stay conservative at the next election? yeah, look, we know the whole reason a seat is marginal is because there are people who change their minds. it's been held by other seats in the past. in order to win what we call a marginal seat, it's about building a coalition of voters, persuading them of the — the — the — your cause, the fact that they want to support your party at this time. so you're always conscious that that's not going to last forever. so the conservative party are thinking all the time about a message that will appeal to those voters in the middle. and i think we're better when we appeal to the centre ground.

but i've also been personally clear that i don't think that people like me, like anna, should feel that the conservative party does not — that there's no place for us there. i think it would be a mistake in terms of appealing to the broad collection of voters that we need to appeal to win. the former chancellor of the exchequer — an ally of yours — george osborne, dismissed with some relish by theresa may last year, described her after this year's disappointing election result — with more than a little relish of his own, you might imagine — as a "dead woman walking". how much longer do you think she can remain upright? well, i had the pleasure of working with george in the treasury, and it was, you know — he was a very good person to work for. i think it's very difficult, in terms of leadership, i think it's a bit of a fool's errand, sometimes, to predict how long somebody will last, who is going to take over, and everything else. i have been clear, and i don't think theresa may is the right person to text of the next election. and think everybody would agree in the conservative party that it was not the election that we sought or expected. it is going to be harder because we don't have the majority,

in terms of putting our programme of government through. mrs may was asked by the bbc in an interview week, "is it your intention to lead the tory party into the next election?" and her response was "yes, i'm here for the long term." well, i think it's — it's difficult to predict what's — what's ahead. but you don't want her to lead the party into the next election. well, look — i — ifeel that there were some mistakes made in the general election campaign. there was a focus very much on one person, which i think is a mistake, because i think the conservative party is a — isa team. there were mistakes in the way the manifesto was handled. but also know that no leader wants to put a date on their departure in advance. i think david cameron found this difficult when he said that he was going to go — what we thought was going to be halfway through a parliament, towards what, 2018—2019. because then you are sort of signing off on your own political mortality. she's done more than that, hasn't she? she's said whatever she might have felt a few months ago, in immediate aftermath of the election, when she was saying

"look, i know it was my fault, i accept responsibility, and i have to, kind of, build bridges, and be more broad and consensual and open." she is now saying, "stuff you, i can carry on. i can carry on." can she carry on? to the next election? would you be comfortable standing for re—election under theresa may? at the next election? i stand as a conservative. and so i would stand on a conservative platform... you would — you'd be asked, though, "do you support the prime minister?" wouldn't you ? i think theresa may's had — she's had a difficult first year as prime minister. an election that didn't go the way we wanted. there are changes that've been made now at number 10, some great appointments. but the voters will ask, did she support strong and stable leadership, and a lot of them said "no, thank you." labour's vote went up to its biggest since 1945 in terms of the share of the vote! didn't win... no, didn't win. but so, too, did the conservatives. ..but it cost you your majority! well — but — the conservatives had a, you know — my seat, for example, i think i've the highest certainly vote share

that the conservatives have had since it's been on the current boundaries, for example. fine, but you've got a government that doesn't have a majority. i agree. i mean, it's fine to rack up the votes in seats that are already tory—held. .. yeah, absolutely. as i say, i can't — you can't get away from the results. what could she change that could make her acceptable to you as a leader for the next election? well, i think one of the things that's been missing, as i said before, is an attempt to — or, not an attempt, but, you know, a real move to reconcile the fault lines in the conservative party, which are particularly are shown up by europe. so, for example, i think, in the autumn of last year, there was a real attempt to sideline the 48%, people like me, who had voted remain, and were going all—out brexit. and actually, i think the election result put a brake on that. i have been clear, i've written articles to say that the tone, the way that the government and number10 is run — i think these thigs are changing — it's very important that they do, in terms of bringing a united party together. now, if the prime minister and her cabinet were able to do that,

to build a real team effort, to make sure the cabinet was working as a team, the party was together, those of us on different sides of the europe debate are actually working alongside each other, that would be a real step forward. the evening standard newspaper in london, which i should say is edited by george osborne, wrote an interesting article a few days ago, talking about the feeling that the party was out of step, particularly with young voters. it quoted a couple of unnamed tory mps: "the feelings is, the current cabinet does not represent us." "they're not attracting younger voters." "there's a genuine fear for the party's future." "the generation on top, borisjohnson, david davis," the man who's negotiating brexit, "are bluffers. things are serious at the moment. we don't want bluffers. there's a real dismay at the mediocrity of theresa may's team." and they right about that? i think that we have some very talented cabinet ministers. but not all of them are competent? well, i think you have to keep all of them — all cabinet ministers — look, i had my review period. i was handed my p45. so i think everybody has a — has a shelf life. and i think you do want to make sure that the team you've got is a — is a real team, and they're

all hanging together, and working together, and supporting each other. but i have to say, i think, just if you change the faces around the table so that's going to appeal to younger voters, is a — is a mistake. the prime minister was terribly keen to do that, wasn't she? i mean, shejust moved a few people in different jobs, but she didn't — didn't bring in new blood, she didn't get rid of... well, there wasn't a — there wasn't a big reshuffle. there was talk about having one. and, you know, reshuffles are like... that shows how weak the prime minister is. that's why a prime minister can't stay in office after what happened, forever, can she? well, i think it could be difficult, for the reason they to lead us into the next general election, but i think, just into the younger voters, i think think about it, we have got to think as a party how we're going appeal, because the trouble is, if you look at the way that the votes stacked up, we got a lot of votes amongst all the people, not amongst younger people. we've got to think how we're to renew our franchise. nicky morgan, former

cabinet minister, now chair of the treasury select committee in the house of commons, thank you very much for being on hardtalk. thank you. hello, there. we're moving into the last day of august, but in some places, yesterday, it felt like september had already arrived. because there was a lot of cloud, there was some rain around, and temperatures across some south—eastern areas only got up to 13 degrees. but further north and west, the day brought brighter skies and some spells of sunshine. just a few showers. and that's the sort of weather that we will take with us into thursday. the cloud has now been chased away to the east. we've got some clear skies following on behind, with just a few shower clouds. and during the day ahead, we are going to see a mixture of sunshine and showers. the showers quite heavy from the word go in western areas. and then extending eastwards as the day goes on. but with some bright or sunny spells between those downpours. so, let's take a closer look at 4pm in the afternoon. across the south—west of england, we'll see quite a few showers

in places, with some sunny spells in between. temperatures around 16—17 degrees. some of those showers stretching across the south—east and into east anglia. but a big improvement in temperatures here. 20 degrees in london, 19 for ipswich. some heavy showers across the midlands, up into northern england. some of the showers could contain the odd rumble of thunder. and for scotland, it is that mixture of sunny spells and heavy showers. 1a degrees in aberdeen for the middle of the afternoon, 17 in glasgow. for northern ireland, some decent sunny breaks between the showers. i think some places will avoid the showers and stay dry all day long. and a similar story for wales. sunny spells, the odd downpour coming along here and there. some of those showers could be heavy, but they will then tend to fade away as we go through the evening. through the night, into the early hours of friday, we'll see clear spells, the odd fog around, and a chilly night. towns and cities 9—12, but in rural areas, one, two, three, four degrees. quite a cool start if you're out and about early on friday morning. but the prospects of friday are fairly promising.

a lot of dry weather and some spells of sunshine. still the chance for a shower, particularly for central and eastern areas, but many will stay dry. 17 in glasgow, 21 in london, about where we'd expect to be. and then we get on into the weekend, and it is not bad news, especially if you like dry weather. because this area of high pressure will give us a fine start to the weekend. weather systems, you'll notice, out west, they won't make much progress into eastern parts, so, even on sunday, eastern areas of scotland, eastern england, should stay dry, with some spells of sunshine. further west, a fine saturday, a chilly saturday night, but then cloud and rain with some strong winds will work in from the west on sunday. this is bbc world news. i'm david eades. the headlines: the governor of texas warns the worst is not over as tropical storm harvey sweeps into neighbouring louisiana. the brother of the manchester bomber, is to go on trial in libya in connection with the attack in may which killed 22 people. 20 years to the day since the death of princess diana, we hear from those with special memories

of the time they met her. and i'm sally bundock. a taxing task for trump, as he pushes plans to ease the burden on business and the middle classes. but can he sell it to a sceptical congress? plus, crude warning — the boss of shell says the price of oil could soon be heading higher as lack of investment squeezes supplies.