On December 11 2017, MPW’s Economics Department attended the PolEconUK A-Level Economics Students Conference in London. This is an annual event held for A-Level Economics Students that focuses on the central economic issues facing Britain. This year’s conference was entitled ‘UK Economy and BREXIT after the General Election’. Key speakers included Tim Harford, a leading economist and author, Vince Cable, Kamal Ahmed, and John Redwood. Despite the rain, the conference was tremendously enjoyable and strengthened my knowledge of economics of the UK and global economy.
The speaker who impressed me the most was Jonathan Portes, Economics Professor from King’s College, London. The main content of his speech concerned the economic future of the UK, especially after Brexit. His speech delivered two important conclusions that enhanced my understanding of economics. His first conclusion was that any forecasts and measurements dealing with the Brexit, or any future events, could not be accurate, and so it is difficult to identify any predictions for the future. However, from there he stated that, based on the overall data and forecasts given, the future of the UK economy after Brexit looked bleak.
Secondly, he concluded that the UK economy has a substantial problem with labour productivity. Comparing the G7 countries, the UK is a disappointing 5, with Canada and Japan being less productive. The reasons for this low productivity were numerous, including infrastructure problems and stagnant growth in wages. Moreover, linking this with Brexit, if the UK leaves the single market, this will cause further problems with labour and labour productivity.
For example, London, especially its financial sector, will see a massive withdrawal of firms and workers heading to Europe. Indeed, banks like HSBC have threatened to leave the UK and move operations to Europe. This is an example of footloose capitalism that we have explored in lessons. Although bringing many benefits to the UK, it can cause a lot of problems if events like Brexit happen. This massive withdrawal of firms and labour can have a negative impact on productivity and an overall decline in output, harming economic growth. Indeed, Portes stressed the point that growth in productivity is crucial for improving living standards. Yet since 2008, productivity in the UK has declined and not entirely recovered. With Brexit on the horizon, this will pose problems for the UK.
Other speakers were also engaging and valuable to our learning. Kamal Ahmed looked to me like a rock star. He was exciting and inspiring, telling us that as students of Economics, the future was up to us and we can change it. Vince Cable, a prominent political and economic figure, was full of economic data. His speech was delivered in a clear and persuasive way.
However, a speaker that contradicted most of the views and data given at the conference was John Redwood MP, a leading Brexiteer. His main argument was “Who needs the EU?” This was a passionate and effective speech that was delivered amongst an audience that did not entirely share his views. Redwood argued that the UK can arrange trade deals with the WTO and play along WTO rules. This would mean that the UK would no longer need the EU and its single market, despite 65% of the UK’s international trade being with Europe. Redwood further argued that the UK can arrange trade deals with countries like China and India. Whilst this made some sense to me, it appeared that Redwood did not think that there would be additional costs or difficulties with trading with the rest of the world. It was clear that he was basing his arguments more on political rather than economic views.
Redwood also discussed the free movement of labour after Brexit. In my opinion, the first issue to be solved after Brexit is the visa problems and employment issue for EU citizens. A spokesman for Theresa May said that from March 2019 EU citizens would be banned from entering the UK freely. Therefore, the United Kingdom will face a large staff issue. As a speaker who supported Britain's departure from the European Union, Redwood mentioned that Britain was a big service market and that there was no real problem with this staffing issue. To me this is not the case as this will have a significant impact on the UK.
Overall, the whole trip was inspirational, engaging, and fulfilling. For many of us, we had not experienced such a vibrant and academic environment before which looked at real life, current issues facing the UK economy. Looking at Brexit, we saw many conflicting arguments about the pros and cons of leaving the single market, and what the future holds for the UK. Ultimately, it was clear that the future is uncertain for the UK and Europe. For me, personally, this is a shame as I can see little or no benefit in leaving Europe, especially as the EU contributes so much to the UK and its people.