June’s EU referendum probably matters “less than people think”. At least that’s what economist Douglas McWilliams told around 30 guests at a breakfast meeting today.
Describing himself as neither in favour or against leaving the EU, Mr McWilliams said that the decision to leave would have a short to medium-term impact of delays and concerns, but that over the longer term these would likely smooth themselves out.
Watch out for a possible collapse of the City of London, regardless of the vote, he added, pointing to the tens of thousands of jobs that were lost last year and plummeting bonuses.
A continuation of this trend would leave a surplus of central London buildings, he warned, with the capital’s rising property prices and its lack of suitable transport infrastructure only exacerbating the situation.
Then there’s the insurgent threat of the ‘flat white economy’, an expression coined by Mr McWilliams for digital enterprises, which he says will eventually overtake construction in their contribution to GDP.
He pointed to the growth of these economies in cities like Birmingham, Leeds, Manchester and Edinburgh, adding that construction and the flat white economy will drive the UK’s growth.
Brexit would, he said, lead to a minimum of two years of dithering. In the immediate aftermath, people will talk about the UK being cut off from the rest of the world, but life would eventually return to normal.
More startling perhaps was his ‘outside bet’ that Newcastle would become the ’financial capital of Scotland’, as lenders moved south if another referendum on independence leads to Scotland’s breakaway.
But looking 10 years ahead, assuming the UK stays in the single market, it would have to accept EU rules and so not a huge amount would change.
Negotiating a deal with the EU would be fraught initially. EU leaders would be unhappy, the deal would be complicated, but once agreement was reached, investors concerns would likely dissipate.
Other attendees, who, unlike Mr McWilliams, declined to waive the Chatham House rule, cited the importance of immigration to the creativity and diversity of the industry.
One said his company’s future recruitment of graduates from outside the UK would be immediately put in doubt should Britain vote to leave the EU. Others wondered what the impact of a Brexit would be on engineering standards or our relationship with world political leaders.
For the most part, people were unsure of the impact either way. Just like the rest of us, really…
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