We may have made a grave mistake in leaving the EU, but little can be achieved by dwelling on a bad hand. Perhaps we can do ‘Apple in Ireland’ incentive schemes: tax breaks, transport links and a Plymouth port that looks like Singapore
‘It’s the economy, stupid” was Bill Clinton’s brilliantly simple and effective campaign maxim. It applies to the UK too, and no more so than to the construction industry, as we deal with the development that comes out of an expanding economy. There is very little construction in a “steady as you go” economy, meaning Brexit and its economic consequences are vital to all of us.
Right now, I hear people saying that the economic consequences of the Brexit vote are not as bad as forecast, but hey, we are still in the EU. This is the “phoney war”, just like the calm period at the beginning of the Second World War while each side was limbering up - the blitzkrieg has yet to come. After we trigger Article 50 and see what terms we can get, all in painful slow motion, we will really see what the markets think of it.
It is true that I am a convinced 48-percenter, a Remainer, and I think that we have made a mistake for bizarre reasons. But I also think you have to play the cards that you are dealt in life, rather than the cards you would like to have been dealt. So, if Brexit does happen, what upsides might we think of?
A recent report claims that the UK has one of the highest levels of income inequality in the developed world. The Equality Trust shows that the top 10% of UK households earn about 10 times what the bottom 10% of households earn. Moreover, the South-east is twice as wealthy as all the other regions bar the East and South-west. It is this geographic difference in wealth that I am interested in. London and its hinterland of the Home Counties in the South-east dominate our country like no other capital does in the western world. In the US, New York is seen as the equivalent of London but Boston, Miami, Orlando, Chicago, Seattle, San Francisco, LA, Houston, Dallas are all huge wealth-creating centres. Even in Europe countries seem to have a better distribution of wealthy cities than in the UK. Germany has Berlin, Bonn, Hamburg, Munich, Stuttgart - all massively successful. France has Paris (a mere shadow of London) but also Lyon, Nice, Marseille, Montpellier, Nantes and so on.
Perhaps if we come out of the EU and leave its restrictive policies behind we can do “Apple in Ireland” incentive schemes; tax breaks to encourage selective industries to flourish around particular cities and create a halo effect of wealth creation in their supply chain and spin offs. We would have to figure it out properly but, for example, Plymouth could be a free port, our Singapore, with hundreds of ships anchored off and millions of square metres of bonded warehouses. There could be tax breaks in Bristol for aerospace industry start-ups or inward investments, similarly Newcastle/Gateshead for engineering, Liverpool for pharmaceuticals, Glasgow for hi-tech, Cardiff for something else, and so forth.
Inevitably that brings us to transport infrastructure: road, rail and air. Our roads are a disgrace; I use the M1 regularly and it is hell on wheels. We need true high-speed rail stitching all of the UK together, not just the odd line from London to Birmingham, and maybe Manchester. Our airports’ runway count is an international joke. We could do with one more at least at Heathrow (although it’s a crazy place for an airport) and Gatwick.
All of this could create a true UK powerhouse, not just a George Osborne northern powerhouse. And instead of pulling down London because it’s too successful (there was something of that in Brexit voters), this could be an incentive driven campaign to raise major cities’ wealth-creating powers across all the UK nations.
This is the sort of silver lining or Brexit bonus that we really need to make all the pain that we will go through worthwhile. And this thought begs the question: if this is not the plan, what is the plan? What are the specific advantages, apart from a blue passport, that Brexit will bring us? What is the strategy that is going to make this all worth it? I think Johnson, Fox and Davies should let us know … What is it all for?
Jack Pringle is principal, managing director EMEA at Perkins+Will