Award winning British journalist, broadcaster, film-maker and author, Paul Mason speaks on economics, globalisation and the future of capitalism along with the current dominating subject of political conversation, Brexit. Economics Editor for Channel 4 for two years covering all aspects of the UK and global economy, markets, labour and commerce; Paul has built up a keen audience and has a following of over half a million. Paul has expressed his opinions through a series of books covering contemporary economics and politics, including the highly successful book titled ‘PostCapitalism: A Guide to Our Future’. His new book ‘Clear Bright Future’ out in May 2019 talks about: How do we preserve what makes us human in an age of uncertainty? Are we now just consumers shaped by market forces? A sequence of DNA? A collection of base instincts? Or will we soon be supplanted by algorithms and A.I. anyway?
The Brexit Slump has affected most industries from retail to housing. How dangerous do you think it will be for the long-term economy?
It all depends on whether we can avoid a No Deal. A no Deal will see a slump in output by 8 percent of GDP, housing and commercial property collapse in price and interest rates rocket to 4%. The severity of that scenario convinces me that it will not be allowed to happen. The scenario emerging after 29 January is of a long-ish delay in implementing Article 50. I think this increases the chances of quite a Soft Brexit deal, but it prolongs uncertainty and the companies that are currently relocating – for example Dyson to Singapore and Sony to the Netherlands – may not be the last.
What are your thoughts on a No Deal outcome?
It’s so economically catastrophic that no civil servant or responsible politician could countenance it, other than as a scare story to push people into a deal. The problem is large parts of the population – 31% of voters – are starting to believe in it as a solution – a kind of political up yours to Europe. I am afraid the cultural legacy of this will stay with us for some time, especially if the final Brexit deal leaves the UK tied to the EU’s rules and regulations for half a decade.
With even more uncertainty around Brexit and the future of the UK, what should British businesses be doing in order to prepare for the possibility of a No Deal?
As little as possible. It’s like “preparing” for a slump or a stock market crash: it risks bringing it on. Most large corporates have already taken their prudential measures against the possibility of No Deal but my fear is that SMEs start stockpiling or reining in spending pre-emptively towards the end of Q1.
London is considered the financial capital of the world however, what long term effect do you think Brexit will have on this standing?
It will still be the financial capital of the world, but with a different mix of skills and specialisms. I think Frankfurt, Paris, Dublin and the Netherlands will all get parts of the London business oriented towards the EU economy and the Eurozone, but I am not massively worried about London losing its niche as a global trading point. The more salient worry is that the best people in finance, quantitative analysis and Fintech just don’t want to live in a country like Britain, even thought London retains its cosmopolitan atmosphere.
In your opinion, what’s the best-case scenario the UK can hope for from Brexit at this stage?
I think there’s a 50% chance we will get a Soft Brexit deal, based on May’s deal but with a permanent customs union. That will split the Conservative party but is deliverable with the opposition parties. After that I think there is a 30% chance we get a snap election and a 20% chance that – in order not to have to call one- Theresa May herself is persuaded to call a second referendum. But this is all based on reading of a very fluid situation: have a pretty good idea of what every player in the game will do except the small inner team of May herself and her advisers. Based on her past behaviour in a crisis, calling an election is the pattern she has established. Don’t be surprised if she marches out into Downing Street and does it again, with minimal consultation.
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