GFTU BGCM Minutes 2017

political union, a banking union, they should do that. If, on the other hand, what

they should do was actually go back to a much looser system which allowed

countries a degree of macroeconomic freedom, they should do that, but I

thought it would provide a major shock to the European project. I fear that that

is a forlorn hope.

In terms of the UK, I also thought that Brexit would provide Britain with a

wakeup call that you cannot really have an economy where you have run a

trade deficit every year for 35 years and you cannot think there is something

seriously awry with your economy. We have got to a position where

manufacturing has shrunk to around 10% of the economy and we just cannot

pay our way in the world with a manufacturing base that small and I saw Brexit

as providing (1) a political shock, which it did, so some of the benefits of Brexit

that I thought would happen have come through in the intervening 12 months,

the Tory Government is now talking about an industrial strategy, the Tory

Government was forced to ameliorate some of the welfare cuts that George

Osborne had put in place and (2) far from being the complete disaster that

everybody says it is, the fall in the value of the pound is actually helpful to

Britain’s manufacturing industry and to the general rebalancing of the economy,

which is so sorely needed. If you think that actually the point of economic

policy is to have a high pound which allows the City of London to attract lots of

hot capital or you think that the sole purpose of economic policy is to give us

more euros when we go away on our holiday, then actually you should support

the idea of having a strong pound, but the strong pound has actually been a

terribly, terribly bad thing for British industry over many, many decades, so

when the pound fell after the Brexit vote, far from seeing that as a bad thing, I

saw that as a good thing. It makes our exports more competitive, it means that

imports become dearer, we get a degree of import substitution in our industry

and it enables us to actually do the things that need to be done. Of course, just

having a competitive pound is not the whole answer. It is a necessary but not

sufficient condition for industrial renaissance, but it is a vital part of the picture.

There are other things that need to be done. We need to actually start thinking

about what we do with government procurement, the Government needs to

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