Sir Martin started by discussing the negative effects of leaving the EU single market and the EU preferential trade agreements on UK exports. 'The modern UK economy is very much service based – around 80% of value added comes from services. UK exports account for around 21% of UK GDP with services representing more than half of that total'. 'The EU takes 46% of UK service exports; nearly four times what we export in services to the US...no other overseas services market is significant'.
Sir Martin went on to say that the 'distinction between services or goods is no longer as robust as it used to be': relating the EU economic activity to 'a bowl of entangled spaghetti rather than separate courses neatly labelled as goods or services'. We heard his now famous analogy comparing the UK exiting the EU single market and preferential trade agreements for its own bilateral trade deals to 'rejecting a three-course meal now in favour of the promise of a packet of crisps later'.
When discussing the implications of wanting to 'cherry pick' market access Sir Martin warned that we are not able to 'have our cake and eat it too in the real world', thus 'to provide UK business with guarantees of full and equal access to the single market without equal acceptance of EU regulatory structures would require not so much a skilled negotiating team as a fairy godmother'.
Our audience of academics, policy makers and business leaders heard about the difficulties universities might face post-Brexit: ‘universities already report the loss of EU staff amid worries that the UK will no longer be able to lead cross-European research teams funded by the EU, and wider concerns about the status of family members under more restrictive migration rules'. This is also a worry for the UK’s start-up industry, 'after Brexit there will be more constraints on EU entrepreneurs seeking to open businesses in the UK’, and that 'restricting the ease of movement of EU young professionals into the UK will slow down growth in tech start-ups in London and the wider UK'.
Sir Martin suggested the need for doubling public sector spending on innovation and scale-ups, to compensate for the loss of European funding and to ensure that universities continue to engage locally with tech and digital start-ups. Sir Martin finished by discussing what measures Parliament should take to support UK competitiveness and trade, if they indeed vote to leave; 'First, increase support for entrepreneurs and innovation. Second, avoid additional UK regulatory bureaucracy. Third, support smaller firms seeking to export'.
Nitika Agarwal, COO of Apolitical led a fireside conversation with Sir Martin and audience Q&A after Sir Martin's speech. Agarwal asked Sir Martin what is the one thing he would ask from Parliament, to which he replied: 'I would suggest an easy visa process, similar to Singapore's. If we don't have this in place, we shut ourselves off to international talent'.
Thank you to Sir Martin Donnelly for an engaging evening and thank you to everyone who was able to attend, despite the heavy snow.
View & Listen to Sir Martin Donnelly’s Talk on UK trade and exports – the challenge of how British firms succeed after Brexit:
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