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Boris Johnson’s former chief economic advisor has told business leaders to be more optimistic about the economy once the UK leaves the European Union.
Economist Gerard Lyons told the GTMC conference in Monaco that the next 20 years will be one of the strongest periods of economic growth for the global economy, but the challenge is being positioned to benefit from that.
“We should be positive not pessimistic about the outlook,” said Lyons. “Too many economists are pessimistic and last year we were told there would be economic Armageddon and collapse if we voted to leave the EU and I disagree.
“Everyone is talking about a hard or soft Brexit but kick all of those terminologies in the bin because they mean nothing. Hard Brexit was something used by the Remain side to make it sound difficult.
“You can either leave things clean or messy and it’s a clean one we need and if done right it could be one of the best things to ever happen to the UK economy.”Lyons said Brexit is a reflection of a “seismic” change impacting the world economy and that too many people have not shared its economic success.
Single marketOne of the key debates of Brexit has been whether we should negotiate access to the single market - something Lyons disagrees with.“We don’t need to be in the single market of the European Union, in fact the single market doesn’t work well in services and 75 per cent of the British economy is services,” he said. “Also if we stay we can’t control migration and every country needs a controlled migration policy.“The European Union is one of the most protectionist groups in the world, and regarding trade the EU decides policies for all countries in the union, so if Britain wants to start doing deals with countries such as China and India it needs to be able to set trade deals itself, so has to be outside the Customs Union as well. These sound difficult but that’s the only way to have a clean break.”He added that on trade and growth, one of the “phenomenal” boosts to the global economy in the next five years will be the ‘Belt and Road’ (B&R) initiative – China’s expansion to the West and South East.Lyons said: “B&R is basically China’s new Silk Road and according to the International Monetary Fund, half of global growth in the next five years is going to come from countries linked to the Belt and Road. This is a huge opportunity and one we must be part of.”He added: “No one should kid themselves that Brexit won’t be difficult, but the underlying message I would stress is a positive one.”
The electionFollowing the talk by Lyons, political commentator and journalist Tim Montgomerie spoke about this week’s General Election.He predicted a Conservative win with a majority of 50-70 seats for current Prime Minister Theresa May, despite the narrowing of recent polls, but warned she faces a backlash from people within her party after Thursday’s vote.“Tory ministers are furious at how she has handled the election and the administration… regardless of the result there will be enormous ramifications for May,” he said. “The cabinet will force some big changes in the way the administration runs.”Montgomerie said May has “alienated” too many people over the past couple of months. “May was the first party leader in history to rip up a manifesto four days after the launch,” he added.Montgomerie also warned the British people to “get ready for bumpy times” with the economy weakening and tough Brexit negotiations.He added that if Labour leader Jeremy Corbyn was elected Prime Minister it would be “one of the biggest shocks ever in politics”.