 So, roeddwn ni wedi'w dweithio hynny o gymryd y cwestiy Ac am hyn arwad, mae'n ddim yn cael eu bod yn chynnol ymgwrs. Rwy'n cael ei gydag y trofa. David Higgins. Rwy'n teimlo eu cyrragyl sefydig. Rwy'n cael ei bod yn ymgrifetau a'r ffordd, a rwy'n chi'n chym ni'n mor ffordd ar y Genlynedd, sydd eёт mynd i'w ympractif iawn i'w ymgynghrau, mae gennyn nhw wedi cael eu gyrffennu cerddau. Gwyddo dechrau i'r ddweud yw i'r cyflwyffydd a bywydd yn ffrwng y cyflwyffydd? A wneud wedi'u gweld i'r pethau. Y ddechrau i'r ddweud yn cyflwyffydd wedi'u cyflwyffydd yn ddod a ddod. Ond, nid ydych chi'n gwybod i'r ddweud i'w cyflwyffydd, ac yn gyfrifiadau, mae'n bwysig i'r 1% o'r ddweud cyflwyffydd. ond rwy'n mynd i'r cyfnodd y cyfnodd yma'r chweithio yn y Unig Llywodraeth a'r ddyliadau ym Mhawdd? Rwy'n rwy'n rwy'n mynd i ddweud yn y Unig Llywodraeth yn 2008 ac yn oed yn rwy'n gweithio, ond mae'n gweld y cerddur oherwydd i gael ei wneud oedd y cerddur o'r gwneud. It is likely to be some combination of stagnant business investment under investment by the public sector in my view to some extent constraints on housing and planning which makes it difficult for people to move where the high productivity jobs are and so on. and the overhang in the financial sector which means that we are still, I suspect, the UK banks are still happiest when they are lending to people buying houses and the rest of it. But how we deal with that, I think nobody knows in the UK. If I did, I would be 쉽 Sandell I would be advising the government, but it is very much the central economic problem in the UK at the moment for the medium to long term. We have full employment, we have, but it has not been combined with significant advances in productivity and we are still at a loss. It is still quite what it is about our economic model that is driving that. My personal view is that the most obvious and easiest from an economic perspective set of issues would be around housing and planning and to some extent also going along with that public sector and infrastructure investment. But those have turned out to be quite difficult to deal with politically. On wages, it is true that the government has lifted the public sector pay cap to a limited extent. Whether this reflects waging rate, wage pressures more generally and public sector, whether we translate it into increasing private sector wages is much less clear at the moment. The government, certainly as of yet, has not said that it is going to be increasing. Public sector wages any faster than private sector wages are already increasing, so as yet that has not happened. It may do, but we have been waiting for wage growth for the UK in a long time. You seem remarkably optimistic in my view, but there is just a question to the econometric models because there are two variables I think really are very hard to quantify but could be quite significant. And Fox berated British business for its lack of ambition recently and he was reflecting I think the panic representation he is getting and I would argue this for two reasons. One, if you are a UK company focusing on the French market and that becomes uncompetitive to regear in the 21st century where you now have to invest so much in re-getting to know your customers, your social media, blah blah blah, that is to suddenly reorientate, which theoretically sounds kind of easy because it is all social media, blah blah, but it is actually remarkably difficult because you need to grasp the culture wherever you go and the investment, the timeline, blah blah, could be catastrophic. That is the first thing that I question if these models are able to take counter. The second and even more dangerous point for the UK and the famous lawnmower case study I thought was really brilliant on this, the day after Britain leaves the European Union, say for example I control 25% of a market and the UK control 20%. Well the first thing I do on the following days I will immediately seek to change EU regulations to make UK products uncompetitive and in the lawnmower case study all I have to do is just raise the decimal level or something and straight away I wipe out the UK lawnmower industry. So in other words those two key things spell catastrophe for the British economy and you rarely hear them debated. You do hear them debated I am quite sure the lobby goes on against Fox. So how do you quantify that and how can you be optimistic against that background? Thank you. I mean those are very good points and the answer is that it is pretty difficult to quantify. I think it goes back to the sort of general point though of which way do you think the asymmetry goes. So I had asserted and right I asserted without backing it up with particularly strong evidence that the gains from integration and trade liberalisation and regulatory organisation between the UK and the EU would be greater than the losses resulting from us leaving and divergence over time. Could you write down model or an economic model where not only was that not the case but as you suggested the reverse might be the case that the losses from leaving might be even greater than the gains from entry. You could in principle it depends on how exactly you specified the time arising of the investment costs and sunk costs and so on in your model. I guess my feeling is that the sort of divergence and the regulatory gaming that you suggest would take quite a long time you know would it happen yes some of it but it would take quite a long time and that time would in itself give UK firms time to readjust in one form or another whether towards the domestic market or the international market but you're right I mean I'm speculating rather than the points you raise are perfectly valid and we will only find out long after the event. Good the gentleman down there beside the fireplace. Good afternoon Thomas Luke Deputy Ambassador for the Netherlands. Mark Price the former trade minister who resigned the fortnight ago he said in an interview today in the Guardian that two underlying reasons why people voted for Brexit was low wages and the outsourcing and he says the Brexit doesn't affect either of those two reasons. How would you respond to that and could the realisation of that play in a role in the current Brexit negotiations. Could what was asked. If that realisation that indeed those two reasons for voting for Brexit doesn't play a real part or doesn't have a real impact after the Brexit won't be changed by the Brexit could influence the debate on the Brexit actually at the moment. Well I mean I think your the first half of your question is clearly right as I tried to explain in my introduction people you know the observable correlates of voting Brexit suggested that people voted for Brexit for lots of reasons which had relatively little to do with the European Union at all. And certainly I think it's you know it's my view and the view of most economists that you know the sort of many of the big both big structural advantages but certainly the big structural disadvantages of the UK economy have really got very little to do with the European Union. It's not the European Union you know the European Union has some influence around the edges around things like environmental regulation certainly and housing and so so and hence housing and planning and around say education and welfare. But those are fundamentally national competencies and if we get them wrong it's our own fault. And did people vote partly on those grounds absolutely and you know and wage stagnation has relatively little to do with the with the EU and quite a lot to do with the structural issues around the UK economy which which I then entered the framework. What that so I agree with that what that does to the political dynamic though I think is much less clear I'm afraid and here this is very much more political science and economics question but if it seems to me that if we have a continued period of stagnation of real wages and people you know that will not in itself lead to people changing their mind about Brexit. In order to you know people tend as I understand it and I'm strange the political science literature people tend on the whole to fix on evidence that confirms their their previous decisions. So the prejudice among most people and this is true on the remain side as well as the leaf side is to point at news and say well this shows that I was right to that remain because it was a disaster because these things are happening. Same time people on the break side point to other bits and say well this shows clearly that Brexit is going to fine. So my view remains that in order to have a proper shift of opinion on this you will need a set of events which fulfilled two characteristics one which that they are unidentifiable that they are. You know very clearly and unargubly associated with Brexit and second that they affect directly the the broad groups who voted for Brexit. So as I said it's not going to be HSBC moving in headquarters if Nissan or Toyota come out and say at some point right we've really had enough of this. You guys do not know what you are doing. We are closing our operations here and we are moving it to Slovakia because or wherever that that a few decisions like that it seems to me would change the tone of the debate quite a lot but we haven't had anything like that yet. Could you say something just again on the voting and economic disparities of the voting population. What do you think the effect will be regionally on the impact on the British economy? Most regions of the UK are dependent on EU trade and EU membership in one form or another but it's quite different of course. London is dependent on financial services whereas the northeast is dependent on manufacturing and Nissan and its supply chain. So we don't know ex ante what the regional effects will look like because we don't know what sort of deal we're going to have and whether it will disproportionately affect manufacturing or services or indeed both. My view but again this is a hypothesis. So there has been a bit of quantitative work on this, the Centre for European Reform. I think you had having produced something showing that actually the regions that voted most were likely to be the most adverse affected but I think that in my view is useful but somewhat speculative. We don't know that to be the case because it will depend on what sort of deal. I think beyond that my sense is although London will suffer from any Brexit related reductions in skilled immigration and Brexit related increased barriers to services. London is sufficiently dynamic and adaptable going back to the earlier question that we'll find ways, we'll find new markets or new industries or whatever. Not that there won't be a cost whereas if going back to the previous question Nissan or Tata Steel closed down that's really very serious for the areas that are affected. And another one in the second row here. Thanks Paul, I'm on sabbatical from the porno. It's often said that Britain acquired its empire and it fit about in mind isn't it. It feels sometimes it's leaving the EU in the same spirit as I said on sabbatical. I wonder if you could say a little bit about how you think the economic might be brought to bear on the waterway fluid political situation where there's no support for a particular model. Of leaving or future relationship with the EU. So how does a business or how do the Irish government or whoever bring the economics into play? Because even the Chancellor seems to be struggling to do it. Well I think it is. I do think it is very difficult. And I think ideally and I worry that it will only come into play as a result either of a breakdown in negotiations or by some sort of major economic event or by the former precipitating the latter. Which on the one hand you might say well that's a good thing at least it will force the UK to confront the consequences of this choice. But on the other you can also see that poisoning the political debate in such a way that we end up in an even worse outcome. I will say sort of what I think we should do if we could. What would I like to see Theresa May say at this point? I think what you or the government say and what I think I like in an ideal world what they would come out and say is look we realize that we're not going to be able to do to establish the framework of our future relationship with the EU within the time available. We therefore need some form of as the Chancellor has already said extension period or interim standstill agreement. During that time we the UK need to have a proper public debate about which of these what I call the Farage Fox or Hammond Treasury Brexit we want. Once we've done that we can move forward and make the best of whatever it is that we choose. But we need to have that we need to have the time and space to do that and to take and to consider the economic and social consequences of those choices. I don't think unfortunately that's what May speaks next week is going to say although I don't genuinely don't know what it is going to say. Thank you very much Tom. Just a quick question. Prior to Brexit what level of stimulation to the UK economy would a 20 percent evaluation have resulted in from the Treasury model and what happened? I mean I think you know we're still arguing in the UK about the extent to which recovery in 1992 to 94. We've driven by the devaluation the ERM exit in the conflict devaluation as opposed to the fall in interest rates and economic recovery elsewhere. So I think the short answer is we're not going to resolve that. But I mean the broad answer which I expect the one you're looking for have the results of the devaluation been quite disappointing so far. Yes that's clearly true. I suspect we will see some pick up in exports over you know we will see British exports doing better over the next year or so. But it will be very difficult to attribute that to as between economic recovery in the Eurozone which obviously helps and the direct impact of the devaluation. I think it's pretty clear that it hasn't been so far the economy has not responded as much as the Treasury model or indeed the Neeser model where I used to work would have predicted. But it is quite difficult as you know to unpick these things. Thank you gentlemen in the doorway there. Thank you very much Donald Dunham. Coming back to your modeling on Brexit scenarios and you didn't mention perhaps the most important issue which is the price to be paid for Brexit. Supposing the European Union decide that they're not going to have a deal with Britain. Brussels will initiate a no deal exit for the UK. Supposing the price is in the hundreds of millions or billions and not just the 20 to 40 that gets mentioned in the British media. Does that change your modeling it's following up I suppose Mr. Tynan's question of your supposition so far seem to be based on a very benign European Union. Well I mean I'm not assuming a benign European Union so much as one that that pursues enlightened self interest which on the whole I tend to think the EU does. I mean not not often crab wise in the usual way of these things. But I don't think you know a chaotic scenario will do significant damage certainly to the Irish economy but also to the French and German economies. It's clearly not in the EU's interests and the EU's negotiating guidelines do not suggest that they are pursuing that their preferred option is no deal as opposed to their preferred option being a deal where the UK has to accept that some things we will have to give ground on some things and compromise on some things on some things we're simply going to have to concede. And particular on the exit bill for example I mean there's nothing that I've seen you know what I've seen suggest that the EU is bidding very much at the high end. But not that the EU is deliberately trying to sabotage the negotiations by coming up with a figure that is so high we can't even talk about it if we wanted to. Whether they can't be negotiated down to a level which if there is a political will in the UK that we could live with. And I think analysts in Brussels and London are reasonably clear that you know that both the EU on one side and the Treasury in London on the other would grudgingly end up being happy with a bill of 30 or 40 billion. And that if that could be presented at least for the first couple of years as payment just continuing our ongoing budget contributions as part of some interim phase you know then you know at official level people will be happy. Now can Theresa May, does Theresa May accept that that's the best option for the UK? Is she then prepared to sell it to her own party and country and to face down people who won't like it? That is unknown. But the fact that the sort of outline of that deal is there I think has been pretty common gossip in Brussels and London for at least the last three months. You mentioned the costs for Ireland is just maybe worth pointing out that Irish exports to the UK's percentage of GDP exceed Britain's exports to the 27. So the impact for us could actually be greater than the UK. The very curious second row is back again. Thank you Oliver Grogan, Wintime Department of Foreign Affairs. We had a talk last week on the trade aspects of Brexit. The speaker whose name I forget at the moment was quite upbeat on the question of future free trade agreements on a bilateral basis that Britain could effect. The reason for his optimism in his own terms was that Britain would no longer be simply part of the negotiating mix of the EU EU and would focus on its own strengths and priorities in particular financial services. Now the discussion left open a number of aspects and maybe perhaps you would address one of them and that is the negotiating heft that Britain could bring to bear as negotiating on its own as opposed to being part of a continental block. I'm thinking in particular of getting a deal with countries like China which would perhaps insist on access for its deal to Britain as a counterpart to a deal on financial services. And similarly with India which would possibly insist on greater openness on immigration. So on this question of just potential negotiating strength that Britain would have on a bilateral basis, I wonder could you address that. Thank you. Well I mean I think you summed up very well. There's a trade off. Yes being one country rather than having the commission negotiate on behalf of 27 and having to make internal deals in order to get a negotiating position means we can be quicker, more flexible. We have fewer vested interests to defend. We in particular can be probably rather more liberal on not all but lots of agricultural products so that clearly makes it easier for us to do deals. On the other hand we're obviously not as powerful or desirable. So how do those trade offs balance out? I think on China and India frankly the chances of any really far reaching trade deal don't change very much which is to say they weren't very large when we were part of the EU and they're all very large now. It's just too difficult. And these countries have their own quite strong vested interests and as you say I mean Theresa May has put India completely off the agenda for the foreseeable future because she doesn't like Indian immigrants. That would be quite blunt about it. But even if we had a more liberal government approach to that that wasn't so hung up on that particular question, the commission has been trying to negotiate with India for quite a long time and you mentioned financial services. The Indians are very nervous about allowing UK financial services access to India for all sorts of complicated, the usual complicated domestic political reasons. So I don't think that's going to happen. I mean I think that the big one for us is very much the US and as the numbers which I went probably too quickly for people to see but in terms of economic impacts by far the biggest issue for us is the US. And there I think the trade-offs are coming to play. It is clearly easier for us in some respects to do deal with the US than it is for the EU. Equally it's clear we'd get a worse deal because the asymmetric negotiating weight is that and so how does that play in domestic British politics? Will, do we want to deal with the US enough to swallow hard and swallow hard? I mean quite literally since some of the most difficult issues for the British public is chlorinated chicken and hormone-treated beef and we'll also have to accept the idea that the US is going to let us compete in financial services in New York. That's not going to happen. We know that the US doesn't take that approach in terms of international negotiations on financial services. So I think it's considerably more likely that a US-UK trade deal will happen than TTIP in a shorter time period but equally it's going to be quite a, not going to be a great deal from the UK point of view and it may well be that UK politics in the end derails it. So those are the trade-offs of leaving a large and powerful trade block. And final question to Alan Dukes. Thank you. Alan Dukes a former politician. On the trade area I would think that the prospects of getting a reasonable trade agreement with the United States during the Trump period is pretty much nil. And certainly the US approach to any discussion will be very aggressive in terms of the products we're talking about. President Modi has said no trade deal unless you take more immigrants from India. But the most enthusiastic one so far has been New Zealand but there's one firm in Ireland that does more business with the UK than the entire economy of New Zealand. We can't see any great prospects there. But it seems to me that there is some excessive pessimism about the UK's post-Brexit trade position with the rest of the world. I proposed to another commentator a while ago that the UK should simply sit down with partners with which the EU already has a trade agreement and say strike out EU and right in UK. He poured cold water on that because he said it's not important for other countries to do that. I would argue every day nothing to lose by doing it and the WTO certainly couldn't oppose a move to lessen the impact on world trade. In addition to which the UK in some sectors already has a pretty unassailable position in trade. If you take for example in the high tech sector it's Rolls Royce is specified equipment on large numbers of American aircraft now. So the Americans are not going to be nasty to the UK after they leave Brexit and that trade both in Europe and elsewhere will be utterly unaffected. So I'm not sure that the prospects for trade are as bleak as people sometimes put them. Where I am concerned is to know is there any discussion in London about what would happen for example to the open skies agreement within the European Union. We have the chief executive of our major airline saying the planes will stop flying the day after Brexit. I think pigs will fly before the plane and stop flying given his motivation but there is a complication there that would need to be earned out. Especially for British Airways in which we have an interest. I mean on that last point yes there is a considerable increase in open skies. My assumption is that unless we have the chaotic Brexit where there is no article 50 deal at all. That there will be some form of you know that that is one of the issues where it's not really in the interest of anyone to have complete breakdown. And therefore we will find some way of replicating most of what we currently have now post Brexit. So my assumption is that that issue will be tied up. But I mean you can't rule out that they would stop flying and obviously Mr O'Leary is not really going to want to stop flying. But equally my assumption is that if we actually exit without any deal at all. That not the planes will physically have to stop flying. But the lawyers will you know the lawyers tell British Airways actually we do not know the legal status under which you're making this flight. Therefore if something goes wrong with it we don't know the extent to which your insurance will cover it. Then they will stop flying right. I mean you don't know you wouldn't. And that is you know that and that writ large of across a whole range of economic relationships. There's fear that we will not know the legal status of various contracts or various forms of economic activities. It's something that's very worrying about no deal or not properly specified deal. And that's another reason why I still don't think it's a likely outcome because it's so much a lose lose proposition. We lose more than most other countries but other countries lose quite a lot too. That no same set of politicians is surely going to another one. On the broader question about trade I agree. As I said I don't think this is the end of the world. We will continue to trade with the EU maybe less. We will continue to trade with the rest of the world. Not as much more as some of the more zealous proponents of global free trade claim. On the copying and pasting existing agreements. Liam Fox said as much just a week ago that that's what the UK intends to do. And I suspect that is what we will. That's another reason that we're actually these big new trade agreements with the US, Indian and China aren't going to happen anytime soon. Because actually the first priority will be to replicate Korea and Sita and maybe Japan. And working out what to do with all the various, what's not called the generalised system of preferences anymore. Anything but arms but the various other trade preferences we already have in place. Even that is not as simple as it sounds because of course rules of origin and accumulation can simply be copied over. If we were to simply copy over the Korean trade agreement, that would interfere with the way that car production supply chains currently work. So even that wouldn't be good enough to preserve what we have now, as I understand it. Now maybe that all can be sorted but it's just another expenditure of time and effort in order to get us back to where we were in the first place. OK, apologies to people who couldn't get in for questions but Jonathan has to fly back shortly. Thank you for that, covered a lot of bases and certainly it was more of a less depressing Brexit contribution.