There is one feature of the Treasury’s ludicrous forecasts for 2030 that I agree with. They reckon in our out of the EU the UK will be better off in 2030 than today. Given the rate of technological change and the ability to work smarter and better in the years ahead, it would be surprising if we were not better off.
The issue in dispute is will be even better off if we leave or stay? 2030 is too far ahead to be sure. Whichever route we choose, we will never be able to answer that question definitively, as the country can only live one of the two options. I do think it more likely we will be better off out, for the many reasons I have set out in recent weeks on this site.
It is easier forecasting the next two or three years. Forecasting the next fifteen is just about impossible. Will China be the world’s largest economy in 2030, still growing well, or will there have been a China crisis as some fear? Will there be major new breakthroughs in technology, or will still be adapting and using the main internet, materials and biotechnologies we already know about? Will the world comfortably absorb the huge supply of potential labour from the poorer countries, or will there be difficulties in spreading wealth and incomes more widely? Will political tensions in the Middle East, in the China Sea and elsewhere remain contained?
It seems likely that if we leave the EU we can look forward to a better pay rise at the bottom end of the pay scale than if we stay in. Lord Rose, the Chairman of Remain, said as much in a rare honest forecast from that campaign. Assuming a post Brexit government does take control of our borders and impose sensible and effective controls on EU migrants wanting to come to take low paid jobs, we will remove some of the downwards pressure on wages.
We will also have £10bn a year to spend at home that we have to give way to EU in contributions we don’t get back. This will enable us to hire more people for the NHS and schools who will tend to be better paid people with more skill. This also helps boost UK family incomes as we train more nurses, doctors and teachers and get them into employment.
There is also the stimulus effect of the first post Brexit budget, spending that money and removing VAT on fuel to increase people’s spending power. That too will boost incomes and help create more jobs as the money circulates through our economy instead of being paid away. The left has often called for more so called fiscal stimulus. They want the state to spend more to create activity and jobs. That is exactly what we can do if we reclaim our own money to spend on our priorities.
(A longer version of this has appeared as an article in City am)