Hamish McRae: MPs need to grow up to get through Brexit

The thing that troubles business is British lack of preparation.

You don’t need to buy the hostile briefings from Brussels to acknowledge that Michel Barnier, Europe’s chief negotiator, has a point when he says all he hears is a clock ticking.

There is still time to pull this together. I don’t like the expression that Britain would “crash out” of the EU if there is no deal. That is to accept the hostile formulation of the argument that Europe seeks to put across.

In any case, Britain’s relationship with Europe will continue to change in the years ahead. This is not a once-and-for-all event, just one stage of a long trudge. But our negotiating team is going to need measured, cautious political leadership, not only from the Cabinet but from MPs of all parties — and that it has most evidently not yet got.

We’ll only thrive when we value tech

From a global perspective Brexit is a middle-ranking issue. If UK and European growth is cut as a result, then the world economy grows a bit slower too.

But Europe is not a major supplier of additional economic activity, at best generating about 10% of global growth. That puts Europe around number five in the scale of things that will shape the world economy over the next decade. It matters, but not that much.

And those four above it? Well, the US of course, for it is and will remain the world’s largest economy for another 10 years at least.

And China, of course, for it is at present the biggest single generator of growth, bigger than the US. It is a smaller economy, but it is growing much faster. If the US and China manage their relationship with adequate harmony they can pull the rest of the world along with them.

I would, however, add two non- geographical features that will determine whether the world economy, continues to thrive. One is money, the other technology.

Money matters because it creates or distorts incentives. Central banks have used cheap money before to boost growth, but never on the this scale, and usually only in wartime. So they don’t know how economies respond to this policy — or indeed how people respond. But common sense would say that whereas benefits are likely to show in the short-term, the costs only become evident in the long. We are now in transition, taking the first halting steps to a more normal policy, and so far only in the US. There lies the danger.

Finally technology: a simple point, which has been made before, is that it cannot be right that the decade of the iPhone has seen the slowest growth of productivity since the beginnings of the Industrial Revolution more than 200 years ago.

We must be undervaluing the benefits of the communications revolution.

Understanding how technology benefits society is the key to understanding how the world economy will, we hope, continue to thrive.