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Brexit harming UK industrial strategy, warns top economist

BusinessBrexit harming UK industrial strategy, warns top economist

Andy Haldane

The Brexit deadlock has undermined efforts to boost the UK economy, the chairman of the government’s Industrial Strategy Council has told Newsnight.

The council holds the government to account over its industrial strategy.

Andy Haldane, who is also chief economist of the Bank of England, said it was “plausible” that one of the “costs of Brexit is that not as much other stuff has happened as might.”

But he added that the strategy could still lift the UK’s prosperity.

The industrial strategy, launched by Business Secretary Greg Clark in 2017, aims to create a more balanced economy by investing in certain sectors to create good jobs.

“In the absence of Brexit, might more have been done? Perhaps,” Mr Haldane told the BBC.

But he stressed that the strategy was a long-term project and that skills, infrastructure and investment problems are not solved overnight.

“In the grand scheme of things, six months missed here, a year missed there, is less important than sticking to a tried and tested plan,” he said.

Asked how worried he was about a potential no-deal Brexit on 31 October – a prospect that Conservative Party leadership contender Boris Johnson has said he would countenance – Mr Haldane pointed to the Bank’s analysis from last year which suggested that, in a worst case scenario, such a rupture could trigger a deep recession.

“That was the conclusion we reached then. We’ve done no updating of that since. That’s our best guess – my best guess – as an economist,” he said.

The Bank of England’s former governor, Lord King, has criticised the Bank of England’s no-deal analysis, rejecting its assumptions on how long transport disruption would last and saying the central bank had been “unnecessarily drawn in” to commenting on the subject.

Mr Haldane responded: “We are in a situation of quite considerable uncertainty right now and therefore reasonable people can reasonably disagree on the future course of the economy and what’s right and what’s not.

“Our role – when asked by Parliament – is to put our best analysis in play.”

The current governor of the Bank of England, Mark Carney, is due to step down in January 2020 and the Treasury deadline for applications to succeed him closed last week.

Mr Haldane, who joined the Bank in 1989, has been spoken of in some quarters as a potential candidate.

Asked whether he was interested in the top job, and had put his hat in the ring, Mr Haldane said: “I’ve got a job currently. It’s a job I love. It’s a job it’s a privilege to carry out. I’m very happy focusing on just that job right now.”

The final choice of candidate is likely to be made by Theresa May’s successor.

Some analysts have suggested Mr Haldane’s chances – who has been unusually outspoken in highlighting the negative economic impact of inequality, the dwindling power of unions and the need for more long-termism in businesses in recent years – would be higher under a future Labour administration.

Asked by Newsnight about Labour’s plans to re-nationalize utilities such as water and rail services, Mr Haldane said that it was not the job of the council to comment in advance on the merits of individual policies – from either the government or the opposition – but to evaluate them once implemented.

But he added: “This is about forming a view on what works and as importantly what doesn’t work. There’s no shame, by the way, in policies not working provided you are candid about reaching that judgment and you act in response to it.”

You can watch Newsnight on BBC Two weekdays at 22:30 or on iPlayer, subscribe to the programme on YouTube and follow it on Twitter.

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