Sajjad joined a panel of distinguished economic and political voices, discussing the economic impact of Brexit on the Northern Powerhouse.
The panel debate was hosted by the Alliance Manchester Business School with an audience of around 180 including many members of the local business community.
In addition to Saj panel members were Simon Derrick, Chief Currency Strategist at BNY Mellon, Diane Coyle, Professor of Economics at the University of Manchester and Professor Alan Harding, Chief Economic Advisor at the Greater Manchester Combined Authority.
The debate was moderated by Jon McLeod, Chairman, Corporate, Financial & Public Affairs, UK, Weber Shandwick and the panel discussed a series of pre-submitted questions with follow up interations from the floor.
Overall, the panel agreed that the full impact of the referendum vote would take some time to feed through to the economy and that when it did the consequences will be far-reaching.
Simon Derrick said: “Since the vote we have had a phoney war because, put simply, we have not left yet. But I fear the economic numbers will change as the hard reality of what we have to negotiate starts to kick in. Sitting here now there seems to me a false optimism and the things supporting that optimism could disappear very quickly.”
Diane Coyle added: “The full impact will take time. It is only when we start to see deals not done, research grants lost, or investment not going ahead that we will start to see that impact.”
Commenting on Article 50 Sajjad said that he believed the government would trigger the UK’s exit via Article 50 in the first quarter of 2017. “It would show seriousness of intent and provide a time frame for us all to start working towards. At the moment the politics of this is still in flux.”
He said EU partners were not actually surprised by the result. “What was surprising to me was that we were shocked by the result. In Brussels there was no shock as there had always been an expectation that nothing good would ever come out of holding the referendum. What people keep telling me now is ‘tell us what do you want and how it can be delivered’. That is about where we still are right now.”
Simon Derrick said that how the financial markets would respond when Article 50 is triggered would depend on the global markets but that in the immediate aftermath of the Referendum allowing the pound to fall was a sensible thing to do. He commented "When Article 50 is triggered I think the pound will take the immediate strain again, but I also think that over time the UK markets will suffer and there will be a drag on markets.”
Diane Coyle said when it came to negotiating future trade deals as part of Brexit people had overlooked the fact that British manufacturers are part of supply chains that spread across many countries. “Will these companies now get cut out of supply chains? A lot of trade deals will not cover these areas and we need to be very cautious about the types of deals done.”
She added that following the Referendum the UK now had an opportunity to change the kind of economic model it operated in response to the shock.
“We need a policy response. Part of that change could be a move towards a more decentralised economy. I have always been a supporter of Northern Powerhouse and devolution and we need to double down on the detail of that. We also need a regional industry strategy and should be thinking about how we take advantage of the current low interest rate environment to invest.”
Relating specifically to the Northern Powerhouse, Professor Alan Harding, stated :“We need to stick to the devolution path that we thought we were on before the referendum. But we also need to go further and faster. The path we were on with Northern Powerhouse seemed a logical one.”
Sajjad said the government is still committed to the Northern Powerhouse but there are caveats.
“Theresa May has been reasonably clear about the fact that she sees the need for the economy to be far better balanced to make sure we do have a very strong devolution agenda. As far as the Northern Powerhouse is concerned she has provided a commitment…but there is one proviso to all of this and that is ‘economy permitting’. Providing we can sustain our economy and maintain some level of growth then we have a chance of doing this, but if the economy starts to go backwards then I’m afraid things will change very, very quickly.”