Remember the real gloom felt during the
referendum campaign? Remember the forecast: ….“Britain’s economy would be tipped into
a year-long recession, with at least 500,000 jobs lost and GDP around 3.6%
lower, following a vote to leave the EU, new Treasury analysis launched today
by the Prime Minister and Chancellor shows.”?
What has happened in these last two and a half years? None of that. Indeed, quite the reverse. The economy grew, unemployment fell, investment went through the roof. So not the best of track records.
So on the latest bad news coming out
of HM Treasury, it does need to be taken with a
pinch of salt. A large one.
And that is
what economist Andrew Lilico did as he pointed out that in its new analysis,
the Treasury makes three remarkable assumptions.
1. Assumes
there is no economic gain at all from controlling our own policy compared with
the EU doing it.
2. Assumes there is no gain from “Future
domestic policy choices.”
3. Assumes GDP gains from new trade deals
with non-EU countries are only 10% of what the EU estimated those gains would be.
Any first year
university would receive a D minus for such clearly ludicrous assumptions. No credible economist assumes there are zero
economic gains to be made from liberating companies from EU red tape and exposing them to new market opportunities.
Just as the ECJ is a political court so the
Treasury is fast becoming seen as a political tool not a serious economic body.
And politicians and Civil Servants wonder
why there is so much mistrust around.
So before you accept the word of the Bank of England or indeed of any other forecaster,
irrespective if they are for Remain or Leave, ask yourself, "are they being honest
with their data".
The Treasury and the Bank
have got almost every big call in relation to leaving the EU wrong up till
now. So why should we have any more
trust in them today?
Can you think of a
reason?
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