You’ve got it wrong! Top economists say Britain will boom after Brexit
A GROUP of leading economists has revealed that civil servants used the wrong data for a Brexit impact study that suggested leaving the EU would damage the economy.
A detailed investigation by Economists for Free Trade has shown that when Government policy on Brexit and its key objectives are used then the British economy will in fact grow between two and four per cent better than if the UK had stayed in the EU.
The Alternative Brexit Impact Assessment has now been passed on to Cabinet ministers to inform the crucial discussion of the Brexit sub-committee tomorrow.
It also reveals that a “no deal” scenario gives Britain a £651billion boost while the EU would lose £507billion.
The discredited Government impact study was branded “Project Fear 2” after it was leaked earlier this month and described as “flawed” by Brexit minister Steve Baker.
It led to claims that Treasury civil servants are deliberately trying to force ministers to accept staying under Brussels rule in the EU customs union.
Pressurise
Prominent Brexiteer Iain Duncan Smith said: “This new study by some of our most respected economists, who have been right in the past on key issues such as the euro and the immediate effects of Brexit, deserves to be taken very seriously.
“It suggests that we should all be highly sceptical of Project Fear Mark 2 – the Treasury-led operation by Whitehall officials to discredit Brexit and browbeat ministers into the softest of departures from the EU.
“It shows that far from depressing UK economic growth in the years to come, escaping from the EU will boost domestic economic growth and raise living standards right across the country, particularly for the poorest.”
The study of the Treasury’s original assessment was carried out by Margaret Thatcher’s former advisor Professor Patrick Minford; Boris Johnson’s former economic advisor Dr Gerard Lyons; Julian Jessop, chief economist at the Institute of Economic Affairs; and Roger Bootle, the founder and chairman of Capital Economics.
The leaked document claimed that growth would be eight per cent lower as a result of leaving the EU without a deal, with staying in the customs union and single market “a best case scenario” but still below expected growth rates. This led to a claim that British households would be £930 worse off as a result of Brexit.
The Economists for Free Trade report notes: “It has become evident that officials in all departments relevant to Brexit have been tasked by officials at No10 to brief their ministers with PowerPoint presentations on the dire implications of this report.
“We believe there is a strong economic argument on which to challenge this Whitehall narrative about the economy’s future under Brexit.
“We also believe the future under Brexit holds substantial potential gains for the UK.”
They pointed out that the Treasury’s new Global Trade Analysis Project was flawed as projections on a future relationship fed into the model are “unrealistically pessimistic”. The group said
that civil servants “assume scenarios that are not consistent with announced Government policy and make policy assumptions that no sensible government would implement”.
Officials also appear to ignore the positive impact of trade barriers coming down with the rest of the world.
“To put this into a nutshell, officials have made their Whitehall analysis case by assuming absurdly that lowering enormous trade barriers against the rest of the world will have virtually no effect, while maintaining existing barrier-free trade with the EU under a Canada+ trade agreement will create huge costs in lost trade with the EU.”
Once Government policy of getting an improved version of the EU’s trade deal with Canada is factored into the model, growth improves by between two and four per cent on what was expected if the UK stays in the bloc, they said.
The report added that a no-deal Brexit would be a massive boost for Britain contrary to the claims by civil servants in their impact study.
The economists said: “It appears that the breakdown of talks would be positive overall for the UK to the tune of a one-off gain of £38billion on the EU budget, plus £180billion from bringing forward the non-budgetary Brexit gains, plus £433billion from EU tariff revenue, some £651billion in all.
“For the EU it would mean a one-off loss of £38billion in financial settlement, plus another one-off loss of £36billion in terms of trade gain, plus the permanent loss due to paying UK tariff revenue of £433billion.”