HOW GEORGE’S PROJECT FEAR BECAME PROJECT FARCE
THE official statistics showing soaring unemployment and strengthening wage growth yet again exposed how mistaken the claims of the Government-led Remain campaign were in the run up to the 2016 EU referendum. As the vote loomed, the then Chancellor George Osborne led the chorus of warnings that Brexit would be an economic disaster. Branded “Project Fear”, his assertions forecast that a vote to leave the EU would crash the economy, sending unemployment and inflation soaring. Here we show how the fear has mainly turned to cheer...
THE ECONOMY WRONG
A dossier published by the Treasury in the run up to the referendum said a vote to leave “would cause an immediate and profound economic shock” which would “push the UK into recession”. In reality, the UK’s GDP is now 3.3 per cent higher than it was two years ago.
UNEMPLOYMENT WRONG
The Treasury also claimed unemployment ‘would increase by around 500,000’ in the wake of a Brexit vote. Yesterday’s figures showed unemployment in the latest three-month period fell by 16,000 to 1.42 million. The 4.2 per cent unemployment rate is the lowest since the three months to May 1975.
INFLATION RIGHT
The Treasury also predicted a fall in the value of the pound would cause inflation to rise, forecasting levels of between 2.3 per cent and 2.7 per cent in the Consumer Price Index measure. That forecast has proved correct with inflation peaking at over three per cent last year, although the total has since fallen back to 2.7 per cent.
HOUSEHOLD INCOMES WRONG
In one of the most infamous claims, the Treasury said UK households would be an average of £4,300 a year worse off if Britain left the EU, according to figures. Incomes have fallen in real terms, but by nowhere near as much as the Treasury forecast. And yesterday’s figures showed that wage rises have begun to outstrip inflation again.
HOUSE PRICES WRONG
Civil servants said that greater economic uncertainty would drive investors out of Britain, sending asset prices – including the value of homes – plummeting. The Treasury warned that by 2018, house prices would be at least 10 per cent lower and possibly fall by up to 18 per cent. The most recent report from the Halifax said that year-on-year prices in February were 2.7 per cent up.