ITV said the UK economy is now smaller by 5 per cent than it otherwise would have been if we had stayed in the EU. They claim this is equal to £31 billion.
At first, I assumed ITV had somehow misunderstood the research since the UK economy is worth about £2.3 trillion (£2,300 billion) and 5% must therefore be closer to £115 billion. Either the percentage is wrong or the absolute figure, they both can’t be right. And from what I know, it's the absolute figure which is wrong.
However, this morning I checked the CER website and the actual report and see that the author John Springford, deputy CER director, says UK GDP is 5.2 per cent smaller and he himself equates this to £31 billion.
This is straight out of the report:
"To estimate the impact on GDP, the algorithm finds the doppelgänger from Q1 2009 to Q2 2016 data (the quarter of the referendum). Chart 1 shows that the gap between Britain and the doppelgänger grew to 2.9 per cent by the fourth quarter of 2019, before the pandemic struck. The pandemic shrank Britain’s economy by far more than that of the doppelgänger, but the subsequent rebound narrowed the gap to 5.2 per cent, or £31 billion, by the end of 2021."
This is Chart 1:
He therefore implies the British economy is worth about £620 billion, which I know is wrong. Perhaps someone will correct the figures or explain how he reached the £31 billion.
Either the £31 billion is for just one quarter (Q4 2021 presumably) or he is confusing GDP with tax revenues which must be down by about £30 billion at least. What is surprising is that Joel Hills, ITV's business and economics editor, hasn't questioned the figures.
However, the important thing is that the mainstream media is at last starting to hit the general public with the real figures. It's a good step which I welcome.
Iain Martin
Times columnist and Brexiteer Iain Martin has written an article (Painful as it is, we need to talk about Brexit) joining others like Lord Hannan who seem to be belatedly recognising it has all been a disaster. After six years, Mr Martin, has come full circle and is back to June 2016. In his piece he concedes that Brexit has failed but shrinks away from the obvious solution.
This is from him:
"The economist Simon French explained in our Business section this week in calm, empirical terms that the weakness in the pound, which he attributes to Brexit — down 9 per cent since June 2016 — and the low valuations for British companies have squeezed profits and made it more difficult to raise capital to invest.
"Most visibly of all, British exporters continue to struggle with the bureaucracy involved in selling goods and services to the EU. The bill is passed on to consumers, adding to inflation. Dip into any trade publication and you’ll encounter tales of hardworking business people in despair about the complexities and costs. Problems with deliveries and paperwork abound in industries from widgets to wine.
"Exports to the EU in 2021 were down almost 12 per cent on 2018. UK exports to the rest of the world fell by about half that percentage. In January the City broker IG said exports to the EU may fall by almost 8 per cent again by 2025.
I could have written those words - not so eloquently perhaps, but with the same message. He goes on to give the Hannan defence that we haven't been bold enough but at least admits that we are unlikely to roll back regulation because voters don't want it.
"The original solution promised by some Brexiteers was massive deregulation and open trade with the rest of the world to replace lost EU business and deliver a boom. This deregulation has not happened and is not going to happen, because this government is afraid of the impact on domestic industries such as agriculture. A successor government won’t deregulate much either and the voters don’t want it. This being the reality, Britain needs a better trading relationship with the EU.
"There’s no use some of my fellow Brexiteers putting their fingers in their ears and humming Rule Britannia. To deny the downsides of Brexit on trade with the EU is to deny reality."
