Saturday 13 January 2024

Robert Colville and 'fantasyland'

Robert Colville has published a critique of the report commissioned by London Mayor Sadiq Khan, from Cambridge Econometrics: Sadiq Khans's Brexit Figures are Straight out of Fantasyland.  Econometrics is an economics consultancy that works for governments, local authorities, NGOs and businesses. They also work for the EU. Colville is a director of the Centre for Policy Studies think tank, Margaret Thatcher’s favourite and although he often tries to appear neutral, it’s quite obvious he’s an avid supporter of and believer in Brexit.

The report suggests the UK economy is currently £140bn a year (5-6%) smaller than it would have been without Brexit and is on course to be 10.1% smaller by 2025. London’s economy alone is said to be losing £30bn a year.

The numbers are considerably worse than the OBR is forecasting and Colville challenges the conclusions as he’s entitled to do. He describes them as being from fantasyland and to be frank, he probably has a point. Khan - a dedicated rejoiner - paid Econometrics for the report and usually, the buyer gets what he wants, something to capture headlines and influence opinion.

There is almost certainly a bit of overegging of the pudding and I wouldn't necessarily accept the figures as given. However, what I would say is that the essence of it is right. Brexit is coming in at a very high cost.

Colville at one point claims he isn’t “making any claims at all about the economic impact of Brexit, positive or negative.”  This is the most telling comment for me because no official body (the Treasury, OBR, Bank of England, IMF, etc) or reputable economist or think tank is arguing there has been any positive impact of Brexit. Even its advocates admit there are negative effects but argue they’re short-term, the sunlit uplands are coming soon, as always. Colville himself doesn't dare claim there are any positive economic impacts

As far as I can see, everyone - even Colville - is arguing about how bad Brexit has been. If Britain was indeed “prospering like never before” there wouldn’t be these gloomy reports and endless speculation about the degree to which the UK economy has been damaged.

In February 2020, just after Brexit day and before the trade talks (or the pandemic) got started Colville was writing in The Times about how Britain would no longer be able to point to EU bureaucrats if things went wrong: We can’t blame the EU if Brexit doesn’t deliver.

His 2020 piece began like this:

"In the Brexit debate, details really matter. What level should Britain set its fishing quotas at? What percentage of those should EU vessels have access to? If someone in Germany uses a 3D printer to construct a product designed in the UK, have we exported a good or a service?"

It now looks laughable to think Britain was able to set its own fishing quotas. The fishing industry has been among the worst hit of all by Brexit. He went on to maintain:

"...discussion of the benefits of Brexit can sometimes concentrate on the transactional. This sector may be damaged by reduced access to the EU market, but there is the potential for that one to benefit if we get our regulations right. Prioritising a trade deal with America may mean concessions that make it harder to get one with China."

It's notable that talk of the 'benefits of Brexit' has fallen silent but back in 2020 Colville was quoting Michael Gove making "a profound point" about the most important consequence of Brexit which was "philosophical: a shift in where responsibility lies."

In short, he is of course referring to 'taking back control' but just like the economic arguments have all turned sour, so is this one.  Increasingly, it's obvious we aren't taking back control but ceding ever more of it to Brussels.  The Irish border and the Windsor Framework couldn't possibly have been the choice of ministers who 'held all the cards'. We were forced to swallow it.

The UKCA mark idea has been dropped, we haven’t diverged to any great extent in any sector and almost certainly won’t in the future. Industry doesn’t want it and ministers aren’t going to force it on them for fear of driving investment away. We've rejoined Horizon and probably Erasmus will be next.

In all sorts of ways, the Brussels effect, the gravitational pull of EU rules and regulations, is most powerful because of our proximity. Trade with the EU as a percentage of the total is actually increasing according to UK in a Changing Europe, reaching 53.3%. This is partly because trade overall isn't growing and the trade deals with Pacific Rim countries aren't having much impact. As UKCE say, it is the old 'gravity' model of trade working as it always has and always will.

So much for Britain shaking free of the 'sclerotic' EU.

Colville is also one of those who seemed to think that Brexit equalled free trade when in fact it was the precise opposite, as many exporters to the EU are finding. I posted about this last June when Colville tweeted about "Defra wanting to impose its own checks on food that already meets EU standards."

This is about the import checks on food arriving from the EU which start at the end of this month. He seems to think the EU is going to check the quality of food in our market. They stopped doing this at the end of 2020.

EU standards only apply to food and goods 'placed for sale to consumers in the single market' - they don't apply to exports. An EU supplier can ship whatever he or she wants outside the EU and it's up to the government of the importing country to check that stuff arriving is safe and wholesome.

Eight years on and Colville is finally getting his head around it all. I am afraid he has been living in fantasyland.

Polling

I thought I would cheer you up with this:

The march back to the EU goes on.

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