Over the last couple of weeks, I had a letter published in the local newspaper about Brexit, which elicited a couple of responses. My letter was pointing out that we are getting poorer and asking if there was a limit to how much of the promised "prosperity" we can take, was there a price that might be too high?
I assume to get a balance there were two letters last week published in response. One supporting another referendum, the other accusing me of using misleading statistics. Now this is an insight into the mind of the average Brexiter since the writer countered my argument with a blizzard of statistics about where we are now, conveniently forgetting we are still in the EU, in an effort to show we will be better off in the future.
My figures all came from the OBR (Office of Budget Responsibility) who are charged with producing an accurate, politically unbiased, view of the economy looking forward over the next five years (HERE). The 258 page document, compiled by experts, is unremittingly gloomy about the uncertainty cause by Brexit and forecasts rising unemployment beginning this quarter. They also downgrade the size of the economy forecast for 2021 by £40 billion a year.
The Resolution Foundation (HERE) added this £40 billion to the earlier downgrade made in March this year and concluded our economy would be smaller by £72 billion than was forecast in March 2016, before the referendum. This was the figure I used. It represents about a loss of 3.4% in the UK economy by 2021.
I looked back at the Treasury document published before the referendum (HERE). In the Executive Summary, they claimed that our economy would shrink by 6.2% by 2030 (As a central projection between the range 4.6% - 7.8%) with a bilateral trade deal. So, the Treasury forecast, dismissed by the leave campaign as scaremongering, is actually slightly better since the OBR now expect a 3.4% reduction in the next five years.
I have sent a reply and hope it will be published but by an odd coincidence, the Rand Corporation, an entirely independent American think tank, have produced a report (HERE) this week showing under all likely scenarios we will be worse off:
They say we will shrink by 4.9% by 2029 under a no-deal scenario but seem to have missed the OBR's figure of 3.4% by 2021 even under a smooth Brexit process. But nonetheless they say we will get poorer. The Full Report is HERE
Faced with these kind of expert forecasts and the visible fact of a slowing economy (rising prices, squeezed incomes and spending) the average Brexiter clings to the belief that they are somehow wrong and that it will all magically turn out right. It is wishful thinking. If there is going to be a debate there needs to be some sort of common ground, an acceptance of a few basic facts but for Brexiters it's all emotion isn't it. Until the facts become overwhelming they will not accept Brexit is a bad thing.
Update: The OBR forecast in November that unemployment would begin to rise in Q4 2017 and figures released on 13th December (HERE) seem to show this is just starting. The number of people in employment actually fell by 56,000 in the three months to the end of October. It looks as if we are just at the peak and the long period of expansion in the jobs market is coming to an end.
Update: The OBR forecast in November that unemployment would begin to rise in Q4 2017 and figures released on 13th December (HERE) seem to show this is just starting. The number of people in employment actually fell by 56,000 in the three months to the end of October. It looks as if we are just at the peak and the long period of expansion in the jobs market is coming to an end.
