The government's economic assessment has been published and you can read all 90 pages of it HERE. It seems to have been written with the idea of deliberate obfuscation in mind and isn't easy to read. The document points out that future growth depends on a lot of other things, not just EU membership, but there is no disguising the fact that the British economy will be smaller under every possible scenario and all the news outlets carry this message loud and clear, which I hope pushes a few more voters our way.
At PMQs it was clear the tack the prime minister is going to take over the next few weeks. When the SNP said the report confirmed we would be worse off, she simply dismissed the idea and compared the assessment to today's wealth. We probably will be better off in 2033 than we are now, just not as well off as we could have been. This is the important bit that Mrs May neglected to tell The House.
Caroline Lucas has written to the PM accusing her of misleading parliament (HERE).
Note also that David Davis is fronting things for the Economists for Free Trade (Patrick Minford et al) and has already launched a pre-emptive strike (HERE) against his own government, claiming The Treasury was always wrong and calling the new assessment 'propaganda'. The old fool said it was a 'frankly disgraceful' that the chancellor hadn't published the underlying assumptions - err, but he had, you can see them HERE - Davis couldn't find them! He is touted as a prospective prime minister but clearly can't even use Google! Don't even bother trying to read the technical reference stuff it's totally impenetrable.
There are a lot of figures in different tables in the assessment but I note the BBC seem to have used those in table E4 on page 7 which is based an zero net inflows of EEA workers and offers predictions for 15 years hence, compared to what would be expected if we remain in the EU, and shows:
- In a No deal scenario the economy would shrink by 9.3% by 2033
- In the Chequers scenario the economy would shrink by 3.9% by 2033
In our £2 Trillion economy each 1% amounts to £20 billion so you can see our EU contributions are dwarfed by the potential losses - equal to £186 billion or £78 billion per year. They refer to the Chequers proposal by the way as the modelled White paper with 50% NTB (Non Tariff Barrier) sensitivity. Don't ask me what this means.
The Treasury assessment does admit (page 4) that:
"Agreement of the Political Declaration will now be followed by negotiations on the legal text. The UK and the EU recognise that this means there could be a spectrum of different outcomes, and both have agreed that we should be as ambitious as possible. The UK has put forward proposals that would enable frictionless trade to be achieved outside the Customs Union and Single Market. That is not something that is accepted by everyone in the EU, but the UK has the ability in the future negotiations to continue to work for its objective of achieving frictionless trade".
In other words, nobody knows where we'll end up. But once again we see the reference to 'frictionless trade' outside the SM and the CU. Barnier has repeatedly said this is impossible but it's still in the assessment and is, in effect, what it's based on. It goes on:
"Given the spectrum of outcomes, and ahead of the detailed negotiations on the legal text, an appropriate analytical approach to modelling the impacts of the Political Declaration is to present a range of possible outcomes. To do this, the analysis applies a sensitivity to illustrate the potential impact of higher NTBs, including checks at or behind the border and other regulatory costs. This iillustrative sensitivity point reflects the midpoint in the difference of NTBs to trade between the modelled White Paper at one end, and the modelled average FTA scenario at the other, and does not represent an expected outcome".
To help the PM mislead the public, The Treasury has added this:
"It is expected that in all scenarios considered in this publication, the economy will continue to grow in the long run. The estimates show the relative impacts of different trading arrangements".
And then euphemistically says (page 5):
"The analysis shows that higher barriers to UK-EU trade would be expected to result in greater economic costs".
For 'greater economic costs' read smaller GDP and reduced tax revenues. There are some other heroic assumptions on trade deals in paragraph 48 (page 22).
"The analysis assumes that all EU trade agreements with third countries are transitioned in their current states to UK-specific arrangements, including those EU agreements that are provisionally applied or agreed but not yet ratified. Therefore, the modelling does not capture any potential short run changes in the UK's trading relationships with these countries as a result of the UK leaving the EU".
I would hazard a guess that barely any of them will be 'transitioned' to UK specific arrangements by 2020. And the push to sign new trade deals is dealt with in paragraph 49:
"In keeping with the Government's ambitious free trade agenda, the analysis also assumes that, in the long run, the UK secures new trade agreements with international partners. These agreements are assumed to cover a broad range of potential trading partners, including the United States, Australia, New Zealand, and other members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership".
This also includes Malaysia, Brunei, China, India, Mercosur (Brazil, Argentina, Paraguay and Uruguay) and the Gulf-Cooperation Council (UAE, Saudi Arabia, Oman, Qatar, Kuwait and Bahrain). But stunningly, all of these 'high ambition' trade deal will, according to the last part of table 4.16 on page 77 will add just 0.2% to our GDP by 2033.
We are losing what is probably a minimum of 3.9% GDP due to Non Tariff Barriers with the EU and in exchange gaining 0.2% if we manage to sign 'high ambition' trade deals with 18 countries including China and the USA.
Does this really sound like a good idea?
Does this really sound like a good idea?
