We’ve all heard that Brexit, in all of its scenarios will be economically bad for us. This is presented as fact when it just isn’t the case because as much as I grow weary of explaining this, it wont be economic suicide for us to leave on No Deal just because the Treasury forecasts say so.
Now before you roll your eyes and think here we go again, another armchair economist denouncing the experts who do this kind of thing for a living you have to look deeper than the headlines of the Treasury forecasts, which took account of every single form of Brexit and then projected their calculation of economic reality 15 years hence. They then compared these scenarios against Remaining and every single one without fail, showed a net negative, economic effect of Brexit on our economy.
Hence many now confidently state that a No Deal Brexit would be economic suicide.
Which frankly is absolute drivel, yet they rely on people, who do not delve too deeply into these forecasts to perpetuate this projection as a reality. So that they inform other busy and easily swayed people to become convinced of that ‘reality’ also. As I will now explain very simply why they are completely wrong to assert such a thing and why economic forecasts are neither to be taken as projections nor reality.
Firstly, in order to produce these figures the Treasury had to make certain assumptions from the outset, as there are many unknown variables which could occur over the next 15 years, they decided that they needed a baseline from which to compare the effect of one possible Brexit scenario against the others.
They quite rightly claimed that it would be too difficult to predict what could happen economically, socially or politically for the next 15years through changes to Government policies, global events and such like so they decided to use economic and Government policies at that moment in time as the baseline and use those to project what things would look like 15 years hence
Now think about that for a second.
No annual Chancellors Budget, no tax rises nor cuts, no spending changes, no rising of tax allowances, no increasing or lowering of corporation tax for the next 15 years. Not one financial lever, available to the Government of the day would be pulled, changed or utilised to kickstart or help the economy, such as interest rate rises or falls would occur for the next 15 years.
Not one Government economic policy would change irrelevant if we had a Conservative, Labour or whoever Government, not a single thing would change for the entire 15 year period of these projections.
Now think about that again.
We are about to undergo the single largest change to our national economy and political landscape since World War 2 and these forecasts assume that nothing will change from our current fiscal policies for 15years down the line.
Now honestly, can you tell me how accurate and reliable these forecasts are or indeed would be?
I’ll tell you how accurate they are. They wont be remotely close to reality as they arent worth the paper that they are written on. This is definitely a case of “Crap in, crap out” but thats what these forecasts assume from the beginnning and it wouldn’t bode well for our current economic policy today if Remaining within the EU didnt outperform any other possible scenario solely because our economic policies are geared towards us being in the European Union and Single Market.
They know that people will glibly repeat the headline and not delve too deeply into how they’ve arrived at these calculations. After all, its the Treasury under a Remainer Civil Service so what could possibly be wrong?
Now to prove my case only last month, Bank of England Governor Mark Carney released an updated forecast, (which is what they will do on an annual basis) and he did so knowing which actual policies and levers have been changed throughout the previous 12 month period and guess what?
The No Deal Brexit forecasted 12 months ago wouldnt be as bad as they feared it wouldve been and funnily enough, it’ll be less scary next year and the year after and the year after as we slowly reconfigure economic policy to fit our new reality. Until finally there comes a day sometime in the next 15 years whereby the reality outperforms the pessimistic forecast from back in the day and we see a No Deal Brexit as having economically benefited our economy.
THIS is the reality, not the ridiculous uninformed nonsense that it’ll be bad or economic suicide as it wont be, despite what these flawed and totally innaccurate projections claim. Especially when you understand how they have been compiled and what ridiculous assumptions they make at the outset. So don’t panic, they aren’t lying to you as such, they just aren’t allowing the truth to get in the way of a good story once again and of course it suits the Remainers narrative to keep it that way.
Yet these forecasts are what Labour MP’s are basing the urgent need for us not to leave the EU without a deal on. Think about what they are doing and you’ll soon get the feeling you are being conned out of your vote to Leave based on false assertions. I know that I am because if Disraeli was alive today he would not doubt change his famous quote of “There are three types of lies. Lies, damned lies and statistics” to “Lies, damned lies and Treasury Forecasts”
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