Complex economic analyses haven't won over the publicby Anand Menon / December 29, 2017 / Leave a comment
Eighteen months on, there is precious little agreement in the British popular debate over the possible economic implications of Brexit. Whatever forecasts of economic pain to come the economists produce, they achieve little if any cut through amongst the people who really count—the politicians and their voters—and for several reasons.
The first is longstanding and—to an extent—helps explain the outcome of the referendum itself as much as debates over its economic aftermath. It was summed up by a female heckler in Newcastle, who asked acerbically “whose GDP” I had in mind when I mentioned forecasts concerning what might happen to the economy in the event of a Leave vote. Grand economic theory had little to say about her life. This speaks to longstanding suspicion of an establishment whose prognostications cannot be trusted, not necessarily because they lie, but simply because the country to which they refer is not the one inhabited by many voters.
A second reason dates back to the referendum campaign itself—the Remain tactics were ridiculed, and indeed continue to be. Earlier this year, responding to claims that Wales might suffer severe economic repercussions as a consequence of Brexit, Welsh Conservative leader Andrew RT Davies said: “According to project fear we should be holed up in a post-apocalyptic wasteland in threadbare clothes eating tinned food by now.” Ever since the referendum, predictions of doom from some in the Remain camp have become the Brexiters’ best friend.
This is true in spades of the short-term forecast published by the Treasury on 23rd May 2016. Never one to do things by halves, George Osborne ensured that, on the day of publication, the front page of the Treasury website declared (not wholly in keeping with the report itself) that a vote to leave the EU would “tip Britain’s economy into a year-long recession,” with at least 500,000 jobs lost and GDP around 3.6 per cent lower than it would otherwise have been.
Not satisfied with this, on 15th June, in what appeared even at the time as an act of some desperation, the Chancellor appeared alongside his Labour predecessor Alistair Darling to declare that a vote to leave the EU would be followed by an emergency budget in which taxes would rise and spending would be slashed—despite the fact that this would have been both politically impossible and economically illiterate.