Brexit Economic Forecasts

The Government has received assessments of the potential  economic consequences of leaving the EU from HM Treasury, the Bank of England, the International Monetary Fund, the World Trade Organisation and other sources.  All of them been rubbished by spokesmen for the Leave Campaign.  The same treatment has been given to the latest report which has been prepared by The Institute for Fiscal Studies (“IFS”).   One of the constant criticisms from the Brexiteers is that EU funds in some part the works of the reporting institutions.   As one might expect from the IFS, it is written in very clear and cautious terms (read the report here).

In the summary introduction to the FIS report there is this passage:-

“However, there is an overwhelming consensus among those who have made estimates of the consequences of Brexit for national income that it would reduce national income in both the short and long runs. The economic reasons for this – increased uncertainty, higher costs of trade and reduced FDI – are clear. The only significant exception to this consensus is ‘Economists for Brexit’.

As may be seen from the Economists for Brexit website, there are two Co-Chairmen,  Dr Gerard Lyons and Professor Patrick Minford.  Thereby hangs a tale.  In December 2012 Boris Johnson, then Mayor of London, hired Dr Lyons as his “Chief Economic Adviser” at the not inconsiderable salary of £127,200 pa for a 30 hour week.  The cost of the appointment caused some stir in City Hall and the press at the time.  Dr Lyons started work for the Mayor of London in  January  2013.  In  August 2014, the then Mayor of London (still Boris) caused to be published a 104 page report entitled “The Europe Report :  A Win-Win Situation” and in the press release put out by City Hall there was the following passage:-

“The report uses specially commissioned and independent long term forecasting by Voterra found in the separate appendix. It is the first time that an economic forecast regarding London’s relationship with the EU has looked two decades into the future and their results very clearly indicate that the best economic scenario for London would be for the UK to remain part of a reformed European Union. However they also indicate that a scenario where the UK leaves the EU but continues to conduct outward looking and positive economic policies with the EU and the wider world offers nearly the same level of benefits.

The UK would remain in the EU but with substantial reforms. London’s economy would nearly double in size to a £640bn economy and 1m jobs would be added. In this scenario Europe would position itself to benefit fully from the changing world economy and reform would potentially be led by the UK. It is the most favourable scenario for London with a growth rate forecast over 20 years to be as high as the UK obtained over any similar time period during the whole of the 20th century.”

Funny how this evaluation which must have cost the citizens of London a  quite considerable amount does not seem to have been advanced by Boris or his fellow rebels.

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