Ignore the economic scaremongering about Brexit – just keep calm and carry on

Ignore the economic scaremongering about Brexit – just keep calm and carry on

There are hundreds of quotes about economists and most of them are derogatory. For example, ask five economists and you’ll get five different answers – or six if one went to Harvard. So please forgive my scepticism about the recent leaked growth predictions which have emerged from the Department for Exiting the EU.

These are growth predictions by the same unnamed economists (despite my written questions asking for them to be named) who said a vote to Leave would lead to an immediate recession and the loss of 800,000 jobs. In the event, the opposite occurred. Imagine if those of us who were campaigning for a Leave vote had said immediately prior to the referendum in 2016, that in the next 18 months the economy overall would grow by 2.8%, that employment would be up by 400,000, that manufacturing would be up by 4%, that exports would surge and that public borrowing would fall it its lowest level for 10 years: if we had predicted this before the referendum, it would have been dismissed as fanciful Leave propaganda.

When we hear constant revisions for annual economic growth throughout the year, the idea that you can forecast over a 15-year period becomes laughable. Think back 15 years to 2003: who would have forecast the credit crunch, great recession and the rise of social media and mobile technology? The previous 15 years before that saw the emergence of the internet, the Big Bang and the fall of Communism – none of which could have been predicted with any degree of certainty.

On the subject of 10- to 15-year forecasting, however, the European Commission itself has estimated that 90% of global growth over this coming period will be outside the European continent. With that in mind, one has to ask, where is all this economic growth within the Single Market that we are going to be missing out on over the next decade and a half?

In fact, there is some considerable debate about the actual positive effect the Single Market has had on UK growth. In the two decades before we joined the EEC, the UK economy grew by two thirds and then only grew by a half in the two decades after we joined. The EU enthusiasts often cite that it was joining the EU that saved the UK from being the sick man of Europe. However, I believe it was the reforms of the Thatcher Government that delivered that prosperity, something we are still enjoying today with unemployment rates approximately half of the EU average.

The UK has contributed hundreds of billions to the EU budget over the past four decades, money the UK has had to borrow and pay interest on. This, for the privilege of buying more from EU countries than we sell to them. Europe is the only part of the world we buy more from than we sell to. Have we really been getting value for money for our membership? The Prime Minister recently visited China where UK exports have risen by 25% in the past year alone. There is no question of the UK paying China for the privilege of selling our goods to them.

The Treasury analysis did not consider the possibility of a bespoke deal. To reiterate, we buy more from the EU than we sell to them, have agreed payments of billions of pounds as part of the divorce arrangement and we are the third biggest country in Europe with 3 million EU citizens living here. We are not Norway or Canada, so it is in everyone’s interest that we work out a free trade deal and quickly. The longer it is left through transition, the less leverage we have for the negotiation. There is no point in paying the EU lots of money for a worse deal than trading under World Trade Organisation terms. I would also point out that Europe relies on the British military and our intelligence services for its security and defence – something we provide in our own interest and theirs, without sending them a bill for it.

I believe there is a negativity within the Civil Service and the Establishment in general surrounding Brexit, which is evidenced by their pre-referendum analysis. If those same economists, who the Treasury refused to name, are those continuing to develop forecasts, then in my view they are more than likely to view future scenarios which are open to interpretation in a negative rather than a positive way.

The Prime Minister must stick to the terms she set out in her Lancaster House speech if we are to achieve the full benefits of Brexit and treat with caution those who have wrongly forecast disaster in the past and spent a career taking a lead from the EU.

Keep calm and carry on.