"Project Fear" lives on in Labour and Plaid scare stories
I feel really sad when opponents of Brexit frighten voters with fiction - what has become known as "Project Fear". I feel bad when people are taken in by the misinformation. If you believed every scare story, your view of the world would be so distorted you'd be afraid to get out of bed.
The number one fear story this week is about privatising the NHS - despite there being commitments from all the major parties not to privatise the NHS! For the record, the Brexit Party policy as set out in the contract is: "The NHS must remain a publicly owned, comprehensive service free at the point of use" and "There should be no privatisation of the NHS". OK!
The reason why scare stories work is that no one can really be sure about the future. If all parties are saying something won't happen it seems unlikely to happen. That said, it could be years before we know for sure if the Tories will - or will not - "privatise" the NHS. Presenting that genuine uncertainty as a guaranteed disaster is what gives politicians a bad name.
But given some time has passed, it's worth looking at the original "Project Fear" cooked up by the Treasury under arch remainer ex-Chancellor Osborne and ex-PM May. The forecast was published in May 2016 and was about the "immediate" impact on the economy if the people dared to vote for "leave" in the referendum.
Given time has passed we now know that the promised "profound" economic shock never came. There was no recession and unemployment did not rise. The fantasy gloom was gleefully propagated by ex-Chancellor Hammond even though it was clear that events were not unfolding as predicted.
What turned out to be a complete shocker of a Treasury forecast ("The immediate economic impact of leaving the EU") offered two scenarios. We can assume that their best guess was something between the two.
They predicted that unemployment would rise in the scenarios by, respectively, 500,000 and 800,000. They reckoned that GDP (economic output) would be, respectively, 3.6% and 6.0% lower if the UK voted to leave. This is a major recession and very substantial rise in unemployment.
So, what has happened? Instead of rising, unemployment has fallen by over 300,000 since the referendum (according to the ONS Labour Force Survey measure). This forecast was wrong not only in scale but in direction! Out by about 1 million people over a two year period.
GDP annual growth in 2015 and 2016 (before the referendum) averaged 2.1% and in 2017 and 2018 averaged 1.8%. Given the volatility of these figures this is a modest and probably not significant difference. Annual GDP growth has been no higher than 2.8% and no lower than 1.0% since 2012 (when it was lower), so growth in the last four years has been in the middle of that range. So, even if growth has been dented a touch by the uncertainty surrounding the outcome of Brexit negotiations, it has dipped by only a very small fraction of the what the Treasury forecast. (These figures are based on ONS series ED9T.) World growth has also slowed a bit recently so the UK is not out of line.
I conclude three things:
First, when people talk of that £350m on the bus, do remind them that a much much bigger lie was Project Fear coming from the Treasury.
Second, if the short-term forecasts were SO wrong, the long-term forecasts (made by the same economists using the same models) might well be wrong too. The economic future could well be rosy outside the EU.
Third, such bad forecasts could only have been produced by civil servants who are incompetent or politicised. This means that there is a trust issue with the "experts". To try to improve this, The Brexit Party "Contract with the people" will require all civil servants to sign an oath to act with political neutrality.
The number one fear story this week is about privatising the NHS - despite there being commitments from all the major parties not to privatise the NHS! For the record, the Brexit Party policy as set out in the contract is: "The NHS must remain a publicly owned, comprehensive service free at the point of use" and "There should be no privatisation of the NHS". OK!
The reason why scare stories work is that no one can really be sure about the future. If all parties are saying something won't happen it seems unlikely to happen. That said, it could be years before we know for sure if the Tories will - or will not - "privatise" the NHS. Presenting that genuine uncertainty as a guaranteed disaster is what gives politicians a bad name.
But given some time has passed, it's worth looking at the original "Project Fear" cooked up by the Treasury under arch remainer ex-Chancellor Osborne and ex-PM May. The forecast was published in May 2016 and was about the "immediate" impact on the economy if the people dared to vote for "leave" in the referendum.
Given time has passed we now know that the promised "profound" economic shock never came. There was no recession and unemployment did not rise. The fantasy gloom was gleefully propagated by ex-Chancellor Hammond even though it was clear that events were not unfolding as predicted.
What turned out to be a complete shocker of a Treasury forecast ("The immediate economic impact of leaving the EU") offered two scenarios. We can assume that their best guess was something between the two.
They predicted that unemployment would rise in the scenarios by, respectively, 500,000 and 800,000. They reckoned that GDP (economic output) would be, respectively, 3.6% and 6.0% lower if the UK voted to leave. This is a major recession and very substantial rise in unemployment.
So, what has happened? Instead of rising, unemployment has fallen by over 300,000 since the referendum (according to the ONS Labour Force Survey measure). This forecast was wrong not only in scale but in direction! Out by about 1 million people over a two year period.
GDP annual growth in 2015 and 2016 (before the referendum) averaged 2.1% and in 2017 and 2018 averaged 1.8%. Given the volatility of these figures this is a modest and probably not significant difference. Annual GDP growth has been no higher than 2.8% and no lower than 1.0% since 2012 (when it was lower), so growth in the last four years has been in the middle of that range. So, even if growth has been dented a touch by the uncertainty surrounding the outcome of Brexit negotiations, it has dipped by only a very small fraction of the what the Treasury forecast. (These figures are based on ONS series ED9T.) World growth has also slowed a bit recently so the UK is not out of line.
I conclude three things:
First, when people talk of that £350m on the bus, do remind them that a much much bigger lie was Project Fear coming from the Treasury.
Second, if the short-term forecasts were SO wrong, the long-term forecasts (made by the same economists using the same models) might well be wrong too. The economic future could well be rosy outside the EU.
Third, such bad forecasts could only have been produced by civil servants who are incompetent or politicised. This means that there is a trust issue with the "experts". To try to improve this, The Brexit Party "Contract with the people" will require all civil servants to sign an oath to act with political neutrality.
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