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The deceptions behind George Osborne’s Brexit report

18 April 2016

2:02 PM

18 April 2016

2:02 PM

Sometimes, George Osborne’s dishonesty is simply breathtaking. Let’s set aside the way he has positioned himself over the years (if he believed that leaving the European Union ‘would be the most extraordinary self-inflicted wound’ he might have told us – and his constituents – earlier, rather than proceeding with the farce of renegotiation). But it’s his maths, today, which shames his office – and his use of this maths to make the entirely false suggestion that the Treasury thinks Brexit would make you £4,300 worse off. For anyone who cares about honesty in politics, and the abuse (and reporting) of statistics, this is an interesting case study.

His chosen date is 2030. By then, the UK economy is expected to have grown by around 37 per cent, but the HM Treasury document claims that this would be closer to about 29 per cent growth after Brexit. A fairly straight situation, which Osborne fundamentally misrepresented using two techniques.

Deception 1. Osborne falsely claims that people would be ‘permanently poorer’ when he’s talking about the difference between 29pc GDP growth and 37pc GDP growth. The most he can claim is that they won’t be as much better off as they would otherwise be.

Deception 2. Osborne then translates this reduction in potential GDP to household income. But they are two fundamentally different things. This is Osborne’s crowning deception, to allow him to conjure up his headline figure of £4,300. This is what he wants households to remember, and is as intellectually dishonest as any manoeuvre ever attempted by Gordon Brown*. The Treasury and the OBR discuss GDP all of the time: never do they convert it into a per-household cash figure because (unlike debt, tax etc) it’s meaningless.GDP contains measures like the operating surplus of corporations; and all manner of other measurements.

GDP per household, this bogus invention, bears no relation to household income. If GDP is divided by households it’s £68,000: nothing like they average disposable income (£18,600 per head, or £45,400 per household)

Deception 3. To arrive at the £4,300 figure, the Treasury divided GDP in 2030 by the number of households today. Arguably the most dishonest trick of the lot because, with all that immigration, there’ll be plenty more households by 2030. The DCLG projection reckons 31.2 million, vs 27 million now. So Osborne’s (bogus) £4,300 figure would be more like £3,700, accounting for the extra households.

So having established 1) a means of dressing up an increase as a decrease and 2) a bogus conflation of GDP with household income and 3) a way of covering up the immigration-driven surge in households Osborne comes up with his grand deception:-

‘Britain would be permanently poorer if we left the European Union, to the tune of £4,300 for every household in the county. That’s a fact everyone should think about as they consider how to vote.’

It’s not a fact, it’s an invention. If you assume that disposable income grows in line with GDP then he’d be arguing that there would be a £5,400 rise outside the EU by 2030 instead of £6,880 inside the EU – so the ‘cost’ of spurning EU membership would be £1,480. Which could be alleviated with a modest tax cut.

I’m a Europhile, but these are the kinds of tactics that make me want to vote ‘out’ – the appalling level of dishonesty with which the government is making the case. And while Nick Robinson did a brilliant job on Today, the BBC’s website is now Britain’s most-read news source (four times as popular as any newspaper) and it uncritically repeated Osborne’s concocted figure of £4,300. This points to a wider problem the BBC has about the reporting standards in its website, lower than that of its news broadcasts even though they now reach far more people.

If the case for ‘in’ really was a strong as the Chancellor suggests, why would he need to mislead? Perhaps the reason is that he can get away with it: he can cook up a £4,300 figure (a quarter of the average person’s disposable income) and have it repeated enough times for voters to remember.

* This technique – to present a rise as a fall – is the closest you can get to statistical alchemy. It was actually pioneered by Gordon Brown in 2005 when he was breaking new ground in the abuse of statistics. Labour campaigned against “Tory cuts” but the Tories attempted to circumvent it by pledging to actually outspend Labour: there would be no cuts. So what could Brown do? His answer was brazen, but effective. He worked out that Labour would spend £27 billion more than the Tories, so used this to claim that they would – ergo – impose a £27 billion “cut”. The technique was politically successful insofar as the public just remember the Big Scary Figure. And here’s a picture with Osborne at his press conference with his prized, concocted £4,300 figure.

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