The good news is that the latest civil service analysis of the most likely impact of Brexit is more optimistic than previous civil service estimates of Brexit’s consequences for the British economy. The bad news is that they’re still pretty gloomy. The best case scenario, modelled for officials at the Department for Exiting the EU, envisages a two per cent hit to GDP by the 2030s. The worst, trading in a ‘No deal is better than a bad deal’ environment, suggests an economy eight per cent smaller than would otherwise be the case.
As Brexit bonuses go this seems on the thin side. No wonder the reaction to Buzzfeed’s scoop on the latest analysis is an exercise in proving the reality of confirmation bias. If you’re a Remainer, you’re probably in a ‘Told You So, You Fools’ mood this morning; if you’re a Leaver, you might be arguing it’s all meaningless anyway because you can’t make reliable estimates of something so complicated and uncertain as the state of the British economy in 15 years’ time. The secret truth no-one wishes to ever admit, you will say, is that no-one knows anything. It’s all a crap shoot, so don’t worry and feel the sweet breeze of national liberation instead.
Be that as it may, Tories rubbishing these estimates might pause to think about the longer-term implications of their harrumphing. At the next general election, whenever it may be, the Conservative message is going to go large on the impact of a Labour victory on the British economy.
There are two obvious and immediate problems with this approach. First, warning you can’t afford to take a ‘risk’ on Prime Minister Corbyn loses some of its salience when your party has spent the past several years baking greater risk into the country’s economic prospects than any government has since, well, since the 1970s. Brexit is an unavoidably uncertain business, so how much more dangerous could the uncertainty of a Corbyn-led government really be?
Secondly, today’s Tory attack on the civil service’s projections gives Corbyn a get-out-of-jail-free card he can play as often as he likes. Imagine the scene at the next election. The Labour party will have plans. They are certain to be very expensive plans. They might even be the kinds of plans that are unaffordable. Or, at the very least, the sort of plans that will have a detrimental impact on the overall health of the British economy. The Conservatives will produce studies and forecasts and projections claiming to show as much. And they will ask you to believe all of this.
And – who knows? – perhaps the Tories will be right. But Labour will have an easy out: the Conservative party says you can’t believe the figures produced by the government’s own civil servants, so why should you put any faith in numbers produced by the Conservative party itself? Which is, actually, a reasonable answer and one likely to be given some credence by at least some voters. Meh, you can prove anything with numbers.
Economic forecasting, like other types of future-gazing, is uncertain. The experts do indeed often get it wrong. Measuring something as complicated as the modern economy is not easy. Equally, the future is not preordained; choices made in the next few years will change the range of future outcomes available. The wise men (and women) in the Treasury and the Department for Exiting the European Union are not infallible seers.
Nevertheless, some things are more easily estimated than others and the consequences of placing additional – needless, you might say – barriers on trade is something more easily modelled than other things for the very good reason there is ample precedent – that is to say, comparative evidence – to be drawn upon.
In any case, you have to start somewhere and these numbers, however imperfect they may be, are the best available. This may not be where many of us would have chosen to start but – too bad – it is where we are.
Sure, a 0.5 per cent loss in GDP each year is not crippling. The sky will not fall as a result of it. But, if repeated year on year, it begins to mount up pretty quickly. The impact is not immediate but it’s paid for nonetheless. And the price extracted is measured in higher taxes or lower spending on government services, many of which are already stretched.
For years, Conservatives have reasonably argued economic growth and correspondingly healthier tax revenues is the essential, and indeed only sustainable, means of escaping the long shadow cast by the 2008 financial crash. There is something to that, you know.
Which makes it doubly unfortunate the Conservative party has embarked upon a project that, by the best available – if, yes, imperfect – analysis is likely to leave economic growth weaker than it might otherwise be. One part of the Tory message contradicts another.
And to what end? A free trade deal with Uruguay! Escaping the intolerable supervision of the European Court of Justice (where we almost always win)! Well, fine. We will be, we are told, a free and independent country again. If the worst comes to the worst and we must retreat to caves we will be consoled by the fact they are our caves. It won’t be that bad. Brexit is not a dystopia any more than the vision of an independent Scotland need be a project for long-term national immiseration. But it seems likely, at least for now, that the short-to-medium term pain will be considerable. Not the end of the world, perhaps, but not necessarily an improvement on the world we have now either.
Or, to put it another way, the British government can be right about the costs of Scottish independence (costs, incidentally, which draw upon Treasury analysis) or it can be right about the absurdity of these latest civil service estimates. But it cannot be right about both. The numbers are either the best available guide or they are not. But they cannot be the best available in one case but not in the other. (This warning applies to the SNP too: they cannot sensibly claim the civil service is right about Brexit while dismissing civil service warnings about independence as ‘Project Fear’.)
Still, since the people have had enough of experts you’d think the government we have now might be more popular than seems to be the case.