UK GDP grew by 0.4pc during the first three months of 2016, we learnt last week, down from 0.6pc the quarter before. “The threat of leaving the European Union is now weighing on our economy,” claimed Chancellor George Osborne.
The Bank of England is worried about “a fall in sterling due to fears of Brexit”, we’re repeatedly told, the latest Threadneedle Street intervention also warning of “a lower path for growth” if British voters have the audacity to leave the EU.
And if only “uncertainty” hadn’t been “heightened by the UK’s referendum on EU membership”, Janet Yellen opined last Wednesday, the mighty Federal Reserve might now be able to raise interest rates, helping the US central bank steer global markets away from dependence on emergency measures and back towards normality.
With Britain’s EU decision-day less than two months away, every official economic body now seems to be telling us Brexit would send the British economy to hell in a hand-basket – and even threat of Brexit is already doing untold damage.
So what if the UK referendum date wasn’t set until the end of February, most of the way through the first quarter, or growth also slowed across Asia and the US? So what if sterling already fell 10pc against our main trading partners between December and March, has since staged a partial recovery, and is anyway on a long-term decline given repeated massive trade deficits and the doubling of the UK’s national debt. So what, also, if many British exporters actually want a lower pound?
So what if the real reason the Fed doesn’t dare raise rates further, having told us in late-2015 to expect four increases this year, is that Western stock and bond prices are so pumped-up on printed money, so dependent on the drip-feed of central bank largesse, that any move could send financial markets haywire? So we blame “China”. We blame “turmoil in the Middle East”. Or – here’s another convenient scapegoat for our inability to kick the hard-drug policy stimulants – we blame “doubts about Brexit”.
Last weekend, I highlighted the absurdly one-sided nature of HM Treasury’s “serious study” into the implications of the UK quitting the EU. Based on much analytical chicanery, the report “concluded” UK households would be £4,300 a year worse off by 2030 if we vote to leave – a spurious outcome Osborne has consistently described as “fact”.
The Organization for Cooperation and Development has now weighed-in with its own anti-Brexit report, the Paris-based, Brussels-funded think-tank “finding” that leaving the EU would impose a “tax” on Brits equivalent to one month’s income. Having read the report, I find its methodology just as twisted as that of our own Treasury.
OECD economists assume a post-Brexit UK will fail for many years to strike any kind of trade deal with Europe – despite the fact other EU nations sell £60bn more of goods and services to us annually than we do to them and EU commercial interests, kicking the politicians to one side, will act to secure such business.
We’ll then take even longer to secure bi-lateral arrangements with any non-EU economy, the OECD assumes – countries like the US, India and Australia, nations where the UK has deep and long-standing commercial and cultural ties. A post-Brexit UK would then, we’re informed, act to harm productivity and growth by imposing our own punitive trade barriers – despite the fact Britain has shown itself, repeatedly and over centuries, to be the most open major trading nation in the world. Such assumptions, all of them aimed at driving an alarming Brexit headline, are ridiculous.
I was also disturbed the London School of Economics – an institution with which I’ve had previous proud affiliation and for which I have enormous respect – provided a platform for this deeply-politicized OECD report upon which the organization’s Secretary General was joined by two leading faculty academics both of whom were unquestioningly supportive. This highly contentious and deeply questionable study was repeatedly described by them as “serious”, “heavy-weight” and – that word again – “fact”. There was no dissenting voice whatsoever. None.
At an academic institution, that is simply not on. Looking at the LSE’s events calendar, I see several more entirely anti-Brexit talks planned, but no equivalent occasion giving over the main lecture hall, student body and university PR machine to a panel comprising exclusively of three note-worthy economists wanting to leave the EU. I’m sure it’s not too late to arrange such an event before 23rd June.
The big multi-laterals – the International Monetary Fund, OECD and so on – are now lined-up against Brexit. Of course they are. Such organizations are stuffed full of risk-averse time-servers – the kind of economists who, in return for a steady tax-free wage, wait to be told the required conclusion and cobble together a justification using assumptions no-one will notice, before garnishing their conclusion with maximum scientific hocus-pocus. The same organizations, brandishing reports written by some of the same people, swore blind the UK should join the single currency. And now their EU-related predictions, mere rhetorical devices, are widely reported as unshakeable truths.
President Obama tells us a post-Brexit Britain “will go to the back of the queue” when it comes to striking an UK-US trade deal. That sparked widespread derision among the media classes of anyone advocating Brexit. How many of the finger-pointers understand the EU itself has no bi-lateral trade deal with the US – yet the two continents have traded successfully, for decades, under existing multi-lateral rules, forged under the auspices of the World Trade Organization and its predecessors? The same would happen between the UK and the US, if we left the EU.
And does anyone really believe America would abandon its vital intelligence-sharing arrangements with the UK? Or that the two countries, joined by generations of history and blood ties, would somehow be less close if Britain freed itself from the iron-grip of Brussels? Of course not – as Obama made clear in the barely-reported parts of his various interviews.
There is an entirely respectable, plausible – and in my view compelling – case for Brexit and, against the odds, some experts are trying to make it on a national stage. Last week, Economists for Brexit issued a report predicting the UK, shorn of the EU’s own trade barriers, would enjoy an economic boost amounting to 4pc of national income. The group includes former government advisor Professor Patrick Minford, the Telegraph’s own Roger Bootle and Dr Gerard Lyons, former Chief Economist at Standard Chartered, among the City’s top-ranked forecasters and now adviser to the London Mayor. These are economists of genuine stature. Their report attracted nothing like the wall-to-wall prime-time broadcast coverage enjoyed by missives emanating from the Treasury and OECD.
Those making the Brexit argument include people of huge credibility and experience. Lord Lawson, in an upcoming essay for the think-tank Politeia, describes as “overwhelming” the case for Brexit. Lord Owen, someone who famously voted to remain in the European Community back in 1975, eventually splitting the Labour party over Europe, now feels the EU has become “so unwieldy, over-powerful and unreformable that the danger of staying in far outweighs any danger of leaving”.
Despite the full force of the government machine backing Remain, and the weight of broadcast coverage, opinion polls show Leave is neck-and-neck with Remain and may even be ahead. The British public feels they’re being sold a line – and many millions of us don’t like it.
Follow Liam on Twitter @liamhalligan