Brexit Economic Analysis: What’s The Point?

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Disclaimer: The views expressed within this article are entirely the author’s own and are not attributable to Wessex Scene as a whole.

The Westminster bubble was recently shaken by the government’s publishing of their economic analysis for four different scenarios of Brexit, ranging from the Prime Minister’s preferred deal to no deal. On the face of it, some of the figures are scary. Potentially, under a no deal scenario, the UK’s economy could be 9.3% worse off in 15 years than it would be had we stayed in the EU.  

Economic forecasts are always questioned by somebody. Sometimes they turn out right, sometimes they don’t. However, this Brexit economic analysis seems like a complete waste of time. The report sets out by saying it ‘does not consider wider external drivers of economic performance’ and ‘should not be interpreted as an economic forecast’. If it’s not a forecast, then what is it? An estimate? Surely an estimate is not on par with the gravity of a situation such as Brexit, an analysis which may be used by some MPs to decide how they vote in the Commons’ meaningful vote in the week beginning 14th January. Some people may even change their minds about Brexit altogether based on this.

Let’s see why this analysis is useless. Factors that are not included in the modelling include cooperation on security, as well as access to waters and fishing. These are sectors which we can use to negotiate ourselves a better deal, which might mean a better outcome than any this analysis has examined. Domestic policy changes are not modelled either, as well as ‘wider economic policies’. For example, neither the government’s flagship industrial strategy set out last year nor the UK export strategy, launched in August to establish principles for helping British business export worldwide, are considered in the modelling. Finally, global trends are also excluded. It may, or may not, be reasonable to sympathise with the omission of some of these factors, but either way it still diminishes the value of this economic analysis because it is not taking in the full reality of the British economy, or indeed, the world.

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What does this mean for Theresa May? As she frantically travels around the UK to promote her Brexit deal, she may be hoping that project fear #2 will kick off and MPs will vote for her deal for the risk of leaving in March without one. However, there is a chance (quite a high one) that this causes an increase in anti-Brexit rhetoric, and we all know what the next stage would be. A people’s vote.

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