David Fuller's view -
Leaked draft papers have revealed Cabinet ministers are being told tax revenues could plummet by £66billion a year if the UK opts for a ‘hard’ Brexit.
The documents, prepared for Cabinet committee discussions, warn Britain’s GDP could fall by as much as 9.5 per cent if the country leaves the EU without securing a trading agreement with the bloc.
The revelation Whitehall is continuing to pump out the same ‘Project Fear’ message officials produced before the EU referendum has sparked fury among Brexit campaigners.
Patrick Minford, a former economic adviser to Margaret Thatcher, hit out at the “outrageous” Brexit warnings being produced on the basis of Treasury estimates, which he suggested is stuffed full of officials who don’t want Britain to quit the EU.
The Cardiff University academic told Express.co.uk: “The Treasury is acting as a sort of fifth column in the Government.”
The leaked forecasts are based on the same controversial Treasury study into the impact of Brexit its officials produced in April under ex-Chancellor George Osborne - the architect of the Remain camp’s ‘Project Fear’ scaremongering.
The April forecast included the same £66bn shortfall warning still reportedly being handed to ministers now.
Professor Minford said it was “outrageous” the Treasury had “learnt nothing from its mistakes” earlier in the year, as he pointed out how their April study had “already been shown to be complete nonsense”.
He pointed out how the Treasury’s growth forecasts included in their pre-referendum estimates had already been proved wrong, while they had also based their figures on “arbitrary uncertainty effects which had no basis”.
At the end of last month, GDP growth in the second quarter of 2016 - the period straddling the June 23 referendum - was was revised upwards, suggesting the economy has been largely unaffected by the Brexit vote.
Professor Minford, a member of the Economists for Brexit group, said: “Their forecast has been completely disproved and they should be hanging their heads in shame, not going back to this completely discredited forecast.”
The ex-Treasury adviser said he expects the UK economy to “grow substantially in the third quarter” when figures are published later this year.
Professor Minford criticised the Treasury’s “completely absurd assumption”, included in its April study,that Britain would continue with the same level of trade tariffs it places on non-EU countries once it leaves the bloc.
He said: “The Government policy now is to go towards free trade agreements with the whole world and a free trade agreement with the EU.
“So what are the Treasury doing assuming that we will have protectionism against both the EU and the rest of the world?”
The economist insisted “the whole point in leaving the EU is to get rid of this protection”.
Professor Minford, who helped craft areas of Mrs Thatcher’s economic policy during the 1980s, suggested the Treasury could face action if they continue to base forecasts on their pre-referendum studies.
He said: “Now that they’ve been proved wrong by events, they should be revising these reports, not carrying on producing the same discredited message. It’s outrageous.
“If they continue with this, there’s going to have to be an inquiry into how the Treasury can persist in these outrageous pieces of analysis that have been discredited and are at variance with Government policy as well.”
I agree with Patrick Minford, and not for the first time. I am surprised UK Chancellor of the Exchequer Philip Hammond has not queried the Treasury’s forecasts in terms of at least asking what they are based on. He should also be asked whether he agrees or disagrees with his department’s forecasts.
The Brexit debate was always going to be contentious. Opening it up to Parliament may seem more democratic but it ignores the intention of the Referendum. In deciding to hold the national vote, David Cameron and George Osborne were the original, most outspoken and committed Remain advocates. If Remain had won the biggest election in the UK’s history by 52 to 48 percent, instead of losing it by that amount, would there be complaints that the public were not informed, whatever that means? I doubt it and there would be no demands for another vote, or a soft Remain.
A so-called ‘soft Brexit’ ignores the Referendum result. It would mean staying in the single market, paying our huge contribution to the inefficient EU, having no control over our own immigration policies, subservience to EU rules and regulations, and no freedom to negotiate trade deals with countries outside the EU. In other words, it would completely ignore what a majority of the UK public voted for. That does not sound very democratic to me.
Patrick Minford said it first – get out of the EU quickly. The alternative is to be strung along by the EU which is hoping that the Brexit decision will somehow be reversed. Getting out quickly clearly means a hard Brexit, which may sound frightening but rather than being ‘a leap in the dark’, it is the only basis for sensible negotiation. The UK will be amenable to negotiating on the basis of mutual interests. Similarly, the EU will be negotiating not on the basis of what it has to lose, but what it has to gain by maintaining close ties with an independent UK which is still the world’s fifth largest economy.
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