One thousand pounds per year per family. That’s the cost of Brexit, according to a member of the Bank of England’s monetary policy committee, which sets UK interest rates.
The calculation, based on what damage the flatlining of business investment has done to the British economy since the referendum, is likely an underestimate – other Brexit factors have also adversely affected growth and wealth. But it is an interesting statistic nonetheless.
For a start, its author is Professor Jonathan Haskell of Imperial College Business School, a world-renowned expert on productivity. So, it is very clear that he knows what he is talking about.
Perhaps this is why the government’s denials seem particularly weak. They clearly “don’t recognize the data”, which is the kind of non-denial you get when it’s completely clear the government is wrong.
His cheerleaders in the dwindling and discredited band of pro-Brexit “experts” have also come to take pot-shots at the professor’s work. According to him, you can call economic modeling whatever you want.
Well, judging by their claims during and since the referendum, that may be the way Brexiters operate, but they may not be of the quality and consistency required to maintain your reputation in a peer-reviewed academic setting. Do not get acquainted with the accuracy of the work.
Nor does it add much weight to their claims when they continue to pretend that all post-Brexit problems are due to Covid or the war in Ukraine. Surely the newly dynamic British economy, breaking the shackles of EU membership and outperforming everyone else in the bloc, need no more excuses for its poor performance?
But beyond that, what’s really worrying about this research is what it says about the future. Failure to invest now is a near guarantee that productivity and growth will be lower in the future.
Think about it. Do you increase productivity and therefore wages by serving old tired, outdated machinery, manned by untrained workers, dilapidated factories, serviced by dilapidated roads? No not at all
This means that the prospect for the UK to bounce back from the current recession with vigor and vigour, is remote. It is far more likely that the UK will revert to its long-term appallingly slow rate of underlying growth.
But the government’s attitude towards Haskell’s findings is really worrying. It is beyond belief that HM Treasury, which employs some of the brightest and best economists and statisticians in the country, along with the Budget Responsibility Office and the Bank of England, do not have very similar figures at their fingertips. After all, they are all working with the same data, and with a similar economic model, if not the same as the British economy.
This means that it is inconceivable that government ministers, including the prime minister and chancellor, are not getting the same analysis, that we are all poorer because of Brexit and something needs to be done about it, very, very quickly or It will get very bad.
But strangely, we get not only disclaimers that the government does not recognize these figures but regular and repeated denials that Brexit is a problem.
Many people are complaining that Labor is refusing to condemn Brexit or say how it will improve things, but remember that like us it doesn’t get to see the government’s own analysis of what went wrong. Happening.
One of the biggest arguments for a change of government is this: having ministers who can immediately say “look at these terrible statistics the previous administration hid from you; We have to do something about it”.
That alone will be a game-changer.