A £60bn bill for Brexit is outweighed heavily by economic gains

John Longworth
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The UK voted to leave the European Union on 23 June (Source: Getty)

The Autumn Statement provides the building blocks for Britain to be the best enterprise economy in the world.

So why then has the Office of Budget Responsibility (OBR) been so pessimistic about growth prospects saying that we will be £60billion worse off?

Well first of all, the growth forecasts outstrip all of our EU competitors, so not so shabby!

However, the OBR can only project forward on the basis of what it knows within the constraint of its economic models.

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As Lord King, the former Governor of the Bank of England pointed out consistently in his book on the financial crisis, economists are hopeless at forecasting macro economics.

They are constrained by models made up of all sorts of assumptions which are often off bean or out of date and the data that input is just as liable to error, "garbage in, garbage out" , especially when "group think" applies. Macro economics is a social/ political science, not a physical science and the biggest error is to think it is.

In fairness to the OBR, they can also, only work with what they know.

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The fact that the Government has not yet confirmed that the end result of Brexit will be Britain leaving the Customs Union and the so called "Single Market" more accurately the "Internal Market" affects their predictions.

Once it is clear that we will be liberated from these protectionist bodies and able embrace free market trade with world and crystallise the benefits of Brexit the economy will boom and the forecasts should improve considerably.

The removal of EU tariffs on British imports is worth up to 4% of extra GDP, deregulation of just 10% of EU regulations, 0.7% on GDP, the net contribution to the EU, 0.5% of GDP, and the lower value of sterling will boost export.

Business tax cuts and signature ready trade deals around the world will provide a further boost. On top of this the EU will eventually seek a free trade deal with the UK. The future is bright.

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But let us assume for a moment the OBR is correct. What price freedom - £60bn amounts to just six years net contribution to the EU or six years of overseas aid money, or three years of the two combined! What does it profit a nation to be a little more wealthy and to sell its soul?

Our forbearers paid many, many times more in treasure and blood not to be ruled by a foreign power or to have a foreign court dictate to us and to have control of our own affairs. The price of liberty is incalculable.

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