A group of senior academics have lambasted the Treasury’s negative reports into how Brexit will affect the economy.
A new paper by the Centre for Business Research, Judge Business School and University of Cambridge predicts that Brexit will “only have a small negative impact on economic growth over the coming years” and a minor impact on living standards.
The paper – which examines the predictions of a range of official and academic reports on the economic impact of Brexit issued during and after the referendum – concludes that most of these, and especially the Treasury reports, were “flawed”.
Graham Gudgin, co-author of the report, said: “Our analysis does not support the frequently repeated claim that membership of the EEC/EU has been good for economic growth in the UK.
The short-term forecasts of the Treasury and OECD, which have turned out to be wrong, have further damaged the already weak public confidence in economists’ contributions to public debate. Our paper is not necessarily an argument in favour of Brexit. But it will cast doubt on traditional economic modelling and it does question the ability of the economics profession to provide high quality policy analysis on issues of national importance.
"Growth in UK per capita GDP has been slower since the UK joined the EEC/EU than it was in previous decades. The fact that the UK’s growth appeared to improve relative to the major EU economies was wholly due to the dramatic slowdown in growth in these EU economies. Taking US growth as a benchmark, this shows that there is no evidence that UK economic growth improved as a result of EEC/EU membership.
"The new paper shows that the now obvious errors of forecasting in the Treasury April 2016 report on the short-term impact of Brexit was due to an arbitrary( and wrong) assumption on the degree of uncertainty generated by the referendum result. Publicity about the forecast of an immediate year-long recession never made it clear that was simply based on an assumption."