Treasury Brexit forecasts were flawed and partisan

So the Project Fear Brexit predictions were "flawed and partisan", says a report from the Centre for Business Research at the University of Cambridge. Indeed the study says that leaving the European Union will halve net migration, give British workers a pay rise and help to solve the housing crisis. Business investment will fall through to 2019, but mainly because of uncertainty, with things turning round once we actually leave the EU.

The report is damning about the Treasury: "Analysis by HM Treasury of the potential impact of various outcomes for trade outside the EU is examined and found wanting. Instead the actual experience of UK export performance is examined for a long period including both pre- and post- accession years. This suggests a more limited impact of EU membership. While we include a scenario based on Treasury assumptions, a more realistic, although in our view still pessimistic, scenario assumes half of the trade loss of the Treasury."

In particular the report was heavily critical of the Treasury's assumptions on trading arrangements post Brexit. It said: “There are probably only two practical options. One is a free trade agreement along the lines of the one Canada has just signed or else no agreement on trade in which case you fall back on WTO rules. The impact of both of those is pretty uncertain. We have looked very carefully at what the Treasury has said about this and we find its work very flawed and very partisan.”

The pessimist in me underlines the comment that the impacts are "pretty uncertain". But maybe not as rocky a ride as we are fearing.

The response from a Treasury spokesperson was revealing: “We want the best outcome for Britain. That means pursuing a bespoke arrangement, which was not what the Treasury’s pre-referendum analysis was based on. This will give British companies the maximum freedom to trade and enables us to decide for ourselves how we control immigration.”  What a change in tune. Who would have thought that a change in Chancellor would cause such an about face?

The Cambridge Business Centre report was covered in the Telegraph (see link) and Daily Mail. I had a look for it in the Guardian and it didn't seem to be mentioned, certainly not prominently. Obviously off message!

Telegraph: Project Fear Brexit predictions flawed (5 January 2016)