DEBATE: Should we take the leaked Brexit impact assessments seriously?

Should we take the leaked Brexit impact assessments seriously?

Sir Vince Cable, leader of the Liberal Democrats and former secretary of state for business, innovation and skills, says YES.

Any official document produced by the government to brief ministers has to be taken seriously, all the more so given that the impact assessment – which finds no positive economic outcome whatsoever for Britain from Brexit – is the work of David Davis’ own department.

The complex empirical models used to simulate changes in our trading arrangements are based on limited assumptions, but are much preferable to prejudices and assertions.

The assessments also undermine one of the main arguments used to advocate for a hard Brexit: the claim that trade deals with non-EU countries will compensate for additional barriers to trade with our next-door neighbours. According to the leaked analysis, trade deals with other countries would only add a mere half a per cent to GDP, compared to the two per cent reduction caused by a soft Brexit and the eight per cent hit associated with a no-deal exit.

It is clear that leaving the EU will make us poorer. The people must be offered a vote on the final deal to establish if this is what they really want.

Read more: Iain Duncan Smith: Brexit forecasts should be taken "with a pinch of salt"

Ruth Lea, economic adviser to the Arbuthnot Banking Group, says NO.

Another day, another Project Fear “analysis” from Whitehall, this time claiming to have insight into the direction of the economy over the next 15 years. But we know forecasting the economy 15 months is difficult enough, never mind 15 years.

For example, the OBR forecast GDP growth for 2017 at 1.4 per cent in November 2016, 2.0 per cent in March 2017, and 1.5 per cent last November. First estimates suggest 1.8 per cent.

And the Bank of England’s forecasts are even more variable, from 0.8 per cent growth in August 2016 (when monetary policy was prematurely relaxed) to 2.0 per cent in February 2017 and 1.6 per cent in November 2018.

Most scandalous of all was the Treasury’s apocalyptic warning (May 2016) of recession and 500,000 extra unemployed in case of a Brexit vote.

So caution and humility please. The truth is that no one knows where the economy will be in 15 years time. So much will depend on government policies post-Brexit. If they take advantage of the new freedoms, assuming there are some, growth will be boosted, not hindered.

Read more: Lord Hill: Govt should prioritise growth over continuity after Brexit

Original Article