HM Treasury's Brexit analysis

April 18, 2016 11:57 AM

Just a week after the government spent £6m on leaflets and £3m on a website telling the public why they would be better off voting to remain in the EU, the Treasury is set to publish a 200 page report setting out the costs and benefits of EU membership.

The report says that in the event of Brexit, the economy will be 6 per cent smaller by 2030, costing each household £4,300 a year.

There are already myriad analyses of the economic impact of Brexit available from trade bodies, economic consultancies, think tanks, academics and others. Some say there would be a large negative effect, some say there would be a large positive effect and some say there would not be a significant impact.

Economic forecasting is extremely hard to get right: In 2008 the consensus from forecasters was that no major economy would fall into recession in 2009. So an analysis trying to put a pound sign on the state of the economy 14 years from now should be treated with extreme scepticism. 

The Treasury estimate is amongst the most pessimistic analysis to date, but this is hardly surprising given how high the political stakes are for the Chancellor.

And given the large amount of work that has already been done in this area, it’s difficult to conclude that this contribution from the Treasury says anything that has not already been said many times before.

What is obvious however is that once again the government is spending taxpayers’ money in an attempt to skew the referendum - this time via thethe Civil Service.

There is no good reason for ministers to be using the machinery of government to influence the referendum, especially now that the official leave and remain campaigns have been designated by the Electoral Commission and the official campaign has started. 

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