There are two ideas gaining currency in the EU referendum debate that I want to kill off with this post.
- The first is that all serious economists agree that Brexit would be economically harmful to the UK.
- The second is that there is no serious economic analysis that has not concluded that Brexit would leave the UK permanently and materially poorer.
On the first point, two of the most illustrious economists in Britain are Roger Bootle, Managing Director of Capital Economics, and Gerard Lyons, Economic advisor to the Mayor of London and former Chief Economist of Standard Chartered Bank. Both favour Brexit. Roger Bootle argues that leaving would be neither economically beneficial nor economically harmful. Gerard Lyons argues that after some initial turbulence the UK would grow faster over the medium- to longer-term outside the EU than within.
Neither Roger nor Gerard can be caricatured as some other-worldly academic ideologue. They are both extremely serious economists whose opinions are sought (at considerable expense) by people across the finance sector across the world. They are by no means the only economists favouring Brexit. I happen to be Chairman of Economists for Britain, affiliated to Vote Leave, including a range of economists from left and right of the political spectrum. There are also various other groups, such as the Economist Friends of Brexit (including Ruth Lea, Warwick Lightfoot, Neil MacKinnon and others).
I do not deny for a moment that there are more economists who write on blogs and in newspapers arguing against Brexit than in favour. Furthermore, opinion polls suggest that most economists believe Brexit would be damaging. But then again in the early 2000s around two thirds of British academic economists favoured the UK joining the euro. Roger and Gerard were opposed, along with many of the other well-known economists who favour Brexit, such as Patrick Minford or Tim Congdon (or, for whatever little it is worth, me). I don’t think George Osborne thinks that our being in a minority amongst economists means we were wrong about the UK joining the euro.
Roger Bootle, Andrew Lilico, Patrick Minford and Tim Congdon may be familiar names to some of you in another context: we were all economists who said Osborne was right to try to cut public spending after 2010. I had a go at asking Twitter if it could suggest the names of five economists who had supported Osborne over austerity who also supported him over the economic impacts of Brexit. Twitter got to…zero.
That means that George Osborne does not even have the “No True Scotsman” gambit to play – he can’t define “serious economist” as meaning “anyone who agrees with me over Brexit” because that would leave him with zero serious economists who support him over austerity. He didn’t think our being in a minority meant we were wrong to support him that time. Being in a minority proves nothing about how right or wrong we are over the impacts of Brexit. I think it’s more than a little ironic the way that Osborne now so lauds reports on the impacts of Brexit that were authored by economists who so vigorously opposed him on austerity. His appeals to the economics authority of his mortal opponents on austerity…lack full credibility.
George Osborne claimed on Monday that there had been no serious economic analysis study that concluded that Brexit could result in anything other than material and permanent economic losses for the UK. That’s simply not true.
Let me offer you a few examples of different kinds of report.
- Here’s one from the Mayor of London’s economics team from 2014, arguing that Brexit would boost UK GDP relative to staying in an unreformed EU (which is what Gerard says is on offer). (Here’s a further piece from 2016 including analysis of the impacts of Brexit on London.)
- Here’s one from Capital Economics, from 2016, arguing that Brexit would have very little medium-term impact on GDP.
- Here’s one from Open Europe, from 2015, arguing that whilst some Brexit scenarios could lead to lost GDP, others could lead to GDP gains.
These are all serious, balanced analyses by highly respected groups.
You can find many other analyses, including updated versions of arguments from those that have always argued UK membership of the EU damages GDP (e.g. Patrick Minford). Different economists have their various different models – as you would expect. As a consequence these different models offer different accounts of what Brexit’s economic impacts would be likely to be. No-one should expect all economists to agree.
But what is clear is that a number of significant economists – including in particular many of those economists that Osborne has relied upon to support him on the euro and on austerity – support Brexit and that a number of the most serious economic analyses have suggested that there could be economic benefits from Brexit. Claims to the contrary should not be allowed to become common currency, unchallenged, in the media presentation of the EU referendum debate.