EU figures produced from Osborne make us scratch our heads
The lengthy algebraic formulas in a Whitehall document published by Chancellor George Osborne were used by Treasury economists to forecast the impact of a Brexit. None included figures used to arrive at their conclusions – that leaving the EU would reduce national income by 6.2 per cent and cost every household £4,300 a year by 2030.
And accompanying text supposed to explain the bewildering calculations only made things worse.
It read: “The HM Treasury analysis below uses a gravity model specification with country-pair fixed effects, recognising that more recent empirical studies have included other explanatory variables.”
Tory MP Tom Pursglove said: “This looks like complete gobbledegook. Few voters will make head or tail of what it’s all about.
“Officials may use baffling formulas to try to prove whatever they like but nobody is really going to understand what they are on about.
“The referendum debate is about whether we can regain control of our borders, stop sending £350million to Brussels every week and take back control of our country.”
One of the mathematical equations produced by Treasury officials
Mr Osborne was plunged into a row over mass immigration after claiming that quitting the EU would make Britain “permanently poorer”. His 200-page Treasury dossier suggested that cutting ties with Brussels would leave a massive black hole in public finances.
This looks like complete gobbledegook. Few voters will make head or tail of what it’s all about
But critics pointed out that the forecast assumed that the Government will fail to deliver a cut in migration even if the UK quits the EU. A senior Tory minister rubbished the dossier as “extraordinarily biased”.
Energy minister Andrea Leadsom, a former Treasury colleague of the Chancellor, said: “A much fairer way to present this argument would be to also look at the impact if we remain in – on further migration, further pressure on public services, security and so on. You have to present a balanced view.”
Former Tory chancellor Lord Lamont said the Treasury forecast was “spurious and entirely unbelievable.”
The Chancellor warned that families would pay a “heavy economic price” if Britain votes to quit the EU in the referendum on June 23.
“Under any alternative, we’d trade less, do less business and receive less investment,” he said.
“And the price would be paid by British families. Wages would be lower and prices would be higher.”
The document said the British economy would be 6.2 per cent smaller by 2030 if we were outside the EU and had a trade deal similar to that of Canada. Lower economic growth would give the Treasury £36billion a year less in tax receipts.
George Osborne is responsible for the mind-bending sums
Making up that shortfall could mean tax hikes equivalent to a crippling 8 per cent rise in the basic rate of income tax. Speaking at a news conference in Bristol, Mr Osborne added: “We’d lose tens of billions of pounds for our public services, because our economy would be smaller.”
He also risked inflaming the referendum row by claiming leave campaigners were “economically illiterate” and had not been “honest”. His attack was seen as a swipe at Boris Johnson, his rival for the Tory leadership and a Brexit campaigner.
But the Treasury report assumes net migration will continue at nearly 200,000 a year at least until 2030 – even if the country quits the EU.
Lord Green of Deddington, chairman of the pressure group Migration Watch, said: “The Treasury forecast takes the Office for National Statistics population projection, a long term assumption that net migration will be 185,000 from 2021.
His 200-page Treasury dossier suggested that Brexit would leave a black hole in public finances
“In other words, it assumes the Government will miss its immigration target by a country mile and we will, on the official projections, see an increase in the UK population of six million over the next 15 years.
“The Government should also explain how even this very unsatisfactory outcome could be achieved with no limits on EU migration.
“A reduction in low-skilled migration from the EU could improve productivity, public finances and GDP per capita as well as raise wages and reduce pressure on housing.”
Matthew Elliott, chief executive of Vote Leave, said: “The headline figures in this report are deeply flawed. It also ignores the Treasury’s own analysis that EU regulation costs the UK economy £125billion a year.”
Tory MP Peter Bone of the Grassroots Out group said: “The truth is the UK would be better off in the long term if it votes to become independent once more.”
Leave.EU’s Arron Banks said: “There will almost certainly be a substantial fall in immigration after Brexit as the UK reasserts control over its borders. This would alleviate pressure on housing, schools and the NHS.”