And the idiot speaks

The Guardian and Times report this morning that the Treasury is of the opinion that Hard Brexit might reduce UK GDP by between 5 and 9 percent and cost the Treasury up to £66 billion a year in lost revenues.

I have not seen the figures that support this. They were produced for George Osborne but the Treasury apparently stands by them. Instinctively I think they indicate a very likely direction of travel. I cannot think of any circumstance now where hard (or come to that, soft) Brexit will increase UK growth.

Apparently a falling pound is not stimulatory in Ritchie world.

Nor can I see Brexit changing wellbeing without the most radical change in policies, which I cannot as yet see the Oppisition promoting.

But this leaves a dilemma. If Brexit had been a product I was sold on the basis that it would increase the well-being of the country, domestic job prospects and cash for the NHS then I could now demand my money back. I would, very clearly, have been conned. And those who mad PE those claims to induce a sale would be guilty of fraud, not least because many of those who did so appear to have already been personally enriched as a consequence.

In that case why isn’t this being said? Why are MPs, let alone us the voters, being denied the opportunity to think again as facts become more apparent? Or to be blunt, why are a tiny majority, many of whom were conned (there is no more polite word) allowed to walk us off a cliff?

Are MPs so witless that they cannot assemble a decent rebellion on this, and demand the democratic right to a second, honest, election, with honest in this case being the operative word?

But the real problem with this whining is that these are not new figures. They’re exactly the same figures the Treasury released before the election. They’re from the same damn report even.

44 thoughts on “And the idiot speaks”

  1. And those who mad PE those claims to induce a sale would be guilty of fraud, not least because many of those who did so appear to have already been personally enriched as a consequence.

    No fucking idea what this means. “Mad PE”? Revealing typo?

    Who has been “personally enriched”? Names, please.

    Tiny majority

    If Remain had won 52-48, it would not be a “tiny majority”.

    Cunt.

  2. Leavings aside Cardinal Murphaloon’s laziness in not doing his homework, the numbers are part of the inflammatory bunk that destroyed Osbo’s career from April/May (?).

    This is taking the outlier (9.5% of a 5.4% to 9.5% range with mid estimate 7.4% iirc) of an estimated range of GDPs 15-20 years out, which are themselves a 6 months out of date guestimate, taking the difference, and applying that to taxes to get 66bn less in 2030 or 2035, which becomes a screeching headline.

    That is then compared to today’s tax revenue of 716bn with no attempt to account for or explain inflation or discounting required.

    My estimate is that applying 2.5% inflation and taking the middle number halves the figure.

    The exaggeration is at least double if the central figure is taken with even a modest 2.5% discount factor.

    It is a surprise that Sam Coated would let his name be used.

  3. No fucking idea what this means. “Mad PE”? Revealing typo?

    He’s just fist typing “those who made those claims”.

    Who has been “personally enriched”? Names, please.

    Well, hardly. Because he’d have problems with another defamation settlement.

  4. Let him be the first Remainiac to get a treason charge.

    Rolf Harris standards of proof will apply and the law will be retro-actively amended –by administrative means–to ensure the death penalty.

    Job done using all the tools the left put in place to do it.

  5. “If Brexit had been a product I was sold on the basis that it would increase the well-being of the country, domestic job prospects and cash for the NHS then I could now demand my money back.”|

    So democratic politics should work like commercial transactions rather than be a political relationship.

    How very Neoliberal of him to think so.

  6. If Brexit had been a product I was sold on the basis that it would increase the well-being of the country, domestic job prospects and cash for the NHS then I could now demand my money back.

    But it wasn’t and you didn’t hand over any money, so your analogy is shit.

  7. Anyway, surely nothing’s going to cost the Treasury a penny, let alone 66 BEEEEEELLION POUNDS. Their income isn’t a function of circumstance. It’s a function of how much they want.

  8. Richard Murphy:

    “If Brexit had been a product I was sold on the basis that it would increase the well-being of the country, domestic job prospects and cash for the NHS then I could now demand my money back.”

    A student of Richard Murphy:

    “If attending Professor Murphy’s economics class at City Uni had been sold to me on the basis that it would increase my well being, domestic job prospects and cash, instead of making my CV the subject of derision amongst prospective employers, I could now demand my money back.”

  9. Timmy
    A falling pound is stimulating, but I wonder by how much.
    Obviously for tourism it feeds pretty well straight to growth.
    For manufacturing exports less, since many inputs are in foreign currency.
    For financial services even less, as they are already largely in foreign currency.
    So it’s more shit happens than an economic bonanza.

  10. Oh, forgot.
    Since exporters will mostly be at least partially hedged against currency movements you’ll be looking at a year’s delay before the stimulus kicks in.

  11. Brexit is a fundamental redefinition of our relationship with near-neighbour countries in the EU. Anyone who thinks they can judge that outcome after a few weeks doesn’t understand the size of the issue and should, for the good of the nation, shut the hell up.

  12. Tim wrote: “They’re from the same damn report even.”

    A report that did a particularly dastardly thing imo in switching off the feedbacks programmed into the models. They effectively projected a hard Brexit and the Bank of England + Treasury doing nothing in response.

    They also assumed that the EU would have the ability to actively depress our trade *with the rest of the world* once we were free.

    Squander Two said: “I was promised an emergency budget to punish the country for voting Leave. LIES!”

    What never gets mentioned about the emergency budget is that the pain was only due to start in 2019.(when we were expected to have left, I guess) By then we would have had a couple of years to prepare so the pain would not have been so bad.

    But of course this wasn’t to be. Dave changed his mind about sticking around, Chinese George was told to bugger off and even George’s pet Goldman Sachs man has left in a huff.

  13. Look- you lot have missed the big story here- Squander 2 has returned!

    Where you been, Fella?

    Nepal? The marianas trench?

  14. Congrats to Andrew Jackson who once again shows up Murphy’s plain ignorance of accountancy.

    How any media outlet can actually ask Murpy’s opinion on anything (and presumably pay for it) is beyond me.

  15. On the 1930s example that gets trotted out as an example of the value of a lower pound:

    Wouldn’t more raw materials (e.g. Burmese rubber) have been denominated in sterling then anyway? So the downside of imported raw materials would have been less then than it might be now?

  16. When we were committed (!) to being in the EU it was understandable that we’d obey the rules of no free trade deals with the larger world.

    Now that we’ve got the door cracked open and the EU is threatening blue murder, why aren’t our negotiators working out the details?
    What would the EU do to us? Throw us out?

  17. Bloke in Costa Rica

    Does anyone ever pull these reports from 20 years ago and compare them to the actual figures? What sort of track record do they have? Is it Met Office climate model accurate, or not quite as good as that? I have a feeling that they have about as much predictive power as a Daily Mail horoscope.

  18. BiF

    “For manufacturing exports less, since many inputs are in foreign currency.”

    I suspect many exporting firms pocket the profit from a lower £ without thinking about the opportunity of investing for expansion. That would explain the failure to build exports on previous devaluations. There’s an initial surge then stasis. Or that’s my impression. Please do lighten my darkness.

  19. Persoanlly I love the way that Bremoaners chunter about WTO “rules”, when the WTO itself says it has no rules except that it would like tariffs toi be as low as possible.

  20. I’m pretty sure that any 15 year estimate isn’t worth the paper it’s written on, it’s a projection of knowns where the unknowns reduce the likelihood of it being correct to a insignificant perspective

  21. Theo
    Not sure I can help, but I suspect that currency movements are sticky / jerky and have contradictory responses,
    In economic theory export prices (demand / supply) seem to be much more elastic than the reality. If prices are inelastic, then you’re just selling the same kilo of spuds at a lower price.

    Germany and Switzerland have managed manufacturing exports for decades despite a relentless advance in their currencies.

    It comes down to Keynes’s “animal spirits”. If your currency has just got down the pan, your entrepreneur is going to be pretty gloomy and unwilling to invest, whatever the figures show.

  22. Remainers will be unique in history for as long as the human race survives for being the only group of humans who passionately wanted to be ruled by unelected, unknown dictators.

  23. @Gareth Too

    I’m sure the negotiators are raring to go but who’s picking up the phone at the other end? Apart from the Irish (who can’t act unilaterally) no one else is as motivated. The Canucks and Yanks aren’t going to rock the boat while their own deals are still in the process. For pretty much everyone else the EU is a far more important trading relationship than the UK plus, if the UK stays in the EEA/customs union, any negotiation would be pointless anyway.

    Nothing meaningful can happen with the rest of the world until the EU-UK relationship is bottomed out.

  24. John Miller – pretty much everyone is ruled by unelected, unknown dictators. Decisions made by the local and national government or company employees affect you far more than some guy who stands for election.
    Who decides what medicine your doctor is allowed to prescribe you? Who decides whether you can build an extension on your house or even a new house? Who decides to pull you over for speeding? Who decides a court case you are involved in? Who decides whether cable is offered on your street? Who decides how much of a bank loan you can get?

  25. Urine, please explain why UK exports more outside EU than to EU. How could that happen if Canada, US etc only deal with EU? Wake up. Trade deals only matter if you want to screw the other side. WTO rules let you set tariffs to ZERO. The world wants to trade with UK more than it wants to deal with Drunky Juncky and Merkel the vicious…..

  26. “But the real problem with this whining is that these are not new figures.”

    No, it’s just whining. They will be whining about Brexit for years. They lost; they can’t let go of it.

  27. Bloke n North Dorset

    “No, it’s just whining. They will be whining about Brexit for years. They lost; they can’t let go of it.”

    And they still aren’t making any positive arguments for the EU and its ever closer union, only more negatives about leaving. That really isn’t the way to win an argument.

  28. We are all Brexiters now no matter what each of us voted. The decision was made and the majority won.
    Not sure some people have grasped this ‘democracy’ idea very well. Put something to a vote by the voters and then not accepting the result because its ‘wrong’?

  29. Here’s what concerns me: think of the unhappiest Remoaner you know and his/her thoughts on Brexit, Those thoughts are in line with what 80% of civil servants and the majority of Tory MPs think.

    They’ll happily fuck up the nation with a fudge. They have form.

  30. Missing the point spectacularly, Urine. UK trade flows are basically moving away from the EU. The benefits of staying in the EU bloc are getting smaller year by year.

  31. “Missing the point spectacularly, Urine. UK trade flows are basically moving away from the EU. The benefits of staying in the EU bloc are getting smaller year by year”

    Are they? From when?

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