The chair of the Government’s official forecaster has said it was a mistake for ministers to have tried to keep the Treasury forecast, which shows Brexit is likely to do long-term harm to the UK economy, secret.
Speaking at the Institute for Government, Robert Chote, the chair of the Office for Budget Responsibility (OBR), was asked about the findings of an internal government document leaked to Buzzfeed, suggesting that even a soft Brexit would harm UK GDP by 2030.
The findings have incensed Brexiteers, with Tory backbencher Jacob Rees-Mogg accusing Treasury civil servants, who produced the document using a new macroeconomic model, of “fiddling the figures” in the study, apparently motivated by their own preferences to remain in the European Union.
“It’s not been a happy period,” Mr Chote admitted.
“There’s clearly a logical case for having a good study done of the economic impact of the different outcomes that the Government is thinking of looking at. There’s also a case for saying that in the current environment... if you do a lot of that work and you circulate it around government it’s not entirely surprising that it leaks.”
Mr Chote, who is a former director of the Institute for Fiscal Studies, suggested that the row might have been avoided if ministers had simply published the findings in the first place.
“In an ideal world you would have embarked on this exercise in the hope and expectation that you end up with a published project that can be shared with the public in general as well as within government,” he said.
Mr Chote said that, in his experience, transparency was generally beneficial when it comes to forecasts and could help allay conspiracy theories.
“Some people have the idea that there’s some sort of vast neoliberal supercomputer in the Treasury basement that generates particular results,” he said.
“Almost all the interest results you get… about macroeconomic forecasts, about the impact of different Brexit scenarios, is down to judgements and assumptions that you put in... No one should take those sorts of results entirely at face value. What you should say is: ‘What are the key judgements and assumptions driving this result and how sensitive are the numbers you get out at the end to those assumptions?’”.
“I would hope that when this does become public that that will be a key part. Whether it’s 2, 5 or 8 [per cent of GDP loss due to Brexit] is only interesting up to a point.”
The unpublished document, according to Buzzfeed, outlines that if the UK leaves the EU without a trade deal GDP growth by 2030 would be 8 per cent worse. If it remained in the single market the hit to GDP would be 2 per cent. A free trade agreement would leave GDP 5 per cent lower than otherwise.
Mr Chote added that the Government ought to have invited Brexit-supporting economists onto an advisory panel to oversee the modelling process.
“In an ideal world you would accompany that with an advisory group of outside people including, hopefully, at least one who thinks Brexit is an economic positive, who would be able to look at that work as it was coming on, to make suggestions, to satisfy themselves about the integrity of the process and then also to be able to comment in an informed way at the end. None of those people would be committed to agree with what emerges at the end,” he said.
The OBR’s own short-term forecasts in November 2016 revealed the working assumption that Brexit would result in a £59bn deterioration in the UK’s public finances by 2020-21 relative to otherwise, outlining the channels as lower inward migration, lower productivity growth and higher inflation.
Mr Chote added that civil servants, including those at the OBR, should not be afraid of their analysis being challenged, and that challenges did not necessarily amount to an undemocratic assault on an institution.
“Departmental civil servants are there to help their ministers argue the cases they want to argue within government. That’s entirely appropriate for that to happen. When it comes to the outputs of things like this Brexit study I would no way say, ‘how dare you question this, we’re an independent body’. I would say, ‘we’re an independent body, do come and question this’. And explain as clearly as you can what are the judgements made,” he said.
“People should look sceptically at our stuff, they should look sceptically at stuff the civil service produces… That’s not an attack on an institution. It’s an appropriate request for accountability and openness.”
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