Brexit: Claim that EU withdrawal could create 400,000 jobs 'entirely fictional', says top economist

Change Britain group is backed by Michael Gove

Jon Sharman
Tuesday 03 January 2017 11:55
Claim that EU withdrawal could create 400,000 jobs 'entirely fictional', says top economist

Claims that leaving the EU customs union and striking free trade deals elsewhere will create nearly 400,000 jobs in Britain are “entirely fictional”, a senior economist has said.

Change Britain, a pro-Brexit campaign group backed by prominent Leave supporter Michael Gove, said that a number of countries including the US, India, China and Canada had already expressed an interest in new deals with the UK.

If these were struck it could create around 240,000 jobs, it claimed in new research.

This could rise to 400,000 if the UK was able to strike trade agreements with other economic partners including Japan, the group said. It arrived at this conclusion after studying figures from the European Commission.

But Professor Jonathan Portes, of King’s College London, dismissed the claims.

During an interview with the BBC’s Today programme, he said: “The point of trade deals is to increase exports, or exports to the countries we make deals with, and imports.

“Change Britain are counting the number of jobs that they claim would be created by those extra exports, but just ignoring the jobs that would be lost because of those extra imports. And that, obviously, makes no sense.”

Prof Portes, a senior fellow of the UK in a Changing Europe research group, added: “In practice, most economists would expect that free trade deals, they’re a good thing, but the jobs created would be pretty much balanced out by the jobs destroyed.

“They’ve just got some facts wrong as well. For example, they score the benefits of a free trade deal that we could do with Korea if we were outside the European Union. The fact is the European Union already has a trade deal with Korea.

“Potentially we could lose that if we leave the EU. They’re counting something as a benefit when it’s a cost. More broadly they are correct that outside the customs union we would have an extra flexibility, but the important point is there are costs and benefits.

“Simply counting the benefits without counting the costs is just nonsense.

“I think the important thing for experts, as it were, like me, is to make the point that it’s not true to say we don’t know anything about anything; equally it’s wrong to put simply hard numbers on them.”

And on Twitter, he joked: “Production of fictional statistics is up 579 per cent.”

Change Britain’s research claimed that over 100,000 jobs “would be in manufacturing (including car, ships and aircraft production) and over 170,000 of these would be in services”.

“This would create jobs across the country including 36,000 in the North West, nearly 30,000 in Scotland and over 87,000 in London,” it said.

Lord Digby Jones, one of the group’s founding supporters and former Confederation of British Industry director general, said: “The only way we can make the most of these huge opportunities is to leave the EU’s customs union and take back control of our trade policy.

“This will create hundreds of thousands of new jobs in a range of industries right across the UK. We can then take our place as one of the global champions of free trade.”

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