The BBC’s Question Time programme enjoyed a dramatic moment on 21 April when a man in the audience produced some maths from the “back of an envelope”. He claimed that Brexit would generate budget savings enabling the UK to “repay the national debt” by 2030. The next morning The Express reported that this “brave” and “confident” contributor had “put the pro-EU panel to shame” – despite Brexiteers outnumbering pro-EU voices on the stage.
The following YouTube clip shows the self-proclaimed economist’s interjection in full.
The claim rests on the assumption that Britain would save £10 billion per year in contributions to the EU budget. “I took the £10 billion of net savings that we would make if we left Europe and I multiplied these by 14, which is the number of years up to 2030. I then used the economic credit multiplier, because of course you have the benefit of spending that £10 billion, the taxes raised on it, some economic growth and so on. And do you know the figure I came up with?
“The figure I came up with was £1.5 trillion, which means that if we leave the EU we’ll be able to fund and repay the national debt by the time 2030 comes.”
It all sounded clever, and Question Time’s live audience burst into cheers. But as InFacts has pointed out many times before, we won’t save anything like £10 billion if we stop paying into the EU budget. We’re more likely to save nothing at all.
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This £10 billion seems to be a rounded figure for the money Britain sends to Brussels each year. But some of this comes back to the UK to support priorities that the Outers appear keen to maintain. No savings there then.
By InFacts’ calculations for 2015, this still leaves £6.3 billion sent annually to the EU which Britain never sees again. But arguing we will save this ignores the economic benefits to the UK of being in the EU’s single market. It also assumes there will be no economic fallout from post-Brexit uncertainty. Both assumptions are wrong.
Rather than retiring the entire national debt, Brexit would probably expand it. The Treasury calculates Brexit will cause a fiscal black hole of £36 billion due to lost tax receipts. These findings are far less controversial than Brexiteers claim – and were presumably worked out on something more substantial than the back of an envelope. Post-Brexit restrictions on EU migrants could add to the fiscal hole because migrants make a net contribution to the UK economy.
Edited by Sebastian Mallaby
I’m not an economist or Financial adviser but I can do maths on the back of an envelope just as well.
If we take the economists facts and figures at face value,
A net saving of 10bn a year over 14 years is £140bn.
If we apply his multiplier which is very open to assumptions but essentially works out at x10 we get £1,400bn or £1.4tn over the 14 years.
The current national debt is about £1.6tn, but for the sake of argument we’ll call it £1.4tn. So the saving over 14 years will pay off the debt the nation owes now.
What he has neglected is that the debt will still be growing all that time.
In round figures, the UK government collects £600bn in tax and spends £700bn, giving a deficit of £100bn. By saving £10bn a year you simply reduce the deficit to £90bn so the debt still grows albeit at a slightly slower pace.
In fact, using his multiplier of x10 the national debt after 14 years would be £12.6tn instead of £14tn.
What gets me is the use of ‘but’ as a preposition in BBC news bulletins, particularly on the radio. This normally starts with the reporting of a Government or other official point of view or statement – in the case of debate about the referendum, that is, normally a Remain point of view – immediately followed by a ‘but’ as a prelude to a reference to the Outers’ disagreement – scaremongering, Obama’s hypocrisy etc etc. This kind of phrase contraction carries a measure of ambiguity or equivocation. For while ‘but’ can be used to mean ‘on the other hand’, it can also mean ‘except that’, thus implying a rebuttal of the first point of view. Or, as my old Chambers dictionary puts it – ‘that not (developing into a negative ..).
Surely the BBC could try a little harder to avoid phrase constructions that may appear less than neutral?