‘Project Fear’ debate will long outlive Osborne’s career

by Sam Ashworth-Hayes | 21.04.2017

George Osborne may be standing down as MP for Tatton, but the former chancellor’s infamous “Project Fear” claims will remain regular targets for Brexiter propaganda desperate to prove the economy is thriving.

The most recent example of this was the Mail labelling pre-referendum Brexit forecasts put out by Osborne’s Treasury as “Project Farce”. Apparently “a new study” has found that “just one in 10 of the ‘Project Fear’ warnings about Brexit” have turned out to be true. By “a new study”, the Mail means “the latest press release from Vote Leave’s successor, Change Britain”.

Did George get it so wrong?

Change Britain picked out 19 Treasury claims, finding two to be “true”, three to be “partially true”, and 14 to be false or likely false – actually making one in four correct. Moreover, Change Britain hasn’t managed to show that many of those labelled false are actually wrong.

Take the claim that “significant access” to the Single Market requires free movement. This is labeled as “likely false” on the grounds that Canada has a deal on tariffs without it, and Theresa May says we want “the greatest possible access” with “control of immigration”.

A tariffs-only deal would be a marked reduction in access for Britain, and every country with full access has had to accept free movement – making this claim “true”. As for May’s statement, wanting something and getting it are two different things.

This seems to have eluded Change Britain, which has labelled several of the Treasury’s referendum claims as false simply because government figures have said something optimistic since the referendum.

Hope not evidence

Getting a good exit and trade deal with the EU, sorting out our non-EU trade deals and changing our domestic legislative framework all within the two-year leaving period would almost certainly be “impossible”, said the Treasury. False, Change Britain argues, because Theresa May said the task “should not be beyond us”.

A free trade agreement won’t mean “reduced access to the Single Market” because David Davis thinks we can get one “that will deliver the exact same benefits as we have”.

For five claims rated “false”, there are only optimistic, evidence-free statements to back up Change Britain’s verdict. The actual evidence available was used by the Treasury in the first place – and shows the claims to be true.

The improbable Donald

The rest of the “false” claims compare forecasts and outturns. It was not “false” for Osborne and the Remain campaign to predict the US would “likely” want to conclude its EU trade deal before it negotiated with the UK. Does Change Britain seriously think the Treasury should have predicted a Trump win – nobody thought that was the most likely scenario!

Change Britain did get some bits right. The Treasury was wrong to say a leave vote “would” cause a recession, a rise in unemployment, and so on. These were conditional forecasts, and it should have hedged these statements – as it did elsewhere. The evidence before the vote suggested an economic hit, but Britain has avoided a slowdown.

Final score

Tallying up, 11 of the Treasury’s claims hold true. The claim about US trade was the best possible prediction. That leaves the economic forecasts. Given that the Treasury didn’t make clear that these were not statements of impregnable fact, let’s say these were “false”.

Even with this generous reading, about two-thirds of Project Fear’s claims hold true – almost as if they were based on evidence rather than scaremongering.

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Edited by Luke Lythgoe

4 Responses to “‘Project Fear’ debate will long outlive Osborne’s career”

  • What is ignored of course is we have not left the EU yet!!! Post 2020 is when the real facts will and the fun and games begin.

  • As for economy proving more resilient then expected….. post brexit lowering of interest rates even more; yet more quantitative easing; abandonment of debt repayment targets; 15% drop in value of sterling. Who needs a formal budget when such remarkable reversals of policy occur or are brought in. The draconian post-referendum measures must account for the buoyancy and are little mentioned, just the headline ‘more resilient than expected’. Also the economy was doing fine inside the EU. Now consumer debt is increasing to finance the spending that is keeping the economy buoyant. National debt increasing at dizzying rates before referendum in a strong-ish economy is increasing still more. The inflationary effects of low pound to an economy heavily dependent on imports in all areas are yet to show. Hate being a Jeremiah, and am no economist, but if there are those that can give optimistic counter-arguments out there, please communicate.