The Cooking the Books column from the August 2016 issue of the Socialist Standard
It is generally recognised that during the referendum campaign the Brexit side relied on lies – about how much Britain paid to the EU, about how the EU worked, about Turkey being about to join – over and above the usual empty promises of politicians as to how things would be better if they won. The Remain side relied more on misleading statistics.
In April the Treasury released a study purporting to show that a ‘Vote to Leave would make British households £4,300 worse off’ by 2030 (Independent, 18 April). The Remain side immediately translated this into a poster proclaiming ‘£4300 cost to UK families if Britain leaves the EU’. This figure was misleading because it was based on the assumption that Britain left the single market as well as the EU institutions; which does not have to be, and might well turn out not to be the case.
Also, the £4,300 did not represent how much households would lose, but how much they would fail to gain, the assumption being that if Britain stayed in families would be better off by that amount – an empty politicians’ promise as this is not something that the government has the power to deliver or even predict
Nobody knows what things will be like in 2030 or what will happen in between now and then. This allowed the Brexit side to score a point by ridiculing forecasts as to what things would be like as far as 14 years ahead.
Norman Lamont, a former Tory Chancellor, best known for having to manage Britain’s ignominious exit from the European Exchange Rate Mechanism in September 1992, pointed out:
‘Few forecasts are right for 14 months, let alone 14 years’ (Guardian, 18 April).
Ex-Cabinet Minister Iain Duncan-Smith was even more scathing:
‘If anybody can tell me they know what the global economy is going to be like over the next year let alone the next ten years I have to say they’re either soothsayers or they’ve got some link with God’ (BBC, 16 May).
Both true. Capitalism is an anarchic system in which capitalist firms compete to make as much profit as they can, which leads to ever-repeating boom/slump cycles with the occasional big crash. Added to this is jockeying between states, in furtherance of the economic interests of their capitalists, over trade deals and access to markets and investment outlets, sometimes resulting in war either directly or by proxy.
Taken together, all this makes the course of global capitalism unpredictable and uncontrollable. Experienced politicians know this but still claim the credit when by chance things are going relatively well when they happen to be in office. When, however, things go badly they resort to saying that they were ‘blown off course’. This in fact is an apt metaphor as governments are like the captains of a ship, not just at the mercy of the weather but also having to navigate by sight. They can only react to what capitalism places in their path and which they cannot predict let alone control.
Governments do try to forecast what lies beyond what they can immediately see but, despite the sophisticated models and scenarios, these are essentially just guesstimates and not to be taken as gospel, as the Remain side encouraged voters to believe. According to Lamont, himself a one-time Chancellor, they don’t set much store by them:
‘Any Chancellor of the Exchequer who believes economic forecasts needs his head examined’ (City AM, 27 April).
Remember that the next time a Chancellor in his budget speech trots out statistics about what future growth is going to be.