It is five years today since the EU referendum. Despite David Cameron’s psephological guru Andrew Cooper predicting a ten point win for In on polling day, we all know what happened next as the Vote Leave team of Boris and Cummings trumped the Britain Stronger in Europe’s brigade of Craig Oliver, Will Straw et al. The UK (eventually) went on to leave the European Union and now five years on, Mr S thought it would be instructive to take a look at five of the predictions that never came true.
Households £4,300 worse off
The focus of the Remain campaign on Brexit’s economic costs was labelled as ‘Project Fear’ by opponents, with no politician doing more to push that line of argument than Chancellor George Osborne. At one event, the former Tory MP unveiled a poster declaring that households would be poorer by £4,300 in 2030 – a claim that earned a rebuke from the BBC’s fact check: ‘the precise figure is questionable and probably not particularly helpful.’ Regardless of the dubious way in which the Treasury concocted this oddly specific figure, records from the Office for National Statistics (ONS) show in the five years since that real disposable income per head has risen from £5,177 in the second quarter of 2016 to £5,354 at the end of 2020.
Half a million job losses
Under Osborne, the Treasury produced multiple doomsday scenarios about the consequences for the labour market if Britain left the EU. One suggested that ‘unemployment would increase by around 500,000 with all regions experiencing a rise in rise in the number of people out of work’ with specific job losses by region with London and the South East set for 73,000 and 74,000 redundancies specifically. Five years on and a million jobs were added by the time Covid hit, with the employment rate for those aged between 16 to 64 rising from 74.5 per cent in June 2016 to 76.6 per cent in January 2020 – the highest level since 1971. In March 2016, the month before the Treasury released its analysis, the total number of jobs in the UK was 34.4 million – the same as it is now, having fallen in the pandemic from its high of 35.7 million.
An inevitable punishment budget
Osborne also told Radio 4’s Today that leaving the EU would leave the UK ‘with no economic plan’ requiring an urgent response as ‘there would have to be increases in tax and cuts in public spending to fill the black hole.’ In the event, Osborne lost his job when Cameron quit and his successor Philip Hammond, a fellow Remainer, said there would be no such emergency budget. In the event, Hammond’s first budget was described as a ‘low-key package’ that increased national insurance contributions for the self-employed and enjoyed stronger-than-expected tax receipts since the EU referendum. Britain even finished the year as one of the fastest growing economies in the G7.
The warnings of the big banks
Forecasting the consequences of a Leave vote did not go well for many of the big banks. Goldman Sachs – which donated half a million pounds to the Remain campaign – claimed the UK would go into recession by early 2017 with Nomura predicting a 1.3 per cent fall in GDP and Credit Suisse a 1 per cent fall. JP Morgan meanwhile wrote to clients days after the vote to say that they expected Scotland to leave the union and change currency. In reality, Scotland is very much still part of the UK with the British economy growing up until the first quarter of 2020 when Covid struck with 1.7 per cent annual GDP growth in both 2016 and 2017 followed by 1.3 per cent in 2018 and 1.4 per cent in 2019. Before the vote accounting firm PricewaterhouseCoopers predicted that up to 100,000 jobs in financial services would go. Rivals EY estimated last month that PWC’s figure had overestimated such losses by a factor of nine, with just 7,600 going overseas as of March 2021.
The collapse of the West
One of the more extravagant claims was made by then European Council president Donald Tusk who told German newspaper Der Bild that: ‘As a historian I fear Brexit could be the beginning of the destruction of not only the EU but also Western political civilization in its entirety.’ David Cameron issued a similar warning – in admittedly less apocalyptic tones – when he implied a third world war could grip the continent if the UK left the European Union, asking: ‘Can we be so sure peace and stability on our continent are assured beyond any shadow of doubt? Is that a risk worth taking? I would never be so rash to make that assumption.’ Five years on and it appears that the greater threat to the EU is in fact its own leaders, given the ongoing debacle of the vaccine rollout in the face of public dismay. Western political civilisation meanwhile has somehow remained intact.
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