Accept for argument’s sake that the vote on June 23 favours the Leave case, what next? No longer in the thrall of Brussels technocrats and having rejected the political project that is the EU, Britain would have a free hand to innovate. A move to a flat-tax, for example.
‘Uncertainty’ is a term in common usage. Both the Leave and Remain campaigns would have to admit to using negative tactics while economic fears are hawked in almost biblical language. Many Britons feel afraid of leaving. They have had to endure President Hollande’s “consequences”[1] and his heir apparent M. Macron warning that he will “roll out the red carpet” for the bankers who will leave London for Paris[2]. They have had warnings from the International Monetary Fund (with more yet to come), the Organisation for Economic Co-operation and Development and the Leader of the Free World himself[3]. President Obama’s remark that Britain would be “at the back of the queue” as regards to any trade deals was slightly at odds with his speech in Germany two days later where he said he wanted the US-EU TTIP trade deal concluded by the end of the year. How long is this queue again?
The IMF report mentions Britain only four times[4]: In the foreword; predictably in the “Outlook for Individual Countries and Regions”; that the potential of Brexit is one of the “Heightened downside risks” facing the world economy[5]; finally in a special section of a hundred odd words[6]. The actual risk from Brexit is quantified as that dreaded word “uncertainty” again as well as potential damage to trading relationships[7]. It is undermined by the report itself pointing out that Britain’s strong economic performance will offset any “heightened uncertainty ahead of the June referendum”[8]. All these are potential risks and are hedged with many ‘coulds’ and ‘likelys’. None of the report’s authors, no matter how experienced, have ever witnessed such an event and all forecasts should be treated as the worst scenario they wish to imagine.
The OECD report, while more detailed, can be dismissed out of hand. A hatchet job deliberately painting the most damaging picture. In presenting the report one almost expected that OECD head, Señor Gurría[9], would unveil the younger Bill Murray of Ghostbusters drily warning of “human sacrifice, dogs and cats living together… mass hysteria!” but relations between the US and Mexico seemed to have soured of late. The underlying assumptions of the report, in all of its scenarios, are so flawed as to be laughable. They surmise that Britain would become inward looking, with little trade, immigration or investment. Even its most neutral assessments rest on premises such as “most of this stems from the decline in trade openness” and “a failure to undertake regulatory reforms”[10] which completely misses the point of why Britain would wish to leave.
Both the OECD and the IMF base their hypotheses on the idea that Brexit is a “turn toward more nationalistic policies, including protectionist ones”[11]. The OECD do concede Britain may wish to “improve the business climate” post Brexit but even its best case assumes it would only do so at a speed it calculates partly from Mr Brown’s Ministry, hardly known as a great de-regulating one, and in its worst case that it would do nothing[12]. Its fundamentally flawed view of the UK is highlighted by its pointing out that despite business opposition to labour market regulation and the Working Time Directive, the “political constellation after Brexit” would probably not heed that[13]. Perhaps the best example of its partisan nature is in its summation of the financial sector. Highlighting the risks it then, apropos of nothing, mentions that Switzerland exports an even greater proportion of its banking services to the EU but that they got a good deal[14].