Opinion – Read Original National Audit Office Report – HM Treasury’s economic analysis in the lead-up to the referendum on European Union membership

Paul Krugman, Laureate of the Sveriges Riksban...

Paul Krugman, Laureate of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2008 at a press conference at the Swedish Academy of Science in Stockholm (Photo credit: Wikipedia)

Londres - HM Treasury

Londres – HM Treasury (Photo credit: Wikipedia)

If you’re tired of the inherent bias in the UK’s mainstream media, read the NAO’s report into HM Treasury’s economic analysis in the lead-up to the referendum on European Union membership. This is important because the Brexit referendum was secured on basis of promoting fear of immigration, rampant xenophobia, and false news, rather than independent evidence and risk analysis.

Source: HM Treasury’s economic analysis in the lead-up to the referendum on European Union membership

Obviously, the terms of reference and political interpretation of the HMT results will demonstrate an element of bias. But the Treasury’s basic methodology was sound, its assumptions reasonable and clearly defined – in short, a professional piece of work. The NAO report highlights the HMT economic analysis compared to other independent studies. It’s perfectly reasonable for the projected results to vary based upon assumptions and modelling methodology.

What is important is the generalized conclusion, rather than the precise metric.

The world’s leading economists, including Nobel Prize Winning, Paul Krugman, have argued that the medium to long-term cataclysmic outlook following Brexit is water-tight. Depending upon the terms of the Brexit, leaving the EU will damage the UK economically for years into the future. Finance theory allows us to capitalize the impact of a future cashflow at the prevailing cost of capital and provide a one-time net present value, or simply a one-time cost of the decision. Last year, I did this calculation and it was eye-watering – it’s a shame that it was not highlighted by the UK’s outrageously biased media.

Secondly, there is the short-term economic impact following the Brexit decision. Here’s there is more room for doubt as a wider range of assumptions comes into play.

But what is clear is that the medium to long-term impact of Brexit will be tragic, disasterous, calamitous, dire and ruinous, penalizing future generations.

For deeper coverage, I recommend the following earlier blogs:

So what should be done to redress the catastrophic damage done by false news from deeply biased politicians and media, promoting self-interest ahead of national well-being?


Opinion – Theresa May will review the cap on public sector pay as public have grown ‘weary’ of austerity | Business Insider – John Gelmini

Dr Alf brings us an interesting story but one which has already been overtaken by events following Mrs May’s latest U turn.

When the Banking Crisis finished I was for two years of brutal Canadian style austerity coupled with measures to stimulate export led growth. We got neither of these because the politicians lack the “cojones” to face down public sector trades unions, malingering pensioners bleeding the NHS dry and mendacious Chief Constables, Head Teachers, Local Authority Chief Executives and Common Purpose trained quangocrats. That failure coupled with the failure to deal with fat cat bosses who pay themselves too much, deliver no increases in shareholder value, fail to sell, fail to export and fail to motivate their workers to improve productivity brings us to where we are today.

Dr Alf asks what the likely targets for cuts are likely to be.

I suspect the politicians will fudge by further rationing of NHS care, introducing tougher benefit eligibility criteria and further moves to extend IR35.

They might increase some taxes on middle earners but they will avoid confrontation and do nothing to force police, council and fire service reform, nothing to effect Adult Social Care and NHS mergers and nothing to drive exports.

Under May all one can expect is minimalism and failure.

Lord Tebbitt suggests the Conservatives need to skip a generation and I agree with him. Putting May and her zombie Cabinet to the sword would be a good first step looking at people like Kwazi Kwarteng who is robust, telegenic, sharp and black would be a good way to wrong foot Corbyn.

Then after the Conservative Party Conference, there can be imposed reform starting with Local Authorities and BBC privatisation and then moving hard against Chief Constables and Fire Chiefs with timing to coincide with the trials of Bettison and Duckenfield for their roles in the Hillsborough disaster.

John Gelmini