POLITICS

Top Economist Slams 'Entirely Fictional' Brexit Report

Hits out at Michael Gove after twitter spat.

03/01/2017 11:40 | Updated 03 January 2017
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Michael Gove

One of Britain’s most respected economists has dismissed claims by a Michael Gove-backed pro-Brexit thinktank that leaving the EU will generate a 400,000 job bonanza.

Change Britain claimed in a new report that leaving the customs union would result in hundreds of thousands of UK jobs, as new deals with eight key countries would boost British exports.

But Jonathan Portes, Professor of Economics, King’s College London & Senior Fellow, has said Change Britain’s claims are “entirely fictional”.

Portes said the new study “should be taken with a huge amount of salt”, saying Change Britain had “just got some facts wrong.”

 Speaking on BBC Radio 4’s Today programme, Portes said: “The point of trade deals is to increase exports, or exports to the countries we make deals with, and imports.

“Change Britain are counting the number of jobs that they claim would be created by those extra exports, but just ignoring the jobs that would be lost because of those extra imports. And that, obviously, makes no sense.

“In practice, most economists would expect that free trade deals are a good thing, but the jobs created would be pretty much balanced out by the jobs destroyed.

“They’ve just got some facts wrong as well. For example, they score the benefits of a free trade deal that we could do with Korea if we were outside the European Union. The fact is the European Union already has a trade deal with Korea.

“Potentially we could lose that if we leave the EU. They’re counting something as a benefit when it’s a cost. More broadly they are correct that outside the customs union we would have an extra flexibility, but the important point is there are costs and benefits.

“Simply counting the benefits without counting the costs is just nonsense.

“I think the important thing for experts, as it were, like me, is to make the point that it’s not true to say we don’t know anything about anything; equally it’s wrong to put simply hard numbers on them.”

The Guardian also reported Simon Tilford, the deputy director of the Centre for European Reform thinktank, as saying Change Britain “seem to assume that leaving the deepest and biggest customs union and free trade agreement in the world, the EU, with which we do half of our trade, will not have any negative economic implications and will not cost employment – that’s an unserious proposition.” 

On Friday in a spat over a report by the International Monetary Fund, Portes called Gove “pathetic”, while the Tory MP demanded Portes give a “neutral” analysis.

On Tuesday Gove said the Change Britain report showed there was “a prosperous future ahead of us if we leave the EU’s customs union and become a beacon of global free trade”.

“As we strike new trade deals with the growing economies of the 21st century, it will create hundreds of thousands of jobs right across the country, strengthening communities throughout the UK and ensuring that everyone feels the benefits of economic growth”, he said.

“But in order to achieve this we must take back control of our trade policy. Only then can we realise the full potential of this great trading nation.”

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