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Email. info@brugesgroup.com
The Bruges Group spearheaded the intellectual battle to win a vote to leave the European Union and, above all, against the emergence of a centralised EU state.
The Bruges Group spearheaded the intellectual battle to win a vote to leave the European Union and, above all, against the emergence of a centralised EU state.
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It Isn't the Government's Job to Frighten the Public

Whitehall---Downing-Street

The duty of government is to obey the will of the Nation. To paraphrase that which Professor Dicey said, referring to "the grand principle underlying the conventional precepts of the constitution, in "The Law of the Constitution[i]":


"… neither the Crown [which I take to mean the Government] nor any servant of the Crown ever refuses obedience to the grand principle which underlies all the conventional precepts of the constitution, namely, that government must be carried out in accordance with the will of the House of Commons, and ultimately with the will of the nation as expressed through" the referendum.


All power belongs to, and resides, in the People: the People are Sovereign.Our democracy is "dedicated to the proposition that all men are created equal" and is, as Churchill said to the US Congress in December 1941, "the Gettysburg ideal of government of the people, by the people, for the people".As Abraham Lincoln said[ii]: "No man is good enough to govern another man, without that other's consent".The People entrust to Members of Parliament, their representatives, the power to make laws.The People, through those representatives, entrusted the office of Chancellor of the Exchequer to Mr Hammond.


Mr Hammond and Mr Rycroft, the former permanent secretary at the Department for Exiting the European Union, are both required under our constitution to obey the will of the nation.The will of the nation was to leave with or without a deal: this instruction given by the People is intentionally and actively resisted and obstructed by the Mr Hammond, the rebellious Chancellor, and the remainers in government and in Parliament.


We have no ability to predict.But, as Nassim Nicholas Taleb writes[iii][iv]:


"… we act as though we are able to predict historical events, or, even worse, as if we are able to change the course of history.We produce thirty year projections of social security deficits and oil prices without realising that we cannot predict these for next summer – our cumulative prediction errors for political and economic events are so monstrous that every time I look at the empirical record I have to pinch myself to verify that I am not dreaming.What is surprising is not the magnitude of our forecast errors, but our absence of awareness of it.…


Our inability to predict … coupled with a general lack of the awareness of this state of affairs, means that certain professionals, while believing they are experts, are in fact not.Based on their empirical record, they do not know more about their subject matter than the general population, but they are much better at narrating – or worse, at smoking you with complicated mathematical models.They also like to wear a tie. …


I will introduce the third element of the triplet, the curse of learning, as follows[v].I closely watched my grandfather who was minister of defense, and later minister of the interior and deputy prime minister in the early days of the war, before the fading of his political role.In spite of his position, he did not seem to know what was going to happen anymore than did his driver, Mikhail".


"I noticed that very intelligent and informed persons were at no advantage over cabdrivers in their predictions.Cabdrivers do not believe that they understood as much as learned people – really, they were not the experts and they knew it.Nobody knew anything, but elite thinkers thought that they knew more than the rest because they were elite thinkers, and if you are a member of the elite, you automatically know more than the non-elite[vi]


I also noticed during the Lebanese war that journalists tended to cluster not necessarily round the same opinions but frequently around the same framework of analyses.They assign the same importance to the same set of circumstances and cut reality into the same categories …"


Mr Hammond in Parliament said [vii]on the 2 July 2019, "I think the hon. Gentleman has sketched a highly unlikely scenario, but I can answer his question. We have built up about £26 billion or £27 billion of fiscal headroom, and the purpose of that headroom is precisely to protect the UK economy from the immediate effects of a possible no-deal exit. I have no doubt whatsoever that in the event of a no-deal exit we will need all that money and more to respond to the immediate impacts of the consequent disruption, which will mean that no money will be available for longer-term tax cuts or spending increases.


Let me go further: the Government's analysis suggests that in the event of a disruptive no-deal exit there would be a hit to the Exchequer of about £90 billion, and that will also have to be factored into future spending and tax decisions".


Liam Halligan's piece[viii] in the Telegraph under the heading "We didn't listen to Project Fear before and here's why we won't listen to it now" says it all. He wrote: "The Treasury's pre-referendum forecast, that simply voting Brexit would cause "an immediate and profound economic shock", was laughably wrong – as some of us predicted. Rather than tipping into instant recession – the Treasury predicted a 1pc GDP contraction in the third quarter of 2016 and another 0.6pc squeeze over the following three months – the UK economy sailed on, recording a 0.6pc expansion in both post-referendum quarters.…


Mr Hammond's prediction of a no deal meltdown lacks credibility. It's based on those same government forecasts of 2016 – the methodology of which the Treasury refuses to discuss with serious academic researchers[ix]. Hunt's comparison of a no deal Brexit with the 2008 crash is similarly based on previous Bank of England scare-mongering."


The elite since 2016 has engaged in an unending barrage of prognostications all designed to frighten the People.It is not a function of government to frighten the People.There were numerous Treasury and other reports stressing the adverse consequences of a Leave vote by the People.These have been analysed by The Centre for Business Research, University of Cambridge Working Paper No. 493, (January 2018), entitled "How the Economics Profession got it wrong on Brexit"[x].In CBR paper the authors say: "We argue in this paper … that much of the economic assessment of the impact of Brexit has been flawed, leading to a conclusion that the profession does indeed need to reassess its methods..."


Our conclusion is that most estimates of the impact of Brexit in the UK, both short-term and long-term, have exaggerated the degree of potential damage to the UK economy. We stress at this point that this is not a politically-driven exercise. Most of the four-person team behind the research for this and our other papers voted 'Remain' in the 2016 referendum and would do so again if given the chance. Our purpose is rather to establish a sound basis for the ongoing"[xi].


On the question "Did EEC/EU Membership Accelerate Economic Growth in the UK?" the authors write: "The Brexit debate has been distorted by several myths. One of the most persistent and widely repeated is that the economic performance of the UK improved after joining the EU, (or EEC as it then was) in 1973. This claim was made by the OECD[xii] and was regularly stated in the media during the Brexit referendum campaign. 


We can conclude[xiii] that there is no evidence that joining the EU improved the rate of economic growth in the UK. Growth in the UK, as elsewhere, is constrained by technology, skills and investment. None of these has been better than the USA and hence the USA experience puts a ceiling on potential long-term growth in the UK, as it does in the EU6. The UK joined the EEC just as the EU6 catch-up ended. The UK thus joined on a false prospectus that accession would accelerate growth. It is also a fact that the previously slow growing Commonwealth markets actually expanded faster than the EU over the long period since 1973. …


"We have been unable to get a meeting with the Treasury to discuss these differences, nor were HMT willing to release any further details of their methods or equations. We do know however that there is an internal Treasury paper from 2005 which generates much smaller estimates of the impact of EU membership on intra-EU trade (HM Treasury, 2005). Importantly, this paper recognises that the impact of EU membership was much smaller for the UK than for other EU members. We had assumed that HMT's failure to recognise this key point in their 2016 report was due to an oversight, but the existence of the 2005 Treasury paper suggests that it was more deliberate. The omission could, of course, be due to a lack of institutional memory in an organisation with high staff turnover, but it is important to note that the official responsible for the 2016 report, Treasury Chief Economist, Sir Dave Ramsden (now Deputy Governor at the Bank of England), was employed at the Treasury in 2005"[xiv].


In their final conclusion, the authors refer to their concerns about democracy thus[xv]:


"Our conclusion is that much of this work contains flaws of analysis, and a treatment of evidence that leads to exaggerated costs of Brexit. …


The refusal of the Treasury to discuss their approach, at least until the issue was aired in Parliament, is in our view unacceptable in an open democracy". This last statement corroborates that which Liam Halligan has written (which is mentioned above) that: "Hammond's prediction of a no deal meltdown lacks credibility. It's based on those same government forecasts of 2016 – the methodology of which the Treasury refuses to discuss with serious academic researchers".[xvi]


The flawed forecasts and assessments formed a significant part of the government's programme to frighten the People. Using flawed computer modelling was a technique deployed by the European Union, IMF and others against Greece, as the then Greek Finance Minister, Yanis Varoufakis has described[xvii].


As Fraser Nelson[xviii] put it: "What could be better calculated to arouse our inner Boadicea than the warnings that we've heard from Remain?We're instead told clever experts have thought about this for us so would we kindly follow their advice? The positive case for staying has scarcely been made".


Nothing frightens more than the threat that of the loss of one's job.The Guardian reported: "1,285 business leaders signed a letter to The Times saying that Brexit would damage Britain's economy[xix]; "Britain leaving the EU would mean uncertainty for our firms, less trade with Europe and fewer jobs," they say in the letter".


The fact that the elite did engage in trying to frighten the People was one of the most revealing elements of the referendum: the elite had no credible arguments for remaining in the European Union.It now appears that Big Business has the most to lose in our leaving the European Union (as to which see my paper entitled "Who Governs and by What Right?" at: https://www.brugesgroup.com/blog/who-governs-and-by-what-right ).President Obama, the IMF, the World Bank, the OECD, the Bank of England, The Treasury, the CBI, the TUC and the British Chamber of Commerce all publicly supported Remain.


The Treasury, which is under the control of Mr Hammond, the Chancellor, appears to be engaged in:

  • 1.Creating so called predictions and analyses designed to frighten the People;

  • 2.Refusing to allow the People to see the basis upon which their predictions and analyses were and are based (including the serious researchers at the Centre for Business Research, University of Cambridge) so as to make less credible any adverse criticism of such predictions;

  • 3.As to the point made by the Centre for Business Research mentioned above, namely:
    "The UK thus joined on a false prospectus that accession would accelerate growth.It is also a fact that the previously slow growing Commonwealth markets actually expanded faster than the EU over the long period since 1973", the Centre has said in their report that they were "unable to get a meeting with the Treasury to discuss these differences, nor were HMT willing to release any further details of their methods or equations";

  • 4.The authors of the CBR report further wrote (as is set out above) that they "had assumed that HMT's failure to recognise this key point in their 2016 report was due to an oversight, but the existence of the 2005 Treasury paper suggests that it was more deliberate. The omission could, of course, be due to a lack of institutional memory in an organisation with high staff turnover, but it is important to note that the official responsible for the 2016 report, Treasury Chief Economist, Sir Dave Ramsden (now Deputy Governor at the Bank of England), was employed at the Treasury in 2005"[xx].


It appears from all that has happened since June 2016, crown servants including Mr Hammond are actively obstructing the will of the People.In a democracy, the principle of accountability holds that government officials — whether elected or appointed by those who have been elected — are responsible to the people for their decisions and actions.


A sober and detailed assessment of the predictions of government as compared with reality is contained in an article[xxi] in the Telegraph by Asa Bennett entitled "Fear v reality: have Remain predictions come true in the two years since the Brexit vote?"


The reality is that no one is able to predict."… certain professionals, while believing they are experts, are in fact not.Based on their empirical record, they do not know more about their subject matter than the general population, but they are much better at narrating – or worse, at smoking you with complicated mathematical models.They also like to wear a tie".


Beware of the men in suits.



Ian Geering QC


[i] AV Dicey, The Law of the Constitution, 1st Edn 1885, 442.

[ii] Abraham Lincoln in his Peoria Speech, 16th October 1854.

[iii] Nassim Nicholas Taleb 'The Black Swan The Impact of the Highly Improbable'; Second Edition 2010, 16 et seq.

[iv] One reviewer of the Black Swan described it thus:"A rallying cry to ignore the 'experts', The Black Swan shows us how to stop trying to predict everything - and take advantage of uncertainty".

[v] Ibid, 43.

[vi] Ibid, 44.

[vii] Hansard, 2 July 2019, Col 1053.

[viii] Liam Halligan, "We didn't listen to Project Fear before and here's why we won't listen to it now",Telegraph, 6 July 2019.

[ix] Those serious researchers include the people working at the Centre for Business Research, University of Cambridge.

[x] Ken Coutts, Graham Gudgin and Jordan Buchanan, "HOW THE ECONOMICS PROFESSION GOT IT WRONG ON BREXIT", Centre for Business Research, 2018 (herein "CBR paper").

[xi] Ibid, p5.

[xii] "Membership of the EU has contributed to the economic prosperity of the UK. Since1973, when the UKjoinedtheEU,UKGDPpercapita doubled,increasing more than in other non-EU English speaking countries over the same period,includingintheUnitedStates(US).Domestic policies partly explain this strong performance, but geographic proximity and unrestricted access to the largest market in the world are undeniably important factors as well. For smaller countrieswithcompetitivemarketsthebenefitscouldbeevenlarger.Forexample,Ireland,whichalsojoinedtheEuropeanUnionin1973,hadanear quadruplingofitsGDPpercapita".OECD (April 2016).This claim for gains from EEC/EU membership is vague. The claim of growth faster than the USA is refutedifGDPintheUSAisadjustedfortheimpactofmispricingofITproduction(seeConferenceBoard,2017).The reference to Ireland omits any mention of that country's tax haven status and the associated gross distortion of its GDP statistics.

[xiii] Ibid, 8.

[xiv] Ibid, 6

[xv] Ibid, 42.

[xvi] Those serious researchers include the people working at the Centre for Business Research, University of Cambridge.

[xvii] Yanis Varoufakis, "Adults in the Room – My Battle with Europe's Deep Establishment", (2017), 416 et seq.

[xviii] "With some sadness I'll vote to Leave an undemocratic and decaying institution that stopped helping Europe some time ago", Telegraph, 23 June 2016.

[xix] Ben Quinn, "1,200 business leaders back remain in EU referendum vote - The group, which included leaders of 50 of the FTSE 100, outlined their support for Britain in the EU in a letter to The Times ", Guardian, 22 June 2016.

[xx] Ken Coutts, Graham Gudgin and Jordan Buchanan, "HOW THE ECONOMICS PROFESSION GOT IT WRONG ON BREXIT", Centre for Business Research, 2018 (herein "CBR paper"), 6.

[xxi] Asa Bennett, "Fear v reality: have Remain predictions come true in the two years since the Brexit vote?", Telegraph 24 August 2018, at https://www.telegraph.co.uk/politics/2018/08/24/fear-v-reality-have-remain-predictions-come-true-two-years-since/ . 

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