Sunak’s pretence that Brexit bad news isn’t real will damage our economy even further

One thousand pounds per household per year. That is the cost of Brexit according to a member of the Bank of England’s Monetary Policy Committee, which sets UK interest rates.

The calculation, based on what damage the flatlining of business investment has done to the British economy since the referendum, is quite possibly an underestimate – other Brexit factors have adversely affected growth and wealth too. But it is an interesting figure nonetheless.

For a start, its author Professor Jonathan Haskel, from Imperial College Business School, just happens to be a world-famous expert on productivity. So, it is pretty obvious that he knows what he is talking about.

That probably explains why the denials from the government seem to be particularly weak. They apparently “don’t recognise the figures”, which is the kind of non-denial denial that you get when it is perfectly obvious that the government is in the wrong.

Their cheerleaders in the dwindling and discredited band of pro-Brexit “experts” have also popped up to take pot-shots at the Professor’s work. According to them, you can make economic modelling tell you pretty much anything you want it to.

Well, that might be the way the Brexiteers operate, given their claims during and ever since the referendum, but they might however not be familiar with the quality and precision of work necessary to maintain your reputation in a peer-reviewed academic setting.

Nor does it lend much credence to their claims when they continue to try to pretend that all the problems post Brexit are down to Covid or the war in Ukraine. Surely the new dynamic British economy, having thrown off the shackles of EU membership should be outperforming everyone else in the bloc, not finding itself needing ever more excuses for underperforming?

But beyond that, the really worrying thing about this research is what it says about the future. A failure to invest now is pretty much a surefire guarantee that productivity and growth will be lower in the future.

Think about it. Do you increase productivity and therefore wages by using old tired, out-of-date machinery, operated by untrained workers, in dilapidated factories, served by crumbling roads? No, of course not.

That means the prospects for the UK bouncing back from the current downturn with vim and vigour is remote. It is far more likely that the UK will return to its long-term appallingly slow rate of underlying growth.

But what is really worrying is the attitude of the government to Haskel’s conclusion. It is beyond belief that HM Treasury, which along with the Office for Budget Responsibility and the Bank of England, employs some of the brightest and best economists and statisticians in the country do not have very similar figures at their fingertips. They are, after all, all working with the same data, and with very similar if not identical economic models of the British economy.

That means it is inconceivable that government ministers including the PM and the chancellor are not getting the same analysis, that we are all poorer because of Brexit and something needs to be done about it, very, very quickly or it will get much worse.

But strangely, we do not just get the non-denial that the government does not recognise these figures but regular and frequent denials that Brexit is a problem at all.

Many people are complaining that Labour is refusing to condemn Brexit or say how it will improve things, but remember that just like us, it does not get to see the government’s own analysis of what is going wrong.

One of the biggest arguments for a change of government is therefore this: having ministers who can immediately say “look at these awful figures that the previous administration hid from you; we are going to have to do something about it”.

That alone would be a game-changer.