EU Referendum: in the absence of a plan

23/05/2016

This is exactly what Flexcit did, and it was freely offered to Dominic Cummings for use by Vote Leave, precisely to head off the scaremongering (FUD) which we knew was to come. Yet, as we all know, Cummings didn't even have the courtesy to respond to me.

And now we have, exactly as we predicted three years ago, a reliance on FUD, with the government cynically exploiting concerns about the economy, exactly as we predicted in July 2014, when we warned of the need to pre-empt it.

With those warnings unheeded, the official "leave" campaign has paved the way for today's Treasury analysis which, accompanied by a lurid graphic (above), tells us:

A vote to leave would cause a profound economic shock creating instability and uncertainty which would be compounded by the complex and interdependent negotiations that would follow. The central conclusion of the analysis is that the effect of this profound shock would be to push the UK into recession and lead to a sharp rise in unemployment.

Two scenarios have been modelled to provide analysis of the adverse impact on the economy. These deliver a "shock" to the economy or a "severe shock". You can take your pick, but what you cannot do is pick the Flexcit scenario. Even Ed Conway of Sky News notices its absence.

But then the Treasury's game is to capitalise on the uncertainty which would necessarily follow from any of the post-exit scenarios proposed by Vote Leave. The moment this organisation rejected the "Norway option" (as did Leave.eu) and then had Cummings and Gove both specifically reject continued participation in the Single Market, they paved the way for today's scare. 

To build its picture of uncertainty, the Treasury tells us that four processes would need to be completed:

Process 1: agreeing the UK's terms of withdrawal from the EU under Article 50 of the Treaty on European Union.

Process 2: agreeing the UK's new trading relationship with the EU.

Process 3: agreeing the UK's new trading relationships with the rest of the world including over 50 countries with which the UK would need to negotiate new trade arrangements.

Process 4: changing the UK's domestic regulatory and legislative framework.

Each of these four processes, we are then told, "would be complicated in their own right". But then we get: "conducting them all at the same time, on any terms that would be acceptable to the UK and within the specified two-year period for leaving the EU would almost certainly be impossible".

This, of course, is straw man territory. None of this presents the slightest problems if we adopt Flexcit. The terms of withdrawal and the trading relationship with the EU are largely settled by continued participation in the EEA.

The trading relationship with the rest of the world is maintained as at present, relying on the presumption of continuity and, as far as the UK's domestic regulatory and legislative framework goes, there would be no change. We would simply repatriate the entire acquis and take our time with any necessary changes or revisions.

Vote Leave, though, has no answers. In the Gove/Cumings scenario, they throw everything into the pot, with absolutely no idea of whether any settlement can be achieved, or what the timescale might be. They then talk grandly of a vast bonfire of regulation, from which they supposedly gain most of the economic benefits from leaving.

In other words, Vote Leave have set us up for the fall. They gave the game to the government, which can make the unanswerable case that leaving will cause a recession. Where we needed certainty, reassurance and predictability, Vote Leave gave us uncertainty and revelled in creating even more.