Thread by @EdConwaySky

There was a time when economic analysis was at the heart of how UK govt worked. Every decision was taken with an eye to econ impact: on jobs, wages, GDP. It was a credo which largely owed itself to the power and persuasion of the Treasury, the policy powerhouse in Whitehall. 1/

When Britain opted not to join the euro it was because of five economic tests. When interest rate decisions went to Bank of England it was because of economic evidence. When pub spending was cut it was alongside economic analysis from the Office for Budget Responsibility 2/

The advice wasn’t always right, the decisions taken weren’t always the best for the economy, but at the very least there was a paper trail which allowed the British public to understand what a given decision would mean for their livelihoods. 3/

It’s been obvious for some time this era of evidence based policy was ending. Arguably during Blair/Cameron era pendulum swung too far in that direction. Decisions were presented as being based on evidence even when evidence was shaky (the Iraq war being the ultimate example) 4/

Even so, one could nonetheless take it for granted that even if govt didn’t bang on abt numbers & economics, behind the scenes officials would be nosing through spreadsheets to ensure they at least knew the likely impact of their decisions. Today I am no longer so sure. 5/

Yday in Washington I attended an off-camera briefing with the Chancellor, Sajid Javid, a few hours after news broke of the new Brexit deal struck by UK/EU for a new withdrawal agreement on Brexit. One obvious question for him: what’s the economic impact? 6/

At this point it’s worth remembering economics shouldn’t be the ONLY basis for decisions. As it happens with Brexit there are plenty of v good non-economic arguments for leaving. A negative GDP projection isn’t EVERYTHING. But that doesn’t mean you should IGNORE it altogether 7/

There’s a reason econ analyses matter: we value our jobs. We value stability of prices & rising wages. And it’s better to have our eyes open. So even if these are not the primary bases for decisions, it’s right to bear them in mind rather than sticking our heads in the sand. 8/

Which is why the Treasury and rest of govt have produced various economic analysis of the impact of Brexit. Not because this should be the sole basis of any future decision. But because it would be irresponsible to take these decisions with our eyes closed 9/

For instance, this is the govt’s assessment of the likely impact on GDP of various Brexit paths. Note the free trade agreement highlighted. That is the most similar to the deal signalled from yesterday’s Brexit documents assets.publishing.service.gov.uk/government/upl… 10/

So, back to that briefing yday.
Sajid Javid:“I don’t think there’s any need for an impact assessment.”
Me: “Does that mean you stand by the existing impact assessments that imply knocking some percentage points off long term GDP?”
SJ: “No”
Cue long pause... 11/

SJ: “Assessment last Nov modelled all sorts of assumptions. That’s still out there for anyone who wishes to look it up - that’s their choice. It didn’t model this deal but in terms of now moving forward & getting to Sat vote there’s no need for further impact assessments” 12/

SJ: “It’s self evident what we have achieved with this deal is the right thing for the economy.”
Narrator: But it’s not self-evident. Indeed most evidence suggests it would mean a WEAKER economy. Unless govt has a different conclusion. In which case why not publish it? 13/

Tho govt is refusing to do its own analysis, happily a few others have had a stab. eg @UKandEU here: ukandeu.ac.uk/wpp-content/up… or @Cebr_uk cebr.com/reports/cebr-e… The gist: deal will prob make the UK econ weaker than the counterfactual tho much depends on nature of final deal 14/

Back to the Chancellor: “It’s the right thing for democracy. We’ve got to move ahead. This isn’t just a debate abt the economics. This is also about the fabric of our democracy. People overwhelmingly want to see Brexit done with a good deal and that’s what we’ve achieved.” 15/

Which is a good point. But it doesn’t answer the question: why not give people the full info so they can make up their own minds? Why keep the economic analysis from them? It’s weirdly evasive. And v unusual coming from the Treasury 16/

I’ve been haunted by this briefing ever since it happened yday pm. If the Treasury isn’t thinking abt the economics then who within government is? And, leaving aside Brexit, what does that spell for UK economic policy in the coming years? 17/

This might seem academic but a govt’s credibility matters, to international investors, if not the rest of us. This country relies on investors to buy our debt. Or not. And on the basis of what he also said yday, the Chancellor wants to borrow lots in next yrs 18/

Being dismissive of the economics is the thin end of the wedge. And that wedge often ends with a loss of credibility and an economic malaise. And now, with austerity ending and a new post-Brexit era poss beginning, is when the UK needs that credibility more than ever... 19/19