"Richard Hughes, the chairman of the Office for Budget Responsibility, (OBR) claims Britain's departure from the European Union has reduced economic output by around 4 per cent compared to if the UK had remained in the bloc".
"Speaking to the BBC's Sunday with Laura Kuenssberg programme, Hughes was asked to quantify the 4 per cent drop in UK economic output that the OBR has attributed to Brexit."
So on what does Hughes base that claim? The OBR website states:
https://obr.uk/forecasts-in-depth/the-economy-forecast/brexit-analysis/#indepth
"Our March 2020 forecast incorporated estimates of the effect that trading under the terms of a 'typical' free trade agreement would have on productivity in the long run. We assumed that this channel would reduce long-run productivity by 4 per cent relative to remaining in the EU, with around one-third of this effectively already seen in the data due to post-referendum uncertainty weighing on business investment. Box 2.1 sets this analysis out in more detail."
That is, "in the long run", " with around one-third of this effectively already seen in the data", in other words on by your own account any reduction so far would not be "around 4 per cent" but more like 1.3 per cent.
And:
https://obr.uk/box/the-effect-on-productivity-of-leaving-the-eu/
"With the outcome of the negotiations still unknown, we have not modelled the long-run impact on productivity and GDP of a specific trading relationship. But, consistent with the formal negotiating objectives of the UK and the EU, we have looked at estimates of the effect of leaving the EU to trade under the terms of a typical free trade agreement. These point to a central estimate of an effect on potential productivity – i.e. including both the effects on total factor productivity and capital deepening – in the region of 4 per cent in the long run (Table A), although the range of estimates is wide."
So once again it is "in the long run", which they do not quantify and, presumably, has not yet happened; and why did he not mention to Laura Kuenssberg that the OBR has not actually done any economic modelling itself, and when taking the average of projections published by other organisations the OBR excluded those from the EU Commission and from three German research bodies, all pointing to a much lower impact?
It is not part of the role of the OBR to feed false lines to anti-Brexit journalists so they can spread a pack of lies.
