February 1, 2018 / 11:23 AM / 16 days ago

All Brexit economic forecasts were wrong, British minister says

LONDON (Reuters) - Brexit minister David Davis rekindled a debate about the credibility of the government’s own forecasts by saying on Thursday that every economic prediction on the British economy since the EU referendum has been wrong.

In the same debate in parliament, the junior Brexit minister Steve Baker suggested government officials had deliberately developed negative economic models in order to influence Brexit policy.

Davis was speaking after being asked about leaked analysis, drawn up by government officials, which suggests Britain would be worse off after Brexit under a wide range of potential scenarios.

He questioned the value of such research, saying the work is “incredibly difficult” and that every institution that had tried it had failed.

“Every forecasting model on the performance on the British economy post the referendum by every major organisation, the banks, the government organisations and, indeed, international organisations has proven wrong,” Davis said.

“One of the ways it has been proven wrong is because employment in this country has grown despite the forecasts to record levels today. We will be seeking to do the best we can to ensure that growth record is maintained.”

Bodies such as the International Monetary Fund and the Bank of England have raised their forecasts from gloomy predictions made around the time of 2016 referendum. However, Britain’s economy has underperformed many of its peers and is likely to lag global growth this year.

A spokesman for Prime Minister Theresa May said junior minister Baker had her full support despite being accused of maligning government officials for the second time in a week.

Baker suggested government officials may be undermining government policy by calibrating their work to show only the downside of Brexit.

When asked by another Member of Parliament whether he had heard claims that Treasury officials had “deliberately developed a model” to show that leaving the EU customs union was damaging to influence policy, Baker said he agreed.

“I‘m sorry to say that my honourable friend’s account is essentially correct,” Baker said, adding that this was “quite extraordinary”.

British officials are legally obliged to remain impartial on policy.

The minister then quickly clarified that he had not suggested the accusation itself was correct.

“To be absolutely clear, I’ve said it was correct that the allegation was put to me,” Baker said. “I did not in any way seek to confirm the truth of it.”

Some of the most vocal advocates of a total separation from the EU, known as a hard Brexit, have repeatedly suggested that the machinery of government was biased against Brexit and working behind the scenes to sabotage it.

Reporting By Andrew MacAskill and Estelle Shirbon; editing by Stephen Addison

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