A quick note on Leave.EU’s creative accounting
The Chancellor’s statement yesterday, on the costs of Brexit has provoked some creative accounting from the Brexit campaign. Their response is built on two highly questionable statistics combined with a statement of such devil-may-care chutzpah that it seems almost heroic.
Let’s take their most eye-catching statement: that the annual £4,300 per household price tag which the treasury puts on leaving the EU is an “absolute bargain“. Arron Banks dismisses it as a mere 21p per hour, per person. It may interest Leave.EU to learn that the average annual income for the poorest fifth of the population including all cash benefits is £15,500. The cost of Brexit would amount to nearly 30% of that. If this is a bargain for Arron Banks and Lord Lawson it is not for those on a low income who will be forced to pay for it. It is indicative of just how out of touch the backers of the leave campaign have become that they could be so blasé about it.
Leaving aside the moxie required to brush off a £4,300 bill as a “bargain”, the figures behind this assertion range from the quixotic to the simply inaccurate. To begin with the inaccurate: Leave.EU claim that there are 6.7 million households in the UK. With an average of 2.3 people per household, it seems that Leave.EU believe the population of the UK is around 15-16 million. It is possible they are employing a unique definition of a household, but the ONS website produces a figure of 27 million households a total population of 63 million people. The last time the population of the UK was so low was 1815, a period to which Leave.EU would possibly like us to return (interestingly a time when we were engaged in a European coalition to oppose Napoleon).
Finally, Leave.EU’s claim that the £4,300 / household bill amounts to a pittance compared to the £40,000 / household they claim the taxpayer spent bailing out the banks. This £40,000 figure comes from a 2009 estimate of the potential total cost if all the money being made available for bailouts was taken up. Essentially Leave.EU have counted exposure (the amount potentially at stake) as a cost which was paid. But as the article makes clear, not all that money would necessarily be spent, and of the money that was paid out, some would be returned when nationalised banks were sold back into the private sector. A 2011 report by the National Audit Office found that far from the £850 billion figure quoted in the Mail article (which was a potential sum), by March 2011 the Government had committed £456.33 billion, of which it had spent £123.93 billion. Not exactly pocket change in anyone’s book but as the NAO pointed out at the time:
“If the support measures had not been put in place, the scale of the economic and social costs if one or more major UK banks had collapsed would be so large as to be difficult to envision. The support provided to the banks was therefore justified…”
That’s leaving aside the fact this cost is a one off payment (baring the costs of financing); from which we can expect to recoup at least some of our costs as the support is repaid. Whether the end result is a profit or a loss is difficult to determine as it will depend on the future state of the market. However, as of July 2015 the Treasury had received about £19 billion in fees and a net gain of £140 million in sales of assets.
What does all this prove? Well, beyond Arron Banks’ rather blasé attitude to household income, it is indicative of a leave campaign that has little real concern for the livelihood of much of the population. They have set their hearts on Brexit and the quality of life of millions of people is a price they seem willing to pay for it.
As our General Secretary Frances O’Grady said:
“The millionaire who funds the Leave EU campaign may think £4,300 a year per family isn’t much money. But losing that much would be a disaster for most working families. That’s why the TUC has consistently warned of Brexit ’s risk to jobs and to an economy that works for everyone.”