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[...] Instead what we have seen, and will continue to see, are a variety of opinions. On the Remain side, the UK Treasury has offered a comprehensive assessment of the possible outcomes: they range from mildly negative to rather more substantially so, but (as the Leave side were quick to observe) all of them are predictions, none comes with a guarantee. The IMF have also produced a similar downbeat review, the previous head of the World Trade Organisation has offered his personal opinion on the very limited chances of a good outcome, and a large number of foreign statesmen have urged to UK to be realistic about life outside the EU, culminating in President Obama’s uncharacteristically blunt warnings at the end of last week that the UK could not expect favourable treatment from the US if it left. But they are all opinions – from experienced people and bodies maybe, but opinions not facts.
To all of these the Brexiteers offer one of just two responses: either they try to deny that the speaker knows what he is talking about, or they try to deny his right to speak at all. This is the political equivalent of students trying to “no-platform” speakers whose views they disagree with. And while this might cheer those who already agree with them, it is about as unconstructive and ineffective at persuading others to their cause.
When the Leave camp do try to put their own case, their problems quickly become apparent. If the claims of the Remain side are not facts but opinions and predictions, those of the Brexiteers are little more than heroic hopes and platitudinous promises. Any attempt to analyse their statements quickly either becomes futile (there is nothing behind the claims) or farcical (as when Michael Gove held out the exciting prospect of “a trading relationship like the one Albania and Belarus have with the EU”).
The Brexit camp appear to live in a world where trade deals are easy to do, where other nations have Britain’s concerns at heart and will be happy to sacrifice their own national interest to the UK’s, and where “they will have to deal with us, because we are the fifth largest economy in the world”. Fifth largest economy the UK may be, but it still represents just 3% of world GDP, and less than 1% of the world’s population. This is not exactly a powerful negotiating position – to more than 99% of the people in the world, the UK is just another foreign country, and not a very big one at that – and anyway there is no “have to” in deals between sovereign states.
What is the average voter to do, faced with such a campaign? In situations like this, where the future is not only unknown but unknowable, the best approach is what economists call scenario analysis. [...]
In the case of the Referendum decision, the maximum downside of voting to stay in is that the UK will have a second-tier membership of what many consider is a slowly failing institution. Nobody quite knows how the new membership deal that David Cameron negotiated will work, but it preserves two crucial things: the UK’s membership of the single market, and the UK’s right to withdraw at a later stage (a right the UK always has, but can only use once) if the EU crisis becomes existential. That would seem a survivable scenario, not least because the option to exit is preserved. In the words of Boris Johnson, this really is “pro having cake, and pro eating it” – membership, with the right to leave.
But the maximum downside of leaving is less comfortable. Leaving will be irreversible: the EU would never countenance an application to rejoin. The option would have been used, and the UK would have to accept the consequences. And those consequences, despite the promises of the Brexit camp, are not under the UK’s control and may not be benign.
It is possible that the EU will prove a hard negotiator and that a trade deal is not forthcoming: not only have the UK’s partners said as much (Germany has specifically warned that it will “have a duty to our own people to negotiate hard”), but it is both the natural reaction of the spurned party in a divorce, as well as the logical policy for the EU, keen as they will be to discourage other states from following the UK’s example.
It is possible that President Obama, after 7 years in the White House, understands how the US and especially its Congress will view calls for a trade deal with the UK, and is right when he warns that it will not happen.
It is possible that other countries with financial services industries, far from seeking to facilitate London’s continuance as the world’s chief financial centre, will seek to supplant it – indeed we know the EU is already very unhappy about the extent of euro business that is conducted in London and outside the Eurozone, and will not tolerate it if London is also outside the EU itself. [...]
Firing the bullet in a game of Russian Roulette may not be very likely, but it is possible, and the outcome is (literally) not survivable. The Leave campaign is asking the British people to play Russian Roulette with their country’s economic future: the upside, and the promises, may sound attractive, but many will ask whether they come at too high a risk.
Full article on Laburnum Consulting