Jacob Rees-Mogg slated for "back of a napkin" £1.1 trillion Brexit boost claim
PUBLISHED: 10:07 11 September 2018 | UPDATED: 10:07 11 September 2018
Jacob Rees-Mogg has been rubbished for "back of a napkin" economics after claiming a no-deal Brexit would boost the British economy by £1.1 trillion.
The leader of the Conservatives' hardline European Research Group will make a speech today claiming no-deal would boost the economy by the figure over 15 years, arguing that crashing out of the EU was preferable to Theresa May’s Chequers plan.
The backbencher uses as evidence the claim that Britain’s trade with World Trade Organisation (WTO) countries had grown four times faster than trade with countries that had a deal with the EU.
And he will also make the claim that trading on WTO terms would reduce food prices by up to 8%.
But he has been mocked by leading Remainers, who described his claims as "desperate stuff" peddling "random numbers, doodled, no doubt, on the back of a napkin at his club".
And his economic soothsaying comes just days after his fellow Brexiteers piled on chancellor Philip Hammond, with international trade secretary Liam Fox saying making predictions 15 years in advance was "hard to swallow".
Rees-Mogg’s intervention today is seen as the beginning of a concerted effort by hardline Leavers to kill off Theresa May’s preferred Brexit plan, which they claim would lead to “Brexit in name only”.
Rees-Mogg will speak today at an event in Parliament hosted by right-wing think tank Economists for Free Trade, at which he will argue that a Canada-style free trade deal with the EU would be the best option for Brexit, but that no deal would be “a very good second best”.
He told the Daily Telegraph: “Leaving the EU on World Trade Organisation terms would lead to a quite remarkable economic advantage for the UK.
“Economists for Free Trade have calculated that a WTO agreement would result in a £1.1 trillion boost to the economy over 15 years, because our trade with WTO countries has grown four times faster than our trade under single market terms.
“Trading on WTO terms has been hugely successful and prices would go down by as much as 8 % for some basic items such as food and footwear, meaning it would provide the biggest benefit to the least well-off.”
Labour MP Owen Smith, a champion of the anti-Brexit campaign group Best for Britain, described the intervention as "desperate stuff from Rees-Mogg".
He said: "These random numbers, doodled, no doubt, on the back of a napkin at his club are no substitute for a detailed, post-Brexit plan.
"He’s right, of course that we would be free to import all the cut-price chlorinated chicken and hormone-pumped beef we want under his plans. But I’m not sure that’s what people voted for. Especially the British farmers whose livelihoods would be destroyed by such a cheap food strategy."
Rees-Mogg's comments also contrast with that of fellow Brexiteer and disgraced former defence secretary Liam Fox, who just days ago attacked Hammond for warning a no-deal Brexit could damage the economy.
Treasury analysis estimates that by 2033 borrowing would be around £80bn a year higher under a "no-deal" scenario and forecasts it could mean a 7.7% hit to GDP over the next 15 years.
Asked by the BBC's Andrew Marr whether he accepted the figures, Fox said: "Can you think back in all your time in politics where the Treasury have made predictions that were correct 15 years out. I can't.
"They didn't predict the financial crisis. No-one could.
"I don't believe that it's possible to have a 15-year time horizon on predictions of GDP."
The European Research Group has abandoned plans to present its own alternative Brexit plan this week after reports at the weekend of disagreements, but is said to be focusing on proposing a solution to the Irish border question which is currently blocking a deal.
David Davis, the former Brexit secretary, will speak at an event tomorrow which will focus on the Irish border, while Rees-Mogg said papers on other elements of Brexit may be published “in due course”.
Downing Street insisted yesterday that Chequers was “the only plan on the table which will deliver on the will of the British people while avoiding a hard border in Northern Ireland”.