Brexit: Economic Effect

Lord Forsyth of Drumlean Excerpts

Thursday 18th October 2018 Lords Chamber

[Lord Bates]

I am very happy to reiterate that commitment which was given to ensure that, before the meaningful vote—and, indeed, the debate in your Lordships’ House—takes place, there will be an appropriate level of analysis to look at the consequences of the deal. Of course, we cannot set that out in detail now, because we do not know what the shape of that deal will be, but when it comes, that analysis will be made so that people can make an informed decision.

[Lord Forsyth of Drumlean (Con)]

My Lords, given that the Treasury model for short-term forecasting has been right for only one quarter since the referendum, and that the Chancellor has indicated that it is defective, what faith can we put in any long-term forecast, and why does the Treasury believe that its long-term forecasts are likely to be any more accurate than its short-term forecasts?

[Lord Bates]

My noble friend raises an interesting point. When we look at the actual economic data rather than the forecast, we see: unemployment falling to record low levels; inflation and the deficit on the way down; employment on the way up; wage increases at their highest level for a decade; and exports increasing. All this points to the fact that, as with all forecasts, these are not targets to be met but something to be beaten.