Andy Burnham is preparing to commission a new Project Fear-style dossier to underpin his plan to reverse Brexit, with Downing Street expected to ask the Treasury to draw up economic analysis making the case for Britain to rejoin the European Union.
The Financial Times reports that Treasury officials are expected to set out forecasts on the economic effect of each route back towards Brussels, whether that means rejoining the single market, restoring customs union membership or, in the Prime Minister’s own phrase, going “all the way” and seeking full membership again. A senior Labour source told the paper that “more work will definitely be needed” to support the case Mr Burnham wants to put to the country.
The analysis is expected to feed into the options Mr Burnham has promised to set out to coincide with the second EU-UK summit, which the European Council confirmed on 12 October will take place in Brussels on 20 November. Downing Street has confirmed the Prime Minister will attend to meet European Council President Antonio Costa and European Commission President Ursula von der Leyen.
At Great British PAC, we believe the democratic decision to leave the European Union must be respected. If the Government intends to use the Treasury to examine a return to the EU, the single market or the customs union, the British public deserves complete transparency about the assumptions, costs and consequences. Economic forecasts must inform democratic debate, not become instruments of political persuasion dressed up as independent analysis.
A Treasury spokesman declined to be drawn on the plan, saying: “We do not comment on hypothetical future scenarios.”
Ten years after the original Project Fear
The parallels with 2016 are uncomfortable for Downing Street, and they are of the Government’s own making. During the referendum campaign, Lord Cameron, then prime minister, and George Osborne, then chancellor, deployed the machinery of the Treasury and the Downing Street operation to warn voters that leaving the EU would trigger an economic catastrophe, including plummeting growth and a house price crash. Critics branded the tactic Project Fear.
The short-term predictions, notably the Treasury’s forecast of an immediate recession, never materialised. Worse for the Remain side, the relentless pessimism backfired. Leave offered a positive vision of life outside the EU while the official campaign appeared to be talking Britain down, and the tactic is now remembered as one of the decisive own goals of the campaign. Downing Street is nevertheless preparing to reach for the same weapon in reverse.
The dossier would be compiled under John Healey, the Chancellor Mr Burnham installed at No 11 after Rachel Reeves left the government within hours of Mr Burnham entering Downing Street in July.
The numbers behind the rejoin case
The figure at the heart of the rejoin argument is the claim that leaving the EU has cost Britain up to 8 per cent of long-term economic output. Rachel Reeves, who was chancellor at the time, used it in her Mais Lecture in March, telling the City that Brexit had done “deep damage” to the economy.
That figure was the upper estimate in research by the United States-based National Bureau of Economic Research. It has not gone unchallenged. Some economists argued the research was flawed, and the Office for Budget Responsibility, the official forecaster Parliament relies upon, put the long-term impact at 4 per cent of GDP, half the figure ministers have quoted.
Last week analysts at Goldman Sachs predicted that rejoining the customs union would boost GDP by 1 per cent, while single market membership would add between 2 and 5 per cent, which the bank suggests could be worth as much as £150 billion to the economy. The Telegraph reported the single market figure in those terms.
It is thought the Treasury’s own analysis could point to a figure of up to 8 per cent from full rejoining, matching the upper end of the contested estimates ministers have already cited. No such analysis has been published, and no forecast can establish with certainty what Britain’s GDP would be under a different EU relationship. If the Treasury does produce one, expect Leave-leaning economists to scrutinise the assumptions line by line, as they did in 2016.
“It is not 2016 any more”
Kemi Badenoch, the Conservative leader, said on Tuesday: “They can commission all the reports that they like, but it’s not going to change the situation, which is that Britain is out of the EU and rejoining the EU would be a massive distraction.
“The country doesn’t want us to have those debates again. The Government needs to focus on today’s problems and not try to go back 10 years. It is not 2016 any more.”
Andrew Griffith, the shadow chancellor, went further, warning of the message such work would send to the financial markets: “At a time when credibility with the gilt market is vital, the Treasury must be wary of giving us Project Fear in reverse.
“Cheaper energy would do far more for the UK economy than another decade of debating closer links to the low-growth EU.”
The dossier plan is the latest step in a deliberate sequence. Mr Burnham has put Brexit back at the centre of British politics since entering No 10, telling MPs in October that rejecting closer ties with the EU would amount to a dereliction of duty, a framing Mrs Badenoch seized on as implying the 2016 referendum result was illegitimate.
A familiar defence
Dr Jeevun Sandher, a Labour MP and former Treasury official, defended the use of Treasury forecasts around Brexit. Writing on X, he said: “When I was in [the Treasury], I worked on the ‘Project Fear’ document. It turned out to be Project Fact.”
That argument will be tested hard. The Treasury’s 2016 short-term forecast of a Leave-vote recession was wrong, and the credibility of any new dossier will rest on whether its range of estimates is presented honestly, including the OBR’s lower figure, rather than on the most dramatic number available.
What is not in dispute is the political direction of travel. A prime minister who owes his job to a Labour Party that spent a decade campaigning against the referendum result is now preparing to spend taxpayers’ money, through the Treasury, on building the case for undoing it. The British people were never consulted on rejoining. Mr Burnham evidently hopes a folder of Treasury charts can settle that question for them.
Great British PAC reaction
Great British PAC regards the 2016 referendum result as a decision of the British people that deserves democratic respect, whatever view any of us took of it at the time. Seventeen and a half million voters were told their verdict would be delivered. If Downing Street is indeed preparing to commission Treasury analysis on rejoining the EU, the single market or the customs union, then taxpayer-funded economic modelling must not become a substitute for the public’s consent. The British people, not a folder of forecasts, are the final arbiters of Britain’s constitutional direction.
Transparency must come first. Any Treasury work in this area should publish its methodology, its assumptions and its alternative scenarios in full, so that Parliament, independent economists and the public can test the findings rather than be asked to swallow them. The Government should also be straight with the country about the financial, regulatory and constitutional implications of closer EU integration, and about how those implications differ between full EU membership, single market participation and customs union membership, including potential financial contributions, freedom of movement obligations and the implications for Britain’s legislative autonomy and voting rights under each proposed arrangement.
Economic projections of this kind should be independently scrutinised before a single number is put before the British people. The Office for Budget Responsibility put the long-term cost of Brexit at half the figure ministers prefer to quote. That gap between the official forecaster and the political narrative is precisely why independent scrutiny matters, and why the public is entitled to scepticism when the Treasury is asked to build a case rather than assess one.
Steve Wright, Brexit Campaign Leader of Great British PAC, said:
„Sadly we have seen this game before, where wildly fantastic forecasts are generated to defend the narrative that the government already wanted to do. The Treasury forecasts in 2016 were proven wrong, and didn’t convince anyone at the time let alone now. The EUs budget has now increased to over two trillion euros, and the UK as a member would have to cover 12-15% of that. There are no options for closer EU ties, that don’t require putting the EU in charge of writing UK laws. The British public have been very clear over the last decade, that control over their laws is a red line.“
Great British PAC believes Britain’s future relationship with the European Union must be decided through honest evidence, democratic accountability and respect for the British electorate. The Treasury’s duty is to inform the public, not to campaign for a predetermined political outcome. If ministers want to reopen the question of EU membership, they must make their case openly and answer to the people whose decision they seek to reverse.
