Any firm or government department that is planning to make a big investment or change in its management practices carries out a feasibility study. I spent much of my working life undertaking such studies on behalf of governments in developing countries when they intended to borrow money internationally to finance agricultural and rural development projects. We had to rigorously examine the technical, institutional, social and environmental feasibility of the proposals, but, above all, we had to assess whether they made economic sense for the country and how they would impact on the earnings of people whose livelihoods would be affected for the better or the worse.
In such studies, estimates of economic and financial benefits are necessarily based on assumptions on future long-term price trends for the main inputs and products. Given the inherent volatility of international prices – for instance for oil, steel or wheat – it is normal to test the sensitivity of the estimates of economic and financial returns to possible variations in the value of future output. Tests are also routinely made about the impact of delays in construction or over-runs in initial investment costs.
One of the most extraordinary aspects of the Brexit saga over the last few months has been the series of attempts by the government to hide from MPs and the general public its own estimates of the feasibility of the Brexit project. At one stage, this behaviour was laughable, when David Davis boasted that his department was analysing the impact of various Brexit scenarios on almost 50 sectors of the British economy, only to turn around a week or two later to claim that the studies did not exist! When pressed, he released some bowdlerized versions of a few documents.
Now we find that a serious economic study has been carried out and a leaked version of the draft text has entered the public domain. After pressure from parliament, a very neurotic Number Ten eventually allowed MPs to get a glimpse of it in well-guarded reading rooms in Westminster: they tried to fob the Members of the Scottish Parliament with a single copy (initially available only in even-numbered pages) that they could view in strict privacy over a period of just two days!
In the meantime, senior Brexiteers, including junior ministers in the Department that produced the document, have been doing their best to rubbish the credibility of economic forecasting in general, and to question the loyalty and objectivity of the civil servants who undertook the work.
What the draft report apparently shows is that any form of Brexit will harm the British economy and that the areas of the country that voted most strongly to leave the EU will be the most badly affected. The worst-case scenario is associated with an exit from the EU without a deal.
If the analyses are credible – and they certainly make intuitive sense – this means that Theresa May and her government, in pursuing a hard Brexit strategy including exit from the customs union and the single market, is deliberately damaging the livelihoods of the majority of the British population, especially those living in areas in which incomes are below the national average.
It is, therefore, not surprising that the Prime Minister should wish to keep the figures under wraps. Unfortunately for her, the attempt to smother them and to treat them as secret information that can only be shared – fleetingly – with MPs can only add to the public curiosity about the report’s findings. It suggests that, even if her ministers try to dismiss the findings, she believes them but is unable to face the implication that she has to revisit the “red lines” that she has set in defining Britain’s future relationship with Europe.
If she persists in trying to keep us in the dark and in continuing to act as though her vision of Brexit will be good for our livelihoods, she will eventually go down as the first British Prime Minister to deliberately lead us into a future that she knows (and we suspect) is seriously self-harming.
Can you beat that?