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Claim and counter-claim about Britain’s economic future outside the European Union have led to bewilderment. Undoubtedly, the scariest short-term forecasts in Project Fear have been refuted and, in that sense, the Leavers have won the opening stages of the debate. However, that has not stopped organisations which issued the scary short-term forecasts — notably Her Majesty’s Treasury and other Whitehall departments of state — from remaining pessimistic about the long-term consequences of Brexit.

Buzzfeed, the internet media service, has reported an official assessment, EU Exit Analysis: Cross Whitehall Briefing, dated January 2018, which reflects work conducted by senior government economists in the Treasury and elsewhere. It looks remarkably similar to the gloom and doom about Brexit in the Project Fear documents of spring 2016. Specifically, the assessment said that the growth of national output over the next 15 years would be 5 per cent lower than current forecasts (that is, with the UK remaining in the EU), even if we completed a comprehensive free trade agreement with the EU once we had left. More fundamentally, we would be no less than 8 per cent down in a “no deal” scenario, with the UK reverting to World Trade Organisation rules and having no special arrangements with our neighbours.

Buzzfeed notes that the report is being “tightly guarded inside government”. Apparently, the Prime Minister would not make the analysis public, because “it’s embarrassing”, because — in other words — it purports to demonstrate that the British government is making a capital error in accepting the result of the 2016 referendum. However, the revelation that Project Fear was full of fake forecasts has increased doubts about the value of this sort of Whitehall work. Are civil servants well-informed and high-minded Platonic Guardians? Or can they be attacked as conspirators against democracy? The larger issue is, “how seriously should the British people take prognostications from their country’s government machine?”

We have been here before. In 1975 a referendum was held on whether the UK should stay inside the European Economic Community, then known as the “Common Market”, with the government issuing a leaflet on “the new deal” that Harold Wilson, as Prime Minister, had negotiated. Membership was commended, as its purposes were “to raise living standards and improve working conditions”, and “to promote growth and boost world trade”. And what would happen if voters said “no” to Wilson’s new deal and decided to leave the Common Market? Allegedly, “the effect could only be damaging” with an inevitable “period of uncertainty”, in which “businessmen who had made plans for investment and development on the basis of membership would have to start afresh”. Even worse, “we would have to try to negotiate some special free trade arrangement” in “a new treaty”, and “its conditions might be harsh”. By implication, “Britain’s exports to the Common Market would be seriously handicapped”.

The 1975 referendum is now history, and so are the economic outcomes of the periods before and after the UK’s accession to the then Common Market on January 1, 1973. Was the government’s enthusiasm for membership vindicated in practice? The first item in any discussion must be the growth rates of output and productivity (that is, output per head), since advances in productivity are vital to living standards in the long run. After that numbers on trade and exports give a more comprehensive picture. 
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