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Two years will soon have passed since the British people voted to leave the European Union. Since then the EU has itself changed radically enough to make renewed UK membership more unattractive and less likely. Most obviously, active steps have been taken to form a European army and President Macron has advocated greater fiscal integration, with the possibility of EU-wide taxes. Opinion surveys have shown that the key issue in the referendum debate was “who governs Britain?”. If there are to be a European army and European taxes, an application to rejoin the EU would — undoubtedly, and with much greater clarity than before — be an attempt to end the UK’s existence as an independent, self-governing nation.

Nevertheless, Tony Blair and others are plotting a campaign to hold a second referendum and reverse the tide of history. They aim to operate on a cross-party basis, with George Osborne a natural ally. Osborne, Chancellor of the Exchequer from 2010 to 2016, has become editor of the London Evening Standard and uses it to spin a pro-EU line. Blair once told the Andrew Marr show that Osborne was “a highly capable guy”. Famously or notoriously, one product of Osborne’s capability was Project Fear in the run-up to the referendum. It pushed alarmist forecasts about how the economy would behave outside the EU, capturing many headlines and provoking much comment.  Osborne cited detailed and allegedly rigorous research from the Treasury (in a White Paper, Cm. 9292, no less) on what would happen in the first two years after a vote to leave.

Time is now almost up for the predictions. We must ask, “How did Project Fear perform?”. Two cases were explored in Cm. 9292: a so-called “cautious” scenario in which a trade agreement with the EU would be negotiated, and a “severe shock” alternative where the UK would quit the single market and trade with our European neighbours on the same basis as other World Trade Organisation members (that is, just as the US or China trade with the EU). Talking in these terms was actually a bit odd. Ahead of June 23, 2016, it was well-known that a two-year negotiating period under Article 50 would be the inevitable sequel to a Leave vote. By implication, the precise trading relationship between the UK and the EU might still be undefined even in early 2019. (Indeed, the precise relationship is still undefined at the time of writing.) 

Anyhow, the Treasury did analyse its two cases, and it did not beat about the bush. The two years from a Leave result in the referendum would be a major setback in the “cautious” case, with a drop of 3.6 per cent in gross domestic product, and a disaster in the WTO case, with a tumble of 6.0 per cent. (Both these figures are relative to what would otherwise have occurred.) Jobs would be lost on a massive scale. Unemployment would jump by 520,000 in the cautious projection and by 820,000 in the situation where only WTO rules applied.

Osborne had no compunction about presenting these numbers on television and other media. In a visit to B&Q’s head office on May 23, 2016, he warned that voting to leave the EU would be “a do-it-yourself recession”. Specifically, Brexit would lead to a repeat of the Great Recession of 2008 and 2009, ruining all the subsequent work “to get our country back on track”. In other announcements the British public was told that the two years after a vote to leave would see falling house prices and a marked deterioration in the public finances. Indeed, the prospective deterioration was so severe that pensions might have to be cut and taxes raised.
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