Dodgy Predictions: Osborne’s Equations from Long Discredited Model

Treasury Gravity Model

Lobby journalists and MPs have reacted with bewilderment at the Treasury’s use of a number of complex mathematical equations to underpin their argument for Brexit. This much vaunted analysis was based on a “gravity model”, a device used to model “trade flows between two countries as a function of economic variables such as GDP, geographic..and cultural variables”.

Well, the Treasury’s gravity model has been discounted numerous times for its use in predicting the impact that large scale economic changes will have on the economy. In 2005 Patrick Minford, Vidya Mahambare and Eric Nowell first looked at how useful gravity models were in predicting the effects of Brexit. Their conclusion was that they were far too simplistic:

“The gravity model may work numerically, and be more accurate in detail, for quite general changes in conditions, like a general drop in transport costs, mirroring globalisation, which is what Costinot and Rodiguez-Clare use it for. The problem with using it for a shock to trade structure like the UK leaving a customs union is that the responses will certainly not be the same as for a general globalisation shock; indeed such a shock changes the UK’s internal structure substantially, in a way not assumed in a gravity model.”

Essentially, the gravity model can’t take into account the numerous complexities that would arise in the event of Brexit. These sentiments are reiterated by Alan Deardorff, Professor of International Economics at the University of Michigan. Deardforff remarks in this paper on gravity models, that their sheer scope mean their “use for empirical tests of any of them is suspect”. So it looks like Osborne’s been too clever by half. His model has been long discredited. You can’t use a few trade equations to predict the future, they are only good for baffling hacks…

Tory MPs’ Verdict on Osborne

Boris: “The Treasury has not been totally successful in all its economic forecasts, let’s be honest.”

Peter Bone: “Treasury’s economic predictions are speculative at best, deceitful at worst”

The response of the Tory benches to the Chancellor’s speech this morning…

Treasury’s Case For Remain in 8 Equations

Osborne and Amber Rudd have directly challenged Boris to respond to the Treasury’s case for Remain. Here it is:

7

Pray for the Lobby journalists currently trying to decipher the document. The Treasury goes for the ‘Baffle ’em with BS’ approach…

EU Funded Tata Spin

save our steel

Despite the evidence that EU taxes and regulations contributed to the decline of the British steel industry, the Remain campaign are spinning hard that Brussels actually helped Tata Steel. A report by consultancy firm CE Delft was pushed by the Guardian this week, claiming Tata benefited overwhelmingly from European Emission Trading Schemes (ETS): “No other British company has benefited from the EU’s emissions trading scheme as much as Tata Steel”. 

Who funds CE Delft? The firm’s website lists clients including the European Commission and the European Parliament. Indeed 14% of their clients are EU institutions. He who pays the piper…

Arron Banks Won’t Seek Judicial Review

“I have spent a lot of time and so much money, alongside many others, over the past few months and years making sure this referendum happened, and more than anything we wanted to make sure it happened fairly. We have raised well over £9 million and reached millions of people around this country.
 
“What is clear now is that if we were to pursue a judicial review, according to legal experts, we would win. But this is a time to take a step back from the matter, and after consulting with leading campaigners on this issue, including UK Independence Party leader Nigel Farage – we have decided to show the public how this process was stitched up, but not to pursue the judicial review any further.
 
“It is time to turn our collective guns on the real opponents in this campaign: those who are repeatedly trying to scare the British public into thinking that Britain is too small and insignificant to be an independent nation engaged with the whole world, not just one corner of it. We will be pursuing this campaign with vigour – and we’ll have some fun with it along the way”.

The right decision. Good news for the Leave campaign.

Farage Buries Hatchet With Vote Leave

Guido hears Chris Grayling will be the first Cabinet member to share a stage with Nigel Farage during the referendum campaign. They are due to appear under a Grassroots Out banner at a rally in Stoke on Monday. Very welcome to see the star supporter of Grassroots Out and a Vote Leave committee member put aside the past differences of their respective campaigns and unite to focus on the real enemy. Farage allies say the hatchet is buried: “onwards to victory”. Nigel himself says:

“All those who want the United Kingdom to leave the European Union will I’m sure welcome Chris Grayling’s approach of co-operating cross-party and cross-group.”

Penny for Suzanne Evans’ thoughts. Arron Banks meanwhile announces his decision on whether he will seek a judicial review on behalf of Leave.EU at midday…

Vote Leave Granted Official Designation

The Electoral Commission has chosen Vote Leave as the designated lead campaigners for the Leave side during the EU referendum:

“We received two high quality applications on the ‘Leave’ side, from ‘Vote Leave Ltd’ and ‘The Go Movement Ltd’. After careful consideration, the Commission decided that ‘Vote Leave Ltd’ better demonstrated that it has the structures in place to ensure the views of other campaigners are represented in the delivery of its campaign. It therefore represents, to a greater extent than ‘Go Movement Ltd’, those campaigning for the ‘Leave’ outcome, which is the test we must apply.”

Remember Arron Banks and UKIP will still be able to spend £4 million on their own side of the campaign…

UPDATE: Grassroots Out’s Peter Bone says “We congratulate Vote Leave… We look forward to working closely and productively”. The right response… 

UPDATE II: A spokesman for Leave.EU tells Guido they will seek a judicial review of the decision. Which potentially could delay the referendum until the autumn. Eurosceptics should all be focusing on the real enemy…

UPDATE III: Nigel Farage signals he is willing to work with Vote Leave:

“I have always wanted all on the Leave side to come together and have done my best to try and make this happen. I’ll continue to do so in the run up to the referendum to ensure the Leave side wins. We in UKIP, as I’ve said from the start, will work with anyone that wants to leave the EU. We must work together to get our country out of the European Union.”

UPDATE IV: Leave.EU CEO Liz Bilney says she wants Outers to work together but the boss Arron Banks confirms in a statement he will apply for a judicial review: “It is to be regretted that this process may put the referendum back until October”. Unlikely.

European Parliament Vice President: Dave’s EU Deal “Not Legally Binding”

Technocrat scum

Yesterday a senior Eurocrat argued it is “time for an EU ban on referenda”, today the same website has published an interview with the Vice President of the European Parliament in which he claims the PM’s renegotiation is not legally binding after all. Alexander Graf Lambsdorff says Brussels “clearly went too far” during its negotiations with Dave and suggests the deal could be altered if we stay in the EU:

“their agreement is in no way a document of the European Union, but a text of hybrid character, which is unspecified and not legally binding”

Incidentally, when was the last time the PM or anyone from the Remain campaign mentioned the renegotiation?

Tory MEP’s W*nker Sign in European Parliament

Pro-Brexit Tory MEP leader Syed Kamall responds to Guy Verhofstadt’s calls for further integration. Superb.

H/T Peter Spiegel

IMF’s Lagarde Repays Osborne

Osborne-and-Lagarde-008.jpg

IMF chief Christine Lagarde – currently due to stand trial over a €400 million fraud case – has been spinning overtime that Brexit will damage the UK. This is merely a geo-political courtesy return favour to Osborne who campaigned hard for her to get the IMF chief’s job.

In reality the IMF figures predict that UK growth will outpace both Germany and France as well as the Eurozone as a whole. Even the short-term initial Brexit effects are marginal, and the Bank of England will stand ready to flood liquidity into the markets in the event of Brexit, which will have a soporific effect on markets. No credible economic forecaster expects any long term negative effect on growth…

Top Eurocrat: “Time For an EU Ban On Referenda”

Evil Man

Look no further than this top Eurocrat for proof of Brussels’ loathing for democracy. After Dutch voters had the gall to defy the EU last week, Fraser Cameron, a former senior adviser to the Commission, wrote this on why “it is time for an EU ban on referenda”. 

“Referenda are becoming a huge problem for the EU. The latest result in the Netherlands on the Association Agreement with Ukraine is probably the worst possible outcome. If the turnout had been below 30% the Dutch government could have safely ignored the vote…

Undoubtedly there is a growing trend towards referenda. There have been over 50 in the last twenty years. Sometimes referenda are forced upon governments if there is sufficient voter support, as was the case in the Netherlands… Perhaps it is time for an EU ban on referenda!”

Pesky democracy, getting in the way of the European super-state…

UPDATE: UKIP’s Steven Woolfe gets in touch:

“Here is the EU’s disdain for democracy exposed. Fraser Cameron worked as a senior adviser to the Commission for a decade and his is a view held by many in the corridors of Brussels. He and his fellow apparatchiks don’t want the people to have a say in the future development of the European Superstate.”

Electoral Commission: £9 Million Taxpayer Cash Gives Remain “Unfair Advantage”

IMG_3466-0

Here is the Electoral Commission’s view on Dave’s £9 million of extra taxpayer cash for pro-EU leaflets:

“We don’t think the government should have done it… [it gives Remain an] unfair advantage… undermines the principle [of spending limits]”

A major intervention – this is very strong language from the usually diplomatic Electoral Commission.

Meanwhile multiple sources report that a whole team of Whitehall civil servants have in the last week or so been seconded from their departmental jobs to help the Remain campaign. Taxpayer-funded officials from the Cabinet Office, Treasury and Foreign Office are said to have been moved to campaign roles. The slanted rules say such activity from publicly-paid staff is banned if they want to help the Leave campaign…

UPDATE: Stronger In stress no one is being seconded from Whitehall to work for them. The speculation doing the rounds is that the seconded civil servants are working on the campaign in Downing Street.

Eurocrats Dismiss Dutch Vote

61% of Dutch voters voted against the government and against the EU last night, in a referendum seen as a vote of confidence in Brussels. This is how Eurocrats have responded to the will of the people being democratic expressed:

How will they respond to 8.6% of the EU’s population voting on June 23…

Top Europhile Admits EU Hurting Steelworkers

Former LibDem minister and arch-Europhile Steve Webb has told the truth about the EU hampering any bailouts of steelworkers’ pensions:

“The issue there is you’re not allowed to subsidise your own industry where they’re competing with other peoples, and the EU come down particularly hard on steel, because the EU takes the view that there’s too much steel capacity. So it’s hard to see that working for the government.”

Webb actually has form for EU honesty, he warned of the “devastating impact” of Brussels legislation on pensions a few years ago. How refreshing!

BSE’s Laughable Leaflet Hypocrisy

BSE spent yesterday whinging that Vote Leave are distributing leaflets “completely absent of Vote Leave branding”. So outraged were the Remain campaign that they pinged off a press release and even had Chris Bryant complain to the Electoral Commission. Which isn’t the brightest move considering BSE have been sending out their own unbranded leaflets, with just the acronym “BSIE” in very small letters on the return address:

Will the Electoral Commission look at them too?

Trotskyist Corbyn Ally Leads Leave Campaign

nillets

Dave Nellist of the Trade Unionist and Socialist Coalition has loudly called for a reunion with his former parliamentary comrade Jeremy Corbyn, even offering to merge the hard-left group with Labour. Corbyn’s own sympathies clearly lie with Nellist, the Labour leader said in February:

“Dave and I worked very well together in Parliament together in the past, I have a lot of respect for him as a good community-minded person and I hope that we will get support from him in all quarters in the future.”

What’s Nellist up to now? He’s just optimistically filed the TUSC application to the Electoral Commission for the official Leave campaign designation. The old Trot has stuck to his anti-Brussels guns:

“I was elected as a Labour MP in 1983 on a manifesto that committed the party to withdrawal from the then European Economic Community (EEC). There are millions of trade unionists, young people, anti-austerity campaigners and working class voters generally who, like TUSC, still oppose the EU from a completely different standpoint to that of Ukip and the Tory outers.”

Any other MPs elected in 1983 on an anti-EEC platform?

Oxbridge Careerists Want To Remain, War Heroes Want To Leave

How about this for some statistical analysis demonstrating unequivocally that Remainers are more likely to be Oxbridge careerists. Research by MyVoucherCodes finds 79% of Oxbridge MPs want to stay in the EU, while just 16% of MPs who started their career as a politician want to leave. Only 19% of MPs with military backgrounds are Remainers. So Oxbridge careerists want us to Remain, and war heroes tend to back Brexit. Talking of which, when is the apparently Eurosceptic Johnny Mercer getting off the fence?

EU Taxes and Regulations Killed British Steel Industry

save our steel

Dave is in Lanzarote, Sajid Javid is on an ill-timed jolly Down Under and Jeremy Corbyn wants parliament recalled to debate the dying British steel industry. While cheaper Chinese imports may have forced prices down, British steel prices have risen £30 per tonne since Christmas, with EU prices nearly £50 higher than Chinese in November. The EU’s 37 failed anti-dumping measures are just a sideshow to the real problem facing the industry: excessive EU green taxes and carbon caps.

By pledging to cut carbon emissions by “at least 40%” in 2030, Brussels has forced energy companies into a spate of investments and divestments, causing chaos within the industry and sending electricity prices into the stratosphere. In the fracking-friendly USA, electricity costs just 7 pence per kilowatt hour – down 2% from last year. In China the cost of coal power has fallen by 2 pence. In Britain the average price per kilowatt hour for electricity last year was 13.9 pence – over 50% higher. As Kate Hoey says:

“The EU’s regulations on energy production are killing our steel industry. It is impossible for the UK to compete with non-EU countries like the US, where electricity costs half the price, and Norway, where energy is 25 per cent of the UK price. They unlike us are free from dogmatic, ineffective rules on energy sources.”

Even if Osborne wants to intervene, his hands are tied in any bailout situation by strict EU government aid laws. The UK had to grovel to EU bureaucrats for permission to off-set the new higher energy costs for the steel industry. Labour voters and Remain-backing unions like the GMB should face facts – the EU won’t save their members and will stop the government from doing so…

EU’s Free Movement of Killers Not Scaremongering

scare

The Remain campaign is squealing about a list released by Vote Leave documenting 50 foreign criminals who were able to commit rapes and murders in Britain because of EU free movement. BSE say it is “scaremongering of the worst kind”, Owen Jones complains it is “grim scaremongering”. Is it, though?

Scaremongering is wildly speculating that something bad might happen in the future, with no actual evidence to back up the claims. Claiming the NHS might be under threat, France might stop cooperating over Calais, or that Toyota and Airbus might pull out of the UK, for example, are all quite obviously cases of scaremongering. 

Pointing out that Polish gangster Mariusz Florowski came to Britain then tortured his victim with blowtorch before killing him is a demonstrably true fact. As is noting that Vitas Plytnykas, an ex-Red Army soldier, came to the UK after 7 years in jail for murder in Germany, before suffocating another victim here. These aren’t lurid, unsubstantiated claims about something that might happen. They all did happen thanks to the EU’s free movement of criminals…

Nicky Morgan’s Nicola Murray Moment

Nicky Morgan is giving a speech this morning to “young people” about why Brexit would be like, totes not amazing for them. A few years ago Morgan was nicknamed “Nicola Murray” by colleagues, not without reason:

[…] Read the rest

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